<PAGE>
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 Section 240.14a-11(c) or Section
240.14a-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:
------------------------------------------------------------------------
(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>
[INSERT LOGO]
April 14, 1999
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 18,
1999 at 11:00 a.m., local time, at the Massasoit Community College Conference
Center, 770 Crescent Street, Route 27, Brockton, Massachusetts.
At the Annual Meeting, you will be asked to consider and vote upon the
election of a class of four Directors. The Board of Directors has fixed the
close of business on Wednesday, March 31, 1999 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>
ABINGTON BANCORP, INC.
536 WASHINGTON STREET
ABINGTON, MASSACHUSETTS 02351
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
MAY 18, 1999
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 Massasoit Community College
Conference Center, 770 Crescent Street, Route 27, Brockton, Massachusetts, on
Tuesday, May 18, 1999, beginning at 11:00 a.m., local time, for the following
purposes:
1. To elect a class of four Directors of the Company; and
2. 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.
The Board of Directors has fixed the close of business on March 31,
1999 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
Lewis J. Paragona, Clerk
Abington, Massachusetts
April 14, 1999
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>
ABINGTON BANCORP, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, MAY 18, 1999
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 Massasoit Community College Conference Center, 770 Crescent Street, Route
27, Brockton, Massachusetts, on Tuesday, May 18, 1999, 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, 1999 in
connection with the solicitation of proxies for the Annual Meeting. The Board of
Directors has fixed the close of business on Wednesday, March 31, 1999 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 3,347,300 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
810 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. 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.
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, 1998 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, 1998 (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>
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 11 members and is
divided into three classes, two of which have four members and one of which has
three 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 James P. McDonough, Gordon N. Sanderson, James J. Slattery and
Wayne P. Smith 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 2002
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,
1999) 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>
Bruce G. Atwood 61 1978 2001
William F. Borhek 60 1980 2000
Ralph B. Carver, Jr. 71 1980 2001
Joel S. Geller 58 1982 2001
Rodney D. Henrikson 63 1973 2000
A. Stanley Littlefield 73 1985 2000
** James P. McDonough 48 1990 1999
Jay Timothy Noonan 56 1975 2001
** Gordon N. Sanderson 65 1985 1999
** James J. Slattery 62 1973 1999
** Wayne P. Smith 60 1973 1999
</TABLE>
- ---------------
footnotes on next page
2
<PAGE>
* 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.
** Nominees for Director.
The principal occupation and business experience during at least the
last five years of each Director and nominee is as follows:
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.
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.
3
<PAGE>
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
For the year ended December 31, 1998, the Company's Board of Directors
met ten 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 Board 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 Commit-
tee, but does not have a nominating committee or another committee performing a
similar function.
The Executive Committee, of which Messrs. Atwood, McDonough, Henrikson,
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's Board. During 1998, the
Executive Committee met 27 times.
The Audit Committee, which is comprised of Messrs. Sanderson, 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's Board. During 1998, the Audit Committee met
four times.
The Compensation Committee, of which Messrs. Carver, Atwood and Smith
are 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's Board. The
Compensation Committee met five times during 1998.
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. Smith, Noonan and Littlefield are members. John R. Sylva,
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 1998. Other Bank employees also serve on this
committee. The CRA 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 four times during 1998.
COMPENSATION OF DIRECTORS
During the year ended December 31, 1998, Directors received $550 for
each Bank Board meeting that they attended. Members of the Executive Committee
received an annual fee of $6,825. Members of the Audit
4
<PAGE>
Committee received $425 and members of all other committees received $350 for
each committee meeting that they attended during the year. 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 that are held immediately prior to or after a Bank Board
meeting.
In each of February 1998 and 1999, the Company granted options to
purchase 2,000 shares of Common Stock 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."
