<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2)
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
FIRST ESSEX BANCORP, INC.
________________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No Fee Required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
--------------------------------------------------------------------
2. Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
--------------------------------------------------------------------
4. Proposed maximum aggregate value transaction:
--------------------------------------------------------------------
5. Total fee paid:
--------------------------------------------------------------------
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration number, or
the Form or Schedule and the date of its filing.
1. Amount previously paid:
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2. Form, Schedule or Registration Statement No.:
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3. Filing Party:
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4. Date Filed:
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<PAGE>
[LOGO]
================================================================================
FIRST ESSEX BANCORP, INC.
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
to be held on May 4, 2000
and
PROXY STATEMENT
================================================================================
IMPORTANT
Please mark, sign and date your proxy
and promptly return it in the enclosed envelope.
<PAGE>
[LOGO]
April 3, 2000
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
First Essex Bancorp, Inc. (the "Corporation") to be held on Thursday, May 4,
2000, at 10:00 a.m., local time, at the Andover Country Club, 60 Canterbury
Street, Andover, Massachusetts.
The Annual Meeting has been called for the purpose of electing three Class
I Directors, each for a three-year term and considering and voting upon such
other business as may properly come before the meeting or any adjournments or
postponements thereof.
The Board of Directors has fixed the close of business on March 15, 2000
as the record date for determining stockholders entitled to notice of and to
vote at the Annual Meeting.
The Board of Directors of the Corporation recommends that you vote "FOR"
the election of the three nominees of the Board of Directors as Directors of the
Corporation.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE
ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY
RETURNED YOUR PROXY CARD.
Very truly yours,
/s/ Leonard A. Wilson
LEONARD A. WILSON
Chairman and Chief Executive
Officer
CORPORATE HEADQUARTERS: 71 Main Street, Andover, MA 01810
o Telephone (978) 681-7500
<PAGE>
FIRST ESSEX BANCORP, INC.
71 Main Street
Andover, Massachusetts 01810
Telephone: (978) 681-7500
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on Thursday, May 4, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of First
Essex Bancorp, Inc. (the "Corporation") will be held on Thursday, May 4, 2000,
at 10:00 a.m., local time, at the Andover Country Club, 60 Canterbury Street,
Andover, Massachusetts, for the purpose of considering and acting upon:
1. The election of three Class I Directors each for a three-year term;
and
2. Such other business as may properly come before the meeting and any
adjournments or postponements thereof.
The Board of Directors has fixed the close of business on March 15, 2000
as the record date for determination of stockholders entitled to notice of and
to vote at the Annual Meeting and any adjournments or postponements thereof.
Only holders of common stock of record at the close of business on that date
will be entitled to notice of and to vote at the Annual Meeting and any
adjournments or postponements thereof.
In the event there are not sufficient votes with respect to the foregoing
proposals at the time of the Annual Meeting, the Annual Meeting may be adjourned
in order to permit further solicitation of proxies.
By Order of the Board of Directors,
/s/ William F. Burke
WILLIAM F. BURKE
Secretary
Andover, Massachusetts
April 3, 2000
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF
YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU
HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
<PAGE>
FIRST ESSEX BANCORP, INC.
71 Main Street
Andover, Massachusetts 01810
Telephone: (978) 681-7500
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
To Be Held on Thursday, May 4, 2000
This Proxy Statement is being furnished to stockholders on or about April
3, 2000 in connection with the solicitation of proxies by the Board of Directors
of First Essex Bancorp, Inc. (the "Corporation") for use at the Annual Meeting
of Stockholders of the Corporation to be held on Thursday, May 4, 2000, at 10:00
a.m., local time, at the Andover Country Club, 60 Canterbury Street, Andover,
Massachusetts, and any adjournments or postponements thereof (the "Annual
Meeting").
At the Annual Meeting, the stockholders of the Corporation will be asked
to consider and vote upon the following matters:
1. To elect three Class I Directors each for a three-year term, each such
term to continue until the 2003 annual meeting and until each such Director's
successor is duly elected and qualified; and,
2. To transact such other business as may properly come before the meeting
and any adjournments or postponements thereof.
The Notice of Annual Meeting, Proxy Statement and proxy card are first
being mailed to stockholders of the Corporation on or about April 3, 2000, in
connection with the solicitation of proxies for the Annual Meeting. The Board of
Directors has fixed the close of business on March 15, 2000, as the record date
for the determination of stockholders entitled to notice of and to vote at the
Annual Meeting (the "Record Date"). Only holders of common stock of record at
the close of business on the Record Date will be entitled to notice of and to
vote at the Annual Meeting. As of the Record Date, there were 7,593,400 shares
of the Corporation's common stock, par value $0.10 per share ("Common Stock"),
outstanding and entitled to vote at the Annual Meeting and 1,162 stockholders of
record. Each holder of a share of Common Stock outstanding as of the close of
business on the Record Date will be entitled to one vote for each share held of
record for each matter properly submitted at the Annual Meeting.
The presence, in person or by proxy, of a majority of the total number of
outstanding shares of Common Stock is necessary to constitute a quorum for the
transaction of business at the Annual Meeting. A quorum being present, the
affirmative vote of a plurality of the shares present and voting is necessary to
elect a nominee as a Director of the Corporation. Abstentions and broker
non-votes will have no effect on the outcome of the election of Directors. Votes
will be tabulated by the Corporation's transfer agent, Boston Equiserve Limited
Partnership.
Stockholders of the Corporation are requested to complete, date, sign and
return the accompanying proxy card in the enclosed envelope. Common stock
represented by properly executed proxies received by the Corporation and not
revoked will be voted at the Annual Meeting in accordance with the instructions
contained therein. If instructions are not given therein, properly executed
proxies will be voted "FOR" the election of the three nominees for Director
listed in this proxy statement. It is not anticipated that any matters other
than the election of Directors will be presented at the Annual Meeting. If other
matters are presented, proxies will
<PAGE>
be voted in accordance with the discretion of the proxy holders.
Any properly completed proxy may be revoked at any time before it is voted
by giving written notice of such revocation to the Secretary of the Corporation,
or by signing and duly delivering a proxy bearing a later date, or by attending
the Annual Meeting and voting in person.
ANNUAL REPORT TO STOCKHOLDERS; OTHER INFORMATION
The Annual Report of the Corporation, including financial statements for
the fiscal year ended December 31, 1999 ("fiscal 1999"), is being mailed to
stockholders of the Corporation concurrently with this Proxy Statement. The
Annual Report, however, is not a part of the proxy solicitation material.
