[Logo] Banknorth Group, Inc.
March __, 1998
Dear Fellow Shareholders:
You are cordially invited to attend our Annual Meeting of Shareholders to be
held at the Capitol Plaza and Conference Center, 100 State Street,
Montpelier, Vermont, on Tuesday, May 12, 1998 at 3:00 p.m. A formal notice
of meeting and proxy statement are attached.
At the meeting you will be asked to elect five directors and to ratify the
selection of the Company's independent auditors for 1998. The Company is
also seeking to amend its Certificate of Incorporation to increase its
authorized shares of Common Stock from 20,000,000 to 70,000,000, authorize a
new class of 500,000 shares of Preferred Stock and delete unnecessary
language regarding the absence of preemptive rights. The Company is
requesting approval of this amendment in order to, among other things,
replenish the authorized shares of Common Stock to be utilized in the two-
for-one stock split that becomes effective on April 6 and to implement
amendments to the shareholder rights plan which will help to protect
shareholders' interests in the event of an unwanted takeover attempt of the
Company.
Please note that the record date for the Annual Meeting precedes the
effective date of the stock split. Accordingly, the number of shares
printed on your proxy card does not reflect the stock split, and only shares
issued and outstanding on the record date for the meeting (that is, pre-
split shares) will be voted or considered in determining the number of
shares required to constitute a quorum or to take action at the meeting.
We hope you will be able to attend our Annual Meeting. I look forward to
seeing you there.
Sincerely,
William H. Chadwick
President and Chief Executive Officer
300 Financial Plaza, Burlington, Vermont 05401 (802) 658-9959
[Logo] Banknorth Group, Inc.
300 Financial Plaza
Burlington, Vermont 05401
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 12, 1998
The Annual Meeting of Shareholders of Banknorth Group, Inc. will be
held at the Capitol Plaza Hotel and Conference Center, 100 State Street,
Montpelier, Vermont, on Tuesday, May 12, 1998 at 3:00 p.m. for the following
purposes:
1. To elect five directors to serve until the Annual Meeting of
Shareholders in 2001;
2. To consider and act upon a proposal to amend the Company's
Certificate of Incorporation to (i) increase the number of
authorized shares of Common Stock from the current 20,000,000 to
70,000,000, (ii) to authorize a new class of 500,000 shares of
Preferred Stock, issuable in one or more series; and (iii) to
delete language relating to preemptive rights;
3. To ratify the selection of independent auditors of the Company for
1998; and
4. To transact such other business as may properly be brought before
the meeting.
Only holders of Banknorth Group, Inc. Common Stock of record as of the
close of business on March 18, 1998, are entitled to notice of, and to vote
at, the Annual Meeting. A list of such shareholders will be available for
examination by any shareholder ten days prior to the meeting during ordinary
business hours at the Company's offices at 300 Financial Plaza in
Burlington, Vermont, and at the offices of The Howard Bank, N.A., 90 Main
Street, Montpelier, Vermont.
By order of the Board of Directors,
Thomas M. Dowling
Secretary
Burlington, Vermont
March __, 1998
YOUR VOTE IS IMPORTANT
WE URGE YOU TO FILL IN, DATE, SIGN AND RETURN YOUR PROXY CARD PROMPTLY
IN THE ENCLOSED POSTAGE PAID ENVELOPE WHETHER OR NOT YOU PLAN TO BE PRESENT
AT THE MEETING. SHOULD YOU ATTEND THE MEETING, YOU MAY WITHDRAW YOUR PROXY
AND VOTE IN PERSON IF YOU SO DESIRE.
BANKNORTH GROUP, INC.
300 Financial Plaza
Burlington, Vermont 05401
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
May 12, 1998
This proxy statement is furnished in connection with the solicitation
of proxies by or on behalf of the Board of Directors of Banknorth Group,
Inc. (the "Company") for use at the Annual Meeting of Shareholders to be
held on Tuesday, May 12, 1998, at 3:00 p.m., at the Capitol Plaza Hotel and
Conference Center, 100 State Street, Montpelier, Vermont, or at any
adjournment or adjournments thereof.
Proxy cards duly executed and returned by a shareholder will be voted
as directed on the card. If no choice is specified, the proxy will be voted
(i) FOR the election of the five nominees for director named in the proxy to
serve until the Annual Meeting of Shareholders in 2001; (ii) FOR approval of
the proposed amendment to the Company's Certificate of Incorporation; and
(iii) FOR ratification of the independent public accounting firm of KPMG
Peat Marwick LLP as the independent auditors of the Company for the ensuing
year. If other matters are voted upon, the persons named in the proxy and
acting thereunder will vote in accordance with the recommendations of
management pursuant to the discretionary authority conferred in the proxy.
Any proxy may be revoked by written notice to the Secretary of the Company
prior to the voting of such proxy.
All expenses of this solicitation will be paid by the Company. This
solicitation of proxies by mail may be followed by solicitation either in
person, or by letter or telephone, by officers or employees of the Company
or its wholly-owned banking subsidiaries, First Vermont Bank and Trust
Company, The Howard Bank, N.A., Franklin Lamoille Bank, Granite Savings Bank
and Trust Company, Woodstock National Bank, Farmington National Bank, First
Massachusetts Bank, N.A. and The Stratevest Group, N.A. Such solicitation on
behalf of the Company may also be made by MacKenzie Partners, Inc., a proxy
solicitation firm. The Company has agreed to pay MacKenzie Partners, Inc.
a fee not to exceed $7,500 plus expenses, for its services in that regard. In
addition, the Company will request brokers, banks and other similar agents
or fiduciaries to forward proxy materials to beneficial owners of stock and,
if requested, will reimburse them for the costs thereof.
Under the rules of the Securities and Exchange Commission ("SEC"),
boxes and a blank space are provided on the proxy card for shareholders to
designate whether they wish to vote "for", "against", or "abstain" on any
proposal, or to withhold authority to vote for one or more of the Company's
nominees for director. Under Delaware law and the Company's By-laws, a
majority of the shares entitled to vote, represented in person or by proxy,
will constitute a quorum at the meeting. Votes withheld from director
nominees, abstentions and broker non-votes (as defined below) are counted
for purposes of determining whether a quorum is present and for determining
the number of votes required to adopt a proposal. Assuming a quorum is
present, (i) a majority of the outstanding shares of Common Stock will be
required to approve the amendment to the Company's Certificate of
Incorporation; and (ii) a majority of the shares represented at the meeting
in person or by proxy will be required to elect a nominee for director, to
ratify the selection of the Company's independent auditors and to approve
any other matter voted on. Since votes withheld from director nominees and
abstentions and broker non-votes on other proposals (including amendment of
the Certificate of Incorporation) are treated as shares outstanding and
present at the meeting, they would have the effect of a vote against the
nominee or proposal, as the case may be. A broker non-vote occurs when a
broker who holds shares in street name for a customer does not have the
authority under applicable stock exchange or broker self-regulatory
organization rules to cast a vote on a particular matter (despite having
voted the proxy on one or more other, discretionary matters) because such
matter is deemed non-discretionary and the broker's customer has not
furnished voting instructions. The difference between the number of votes
cast by a broker on discretionary and non-discretionary proposals represents
broker non-votes on the non-discretionary proposals.
This proxy statement and accompanying proxy card were first sent to
shareholders on or about March __, 1998. A copy of the Company's Annual
Report to Shareholders containing its audited financial statements for 1997
accompanies this proxy statement.
VOTING SECURITIES
Only holders of record of the Company's shares of common stock
outstanding as of the close of business on March 18, 1998 will be entitled
to notice of and to vote at the Annual Meeting. As of such date, there were
__________ shares of the Company's Common Stock issued and outstanding.
Each such share is entitled to one vote on all matters presented to the
shareholders for vote. Shareholders should note that, notwithstanding the
two-for-one stock split which will take effect prior to the Annual Meeting,
for all purposes of the meeting, only shares outstanding on the record date
meeting (that is, the pre-split shares) will be voted or considered in
determining the number of shares required to constitute a quorum, to elect a
director or to adopt a proposal.
As of February 1, 1998, the Company's wholly-owned trust company
subsidiary, The Stratevest Group, N.A. ("Stratevest"), held as fiduciary
approximately 205,704 shares (or 2.69%) over which it had sole voting and
investment power and approximately 145,883 shares (or 1.89%) as to which it
had shared voting or investment power or sought voting instructions from
beneficial owners, donors, beneficiaries, co-trustees or co-executors. In
cases in which Stratevest does not have sole voting control under the
governing instrument, Stratevest will vote shares of the Company's common
stock in accordance with instructions from donors, beneficiaries, co-
trustees or co-executors and will not vote such shares unless instructions
are received. Shares held by Stratevest as fiduciary over which it has sole
voting power under either the governing instrument or applicable statute
will be voted in a manner that best serves the interests of trust
beneficiaries.
Except as otherwise noted in the following sentence, the Company is
not aware of any individual, person, entity or group within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934 (the "Exchange Act")
which owns beneficially more than 5% of the Company's outstanding common
stock. In accordance with Section 13(g) under the Exchange Act, the Company
has been informed that John Hancock Mutual Life Insurance Company and
related entities own, in the aggregate, 483,000 shares, representing 6.3% of
the Company's outstanding stock, with sole voting and investment power over
such shares vested in John Hancock Advisors, Inc., an affiliated investment
advisor.