Effective July 1, 1998, pursuant to the Company's Deferred Stock
Compensation Plan, non-employee Directors of the Company or any of its
subsidiaries may elect to defer payment of compensation for service as a
Director. Directors who elect to defer compensation are awarded stock units
("Stock Units") in lieu of cash compensation for each Board and committee
meeting attended (other than Executive Committee meetings), and in lieu of
quarterly cash payments for service on the Executive Committee. For each dollar
of cash compensation foregone, Directors receive a fraction of a Stock Unit
equal to one divided by $18.75, the fair market value of the Common Stock
calculated as of July 1, 1998. Each Stock Unit represents one share of the
Company's Common Stock.
MANAGEMENT
EXECUTIVE OFFICERS
The names and ages of all executive officers of the Company and the
Bank as of April 14, 1999 and the principal occupation and business experience
during at least the last five years for each are set forth below:
JAMES P. MCDONOUGH. For biographical information concerning Mr.
McDonough, see "Election of Directors - Information Regarding Directors and
Nominees" above.
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 49 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 34 years old.
JOHN R. SYLVA was named Senior Vice President -- Consumer Banking
Division of the Bank in May 1998. Prior to May 1998, he served as Vice President
- -- Private Banking Division and also Senior Vice President -- Community Banking
Division with BayBank from 1985 to 1996. Prior to that, he served as Senior Vice
President and Marketing Director of BayBank from 1982 to 1985. Mr. Sylva has an
M.B.A. from Suffolk University and an undergraduate degree from Boston College.
Mr. Sylva is 50 years old.
KEVIN M. TIERNEY has been Executive Vice President of the Company since
November 1998. Prior to that date, he served as Executive Vice President/General
Manager for the Consumer Network Services Unit of
5
<PAGE>
Electronic Data Systems' electronic markets strategic business line, overseeing
all operations for the Unit from October 1997 to November 1998. From 1986 to
October 1997, Mr. Tierney served as a Senior Vice President and Chief
Information Officer for Salem Five Cents Savings Bank. Prior to that, from 1983
to 1986, he served as Regional Business Manager for the Electronic Financial
Services Division of Automatic Data Processing. Mr. Tierney has a B.S. degree in
Business Administration from Merrimack College. Mr. Tierney is 39 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 at the end of fiscal 1998 and whose
annual compensation exceeded $100,000 for fiscal 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM ALL OTHER(1)
ANNUAL COMPENSATION COMPENSATION COMPENSATION
------------------------------------- ------------ ------------
NAME AND FISCAL OPTION
PRINCIPAL POSITION YEAR SALARY(2) BONUS(3) OTHER(4) GRANTS
- ------------------ ------ --------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
James P. McDonough 1998 $249,505 $46,980 10,000 $15,713
President and Chief 1997 223,080 56,885 10,000 15,642
Executive Officer of the 1996 202,800 47,315 10,000 10,930
Company and the Bank
Robert M. Lallo 1998 96,537 17,929 7,000 7,702
Treasurer of the Company, 1997 78,885 21,770 0 7,043
Senior Vice President - 1996 68,640 10,687 0 4,058
Treasurer and Chief Fin-
ancial Officer of the Bank
Mario A. Berlinghieri 1998 95,336 17,302 7,000 7,662
Senior Vice President - 1997 88,400 21,393 6,000 8,178
Business Banking 1996 85,000 13,770 0 523
Division of the Bank
</TABLE>
- ---------------
(1) Includes life insurance premiums of $1,317, $671 and $194 in 1998 for
Messrs. McDonough, 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 1998 for Messrs. McDonough, Berlinghieri
and Lallo was $14,396, $6,991 and $7,508, respectively.
(2) Represents gross salary prior to deduction for employee's voluntary
401(k) contribution; the Company did not provide matching 401(k)
contributions.
(3) Bonuses are reported for the year they were earned, even if paid in the
subsequent year.
6
<PAGE>
(4) Perquisites and other personal benefits paid to each officer included in
the Summary Compensation Table in each instance aggregated less than 10%
of the total annual salary and bonus set forth in the columns entitled
"Salary" and "Bonus" for each officer, and accordingly, are omitted from
the table as permitted by the rules of the Securities and Exchange
Commission.