Stockholders of record on March 15, 2000 will receive a Proxy Statement
and the Corporation's 1999 Annual Report to Stockholders, including the
Company's Annual Report on Form 10-K, as filed with the Securities and Exchange
Commission which contains detailed financial information concerning the
Corporation. Additional copies of the Annual Report and Form 10-K are available
upon written request, without charge. Please submit any such written request to
William F. Burke, Chief Financial Officer, First Essex Bancorp, Inc., 71 Main
Street, Andover, Massachusetts 01810.
GENERAL
First Essex Bancorp, Inc., a Delaware corporation, is the holding company
for First Essex Bank, FSB (the "Bank").
PROPOSAL ONE - ELECTION OF DIRECTORS
The Board of Directors of the Corporation currently consists of nine
members and is divided into three classes, all of which have three members.
Directors serve for three year terms with one class of Directors being elected
by the Corporation's stockholders at each annual meeting.
At the Annual Meeting, three Class I Directors will be elected to serve
until the 2003 annual meeting and until their successors are duly elected and
qualified. The Board of Directors has nominated Frank J. Leone, Jr., Robert H.
Pangione, and Brian W. Thompson to serve as Class I Directors. Unless otherwise
specified in the proxy, it is the intention of the persons named in the proxy to
vote the shares represented by each properly executed proxy for the election as
Directors of each of the nominees. Each of the nominees has agreed to stand for
election and to serve if elected as a Director. However, if any of the persons
nominated by the Board of Directors fails to stand for election or is unable to
accept election, the proxies will be voted for the election of such other
persons as the Board of Directors may recommend.
The Board of Directors of the Corporation recommends that the
Corporation's stockholders vote FOR the election of the three nominees of the
Board of Directors as Directors of the Corporation.
2
<PAGE>
Information Regarding Directors and Nominees
The following table sets forth certain information as of March 15, 2000
concerning each Director of the Corporation, including the three Class I
Directors who have been nominated for re-election at the Annual Meeting, based
on information furnished by them to the Corporation.
Director
Name Age Since(1)
------------------------------------ ----- --------
CLASS I - TERM TO EXPIRE 2000
Frank J. Leone, Jr. *............... 60 1973
Robert H. Pangione *................ 64 1982
Brian W. Thompson *................. 53 1998
CLASS II - TERM TO EXPIRE 2001
Augustine J. Fabiani ............... 69 1981
Walter W. Topham ................... 61 1981
Leonard A. Wilson, Chairman ........ 60 1989
CLASS III - TERM TO EXPIRE 2002
Thomas S. Barenboim ................ 44 1996
William L. Lane .................... 58 1977
Robert H. Watkinson ................ 59 1983
- ---------------------------
* Nominee for election.
(1) The Bank converted from mutual to stock form in December, 1986, and the
Corporation was simultaneously formed to be the holding company for the
Bank. All Directors of the Corporation were first elected on, and have
served as Directors since, December 17, 1986, except Messrs. Wilson,
Barenboim, and Thompson who were elected to the Board effective as of
February 16, 1989, March 21, 1996, and September, 1998 respectively. The
year listed in the table is the year in which the named individual became
a Trustee of the Bank (prior to its conversion from mutual to stock form)
or a Director of the Corporation. All Directors are also Directors of the
Bank.
The principal occupation and business experience during at least the last
five years for each Director of the Corporation is set forth below. Information
regarding Mr. Wilson and Mr. Thompson is set forth under the heading "Executive
Officers."
Thomas S. Barenboim is President and owner of Clark Chrysler-Plymouth Jeep
Eagle, Robert's Chrysler Plymouth, Thames Ford-Mercury, and I.T. Robert's
Autobody.
Augustine J. Fabiani is retired; he was formerly Division Personnel
Manager of Massachusetts Electric Co. in North Andover, Massachusetts.
William L. Lane is President of Valley Regional Health System, Inc. and
its subsidiary corporations, Holy Family Hospital, Inc., Valley Regional Support
Services, Inc., Valley Regional Ventures, Inc. and Holy Family Hospital
Foundation, Inc. The principal business of these corporations is to provide
acute hospital service. Mr. Lane has been the Chief Executive Officer of this
entity since 1971.
Frank J. Leone, Jr. is a partner in Leone Realty Trust, commercial real
estate. He was formerly President of F.J. Leone Furniture Co., Inc., a furniture
store located in Methuen, Massachusetts.
Robert H. Pangione is President of MacDonald and Pangione Insurance
Agency, Inc. in North Andover, Massachusetts, and R.C. Briggs Insurance Agency,
Inc. in Amesbury, Massachusetts.
3
<PAGE>
Walter W. Topham is a partner of Topham, Fardy & Co., Certified Public
Accountants, located in Andover, Massachusetts.
Robert H. Watkinson is Executive Director of Massachusetts Statewide
Emergency Telecommunications Board, in Reading, Massachusetts. He was formerly a
telecommunications consultant and a Managing Director of NYNEX, at its facility
in Boston.
Information Regarding the Board of Directors and its Committees
The Board of Directors of the Corporation held 14 meetings during fiscal
1999. During fiscal 1999, each of the incumbent Directors attended at least 75%
of the total number of meetings of the Board and of the committees of which he
was a member.
The Corporation's Board of Directors has four standing committees: an
Executive Committee, an Auditing Committee, a Compensation/Nominating Committee,
and a Community Reinvestment Act (CRA) Committee. During 1998 and 1999, the
Corporation also had a Year 2000 (Y2K) Compliance Committee.
Executive Committee. The members of the Executive Committee are Messrs.
Lane, Leone, Pangione, Thompson, Topham and Wilson. During fiscal 1999, the
Executive Committee of the Corporation met 13 times. The Executive Committee is
vested with authority of the Board in most matters between meetings of the
Board.
Auditing Committee. The members of the Auditing Committee are Messrs.
Fabiani, Lane, Topham and Watkinson. The members of the Auditing Committee of
the Corporation also serve as members of the Auditing Committee of the Bank.
During fiscal 1999, the Auditing Committee of the Corporation met four times.
The Auditing Committee reviews the financial statements of the Corporation and
the scope of the annual audit, monitors the Corporation's internal financial and
accounting controls and recommends to the Board of Directors the appointment of
independent certified public accountants.
