<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
MADISON BANCSHARES GROUP, LTD.
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
<PAGE>
MADISON BANCSHARES GROUP, LTD.
MADISON BANK BUILDING
1767 SENTRY PARKWAY WEST
BLUE BELL, PENNSYLVANIA 19422
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 22, 1999
-----------------
TO OUR SHAREHOLDERS:
NOTICE IS HEREBY GIVEN THAT the 1999 Annual Meeting of
Shareholders (the "Annual Meeting") of Madison Bancshares Group, Ltd. (the
"Corporation") will be held on June 22, 1999 at 3:00 p.m., at Madison Bank
Building, 1767 Sentry Parkway West, Blue Bell, PA 19422 to consider and act
upon:
1. The election of four (4) Class II Directors to serve until
the Annual Meeting of Shareholders in 2002;
2. The ratification of the selection of Deloitte & Touche LLP
as the Corporation's auditors for the 1999 fiscal year;
and,
3. The transaction of such other business as may be properly
brought before the Annual Meeting or any adjournment
thereof.
Shareholders of record of the Corporation at the close of
business on May 24, 1999 will be entitled to notice of and to vote at the Annual
Meeting and any adjournment or postponement thereof.
All shareholders are cordially invited to attend the Annual
Meeting. Whether or not you plan to attend the Annual Meeting, please complete
and sign the enclosed proxy card and return it promptly to the Corporation in
the enclosed envelope, which requires no postage if mailed in the United States.
At any time prior to their being voted, your proxy is revocable by delivering
written notice to the Corporation in accordance with the instructions set forth
in the Proxy Statement or by voting at the Annual Meeting in person.
Please complete, sign and return the enclosed proxy card in the
accompanying envelope promptly, whether or not you plan to attend the annual
meeting.
May 28, 1999
/s/ Philip E. Hughes, Jr.
-------------------------
Philip E. Hughes, Jr.
Secretary
<PAGE>
TABLE OF CONTENTS
Page
PROXY STATEMENT.............................................................1
General Information..................................................1
Voting and Revocability of Proxies...................................1
Solicitation of Proxies..............................................1
Voting Securities and Holders Thereof................................2
Shareholder Proposals for the 2000 Annual Meeting....................2
Nominations for Directors for the 2000 Annual Meeting................2
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934.......................3
PROPOSAL I
ELECTION OF DIRECTORS................................................4
Information Concerning Nominees and Continuing Directors.............4
Nominees.............................................................4
Class II Directors...........................................4
Continuing Directors.................................................5
Class I Directors:...........................................5
Class III Directors..........................................6
RECOMMENDATION OF THE CORPORATION'S BOARD OF DIRECTORS...............6
VOTING SECURITIES AND PRINCIPAL HOLDERS.....................................7
Security Ownership of Management and Beneficial Owners...............7
Board Committees.....................................................8
Executive Committee..................................................8
Audit Committee......................................................8
Executive Compensation/Stock Option Committee........................8
Y2K Committee........................................................8
EXECUTIVE COMPENSATION; RELATED PARTY TRANSACTIONS; AND
CERTAIN INFORMATION CONCERNING OFFICERS..............................9
Executive Compensation...............................................9
Summary Compensation Table...........................................9
Employment Arrangements.............................................10
Related Party Transactions..........................................11
Other Officers......................................................12
PROPOSAL II
PROPOSAL TO RATIFY SELECTION OF DELOITTE & TOUCHE LLP AS
INDEPENDENT PUBLIC ACCOUNTANT.......................................13
RECOMMENDATION OF THE CORPORATION'S BOARD OF DIRECTORS..............13
OTHER MATTERS..............................................................14
i
<PAGE>
MADISON BANCSHARES GROUP, LTD.
MADISON BANK BUILDING
1767 SENTRY PARKWAY WEST
BLUE BELL, PENNSYLVANIA 19422
-----------------
ANNUAL MEETING OF SHAREHOLDERS
To Be Held on June 22, 1999
---------------
PROXY STATEMENT
---------------
General Information
This Proxy Statement has been prepared and is being distributed in
connection with the solicitation by the Board of Directors of Madison Bancshares
Group, Ltd. (the "Corporation") of proxies in the enclosed form for use at the
Annual Meeting of Shareholders of the Corporation to be held on June 22, 1999 at
3:00 p.m., at the Madison Bank Building, 1767 Sentry Parkway West, Blue Bell, PA
19422, and at any adjournment or postponement thereof. (Such meeting and any
adjournment or postponement thereof will be hereinafter referred to as the
"Annual Meeting.") This Proxy Statement is being first given or sent to
shareholders of the Corporation on or about May 26, 1999.
