<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by 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 Rule 14a-11(c) or Rule 14a-12
ABINGTON BANCORP, INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
NOT APPLICABLE
------------------------------------------------
(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)(1) 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 of transaction:
<PAGE> 2
(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
statement number, or the form or schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement no.:
3) Filing Party:
4) Date Filed:
* * * * *
<PAGE> 3
April 14, 1998
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders (the
"Annual Meeting") of Abington Bancorp, Inc. to be held on Tuesday, May 19, 1998
at 11:00 a.m., local time, at the Ridder Country Club, Route 14, Oak Street,
Whitman, Massachusetts.
At the Annual Meeting, you will be asked to consider and vote upon the
election of a class of four Directors and the approval of the Abington Bancorp,
Inc. Deferred Stock Compensation Plan for Directors. The Board of Directors has
fixed the close of business on Wednesday, April 1, 1998 as the record date for
determining stockholders entitled to notice of and to vote at the Annual
Meeting.
The officers and Directors look forward to greeting you personally at the
Annual Meeting. However, whether or not you plan to attend personally and
regardless of the number of shares you own, it is important that your shares be
represented.
YOU ARE URGED TO SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE
POSTAGE-PAID ENVELOPE PROVIDED FOR YOUR CONVENIENCE.
Sincerely,
JAMES P. MCDONOUGH
President and
Chief Executive Officer
<PAGE> 4
ABINGTON BANCORP, INC.
536 WASHINGTON STREET
ABINGTON, MASSACHUSETTS 02351
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 19, 1998
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of Abington Bancorp, Inc., a Massachusetts bank holding company (the
"Company"), will be held at the Ridder Country Club, Route 14, Oak Street,
Whitman, Massachusetts, on Tuesday, May 19, 1998, beginning at 11:00 a.m., local
time, for the following purposes:
1. To elect a class of four Directors of the Company;
2. To approve the Abington Bancorp, Inc. Deferred Stock Compensation Plan
for Directors; and
3. To transact such further business as may properly come before the
Annual Meeting, or any adjournment or adjournments thereof.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE NOMINEES FOR
DIRECTOR LISTED IN THE ACCOMPANYING PROXY STATEMENT AND FOR APPROVAL OF THE
DEFERRED STOCK COMPENSATION PLAN FOR DIRECTORS.
The Board of Directors has fixed the close of business on April 1, 1998 as
the record date for determining the stockholders of the Company entitled to
notice of and to vote at the Annual Meeting and any adjournments thereof.
Accordingly, only stockholders of record on such date are entitled to notice of
and to vote at the Annual Meeting or any adjournments thereof.
By Order of the Board of Directors
Barbara M. Manning, Clerk
Abington, Massachusetts
April 14, 1998
IMPORTANT
EVEN THOUGH YOU MAY PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE
COMPLETE, SIGN, AND DATE THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF
YOU ATTEND THE ANNUAL MEETING AND DESIRE TO WITHDRAW YOUR PROXY AND VOTE IN
PERSON, YOU MAY DO SO.
<PAGE> 5
ABINGTON BANCORP, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, MAY 19, 1998
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Abington Bancorp, Inc. (the "Company") for
use at the Annual Meeting of Stockholders (the "Annual Meeting") to be held at
the Ridder Country Club, Route 14, Oak Street, Whitman, Massachusetts, on
Tuesday, May 19, 1998, beginning at 11:00 a.m., local time, and at any
adjournments thereof.
This Proxy Statement and the accompanying Notice and Proxy are first being
mailed to stockholders of the Company on or about April 14, 1998 in connection
with the solicitation of proxies for the Annual Meeting. The Board of Directors
has fixed the close of business on Wednesday, April 1, 1998 as the record date
for the Annual Meeting (the "Record Date"). Only stockholders of record as of
the close of business on the Record Date will be entitled to notice of and to
vote at the Annual Meeting and any adjournments thereof. The holders of the
Common Stock on the Record Date will be entitled to one vote for each share held
of record upon each matter properly submitted to the Annual Meeting or any
adjournments thereof. On the Record Date, there were 3,563,800 shares of the
Company's common stock, $.10 par value per share (the "Common Stock"), issued,
outstanding and entitled to vote at the Annual Meeting and approximately 800
holders of record of Common Stock.
The presence, in person or by proxy, of at least a majority in interest of
all Common Stock issued, outstanding and entitled to vote is necessary to
constitute a quorum for transaction of business at the Annual Meeting. The
affirmative vote of the holders of a plurality of the Common Stock present and
voting, in person or by proxy, is required to elect each of the nominees for
Director and the affirmative vote of a majority of the Common Stock present and
voting, in person or by proxy, is required to approve the Abington Bancorp, Inc.
Deferred Stock Compensation Plan for Directors. Any abstentions or broker
nonvotes will count as "present" toward formation of a quorum for transaction of
business at the Annual Meeting. Assuming the presence of a quorum, abstentions
and broker nonvotes will have no effect on the outcome of any of the matters
voted upon at the Annual Meeting. Votes will be tabulated by the Company's
transfer agent, Registrar & Transfer Company.
Stockholders of the Company are requested to complete, date, sign and
promptly return the accompanying form of proxy in the enclosed envelope.
Properly executed proxies received by the Company and not revoked will be voted
at the Annual Meeting in accordance with the instructions contained therein. If
instructions are not given in such proxies, they will be voted FOR the election
of the four nominees for Director listed in this Proxy Statement and FOR the
approval of the Deferred Stock Compensation Plan for Directors.
Any properly completed proxy may be revoked at any time before the
commencement of voting on any matter at the Annual Meeting or any adjournment
thereof by giving written notice of revocation to the Clerk of the Company (536
Washington Street, Abington, Massachusetts 02351), or by signing and duly
delivering a proxy bearing a later date, or by attending the Annual Meeting and
voting in person. Attendance at the Annual Meeting will not in and of itself
constitute revocation of a proxy.
ANNUAL REPORT TO STOCKHOLDERS; OTHER INFORMATION
The Company's Annual Report to Stockholders for the fiscal year ended
December 31, 1997 accompanies this Proxy Statement, but is not incorporated
herein and is not to be deemed a part hereof.
COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1997 (EXCLUDING EXHIBITS) ARE AVAILABLE WITHOUT CHARGE UPON
REQUEST. SUCH REQUESTS SHOULD BE DIRECTED TO ROBERT M. LALLO, TREASURER,
ABINGTON BANCORP, INC., P.O. BOX 2006, ABINGTON, MASSACHUSETTS 02351, (781)
982-3200.
<PAGE> 6
GENERAL
Abington Bancorp, Inc. is the holding company for Abington Savings Bank
(the "Bank").
PROPOSAL 1 - ELECTION OF DIRECTORS
The Board of Directors of the Company consists of 12 members and is divided
into three classes, each of which has four members. Directors serve for
three-year terms with one class of Directors being elected by the Company's
stockholders at each annual meeting.
Pursuant to the Company's By-laws, the Board of Directors acted as a
nominating committee for selecting nominees for election as Directors. The Board
has nominated Bruce G. Atwood, Ralph B. Carver, Jr., Joel S. Geller and Jay
Timothy Noonan as Directors for a three-year term. Each of the nominees is
currently serving as a Director of the Company.
Unless authority is withheld, proxies in the accompanying form will be
voted FOR the election of the four nominees, to hold office until the 2001
annual meeting of stockholders or special meeting in lieu thereof and until
their respective successors are elected and qualified. If the proxy withholds
authority to vote for one or more nominees for Director, the stockholder's
instructions will be followed.
The Company has no reason to believe that any of the nominees will not be
able to serve. In the event that any nominee is unable to serve at the time of
the election, the shares represented by the proxy will be voted for the other
nominees and may be voted for a substitute for that nominee.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF THE
FOUR NOMINEES FOR DIRECTOR LISTED IN THIS PROXY STATEMENT.
INFORMATION REGARDING NOMINEES AND DIRECTORS
The following table sets forth certain information (as of April 14, 1998)
regarding the current Directors and the nominees for Director of the Company:
<TABLE>
<CAPTION>
Term as
Director
Director Will
Name Age Since* Expire
-------------- ------------ ------------- ----------------
<S> <C> <C> <C>
** Robert J. Armstrong 75 1971 1998
*** Bruce G. Atwood 60 1978 1998
William F. Borhek 59 1980 2000
*** Ralph B. Carver, Jr. 70 1980 1998
*** Joel S. Geller 57 1982 1998
Rodney D. Henrikson 62 1973 2000
A. Stanley Littlefield 72 1985 2000
James P. McDonough 47 1990 1999
*** Jay Timothy Noonan 55 1975 1998
Gordon N. Sanderson 64 1985 1999
James J. Slattery 62 1973 1999
Wayne P. Smith 59 1973 1999
</TABLE>
2
<PAGE> 7
- ---------------
* Includes service as a trustee of the Bank prior to its conversion from
mutual to stock form in 1986 (the "Conversion") and as director of the Bank
from the date of the Conversion to the establishment of the Company as the
holding company of the Bank on January 31, 1997. All Directors of the
Company are also Directors of the Bank.
** In accordance with the Company's By-Laws, Mr. Armstrong will be retiring
from the Board of Directors effective as of the Annual Meeting.
*** Nominees for Director.
The principal occupation and business experience during at least the last
five years of each Director and nominee is as follows:
ROBERT J. ARMSTRONG has been President and General Manager of Armstrong
Construction Corporation, a home building firm, since 1952.
BRUCE G. ATWOOD has been Vice President-Operations and Treasurer of Hyer
Industries, Inc., a manufacturer of industrial scales, since 1978.
