NEWMIL BANCORP, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of NewMil Bancorp, Inc.:
NOTICE IS HEREBY GIVEN that the 1995 Annual Meeting of Shareholders of
NEWMIL BANCORP, INC. will be held at the Candlewood Valley Country Club, New
Milford, Connecticut on Friday, October 20, 1995 at 9:30 a.m., for the
purpose of considering and voting on the following matters:
1. To elect three Directors to serve until the Annual Meeting of
Shareholders in 1998 who, with the five Directors whose terms of
office do not expire at this meeting, will constitute the full Board.
2. To approve amendments to the Corporation's 1986 Stock Option and
Incentive Plan for key officers and employees.
3. To approve amendments to the Corporation's 1992 Stock Option Plan
for Outside Directors.
4. To ratify the appointment of Coopers & Lybrand as independent
auditors for the fiscal year ending June 30, 1996.
5. To transact such other business as may properly be brought before
the meeting or any adjournment thereof.
Only shareholders of record at the close of business on August 31, 1995,
are entitled to notice of and to vote at this meeting or any adjournment
thereof.
By order of the Board of Directors,
Betty F. Pacocha
Secretary
New Milford, Connecticut
September 20, 1995
YOUR VOTE IS IMPORTANT. WE URGE YOU TO SIGN AND RETURN THE ENCLOSED PROXY
IN THE ENCLOSED POSTAGE PREPAID ENVELOPE AS PROMPTLY AS POSSIBLE WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING IN PERSON. IF YOU DO ATTEND THE MEETING, YOU MAY
THEN REVOKE YOUR PROXY AND VOTE IN PERSON.
NEWMIL BANCORP, INC.
19 Main Street
New Milford, Connecticut 06776
ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 20, 1995
PROXY STATEMENT
INFORMATION CONCERNING THE SOLICITATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of NewMil Bancorp, Inc. (the
"Corporation"), a Delaware corporation, for the Annual Meeting of
Shareholders of the Corporation to be held at the Candlewood Valley Country
Club, New Milford, Connecticut on Friday, October 20, 1995 at 9:30 a.m.
(the "Meeting"), and any adjournments thereof. This Proxy Statement and
the enclosed proxy card are first being given or sent to shareholders on or
about September 20, 1995.
The Corporation will bear the costs of soliciting proxies from its
shareholders. In addition to this solicitation by mail, proxies may be
solicited by Directors, officers and employees of the Corporation and the
Bank by personal interview, telephone or telegram. Arrangements will also
be made with brokerage houses and other custodians, nominees and fiduciaries
for the forwarding of solicitation material to the beneficial owners of the
Corporation's Common Stock (as hereinafter defined) held of record by such
persons, and the Corporation may reimburse such custodians, nominees and
fiduciaries for reasonable out-of-pocket expenses incurred in connection
therewith.
Only holders of Common Stock of record at the close of business on
August 31, 1995 (the "Record Date") are entitled to vote at the Meeting.
On that date, there were 4,492,979 shares of the Corporation's $.50 par
value common stock outstanding (the "Common Stock"). All shares of Common
Stock outstanding carry voting rights and all shareholders are entitled to
one vote per share of Common Stock held by such shareholder on each matter
submitted to vote. Pursuant to the Corporation's Bylaws, a majority of
the outstanding shares entitled to vote, present either in person or by
proxy, will constitute a quorum for transacting business at the Meeting.
Shares represented by properly executed proxies in the enclosed form
will be voted in accordance with any specifications made therein. Proxies
that contain no directions to the contrary will be voted FOR the election
of all nominees for Director, FOR approval of amendments to the Corporation's
1986 Stock Option Plan and Incentive Plan for key officers and employees,
FOR approval of amendments to the Corporation's 1992 Stock Option Plan for
Outside Directors, and FOR the ratification of the appointment of Coopers
& Lybrand as the Corporation's independent auditors for the fiscal year
ending June 30, 1996. If any other business is properly presented at this
Meeting, the Proxy shall be voted in accordance with the recommendations of
management.
A shareholder who executes and returns a proxy on the enclosed form has
the power to revoke it at any time before it is voted at the Meeting by
filing with the Secretary of the Corporation an instrument revoking it, or
a duly executed proxy bearing a later date, or by attending the Meeting and
voting in person. Attendance at the Meeting will not in and of itself
constitute the revocation of a proxy. Voting by those present during the
conduct of the Meeting will be by ballot.
PRINCIPAL SHAREHOLDERS
The following table shows those persons known to the Corporation
(including any "group" as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934) to be the beneficial owners of more than
five percent of the Common Stock as of the Record Date. In preparing the
following table, the Corporation has relied on information supplied in
public filings filed by such persons with the Securities and Exchange
Commission as referenced below the table in the footnotes. According to
these filings, each person listed below is believed to have sole voting and
investment powers with respect to shares beneficially owned except as noted.
Shares
Name and Address Beneficially Percent
of Beneficial Owner Owned of Class
J. J. Cramer & Co. 384,300(1) 8.56%
56 Beaver Street, Suite 701
New York, NY 10004
Dimensional Fund Advisors Inc. 277,100(2) 6.17%
1299 Ocean Avenue, 11th Floor,
Santa Monica, CA 90401
James R. Williams 245,978(5) 5.48%
28 Lane Street
Kent, CT 06757
(1) J. J. Cramer & Co. beneficially owned shares are based on the Securities
& Exchange Commission Form 13D filed June 8, 1995.
(2) Dimensional Fund Advisors Inc.'s beneficially owned shares are based
on a Securities and Exchange Commission 13F filing for the quarter
ended March 31, 1995. Dimensional Fund Advisors Inc. ("Dimensional"),
a registered investment advisor, is deemed to have beneficial ownership
of 277,100 shares of NewMil Bancorp, Inc. common stock as of March 31,
1995, all of which shares are held in portfolios of DFA Investment
Dimensions Group, Inc., a registered open-end investment company, or
in series of the DFA Investment Trust Company, a Delaware business
trust, or the DFA Group Trust and DFA Participation Group Trust,
investment vehicles for qualified employee benefit plans, all of which
Dimensional Fund Advisors Inc. serve as investment manager. Dimensional
disclaims beneficial ownership of all such shares.
(3) Mr. Williams' beneficially owned shares are based on the Securities and
Exchange Commission Form 4 filings of director Mary C. Williams, Mr.
Williams' former spouse, for the months of August 1992 and 1993.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
In accordance with the Corporation's Bylaws and the applicable laws of
Delaware, responsibility for the management of the Corporation is vested in
the Board of Directors. During the year ended June 30, 1995, the Board of
Directors of the Corporation held sixteen (16) regular and special meetings.
The Board of Directors of the Corporation is comprised of the same individuals
who serve on the Board of Directors of the Corporation's wholly-owned
subsidiary, New Milford Savings Bank (the "Bank"). Each Director attended at
least 75 percent of the meetings of the Board of Directors of the Corporation
and any committee(s) of which he or she was a member.
During fiscal 1995 many matters ordinarily dealt with by subcommittees of
each Board of Directors were dealt with by the appropriate Board of Directors
as a committee of the whole. The committees of the Corporation's Board
of Directors are the Audit Committee, the Investment Committee, the Nominating
Committee, and the Salary and Benefits Committee. The committees of the
Bank's Board of Directors are the Audit Committee, the Community Reinvestment
Act Committee, the Investment Committee, the Loan Committee, the Nominating
Committee, the Salary and Benefits Committee, and the Trust Committee.
The Corporation's Audit Committee met six (6) times during fiscal 1995.
The Corporation's Audit Committee is responsible, amongst other things, for
oversight of: internal accounting controls; the internal audit function; the
selection of independent accountants; the results of the annual audit
examination; and, relationships with state and federal regulatory agencies.
The members of the Corporation's Audit Committee are Willis H. Barton, Jr.,
Herbert E. Bullock, Laurie G. Gonthier and Mary C. Williams.
The Corporation's Nominating Committee met two (2) times during fiscal
1995. The Corporation's Nominating Committee recommends to the Corporation's
Board of Directors candidates for director either to be elected at annual
meetings of shareholders or to be appointed by the Board of Directors from
time to time for the purpose of filling any vacancy on the Board of Directors.
Vacancies in directorships may be filled, until the expiration of the term of
the vacated directorship, by a vote of a majority of the directors then in
office. The members of the Corporation's Nominating Committee are Herbert E.
Bullock, John V. Haxo, Suzanne L. Powers and Mary C. Williams.
The Corporation's Salary and Benefits Committee met six (6) times during
fiscal 1995. The Corporation's and the Bank's Salary and Benefits Committees
make recommendations to their respective Board of Directors on compensation
for officers and employees, and on benefit plans for employees of the
Corporation and the Bank. The Bank's Salary and Benefits Committee administers
the 1986 Stock Option Plan for officers and key employees of the Bank, which
includes recommendations for the granting of stock options. The members of the
Salary and Benefits Committee are Willis H. Barton, Jr., John V. Haxo,
Suzanne L. Powers and Mary C. Williams.
The Corporation's Investment Committee met thirteen (13) times during
fiscal year 1995. The Corporation's and the Bank's Investment Committees
approve investment policies and monitor the performance of the Corporation's
and the Bank's investment portfolios. The members of the Corporation's and the
Bank's Investment Committees are Herbert E. Bullock, Laurie G. Gonthier and
John V. Haxo, Anthony J. Nania and Francis J. Wiatr.
Matters ordinarily dealt with by the Bank's Loan Committee were dealt
with during fiscal year 1995 by the Bank's Board of Directors as a committee of
the whole. The Bank's Loan Committee approves the loan policies of the Bank,
approves certain loans and reviews all loans made during the fiscal year by the
Bank. The members of the Bank's Loan Committee are Willis H. Barton, Jr.,
Laurie G. Gonthier and Suzanne L. Powers.
Matters ordinarily dealt with by the Bank's Trust Committee were dealt with
during fiscal year 1995 by the Bank's Board of Directors as a committee of the
whole. The Trust Committee approves the trust policies of the Bank and reviews
all trust accounts. The Bank's Trust Committee no longer administers trust
accounts for unrelated third parties. The Bank remains as Trustee for only one
account, New Milford Savings Bank Pension Plan, and serves as custodian for
New Milford Savings Bank Foundation. The Bank's Trust Committee, therefore,
continues to administer these accounts. The members of the Bank's Trust
Committee are Herbert E. Bullock, John V. Haxo, Anthony J. Nania and Mary C.
Williams.
The Bank's Community Reinvestment Act Committee ("CRA") met four (4) times
during fiscal year 1995. The committee was formed as a means of assuring
compliance with the requirements of the Community Reinvestment Act. The
members of the Bank's CRA Committee are Herbert E. Bullock, Willis H. Barton,
Jr., Anthony J. Nania and Francis J. Wiatr.
Directors Compensation
Officers of the Corporation who are also directors receive no compensation
as directors. Each non-employee director received an annual stipend of $7,500
for the fiscal year ended June 30, 1995. Directors also receive $250 for
each Board meeting attended and $150 for each additional committee meeting
attended.
On October 23, 1992, at the 1992 Annual Meeting, the Shareholders approved
the 1992 Stock Option Plan for Outside Directors (the "1992 Plan"). Each
non-employee director was granted options to purchase 10,000 shares of
Common Stock pursuant to such 1992 Plan, at an exercise price of $3.00, the
fair market value of the Corporation's Common Stock on the date of grant. The
1992 Plan provides for subsequent grants of additional options of 2,000 shares
to newly elected and subsequently reelected non-employee directors. Directors
employed by the Corporation or the Bank are not eligible to participate in
this 1992 Plan. The Board has adopted certain amendments to the 1992 Plan
which are subject to the approval of shareholders and which are discussed below
in Proposal 3. That discussion includes a summary of the existing 1992 Plan
and the amendments proposed.
PROPOSAL 1
ELECTION OF DIRECTORS
The Certificate of Incorporation and the Bylaws of the Corporation
provide for the election of directors by the shareholders. For this purpose,
the Board of Directors is divided into three classes, as nearly equal in size
as possible, with one class elected each year for a three-year term, to hold
office until the end of such term and until successors have been elected and
qualified. The terms of office of the members of one class expire and a
successor class is elected at each annual meeting of the shareholders. The
Corporation's Bylaws contain a special provision applicable only to a
director who is also an officer of the Corporation; in such case, the officer/
director shall be deemed to have resigned as a director should he, for any
reason, no longer be an officer of the Corporation.
At the Meeting, the terms of three directors, Laurie G. Gonthier, John V.
