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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:
/x/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
COMMUNITY FINANCIAL HOLDING CORPORATION
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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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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COMMUNITY FINANCIAL HOLDING CORPORATION
- -------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 13, 1997
TO THE SHAREHOLDERS OF
COMMUNITY FINANCIAL HOLDING CORPORATION
Notice is hereby given that the Annual Meeting of Shareholders of
Community Financial Holding Corporation ("Corporation") will be held at 7:30
p.m., prevailing time, on Tuesday, May 13, 1997, at Tavistock Country Club,
Tavistock Lane, Haddonfield, New Jersey 08033. The Annual Meeting is being held
for the following purposes:
1. To elect three directors to serve until the expiration of
their three-year terms and until their successors are elected
and qualified (Proposal No. 1);
2. To consider and take action on a proposed amendment to the
Corporation's Certificate of Incorporation which would
increase the number of authorized shares of common stock from
1,600,000 to 3,200,000 (Proposal No. 2);
3. To ratify the selection of KPMG Peat Marwick LLP, of
Philadelphia, Pennsylvania, Certified Public Accountants, as
the independent auditors for the Corporation for its 1997
fiscal year (Proposal No. 3); and
4. To transact such other business as may properly come before
the Annual Meeting and any adjournment thereof.
The Board of Directors of the Corporation has fixed the close of
business on April 1, 1997, as the record date for determining those shareholders
who will be entitled to notice of and to vote at the Annual Meeting.
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THE
MEETING. ACCORDINGLY, WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY
CARD AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. YOU MAY
REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE TIME IT IS VOTED.
By Order of the Board of Directors
Kevin L. Kutcher
Executive Vice President & Secretary
April 14, 1997
Westmont, New Jersey
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COMMUNITY FINANCIAL HOLDING CORPORATION
- -------------------------------------------------------------------------------
PROXY STATEMENT FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON MAY 13, 1997
GENERAL
INTRODUCTION, DATE, TIME AND PLACE OF ANNUAL MEETING
The Proxy Statement is being furnished in connection with the
solicitation by the Board of Directors of Community Financial Holding
Corporation ("Corporation") of proxies to be voted at the Annual Meeting of
Shareholders of the Corporation to be held on Tuesday, May 13, 1997, at 7:30
p.m. prevailing time, at Tavistock Country Club, Tavistock Lane, Haddonfield,
New Jersey, 08033, and at any adjournment thereof.
The principal executive offices of the Corporation are located at The
Community National Bank of New Jersey (the "Bank"), 222 Haddon Avenue, Westmont,
New Jersey 08108. The telephone number for the Corporation is 609-869-7900.
SOLICITATION AND VOTING PROXIES
This Proxy Statement and the enclosed form of proxy (the "Proxy") are
first being sent to shareholders of the Corporation on or about April 14, 1997.
Shares represented on the accompanying Proxy, if properly signed and
returned in time to be voted at the Annual Meeting, will be voted in accordance
with the specifications made thereon by the shareholder. Any Proxy not
specifying to the contrary will be voted FOR the election of the nominees for
Director named below, FOR the approval of the amendment to the Corporation's
Certificate of Incorporation increasing the Corporation's authorized common
stock, and FOR the ratification of the selection of KPMG Peat Marwick LLP,
Certified Public Accountants, as the independent auditors for the Corporation
for the year ending December 31, 1997. Execution and return of the enclosed
Proxy will not affect a shareholder's right to attend the Annual Meeting and
vote in person by giving written notice of revocation to the Secretary of the
Corporation at any time before the Proxy is voted. The costs of preparing,
assembling, printing, mailing and soliciting proxies, and any additional
material which the Corporation may furnish shareholders in connection with the
Annual Meeting, will be borne by the Bank. In addition to the use of the mails,
certain directors, officers and employees of the Corporation and the Bank
without additional compensation may solicit proxies personally, by telephone, by
telegraph or by telecopier. Arrangements will be made with brokerage houses and
other custodians, nominees and fiduciaries to forward proxy solicitation
material to the beneficial owners of stock held of record by these persons, and
upon request therefor, the Corporation will reimburse them for their reasonable
forwarding expenses.
The enclosed Proxy confers discretionary authority to vote with respect
to any and all of the following matters that may come before the Annual Meeting:
(i) matters which the Corporation does not know, a reasonable time before the
proxy solicitation, are to be presented at the Annual Meeting; (ii) approval of
the minutes of a prior meeting of shareholders if such approval does not amount
to ratification of the action taken at that meeting; (iii) the election of any
person to any office for which a bona fide nominee is named in this Proxy
Statement and such nominee is unable to serve or for good cause will not serve;
(iv) any proposal omitted from this Proxy Statement and Proxy pursuant to Rule
14a-8 or Rule 14a-9 promulgated under the Securities Exchange Act of 1934; and
(v) matters incident to the conduct of the Annual Meeting. In connection with
such matters, the persons named on the enclosed Proxy Card will vote in
accordance with their best judgment.
At the date of this Proxy Statement the Corporation is not aware of any
matters which will be brought before the Annual Meeting (other than procedural
matters) which are not referred to this Proxy Statement.
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REVOCABILITY OF PROXY
A shareholder who returns a Proxy may revoke the Proxy at any time
before it is voted only: (1) by giving written notice of revocation to Kevin L.