Stock Ownership of Directors and Executive Officers
The following table shows the amount of common stock owned
beneficially, directly or indirectly, by each director and nominee for
director, by each of the executive officers named in the summary
compensation table presented elsewhere in this proxy statement, and by all
incumbent directors, nominees and executive officers of the Company as a
group. Except as otherwise indicated in the footnotes to the table (i)
share data is presented on a pre-split basis, as of March 4, 1998; and (ii)
the named individuals possess sole voting and investment power over the
shares listed.
<TABLE>
<CAPTION>
Shares
Beneficially Percent
Shareholder or Group Owned (1) of Class
-------------------- ------------ --------
<S> <C> <C>
Incumbent Directors and Nominees
Thomas J. Amidon, Esq. (2)..................... 11,669 .152%
Jacqueline D. Arthur (3)....................... 570 .007%
Robert A. Carrara (4).......................... 3,289 .043%
William H. Chadwick (5)........................ 58,784 .766%
Susan C. Crampton, CPA (6)..................... 8,472 .110%
Richard J. Fleming............................. 2,160 .028%
Luther Frederick Hackett (7)................... 39,206 .511%
Kathleen Hoisington............................ 511 .007%
Douglas G. Hyde (8)............................ 499 .007%
Richard M. Narkewicz, M.D. (9)................. 13,395 .175%
John B. Packard (10)........................... 373 .005%
R. Allan Paul, Esq. (11)....................... 11,579 .151%
Angelo P. Pizzagalli (12)...................... 10,662 .139%
Thomas P. Salmon, Esq. (13).................... 1,532 .020%
Certain Executive Officers
Thomas J. Pruitt (14).......................... 24,314 .317%
Robert M. Gillis (15).......................... 30,117 .393%
Richard J. Fitzpatrick (16).................... 12,778 .167%
Owen H. Becker (17)............................ 2,651 .035%
All Directors, Nominees and Executive
Officers as a Group (19 individuals)........... 233,061 3.04%
____________________
<F1> Includes (i) 7,130 shares with respect to which voting or
investment powers are shared; (ii) 2,629 shares as to which
beneficial ownership is disclaimed; (iii) 38,950 shares of
performance stock awarded to certain members of the group under the
Company's 1997 Equity Compensation Plan (the "Equity Compensation
Plan") or predecessor plans; (iv) 27,800 shares underlying exercisable
stock options awarded to certain members of the group under the Equity
Compensation Plan or its predecessor plan; (v) 33,434 stock units
accrued to the accounts of certain members of the group under the
Company's 1994 Deferred Compensation Plan, as amended (the "Deferred
Compensation Plan"); and (vi) approximately 22,743 shares in which
certain members of the group have an indirect interest by virtue of
their participation in a pooled Company stock fund maintained under
the Company's 401(k) Plan. Each stock unit accrued under the Deferred
Compensation Plan will be payable in the form of one share of the
Company's Common Stock. Share information relating to the 401(k) Plan
and to the Deferred Compensation Plan is as of December 31, 1997, the
date of the most recent 401(k) Plan report and most recent quarterly
Deferred Compensation Plan accrual.
<F2> Includes 4,126 stock units accrued to Mr. Amidon's account under the
Deferred Compensation Plan.
<F3> Includes 470 stock units accrued to Ms. Arthur's account under the
Deferred Compensation Plan.
<F4> Includes 1,420 stock units accrued to Mr. Carrara's account under the
Deferred Compensation Plan.
<F5> Includes (i) 5,504 shares held by Mr. Chadwick indirectly through
the Company's 401(k) Plan; (ii) 16,500 shares of performance stock
granted under the Company's Equity Compensation Plan; and (iii) 10,000
shares Mr. Chadwick has the right to acquire upon exercise of options
awarded under the Company's Equity Compensation Plan or its
predecessor plan.
<F6> Includes (i) 3,122 shares held by Mrs. Crampton jointly with her
husband; (ii) 2,040 shares held by her husband; and (iii) 3,310
stock units accrued to Ms. Crampton's account under the Deferred
Compensation Plan.
<F7> Includes (i) 34,752 shares held by various corporations controlled
by Mr. Hackett and (ii) 54 shares held by Mrs. Hackett's wife, as to
which beneficial ownership is disclaimed.
<F8> Includes 420 stock units accrued to Mr. Hyde's account under the
Deferred Compensation Plan.
<F9> Includes (i) 1,968 shares held by Dr. Narkewicz jointly with his
wife as to which voting and investment power is shared; and (ii)
11,358 stock units accrued to Dr. Narkewicz's account under the
Company's Deferred Compensation Plan.
<F10> Includes 273 stock units accrued to Mr. Packard's account under the
Deferred Compensation Plan.
<F11> Includes (i) 2,287 shares held by Mr. Paul's wife as to which Mr.
Paul disclaims beneficial ownership; and (ii) 5,071 stock units
accrued to Mr. Paul's account under the Deferred Compensation Plan.
<F12> Includes (i) 3,359 shares held by Pizzagalli Construction
Company, Inc., an affiliate of Mr. Pizzagalli as to which voting and
investment power is shared; and (ii) 6,303 stock units accrued to Mr.
Pizzagalli's account under the Deferred Compensation Plan.
<F13> Includes (i) 288 shares held by Mr. Salmon's wife as to which
Mr. Salmon disclaims beneficial ownership; and (ii) 683 stock units
accrued to Mr. Salmon's account under the Deferred Compensation Plan.
<F14> Includes (i) 3,435 shares held by Mr. Pruitt indirectly through
the Company's 401(k) Plan; (ii) 9,200 shares of performance stock
granted under the Company's Equity Compensation Plan or its
predecessor plan; and (iii) 5,500 shares underlying exercisable stock
options awarded to Mr. Pruitt under the Equity Compensation Plan or
its predecessor plan.
<F15> Includes (i) 10,019 shares held by Mr. Gillis indirectly through
the Company's 401(k) Plan; (ii) 5,250 shares of performance stock
granted under the Company's Equity Compensation Plan; and (iii) 9,800
shares underlying exercisable stock options awarded to Mr. Gillis
under the Equity Compensation Plan or predecessor plan.
<F16> Includes (i) 3,384 shares held by Mr. Fitzpatrick indirectly
through the Company's 401(k) Plan; (ii) 5,250 shares of
performance stock granted under the Company's Equity Compensation
Plan; and (iii) 2,500 shares underlying exercisable stock options
awarded to Mr. Fitzpatrick under the Equity Compensation Plan or its
predecessor plan.
<F17> Includes (i) 401 shares held by Mr. Becker indirectly through
the Company's 401(k) Plan; and (ii) 2,250 shares of performance
stock granted under the Company's Equity Compensation Plan.
</TABLE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's officers and
directors to file with the Securities and Exchange Commission reports of
their ownership and changes in ownership of the Company's equity securities
and to furnish the Company with copies of all such reports. Except as noted
in the following sentence, and based solely on its review of copies of
Section 16 reports received by it, or on written representations from
certain reporting persons that no filings were required for those persons,
the Company believes that during 1997 all Section 16(a) filing requirements
applicable to its officers and directors were complied with.
ARTICLE I
ELECTION OF DIRECTORS
The Certificate of Incorporation and By-laws of the Company provide
for division of the Board of Directors into three classes, as nearly equal
in number as possible, each class serving for a period of three years.
During 1997 the Board of Directors consisted of fourteen persons and the
Board has fixed at fourteen the number of directors for the ensuing year.
The following five incumbent directors, whose terms expire at the 1998
Annual Meeting, have been nominated by the Board of Directors to stand for
re-election to serve a three-year term expiring in 2001: Thomas J. Amidon,
Jacqueline D. Arthur, Robert A. Carrara, William H. Chadwick and Susan C.
Crampton. Unless authority is withheld, proxies solicited hereby will be
voted in favor of each of the five nominees to serve a three-year term
expiring at the Annual Meeting in 2001. If for any reason not now known by
the Company any of such nominees should not be able to serve, proxies will
be voted for a substitute nominee or nominees designated by the Board of
Directors, or for fewer than five nominees if the Board has instead voted to
fix the number of Directors at fewer than fourteen, as the Directors deem
appropriate.
Set forth in the table below is certain information concerning each of
the nominees and other incumbent directors. The dates indicated for service
on the Company's Board of Directors include service on the boards of the
Company's predecessor bank holding companies, but not the subsidiaries.
<TABLE>
<CAPTION>
Served as
Director
Name and Age Since Principal Occupation
------------ --------- --------------------
Nominees for Director whose terms (if elected) will expire in 2001:
<S> <C> <S>
Thomas J. Amidon, Esq., 58 1982 Attorney at Law
Stowe, VT
Jacqueline D. Arthur, 48 1996 President and Treasurer,
American Training Solutions, LLC
Lowell, MA
(association of technical and professional
training companies)
Robert A. Carrara, 58 1983 Vice President and Treasurer, J.P. Carrara
& Sons, Inc.
North Clarendon, VT
(concrete products)
William H. Chadwick, 61 1987 President and Chief Executive Officer
Banknorth Group, Inc.
Burlington, VT
Susan C. Crampton, C.P.A., 57 1985 Principal, The Vermont Partnership
Jericho, VT
(business consultants)
<CAPTION>
Incumbent Directors whose terms will expire in 2000:
<S> <C> <S>
Richard J. Fleming, 66 1994 Chairman, Fleming Oil Company, Inc.