Haxo and Suzanne L. Powers expire. They have been nominated to be elected each
for a three-year term, expiring at the annual meeting in 1998. In the event
that any nominee for director is unable or declines to serve, which the Board
of Directors has no reason to expect, the attorneys named in the proxy will
vote for a substitute designated by the present Board of Directors.
Nominations of persons for election to the Board of Directors may be
made at a meeting of shareholders by or at the direction of the Board of
Directors or by any shareholder of the Corporation entitled to vote for the
election of directors at the meeting who complies with certain notice procedures
set forth in the Bylaws. Such nominations, other than those made by or at the
direction of the Board of Directors, must be made pursuant to timely notice
in writing to the Secretary of the Corporation. To be timely, a shareholder's
notice must be delivered to or mailed and received at the Corporation's
principal executive offices not fewer than 60 days nor more than 90 days prior
to the annual meeting; provided, however, that if fewer than 50 days' notice
or prior public disclosure of the date of the annual meeting is given or made
to shareholders, notice by the shareholder to be timely must be received not
later than the close of business on the 10th day following the day on which
such notice of the date of the Meeting was mailed or such public disclosure
was made. A shareholder's notice must set forth (a) as to each person whom the
shareholder proposes to nominate for election or re-election as a Director,
(i) the name, age, business address and residence address of such person, (ii)
the principal occupation or employment of such person, (iii) the class and
number of shares of capital stock of the Corporation which are beneficially
owned by such person, (iv) the total number of shares of capital stock of the
Corporation that will be voted for each proposed nominee; and (v) any other
information relating to such person that is required to be disclosed in
solicitation of proxies for election of Directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Securities Exchange Act of
1934, as amended (including without limitation such person's written consent to
being named in the proxy statement as a nominee and to serving as a Director if
elected) and (b) as to the shareholder giving the notice (i) the name and
address of such shareholder, as they appear on the Corporation's books, and
(ii) the class and number of shares of capital stock of the Corporation which
are beneficially owned by such shareholder.
The following tables set forth information as of the Record Date based
upon the Corporation's and the Bank's books and records and upon Questionnaires
executed by the Corporation's and the Bank's directors and executive officers,
regarding the nominees for election as directors at the Meeting and each
director continuing in office. The tables include the total number and
percentage of shares of Common Stock beneficially owned by each nominee and
by all directors and executive officers as a group. Each person has sole
voting and investment powers with respect to shares listed as being beneficially
owned by them, except as indicated in the notes following the tables.
<TABLE>
NOMINEES FOR ELECTION FOR A THREE YEAR TERM
<CAPTION>
Positions Shares
Held With of
the Corp. Term Common
and the Bank; Will Stock
Principal Expire Beneficially Percent
Occupation Has at Owned of
During Past Served the as of Common
Five Years as a Annual Sept. Stock
and Director Meeting 1, Beneficially
Directorships Age Since in 1995 Owned
<S> <C> <C> <C> <C> <C> <C>
_______________________________________________________________________________
Laurie G.
Gonthier Director; Vice
President
of Marketing for
Paine Webber,
Middlebury, CT 45 1990 1998 15,000(1) 0.33%
Dr. John V.
Haxo Director;
Retired
Surgeon 71 1987(2) 1998 11,000(3) 0.24%
Suzanne L.
Powers Director;
Attorney;
Judge of
Probate 57 1988 1998 20,000(4) 0.44%
</TABLE>
(1) Includes 2,500 shares held jointly by Mr. Gonthier with his spouse, 2,500
shares in Mr. Gonthier's Individual Retirement Account and options to
purchase 10,000 shares of Common Stock exercisable within 60 days of the
Record Date.
(2) Dr. Haxo has been a director of the Corporation since its formation in
1987. Dr. Haxo has been a director of the Bank since 1973.
(3) Includes 1,000 shares owned directly by Dr. Haxo and options to purchase
10,000 shares of Common Stock exercisable within 60 days of the Record
Date.
(4) Includes 1,000 shares owned directly by Mrs. Powers, 4,000 shares owned
jointly by Mrs. Powers with her spouse, 5,000 shares owned by Mrs. Powers'
spouse and options to purchase 10,000 shares of Common Stock exercisable
within 60 days of the Record Date.
<TABLE>
DIRECTORS CONTINUING IN OFFICE
<CAPTION>
Positions
Held
With the
Corporation
and the Bank;
Principal Shares of
Occupation Common Stock Percent
During Has Beneficially of
the Served Term Will Owned Common
Past Five as a Expire at as of Stock
Years and Director the Annual Sept. 1, Beneficially
Name Directorships Age Since Meeting in 1995 Owned
<S> <C> <C> <C> <C> <C> <C>
Willis H.
Barton, Jr. Director;
Retired
Partner
in W.G.
Barton &
Son;
Director of
New Milford
Center
Cemetery
Association
and New
Milford
Hospital,
New Milford,
CT 73 1987(3) 1997 20,250(2) .45%
Herbert E.
Bullock Director;
Employee,
Echo Bay
Marina,
New Milford,
CT 60 1987(3) 1997 14,400(4) .32%
Anthony J.
Nania Director;
Chairman
and CEO
of the
Corporation
and
Chairman of
the Bank;
Attorney;
Chairman
and
President
of Geer Corp.,
a nursing
home and
rehabili-
tation
center;
Director
of Colt
Firearms,
Inc.; Former
Probate
Judge and
Representative
to General
Assembly 50 1990 1996 108,318(5) 2.36%
Francis J.
Wiatr Director;
President of
the Corpora-
tion; CEO and
President of
the Bank;
Former
President and
CEO, Bank of
Waterbury,
Waterbury,
CT; Former
Senior
Executive
Vice
President,
Citytrust,
Bridgeport,
CT 45 1994(6) 1997 50,475(7) 1.11%
Mary C.
Williams Director;
Former Vice
President,
J & J Log
and Lumber
Corp. 55 1990 1996 72,000(8) 1.60%
All
Directors
and
Executive
Officers
as a
Group (14
Persons) 412,769(9) 8.59%
</TABLE>
(1) Mr. Barton has been a director of the Corporation since its formation in
1987. Mr. Barton has been a director of the Bank since 1970.
(2) Includes 5,000 shares owned jointly with spouse, 1,250 shares owned by
spouse and daughter, 2,000 shares held directly and options to purchase
12,000 shares of Common Stock exercisable within 60 days of the Record
Date.
(3) Mr. Bullock has been a director of the Corporation since its formation
in 1987. Mr. Bullock has been a director of the Bank since 1972.
(4) Includes 400 shares held jointly with spouse, 2,000 shares owned by
spouse and mother-in-law and options to purchase 12,000 shares of Common
Stock exercisable within 60 days of the Record Date.
(5) Includes 1,200 shares owned directly by Mr. Nania, 1,057 held by Mr.
Nania in his Individual Retirement Account, options to purchase 100,000
shares of Common Stock exercisable within 60 days of the Record Date,
1,061 shares held by Mr. Nania's spouse in her Individual Retirement
Account, and 5,000 shares held by Mr. Nania as custodian for his minor
children.
(6) Mr. Wiatr became President of the Corporation and President and Chief
Executive Officer ("CEO") of the Bank , and a director of both the
Bank and the Corporation, on March 21, 1994.
(7) Includes 475 shares held directly by Mr. Wiatr and options granted to
Mr. Wiatr to purchase 50,000 shares which are exercisable within 60
days of the Record Date. Excludes additional options granted to Mr.
Wiatr to purchase 50,000 shares which are not exercisable within 60
days of the Record Date.
(8) Includes 60,000 shares held directly by Mrs. Williams and options to
purchase 12,000 shares of Common Stock exercisable within 60 days of
the Record Date.
(9) Includes 312,000 shares issuable upon the exercise of options
exercisable by such persons within 60 days of the Record Date.
(10) For the purpose of calculating the percentage of Common Stock
beneficially owned by the persons listed in the table, including the
directors and executive officers as a group, the total number of
shares outstanding includes the 312,000 shares issuable upon the
exercise of options which may be exercised by such persons within
60 days of the Record Date (the "Option Shares").
THE NOMINEES FOR DIRECTOR MUST BE ELECTED BY A MAJORITY OF THE SHARES
PRESENT IN PERSON OR BY PROXY AT THE ANNUAL MEETING.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
PROPOSED NOMINEES.
Section 16 Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Corporation's directors and executive officers,
and persons who own more than ten percent of a registered class of the
Corporation's equity securities (collectively referred to as the "Insiders"),
to file with the Securities and Exchange Commission and NASD initial reports
of ownership and reports of changes in ownership of any securities of the
Corporation. Insiders are required by the Exchange Act to furnish the
Corporation with copies of all Section 16(a) reports they file. Based
solely on a review of the copies of such reports furnished to the Corporation
and written representations from directors and executive officers that no
other reports were required, the Corporation believes that during the fiscal
year ended June 30, 1995, all Section 16(a) required filings applicable to
the Corporation's Insiders were made.
EXECUTIVE COMPENSATION
The following Cash Compensation Table is required to set forth cash
compensation and certain other compensation paid or accrued by the
Corporation or the Bank for services in all capacities rendered during fiscal
years ended June 30, 1995, 1994 and 1993 to the Corporation's CEO and the
four most highly compensated executive officers of the Corporation and the
Bank, other than the CEO, whose cash compensation for the fiscal year ended
June 30, 1995 exceeded $100,000 (together, the "Named Executives"). There
were only two Named Executives, in addition to Mr. Nania, who exceeded
$100,000 in cash compensation for the fiscal year ended June 30, 1995.
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term
Compensa-
tion
Annual Compensation Awards
_______________________________________________________________________________
(a) (b) (c) (d) (e) (g) (i)
Other All
Annual Other
Name and Compen- Compen-
Principal sation Options/ sation
Position Year Salary($) Bonus ($) ($) SARs(#) ($)(7)
________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Anthony J. Nania 1995 $150,000 $37,570(1) $ - 20,000 $6,300
Chairman/CEO of the 1994 150,000 8,438(2) - 10,000 2,116
Corporation and 1993 150,000 15,000 - 10,000 807
Chairman of the
Bank
Francis J. Wiatr 1995 $160,000 $57,570(3) $ - - $ 959
President of the 1994 $40,000(4) - - 75,000(5) -
Corporation;
President/ 1993 - - - - -
CEO of the Bank
Thomas Grant 1995 $80,000 $42,759(6) - $ 518
Senior Vice President 1994 - -
Commercial Lending of 1993 - - -
the Bank
</TABLE>
(1) Mr. Nania received a total performance bonus valued at $37,570. The
amount shown reflects the total amount of cash bonus and the dollar
value of stock option bonus (measured as the market value of the
underlying stock on the date of grant minus the exercise price) paid or
earned during the fiscal year ended June 30, 1995.
(2) The amount shown reflects the dollar value of stock option bonus
(measured as the market value of the underlying securities at the date
of grant minus the exercise price) paid or earned during the fiscal year
ended June 30, 1994.
(3) Mr. Wiatr received a performance bonus of $57,570 for the fiscal year
ended June 30, 1995.
(4) Mr. Wiatr was elected President of the Corporation and President and CEO
of the Bank on March 22, 1994. Thereafter, during fiscal 1994 Mr.
Wiatr received wages aggregating $40,000 based on an annualized salary of
$160,000.
(5) On March 22, 1994, an aggregate of 75,000 options, in three tranches, were
granted to Mr. Wiatr pursuant to the 1986 Stock Option and Incentive Plan
(the "1986 Plan"). 25,000 options are currently exercisable and 25,000
will become exercisable on each of March 1, 1996 and March 1, 1997 (unless
accelerated upon a change
of control).
(6) Mr. Grant was appointed as Senior Vice President - Commercial Lending of
the Bank on June 20, 1994. Mr. Grant received bonuses totalling $42,759
for the fiscal year ended June 30, 1995.
(7) The amounts reported for All Other Compensation include the following: (i)
Term life insurance premiums paid by the Corporation or the Bank in
fiscal 1995, 1994 and 1993 on behalf of each of the named executives:
Mr. Nania, $1,573, $1,246 and $807, respectively; Mr. Wiatr, $959 for
1995; Mr. Grant, $518 for 1995; and (ii) Contribution match paid by the
Bank under the Bank's 401K Plan in fiscal years 1995 and 1994 on behalf of
Mr. Nania of $4,727 and $870 respectively.