Compensation/Nominating Committee. The members of the
Compensation/Nominating Committee are Messrs. Barenboim, Fabiani, Pangione,
Topham and Wilson (ex officio). The members of the Compensation/Nominating
Committee of the Corporation also constitute the Compensation/Nominating
Committee of the Bank. During fiscal 1999, the Compensation/Nominating Committee
of the Corporation met four times. The Compensation/Nominating Committee
recommends the compensation levels, positions and titles of officers and
employees of the Corporation to the Board of Directors. The members of the
Compensation/Nominating Committee also serve as the Option Committee under the
Corporation's 1987 Stock Option Plan (the "1987 Stock Plan") and 1997 Stock
Incentive Plan (the "1997 Stock Plan" and, together with the 1987 Stock Plan,
the "Stock Plans"). The Compensation/Nominating Committee recommends nominees
for election as Directors of the Corporation. The Compensation/Nominating
Committee will consider nominees for Director recommended by stockholders for
the 2001 Annual Meeting. If any stockholder desires to make such a
recommendation, the name or names of the persons recommended should be timely
submitted in writing together with supporting information with respect to the
qualifications and experience of such persons and the other information required
by the Corporation's By-laws. See "Submission of Stockholder Proposals for 2001
Annual Meeting."
Community Reinvestment Act (CRA) Committee. The members of the CRA
Committee are Messrs. Leone and Watkinson. During fiscal 1999, the CRA Committee
met four times.
Year 2000 (Y2K) Compliance Committee. In 1998, the Board established a Y2K
Compliance Committee to oversee the activities of management and others in
dealing with the issues raised by the change of century. The members of the Y2K
Compliance Committee were Messrs. Barenboim, Fabiani
4
<PAGE>
and Leone. During fiscal 1999, the Y2K Compliance Committee met six times.
During fiscal 1999, Directors of the Corporation who are not employees of
the Corporation received $600 for each Board of Directors meeting they attended.
Members of the Executive Committee, the Auditing Committee, the
Compensation/Nominating Committee, the CRA Committee and the Y2K Committee also
received $600 for each committee meeting they attended. The Directors also
received an annual retainer of $10,000 payable in cash on a quarterly basis. No
such fees are paid to Directors who are also employees of the Corporation. The
Directors of the Corporation are also the Directors of the Bank. No additional
fees or retainers are paid to any Director for serving on the Bank's Board of
Directors or any committee thereof.
Executive Officers
The names and ages of all executive officers of the Corporation and the
principal occupation and business experience during at least the last five years
for each are set forth below as of March 15, 2000.
Leonard A. Wilson became Chairman and Chief Executive Officer of the
Corporation and the Bank on September 12, 1998. Mr. Wilson was President and
Chief Executive Officer of the Corporation from May 1989 to September 1998, and
President and Chief Executive Officer of the Bank from February 1989 to
September 1998. Mr. Wilson also served as Executive Vice President of the
Corporation from February 1989 to May 1989. Mr. Wilson was previously employed,
since 1966, by various commercial banking subsidiaries of Shawmut Corporation in
various management and executive positions. Mr. Wilson was Chairman of the Board
and/or President and Chief Executive Officer for various subsidiaries of Shawmut
Corporation from 1977 to 1989. Mr. Wilson is 60 years old.
Brian W. Thompson became President and Chief Operating Officer of both the
Corporation and the Bank in September 1998. At the same time, he was also
elected to the Board of Directors of both the Corporation and the Bank. From
December 1996 until September 1998 Mr. Thompson served as Executive Vice
President of the Corporation and Executive Vice President for Commercial Banking
of the Bank. Prior to joining the Corporation, Mr. Thompson was President and
Chief Executive Officer of Finest Financial Corp. and its subsidiary, Pelham
Bank and Trust Company, from October 1995 until its acquisition by the
Corporation in December 1996. Prior to joining Finest Financial Corp., Mr.
Thompson was Executive Vice President of Peoples Bancorp and Peoples Bank of
Worcester from 1991 to 1995 with responsibility for commercial banking
activities. He was also employed by Shawmut National Corporation serving as
President of a number of banking subsidiaries and in other various executive,
management and lending activities for 23 years. Mr. Thompson is 53 years old.
William F. Burke became Chief Financial Officer of the Corporation and the
Bank in October, 1998. He became Senior Vice President of the Corporation and
the Bank in April 1993. In addition, Mr. Burke currently holds the positions of
Secretary of the Corporation and Secretary of the Bank to which he was named in
May 1996 and August 1994, respectively. Mr. Burke was Vice President of the
Corporation and the Bank from June 1992 to April 1993. Mr. Burke was previously
employed by Shawmut National Corporation in various management capacities from
1975 to 1992. Mr. Burke is 51 years old.
John M. DiGaetano became Executive Vice President of the Corporation and
Executive Vice President for Consumer Banking of the Bank in October 1992. Mr.
DiGaetano was previously employed by Shawmut National Corporation as its
President of Shawmut Arlington Trust Company from 1989 to 1991. Previously Mr.
DiGaetano was Executive Vice President of Consumer Banking for Arlington Trust
Company from 1984 to 1989. In these positions, Mr. DiGaetano was responsible for
branch administration, consumer sales, marketing and consumer lending. He was
employed by Arlington Trust Company in various other capacities from 1961
through 1984. Mr. DiGaetano is 56 years old.
5
<PAGE>
Wayne C. Golon became Executive Vice President of the Corporation and
Executive Vice President for Operations and Systems of the Bank in July 1995.
Mr. Golon was previously employed by Shawmut National Corporation as its Senior
Vice President and Division Head of Cash Management and Deposit Operations from
1992 to 1995, responsible for a staff of 850 people providing cash management
and deposit account servicing to corporate, commercial, and retail customers.
Prior to 1992, Mr. Golon held a variety of management positions in Operations
within Shawmut National Corporation. Mr. Golon is 51 years old.
Each officer of the Corporation holds his office for one year and until
his successor is elected and qualified or until his earlier resignation or
removal.
Executive Compensation
Summary Compensation Table
The following summary compensation table sets forth information concerning
compensation for services rendered in all capacities awarded to, earned by or
paid to the Corporation's Chief Executive Officer and the four other most highly
compensated executive officers serving on December 31, 1999 whose compensation
exceeded $100,000 during fiscal 1999 (the "Named Executive Officers").
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
----------
Annual Compensation Securities
--------------------------- Underlying All Other
Salary Bonus Options Compensation
Name and Principal Position Year ($)(1) ($)(1) (#)(2) ($)(3)
- --------------------------- ---- -------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Leonard A. Wilson 1999 $345,000 $138,000 25,000 $258,527
Chairman and Chief 1998 315,000 95,382 25,000 198,362
Executive Officer 1997 290,000 50,025 15,000 127,202
Brian W. Thompson 1999 215,000 86,000 17,500 3,200
President and Chief 1998 174,231 59,046 17,500 3,200
Operating Officer 1997 153,365 25,875 17,000 4,500
William F. Burke 1999 136,272 41,600 10,000 3.200
Chief Financial 1998 119,885 29,768 10,000 2,670
Officer 1997 97,500 11,213 4,000 2,460
John M. DiGaetano 1999 145,200 43,560 10,000 3,200
Executive Vice 1998 138,200 33,044 10,000 3,073
President 1997 136,681 15,433 6,000 3,456
Wayne C. Golon 1999 160,000 48,000 10,000 3,200
Executive Vice 1998 152,000 36,343 10,000 3,200
President 1997 144,700 16,641 17,000 4,800
</TABLE>
- -------------------
(1) Perquisites and other personal benefits paid to each Named Executive
Officer in each instance aggregated less than 10% of the total annual
salary and bonus set forth in the columns entitled "Salary" and "Bonus"
for each Named Executive Officer, and accordingly, are omitted from the
table as permitted by the rules of the Securities and Exchange Commission.
