SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement |_| Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Bancorp Connecticut, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
N/A
- --------------------------------------------------------------------------------
(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: N/A.
(2) Aggregate number of securities to which transaction applies: N/A.
(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): N/A.
(4) Proposed maximum aggregate value of transaction: N/A.
(5) Total fee paid: N/A.
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset is 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: N/A.
(2) Form, Schedule or Registration Statement No.: N/A.
(3) Filing Party: N/A.
(4) Date Filed: N/A.
<PAGE>
HART1-629448-6
[Bancorp Connecticut, Inc. Letterhead]
Dear Shareholder:
You are cordially invited to attend the 1997 Annual Meeting of the
Shareholders of Bancorp Connecticut, Inc. (the "Company") to be held on
Wednesday, May 14, 1997. Matters scheduled for consideration at the Meeting are
the election of directors, the approval of the Company's 1997 Stock Option Plan,
and the ratification of the appointment of the Company's independent accountants
for 1997.
Please give the enclosed Proxy Statement your prompt and careful
attention. A copy of the Company's 1996 Annual Report to Shareholders also is
enclosed. If you need an additional copy of the Company's Annual Report, please
call Lesley A. DeAngelo at 860-620-6579.
It is important that your shares be represented at the Meeting. To ensure
that your shares will be represented, please sign and promptly return the
enclosed proxy in the envelope provided, regardless of whether you plan to
attend the Meeting. If you attend the Meeting, you may vote in person even if
you previously have mailed in your proxy.
Sincerely,
/s/ Robert D. Morton
ROBERT D. MORTON
President
<PAGE>
BANCORP CONNECTICUT, INC.
121 MAIN STREET
SOUTHINGTON, CONNECTICUT 06489
NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS OF
BANCORP CONNECTICUT, INC.
TO BE HELD MAY 14, 1997
TO THE SHAREHOLDERS OF BANCORP CONNECTICUT, INC.:
Notice is hereby given that the 1997 Annual Meeting of the Shareholders
(the "Meeting") of Bancorp Connecticut, Inc. (the "Company") will be held at
2:00 p.m. on Wednesday, May 14, 1997, at The Elks Club of Southington, 114 Main
Street, Southington, Connecticut, for the following purposes:
(1) To elect four directors to serve until the 2000 annual meeting
of shareholders and until their successors are elected and have qualified;
(2) To approve the Company's 1997 Stock Option Plan;
(3) To ratify the appointment of Coopers & Lybrand L.L.P. as the
Company's independent accountants for the fiscal year ending December 31,
1997; and
(4) To transact such other business as may properly come before the
Meeting or any adjournment thereof.
Only shareholders of record of outstanding shares of Common Stock of the
Company at the close of business on March 19, 1997, are entitled to notice of,
and to vote at, the Meeting or any adjournment or postponement thereof.
A list of the Company's shareholders will be open to the examination of
any shareholder, for any purpose germane to the Meeting, during ordinary
business hours, for at least 10 days prior to the Meeting, at the offices of the
Company.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Anthony Priore, Jr.
Anthony Priore, Jr.
Secretary
Southington, Connecticut
April 9, 1997
YOUR VOTE IS IMPORTANT. TO VOTE YOUR SHARES, PLEASE MARK, SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE WHETHER OR NOT YOU PLAN
TO ATTEND THE MEETING IN PERSON. IF YOU ATTEND THE MEETING, YOU MAY THEN REVOKE
YOUR PROXY AND VOTE IN PERSON.
<PAGE>
BANCORP CONNECTICUT, INC.
121 MAIN STREET
SOUTHINGTON, CONNECTICUT 06489
(860) 628-0351
------------------------------
PROXY STATEMENT
FOR ANNUAL MEETING
TO BE HELD MAY 14, 1997
-----------------------------------
INTRODUCTION
This Proxy Statement is furnished to shareholders of Bancorp Connecticut,
Inc., a Delaware corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company (the "Board")
for use at the Annual Meeting of Shareholders of the Company to be held on
Wednesday, May 14, 1997, at 2:00 p.m., local time, at The Elks Club of
Southington, 114 Main Street, Southington, Connecticut 06489 and any adjournment
or postponement thereof (the "Meeting"). The Company is the holding company for
Southington Savings Bank, a Connecticut-chartered capital stock savings bank
(the "Bank").
