<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
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)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / 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:
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(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.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
April 13, 2000
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 16, 2000
at 11:00 a.m., local time, at the Ridder Country Club, Route 14, Oak Street,
East Bridgewater, Massachusetts.
At the Annual Meeting, you will be asked to consider and vote upon the
election of a class of three Directors and approval of the Abington Bancorp,
Inc. 2000 Incentive and Nonqualified Stock Option Plan. The Board of Directors
has fixed the close of business on Wednesday, March 29, 2000 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,
/s/ James P. McDonough
James P. McDonough
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Abington Bancorp, Inc., 536 Washington Street, P.O. Box 2006, Abington, MA 02351
<PAGE>
ABINGTON BANCORP, INC.
536 WASHINGTON STREET
ABINGTON, MASSACHUSETTS 02351
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
MAY 16, 2000
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, East
Bridgewater, Massachusetts, on Tuesday, May 16, 2000, beginning at 11:00 a.m.,
local time, for the following purposes:
1. To elect a class of three Directors of the Company;
2. To approve the Abington Bancorp, Inc. 2000 Incentive and Nonqualified
Stock Option Plan; 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 THE ABINGTON
BANCORP, INC. 2000 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN.
The Board of Directors has fixed the close of business on Wednesday, March
29, 2000 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
/s/ Lewis J. Paragona
Lewis J. Paragona, Clerk
Abington, Massachusetts
April 13, 2000
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 16, 2000
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, East Bridgewater, Massachusetts,
on Tuesday, May 16, 2000, 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 13, 2000 in connection
with the solicitation of proxies for the Annual Meeting. The Board of Directors
has fixed the close of business on Wednesday, March 29, 2000 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 3,027,300 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 780
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. 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.
2000 Incentive and Nonqualified Stock Option Plan (the "2000 Stock Option
Plan"). Votes withheld from any nominee, abstentions and broker non-votes will
count as "present" toward formation of a quorum for transaction of business at
the Annual Meeting. A "non-vote" occurs when a broker holding shares for a
beneficial owner votes on one proposal, but does not vote on another proposal
because the broker does not have discretionary voting power and has not received
instructions from the beneficial owner. Brokers have discretionary voting power
with respect to all matters to be voted on at the Annual Meeting. Assuming the
presence of a quorum, abstentions and broker non-votes will have no effect on
any of the matters to be voted on 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 three nominees for Director listed in this Proxy Statement and FOR the
approval of the 2000 Stock Option Plan.
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, 1999 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, 1999 (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 William F. Borhek, Rodney D. Henrikson and A. Stanley Littlefield
as Directors for a three-year term. The Company's by-laws prohibit Directors
from serving after the annual meeting following their 75th birthday. Unless the
by-laws are amended, Mr. Littlefield would not be eligible to serve as a
Director after the 2001 annual meeting. 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 three nominees, to hold office until the 2003
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
THREE NOMINEES FOR DIRECTOR LISTED IN THIS PROXY STATEMENT.
INFORMATION REGARDING NOMINEES AND DIRECTORS
The following table sets forth certain information (as of April 13, 2000)
regarding the current Directors and the nominees for Director of the Company:
<TABLE>
<CAPTION>
Director Term as Director
Name Age Since* Will Expire
----------------------- ------- ---------- ------------------
<S> <C> <C> <C>
Bruce G. Atwood 62 1978 2001
** William F. Borhek 61 1980 2000
Ralph B. Carver, Jr. 72 1980 2001
Joel S. Geller 59 1982 2001
** Rodney D. Henrikson 64 1973 2000
** A. Stanley Littlefield 74 1985 2000
James P. McDonough 49 1990 2002
Jay Timothy Noonan 57 1975 2001
Gordon N. Sanderson 66 1985 2002
James J. Slattery 63 1973 2002
Wayne P. Smith 61 1973 2002
</TABLE>
- ---------------
* 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.
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<PAGE>
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 operator since 1964 and owner since 1987 of
Transport Properties Trust and President, Treasurer and a director of Den-Lea
Rental, Inc., a truck leasing company, from 1979 until 1999.
JOEL S. GELLER has been a partner in Wein-Gell Associates, an investment
firm, since 1969. Until February 2000, he was 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.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
For the year ended December 31, 1999, the Company's Board of Directors met
seven times and the Bank's Board of Directors met 12 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.
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<PAGE>
The Executive Committee, of which Messrs. Atwood, McDonough, Henrikson,
Geller and Smith are the current 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
1999, the Executive Committee met 22 times.
The Audit Committee, which is currently comprised of Messrs. Sanderson,
Noonan and Carver, 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' recommenda tions 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 1999,
the Audit Committee met four times.
The Compensation Committee, of which Messrs. Carver, Atwood and Littlefield
are the 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's
Board. The Compensation Committee met six times during 1999.
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. Geller, Noonan and Littlefield are the current members. John R.
Sylva, Senior Vice President, Consumer Banking Division of the Bank, and Mario
A. Berlinghieri, Senior Vice President, Credit Policy and Administration of the
Bank, chaired the committee during 1999. 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 1999.
COMPENSATION OF DIRECTORS
During the year ended December 31, 1999, 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 Committee received $425
and members of all other committees received $350 for each committee meeting
that they attended during the year. Effective January 1, 2000, the fees paid to
Directors increased as follows: Directors receive $550 for each Bank Board
meeting they attend as well as an annual fee of $6,000. Members of the Executive
Committee receive an annual fee of $8,000 and members of all other committees
receive $550 for each committee meeting 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
that are held immediately prior to or after a Bank Board meeting.
In each of February 1999 and 2000, 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."
4
<PAGE>
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.
PROPOSAL 2 - 2000 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN
The Board of Directors of the Company has adopted the Abington Bancorp,
Inc. 2000 Incentive and Nonqualified Stock Option Plan ("the 2000 Stock Option
Plan"), subject to approval by the stockholders. The Company's existing option
plan, the 1997 Incentive and Nonqualified Stock Option Plan, has only 417 shares
of the Company's Common Stock available for grant.
Under the Internal Revenue Code (the "Code"), stockholder approval is
necessary for stock options relating to the shares issuable under the 2000 Stock
Option Plan to qualify as incentive stock options under Section 422 of the Code.
In addition, Nasdaq rules (the "Nasdaq Rules") require stockholder approval of
the 2000 Stock Option Plan. Approval for purposes of the Code and the Nasdaq
Rules will require the affirmative vote of a majority of the shares of Common
Stock present or represented at the meeting and voting on the 2000 Stock Option
Plan. The full text of the 2000 Stock Option Plan as adopted by the Board of
Directors is printed as Appendix A, beginning on page A-1. The following is a
summary of some of its provisions.
The 2000 Stock Option Plan authorizes the grant of (i) options to purchase
Common Stock intended to qualify as incentive stock options ("Incentive
Options"), as defined in Section 422 of the Code, and (ii) options that do not
so qualify ("Nonqualified Options"). Up to 150,000 shares of Common Stock
(subject to adjustment upon certain changes in the capitalization of the
Company) may be issued pursuant to awards granted under the 2000 Stock Option
Plan. The 2000 Stock Option Plan will be administered by the Company's
Compensation Committee (the "Compensation Committee"). The Compensation
Committee will select the individuals to whom awards are granted and will
determine the terms of each award, subject to the provisions of the 2000 Stock
Option Plan. In addition, any power of the Compensation Committee may also be
exercised by the full Board of Directors. Incentive Options may be granted under
the 2000 Stock Option Plan only to officers and other employees of the Company
or its subsidiaries. Nonqualified Options may be granted under the 2000 Stock
Option Plan to officers or other employees of the Company or its subsidiaries,
and to members of the Board of Directors and consultants or other persons who
render services to the Company. As of April 13, 2000, ten non-employee directors
and approximately 36 officers and 250 non-officer employees were eligible to
participate in the 2000 Stock Option Plan.