6
<PAGE>
(2) Represents options granted in each of fiscal 1997, fiscal 1998 and fiscal
1999. During fiscal 1997, fiscal 1998 and fiscal 1999, the Corporation did
not grant any restricted stock awards or stock appreciation rights or make
any long-term incentive plan payouts to any of the executive officers.
(3) All Other Compensation represents a payment by the Corporation of premiums
for term life insurance on behalf of Mr. Wilson in fiscal 1997, fiscal
1998 and fiscal 1999 in the amounts of $2,829, $3,162 and 3,327,
respectively, and accruals in fiscal 1997, fiscal 1998 and fiscal 1999 to
Mr. Wilson's Executive Salary Continuation Agreement of $120,000, $192,000
and $252,000, respectively. The amounts reported also include Corporation
matching contributions pursuant to the 401(k) Plan for fiscal 1997, fiscal
1998 and fiscal 1999, respectively, for the benefit of the named
individuals. Such contributions were made in shares of Common Stock,
valued as follows: Mr. Wilson, $4,373, $3,200 and $3,200; Mr. Thompson,
$4,500, $3,200 and $3,200; Mr. Burke $2,460, $2,670, and $3,200; Mr.
DiGaetano, $3,456, $3,073 and $3,200; and Mr. Golon, $4,800, $3,200 and
$3,200.
Stock Options Granted in Fiscal 1999
The following table sets forth certain information regarding stock options
granted during fiscal 1999 to the Named Executive Officers. The grants reflected
in the table were made pursuant to the Corporation's 1997 Stock Plan.
<TABLE>
<CAPTION>
Individual Grants Potential Realizable
----------------------------------- Value at Assumed
Annual Rates of
Number of % of Total Stock Price
Securities Options/SARs Exercise Appreciation For
Underlying Granted to Or Option Term
Options/SARs Employees in Base Price Expiration -----------------------
Name Granted(#) Fiscal Period ($/Share) Date 5%($) 10%($)
- ----------------- ------------ ------------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Leonard A. Wilson 25,000 18.94% $16.75 03/11/09 $263,350 $667,380
Brian W. Thompson 17,500 13.26 16.75 03/11/09 184,345 467,166
William F. Burke 10,000 7.58 16.75 03/11/09 105,340 266,952
John M. DiGaetano 10,000 7.58 16.75 03/11/09 105,340 266,952
Wayne C. Golon 10,000 7.58 16.75 03/11/09 105,340 266,952
</TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
The table below sets forth certain information regarding stock options
exercised during fiscal 1999 and stock options held at December 31, 1999, by the
Named Executive Officers. No stock appreciation rights ("SARS") are outstanding
under the Stock Plans.
7
<PAGE>
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
Shares Fiscal Year-End (#) Fiscal Year-End($)
Acquired on Value Exercisable/ Exercisable/
Name Exercise(#) Realized($) Unexercisable Unexercisable(1)
- ------------------ ----------- ----------- ------------- ----------------
<S> <C> <C> <C> <C>
Leonard A. Wilson 0 $0 81,696 / 85,604 $434,177 / $116,811
Brian W. Thompson 0 0 105,216 / 34,834 590,375 / 0
William F. Burke 0 0 41,999 / 18,001 206,063 / 0
John M. DiGaetano 0 0 68,333 / 18,667 397,438 / 0
Wayne C. Golon 0 0 34,479 / 27,521 95,125 / 0
</TABLE>
- ----------
(1) Calculations based upon the difference between the closing price of the
Corporation's Common Stock on December 31, 1999 of $14.75 and the exercise
price of the options under the Stock Plans.
Pension Plan
The Bank provides a retirement plan (the "SBERA Plan") for its eligible
employees through SBERA, an unincorporated association of savings banks
operating within Massachusetts and of other organizations which provide services
to or for savings banks. SBERA's sole purpose is to enable the participating
employers to provide pensions and other benefits for their employees.
The following table illustrates annual pension benefits for retirement at
age 65 under the most advantageous plan provisions in effect on December 31,
1999.
Annual Pension Benefits
Based on Years of Service (1)
----------------------------------------------
Average 25 Years
Compensation 10 Years 15 Years 20 Years and after
------------ -------- -------- -------- ---------
$ 20,000...... $ 2,500 $ 3,750 $ 5,000 $ 6,250
40,000...... 5,416 8,124 10,832 13,540
60,000...... 9,116 13,674 18,232 22,790
80,000...... 12,816 19,224 25,632 32,040
100,000...... 16,516 24,774 33,032 41,290
120,000...... 20,216 30,324 40,432 50,540
125,000...... 21,141 31,712 42,282 52,853
140,000...... 23,916 35,874 47,832 69,790
150,000...... 25,766 38,649 51,532 64,415
160,000 (2).. 27,616 41,424 55,232 69,040
- ----------
(1) The annual pension benefit is computed on the basis of a single life
annuity.
(2) The maximum compensation that may be used to calculate benefits under the
retirement plan is $160,000.
8
<PAGE>
The number of estimated credited years of service at age 65 for purposes
of the retirement plan for the Named Executive Officers are: Mr. Wilson, 16; Mr.
Thompson, 15; Mr. Burke, 21: Mr. DiGaetano, 16; and Mr. Golon, 18.
The pension benefit described above is funded entirely by contributions of
the Bank. Mr. Wilson may also receive benefits under the Executive Salary
Continuation Agreement described below.
Executive Salary Continuation Agreements; Benefit Enhancement Plans
The Corporation and the Bank (which are hereinafter sometimes referred to
collectively as the "Employers") have entered into an Executive Salary
Continuation Agreement ("SERP") with Mr. Wilson. Under this agreement, Mr.
Wilson would be entitled to certain payments following retirement at or after
age 62. Payments under the agreement will equal 65% of the highest annual
compensation (including bonuses) received during any of the five years preceding
retirement, reduced by a portion of social security benefits payable as well as
amounts payable pursuant to other qualified defined benefit pension plans (i.e.,
the SBERA Plan). The agreement also provides for certain reduced payments if Mr.