At the Meeting, shareholders will be asked to consider and vote upon three
proposals: (1) the election of four directors to serve as directors of the
Company until the 2000 annual meeting of shareholders ("Proposal Number One");
(2) the approval of the Company's 1997 Stock Option Plan ("Proposal Number
Two"); and (3) the ratification of the appointment of Coopers & Lybrand L.L.P.
as the Company's independent accountants for the fiscal year ending December 31,
1997 ("Proposal Number Three").
This Proxy Statement is dated April 9, 1997, and is first being mailed to
shareholders along with the related form of proxy on or about April 9, 1997.
If a proxy in the accompanying form is properly executed and returned to
the Company in time for the Meeting and is not revoked prior to the time it is
exercised, the shares represented by the proxy will be voted in accordance with
the directions specified therein for the matters listed on the proxy card.
Unless the proxy specifies that it is to be voted against or voting authority is
to be withheld on a listed proposal, such proxy will be voted FOR each nominee
listed in Proposal Number One, FOR Proposal Number Two, and FOR Proposal Number
Three, and otherwise in the discretion of the proxy holders as to any other
matter that may come before the Meeting.
Voting by those present during the Meeting will be by ballot. Votes will
be counted by tellers of the election. These tellers will canvas the
shareholders present at the Meeting, count their votes and count the votes
represented by proxies presented. Abstentions and broker nonvotes are counted
for purposes of determining the number of shares represented at the Meeting, but
are deemed not to have voted on the applicable proposal. Abstentions and broker
nonvotes will therefore have the same effect as a negative vote. Broker nonvotes
occur when a broker nominee, holding shares in street name for the beneficial
owner thereof, has not received voting instructions from the beneficial owner
and does not have discretionary authority to vote such shares.
<PAGE>
REVOCABILITY OF PROXY
Any shareholder of the Company who has given a proxy may revoke such proxy
at any time before it is voted by either (i) filing a written revocation or a
duly executed proxy bearing a later date with Anthony Priore, Jr., Secretary of
the Company, at Bancorp Connecticut, Inc., 121 Main Street, Southington,
Connecticut 06489, or (ii) attending the Meeting and voting in person before the
proxy is voted. Attendance at the Meeting will not in and of itself constitute
the revocation of a proxy.
RECORD DATE, OUTSTANDING SECURITIES AND VOTES REQUIRED
The Board has fixed the close of business on March 19, 1997 as the record
date (the "Record Date") for determining holders of outstanding shares of the
Company's Common Stock, par value $1.00 per share ("Common Stock") who are
entitled to notice of and to vote at the Meeting. As of the Record Date,
2,557,865 shares of Common Stock were issued and outstanding. Each share of
Common Stock is entitled to one vote, and a majority of the outstanding shares
of Common Stock will constitute a quorum for the transaction of business at the
Meeting. No other class of securities of the Company is outstanding or entitled
to vote at the Meeting.
The election of each nominee listed in Proposal Number One as a director
of the Company requires the affirmative vote of a plurality of the shares of
Common Stock which are present or represented at the Meeting. The approval of
Proposal Number Two and Proposal Number Three each requires the affirmative vote
of a majority of the shares of Common Stock which are present or represented at
the Meeting.
The Company expects that the officers and directors of the Company will
vote the shares of Common Stock held by them (representing approximately 7.56%
of the shares of Common Stock issued and outstanding) in favor of each nominee
listed in Proposal Number One, and in favor of Proposal Number Two and Proposal
Number Three.
PRINCIPAL SHAREHOLDERS
As of the Record Date, there were no persons or groups (as that term is
used in Section 13(d)(3) of the Securities Exchange Act of 1934) known to the
Company who own or may be deemed to own beneficially more than five percent of
the outstanding Common Stock.