Options/SAR Grants
The following table provides detailed information concerning stock
options granted to the Named Executives pursuant to the 1986 Plan during the
fiscal year ended June 30, 1995. In addition, in accordance with SEC rules,
this table shows potential realizable gains that would exist for these
options for the Named Executives. These potential gains are based on assumed
annualized rates of stock price appreciation of 5% and 10% from the date the
options were granted over the full 10 year option term.
<TABLE>
Options/SAR Grants in Fiscal Year Ended June 30, 1995
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants Over Option Term
_______________________________________________________________________________
(a) (b) (c) (d) (e) (f) (g)
%
of Total
Options/
SARs
Granted to
Employees Exercise
in or Base Expi-
Options Fiscal Price ration
Name Granted(#) Year ($/Sh) Date 5% ($) 10% ($)
_______________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Anthony J.
Nania 20,000(1)(2) 80.0% $4.569 07/7/04 $55,221(3) $142,057(3)
</TABLE>
(1) These options were issued to Mr. Nania on July 7, 1994 at 85% of the
fair market value of the Corporation's stock on the date of the grant
pursuant to the 1986 Plan. The exercise price is $4.569, and the market
price was $5.375 on the date of grant, a difference of $.806 per share, or
$16,120 for the entire award of 20,000 options.
(2) Options granted pursuant to the 1986 Plan will terminate on the earlier
of ten years from the date of grant or three months following the
employee's ceasing to be employed by the Corporation or the Bank. Under
the terms of the 1986 Plan, the Salary and Benefits Committee retains
limited discretion to modify the terms of outstanding options, including
the repricing of options, under certain conditions.
(3) The resulting stock price for the grant expiring on July 7, 2004 would
be $7.442 at 5% and $11.851 at 10% compounded annually for 10 years.
In addition to the options set forth in the table above, after June 30, 1995,
the Corporation granted the following options to the named individuals under
the 1986 Plan: Mr. Nania, 45,000 shares; Mr. Wiatr, 25,000 shares; and Mr.
Grant, 15,000 shares.
The following table provides detailed information concerning stock options
exercised by the Named Executives during the fiscal year ended June 30, 1995.
This table also provides information concerning the number and value of
specified exercisable ("vested") and unexercisable ("unvested") stock options
at June 30, 1995. Finally, this table reports the value of unexercised
"in-the-money" stock options at June 30, 1995, which represents the positive
spread between the exercise price of any such existing stock options and
the fair market value of the Corporation's Common Stock on June 30, 1995
($6.25).
<TABLE>
Aggregated Option/SAR Exercises in Fiscal Year Ended June 30, 1995
and June 30, 1995 Option/SAR Value Table
<CAPTION>
(a) (b) (c) (d) (e)
Value of
Shares Number of Unexercised
Acquired Unexercised In-the Money
on Value (a) at 6/30/95 at 6/30/95
Name Exercise(#) Realized($) Exercisable/ Exercisable/
Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Anthony J.
Nania - $ - 55,000 /0 $132,058/$ 0
Francis J.
Wiatr - - 25,000 /50,000 $56,250 /$112,500
Thomas Grant - - - / - - / -
</TABLE>
Employment Agreements
The Bank currently has an Employment Agreement with Mr. Wiatr. Mr. Wiatr's
agreement provides for an annual base compensation of $160,000. Mr. Wiatr
also agrees to serve as director of the Corporation and the Bank (for so long
as he continues as an officer of the Corporation and Bank) for which he will
receive no additional compensation. In addition, the agreement provides for
the stock options described in footnote 5 to the Summary Compensation Table
above. The issuance price of these options is $4.00 per share. These
options are for a term of ten (10) years from the date of the grant. The
Agreement also provides for certain customary benefits, including an
automobile allowance and country club membership.
Mr. Wiatr's agreement provides that if the Bank experiences a change in
control, Mr. Wiatr will be entitled to receive a lump sum cash payment equal
to three times the greater of his compensation for the last full fiscal year
preceding the change of control or the average of such compensation for the
last three full fiscal years. In no event shall such payments cause such
payments to be deemed "excess parachute payments" under Section 280G of the
Internal Revenue Code of 1986, as amended. If Mr. Wiatr is terminated before a
change in control occurs, no severance would be due other than a continuation
of benefits for three months and payment for unused vacation time.
The agreement provides that for a period of two (2) years following Mr.
Wiatr's employment with the Bank, he shall not engage in, render advice or
assistance to or be employed on a compensation basis by any person, firm or
entity which is in competition (as defined in the agreement) with the Bank.
In addition, Mr. Wiatr agrees in the agreement not to use or reveal, at any
time during or after the term of the agreement, any confidential information
that he has received during the course of his employment at the Bank.
The Corporation and the Bank currently have no employment agreements
with any other officers of the Corporation or the Bank.
EMPLOYEE BENEFIT PLANS
Pension Plan
The Bank maintains a non-contributory defined benefit pension plan (the
"Pension Plan") that is qualified under the Internal Revenue Code and
complies with the requirements of the Employee Retirement Income Security Act of
1984 ("ERISA").
Effective September 1, 1993 the Pension Plan was curtailed and the
crediting of additional benefits to participants under the Pension Plan
discontinued. Distributions of vested benefits will be made after the
retirement of vested participants. If a participant terminates employment
before attaining the normal retirement date as set forth in the Pension Plan,
the Pension Plan's vesting provisions will govern whether such participant
is entitled to any benefits pursuant to such Pension Plan.
The Pension Plan covers full-time employees, as of September 1, 1993, who
had attained the age of 21 years and had completed at least six months
service with the Bank at September 1, 1993. The Pension Plan provides in
general for monthly payments to or on behalf of each covered employee upon
such employee's retirement at age 62 or 65, depending upon whether their
employment began before April 1, 1976, or after that date. Annual payments are
based upon the employee's basic annual compensation for the highest paid
three years of employment through September 1, 1993 and such employee's
covered months of service to a maximum of 60 percent.
The Pension Plan provides for optional early retirement benefits provided
a participant has attained age 58 and completed at least 25 years of service
with the Bank or attained the age of 62 depending on whether their employment
began before April 1, 1976 or after that date. The Pension Plan also provides
death benefits comparable to the benefits offered in the case of early
retirement. To fund the benefits provided by the Pension Plan, the Bank
makes an annual contribution, if required, for the benefit of eligible
employees computed on an actuarial basis. No contribution was required or
made during the last fiscal year. Contributions to the Pension Plan fund are
paid entirely by the Bank and expenses of administering the Pension Plan
are paid from the fund.
The following table illustrates annual pension benefits for retirement
in fiscal 1995 at age 65 under the most advantageous Pension Plan provisions
available for various levels of compensation and years of service. The Bank's
Pension Plan does not provide for Social Security integration.
<TABLE>
Pension Plan Table
<CAPTION>
Average Final Years of Service(b)
Earnings(a) 15 Years 20 Years 25 Years 30 Years 35 Years
<S> <C> <C> <C> <C> <C>
$ 25,000 $ 7,500 $10,000 $12,500 $15,000 $15,000
50,000 15,000 20,000 25,000 30,000 30,000
75,000 22,500 30,000 37,500 45,000 45,000
100,000 30,000 40,000 50,000 60,000 60,000
125,000 37,500 50,000 62,500 75,000 75,000
150,000 45,000 60,000 75,000 90,000 90,000
</TABLE>
(a) Average of highest three years of annual compensation.
(b) Benefits are computed based on the participant's average of highest
three years of annual compensation and the number of months of service,
up to a maximum of 60%. The Pension Plan does not provide for Social
Security integration.
As of June 30, 1995, Mr. Nania's salary for pension benefit purposes was
$146,957, he had one year of service accrued, and his estimated accrued
annual pension benefit payable upon retirement assuming full vesting (which
amount was frozen effective September 1, 1993) was $2,939. No amounts would
be payable to Mr. Wiatr or Mr. Grant pursuant to the Pension Plan.
Savings and Protection Plan
The Bank maintains a Profit Sharing Plan (the "Profit-Sharing Plan")
which benefits all full-time employees.
Effective April 1, 1994 the Bank amended the Profit-Sharing Plan to add
a 401K provision. This part of the Plan allows for a defined contribution by
employees with a match by the Bank of 50% on the first 6% of an employee's
salary. If an employee elects to contribute greater than 6% of their salary,
the Bank's match is capped at 50% of 6% of the employee's salary. The Bank's
matching contribution for the 1995 fiscal year, covering the period from July 1,
1994 to June 30, 1995, was $50,817. All contributions under the 401K are
vested when made, except to the extent adjustment may be necessary to comply
with applicable allocation restrictions which apply to 401K plans generally.
The Bank maintains a non-contributory profit-sharing feature to the
Profit-Sharing Plan which benefits all full-time employees and follows the
same eligibility requirements contained in the Bank's Pension Plan. The amounts
contributed to the Profit-Sharing Plan are determined annually by the Board of
Directors of the Bank on a discretionary basis. No contributions were made
to the profit-sharing feature of the Profit-Sharing Plan in the fiscal year
ended June 30, 1995.
The Board of Directors of the Bank reviews the structure of the Profit-
Sharing Plan annually, and makes whatever adjustments it deems appropriate.
The Bank has no long-term agreement or commitment to maintain the
Profit-Sharing Plan.
REPORT OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Board of Directors as a whole makes decisions on compensation for Mr.
Nania and Mr. Wiatr (with Messrs. Nania and Wiatr not participating in
decisions concerning their compensation). The Board is currently comprised
of eight members. Because the business of the Corporation currently consists
of the business of the Bank, no separate cash compensation is paid to the
executive officers of the Corporation. Except for Mr. Nania, who has
participated in discussions concerning Mr. Wiatr's compensation, no other
members of the Board who participate in these decisions are employed by the
Corporation or the Bank, neither do any of these members have an interlocking
relationship with a compensation committee of another entity, nor do they
participate in any of the Corporation's or Bank's executive compensation plans.
In addition, the Salary and Benefits Committee, none of whose members
are employees of the Corporation or the Bank, makes recommendations to the
Board of Directors concerning the grant of stock options pursuant to the
1986 Plan to employees, including director and non-director executive
employees. Based on these recommendations, the Board of Directors makes
decisions regarding the grant of any such options (with Messrs. Nania and
Wiatr not participating in decisions concerning themselves). This Committee
also makes recommendations to the Board of Directors on compensation for
other officers and employees and on other benefit plans for employees of the
Corporation and the Bank.
The Board of Directors does not have formal compensation policies. The
Board does, however, consider the Corporation's and the Bank's performance,
the accomplishment of business objectives, and the individual's contribution
to earnings and shareholder value in setting senior officer compensation
levels. The Board also considers the compensation paid by peer group
institutions with the goal of being competitive in the attraction and
retention of qualified executives. The two principal components of Mr.
Nania's and Mr. Wiatr's compensation are salary and stock options granted
under the Corporation's 1986 Plan. The Board considers granting bonuses
only when it determines that performance is meritorious and exceptional,
and only after consideration of such factors as the Bank's performance
for such year compared to prior years, and the time and effort exerted by
management. These decisions are made on a judgmental basis, and not
according to a specific formula. The Board decided not to increase the cash
compensation paid to the Chairman in 1995 over its 1994 level of $150,000,
but rather to recognize meritorious performance for the fiscal year ended
June 30, 1995 and prior years by payment of cash bonus and stock option bonus
as reflected in the Summary Compensation Table. The Board decided to
recognize meritorious performance by Mr. Wiatr in the fiscal year ended
June 30, 1995 by payment of the cash bonuses as reflected in the Summary
Compensation Table. Also, in accordance with his employment agreement,
the Board reviewed his annual base salary in June of 1995 and determined
to increase it to $170,000.
Board of Directors of the Corporation and the Bank
Willis H. Barton, Jr. Anthony J. Nania (not as to himself)
Herbert E. Bullock Suzanne L. Powers
Laurie G. Gonthier Francis J. Wiatr (not as to himself)
John V. Haxo Mary C. Williams
PERFORMANCE GRAPH
The following graph compares over the last five years the cumulative
total shareholder return on the Corporation's Common Stock, based on the
market price of the Corporation's Common Stock, with the cumulative total
return of companies on the S&P 500 Index and the reported total return of
companies on the KBW New England Savings Bank Index. Total return values
were calculated based on cumulative total return values assuming reinvestment
of dividends. The graph assumes a $100 investment on June 30, 1990.