Wilson's employment terminates before age 62, and for certain benefits in the
event of disability. Additionally, if Mr. Wilson were to die prior to retirement
or disability, death benefits provided by this agreement may, in certain
circumstances, be payable to his beneficiaries. In connection with this
agreement, the Employers may elect to maintain an insurance policy on Mr.
Wilson's life. As of the date of this Proxy Statement, the Employers have not
elected to do so.
The Boards of Directors of the Corporation and the Bank have authorized
the Employers to revise Mr. Wilson's SERP to provide for the funding of a Trust
by the Corporation in the event of a Change of Control, as defined therein. This
Trust will be funded in the event of a Change of Control with the resources
necessary to fulfil the Employers' obligations under the SERP. The Boards of
Directors of the Corporation and the Bank have also authorized the Employers to
enter into a substantially similar agreement with Mr. Thompson.
The Boards of Directors of the Corporation and the Bank have authorized
the Employers to enter into Benefit Enhancement Plans for Messrs. Burke, Golon
and DiGaetano. Under the Benefit Enhancement Plans, the Employers will provide
an additional retirement benefit to compensate for benefits that otherwise would
be lost due to the limitations imposed on benefits by the Internal Revenue Code
of 1986, as amended.
Employment Contracts, Termination of Employment and Change in Control
Arrangements
The Employers have entered into amended and restated employment agreements
(the "Employment Agreements") with Messrs. Wilson and Thompson. The Employment
Agreements provide that such officers will receive annual compensation equal to
$362,250 and $233,500, respectively, subject to increases in accordance with the
Employers' usual practice.
Each Employment Agreement is for a three-year term, commencing on January
1, 1997, and is extended daily until notice of non-renewal is given by either
the officer or the Employers. Under both of the Employment Agreements, the
Employers may terminate the officer's employment at any time for "cause" as
defined therein, without incurring any continuing obligations to the officer. If
the Employers terminate an officer's employment for any reason other than for
"cause", as defined in the Employment Agreement, or if the officer terminates
his employment for "good reason", as defined therein, the Employers will remain
obligated to provide (a) an amount equal to the sum of such officer's base
salary or other compensation earned through the date of termination, plus such
officer's pro rata share of his highest annual bonus paid during the three
fiscal years preceding such termination, plus all accrued vacation and deferred
compensation; (b) a lump sum severance benefit equal to three times the
officer's highest
9
<PAGE>
annual "Total Compensation," as specifically defined therein, during the three
preceding fiscal years; (c) benefits as specified in the officer's Employment
Agreement for the duration of what otherwise would have been the term of the
Employment Agreement and (d) a pension adjustment as specified in the Employment
Agreement.
In addition, the Employers have entered into special termination
agreements (the "Special Termination Agreements") with Messrs. Wilson, Thompson,
Burke, DiGaetano and Golon. These agreements provide generally that the officer
would be entitled to receive certain severance benefits if there is a "Change in
Control", as defined therein, of either of the Employers, and if at any time
during the three-year period (in the case of Messrs. Wilson and Thompson) or
two-year period (in the case of Messrs. Burke, DiGaetano and Golon) following
such "Change in Control", (i) either of the Employers were to terminate the
officer's employment for any reason other than due to the officer's death, or
for "cause", as defined therein, or (ii) the officer were to terminate his
employment with either of the Employers following the occurrence of one of the
events specified in the agreement, including a significant change in the nature
or scope of, or inability to exercise, the officer's responsibilities,
authorities, powers, functions or duties; a reduction in such officer's annual
base salary or a failure of the Employers to pay compensation due; a significant
relocation of the Employers' offices; the termination of or a material reduction
in benefits; or the failure of the Employers to obtain a satisfactory agreement
from any successor to assume and agree to perform the Special Termination
Agreement. The severance benefits payable under the Special Termination
Agreements include: an amount equal to the sum of such officer's base salary or
other compensation earned through the date of termination, plus such officer's
pro rata share of his highest annual bonus paid during the three fiscal years
preceding such termination, plus all accrued vacation and deferred compensation;
and an amount equal to the sum of the current base salary and highest annual
bonus paid to the officer during the three fiscal years preceding the
termination of employment, multiplied by three in the case of Messrs. Wilson,
Thompson and Burke, and multiplied by two in the case of Messrs. DiGaetano and
Golon. Additionally, Messrs. Wilson, Thompson and Burke would continue to
receive disability and medical benefits for three years after such termination,
and the pensions of Messrs. DiGaetano and Golon would be credited with two, and
the pension of Mr. Burke would be credited with three, additional years of
accrual. In the case of such a termination, Mr. Wilson and Mr. Thompson could
elect to receive (in lieu of any benefits due under such officer's Special
Termination Agreement) such termination benefits as he may receive under his
Employment Agreement.
Compensation/Nominating Committee Interlocks and Insider Participation
Mr. Wilson participated in the deliberations of the
Compensation/Nominating Committee concerning compensation of all executive
officers other than himself. No Compensation/Nominating Committee interlocks
exist.
Compensation/Nominating Committee Report on Executive Compensation
Overview
The Corporation's executive compensation philosophy is to provide
competitive levels of compensation, integrate management's pay with the
achievement of the Corporation's performance goals, reward above average
corporate performance, recognize individual initiative and achievement, align
management's and stockholders' interests in the enhancement of stockholder value
through stock and stock option awards, and assist the Corporation in attracting
and retaining qualified management.
Compensation of the Corporation's executive officers currently for fiscal
1999 was composed of three elements: (1) annual base salary, (2) annual
performance incentives in the form of cash bonuses under the Corporation's
Senior Management Incentive Compensation Plan (the "Incentive Plan") and (3)
long-term performance incentives in the form of stock option awards under the
Corporation's 1997 Stock Plan.
10
<PAGE>
In 1996, the Corporation retained Thomas Warren & Associates, Inc.
("Warren") as a compensation consultant to evaluate the Corporation's executive
compensation. In its analysis, Warren compared the Corporation's compensation to
that of a peer group of eleven Massachusetts banks with assets between $1.0
billion and $2.5 billion (the "Peer Group"). Warren also compared the
Corporation's compensation levels to levels for banks located in New England of
comparable size and type published by banking associations and other
organizations ("Published Data"). The Corporation receives an update of Warren's
analysis each fall, and the updated analysis is reflected in the base salary
ranges set for fiscal 1999.
While the Peer Group and the banks discussed in the Published Data are not
identical to the banks included in the Keefe, Bruyette & Woods, Inc. New England
Savings Bank Index to which the Corporation's stock performance is compared in
this Proxy Statement (see "Comparative Performance of the Corporation"), the
Compensation/Nominating Committee believes that the compensation information for
these groups is comparable since both groups contain many of the same banks, as
well as other banks located in New England of comparable size and type.