Brattleboro, VT
(petroleum products distributor)
Luther Frederick Hackett, 64 1983 President, Hackett, Valine & MacDonald, Inc.
(Chairman of the Board of South Burlington, VT
Banknorth Group, Inc.) (insurance agency)
Richard M. Narkewicz, M.D., 64 1983 Retired Physician, CHP/Kaiser Permanente,
Northeast
Shelburne, VT
John B. Packard, 52 1997 President, U.S. First LLC
Rye, NH
(manufacturer and distributor, industrial
equipment)
<CAPTION>
Incumbent Directors whose terms will expire in 1999:
<S> <C> <S>
Kathleen Hoisington, 55 1996 President, Hoisington Realty, Inc.
Bennington, VT
(real estate agency)
Douglas G. Hyde, 55 1997(1) President, Green Mountain Energy
Resources, Inc.
South Burlington, VT
(national energy marketing company)
R. Allan Paul, Esq., 66 1983 Of Counsel, Paul, Frank & Collins, Inc.
Burlington, VT
(law firm)
Angelo P. Pizzagalli, 63 1983 President, Pizzagalli Construction Company
South Burlington, VT
Thomas P. Salmon, Esq., 65 1982 Of Counsel, Salmon and Nostrand
Bellows Falls, VT
(law firm)
____________________
<F1> Mr. Hyde was appointed to the Board in July, 1997 to fill the vacancy
created upon the resignation of Nordahl L. Brue. Mr. Hyde previously
served as a director of The Howard Bank, N.A. since 1994.
</TABLE>
Except as set forth below, each of the individuals listed in the
foregoing table has been employed by the firm or has had the occupation set
forth opposite his or her name for the past five years. Before joining
American Training Solutions, LLC, Ms. Arthur served as the Vice President
and Chief Financial Officer of CP Clare Corporation, an electronics
manufacturer in Beverly Massachusetts and as Vice President and Chief
Financial Officer of T Cell Sciences, Inc., a biotechnology firm in Needham,
Massachusetts. Mr. Hyde, who is the President of Green Mountain Energy
Resources, Inc., also served as President of Green Mountain Power
Corporation until his retirement from that position in 1997. Mr. Salmon
previously served as President of the University of Vermont until his
retirement from that position and his return to the practice of law with the
firm of Salmon and Nostrand in 1997.
Certain of the nominees and incumbent directors also serve as
directors of other companies registered or filing reports under the
Securities Exchange Act of 1934, or investment companies registered under
the Investment Company Act of 1940, as follows;
Mr. Hackett - Central Vermont Public Service Corporation and Vermont
Electric Power Company, Inc.
Mr. Salmon - Green Mountain Power Corporation (Chairman of the Board)
Committees of the Board and Meeting Attendance
During 1997, the Company's Board of Directors held eleven regular
meetings and three special meetings. Each incumbent director attended at
least 75% of the aggregate of all meetings of the Company's Board of
Directors and committees of which he or she was a member, except for Mr.
Hyde, who attended 50% of such meetings.
The Company's Board of Directors has standing Executive, Audit,
Compensation and Nominating/Governance Committees. Members of the committees
are appointed annually by the Board of Directors.
The Executive Committee has substantially all powers of the Board of
Directors in the management of the business and affairs of the Company
between meetings of the Board of Directors. The present members of the
Company's Executive Committee are Angelo P. Pizzagalli (Chair), Susan C.
Crampton, William H. Chadwick, Luther F. Hackett, Richard M. Narkewicz,
M.D., R. Allan Paul and Thomas P. Salmon. During 1997, the Executive
Committee met four times.
The functions of the Audit Committee are to recommend to the Company's
Board of Directors the engagement of independent accountants and to review
with the independent accountants the scope and results of the audits, the
Company's internal controls and the professional services furnished by the
independent accountants. The Audit Committee also has oversight
responsibility for the Company's consolidated loan review functions. The
present members of the Company's Audit Committee are R. Allan Paul (Chair),
Susan C. Crampton (Vice Chair), Thomas J. Amidon, Jacqueline D. Arthur,
Robert A. Carrara, Kathleen Hoisington and John B. Packard. The Chairman
of the Board attends meetings of the Committee ex officio but is not a
member of the Committee and does not vote on matters considered by the
Committee. During 1997, the Audit Committee met four times.
The functions of the Nominating/Governance Committee are to recommend
candidates for election as Directors of the Company and its subsidiaries and
to consider recommendations for improvements in corporate governance. The
Committee will consider recommendations by stockholders for nomination as
Directors, provided such recommendations are submitted in writing to the
Secretary of the Company. The present members of the Nominating Committee
are Thomas P. Salmon (Chair), Robert A. Carrara, William H. Chadwick,
Richard J. Fleming, Kathleen Hoisington, Douglas G. Hyde and Angelo P.
Pizzagalli. The Chairman of the Board attends meetings of the Committee
ex officio, but is not a member of the Committee and does not vote on
matters considered by the Committee. During 1997, the Nominating/Governance
Committee met six times.
The functions and membership of the Company's Compensation Committee
are described below under the caption "Compensation Committee Interlocks and
Insider Participation."
Compensation Committee Interlocks and Insider Participation
The Company is not aware of the existence of any interlocking
relationships between the senior management of the Company and that of any
other company.
During 1997, the following directors served on the Compensation
Committee of the Board: Richard M. Narkewicz, M.D. (Chair), Thomas J.
Amidon, Jacqueline D. Arthur, Richard J. Fleming, Luther F. Hackett, Douglas
G. Hyde and John B. Packard. President and Chief Executive Officer William
H. Chadwick attends meetings of the Compensation Committee ex officio, but
is not a member of the Committee and does not participate in its votes. The
function of the Company's Compensation Committee is to review and to make
recommendations to the Board of Directors concerning compensation and
benefits paid to the Company's employees and to the Boards of Directors of
the Company's subsidiaries. A Report of the Compensation Committee on
matters relating to executive compensation is set forth below in this proxy
statement under the caption "COMPENSATION COMMITTEE REPORT". During 1997,
the Compensation Committee met six times.
Compensation Committee member Thomas J. Amidon is an attorney who
practices law in Stowe, Vermont. Mr. Amidon performed various legal
services for the Company or its subsidiaries during 1997 and it is expected
that he will also perform legal services for the Company or its subsidiaries
during 1998.
Other Director Affiliations and Related Transactions
R. Allan Paul is Of Counsel to the law firm of Paul, Frank &
Collins, Inc. in Burlington, Vermont. Thomas P. Salmon is Of Counsel to the
law firm of Salmon & Nostrand in Bellows Falls, Vermont. Susan C.
Crampton's husband is a part owner of the law firm of Gravel and Shea in
Burlington, Vermont. Each of these law firms performed various legal
services for the Company or its subsidiaries during 1997 and it is expected
that they will perform legal services for the Company or its subsidiaries
during 1998.
The Company's banking subsidiaries have had, and in the future expect
to have, banking transactions with directors and officers of the Company,
with members of their immediate families and with corporations and
organizations with which the directors and officers are affiliated. These
transactions were undertaken in the ordinary course of business, on
substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons,
and do not involve more than normal risk of collectibility or present any
other unfavorable features.
Directors' Fees
Directors of the Company who are not also salaried employees of the
Company or its subsidiaries receive an annual retainer of $10,000. The
Chair of the Board receives an additional annual retainer of $20,000. All
directors, other than salaried employees of the Company, receive $600 for each
Board meeting attended and $600 for each committee attended, except that if
a committee meeting is held on the same day as a Board meeting the committee
meeting fee is $400. Chairs of the Company's standing committees receive an
annual retainer of $2,000. Directors are reimbursed for their out-of-pocket
expenses incurred in attending meetings of the Board or its committees.
Directors' Stock Options
Each non-employee director (other than Mr. Hackett) was awarded
options to purchase 500 shares of the Company's Common Stock, pursuant to
the 1997 Equity Compensation Plan. Mr. Hackett, who serves as Chairman of
the Board, received options to purchase 1,000 shares of the Company's Common
Stock. All of such options were issued on December 23, 1997 with a ten-year
term and at an exercise price of $64.00 per share, the market price of the
Company's Common Stock on the date of the grant. The Board believes that
payment of director compensation partially in the form of Company Common
Stock is consistent with the Company's policy of aligning the long-term
interests of the Board of Directors and management with those of the
shareholders.
Deferred Compensation Plan
Directors may elect to defer current receipt of some or all of their
fees under the Company's Amended and Restated 1994 Deferred Compensation
Plan For Directors and Selected Executives. Under the terms of the plan,
participants may elect to credit deferrals to either or both of (i) a cash
account which bears interest (adjusted annually) at a rate equal to one-half
a percentage point above the one-year Treasury bill rate, and (ii) a Company
Common Stock unit account. The number of Common Stock units credited to a
participant's account is determined by the amount of the deferrals and the
market value of the Company's Common Stock at the time the deferrals are
credited to the account. Payment of deferrals from the cash account is made
only in cash and payment from the Company stock account is made only in the
form of Common Stock. Payments are deferred until the participant's
retirement, death or disability, or at an earlier or later date elected by
the participant. Amounts deferred and interest and other accruals under the
plan represent a general unsecured obligation of the Company and no assets
of the Company have been segregated to meet the Company's obligations under
the plan.
