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 (section)240.14a-11(c) or
(section)240.14a-12
Regent Bancshares Corp.
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(Name of Registrant as Specified In Its Charter)
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(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)(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 the
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>
REGENT BANCSHARES CORP.
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 28, 1997
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To the Holders of Common Stock and
Series A Convertible Preferred Stock of
REGENT BANCSHARES CORP.:
The Annual Meeting of Stockholders of Regent Bancshares Corp.
("Regent") will be held at 10:00 a.m., prevailing time, on Wednesday, May 28,
1997 at The Union League of Philadelphia, 140 South Broad Street, Philadelphia,
Pennsylvania 19102 for the following purposes:
1. To elect six directors to serve until the 1998 Annual Meeting of
Stockholders and until their successors are elected;
2. To consider and vote upon a proposal to adopt Regent's 1997 Equity
Incentive Plan for officers, directors, employees and consultants; and
3. To transact such other business as may properly come before the
Annual Meeting and any adjournment, postponement or continuation thereof.
The Board of Directors has fixed the close of business on April 30,
1997 as the record date for the determination of the holders of Regent Common
Stock and Regent Series A Convertible Preferred Stock entitled to notice of and
to vote at the Annual Meeting.
A copy of Regent's Annual Report for the year ended December 31, 1996
is being mailed to stockholders together with this Notice.
Holders of Regent Common Stock and Regent Series A Convertible
Preferred Stock are requested to complete, sign and return the enclosed form of
proxy in the envelope provided whether or not they expect to attend the Annual
Meeting in person.
By Order of the Board of Directors,
David W. Ring, Chairman of the Board
May 2, 1997
Philadelphia, Pennsylvania
<PAGE>
REGENT BANCSHARES CORP.
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Regent Bancshares Corp. ("Regent") is first mailing this Proxy
Statement and the form of proxy enclosed herewith to the holders of Common
Stock, par value $.10 per share, of Regent ("Regent Common Stock") and Series A
Convertible Preferred Stock, par value $.10 per share, of Regent ("Regent Series
A Stock") on or about May 2, 1997. This Proxy Statement and the form of proxy
are furnished in connection with the solicitation by the Board of Directors of
Regent of proxies to be voted at Regent's Annual Meeting of Stockholders (the
"Annual Meeting") to be held at 10:00 a.m., prevailing time, on Wednesday, May
28, 1997, and at any adjournment, postponement or continuation thereof, at The
Union League of Philadelphia, 140 South Broad Street, Philadelphia, Pennsylvania
19102. Regent's principal executive offices are located at 1430 Walnut Street,
Philadelphia, Pennsylvania 19102.
Shares represented by proxies in the accompanying form, if properly
signed and returned, will be voted in accordance with the specifications made
thereon by the stockholders. Any proxy not specifying to the contrary will be
voted for the election of the nominees for director named below and for adoption
of Regent's 1997 Equity Incentive Plan (the "Plan"). A stockholder who signs and
returns a proxy in the accompanying form may revoke it at any time before it is
voted by giving written notice of revocation or a duly executed proxy bearing a
later date to the Secretary of Regent or by attending the Annual Meeting and
voting in person.
The cost of solicitation of proxies in the accompanying form will be
borne by Regent, including expenses in connection with preparing and mailing
this Proxy Statement. Such solicitation will be made by mail and may also be
made on behalf of Regent in person or by telephone or telegram by Regent's
regular officers and employees, none of whom will receive special compensation
for such services. Regent, upon request therefor, will also reimburse brokers,
nominees, fiduciaries and custodians and persons holding shares in their names
or in the names of nominees for their reasonable expenses in sending proxies and
proxy material to beneficial owners.
Only holders of Regent Common Stock and Regent Series A Stock of record
at the close of business on April 30, 1997 will be entitled to notice of and to
vote at the Annual Meeting. Each share of Regent Common Stock and Regent Series
A Stock is entitled to one vote on all matters to come before the Annual
Meeting. The holders of Regent Common Stock and Regent Series A Stock will vote
together as a single class on all matters presented at the Annual Meeting.
Cumulative voting rights do not exist with respect to the election of directors.
As of the close of business on April 28, 1997, 1,251,068 shares of
Regent Common Stock and 443,436 shares of Regent Series A Stock were
outstanding. The presence, in person or by proxy, of holders of Regent Common
Stock and Regent Series A Stock entitled to cast at least a majority of the
votes which all holders of Regent Common Stock and Regent Series A Stock are
entitled to cast on a particular matter will constitute a quorum for the purpose
of considering such matter.
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BENEFICIAL OWNERSHIP OF REGENT VOTING SECURITIES
The following table sets forth as of April 16, 1997 the amount and
percentage of the outstanding Regent Common Stock and Regent Series A Stock,
Regent's only voting securities, beneficially owned by (i) each person who is
known by Regent to own beneficially more than 5% of the outstanding Regent
Common Stock or the outstanding Regent Series A Stock, (ii) each director and
nominee for director, (iii) each executive officer named in the Summary
Compensation Table and (iv) all executive officers and directors of Regent as a
group.
<TABLE>
<CAPTION>
Common Stock Series A Stock
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Amount and Amount and
Nature of Nature of
Beneficial Percent Beneficial Percent
Name and Address Ownership(1) of Class(1) Ownership(1) of Class
- ---------------- ------------ ----------- ------------ --------
<S> <C> <C> <C> <C>
Abraham L. Bettinger 82,750(2) 6.6% 4,500(3) 1.0%
845 3rd Avenue
New York, NY 10022
O. Francis Biondi 132,125(4) 10.5 8,433 1.8
P.O. Box 1347
Wilmington, DE 19801-1347
Leonard S. Dwares(5) 1,578(6) * 200 *
Lance T. Funston(5) 48,730(7) 3.8 26,400 5.7
2044 Spruce Street
Philadelphia, PA 19103
Edward Parnes, Ph.D.(5) 14,995(8) 1.2 2,000 *
Harvey Porter(5) 127,806(9) 10.2 11,833(10) 2.6
c/o Regent National Bank
1430 Walnut Street
Philadelphia, PA 19102
Robert J. Reichlin(5) 13,471(11) 1.1 5,000 1.1
David W. Ring 164,308(12) 13.0 12,433 2.7
c/o Regent National Bank
1430 Walnut Street
Philadelphia, PA 19102
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Barbara H. Teaford(5) 82,375(13) 6.6% 7,600 1.7%
c/o Regent National Bank
1430 Walnut Street
Philadelphia, PA 19102
Harry D. Zutz(5) 9,411(14) * -- --
Robert B. Goldstein --(15) -- -- --
John J. Lyons 200(16) * -- --
John W. Rose --(17) -- -- --
All Directors and
Executive Officers
as a Group (15 persons) 685,931(18) 50.7 86,581 19.5
</TABLE>
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* Less than 1%.
(1) Includes shares currently issued and outstanding and shares issuable
upon conversion of Regent Series A Stock and Regent Series E
Convertible Preferred Stock ("Regent Series E Stock"). For the purposes
of this table, each share of Regent Series A Stock and Regent Series E
Stock is treated as convertible into one share of Regent Common Stock.
(2) Includes 44,131 shares and 150 shares into which shares of Regent
Series E Stock are convertible owned by the Trustees of Bettinger &
Leech, Inc. Profit Sharing Plan of which Mr. Bettinger is a Trustee;
13,658 shares owned by the Trustees of Bettinger & Leech, Inc. Money
Purchase Plan of which Mr. Bettinger is a Trustee; 7,099 shares and 300
shares into which shares of Regent Series E Stock are convertible owned
by Bettinger & Leech Financial Corp. of which Mr. Bettinger is a
principal and 17,412 shares owned by Bettinger & Leech, Inc. of which
Mr. Bettinger is a principal. Mr. Bettinger shares voting and
investment power with respect to these shares.
(3) Includes 1,500 shares owned by the Bettinger & Leech, Inc. Profit
Sharing Plan and 3,000 shares owned by Bettinger & Leech Financial
Corp.
(4) Includes 11,166 shares owned by Mr. Biondi's wife as to which Mr.
Biondi disclaims beneficial ownership; 9,771 shares owned by O. Francis
Biondi, Trustee for Mary Biondi, daughter; 9,772 shares owned by
O. Francis Biondi, Trustee for O. Francis Biondi, Jr., son and 3,372
shares into which shares of Regent Series E Stock owned by Mr. Biondi
are convertible.
(5) Not standing for reelection as a director of Regent.
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(6) Includes 80 shares into which shares of Regent Series E Stock owned by
Mr. Dwares are convertible.
(7) Mr. Funston and his wife own all of the shares set forth in this table
as joint tenants with right of survivorship, and share voting and
investment power with respect to all such shares. Includes 10,560
shares into which shares of Regent Series E Stock owned by Mr. Funston
are convertible.
(8) Includes 800 shares into which shares of Regent Series E Stock owned by
Mr. Parnes are convertible.
(9) Of these shares, 46,200 shares are owned jointly by Mr. Porter and his
wife and 68,590 shares are owned by Mr. Porter's wife as trustee of
Trust Under Deed dated 2/28/94 for the benefit of Mr. Porter's wife.
Also includes 290 shares and 893 shares into which shares of Regent
Series E Stock owned by Mr. Porter and his wife, respectively, are
convertible. Mr. Porter and his wife share voting and investment power
with respect to all shares owned jointly.
