<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
(Name of Registrant as Specified In Its Charter)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act
Rule 0-11 (Set forth the amount on which the filing fee is calculated and
state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
ANNUAL MEETING OF STOCKHOLDERS
APRIL 23, 1999 AT 10:00 A.M.
Notice to: Stockholders of BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of Boston Private Financial Holdings, Inc. (the "Company") will be
held at 225 Franklin Street, 33rd Floor, Boston, Massachusetts, on Friday, April
23, 1999 at 10:00 a.m., for the following purposes:
1. To elect three (3) Class II Directors of the Company;
2. To consider and act upon any other matter which may properly come
before the Meeting or any adjournment or postponement thereof.
Any action may be taken on the foregoing proposals at the Meeting on the
date specified above, or on any date or dates to which, by original or later
adjournment, the Meeting may be adjourned, or to which the Meeting may be
postponed.
The Board of Directors has fixed the close of business on February 22, 1999
as the record date for determining the stockholders entitled to notice of and to
vote at the Meeting or any adjournment or postponement thereof.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, YOU ARE REQUESTED
TO COMPLETE AND SIGN THE ENCLOSED PROXY CARD, WHICH IS SOLICITED BY THE BOARD OF
DIRECTORS, AND TO MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE. ANY PROXY MAY BE
REVOKED BY DELIVERY OF A LATER DATED PROXY. STOCKHOLDERS OF RECORD WHO ATTEND
THE MEETING MAY VOTE IN PERSON BY NOTIFYING THE CLERK, EVEN IF THEY HAVE
PREVIOUSLY DELIVERED A PROXY.
By Order of the Board of Directors
ANA E. STEELE
Clerk
Boston, Massachusetts
Dated: March 11, 1999
<PAGE> 3
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
TEN POST OFFICE SQUARE
BOSTON, MASSACHUSETTS 02109
------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FRIDAY, APRIL 23, 1999
------------------------
GENERAL
This Proxy Statement (the "Proxy Statement") is furnished to the
stockholders of Boston Private Financial Holdings, Inc., a Massachusetts
corporation (the "Company"), in connection with the solicitation of proxies by
the Board of Directors of the Company (the "Board of Directors") from holders of
the outstanding shares of the Common Stock, par value $1.00 per share (the
"Common Stock"), of the Company for use at the Annual Meeting of Stockholders
(the "Meeting") of the Company to be held on April 23, 1999 at 10:00 a.m. Boston
time, at 225 Franklin Street, 33rd Floor, Boston, Massachusetts 02110 and at any
adjournment or postponement thereof, for the purposes set forth herein.
The Notice of Annual Meeting of Stockholders and the accompanying proxy are
first being sent to stockholders on or about March 11, 1999.
The shares represented by the enclosed proxy will be voted as specified
therein if the proxy is properly executed and received prior to the Meeting and
not properly revoked. If a properly executed proxy is submitted and no
instructions are given, the proxy will be voted FOR the election of the nominees
to the Board of Directors. In accordance with Securities and Exchange Commission
(the "Commission") rules, boxes and instructions are provided on the enclosed
proxy card for stockholders to mark if they wish either to vote "for" or to
"withhold authority" to vote for one or more of the Company's nominees for
directors. It is not anticipated that any matters other than those set forth in
this Proxy Statement will be presented at the Meeting. If other matters are
presented, proxies will be voted in accordance with the discretion of the proxy
holders.
A stockholder of record may revoke a proxy by filing an instrument of
revocation with Boston Private Financial Holdings, Inc., Ten Post Office Square,
Boston, Massachusetts 02109, Attention: Clerk, by filing a duly executed proxy
bearing a later date or by appearing in person at the Meeting and withdrawing
the proxy.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, HOLDERS OF COMMON STOCK ARE
REQUESTED TO COMPLETE, DATE AND SIGN THE ACCOMPANYING PROXY CARD AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE.
VOTING AND QUORUM
The Board of Directors has fixed the close of business on February 22,
1999, as the record date (the "Record Date") for the determination of
stockholders entitled to notice of, and to vote at, the Meeting. At the Record
Date 10,795,513 shares of Common Stock were outstanding and entitled to vote at
the Meeting and there were 400 stockholders of record.
The holders of each share of Common Stock outstanding as of the close of
business on the Record Date shall be entitled to notice of, and to vote at, the
Meeting, or any adjournment or postponement thereof. Transferees after such date
will not be entitled to vote at the Meeting. Each holder of Common Stock is
entitled to one vote for each share held of record for each matter properly
submitted at the Meeting. The presence, in person or by proxy, of at least a
majority of the total number of outstanding shares of Common Stock is necessary
to constitute a quorum for the transaction of business at the Meeting.
Abstentions, votes withheld for director nominees and "broker non-votes" (that
is, shares represented at the meeting which are
<PAGE> 4
held by a broker or nominee and as to which (i) instructions have not been
received from the beneficial owner or the person entitled to vote and (ii) the
broker or nominee does not have discretionary voting power) shall be treated as
shares that are present and entitled to vote with respect to such matters for
purposes of determining whether a quorum is present. With respect to the
election of directors, such election shall be determined by a plurality of votes
cast by stockholders and thus shares represented by a proxy that withholds
authority to vote for a particular nominee or nominees and broker non-votes will
have no effect on the outcome of voting for the election of directors.
ANNUAL REPORT
All holders of record are being sent herewith a copy of the Company's 1998
Annual Report, which contains audited financial statements of the Company for
the fiscal years ended December 31,1998, 1997, and 1996, and a copy of the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1998, as filed with the Commission on February 25, 1999. These reports, however,
are not part of the proxy soliciting material.
PROPOSAL 1.
ELECTION OF DIRECTORS
The Board of Directors of the Company will consist of nine members divided
into three classes, with each class elected for a three-year term. One class of
directors is elected by the Company's stockholders at each annual meeting. At
the Meeting, three (3) Class II Directors will be elected to serve until the
2002 annual meeting and until their successors are duly elected and qualified,
or until their earlier death, resignation or removal. E. Christopher Palmer and
Robert A. Radloff, whose terms expire in 1999, will not stand for re-election.
The Board of Directors has nominated Arthur J. Bauernfeind and C. Michael Hazard
for re-election as Class II Directors and Peter C. Bennett for election as a
Class II Director. Each nominee has agreed to continue to serve as a director,
if re-elected or elected. If any nominee shall become unavailable for any
reason, all proxies will be voted for the election of such other person as the
Board of Directors may recommend.