<TABLE>
<CAPTION>
Worksheet for Proxy Graph
Cumulative shareholders return
June 90 June 91 June 92 June 93 June 94 June 95
<S> <C> <C> <C> <C> <C> <C>
S&P 500 100.00 107.4 121.7 138.3 140.2 176.7
NewMil Bancorp,
Inc. 100.00 48.4 92.8 92.8 119.3 167.4
KBW New England
Savings Bank
Index 100.00 77.6 146.6 198.6 314.2 325.6
</TABLE>
TRANSACTIONS WITH MANAGEMENT AND OTHERS
During the fiscal year ended June 30, 1995, certain directors and
officers of the Corporation and the Bank and associates of such directors
and officers have been and currently are customers of the Bank and the
Corporation and have had banking and other transactions with the Bank and
the Corporation. All transactions, including loans, if any, made to such
persons and their associates (a) were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time
for comparable transactions with other customers of the Bank, (b) were made
in the ordinary course of business, and (c) did not involve more than the
normal risk of collectability or present other unfavorable features.
During the fiscal year ended June 30, 1995, the Bank and the Bank's
Pension Plan and Profit-Sharing Plan paid Paine Webber fees or commissions
totaling $64,086. Director Laurie G. Gonthier is a Vice President-
Marketing of Paine Webber, in Middlebury, Connecticut. During the fiscal
year ended June 30, 1995, the Bank paid legal fees totaling $33,540 to the
law firm of Powers & Powers of which director Suzanne L. Powers was a
partner. During the fiscal year ended June 30, 1995 the Bank paid legal
fees totaling $50 to the law firm of Nania & Drury of which Anthony J.
Nania, Chairman and CEO of the Corporation and Chairman of the Bank, was
a partner.
PROPOSAL 2
AMENDMENT OF THE 1986 STOCK OPTION AND INCENTIVE PLAN
The Board of Directors has adopted certain amendments to the
Corporation's 1986 Stock Option and Incentive Plan (the "Employee Option
Plan") subject to approval by the shareholders. A copy of the Amended and
Restated 1986 Stock Option and Incentive Plan, which incorporates the
proposed amendments, is attached to this Proxy Statement as Exhibit A. The
Board believes that these amendments will operate as an additional incentive
for certain employees, encourage stock ownership by them, increase their
proprietary interest in the success of the Corporation and Bank, and encourage
them to remain as employees. The proposed material amendments to the
Employee Option Plan are as follows: (1) to extend the termination date of
the Employee Option Plan ten (10) years from December 10, 1995 to December
10, 2005; (2) to increase the aggregate number of shares of stock subject to
options which may be granted under the Employee Option Plan from its present
446,000 shares to 500,000 shares (an increase of 54,000 shares); (3) to
provide that, upon a "change in control" of the Corporation (as that term
is defined in the Employee Option Plan), (i) all options and stock
appreciation rights issued pursuant to the Employee Option Plan shall become
immediately exercisable in full for the remainder of their terms, and (ii)
the holders of such options and stock appreciation rights shall have the
right to require the Corporation to purchase the options and stock
appreciation rights upon the terms and conditions set forth in the Employee
Option Plan; (4) to provide that, with respect to Nonqualified Stock Options,
the Salary and Benefits Committee of the Board (which administers the
Employee Option Plan) may in its discretion extend the time within which a
participant or his or her estate or beneficiaries may exercise such options
following his or her termination of employment with the Corporation or the
Bank; (5) to provide that no individual is eligible to receive any grant
under the Employee Option Plan if, at the time, he or she is also eligible
to receive options under any other stock option plan maintained for outside
directors, including the Corporation's 1992 Stock Option Plan for Outside
Directors; (6) to provide that the Board shall not appoint any member of
the Board to the Salary and Benefits Committee if, during the one-year
period immediately prior to such proposed appointment, the member received a
grant or award pursuant to the Employee Option Plan or any other stock option
plan of the Corporation other than the 1992 Stock Option Plan for Outside
Directors; and (7) to provide the Board with greater flexibility to amend the
Employee Option Plan in the future. The amendments shall apply only to
options granted after August 22, 1995 and only if approved by shareholders.
Set forth below is a description of the Employee Option Plan as proposed
to be amended. The Employee Option Plan is designed to promote the long-term
success of the Corporation by providing financial incentives to the officers
and employees who have made and who are in a position to continue to make
significant contributions toward such success. The Employee Option Plan is
designed to be available to attract individuals of outstanding ability to
employment with the Corporation and the Bank and to encourage key employees to
acquire a proprietary interest in the Corporation and the Bank, to continue
employment with the Corporation, and to render superior performance during
their employment. The Employee Option Plan provides for incentive stock
options and nonqualified stock options ("Stock Options"), stock
appreciation rights ("SARs"), and performance awards. The maximum number of
shares reserved for the Employee Option Plan is presently 446,000 and, if
the amendment is approved, will increase to 500,000.
The Employee Option Plan is administered by the Salary and Benefits
Committee of the Board (the "Committee"). The Committee selects full-time
key employees eligible to participate in the Employee Option Plan, determines
the terms of awards, interprets the Employee Option Plan and makes all other
determinations for administering the Employee Option Plan. The proposed
amendments make clear that no person who may be in a position to receive an
option or other grant under the Employee Option Plan may be a member of the
Committee.
The Employee Option Plan provides that certain of the stock options are
intended to qualify as "Incentive Stock Options" within the meaning of
Section 422A of the Code. Incentive Stock Options may entitle the optionee
to favorable income tax treatment if certain required holding periods are
met. Other stock options will be granted as nonqualifying stock options.
Incentive Stock Options will be issued at an option price based upon the fair
market value of the shares of common stock on the date of grant.
Nonqualifying stock options will be issued at an option price determined by
the Committee, but may not be less than 85% of the market value of the
Corporation's stock at the time the option is issued. Exercise of a stock
option will be subject to terms and conditions set by the Committee and set
forth in the instrument evidencing the stock option, if any. Stock options
may be exercised with either cash or shares of common stock. The date of
expiration of a stock option will be fixed by the Committee, but may not be
longer than ten years from the date of grant.
As to Incentive Stock Options, the Corporation will not be entitled to a
deduction for tax purposes upon grant or exercise of an Incentive Stock
Option if the optionee holds the shares for at least two years after the date
of exercise. For an option to qualify as an Incentive Stock Option, the
optionee generally must be an employee of the Corporation or a subsidiary
from the date the option is granted through a date within three (3) months
before the date of exercise. If all of the requirements for the Incentive
Stock Options are met, except for the special holding period rules set forth
in the preceding sentence, the Corporation will be allowed a deduction when
the optionee disposes of the stock, generally in an amount equal to the
excess of the fair market value of the stock at the time the option was
exercised over the option exercise price (but not in excess of the gain
realized on the sale). When the optionee exercises a nonqualified option,
the Bank will be entitled to a tax deduction 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 (or, if the optionee is subject to
certain restrictions imposed by the securities laws, upon the lapse of
those restrictions, unless the optionee makes a special tax selection
within thirty days after the exercise to have income determined without
regard to restrictions).
SARs may be granted in conjunction with all or any part of any
Stock Option. SARs entitle the holder of a Stock Option with respect to
which SARs are granted to surrender the Stock Option, or any applicable
unexercised portion thereof, and to receive the difference (the "SAR
Difference") between the (i) fair market value of the shares of Common Stock
subject to the surrendered option at the time the SARs are exercised, and
(ii) the option price of such shares. The Corporation, at the sole
discretion of the Committee, will pay such difference either by delivery of
shares of Common Stock or cash or some combination of Common Stock and cash.
SARs may be exercised at such time or times and to the extent, but only to
the extent, that the related Stock Options may be exercised, and only
after the holder has held the SAR and related Stock Option for a period of
at least six months. The SAR holder will recognize income for federal
income tax purposes, and the Corporation will be entitled to a deduction
for federal income tax purposes, upon receipt of and in the amount of the
SAR Difference.
Performance awards may be granted by the Committee from time to time
as an additional incentive to management accountability and as a means of
performance measurement. Awards may be measured against individual
achievements, those of the Corporation or both. Upon making an award, the
Committee will determine the stated value of such award (the "Stated Value").
The Stated Value will be a function of the fair market value of a share of
Common Stock. The earning of an award (the "Performance Shares") by the
key employee will be calculated by reference to a performance target for
such shares for a prescribed period of time. The performance target will be
based on a specific dollar amount of growth or on a percentage rate of
improvement in such elements as the Corporation's earnings per share, net
income before securities transactions, return on equity or other such
measures related to growth or improvement of the Corporation as the
Committee shall determine. To the extent that a performance target is either
not achieved or is exceeded, the Committee shall determine the value deemed
to have been earned. Performance Share payments will be made in cash or
Common Stock or some combination of cash and Common Stock, at the discretion
of the Committee. The recipient will recognize income for federal income
tax purposes, and the Corporation will be entitled to a deduction for
federal income tax purposes, in the amount of and at the time of earning
performance shares.
Stock options and SARs will expire based upon a schedule following
termination of employment due to retirement, disability or death. The
extent to which Performance Shares covered by a performance award agreement
shall be payable following the time of termination of employment due to
disability or death is subject to the discretion of the Committee. Upon
the termination of employment for any reason other than retirement,
disability or death, all Stock Options will terminate on the earlier of (i)
their expiration date, or (ii) three (3) months following termination
or, in the case of Nonqualifying Stock Options, such longer period as the
Committee may determine in its sole discretion. In no event may a stock
option or an SAR be exercised after the expiration of its term.
The Employee Option Plan may be amended by the Board, in the future,
except that it may not increase the number of Shares subject to such Plan,
modify the requirements for eligibility for grants under such Plan, or
materially increase the benefits accruing to Participants under the Plan
without shareholder approval. At the present time, the Committee has not
identified any potential recipients of Stock Options, SARs or Performance
Shares which may be granted in the future under the proposed amendments to
the Employee Option Plan. Currently, 68,530 option shares are available for
grant under the Plan; 9,900 SARs are outstanding and no Performance Shares
have been granted. The 54,000 additional option shares to be made available
pursuant to this amendment would have a market value of $357,750 in the
aggregate based upon a fair market value of $6.625 per share on September 1,
1995.
THE ADOPTION OF THE AMENDMENTS TO THE 1986 STOCK OPTION AND INCENTIVE
PLAN MUST BE RATIFIED BY THE AFFIRMATIVE VOTE OF AT LEAST A MAJORITY OF
THE VOTES PRESENT IN PERSON OR BY PROXY AT THE ANNUAL MEETING.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS
VOTE "FOR" THE ADOPTION OF THE AMENDMENTS TO THE 1986 STOCK OPTION AND
INCENTIVE PLAN.
PROPOSAL 3
AMENDMENT OF THE 1992 STOCK OPTION PLAN
FOR OUTSIDE DIRECTORS
The Board of Directors has adopted certain amendments to the
Corporation's 1992 Stock Option Plan for Outside Directors (the "Director
Option Plan"), subject to approval by shareholders. The Board believes that
these amendments will provide further incentives to non-employee directors
of the Corporation, provide an attraction and retention vehicle for qualified
directors, encourage director stock ownership, and generally align the
interests of the directors more closely with those of the shareholders. The
proposed material amendments to the Director Option Plan are as follows:
(1) to provide that, commencing on June 30, 1996 and continuing on June 30 of
each year thereafter until the Director Option Plan terminates, each person
who is then a director of the Corporation shall receive an Option to purchase
2,000 shares of the Corporation's Common Stock; (2) to delete the provisions
of the Director Option Plan which provide for the grant of Options to
Directors upon their re-election to the Board; and (3) to delete the
provisions of the Director Option Plan which restrict the exercise of Options
to fiscal quarters immediately following fiscal quarters in which dividends
have been declared.
The amendments to the Director Option Plan are subject to the approval
by the shareholders of the Corporation. Set forth below is a description
of the Director Option Plan, as proposed to be amended. The Director Option
Plan provides for the issuance of nonqualified stock options ("Options"). The
maximum number of shares reserved for the Director Option Plan is 130,000.
A copy of the Amended and Restated 1992 Stock Option Plan for Outside
Directors, which incorporates the amendments summarized above, is attached to
this Proxy Statement as Exhibit B.
The Director Option Plan is administered by the Salary and Benefits
Committee of the Board (the "Committee"). Each member of the Committee must
be a disinterested person under Rule 16b-3 promulgated pursuant to the
Securities Exchange Act of 1934. The Committee has the authority to
interpret the Director Option Plan, to prescribe, amend and rescind rules
and regulations relating to it and to make all other determinations with
respect to the administration of the Director Option Plan. The Committee,
however, has no discretion to determine the non-employee directors who will
receive options, the number of shares subject to options, or the terms upon
which, the times at which or the periods within which shares may be acquired
or the options may be acquired and exercised.