WILLIAM F. BORHEK has been President of Wm. F. Borhek Insurance Agency,
Inc., a general insurance agency, since 1964.
RALPH B. CARVER, JR. has been President, Treasurer and a director of
Den-Lea Rental, Inc., a truck leasing company, since 1979.
JOEL S. GELLER is the owner-manager and a director of Abington Liquors
Corp., a retail liquor store.
RODNEY D. HENRIKSON has been Treasurer of Henrikson Realty Corp., a real
estate company, since 1986. He was Treasurer of Henrikson's Dairy, Inc., a food
processing and distribution company, from 1982 through 1984 and President from
1984 through 1986.
A. STANLEY LITTLEFIELD is an attorney in private practice in Rockland,
Massachusetts. He was formerly District Attorney of Plymouth County.
JAMES P. MCDONOUGH has been President and Chief Executive Officer of the
Company since its incorporation on October 15, 1996. Mr. McDonough has also
served as President and Chief Executive Officer of the Bank since August 1991.
Previously, he served as President and Chief Operating Officer of the Bank from
November 1990 to August 1991 and Senior Vice President-Lending of the Bank from
December 1987 to November 1990. Mr. McDonough was also Vice President-Regional
Manager of GEM Mortgage Corporation of North America from 1983 to 1987. Mr.
McDonough is a graduate of Massasoit Community College and Boston State College.
JAY TIMOTHY NOONAN has been with J. P. Noonan Trans., Inc., an interstate
hauler, in a management capacity since 1968 and is currently Chief Financial
Officer. Mr. Noonan was also President of Rourke Coal and Oil Co. from 1960 to
1989.
GORDON N. SANDERSON has been retired since 1991. From 1970 to 1991, he was
Vice President-Sales of B & W Press, Inc., a specialty printing company.
3
<PAGE> 8
JAMES J. SLATTERY has been President of J. H. Slattery Insurance Agency,
Inc., Abington, Massachusetts, an independent insurance agency, since 1958.
WAYNE P. SMITH is Treasurer and a director of Suburban Enterprises Inc.,
Abington, Massachusetts, a sales and marketing firm.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
For the year ended December 31, 1997, the Company's Board of Directors met
six times and the Bank's Board of Directors met 14 times. Each incumbent
Director attended at least 75% of all meetings of the Company's and the Bank's
Board and any committees thereof of which he was a member.
The Board of Directors has an Executive Committee, an Audit Committee and a
Compensation Committee, but does not have a nominating committee or another
committee performing a similar function.
The Executive Committee, of which Messrs. Atwood, McDonough, Littlefield,
Geller and Slattery are members, is the primary operating committee of the Board
of Directors and is vested with the authority of the Board in most matters,
except those powers which by law may not be delegated. The Executive Committee
also serves as the Executive Committee of the Bank. During 1997, the Executive
Committee met 26 times.
The Audit Committee, which is comprised of Messrs. Henrikson, Noonan and
Borhek, is responsible for recommending the selection of the Company's
independent certified public accountants, reviewing the scope of the annual
examination of the Company's financial statements, reviewing the report of the
independent certified public accountants, reviewing the independent certified
public accountants' recommendations to management concerning auditing,
accounting and tax issues, aiding the Board in discharging its responsibility in
financial reporting and related matters and reviewing the services and fees of
the independent certified public accountants. The Audit Committee also serves as
the Audit Committee of the Bank. During fiscal 1997, the Audit Committee met
four times.
The Compensation Committee, of which Messrs. Carver, Littlefield and Smith
are current members, reviews and establishes salaries and other compensation of
certain officers and employees of the Company and its subsidiaries, and
administers the Company's stock option plan and recommends to the Board of
Directors the granting of stock options to employees eligible thereunder. The
Compensation Committee also serves as the Compensation Committee of the Bank.
The Compensation Committee met nine times during 1997.
The Board of Directors of the Company nominates candidates for election as
Directors. In accordance with the Company's By-laws, the Board will consider
nominees recommended by a stockholder of the Company, provided that the
stockholder notifies the Clerk of the Company of the proposed nominee in
writing, setting forth certain required information regarding the nominee. Such
notification must be made in a timely manner, as set forth in the By-laws. To be
timely, such notice must be received by the Company not less than 60 nor more
than 150 days prior to the scheduled date of the annual meeting of stockholders,
or, if less than 70 days' notice or prior public disclosure of the date of the
meeting is given or made, within 10 days of public disclosure of the date of the
annual meeting. The Board may reject any stockholder nomination that is not
timely made or does not otherwise satisfy the requirements of the Company's
By-laws.
The Bank also maintains a Community Reinvestment Act ("CRA") Committee, of
which Messrs. Armstrong, Henrikson and Sanderson are members. Donna L. Thaxter,
Senior Vice President, Consumer Banking Division, of the Bank and Mario A.
Berlinghieri, Senior Vice President, Business Banking Division, of the Bank
chaired the committee during 1997. Other Bank employees also serve on this
committee. The CRA
4
<PAGE> 9
Committee reviews the Bank's policy with respect to the Community Reinvestment
Act and establishes the Bank's goals and guidelines in this area. The CRA
Committee met five times during 1997.
COMPENSATION OF DIRECTORS
During the year ended December 31, 1997, Directors received $525 for each
Bank Board meeting that they attended. Members of the Executive Committee
received an annual fee of $6,825. Members of the Audit Committee received $400
and members of all other committees received $325 for each committee meeting
that they attended during the year. Effective January 1, 1998, Directors receive
$550 for each Bank Board meeting that they attend, Audit Committee members
receive $425 and members of all other committees receive $350 for each committee
meeting that they attend. Members of the Board who are employees of the Company
or the Bank do not receive these fees. Directors do not receive additional fees
for attendance at meetings of the Company's Board of Directors that are held
immediately prior to or after a Bank Board meeting.
In July 1997, the Company granted options to purchase 1,500 shares of
Common Stock (adjusted to reflect a two-for-one split in the Company's Common
Stock in December 1997) under the Company's 1997 Incentive and Nonqualified
Stock Option Plan to each non-employee Director pursuant to the Company's Long
Term Performance Incentive Plan, which is described in this proxy statement
under the heading "Compensation Committee Report."
PROPOSAL 2 - DEFERRED STOCK COMPENSATION PLAN FOR DIRECTORS
The Board of Directors has adopted a Deferred Stock Compensation Plan
pursuant to which non-employee Directors of the Company or any of its
subsidiaries may elect to defer payment of compensation for service as a
Director. Eleven Directors are currently eligible to participate in the Plan.
The Plan is effective for compensation earned on or after July 1, 1998, subject
to approval by the affirmative vote of a majority of the shares of Common Stock
of the Company present or represented and voting at a meeting of stockholders.
The full text of the Plan as adopted by the Board of Directors is printed as
Appendix A, beginning on page A-1. The following is a summary of its principal
provisions.
Directors who elect to defer compensation will be awarded stock units
("Stock Units") in lieu of cash compensation for each Board and committee
meeting attended (other than Executive Committee meetings) and a quarterly award
of Stock Units for service on the Executive Committee. Each Stock Unit
represents one share of the Company's Common Stock. The number of Stock Units
allocated for each meeting attended (or for service on the Executive Committee)
will be fixed for the first three years that the Plan is in effect at a number
determined by dividing the amount of the cash Board and committee fees payable
for such meeting (or for such service) as of January 1, 1998 (see "Compensation
of Directors") by the fair market value of the Common Stock on July 1, 1998.
Because the number of Stock Units is fixed, the value of the compensation
received by participating Directors will increase (or decrease) if the value of
the Common Stock increases (or decreases). The number of Stock Units allocated
for each meeting attended (or for service on the Executive Committee) may be
readjusted after the Plan has been in effect for three years. During the term of
the deferral, each Director's Stock Unit Deferral Account will be credited with
additional Stock Units to reflect any payment of cash dividends on the Company's
Common Stock.
The aggregate maximum number of shares of Common Stock reserved and
available for issuance under the Plan is 100,000, subject to appropriate
adjustments in the event of a stock dividend, stock split, or similar change in
capitalization affecting the Common Stock. Shares subject to the Plan are
authorized but unissued shares, Treasury shares or shares purchased in open
market transactions.
Stock Units are payable only in the form of whole shares of Common Stock
(with any fractional share payable in cash) and will be paid, or commenced to be
paid, on the January 15th or July 15th (in the case of semi-annual installments)
coincident with or next following the date on which the Director ceases to be a
member of
5
<PAGE> 10
the Board of Directors of the Company. Payment of shares of Common Stock
corresponding to the Stock Units in a Director's Stock Unit Deferral Account may
be made in a single lump sum or in annual or semi-annual installments over a
period of ten years, as the Director may have irrevocably specified before the
compensation is earned. In the absence of an effective election, payment will be
made in a single lump sum.
In the event of a Change in Control (as defined in the Plan) of the Company
while Stock Units remain outstanding under the Plan, the right to receive
distributions in respect of Stock Units will be immediately accelerated and each
participating Director will be entitled to receive, in payment for each Stock
Unit then allocated to his or her Stock Unit Deferral Account, (i) one share of
Common Stock of the Company (in the case of a Change in Control that does not
result in any change in the Common Stock of the Company), or (ii) such
securities, cash or property as the holders of each share of Common Stock
received in connection with such Change of Control (in the case of a Change in
Control that results in a change in the Common Stock of the Company or a
conversion of such Common Stock into other securities, cash or property). Such
distribution or payment will be made no later than the effective date of the
Change in Control.