PROPOSAL NUMBER ONE
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation (the "Certificate") provides
for a Board of Directors of not less than seven and not more than fifteen
members, as fixed from time to time by the Board pursuant to the Company's
Bylaws. The Certificate also provides that the Board is divided into three
classes, as nearly equal in number as the then total number of directors
constituting the entire Board permits, with the term of office of one class
expiring each year at the annual meeting. Each class of directors is elected for
a term of three years except in the case of elections to fill vacancies or newly
created directorships.
The Board presently consists of the twelve persons indicated below as
either nominees for director or continuing directors. Four individuals are to be
elected to serve for a term of three years and until the election and
qualification of their successors. Unless a shareholder WITHHOLDS AUTHORITY, the
holders of proxies representing shares of Common Stock will vote FOR the
election of Andrew J. Meade, Frank R.
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<PAGE>
Miller, Robert D. Morton, and Dennis J. Stanek as directors to serve until the
Company's 2000 annual meeting and until their successors are elected and have
qualified. The Board has no reason to believe that any of the nominees will
decline or be unable to serve as a director of the Company. However, if any such
nominee shall be unavailable for any reason, then proxies will be voted for the
election of such person or persons as may be recommended by the Board.
The following tables set forth, as of February 28, 1997, certain
information about each nominee director, each director continuing in office and
each executive officer of the Company and the Bank who is not a director. Unless
otherwise stated, all nominees, directors continuing in office, and executive
officers have held the positions described for the past five years. The
Company's executive officers serve at the pleasure of the Board. Each nominee
and continuing director also serves as a director of the Bank.
Nominees Age Director Since Term Expiring*
Andrew J. Meade 58 1994 2000
Frank R. Miller 58 1994 2000
Robert D. Morton 56 1994 2000
Dennis J. Stanek 54 1994 2000
Continuing Directors Age Director Since Term Expiring
Norbert H. 60 1995 1998
Beauchemin
Walter J. Hushak 73 1994 1998
Frederick E. Kuhr 59 1994 1998
Joseph J. LaPorte 63 1994 1998
Michael J. Karabin 50 1994 1999
David P. Kelley 55 1994 1999
Ralph G. Mann 67 1994 1999
Anthony S. Pizzitola 66 1994 1999
* Assumes election at the Meeting.
NORBERT H. BEAUCHEMIN, CPA, is Vice President of the accounting firm of
Dudzik & Beauchemin, P.C., CPAs, with offices in Southington and West Hartford,
Connecticut.
WALTER J. HUSHAK has served as Chairman of the Board of Directors of the
Bank (the "Bank Board") since May, 1994 and prior to that as Vice Chairman of
the Bank Board since 1982. He is Senior Vice President of Janazzo Services,
Inc., which is located in Southington, Connecticut.
MICHAEL J. KARABIN is President of Acme-Monaco Spring Corporation, a
manufacturer of springs, stampings, wire forms, orthodontic hardware and medical
assemblies located in New Britain, Connecticut.
DAVID P. KELLEY is a partner in the law firm of Kelley, Crispino & Kania,
Southington, Connecticut. He has been the Southington Town Attorney since
November, 1993. He is also Counsel to the Bank.
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<PAGE>
FREDERICK E. KUHR is President and controlling shareholder of Evergreen
Nursery, Inc., Southington, Connecticut.
JOSEPH J. LAPORTE retired in 1996 as a Manufacturers Representative of the
BCS Company, a distributor of industrial metal finishing chemicals and
equipment, located in Thompson, Connecticut. Since December, 1992, he has been
President of JNF Associates Inc., developers of real estate.
RALPH G. MANN retired as President and Chief Executive Officer of the Bank
on December 31, 1991. He was associated with the Bank as an officer or employee
for 37 years, including 10 years as Chief Executive Officer.
ANDREW J. MEADE has served as Vice Chairman of the Bank Board since May,
1994. He is President of International Security Products, Inc. (doing business
as Lori Lock), a manufacturer of security products located in Southington,
Connecticut. He also is President of Delta Controls, a subsidiary of
International Security Products. Mr. Meade also has been the Chairman of the
Southington Town Council since 1993.