(10) Of these shares, 2,900 shares are owned jointly by Mr. Porter and his
wife and 8,933 shares are owned by Mr. Porter's wife as trustee of
Trust Under Deed dated 2/28/94 for the benefit of Mr. Porter's wife.
Mr. Porter and his wife share voting and investment power with respect
to all shares owned jointly.
(11) Includes 500 shares into which shares of Regent Series E Stock owned by
Mr. Reichlin are convertible and 2,942 shares owned by
Zuckerman-Honickman, Inc., of which Mr. Reichlin is President.
(12) Includes 4,972 shares into which shares of Regent Series E Stock owned
by Mr. Ring are convertible.
(13) Mrs. Teaford and her husband, Stephen D. Teaford, own all of the shares
set forth in this table as tenants by the entireties and share voting
and investment power with respect to all such shares; includes 3,040
shares into which shares of Regent Series E Stock owned by Mr. and Mrs.
Teaford are convertible.
(14) Includes 2,942 shares owned by H.D. Zutz Insurance, Inc. Profit Sharing
Plan of which Mr. Zutz is a Trustee and shares voting and investment
power.
(15) Mr. Goldstein has an option to purchase 150,000 shares at $6.75 per
share, none of which options is currently exercisable or included in
the table. In addition, the table does not reflect the ownership by Mr.
Goldstein and his wife of 59,000 shares of Common Stock ("Bank Common
Stock") of Regent National Bank (the "Bank"), Regent's majority-owned
subsidiary, which are exchangeable for Regent Common Stock, at the
discretion of Regent, following the satisfaction of certain conditions
currently not satisfied, at the rate of 1.41666 shares of Regent Common
Stock for each share of Bank Common Stock held.
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(16) Mr. Lyons, a nominee for election as director at the Annual Meeting,
has an option to purchase 50,000 shares at $6.75 per share, none of
which options are currently exercisable or included in the table. In
addition, the table does not reflect the ownership by Mr. Lyons and his
wife of an aggregate of 29,412 shares of Bank Common Stock, which are
exchangeable for Regent Common Stock, at the discretion of Regent,
following the satisfaction of certain conditions not currently
satisfied, at the rate of 1.41666 shares of Regent Common Stock for
each share of Bank Common Stock held.
(17) The table does not reflect the ownership by Castle Creek Capital
Partners Fund-I, of which Mr. Rose, a nominee for election as director
at the Annual Meeting, is a general partner, of 110,000 shares of Bank
Common Stock, which are exchangeable for Regent Common Stock, at the
discretion of Regent, following the satisfaction of certain conditions
not currently satisfied, at the rate of 1.41666 shares of Regent Common
Stock for each share of Bank Common Stock held.
(18) Includes 86,581 shares of Regent Common Stock into which shares of
Regent Series A Stock owned by such persons are convertible and 24,977
shares of Regent Common Stock into which shares of Regent Series E
Stock owned by such persons are convertible. Such persons, in the
aggregate, hold options to purchase 225,000 shares at $6.75 per share,
none of which is currently exercisable or included in the table. In
addition, the table does not reflect the ownership by such persons of
an aggregate of 216,059 shares of Bank Common Stock, which are
exchangeable for Regent Common Stock, at the discretion of Regent,
following the satisfaction of certain conditions not currently
satisfied, at the rate of 1.41666 shares of Regent Common Stock for
each share of Bank Common Stock held.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires that the officers and directors of a corporation, such as Regent,
which has a class of equity securities registered under Section 12 of the
Exchange Act, as well as persons who own more than 10% of a class of equity
securities of such a corporation, file reports of their ownership of such
securities, as well as monthly statements of changes in such ownership, with the
corporation and the Securities and Exchange Commission (the "Commission"). Based
upon written representations received by Regent from its officers and directors,
and Regent's review of the monthly statements of ownership changes filed with
Regent by its officers, directors and 10% or greater stockholders during 1996,
Regent believes that all such filings required during 1996 were made on a timely
basis.
RELATIONSHIP WITH REGENT NATIONAL BANK
Regent was formed on December 22, 1986 and became a bank holding
company on June 2, 1989 when it completed the acquisition of all of the
authorized capital stock of the Bank, Regent's only subsidiary. Regent provides
banking services through the Bank and does not engage in any activities other
than banking activities.
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<PAGE>
On April 16, 1997, the Bank completed a private placement of 1,120,000
shares of Bank Common Stock for $8.50 per share, the approximate book value of
one share of Bank Common Stock as of the date of the private placement. The net
proceeds of approximately $9.1 million from this private placement were used to
restore the Bank's capital so that the Bank can comply with certain capital
ratios that the Bank has agreed to maintain pursuant to a written agreement with
the Office of the Comptroller of the Currency. Following the private placement,
Regent holds 1,275,000 shares of the 2,395,000 outstanding shares of Bank Common
Stock, or approximately 53% of the outstanding shares of Bank Common Stock. The
Bank Common Stock issued in the private placement is exchangeable for Regent
Common Stock at the rate of 1.41666 shares of Regent Common Stock for each share
of Bank Common Stock at the discretion of Regent at any time after (i) the
average of the closing bid price for Regent Common Stock has equaled or exceeded
$12.00 per share for 15 consecutive trading days and (ii) the Regent Common
Stock issuable in exchange for the privately placed Bank Common Stock has been
registered under the Securities Act of 1933 (the "Securities Act"). See "Certain
Transactions."
Two of Regent's four executive officers are executive officers of the
Bank and, following the Annual Meeting, three of Regent's six directors will be
directors of the Bank. Following the Annual Meeting, Regent and the Bank will
maintain a Coordinating Committee, consisting of two directors of Regent, O.
Francis Biondi and John J. Lyons, who will not also be directors of the Bank and
two directors of the Bank, Nelson C. Mishkin and Harry D. Zutz, who will not
also be directors of Regent, to review and approve all matters involving actual
or potential conflicts of interest between Regent and the Bank. The decisions of
the Coordinating Committee are binding on Regent and the Bank. In order for a
Regent-Bank transaction to be approved, Regent's Coordinating Committee members
must conclude that the transaction is fair and equitable to Regent and the
Bank's Coordinating Committee members must conclude that the transaction is fair
and equitable to the Bank. See "Election of Directors" for certain information
regarding Messrs. Biondi and Lyons. Certain information regarding Messrs.
Mishkin and Zutz is as follows:
Mr. Mishkin, age 54, has been a director of the Bank since 1993 and,
since 1976, has been a partner of the accounting firm of Gable, Peritz, Mishkin
& Co. Mr. Mishkin was Corporate Secretary and Director of Taxes for LCA
Corporation from 1973 to 1976. Mr. Mishkin held an accounting staff position
with Price Waterhouse from 1964 to 1972. He is a member of the American and
Pennsylvania Institutes of Certified Public Accountants.
Mr. Zutz, age 79, is Chairman of the Board of Harry David Zutz
Insurance, Inc. and Professional Liability Insurance, Inc., regional insurance
agencies with offices in Wilmington, Delaware and London, England. Harry David
Zutz Insurance, Inc., acting as insurance agent, has obtained various types of
insurance for Regent since June 1989. See "Certain Transactions." Mr. Zutz is a
member of Lloyds of London and a former director of the Bank of Delaware. He is
also involved with various real estate interests.
ELECTION OF DIRECTORS
Following the Annual Meeting, Regent's Board of Directors will consist
of six members. Each director will be elected for a one-year term and until his
successor has been elected. Unless otherwise
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<PAGE>
instructed, the proxy holders will vote the proxies received by them for the
election of the nominees named below, all of whom are currently directors of
Regent with the exception of John J. Lyons and John W. Rose. If a nominee
becomes unavailable for any reason, it is intended that the proxies will be
voted for a substitute nominee designated by the Board of Directors. The Board
of Directors has no reason to believe the nominees named will be unable to serve
if elected. Any vacancy occurring on the Board of Directors for any reason may
be filled by a majority of the directors then in office. A director so elected
shall hold office until the next annual meeting of stockholders and until such
director's successor shall have been elected. Shares held by brokers or nominees
as to which voting instructions have not been received from the beneficial owner
or person otherwise entitled to vote and as to which the broker or nominee does
not have discretionary voting power, i.e., broker nonvotes, will be treated as
not present and not entitled to vote for nominees for election as directors.
Abstentions from voting and broker nonvotes will have no effect on the election
of directors since they will not represent votes cast at the Annual Meeting for
the purpose of electing directors. The vote of at least a majority of the
stockholders present at the Annual Meeting in person or by proxy is required to
elect the directors.
The name of the nominees for directors of Regent, together with certain
information regarding them, are as follows:
Name Age
---- ---
David W. Ring 81
Robert B. Goldstein 56
Abraham L. Bettinger 61
O. Francis Biondi 64
John J. Lyons 57
John W. Rose 47
Mr. Ring is presently, and has been since December 1986, the Chairman
of the Board of Regent and a Director of Regent and the Bank. From December 1986
until April 1997, Mr. Ring also served as Chairman of the Board of the Bank. In
addition, from September 1996 until April 1997, Mr. Ring served as Chief
Executive Officer of Regent. Mr. Ring was formerly a consultant to, and a
director of, Larami Corporation, a toy manufacturer, a director and a control
stockholder of The First National Bank of Wilmington and a director of Integrity
Holding Co., its one-bank holding company. Mr. Ring was a director of the Port
Corporation of Philadelphia and was formerly a director and Corporate Vice
President of Tasty Baking Co.