Kutcher, Executive Vice President & Secretary of Community Financial Holding
Corporation, at 222 Haddon Avenue, Westmont, New Jersey, 08108; (2) by executing
a later-dated Proxy and giving written notice thereof to the Secretary of the
Corporation; or (3) by voting in person by ballot after giving written notice of
revocation to the Secretary of the Corporation at the Annual Meeting.
VOTING SECURITIES, RECORD DATE, AND VOTING
At the close of business on April 1, 1997, the Corporation had
outstanding 978,774 shares of Common Stock, par value $5.00 per share (the
"Common Stock").
Only holders of Common Stock of record at the close of business on
April 1, 1997, will be entitled to notice of and to vote at the Annual Meeting.
On all matters to come before the Annual Meeting, each share of Common Stock is
entitled to one vote.
Under the By-laws of the Corporation, the presence of a quorum is
required for each matter to be acted upon at the Annual Meeting. The holders of
a majority of the shares entitle to vote at the meeting must be present in
person or represented by proxy in order to constitute a quorum for all matters
to come before the meeting. Broker non-votes (which occur when brokers holding
shares as nominees for their customers do not have authority to vote on a matter
absent specific instructions from the beneficial owners of the shares) and
abstentions will be counted only for the purpose of determining whether a quorum
is present at the meeting.
Except for the election of directors, which requires a plurality of the
votes cast, all matters to be voted upon at the Annual Meeting must receive the
approval of a majority of votes cast at the duly convened Annual Meeting in
order to become binding upon the Corporation. For purposes of determining the
number of votes cast with respect to any voting matter, only votes cast "for" or
"against" are included.
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SECURITIES OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth certain information regarding ownership
of the Corporation's Common Stock, as of April 14, 1997, by: (i) each person or
entity (including such person's or entity's address) who is known by the
Corporation to own beneficially more than five percent of the Corporation's
Common Stock, (ii) each of the Corporation's Directors and nominees for Director
who beneficially owns shares, (iii) each Named Executive Officer (as defined
under Executive Compensation) who beneficially owns shares, and (iv) all
executive officers and Directors as a group. The information presented in the
table is based upon the most recent filings with the Securities and Exchange
Commission by such persons or upon information otherwise provided by such
persons to the Corporation.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY PERCENTAGE
NAME OF BENEFICIAL OWNER OWNED(1) OWNED
------------------------ -------- -----
<S> <C> <C>
Bushman's Inc. 401(k) Savings Plan 93,665 9.57%
and certain individuals(2)
P.O. Box 11
Galloway, WI 54432
Robert T. Pluese(3) 83,615 8.28%
21 Euclid Avenue
Haddonfield, NJ 08033
Rae Pluese(4) 83,615 8.28%
21 Euclid Avenue
Haddonfield, NJ 08033
Gerard M. Banmiller(5) 26,628 2.69%
Michael G. Brennan (6) 31,106 3.14%
Letitia G. Colombi (7) 7,254 *
Gerard J. DeFelicis (8) 23,758 2.40%
Joseph A. Riggs, Sr., M.D. (9) 26,779 2.71%
Marvin Samson (10) 18,975 1.92%
Frank B. Smith (11) 13,275 1.35%
Elizabeth Burns (12) 7,539 *
Doris M. Damm 105 *
Kevin L. Kutcher(13) 14,211 1.44%
All Directors and Executive Officers
as a Group (eleven persons)(14) 253,245 23.45%
</TABLE>
* Less than 1% of shares of Common Stock outstanding.
- -----------------------------
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. Under such rules, shares are deemed
to be beneficially owned by a person or entity if such person or entity
has or shares the power to vote or dispose of the shares, whether or
not such person or entity has any economic interest in such shares.
Except as otherwise indicated,
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and subject to community property laws where applicable, the persons
and entities named in the table above have sole voting and investment
power with respect to all shares of Common Stock shown as beneficially
owned by them. Shares of Common Stock subject to options or warrants
currently exercisable or exercisable within 60 days are deemed
outstanding for purposes of computing the percentage ownership of the
person or entity holding such option or warrant but are not deemed
outstanding for purposes of computing the percentage ownership of any
other person or entity.
(2) On August 21, 1995, the following entity and individuals filed as a
group a Schedule 13D with the Securities and Exchange Commission,
which, as amended on September 1, 1995 and adjusted for stock
dividends, indicates the following beneficial ownership:
<TABLE>
<CAPTION>
Shares
Beneficially
Name Owned Percentage Owned
---- ----- ----------------
<S> <C> <C>
Bushman's Inc. 401(k) Savings Plan 69,458 7.10%
Jerome Bushman 1,654 0.17%
Barbara Bushman 503 0.05%
Tia Bushman 11,576 1.18%
Mitchell Bushman 3,859 0.39%
Derrick Bushman 6,615 0.68%
</TABLE>
With the exception of the Bushman's Inc. 401(k) Savings Plan, which
indicated shared voting and dispositive power as to all shares held
beneficially by it, each individual named above indicated sole voting
and dispositive power as to all shares held beneficially by such
person.
(3) Includes 39,290 shares held by Rae Pluese who has sole voting and
dispositive power with respect thereto, as to which Mr. Pluese
disclaims beneficial ownership. Also includes 30,537 shares issuable
upon exercise of fully vested options. Mr. Pluese is married to Rae
Pluese.
(4) Includes 44,325 shares held or issuable upon exercise of fully vested
options by Robert Pluese who has sole voting and dispositive power with
respect there to, as to which Mrs. Pluese disclaims beneficial
ownership. Mrs. Pluese is married to Robert T. Pluese.