OPTION GRANTS TABLE. The following Option Grants Table sets forth
certain information regarding stock options granted during the fiscal year ended
December 31, 1998 by the Company to the executive officers named in the Summary
Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
INDIVIDUAL GRANTS AT ASSUMED
--------------------------------------------- ANNUAL RATES OF
PERCENT OF STOCK PRICE
TOTAL OPTIONS EXERCISE APPRECIATION FOR
GRANTED TO PRICE PER OPTION TERM (2)
OPTIONS EMPLOYEES IN SHARE EXPIRATION --------------------
NAME GRANTED FISCAL YEAR ($/SH)(1) DATE 5% 10%
---- ------- ----------- --------- ----------- ------ -----
<S> <C> <C> <C> <C> <C> <C>
James P. McDonough 10,000 17.2% $20.75 2/24/08 $131,500 $330,700
Mario A. Berlinghieri 7,000 12.1 20.75 2/24/08 91,350 231,490
Robert M. Lallo 7,000 12.1 20.75 2/24/08 91,350 231,490
</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. As provided in the Company's Long Term Performance
Incentive Plan, 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
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.
7
<PAGE>
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, 1998 and stock options held as of December
31, 1998 by the executive officers named in the Summary Compensation Table.
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 10,000 $1,124,375 0
Mario M. Berlinghieri 0 0 6,000 7,000 0 0
Robert M. Lallo 1,600 $26,600 5,400 7,000 42,144 0
</TABLE>
- ---------------
(1) Value is based on the last sales price of Common Stock of $13.875 on
December 31, 1998, 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, Atwood and Smith. Mr. Slattery replaced Mr.
Littlefield as a member of the Compensation Committee on May 28, 1998, and Mr.
Atwood replaced Mr. Slattery on October 22, 1998. The Compensation Committee
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 1998.
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.
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.
8
<PAGE>
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
18.4% of the Company's compensation to executives of the Company and the Bank in
fiscal 1998 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 1999, options to purchase 48,083 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 1998. 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.
Bruce G. Atwood
Wayne P. Smith, Chairman
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Ralph B. Carver, A. Stanley Littlefield, James J. Slattery, Bruce G.
Atwood and Wayne P. Smith served on the Compensation Committee during fiscal
1998. Mr. Slattery replaced Mr. Littlefield as a member of the Compensation
Committee on May 28, 1998, and Mr. Atwood replaced Mr. Slattery on October 22,
1998. 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,
except as described below under "Certain Transactions with Management and
Others". 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.
9
<PAGE>
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, 1993. 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 (12/31/93 = 100)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
S&P 500 KBW NEW ENGLAND ABBK PRICE PLUS
DATE INDEX BANK INDEX INDEXED CUMULATIVE DIVIDENDS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
12/31/93 100.00 100.00 100.00 $5.750
3/31/94 96.24 105.19 104.13 $5.988
6/30/94 96.65 123.93 136.79 $7.866
9/30/94 101.38 118.33 135.47 $7.790
12/31/94 101.36 100.67 107.49 $6.181
- -------------------------------------------------------------------------------------------------------------------
3/31/95 111.19 113.03 116.45 $6.696
6/30/95 121.77 128.41 136.38 $7.842
9/30/95 131.42 146.93 144.04 $8.282
12/31/95 139.31 157.13 157.42 $9.052
- -------------------------------------------------------------------------------------------------------------------
3/31/96 146.78 157.45 146.93 $8.448
6/30/96 153.35 167.00 143.25 $8.237
9/30/96 158.05 187.66 161.51 $9.287
12/31/96 171.21 217.03 182.19 $10.476
- -------------------------------------------------------------------------------------------------------------------
3/31/97 175.83 225.37 197.14 $11.336
6/30/97 206.46 270.80 240.32 $13.819
9/30/97 221.91 319.57 302.52 $17.395
12/31/97 228.26 373.11 398.01 $22.885
- -------------------------------------------------------------------------------------------------------------------
3/31/98 260.03 395.82 417.91 $24.030
6/30/98 268.59 386.00 359.02 $20.644
9/30/98 241.92 302.58 283.39 $16.295
12/31/98 293.36 344.79 268.50 $15.439
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
SOURCE: KEEFE, BRUYETTE & WOODS, INC.