Directors' Stock Ownership Guidelines
Because the Board believes that ownership of Company stock helps align
management and shareholder interests, the Board has adopted stock ownership
guidelines for directors and certain officers. The stock ownership
guidelines for executive officers are described below under the caption
"COMPENSATION COMMITTEE REPORT". The directors' stock ownership guidelines
recommend that each director own Company Common Stock equal in value to five
times the amount of the director's annual retainer. If a director fails to
achieve the recommended level of stock ownership within five years, the
director will receive his or her retainer partially in the form of the
Company's stock. Under the guidelines, stock units accrued under the
Deferred Compensation Plan are considered in satisfying the stock ownership
test, but stock options are not.
Directors Emeriti
Several former directors of the Company have been appointed to serve
as Directors Emeriti. Under By-law amendments adopted by the Board of
Directors in 1996, only individuals who were directors of the Company on
February 27, 1996 and who continue to serve until their retirement will
qualify for appointment as Directors Emeriti, provided that they retire
following attainment of age 65 but prior to the first Annual Meeting after
attainment of age 67. Directors Emeriti are entitled to attend meetings of
the Board of Directors, but do not vote on matters acted upon by the Board,
nor is their presence counted for purposes of determining a quorum.
Director Emeritus status terminates at the Annual Meeting following
attainment of age 72. The Director Emeritus designation will terminate
after all individuals who served on the Board of Directors on February 27,
1996 have served as Directors Emeriti. Each Director Emeritus is paid an
annual retainer of $10,000, but receives no meeting or other fees. The
present Directors Emeriti are Stephen E. Baker, Lawrence H. Reilly, Margaret
E. Richey, Theodore H. Thomas, Jr. and Elizabeth G. Woods.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ARTICLE 1.
COMPENSATION COMMITTEE REPORT
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors. The Committee is composed
of six independent, non-employee directors. Recommendations of the
Committee on compensation are submitted to the full Board of Directors for
approval.
Based on the Committee's recommendation, the Board has approved the
following principal objectives for the Company's executive compensation
policies:
* To increase management's focus on long-term strategic plans to further
the growth in the earnings of the Company.
* To increase management's focus on decisions to maximize annual
earnings.
* To link shareholder and management interests by tying a significant
portion of executive compensation rewards to changes in shareholder
value.
* To link shareholder and management interests by encouraging executive
stock ownership.
* To attract experienced management.
* To retain quality management.
To reach these objectives, the executive compensation program contains
three components:
1. Base salary with possible annual merit increases based upon
individual performance.
2. Short-term cash incentive payments based on meeting annual plans
and budgets approved by the Board of Directors and based upon a
comparison to a select group of peer banks.
3. Long-term stock and stock-based cash awards, for meeting
performance goals approved by the Board of Directors over a two-
to five-year period and based primarily on corporate performance.
The Committee believes that this compensation program fairly balances
individual, subsidiary and corporate performance and recognizes both the
short-term and long-term objectives of the Company.
It is the philosophy of the Committee to place significant emphasis on
incentive compensation, which reduces the relative amount of compensation
that is fixed. Compensation for management positions is a mix of three
components. For example, the portions of total compensation for the
President and Chief Executive Officer ("CEO") under the approved plan, which
would be earned if the Company meets performance objectives would be:
<TABLE>
<S> <C>
Base Salary................. 45%
Short-Term Cash Incentives.. 22%
Long-Term Stock Awards...... 33%
---
Total Compensation.......... 100%
</TABLE>
In general, the greater the executive's responsibilities, the greater
is the portion of his or her potential total compensation that is tied to
performance incentives and to the value of the Company's Common Stock. The
Board believes that this approach properly reflects the greater potential
impact senior management has on the strength and performance of the Company
over the longer term.
In 1993, the Board established a peer group of like-sized, publicly
traded commercial banking organizations to use for executive compensation
comparisons. The Board also approved an executive compensation program that
matches total compensation levels of the CEO and other executives to those
of the peer group. In 1997, the peer group consisted of 36 companies. 26 of
the 36 are included in the NASDAQ Bank Stock Index referred to in the stock
performance graph on page ___. There is no published data readily available
on the combined stock performance of the peer group, though the Compensation
Committee does review the relative stock performance over both one- and five-
year periods of individual companies included in the group.
Section 162(m) of the Internal Revenue Code limits the deductibility
of executive compensation (currently $1 million per covered individual). As
the compensation levels paid by the Company to its executives are below the
deductibility limit, this provision does not at present have any impact on
the Company. Nevertheless the Board, upon recommendation of the
Compensation Committee, has determined that as a matter of policy,
compensation levels of the Company's executives should be structured to
preserve tax deductibility, should Section 162(m) impact the Company in the
future.
Components of Compensation
Base Salary. Consistent with the philosophy described above, the base
salary of executive officers is generally targeted to be below the median of
comparable businesses. Base salaries for all managers are reviewed annually
and salaries may be increased based on individual contributions to the
Company. Each position is assigned to a grade level and each grade level
has a range of base salary.
The Compensation Committee works with the consulting firm of Watson
Wyatt Worldwide in reviewing and setting the overall compensation strategy
for the Company. The pay ranges were increased for 1998, based on annual
survey information from Watson Wyatt Worldwide. The midpoint (50th
percentile) for the President and CEO for 1998 is $343,855.
Mr. Chadwick's base salary was increased from $275,000 to $295,000 in
1997. The other senior executives whose performance met or exceeded
expectations, were also given base salary increases in 1997. All salary
increases for senior executives were approved by the Compensation Committee
and the Board.
Short-Term Cash Incentives. Executive personnel of the Company and
its subsidiaries may earn cash incentives for meeting annual goals
established by the Board under the Management Incentive Compensation Plan.
Incentives for the parent company executives are based 100% on corporate
performance. Incentives for the subsidiary presidents are based 50% on
corporate performance and 50% on the respective subsidiary's performance.
Incentives for designated members of senior management of each subsidiary
are based 25% on corporate performance and 75% on the respective
subsidiary's performance. In every case, the requirements of the Company to
meet its overall goal must be met before any incentives are paid for the
subsidiary's performance. The Board retains the discretion under the Plan
to adjust the performance targets and/or payment amounts at any time in
cases of significant non-recurring events.
For 1997, there were five levels of incentives of participants.
Possible incentives for the President and CEO ranged between 0% and 150% of
salary paid for the calendar year and for the other four most highly
compensated executives, between 0% and 120%. Performance targets for the
Company included targets based on net income, return on average equity
(ROAE) and return on average assets (ROAA). Performance targets for each
subsidiary are based on its contributions to the Company's net income and on
that subsidiary's ROAA, as well as the subsidiary's Efficiency Ratio and
ratio of Salary plus Benefits to Earning Assets. The corporate and
subsidiary performance targets for 1997 included ROAE and ROAA as well as
net income in order to emphasize the link between short-term and long-term
performance.
A performance-based peer comparison component was also added in 1994
to emphasize the Board's desire to rank in the higher percentiles of the
peer group's performance. ROAE (weighted at four), ROAA, Net Interest
Margin, the ratio of Net Operating Expenses to Average Assets, and Non-
performing Assets/Total Assets (each weighted at one) were chosen as peer
group measures due to the high correlation between those measures and the
market value of publicly traded commercial banking company stocks.
Based upon 1997 performance, the President and CEO earned an incentive
award of 45.88% of base salary. The other four most highly compensated
executive officers of the Company earned incentive awards for 1997 ranging
from 21.78% to 40.69% of base salary.
During 1997, the Board approved a number of changes to the Company's
Short-Term Cash Incentive program for 1998. It is the goal of these
improvements to continue to strengthen the link between executive and
shareholder interests.
Long-Term Stock Awards. Improvements in the Company's long-term
performance, as evidenced by meeting Board-adopted goals for ROAE and ROAA
and increased market value of its stock, are rewarded under the Banknorth
Group, Inc. Equity Compensation Plan (the Plan). The Plan provides for
discretionary awards to executives designated by the Compensation Committee.
Awards may include stock options, stock appreciation rights, restricted
stock, performance shares, restricted stock units and performance share
units. Because awards of options and stock appreciation rights are keyed to
the market value of the Company's stock at the time of grant, the future
value of those awards is entirely dependent on increases in the market value
of the Company's stock.
During 1997, the Board of Directors issued 25,668 incentive stock
options and 85,332 non-qualified stock options and awarded 6,500 performance
shares (restricted stock with performance-based restrictions) to select
executives. The award amounts were set to approximate the compensation mix
described above. The CEO received 2,139 incentive stock options, 3,861 non-
qualified stock options and 2,500 performance shares. These awards were the
highest of any Company executive. The other four most highly compensated
executive officers received, in the aggregate, 8,556 incentive stock
options, 2,944 non-qualified stock options and 2,500 performance shares with
vesting of performance shares over five years tied to attainment of annual
ROAE and ROAA targets.
The Board envisions that future option and performance share and unit
awards will be consistent with the emphasis on performance-driven
compensation and will be consistent with the mix of components of
compensation described earlier in this report. Typically, the Compensation
Committee meets to consider awards of stock-based compensation in time for
action at the July Board meeting. The Committee and the Board consider
stock-based awards annually based on the targeted compensation mix described
above and not based upon prior or anticipated future awards.