Unless otherwise instructed, the persons named in the proxy will vote the
shares to which the proxy relates FOR the election of the nominees to the Board
of Directors.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE ELECTION OF
THE THREE NOMINEES OF THE BOARD OF DIRECTORS AS CLASS II DIRECTORS OF THE
COMPANY.
INFORMATION REGARDING DIRECTORS
INCUMBENT DIRECTORS
The following table sets forth certain information regarding the directors
of the Company, including the nominees for election at the Meeting as Class II
Directors, based on information furnished by them to the Company:
<TABLE>
<CAPTION>
DIRECTOR
AGE SINCE
--- --------
<S> <C> <C> <C>
CLASS II -- TERM EXPIRES 1999
Arthur J. Bauernfeind(1)...................... Boston, MA 61 1997
C. Michael Hazard(1).......................... Boston, MA 67 1997
Peter C. Bennett(2)(3)........................ Hingham, MA 60 1986
CLASS III -- TERM EXPIRES 2000
Herbert S. Alexander.......................... Westborough, MA 57 1991
Lynn Thompson Hoffman......................... Santa Fe, New Mexico 50 1994
Charles O. Wood, III.......................... Chambersburg, PA 60 1989
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
DIRECTOR
AGE SINCE
--- --------
<S> <C> <C> <C>
CLASS I -- TERM EXPIRES 2001
Eugene S. Colangelo........................... Westborough, MA 51 1987
Allen Sinai................................... Lexington, MA 60 1995
Timothy L. Vaill.............................. Andover, MA 57 1993
</TABLE>
- ---------------
(1) Nominee for re-election.
(2) Nominee for election.
(3) Includes service as a director of the Bank prior to the formation of the
holding company structure in 1988.
The principal occupation and business experience during the last five (5)
years of each director and nominee for election as Class II Directors is set
forth below:
Herbert S. Alexander, CPA. Mr. Alexander is founder, President and Chief
Executive Officer of Alexander, Aronson, Finning & Co., P.C., a firm of
certified public accountants and consultants established in 1973. He serves on
the Alumni Board of Boston University School of Management and formerly on the
Board of Directors of the Massachusetts Society of Certified Public Accountants
and the Massachusetts Easter Seal Society. Additionally, he is a member of the
Advisory Council of the Northeastern University Graduate School of Professional
Accounting.
Arthur J. Bauernfeind. Mr. Bauernfeind is President and Chief Operating
Officer of Westfield Capital Management Company ("Westfield Capital"). He joined
the firm in 1990, and he is an Investment Strategist and Portfolio Manager with
direct responsibility covering transportation, banking and finance, economics
and fixed income markets. Mr. Bauernfeind is a Trustee of Murray State
University, a former President of the Boston Economic Club and a member of the
Boston Security Analysts Society.
Eugene S. Colangelo. Mr. Colangelo is Chairman of the Board of Julio
Enterprises and has served as such since the early 1980s. Julio Enterprises, a
conglomerate headquartered in Westborough, Massachusetts, operates numerous
businesses including supermarkets, a newspaper, retail liquor stores and a
commercial and residential real estate business. He is member of the Board of
Directors of Morgan Memorial Goodwill Industries in Boston, Massachusetts, and
currently its Treasurer. Mr. Colangelo serves as Chairman of the Board of
Directors of Boston Private Bank & Trust Company (the "Bank").
C. Michael Hazard. Mr. Hazard has been Chairman, Chief Executive Officer
and Chief Investment Officer of Westfield Capital since the firm was founded in
1989. He is a Portfolio Manager primarily covering healthcare services and
investment policy. Mr. Hazard is Past President of Healthcare Analysts of
Boston, a member of the Finance Committee and Chairman of the Investment
Committee of South County Hospital in Wakefield, Rhode Island, and a member of
the Board of Directors of E. R. Taylor Investments, Inc., Concord, New
Hampshire.
Lynn Thompson Hoffman. Mrs. Hoffman is an attorney and private investor. A
former investment banker with Blyth Eastman Paine Webber, Mrs. Hoffman joined
Houghton Mifflin Company as Vice President of the Trade Publishing Group. As a
private investor, Mrs. Hoffman is Managing General Partner of various investment
partnerships specializing in real estate and works with early stage technology
companies. She serves as Chairman of the Finance and Investment Committee of the
Massachusetts Society for the Prevention of Cruelty to Children, and previously
served as Director of First Mutual Bank and the American Association of
Publishers, Overseer of the New England Conservatory, Harvard Community Health
Plan, and Babson College. She is past President of the Shirley Eustis House
Association and Founder of the Endowment for Children in Crisis. Mrs. Hoffman
resides in Santa Fe, New Mexico.
Dr. Allen Sinai. Dr. Sinai is President, Chief Executive Officer and Chief
Global Economist, Primark Decision Economics, Inc. (PDE) and Chief Global
Economist and Vice Chairman, WEFA Holdings, Inc. Dr. Sinai is responsible for
the PDE and WEFA forecasts and analyses of the U.S. and world economics and
financial markets and translating this information for senior level
decisionmakers in financial institutions, corporations and government.
Previously, Dr. Sinai served for over 13 years at Lehman Brothers, where he was
3
<PAGE> 6
Managing Director and Chief Global Economist, and the Director of Lehman
Brothers Global Economics; also as Executive Vice President and Chief Economist
of The Boston Company, a subsidiary of Shearson Lehman Brothers. Dr. Sinai has
taught at numerous universities, including Brandeis, Massachusetts Institute of
Technology, Boston University and the University of Illinois-Chicago. He is a
past President and Fellow of the Eastern Economic Association and has been a
Member of the Executive Committee, Western Economic Association. He is a member
of and contributor to the National Bureau of Economic Research-National Science
Foundation Model Comparison Seminar. Additionally, he has been Chairman of The
Committee on Developing American Capitalism (CODAC) and is a member of the Time
Magazine Board of Economists.
Timothy L. Vaill. Mr. Vaill is Chairman of the Board of Directors, the
President and Chief Executive Officer of the Company, which he joined on January
1, 1993. He is also President and Chief Executive Officer of the Bank, and
serves as Chairman of the Board of Directors for Westfield Capital. Prior to
joining the Company, Mr. Vaill was Executive Vice President for The Boston
Company, and President of its private banking subsidiary, Boston Safe Deposit &
Trust Company, serving as a director of both companies. He was with The Boston
Company in various executive capacities for 18 years, and among other
assignments, directed all of its international operations. In 1992, Mr. Vaill
served in a senior consulting capacity for Fidelity Investments in Boston where
he created a new business for the high net worth marketplace. Mr. Vaill serves
on the Board of The Schreiber Corporation in Birmingham, and is a Director for
the Junior Achievement Foundation in New York. He serves as a Director for the
Boston Ten Point Coalition and the New England Aquarium, and is the Chairman of
the Board of Trustees at Bay State College in Boston.