(5) Includes 11,703 shares issuable upon exercise of fully vested options.
(6) Includes 1,520 shares held by family members who have sole voting and
dispositive power with respect thereto, as to which Mr. Brennan
disclaims beneficial ownership. Also includes 10,186 shares issuable
upon exercise of fully vested options; 4,481 shares held in certain
employee retirement plans, as to which, as sole trustee under such
plans, Mr. Brennan has sole voting and dispositive power; and 11,694
shares held jointly by Mr. Brennan and his wife, Jeanne M. Brennan, as
to which he shares voting and dispositive power.
(7) Includes 3,655 shares held by family members who have sole voting and
dispositive power with respect thereto, as to which Ms. Colombi
disclaims beneficial ownership. Also includes 3,464 shares issuable
upon exercise of fully vested options.
(8) Includes 1,741 shares held by family members who have sole voting and
dispositive power with respect thereto, as to which Mr. DeFelicis
disclaims beneficial ownership. Also includes 10,841 shares issuable
upon exercise of fully vested options.
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(9) Includes 579 shares held by family members who have sole voting and
dispositive power with respect thereto, as to which Dr. Riggs, Sr.
disclaims beneficial ownership. Also includes 10,186 shares issuable
upon exercise of fully vested options; and 6,334 shares held by Riggs
Gynecology Associates 401(K) Profit Sharing Plan and Trust and Defined
Benefit Rollover Plan (the "Riggs Plan") in a defined benefit
segregated rollover account held for the benefit of Dr. Riggs, Sr. and
John C. Riggs, M.D., Dr. Riggs' son, in the following percentages,
94.61% and 5.39% respectively. Each participant in the account has sole
dispositive power with respect to that number of shares represented by
his percentage interest in the account. Dr. Riggs, Sr. and John C.
Riggs, M.D., as sole trustees of the Riggs Plan, share voting power all
shares held in the defined benefit segregated rollover account. Also
includes 395 shares held by Riggs Gynecology Associates, a New Jersey
partnership, as to which Dr. Riggs and John C. Riggs, M.D., as sole
partners of the partnership, share voting and dispositive power with
respect thereto.
(10) Includes 7,399 shares issuable upon exercise of fully vested options.
Also includes 11,576 shares held jointly by Mr. Samson and his wife,
Elaine Samson, as to which he shares voting and dispositive power.
(11) Includes 6,284 shares held jointly by Mr. Smith and his wife, Mary Jane
Smith, as to which he shares voting and dispositive power. Also
includes 6,722 shares issuable upon exercise of fully vested options.
(12) Includes 1,313 shares issuable upon exercise of fully vested options.
(13) Includes 7,101 shares issuable upon exercise of fully vested options.
(14) Includes 101,304 shares issuable upon exercise of fully vested options.
Also includes 46,785 shares as to which the above-named directors and
officers have disclaimed beneficial ownership, as described in notes
(3) and (6)-(9), above.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
In accordance with the New Jersey banking law and the Corporation's
Bylaws, the Board of Directors is classified into three classes, with each class
elected for a term of three years. The term of office of one class of directors
expires each year in rotation so that one class is elected at each annual
meeting of shareholders for a three-year term. The term of three of the present
directors will expire at the 1997 Annual Meeting. The By-Laws further provide
that the Corporation's Board of Directors shall consist of such number of
directors as shall be fixed from time to time by a majority vote of the full
Board of Directors. The Board of Directors has fixed the number of directors at
ten and, at this Annual Meeting, three directors will be elected for a
three-year term expiring in 2000 and until their successors are elected and
qualified.
The nominees for election as directors are Robert T. Pluese, Gerard M.
Banmiller, and Frank B. Smith. The proxy holders intend to vote all proxies
received by them in the accompanying form for such nominees unless otherwise
directed. In the event any nominee is unable or declines to serve as a director
at the time of the Annual Meeting, the proxies will be voted for any nominee who
shall be designated by the present Board of Directors to fill the vacancy.
Each of the nominees has consented to being named as a nominee and
agreed to serve if elected. The Corporation's Board of Directors has no reason
to believe that any nominee listed below will be unable to serve as a director.
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Set forth below is certain information concerning each nominee for
election as director and each other continuing member of the Corporation's Board
of Directors.
<TABLE>
<CAPTION>
DIRECTOR-NOMINEES FOR TERMS TO EXPIRE IN 2000
DIRECTOR TERM TO
NAME AGE SINCE EXPIRE
-------------------------- --- -------- -------
<S> <C> <C> <C>
Robert T. Pluese 57 1987 2000
Gerard M. Banmiller 49 1987 2000
Frank B. Smith(1) 60 1987 2000
<CAPTION>
CONTINUING DIRECTORS
DIRECTOR TERM TO
NAME AGE SINCE EXPIRE
-------------------------- --- -------- -------
<S> <C> <C> <C>
Michael G. Brennan (2) 51 1987 1999
Joseph A. Riggs 63 1987 1999
Doris M. Damm(2) 62 N/A 1999
Elizabeth H. Burns (1&2) 57 1995 1998
Letitia Colombi (1) 52 1988 1998
Gerald DeFelicis 70 1987 1998
Marvin Samson 55 1994 1998
</TABLE>
(1) Member of Audit Committee
(2) Member of Compensation Committee
ROBERT T. PLUESE has been Chairman of the Board of the Corporation
since its formation in 1991 and of the Bank since its organization in 1987. He
is an attorney-at-law admitted to practice in Pennsylvania and New Jersey, and
is a shareholder in the law firm of Pluese & Lihotz, P.C.