A maximum of 130,000 shares of Common Stock may be issued to individuals
upon exercise of Options under the Directors Option Plan, except that such
amount may be adjusted for stock dividends, stock splits, recapitalizations,
mergers, consolidations, combinations or exchanges of shares, separations,
reorganizations or liquidations. Options may be granted only to members of
the Board of Directors of the Corporation who are not otherwise employees of
the Corporation or any of its subsidiaries on the date of grant.
Each individual who was a participant on the effective date of the
original Director Option Plan adopted in 1992 received an automatic grant
of an Option to purchase 10,000 shares of Common Stock. Directors who are
newly elected to the Board after the effective date of the Director Option
Plan receive an automatic grant of an Option to purchase 3,000 shares of
Common Stock on the date of such election (or, if elected by the Board, on the
date of the annual meeting of the shareholders of the Corporation immediately
following such election)(no such 3,000 Share Option grant has been made to
date). Under the original Director Option Plan, continuing directors receive
automatic grants of options when they are re-elected to the Board of Directors
(every 3 years). The proposed amendments to the Director Option Plan provide
that every person serving as a director on June 30, 1996 and on each June 30
thereafter until June 30, 2002 shall, so long as he or she is a director on
that date, receive an automatic grant of options on each such date to
purchase 2,000 shares of Common Stock. Such automatic grant, however, will
be reduced pro rata or not made at all if the number of shares available
for grant under the Director Option Plan is not sufficient to make the
automatic grants on the applicable date.
The per share exercise price of all Options shall be equal to the fair
market value of a share of the Common Stock on the date of grant. No
Option may be exercised until six months after it is granted. Options are
exercisable for a period of ten years from the date of grant. The number
of shares which may be purchased at any one time is 100 shares, a multiple
thereof or the total number at the time purchasable under the Option. The
exercise price is payable in cash or by certified check, bank draft or
postal express money order. No Option may be assigned or transferred except
by will and/or by the laws of descent and distribution and may be exercised
during the life of any director only by the director. If a director
terminates service as a director for any reason, any outstanding Option held
by the director will terminate on the earlier of the date on which the
Option would otherwise expire or three years after such termination. If a
director's service as a director is terminated by disability, death or
retirement upon obtaining age 70, the director or the representative of the
director's estate or his or her beneficiary to whom the Option has been
transferred will have the right to exercise any then outstanding Options
until the date on which they would otherwise expire. Unless sooner
terminated by the Board, the Director Option Plan will remain in effect for
a period of ten (10) years after the effective date of the Director Option
Plan until October 23, 2002. No Options may be granted after the
termination of the Director Option Plan.
Upon the exercise of an Option, an optionee will recognize ordinary
compensation income in an amount equal to the excess of the fair market of
the Common Stock on the date of the exercise over the option price. Any gain
or loss recognized by the optionee on the subsequent disposition of the
stock will be capital gain or loss. The Corporation will be entitled to a
deduction for federal income tax purposes at the same time and in the same
amount as the optionee is required to recognize ordinary compensation
income as described above. To the extent that an optionee recognizes capital
gain as described above, the Corporation will not be entitled to a deduction
for federal income tax purposes.
THE ADOPTION OF THE AMENDMENTS TO THE 1992 STOCK OPTION PLAN FOR OUTSIDE
DIRECTORS MUST BE RATIFIED BY THE AFFIRMATIVE VOTE OF AT LEAST A MAJORITY OF
THE OUTSTANDING SHARES OF THE CORPORATION'S COMMON STOCK.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS
VOTE "FOR" THE ADOPTION OF THE AMENDMENT TO THE 1992 STOCK OPTION PLAN FOR
OUTSIDE DIRECTORS.
PROPOSAL 4
RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND AS INDEPENDENT
AUDITORS FOR THE FISCAL YEAR ENDING JUNE 30, 1996
The Board of Directors of the Corporation has made arrangements with
Coopers & Lybrand, independent certified public accountants, to be its
independent auditors for the fiscal year ending June 30, 1996 subject to
ratification by the Corporation's shareholders. Neither the firm nor any of
its partners has any direct or indirect financial interest in, or any
connection (other than as independent auditors) with the Corporation or the
Bank. A representative of Coopers & Lybrand is expected to be present at
the Meeting and will be provided with an opportunity to make a statement if
he or she desires to do so and to respond to shareholders' questions.
THE INDEPENDENT AUDITORS MUST BE RATIFIED BY A MAJORITY OF THE VOTES
PRESENT IN PERSON OR BY PROXY AT THE ANNUAL MEETING.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
RATIFICATION.
SHAREHOLDER PROPOSALS
Proposals of the Corporation's shareholders intended to be presented at
the 1995 annual meeting of the Corporation must be received by the
Corporation not later than May 9, 1996, to be included in the Corporation's
proxy statement and form of proxy relating to that meeting. Any such
proposal must comply with Rule 14a-8 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended.
OTHER MATTERS
At the time of preparation of this Proxy Statement, the Board of
Directors of the Corporation knew of no other matters to be presented for
action at the 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 Meeting or any adjournment(s) thereof, the proxies
will be voted in accordance with the determination of a majority of the Board of
Directors.
By order of the Board of Directors,
BETTY F. PACOCHA
Secretary
September 20, 1995
EXHIBIT A
NEWMIL BANCORP, INC.
AMENDED AND RESTATED
1986 STOCK OPTION AND INCENTIVE PLAN
1. Purpose. This 1986 Stock Option and Incentive Plan (the "Plan") of
NewMil Bancorp, Inc. (the "Corporation") is intended to advance the
interests of the Corporation and the New Milford Savings Bank (the
"Bank") by providing certain of their employees with an additional
incentive, encouraging stock ownership by such employees, increasing
their proprietary interest in the success of the Corporation and the
Bank and encouraging them to remain employees of the Corporation and the
Bank.
2. Definitions. Whenever used herein, the following terms shall have the
meanings set forth below:
(a) "Board" means the Board of Directors of the Corporation.
(b) "Code" means the Internal revenue Code of 1986, as it may be
amended from time to time.
(c) "Committee" means the Salary and Benefits Committee appointed by
the Board to administer this Plan pursuant to Section 3 hereof.
(d) "Disability" means a permanent and total disability as defined
in Section 422(c)(6) of the Code.
(e) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(f) "Fair Market Value" means the average of closing bid and ask
prices for the Shares on the date as of which the determination is
made (or if no such quotation occurred on that date, on the next
preceding date on which there was such a quotation), as made
available for publication by the National Association of
Securities Dealers Automated Quotation System, or if no such
prices are available, the fair market value as determined by
rules to be adopted by the Committee.
(g) "Grantee" means an employee of the Corporation or one of its
subsidiaries to whom an option is granted.
(h) "New Milford Group" means the Corporation or the Bank, or a
corporation, or a parent corporation or subsidiary corporation
of them, issuing or assuming an Option in a transaction of the
type described in Section 424(a) of the Code. The terms "parent
corporation" and "subsidiary corporation" shall have the meanings
assigned to such terms by Section 424 of the Code.
(i) "Incentive Stock Option" means an Option granted pursuant to
the Incentive Stock Option provisions as set forth in Part II of
this Plan.
(j) "Nonqualified Stock Option" means an Option granted pursuant to
the Nonqualified Stock Option provisions as set forth in Part III
of this Plan.
(k) "Option" means an option to purchase Shares pursuant to this Plan.
(l) "Participant" means an individual to whom an Option is granted, or
a Performance Award is made under this Plan.
(m) "Performance Award" means an award made to a Participant pursuant
to Part IV of this Plan.
(n) "Shares" means shares of the Corporation's common stock.
(o) "Stock Appreciation Right" means a stock appreciation right granted
to a Participant pursuant to Section 3 of Part II or Part III of
this Plan.
3. Administration. This Plan shall be administered by a Salary and Benefits
Committee appointed by the Board. The Committee shall consist of three
members of the Board who are not eligible to participate in the Plan. The
Board, at its pleasure, may remove members from or add members to the
Committee. A majority of Committee members shall constitute a quorum of
members, and the actions of the majority shall be final and binding on the
whole Committee.
In addition to the other powers granted to the Committee under this Plan, the
Committee shall have the power, subject to the terms of this Plan: (i) to
determine which of the eligible employees shall be granted Options, Stock
Appreciation Rights and Performance Awards; (ii) to determine the time or
times when Options, Stock Appreciation Rights and Performance Awards shall
be granted and to determine the number of Shares subject to each Option,
Stock Appreciation Right and Performance Award; (iii) to grant Options with
or without related Stock Appreciation Rights; (iv) to determine whether
Stock Appreciation Rights and Performance Awards shall be settled in cash,
in Shares, or in a combination of cash and Shares; (v) to accelerate or
extend (except for Incentive Stock Options) the date on which a previously
granted Option or Stock Appreciation Right may be exercised (including
extensions after the employee has left the employ of the Corporation
or Bank); (vi) to prescribe the form of agreement evidencing Options, Stock
Appreciation Rights and Performance Awards granted pursuant to this Plan;
(vii) to establish corporate performance goals for purposes of the granting
of Performance Awards; and (viii) to construe and interpret this Plan and
the agreements evidencing Options, Stock Appreciation Rights and
Performance Shares granted pursuant to this Plan, and to make all other
determinations and take all other actions necessary or advisable for the
administration of this Plan.
Notwithstanding the above, the Board shall not appoint any member of the
Board to the Committee if, during the one-year period immediately prior to
such proposed appointment, the member received a grant or award pursuant to
the Plan or any other plan of the Corporation other than the 1992 Stock
Option Plan for Outside Directors.
4. Eligibility. The individuals who shall be eligible to receive Options,
Stock Appreciation Rights and Performance Awards shall be such full-time
employees employed by a member of the "New Milford Group" as shall be
selected by the Committee. Without otherwise limiting the foregoing, no
individual is eligible to receive any grant under this Plan if, at the time,
he is also eligible to receive options under any stock option plan for any
member of the New Milford Group maintained for outside directors of such
member, such as the Corporation's 1992 Stock Option Plan for Outside
Directors. Participants chosen to participate under this Plan may be
granted an Incentive Stock Option (with or without a related Stock Appreciation
Right), a Nonqualified Stock Option (with or without a related Stock
Appreciation right), Performance Awards or any combination thereof; provided,
however, that no person shall be eligible to receive or exercise any rights
under this Plan for a period of one (1) year following the effective date of
this Plan if such person owns, directly or indirectly, five percent (5%)
or more of the Bank's total outstanding Shares or would own such amount as a
result of the exercise of Options or Performance Awards granted hereunder.
5. Shares Subject to this Program. The Shares subject to Options, Stock
Appreciation Rights and Performance Awards shall be either authorized and
unissued Shares or treasury Shares. The aggregate number of Shares which
may be issued pursuant to the exercise of Options and Stock Appreciation
Rights and granted pursuant to a Performance Award under this Program shall
be 500,000. Except as provided below, if an Option shall expire and
terminate for any reason, in whole or in part, without being exercised, or
if any Shares subject to a Performance Award shall be forfeited for any
reason, the number of Shares as to which such expired or terminated Option
shall not have been exercised or so forfeited may again become available for
the grant of Options, Stock Appreciation Rights or Performance Awards. If
a Stock Appreciation Right is exercised in whole or in part, and, as a
result the related Nonqualified Stock Option or Incentive Stock Option is
cancelled to the extent of the number of Shares with respect to which the
Stock Appreciation Right was exercised, such number of Shares shall not
again be available for the grant of Options, Stock Appreciation Rights or
Performance Awards.
6. No Tandem Options. There shall be no terms and conditions under an
Option which provide that the exercise of an Incentive Stock Option
reduces the number of Shares for which a Nonqualified Stock Option may be
exercised; and there shall be no terms and conditions under an Option which
provide that the exercise of a Nonqualified Stock Option reduces the number
of Shares for which an Incentive Stock Option may be exercised.