Charles O. Wood, III. In June 1989 Mr. Wood joined the Board of Directors
of the Company and the Bank, and was elected Chairman of the Board of Directors
of both companies on December 18, 1991. Mr. Wood served as Chairman of the Board
of the Bank until Eugene S. Colangelo succeeded him in December 1997. Mr. Wood
continued as Chairman of the Board of Directors of the Company, until he became
Lead Director of the Board of Directors on February 12, 1999. Previously, Mr.
Wood was a member of and in his last two years Chairman of the Board of
Directors of Valley Bank & Trust Company in Chambersburg, Pennsylvania and its
holding company. Mr. Wood is presently trustee of the Henry Francis du Pont
Winterthur Museum, the Isabella Stewart Gardner Museum and Bank of Boston
Celebrity Series. He is a Director of JLG Industries, a public company engaged
in the manufacturing and marketing of aerial lift platforms located in
McConnellsburg, Pennsylvania. A venture capital investor, Mr. Wood also serves
on the boards of directors of several early-stage businesses.
NOMINEE FOR ELECTION
Peter C. Bennett. Mr. Bennett served as a Director of the Company from
1986 until his resignation on December 31, 1997, but continued to serve as a
member of the Board of Directors of the Bank. Mr. Bennett is a Director and
Executive Vice President of State Street Research & Management Company where he
has been a senior executive since 1984. Mr. Bennett is the Chief Investment
Officer -- Equities and Head of the Equity Group. He is Chairman of the Board of
Directors of Christian Camps & Conferences, Inc., Boston, Massachusetts, and is
Chairman of the Board of Trustees of Gordon College where he also acts as
Chairman of the Investment Committee.
BOARD OF DIRECTORS MEETINGS
The Board of Directors held seven (7) meetings during 1998. All incumbent
directors attended at least 75% of the aggregate number of meetings of the Board
of Directors and the committees of which he or she was a member in 1998.
COMMITTEES OF THE BOARD OF DIRECTORS
Directors of the Company are nominated in accordance with the Company's
By-laws, which provide that directors may be nominated (i) by a majority of the
Board of Directors or (ii) by any holder of record of any shares of the capital
stock of the Company entitled to vote at the annual meeting of stockholders. Any
4
<PAGE> 7
stockholder who seeks to make such a nomination must be present in person at
such Annual Meeting and must comply with the notice provisions set forth below
under "STOCKHOLDER PROPOSALS."
The standing committees of the Board of Directors consist of the Audit
Committee, the Compensation Committee and the Governance Committee. Membership
of the Committees of the Board of Directors is comprised of directors of the
Company and members who are currently directors of the Bank.
The Audit Committee arranges for suitable audits of the financial and
business affairs of the Company and its subsidiaries, reviews the results of
such examinations and reports its findings to the Board of Directors at least
twice annually. The present members of this committee are Herbert S. Alexander,
Chairman, Kathleen M. Graveline, Vice-Chairperson (Bank member), John H. Clymer
(Bank member) and Robert A. Radloff. The Audit committee held six (6) meetings
during 1998.
The Compensation Committee provides guidance to management and the Board of
Directors on matters of executive compensation and related benefits, and makes
recommendations to the Board of Directors where necessary on all compensation
and benefits programs of the Company. The present members of this committee are
Peter C. Bennett, Chairman (Bank member), Eugene S. Colangelo, Allen Sinai, Vice
Chairman, and Charles O. Wood, III. The Compensation Committee held six (6)
meetings during 1998.
The Governance Committee assists the Board of Directors by recommending the
slate of candidates to be proposed for election and by recommending the members
and the Chairpersons of the Committees of the Board of Directors. In addition,
the Governance Committee considers candidates for directorship, provides for the
orientation and integration of new members of the Board of Directors and
develops procedures for appraising the performance of the Board of Directors and
each member thereof. The present members of this committee are Lynn Thompson
Hoffman, Chairperson, Kate S. Flather, Vice Chairperson (Bank member), John L.
Thompson (Bank member) and Charles O. Wood, III. The Governance Committee held
six (6) meetings during 1998.
COMPENSATION OF DIRECTORS
Effective May 1, 1998, directors of the Company and its subsidiaries, who
are not full-time employees of the Company or any of its subsidiaries, receive
compensation as follows: the Chairman of the Board of Directors receives an
annual retainer fee of $6,000; Chairman of the Executive Committee of the Bank
receives an annual retainer fee of $4,000; Committee Chairpersons receive an
annual retainer fee of $3,000; and each other director receives an annual
retainer fee of $2,000. Any outside director serving simultaneously as a member
of the Board of Directors of the Company and the Board of Directors of a
subsidiary will receive only one retainer fee for each twelve (12) month period
that is served. In addition, non-employee directors receive $300 per Board of
Directors and committee meeting attended.
Directors are also eligible to receive options to purchase Common Stock
under the Directors' Stock Option Plan (the "Directors' Plan"). Annually, on or
about May 1, each non-employee director is automatically granted an option to
purchase 3,000 shares of Common Stock, pursuant to the terms and conditions of
the Directors' Plan.
THE DIRECTORS' PLAN
The Directors' Plan became effective on March 31, 1993, with 90,000 shares
of the Common Stock reserved for issuance thereunder. In 1995, the Directors'
Plan was amended to provide for an additional 110,000 shares of Common Stock to
be reserved for issuance thereunder. On January 28, 1998, the Board of Directors
voted to amend and restate the Directors' Plan to reserve for issuance
thereunder such aggregate number of shares of Common Stock as does not exceed
one percent (1%) of the total shares of outstanding Common Stock of the Company
as of the last business day of the preceding fiscal year. The stockholders
approved this amended and restated Directors' Plan at the Annual Meeting of
Stockholders held on April 22, 1998. During 1998, 106,411 shares of Common Stock
were available to issue. Of this, options for an aggregate 45,000 shares were
issued, and options for an aggregate 2,400 shares were cancelled during 1998.
Pursuant to the terms of the Directors' Plan, the exercise price of an option
may not be less than 100% of the fair market
5
<PAGE> 8
value of the Common Stock at the time the option is granted. All options granted
under the Directors' Plan are Non-Qualified Stock Options not entitled to
special tax treatment under Section 422 of the Internal Revenue Code of 1986, as
amended. Generally, stock options granted under the Directors' Plan will be
exercisable not earlier than one year and not later than ten years after the
date they are granted.