10
<PAGE>
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 ($10,000 in calendar year 1998). 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"), whose purpose is to enable participating savings 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.
11
<PAGE>
PROJECTED ANNUAL PENSION BENEFIT
BASED ON YEARS OF SERVICE(1)
<TABLE>
<CAPTION>
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 5,932 8,898 11,865 14,831 17,797
60,000 9,832 14,748 19,665 24,581 29,497
80,000 13,732 20,598 27,465 34,331 41,197
100,000 17,632 26,448 35,265 44,081 52,897
120,000 21,532 32,298 43,065 53,831 64,597
125,000 22,507 33,761 45,015 56,268 67,522
140,000 25,432 38,148 50,865 63,581 76,297
150,000 27,382 41,073 54,765 68,456 82,147
160,000 (2) 29,332 43,998 58,665 73,331 87,987
</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, 1998 and
October 31, 1999.
(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 29 $ 77,320
Mario A. Berlinghieri 20 34,950
Robert M. Lallo 37 53,885
</TABLE>
TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS
The Company and the Bank have entered into special termination agreements
with Messrs. McDonough, Berlinghieri, Lallo, Sylva and Tierney.
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) 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
12
<PAGE>
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 Mr. Sylva, two times) the officer's average annual compensation
(including bonuses) over the five years prior to the change in control.
Notwithstanding the foregoing, if a Change of Control takes place after the
second anniversary of the date on which Mr. Sylva's employment with the Bank
commenced and a Terminating Event occurs within three (3) years after such
Change in Control, the Employers shall pay to the Executive an amount equal to
(x) three times such "base amount" applicable to the Executive, less (y) One
Dollar ($1.00), payable in one lump-sum payment on the date of termination.
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
The Bank has entered into a Supplemental Executive Retirement Agreement
and a related Split Dollar Agreement (collectively, the "SERP") with Mr.
McDonough and is establishing a related insurance trust for the purpose of
providing a supplemental retirement benefit to Mr. McDonough.
The SERP 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 his benefit calculation
were to disregard the limits imposed by the Internal Revenue Code on (x) the
maximum amount of compensation that may be taken into account by a SBERA
retirement plan in determining retirement benefits and on (y) the amounts
payable to certain participants by a retirement plan, 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.
13
<PAGE>
In November 1993, the ESOP entered into a loan agreement with the Bank
pursuant to which the ESOP borrowed $570,000 to purchase 94,256 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. An aggregate of 17,111 shares were allocated to participants for
the plan year ended October 31, 1998.
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 Kristin
McDaniel 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 also are 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, substantially the same 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 $50,400.
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.
14
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information as of March 26, 1999
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.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME BENEFICIAL OWNERSHIP (1) PERCENT OF CLASS (2)
- --------------- ----------------------------------- ----------------------------
<S> <C> <C>
Dennis E. Barry and 356,000 (3) 10.63%
Joseph L. Barry, Jr.
c/o Hallamore Motor
Transportation, Inc.
795 Plymouth Street
Holbrook, MA 02343
Cadence Capital Management 211,300 (4) 6.31
Exchange Place
53 State Street
Boston, MA 02109
* James P. McDonough 199,135 (5) 5.74
c/o Abington Savings Bank
536 Washington Street
Abington, MA 02351
Dimensional Fund Advisors Inc. 190,300 (6) 5.69
1299 Ocean Avenue
Santa Monica, CA 90401
Joel S. Geller 133,441 (7) (8) 3.96
* Wayne P. Smith 66,153 (7) (9) 1.97
* James J. Slattery 65,978 (7) (10) 1.96
Bruce G. Atwood 32,810 (7) (11) .98
* Gordon N. Sanderson 32,121 (7) (12) .95
William F. Borhek 30,836 (7) (13) .91
Rodney D. Henrikson 26,493 (7) (14) .78
Jay Timothy Noonan 22,936 (15) .68
Ralph B. Carver, Jr. 22,238 (16) .66
A. Stanley Littlefield 20,500 (7) (17) .60
Mario A. Berlinghieri 16,994 (18) .50
Robert M. Lallo 11,660 (19) .34
All Directors and executive
officers as a group (15 persons) 693,185 (20) 19.00
</TABLE>
- ---------------
* Nominee for Director
footnotes on next page
15
<PAGE>
(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 (referred to herein as "currently
exercisable options").