GERARD M. BANMILLER has been a director and the President of the
Corporation since its formation in 1991 and a director and the President and
Chief Executive Officer of the Bank since its organization in 1987.
MICHAEL G. BRENNAN has been a director of the Corporation since its
formation in 1991 and of the Bank since its organization in 1987. He is an
attorney-at-law admitted to practice in New Jersey and is a shareholder and
President of the law firm of Brennan & Bernardin P.C. Mr. Brennan served as the
Mayor of the Borough of Collingswood, New Jersey, from 1971 to 1993.
ELIZABETH H. BURNS has been a director of the Corporation and of the
Bank since 1995 and is a member and the President of E. H. Burns, A Professional
Association, Certified Public Accountants of Haddonfield, New Jersey. Ms. Burns
is a Certified Public Accountant.
LETITIA G. COLOMBI has been a director of the Corporation since its
formation in 1991 and of the Bank since October, 1988. Since 1985, she has been
a Borough Commissioner and the Director of Public Works for the Borough of
Haddonfield, New Jersey.
DORIS M. DAMM has been a director of the Corporation and of the Bank
since 1996. Since 1990, she has been the President and a director of ACCU
Personnel, Inc., a temporary employment service company.
GERALD J. DEFELICIS has been a director of the Corporation since its
formation in 1991 and of the Bank since its organization in 1987. Mr. DeFelicis
is retired after 40 years of service with Sun Company, Inc., where he held the
position of Manager of Systems Policy and Strategic Facilities.
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JOSEPH A. RIGGS, SR., M.D. has been a director of the Corporation since
its formation in 1991 and of the Bank since its organization in 1987. Dr. Riggs
is a physician licensed to practice in New Jersey and is a member and the
President of Riggs Gynecology Associates.
MARVIN SAMSON has been a director of the Corporation and of the Bank
since January, 1994. Since 1985, Mr. Samson has been President and CEO and a
director of Marsam Pharmaceuticals, Inc. In September, 1995, Marsam
Pharmaceuticals, a manufacturer and marketer of pharmaceutical products, was
acquired by Schein Pharmaceutical, Inc., a privately-held corporation. Mr.
Samson serves as a director of Schein Pharmaceutical, Inc. Prior to September,
1995, Marsam Pharmaceuticals, Inc. was a publicly-held corporation.
FRANK B. SMITH has been a director of the Corporation since its
formation in 1991 and of the Bank since its organization in 1987. From 1986 to
1995, Mr. Smith was Chairman of the Board, President and Chief Executive
Officer of Smith, Breslin, Enright & Associates, Inc., a mortgage banking
consulting firm. Since 1995, Mr. Smith has been Chairman of the Board of Smith,
Breslin, Enright & Associates, Inc., and since 1996, he has been the President
of Green Shield Ltd, which provides warehousing lines of credit to mortgage
originators. In addition, from 1993 to 1996, Mr. Smith was President and Chief
Executive Officer of Princap Mortgage Warehouse, Inc.
THE BOARD OF DIRECTORS
During 1996 each non-employee director received a quarterly retainer of
$750 for service as a director, except for Mr. Pluese who receives a quarterly
retainer of $6,250, as Chairman of the Board. The quarterly retainer for
non-employee directors was increased to $1,000, and Mr. Pluese's quarterly
retainer was increased to $8,750, commencing January 1, 1997. In addition, Bank
committee chairpersons receive a $500 annual retainer for their service as a
committee chairperson. Committee members receive $50 for each Bank committee
meeting attended. The committee chairperson is not compensated a per- meeting
fee unless the committee which they chair meets in excess of four times within
the year. In addition, each non-employee director receives $100 for each
meeting of the Bank's Board of Directors attended. The Board of Directors
compensation is paid by the Bank.
On April 4, 1994, the Board of Directors adopted the 1994 Employee and
Director Stock Option Plan (the "Option Plan") pursuant to which directors and
officers of the Corporation and Bank may be granted options to purchase shares
of the Corporation's stock. During 1996, no options were granted under the
Option Plan.
The Board of Directors of the Corporation held four meetings in 1996.
The Board of Directors of the Bank held twelve meetings during 1996. The
standing committees of the Corporation during 1996 were as follows: the
Executive Committee, the Compensation Committee, and the Audit Committee. In
1996, each of the Corporation's directors attended more than 75% of the
aggregate number of meetings of the Board of Directors and all committees of the
Board of Directors of the Corporation and the Bank of which they were members.
The Executive Committee, which did not meet in 1996, has and may
exercise the authority of the Board of Directors regarding urgent issues for
which a meeting of the full Board cannot be convened timely; except that the
Executive Committee cannot make, alter or repeal any Bylaw of the Corporation,
elect or appoint any director or remove any officer or director, submit to
shareholders any action that requires shareholder approval, or amend or repeal
any resolution thereto for adopted by the Board, which by its terms is amendable
or repealable only by the Board.
The Compensation Committee, which met four times in 1996, is
responsible for administering the awards granted pursuant to the Corporation's
1994 Employee and Director Stock Option Plan and reviewing and setting executive
compensation for Bank management.