Each element of the Corporation's executive compensation, as well as the
compensation of the Chief Executive Officer, is discussed separately below.
Base Salary
The fiscal 1999 salaries of the executive officers were established in
December 1998 based upon salary ranges determined by the Compensation/Nominating
Committee. The Committee established the salary ranges after reviewing Warren's
recommendations based upon salaries paid by banks of comparable size and type
located in New England.
The Chief Executive Officer recommends to the Compensation/Nominating
Committee the salary level to be paid to each executive officer within the
ranges so established based upon corporate and individual performance. The
numeric data used to evaluate the performance of the Corporation includes, but
is not limited to, return on assets, return on equity, asset growth and quality,
operating efficiency ratio, and capital position. Salaries are also based upon a
subjective evaluation of the individual performance of the officer and his or
her duties and responsibilities. The Compensation/Nominating Committee
determines the salary level of the Chief Executive Officer based upon the same
criteria.
Base salaries in fiscal 1999 were established within the salary ranges set
by the Compensation/ Nominating Committee. Salaries were generally set within
the middle third of the established salary range, reflecting the
Compensation/Nominating Committee's belief that the Corporation's Named
Executive Officers perform comparable duties and have comparable
responsibilities to similarly situated officers at the banks analyzed in
determining the salary ranges. These salaries also reflect the continuing
improvement in the Corporation's performance and are designed to provide the
executive officers with base salaries comparable to officers in the
Corporation's Peer Group and the banks analyzed in the Published Data.
Cash Bonuses
Annual incentives are provided through the grant of cash bonuses pursuant
to the Incentive Plan. Incentive compensation paid pursuant to the Incentive
Plan is based on both organizational and individual performance, with the
exception of incentive compensation for Messrs. Wilson and Thompson which is
based solely on organizational performance.
The Incentive Plan provides that bonuses, calculated as a percent of base
salary, may be awarded if the Corporation meets specified performance
objectives, measured on the basis of return on equity, budgeted earnings and
individual performance.
11
<PAGE>
In fiscal 1999, the Compensation/Nominating Committee granted cash bonuses
to Messrs. Wilson, Thompson, Burke, DiGaetano and Golon totaling $138,000,
$86,000, $41,600, $43,560, and $48,000, respectively. These awards reflect the
Corporation's achievement of specified performance objectives as provided in the
Incentive Plan. Bonuses awarded to Messrs. Burke, DiGaetano and Golon also
reflect such officers' attainment of individual performance goals established
for 1999.
Stock Options
Long-term incentives are provided through the grant of stock options. The
Stock Plans are administered by the Compensation/Nominating Committee, which has
the power to determine those individuals to whom options and rights will be
granted, the number of shares, the types of options and other terms and
conditions of the options and rights. The Stock Plans provide for the granting
of both "incentive stock options" and "nonqualified stock options". In addition,
the 1997 Stock Plan provides for the granting of unrestricted stock awards,
conditioned stock awards, performance share awards and stock appreciation
rights. All options granted under the Stock Plans are required to have an
exercise price per share equal to at least the fair market value of a share of
Common Stock on the date the option is granted and will expire no later than ten
years from the date of grant. The 1987 Stock Plan expired on August 4, 1997.
Although options remain outstanding, no further options can be granted
thereunder.
In fiscal 1999, the Compensation/Nominating Committee granted stock
options to Mr. Wilson and Mr. Thompson totaling 25,000 shares and 17,500
respectively, and 10,000 shares each to Messrs. Burke, DiGaetano and Golon.
Determination of the Chief Executive Officer's Compensation
Mr. Wilson's salary, cash bonus, and stock options are determined by the
Compensation/Nominating Committee substantially in accordance with the policies
described above relating to all executives of the Corporation. In particular,
the Compensation/Nominating Committee considered, among other things, the
following performance criteria in determining Mr. Wilson's 1999 base salary: (1)
financial performance of the Corporation; (2) selection and management of staff;
(3) development of regional business relationships; (4) effective management of
bank budgets and asset growth; and (5) development of new opportunities for
business expansion. The grant of a cash bonus to Mr. Wilson in fiscal 1999
reflects the Corporation's achievement of certain performance objectives as
specified in the Incentive Plan.
In December 1998, the Compensation/Nominating Committee increased Mr.
Wilson's base salary for fiscal 1999. This salary increase reflects the
continuing improvement in the performance of the Corporation, recognizes Mr.
Wilson's achievement of certain strategic goals including building an
experienced management team, improving asset quality and developing a strategic
plan for the Corporation, and ensures that Mr. Wilson's salary will remain
comparable to that of other chief executive officers of similarly situated
banks.
THOMAS S. BARENBOIM
AUGUSTINE J. FABIANI
ROBERT H. PANGIONE
WALTER W. TOPHAM
LEONARD A. WILSON (ex officio)
12
<PAGE>
Comparative Performance by the Corporation
The chart that follows compares the Common Stock with (i) the S&P 500 and
(ii) the Keefe, Bruyette & Woods, Inc. ("KBW") New England Savings Bank Index,
and assumes an investment of $100 on December 31, 1994, in each of the
following: (1) the Common Stock of the Corporation; (2) the Stocks comprising
the S&P 500 Index; and (3) the Stocks of the KBW New England Savings Bank Index.
- --------------------------------------------------------------------------------
First Essex Bancorp (FESX) Vs. The Five Year Total Return for the
KBW New England Bank Index and S&P 500 Index
- --------------------------------------------------------------------------------
[The following table was depicted as a mountain chart in the printed material.]
<TABLE>
<CAPTION>
INDEX OF TOTAL RETURN (12/31/94 = 100)
- ------------------------------------------------------------------------------------------------------------------------------------
S&P 500 KBW New England FESX Price Plus
DATE INDEX Bank Index Indexed Cumulative Dividends
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
12/31/1994 100.00 100.00 100.00 $7.438
3/31/1995 109.71 112.27 110.32 $8.205
6/30/1995 120.15 127.55 113.10 $8.412
9/30/1995 129.66 145.95 147.31 $10.956
12/31/1995 137.45 156.08 159.37 $11.853
- ------------------------------------------------------------------------------------------------------------------------------------
3/31/1996 144.82 156.40 152.29 $11.327
6/30/1996 151.30 165.88 155.77 $11.585
9/30/1996 155.94 186.41 173.60 $12.911
12/31/1996 168.92 215.58 191.61 $14.251
- ------------------------------------------------------------------------------------------------------------------------------------
3/31/1997 173.48 223.86 217.08 $16.146
6/30/1997 203.70 268.99 259.32 $19.287
9/30/1997 218.94 317.44 303.70 $22.588
12/31/1997 225.21 370.62 348.64 $25.930
- ------------------------------------------------------------------------------------------------------------------------------------
3/31/1998 256.55 393.17 363.86 $27.062
6/30/1998 265.00 383.42 339.58 $25.256
9/30/1998 238.69 300.56 254.44 $18.924
12/31/1998 289.43 342.49 277.93 $20.671
- ------------------------------------------------------------------------------------------------------------------------------------
3/31/1999 303.84 313.67 235.05 $17.482
6/30/1999 325.22 353.23 256.07 $19.045
9/30/1999 304.95 319.14 251.70 $18.720
12/31/1999 350.26 303.96 231.68 $17.231
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Source: KEEFE, BRUYETTE & WOODS, INC.