The Plan will be administered by an independent Plan Administrator
appointed by the Company's Board of Directors. In addition, although not
required under the Plan, the Company is establishing a revocable "rabbi" trust
into which the Company intends to make contributions at least quarterly to
enable the trustee to purchase shares of Common Stock corresponding to the Stock
Units allocated to Directors under the Plan. The trustee will be an independent
third party and will have the power to vote all shares of Company Common Stock
held in the trust in its discretion.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE
ABINGTON BANCORP, INC. DEFERRED STOCK COMPENSATION PLAN FOR DIRECTORS.
MANAGEMENT
EXECUTIVE OFFICERS
The names and ages of all executive officers of the Company and the Bank
and the principal occupation and business experience during at least the last
five years for each are set forth below as of April 14, 1998.
JAMES P. MCDONOUGH. For biographical information concerning Mr. McDonough,
see "Election of Directors--Information Regarding Directors and Nominees" above.
EDWARD J. MERRITT has been Executive Vice President of the Bank since
September 1993. He was Treasurer of the Company since its incorporation on
October 15, 1996 until June 1997 and Executive Vice President and Chief
Financial Officer of the Bank from September 1993 until June 1997. Prior to that
date, he served as Senior Vice President and Chief Financial Officer of the Bank
from June 1991 to September 1993 and Treasurer and Chief Financial Officer of
the Bank from July 1986 to June 1991. Previously, he held various positions,
including Senior Accountant and Supervisor, at Wolf & Company of Massachusetts,
P.C., from 1983 to 1986. Mr. Merritt is a graduate of Salem State College and is
a Certified Public Accountant. Mr. Merritt is 38 years old.
MARIO M. BERLINGHIERI has been Senior Vice President - Business Banking
Division of the Bank since January 29, 1996. Prior to that date, he served as
Program Manager of the Executive Office of Communities & Development for The
Commonwealth of Massachusetts in 1995; Vice President and Senior Risk Manager of
Fleet Bank of Massachusetts in charge of commercial portfolio approval from 1992
to 1994; and Regional Manager - Boston Small Business Lending for Bank of New
England from 1990 to 1992. Mr. Berlinghieri is a graduate of Suffolk University
with a B.S.B.A. degree in Banking/Finance and an M.B.A. in Business
Administration. Mr. Berlinghieri is 48 years old.
DONNA L. THAXTER has been Senior Vice President - Consumer Banking Division
of the Bank since December 1993. Prior to that date, she was Vice President -
Retail Banking since August 1992. Ms. Thaxter joined the Bank in January 1988
and has held various positions including Production Manager, Commercial
6
<PAGE> 11
Loan Officer and Compliance Officer. Previously, she worked as Underwriting
Manager for GEM Mortgage Corporation of North America from 1984 to 1988. Ms.
Thaxter is a graduate of Framingham State College. Ms. Thaxter is 37 years old.
ROBERT M. LALLO has been Treasurer of the Company and Senior Vice President
- - Treasurer and Chief Financial Officer of the Bank since June 1997. Prior to
that date, he served as Vice President and Treasurer since he joined the Bank in
October 1993 until June 1997. Previously, he held various positions, including
Audit Manager, with Arthur Andersen & Co., currently known as Arthur Andersen
LLP, from July 1986 to October 1993. Mr. Lallo is a graduate of Boston College
with degrees in both Accounting and Finance and is a Certified Public
Accountant. Mr. Lallo is 33 years old.
All executive officers of the Company and the Bank hold office until the
first meeting of the Board of Directors following the annual meeting of
stockholders or special meeting in lieu thereof and until their successors are
chosen and qualified, unless a shorter term is specified in the vote appointing
them. Officers may generally be removed from office by vote of two-thirds of the
Board of Directors.
EXECUTIVE COMPENSATION
Summary Compensation Table. The following Summary Compensation Table sets
forth certain information regarding compensation paid or accrued by the Company
and the Bank with respect to the Chief Executive Officer and the Company's and
the Bank's most highly compensated officers other than the Chief Executive
Officer who served as officers in fiscal 1997 and whose annual compensation
exceeded $100,000 for fiscal 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term All Other(2)
Annual Compensation Compensation(1) Compensation
------------------- --------------- ------------
Name and Fiscal Option
Principal Position Year Salary(3) Bonus(4) Other(5) Grants
- ------------------ ---- --------- -------- -------- ------
<S> <C> <C> <C> <C> <C>
James P. McDonough 1997 $223,080 $56,885 10,000 $15,642
President and Chief 1996 202,800 47,315 10,000 10,930
Executive Officer of the 1995 195,000 32,175 10,000 10,727
Company and the Bank
Edward J. Merritt 1997 120,510 29,139 8,000 14,281
Executive Vice 1996 117,000 25,826 8,000 9,462
President of the Bank 1995 112,500 19,125 8,000 9,101
Donna L. Thaxter 1997 98,992 23,016 6,000 10,090
Senior Vice President - 1996 86,643 15,941 6,000 5,969
Consumer Banking 1995 81,900 13,104 6,000 5,639
Division of the Bank
Mario A. Berlinghieri 1997 88,400 21,393 6,000 8,178
Senior Vice President - 1996 85,000 13,770 0 523
Business Banking
Division of the Bank (6)
Robert M. Lallo 1997 78,885 21,770 0 7,043
Treasurer of the Company, 1996 68,640 10,687 0 4,058
Senior Vice 1995 66,000 10,560 0 3,852
President-Treasurer and
Chief Financial Officer of
the Bank
</TABLE>
7
<PAGE> 12
- ---------------
(1) The numbers shown in this column have been restated to reflect a
two-for-one split in the Company's Common Stock in December 1997.
(2) Includes life insurance premiums of $958, $302, $237, $595 and 169 in 1997
for Messrs. McDonough and Merritt, Ms. Thaxter and Messrs. Berlinghieri and
Lallo, respectively. Also includes allocation of shares of Common Stock to
employees under the Company's Employee Stock Ownership Plan (the "ESOP").
The dollar value of the Company's ESOP contributions in 1997 for Messrs.
McDonough and Merritt, Ms. Thaxter and Messrs. Berlinghieri and Lallo was
$14,684, $13,979, $9,853, $7,583 and $6,874, respectively.
(3) Represents gross salary prior to deduction for employee's voluntary 401(k)
contribution; the Company did not provide matching 401(k) contributions.
(4) Bonuses are reported for the year they were earned, even if paid in the
subsequent year.
(5) Perquisites and other personal benefits paid to each officer included in
the Summary Compensation Table in each instance aggregated less than 10% of
the total annual salary and bonus set forth in the columns entitled
"Salary" and "Bonus" for each officer, and accordingly, are omitted from
the table as permitted by the rules of the Securities and Exchange
Commission.
(6) Mr. Berlinghieri joined the Bank in January 1996.
Option Grants Table. The following Option Grants Table sets forth certain
information regarding stock options granted during the fiscal year ended
December 31, 1997 by the Company to the executive officers named in the Summary
Compensation Table. The numbers shown reflect a two-for-one split in the
Company's Common Stock in December 1997.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
INDIVIDUAL GRANTS AT ASSUMED
---------------------------------------------- ANNUAL RATES OF
PERCENT OF STOCK PRICE
TOTAL OPTIONS EXERCISE APPRECIATION FOR
GRANTED TO PRICE PER OPTION TERM (2)
OPTIONS EMPLOYEES IN SHARE EXPIRATION ----------------
NAME GRANTED FISCAL YEAR ($/SH)(1) DATE 5% 10%
---- ------- ----------- --------- ----------- ------ ----
<S> <C> <C> <C> <C> <C> <C> <C>
James P. McDonough 10,000 33.3 $15.50 7/24/07 $97,478 $247,030
Edward J. Merritt 8,000 26.7 15.50 7/24/07 77,983 197,624
Donna L. Thaxter 6,000 20.0 15.50 7/24/07 58,487 148,218
Mario A. Berlinghieri 6,000 20.0 15.50 7/24/07 58,487 148,218
Robert M. Lallo 0 0 N/A N/A N/A N/A
</TABLE>
- ---------------
(1) Stock options were granted under the Company's 1997 Stock Option Plan at an
exercise price equal to the fair market value of the Company's Common Stock
on the date of the grant. The stock options expire ten years from the date
of grant. Options may not be exercised until the fair market value (as
defined in option agreements) is at least 120% of the exercise price per
share for thirty consecutive business days or upon the ninth anniversary of
the date of grant.
(2) Amounts reported in these columns represent amounts that may be realized
upon exercise of the options immediately prior to the expiration of their
term assuming the specified compounded rates of appreciation of the
8
<PAGE> 13
Company's Common Stock over the term of the options. These numbers are
calculated based on rules promulgated by the Securities and Exchange
Commission and do not reflect the Company's estimates of future stock price
growth. Actual gains, if any, on stock option exercises and Common Stock
holdings are dependent on the timing of such exercise and sale of the
shares and the future performance of the Company's Common Stock. There can
be no assurances that the rates of appreciation assumed in this table can
be achieved or that the amounts shown will be received by the individuals.
Fiscal Year-End Option Table. The following Fiscal Year-End Option Table
sets forth certain information regarding stock options exercised during the
fiscal year ended December 31, 1997 and stock options held as of December 31,
1997 by the executive officers named in the Summary Compensation Table. The
numbers shown reflect a two-for-one split in the Company's Common Stock in
December 1997.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END(1)
ON VALUE --------------------------- -----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James P. McDonough 0 $ 0 120,000 0 $1,979,375 0
Edward J. Merritt 1,000 9,656 53,000 0 760,875 0
Donna L. Thaxter 1,000 11,000 25,000 0 290,469 0
Mario M. Berlinghieri 0 0 6,000 0 33,000 0
Robert M. Lallo 0 0 7,000 0 105,219 0
</TABLE>
- ---------------
(1) Value is based on the last sales price of Common Stock of $21.00 on
December 31, 1997, as reported by The Nasdaq Stock Market National Market
System, less the applicable option exercise price. These values have not
been and may never be realized. Actual gains, if any, on exercise will
depend on the value of the Common Stock on the date of the sale of the
shares underlying the options.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board is currently composed of three
Directors, Messrs. Carver, Littlefield and Smith. Mr. Smith replaced Mr. Borhek
as a member of the Compensation Committee on July 17, 1997. The Compensation
Committee also administers the 1997 Stock Option Plan. This Committee is charged
with the responsibility of reviewing and approving executive officers'
compensation and recommending all discretionary grants of stock options under
the Company's stock option plan. The following describes the compensation
programs in effect during fiscal 1997.