Each option shall expire on the date specified in the option agreement,
which date shall not, in the case of an Incentive Option, extend for more than
ten years from the date of grant (five years in the case of an optionee who owns
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company or any subsidiary ("greater-than-ten-percent-
stockholder")). The exercise price of each option shall be determined by the
Compensation Committee at the time the option is granted; provided, however,
that the option price of any Incentive Option granted under the 2000 Stock
Option Plan must be at least equal to the fair market value of the Common Stock
on the date of grant (110% of fair market value in the case of a
greater-than-ten-percent-stockholder). For purposes of the 2000 Stock Option
Plan, the fair market value is the average of the closing price of the Common
Stock on the 20 business days prior to and including the date of grant of the
option. The aggregate fair market value (determined at the time of grant) of
shares issuable pursuant to Incentive Options which first become exercisable by
an employee or officer in any calendar year may not exceed one hundred thousand
dollars ($100,000). Options are non-transferable except by will or by the laws
of descent or distribution and are exercisable, during the optionee's lifetime,
only by the optionee.
5
<PAGE>
Options generally may not be exercised (i) after termination of the
optionee's employment with the Company or any of its subsidiaries, or
directorship with the Company, for cause or by reason of such optionee's
voluntary resignation, (ii) thirty days after termination of the optionee's
employment or other services with the Company or any of its subsidiaries,
without cause or by reason of retirement in accordance with the Company's (or
the applicable subsidiary's) retirement policies, (iii) one year after
termination of the optionee's directorship with the Company by reason of
retirement in accordance with the Company's retirement policies, (iv) ninety
days after termination of the optionee's employment with the Company or any of
its subsidiaries, or directorship with the Company, by reason of disability, and
(v) one hundred and eighty days after termination of the optionee's employment
with the Company or any of its subsidiaries, or directorship with the Company,
by reason of death. In all cases, however, the Board has the discretion to
extend the exercise date. Payment of the exercise price of the shares subject to
the option may be made (i) in cash in an amount, or by check, bank draft or
postal or express money order payable in an amount, equal to the aggregate
exercise price for such shares, (ii) in the form of shares of Common Stock
having a fair market value equal to the exercise price of such shares, (iii) by
reducing the number of option shares otherwise issuable to the optionee upon
exercise of the option by a number of shares having a fair market value equal to
the aggregate exercise price of such shares, (iv) by delivering such other
consideration that is acceptable to the Company and that has a fair market
value, as determined by the Company, equal to the aggregate exercise price of
such shares, including any broker-directed cashless exercise/resale procedure
adopted by the Company, or (v) any combination of the foregoing.
At the discretion of the Company, options granted under the 2000 Stock
Option Plan may include a so-called "reload" feature pursuant to which an
optionee exercising an option by the delivery of a number of shares of Common
Stock would automatically be granted an additional option (with an exercise
price equal to the fair market value of the Common Stock on the date the
additional option is granted and with the same expiration date as the original
option being exercised, and with such other terms as the Compensation Committee
may provide) to purchase that number of shares of Common Stock equal to the
number delivered to exercise the original option.
In the event of a change of control, as defined in the 2000 Stock Option
Plan, (i) the time for exercise of all unexercised and unexpired awards will be
automatically accelerated, effective as of the effective time of the change of
control (or such earlier date as may be specified by the Board) and (ii) after
the effective time of the change of control, all unexercised awards will remain
outstanding and will be exercisable in full for shares of Common Stock or, if
applicable, for shares of such securities, cash or property as the holders of
shares of Common Stock received in connection with the change of control.
FEDERAL INCOME TAX INFORMATION WITH RESPECT TO THE 2000 STOCK OPTION PLAN.
The grantee of a Nonqualified Option recognizes no income for federal income tax
purposes on the grant thereof. On the exercise of a Nonqualified Option, the
difference between the fair market value of the underlying shares of Common
Stock on the exercise date and the option exercise price is treated as
compensation to the holder of the option taxable as ordinary income in the year
of exercise, and such fair market value becomes the basis for the underlying
shares which will be used in computing any capital gain or loss upon disposition
of such shares. Subject to certain limitations, the Company may deduct for the
year of exercise an amount equal to the amount recognized by the option holder
as ordinary income upon exercise of a Nonqualified Option.
The grantee of an Incentive Option recognizes no income for federal income
tax purposes on the grant thereof. Except as provided below with respect to the
alternative minimum tax, there is no tax upon exercise of an Incentive Option.
If no disposition of shares acquired upon exercise of the Incentive Option is
made by the option holder within two years from the date of the grant of the
Incentive Option or within one year after exercise of the Incentive Option, any
gain realized by the option holder on the subsequent sale of such shares is
treated as a long-term capital gain for federal income tax purposes. If the
shares are sold prior to the expiration of such periods, the difference between
the lesser of the value of the shares at the date of exercise or at the date of
sale and the exercise price of the Incentive Option is treated as compensation
to the employee taxable as ordinary income and the excess gain, if any, is
treated as capital gain (which will be long-term capital gain if the shares are
held for more than one year). The excess of the fair market value of the
underlying shares over the option price at the time of exercise of an Incentive
Option will constitute an item of tax preference for purposes of the alternative
6
<PAGE>
minimum tax. Taxpayers who incur the alternative minimum tax are allowed a
credit which may be carried forward indefinitely to be used as a credit against
the regular tax liability in a later year; however, the minimum tax credit can
not reduce the regular tax below the alternative minimum tax for that carryover
year. In connection with the sale of the shares covered by Incentive Options,
the Company is allowed a deduction for tax purposes only to the extent, and at
the time, the option holder receives ordinary income (for example, by reason of
the sale of shares by the holder of an Incentive Option within two years of the
date of the granting of the Incentive Option or one year after the exercise of
the Incentive Option), subject to certain limitations on the deductibility of
compensation paid to executives.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE
ABINGTON BANCORP, INC. 2000 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN.
MANAGEMENT
EXECUTIVE OFFICERS
The names and ages of all executive officers of the Company and the Bank as
of April 13, 2000 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, Credit Policy and
Administration of the Bank since February 2000. From 1996 until February 2000,
Mr. Berlinghieri served as Senior Vice President - Business Banking Division of
the Bank. Prior to 1996, 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 50
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. From
October 1993 until June 1997, he served as Vice President and Treasurer of the
Bank. Prior to joining the Bank in 1993, Mr. Lallo held various positions with
Arthur Andersen LLP, including Audit Manager, 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 35 years old.
JACK B. MEEHL, JR. has been Senior Vice President of the Business Banking
Division since February 2000. Mr. Meehl served as Senior Vice President and Area
Manager for Small Business Services at Fleet National Bank from 1992 to 1999.
From 1971 to 1992 he held various positions at Bank of New England including
Vice President and Team Leader of the Community Lending and Commercial Real
Estate Lending Groups. Mr. Meehl is a graduate of Curry College with a B.S.
degree in Economics. Mr. Meehl is 50 years old.