Mr. Goldstein became Chairman, Chief Executive Officer and a Director
of the Bank and President, Chief Executive Officer and a Director of Regent in
April 1997. Mr. Goldstein is serving in these positions pursuant to an
Employment Agreement, dated April 7, 1997, among Regent, the Bank and Mr.
Goldstein which provides for an initial term of three years, such term to extend
automatically for additional periods of one year unless terminated by one of the
parties. See "Executive Compensation - Employment Agreements" for information
regarding the compensation of Mr. Goldstein. Mr. Goldstein succeeded John J.
Lyons who served as the Bank's President and Chief Executive Officer on a
interim basis following the resignation of Harvey Porter as the Bank's President
and Chief Executive Officer in
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<PAGE>
September 1996 until April 1997. Mr. Goldstein has been engaged in commercial
banking for over 30 years. From November 30, 1993 until immediately prior to his
employment by Regent and the Bank, Mr. Goldstein served as President and Chief
Executive Officer and a director of Lafayette American Bank in Bridgeport,
Connecticut. Mr. Goldstein served as Vice Chairman of the Board of National
Community Banks, Inc. in West Paterson, New Jersey from January 1992 to November
1993 and as President and a director of Crossland Savings Bank in Brooklyn, New
York from March 1991 to January 1992. From 1974 to 1991, Mr. Goldstein served as
Senior Vice President and then Executive Vice President of First Interstate Bank
of Texas in Houston, Texas. Mr. Goldstein is a director of HUBCO, Inc., a bank
holding company in Mahwah, New Jersey.
Mr. Bettinger has been a Director of Regent and the Bank since 1986,
and has served as Vice Chairman of the Board of Directors of the Bank since
1986. Mr. Bettinger also served as Vice Chairman of the Board of Directors of
Regent from 1986 to April 1997. Mr. Bettinger is the President of Bettinger &
Leech, Inc., a bank consulting firm, and Chairman of Bettinger & Leech Financial
Corp. Bettinger & Leech, Inc. has acted as a consultant to the Bank from the
commencement of operations in June 1989 through February 28, 1997. See "Certain
Transactions." From 1973 to 1981, Mr. Bettinger was a Senior Vice President of
Keefe, Bruyette & Woods, Inc., a bank consulting and investment banking firm,
where he headed the firm's bank consulting activities. Mr. Bettinger was
formerly a Vice President of Manufacturers Hanover Trust Company.
Mr. Biondi has been a Director of Regent since its inception. He has
been a senior partner with the law firm of Morris, Nichols, Arsht & Tunnell of
Wilmington, Delaware for more than five years, which firm performed professional
services for Regent during 1996. See "Certain Transactions." From 1974 to 1983,
he was a director and a control stockholder of The First National Bank of
Wilmington and Integrity Holding Co., its one-bank holding company. Mr. Biondi
is a former member of the State of Delaware Council on Banking, former President
of the Delaware Bar Association and former City Solicitor of Wilmington,
Delaware.
Mr. Lyons, a nominee for election as a Director of Regent, is a
professional banking consultant and served as President and Chief Executive
Officer of the Bank on an interim basis from September 1996 until April 1997
when Mr. Goldstein took office. Mr. Lyons became a director of the Bank in
September 1996 and will continue to serve as a director of the Bank until the
Bank's 1997 Annual Meeting of Stockholders. Mr. Lyons is the former President,
Chief Executive Officer and a director of Monarch Savings Bank and of Jupiter
Tequesta National Bank. Mr. Lyons is also a director of Bisys Group, Inc.
Mr. Rose, a nominee for election as a Director of Regent, has served as
Executive Vice President of F.N.B. Corporation, a multi-bank holding company
located in Hermitage, Pennsylvania, since March 1995. Since May 1996, Mr. Rose
has been a general partner and head of the investment committee of Castle Creek
Capital Partners Fund, a fund that invests in turnaround banking situations.
Since January 1992, Mr. Rose has been President and Owner of McAllen Capital
Partners, an investment banking firm that specialized in bank turnaround
investments and which has been inactive since the formation of Castle Creek
Capital Partners Fund. From May 1988 to January 1992, Mr. Rose was President of
Livingston Financial Group, an investor in turnaround opportunities in community
banks.
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<PAGE>
Executive Officers
On January 21, 1997, Joel E. Hyman became the Executive Vice President,
Treasurer and Chief Financial Officer of the Bank and Regent. See "Executive
Compensation -- Employment Agreements." From 1993 to 1996, Mr. Hyman served as
Executive Vice President, Chief Financial Officer and Treasurer of Farmers &
Mechanics Bank located in Middletown, Connecticut until that bank was acquired
by Citizens Financial Group. From 1990 to 1993, Mr. Hyman served as Senior Vice
President, Chief Financial Officer and Treasurer of Tolland Bank in Vernon,
Connecticut. Prior thereto, he served in various officer-level capacities in the
Financial Division of Connecticut Bank & Trust Co., Hartford, Connecticut from
1977 to 1990.
On April 14, 1997, Amanda V. Perkins began serving as Executive Vice
President and Chief Lending Officer of the Bank. The Bank does not have an
employment agreement with Ms. Perkins. From November 30, 1993 until immediately
prior to her engagement by the Bank, Ms. Perkins served as Executive Vice
President and Chief Credit Officer of Lafayette American Bank in Bridgeport,
Connecticut. Prior thereto, Ms. Perkins was Senior Vice President and Deputy
Chief Credit Officer of National Community Bank in West Paterson, New Jersey
from January 1992 to November 1993.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors of Regent met 14 times in 1996. During 1996,
each Director attended more than 75% of the meetings of the Board of Directors
and any Board of Directors committee on which such Director served with the
exception of Lance T. Funston, Robert J. Reichlin and Harry D. Zutz. During
1996, the standing committees of the Board of Directors were the Audit Committee
and, since October 6, 1996, the Compliance Committee. The Board of Directors did
not have a Compensation Committee in 1996.
The Audit Committee, the members of which were Leonard S. Dwares and
Nelson C. Mishkin during 1996, met 11 times in 1996. The Audit Committee has
responsibility for recommending to the Board of Directors the selection of
independent public accountants and meeting with such accountants to receive and
consider their recommendations, reviewing and examining the reports of internal
auditors, evaluating internal financial controls and reviewing the reports of
regulatory agencies having jurisdiction over Regent and the Bank. The Audit
Committee has the authority to retain independent legal counsel.
Messrs. Dwares and Mishkin, along with John J. Lyons, constitute the
Compliance Committee of the Bank appointed pursuant to the written agreement,
dated October 10, 1996, between the Bank and the Office of the Comptroller of
the Currency entered into pursuant to 12 U.S.C. (section)1818(b) (the
"Regulatory Agreement"). The Compliance Committee is responsible for monitoring
and coordinating the Bank's adherence to the provisions of the Regulatory
Agreement. The Compliance Committee met 10 times in 1996. In April 1997, Mr.
Goldstein succeeded Mr. Lyons as a member of the Compliance Committee.
Regent's Board of Directors does not have a Nominating Committee.
Regent's Board of Directors will consider nominees recommended by stockholders.
Nominations, including biographical information
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and a statement by the nominee that he or she is willing to serve if nominated,
should be submitted to Regent's secretary by October 1 for consideration for
proposal at Regent's next annual meeting of stockholders.
Commencing with the Annual Meeting, Regent and the Bank will maintain a
Coordinating Committee to review and approve all matters involving actual or
potential conflicts of interest between Regent and the Bank. See "Relationship
with Regent National Bank." Regent's Board of Directors currently anticipates
that, following the Annual Meeting, the members of Regent's Audit Committee will
consist of the non-employee Directors of Regent and that the entire Board of
Directors of Regent will serve as Regent's Compensation Committee. The
Compensation Committee will determine employment, promotion and remuneration
arrangements for executive officers and directors, including the approval of all
executive incentive plans and grants thereunder.
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EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the compensation for the years ended
December 31, 1996, 1995 and 1994 of (i) each person who served at any time
during 1996 as the chief executive officer of Regent and (ii) each other
executive officer of Regent and the Bank whose salary exceeded $100,000 in the
year ended December 31, 1996. No bonuses were paid to executive officers during
1996.
Summary Compensation Table
-------------------------------
Annual Compensation
-------------------------------
Name and Principal Position Year Salary($)
- --------------------------- ---- ---------
John J. Lyons, President and Chief 1996 $ 51,923
Executive Officer of the Bank (1)
Harvey Porter, President and Chief 1996 $159,872
Executive Officer of Regent and 1995 175,672
the Bank (2) 1994 164,479
David W. Ring, Chief Executive 1996 $ 55,500
Officer of Regent (3) 1995 65,000
1994 65,000
Barbara H. Teaford, Executive Vice 1996 $110,692
President and Secretary of Regent 1995 118,939
and the Bank (4) 1994 109,300
- ----------
(1) Mr. Lyons served as President and Chief Executive Officer of the Bank
from September 1996 until April 14, 1997 when Mr. Goldstein became
Chairman and Chief Executive Officer of the Bank. Mr. Lyons was
compensated at the rate of $180,000 per year. Mr. Lyons is a nominee
for election as a Director of Regent at the Annual Meeting.
(2) Includes salary payment to Mr. Porter after his resignation in
September 1996 for reasons of ill health. Mr. Porter will receive
salary payments of $10,433 per month from the Bank through September
1997.
(3) Mr. Ring served as Chief Executive Officer of Regent from September
1996 until April 14, 1997 when Mr. Goldstein became President and Chief
Executive Officer of Regent.