Compensation Policy
The Company's compensation policies are designed to pay executives an
annual salary that is industry competitive and an annual bonus that is based
both on the performance of the Company (as compared to its annual business plan
as well as a selected peer group) and on individual goals established for each
of the executives for the fiscal year. The Company also has longer term
incentives based on stock options. All three components of compensation are
reviewed by the Committee to ensure salaries remain competitive, bonuses reward
performance and stock options provide continued incentives.
9
<PAGE> 14
Salaries for executive officers are based on the duties and
responsibilities of the position held by the executive compared with executive
officers of other companies in the industry. Salaries are reviewed and
established annually. Various industry salary surveys are reviewed in
establishing the new compensation. The Chief Executive Officer prepares a
performance review, including an assessment of prior-year performance, for each
executive officer, then communicates this information to the Compensation
Committee. Based on this information and its performance review of the Chief
Executive Officer, which is based on its assessment of the degree to which the
Chief Executive Officer accomplished pre-established strategic and financial
goals, the Compensation Committee makes recommendations to the Board of
Directors, which establishes annual executive salaries for the next year.
Executive officers and key management employees of the Company and the Bank
participate in the Company's Management Incentive Compensation Program (the
"Bonus Plan"). Payments under the Bonus Plan are contingent on the Company
meeting its strategic and operational objectives for the fiscal year. Bonuses
may be awarded for the achievement of the Company's financial performance goals
and an individual participant's objectives. Bonus awards are determined by a
defined formula; factors considered in this formula include financial
performance of the Company, evaluation of achievement of strategic and/or
operational goals and unit profitability, and Company performance compared to a
peer group on both a return-on-assets and a return-on-equity basis. Based on the
extent to which the Company achieves those objectives, participants, depending
on the Bonus Plan group, may receive from 15% to 30% of base salary. The
Committee reviews both individual and Company goals annually. However, the Board
of Directors has final authority with respect to all bonus awards. Approximately
18.6% of the Company's compensation to executives of the Company and the Bank in
fiscal 1997 was in the form of bonuses.
On March 27, 1997, the Board of Directors of the Company adopted a Long
Term Performance Incentive Plan (the "LTIP") as an incentive for executive
management and members of the Board of Directors to build long-term shareholder
value. The LTIP replaces a similar plan previously adopted by the Bank. The LTIP
provides a mechanism for granting options under the Company's option plan. In
February 1998, options to purchase 60,000 shares of Common Stock were granted to
members of the Board of Directors, the Chief Executive Officer, the Chief
Financial Officer, and eligible Division Heads of the Company and the Bank based
on achievement of the Bank's business plan for 1997. Such options become
exercisable after the fair market value per share of the Common Stock exceeds
120% of the exercise price for a period of 30 consecutive business days, upon
the ninth anniversary of the date of grant or upon a change of control of the
Company. Thus, no benefit will accrue to the executive or key employee from the
stock option grant until the Common Stock appreciates by at least 20%.
Chief Executive Officer Compensation
Mr. McDonough's salary, bonus and stock options are determined by the
Compensation Committee substantially in accordance with the policies described
above relating to all executives of the Company.
COMPENSATION COMMITTEE
Ralph B. Carver, Jr.
A. Stanley Littlefield
Wayne P. Smith
10
<PAGE> 15
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
William F. Borhek, Ralph B. Carver, A. Stanley Littlefield and Wayne P.
Smith served on the Compensation Committee during fiscal 1997. Mr. Smith
replaced Mr. Borhek as a member of the Compensation Committee on July 17, 1997.
Persons serving on the Compensation Committee had no relationships with the
Company other than their relationship to the Company as Directors entitled to
the receipt of standard compensation as Directors and members of certain
committees of the Board and their relationship to the Company as stockholders.
No person serving on the Compensation Committee or on the Board of Directors of
the Company is an executive officer of another entity for which an executive
officer of the Company or the Bank serves on the board of directors or on that
entity's compensation committee.
PERFORMANCE GRAPH
The following Performance Graph compares the performance of the Company's
cumulative stockholder return with that of a broad market index (the S&P 500
Index) and a published industry index (the Keefe, Bruyette & Woods New England
Bank Index) for each of the most recent five fiscal years. The cumulative
stockholder return for shares of Common Stock and each of the indices is
calculated assuming that $100 was invested on December 31, 1992. The performance
of the indices is shown on a total return (dividends reinvested) basis. The
graph lines merely connect year-end dates and do not reflect fluctuations
between those dates.
COMPARISON OF FIVE-YEAR CUMULATIVE RETURN
INDEX OF TOTAL RETURN (12/31/92 = 100)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
S&P 500 KBW New England ABBK Price Plus
DATE INDEX Bank Index Indexed Cumulative Dividends
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
12/31/92 100.00 100.00 100.00 $ 4.250
12/31/93 110.02 133.51 135.29 $ 5.750
12/31/94 111.51 134.40 145.43 $ 6.181
12/31/95 153.26 209.77 212.98 $ 9.052
12/31/96 188.36 289.74 246.49 $10.476
12/31/97 251.12 498.12 538.48 $22.885
</TABLE>
11
<PAGE> 16
401(k) PLAN
The Bank has a defined contribution plan pursuant to Section 401(k) of the
Internal Revenue Code for the benefit of its employees, including officers.
Subject to certain eligibility requirements, the 40l(k) plan permits each
participant to defer up to 15% of such participant's annual salary up to a
maximum annual amount ($9,500 in calendar year 1997). The Bank does not make
matching contributions to the plan. Federal income taxes on amounts allocated to
a participating employee are deferred until such amounts are distributed to the
participant.
RETIREMENT PLAN
In addition to the foregoing, the Bank also provides a retirement plan for
eligible employees through the Savings Banks Employees Retirement Association
("SBERA"), an unincorporated association of savings banks operating within
Massachusetts and other organizations providing services to or for savings
banks. SBERA's purpose is to enable the participating banks to provide pension
and other benefits for their employees. Each employee age 21 or older who has
completed at least 1,000 hours of service in one consecutive twelve-month period
beginning with such employee's date of employment automatically becomes a
participant in the retirement plan. All participants become fully vested after
three years of service or at age 62 if earlier.
The retirement plan is a qualified defined benefit plan which does not
require the employee to make any contribution to become a participant or to earn
benefits under the plan. The benefits provided at age 65 to any participant are
based on the average of the highest three consecutive years of compensation
(including bonuses) for such participant (the "Average Compensation"). The
benefits provided at age 65 are equal to 1.35% of the Average Compensation for
each year of service with the Bank up to a maximum of 30 years, plus .6% of the
excess of Average Compensation over Covered Compensation (as defined below) for
the participant's age for each year of service with the Bank up to 30 years.
Covered Compensation is the average of 35 years of social security taxable wages
up to and including the year in which a participant reaches social security
retirement age. Due to certain requirements of the Tax Reform Act of 1986, the
Bank's retirement plan was modified, effective November 1, 1989. The prior plan
calculated benefits using a different formula than the current plan.
Participants who were employed by the Bank on November 1, 1989 and were
participants in the plan prior to that date will receive the greater of the
retirement benefit earned as of October 31, 1989 under the prior plan or the
benefit earned by application of the new formula under the current plan.
The following table is derived from information provided by SBERA and
illustrates annual pension benefits for retirement at age 65 under the most
advantageous plan provisions available for various levels of compensation and
years of service. The figures in this table are based upon the assumption that
the plan continues in its present form and certain other assumptions regarding
social security benefits and compensation trends.
12
<PAGE> 17
<TABLE>
<CAPTION>
PROJECTED ANNUAL PENSION BENEFIT
BASED ON YEARS OF SERVICE(1)
Average 10 15 20 25 30 Years
Compensation Years Years Years Years and After
------------ ----- ----- ----- ----- ---------
<S> <C> <C> <C> <C> <C>
$20,000 $2,700 $4,050 $5,400 $6,750 $8,100
40,000 6,042 9,063 12,084 15,104 18,125
60,000 9,942 14,913 19,884 24,854 29,825
80,000 13,842 20,763 27,684 34,604 41,525
100,000 17,742 26,613 35,484 44,354 53,225
120,000 21,642 32,463 43,284 54,104 64,925
125,000 22,617 33,925 45,234 56,542 67,850
140,000 25,542 38,313 51,084 63,854 76,625
150,000 27,492 41,238 54,984 68,729 82,475
160,000 (2) 29,442 44,163 58,884 73,604 88,325
</TABLE>
- ---------------
(1) The annual pension benefit is computed on the basis of a straight-line
annuity and assumes retirement at age 65 between November 1, 1997 and
October 31, 1998.
(2) Federal law does not permit defined benefit pension plans to recognize
compensation in excess of $160,000.
Normal retirement age under the plan is 65; a reduced early retirement
benefit is payable from age 50 to 65 under certain conditions. The following
table is derived from information provided by SBERA and sets forth estimated
retirement benefits under the plan at normal retirement dates for the executive
officers of the Company and the Bank named in the Summary Compensation Table,
computed on the basis of their present salary levels.