The Audit Committee, which met four times during 1996, is the liaison
among the Board of Directors, the Corporation's independent certified public
accountants, and the Bank's independent loan review function. In addition, the
Audit Committee makes recommendations to the Board of Directors concerning the
designation of the
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Corporation's independent certified public accountants and certain other
auditing matters of the Corporation and the Bank.
EXECUTIVE OFFICERS
Set forth below is certain information concerning the Corporation's
Executive Officers.
<TABLE>
<CAPTION>
NAME AGE POSITION(S)
---- --- -----------
<S> <C> <C>
Gerard M. Banmiller 49 President of the Corporation since formation
in 1991; Chief Executive Officer and President
of the Bank since organization in 1987.
Kevin L. Kutcher 41 Executive Vice President, Treasurer and
Secretary of the Corporation since formation
in 1991; Executive Vice President and Chief
Operating Officer of the Bank since 1988.
</TABLE>
The Corporation's officers are elected annually by, and serve at the
discretion of, the Board of Directors.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Corporation's officers, directors, and persons who own more than
ten percent (10%) of the registered class of the Corporation's equity
securities, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission. In addition, Section 16(a) requires
officers, directors and greater than ten percent (10%) shareholders to furnish
the Corporation with copies of all Section 16(a) forms they file. The
Corporation knows of no ten percent (10%) shareholders of the Corporation's
equity securities.
The Corporation believes, to the best of its knowledge, that during the
period of January 1, 1996, through December 31, 1996, all filing requirements
applicable to its officers and directors were satisfied, with exception of one
report, covering one transaction, which was inadvertently filed late by Kevin L.
Kutcher.
EXECUTIVE COMPENSATION
The following table sets forth certain information relating to the
compensation awarded to, earned by or paid to the Chief Executive Officer and
the Company's other executive officers whose total annual salary and bonus
exceeded $100,000 during 1996 (the "Named Executive Officers") for services in
all capacities during 1996, 1995, and 1994.
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SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- ------------
SECURITIES ALL OTHER
NAME AND UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS (#) ($)
- ------------------ ---- --------- -------- ----------- ----
<S> <C> <C> <C> <C> <C>
GERARD M. BANMILLER, 1996 $137,345 $22,500 4,000 (1) $3,652 (2)
President of the Corporation; 1995 $134,871 $3,175 4,000 $1,802
Chief Executive Officer and 1994 $128,024 0 7,875 $1,497
President of the Bank
KEVIN L. KUTCHER, 1996 $103,258 $18,500 3,000 (1) $2,220 (3)
Executive Vice President & 1995 $100,092 $2,480 2,500 $1,621
Treasurer & Secretary of the 1994 $95,090 0 5,000 $1,426
Corporation; EVP/Chief
Operating Officer of the Bank
</TABLE>
- -------------------
(1) Options were granted in March, 1997, based in part on performance for
1996.
(2) Consists of $3,382 of matching 401(k) contributions made by the
Corporation and $270 of premiums paid by the Corporation with respect
to term life insurance premiums.
(3) Consists of $2,002 of matching 401(k) contributions made by the
Corporation and $218 of premiums paid by the Corporation with respect
to term life insurance premiums.
EMPLOYMENT AND SEVERANCE AGREEMENTS
Gerard M. Banmiller, President of the Corporation and President and
Chief Executive Officer of the Bank, has an employment agreement with the
Corporation. The agreement may be terminated by the Corporation for cause and
terminates on the last day of the calendar month in which Mr. Banmiller dies or
becomes totally disabled. The agreement provides for an annual base salary, to
be determined each January for that calendar year, participation in incentive or
long range incentive plans, health insurance, other fringe benefits available to
employees generally, and the use of an automobile. In the event that Mr.
Banmiller's employment is terminated (other than for cause) following a sale of
all or substantially all of the assets of the Corporation or the Bank, or shares
of stock of the Corporation or the Bank are transferred or sold, so as to effect
a change of ownership or control of the Corporation or the Bank, whether by
merger, consolidation or otherwise, Mr. Banmiller is entitled to receive a lump
sum payment within thirty (30) days following termination of employment in an
amount equal to the sum of his base salary which would otherwise have been
payable for the remainder of that calendar year plus his base salary for the
following calendar year. Under the terms of the agreement Mr. Banmiller has
agreed not to compete with, or maintain any significant investment or
participation in, any business similar to the Corporation or any of its
subsidiaries, during the term of his employment.
Kevin L. Kutcher, Executive Vice President, Treasurer and Secretary of
the Corporation and Executive Vice President and Chief Operating Officer of the
Bank, has a Severance Compensation Agreement with the Corporation. In the event
of a change in control of the Corporation or the Bank resulting in the
termination of Mr. Kutcher's employment with the Bank, under the Severance
Compensation Agreement Mr. Kutcher is entitled, under certain circumstances, to
receive monthly one-twelfth of his annual base salary on the effective date of
the Change
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in Control for up to twenty-four months. The agreement also contains certain
confidentiality agreements and restrictive covenants against employee piracy or
soliciting customers or former customers of the Bank during and following
termination of employment.