FRANK R. MILLER, CPA, is the Managing Partner of the accounting firm of
Miller, Moriarty and Company, L.L.C., located in New Britain, Connecticut.
ROBERT D. MORTON has been the President of the Company since its formation
on March 31, 1994. Mr. Morton was elected President and Chief Executive Officer
of the Bank on January 1, 1992.
ANTHONY S. PIZZITOLA retired as President and Treasurer of Pizzitola
Electric Co., Inc., an electrical contractor located in Southington,
Connecticut, in October, 1994.
DENNIS J. STANEK is Senior Vice President-Investments of Tucker Anthony
Incorporated, an investment banking firm. Mr. Stanek is based in such firm's
Hartford, Connecticut office.
COMPANY AND BANK EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Mr. Anthony Priore, Jr. is the Company's only executive officer other than
Mr. Morton. The other persons listed below are executive officers of the Bank.
Name Age Position
Anthony Priore, Jr. 44 Secretary and Treasurer of the
Company; Senior Vice President,
Treasurer and Chief Financial
Officer of the Bank
Barry J. Abramowitz 37 Chief Information Officer of the
Bank
William DellaVecchia 53 Senior Vice President - Commercial
Banking of the Bank
Charles J. DeSimone, Jr. 53 Chief Credit Officer of the Bank
Richard A. Fracasso 54 Senior Vice President - Consumer
Banking of the Bank
Robert P. Vocelli 52 Financial Services Manager of the
Bank
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<PAGE>
ANTHONY PRIORE, JR. has been the Treasurer and Secretary of the Company
since its formation on March 31, 1994. Mr. Priore has served as Senior Vice
President, Treasurer and Chief Financial Officer of the Bank since 1992.
BARRY J. ABRAMOWITZ has been Chief Information Officer of the Bank since
September, 1996. Prior to joining the Bank, he served from 1995 to 1996 as
Senior Manager for Arthur Andersen, LLP and from 1990 to 1995 as Senior Vice
President of Corporate Systems and Operations for Northeast Savings, FA.
WILLIAM DELLAVECCHIA has served as Senior Vice President-Commercial
Banking of the Bank since December, 1990.
CHARLES J. DESIMONE, JR. has been the Chief Credit Officer of the Bank
since June, 1993. Prior to joining the Bank, he served as Founder and President
of William Charles Investment Management, Inc., a Hartford, Connecticut-based
investment banking company from 1984 to 1993.
RICHARD A. FRACASSO has served as Senior Vice President-Consumer Banking
of the Bank since July, 1992. Prior to joining the Bank, he served from 1990 to
1992 as Senior Vice President of Administrative Services for Fleet Bank, N.A.
ROBERT P. VOCELLI has been the Financial Services Manager of the Bank
since January, 1995. Prior to joining the Bank he served as Senior Vice
President of "The Private Bank" of the Bank of Boston Connecticut from 1990 to
1994.
THE BOARD OF DIRECTORS AND CERTAIN OF ITS COMMITTEES
The Board has a standing Audit and Compliance Committee whose members are
appointed annually. The Audit and Compliance Committee currently consists of
Messrs. Beauchemin, Hushak, Karabin, Kelley, Meade and Miller. The Audit and
Compliance Committee reviews the report of the Company's internal auditor and
compliance officer, recommends annually to the Board the appointment of the
independent certified public accountants for the Company, reviews the scope and
the cost of the prospective annual audit and reviews the results thereof with
the Company's independent certified public accountants, reviews management's
procedures and policies relative to the adequacy of the Company's internal
accounting controls, and reviews compliance with federal and state laws relating
to accounting practices. The members of the Audit and Compliance Committee are
also members of the Bank's Audit and Compliance Committee.
The Board has a Compensation Committee that meets jointly with the
Compensation Committee of the Bank Board because the Company has no paid
employees. The Compensation Committee is responsible for developing the
Company's overall compensation philosophy and recommending the compensation of
the Bank's executive officers to the Bank Board and the Company Board. Mr.
Morton does not participate in any Board or Bank Board discussions concerning
his compensation. The Compensation Committee currently consists of Messrs.