Executive Stock Ownership Guidelines
In order to further align the interests of executives and
shareholders, the Board in 1994 adopted stock ownership guidelines for the
Company's executives. (Similar guidelines were also adopted for the
Directors.) The guidelines recommend that executives own Company stock
equal in market value to specified multiples of their base salary. The
recommended multiple for the CEO is three times base salary and for the next
four most highly compensated executive officers, the recommended multiple is
two times base salary. If an executive has not attained these levels of
stock ownership within five years, the executive may subsequently receive
stock in lieu of cash awards to which the executive may otherwise be
entitled. Stock options are excluded from the stock ownership calculations
under the guidelines.
Banknorth Group, Inc. Compensation Committee
Richard M. Narkewicz, M.D., Chair
Thomas J. Amidon, Esq.
Luther F. Hackett
Douglas G. Hyde
Richard J. Fleming
Jacqueline Arthur
John Packard
Pursuant to Item 402(a)(9) of Regulation S-K promulgated by the
Securities and Exchange Commission (SEC), neither the foregoing Report nor
the material set forth below under the caption "STOCK PERFORMANCE
COMPARISON" shall be deemed to be filed with the SEC for purposes of the
Securities Exchange Act of 1934, nor shall such Report or such material be
deemed to be incorporated by reference in any past or future filing by the
Company under the Securities Exchange Act of 1934 or the Securities Act of
1933, as amended.
STOCK PERFORMANCE COMPARISON
Set forth below is a line-graph presentation comparing in cumulative,
five-year shareholder returns on the Company's stock with cumulative, five-
year returns of two peer indices--the Nasdaq U.S. Companies Stock Index and
the Nasdaq Bank Stock Index. Both indices are unmanaged and published by
Nasdaq.
Comparative Five-Year Total Returns*
BKNG Comparison to NASDAQ U.S. Companies and NASDAQ Banks
<TABLE>
<CAPTION>
NASDAQ NASDAQ
US BANKS BKNG
------ ------ ----
<C> <C> <C> <C> <C>
December 1992 100.000 100.000 100.000
January 1993 102.847 103.885 135.185
February 1993 99.010 106.341 135.925
March 1993 101.876 110.647 141.511
April 1993 97.528 106.135 131.270
May 1993 103.354 103.988 125.498
June 1993 103.832 106.932 130.181
July 1993 103.954 110.749 144.229
August 1993 109.327 113.699 146.852
September 1993 112.583 116.889 148.734
October 1993 115.114 115.181 154.383
November 1993 111.682 110.566 140.074
December 1993 114.796 114.042 147.646
January 1994 118.281 115.915 157.110
February 1994 117.177 114.458 150.674
March 1994 109.971 112.662 138.277
April 1994 108.544 116.305 146.859
May 1994 108.809 121.608 156.590
June 1994 104.830 121.613 158.030
July 1994 106.980 123.301 182.520
August 1994 113.800 126.452 195.210
September 1994 113.509 122.961 187.470
October 1994 115.740 119.268 175.880
November 1994 111.900 114.288 180.900
December 1994 112.214 113.627 171.180
January 1995 112.843 117.447 198.410
February 1995 118.811 123.190 198.250
March 1995 122.334 124.405 184.510
April 1995 126.186 127.853 192.370
May 1995 129.442 131.749 202.020
June 1995 139.932 137.351 212.920
July 1995 150.218 143.822 234.700
August 1995 153.262 151.541 251.380
September 1995 156.787 155.039 265.350
October 1995 155.888 157.561 253.380
November 1995 159.549 165.642 275.160
December 1995 158.699 169.222 309.310
January 1996 159.482 169.593 271.140
February 1996 165.552 171.922 275.160
March 1996 166.101 175.863 285.280
April 1996 179.882 174.956 283.250
May 1996 188.141 177.893 271.120
June 1996 179.660 178.770 279.270
July 1996 163.658 176.573 267.040
August 1996 172.828 188.803 289.460
September 1996 186.048 197.846 306.910
October 1996 183.993 206.606 283.300
November 1996 195.367 222.049 318.200
December 1996 195.192 223.412 343.000
January 1997 209.064 235.843 336.800
February 1997 197.506 249.127 374.320
March 1997 198.376 240.130 336.890
April 1997 190.384 245.531 353.530
May 1997 211.969 260.877 364.260
June 1997 218.452 279.447 387.280
July 1997 241.510 300.881 406.130
August 1997 241.142 298.427 421.110
September 1997 225.404 329.561 460.070
October 1997 242.129 331.201 509.550
November 1997 243.326 344.515 511.990
December 1997 239.527 377.438 543.730
</TABLE>
Assumes $100 invested at the close of trading day preceding the first day of
the fifth preceding fiscal year in BKNG common stock, NASDAQ, and NASDAQ
Banks.
* Cumulative total return assumes reinvestment of dividends.
EXECUTIVE OFFICERS
Set forth below is certain information regarding the executive
officers of the Company.
<TABLE>
<CAPTION>
Position with the Company
Name and Age and Occupation for Past Five Years
- ------------ ----------------------------------
<S> <S>
William H. Chadwick, 61 President, Chief Executive Officer and Director, Banknorth; Chair,
Banknorth Policy Committee.
Thomas J. Pruitt, 55 Executive Vice President and Chief Financial Officer, Banknorth;
Member, Banknorth Policy Committee.
Robert M. Gillis, 60 Executive Vice President, Banknorth; Member, Banknorth Policy
Committee; President, Chief Executive Officer and Director, First
Vermont Bank.
Richard J. Fitzpatrick, 48 Executive Vice President and Chief Banking Officer, Banknorth;
Member, Banknorth Policy Committee (since 1992); Previously:
President, Chief Executive Officer and Director, The Howard Bank,
N.A. (1994-1997); Executive Vice President and Managing Director
- Loans, Banknorth (1992-1994).
Owen H. Becker, 60 Executive Vice President-Administration, Banknorth; Member,
Banknorth Policy Committee (since 1995). Previously: Consultant,
Vermont State Colleges (May, 1994 to December, 1994); Director of
Human Resources and Community Relations, Stowe Mountain
Resort, Stowe, Vermont (November, 1993 to May, 1994); and Site
Services Manager, IBM, Inc., Burlington, Vermont (prior to
November, 1993).
John M. Keel, 41 Executive Vice President-Chief Information Officer, Banknorth;
Member, Banknorth Policy Committee. Previously: Senior Vice
President, Key Services Corp., Cleveland, OH (prior to March, 1997).
</TABLE>
EXECUTIVE COMPENSATION
The following table sets forth the cash compensation, and certain
other compensation, paid to the Chief Executive Officer and each of the
other four most highly compensated executive officers of the Company for
services rendered to the Company and its subsidiaries in all capacities
during each of the years 1995, 1996 and 1997.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
----------------------------- -------------------------------------------
Securities
Restricted Underlying All
Stock Options/ Other
Name and Principal Position Year Salary(1) Bonus Awards(2) SARs(#)(3) Compensation(4)
- --------------------------- ---- --------- ----- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
William Chadwick, President 1997 $290,376 $133,238 $175,313 6,000 $6,333
and Chief Executive Officer 1996 272,096 43,195 142,875 10,000 6,000
of the Company 1995 256,154 172,812 126,000 10,000 3,354
Thomas J. Pruitt, Executive 1997 $188,846 $ 60,656 $ 70,125 4,000 $6,041
Vice President and Chief 1996 182,115 20,238 57,150 5,000 6,000
Financial Officer of 1995 168,077 80,752 63,000 5,500 5,855
the Company
Robert M. Gillis, Executive Vice 1997 $158,846 $ 34,592 $ 35,063 2,500 $5,595
President of the Company; 1996 155,000 35,737 35,719 2,500 6,000
President and Chief Executive 1995 155,000 83,958 42,000 2,500 5,352
Officer, First Vermont Bank
and Trust Company
Richard J. Fitzpatrick, 1997 $158,846 $ 64,634 $ 35,063 2,500 $5,708
Executive Vice President of the 1996 154,038 24,261 35,719 2,500 6,000
Company; President and Chief 1995 144,000 74,248 42,000 2,500 5,898
Executive Officer, The
Howard Bank, N.A.
Owen H. Becker, Executive 1997 $137,692 $ 44,226 $ 35,063 2,500 $5,013
Vice President - Administration 1996 128,077 14,233 35,719 2,500 5,634
of the Company 1995 108,884 52,146 42,000 0 2,383
____________________
<F1> Includes voluntary pre-tax and after-tax salary deferrals under the
Company's Employee Savings (401(k)) Plan.
<F2> During 1997, performance shares were awarded to the named executives
under the Company's 1997 Equity Compensation Plan (the "Equity
Compensation Plan"), as follows: Mr. Chadwick, 2,500 shares; Mr.
Pruitt, 1,000 shares; Mr. Gillis, 500 shares; Mr. Fitzpatrick, 500
shares; and Mr. Becker, 500 shares. All such awards included an award
of performance share units entitling the holder to receive a cash
payment upon vesting equal to 50% of the value of the underlying
shares. Vesting of both the performance shares and performance share
units awarded in 1997 requires continuous service through the
restriction period ending five years after the date of grant and is
subject to the additional condition that vesting will occur in 25%
increments (not to exceed 100% in the aggregate) only in any of the
calendar years 1997 through 2001 in which the Company achieves a
return on average equity of at least 13% and a return on average
assets of at least 1.1%. All awards will vest immediately upon a
change in control of the Company. Holders of performance stock are
entitled to receive dividends on the performance stock during the
restriction period if and to the extent dividends are paid on the
Company's common stock generally. No dividends are paid on
performance stock units. The amounts disclosed in the table include
the value of both the performance stock and performance stock units on
the respective dates of grant ($46.75 per share for restricted stock
awarded in 1997), without regard to restrictions. As of December 31,
1997, the total number of unvested shares of performance stock held by
the individuals named in the table, together with the market value of
those shares and related performance stock units on such date ($64.25
per share), without regard to restrictions, was as follows: Mr.