<TABLE>
<CAPTION>
ESTIMATED
YEARS OF CREDITED ANNUAL PENSION
NAME SERVICE AT AGE 65 BENEFIT AT AGE 65
---------------- ----------------------- -------------------------
<S> <C> <C>
James P. McDonough 28 $74,358
Edward J. Merritt 38 59,294
Donna L. Thaxter 37 46,670
Mario A. Berlinghieri 19 27,552
Robert M. Lallo 36 42,805
</TABLE>
TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS
The Company and the Bank have entered into special termination agreements
with Messrs. McDonough, Merritt, Berlinghieri and Lallo and Ms. Thaxter.
The Agreements provide for severance payments if the officer's employment
with the Company or the Bank is terminated within three years following a change
in control of the Company (as defined in the agreements)
13
<PAGE> 18
under certain circumstances, including either (1) termination of the officer's
employment by the Company or the Bank for any reason other than death,
deliberate dishonesty with respect to the Company or any subsidiary or affiliate
thereof or conviction of a crime involving moral turpitude, or (2) resignation
by the officer subsequent to the occurrence of any of the following events: (a)
a reduction in compensation, (b) a significant change in the officer's authority
or responsibility, (c) a reasonable determination by the officer that he is
unable to exercise his prior authority or responsibility as a result of such
change in control or (d) the failure by the Company or the Bank to continue any
material compensation, incentive, bonus or benefit plan (or provide an
appropriate substitute plan) or the failure by the Company or the Bank to
continue the officer's participation therein on a basis not materially less
favorable as existed at the time of the change of control. In such event, the
officer would receive a lump sum payment equal to approximately three times (in
the case of Messrs. Berlinghieri and Lallo, two times) the officer's average
annual compensation (including bonuses) over the five years prior to the change
in control.
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
The Bank has entered into a Supplemental Executive Retirement Agreement
(the "SERP") with Mr. McDonough dated as of March 26, 1998 and is establishing a
related insurance trust for the purpose of providing a supplemental retirement
benefit to Mr. McDonough.
The agreement provides that Mr. McDonough will be entitled to receive at
age 65 an annual benefit equal to the difference between (i) the annual
retirement benefit which would have been payable to Mr. McDonough under the
Bank's SBERA retirement plan for employees (see above description) if the limits
imposed by the Internal Revenue Code on the maximum amount of compensation that
may be taken into account by a SBERA retirement plan in determining retirement
benefits and on the amounts payable to certain participants by a retirement plan
had been disregarded in calculating such benefit and (ii) the actual annual
retirement benefit payable to Mr. McDonough under the retirement plan. If Mr.
McDonough's employment with the Bank is terminated other than for "cause" (as
defined in the Agreement) prior to his attaining the age of 65, Mr. McDonough is
entitled to receive an amount equal to the accruals previously made by the Bank
or the Company with respect to the SERP benefit, subject to downward adjustment
in certain limited circumstances. If within three years following a change in
control (as defined in the agreement) Mr. McDonough's employment is terminated
for other than cause or death or Mr. McDonough resigns following the failure of
the Board of Directors to elect him to the office of President and Chief
Executive Officer or his salary, benefits or scope of responsibility are
reduced, Mr. McDonough is entitled to receive the benefit to which he would have
been entitled had he resigned at age 65. If Mr. McDonough dies before age 65,
his designated beneficiary is entitled to receive a benefit equal to three times
Mr. McDonough's final compensation for the three calendar years (out of his
final five calendar years of employment with the Bank) during which his
compensation was the highest plus an amount equal to the accruals previously
made by the Bank or the Company with respect to the SERP benefit.
EMPLOYEE STOCK OWNERSHIP PLAN
The Bank established an Employee Stock Ownership Plan (the "ESOP"),
effective as of November 1, 1985, for employees age 21 or older who have
completed at least 1,000 hours of service with the Bank in a twelve-month period
beginning with the employee's date of employment or any anniversary thereof.
The ESOP is funded by contributions made in cash or stock. Cash
contributions will generally be invested in Common Stock of the Company and
stock contributions will be made in Common Stock of the Company. Benefits may be
paid in shares of Common Stock or in cash, subject to the participant's right to
require payment in shares.
14
<PAGE> 19
In November 1993, the ESOP entered into a loan agreement with the Bank
pursuant to which the ESOP has borrowed up to $570,000 to purchase additional
shares of Common Stock. The loan is to be repaid over seven years, with
principal and interest (at a fixed rate of 8.5% per annum) payable quarterly.
Shares purchased with loan proceeds are held in a suspense account for
allocation among participants as the loan is paid. The loan is secured by the
unallocated shares acquired by the ESOP and will be repaid with funds from
contributions to the ESOP. The ESOP's purchases of additional shares of the
Company's Common Stock (including reinvestment of cash dividends) will be and
have been made through periodic purchases on the open market effected through a
broker-dealer, subject to market conditions. The timing and price of the
purchases are in the discretion of the ESOP Trustee. As of December 31, 1997,
47,128 additional shares were purchased by the ESOP with the proceeds from the
loan. An aggregate of 8,661 shares were allocated to participants for the plan
year ended October 31, 1997.
Contributions to the ESOP and shares released from the suspense account are
allocated among participants on the basis of compensation (including bonuses).
Benefits become 20% vested after three years of eligible service with an
additional 20% becoming vested each year thereafter. Non-vested benefits that
are forfeited are reallocated among remaining participants in the same manner as
contributions. Benefits are payable upon retirement, death, disability, or
separation from service with the Bank. Dividends paid by the Company on
allocated shares of Common Stock held in the ESOP may be paid directly to the
participants in cash. The Bank's contributions to the ESOP are not fixed
(although required to be in amounts at least sufficient to pay the principal and
interest of the loan) so future benefits payable under the ESOP cannot be
estimated.
A Committee consisting of Lewis J. Paragona, Ida C. Frazier and Donna L.
Thaxter administers the ESOP. The trustee of the ESOP is currently James P.
McDonough. Under the ESOP, the Committee is required to solicit instructions
from the participants with respect to voting shares that have been allocated to
such participants, and is required to follow such instructions in directing the
trustee to vote such allocated shares. In addition, the trustee is required to
vote shares which are held in the suspense account in the same proportion as the
trustee is directed to vote those shares for which instructions are given. Upon
the direction of the Committee, the trustee also exercises numerous other powers
including the right to sell or otherwise dispose of Common Stock held by the
ESOP.
CERTAIN TRANSACTIONS WITH MANAGEMENT AND OTHERS
Certain of the Directors and officers of the Company and the Bank are at
present, as in the past, customers of the Bank and have loans with the Bank in
the ordinary course of business. Certain of the Directors of the Company and the
Bank are also at present, as in the past, directors, officers or stockholders of
corporations, trustees of trusts or members of partnerships which are customers
of the Bank and which have loans with the Bank in the ordinary course of
business. Such loan transactions with Directors and officers of the Company and
the Bank and with such corporations, trusts and partnerships were on terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons and did not involve more than normal
risk of collectibility or present other features unfavorable to the Bank.
The Bank is a party to a lease for office space located at 538 Bedford
Street, Abington, Massachusetts, used for certain of the Bank's administrative
offices. Northeast Terminal Associates, Limited, of which Dennis E. Barry and
Joseph L. Barry, Jr. (who beneficially own more than 5% of the Company's Common
Stock) are the principal beneficial owners, owns the property. All lease
negotiations were conducted on an arms-length basis. Messrs. Barry did not
participate in the Bank's decision to enter into the lease and received no fees
in connection therewith. The lease extends until June 30, 1999, with an annual
rent of $48,000 in 1997 and an annual rent of $50,400 thereafter.
15
<PAGE> 20
As a result of a competitive bid process, the Company purchases some of its
insurance from J. H. Slattery Insurance Agency, Inc. of which James J. Slattery,
a Director of the Company, is President. The Bank paid $139,279 to the insurance
agency in 1996 for insurance premiums covering the three-year period ending
November 1, 1999.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information as of March 23, 1998
regarding each person known by the Company to own beneficially more than 5% of
the Company's Common Stock, each Director and nominee for Director of the
Company, each executive officer named in the Summary Compensation Table and all
Directors and executive officers of the Company as a group. The numbers shown in
the table below reflect a two-for-one split in the Company's Common Stock that
became effective December 12, 1997.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME BENEFICIAL OWNERSHIP (1) PERCENT OF CLASS (2)
----------- -------------------------------- --------------------------
<S> <C> <C>
Dennis E. Barry and 364,000 (3) 10.25%
Joseph L. Barry, Jr.
c/o Hallamore Motor
Transportation, Inc.
795 Plymouth Street
Holbrook, MA 02343
James P. McDonough 196,679 (4) 5.36
c/o Abington Savings Bank
536 Washington Street
Abington, MA 02351
Dimensional Fund Advisors Inc. 184,800 (5) 5.21
1299 Ocean Avenue
Santa Monica, CA 90401
* Joel S. Geller 148,010 (6) (7) 4.2
James J. Slattery 65,547 (6) (8) 1.8
Wayne P. Smith 64,970 (6) (9) 1.8
Edward J. Merritt 60,367 (10) 1.7
Robert J. Armstrong 32,700 (6) (11) .9
* Bruce G. Atwood 32,141 (6) (12) .9
Gordon N. Sanderson 31,976 (6) (13) .9
Donna L. Thaxter 32,835 (14) .9
William F. Borhek 30,173 (6) (15) .9
Rodney D. Henrikson 26,346 (6) (16) .7
* Ralph B. Carver, Jr. 22,000 (17) .6
* Jay Timothy Noonan 20,500 (18) .6
A. Stanley Littlefield 18,500 (6) (19) .5
Mario A. Berlinghieri 16,081 (20) .5
Robert M. Lallo 10,931 (21) .3
All Directors and executive
officers as a group (16 809,756 (22) 20.8
persons)
</TABLE>
16
<PAGE> 21
- ---------------
* Nominee for Director
(1) Except as otherwise noted, all persons and entities have sole voting and
investment power over their shares. All amounts shown in this column
include shares obtainable upon exercise of stock options exercisable within
60 days of the date of this table.