Hushak, Karabin, Kelley, LaPorte, Meade, Miller, and Pizzitola. See
"Compensation Committee Report on Executive Compensation" for a more detailed
description of the Compensation Committee's function.
The Board has not established a standing nominating committee. The Board
as a whole operates as a nominating committee. A shareholder's right to nominate
individuals for election to the Board is set forth in the Company's Bylaws.
Pursuant to the Bylaws, a shareholder must deliver written notice of such
shareholder's intent to make such a nomination to, or mail such notice so that
it is received by, the Company's Secretary at the Company's principal executive
offices not less than 20 days nor more than 130 days prior to the applicable
meeting. The Bylaws further require that the written notice set forth (1) as to
each person whom
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<PAGE>
the shareholder proposes to nominate (a) such person's name, age, business
address and residence address, (b) such person's principal occupation or
employment, (c) the class and number of shares of the Company such person
beneficially owns, and (d) any other information required by law; and (2) as to
the shareholder giving such notice (a) such shareholder's name and address as
they appear on the Company's records, (b) the class and number of shares of the
Company such shareholder beneficially owns, (c) a representation that the
shareholder is a holder of record of stock of the Company entitled to vote at
the applicable meeting and intends to appear in person or by proxy at such
meeting to nominate the person or persons specified in the notice, and (d) a
description of all arrangements or understandings between the shareholder and
each nominee specified in the notice and any other person or persons (naming
such other person or persons) pursuant to which the shareholder will make such
nomination or nominations. A copy of the Company's Bylaws will be provided
without charge to any shareholder of the Company upon such shareholder's written
request to Lesley A. DeAngelo, Bancorp Connecticut, Inc., 121 Main Street,
Southington, Connecticut 06489.
During 1996, the Board held 13 meetings, the Audit and Compliance
Committee held 1 meeting, and the Compensation Committee held 4 meetings. During
1996, each director of the Company attended at least 75% of the meetings of the
Board and all committees upon which he served.
STOCK OWNERSHIP OF DIRECTORS AND OFFICERS
The following table sets forth as of February 28, 1997, the number of shares of
Common Stock beneficially owned by (a) each director, nominee for director and
the individual named in the Summary Compensation Table of the Company; and (b)
all directors, nominees and executive officers of the Company as a group.
Name of Beneficial Amount and Nature of Percent of
Owner Beneficial Ownership (1) Class (2)
Robert D. Morton 74,505 (3) 2.53%
Walter J. Hushak 40,282 (4) 1.37%
Anthony S. Pizzitola 33,902 (5) 1.15%
Michael J. Karabin 31,572 (6) 1.07%
Joseph J. LaPorte 29,958 (7) 1.02%
Ralph G. Mann 29,534 (8) 1.00%
Norbert H. Beauchemin 27,005 (9) *
Andrew J. Meade 26,628 (10) *
Frederick E. Kuhr 25,234 (11) *
David P. Kelley 19,491 (12) *
Dennis J. Stanek 18,148 (13) *
Frank R. Miller 11,776 (14) *
All directors, nominees and 393,763 (16) 13.39%
executive officers as a
group (13 persons) (15)
* Less than one percent.
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<PAGE>
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(1) Except as otherwise noted, each person named in the table has sole voting
and investment power over the number of shares of Common Stock listed
opposite his name. The Company's directors and principal officers hold
options to purchase shares of Common Stock pursuant to the Company's Stock
Option Plans. For the purpose of the table, shares subject to those
options which may be exercised within the next 60 days ("currently
exercisable options") are deemed beneficially owned by the individuals
holding such options. Until such time as the options are exercised, no
person will have voting or investment power over the shares subject to the
options.
(2) For the purpose of computing the percentage of outstanding Common Stock
owned by each person named in the table, shares subject to currently
exercisable options held by such person pursuant to the Company's Stock
Option Plans are deemed to be outstanding.
(3) Includes beneficial ownership of 14,915 shares purchased by Mr. Morton for
himself; and 4,230 shares purchased by Mr. Morton's wife over which Mr.
Morton has no voting or investment power and of which Mr. Morton disclaims
beneficial ownership. Includes 55,360 shares issuable upon the exercise of
currently exercisable options.