JOHN R. SYLVA has been Senior Vice President -- Consumer Banking Division
of the Bank since 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 51 years old.
KEVIN M. TIERNEY, SR. has been Vice President of the Company since June
1999 and Executive Vice President of the Bank since November 1998. Prior to
November 1998, he served as Executive Vice President/General Manager for the
Consumer Network Services Division of Electronic Data Services, Inc.,
7
<PAGE>
overseeing all operations for the Division from October 1997 to November 1998.
From 1986 to October 1997, Mr. Tierney served as a Senior Vice President of
Retail Banking and Operations 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 40
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 1999 and whose annual
compensation exceeded $100,000 for fiscal 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term All Other
Annual Compensation Compensation Compensation(1)
------------------------------------- ------------ ---------------
Name and Fiscal Option
Principal Position Year Salary(2) Bonus(3) Other(4) Grants
- ------------------ ---- --------- -------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
James P. McDonough 1999 $264,810 $89,000 10,000 $14,556
President and Chief 1998 249,505 46,980 10,000 15,713
Executive Officer of the 1997 223,080 56,885 10,000 15,642
Company and the Bank
Kevin M. Tierney, Sr. 1999 149,999 39,900 0 6,688
Vice President of the 1998 25,962 (5) 30,000 20,000 0
Company and Executive
Vice President of the Bank
Robert M. Lallo 1999 102,491 28,689 7,000 5,689
Treasurer of the Company, 1998 96,537 17,929 7,000 7,702
Senior Vice President -- 1997 78,885 21,770 0 7,043
Treasurer and Chief
Financial Officer of the Bank
John R. Sylva 1999 95,009 18,938 4,083 4,983
Senior Vice President -- 1998 53,385 (5) 9,906 0 267
Consumer Banking
Division of the Bank
Mario A. Berlinghieri 1999 90,168 17,452 7,000 5,285
Senior Vice President -- 1998 95,336 17,302 7,000 7,662
Business Banking 1997 88,400 21,393 6,000 8,178
Division of the Bank
</TABLE>
- ---------------
(1) Includes life insurance premiums of $1,440, $441, $219, $924 and $729 in
1999 for Messrs. McDonough, Tierney, Lallo, Sylva and Berlinghieri,
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
8
<PAGE>
in 1999 for Messrs. McDonough, Tierney, Lallo, Sylva and Berlinghieri was
$11,344, $6,247, $5,470, $4,059 and $4,556, respectively. For Mr.
McDonough, includes $1,772, which represents the economic value of term
insurance purchased in connection with his SERP.
(2) Represents gross salary prior to deduction for employee's voluntary 401(k)
contribution; the Company did not provide matching 401(k) contributions.
(3) Bonuses are reported for the year they were earned, even if paid in the
subsequent year.
(4) Perquisites and other personal benefits paid to each officer included in
the Summary Compensation Table in each instance aggregated less than 10% of
the total annual salary and bonus set forth in the columns entitled
"Salary" and "Bonus" for each officer, and accordingly, are omitted from
the table as permitted by the rules of the Securities and Exchange
Commission.
(5) Messrs. Tierney and Sylva joined the Company in November 1998 and May 1998,
respectively.
OPTION GRANTS TABLE. The following Option Grants Table sets forth certain
information regarding stock options granted during the fiscal year ended
December 31, 1999 by the Company to the executive officers named in the Summary
Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
INDIVIDUAL GRANTS AT ASSUMED
--------------------------------------------- ANNUAL RATES OF
PERCENT OF STOCK PRICE
TOTAL OPTIONS EXERCISE APPRECIATION FOR
GRANTED TO PRICE PER OPTION TERM (2)
OPTIONS EMPLOYEES IN SHARE EXPIRATION --------------------
NAME GRANTED FISCAL YEAR ($/SH)(1) DATE 5% 10%
---- ------- ----------- --------- ----------- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
James P. McDonough 10,000 10.7% $13.50 2/25/09 $84,300 $214,400
Kevin M. Tierney, Sr. 0 N/A N/A N/A N/A N/A
Robert M. Lallo 7,000 7.5 13.50 2/25/09 59,010 150,080
John R. Sylva 4,083 4.4 13.50 2/25/09 34,420 87,540
Mario A. Berlinghieri 7,000 7.5 13.50 2/25/09 59,010 150,080
</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.
9
<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, 1999 and stock options held as of December 31,
1999 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 2,500 $25,313 117,500 20,000 $704,277 0
Kevin M. Tierney, Sr. 0 0 13,444 6,556 0 0
Robert M. Lallo 0 0 5,400 14,000 24,259 0
John R. Sylva 0 0 0 4,083 0 0
Mario M. Berlinghieri 0 0 6,000 14,000 0 0
</TABLE>
- ---------------
(1) Value is based on the last sales price of Common Stock of $10.563 on
December 31, 1999, 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 Littlefield. Mr. Littlefield replaced Mr.
Smith as a member of the Compensation Committee on June 25, 1999. 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 1999.
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.
10
<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, return on equity and evaluation of achievement of
strategic and/or operational goals and unit profitability. Based on the extent
to which the Company achieves those objectives, participants, depending on the
Bonus Plan group, may receive from 15% to 40% 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
19.9% of the Company's compensation to executives of the Company and the Bank in
fiscal 1999 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. The
LTIP was amended in February 2000 to provide that options granted under the LTIP
on or after the date of amendment are fully vested on the date of grant. Options
granted prior to amendment of the LTIP 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. In February 2000, options
to purchase 59,500 shares of Common Stock were granted under the LTIP 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 1999.
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
Bruce G. Atwood, Chairman
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Ralph B. Carver, A. Stanley Littlefield, Bruce G. Atwood and Wayne P. Smith
served on the Compensation Committee during fiscal 1999. Mr. Littlefield
replaced Mr. Smith as a member of the Compensation Committee on June 25, 1999.
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.
11
<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, 1994. 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.
[GRAPH]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Abington Bancorp, Inc. (ABBK) $100 $147.6 $170.8 $373.1 $250.6 $195.8
KBW New England Bank Index 100 156.1 215.6 370.6 342.5 304.0
S&P 500 Index 100 137.4 168.9 225.2 289.4 350.3
</TABLE>
12
<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 1999). 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.
13
<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 5,816 8,724 11,632 14,540 17,448
60,000 9,716 14,574 19,432 24,290 29,148
80,000 13,616 20,424 27,232 34,040 40,848
100,000 17,516 26,274 35,032 43,790 52,548
120,000 21,416 32,124 42,832 53,540 64,248
125,000 22,391 33,587 44,782 55,978 67,173
140,000 25,316 37,974 50,632 63,290 75,948
150,000 27,266 40,899 54,532 68,165 81,798
160,000 (2) 29,216 43,824 58,432 73,040 87,648
</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, 1999 and
October 31, 2000.
(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 $ 79,706
Kevin M. Tierney, Sr. 26 70,137
Robert M. Lallo 37 55,672
John R. Sylva 15 24,952
Mario A. Berlinghieri 20 34,631
</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, Tierney and Meehl.
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 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. Sylva and Meehl, two times) the officer's average annual compensation
(including bonuses) over the five years prior to the change in control.
14
<PAGE>
Notwithstanding the foregoing, if a Change of Control takes place after the
second anniversary of the date on which Messrs. Sylva's and Meehl'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 has established 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.