(4) Ms. Teaford became President of the Bank on April 14, 1997.
-11-
<PAGE>
There is no other annual compensation or long-term compensation that is
required to be disclosed in the foregoing table.
Employment Agreements
Compensation for Mr. Goldstein is paid pursuant to an employment
agreement, the initial term of which is three years, and thereafter
automatically extends on each anniversary of the effective date of his
employment, which will commence for this purpose upon the receipt of all
approvals of his employment required under applicable federal banking
regulations, for successive one-year periods, subject to prior written notice of
termination by Mr. Goldstein or the Bank, in each case no later than 90 days
prior to the expiration of the then current term. Mr. Goldstein will receive an
annual base salary of $200,000, which increases 15% each year, an annual bonus
ranging from 25% to 50% of his annual base salary depending upon achievement of
specified performance objectives, a signing bonus of $50,000, options to
purchase 150,000 shares of Regent Common Stock and various other benefits,
including the use of a Mercedes Benz 420E automobile and a housing allowance of
$4,000 per month to assist Mr. Goldstein in establishing a residence in the
Greater Philadelphia area. Mr. Goldstein is also entitled to change in control
benefits of 2.99 times his annual salary and bonus in the event that, during the
270 days prior to or the 180 days subsequent to a Change in Control of Regent,
or of the Bank if the Bank is a successor to Regent, Mr. Goldstein (i) resigns
for Good Reason or within 180 days after a Change in Control, (ii) is terminated
without Cause or (iii) dies or becomes subject to a Permanent Disability, in
each case as such capitalized term is defined in the agreement. The agreement
with Mr. Goldstein provides for the continued payment of Mr. Goldstein's salary
and provision of life, health and disability coverage for Mr. Goldstein and his
eligible dependents for the lesser of the initial term of his employment, as
provided in the agreement, or three years, in the event that the Bank terminates
Mr. Goldstein's employment other than for Cause, as defined in the agreement.
Compensation for Ms. Teaford is paid pursuant to an employment
agreement, the current term of which expires in May 1998, and thereafter
automatically extends for successive one-year periods, subject to prior written
notice of termination by Ms. Teaford or Regent, in each case, no later than 90
days prior to expiration of the then current term. The agreement with Ms.
Teaford requires continuation of compensation for one year to the executive's
spouse, issue or estate in the event of death, but does not provide for
severance payments.
Compensation for Joel E. Hyman, who became Executive Vice President,
Chief Financial Officer and Treasurer of Regent and the Bank in January 1997, is
paid pursuant to an employment agreement dated as of January 21, 1997 among
Regent, the Bank and Mr. Hyman, the initial term of which is three years, and
thereafter automatically extends on each anniversary of his employment for
successive one-year periods, subject to prior written notice of termination by
Mr. Hyman or the Bank, in each case no later than 90 days prior to the
expiration of the then current term. The agreement provides for an initial
annual salary at the rate of $110,000, options to purchase 25,000 shares of
Regent Common Stock and various other benefits. Mr. Hyman is also entitled to
change in control benefits of 2.99 times his annual salary plus any
discretionary bonus paid during the preceding 12 months in the event that,
during the 270 days prior to or the 180 days subsequent to a Change in Control
of Regent, or of the Bank if the Bank is a successor to Regent, Mr. Hyman
resigns for Good Reason, is terminated without Cause or dies or becomes subject
to
-12-
<PAGE>
Permanent Disability, in each case as such capitalized term is defined in the
agreement. The agreement with Mr. Hyman provides for the continuation of
Mr. Hyman's salary and employee benefits for the term of employment in the event
that the Bank terminates Mr. Hyman's employment other than for Cause, as defined
in the agreement.
During the year ended December 31, 1996, Regent did not grant any stock
options to any executive officer named in the Summary Compensation Table, nor
did any such officer exercise any options held during 1996. At December 31,
1996, no executive officer named in the Summary Compensation Table held any
stock option or warrant to purchase any securities of Regent.
Director Compensation
Following the Annual Meeting, Regent will pay its non-employee
directors an annual retainer of $7,500, and the Bank will pay its non-employee
directors an annual retainer of $3,600 and a fee of $350 for each Board meeting
attended. Prior to the Annual Meeting, neither Regent nor the Bank paid any
compensation to their non-employee directors.
Report of the Compensation Committee of Regent Bancshares Corp.
1996
During 1996, Regent's Board of Directors established the compensation
of the executive officers of Regent and the Bank. Harvey Porter served as Chief
Executive Officer of Regent and the Bank from January 1, 1996 until September
1996, when Mr. Porter resigned for reasons of ill health. Thereafter, Mr. Ring
served as Chief Executive Officer of Regent and Mr. Lyons served as President
and Chief Executive Officer of the Bank. Mr. Lyons, a professional bank
consultant, was compensated on the basis of a consulting fee of $15,000 per
month. Mr. Ring received compensation of $55,500 for serving as Chairman of the
Board of Regent and the Bank. Mr. Porter and Ms. Teaford were compensated on the
basis of employment agreements first entered into in 1989. In September 1996,
because of the continuing losses incurred by Regent, the aggregate annual
compensation of Regent's executive officers was reduced by $180,000. In
addition, because of Regent's losses, no bonuses or other forms of incentive
compensation were paid to any of Regent's executive officers in 1996.
1997
Since January 1, 1997, Regent has retained a new Chairman and Chief
Executive Officer, a new President, a new Chief Financial Officer and a new
Chief Lending Officer. Regent's Board of Directors has established compensation
policies for its new executive officers intended to further the earnings of
Regent and facilitate securing, retaining and motivating management employees of
high caliber and potential. Regent's executive compensation will consist of
three components: base salary, annual incentive awards based on the performance
of Regent and the Bank and long-term incentive awards. The persons eligible to
receive awards under these policies will be the officers and other employees of
Regent and the Bank who are in positions in which their decisions, actions and
counsel significantly impact upon the short and long-term goals and strategies
of Regent.
-13-
<PAGE>
Regent intends to establish base salaries for its officers that are at
the median rate paid by banks in Regent's peer group. Regent anticipates that it
will pay an annual incentive bonus to Mr. Goldstein, as Chief Executive Officer,
based on the attainment of objectives specified in his employment agreement, and
to other officers on a discretionary basis depending upon the achievement of a
mix of corporate and individual performance goals. Regent intends to grant stock
options to its officers based on their level of responsibility and support for
Regent's long-term strategic objectives. By providing its officers with an
opportunity to benefit from a long-term increase in the value of Regent's Common
Stock, Regent believes it will align the interests of it officers and employees
with the interests of Regent's stockholders and tie a significant portion of
executive compensation to stockholder returns.
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), generally disallows a tax deduction to public companies for
compensation in excess of $1 million paid to the Chief Executive Officer and the
other four most highly compensated individuals who are executive officers at the
end of the year. Qualifying performance-based compensation is not subject to the
deduction limit if certain requirements are met. While it is Regent's policy to
preserve corporate tax deductions by qualifying compensation paid over $1
million to named executive officers, Regent also intends to maintain the
flexibility to approve compensation arrangements that it deems to be in the best
interests of Regent and its stockholders but which may not always qualify for
full tax deductibility.
Abraham L. Bettinger Harvey Porter
O. Francis Biondi Robert J. Reichlin
Leonard S. Dwares David W. Ring
Lance T. Funston Barbara H. Teaford
Edward Parnes Harry D. Zutz
CERTAIN TRANSACTIONS
On October 7, 1996, in connection with the Bank's capital plan required
by the Regulatory Agreement with the OCC, Regent sold an aggregate of 148,148
shares of Regent Common Stock at $6.75 per share to four Regent Directors in a
private placement pursuant to Section 4(2) of the Securities Act as follows:
Harvey Porter (37,037 shares), David W. Ring (59,259 shares), Abraham L.
Bettinger (14,185 shares) and O. Francis Biondi (37,037 shares). The aggregate
net proceeds of $1 million from this sale were contributed to the capital of the
Bank.
Stephen D. Teaford, the husband of Barbara H. Teaford, the President of
the Bank, is a partner in the law firm of Duane, Morris & Heckscher, to which
Regent and the Bank paid legal fees of approximately $403,000 in 1996.
During 1996, Regent paid insurance premiums of approximately $114,000
to Harry David Zutz Insurance, Inc., of which Harry D. Zutz, a director of
Regent and the Bank, is Chairman of the Board and a principal stockholder.
-14-
<PAGE>
During 1996, Regent paid legal fees of approximately $87,000 to the law
firm of Morris, Nichols, Arsht & Tunnell, of which firm, O. Francis Biondi, a
director of Regent, has been a senior partner for many years.
As of December 31, 1996, the Bank had outstanding loans to various
officers, directors and advisory directors of Regent and the Bank and their
families and various entities of which such persons are directors and officers.
Such loans were made in the ordinary course of the Bank's business, were made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with unrelated third parties,
and did not involve more than the normal risk of collectibility or present other
unfavorable features, except for the Funston loan described below.
Regent director Lance T. Funston, who is not standing for reelection at
the Annual Meeting, and his wife are indebted to the Bank pursuant to a loan the
outstanding principal amount of which was approximately $704,000 at April 30,
1997. The Funstons' borrowing originated at $850,000 in November 1989 as a
secured term loan for business purposes. The loan is secured by a second
mortgage lien against their personal residence for which equity available to the
Bank (based on a 1994 MAI Appraisal) exceeded $1.2 million. The interest rate,
collateral margin and balance requirements conform to normal Bank standards.