(2) Calculated based on outstanding shares of Common Stock on April 1, 1998.
Such outstanding number reflects stock repurchases by the Company during
the first quarter of 1998.
(3) The Bank received a report on Schedule 13D, Amendment No. 3, dated February
22, 1990, as filed with the FDIC, stating that (i) Dennis E. Barry owns
84,750 shares as to which he has sole voting and dispositive power, (ii)
Joseph L. Barry, Jr. owns 84,750 shares as to which he has sole voting and
dispositive power, and (iii) Dennis E. Barry and Joseph L. Barry, Jr.
jointly own 12,500 shares as to which they have shared voting and
dispositive power. The Schedule 13D indicated that Messrs. Barry were each
describing a relationship with other persons but were not affirming the
existence of a group. Nevertheless, the Company believes that Dennis E.
Barry and Joseph L. Barry, Jr. may constitute a "group" as that term is
used in Section 13(d)(3) of the Securities Exchange Act of 1934 and that
such group may be deemed to be the beneficial owner of the shares set forth
in this table. Pursuant to the Company's two-for-one stock split on
December 12, 1997, the above shares owned became 169,500, 169,500 and
25,000 respectively.
(4) Includes 120,000 shares subject to currently exercisable options, 13,567
shares held in his self-directed IRA, 48,218 shares owned jointly with his
wife and 2,246 shares owned by his wife in a self-directed IRA. Also
includes 509 shares held by Mr. McDonough as custodian for one of his two
children and 508 shares held by his wife as custodian for one of his two
children (1,017 shares total). Mr. McDonough disclaims beneficial ownership
of the shares owned directly by his wife. Also includes 11,631 shares held
by the ESOP as to which Mr. McDonough has the power to direct the voting.
Does not include 10,000 shares subject to options which by their terms are
not exercisable until the fair market value (as defined in the option
agreement) is at least $24.90 per share for a period of 30 consecutive
business days.
(5) The Bank has obtained a copy of a report on Schedule 13G, dated February 6,
1998, as filed with the SEC, stating that Dimensional Fund Advisors Inc.
(the "Fund") is the beneficial owner of 184,800 shares, of which it has
sole voting power with respect to 105,000 shares and sole dispositive power
with respect to 184,800 shares. The Schedule 13G states that all of the
shares reported in the Schedule are owned by advisory clients of the Fund.
The Fund disclaims beneficial ownership of all such shares.
(6) Includes 17,500 shares subject to currently exercisable options. Does not
include for each person 2,000 shares which by their terms are not
exercisable until the fair market value (as defined in the option
agreement) is at least $24.90 per share for a period of 30 consecutive
business days.
(7) Includes 2,000 shares owned jointly with his mother, 6,000 shares owned
jointly with his wife, 3,568 shares owned directly by his wife, 1,688
shares owned by his son, 2,228 shares owned by his daughter, and 113,026
shares owned by a partnership in which Mr. Geller is a partner. Mr. Geller
disclaims beneficial ownership of the 3,568 shares owned directly by his
wife and the shares owned by his son and daughter.
(8) Includes 5,708 shares held in his IRA, 4,000 shares held as custodian for
each of two daughters (8,000 shares total), 1,800 shares held as custodian
for his daughter, 4,040 held as custodian for his son, 200 shares owned by
his wife, 1,624 shares held in his wife's IRA, 100 shares held by his wife
as custodian for his son and 12,825 shares owned by a corporation of which
he is a principal owner. Mr. Slattery disclaims beneficial ownership of the
shares held on behalf of his children and the shares owned by his wife.
(9) Includes 20,553 shares owned by his wife. Mr. Smith disclaims beneficial
ownership of the shares owned by his wife.
(10) Includes 23,000 shares subject to currently exercisable options, 100 shares
owned by his wife and 50 shares held as custodian for each of two sons (100
shares total). Also includes 10,053 shares held by the ESOP as to which Mr.
Merritt has the power to direct voting. Does not include 7,000 shares
subject to options which by their terms are not exercisable until the fair
market value (as defined in the option agreement) is at least $24.90 per
share for a period of 30 consecutive business days.
17
<PAGE> 22
(11) Includes 15,200 shares owned jointly with his wife.
(12) Includes 10,458 shares owned by his wife. Mr. Atwood disclaims beneficial
ownership of the shares owned by his wife.
(13) Includes 14,476 shares owned through a realty trust.
(14) Includes 1,000 shares owned jointly with her husband. Also includes 25,000
shares subject to currently exercisable options and includes 4,641 shares
held by the ESOP as to which Ms. Thaxter has the power to direct voting.
Does not include 7,000 shares subject to options which by their terms are
not exercisable until the fair market value (as defined in the option
agreement) is at least $24.90 per share for a period of 30 consecutive
business days.
(15) Includes 10,581 shares owned jointly with his wife and 2,092 shares owned
by his wife. Mr. Borhek disclaims beneficial ownership of the shares owned
directly by his wife.
(16) Includes 4,842 shares owned by a corporation in which Mr. Henrikson is an
officer, director and stockholder. Also includes 1,800 shares held in his
self-directed IRA and 1,800 shares held by his wife in a self-directed IRA.
(17) Includes 1,500 shares subject to currently exercisable options and 16,000
shares owned jointly with his wife. Does not include 2,000 shares subject
to options which by their terms are not exercisable until the fair market
value (as defined in the option agreement) is at least $24.90 per share for
a period of 30 consecutive business days.
(18) Includes 6,000 shares subject to currently exercisable options. Does not
include 2,000 shares subject to options which by their terms are not
exercisable until the fair market value (as defined in the option
agreement) is at least $24.90 per share for a period of 30 consecutive
business days.
(19) Includes 1,000 shares owned jointly with his wife.
(20) Includes 815 shares owned jointly with his wife and 8,840 shares held in
his self-directed IRA. Also includes 6,000 shares subject to currently
exercisable options and 426 shares held by the ESOP as to which Mr.
Berlinghieri has the power to direct voting. Does not include 7,000 shares
subject to options which by their terms are not exercisable until the fair
market value (as defined in the option agreement) is at least $24.90 per
share for a period of 30 consecutive business days.
(21) Includes 1,654 shares held in his self-directed IRA. Also includes 7,000
shares subject to currently exercisable options and 1,609 shares held by
the ESOP as to which Mr. Lallo has the power to direct voting. Does not
include 7,000 shares subject to options which by their terms are not
exercisable until the fair market value (as defined in the option
agreement) is at least $24.90 per share for a period of 30 consecutive
business days.
(22) Includes 346,000 shares obtainable by exercise of currently exercisable
options held by all Directors and executive officers as a group. Also
includes 28,360 shares held by the ESOP as to which executive officers of
the Company have the power to direct the voting. Does not include 60,000
shares subject to options which by their terms are not exercisable until
the fair market value (as defined in the relevant option agreements) of the
Common Stock is at least $24.90 per share for a period of 30 consecutive
business days.
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
During fiscal 1997, the Company was subject to Section 16(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), which requires
the Company's officers and Directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, Directors, and greater-than-10% shareholders were required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on review of the copies of Forms 3, 4 and 5 furnished to the
Company during and with respect to the 1997 fiscal year, or written
representations that no Forms 5 were required, the Company believes that all
Section 16(a) filing requirements applicable to the Company's and the Bank's
officers, Directors, and greater-than-10% beneficial owners were complied with
during 1997, except that Donna Thaxter, an officer of
18
<PAGE> 23
the Bank, and Ralph B. Carver, Jr., a Director, each failed to file on a timely
basis one Form 4 disclosing one transaction.
INFORMATION CONCERNING AUDITORS
The Board of Directors has selected Arthur Andersen LLP to audit the
Company's financial statements for the current fiscal year. That firm also
served as the auditors for the Company during the past fiscal year. A
representative of Arthur Andersen LLP is expected to be present at the Annual
Meeting, will have the opportunity to make a statement if he or she desires to
do so and will be available to respond to appropriate questions.
SOLICITATION
Brokers, banks and other nominees will be reimbursed for out-of-pocket
expenses and other reasonable clerical expenses incurred in obtaining
instructions from beneficial owners of Common Stock. In addition to the
solicitation by mail, solicitations of proxies may be made personally or by
telephone by Directors, officers and certain employees of the Company. The
Company also intends to employ the services of Regan and Associates, Inc. to
solicit proxies. It is estimated that Regan and Associates, Inc. will receive
approximately $3,750 in connection with such solicitation of proxies. All
expenses incurred in connection with this solicitation will be borne by the
Company.
SUBMISSION OF STOCKHOLDER PROPOSALS
FOR 1999 ANNUAL MEETING
In order to be included in proxy materials for the 1999 annual meeting of
stockholders or special meeting in lieu thereof, qualifying stockholder
proposals must be delivered to the Company at its principal executive offices on
or before January 14, 1999. Any such proposal should be mailed to: Clerk,
Abington Bancorp, Inc. 536 Washington Street, Abington, Massachusetts 02351. If
the date of the next annual meeting is subsequently changed by more than 30
calendar days from the date of this year's Annual Meeting, the Company will, in
a timely manner, inform its stockholders of such change and the date by which
proposals of stockholders must be received.