INFORMATION REGARDING EXECUTIVE OFFICERS
The following table lists the name, age and position of each executive
officer of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Arthur J. Bauernfeind.................. 61 President and Chief Operating Officer, Westfield
Capital
Carey H. Davis......................... 41 Executive Vice President and Director of Marketing
Communications
James D. Dawson........................ 46 Executive Vice President and Chief Lending Officer
C. Michael Hazard...................... 67 Chairman and Chief Executive Officer, Westfield
Capital
James D. Henderson..................... 58 Executive Vice President, Investment Management &
Trust
Barbara M. Houlihan.................... 43 Executive Vice President and Director of Technology
& Operations
Amy E. Hunter.......................... 39 Executive Vice President, Residential Mortgage
Lending
Walter M. Pressey...................... 54 Executive Vice President, Chief Financial Officer
and Treasurer
Mark D. Thompson....................... 42 Executive Vice President, Deposit Management and
Treasury
Timothy L. Vaill....................... 57 Chairman of the Board, President and Chief Executive
Officer
</TABLE>
The principal occupation and business experience during the last five years
(5) of each of the executive officers (other than executive officers who are
also directors) of the Company is as follows:
Carey H. Davis. Ms. Davis joined the Company in 1996 and is Executive Vice
President and Director of Marketing Communications. Beginning in 1993, Ms. Davis
worked with the Company as a consultant and provided marketing communication
services. Previously, Ms. Davis was Vice President and Director of Advertising
and External Affairs at The Boston Company.
James D. Dawson. Mr. Dawson joined the Company in 1996 and is Executive
Vice President and Chief Lending Officer, with responsibility for the Commercial
Banking business. Previously, Mr. Dawson was a Senior Vice President and Chief
Lending Officer at Andover Bank, after spending 10 years as a senior officer at
Shawmut Bank.
James D. Henderson. Mr. Henderson joined the Company in 1994 and is
Executive Vice President, with responsibility for the Bank's Investment
Management and Trust business. From the early 1980's until joining the Company,
Mr. Henderson was Managing Director of Freedom Capital Management Corporation.
Barbara M. Houlihan. Ms. Houlihan joined the Company in 1994 and is
Executive Vice President and Director of Technology and Operations. During the
previous ten years, Ms. Houlihan served as Vice President, Client Trust Services
at Fidelity Investments, Inc., and she served as a senior officer at State
Street Bank and Trust Company.
Amy E. Hunter. Ms. Hunter has been with the Company since its inception in
1987 and is Executive Vice President with responsibility for the Bank's
residential mortgage lending business. Prior to joining the Company, Ms. Hunter
was a mortgage originator at Boston Safe Deposit & Trust Company.
Walter M. Pressey. Mr. Pressey joined the Company in 1996 and is Executive
Vice President, Treasurer and Chief Financial Officer responsible for the
overall management of the finance functions. Previously, Mr. Pressey was
employed for more than twenty years at The Boston Company as a Senior Vice
President.
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<PAGE> 9
Mark D. Thompson. Mr. Thompson joined the Company in 1994 and is Executive
Vice President and Treasurer of Boston Private Bank & Trust Company with
responsibility for the Bank's Deposit Management & Treasury business. From 1987
until 1994, Mr. Thompson was a senior officer of Wainwright Bank and Trust
Company of which he was a founder.
Pursuant to the By-laws, the President, Treasurer and Clerk of the Company
hold office until the first meeting of the directors following the next annual
meeting of stockholders, or any special meeting held in lieu thereof. Other
officers shall hold office for such term, unless a shorter term is specified in
the vote electing or appointing them.
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation. The following table sets forth information
concerning the compensation earned during each of three (3) fiscal years ended
December 31, 1998, 1997, and 1996, respectively, paid to the Company's Chief
Executive Officer and the four other most highly compensated executive officers
of the Company. No officer earned in excess of $1,000,000 for the periods
indicated.
<TABLE>
<CAPTION>
LONG-TERM LONG-TERM
COMPENSATION COMPENSATION
AWARDS AWARDS
OTHER RESTRICTED SECURITIES
BONUS($) ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) (1) COMPENSATION($) AWARDS($) OPTIONS(#) COMPENSATION($)
- --------------------------- ---- --------- -------- --------------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Timothy L. Vaill............ 1998 275,000 221,000(2) -- 12,000 35,000 5,000(3)
President and CEO 1997 227,125 205,750(2) -- -- 35,750 4,749(3)
1996 215,000 166,000(2) -- -- 25,000 4,500(3)
Arthur J. Bauernfeind....... 1998 350,236 50,000(2) -- -- -- --
President, Chief Operating 1997 266,839(4)(5) 412,945(2) -- -- -- 2,914(6)
Officer Westfield Capital
James D. Henderson.......... 1998 225,000 90,500(2) 189,782(7) 4,000 12,000 4,716(3)
Executive Vice President 1997 190,269 60,500(2) 156,736(7) 13,314 10,500 4,749(3)
1996 175,000 25,750(2) 88,129(7) -- 7,500 4,500(3)
C. Michael Hazard........... 1998 431,037 100,000(2) -- -- -- --
Chairman, Chief Executive 1997 321,617(8)(9) 750(2) -- -- -- 13,731(10)
Officer Westfield Capital
Mark D. Thompson............ 1998 145,000 46,000(2) 64,935(7) 3,000 9,000 5,000(3)
Executive Vice President 1997 136,581 35,500(2) 37,068(7) 13,314 10,500 4,749(3)
1996 130,000 25,750(2) 46,702(7)(11) -- 7,500 4,500(3)
</TABLE>
- ---------------
(1) Represents bonus compensation earned in 1996, 1997 and 1998 and paid in
1997, 1998 and 1999, respectively.
(2) Includes Company-wide Longevity Bonus Awards of $1,000 in 1996 and 1998 and
$750 in 1997 to Mr. Vaill, $750 in 1996 and $500 in each of 1997 and 1998
to Mr. Henderson, $750 in 1996, $500 in 1997 and $1,000 in 1998 to Mr.
Thompson, and $750 in 1997 to each of Messrs. Bauernfeind and Hazard.
(3) Represents contributions made to the executive by the Company under its
401(k) plan.
(4) Does not include S-Corp distribution to Mr. Bauernfeind, a principal
stockholder of Westfield Capital, as a result of the October 31, 1997,
merger of Westfield Capital.