Chadwick, 6,625 shares, $638,484; Mr. Pruitt, 2,900 shares, $279,488;
Mr. Gillis, 1,813 shares, $174,728; Mr. Fitzpatrick, 1,813 shares,
$174,728 and Mr. Becker, 1,438 shares, $138,587. All performance share
information is on a pre-split basis.
<F3> The numbers shown in the table represent the shares underlying stock
options granted to the named executives under the Equity Compensation
Plan (or its predecessor plan) during each of the years shown, on a
pre-split basis. Contingent stock appreciation rights (SARs),
exercisable only in the event of a change in control of the Company,
were also awarded in tandem with such options. All options shown in
the table are subject to a two-year holding period from the date of
grant before they become exercisable, and expire ten years from the
date of grant. Options and tandem SARs become immediately exercisable
upon a change in control of the Company regardless of whether the two
year holding period has been met. All 1997 options and tandem SARs
were issued at an exercise price of $46.75 per share, which represents
the fair market value of the Company's stock on the date of grant
(July 22, 1997).
<F4> Represents employer matching contributions under the Company's
Employee Savings (401(k)) Plan. Mr. Becker's total also includes an
incentive referral fee of $180.
</TABLE>
------------------------------------
COMPENSATION AND BENEFIT PLANS
Banknorth Group 1997 Equity Compensation
Executives may receive awards of stock options, stock appreciation
rights and restricted stock and restricted stock units (including
performance shares and performance share units) under the Company's 1997
Equity Compensation Plan (the "Equity Compensation Plan"). Eligibility is
limited to those officers and other key executive personnel of the Company
and its subsidiaries who are in positions in which they may contribute
significantly to the profitability of the Company. Eligible employees are
designated annually by the Board of Directors, upon recommendation of the
Compensation Committee, which administers the Plan. The Plan was approved
by the shareholders in 1998 and provides that up to 525,000 shares may be
issued, subject to certain adjustments such as for recapitalizations, stock
splits and stock dividends. The Plan terminates in the year 2007 and any
new Plan will require shareholder approval.
The following table sets forth certain information regarding the grant
of stock options and tandem contingent stock appreciation rights under the
Company's Equity Compensation Plan made during 1997 to the five executive
officers named in the summary compensation table.
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise
Options/SARs Employees in or Base Expiration Grant Date
Name Granted(#)(1) Fiscal Year Price ($/Sh)(2) Date(3) Value(4)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
William H. Chadwick 6,000 5.44% $46.75 7/22/07 $61,860
Thomas J. Pruitt 4,000 3.63% 46.75 7/22/07 41,240
Robert M. Gillis 2,500 2.27% 46.75 7/22/07 25,775
Richard J. Fitzpatrick 2,500 2.27% 46.75 7/22/07 25,775
Owen H. Becker 2,500 2.27% 46.75 7/22/07 25,775
____________________
<F1> Each option carries a contingent, tandem stock appreciation right
exercisable only in the event of a change in control of the Company.
A SAR entitles the holder upon exercise to receive a cash payment
equal to the difference between the exercise prices of the underlying
stock option and the market price of the stock on the date of
exercise. Performance share information is on a pre-split basis.
<F2> Represents the fair market value of the Company's common stock on the
date of grant. The exercise price may be paid in cash or in shares of
the Company's stock valued at their fair market value on the date of
exercise, or a combination of the two, or through withholding of a
sufficient number of shares upon exercise.
<F3> All options listed in the table (a) were granted on July 22, 1997, (b)
are subject to a two-year holding period before they become
exercisable and (c) are subject to early termination following the
optionee's termination of employment during the option period.
<F4> Represents a discounted present value of $10.31 per share, determined
using the Black-Scholes valuation method and assuming a grant date
market price and option exercise price of $46.75 per share, an
expected period of 5 years prior to option exercise, an annual
dividend yield of 2.61%, expected market value volatility of 20.55%
and an alternative, risk free investment rate of 6.00% per year.
</TABLE>
In assessing the grant date values in the foregoing table it should be
kept in mind that no matter what theoretical value is placed on a stock
option on the date of grant, its ultimate value will be dependent on the
market value of the Company's stock at a future date and that value will in
large part depend, in turn, on the efforts of its management team to foster
the future success of the Company.
The following table sets forth certain information regarding year-end
values of outstanding stock options issued under the Equity Compensation
Plan (and its predecessor plan) to the executive officers named in the
summary compensation table, as well as information on option exercises
during 1997 by such officers:
Aggregated Option/SAR Exercises in Last Fiscal Year,
and FY-End Option/SAR Values
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Number Options/SARs Options/SARs
Of Shares at FY-End(#)(3) at FY-End($)(2)
Underlying -----------------------------------
Options/SARs Value Exercisable/ Exercisable/
Name Exercised(1) Realized(2) Unexercisable Unexercisable
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
William H. Chadwick 9,000 $369,000 10,000/16,000 $362,500/$430,000
Thomas J. Pruitt 15,450 $740,925 5,500/9,000 $199,375/$232,500
Robert M. Gillis 5,000 $267,750 9,800/5,000 $408,950/$425,000
Richard J. Fitzpatrick 10,300 $443,300 2,500/5,000 $ 90,625/$125,000
Owen H. Becker N/A 0/5,000 $ 0/$125,000
____________________
<F1> The named individuals elected to pay the exercise price of the options
and/or a portion of tax withholding obligations resulting from the
exercise through withholding by the Company of a sufficient number of
shares (valued at their fair market value at the date of exercise).
The net number of shares received upon exercise was as follows: Mr.
Chadwick, 5,854 shares; Mr. Pruitt, 5,929 shares; Mr. Gillis, 2,587
shares; and Mr. Fitzpatrick, 4,585 shares. All share information in
the table is on a pre-split basis.
<F2> Represents the difference between the option exercise price (whether
paid in cash or by withholding of shares or by tender of other shares
of the Company's common stock, valued at their fair market value on
the date of exercise) and the market value of the stock on the date of
exercise.
<F3> Amounts disclosed relate only to options. The tandem stock
appreciation rights related to such options are contingent and become
exercisable only in the event of a change in control of the Company.
Year-end values are based on the market value of the Company's stock
on December 31, 1997 ($64.25 per share), less the applicable option
exercise prices.
</TABLE>
Awards of performance shares and performance share units made pursuant
to the Equity Compensation Plan during the last three years to the five
executives named in the summary compensation table are disclosed in such
table and accompanying footnotes.
Banknorth Group Management Incentive Compensation Plan
The Company's Management Incentive Compensation Plan, which provides
short-term performance incentives, is described above under the caption
"COMPENSATION COMMITTEE REPORT." Awards earned under the Plan for services
rendered during each of the last three years by the five executives named in
the summary compensation table are disclosed in such table and accompanying
footnotes.
Banknorth Group, Inc. Employee Savings (401(k)) Plan
The Company maintains an Employee Savings Plan (also known as 401(k)
Plan) which provides a means for eligible employees to accumulate savings
and investment income without payment of current income taxes. Employees
who have completed at least three months of service, as defined in the Plan,
and are scheduled to work at least twenty hours per week are eligible to
participate. An eligible employee who elects to participate in the Plan may
authorize the Company to contribute to the Plan for his or her account
between 1% and 15% of eligible compensation on a pre-tax basis or between 1%
and 10% on an after-tax basis, or a combination of both, up to a maximum of
15% of eligible compensation. The Company makes a matching contribution in
cash or stock equal to 66 2/3% of the employee's contributions up to a
maximum of 6% of eligible compensation. A participant may direct the
investment of his Plan account among various portfolios maintained by The
Stratevest Group, N.A. which serves as the trustee of the Plan.
Participants are at all times fully vested in their Plan accounts.
Generally, distribution of employee contributions is deferred until the
participant's death, disability, retirement or other termination of
employment, except in cases of financial hardship. Voluntary deferrals and
matching employer contributions credited in the years 1995 through 1997 to
the Plan accounts of the executives named in the summary compensation table
are reflected in the table and accompanying footnotes.
Deferred Compensation Plan
The Company's Amended and Restated 1994 Deferred Compensation Plan for
Directors and Selected Executive Officers, pursuant to which participants
may elect to defer receipt of all or a portion of their cash compensation,
is described above under the caption "ARTICLE 1 - ELECTION OF DIRECTORS -
Deferred Compensation Plan."
Contracts with Management
The Company and Mr. Chadwick are parties to an employment agreement
which provides for a renewable one-year contract term, with an automatic
three-year extension in the event of a change in control of the Company.
Under the agreement Mr. Chadwick is entitled to continue to receive 100% of
his salary and benefits, including bonuses, for the remaining contract term
in the event of an involuntary termination of his employment, which is
defined to include a termination by Mr. Chadwick for good reason, such as
material reduction in his responsibilities or authority.