In addition, the Company's By-laws set forth certain procedural
requirements, including a notice requirement, that apply to stockholders wishing
to nominate a Director or propose an item of business for consideration at the
scheduled annual meeting or special meeting in lieu thereof.
MISCELLANEOUS
The Board was not aware, a reasonable time before mailing this Proxy
Statement to stockholders, of any business that may properly be presented at the
Annual Meeting, other than the matters specifically listed in the Notice of
Annual Meeting of Stockholders. However, if any further business is properly
presented, the persons present will have discretionary authority to vote the
shares they own or represent by proxy in accordance with their judgment.
19
<PAGE> 24
APPENDIX A
DEFERRED STOCK COMPENSATION PLAN FOR DIRECTORS
OF
ABINGTON BANCORP, INC. AND ITS SUBSIDIARIES
This Deferred Stock Compensation Plan For Directors of Abington Bancorp,
Inc. and Its Subsidiaries (the "Plan") is adopted as of January 22, 1998,
effective with respect to compensation earned after July 1, 1998.
1. ELIGIBILITY. Any member of the Board of Directors of Abington Bancorp,
Inc. or any of its subsidiaries (each such entity being referred to herein as
the "Corporation") who is not an employee of Abington Bancorp, Inc. or any of
its subsidiaries may elect to defer, into a Stock Unit Deferral Account, payment
of the compensation payable to him for service as such Director, all in
accordance with the terms of this Plan.
2. ADMINISTRATION OF THE PLAN. The Plan shall be administered by an
independent Plan Administrator, to be appointed by the Corporation's Board of
Directors. By accepting the appointment, the Plan Administrator shall be deemed
to have agreed to abide by all of the terms hereof as if it were a signatory
hereof.
3. ELECTION TO DEFER. Deferrals under this Plan shall be made on the basis
of a July 1-June 30 year (a "Plan Year"), commencing July 1, 1998. Directors
wishing to defer compensation pursuant to this Plan shall submit a written
election (the "Deferral Election") to the Corporation at least 45 days prior to
the commencement of the Plan Year for which such Deferral Election is to apply.
Such Deferral Election shall be effective upon receipt by the Corporation, and
shall apply to all compensation earned by the Director during the Plan Year
commencing on the succeeding July 1 (the "Deferral Commencement Date").
NOTWITHSTANDING THE FOREGOING, A DIRECTOR'S DEFERRAL ELECTION SHALL BE EXTENDED
AUTOMATICALLY FOR AN ADDITIONAL PLAN YEAR COMMENCING ON THE FIRST ANNIVERSARY OF
THE DEFERRAL COMMENCEMENT DATE AND ON EACH SUBSEQUENT ANNIVERSARY THEREAFTER,
UNLESS THE DIRECTOR GIVES WRITTEN NOTICE TO THE CORPORATION, AT LEAST 45 DAYS
PRIOR TO PRIOR TO THE DATE OF ANY SUCH ANNIVERSARY, OF SUCH DIRECTOR'S ELECTION
NOT TO EXTEND SUCH DEFERRAL ELECTION.
Any election to participate in the Plan may be revoked, but only as to
compensation to be earned at and after commencement of the next succeeding Plan
Year and only if such revocation is submitted in writing to the Corporation at
least 45 days prior to the commencement of such succeeding Plan Year.
4. ALLOCATION OF STOCK UNITS. A Director's election to defer compensation
hereunder shall result in his compensation being allocated to him in the form of
stock units ("Stock Units"), with each Stock Unit representing one share of
common stock of Abington Bancorp, Inc. ("Stock"). Throughout the first three
Plan Years (commencing July 1, 1998 and ending June 30, 2001), Stock Units will
be allocated to participating Directors in the following amounts:
Capacity of Service Number of Stock Units Allocated
------------------- -------------------------------
Board of Directors A number of Units (rounded up to the nearest
whole Unit) per meeting attended(1) determined
by dividing $550 by the closing price reported
for Abington Bancorp, Inc. Common Stock on the
Nasdaq National Market on July 1, 1998, or, if
no sales were reported on such date, for the
last date preceding such date for which a sale
was reported (the "July 1 Fair Market Value").
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Capacity of Service Number of Stock Units Allocated
------------------- -------------------------------
Executive Committee A number of Units (rounded up to the nearest
whole Unit) per calendar quarter determined by
dividing $1706.25 by the July 1 Fair Market
Value, such Units to be allocated in advance on
the first day of each calendar quarter
Audit Committee A number of Units (rounded up to the
nearest whole Unit) per meeting attended(1)
determined by dividing $425 by the July 1 Fair
Market Value
All Other Committees A number of Units (rounded up to the nearest
whole Unit) per meeting attended(1) determined
by dividing $350 by the July 1 Fair Market Value
- ----------
(1) Stock Units will be allocated to participating Directors'
Stock Unit Deferral Accounts as of the date of each meeting attended of
the Board of Directors or any Board Committee (other than the Executive
Committee) of the Corporation and its subsidiary, Abington Savings Bank
(the "Bank"). However, a joint meeting of the Boards or Committees of
the Corporation and the Bank will be treated as a single meeting for
purposes of Stock Unit allocations hereunder.
For Plan Years commencing on and after July 1, 2001, the Board of
Directors may, in its discretion, adjust the number of Stock Units to be
allocated to Directors from time to time, such adjustment(s) to be made no more
frequently than annually and to be based generally upon the cash compensation
being paid to nonparticipating Directors at the time of the adjustment, divided
by the then-current Fair Market Value of the Stock.
5. STOCK UNIT DEFERRAL ACCOUNT. The Corporation shall maintain, or shall
cause the Plan Administrator to maintain, a book account to which participating
Directors' Stock Units shall be credited as of the date on which such
compensation is earned ("Stock Unit Deferral Account" or "deferred compensation
account").
To enable the Plan Administrator to maintain such Stock Unit Deferral
Accounts, the Corporation shall, periodically (and at any time upon the Plan
Administrator's request), provide the Plan Administrator with a written report
(i) listing the number of Stock Units earned by each participating Director
since the date of the previous report (or during such period of time as the Plan
Administrator may request), and (ii) setting forth the date upon which each
Stock Unit was earned. The Corporation will also provide the Plan Administrator
with prompt notification of any dividend payable with respect to the Common
Stock, to enable the Plan Administrator to make appropriate credits and
adjustments to the Stock Unit Deferral Accounts, as required below.
During the term of the deferral, the Corporation (or the Plan Administrator
on the Corporation's behalf) shall credit each Director's Stock Unit Deferral
Account with additional Stock Units to reflect any payment of dividends payable
in cash or other property (other than dividends payable only in shares of Common
Stock, which shall be accounted for in accordance with the following paragraph).
Each Stock Unit Deferral Account will be credited with a number of whole and
fractional shares of Stock Units determined by multiplying the dividend value
per share of Common Stock by the number of Stock Units in the account on the
record date and dividing the result by the fair market value of the Stock on the
dividend record date. For this purpose, the fair market value of the Stock on
any given date shall mean the closing price reported for the Common Stock on the
Nasdaq National Market on the immediately preceding trading date, or, if no
sales were reported on such date, for the last date preceding such date for
which a sale was reported.
In the event of a stock dividend, stock split or similar change in
capitalization affecting the Common Stock, the Corporation (or the Plan
Administrator on the Corporation's behalf) shall make appropriate adjustments in
the number of Stock Units credited to each Director's Stock Unit Deferral
Account.
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<PAGE> 26
The Corporation or the Plan Administrator shall provide to each
participating Director a quarterly accounting of the number of Stock Units in
his Stock Unit Deferral Account. The Plan Administrator shall provide to the
Corporation a quarterly accounting of the number of Stock Units allocated to all
participating Directors' Stock Unit Deferral Accounts.
6. METHOD AND TIMING OF PAYMENT FROM STOCK UNIT DEFERRAL ACCOUNT.
(a) Stock Units credited to a Director's Stock Unit Deferral Account shall
be payable only in the form of whole shares of Stock (with any fractional share
payable in cash) and shall be paid, or commenced to be paid, on the January 15
coincident with or next following the date on which the Director ceases to be a
member of the Board of Directors of the Corporation for any reason whatsoever.
In the case of semi-annual installments, payments shall also be made on each
July 15.
(b) Payment of shares of Stock corresponding to the Stock Units in a
Director's Stock Unit Deferral Account may be made either in a single lump sum
or in annual, or semi-annual, installments over a period of ten (10) years, as
the Director may have irrevocably specified before the compensation is earned.
In the absence of an effective election, payment shall be made in a single lump
sum. In the case of installment payments, dividends shall continue to be
credited in accordance with Section 5 during the payment period. The number of
shares of Stock payable with each installment shall be equal to the number of
Stock Units credited to the Director's Stock Unit Deferral Account as of the
preceding June 30 or December 31, as the case may be, divided by the number of
payments remaining to be made, including the current payment. Installment
payments shall be made as they become due to the Director if then living,
otherwise to a beneficiary or beneficiaries designated by the Director in
writing to the Corporation prior to the Director's death, or failing such
designation, to the Director's estate.
(c) Elections by a Director of a method of payment under sub-paragraph (b)
shall be made in writing, effective upon receipt and acceptance by the
Corporation, and applicable only to compensation to be earned after the
effective date of the election. Such elections may also be changed by a
Director, subject to the same restrictions.
(d) Notwithstanding any provision hereof to the contrary, if a Director (or
after a Director's death the Director's beneficiary, in the case of subsection
(i) below) believes he is suffering from financial hardship, an application may
be made to the Plan Administrator for:
(i) acceleration of distributions of shares of Stock corresponding
to the Director's Stock Unit Deferral Account, or
(ii) immediately effective revocation of such Director's election to
defer compensation hereunder with respect to compensation to be
earned in the future.