(5) Includes $58,373 for compensation paid by the Company and $209,216 paid by
Westfield Capital prior to the merger on October 31, 1997. Under Mr.
Bauernfeind's Employment Agreement with the Company, Mr. Bauernfeind is
paid a base salary of $350,236 per annum, and he is eligible for a
performance-based bonus. See "Agreements with Executive Officers."
(6) Represents reimbursement for medical insurance premiums.
(7) Represents payment pursuant to an individual incentive program developed
for the executive based upon the achievement of certain enumerated goals.
(8) Does not include S-Corp distribution to Mr. Hazard, the principal
stockholder of Westfield Capital, as a result of the October 31, 1997,
merger of Westfield Capital.
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<PAGE> 10
(9) Includes $71,840 for compensation paid by the Company and $250,527 paid by
Westfield Capital prior to the merger on October 31, 1997.
(10) Represents reimbursements of $6,315 for medical insurance premiums, $4,816
for automobile expense, $2,600 for parking expense.
(11) Includes $5,750 awarded to Mr. Thompson under a Bank-wide Cross-selling
Sales Incentive program.
Option Grants. The following table sets forth information concerning the
individual grants of options to purchase Common Stock to the named executive
officers during the fiscal year ended December 31, 1998.
<TABLE>
<CAPTION>
REALIZED VALUE
AT ASSUMED
ANNUAL
PERCENT OF RATES OF STOCK
TOTAL PRICE
NUMBER OF OPTIONS EXERCISE APPRECIATION FOR
SECURITIES GRANTED TO OR BASE OPTION TERM
UNDERLYING OPTIONS EMPLOYEES IN PRICE -----------------
NAME GRANTED(#)(1) FISCAL YEAR ($/SH) EXPIRATION DATE 5%($) 10%($)
---- ------------------ ------------ -------- --------------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Timothy L. Vaill........ 35,000 18.71 8.84 1/28/08 194,580 493,104
Arthur J. Bauernfeind... -- -- -- -- -- --
James D. Henderson...... 12,000 6.41 8.84 1/28/08 66,713 169,064
C. Michael Hazard....... -- -- -- -- -- --
Mark D. Thompson........ 9,000 4.81 8.84 1/28/08 50,035 126,798
</TABLE>
- ---------------
(1) These options vest annually in equal installments over the three-year period
ending January 28, 2001.
Option Exercises and Holdings. The following table sets forth information
concerning each exercise of options to purchase Common Stock during the fiscal
year ended December 31, 1998 by each of the named executive officers and the
fiscal year-end number and value of unexercised options to purchase Common
Stock.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
SHARES UNEXERCISED IN-THE-MONEY
ACQUIRED OPTIONS AT FISCAL OPTIONS AT FISCAL
ON VALUE YEAR END(#) YEAR END($)
NAME EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1)
---- ----------- ----------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
Timothy L. Vaill.......... 25,000 212,679 185,952/41,250 $995,071/59,688
Arthur J. Bauernfeind..... -- -- 750/ 0 $ 45/ 0
C. Michael Hazard......... -- -- 750/ 0 $ 45/ 0
James D. Henderson........ -- -- 57,025/15,875 $290,743/25,625
Mark D. Thompson.......... 12,000 93,000 29,275/13,625 $135,493/27,250
</TABLE>
- ---------------
(1) Based on the closing price of $8.50 on the NASDAQ National Market System on
December 31, 1998 less the exercise price of the option award. Unless
exercised, options expire ten years from the date granted.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
The Compensation Committee of the Board of Directors is comprised of the
following non-employee Directors of the Company and the Bank: Peter C. Bennett,
Chairman, Eugene S. Colangelo, Allen Sinai, Vice Chairman, and Charles O. Wood,
III. The Committee provides guidance to management and the Board of Directors on
matters of executive compensation and related benefits, and makes
recommendations to the Board of Directors where necessary on all compensation
and benefits programs of the Company.
8
<PAGE> 11
STATEMENT OF COMPENSATION PHILOSOPHY
Compensation Strategy. The Board of Directors and the Compensation
Committee compensate members of senior management for their contributions to the
Company over both the short and the long-term, and to incent them in such a way
as to maximize their performance. Executive compensation is designed to create a
performance-oriented environment that differentiates awards based on
performance, aligns the interests of senior management with those of the
shareholders, attracts and retains key executives critical to the long-term
success of the Company and provides compensation opportunities which are fully
competitive with those offered in the marketplace. The Compensation Committee
reviews compensation studies to determine the competitiveness of its executive
compensation program. The relevant market used for compensation analysis
includes regional banks of comparable size with similar business mix, private
banking organizations within larger banks, and investment management and
advisory firms. When compared to the mid range of the relevant market, base
salaries are targeted to be at or somewhat below the market while
performance-based compensation, which includes both short-term and long-term
incentives, are targeted to be at or above the market.
Base Salaries. The purpose of base salary is to attract and retain key
executives who are critical to the Company's long-term success by providing a
basic level of income comparable to that of executives in similar positions as
well as taking into account the individual's performance and experience. Normal
cost of living and appropriate merit adjustments will be made periodically.
Short-Term Incentives. The purpose of the Company's short-term incentive
plans is to motivate and reward executives for the achievement of earnings,
sales and growth targets as well as strategic initiatives in a given year in
support of a 'pay for performance' philosophy. Under this philosophy, the
Compensation Committee awards incentive payments in its discretion based on
results in three basic performance areas: overall company success, business line
sales growth and contribution to overall profitability and individual
performance. Performance is measured primarily on results achieved against
internal and external goals, taking into account key indicators and performance
measures as determined by the Compensation Committee each year.
Long-Term Stock Incentives. The purpose of the Company's stock incentive
plan is to provide executives opportunities to acquire an ownership interest in
the Company. The Compensation Committee believes that ownership of Company
Common Stock will provide an incentive to achieve increases in shareholder value
over the long-term and will assure a closer identification of senior management
with the Company's shareholders by providing them with a more direct stake in
the Company's economic success and by aligning the interests of senior
management with those of the Company's stockholders.
COMPENSATION OF TIMOTHY L. VAILL, CHIEF EXECUTIVE OFFICER
The compensation paid to Timothy L. Vaill, the Chief Executive Officer of
the Company and the Bank, consisted of his annual base salary, a cash bonus,
awards of stock options and restricted stock. For 1998, the Committee considered
the following factors in determining the compensation to be paid to Mr. Vaill:
the Company's overall performance, return on equity and earnings per share
results; Mr. Vaill's performance against personal goals in four areas including
financial earnings, shareholder value, business development and leadership
abilities; and, the compensation of chief executive officers at similar
institutions. Based on these factors, Mr. Vaill's annual compensation,
consisting of base salary and an annual performance incentive in the form of a
cash bonus was increased approximately 14.5% during 1998, and he was awarded
12,000 restricted shares of Common Stock and options to acquire 35,000 shares of
Common Stock.