Voting and Revocability of Proxies
Unless contrary instructions are indicated on the proxy, all shares
represented by valid proxies received pursuant to this solicitation (and not
revoked before they are voted) will be voted FOR the election of the nominees
for Directors named herein, and FOR the ratification of the selection of
Deloitte & Touche LLP as the Corporation's outside auditors described in this
Proxy Statement in the manner stated in the accompanying proxy. As of the date
of this Proxy Statement, the Board of Directors knows of no business that will
be presented for consideration at the Annual Meeting other than that referred to
above. If any other business properly comes before the Annual Meeting, the
persons designated in the enclosed proxy will vote on such business in
accordance with their best judgment. In addition, the Corporation intends to
exercise discretionary voting authority over any proposal presented at the
Annual Meeting, but not included in this Proxy Statement, if the presenting
shareholder did not notify the Corporation of such proposal on or before March
6, 1999.
Any shareholder who executes and returns a proxy may revoke it at any
time before it is exercised by (i) delivering to E. Cheryl Hinkle, Assistant
Secretary of the Corporation, at the principal executive offices of the
Corporation at 1767 Sentry Parkway West, Blue Bell, PA 19422, either an
instrument revoking the proxy, or a duly executed proxy bearing a later date, or
(ii) by attending the Annual Meeting and voting in person.
Solicitation of Proxies
The enclosed proxy is being solicited by the Board of Directors of the
Corporation for use in connection with the Annual Meeting. The cost of such
solicitation will be borne by the Corporation.
1
<PAGE>
Proxies may be solicited in person or by mail, telephone, telegram, mailgram or
other means by directors, officers, employees and management of the Corporation;
however, such persons will not receive any fees for such solicitation. Brokers,
nominees, fiduciaries and other custodians have been requested to forward such
soliciting material to the beneficial owners of shares held of record by them,
and such custodians may be reimbursed for their expenses.
Voting Securities and Holders Thereof
As of the close of business on May 24, 1999, the record date for voting
at the Annual Meeting, the Corporation had outstanding 1,567,669 shares of
common stock, par value $1.00 per share (the "Common Stock"), held by
approximately 261 shareholders of record. The actual number of beneficial
holders of the Corporation's Common Stock is believed to be higher. Holders of
Common Stock are entitled to one vote per share on all matters to be voted upon
at the Annual Meeting. As of the date hereof, there are no other classes of the
Corporation's capital stock issued or outstanding.
Shareholder Proposals for the 2000 Annual Meeting
Any shareholder who intends to present a proposal for consideration at
the Corporation's 2000 Annual Meeting must, on or before December 21, 1999,
submit his proposal to the Corporation and notify the Corporation that he
intends to appear personally at the 2000 Annual Meeting to present his proposal
in order to have the Corporation consider the inclusion of such proposal in the
Corporation's 2000 Proxy Statement and form of proxy relating to the 2000 Annual
Meeting. Shareholders are referred to Rule 14a-8 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), for information concerning the
content and form of such proposal and the manner in which such proposal must be
made.
The Corporation intends to exercise discretionary voting authority over
any proposal presented at the 2000 Annual Meeting, but not included in the
Corporation's proxy statement and form of proxy relating to that meeting, unless
the presenting shareholder notified the Corporation of such proposal on or
before March 6, 2000.
Nominations for Directors for the 2000 Annual Meeting
Nominations for election to the Board of Directors at the 2000 Annual
Meeting may be made only in writing by a shareholder entitled to vote at the
2000 Annual Meeting of Shareholders. Such nominations must be sent to the
Chairman or President of the Corporation at the following address: Madison
Bancshares Group, Ltd., 1767 Sentry Parkway West, Blue Bell, Pennsylvania 19422.
Nominations for the 2000 Annual Meeting must be received not less than 14 days
nor more than 50 days prior to the date of the 2000 Annual Meeting. To the
extent known by the nominating shareholder, the nomination shall contain (i) the
name and address of the nominee; (ii) the principal occupation of each proposed
nominee; (iii) the total number of shares of capital stock of the Corporation
that will be voted for each proposed nominee; (iv) the name and residence of the
nominating shareholder; and, (v) the number of shares of the Corporation's
capital stock owned by the nominating shareholder. In the event that less than
twenty-one days notice of the 2000 Annual Meeting is given to shareholders,
shareholder nominations to the Board of Directors shall be mailed or delivered
to the Chairman or President of the Corporation not later than the close of
business on the seventh day following the date on which the notice of the Annual
Meeting was mailed to shareholders.
2
<PAGE>
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Corporation's directors,
certain of its officers and persons who own more than ten percent of the
Corporation's Common Stock (collectively, the "Reporting Persons") to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission and to furnish the Corporation with copies of these reports.
Based on the Corporation's review of the copies of these reports received
by it, and representations received from Reporting Persons, the Corporation
believes that all filings required to be made by the Reporting Persons for the
period January 1, 1998 through December 31, 1998 were made on a timely basis.