A "financial hardship" shall mean a need for financial assistance due to the
occurrence of an unanticipated emergency caused by an event beyond the
Director's control. The need for financial assistance must be such that the
Director, any member of the Director's immediate family or, after the Director's
death, a designated beneficiary will be subject to substantial hardship if the
acceleration or the revocation is not permitted. If the Plan Administrator
determines, in its sole discretion, that a hardship exists, distributions shall
be accelerated from the Plan to the Director or the designated beneficiary of
only so much of the Director's deferred compensation account as the Plan
Administrator may determine is required to alleviate such hardship, and the
deferred compensation account shall be charged with said amount upon payment.
7. CHANGE IN CONTROL. In the event of a Change in Control of the
Corporation while Stock Units remain outstanding under the Plan, then the right
to receive distributions in respect of Stock Units shall be immediately
A-3
<PAGE> 27
accelerated and each participating Director shall be entitled to receive, in
payment for each Stock Unit then allocated to his Stock Unit Deferral Account,
(i) one share of Common Stock of the Corporation (in the case of a Change in
Control that does not result in any change in the Common Stock of the
Corporation), or (ii) such securities, cash or property as the holders of each
share of Common Stock received in connection with such Change of Control (in the
case of a Change in Control that results in a change in the Common Stock of the
Corporation or a conversion of such Common Stock into other securities, cash or
property). Such distribution or payment shall be made no later than the
effective date of the Change in Control.
"Change in Control" shall mean the occurrence of any one of the following
events:
(a) any "person" (as such term is used in Sections 13(d) and 14(d)(2)
of the Exchange Act) becomes a "beneficial owner" (as such term is defined
in Rule 13d-3 promulgated under the Exchange Act) (other than the
Corporation any trustee or other fiduciary holding securities under an
employee benefit plan of the Corporation, or any corporation owned,
directly or indirectly, by the stockholders of the Corporation in
substantially the same proportions as their ownership of stock of the
Corporation), directly or indirectly, of securities of the Corporation
representing thirty-five percent (35%) or more of the combined voting power
of the Corporation's then outstanding securities; or
(b) persons who, as of January 1, 1998, constituted the Corporation's
Board (the "Incumbent Board") cease for any reason, including without
limitation as a result of a tender offer, proxy contest, merger or similar
transaction, to constitute at least a majority of the Board, provided that
any person becoming a director of the Corporation subsequent to January 1,
1998 whose election was approved by, or who was nominated with the approval
of, at least a majority of the directors then comprising the Incumbent
Board shall, for purposes of this Plan, be considered a member of the
Incumbent Board; or
(c) the Corporation merges or consolidates with any other corporation
or other entity, other than a merger or consolidation which would result in
the voting securities of the Corporation outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than
fifty percent (50%) of the combined voting power of the voting securities
of the Corporation or such surviving entity outstanding immediately after
such merger or consolidation; or
(d) the stockholders of the Corporation approve 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.
8. MERGER WITHOUT CHANGE OF CONTROL. After a merger or consolidation of the
Corporation with another corporation in which the stockholders of the
Corporation immediately prior to such merger or consolidation continue to own
after such merger or consolidation shares representing at least fifty percent of
the voting power of the Corporation, each Stock Unit shall be automatically
converted into a stock unit representing the number and class of shares of stock
or other securities to which such Stock Unit would have been converted if,
immediately prior to such merger or consolidation, such Stock Unit had been paid
out in shares of Common Stock of the Corporation.
9. LIMITATION ON RIGHTS OF DIRECTORS. No action taken pursuant to this Plan
shall create or be deemed to create a trust or fiduciary relationship of any
kind between the Corporation and the Directors. Although the Corporation shall
have no obligation to establish any separate trust, fund, or reserve or to
invest in any specific asset to provide security with respect to any deferred
amounts during the deferral period, the Corporation may elect to do so and, in
such event, the Directors shall not have any interest in such assets and all
such assets shall continue for all purposes to be a part of the general assets
of the Corporation, with the beneficial ownership of such assets remaining at
all times in the Corporation. Each Director, his legal representative or any of
his
A-4
<PAGE> 28
beneficiaries shall not have any right, other than the right of an unsecured
general creditor of the Corporation, in respect to the Stock Unit Deferral
Account established hereunder, and such persons shall have no property interest
in any specific assets of the Corporation.
10. NONFORFEITABLE. The right of each Director to the payment of deferred
stock compensation under this Plan shall be nonforfeitable and no action or
failure to act by the Director, the Corporation or any other person shall
deprive the Director of, or excuse the Corporation from its obligations to pay,
the amounts due hereunder.
11. WITHHOLDING TAX. The Corporation shall have the right to deduct from
all deferred amounts or payments hereunder any federal or state taxes required
by law to be withheld with respect to such deferred amounts or payments.
12. NON-ASSIGNABLE. The deferred stock compensation payable under this Plan
shall not be subject to alienation, assignment, garnishment, execution or levy
of any kind, and any attempt to cause any compensation to be so subjected shall
not be recognized.
13. TERMINATION AND AMENDMENT. This Plan shall automatically terminate when
Stock has been issued under the Plan in an amount equal to the total number of
shares of Stock reserved for issuance hereunder. The Board of Directors of
Abington Bancorp, Inc. may amend or terminate this Plan, in whole or in part, at
any time, and from time to time, subject to applicable law, regulation and
Nasdaq requirements. The foregoing provisions of this Paragraph notwithstanding,
no amendment or termination of this Plan shall, without the consent of a
Director, adversely affect the amounts payable hereunder on account of
compensation deferred prior to the effective date of such amendment or
termination.
14. NOTICES. All notices, elections or designations by a Director to the
Corporation shall be delivered in person or by registered mail, postage prepaid,
and noted to be brought to the attention of the Treasurer, Abington Bancorp,
Inc.
15. GOVERNING LAW. This Plan, and all actions taken hereunder, shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts, except as such laws may be superseded by any applicable federal
law.
16. SHARES ISSUABLE. The aggregate maximum number of shares of Stock
reserved and available for issuance under the Plan shall be 100,000, subject to
appropriate adjustments in the event of a stock dividend, stock split, or
similar change in capitalization affecting the Stock. Shares subject to the Plan
are authorized but unissued shares, Treasury shares or shares purchased in open
market transactions. Notwithstanding the foregoing, no shares of Stock may be
issued under the Plan until this Plan has been approved by the affirmative votes
of the holders of a majority of the shares of Common Stock of Abington Bancorp,
Inc. present, or represented, and entitled to vote at a meeting of shareholders.
A-5
<PAGE> 29
- ---
X PLEASE MARK VOTES
- --- AS IN THIS EXAMPLE
REVOCABLE PROXY
ABINGTON BANCORP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 19, 1998
The undersigned stockholder of Abington Bancorp, Inc. (the "Company")
hereby appoints James P. McDonough, Edward J. Merritt and Barbara M. Manning,
and each or any of them, proxies, with full power of substitution to each and
to each substitute appointed pursuant to such power, of the undersigned to vote
all shares of stock of the Company which the undersigned may be entitled to
vote at the Annual Meeting of Stockholders of the Company to be held on
Tuesday, May 19, 1998, and at any and all adjournments thereof, with all powers
the undersigned would possess if personally present. The proxies are authorized
to vote as indicated herein upon the matters which may properly come before
said Meeting.
----------------------------------------
Please be sure to sign and date Date
this Proxy in the box below.
- -----------------------------------------------------------------------------
- ------- Stockholder sign above ---------- Co-holder (if any) sign above -----
With- For All
For hold Except
1. Election of Directors ------- ------- -------
------- ------- -------
BRUCE G. ATWOOD JOEL S. GELLER
RALPH B. CARVER, JR. JAY TIMOTHY NOONAN
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
"FOR ALL EXCEPT" AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
- ---------------------------------------------------------------------------
For Against Abstain
2. Approval of the Deferred Stock ------- ------- -------
Compensation Plan for Directors.
------- ------- -------
The undersigned hereby acknowledges receipt of a copy of the accompanying
Notice of the Annual Meeting of Stockholders and Proxy Statement for said
Meeting and hereby revokes all proxies, if any, heretofore given by him to
others for said Meeting.
If this proxy is properly executed and returned, the shares represented
hereby will be voted. If a choice is specified hereof by the stockholder with
respect to any matter to be acted upon, the shares will be voted upon such
matter in accordance with specification so made. IN THE ABSENCE OF ANY
SPECIFICATION, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR PROPOSALS
1 AND 2.
Please sign this proxy exactly as your name appears on the books of the
Company. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more
than one name appears, a majority must sign. If a corporation, the signature
should be that of an authorized officer who should state his or her title.
<PAGE> 30
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.
ABINGTON BANCORP, INC.
- -------------------------------------------------------------------------------
Dear Stockholder:
Please take note of the important Company information enclosed with this
proxy card. There are a number of issues related to the management and operation
of the Company that require your immediate attention and approval. These are
discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right
to vote your shares.
Please mark the boxes on the proxy card above to indicate how your shares
shall be voted. Then sign the card, detach it (except if filled out below) and
return your proxy in the enclosed postage-paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders, to
be held on Tuesday, May 19, 1998.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Abington Bancorp, Inc. Mark box at right if comments or
address change have been noted below. [ ]
- -------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ----------------------------------- ------------------------------
- ----------------------------------- ------------------------------
- ----------------------------------- ------------------------------
PLEASE VOTE, DATE, AND SIGN ABOVE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