The report of the Compensation Committee of the Board of Directors on
executive compensation is made by each of the members of the Compensation
Committee listed below:
Peter C. Bennett Eugene S. Colangelo Allen Sinai Charles O. Wood, III
9
<PAGE> 12
AGREEMENTS WITH EXECUTIVE OFFICERS
The Company entered into an Executive Employment Agreement effective
January 1, 1996 (the "Employment Agreement") to extend, amend and restate the
terms of Mr. Vaill's existing employment agreement, which expired in accordance
with its terms on December 31, 1995. The Employment Agreement provides for a
three-year term which expires December 31, 1998, a term which is extended by one
year each December 31st, beginning in 1999, unless the Company provides thirty
days' prior written notice to the contrary to Mr. Vaill. Notwithstanding the
foregoing, the Company may terminate the Employment Agreement for cause (as
defined in the Employment Agreement). If the Company terminates the Employment
Agreement without cause, Mr. Vaill will be entitled to receive, among other
things, his base salary for the remainder of the term plus a pro-rata bonus for
the year in which the termination occurs. If Mr. Vaill terminates his employment
for good reason (as defined in the Employment Agreement) within three years
following a change in control (as defined in the Employment Agreement and
described below), Mr. Vaill will be entitled to receive a payment equal to 2.99
times his average annual compensation for the five years preceding the change in
control, provided that the Company will not be required to make any payment to
the extent such payment would constitute a "parachute payment" within the
meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended
(a "Parachute Payment"). The Employment Agreement also provides (i) that upon
any voluntary termination by Mr. Vaill of his employment (other than with good
reason), he shall not be employed by any significant competitor of the Company
(as defined in the Employment Agreement) for two years following such
termination and (ii) that Mr. Vaill shall not disclose any confidential
information obtained by him during his employment. Mr. Vaill is also eligible to
receive stock options under the 1997 Incentive Stock Option Plan and certain
incentive payments directly tied to the profit performance of the Company.
The Company entered into Employment Agreements effective October 31, 1997,
(the "Westfield Employment Agreements") with Messrs. Bauernfeind and Hazard. Mr.
Bauernfeind's Employment Agreement provides for a five-year initial term
expiring on October 31, 2002, and Mr. Hazard's Employment Agreement provides for
a four-year initial term expiring on October 31, 2001. The terms of the
Westfield Employment Agreements, respectively, may be extended upon mutual
agreement of the parties thereto. As employees of the Company, Mr. Bauernfeind
will receive an annual base salary of $350,236, and Mr. Hazard will receive an
annual base salary of $431,037. Commencing with fiscal year ending December 3l,
1998, Messrs. Bauernfeind and Hazard are eligible for an annual performance fee
share bonus representing the employee's allocation of the annual limited
partnership bonus pool of Westfield Capital for the fiscal year just ended. The
limited partnership bonus pool shall be determined, and each of Messrs.
Bauernfeind's and Hazard's allocation of such bonus pool for any year shall be a
percentage determined in respect of such year by the Westfield Capital Chief
Executive Officer and approved by Westfield Capital Board of Directors. Each of
Messrs. Bauernfeind and Hazard may be terminated for cause (as defined in the
applicable Westfield Employment Agreement) upon written notice. If the Company
terminates either of Messrs. Bauernfeind or Hazard without cause (as defined in
the applicable Westfield Employment Agreement), then each of Messrs. Bauernfeind
and Hazard will be entitled to receive, among other things, his base salary for
the remainder of the term plus a pro-rated bonus for the year in which the
termination occurs. If each of Messrs. Bauernfeind and Hazard terminates his
employment for good reason (as defined in the applicable Westfield Employment
Agreement) occasioned by certain events, then each of Messrs. Bauernfeind and
Hazard will be entitled to receive his base salary for the shorter of (x) the
remainder of the term or (y) the remainder of the term less two years. In
addition, each of the Westfield Employment Agreements provides that Mr.
Bauernfeind and Mr. Hazard, respectively, (i) shall not disclose any
confidential information obtained by them during their employment, (ii) shall
not engage in any employment competitive with Westfield Capital during the term
of the Westfield Employment Agreement and (iii) shall not solicit customers or
employees of Westfield Capital for the latter of the term of five years
following termination of employment or the end of the term.
The Company entered into Change in Control Protection Agreements effective
March 19, 1997 (the "Change in Control Agreements") with Messrs. Henderson and
Thompson and certain other officers (each an "Executive" and collectively, the
"Executives"). The Change in Control Agreements provide for certain payments and
other benefits upon the occurrence of a change in control (as defined below) and
termination by
10
<PAGE> 13
the Company of an Executive without cause (as defined in the Change in Control
Agreements) or by the Executive for good reason (as defined in the Change in
Control Agreements) at any time during the three years after a change in control
(as defined below). Upon the occurrence of such events, (i) the Executives will
receive a payment equal to 2 to 2.5 times his or her average annual compensation
for the five most recent taxable years preceding the change in control; (ii)
outstanding unvested stock options and restricted stock awards held by the
Executives shall become immediately exercisable or otherwise vested and (iii)
the Executives will be eligible to receive a pro-rata bonus for the year in
which the termination occurs. Notwithstanding the foregoing, the Company will
not be required to make any payment to the extent such payment would constitute
a Parachute Payment.
For purposes of the Change in Control Agreements a "change in control"
generally means the occurrence of any of the following events: (i) any person
(as such term is defined in Section 13(d) of the Securities Exchange Act of 1934
(the "1934 Act")), becomes a beneficial owner (as such term is defined in Rule
13d-3 under the 1934 Act) of at least 25% or more of the voting stock of the
Company; (ii) the majority of the Board of Directors of the Company consists of
individuals other than Incumbent Directors (as defined in the Change in Control
Agreements); or (iii) the stockholders of the Company approve (a) any
consolidation or merger of the Company (as defined in the Change in Control
Agreements), (b) any sale, lease, exchange or other transfer of all or
substantially all of the assets of the Company or (c) any plan of liquidation of
the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
Messrs. Bennett, Colangelo, Sinai and Wood served as members of the
Compensation Committee of the Board of Directors of the Company during fiscal
year ended December 3l, 1998. None of these individuals has ever been an officer
or employee of the Company or has ever had any other reportable relationship
with the Company other than through his position as a director of the Company.