On March 31, 1997, Joel E. Hyman, Executive Vice President, Chief
Financial Officer and Treasurer of Regent and the Bank, and his wife jointly
purchased 8,182 shares of Regent Series A Stock for an aggregate purchase price
of $53,183.
On April 16, 1997, the Bank sold 1,120,000 shares of Bank Common Stock
at a price of $8.50 per share in a private placement for which Keefe, Bruyette &
Woods, Inc. served as the Bank's Placement Agent. The purchasers included Robert
B. Goldstein, Chairman of the Board, Chief Executive Officer and a Director of
the Bank and President, Chief Executive Officer and a Director of Regent since
April 14, 1997, and his wife, who purchased 59,000 shares of Bank Common Stock
for an aggregate purchase price of $501,500; John J. Lyons, President, Chief
Executive Officer and a Director of the Bank from September 1996 until April 14,
1997 and a nominee for election as a Director of Regent at the Annual Meeting,
and his wife, who purchased an aggregate of 29,412 shares of Bank Common Stock
for an aggregate purchase price of $250,002; Joel E. Hyman, and his wife, who
purchased an aggregate of 17,647 shares of Bank Common Stock for an aggregate
purchase price of $150,000 and Castle Creek Capital Partners Fund-I, of which
John W. Rose, a nominee for election as a Director of Regent at the Annual
Meeting, is a general partner, which purchased 110,000 shares of Bank Common
Stock for an aggregate purchase price of $935,000.
-15-
<PAGE>
ADOPTION OF THE
1997 EQUITY INCENTIVE PLAN
Description of the Plan
The Board of Directors of Regent adopted the Plan on March 26, 1997,
subject to approval by the holders of Regent Common Stock and Regent Series A
Stock at the Annual Meeting. The purpose of the Plan is to further the growth,
development and financial success of Regent and the Bank by enhancing the
ability of Regent and the Bank to attract and retain highly qualified directors,
officers, employees and consultants, to compensate them for their services to
Regent and the Bank, as the case may be, and, in so doing, to strengthen the
alignment of the interests of such individuals with the interests of Regent's
stockholders through ongoing ownership of Regent's Common Stock.
The Plan provides for the grant of non-qualified stock options (the
"Options") to purchase an aggregate of 380,000 shares of Regent Common Stock to
directors, officers, employees and consultants of Regent and/or the Bank. The
number of persons who are eligible to participate in the Plan is currently 15.
The following table sets forth grants of Options made under the Plan as
of April 30, 1997, subject to stockholder approval of the Plan at the Annual
Meeting:
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
Exercise Price Number of Shares
Name and Position Per Share Underlying Options
- ----------------- --------- ------------------
<S> <C> <C>
Robert B. Goldstein, President and Chief $6.75 150,000
Executive Officer of Regent; Chairman
of the Board and Chief Executive
Officer of the Bank
Joel E. Hyman, Executive Vice President, 6.75 25,000
Chief Financial Officer and Treasurer
of Regent and the Bank
Executive Officers as a Group(1) 6.75 175,000
Non-Executive Director Group 6.75 50,000
Non-Executive Officer Employee 6.75 45,000
Group
</TABLE>
- ----------
(1) In addition to the grants shown in the foregoing table, Options to
purchase an aggregate of 50,000 shares of Regent Common Stock at a per
share exercise price of $6.75 have been reserved for grant to Barbara
H. Teaford and Amanda V. Perkins, subject to the satisfaction of
certain conditions precedent.
-16-
<PAGE>
Appropriate adjustments to outstanding Options and to the number or
kind of shares subject to the Plan are provided for in the event of a stock
split, reverse stock split, stock dividend, share combination or
reclassification and certain other types of corporate transactions involving
Regent, including a merger or a sale of all or substantially all of the assets
of Regent.
The Plan is currently administered by the Board of Directors of Regent.
The Board of Directors of Regent may, from time to time, appoint a committee to
administer the Plan. The Board of Directors or such committee (collectively, the
"Board") has the power to determine the persons to whom Options will be granted,
the number of Options to be granted, the timing of such grant and the terms of
exercise of such Options, interpret the Plan, decide all questions of fact
arising in its application and make all other determinations necessary or
advisable for the administration of the Plan.
Options
The exercise price of Options granted under the Plan will be set by the
Board and may not be less than 100% of the fair market value per share of Regent
Common Stock on the date that the Option is granted, but in no event less than
the par value of the Common Stock.
Options will be evidenced by written agreements in such form not
inconsistent with the Plan as the Board shall approve from time to time. Each
agreement will state the period or periods of time within which the Option may
be exercised. The Board may accelerate the exercisability of any Options upon
such circumstances and subject to such terms and conditions as the Board deems
appropriate. Unless the Board accelerates exercisability, or the terms of an
employment agreement among Regent, the Bank and the particular individual
provide otherwise, no Option that is unexercisable at the time of the optionee's
termination of service as a director, officer, employee or consultant of Regent
or the Bank may thereafter become exercisable. No Option may be exercised after
five years from the date of grant. If an Option expires or is canceled for any
reason without having been fully exercised or vested, the number of shares
subject to such Option that had not been purchased or become vested may again be
made subject to an Option under the Plan.
The option price must be paid in full at the time of exercise unless
otherwise determined by the Board. Payment must be made in cash, in shares of
Regent Common Stock valued at their then fair market value, or a combination
thereof, as determined in the discretion of the Board. It is the policy of the
Board that any taxes required to be withheld must also be paid at the time of
exercise. The Board may, in its discretion, allow an optionee to enter into an
agreement with Regent's transfer agent or a brokerage firm of national standing
whereby the optionee will simultaneously exercise the Option and sell the shares
acquired thereby and either Regent's transfer agent or the brokerage firm
executing the sale will remit to Regent from the proceeds of sale the exercise
price of the shares as to which the Option has been exercised as well as the
required amount of withholding.
Amendment or Termination
The Plan will remain in effect until all Options granted under the Plan
have been satisfied by the issuance of shares, except that no Options may be
granted under the Plan after March 25, 2007. The Board
-17-
<PAGE>
may terminate, modify, suspend or amend the Plan at any time, subject to any
required stockholder approval or any stockholder approval that the Board may
deem to be advisable for any reason, such as for the purpose of obtaining or
retaining any statutory or regulatory benefits under tax, securities or other
laws or satisfying any applicable stock exchange listing requirements. No
modification, amendment or termination of the Plan will alter or impair any
rights or obligations under any outstanding Option without the consent of the
optionee. No Option may be granted during any period of suspension nor after
termination of the Plan.
Federal Income Tax Consequences
The Plan is not a qualified plan under Section 401(a) of the Code and
the Options are not intended to qualify as incentive stock options within the
meaning of Section 422 of the Code. The following description, which is based on
existing laws, sets forth generally certain of the federal income tax
consequences of Options granted under the Plan. This description may differ from
the actual tax consequences of participation in the Plan.
An optionee will not recognize income for federal income tax purposes
upon the receipt of a Option, nor will Regent be entitled to any deduction on
account of such grant. Such optionee will recognize ordinary taxable income for
federal income tax purposes at the time of exercise of the Option in the amount
by which the fair market value of such shares then exceeds the option price
times the number of shares acquired. When the optionee disposes of the shares
acquired upon exercise of the Option, the optionee will generally recognize
capital gain or loss equal to the difference between (i) the amount received
upon disposition of the shares and (ii) the sum of the option price and any
amount included in the optionee's income when the Option was exercised. Such
gain will be long-term or short-term depending upon whether the shares were held
for at least one year after the date of exercise.
Under current law, any gain realized by an optionee, other than
long-term capital gain, is taxable at a maximum federal income tax rate of
39.6%. Long-term capital gain is taxable generally at a maximum federal income
tax rate of 28%.
Regent generally will be entitled to a tax deduction, subject to the
provisions of Section 162(m) of the Code, in connection with Options under the
Plan in an amount equal to the ordinary income realized by the optionee at the
same time and in the same amount as the optionee is considered to have realized
compensation by reason of exercise of the Option.
Vote Required
Adoption of the Plan will require the affirmative vote of the holders
of a majority of the outstanding shares of Regent Common Stock and Regent Series
A Stock present in person or represented by proxy at the Annual Meeting.
Abstentions are considered shares of stock present in person or represented by
proxy at the meeting and entitled to vote and are counted in determining the
number of votes necessary for a majority. An abstention will therefore have the
practical effect of voting against adoption of the Plan because it represents
one fewer vote for adoption of the Plan. Broker non-votes are not considered
shares present in person or represented by proxy and entitled to vote on the
Plan and will have no ef-
-18-
fect on the vote. The Board of Directors recommends that the holders of Regent
Common Stock and Regent Series A Stock vote FOR the adoption of the Plan.
ANNUAL REPORT
A copy of Regent's Annual Report for 1996 is being mailed to Regent's
stockholders with this Proxy Statement.
INDEPENDENT PUBLIC ACCOUNTANTS
Pursuant to the Regulatory Agreement, the Bank retained a forensic
accounting firm to investigate whether there was any basis upon which it or
Regent should assert a claim against Arthur Andersen LLP ("Arthur Andersen") in
connection with auditing and consulting services rendered by Arthur Andersen to
Regent and the Bank in 1994, 1995 and 1996. Thereafter, Arthur Andersen
indicated to Regent that the existence of the investigation raised an issue as
to the independence of Arthur Andersen in the conduct of Arthur Andersen's
examination of Regent's financial statements for future periods unless Regent
and the Bank waived any such claim. Because of Regent's concern that Arthur
Andersen might resign, Regent's management, with the concurrence of Regent's
Audit Committee, began to interview public accounting firms that could serve as
Regent's certifying accountant in the event Arthur Andersen were to resign.