In addition to the agreement with Mr. Chadwick, the Company has
entered into change of control agreements with six other officers, including
the following three executive officers named in the summary compensation
table: Messrs. Fitzpatrick, Gillis and Pruitt. The agreements provide that
the executive is entitled to continue his employment with the Company for a
period of two years following a change in control of the Company. In the
event of an involuntary termination of his employment during such two-year
period (including a termination by the executive for good reason) the
executive is entitled to continue to receive his salary and benefits,
including bonuses, for the remaining contract term.
For purposes of all of the agreements referred to above, a change in
control is deemed to have occurred if (i) any person (including an
individual, entity or group) directly or indirectly owns, controls or has
power to vote 25% or more of the Company's voting stock, (ii) any person
controls the election of a majority of the Company's directors, or (iii) the
Board of Directors determines that any person directly or indirectly
exercises a controlling influence over the management or policies of the
Company. Payments under the contracts are limited to the extent necessary
to avoid characterization as excess compensation under Section 280G of the
Internal Revenue Code.
The Board of Directors believes that the compensation protection
afforded by the change of control agreements will facilitate an impartial
assessment by management of any change of control situation by minimizing
the possibility of conflicting personal financial interests.
Banknorth Group, Inc. Employee Pension Plan
The Company maintains a non-contributory, trusteed retirement income
plan for the benefit of all employees of the Company and its subsidiaries
who are 21 years of age or older and who have completed at least 1,000 hours
of service during a one-year period, as defined in the plan. Pension
benefits under the Plan are based on the participant's average annual
compensation, years of service and Social Security covered compensation at
the date of retirement. For purposes of the Plan "average annual
compensation" is defined as the highest average of the annual compensation
earned in any three consecutive years during the ten years prior to
retirement; "Social Security covered compensation" is the average of the
taxable Social Security wage bases in effect during the last 35 years before
attainment of Social Security normal retirement age; and a "year of service"
is ordinarily a year in which a participant has worked at least 1,000 hours.
A participant who retires on or after age 55 having at least 10 years of
service is entitled to early retirement benefits, with the amount of the
benefit (if paid in installments) reduced to reflect payment over a longer
period of time. Participants in the Plan are fully vested after completion
of five years of service. Pension benefits are payable as a joint or single
life annuity or (in certain circumstances) as a lump sum at the election of
the participant. Death benefits are payable to an employee's spouse in
certain circumstances if an employee who is vested in the Plan dies prior to
retirement. Benefit calculations under the Plan are subject to the annual
benefit limitation under Internal Revenue Code Section 415 ($125,000 for
1997 and $130,000 for 1998) and to the limitation on annual covered
compensation under Internal Revenue Code Section 401(a)(17) ($160,000 for
1997 and 1998). However, as described below under the caption "Supplemental
Retirement Benefits" the Company has entered into supplemental retirement
agreements with certain officers who would be affected by these limitations.
Special "grandfather provisions" apply to certain employees of the
Company or its subsidiaries who were covered under prior plans.
The following table represents estimated annual benefits payable under
the Plan upon retirement at age 65 in 1998 to participants in specified
compensation and years of service classifications. Actual benefits for
certain retirees covered by the grandfather provisions referred to above may
exceed the amounts shown in the table.
<TABLE>
<CAPTION>
Assumed Average
Three-Year Years of Service
Annual --------------------------------------------------------
Compensation 10 15 20 25 30 35
- --------------- -- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C>
$ 25,000................. 3,250 4,875 6,500 8,125 8,938 9,750
$ 50,000................. 7,727 11,590 15,453 19,317 20,942 22,567
$ 75,000................. 12,602 18,903 25,203 31,504 33,942 36,379
$100,000................. 17,477 26,215 34,953 43,692 46,942 50,192
$125,000................. 22,352 33,528 44,703 55,879 59,942 64,004
$150,000................. 27,227 40,840 54,453 68,067 72,942 77,817
$175,000 & Higher........ 28,527 42,790 57,053 71,317 76,408 81,500
</TABLE>
For purposes of calculating benefits under the Plan for all
participants, including the executives named in the summary compensation
table, eligible earnings include salary and incentive compensation payments
(including any deferrals), but do not include matching employer
contributions under the 401(k) Plan. The credited years of service under
the Plan at December 31, 1997, for the executive officers named in the
summary compensation table were approximately as follows: Mr. Chadwick, 11
years; Mr. Pruitt, 8 years; Mr. Gillis, 21 years; Mr. Fitzpatrick, 4 years
and Mr. Becker, 2 years.
Supplemental Retirement Benefits
The Company maintains a supplemental retirement plan for those of its
executives (except as otherwise designated by the Board) whose pension under
the Company's pension plan would be subject to pay or benefit limits under
applicable provisions of the Internal Revenue Code. Each of the executives
named in the summary compensation table participates in the Plan. The
supplemental plan restores the full amount of the pension benefit that would
be payable under the pension plan if the benefit formula were applied
without regard to such limitations. The Plan also provides that Mr. Becker,
who joined the Company in 1995 at age 57, will receive a benefit, payable at
age 65, of either $1,000 per month for life if he leaves the Company before
becoming vested in the Company's qualified pension plan, or $2,000 per month
for life if he leaves after becoming vested. The table below shows total
estimated annual benefits under the pension plan, as supplemented by the
supplemental plan, for specified compensation and years of service
categories, assuming retirement at age 65 in 1998.
<TABLE>
<CAPTION>
Assumed Average
Three-Year Years of Service
Annual -------------------------------------------------------------
Compensation 10 15 20 25 30 35
-- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C>
$175,000................. 32,102 48,153 64,203 80,254 85,942 91,629
$200,000................. 36,977 55,465 73,953 92,442 98,942 105,442
$225,000................. 41,852 62,778 83,703 104,629 111,942 119,254
$250,000................. 46,727 70,090 93,453 116,817 124,942 133,067
$275,000................. 51,602 77,403 103,203 129,004 137,942 146,879
$300,000................. 56,477 84,715 112,953 141,192 150,942 160,692
$325,000................. 61,352 92,028 122,703 153,379 163,942 174,504
$350,000................. 66,227 99,340 132,453 165,567 176,942 188,317
$375,000................. 71,102 106,653 142,203 177,754 189,942 202,129
</TABLE>
The supplemental plan also incorporates the terms of various
supplemental retirement agreements between the Company or its subsidiaries
and certain former employees, as well as the terms of a separate agreement
between Mr. Chadwick and the Company. That agreement provides Mr. Chadwick
with an additional supplemental annual retirement benefit for the remainder
of his lifetime following retirement at age 65 (or earlier with the consent
of the Company). The annual benefit under the contract is equal to the
number of years of his employment with the Company (and its predecessor
companies and subsidiaries), multiplied by $5,300, up to a maximum annual
benefit of $79,500. The annual benefit amount accrued by Mr. Chadwick as of
December 31, 1997 was $58,300. At the Company's election, benefits under
the agreement may be paid in equal monthly installments of one-twelfth of
the annual accrued benefit or in less frequent lump sum payments. In the
event of a change in control of the Company and subsequent termination of
his employment, Mr. Chadwick would be entitled to receive in a lump sum a
payment equal to the actuarial value of his accrued annual benefit. The
agreement also provides for benefits in the event Mr. Chadwick becomes
disabled while in the Company's employ.
The Board of Directors believes that supplemental retirement benefits
are an appropriate component of the Company's overall strategy for
attracting and maintaining executives of high caliber. Benefits under the
supplemental retirement arrangements referred to above will be paid out of
the general assets of the Company, either directly or through the purchase
of annuities or insurance coverage.
ARTICLE 2
AMENDMENT TO CERTIFICATE OF INCORPORATION
The Board of Directors has adopted a resolution recommending that the
stockholders consider and adopt at the Annual Meeting an amendment to
Article FOURTH of the Company's Certificate of Incorporation. In summary,
the proposed amendment would (i) increase the authorized Common Stock to
70,000,000 shares; (ii) create a new class of Preferred Stock consisting of
500,000 shares, $.01 par value per share, issuable in one or more series and
having such terms, conditions, privileges and rights as the Board of
Directors may determine prior to issuance; and (iii) eliminate unnecessary
language relating to preemptive rights.
For the reasons described below, the Board of Directors believes that
the proposed amendment is in the best interests of the Company and its
shareholders. If the amendment is approved, it will become effective upon
the filing of a Certificate of Amendment with the Delaware Secretary of
State following the Annual Meeting. The text of the proposed amendment,
along with the text of Article FOURTH as presently in effect, is set forth
in Exhibit A to this proxy statement.
The proposed amendment would increase by 50,000,000 from 20,000,000 to
70,000,000 the number of authorized shares of Common Stock, $1.00 par value
per share, and would authorize a class of Preferred Stock, $.01 par value
per share. The Certificate of Incorporation does not currently authorize
any preferred stock. If the proposed amendment is adopted, the Board of
Directors will be authorized to establish and designate different series
within the new class of Preferred Stock and to fix and determine the
relative rights and preferences of each series, including voting powers,
dividend rights, conversion rights, liquidation preferences, redemption
provisions and preemptive rights. Such rights and provisions would be
established by the Board taking into account relevant factors at the time,
including prevailing market and other conditions. Subject to the
requirements of applicable law and regulations, the Board of Directors
generally will have the sole discretion to issue either authorized Common
Stock or authorized Preferred Stock without further shareholder approval.