The Corporation will provide, without charge, to each person or
shareholder, upon written request of any such person, additional copies of the
Corporation's 1998 Annual Report on Form 10-KSB, as well as exhibits and the
Financial Statements thereto. Any such request should be delivered to E. Cheryl
Hinkle, Assistant Secretary, Madison Bancshares Group, Ltd., 1767 Sentry
Parkway West, Blue Bell, PA 19422.
3
<PAGE>
PROPOSAL I
ELECTION OF DIRECTORS
Information Concerning Nominees and Continuing Directors
The Corporation's By-Laws provide for the classification of Directors
into three classes, as nearly equal in number as possible, with approximately
one-third of the Directors to be elected annually for three-year terms. At the
Annual Meeting, there will be four (4) persons elected as Class II Directors,
for terms expiring in 2002. All four (4) of the persons nominated for election
as Class II Directors are presently serving as Directors of the Corporation.
All Directors are elected for a three year term, with Class I Directors
to be elected in 2000 and Class III Directors to be elected in 2001.
Set forth below is certain information with respect to each of the
nominees for election to the Board of Directors at the Annual Meeting as well as
each of the other continuing Directors, including name, age, the period during
which such person has served as a Director of the Corporation, such person's
principal occupation and employment during the past five years and the amount
and percentage of the Corporation's Common Stock beneficially owned by such
person. It is the intention of the persons named in the accompanying form of
proxy to vote for all those nominees listed below.
Each of the persons listed below as nominees has agreed to be named as a
nominee for Director in this Proxy Statement and has consented to serve as a
Director if elected. The Corporation expects all nominees to be willing and able
to serve. The Board of Directors may designate a substitute nominee to replace
any bona fide nominee who was nominated and who, for any reason, becomes
unavailable for election as a Director. If any of the nominees shall become
unable to serve, the persons designated in the enclosed Proxy Card will vote for
the election of such other person or persons as the Board of Directors may
recommend.
Nominees
Class II Directors:
Peter DePaul, age 71, has served as a Director of the Corporation since
1988 and the Bank since 1989. Since March, 1996, he has served as Chairman of
the Board of Directors of the Corporation and since April , 1996, as President
and Chief Executive Officer of the Corporation and Chairman of the Bank. Mr.
DePaul also serves as a member of the Corporation's Executive, Audit and
Executive Compensation/Stock Option Committees. Mr. DePaul is the Managing
Partner of the DePaul Group of Companies, headquartered in Blue Bell,
Pennsylvania, specializing in the real estate, construction, health care and
hospitality industries. In addition, Mr. DePaul serves on the Board of Trustees
of Temple University, the Board of Directors of the Philadelphia Heart Institute
of Presbyterian Hospital and the Board of Directors of Independence Blue Cross.
Mr. DePaul is the brother-in law of Michael O'Donoghue, who is a Director of the
Corporation.
Arnold M. Katz, CLU, age 59, has served as a Director of the Corporation
since 1988 and the Bank since 1989. Mr. Katz also serves as a member of the
Corporation's Executive Committee and Y2K Committee. Mr. Katz is President of
Brokerage Concepts, Inc., a distributor of life and health insurance and the
largest privately held third party administrator in America . Mr. Katz is
Chairman of the Board of Brokers Service, Inc. and the president of several
companies in the life and
4
<PAGE>
health insurance field. Mr. Katz serves as a member of the executive committee
of the Police Athletic League, the Board of Trustees of Albert Einstein Health
Care Foundation and the Golden Slipper Foundation.
Lorraine C. King, M.D., age 57, has served as a Director of the
Corporation since 1988 and the Bank since 1989. Dr. King serves as a member of
the Audit and Executive Compensation/Stock Option Committees. Dr. King
specializes in the field of reproductive endocrinology and infertility and is
President of L.C. King M.D., P.C. and Diagnostic Endocrinology Associates. Dr.
King is a member of the Philadelphia College of Physicians and an Associate
Professor of OB/GYN. Dr. King is also a staff physician at Thomas Jefferson
University Hospital and the author of scholarly articles on the subject of
reproductive endocrinology.
Michael O'Donoghue, age 56, has served as a Director of the Corporation
and the Bank since 1991. Mr. O'Donoghue serves as Chairman of the Audit
Committee, member of the Executive Committee and Executive Compensation/Stock
Option Committee. Mr. O'Donoghue is a senior partner in the law firm of Wisler,
Pearlstine, Talone, Craig, Garrity and Potash located in Blue Bell,
Pennsylvania. Mr. O'Donoghue serves as a member of the Board of Directors of the
Southeastern Pennsylvania Transportation Authority (SEPTA). Mr. O'Donoghue
formerly served on the Board of Directors of the Montgomery County Bar
Association and as editor of the Montgomery County Law Reporter. Mr. O'Donoghue
is the brother-in-law of Peter DePaul, who is the Chairman, President and Chief
Executive Officer of the Corporation and Chairman of the Bank.