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 18,316 shares were allocated to participants for
the plan year ended October 31, 1999.
15
<PAGE>
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 was a party to a lease for office space located at 538 Bedford
Street, Abington, Massachusetts until June 30, 1999, when the lease expired. The
Bank is now a tenant at will in the space, which is 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 Bank pays annual rent of $50,400.
As a result of a competitive bid process, the Company purchases some of its
insurance from Wm. F. Borhek Insurance Agency of which William F. Borhek, a
Director of the Company, is President. The Company paid $98,835 to the insurance
agency in 1999 for insurance premiums covering the three-year period ending
November 1, 2002.
16
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information as of March 29, 2000
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 PERCENT
NAME BENEFICIAL OWNERSHIP (1) OF CLASS (2)
- ------------- ------------------------ -------------
<S> <C> <C>
Dennis E. Barry and 356,000 (3) 11.76%
Joseph L. Barry, Jr.
c/o Hallamore Motor
Transportation, Inc.
795 Plymouth Street
Holbrook, MA 02343
James P. McDonough 215,833 (4) 6.84
c/o Abington Savings Bank
536 Washington Street
Abington, MA 02351
Dimensional Fund Advisors Inc. 197,400 (5) 6.52
1299 Ocean Avenue
Santa Monica, CA 90401
Joel S. Geller 151,271 (6) 4.98
Wayne P. Smith 69,920 (7)(8) 2.29
James J. Slattery 67,130 (7)(9) 2.20
Bruce G. Atwood 36,174 (7)(10) 1.19
Gordon N. Sanderson 34,399 (7)(11) 1.13
*William F. Borhek 33,599 (12) 1.11
Kevin M. Tierney, Sr. 32,939 (13) 1.07
Robert M. Lallo 31,296 (14) 1.02
*Rodney D. Henrikson 28,738 (15) .94
Jay Timothy Noonan 25,181 (16) .83
Mario A. Berlinghieri 25,003 (17) .82
*A. Stanley Littlefield 22,500 (18) .74
Ralph B. Carver, Jr. 20,268 (19) .67
John R. Sylva 7,318 (20) .24
All directors and executive 811,569 (21) 24.07
officers as a group (16 persons)
</TABLE>
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* 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 March 29, 2000.
(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
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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) Includes 127,500 shares subject to currently exercisable options, 14,070
shares held in his self-directed IRA, 54,323 shares owned jointly with his
wife and 2,331 shares owned by his wife in a self-directed IRA. Also
includes 532 shares held by Mr. McDonough as custodian for one of his two
children and 532 shares held by his wife as custodian for one of his two
children (1,064 shares total). Mr. McDonough disclaims beneficial ownership
of the shares owned directly by his wife. Also includes 13,485 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 and 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 $16.20 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
11, 2000, as filed with the SEC, stating that Dimensional Fund Advisors
Inc. (the "Fund") is the beneficial owner of 197,400 shares, of which it
has sole voting power and sole dispositive power with respect to all
197,400 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 8,000 shares subject to currently exercisable options, 2,000
shares owned jointly with his mother, 17,500 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. Also includes, 1,261 shares
which have been accrued under the Abington Bancorp, Inc. Deferred Stock
Compensation Plan for Directors. Mr. Geller disclaims beneficial ownership
of the 3,568 shares owned directly by his wife and the shares owned by his
son and daughter. Does not include 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 and 2,000 shares which by their terms are not exercisable
until the fair market value (as defined in the option agreement) is at
least $16.20 per share for a period of 30 consecutive business days.
(7) Includes 19,500 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 and 2,000 shares which by their terms are not exercisable
until the fair market value (as defined in the option agreement) is at
least $16.20 per share for a period of 30 consecutive business days.
(8) Includes 21,374 shares owned by his wife. Also includes 1,020 shares which
were accrued under the Abington Bancorp, Inc. Deferred Stock Compensation
Plan for Directors. Mr. Smith disclaims beneficial ownership of the shares
owned by his wife.
(9) Includes 5,708 shares held in his IRA, 4,000 shares held as custodian for
each of two daughters (8,000 shares total), 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 1,383 shares
accrued under the Abington Bancorp, Inc. Deferred Stock Compensation Plan
for Directors. Mr. Slattery disclaims beneficial ownership of the shares
held on behalf of his children and the shares owned by his wife.
(10) Includes 10,926 shares owned by his wife. Also includes 1,383 shares
accrued under the Abington Bancorp, Inc. Deferred Compensation Plan for
Directors. Mr. Atwood disclaims beneficial ownership of the shares owned by
his wife.
(11) Includes 14,899 shares owned through a realty trust.
(12) Includes 5,000 shares subject to currently exercisable options and 25,506
shares owned jointly with his wife. Also includes 811 shares accrued under
the Abington Bancorp, Inc. Deferred Compensation Plan for Directors. Mr.
Borhek disclaims beneficial ownership of the shares owned directly by his
wife. Does not include 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 and 2,000 shares which by their terms are not exercisable
until the fair market value (as defined in the option agreement) is at
least $16.20 per share for a period of 30 consecutive business days.
(13) Includes 31,000 shares subject to currently exercisable options and 489
shares held by the ESOP as to which Mr. Tierney has the power to direct
voting.
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<PAGE>
(14) Includes 1,804 shares held in his self-directed IRA and 1,600 shares owned
jointly with spouse. Also includes 24,400 shares subject to currently
exercisable options and 2,544 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 int he option agreement) is at least $24.90 per share for
a period of 30 consecutive business days and 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 $16.20 per share for
a period of 30 consecutive business days.
(15) Includes 14,500 shares subject to currently exercisable options and 5,061
shares in a corporation in which Mr. Henrikson is an officer, director and
stockholder. Also includes 1,878 shares held in his self-directed IRA and
1,878 shares held by his wife in a self-directed IRA. Does not include
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 and 2,000 shares which by their
terms are not exercisable until the fair market value (as defined in the
option agreement) is at least $16.20 per share for a period of 30
consecutive business days.
(16) Includes 8,000 shares subject to currently exercisable options and 539
shares which accrued under the Abington Bancorp, Inc. Deferred Compensation
Plan for Directors and 2,142 shares representing a 20% 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 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 and 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 $16.20 per share for a period of 30
consecutive business days.
(17) Includes 209 shares owned jointly with his wife and 9,196 shares held in
his self-directed IRA. Also includes 1,256 shares held by the ESOP as to
which Mr. Berlinghieri has the power to direct the voting. Includes 13,000
shares subject to currently exercisable options. 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 and 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
$16.20 per share for a period of 30 consecutive business days.
(18) Includes 14,500 shares subject to currently exercisable options and 6,000
shares owned jointly with his wife. 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 per
share 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
per share for a period of 30 consecutive business days.
(19) Includes 3,500 shares subject to currently exercisable options and 16,000
shares owned jointly with his wife. Also includes 768 shares accrued under
the Abington Bancorp, Inc. Deferred Stock Compensation Plan for Directors.
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 and 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 $16.20 per share for a period of 30 consecutive
business days.
(20) Includes 7,000 shares subject to currently exercisable options and 318
shares held by the ESOP as to which Mr. Sylva has the power to direct
voting. Does not include 4,083 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.