11
<PAGE> 14
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Company's Common Stock, based on
the market price of the Company's Common Stock, with the total return on
companies within the NASDAQ Stock Market and the companies within the SNL Bank
Asset Index prepared by SNL Securities LC. The calculation of cumulative return
assumes a $100 investment in the Company's Common Stock, the NASDAQ Stock Market
and the SNL Bank Asset Index on February 14, 1994.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
BOSTON PRIVATE FINANCIAL SNL $250M-$500M BANK
HOLDINGS, INC. NASDAQ - TOTAL US ASSET INDEX
------------------------ ----------------- --------------------
<S> <C> <C> <C>
2/14/94 100.00 100.00 100.00
12/31/94 91.67 96.73 104.19
12/31/95 125.00 136.82 140.60
12/31/96 179.17 168.24 182.57
12/31/97 266.67 206.41 315.76
12/31/98 283.33 290.15 282.78
</TABLE>
12
<PAGE> 15
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information as of the Record Date
regarding (i) the security holdings of each person, including any group of
persons, known by the Company to be the beneficial owner of five percent (5%) or
more of the outstanding Common Stock, (ii) the ownership interest in the Common
Stock of each director of the Company, each nominee for director of the Company
and each executive officer of the Company and (iii) the ownership interest of
all directors and executive officers of the Company, as a group. Except as
indicated in the notes following the table below, each person or group has sole
voting and investment power with respect to all shares of Common Stock listed.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP CLASS(1)
------------------------ ---------- ----------
<S> <C> <C>
OWNERSHIP OF 5% OR MORE
C. Michael Hazard........................................... 1,315,951(2) 11.32%
Westfield Capital Management
One Financial Center
Boston, MA 02111-2621
Arthur J. Bauernfeind....................................... 764,662(3) 6.58%
29 Rowes Wharf PH-7
Boston, MA 02110
Financial Stocks, Inc....................................... 656,000(4) 5.64%
507 Carew Tower
44l Vine Street
Cincinnati, Ohio 45202
OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS
Herbert S. Alexander........................................ 38,988(5) *
Arthur J. Bauernfeind....................................... 764,662(3) 6.58%
Peter C. Bennett............................................ 59,500(6) *
Eugene S. Colangelo......................................... 91,666(7)(8) *
C. Michael Hazard........................................... 1,315,951(2) 11.32%
Lynn Thompson Hoffman....................................... 72,700(9)(10) *
E. Christopher Palmer....................................... 37,600(5) *
Robert A. Radloff........................................... 52,200(5) *
Allen Sinai................................................. 35,700(10) *
Charles O. Wood, III........................................ 534,000(11) 4.59%
Timothy L. Vaill............................................ 301,056(12)(13) 2.59%
Carey H. Davis.............................................. 17,825(14) *
James D. Dawson............................................. 43,655(15) *
James D. Henderson.......................................... 82,819(16) *
Barbara M. Houlihan......................................... 24,563(17) *
Amy E. Hunter............................................... 45,750(18) *
Walter M. Pressey........................................... 32,180(19) *
Mark D. Thompson............................................ 51,819(20) *
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (18
PERSONS).................................................. 3,602,634(21) 30.98%
</TABLE>
- ---------------
* Represents less then 1%
(1) As calculated pursuant to Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended. Percentages are calculated on the basis of
11,621,304 shares of Common Stock outstanding as of the record date, which
includes 193,500 shares subject to options exercisable within 60 days of the
record date granted pursuant to the Directors' Plan and 632,291 shares
subject to options exercisable within 60 days of the record date granted
pursuant to the Long Term Incentive Plan (the "Incentive Plan").
13
<PAGE> 16
(2) Includes 4,500 shares subject to options which are currently exercisable
granted to Mr. Hazard pursuant to the Incentive Plan.
(3) Includes 3,250 shares subject to options which are currently exercisable
granted to Mr. Bauernfeind pursuant to the Incentive Plan.
(4) The above information is based on copies of a statement on Schedule 13D
filed with the Commission on March 5, 1998, which indicates that Financial
Stocks, Inc., as the general partner of FSLP, has sole voting and
dispositive power with respect to 602,000 shares of Common Stock and that
Financial Stocks, Inc., as an investment advisor to Rising Stars, has
shared voting and dispositive power with respect to 54,000 shares of Common
Stock.
(5) Includes 12,200 shares subject to options which are currently exercisable
granted to each of Messrs. Alexander, Palmer and Radloff pursuant to the
Directors' Plan.
(6) Includes 15,500 shares subject to options which are currently exercisable
granted to Mr. Bennett pursuant to the Directors' Plan.
(7) Includes 6,766 shares owned by Mr. Colangelo's wife and 16,236 shares owned
by two of Mr. Colangelo's children. Mr. Colangelo disclaims beneficial
ownership of all such shares.
(8) Includes 12,800 shares subject to options which are currently exercisable
granted to Mr. Colangelo pursuant to the Directors' Plan.
(9) Includes 23,000 shares owned by Mrs. Hoffman's husband. Mrs. Hoffman
disclaims beneficial ownership of all such shares.
(10) Includes 10,200 shares subject to options which are currently exercisable
granted to each of Mrs. Hoffman and Dr. Sinai pursuant to the Directors'
Plan.
(11) Includes 14,000 shares subject to options which are currently exercisable
granted to Mr. Wood pursuant to the Directors' Plan.
(12) Includes 7,000 shares owned by Mr. Vaill's wife and an aggregate 6,000
shares owned by three of Mr. Vaill's children. Mr. Vaill disclaims
beneficial ownership of all such shares.
(13) Includes 212,202 shares subject to options which are currently exercisable
granted to Mr. Vaill pursuant to the Incentive Plan.
(14) Includes 10,250 shares subject to options which are currently exercisable
granted to Ms. Davis pursuant to the Incentive Plan.
(15) Includes 24,250 shares subject to options which are currently exercisable
granted to Mr. Dawson pursuant to the Incentive Plan.
(16) Includes 68,619 shares subject to options which are currently exercisable
granted to Mr. Henderson pursuant to the Incentive Plan.
(17) Includes 18,938 shares subject to options which are currently exercisable
granted to Ms. Houlihan pursuant to the Incentive Plan.
(18) Includes 32,375 shares subject to options which are currently exercisable
granted to Ms. Hunter pursuant to the Incentive Plan.