Continuing Directors
Class I Directors:
Philip E. Hughes, Jr., age 50, has served as a Director of the
Corporation since 1988 and the Bank since 1989. Mr. Hughes also serves as
Secretary/Treasurer and Chief Financial Officer of the Corporation, Vice
Chairman and Treasurer of the Bank and a member of the Executive and Executive
Compensation/Stock Option Committee and Y2K Committee. Mr. Hughes is an attorney
at law, a certified public accountant and Director of Taxation of Schiffman
Hughes Brown, a regional certified public accounting firm. Mr. Hughes serves on
the Board of the Philadelphia Senior Center and formerly served on the Board of
Trustees of LaSalle University and Chairman of the Board of Trustees of the
Roxborough YMCA.
Kathleen A. Kucer, M.D., age 47, has been a Director of the Corporation
since 1988 and the Bank since 1989. Dr. Kucer also serves as a member of the
Executive, Audit and Y2K Committees. Dr. Kucer is Chairman of the Department of
Dermatology at Grandview Hospital and the author of scholarly articles on the
subject of Dermatology. Dr. Kucer conducts skin cancer prevention screenings for
the Grand View Community and is an active contributor to Aid for Friends and St.
Rose of Lima Church.
Blaine W. Scott, III, age 72, has been a Director of the Corporation
since 1988 and the Bank since 1989. Mr. Scott also serves as a member of the
Corporation's Executive, Audit and Executive Compensation/Stock Option
Committees. Mr. Scott is President and Chief Executive Officer of Upper Merion
Investment Corporation, a real estate and restaurant management company. Mr.
Scott is also Secretary/Treasurer and Chief Financial Officer of Baron's Inne.
Mr. Scott was formerly a Trustee of Valley Forge Military Academy and College
and Temple University and a member of the Pennsylvania Republican State
Committee. Mr. Scott is a Director Emeritus of the King of Prussia Chamber of
Commerce.
5
<PAGE>
Class III Directors:
Vito A. DeLisi, age 50, has served as a Director and President of the
Corporation since 1988 and President, Chief Executive Officer and Director of
Madison Bank, a wholly-owned subsidiary of the Corporation (the "Bank"), since
1989. Mr. DeLisi also serves as chairman of the Executive Committee.
Francis R. Iacobucci, age 69, has served as a Director of the Corporation
since 1988 and the Bank since 1989. Mr. Iacobucci also serves as a member of the
Executive Compensation/Stock Option Committee. Mr. Iacobucci is President and
co-founder of the Iacobucci Organization and Consolidated Carpenters, Inc.,
builder of residential housing and commercial and industrial complexes.
Donald J. Reape, age 62, has been a Director of the Corporation and the
Bank since 1994. Mr. Reape is President of Donald J. Reape and Associates, a
real estate company specializing in appraisals, mortgage banking and
development.
Salvatore S. Paone, age 54, has been a director of the Corporation and
the Bank since 1998. Mr. Paone is President of S. Paone Inc., S. Paone Realty
Inc., P.C.I. Builders, Inc., S. Paone Homes Corp. and S.T.M., Inc. Mr. Paone
also is General Partner in various real estate business throughout the
Philadelphia area.
RECOMMENDATION OF THE CORPORATION'S BOARD OF DIRECTORS
The Board of Directors of the Corporation recommends that shareholders
vote FOR these nominees.
6
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS
Security Ownership of Management and Beneficial Owners
The following table sets forth information as of May 24, 1999 with
respect to the shares of the Corporation's Common Stock beneficially owned by
each director and executive officer of the Corporation, by all directors and
executive officers as a group and by each person who is known by the Corporation
to own beneficially 5% or more of the Corporation's Common Stock (based on
1,567,669 shares of the Corporation's Common Stock outstanding as of May 24,
1999). The information in the table concerning persons known by the Corporation
to own beneficially 5% or more of the Corporation's Common Stock is derived,
without independent investigation on the part of the Corporation, from the most
recent filings made by such persons with the Securities and Exchange Commission
on Schedule 13D and Schedule 13G pursuant to Rule 13d-3 of the Exchange Act.
Shares Beneficially Percentage of
Name Owned (1) Class (1)
- ---- --------- ---------
Vito A. DeLisi (2) 95,774 5.8%
Peter D. DePaul (3) 143,578 9.1%
Philip E. Hughes, Jr. (4) 32,766 2.1%
Francis R. Iacobucci (5) 29,418 1.9%
Arnold M. Katz (6) 75,270 4.8%
Lorraine C. King, M.D. (7) 29,041 1.9%
Kathleen A. Kucer, M.D. (8) 16,700 1.1%
Michael O'Donoghue 9,444 *
Donald J. Reape 21,765 1.4%
Blaine W. Scott, III (9) 15,329 *
Salvatore Paone 5,000 *
All Directors and executive officers as a 497,645 29.4%
group (13 persons)
* Less than one (1%) percent.