OPTION GRANTS IN LAST FISCAL YEAR
There were no grants of stock options pursuant to the Company's 1994
Employee and Director Stock Option Plan during the fiscal year ended December
31, 1996, to the Named Executive Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
No options were exercised during the year ended December 31, 1996 by
any Named Executive Officer. The following table sets forth the aggregate
options to purchase shares of Common Stock of the Company held by the Named
Executive Officers at December 31, 1996, separately identifying exercisable and
unexercisable options, and the aggregate dollar value of in-the-money
unexercised options, separately identifying exercisable and unexercisable
options.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-THE-MONEY
UNEXERCISED OPTIONS HELD AT 12/31/96(#) OPTIONS AT 12/31/96($)(1)
---------------------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Gerard M. Banmiller 11,703 2,100 $109,029 $14,343
Kevin L. Kutcher 7,101 1,313 $ 66,038 $ 8,968
</TABLE>
- --------------------
(1) Based upon the December 31, 1996, NASDAQ closing price of the
Corporation's Common Stock of $18.50 per share, less the respective
exercise prices.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee members are Michael Brennan, Doris M. Damm
and Elizabeth Burns.
Mr. Brennan, a director of the Corporation, is a shareholder of the law
firm of Brennan and Bernardin, P.C., which provides legal services to the Bank
from time to time. Mr. Brennan is a partner in the partnership from which the
Bank leased certain facilities during 1996. In January, 1997, the Bank purchased
the facilities from the Partnership. SEE, CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, below.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Corporation
(the "Committee") is comprised of non-employee directors. The Committee is
responsible for setting and administering policies governing compensation of
executive officers of the Bank. (The Corporation has no salaried executive
officers.) The Committee reviews the performance and compensation levels for
executive officers, sets salary and bonus levels and makes option grants under
the Corporation's 1994 Employee and Director Stock Option Plan ("Option Plan").
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COMPENSATION POLICIES
The goals of the Corporation's executive officer compensation policies
are to attract, retain and reward executive officers who contribute to the
Corporation's success, to align executive officer compensation with the
Corporation's performance and to motivate executive officers to achieve the
Corporation's business objectives. The Corporation uses salary, bonuses and
stock options to achieve these goals. The Committee reviews various available
data, including compensation surveys, to enable the Committee to compare the
Bank's compensation package with that of other banks of similar size and market
in the Corporation's geographic area. The Committee also considers net income
for the year and earnings per share of the Corporation.
BASE SALARY
Base Salary is minimum compensation for the particular office and is
not tied to any performance formula or standard. Position description,
direct responsibility assumed, comparatives to salaries of peers in the
region, and the performance of the Bank are among the criteria used to
establish base salary.
ANNUAL BONUSES
Cash incentive compensation is provided through bonus awards. For 1996,
individual awards to executive officers were determined by multiplying
the executive officer's base salary by a percentage which is determined
by a formula based upon the average of the increases in the return on
average assets and the growth in average assets in excess of a
pre-determined minimum over the prior year. The resulting bonus amount
may be increased or decreased in the subjective determination of the
Committee based upon a review by the Committee of overall individual
performance. Total bonus awards to executive officers earned with
respect to performance during the 1996 fiscal year ranged from $18,500
to $22,500.
STOCK OPTIONS
Stock option awards are determined by the Committee. The Committee
believes that equity ownership by executive officers provides
incentives to build shareholder value and aligns the interests of
executive officers with the shareholders. The Committee meets to
evaluate meritorious performance of all officers for consideration to
receive stock options. Depending on circumstances, the Committee makes
awards based upon the position of the officer in the Bank, its
determination of the benefit which the Corporation has derived as a
result of the performance of the executive officer, and the
Corporation's desire to encourage long-term employment of the executive
officer. In 1996, no options were granted to executive officers.
However, options were granted on March 18, 1997, based in part, on
performance for 1996. Option grants to executive officers ranged from
3,000 to 4,000 shares.
CHIEF EXECUTIVE OFFICER COMPENSATION
The compensation of the Chief Executive Officer is based upon the same
criteria outlined above for the other executive officers of the Bank. Subjective
factors considered in determining the cash bonus awarded to the Chief Executive
Officer included, among others, receipt of approvals to open four new branch
offices, significant increase in revenues from the residential mortgage business
and favorable regulatory examinations and audit reports, during the 1996 fiscal
year. While the Chief Executive Officer makes recommendations about the
compensation levels, goals and performance of the other executive officers, he
does not participate in discussions regarding his compensation or performance.
In 1996, the Committee increased the Chief Executive Officer's base salary from
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$134,871 to $137,345, and awarded him a bonus of $22,500. The Committee has not
taken action with respect to the Chief Executive Officer's compensation for 1997
performance.
By the Compensation Committee:
Michael G. Brennan
Elizabeth Burns
Doris M. Damm
PERFORMANCE GRAPH
The following graph summarizes the cumulative return on an investment
of $100 on June 17, 1994, in the Common Stock of the Corporation, as compared to
a similar investment of $100 on that date in stocks comprising the broad market
index of NASDAQ US Stocks and stocks comprising the peer group defined as SNL
listed banks under $500 million in assets. The graph assumes the reinvestment of
all dividends. SNL Securities is a research and publishing firm specializing in
the collection and dissemination of data on banking, thrift, and financial
services industries. SNL maintains databases with stock price, dividend, market,
financial, and equity information regarding every domestic publicly traded bank
and thrift and a wide range of financial services companies.