(2) Calculated based on outstanding shares of Common Stock on March 26, 1999.
(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
169,500 shares as to which he has sole voting and dispositive power, (ii)
Joseph L. Barry, Jr. owns 169,500 shares as to which he has sole voting and
dispositive power, and (iii) Dennis E. Barry and Joseph L. Barry, Jr.
jointly own 25,000 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.
(4) Information about Cadence's ownership is based on a Form 13-F filed with
the Securities and Exchange Commission by PIMCO Advisors L.P. for the
quarter ended December 31, 1998. The Company believes that PIMCO Advisors
L.P. is a limited partnership of which Cadence Capital Management is a
subpartnership.
(5) Includes 120,000 shares subject to currently exercisable options, 13,730
shares held in his self-directed IRA, 47,293 shares owned jointly with his
wife and 2,274 shares owned by his wife in a self-directed IRA. Also
includes 518 shares held by Mr. McDonough as custodian for one of his two
children and 518 shares held by his wife as custodian for one of his two
children (1,036 shares total). Mr. McDonough disclaims beneficial ownership
of the shares owned directly by his wife. Also includes 12,607 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 are not exercisable
until the fair market value (as defined in the option agreement) of the
Common Stock is at least $24.90 for a period of 30 consecutive business
days, and 10,000 shares subject to options which are not exercisable until
the fair market value (as defined in the option agreement) of the Common
Stock is at least $16.20 for a period of 30 consecutive business days.
(6) The Bank received a report on Schedule 13G, dated February 11, 1999, as
filed with the SEC, stating that Dimensional Fund Advisors Inc. (the
"Fund") is the beneficial owner of 190,300 shares, of which it has sole
voting power and sole dispositive power with respect to all 190,300 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.
(7) Includes 17,500 shares subject to currently exercisable options. Does not
include 2,000 shares subject to options which are not exercisable until the
fair market value (as defined in the option agreement) of the Common Stock
is at least $24.90 for a period of 30 consecutive business days, and 2,000
shares subject to options which are not exercisable until the fair market
value (as defined in the option agreement) of the Common Stock is at least
$16.20 for a period of 30 consecutive business days.
(8) 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 83,026
shares owned by a partnership in which Mr. Geller is a partner. Also
includes 431 shares which have been accrued under the Abington Bancorp,
Inc. Deferred Compensation Plan for Directors (the "Deferred Compensation
Plan"). Mr. Geller disclaims beneficial ownership of the 3,568 shares owned
directly by his wife and the shares owned by his son and daughter.
(9) Includes 20,867 shares owned by his wife. Also includes 276 shares which
have been accrued under the Deferred Compensation Plan. Mr. Smith disclaims
beneficial ownership of the shares owned by his wife.
(10) 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. Also includes 431 shares which have been accrued
under the Deferred Compensation Plan. Mr. Slattery disclaims beneficial
ownership of the shares held on behalf of his children and the shares owned
by his wife.
(11) Includes 10,618 shares owned by his wife. Also includes 450 shares which
have been accrued under the Deferred Compensation Plan. Mr. Atwood
disclaims beneficial ownership of the shares owned by his wife.
16
<PAGE>
(12) Includes 14,621 shares owned through a realty trust.
(13) Includes 10,842 shares owned jointly with his wife and 2,124 shares owned
by his wife. Also includes 275 shares which have been accrued under the
Deferred Compensation Plan. Mr. Borhek disclaims beneficial ownership of
the shares owned directly by his wife.