(1) Calculated in accordance with Rule 13d-3 of the Exchange Act. The address
for all persons listed in the above table is c/o Madison Bancshares
Group, Ltd., Madison Bank Building, 1767 Sentry Parkway West, Blue Bell,
Pennsylvania 19422.
(2) Includes 78,197 immediately exercisable options to purchase shares of the
Corporation's Common Stock ("Options").
(3) Includes 12,551 immediately exercisable Options.
(4) Includes 5,134 immediately exercisable Options.
(5) Includes 7,612 immediately exercisable Options.
(6) Includes 6,084 immediately exercisable Options.
(7) Includes 5,435 immediately exercisable Options.
(8) Includes 3,496 immediately exercisable Options.
(9) Includes 3,719 immediately exercisable Options.
7
<PAGE>
Board Committees
The Corporation's Board of Directors has standing Executive, Audit,
Executive Compensation/Stock Option and Y2K committees.
Executive Committee. The Executive Committee is composed of the following
Directors: Messrs. DeLisi (Chairman), DePaul, Hughes, Katz, O'Donoghue, Reape,
Scott and Dr. Kucer. The Executive Committee is authorized by the entire Board
of Directors to exercise all of the authority of the Board in the management of
the Corporation between Board meetings, unless otherwise provided in the
Corporation's by-laws. The Executive Committee held 12 meetings during 1998.
Audit Committee. The Audit Committee is composed of the following
independent Directors: Messrs. O'Donoghue (Chairman), DePaul, and Scott and Drs.
King and Kucer. The Audit Committee provides general financial oversight in
financial reporting and the adequacy of the Corporation's internal controls
through periodic meetings with the Corporation's management and its independent
auditors. The Audit Committee held one meeting during 1998.
Executive Compensation/Stock Option Committee. The Executive
Compensation/Stock Option Committee is composed of the following Directors:
Messrs. DePaul, Iacobucci, Hughes, Scott, O'Donoghue, Katz and Drs. King and
Kucer. The Executive Compensation/Stock Option Committee provides general
oversight in all employee personnel matters through periodic meetings with
management of the Corporation. The Executive Compensation/Stock Option Committee
held one meeting during 1998.
Y2K Committee. The Y2K Committee is composed of the following Directors:
Messrs. Hughes, Katz and Dr. Kucer. The Y2K Committee is responsible for
oversight of the Corporation's Year 2000 preparation and compliance programs.
The Y2K Committee held 12 meetings during 1998.
The Corporation does not have a standing nominating committee.
During 1998, the Corporation's Board of Directors held 12 meetings. Of
the continuing directors and nominees, no director attended fewer than 75% of
the aggregate number of meetings of the Board of Directors of the Corporation
and the Bank and meetings of the committees on which such director served.
8
<PAGE>
EXECUTIVE COMPENSATION; RELATED PARTY TRANSACTIONS; AND
CERTAIN INFORMATION CONCERNING OFFICERS
Executive Compensation
The following table shows the annual compensation of the Chief Executive
Officer of each of the Corporation and the Bank and the Corporation's three most
highly compensated executive officers for the fiscal years 1998, 1997 and 1996.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
------------------- -------------------
Other
Annual
Name & Principal Compen- Securities
Position (a) sation Underlying All other
Year Salary ($) Bonus ($) ($) Options/SARs (#) Compensation
(b) (c) (d) (e)(1) (g) ($) (i)
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Vito A. DeLisi 1998 $175,000 $60,000 $6,000 0 $10,568 (2)
President and Director of the 1997 175,000 60,000 4,200 0 8,278 (3)
Corporation; President, Chief 1996 175,000 50,000 4,725 0 8,646 (4)
Executive Officer and Director
of the Bank
Thomas J. Coletti 1998 $112,875 $18,000 0 0 $3,846 (5)
Executive Vice President of the 1997 107,500 18,000 0 0 2,550 (6)
Bank 1996 102,300 15,000 0 0 2,446 (7)
E. Cheryl Hinkle 1998 $100,000 15,000 3,600 0 $2,583 (8)
Senior Vice President and Chief 1997 95,000 15,000 2,400 0 1,737 (9)
Financial Officer of the Bank; 1996 90,000 10,000 2,600 0 1,074(10)
Senior Vice President, Assistant
Secretary and Assistant
Treasurer of the Corporation
</TABLE>
(1) All amounts listed in this column represent amounts paid to the listed
person for their services as a member of the Board of Directors or, in
the case of Ms. Hinkle, amounts paid for services in connection with
attending meetings of the Board of Directors.