The additional shares of Common Stock authorized in the amendment
would, among other things, replenish the shares to be utilized in the two-
for-one stock split (effected in the form of a 100% stock dividend) declared
by the Board of Directors on February 24, 1998, payable on April 6, 1998 to
shareholders of record on March 20, 1998. The stock split will result in
the issuance of shares of Common Stock, including
shares payable on treasury shares held by the Company which are considered
issued for purposes of receiving the stock dividend but are not outstanding
for cash dividend, quorum, voting or other purposes.
The aggregate number of issued shares of Common Stock (including
treasury shares) at the close of business on the effective date of the stock
split is expected to be , leaving an unused balance of
authorized shares of Common Stock. Appropriate adjustment to reflect the
stock split will also be made to outstanding stock options, performance
share awards, deferred compensation stock unit accruals, and to the number
of shares reserved for issuance under the 1997 Equity Compensation Plan
(1,050,000 shares, on a post-split basis). These adjustments will further
reduce the balance of unused authorized shares available for other corporate
purposes.
The Board of Directors believes that it is in the best interests of
the Company to increase the Company's authorized capital stock in order to
meet possible contingencies and opportunities for which the issuance of
shares may be deemed advisable. From time to time the Company has given,
and in the future is likely to give, consideration to the feasibility of
obtaining funds for appropriate corporate objectives through the public or
private sale of equity securities. Questions of timing are always central
to whether or on what basis security financings are to be undertaken.
Having available authorized shares (including Preferred Stock) will give the
Company maximum flexibility and will avoid the need for, and related expense
and delay of, a special shareholders' meeting.
Holders of Common Stock do not and will not have any preemptive rights
to acquire Common or Preferred Stock of the Company, nor will the holders of
any series of Preferred Stock have any such rights unless and to the extent
that such preemptive rights are created by the Board as part of its
designation of the rights and preferences of such series. If the Company
elects to issue additional shares of Common Stock or shares of Preferred
Stock, shareholders would not have any preferential right to purchase them,
and their ownership could therefore be diluted. In addition, to the extent
that any series of the Preferred Stock were to provide preemptive rights or
rights to convert such Stock into Common Stock, the proportionate rights and
interest of the holders of the outstanding Common Stock could be diluted.
Although the Board is not aware of any effort by any person to acquire
control of the Company, the authorized but unissued shares could be used to
make it more difficult to effect a change in control, and thereby make it
more difficult for shareholders to obtain an acquisition premium for their
shares. Such shares could be used to create impediments for persons seeking
to gain control of the Company by means of a merger, tender offer, proxy
contest or other means. For example, substantial dilution of a potential
acquiror could be achieved through implementation of the Company's
Shareholder Rights Plan adopted in 1990 (the "Rights Plan"), or through
private placement of securities with purchasers who might cooperate with the
Board of Directors in opposing the potential acquiror.
The Company has no current plans, has made no arrangements and has not
entered into any understandings whereby it would be required to issue any of
the additional shares of stock for which authority is now sought. Purposes
for which the additional shares of Common and Preferred Stock could be
issued include the acquisition of the shares or assets of other
corporations, stock splits or dividends, dividend reinvestment programs and
employee benefit plans. The Board of Directors believes that the additional
authorized shares will provide greater flexibility in achieving these
purposes.
The Board of Directors does now have under consideration renewal of
the Rights Plan, the implementation of which could involve the utilization
of Common Stock or Preferred Stock.
In addition to increasing the Common Stock and authorizing Preferred
Stock, the Board of Directors has proposed deleting unnecessary language in
Article FOURTH of the Certificate of Incorporation relating to preemptive
rights. The proposal has been made to better conform the Certificate to
Delaware law and to avoid any potential ambiguity with regard to the
authority of the Board of Directors to create one or more series of
Preferred Stock that includes preemptive rights.
At present, Article FOURTH of the Company's Certificate of
Incorporation states that shareholders do not have preemptive or
preferential rights to subscribe to purchase additional securities of the
Company. Because Delaware law already provides that such preemptive or
preferential rights do not exist unless they are expressly granted in the
Certificate of Incorporation, a statement in the Company's Certificate of
Incorporation negating such rights is unnecessary. Moreover, such language
could create an interpretational ambiguity should the Board in the future
determine to issue shares of Preferred Stock having such rights.
Accordingly, the Board recommends that the existing preemptive rights
language be deleted.
Vote Required.
In accordance with the Delaware Corporation Act, the proposed
amendment to the Certificate of Incorporation must be approved by the
affirmative vote of the holders of at least a majority of the outstanding
shares of the Company's Common Stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ARTICLE 2.
ARTICLE 3
APPOINTMENT OF AUDITORS
The Company has appointed KPMG Peat Marwick LLP, independent public
accountants, as the external auditors for the Company for the year ending
December 31, 1998, and requests ratification of that appointment. KPMG Peat
Marwick LLP has advised the Company that it has no direct or indirect
financial interest in the Company.
The Company's consolidated financial statements for the year ended
December 31, 1997 were audited by KPMG Peat Marwick LLP. Other services
rendered during 1997 by KPMG Peat Marwick LLP included tax return
preparation, tax planning and consultation and services relative to certain
filings with the SEC.
It is expected that representatives of KPMG Peat Marwick LLP will be
present at the Annual Meeting of the Company where they will have the
opportunity to make a statement if they so desire and will be available to
respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ARTICLE 3.
SHAREHOLDER PROPOSALS
In order to be considered for inclusion in the proxy material for the
1999 Annual Meeting, shareholder proposals must be submitted in writing to
the President of the Company not later than November 29, 1998, and must
comply in all respects with applicable rules and regulations of the
Securities and Exchange Commission relating to such inclusion. Any such
proposal will be omitted from or included in the proxy material at the
discretion of the Board of Directors of the Company, in accordance with
applicable rules and regulations.
OTHER MATTERS
As of the date of this proxy statement, management knows of no
business expected to come before the meeting except as set forth above. If
any other matters should properly come before the meeting, it is expected
that proxies solicited hereby will be voted on such matters in accordance
with the recommendations of management.
EXHIBIT A
TEXT OF ARTICLE FOURTH AS PROPOSED TO BE AMENDED:
FOURTH: The aggregate number of shares of capital stock that the Corporation
shall have authority to issue is 70,500,000 shares, divided into 70,000,000
shares of Common Stock, with a par value of $1.00 per share, and 500,000
shares of Preferred Stock, with a par value of $.01 per share and issuable
from time to time in one or more series. The Board of Directors of the
Corporation is hereby authorized to divide the shares of Preferred Stock
into one or more series and to fix and determine by resolution the relative
rights and preferences of any series so established, to the fullest extent
permitted by law, including, without limitation, any voting powers, dividend
rights, conversion rights, preemptive rights, liquidation preferences and
redemption provisions.
TEXT OF ARTICLE FOURTH AS PRESENTLY IN EFFECT:
FOURTH: The aggregate number of shares which the Corporation shall have
authority to issue is 20,000,000 shares, Common Stock, with a par value of
$1.00 per share. No holders of stock of any class shall have any preemptive
or preferential rights to acquire unissued or treasury shares of any class
or any warrants to purchase such shares or securities convertible into such
shares.
REVOCABLE PROXY
BANKNORTH GROUP, INC.
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
ANNUAL MEETING OF SHAREHOLDERS
TUESDAY, MAY 12, 1998, 3:00 P.M.
The undersigned hereby appoints Kathleen Hoisington and Richard J.
Fleming, or either of them, as proxies, with full power of substitution in
each, to vote the common stock of Banknorth Group, Inc. that the undersigned
is (are) entitled to vote at the Annual Meeting of Shareholders to be held
at the Capitol Plaza Hotel and Conference Center, 100 State Street,
Montpelier, Vermont, on Tuesday, May 12, 1998, at 3:00 p.m., and at any
adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE
REVOKED PRIOR TO ITS EXERCISE.
1. ELECTION OF FIVE DIRECTORS:
To serve until the Annual Meeting in 2001:
Thomas J. Amidon, Jacqueline D. Arthur, Robert A. Carrara, William H.
Chadwick and Susan C. Crampton.
[ ] FOR [ ] WITHHELD [ ] FOR ALL EXCEPT
INSTRUCTION: To withhold authority to vote for any individual nominee, mark
"For All Except" and write that nominee's name in the space provided below.
_______________________________________________________________________________
2. To amend Article FOURTH of the Certificate of Incorporation to
increase the authorized common stock, create a class of preferred stock
and delete language relating to preemptive rights.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To ratify the selection of the independent public accounting firm of
KPMG Peat Marwick LLP as the Company's external auditors for 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, to act upon such other business as may properly
come before the meeting or any adjournments thereof. If any such business is
presented, it is the intention of the proxies to vote the shares represented
hereby in accordance with recommendations of management.
This Proxy, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder(s). If no direction is made,
this proxy will be voted "FOR" Items 1, 2 and 3.
Please sign exactly as name(s) is (are) printed on this Proxy. When
signing as attorney, executor, administrator, trustee, guardian or in any
other representative capacity, please so indicate.
__________________
|Date | Please be sure to sign and date
| | this Proxy in the box below.
|_________________|___________________________________________________________
| | |
| | |
| | |
|______ Stockholder sign above____|_______Co-holder (if any) sign above_______|
|_ _|
| |
- -------------------------------------------------------------------------------
Detach above card, sign, date and mail in postage paid envelope provided.
BANKNORTH GROUP, INC.
______________________________________________________________________________
| PLEASE ACT PROMPTLY |
| SIGN, DATE & MAIL YOUR PROXY CARD TODAY |
|_____________________________________________________________________________|