II. INCENTIVE STOCK OPTION PROVISIONS
1. Grant of Incentive Stock Options. Subject to the provisions of this
Part II, the Committee shall from time to time determine those individuals
eligible pursuant to Section 4 of Part I to whom Incentive Stock Options
shall be granted and the number of Shares subject to, and terms and
conditions of, such Options. The aggregate Fair Market Value, as determined
as of the date any Incentive Stock Option is granted of the Shares for which
an individual has been or may be granted Incentive Stock Options (under all
plans of the New Milford Group) which are exerciseable for the first time in
any calendar year shall not exceed $100,000, or such excess Options shall be
treated as Options which are not Incentive Stock Options. Anything herein
to the contrary notwithstanding, no Incentive Stock Option shall be granted
to an employee if, at the time the Incentive Stock Option is granted, such
employee owns stock possessing more than 10% of the total combined voting
power of all classes of stock of any member of the New Milford Group unless
the option price is at least 110% of the Fair Market Value of the Shares
subject to the Incentive Stock Option at the time the Incentive Stock Option
is granted and the Incentive Stock Option is not exercisable after the
expiration of five (5) years from the date the Incentive Stock Option is
granted.
2. Terms and Conditions of Incentive Stock Options. Each Incentive Stock
Option may be evidenced by an option agreement which shall be in such form
as the Committee shall from time to time approve, and which shall comply
with and be subject to the following terms and conditions:
(a) Number of Shares. Each Incentive Stock Option agreement shall
state the number of shares covered by the agreement.
(b) Option Price and Method of Payment. The option price of each
Incentive Stock Option shall be the Fair Market Value of the Shares on the
date the Incentive Stock Option is granted. The option price shall be
payable on exercise of the Option (i) in cash or by certified check, bank
draft or postal or express money order, (ii) by the surrender of Shares
then owned by the Participant, or (iii) partially in accordance with clause
(i) and partially in accordance with clause (ii) of this Section 2(b).
Shares so surrendered in accordance with clause (ii) or (iii) shall be valued at
the Fair Market Value thereof on the date of exercise, surrender of such
Shares to be evidenced by delivery of the certificate(s) representing such
Shares in such manner, and endorsed in such form, or accompanied by stock
powers endorsed in such form, as the Committee may determine.
(c) Option Period.
(i) General. The period during which an Incentive Stock Option
shall be exercisable shall not exceed ten (10) years from the date such
Incentive Stock Option is granted; provided, however, that such Option may be
sooner terminated in accordance with the provisions of this Section 2(c).
Subject to the foregoing, the Committee may establish a period or periods
with respect to all or any part of the Incentive Stock Option during which
such Option may not be exercised and at the time of a subsequent grant of an
Incentive Stock Option or at such longer time as the Committee may determine
accelerate the right of the Participant to exercise all or any part of the
Incentive Stock Option not then exercisable. The number of Shares which
may be purchased at any one time shall be 50 Shares, a multiple thereof or
the total number at the time purchasable under the Incentive Stock Option.
(ii) Termination of Employment. If the Participant ceases to be
an employee of any member of New Milford Group for any reason other than
Disability or death, any then outstanding Incentive Stock Option held by the
Participant shall terminate on the earlier of the date on which such Option
would otherwise expire or three (3) months after such termination of
employment, and such Option shall be exercisable, prior to its termination,
to the extent it was exercisable as of the date of termination of employment.
The Committee may, in its discretion, extend the period for exercise beyond
three (3) months after termination, in which case the Incentive Stock Option
shall be deemed to be a Nonqualified Stock Option.
(iii) Disability. If a Participant's employment is terminated by
reason of Disability, any then outstanding Incentive Stock Option held by
the Participant shall terminate on the earlier of the date on which such
Option would otherwise expire or one (1) year after such termination of
employment, and such Option shall be exercisable, prior to its termination,
to the extent it was exercisable as of the date of termination of employment.
The Committee may, in its discretion, extend the time period for exercise
beyond the one (1) year, in which case the Incentive Stock Option shall be
deemed to be a Nonqualified Stock Option.
(iv) Death. If a Participant's employment is terminated by death,
the representative of the Participant's estate or beneficiaries thereof to
whom the Option has been transferred shall have the right during the one (1)
year period following the date of the Participant's death to exercise any
then outstanding Incentive Stock Options in whole or in part. The number of
Shares in respect of which an Incentive Stock Option may be exercised after
a Participant's death shall be the number of Shares in respect of which such
Option could be exercised as of the date of the Participant's death. In no
event may the period for exercising an Incentive Stock Option extend beyond
the date on which such Option would otherwise expire. The Committee may, in
its discretion, extend the time period for exercise beyond the one (1) year,
in which case the Incentive Stock Option shall be deemed to be a Nonqualified
Stock Option.
(d) Non-transferability. An Incentive Stock Option shall not be
transferable or assignable by the Participant other than by will or the
laws of descent and distribution; and shall be exercisable during the
Participant's lifetime only by the Participant.
(e) Separate Agreements. Nonqualified Options and/or Performance
Awards may not be memorialized in the same agreement as an Incentive Stock
Option.
3. Stock Appreciation Rights.
(a) Grant. Stock Appreciation Rights related to all or any portion
of an Incentive Stock Option may be granted by the Committee to any
Participant in connection with the grant of an Incentive Stock Option to such
Participant. Each Stock Appreciation Right shall be subject to such terms
and conditions (which may include limitations as to the time and when such
Stock Appreciation Right becomes exercisable and when it ceases to be
exercisable that are more restrictive than the limitations on the exercise
of the Incentive Stock Option to which it relates) not inconsistent with
the provisions of this Part II as shall be determined by the Committee and
included in the agreement relating to such Incentive Stock Option and Stock
Appreciation Right, subject in any event, however, to the following terms
and conditions of this Section 3.
(b) Exercise. No Stock Appreciation Right shall be exercisable
after the date the related Incentive Stock Option shall cease to be
exercisable, and no Stock Appreciation Right shall be exercisable with
respect to such related Incentive Stock Option or portion thereof unless
such Incentive Stock Option or portion thereof shall itself be exercisable at
that time. A Stock Appreciation Right shall be exercised only upon surrender of
the related Incentive Stock Option or portion thereof in respect of which
the Stock Appreciation Right is then being exercised. A Stock Appreciation
Right related to an Incentive Stock Option shall be exercisable only at a
date when the then Fair Market Value of a Share exceeds the option price per
share specified in the related Incentive Stock Option.
(c) Amount of Payment. On exercise of a Stock Appreciation Right, a
Participant shall be entitled to receive an amount equal to the product of
(i) the amount by which the Fair Market Value of a Share on the date of
exercise of the Stock Appreciation Right exceeds the option price per share
specified in the related Incentive Stock Option and (ii) the number of shares
in respect of which the Stock Appreciation Right shall have been exercised.
(d) Form of Payment. The Committee shall have the sole discretion
either (i) to determine the form in which payment in settlement of a Stock
Appreciation Right will be made (i.e., cash, Shares or any combination
thereof), or (ii) to consent to or disapprove the election by the Participant
to receive cash in full or partial settlement of a Stock Appreciation Right,
such consent or disapproval to be given at any time after the election to
which it relates. If settlement of a Stock Appreciation Right, or portion
thereof, is to be made in the form of Shares, the number of Shares to be
distributed shall be the largest whole number obtained by dividing the cash
sum otherwise distributable in respect of such settlement by the Fair Market
Value of a Share on the date of exercise of the Stock Appreciation Right.
The value of any fractional Share shall be paid in cash.
(e) Effect of Exercise of Right or Related Option. If the related
Incentive Stock Option is exercised in whole or in part, then the Stock
Appreciation Right with respect to the Shares purchased pursuant to such
exercise (but not with respect to any unpurchased Shares) shall be terminated
as of the date of exercise.
(f) Non-transferability. A Stock Appreciation Right shall not be
transferable or assignable by the Participant other than by will or by the
laws of descent and distribution, shall not be transferred other than
together with the Incentive Stock Option to which it relates, and shall be
exercisable during the Participant's lifetime only by the Participant.
(g) Termination of Employment. If the Participant ceases to be an
employee of any member of the New Milford Group for any reason, each
outstanding Stock Appreciation Right shall only be exercisable for such
period and to such extent as the related Incentive Stock Option or portion
thereof.
III. NONQUALIFIED STOCK OPTION PROVISIONS
1. Grant of Nonqualified Stock Options. Subject to the provisions of this
Part III, the Committee shall from time to time determine those individuals
eligible pursuant to Section 4 of Part I to whom Nonqualified Stock Options
shall be granted and the number of shares subject to, and terms and
conditions of, such Options.
2. Terms and Conditions of Nonqualified Stock Options. Each Nonqualified
Stock Option may be evidenced by an option agreement which shall be in such
form as the Board shall from time to time approve, and which shall comply
with and be subject to the following terms and conditions:
(a) Number of Shares. Each Nonqualified Stock Option agreement
shall state the number of Shares covered by the agreement.
(b) Option Price and Method of Payment. The option price of each
Nonqualified Stock Option shall be such price as the Committee, in its
discretion, shall establish, and the Committee may, in its discretion,
reduce the option price of such Option at any time prior to the exercise of
the Option; provided, however, that the option price may not be less than
85% of the Fair Market Value, if any, of the Shares. The option price shall
be payable on exercise of the Option (i) in cash or by certified check, bank
draft or postal or express money order, (ii) by the surrender of Shares then
owned by the Participant, or (iii) partially in accordance with clause (i)
and partially in accordance with clause (ii) of this Section 2(b). Shares
so surrendered in accordance with clause (ii) or (iii) shall be valued at the
Fair Market Value thereof on the date of exercise, surrender of such Shares
to be evidenced by delivery of the certificate(s) representing such Shares
in such manner, and endorsed in such form, or accompanied by stock powers
endorsed in such form, as the Committee may determine.
(c) Option Period.
(i) General. The period during which a Nonqualified Stock Option
shall be exercisable shall not exceed ten (10) years from the date such
Nonqualified Stock Option is granted; provided, however, that such Option
may be sooner terminated in accordance with the provisions of this Section
2(c). Subject to the foregoing, the Committee may establish a period or
periods with respect to all or any part of the Nonqualified Stock Option
during which such Option may not be exercised and at the time of a subsequent
grant of a Nonqualified Stock Option or at such other time as the Committee
may determine accelerate the right of the Participant to exercise all or any
part of the Nonqualified Stock Option not then exercisable. The number of
Shares which may be purchased at any one time shall be 50 Shares, a multiple
thereof or the total number at any time purchasable under the Nonqualified
Stock Option.
(ii) Termination of Employment. If the Participant ceases to be
an employee of any member of the New Milford Group for any reason other than
Disability or death, any outstanding Nonqualified Stock Option held by the
Participant shall terminate on the earlier of (i) the date on which such Option
would otherwise expire, or (ii) three (3) months after such a termination of
employment or such longer period as the Committee may determine in its sole
discretion with respect to any individual grant at the time of grant or
termination; and such Option shall be exercisable to the extent it was
exercisable as of the date of termination of employment.
(iii) Disability. If a Participant's employment is terminated by
Disability, the terms of any then outstanding Nonqualified Stock Option held
by the Participant shall terminate on the earlier of (i) the date on which
such Option would otherwise expire, or (ii) one (1) year after such
termination of employment or such longer period as the Committee may
determine in its sole discretion with respect to any individual grant
at the time of grant or Disability; and such Option shall be exercisable to
the extent it was exercisable as of the date of termination of employment.
(iv) Death. If a Participant's employment is terminated by death,
the representative of the Participant's estate or beneficiaries thereof to
whom the Option has been transferred shall have the right during the one (1)
year period following the date of the Participant's death to exercise any then
outstanding Nonqualified Stock Options in whole or in part or such longer
period as the Committee may determine in its sole discretion with respect to
any individual grant at the time of grant or subsequent to death. The number
of Shares in respect to which a Nonqualified Stock Option may be exercised
after a Participant's death shall be the number of shares in respect of which
such Option could be exercised as of the date of the Participant's death. In
no event may the period for exercising a Nonqualified Stock Option extend
beyond the date on which such Option would otherwise expire.
(d) Non-transferability. A Nonqualified Stock Option shall not be
transferable or assignable by the Participant other than by will or the laws
of descent and distribution, and shall be exercisable during the
Participant's lifetime only by the Participant.
3. Stock Appreciation Rights.
(a) Grant. Stock Appreciation Rights related to all or any portion of
a Nonqualified Stock Option may be granted by the Committee to any
Participant in connection with the grant of a Nonqualified Stock Option or
unexercised portion thereof held by the Participant at any time and from time
to time during the term thereof. Each Stock Appreciation Right shall be
subject to such terms and conditions (which may include limitations as to the
time when such Stock Appreciation Right becomes exercisable and when it
ceases to be exercisable that are more restrictive then the limitations on
the exercise of the Nonqualified Stock Option to which it relates) not
inconsistent with the provisions of this Part III as shall be determined by
the Committee and included in the agreement relating to such Nonqualified
Stock Option and Stock Appreciation Right, subject in any event, however, to
the following terms and conditions of this Section 3.