(2) Includes $6,270 paid by the Bank for premium on life and disability
insurance policies for the benefit of Mr. DeLisi and $4,298 contributed
by the Corporation to a defined contribution plan for the benefit of Mr.
DeLisi.
(3) Includes $5,519 paid by the Bank for premium on life and disability
insurance policies for the benefit of Mr. DeLisi and $2,759 contributed
by the Corporation to a defined contribution plan for the benefit of Mr.
DeLisi.
(4) Includes $5,292 paid by the Bank for premium on life and disability
insurance policies for the benefit of Mr. DeLisi and $3,354 contributed
by the Corporation to a defined contribution plan for the benefit of Mr.
DeLisi.
9
<PAGE>
(5) Includes $404 paid by the Bank for premiums on a life insurance policy
for the benefit of Mr. Coletti and $3,442 contributed by the Bank to a
defined contribution plan for the benefit of Mr. Coletti.
(6) Includes $404 paid by the Bank for premiums on a life insurance policy
for the benefit of Mr. Coletti and $2,146 contributed by the Bank to a
defined contribution plan for the benefit of Mr. Coletti.
(7) Includes $296 paid by the Bank for premiums on a life insurance policy
for the benefit of Mr. Coletti and $2,150 contributed by the Bank to a
defined contribution plan for the benefit of Mr. Coletti.
(8) Includes $253 paid by the Bank for premiums on a life insurance policy
for the benefit of Ms. Hinkle and $2,330 contributed by the Bank to a
defined contribution plan for the benefit of Ms. Hinkle.
(9) Includes $687 paid by the Bank for premiums on a life insurance policy
for the benefit of Ms. Hinkle and $1,050 contributed by the Bank to a
defined contribution plan for the benefit of Ms. Hinkle.
(10) Includes $674 paid by the Bank for premiums on a life insurance policy
for the benefit of Ms. Hinkle and $400 contributed by the Bank to a
defined contribution plan for the benefit of Ms. Hinkle.
During 1998, members of the Boards of Directors of the Corporation and
the Bank were compensated at the following rates for their services: the
Chairman of the Board received $500 per Board meeting and $350 per Committee
meeting attended; each other Director received $350 per Board meeting and $350
per Committee meeting attended.
During 1998, an aggregate of $155,000 was paid to directors for their
services. No director received more than $33,650.
Employment Arrangements
Vito A. DeLisi. Mr. DeLisi serves as President of the Corporation and
President and Chief Executive Officer of the Bank. Mr. DeLisi receives an annual
base salary of $175,000, a car allowance, four (4) weeks of paid vacation,
reimbursement of expenses reasonably incurred in the performance of his duties
and life insurance in the face amount of $1,000,000.
In the event that Mr. DeLisi's services were terminated due to
disability, he will be entitled to the continuation of his annual salary and/or
the payment to him of benefits under any disability insurance policy up to the
aggregate amount of $200,000. In the event of a merger or acquisition wherein
the Corporation is not the surviving entity, Mr. DeLisi will be granted stock
options to purchase an aggregate number of shares of the Common Stock of the
Corporation equal to 5% of the issued and outstanding Common Stock immediately
prior to any such merger or acquisition. Such options will only be exercisable
by Mr. DeLisi in the event of such a merger or acquisition. Such options would
be exercisable for a period of 5 years at an exercise price equal to the highest
per share price to be paid to the Corporation's shareholders in the merger or
acquisition by the surviving or acquiring entity. In addition, in the event of
the termination of his employment by the Corporation within one year after the
date of the merger or acquisition, Mr. DeLisi would be entitled to receive a
lump sum payment equal to the total compensation paid to him or earned by him
for the twelve
10
<PAGE>
month period preceding the termination of his services to the Corporation, up to
an aggregate amount of $200,000.
Thomas J. Coletti. Mr. Coletti serves as Executive Vice President of the
Bank at an annual salary of $125,000. In the event of a merger or acquisition
wherein the Corporation is not the surviving entity, Mr. Coletti will be granted
stock options to purchase an aggregate number of shares of the Common Stock of
the Corporation equal to 1% of the issued and outstanding Common Stock
immediately prior to any such merger or acquisition. Such options would be
exercisable for a period of 5 years at an exercise price equal to the highest
per share price to be paid to the Corporation's shareholders in the merger or
acquisition by the surviving or acquiring entity. In addition, in the event of
the termination of his employment by the Corporation within one year after the
date of the merger or acquisition, Mr. Coletti would be entitled to receive a
lump sum payment equal to one-half the total compensation paid to him or earned
by him for the twelve month period preceding the termination of his services to
the Corporation, up to an aggregate amount of $100,000.
E. Cheryl Hinkle. Ms. Hinkle serves as Senior Vice President and Chief
Financial Officer of the Bank and Senior Vice President, Assistant Secretary and
Assistant Treasurer of the Corporation at an annual salary of $110,000. In the
event of a merger or acquisition wherein the Corporation is not the surviving
entity, Ms. Hinkle will be granted stock options to purchase an aggregate number
of shares of the Common Stock of the Corporation equal to 1% of issued and
outstanding Common Stock immediately prior to any such merger or acquisition.