On December 17, 1996, Regent notified Arthur Andersen that Regent and
the Bank did not have sufficient information on which to base a decision on
whether or not to waive any claim against Arthur Andersen and thereby eliminate
any issues as to the independence of Arthur Andersen. On December 31, 1996,
Arthur Andersen submitted its resignation as Regent's independent public
accountants, and the resignation of Arthur Andersen was accepted by Regent's
Audit Committee effective as of such date.
Arthur Andersen's reports on the financial statements of Regent for the
fiscal years ended December 31, 1994 and December 31, 1995 contained no adverse
opinions or disclaimers of opinions and were not qualified or modified as to
uncertainty, audit scope or accounting principles. Arthur Andersen's report
dated March 22, 1995 on the consolidated financial statements of Regent for the
fiscal year ended December 31, 1994 was qualified as to an uncertainty related
to a dispute that arose in bankruptcy proceedings of a mortgage banking company
with which Regent had engaged in business transactions. This uncertainty was
resolved during 1995 and, as a result, Arthur Andersen's report dated May 23,
1996 on Regent's consolidated financial statements for the year ended December
31, 1995 did not include a reference to this matter. Also, Arthur Andersen's
report dated May 23, 1996 on Regent's consolidated financial statements for the
year ended December 31, 1995 contained the following "emphasis-of-the-matter"
paragraph:
"As discussed in Note 2, the Bank recognized a loss from operations for
the year ended December 31, 1995 primarily as a result of a substantial increase
in the provision for loan losses associated with its insurance premium finance
loan portfolio. As a result, the Bank did not meet the Tier 1 leveraged capital
-19-
<PAGE>
requirement established by the Office of the Comptroller of the Currency (OCC)
for the Bank under the OCC's discretionary authority. Additionally, on a
consolidated basis, the parent company's Tier 1 leveraged capital ratio amounts
to 4% which equals the minimum legal requirement. Failure to meet minimum
capital requirements can result in the regulators initiating certain actions
that, if undertaken, could have a direct material effect on the Bank's financial
statements. Such actions are presently uncertain, and, accordingly, no
adjustments have been made in the accompanying financial statements."
During the fiscal years ended December 31, 1994 and December 31, 1995,
and the subsequent interim periods preceding Arthur Andersen's resignation,
Arthur Andersen advised Regent of the following matters:
(i) In connection with the audit of Regent's consolidated
financial statements for the year ended December 31, 1995, Arthur Andersen
advised Regent that certain accounting controls were not adequate with respect
to Regent's automobile insurance premium finance ("IPF") loan portfolio. As a
result, Arthur Andersen advised Regent of the need for Arthur Andersen to
significantly expand the scope of its audit procedures related to Regent's IPF
loan portfolio. Arthur Andersen concluded, as a result of its audit, that
Regent's reserve for possible loan losses was not adequate and proposed an
adjustment to increase the reserve at December 31, 1995. Management of Regent
disagreed with Arthur Andersen's proposed reserve increase. Arthur Andersen
informed Regent that failure to resolve this issue would cause it to modify its
opinion on Regent's consolidated financial statements as of December 31, 1995;
however, this was not necessary as management agreed to increase the reserve for
possible loan losses related to the IPF loan portfolio.
The Audit Committee of Regent's Board of Directors discussed
this matter with Arthur Andersen and Regent authorized Arthur Andersen to
respond fully to the inquiries of the successor accountant concerning this
matter.
(ii) Arthur Andersen had advised Regent that it has come to
Arthur Andersen's attention as a result of discussions with Regent's management
and internal audit personnel that Regent's financial statements for the third
quarter of 1996, included in Regent's Form 10-Q Report filed on November 14,
1996, reflect a significant adjustment representing management's estimate of
erroneous charge-offs of seriously delinquent IPF loans due to mispostings of
return premium checks by the IPF loan servicer on similar delinquent IPF
accounts, thereby creating credit balances of $1,244,000 in the aggregate on all
charged-off IPF accounts. Since September 30, 1996, Regent had no unprocessed
claims for the return of these credit balances. To the extent Regent receives
valid claims for refunds of these credit balances, Regent will make appropriate
refunds thereof. At the time of Arthur Andersen's resignation, Arthur Andersen
had not completed its analysis of this adjustment, and had not reached any
conclusion as to the appropriateness of this adjustment. However, the amount of
such adjustment is material to the third quarter 1996 financial statements and
Regent's compliance with certain minimum capital requirements as of September
30, 1996 and the determination of the Bank's compliance with the Tier 1
leveraged capital requirement established by the OCC for the Bank as of October
31, 1996, and agreed to by the Bank's Board of Directors.
-20-
<PAGE>
Effective December 31, 1996, Regent, with the approval of Regent's
Audit Committee, retained the firm of Grant Thornton LLP to serve as Regent's
certifying accountant, and Grant Thornton LLP audited the Consolidated Financial
Statements of Regent for the year ended December 31, 1996.
A representative of Grant Thornton LLP will attend the Annual Meeting,
will have the opportunity to make a statement, if such representative desires to
do so, and will be available to respond to appropriate questions presented by
stockholders at the Annual Meeting.
Because of the extensive changes that will occur in the membership of
Regent's Board of Directors following the Annual Meeting, Regent's Board of
Directors has not selected or recommended stockholder approval of the
independent certified public accounting firm that will audit Regent's
Consolidated Financial Statements for the year ending December 31, 1997.
STOCKHOLDER PROPOSALS
Any holder of Regent Common Stock or Regent Series A Stock who, in
accordance with and subject to the provisions of the proxy rules of the
Commission, wishes to submit a proposal for inclusion in Regent's proxy
statement for its 1998 Annual Meeting of Stockholders must deliver such proposal
in writing to Regent's Secretary at Regent's principal executive offices at 1430
Walnut Street, Philadelphia, Pennsylvania 19102, not later than December 31,
1997.
OTHER PROPOSALS
The Board of Directors does not know of any matters to be presented for
consideration other than the matters described in the Notice of Annual Meeting,
but if any matters are properly presented, it is the intention of the persons
named in the accompanying proxy to vote on such matters in accordance with their
judgment.
By Order of the Board of Directors,
David W. Ring, Chairman of the Board
May 2, 1997
-21-
<PAGE>
REGENT BANCSHARES CORP.
COMMON STOCK AND SERIES A CONVERTIBLE PREFERRED STOCK
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 28, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby constitutes and appoints Barbara H. Teaford and
Joel E. Hyman, and each of them, proxies of the undersigned, with full power of
substitution, to vote all of the shares of Common Stock and Series A Convertible
Preferred Stock of Regent Bancshares Corp. ("Regent") which the undersigned may
be entitled to vote at the Annual Meeting of Stockholders of Regent to be held
at The Union League of Philadelphia, 140 South Broad Street, Philadelphia,
Pennsylvania 19102, on May 28, 1997 at 10:00 a.m., and at any adjournment,
postponement or continuation thereof, as follows:
(1) ELECTION OF DIRECTORS
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY
to vote for all nominees listed below
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.
DAVID W. RING, ROBERT B. GOLDSTEIN, ABRAHAM L. BETTINGER, O. FRANCIS
BIONDI, JOHN J. LYONS, JOHN W. ROSE
(2) ADOPTION OF THE 1997 EQUITY INCENTIVE PLAN. The Board of Directors
recommends a vote FOR this proposal.
/ / FOR / / AGAINST / / ABSTAIN
<PAGE>
(3) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting and any adjournment,
postponement or continuation thereof.
THIS PROXY WILL BE VOTED AS SPECIFIED. IF A CHOICE IS NOT SPECIFIED, THE PROXY
WILL BE VOTED FOR THE NOMINEES FOR DIRECTOR AND FOR ADOPTION OF THE 1997 EQUITY
INCENTIVE PLAN.
This proxy should be dated, signed
by the stockholder exactly as his
or her name appears below and
returned promptly to Continental
Stock Transfer & Trust Company in
the enclosed envelope. Persons
signing in a fiduciary capacity
should so indicate.
_____________________________(SEAL)
_____________________________(SEAL)
___________________________________
Dated: _______________,1997
THE FOLLOWING MATERIALS ARE BEING PROVIDED TO THE COMMISSION AND ARE NOT
INCLUDED WITH THE PROXY MATERIAL BEING DISTRIBUTED TO STOCKHOLDERS.
REGENT BANCSHARES CORP.
1997 EQUITY INCENTIVE PLAN
Regent Bancshares Corp., a New Jersey corporation and bank holding
company ("Regent"), hereby sets forth the Regent Bancshares Corp. 1997 Equity
Incentive Plan (the "Plan"). The Plan provides for the grant of non-qualified
stock options ("Options") to officers, directors, employees and consultants of
Regent or its subsidiary, Regent National Bank, a national banking association
(the "Bank").
1. Purpose. The purpose of the Plan is to further the growth,
development and financial success of Regent and the Bank by providing additional
incentives to officers, directors, employees and consultants of Regent and of
the Bank, which will enable them to participate directly in the growth of the
value of the capital stock of Regent. Regent intends that the Plan will
facilitate securing, retaining and motivating officers, directors, employees and
consultants of high caliber and potential. To accomplish these purposes, the
Plan provides a means whereby officers, directors, employees and consultants of
Regent and of the Bank may receive Options to purchase shares of Regent's Common
Stock, par value $.10 per share (the "Common Stock").