(b) Exercise. No Stock Appreciation Right shall be exercisable with
respect to such related Nonqualified Stock Option or portion thereof unless
such Nonqualified Stock Option or portion shall itself be exercisable at that
time. A Stock Appreciation Right shall be exercised only upon surrender of
the related Nonqualified Stock Option or portion thereof in respect of which
the Stock Appreciation Right is then being exercised.
(c) Amount of Payment. On exercise of a Stock Appreciation Right, a
Participant shall be entitled to receive an amount equal to the product of
(i) the amount by which the Fair Market Value of a Share on the date of
exercise of the Stock Appreciation Right exceeds the option price per share
specified in the related Nonqualified Stock Option and (ii) the number of
shares in respect to which the Stock Appreciation Right shall have been
exercised.
(d) Form of Payment. The Committee shall have the sole discretion
either (i) to determine the form in which payment in settlement of a Stock
Appreciation Right will be made (i.e., cash, Shares or any combination
thereof), or (ii) to consent to or disapprove the election by the Participant
to receive cash in full or partial settlement of the Stock Appreciation Right,
such consent or disapproval to be given at any time after the election to
which it relates. If settlement of a Stock Appreciation Right, or portion
thereof, is to be made in the form of Shares, the number of Shares to be
distributed and shall be the largest whole number obtained by dividing the
cash sum otherwise distributable in respect of such settlement by the Fair
Market Value of a Share on the date of exercise of the Stock Appreciation
Right. The value of any fractional Share shall be paid in cash.
(e) Effect of Exercise of Right or Related Option. If the related
Nonqualified Stock Option is exercised in whole or in part, then the Stock
Appreciation Right with respect to the Shares purchased pursuant to such
exercise (but not with respect to any unpurchased Shares) shall be terminated
as of the date of exercise.
(f) Non-transferability. A Stock Appreciation Right shall not be
transferable or assignable by the Participant other than by will or the
laws of descent and distribution, shall not be transferred other than together
with the Nonqualified Stock Option to which it relates, and shall be
exercisable during the Participant's lifetime only by the Participant.
(g) Termination of Employment. If the Participant ceases to be an
employee of any member of the New Milford Group for any reason, each
outstanding Stock Appreciation Right shall be exercisable for such period
and to such extent as the related Nonqualified Stock Option or portion
thereof.
IV. PERFORMANCE AWARD PROVISIONS
1. Grant of Performance Awards. Subject to the provisions of this Part IV,
the Committee shall from time to time determine those individuals eligible
pursuant to Section 4 of Part I to whom Performance Awards shall be granted
and the amount and terms and conditions of such Performance Awards.
2. Terms and Conditions of Performance Awards. Each grant of Performance
Awards shall be evidenced by an agreement which shall be in such form as the
Committee shall from time to time approve, and which shall comply with and be
subject to the following terms and conditions:
(a) Amount of Award. Each Performance Award agreement shall state the
number of Shares covered by the agreement which become payable if the
performance criteria specified in the agreement are achieved.
(b) Performance Criteria. Each time the Committee approves the
granting of Performance Awards, it shall establish corporate performance
goals to be attained by the Bank or individual Participants or both and the
date or dates (i.e., earn-out dates) by which such goals must be achieved
for the Participant to be entitled to payment of an award. These goals shall
be subject to subsequent modification by the Committee, as appropriate based
on changes in business conditions. To the extent that a performance goal is
either not achieved or is exceeded by the applicable earn-out date or dates
specified in the agreement, the amount of the award to be earned shall be
determined by the Committee.
(c) Disability of Death. No Performance Award shall be paid for any
period after the termination of the Participant's employment; provided,
however, that if a Participant's employment is terminated by Disability or
death, then the Committee shall determine the extent to which any Shares
covered by a Performance Award agreement but not yet payable shall become
payable.
(d) Form of Payment. The Committee shall have the sole discretion to
determine the form in which payment of the Performance Award shall be made
(i.e., in cash, in Shares, or in any combination thereof). Instead of
distributing the number of Shares covered by the Performance Award agreement
as of the applicable earn-out date, the Committee may distribute the cash
equivalent (determined on the basis of Fair Market Value of a Share at such
earn-out date) for all or a portion of such Shares.
V. MISCELLANEOUS
1. Effective Date. This Plan, as amended, shall become effective on August
22, 1995; provided, however, that if the Plan is not approved by the holders
of a majority of the outstanding Shares of the Bank prior to August 22, 1996,
this amended Plan and all Options, Stock Appreciation Rights and Performance
Awards granted hereunder shall be null and void and shall be of no effect.
2. Duration of Program. Unless sooner terminated, the Plan shall remain in
effect for a period of ten years after August 22, 1995, and shall thereafter
terminate. No Incentive Stock Option, Nonqualified Stock Options or
Performance Awards may be granted after the termination of this Plan;
provided, however, that except as otherwise provided in Section 1 of this Part
V, termination of the Plan shall not affect any Options, Stock Appreciation
Rights or Performance Awards previously granted, which such Options, Stock
Appreciation Rights and Performance Awards shall remain in effect until
exercised, surrendered or cancelled, or until they have expired, all in
accordance with their terms.
3. Changes in Capital Structure, etc. In the event of changes in the
outstanding common shares of the Corporation by reasons of stock dividends,
stock splits, recapitalizations, mergers, consolidations, combinations or
exchange of shares, separations, reorganizations, or liquidations, the
number of Shares available under the Plan in the aggregate and the maximum
number of Shares as to which Options, Stock Appreciation Rights and
Performance Awards may be granted to any Participant shall be correspondingly
adjusted by the Committee. In addition, the Committee shall make appropriate
adjustments in the number of Shares as to which outstanding Options, Stock
Appreciation Rights, or portions thereof then unexercised, shall relate, to
the end that the Participant's proportionate interest shall be maintained as
before the occurrence of such events; such adjustment shall be made without
change in the total price applicable to the unexercisable portion of Options
and with a corresponding adjustment in the option price per Share.
4. Change in Control
(a) Upon the occurrence of a Change in Control (as hereinafter defined):
(1) All Options shall become immediately exercisable in full for
the remainder of their terms. Grantees, other than Grantees who are subject
to Section 16 of the Exchange Act, shall have the right to have the
Corporation purchase the Options as to which no Stock Appreciation Rights
have been granted for cash for a period of thirty days following a Change in
Control at the Acceleration Price (as hereinafter defined). Such Options
held by Grantees who are subject to Section 16 of the Exchange Act for which
at least six months has elapsed from the date of grant of such Options at
the date of the Change in Control shall be automatically purchased by the
Corporation at the Acceleration Price upon a Change in Control, with payment
to be made within thirty days of such Change in Control.
(2) All Stock Appreciation Rights shall become immediately
exercisable in full for cash at the Acceleration Price, which shall be paid
by the Corporation within a period of thirty days following a Change in Control,
provided that such Stock Appreciation Rights held by Grantees who are subject
to Section 16 of the Exchange Act for which at least six months has elapsed
from the date of grant of such rights at the date of the Change in Control
shall be automatically purchased by the Corporation at the Acceleration Price
upon a Change in Control, with payment to be made within thirty days of such
Change in Control.
(b) (1) The "Acceleration Price" is the excess over the option price
of the highest of the following on the date of a Change in Control:
(i) the highest reported sales price of the Common Stock
within the sixty days preceding the date of the Change in Control, as
reported on any securities exchange or quotation system upon which the
Common Stock is traded,
(ii) the highest price of the Common Stock reported in a Form
F-11 or an amendment thereto as paid within the sixty days preceding the date
of the Change in Control,
(iii) the highest tender offer price paid for the Common
Stock, and
(iv) any cash merger or similar price.
(2) For Incentive Stock Options and Stock Appreciation Rights
granted with respect to Incentive Stock Options, the Acceleration Price is
limited to the spread between the Fair Market Value on the date of the purchase
of such awards by the Corporation and the option price.
(c) A "Change in Control" is the occurrence of any one of the following
events:
(i) any Person (other than a Grantee, the Corporation or
any trustee or other fiduciary holding securities under an employee benefit
plan of the Corporation (or of any subsidiary of the Corporation) is or
becomes an "Acquiring Person";
(ii) less than eighty percent (80%) of the total membership
of the Board shall be Continuing Directors; or
(iii) the shareholders of the Corporation shall approve a
merger or consolidation of the Corporation or a plan of complete liquidation
of the Corporation or an agreement for the sale or disposition by the
Corporation of all or substantially all of the Corporation's assets to
another Person, except in any such case in a transaction in which immediately
after such merger, consolidation or sale, exchange or transfer, the
shareholders of the Corporation, in their capacities as such and as a result
thereof, shall own at least 50 percent in voting power of the then outstanding
securities of the Corporation or of any surviving Person pursuant to any
such merger (or of its parent), the consolidated corporation or business
entity in any such consolidation, or of the other Person to which such sale,
exchange or transfer of assets is made.
(d) A "Change in Control" shall be deemed not to have occurred if such
event is mandated or directed by a regulatory body having jurisdiction over
the Corporation's operations.
(e) For purposes of this Section 4:
(1) "Acquiring Person" shall mean any Person who is or becomes a
"beneficial owner" (as defined in Rule 13d-3 of the Exchange Act) of
securities of the Corporation representing twenty-five percent (25%) or more
of the combined voting power of the Corporation's then outstanding voting
securities, unless such Person has filed Form F-11A and all required
amendments thereto with respect to its holdings and continues to hold such
securities for investment in a manner qualifying such Person to utilize Form
F-11A for reporting of ownership.
(2) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act as in effect on the date hereof.
(3) "Continuing Directors" shall mean any member of the Board who
was a member of the Board prior to the date hereof, and any successor of a
Continuing Director while such successor is a member of the Board who is not
an Acquiring Person or an Affiliate or Associate of an Acquiring Person or of
any such Affiliate or Associate and is recommended or elected to succeed the
Continuing Director by a majority of the Continuing Directors.
(4) "Person" shall mean any individual, corporation, partnership,
group, association or other "person", as such term is used in Section 13(d)
and 14(d) of the Exchange Act.
5. Rights as Shareholder. A Participant entitled to Shares as a result of
the exercise of an Option or Stock Appreciation Right or grant of a
Performance Share shall not be deemed for any purpose to be, or have rights
as, a shareholder of the Corporation or the Corporation by virtue of such
exercise, except to the extent a stock certificate is issued therefor and then
only from the date such certificate is issued. No adjustments shall be made for
dividends or distributions or other rights for which the record date is prior
to the date such stock certificate is issued.
6. Expenses. The expenses of this Plan shall be paid by the Corporation or
the Bank.
7. Withholding. Any person exercising an Option or Stock Appreciation Right
or becoming vested in a Performance Award shall be required to pay to the
appropriate member of New Milford Group the amount of any taxes such member is
required by law to withhold with respect to the exercise of such Option or Stock
Appreciation Right or vested Performance Award. Such payment shall be due on
the date such member is required by law to withhold such taxes. In the event
that such payment is not made when due, the Corporation or the Bank shall
have the right to deduct, to the extent permitted by law, from any payment of
any kind otherwise due to such person from any member of the New Milford Group,
all or part of the amount required to be withheld (including cash payable in
settlement of a Stock Appreciation Right).
8. Compliance with Applicable Law. Notwithstanding anything herein to the
contrary, the Corporation shall not be obligated to cause to be issued or
delivered any certificates evidencing Shares to be delivered pursuant to the
exercise of an Option or Stock Appreciation Right or Performance Award,
unless and until the Corporation is advised by its counsel that the issuance
and delivery of such certificates is in compliance with all applicable laws and
regulations of governmental authority. The Corporation shall in no event be
obligated to register any securities pursuant to the Securities Act of 1933
(as now in effect or as hereafter amended) or to take any other action in
order to cause the issuance and delivery of such certificates to comply with
any such law or regulation. The Board may require, as a condition of the
issuance and delivery of such certificates and in order to ensure compliance
with such laws and regulations, that the Participant make such covenants,
agreements and representations as the Committee, in its sole discretion, deems
necessary or desirable.
9. Application of Funds. Any cash proceeds received by the Corporation from
the sale of Shares pursuant to Options will be used for general corporate
purposes.