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COMMUNITY FINANCIAL HOLDING CORPORATION
[LINE GRAPH]
<TABLE>
<CAPTION>
PERIOD ENDING
----------------------------------------------------------
Index 6/17/94 12/31/94 6/30/95 12/31/95 6/30/96 12/31/96
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Community Financial Holding Corp. 100.00 89.12 87.91 143.58 120.50 199.22
NASDAQ-Total US 100.00 103.71 129.32 146.67 166.05 180.41
SNL Banks (under $500M) Index 100.00 99.74 113.89 136.45 151.06 175.63
</TABLE>
<PAGE> 16
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Robert T. Pluese, Chairman of the Board of the Corporation, is a
shareholder of the law firm of Pluese & Lihotz, P.C., which provides legal
services to the Bank on certain limited matters. Michael G. Brennan, a director
of the Corporation, is a shareholder of the law firm of Brennan & Bernardin,
P.C., which provides legal services to the Bank from time to time.
The Bank's operations and support facility, located at 231 Haddon
Avenue, Westmont, New Jersey (the "Property"), was leased until January 7, 1997
from a partnership (the "Partnership") in which Messrs. Pluese, Riggs,
DeFelicis, Brennan and Smith, and a trust for the benefit of children of Joseph
Riggs, Jr. (the son of a director of the Company), among others, are partners.
The aggregate rent payments with respect to the lease in 1996 were approximately
$57,600. The Corporation believes that the terms of this lease were no less
beneficial to the Corporation than those that could be obtained in an
arms-length transaction with an unrelated party. On January 7, 1997, the Bank
purchased the Property from the Partnership for $325,000. The purchase price was
based upon an independent third party appraisal of the Property and was
determined by negotiations between the Partnership and a committee, appointed by
the Board of Directors of the Corporation, comprised of Mr. Samson, Mrs. Damm,
and Mrs. Burns, none of whom are (or were) partners of the Partnership. The
respective interests of the partners in the Partnership who are directors of the
Corporation or and the Bank are Mr. Pluese - 11.11%, Dr. Riggs - 11.11%, Mr.
DeFelicis - 11.11%, Mr. Brennan - 11.11%, Mr. Smith - 11.11%, and the trust -
11.11%.
PROPOSAL NO. 2
AMENDMENT TO CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK
The Board of Directors of the Corporation believes that it is desirable
for the shareholders to consider and act upon a Proposal to amend the
Corporation's Certificate of Incorporation (the "Certificate"). Pursuant to the
Proposal, the Corporation's currently authorized shares of common stock, $5.00
par value, will be increased from 1,600,000 shares to 3,200,000 shares. Of the
1,600,000 currently authorized shares of common stock, as of April 14, 1997,
978,775 were issued and outstanding. Of the remaining 621,225 authorized shares
of common stock, 347,288 were reserved for issuance in connection with the
Corporation's 1994 Employee and Director and Stock Option Plan.
Except for shares currently reserved as explained above, the
Corporation does not have any present plan, understanding or agreement to issue
additional shares of common stock. However, the Board believes that the proposed
increase in authorized shares of common stock is desirable to enhance the
Corporation's flexibility in connection with possible future actions, such as
stock splits, stock dividends, financings, corporate mergers, acquisition of
property, use in employee benefit plans, or other corporate purposes. The Board
will determine whether, when, and on what terms the issuance of shares of common
stock may be warranted in connection with any of the foregoing purposes. In the
event of any such issuance, shareholders will have no pre-emptive rights.
Further authorization for the issuance of common stock will only be solicited
from the shareholders of the Corporation if required by law.
The Board of Directors is required by applicable law to make any
determination to issue shares of common stock based on its judgment as to the
best interests of the shareholders and the Corporation. Although the Board of
Directors has no present intention of doing so, it could issue shares of common
stock that could make more difficult or discourage an attempt to obtain control
of the Corporation by means of a merger, tender offer, proxy contest or other
means. When in the judgment of the Board of Directors this action would be in
the best interests of the shareholders and the Corporation, such shares could be
used to create voting or other impediments or to discourage persons seeking to
gain control of the Corporation. Such shares could be privately placed with
purchasers favorable to the Board of Directors in opposing such action. In
addition, the existence of additional
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authorized shares could have the effect of discouraging unsolicited takeover
attempts. The issuance of new shares could also be used to dilute the stock
ownership of the person or entity seeking to obtain control of the Corporation
should the Board of Directors consider the action of such person or entity not
to be in the best interests of the shareholders and the Corporation.
While the Corporation may consider effecting an equity offering of
common shares in the proximate future for purposes of raising additional working
capital or otherwise, the Corporation, as of the date hereof, has no agreements
or understandings with any third party to effect such offering, to purchase any
shares offered in connection therewith, or to vote any such shares, and no
assurances can be given that any offering will, in fact, be effected.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT TO THE
CORPORATION'S CERTIFICATE OF INCORPORATION TO PROVIDE AN INCREASE IN THE NUMBER
OF AUTHORIZED COMMON SHARES FROM 1,600,000 SHARES TO 3,200,000 SHARES.
PROPOSAL NO. 3
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Corporation has appointed KPMG Peat
Marwick LLP, certified public accountants, as the Corporation's independent
auditors for the fiscal year ending December 31, 1997, subject to ratification
of such appointment by shareholders. The submission of the appointment of KPMG
Peat Marwick LLP for ratification by the shareholders is not required by law or
by the Corporation's Bylaws and is being done for the sole purpose of
ascertaining the views of the shareholders of the Corporation with respect to
such appointment. The Corporation shall not be bound by such shareholder action
if the shareholders do not ratify the appointment, in which event the selection
of other independent certified public accountants may be considered by the Board
of Directors. Representatives of KPMG Peat Marwick LLP are expected to be
present at the Meeting, will be given an opportunity to make a statement if they
desire to do so, and will be available to answer appropriate questions from
shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
SELECTION OF KPMG PEAT MARWICK LLP, CERTIFIED PUBLIC ACCOUNTANTS, AS INDEPENDENT
AUDITORS FOR THE CORPORATION FOR THE YEAR ENDING DECEMBER 31, 1997.