(21) Includes 344,400 shares obtainable by exercise of currently exercisable
options held by all Directors and executive officers as a group. Also
includes 18,092 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 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 or 48,083 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 $16.20 per share for a period of 30 consecutive
business days.
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<PAGE>
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
During 1999, 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 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 1999, 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 1999.
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 $5,750, plus reimbursement of certain out-of-pocket expenses, for
its service 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 2001 ANNUAL MEETING
In order to be included in proxy materials for the 2001 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 December 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.
At the 2001 annual meeting of stockholders or special meeting in lieu
thereof, the persons named as proxies in the Company's proxy for the meeting may
vote the proxy in their discretion on any proposal received by the Company after
February 27, 2001.
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.
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<PAGE>
APPENDIX A
ABINGTON BANCORP, INC.
2000 INCENTIVE AND NONQUALIFIED
STOCK OPTION PLAN
SECTION 1. PURPOSE
This 2000 Incentive and Nonqualified Stock Option Plan (the "Plan") of
Abington Bancorp, Inc., a Massachusetts corporation (the "Company"), is designed
to provide additional incentive to executives and other key employees of the
Company and its subsidiaries and for certain other individuals providing
services to or acting as directors of the Company and its subsidiaries. The
Company intends that this purpose will be effected by the granting of incentive
stock options ("Incentive Stock Options") as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), and nonqualified stock
options ("Nonqualified Options") under the Plan which afford such executives,
key employees, directors and other eligible individuals an opportunity to
acquire or increase their proprietary interest in the Company through the
acquisition of shares of its Common Stock. The Company intends that Incentive
Stock Options issued under the Plan will qualify as "incentive stock options" as
defined in Section 422 of the Code and the terms of the Plan shall be
interpreted in accordance with this intention. The term "subsidiary" shall have
the meaning set forth in Section 424 of the Code.
SECTION 2. ADMINISTRATION
2.1 THE COMMITTEE. The Plan shall be administered by the Company's
Compensation Committee (the "Committee"). It is the intention of the Company
that the Plan shall be administered by "non-employee directors" within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934 (the "Exchange
Act"), but the authority and validity of any act taken or not taken by the
Committee shall not be affected if any person administering the Plan is not a
non-employee director. Except as specifically reserved to the Company's Board of
Directors (the "Board") under the terms of the Plan, the Committee shall have
full and final authority to operate, manage and administer the Plan on behalf of
the Company. Action by the Committee shall require the affirmative vote of a
majority of all members thereof. Notwithstanding the foregoing, any power of the
Committee hereunder may also be exercised by the full Board of Directors in lieu
of the Committee.
2.2 POWERS OF THE COMMITTEE. Subject to the terms and conditions of the
Plan, the Committee shall have the power:
(a) To determine from time to time the persons eligible to
receive options and the options to be granted to such persons under the
Plan and to prescribe the terms, conditions, restrictions, if any, and
provisions (which need not be identical) of each option granted under
the Plan to such persons, and to recommend to the Board of Directors
for its approval the grant of options (the power to grant options is
specifically reserved to the Board of Directors);
(b) To construe and interpret the Plan and options granted
thereunder and to establish, amend, and revoke rules and regulations
for administration of the Plan. In this connection, the Committee may
correct any defect or supply any omission, or reconcile any
inconsistency in the Plan, or in any option agreement, in the manner
and to the extent it shall deem necessary or expedient to make the Plan
fully effective. All decisions and determinations by the Committee in
the exercise of this power shall be final and binding upon the Company
and optionees;
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(c) To make, in its sole discretion, changes to any
outstanding option granted under the Plan, including: (i) to reduce the
exercise price, (ii) to accelerate the vesting schedule or (iii) to
extend the expiration date; and
(d) Generally, to exercise such powers and to perform such
acts as are deemed necessary or expedient to promote the best interests
of the Company with respect to the Plan.
SECTION 3. STOCK
3.1 STOCK TO BE ISSUED. The stock subject to the options granted under
the Plan shall be shares of the Company's authorized but unissued Common Stock,
$.10 par value (the "Common Stock"), or shares of the Company's Common Stock
held in treasury. The total number of shares that may be issued pursuant to
options granted under the Plan shall not exceed an aggregate of 150,000 shares
of Common Stock; provided, however, that the class and aggregate number of
shares which may be subject to options granted under the Plan shall be subject
to adjustment as provided in Section 8 hereof.
3.2 EXPIRATION, CANCELLATION OR TERMINATION OF OPTION. Whenever any
outstanding option under the Plan expires, is cancelled or is otherwise
terminated (other than by exercise), the shares of Common Stock allocable to the
unexercised portion of such option may again be the subject of options under the
Plan.
SECTION 4. ELIGIBILITY
4.1 PERSONS ELIGIBLE. Incentive Stock Options under the Plan may be
granted only to officers and other employees of the Company or its subsidiaries.
Nonqualified Options may be granted to officers or other employees of the
Company or its subsidiaries, and to members of the Board and consultants or
other persons who render services to the Company (regardless of whether they are
also employees).
4.2 GREATER-THAN-TEN-PERCENT STOCKHOLDERS. Except as may otherwise be
permitted by the Code or other applicable law or regulation, no Incentive Stock
Option shall be granted to an individual who, at the time the option is granted,
owns (including ownership attributed pursuant to Section 424 of the Code) more
than ten percent of the total combined voting power of all classes of stock of
the Company or any subsidiary (a "greater-than-ten-percent stockholder"), unless
such Incentive Stock Option provides that (i) the purchase price per share shall
not be less than one hundred ten percent of the fair market value of the Common
Stock at the time such option is granted, and (ii) that such option shall not be
exercisable to any extent after the expiration of five years from the date it is
granted.
4.3 MAXIMUM AGGREGATE FAIR MARKET VALUE. The aggregate fair market
value (determined at the time the option is granted) of the Common Stock with
respect to which Incentive Stock Options are exercisable for the first time by
any optionee during any calendar year (under the Plan and any other plans of the
Company or its subsidiary for the issuance of incentive stock options) shall not
exceed $100,000 (or such greater amount as may from time to time be permitted
with respect to incentive stock options by the Code or any other applicable law
or regulation).
SECTION 5. TERMINATION OF EMPLOYMENT OR DEATH OF OPTIONEE
5.1. TERMINATION BY DEATH. If any optionee's employment with or other
services to the Company and its Subsidiaries terminates by reason of death, any
option held by such optionee may thereafter be exercised to the extent
exercisable at the date of death, by the legal representative or legatee of the
optionee, for a period of 180 days from the date of death (or such longer period
as the Committee shall specify at any time), or until the expiration of the
stated term of the option, if earlier.
5.2 TERMINATION BY REASON OF DISABILITY. If any optionee's employment
with or other services to the Company and its Subsidiaries terminates by reason
of Disability, any option held by such optionee may
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thereafter be exercised, to the extent it was exercisable at the time of such
termination, for a period of 90 days from the date of such termination of
employment or other services (or such longer period as the Committee shall
specify at any time, it being understood that any Incentive Stock Options that
are so extended shall thereafter become Nonqualified Stock Options to the extent
provided by applicable law) or until the expiration of the stated term of the
option, if earlier. The Committee shall have sole authority and discretion to
determine whether an optionee's employment or services has been terminated by
reason of Disability. Except as otherwise provided by the Committee or the Board
at the time of grant, the death of an optionee during a period provided in this
Section 5.2 for the exercise of an option shall extend such period for 180 days
from the date of death, subject to termination on the expiration of the stated
term of the option, if earlier.