(14) Includes 4,916 shares owned by a corporation in which Mr. Henrikson is an
officer, director and stockholder. Also includes 1,833 shares held in his
self-directed IRA and 1,833 shares held by his wife in a self-directed IRA.
(15) Includes 6,000 shares subject to currently exercisable options, 294 shares
which have been accrued under the Deferred Compensation Plan and 2,142
shares representing a 20% beneficial ownership interest in a family trust
(over which Mr. Noonan does not exercise voting or investment authority).
Does not include 2,000 shares subject to options which are not exercisable
until the fair market value (as defined in the option agreement) of the
Common Stock is at least $24.90 for a period of 30 consecutive business
days, and 2,000 shares subject to options which are not exercisable until
the fair market value (as defined in the option agreement) of the Common
Stock is at least $16.20 for a period of 30 consecutive business days.
(16) Includes 1,500 shares subject to currently exercisable options and 16,000
shares owned jointly with his wife. Also includes 238 shares which have
been accrued under the Deferred Compensation Plan. Does not include 2,000
shares subject to options which are not exercisable until the fair market
value (as defined in the option agreement) of the Common Stock is at least
$24.90 for a period of 30 consecutive business days, and 2,000 shares
subject to options which are not exercisable until the fair market value
(as defined in the option agreement) of the Common Stock is at least $16.20
for a period of 30 consecutive business days.
(17) Includes 1,000 shares owned jointly with his wife.
(18) Includes 204 shares owned jointly with his wife and 8,975 shares held in
his self-directed IRA. Also includes 6,000 shares subject to currently
exercisable options and 900 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 are not exercisable until the fair market value
(as defined in the option agreement) of the Common Stock is at least $24.90
for a period of 30 consecutive business days, and 7,000 shares subject to
options which are not exercisable until the fair market value (as defined
in the option agreement) of the Common Stock is at least $16.20 for a
period of 30 consecutive business days.
(19) Includes 1,654 shares held in his self-directed IRA and 1,600 shares owned
jointly with his wife. Also includes 5,424 shares subject to currently
exercisable options and 2,117 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 are not exercisable until the fair market value (as defined
in the option agreement) of the Common Stock is at least $24.90 for a
period of 30 consecutive business days, and 7,000 shares subject to options
which are not exercisable until the fair market value (as defined in the
option agreement) of the Common Stock is at least $16.20 for a period of 30
consecutive business days.
(20) Includes 292,344 shares subject to currently exercisable options. Also
includes 15,610 shares held by the ESOP as to which executive officers of
the Company have the power to direct the voting. Does not include 44,000
shares subject to options which are not exercisable until the fair market
value (as defined in the option agreement) of the Common Stock is at least
$24.90 for a period of 30 consecutive business days, and 48,083 shares
subject to options which are not exercisable until the fair market value
(as defined in the option agreement) of the Common Stock is at least $16.20
for a period of 30 consecutive business days.
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
During 1998, 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%
17
<PAGE>
shareholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file.
Based solely on its review of the copies of Forms 3, 4 and 5 furnished to
the Company during and with respect to 1998, 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 1998, except that
the Company has recently learned that Mr. Noonan did not timely report the
transfer of Company common stock by his parents to a family trust in which Mr.
Noonan is a beneficiary.
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.
SUBMISSION OF STOCKHOLDER PROPOSALS
FOR 2000 ANNUAL MEETING
In order to be included in proxy materials for the 2000 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 13, 2000. 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.
18
<PAGE>
|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 18, 1999
The undersigned stockholder of Abington Bancorp, Inc. (the "Company")
hereby appoints James P. McDonough, Robert M. Lallo and Lewis J. Paragona, 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 18,
1999, 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 set forth herein and in their discretion upon
all other 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 /_/ /_/ /_/
JAMES P. MCDONOUGH JAMES J. SLATTERY
GORDON N. SANDERSON WAYNE P. SMITH
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.
- --------------------------------------------------------------------------------
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 PROPOSAL
1.
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.
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 18, 1999.
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.