ANNUAL REPORT
A copy of the Corporation's Annual Report for the fiscal year ended
December 31, 1996, is being mailed to the Corporation's shareholders with this
Proxy Statement.
SHAREHOLDER PROPOSALS
Any shareholder who, in accordance with and subject to the provisions
of the proxy rules of the Securities and Exchange Commission, wishes to submit a
proposal for inclusion in the Corporation's Proxy Statement for its 1998 Annual
Meeting of Shareholders must deliver such proposal in writing to the Secretary
of the Corporation at the Corporation's principal executive offices at 222
Haddon Avenue, Westmont, New Jersey 08108, not later than Tuesday, December 16,
1997.
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OTHER MATTERS
The Board of Directors does not know of any matters to be presented for
consideration other than the matters described in the Proxy Statement. If other
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 judgement.
ADDITIONAL INFORMATION
UPON WRITTEN REQUEST OF ANY SHAREHOLDER, A COPY OF THE CORPORATION'S
REPORT ON FORM 10-K FOR ITS FISCAL YEAR ENDED DECEMBER 31, 1996, INCLUDING THE
FINANCIAL STATEMENTS AND THE SCHEDULES THERETO, AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, MAY BE OBTAINED, WITHOUT CHARGE, FROM KEVIN L. KUTCHER,
SECRETARY, COMMUNITY FINANCIAL HOLDING CORPORATION, 222 HADDON AVENUE, WESTMONT,
NEW JERSEY 08108, TELEPHONE 609-869-7900.
By Order of the Board of Directors
Kevin L. Kutcher
April 14, 1997 Executive Vice President & Secretary
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COMMUNITY FINANCIAL HOLDING CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
Annual Meeting of Shareholders - May 13, 1997
The undersigned shareholder of COMMUNITY FINANCIAL HOLDING CORPORATION
(the "Company"), revoking all previous proxies, hereby appoints John
Masters and Richard Breyley, and each of them acting individually, as the
attorney and proxy of the undersigned, with full power of substitution, to vote
all shares of stock of the Company which the undersigned would be entitled to
vote if personally present at the Annual Meeting of Shareholders of the Company,
to be held at the Tavistock Country Club, Haddonfield, New Jersey on May 13,
1997, at 7:30 p.m., and at any adjournment thereof; provided that said proxies
are authorized and directed to vote as indicated with respect to the following
matters:
<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS
Election of three directors for a term of three years expiring at WITHHOLD
the 2000 Annual Meeting. FOR AUTHORITY
ROBERT T. PLUESE / / / /
GERARD M. BANMILLER / / / /
FRANK B. SMITH / / / /
2. AMENDMENT TO CERTIFICATE OF INCORPORATION
INCREASING THE NUMBER OF AUTHORIZED SHARES
OF COMMON STOCK
To approve an amendment to the Company's Certificate of FOR AGAINST ABSTAIN
Incorporation increasing the number of authorized shares of
common stock from 1,600,000 to 3,200,000. / / / / / /
3. RATIFICATION OF APPOINTMENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
To ratify the selection of KPMG Peat Marwick LLP, of FOR AGAINST ABSTAIN
Philadelphia, Pennsylvania, Certified Public Accountants, as the
independent auditors for the corporation for its 1997 fiscal year. / / / / / /
</TABLE>
(Continued and to be signed on reverse side)
<PAGE> 20
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. UNLESS
OTHERWISE SPECIFIED, THE SHARES WILL BE VOTED "FOR" ELECTION OF NOMINEES FOR
DIRECTORS LISTED ON THE REVERSE SIDE HEREOF, "FOR" THE AMENDMENT TO THE
COMPANY'S CERTIFICATE OF INCORPORATION INCREASING THE NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK, AND "FOR" RATIFICATION OF THE APPOINTMENT OF KPMG PEAT
MARWICK LLP, AS THE COMPANY'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS. THIS
PROXY ALSO DELEGATES DISCRETIONARY AUTHORITY TO THE PROXY HOLDERS NAMED ON THE
REVERSE SIDE WITH RESPECT TO ANY OTHER BUSINESS WHICH MAY PROPERLY COME BEFORE
THE MEETING OR ANY ADJOURNMENT THEREOF.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL
MEETING AND PROXY STATEMENT. DATE ______________________, 1997.
---------- ---------------------------------------
Date Signature of Shareholder
---------- ---------------------------------------
Date Signature of Shareholder
NOTE: PLEASE SIGN THIS PROXY EXACTLY AS NAME(S) APPEAR ON
YOUR STOCK CERTIFICATE. WHEN SIGNING AS ATTORNEY-
IN-FACT, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN,
PLEASE ADD YOUR TITLE AS SUCH, AND IF SIGNER IS A
CORPORATION, PLEASE SIGN WITH FULL CORPORATE NAME BY A
DULY AUTHORIZED OFFICER OR OFFICERS AND AFFIX THE
CORPORATE SEAL. WHERE STOCK IS ISSUED IN THE NAME OF TWO
(2) OR MORE PERSONS, ALL SUCH PERSONS SHOULD SIGN.