Such options would be exercisable for a period of 5 years at an exercise price
equal to the highest per share price to be paid to the Corporation's
shareholders in the merger or acquisition by the surviving or acquiring entity.
In addition, in the event of the termination of her employment by the
Corporation within one year after the date of the merger or acquisition, Ms.
Hinkle would be entitled to receive a lump sum payment equal to one-half the
total compensation paid to her or earned by her for the twelve month period
preceding the termination of her services to the Corporation, up to an aggregate
amount of $100,000.
Related Party Transactions
Except as set forth below, there are no other existing or proposed direct
or indirect material transactions between the Corporation or the Bank and any of
its officers, directors, promoters, or any associates of the foregoing, outside
the ordinary course of the Bank's and the Corporation's business.
Certain of the Directors, including Peter D. DePaul, and Philip E.
Hughes, Jr., executive officers of the Corporation, own the Madison Bank
Building (the "Building") where the Corporation and the Bank have maintained
their principal offices since 1989. The Corporation and the Bank were advised by
an independent real estate firm at the outset of the lease for such principal
office (the "Lease") that the Lease was on terms which are commercially
reasonable and typical of those found for similar leases in the Blue Bell,
Pennsylvania area. The Corporation currently leases approximately 13,381 square
feet on the first floor and 3,355 total square feet of space on the second floor
of the building for its mortgage department. This total includes 3,381 square
feet leased by the Corporation on February 1, 1996 on the first floor of the
Building and 1,400 square feet leased by the Corporation on January 21, 1997 on
the first floor of the Building. This 1,400 square feet of additional feet was
included in the Lease originally, but the Corporation subsequently surrendered
possession. The leased space is occupied by both the Corporation and the Bank
and serves as the Bank's primary banking location. The space contains a banking
area, lobby, operations center and a vault together with administrative and
executive offices. The initial term of the Lease expired on December 31, 1994,
and the Corporation exercised the first of two five year renewal options. Annual
base rental payments are $142,092 during the current option term. In the event
that the Corporation exercises its second renewal option, beginning January 1,
2000, the amount of the base rental payments will
11
<PAGE>
increase to $164,700 per annum. In addition to the base rents referred to above,
the Corporation is required to pay its pro rata share of the Building's
operating costs, including real estate taxes, water and sewer charges, equipment
maintenance charges, exterior maintenance and upkeep, common area electric
charges, trash removal, and certain other similar items. For 1998, the amount of
such expenses was $34,272. The maximum allowable portion of the Building's
operating costs will be $35,988 for 1999 and will ultimately increase to $51,684
for the final year of the second option period. The additional 3,381 square feet
are leased at an annual rate of approximately $58,660 with a 3.5% increase
during each year through February 1, 2000. The additional 1,400 square feet were
leased for approximately $28,078 during 1998 which amount increases to $29,575
through February 1, 2000. The second floor space of 3,355 square feet was leased
at an annual rate of approximately $70,722 and increased to $75,634 through
December 1, 2000.
Certain of the directors and officers of the Bank, and companies with
which they are associated, have and will enter into banking relationships and
transactions with the Bank in the ordinary course of business. Any loans to such
persons or commitments to make such loans are required by law to be made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons of similar
creditworthiness. At December 31, 1998, the aggregate amount of such loans was
$7,830,641 or 83% of total shareholder's equity. When appropriate, each such
banking relationship and transaction has been or will be approved by the Bank's
Board of Directors or an appropriate committee thereof with any interested
director not voting on such transaction.
Other Officers
Set forth below is certain information with respect to Thomas J. Coletti
and E. Cheryl Hinkle, the officers of the Corporation or the Bank who are not
also directors of the Corporation or the Bank, including such officers' ages,
positions with the Corporation and the amount and percentage of the
Corporation's Common Stock, if any, beneficially owned as of May 24, 1999.
<TABLE>
<CAPTION>
Corporation's Common Stock
Position with the Beneficially Owned Directly or
Name Age Corporation Indirectly on May 24, 1999
- ---- --- ----------- --------------------------
Percent of
Amount Outstanding
------ -----------
<S> <C> <C> <C>
Thomas J. Coletti 45 Executive Vice President of the 17,262(1) 1.1%
Bank.
E. Cheryl Hinkle 44 Senior Vice President and Chief 6,298(2) *
Financial Officer of the Bank;
Senior Vice President, Assistant
Secretary and Assistant
Treasurer of the Corporation
</TABLE>
- ------------------------
(1) Includes 12,394 immediately exercisable Options.
(2) Includes 5,798 immediately exercisable Options.