13
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
At the close of business on March 15, 2000, there were issued and
outstanding 7,593,400 shares of Common Stock entitled to cast 7,593,400 votes.
On March 15, 2000, the closing price of the Corporation's Common Stock as
reported by The Nasdaq Stock Market was $13.313 per share.
Principal Stockholders
The following table sets forth, as of March 15, 2000, the beneficial
ownership of Common Stock for (i) each current Director and nominee for
re-election as a Director of the Corporation, (ii) each executive officer named
in the Executive Compensation table, and (iii) all current directors and
executive officers of the Corporation as a group. The Corporation is not aware
of any person who owns beneficially more than 5% of the Common Stock.Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission. Shares of common stock issuable by the Corporation pursuant
to options which may be exercised within 60 days after March 15, 2000 are deemed
to be beneficially owned and outstanding for purposes of calculating the number
of shares and the percentage beneficially owned by the applicable person.
However, these shares are not deemed to be beneficially owned and outstanding
for purposes of computing the percentage beneficially owned by any other person
or entity.
Number of Shares
of Common Stock
Beneficially Percent
Name Owned(1) of Class(2)
------------------------- ---------------- -----------
Thomas S. Barenboim 33,720 0.44%
William F. Burke (2)(3) 49,348 0.65%
John M. DiGaetano (3) 80,835 1.05%
Augustine J. Fabiani (4) 30,823 0.40%
Wayne C. Golon (2)(3) 48,321 0.63%
William L. Lane (2) 28,872 0.38%
Frank J. Leone, Jr. (2)(5) 44,565 0.59%
Robert H. Pangione (2)(6) 104,973 1.38%
Brian W. Thompson (3) 134,273 1.74%
Walter W. Topham (2)(7) 33,492 0.44%
Robert H. Watkinson (2) 33,048 0.43%
Leonard A. Wilson (2)(3) 181,222 2.36%
All Directors and 818,485 10.08%
Officers as a group (14
persons) (1)(3)(4)(5)(6)(7)
- ----------
(1) The amounts set forth above as beneficially owned include shares of Common
Stock which such beneficial owner had the right to acquire within 60 days
of March 15, 2000 under options previously granted pursuant to the 1987
Stock Plan and/or the 1997 Stock Plan in the following amounts: Mr.
Barenboim, 23,500 shares; Mr. Burke, 45,332; Mr. DiGaetano, 71,666 shares;
Mr. Fabiani, 21,000 shares; Mr. Golon, 43,918 shares; Mr. Lane, 21,000
shares; Mr. Leone, 18,000 shares; Mr. Pangione, 13,000 shares; Mr.
Thompson, 114,716 shares; Mr. Topham, 16,000 shares; Mr. Watkinson, 21,000
shares; Mr. Wilson, 98,820 shares; and all of the Directors and Officers
as a group, 522,618 shares. The persons named in this table have sole
voting and investment power with respect to the shares listed, except as
otherwise indicated. The inclusion herein of shares listed as beneficially
owned does not constitute an admission of beneficial ownership.
14
<PAGE>
(2) Indicates that such person shares voting or investment power as to all or
a portion of such shares. The number of shares as to which each person
shares voting or investment power is as follows: Mr. Burke, 1,500; Mr.
Golon, 3,000 shares; Mr. Lane, 4,552 shares; Mr. Leone, 26,440 shares; Mr.
Pangione, 12,825 shares; Mr. Topham, 2,457 shares; Mr. Watkinson, 3,000
shares; Mr. Wilson, 28,500 shares.
(3) Includes shares allocated to the account of such persons under the 401(k)
Plan in the following amounts: Mr. Burke, 2,516; Mr. DiGaetano, 4,984
shares; Mr. Golon, 1,403 shares; Mr. Thompson 3,952 shares and Mr. Wilson,
12,702 shares; and all of the Directors and Officers as a group, 25,884
shares.
(4) Includes 1,595 shares owned by a trust of which Mr. Fabiani is the trustee
and the beneficiary.
(5) Includes 26,440 shares owned by a trust of which Mr. Leone is a trustee
and a beneficiary.
(6) Includes 35,000 shares owned by Mr. Pangione's wife. Mr. Pangione
disclaims beneficial ownership of the shares owned by his wife.
(7) Includes 43 shares owned jointly by Mr. Topham's wife and daughter.
Certain Transactions With Management and Others
As a matter of policy, the Bank makes loans to Directors, officers and
employees of the Corporation or the Bank within the limitations set by law,
provided that such loans are on the same terms and conditions as offered to any
other borrower. All loans that have been obtained by the Directors, officers and
employees of the Corporation or the Bank were made in the ordinary course of
business and on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
unaffiliated persons and did not involve more than the normal risk of
collectibility or present other unfavorable features to the Bank. All loans to
Directors or officers must be approved by the Board of Directors.
From time to time the Bank has purchased various services and products in
the ordinary course of its business from various companies owned or operated by,
or employing, certain of its Directors. Such transactions have been entered into
on terms no less favorable to the Bank than would have been available from
unrelated third parties.
EXPENSES OF SOLICITATION
The Corporation will pay the entire expense of soliciting proxies for the
Annual Meeting. D.F. King & Co., Inc. has been retained to assist in the
solicitation of proxies and will be compensated in the amount of $1,500 plus
reasonable out-of-pocket expenses. In addition to such solicitation and
solicitation by use of the mails, certain Directors, officers and regular
employees of the Corporation and the Bank (who will receive no compensation for
their services other than their regular compensation) may solicit proxies by
telephone, telegram or personal interview. Banks, brokerage houses, custodians,
nominees and other fiduciaries have been requested to forward proxy materials to
the beneficial owners of shares held of record by them and such custodians will
be reimbursed for their expenses.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Corporation's directors and
executive officers and any persons who own more than 10% of the Corporation's
common stock to file with the Securities and Exchange Commission (the "SEC")
initial reports of ownership and reports of changes of ownership of common
stock. Such persons are required by SEC regulations to furnish the Corporation
with copies of all Section 16(a) forms they file. During fiscal 1999, the
Corporation made a single grant of stock options to each of its thirteen
directors and executive officers (including the twelve directors and executive
officers listed herein as well as Thomas P. Coursey, a Senior Vice President of
the Corporation). Al-
15
<PAGE>
though each such director and executive officer reported his option grant on
Form 5, such Forms 5 were not filed on a timely basis. In addition, during 1999,
two directors of the Corporation, Messrs. Barenboim and Topham, engaged in two
purchases each of shares of the Corporation's Common Stock. Mr. Barenboim's
purchases should have been, but were not, reported on separate Forms 4; such
purchases were reported on Form 5, which was not filed on a timely basis. Mr.