2. Administration.
(a) Administration by the Board. The Plan shall be administered by the
Board of Directors of Regent (the "Board"), which, in its discretion, may
appoint a committee (the "Committee") of at least two non-employee directors of
Regent, as that term is defined in Rule 16b-3(b)(3)(i) of the Securities
Exchange Act of 1934 (the "1934 Act") to administer the Plan in lieu of the
Board, subject to the ultimate authority of the Board to administer the Plan. If
the Board appoints a Committee, the Board, from time to time, may increase the
size of the Committee and appoint additional members thereof, remove members
(with or without cause) and appoint new members in substitution therefor, fill
vacancies, however caused, or remove all members of the Committee and thereafter
directly administer the Plan.
(b) Authority of the Board. The Board shall have full and final
authority, in its sole discretion, to interpret the provisions of the Plan and
to decide all questions of fact arising in its application and to make all other
determinations necessary or advisable for the administration of the Plan. All
decisions, determinations, and interpretations of the Board shall be final and
binding on all holders of Options granted under the Plan. The Board shall
determine the officers, directors, employees or consultants to whom Options are
to be granted, the type, amount, size, and terms of each such grant and the time
or times when Options are to be exercisable. Members of the Board shall not
receive any compensation for their services in administering the Plan, but all
expenses and liabilities they incur in connection with the administration of the
Plan shall be borne by Regent. No member of the Board shall be personally liable
for any action, determination
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or interpretation made in good faith with respect to the Plan, and all members
of the Board shall be fully protected and indemnified by Regent in respect to
any such action, determination or interpretation.
3. Grant of Options.
(a) Limitations. The shares of Common Stock issuable pursuant to
Options shall not exceed in the aggregate 380,000 shares of Common Stock. Such
shares may be authorized and unissued shares or shares issued and subsequently
reacquired by Regent. Except as otherwise provided herein, any shares subject to
an Option that for any reason expires or is terminated unexercised as to such
shares shall again be available under the Plan.
(b) Eligibility To Receive Options. All officers, directors, employees
and consultants of Regent and of the Bank shall be eligible to receive Options
under the Plan as determined by the Board in its sole discretion.
(c) Type of Options. Grants may be made at any time and from time to
time by the Committee in the form of Options to purchase shares of Common Stock.
Options granted hereunder are not intended to qualify as incentive stock options
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), or any amendment or substitute thereto.
(d) Option Agreements. Options for the purchase of Common Stock shall
be evidenced by written agreements in such form not inconsistent with the Plan
as the Committee shall approve from time to time. The Options granted hereunder
may be evidenced by a single agreement or by multiple agreements, as determined
by the Board in its sole discretion. Each option agreement shall contain in
substance the following terms and conditions:
(i) Option Price. Each option agreement shall set forth the
purchase price of the Common Stock purchasable upon the exercise of the Option
evidenced thereby. The purchase price of the Common Stock subject to an Option
shall be not less than 100% of the fair market value of such stock on the date
the Option is granted, as determined by the Board but in no event less than the
par value of such stock. For this purpose, fair market value on any date shall
mean the closing price of the Common Stock, as reported in The Wall Street
Journal, or if not so reported, as otherwise reported by the National
Association of Securities Dealers Automated Quotation ("Nasdaq"), or if the
Common Stock is not reported by Nasdaq, the fair market value shall be as
determined by the Board.
(ii) Exercise Term. Each Option shall state the period or
periods of time within which the Option may be exercised, in whole or in part,
as determined by the Board, provided that no Option shall be exercisable after
five years from the date of grant thereof. The Board shall have the power to
permit an acceleration of exercise terms upon such circumstances and subject to
such terms and conditions as the Board deems appropriate.
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(iii) Substitution of Options. Options may be granted under the
Plan from time to time in substitution for stock options held by officers,
directors, employees or consultants of other financial institutions or
corporations who are about to become, and who do concurrently with the grant of
such options become, officers, directors, employees or consultants of Regent or
of the Bank as a result of a merger or consolidation of such financial
institution or corporation with Regent or the Bank, or the acquisition by Regent
or the Bank of the assets of such financial institution or corporation, or the
acquisition by Regent or the Bank of stock of such financial institution or
corporation. The terms and conditions of the substitute Options so granted may
vary from the terms and conditions set forth in this Section 3 to such extent as
the Board at the time of grant may deem appropriate to conform, in whole or in
part, to the provisions of the stock options in substitution for which Options
are granted.
4. Date of Grant. The date on which an Option shall be deemed to have
been granted under the Plan shall be the date of the Board's authorization of
the Option or such later date as may be determined by the Board at the time the
Option is authorized. Notice of the determination shall be given to each
individual to whom an Option is so granted within a reasonable time after the
date of such grant.
5. Manner of Exercise. Options may be exercised in whole or in part,
from time to time, by giving written notice of exercise to the Chief Financial
Officer of Regent, specifying the number of shares to be purchased. The purchase
price of the shares with respect to which an Option is exercised shall be
payable in full with the notice of exercise in cash, Common Stock at fair market
value, or a combination thereof, as the Board may determine from time to time
and subject to such terms and conditions as may be prescribed by the Board for
such purpose. The Board may also, in its discretion and subject to prior
notification to Regent by an optionee, permit an optionee to enter into an
agreement with Regent's transfer agent or a brokerage firm of national standing
whereby the optionee will simultaneously exercise the Option and sell the shares
acquired thereby through Regent's transfer agent or such a brokerage firm and
either Regent's transfer agent or the brokerage firm executing the sale will
remit to Regent from the proceeds of sale the exercise price of the shares as to
which the Option has been exercised. Regent shall not be required to issue
fractional shares on exercise of an Option.
6. Rights upon Termination of Service. In the event an optionee ceases
to be an officer, director, employee or consultant of Regent or the Bank for any
reason other than death, disability (within the meaning of Section 72(m)(7) of
the Internal Revenue Code or any substitute therefor) or retirement, the
optionee shall have the right to exercise the Option during its term within a
period of three months after such termination to the extent that the Option was
exercisable at the time of termination, or within such other period, and
subject to such terms and conditions, as may be specified by the Board. In the
event that an optionee dies, retires or becomes disabled prior to the expiration
of his or her Option and without having fully exercised such Option, the
optionee or the optionee's successor shall have the right to exercise the Option
during its term within a period of one year after such termination due to death,
retirement or disability to the extent that the Option was exercisable at the
time of such termination or within such other period, and subject to such terms
and conditions, as may be specified by the Board. As used in this Section 6,
"retirement" means a termination of employment by reason of an optionee's
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retirement at or after the optionee's earliest permissible retirement date
pursuant to and in accordance with his or her employer's regular retirement plan
or personnel practices.
7. General Restrictions. Each Option granted under the Plan shall be
subject to the requirement that if at any time the Board shall determine that
(i) the listing, registration, or qualification of the shares of Common Stock
subject or related thereto upon any securities exchange or under any state or
federal law, or (ii) the consent or approval of any government regulatory body,
or (iii) the satisfaction of any tax withholding obligation or (iv) an agreement
by the recipient of an Option with respect to the disposition of shares of
Common Stock is necessary or desirable as a condition of or in connection with
the granting of such Option or the issuance or purchase of shares of Common
Stock thereunder, such Option shall not be consummated in whole or in part
unless such listing, registration, qualification, consent, approval, or
agreement shall have been effected or obtained free of any conditions not
acceptable to the Board.
8. Rights of a Stockholder. The recipient of any Option under the Plan,
unless otherwise provided by the Plan, shall have no rights as a stockholder
unless and until certificates for shares of Common Stock are issued and
delivered to such recipient.
9. Right to Terminate Employment. Nothing contained in the Plan or in
any option agreement entered into pursuant to the Plan shall confer upon any
optionee the right to continue in the employment or service of Regent or the
Bank or affect any right that Regent or the Bank may have to terminate the
service or employment of such optionee.
10. Withholding. Whenever Regent proposes or is required to issue or
transfer shares of Common Stock under the Plan, Regent shall have the right to
require the recipient to remit to Regent an amount sufficient to satisfy any
federal, state or local withholding tax requirements prior to the delivery of
any certificate or certificates for such shares. If and to the extent authorized
by the Board, in its sole discretion, an optionee may make an election, by means
of a form of election to be prescribed by the Board, to have shares of Common
Stock that are acquired upon exercise of an Option withheld by Regent or to
tender other shares of Common Stock or other securities of Regent owned by the
optionee to Regent at the time of exercise of an Option to pay the amount of tax
that would otherwise be required by law to be withheld by Regent as a result of
any exercise of an Option. Any such election shall be irrevocable and shall be
subject to termination by Regent, in its sole discretion, at any time. Any
securities so withheld or tendered will be valued by the Board at the fair
market value thereof as of the date of exercise.
11. Assignability. Options under the Plan shall be assignable and
transferable by the recipient thereof. Regent shall not be required to recognize
any such transfer or assignment until written notice thereof, signed by the
holder of the Option, is delivered to Regent. Unless otherwise transferred or
assigned, the Option shall be exercisable only by the recipient or by the
recipient's guardian or legal representative during the life of the recipient.
12. Non-Uniform Determinations. Determinations by the Board under
the Plan (including without limitation determinations of the persons to receive
Options, the form, amount and timing of such grants, the terms and provisions of
Options, and the agreements evidencing
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same) need not be uniform and may be made selectively among persons who receive,
or are eligible to receive, grants of Options under the Plan whether or not such
persons are similarly situated.