10. Amendment of the Plan. The Board may from time to time suspend or
discontinue this Plan or revise or amend it in any respect whatsoever;
provided, however, that any amendment requiring stockholder approval under Rule
16b-3 of the Securities Exchange Act of 1934, as it may be hereafter amended,
shall not be made without such approval. No such suspension, discontinuance,
revision or amendment shall in any manner affect any grant theretofore made
without the consent of the Participant or the transferee of the Participant,
unless necessary to comply with applicable law.
EXHIBIT B
AMENDED AND RESTATED
1992 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
OF
NEWMIL BANCORP, INC.
1. Purpose.
The purpose of this Amended and Restated 1992 Stock Option Plan For Outside
Directors (the "Plan") is to attract and retain the continued services of
non-employee directors of NewMil Bancorp, Inc. (the "Corporation") with the
requisite qualifications and to encourage such directors to secure or
increase on reasonable terms their stock ownership in the Corporation. The
Board of Directors of the Corporation (the "Board") believes that the granting
of options (the "Options") under the Plan will promote continuity of
management and increased personal interest in the welfare of the Corporation by
those who are responsible for shaping and carrying out the long-range plans of
the Corporation and securing its continued growth and financial success.
2. Effective Date of the Plan.
The Plan became effective upon its approval by the shareholders of the
Corporation on October 23, 1992 (the "Effective Date").
3. Stock Subject to Plan.
130,000 in the aggregate of the authorized but unissued shares of the
Corporation's common stock, $.50 par value per share (the "Shares") and/or
treasury Shares shall be reserved for issuance upon the exercise of Options.
If any Options expire or terminate for any reason without having been
exercised in full, the unpurchased Shares subject thereto shall again be
available for the grant of Options.
4. Administration.
The Plan shall be administered by the Committee referred to in Section 5
hereof. Subject to the provisions of the Plan, the Committee shall have
authority in its discretion to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to it and to make all other
determinations necessary or advisable for the administration of the Plan;
provided, however, that the Committee shall have no discretion to determine
the non-employee directors who will receive Options, the number of Shares
subject to Options, the terms upon which, the times at which or the periods
within which Shares may be acquired or the Options may be acquired and
exercised.
5. Committee.
The Committee shall consist of at least three members of the Board each
of whom shall be a disinterested person as defined in Rule 16b-3 under the
Securities Exchange Act of 1934, and as such Rule may be hereafter amended.
Each member of the committee shall be a person who is not an employee of the
Corporation or any subsidiary of the Corporation, and who has not received a
grant of an option to acquire common stock of the Corporation since the
beginning of the preceding fiscal year under any plan maintained by the
Corporation other than this Plan. The Committee shall be appointed by the
Board, which may at any time and from time to time remove any member of the
Committee, with or without cause, appoint additional members to the Committee
and fill vacancies, however caused, in the Committee. A majority of the
members of the Committee shall constitute a quorum. All determinations of
the Committee shall be made by a majority of its members. Any decision or
determination of the Committee reduced to writing and signed by all of the
members of the Committee shall be fully effective as if it had been made at
a meeting duly called and held.
6. Eligibility.
An Option may be granted only to members of the Board who are not otherwise
employees of the Corporation or any of its subsidiaries on the date of grant
(the "Participants").
7. Grant of Options and Option Price.
(a) Participants on the Effective Date. Each individual who was a
Participant on the Effective Date was automatically granted on the Effective
Date an Option to purchase 10,000 Shares.
(b) Future Participants. Directors who are newly elected to the board
after the Effective Date shall receive an automatic grant of an Option to
purchase 3,000 Shares on the date of such election (or, if elected by the
Board, on the date of the annual meeting of the shareholders of the Corporation
immediately following such election); provided, that such automatic grant
shall only be made if the director is a Participant on such date, and such
automatic grant shall be subject to pro rata reduction to the extent that the
number of Shares subject to future grant under the Plan is not sufficient to
make the full automatic grants required to be made pursuant to the Plan on
such date.
(c) Additional Grants. Each director who was re-elected as a director
at the annual meeting of shareholders in 1993, 1994 and 1995 received an
automatic grant of Options to purchase 2,000 Shares. Each director who is a
director of the Corporation on June 30, 1996 and on each June 30 thereafter
during the term of this Plan shall automatically be granted an Option to
purchase 2,000 Shares; provided, that such automatic grant shall only be made if
the director is a Participant on each such date and such automatic grant shall
be subject to pro rata reduction (or elimination) to the extent that the number
of Shares subject to grant under the Plan at that time is not sufficient to
make the automatic grants required to be made pursuant to the Plan on such date.
(d) Price. The initial per Share price to be paid by a Participant upon
the exercise of an Option shall be equal to the fair market value of a Share
on the date of grant. For the purposes hereof, the fair market value of a
Share on any date shall be equal to the average of the closing bid and asked
prices for the Shares on such date (or if no such quotation occurred on that
date, on the next preceding date on which there was such a quotation), as
made available for publication by the National Association of Securities
Dealers Automated Quotation System, or if no such prices are available, the
fair market value as determined by rules to be adopted by the Committee.
8. Option Period.
Participants shall be granted Options which are exercisable for a period
of ten (10) years from the date of the granting thereof. Notwithstanding the
foregoing, no Option granted under this Plan shall be exercisable until six
(6) months after the grant thereof pursuant to the provisions of Rule 16b-3,
as such rule may be hereafter amended.
9. Exercise of Option.
Subject to Section 8, an Option may be exercised in whole or in part at
any time after the date it is granted and only by a written notice of intent
to exercise the Option with respect to a specified number of Shares and payment
to the Corporation in cash or by certified check, bank draft or postal or
express money order, of the amount of the Option exercise price for the
number of Shares with respect to which the Option is then exercised. The
number of Shares which may be purchased at any one time shall be 100 Shares,
a multiple thereof, or the total number at the time purchasable under the
Option.
10. Transferability.
No Option shall be assignable or transferable except by will and/or by
the laws of descent and distribution and, during the life of any Participant,
each Option granted to the Participant may be exercised only by the Participant.
11. Ceasing to be a Director.
(a) Termination. If a Participant terminates service as a director for
any reason other than those set forth in clause (b) below, any outstanding
Option held by the Participant shall terminate on the earlier of the date on
which such Option would otherwise expire or three (3) years after such
termination.
(b) Disability, Death or Retirement. If a Participant's service as a
director is terminated by disability (which condition constitutes total
disability under the federal Social Security Acts), death, or retirement upon
attaining age seventy (70), the Participant or the representative of the
Participant's estate or beneficiaries thereof to whom the Option has been
transferred shall have the right to exercise any outstanding Option until the
date on which such Option would otherwise expire.
12. Duration of Plan.
Unless sooner terminated, the Plan shall remain in effect for a period of
ten years after the Effective Date and shall thereafter terminate. No Options
may be granted after the termination of this Plan; provided, however, that
termination of the Plan shall not affect any Options previously granted, which
Options shall remain in effect until exercised, surrendered or cancelled, or
until they have expired, all in accordance with their terms.
13. Changes in Capital Structure, etc.
In the event of changes in the outstanding common stock of the Corporation
by reasons of stock dividends, stock splits, recapitalizations, mergers,
consolidations, combination or exchange of shares, separations, reorganizations,
or liquidations, the number of Shares available under the Plan in the aggregate
and the number of Shares as to which Options may be granted to any
Participant shall be correspondingly adjusted by the Committee. In addition,
the Committee shall make appropriate adjustments in the number of Shares as
to which outstanding Options, or portions thereof then unexercised, shall
relate, to the end that the Participant's appropriate interest shall be
maintained as before the occurrence of such event; such adjustment shall be
made without change in the total price applicable to the unexercised portion of
the Options and with a corresponding adjustment in the option price per Share.
14. Rights as Shareholder.
A Participant entitled to Shares as a result of the exercise of an Option
shall not be deemed for any purpose to be, or have rights as, a shareholder
of the Corporation by virtue of such exercise, except to the extent a stock
certificate is issued therefor and then only from the date such certificate is
issued. No adjustments shall be made for dividends or distributions or other
rights for which the record date is prior to the date such stock certificate
is issued.
15. Expenses.
The expenses of this Plan shall be paid by the Corporation.
16. Compliance with Applicable Law.
Notwithstanding anything herein to the contrary, the Corporation shall
not be obligated to cause to be issued or delivered any certificates
evidencing Shares to be delivered pursuant to the exercise of an Option,
unless and until the Corporation is advised by its counsel that the issuance
and delivery of such certificates is in compliance with all applicable laws
and regulations of governmental authority. The Corporation shall in no event
be obligated to register any securities pursuant to the Securities Act of
1933 (as now in effect or as hereafter amended) or to take any other action in
order to cause the issuance and delivery of such certificates to comply with
any such law or regulation. The Committee may require as a condition of the
issuance and delivery of such certificates and in order to ensure compliance
with such laws and regulations, that the Participant make such covenants,
agreements and representations as the Committee, in its sole discretion, deems
necessary or desirable.
17. Application of Funds.
Any cash proceeds received by the Corporation from the sale of Shares
pursuant to options will be used for general corporate purposes.
18. Amendment of the Plan.
The Board may from time to time suspend or discontinue this Plan or
revise or amend it in any respect whatsoever; provided, however, that any
amendment requiring stockholder approval under Rule 16b-3, as in effect on the
Effective Date and as it may be subsequently amended, shall not be made
without such approval; and provided further, that the provisions of Sections
6 and 7 of this Plan may not be amended more than once every six (6) months,
except as otherwise provided in or permitted by Rule 16b-3. No such
suspension, discontinuance, revision or amendment shall in any manner affect
any grant theretofore made without the consent of the Participant or the
transferee of the Participant, unless necessary to comply with applicable law.
PROXY NEWMIL BANCORP, INC. PROXY
19 Main Street
New Milford, Connecticut 06776
1995 ANNUAL MEETING OF SHAREHOLDERS - OCTOBER 20, 1995
This proxy is solicited on behalf of the Board of Directors of NewMil Bancorp,
Inc.
The undersigned shareholder of NewMil Bancorp, Inc. hereby appoints
Willis H. Barton, Jr., Herbert E. Bullock and Mary C. Williams and each of
them the proxies of the undersigned with full power of substitution to vote
all the shares of NewMil Bancorp, Inc. held of record by the undersigned on
August 31, 1995, at the Annual Meeting of Shareholders of the Corporation to
be held at the Candlewood Valley Country Club, in New Milford, Connecticut,
at 9:30 a.m. on Friday, October 20, 1995 and at any adjournment(s) thereof,
with all the power which the undersigned would have if personally present,
hereby revoking any proxy heretofore given. A majority of said proxies or
their substitutes who attend the meeting (or if only one shall be present,
then that one) may exercise all of the powers hereby granted.
This proxy when properly signed will be voted in the manner directed herein
by the undersigned shareholder. If no specification is made, this proxy will
be voted "FOR" all nominees for Director, "FOR" proposal 2, "FOR" proposal 3,
and "FOR" proposal 4. If any other business is properly presented at this
Annual Meeting, or any adjournment(s) thereof, this proxy will be voted in
accordance with the determination of a majority of the Board of Directors.
The undersigned hereby acknowledges receipt of the proxy statement for the
Meeting and instructs the proxies to vote as follows:
1. ELECTION OF DIRECTORS:
Laurie G. Gonthier; Dr. John V. Haxo; and Suzanne L. Powers
FOR all nominees listed above WITHHOLD AUTHORITY to vote for
(except as marked to the contrary below) all nominees listed above
(Instruction: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below.)
For all nominees except:
2. PROPOSAL TO AMEND THE CORPORATION'S 1986 STOCK OPTION AND INCENTIVE PLAN
for key officers and employees.
FOR AGAINST ABSTAIN
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
3. PROPOSAL TO AMEND THE CORPORATION'S 1992 STOCK OPTION PLAN FOR OUTSIDE
DIRECTORS.
FOR AGAINST ABSTAIN
4. PROPOSAL TO RATIFY THE APPOINTMENT OF COOPERS & LYBRAND as independent
auditors of NewMil Bancorp, Inc. for the fiscal year ending June 30, 1996.
FOR AGAINST ABSTAIN
5. With discretionary authority to vote upon such other matters as may
properly come before the Meeting.
Please sign exactly as your name appears on this proxy card. When
signing as a fiduciary or representative - attorney, executor,
administrator, trustee or guardian - please give your full title as
such. Proxies signed by a corporation must be signed in the full
corporate name by the President or otherwise duly authorized
officer. Proxies signed by a partnership must be signed in the
partnership name by a duly authorized person.
Date:
Signature
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
I PLAN TO ATTEND MEETING
ACCOUNT NUMBER COMMON