Topham's purchases were reportable only on Form 5 because they were both "small
acquisitions" under Rule 16a-6; such Form 5 was filed, but not on a timely
basis.
NOTICE OF 2001 ANNUAL MEETING
Notice is hereby given that the 2001 Annual Meeting of Stockholders of
First Essex Bancorp, Inc. will be held on Thursday, May 3, 2001, unless
stockholders are notified otherwise.
SUBMISSION OF STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
In order to be eligible for inclusion in the Corporation's proxy statement
and form of proxy for the annual meeting scheduled to be held in May 2001,
stockholder proposals must comply with SEC rule 14a-8 and any other applicable
rules and must be delivered to the Corporation's principal executive offices at
least 120 days prior to the anniversary date of mailing of this Proxy Statement.
This Proxy Statement was mailed on or about April 3, 2000, so the date by which
proposals are required to be received under Rule 14a-8 will be December 4, 2000.
In addition, the By-laws of the Corporation provide that any proposals or
Director nominations submitted by stockholders that will not be included in the
Proxy Statement for an annual meeting may still be presented for action at such
annual meeting if such proposal is filed with the Secretary of the Corporation
at least 75 days, but not more than 120 days, before the anniversary of the
previous year's annual meeting (the "Anniversary Date"). However, if the annual
meeting is scheduled for a date more than seven days before the Anniversary
Date, stockholder proposals or nominations must be received by the Corporation
before the later of (i) 20 days after public disclosure of the date for the
annual meeting or (ii) the 75th day before the annual meeting. If next year's
annual meeting is held as scheduled, proposals or nominations must be received
not earlier than January 4, 2001, but not later than February 18, 2001, and any
proposal or nomination submitted after February 18, 2001 will be untimely. The
By-laws contain a number of other substantive and procedural requirements which
should be reviewed by any interested stockholder. Any proposals should be mailed
to: Secretary, First Essex Bancorp, Inc., 71 Main Street, Andover, Massachusetts
01810.
INDEPENDENT ACCOUNTANTS
Arthur Andersen LLP served as the independent public accountants for the
Corporation for fiscal 1999 and is expected to serve as the Corporation's
independent public accountants for 2000. Representatives of Arthur Andersen LLP
will be present at the meeting and will have the opportunity to make a
statement, if they so desire, and will be available to respond to appropriate
questions.
OTHER MATTERS
The Board of Directors does not know of any matters other than those
described in this Proxy Statement which will be presented for action at the
Annual Meeting. If other matters are duly presented, proxies will be voted in
accordance with the best judgment of the proxy holders.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
16
<PAGE>
0981-00-PS
<PAGE>
DETACH HERE
PROXY
FIRST ESSEX BANCORP, INC.
71 MAIN STREET, ANDOVER, MASSACHUSETTS 01810
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 4, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking any proxy heretofore given, hereby constitutes
and appoints Leonard A. Wilson, Brian W. Thompson and William F. Burke and
each of them the attorney and proxy of the undersigned, with full power of
substitution to vote all shares of common stock of First Essex Bancorp, Inc.
(the "Corporation") held of record by the undersigned at the close of
business on March 15, 2000, on behalf of the undersigned at the Annual
Meeting of Stockholders of the Corporation to be held on Thursday, May 4,
2000 at 10:00 a.m., local time at the Andover Country Club, 60 Canterbury
Street, Andover, Massachusetts and any adjournments thereof, hereby granting
full power and authority to act on behalf of the undersigned at said meeting
and any adjournments thereof. In their discretion, the proxies are each
authorized to vote upon such other business as may properly come before said
meeting and any adjournments thereof.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY
WILL BE VOTED FOR ELECTION OF THE THREE NOMINEES PROPOSED BY THE BOARD OF
DIRECTORS AS CLASS I DIRECTORS OF THE CORPORATION, SO THAT A STOCKHOLDER
WISHING TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS
NEED ONLY SIGN AND DATE THIS PROXY ON THE REVERSE SIDE AND RETURN IT IN THE
ENCLOSED ENVELOPE.
- ----------- -----------
SEE REVERSE PLEASE SIGN EXACTLY AS NAME APPEARS HEREON AND SEE REVERSE
SIDE DATE ON THE REVERSE SIDE AND RETURN YOUR PROXY SIDE
CARD PROMPTLY IN THE ENCLOSED ENVELOPE.
- ----------- -----------
<PAGE>
DETACH HERE
/X/ Please mark
votes as in
this example.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF A COPY OF THE ACCOMPANYING
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT FOR THE
ANNUAL MEETING OF STOCKHOLDERS AND HEREBY REVOKES ANY PROXY OR PROXIES
HERETOFORE GIVEN. THIS PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED ON
ANY MATTER (WITHOUT, HOWEVER, AFFECTING ANY VOTE TAKEN PRIOR TO SUCH
REVOCATION) PURSUANT TO THE REVOCATION METHODS SPECIFIED IN THE PROXY
STATEMENT.
1. To elect the following three nominees proposed by the Board of Directors
as Class I Directors of the Corporation.
NOMINEES: (01) Frank J. Leone, Jr., (02) Robert H. Pangione and (03) Brian W.
Thompson
FOR WITHHELD
ALL FROM ALL
NOMINEES / / / / NOMINEES
FOR
ALL
EXCEPT / / ________________________________________
If you wish to withhold your shares from one or two of the nominees, mark the
"For All Except" box and write nominee's(s) name(s) on the line above.
MARK HERE IF YOU PLAN TO ATTEND THE MEETING / /
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
Please date and sign exactly as your name
appears hereon and return in the enclosed envelope.
Where there is more than one holder only one must
sign. When signing as an attorney, administrator,
executor, guardian or trustee, please add your full
title as such. If executed by a corporation, the
proxy should be signed by a duly authorized person,
stating his or her title or authority.
Signature:________________Date:_________Signature:_________________Date:_______