* less than one (1%) percent
12
<PAGE>
PROPOSAL II
PROPOSAL TO RATIFY SELECTION OF
DELOITTE & TOUCHE LLP AS
INDEPENDENT PUBLIC ACCOUNTANT
The Board of Directors has selected Deloitte & Touche LLP ("Deloitte &
Touche") as independent public accountants to examine and verify the accounts of
the Corporation for the 1999 fiscal year, and to report thereon to the Board of
Directors and the shareholders. This selection will be submitted for
ratification or rejection at the 1999 Annual Meeting.
The Corporation's financial statements for the year ended December 31,
1998 were examined by Deloitte & Touche, independent public accountants. The
Audit Committee of the Corporation's Board of Directors meets with
representatives of Deloitte & Touche periodically to review the nature and scope
of services performed by that firm.
Deloitte & Touche has no interest in or relationship with the Corporation
except in the capacity of independent public accountants, nor has that firm had
any other interest or relationship with the Corporation in the past.
Representatives of Deloitte & Touche are expected to be present at the
1999 Annual Meeting. Such representatives will have the opportunity at the
Annual Meeting to make a statement if they so desire and will be available to
respond to appropriate shareholder questions.
RECOMMENDATION OF THE CORPORATION'S BOARD OF DIRECTORS
The Board of Directors of the Corporation recommends that shareholders
vote FOR this Proposal.
13
<PAGE>
OTHER MATTERS
Management does not know of any other matters to come before the meeting.
However, if any other matters properly come before the meeting, it is the
intention of the persons designated as proxies to vote in accordance with their
best judgment.
Please complete, sign and mail the enclosed white Proxy Card in the
accompanying envelope promptly, whether or not you plan to attend the Annual
Meeting.
By Order of the Board of Directors,
/s/ Philip E. Hughes, Jr.
-------------------------
Philip E. Hughes, Jr.
Secretary
14
<PAGE>
MADISON BANCSHARES GROUP, LTD.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
Annual Meeting of Shareholders - June 22, 1999
The undersigned shareholder of MADISON BANCSHARES GROUP, LTD. (the
"Company"), revoking all previous proxies, hereby constitutes and appoints E.
Cheryl Hinkle and Thomas J. Coletti, and each of them acting individually, as
the attorney and proxy of the undersigned, with full power of substitution, for
and in the name and stead of the undersigned, to attend the Annual Meeting of
Shareholders of the Company to be held on Tuesday, June 22, 1999 at 3:00 P.M.
at the Madison Bank Building, 1767 Sentry Parkway West, Blue Bell,
Pennsylvania, 19422, and to vote all shares of Common Stock of the Company
which the undersigned would be entitled to vote if personally present at such
Annual Meeting, and at any adjournment or postponement thereof; provided, that
said proxies are authorized and directed to vote as indicated with respect to
the following matters:
1. / / FOR all nominees for director named below.
/ / WITHHOLD AUTHORITY to vote for all nominees for director named below.
/ / FOR all nominees for director named below, except WITHHOLD AUTHORITY to
vote for the nominee(s) whose name(s) is (are) lined through.
Nominees: Peter DePaul; Arnold M. Katz; Lorraine C. King, M.D.; and
Michael O'Donoghue.
2. / / FOR the ratification of the selection of Deloitte & Touche L.L.P. as the
Company's independent accountant for 1999.
/ / AGAINST
/ / ABSTAIN
3. / / In their discretion, the proxies will vote on such other business as may
properly come before the meeting.
This Proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholders. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" THE NOMINEES FOR DIRECTOR AND "FOR" THE RATIFICATION OF THE
SELECTION OF ACCOUNTANT. This proxy also delegates discretionary authority to
vote with respect to any other business which may properly come before the
meeting or any adjournment or postponement thereof.
- --------------------------------------------------------------------------------
(Continued and to be signed on opposite side)
<PAGE>
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE ANNUAL REPORT, NOTICE
OF SAID MEETING AND THE PROXY STATEMENT FURNISHED IN CONNECTION THEREWITH. The
undersigned also hereby ratifies all that the said attorneys and proxies may do
by virtue hereof and hereby confirms that this proxy shall be valid and may be
voted whether or not the shareholder's name is signed as set forth below or a
seal is affixed or the description, authority or capacity of the person signing
is given or other defect of signature exists.
NOTE: PLEASE MARK, DATE AND SIGN THIS PROXY CARD AND RETURN IT IN THE
ENCLOSED ENVELOPE. Please sign this proxy exactly as it appears in address
below. If shares are registered in more than one name, all owners should sign
full title. Corporations please sign with full corporate name by a duly
authorized officer and affix the corporate seal.
Date ------------------------ , 1999
----------------------------- (SEAL)
(Shareholder's Signature)
----------------------------- (SEAL)
(Shareholder's Signature)
----------------------------SHARES