5.3 TERMINATION BY REASON OF NORMAL RETIREMENT. If any optionee's
employment with or other services to the Company and its Subsidiaries terminates
by reason of normal retirement in accordance with the Company's retirement
policies, any option held by such optionee may thereafter be exercised, to the
extent it was exercisable at the time of such termination, for (i) a period of
30 days from the date of such termination of employment or services or, in the
case of a Nonqualified Stock Option held by a director of the Company, for a
period of one year from the date of such director's retirement (or such longer
period as the Committee shall specify at any time, it being understood that any
Incentive Stock Options that are so extended shall thereafter become
Nonqualified Stock Options to the extent provided by applicable law) or (ii)
until the expiration of the stated term of the option, if earlier. The Committee
shall have sole authority and discretion to determine whether an optionee's
employment or services has been terminated by reason of normal retirement.
Except as otherwise provided by the Committee or the Board at the time of grant,
the death of an optionee during the 30-day or one-year post-retirement period
provided in this Section 5.3 for the exercise of an option shall extend such
period until 180 days from the date of death (if later than the expiration of
the applicable post-retirement period), subject to termination on the expiration
of the stated term of the option, if earlier.
5.4 VOLUNTARY TERMINATION. If any optionee's employment with or other
services to the Company and its Subsidiaries terminates by reason of such
optionee's voluntary resignation, any option held by such optionee shall
immediately terminate and shall thereafter be of no further force and effect (i)
at the end of the last day of the optionee's employment or, (ii) in the case of
a director, on the effective date of the optionee's resignation from the Board
of Directors (or in either case for such longer period as the Committee shall
specify at any time, it being understood that any Incentive Stock Options that
are so extended shall thereafter become Nonqualified Stock Options to the extent
provided by applicable law) or until the expiration of the stated term of the
option, if earlier.
5.5 TERMINATION FOR CAUSE. If any optionee's employment with or other
services to the Company and its Subsidiaries has been terminated by the Company
or any of its Subsidiaries for cause, any option held by such optionee shall
immediately terminate at the end of the last day of the optionee's employment or
other services and shall thereafter be of no further force and effect; provided,
however, that the Committee may, in its sole discretion, provide that such
option can be exercised for a period of up to thirty (30) days from the date of
termination of employment or other services (it being understood that any
Incentive Stock Options that are so extended shall thereafter become
Nonqualified Stock Options to the extent provided by applicable law) or until
the expiration of the stated term of the option, if earlier. The Committee shall
have sole authority and discretion to determine whether an optionee's employment
has been terminated for cause.
5.6 TERMINATION WITHOUT CAUSE. Unless otherwise determined by the
Committee, if an optionee's employment with or other services to the Company and
its Subsidiaries is terminated by the Company or any of its Subsidiaries without
cause, any option held by such optionee may thereafter be exercised, to the
extent it was exercisable on the date of termination of employment, for thirty
(30) days from the last day of the optionee's employment or other services (or
such longer period as the Committee shall specify at any time, it being
understood that any Incentive Stock Options that are so extended shall
thereafter become Nonqualified Stock Options to the extent provided by
applicable law) or until the expiration of the stated term of the option, if
earlier.
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5.7 MISCELLANEOUS. An employment relationship between the Company and
the optionee shall be deemed to exist during any period in which the optionee is
employed by the Company or any subsidiary. Whether authorized leave of absence,
or absence on military or government service, shall constitute termination of
the employment relationship between the Company and the optionee shall be
determined by the Committee at the time thereof. "Disability" shall mean
disability as set forth in Section 22(e)(3) of the Code.
SECTION 6. TERMS OF THE OPTION AGREEMENTS
Each option agreement shall be in writing and shall contain such terms,
conditions, restrictions, if any, and provisions as the Committee shall from
time to time deem appropriate. Such provisions or conditions may include without
limitation restrictions on transfer, repurchase rights, or such other provisions
as shall be determined by the Committee; provided that such additional
provisions shall not be inconsistent with any other term or condition of the
Plan and such additional provisions shall not cause any Incentive Stock Option
granted under the Plan to fail to qualify as an incentive option within the
meaning of Section 422 of the Code. Option agreements need not be identical, but
each option agreement by appropriate language shall include the substance of all
of the following provisions:
6.1 EXPIRATION OF OPTION. Notwithstanding any other provision of the
Plan or of any option agreement, each option shall expire on the date specified
in the option agreement, which date shall not, in the case of an Incentive Stock
Option, be later than the tenth anniversary (fifth anniversary in the case of a
greater-than-ten-percent stockholder) of the date on which the option was
granted, or as specified in Section 5 hereof.
6.2 EXERCISE. Subject to Section 7.3 hereof, each option may be
exercised, so long as it is valid and outstanding, from time to time in part or
as a whole, subject to any limitations with respect to the number of shares for
which the option may be exercised at a particular time and to such other
conditions as the Committee in its discretion may specify upon granting the
option.
6.3 PURCHASE PRICE. The purchase price per share under each option
shall be determined by the Committee at the time the option is granted;
provided, however, that the option price of any Incentive Stock Option shall
not, unless otherwise permitted by the Code or other applicable law or
regulation, be less than the fair market value of the Common Stock on the date
the option is granted (110% of the fair market value in the case of a
greater-than-ten-percent stockholder). For the purpose of the Plan the fair
market value of the Common Stock shall be the average of the closing price of
the Common Stock on the twenty business days prior to and including the date of
grant of the option (or other determination date, as applicable), as reported by
Nasdaq, or, if the Common Stock is not quoted on Nasdaq, the fair market value
as determined by the Committee.
6.4 TRANSFERABILITY OF OPTIONS. Options shall not be transferable by
the optionee otherwise than by will or under the laws of descent and
distribution, and shall be exercisable, during his or her lifetime, only by him
or her.
6.5 RIGHTS OF OPTIONEES. No optionee shall be deemed for any purpose to
be the owner of any shares of Common Stock subject to any option unless and
until the option shall have been exercised pursuant to the terms thereof, and
the Company shall have issued and delivered the shares to the optionee.
6.6 RELOAD OPTIONS. At the discretion of the Committee, options granted
hereunder may include a so-called "reload" feature pursuant to which an optionee
exercising an option by the delivery of a number of shares of Common Stock in
accordance with Section 7.2(b) hereof would automatically be granted an
additional option (with an exercise price equal to the fair market value of the
Common Stock on the date the additional option is granted and with the same
expiration date as the original option being exercised, and with such other
terms as the Committee may provide) to purchase that number of shares of Common
Stock equal to the number delivered to exercise the original option; provided,
however, that the grant of such additional
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Option shall be subject to the availability of shares of Stock under the Plan at
the time of the exercise of the original Option.
SECTION 7. METHOD OF EXERCISE; PAYMENT OF PURCHASE PRICE
7.1 METHOD OF EXERCISE. Any option granted under the Plan may be
exercised by the optionee by delivering to the Company on any business day a
written notice specifying the number of shares of Common Stock the optionee then
desires to purchase and specifying the address to which the certificates for
such shares are to be mailed (the "Notice"), accompanied by payment for such
shares.