13. Adjustments.
(a) Changes in Capitalization. Subject to any required action by
the stockholders of Regent, the number of shares of Common Stock covered by each
outstanding Option and the number of shares of Common Stock that have been
authorized for issuance under the Plan but as to which no Options have yet been
granted or which have been returned to the Plan upon cancellation or expiration
of an Option, as well as the price per share of Common Stock covered by each
such outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by Regent;
provided, however, that conversion of any convertible securities of Regent shall
not be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive. Except as expressly provided herein, no
issuance by Regent of shares of stock of any class, or securities convertible
into shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of Common
Stock subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of Regent or the Bank, all outstanding Options will
terminate immediately prior to the consummation of such proposed action, unless
otherwise provided by the Board. The Board may, in the exercise of its
discretion in such instances, declare that any Option shall terminate as of a
date fixed by the Board and give each Option holder the right to exercise his or
her Option as to all or any part of the shares of Common Stock covered by the
Option, including shares as to which the Option would not otherwise be
exercisable.
(c) Sale or Merger. In the event of a proposed sale of all or
substantially all of the assets of Regent or the Bank, or the merger of Regent
or the Bank with or into another corporation, the Board, in the exercise of its
sole discretion, may take such action as it deems desirable, including, but not
limited to: (i) causing an Option to be assumed or an equivalent option to be
substituted by the successor corporation or a parent or subsidiary of such
successor corporation, (ii) providing that each Option holder shall have the
right to exercise his or her Option as to all of the shares of Common Stock
covered by the Option, including shares as to which the Option would not
otherwise be exercisable or (iii) declaring that an Option shall terminate at a
date fixed by the Board provided that the Option holder is given notice and
opportunity to exercise the then exercisable portion of his or her Option prior
to such date.
14. Rights Upon Change in Control. In the event of a Change of Control,
all Options granted pursuant to the Plan shall become immediately exercisable as
to all the shares covered thereby, notwithstanding any other provision contained
herein or in the option agreements. As
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used herein, "Change of Control" shall mean (A) the acquisition of shares of
Regent (or of the Bank if the Bank is a successor to Regent) by any "person" or
"group" (as such terms are used in Rule 13d-3 under the 1934 Act as now or
hereafter amended) in a transaction or series of transactions, but excluding any
exchange of common stock of the Bank for Common Stock of Regent, that result in
such person or group directly or indirectly first owning beneficially more than
35% of Regent's Common Stock (or of the Bank if the Bank is a successor to
Regent) after May 28, 1997, (B) the consummation of a merger or other business
combination after which the holders of voting capital stock of Regent and the
Bank do not collectively own 50% or more of the voting capital stock of the
entity surviving such merger or other business combination or the sale, lease,
exchange or other transfer in a transaction or series of transactions of all or
substantially all of the assets of the Bank, but excluding therefrom the sale
and reinvestment of the Bank's investment portfolio or (C) as the result of or
in connection with any cash tender offer or exchange offer, merger or other
business combination, sale of assets or contested election of directors or any
combination of the foregoing transactions (a "Transaction"), other than a
Transaction between the Bank and Regent, the persons who constituted a majority
of the members of the Board and the Board of Directors of the Bank
(collectively, the "Boards") on May 28, 1997 and persons whose election as
members of the Boards was approved by such members then still in office or whose
election was previously so approved after May 28, 1997, but before the event
that constitutes a Change of Control, no longer constitute such a majority of
the members of the Boards then in office. A Transaction constituting a Change in
Control shall only be deemed to have occurred upon the closing of the
Transaction.
15. Amendment, Suspension or Termination of the Plan. This Plan may be
wholly or partially amended or otherwise modified, suspended or terminated at
any time or from time to time by the Board, subject to any required stockholder
approval or any stockholder approval that the Board may deem advisable for any
reason, such as for the purpose of obtaining or retaining any statutory or
regulatory benefits under tax, securities or other laws or satisfying any
applicable stock exchange listing requirements. The Board may not, without the
consent of the holder of an Option, alter or impair any Option previously
granted under the Plan, except as specifically authorized herein.
16. Reservation of Shares. Regent, during the term of the Plan, will at
all times reserve and keep available such number of shares as shall be
sufficient to satisfy the requirements of the Plan. Inability of Regent to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by Regent's counsel to be necessary to the lawful issuance and sale of
any shares hereunder, shall relieve Regent of any liability for the failure to
issue or sell such shares as to which such requisite authority shall not have
been obtained.
17. Effect on Other Plans. Participation in the Plan shall not affect
an optionee's eligibility to participate in any other benefit or incentive plan
of Regent or the Bank. Any Options granted pursuant to the Plan shall not be
used in determining the benefits provided under any other plan of Regent or of
the Bank unless specifically provided.
18. Duration of the Plan. The Plan shall remain in effect until all
Options granted under the Plan have been satisfied by the issuance of shares,
but no Option shall be granted after March 26, 2007.
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19. Forfeiture for Dishonesty. Notwithstanding anything to the contrary
in the Plan, if the Board finds, by a majority vote, after full consideration of
the facts presented on behalf of both Regent and any optionee, that the optionee
has been engaged in fraud, embezzlement, theft, commission of a felony or
dishonest conduct in the course of such optionee's employment, service or
retention by Regent or the Bank that damaged Regent or the Bank or that the
optionee has disclosed confidential information of Regent or the Bank, the
optionee shall forfeit all unexercised Options and all exercised Options under
which Regent has not yet delivered the certificates. The decision of the Board
in interpreting and applying the provisions of this Section 19 shall be final.
No decision of the Board, however, shall affect the finality of the discharge or
termination of such optionee by Regent or by the Bank in any manner.
20. No Prohibition on Corporate Action. No provision of the Plan shall
be construed to prevent Regent or the Bank, or any officer or director of Regent
or the Bank from taking any action deemed by Regent, the Bank or such officer or
director to be appropriate or in the best interest of Regent or of the Bank,
whether or not such action could have an adverse effect on the Plan or any
Options granted hereunder, and no optionee or optionee's estate, personal
representative or beneficiary shall have any claim against Regent or the Bank,
or any officer or director of Regent or the Bank as a result of the taking of
such action.
21. Indemnification. With respect to the administration of the Plan,
Regent shall indemnify each present and future member of the Board against, and
each member of the Board shall be entitled without further action on such
member's part to indemnity from Regent for, all expenses (including the amount
of judgments and the amount of approved settlements made with a view to the
curtailment of costs of litigation, other than amounts paid to Regent itself)
reasonably incurred by the member in connection with or arising out of, any
action, suit or proceeding in which the member may be involved by reason of his
or her being or having been a member of the Board, whether or not he or she
continues to be such member at the time of incurring such expenses; provided,
however, that such indemnity shall not include any expenses incurred by any such
member of the Board (i) in respect of matters as to which he or she shall be
finally adjudged in any such action, suit or proceeding to have been guilty of
gross negligence or willful misconduct in the performance of his or her duty as
such member of the Board; or (ii) in respect of any matter in which any
settlement is effected for an amount in excess of the amount approved by Regent
on the advice of its legal counsel; and provided further that no right of
indemnification under the provisions set forth herein shall be available to or
enforceable by any such member of the Board unless, within 60 days after
institution of any such action, suit or proceeding, he or she shall have offered
Regent in writing the opportunity to handle and defend same at its own expense.
The foregoing right of indemnification shall inure to the benefit of the heirs,
executors or administrators of each such member of the Board and shall be in
addition to all other rights to which such member may be entitled as a matter of
law, contract or otherwise.
22. Miscellaneous Provisions.
(a) Compliance with Plan Provisions. No optionee or other person shall
have any right with respect to the Plan, the Common Stock reserved for issuance
under the Plan or in any Option until a written stock option agreement shall
have been executed on behalf of Regent and by the
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optionee and all the terms, conditions and provisions of the Plan and the Option
applicable to such optionee (and each person claiming under or through such
optionee) have been met.
(b) Approval of Counsel. In the discretion of the Board, no shares of
Common Stock, other securities or property of Regent or other forms of payment
shall be issued hereunder with respect to any Option unless counsel for Regent
shall be satisfied that such issuance will be in compliance with applicable
federal, state, local and foreign legal, securities exchange and other
applicable requirements.
(c) Effects of Acceptance. By accepting any Option or other benefit
under the Plan, each optionee and each person claiming under or through such
optionee shall be conclusively deemed to have indicated his or her acceptance
and ratification of, and consent to, any action taken under the Plan by Regent,
the Board or its delegates.
(d) Compliance with Rule 16b-3. To the extent that Rule 16b-3 under the
1934 Act, as amended, applies to Options granted under the Plan, it is the
intention of Regent that the Plan comply in all respects with the requirements
of Rule 16b-3, that any ambiguities or inconsistencies in construction of the
Plan be interpreted to give effect to such intention and that if the Plan shall
not so comply, whether on the date of adoption or by reason of any later
amendment to or interpretation of Rule 16b-3, the provisions of the Plan shall
be deemed to be automatically amended so as to bring them into full compliance
with such rule.
23. Stockholder Approval. No Option may be exercised until the Plan
shall have been approved by the affirmative vote of the holders of a majority of
the shares of Regent's outstanding Common Stock present or represented and
entitled to vote at a duly convened meeting of stockholders.
24. Titles. Titles are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of the Plan.
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