(19) Includes 25,125 shares subject to options which are currently exercisable
granted to Mr. Pressey pursuant to the Incentive Plan.
(20) Includes 38,619 shares subject to options which are currently exercisable
granted to Mr. Thompson pursuant to the Incentive Plan.
(21) Includes 537,428 shares subject to options which are currently exercisable.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Securities Exchange Act of 1934, as amended (the "Exchange Act"),
requires that the Company's officers and directors, and persons who own more
than 10% of the Company's outstanding shares of Common Stock file initial
reports of ownership and reports of changes in ownership with the Commission and
14
<PAGE> 17
NASDAQ. Mr. Vaill inadvertently failed to timely file a Form 4 with respect to
the sale of an aggregate 23,000 shares of Common Stock and Mrs. Hoffman
inadvertently failed to timely file a Form 4 with respect to the purchase of
11,500 shares of Common Stock. Each of Mr. Vaill and Mrs. Hoffman has filed the
required form. Based solely upon a review of Forms 3 and 4 and amendments
thereto furnished to the Company under Rule 16a-3(e) of the Exchange Act during
Fiscal 1998 and Form 5 and amendments thereto furnished to the Company with
respect to Fiscal 1998, no other officer, director or person who owns more than
10% of the Company's outstanding shares of Common Stock failed to file on a
timely basis such reports.
SOLICITATION OF PROXIES
The cost of solicitation of proxies in the form enclosed herewith will be
borne by the Company. In addition to the solicitation of proxies by mail, the
Company's regular employees may also solicit proxies personally or by telephone.
Banks, brokerage houses, custodians, nominees and other fiduciaries have been
requested to forward proxy materials to the beneficial owners of shares of
Common Stock held of record by them. Such custodians will be reimbursed for
their expenses.
INDEPENDENT AUDITORS
The Company has selected KPMG Peat Marwick LLP ("KPMG") as the independent
auditors for the Company for the fiscal year ending December 31, 1999. KPMG has
served as the Company's independent auditors since 1987. A representative of
KPMG will be present at the Meeting, will be given the opportunity to make a
statement if such representative so desires and will be available to respond to
appropriate questions.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors is not aware
of any other matters to be considered at the Meeting. If any other matters
properly come before the Meeting, the proxies will be voted in accordance with
the best judgment of the proxy holders.
A summary of the proceedings of the 1999 Annual Meeting of Stockholders
will be available after June 1, 1999, to any stockholder upon request to the
Clerk and upon payment of $10.00 to cover the cost of postage and production.
STOCKHOLDER PROPOSALS
Any stockholder desiring to present a proposal for inclusion in the
Company's proxy statement in connection with its 2000 annual meeting of
stockholders must submit the proposal so as to be received by the Clerk of the
Company at the principal executive offices of the Company located at Ten Post
Office Square, Boston, Massachusetts 02109, not later than November 13, 1999. In
addition, in order to be included in the proxy statement, such a proposal must
comply with the requirements as to form and substance established by applicable
laws and regulations.
Stockholders wishing to present business for action at the 2000 annual
meeting or to nominate directors for election at a meeting of the Company's
stockholders, must do so in accordance with the Company's By-laws. The By-laws
provide, among other requirements, that in order to be presented at an annual
meeting, such stockholder proposals or nominations may only be made by holders
of record who shall have given notice of such proposals or nominations and any
other required information to the Company no earlier than December 2, 1999, and
no later than February 20, 2000.
15
<PAGE> 18
BPBCM-PS-99
<PAGE> 19
<TABLE>
<S> <C>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
--------------------------------------------- 1. To elect three (3) Class II
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. Directors to serve until the 2002
--------------------------------------------- Annual Meeting and until their
successors are duly elected and For All With- For All
qualified. Nominees: Nominees hold Except
Arthur J. Dauernfeind [ ] [ ] [ ]
C. Michael Hazard
Peter C. B???
If you wish to withhold your vote for any of the nominees listed
above, mark the "For All Except" box and strike a line through the
name(s) of the nominee(s) for whom you wish to withhold your vote.
RECORD DATE SHARES:
Mark box at right if you plan to attend the Meeting [ ]
-------------
Please be sure to sign and date this Proxy. Date Mark box at right if an address change has been noted on the [ ]
- ------------------------------------------------------------- reverse side of this card
- --- Stockholder sign here ------------- Co-owner sign here --
DETACH CARD DETACH CARD
</TABLE>
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Dear Stockholder:
Please take note of the important information enclosed with this proxy
card.
Your vote counts and you are strongly encouraged to exercise your right to
vote your shares.
Please mark the boxes on this proxy card to indicate how your shares will
be voted. Then sign the card, detach it and return your proxy vote in the
enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders,
April 23, 1999.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Boston Private Financial Holdings, Inc.
<PAGE> 20
Proxy Solicited by the Board of Directors
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Ten Post Office Square, Boston, Massachusetts 02109
The undersigned hereby constitute(s) and appoints Walter M. Pressey and Ann E.
Bzoela, and each of them, as proxies of the undersigned (the "Proxies") each
with full power to appoint his or her substitute and hereby authorizes each of
them to represent and to vote all the shares of the Common Stock of Boston
Private Financial Holdings, Inc. (the "Company") held of record by the
undersigned on February 22, 1999, at the Annual Meeting of Stockholders (the
"Meeting") to be held on Friday, April 23, 1999 at 10:00 a.m. Boston time, or
any adjournments or postponements thereof.
When properly executed, this proxy will be vested in the manner directed herein
by the undersigned stockholder(s). If no direction is given, this proxy will be
voted FOR the election of the nominees to the Board of Directors. In their
discretion, the Proxies are authorized to vote upon such other business as may
properly come before the Meeting and any adjournments or postponements thereof.
A stockholder wishing to vote in accordance with the Board of Directors'
recommendations need only sign and date this proxy and return it in the postage
paid envelope provided.
The undersigned hereby acknowledge(s) receipt of a copy of the accompanying
Notice of Annual Meeting of Stockholders, the Proxy Statement with respect
thereto, the Company's Annual Report to Stockholders and the Company's Annual
Report to Stockholders and the Company's Annual Report on Form 10-K for Fiscal
Year 1998, and hereby revoke(s) any proxy or proxies heretofore given. This
proxy may be revoked at any time before it is exercised.
- -------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NOTE: Please sign exactly as your name(s) appear(s) hereon. When shares are
held by joint tenants, both should sign. When signing as an attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by an
authorized person.
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HAS YOUR ADDRESS CHANGED?
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