7.2 PAYMENT OF PURCHASE PRICE. Payment for the shares of Common Stock
purchased pursuant to the exercise of an option shall be made:
(a) in cash in an amount, or a check, bank draft or postal or
express money order payable in an amount, equal to the aggregate
exercise price for the number of shares specified in the Notice;
(b) by delivering "mature" shares (as defined in the Financial
Accounting Standards Board's Emerging Issues Task Force Issue 84-18
("Issue 84-18")) of Common Stock of the Company having a fair market
value (as defined for purposes of Section 6.3 hereof as of the date of
exercise) equal to such aggregate exercise price;
(c) by reducing the number of option shares otherwise issuable
to the optionee upon exercise of the option by a number of shares
having a fair market value (as defined for purposes of Section 6.3
hereof as of the date of exercise) equal to such aggregate exercise
price (it being understood that this alternative will be available only
if the optionee holds sufficient "mature" shares as defined in Issue
84-18);
(d) by delivering such other consideration that is acceptable
to the Company and that has a fair market value, as determined by the
Company, equal to such aggregate exercise price, including any
broker-directed cashless exercise/resale procedure adopted by the
Company; or
(e) any combination of the foregoing.
As promptly as practicable after receipt of the Notice and accompanying payment,
the Company shall deliver to the optionee certificates for the number of shares
with respect to which such option has been so exercised, issued in the
optionee's name, either individually or jointly with another person; provided,
however, that such delivery shall be deemed effected for all purposes when the
Company or a stock transfer agent of the Company shall have deposited such
certificates in the United States mail, addressed to the optionee, at the
address specified in the Notice.
7.3 SPECIAL LIMITS AFFECTING SECTION 16(b) OPTION HOLDERS. Shares
issuable upon exercise of options granted to a person who in the opinion of the
Committee may be deemed to be a director or officer of the Company within the
meaning of Section 16(b) of the Exchange Act and the rules and regulations
thereunder shall not be sold or disposed of until after the expiration of six
months following the date of grant.
SECTION 8. CHANGES IN COMPANY'S CAPITAL STRUCTURE
8.1 RIGHTS OF COMPANY. The existence of outstanding options shall not
affect in any way the right or power of the Company or its stockholders to make
or authorize, without limitation, any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of Common
Stock, or any issue of bonds, debentures, preferred or prior preference stock or
other capital stock ahead of or affecting the Common
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Stock or the rights thereof, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.
8.2 RECAPITALIZATION, STOCK SPLITS AND DIVIDENDS. If the Company shall
effect a subdivision or consolidation of shares or other capital readjustment,
the payment of a stock dividend, or other increase or reduction of the number of
shares of the Common Stock outstanding, in any such case without receiving
compensation therefor in money, services or property, then (i) the number,
class, and price per share of shares of stock subject to outstanding options
hereunder shall be appropriately adjusted in such a manner as to entitle an
optionee to receive upon exercise of an option, for the same aggregate cash
consideration, the same total number and class of shares as he or she would have
received as a result of the event requiring the adjustment had he or she
exercised his or her option in full immediately prior to such event and (ii) the
number and class of shares with respect to which options may be granted under
the Plan shall be adjusted by substituting for the total number of shares of
Common Stock then reserved for issuance under the Plan that number and class of
shares of stock that the owner of an equal number of outstanding shares of
Common Stock would own as the result of the event requiring the adjustment.
8.3 MERGER WITHOUT CHANGE OF CONTROL. After a merger of one or more
corporations into the Company, or after a consolidation of the Company and one
or more corporations in which (i) the Company shall be the surviving
corporation, and (ii) the stockholders of the Company immediately prior to such
merger or consolidation own after such merger or consolidation shares
representing at least fifty percent of the voting power of the Company, each
holder of an outstanding option shall, at no additional cost, be entitled upon
exercise of such option to receive in lieu of the number of shares as to which
such option shall then be so exercisable, the number and class of shares of
stock or other securities to which such holder would have been entitled pursuant
to the terms of the agreement of merger or consolidation if, immediately prior
to such merger or consolidation, such holder had been the holder of record of a
number of shares of Common Stock equal to the number of shares for which such
option was exercisable.
8.4 CHANGE OF CONTROL. In the event of a Change of Control while
unexercised options remain outstanding under the Plan, then (i) the time for
exercise of all unexercised and unexpired options shall be automatically
accelerated, effective as of the effective time of the Change of Control (or
such earlier date as may be specified by the Board), and (ii) after the
effective time of such Change of Control, unexercised options shall remain
outstanding and shall be exercisable in full for shares of Common Stock or, if
applicable, for shares of such securities, cash or property as the holders of
shares of Common Stock received in connection with such Change of Control.
"Change of 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 Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or any
corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of
stock of the Company), directly or indirectly, of securities of the
Company representing thirty-five percent (35%) or more of the combined
voting power of the Company's then outstanding securities; or
(b) persons who, as of January 1, 2000, constituted the
Company'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 Company subsequent
to January 1, 2000 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
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(c) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation or other
entity, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than
sixty-five percent (65%) of the combined voting power of the voting
securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or
(d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets.
8.5 ADJUSTMENTS TO COMMON STOCK SUBJECT TO OPTIONS. Except as
hereinbefore expressly provided, the issue by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, for cash
or property, or for labor or services, either upon direct sale or upon the
exercise of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock then subject to
outstanding options.
8.6 MISCELLANEOUS. Adjustments under this Section 8 shall be determined
by the Committee, and such determinations shall be conclusive. No fractional
shares of Common Stock shall be issued under the Plan on account of any
adjustment specified above.
SECTION 9. GENERAL RESTRICTIONS
9.1 NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS. The Committee
may require each person acquiring shares pursuant to an option to represent to
and agree with the Company in writing that such person is acquiring the shares
without a view to distribution thereof.
No shares of Common Stock shall be issued pursuant to an option until
all applicable securities laws and other legal and stock exchange requirements
have been satisfied. The Committee may require the placing of such stop orders
and restrictive legends on certificates for stock as it deems appropriate.
9.2 DELIVERY OF STOCK CERTIFICATES. Delivery of stock certificates to
optionees under this Plan shall be deemed effected for all purposes when the
Company or a stock transfer agent of the Company shall have delivered such
certificates in the United States mail, addressed to the optionee, at the
optionee's last known address on file with the Company.
9.3 NO EMPLOYMENT RIGHTS. The adoption of the Plan or the granting of
any option under the Plan does not confer upon any employee any right to
continued employment with the Company or any Subsidiary.
SECTION 10. WITHHOLDING TAXES
10.1 RIGHTS OF COMPANY. The Company may require an employee exercising
a Nonqualified Option, or disposing of shares of Common Stock acquired pursuant
to the exercise of an Incentive Option in a disqualifying disposition (as
defined in Section 421(b) of the Code), to reimburse the Company for any taxes
required by any government to be withheld or otherwise deducted and paid by the
Company in respect of the issuance or disposition of such shares. In lieu
thereof, the Company shall have the right to withhold the amount of such taxes
from any other sums due or to become due from the Company to the employee upon
such terms and conditions as the Company may prescribe. The Company may, in its
discretion, hold the stock certificate to which such employee is otherwise
entitled upon the exercise of an option as security for the payment of any such
withholding tax liability, until cash sufficient to pay that liability has been
received or accumulated.
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10.2 PAYMENT IN SHARES. An employee may elect to have such tax
withholding obligation satisfied, in whole or in part, by (i) authorizing the
Company to withhold from shares of Common Stock to be issued pursuant to the
exercise of a Nonqualified Option a number of shares with an aggregate fair
market value (as defined in Section 6.3 hereof determined as of the date the
withholding is effected) that would satisfy the minimum statutory withholding
amount due for federal and state purposes with respect to such exercise, or (ii)
transferring to the Company mature shares (as defined in Section 7.2) of Common
Stock owned by the employee with an aggregate fair market value (as defined in
Section 6.3 hereof determined as of the date the withholding is effected) that
would satisfy the withholding amount due. With respect to any employee who is
subject to Section 16 of the Exchange Act, the following additional restrictions
shall apply:
(a) the election to satisfy tax withholding obligations
relating to an option exercise in the manner permitted by this Section
10.2 shall be made either (1) during the period beginning on the third
business day following the date of release of quarterly or annual
summary statements of sales and earnings of the Company and ending on
the twelfth business day following such date, or (2) at least six (6)
months prior to the date of exercise of the option;
(b) such election shall be irrevocable;
(c) such election shall be subject to the consent or approval
of the Committee; and
(d) the Common Stock withheld to satisfy tax withholding, if
granted at the discretion of the Committee, must pertain to an option
which has been held by the employee for at least six (6) months from
the date of grant of the option.
10.3 NOTICE OF DISQUALIFYING DISPOSITION. Each holder of an Incentive
Option shall agree to notify the Company in writing immediately after making a
disqualifying disposition (as defined in Section 421(b) of the Code) of any
Common Stock purchased upon exercise of the Incentive Option.
SECTION 11. AMENDMENT OF PLAN
The Board may amend the Plan at any time, and from time to time,
subject to the limitation that, except as provided in Section 8 hereof, no
amendment shall be effective unless approved by the stockholders of the Company
in accordance with applicable law and regulations, at an annual or special
meeting held within twelve months before or after the date of adoption of such
amendment, in any instance in which such amendment would: (i) increase the
number of shares of Common Stock that may be issued under, or as to which
options may be granted pursuant to, the Plan; or (ii) change in substance the
provisions of Section 4 hereof relating to eligibility to participate in the
Plan. Without limiting the generality of the foregoing, the Board is expressly
authorized to amend the Plan, at any time and from time to time, to conform it
to the provisions of Rule 16b-3 under the Exchange Act, as that Rule may be
amended from time to time.
Except as provided in Section 8 hereof, the rights and obligations
under any option granted before amendment of this Plan or any unexercised
portion of such option shall not be adversely affected by amendment of this Plan
or such option without the consent of the holder of such option.
SECTION 12. NONEXCLUSIVITY OF PLAN
Neither the adoption of this Plan by the Board of Directors nor the
submission of this Plan to the stockholders of the Company for approval shall be
construed as creating any limitations on the power of the Board to adopt such
other or additional compensation or incentive arrangements as it may deem
desirable, including the granting of stock options otherwise than under this
Plan, and such arrangements may be either applicable generally or only in
specific cases.
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SECTION 13. EFFECTIVE DATE AND DURATION AND TERMINATION OF PLAN
13.1 EFFECTIVE DATE. The effective date of this Plan shall be the date
of its adoption by the Board, provided that the stockholders of the Company
shall have approved this Plan within twelve months prior to or following the
adoption of this Plan by the Board. Subject to the foregoing, options may be
granted under the Plan at any time subsequent to its effective date; provided,
however, that (a) no such option shall be exercised or exercisable unless the
stockholders of the Company shall have approved the Plan within twelve months
prior to or following the adoption of this Plan by the Board, and (b) all
options issued prior to the date of such stockholders' approval shall contain a
reference to such condition.
13.2 TERMINATION. The Plan shall terminate (i) when the total amount of
the Common Stock with respect to which options may be granted shall have been
issued upon the exercise of options or (ii) by earlier action of the Board of
Directors for any (or no) reason, whichever shall first occur. No option may be
granted under the Plan after the tenth anniversary of the effective date of the
Plan, or after the Plan has been terminated (if earlier). No option granted
while this Plan is in effect shall be altered or impaired by termination of this
Plan, except upon the consent of the holder of such option. The power of the
Committee to construe and interpret this Plan and the options granted prior to
the termination of this Plan shall continue after such termination.
SECTION 14. PROVISIONS OF GENERAL APPLICATION
14.1 SEVERABILITY. The invalidity or unenforceability of any provision
of this Plan shall not affect the validity or enforceability of any other
provision of this Plan, each of which shall remain in full force and effect.
14.2 CONSTRUCTION. The headings in this Plan are included for
convenience only and shall not in any way effect the meaning or interpretation
of this Plan. Any term defined in the singular shall include the plural, and
vice versa. The words "herein," "hereof" and "hereunder" refer to this Plan as a
whole and not to any particular part of this Plan. The word "including" as used
herein shall not be construed so as to exclude any other thing not referred to
or described.
14.3 FURTHER ASSURANCES. The Company and any holder of an option shall
from time to time execute and deliver any and all further instruments, documents
and agreements and do such other and further acts and things as may be required
or useful to carry out the intent and purpose of this Plan and such option and
to assure to the Company and such option holder the benefits contemplated by
this Plan; provided, however, that neither the Company nor any option holder
shall in any event be required to take any action inconsistent with the
provisions of this Plan.
14.4 GOVERNING LAW. This Plan and each option shall be governed by the
laws of the Commonwealth of Massachusetts.
* * * * *
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<TABLE>
<S> <C>
/X/ PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE ABINGTON BANCORP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS WITH- FOR ALL
THE ANNUAL MEETING OF STOCKHOLDERS FOR HOLD EXCEPT
TO BE HELD ON MAY 16, 2000
1. Election of Directors / / / / / /
The undersigned stockholder of Abington Bancorp, Inc. (the
"Company") hereby appoints James P. McDonough, Robert M. Lallo WILLIAM F. BORHEK A. STANLEY LITTLEFIELD
and Lewis J. Paragona, and each or any of them, proxies, with RODNEY D. HENRIKSON
full power of substitution to each and to each substitute
appointed pursuant to such power, of the undersigned to vote all INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
shares of stock of the Company which the undersigned may be INDIVIDUAL NOMINEE, MARK "FOR ALL EXCEPT" AND WRITE THAT
entitled to vote at the Annual Meeting of Stockholders of the NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
Company to be held on Tuesday, May 16, 2000, and at any and all
adjournments thereof, with all powers the undersigned would FOR AGAINST ABSTAIN
possess if personally present. The proxies are authorized to vote 2. Approval of the Abington / / / / / /
as indicated herein upon the matters set forth herein and in Bancorp, Inc. 2000 Incentive
their discretion upon all other matters which may properly come and Nonqualified Stock
before said Meeting. Option Plan.
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 the 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
Please be sure to sign and date Date books of the Company. Joint owners should each sign
this Proxy in the box below. 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
- ---Stockholder sign above-------Co-holder (if any) sign above--- state his or her title.
</TABLE>
- --------------------------------------------------------------------------------
^ 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 16, 2000.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Mark box at right if comments or address
Abington Bancorp, Inc. change have been noted below. / /
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ---------------------------------- ----------------------------------
- ---------------------------------- ----------------------------------
- ---------------------------------- ----------------------------------
PLEASE VOTE, DATE AND SIGN ABOVE A RETURN PROMPTLY IN ENCLOSED ENVELOPE.