(4) Includes 13,020 shares issuable upon exercise of currently exercisable
options.
(5) Includes beneficial ownership of 11,188 shares purchased by Mr. Pizzitola
for himself and 11,174 shares purchased by Mr. Pizzitola's wife over which
Mr. Pizzitola has no voting or investment power. Includes 11,540 shares
issuable upon the exercise of currently exercisable options.
(6) Includes beneficial ownership of 2,306 shares purchased by Mr. Karabin for
himself; 1,285 shares purchased by Mr. Karabin's wife for their daughters
over which Mr. Karabin has no voting or investment power; 1,001 shares
purchased by Mr. Karabin's wife for their sons over which Mr. Karabin has
no voting or investment power; and 16,740 shares purchased by Acme-Monaco
Spring Corporation (Profit Sharing), of which Mr. Karabin is President,
over which Mr. Karabin has shared voting and investment power. Includes
10,240 shares issuable upon the exercise of currently exercisable options.
(7) Includes 16,738 shares purchased jointly by Mr. LaPorte and his wife over
which Mr. LaPorte has shared voting and investment power. Includes 13,220
shares issuable upon exercise of currently exercisable options.
(8) Includes 19,294 shares purchased jointly by Mr. Mann and his wife over
which Mr. Mann has shared voting and investment power. Includes 10,240
shares issuable upon the exercise of currently exercisable options.
(9) Includes 1,651 shares purchased by Mr. Beauchemin for himself; 150 shares
purchased jointly by Mr. Beauchemin and his sister over which Mr.
Beauchemin has shared voting and investment power; 1,648 shares purchased
by Mr. Beauchemin's wife over which Mr. Beauchemin has no voting or
investment power and of which Mr. Beauchemin disclaims beneficial
ownership; 15,840 shares purchased by Dudzik & Beauchemin, P.C. CPA's
Profit Sharing Trust over which Mr. Beauchemin has no voting or investment
power and of which Mr. Beauchemin disclaims beneficial ownership; and 216
shares purchased by Dudzik & Beauchemin, P.C. CPA's over which Mr.
Beauchemin has no voting or investment power and of which Mr. Beauchemin
disclaims beneficial ownership. Includes 7,500 shares issuable upon
exercise of currently exercisable options.
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<PAGE>
(10) Includes beneficial ownership of 5,798 shares purchased by Mr. Meade for
himself; 467 shares purchased by Mr. Meade's wife; 4,941 shares purchased
by Mr. Meade for the Meade Trust; and 2,452 shares purchased jointly by
Mr. Meade and his wife. Includes 12,970 shares issuable upon the exercise
of currently exercisable options.
(11) Includes beneficial ownership of 12,014 shares purchased jointly by Mr.
Kuhr and his wife over which Mr. Kuhr has shared voting and investment
power. Includes 13,220 shares issuable upon the exercise of currently
exercisable options.
(12) Includes 13,220 shares issuable upon exercise of currently exercisable
options.
(13) Includes 13,220 shares issuable upon exercise of currently exercisable
options.
(14) Includes beneficial ownership of 5,424 shares purchased by Mr. Miller for
himself; and 52 shares purchased by Mr. Miller's wife as custodian for an
unrelated third party over which Mr. Miller has no voting or investment
power and of which Mr. Miller disclaims beneficial ownership. Includes
6,300 shares issuable upon the exercise of currently exercisable options.
(15) Includes Mr. Priore.
(16) Includes 200,450 shares issuable upon the exercise of currently
exercisable options.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of
its Common Stock, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission (the "Commission") and the National
Association of Securities Dealers, Inc. Officers, directors and greater than ten
percent shareholders are required by the Commission to furnish the Company with
copies of all Section 16(a) forms that they file. The Company is not aware of
any person or group that owns in excess of five percent of the outstanding
Common Stock. See "Principal Shareholders."
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no reports on Form 5
were required for those persons, the Company believes that during 1996 all
filing requirements applicable to its officers and directors were complied with
except that Mr. Kuhr filed two late reports of beneficial ownership on Form 4
regarding two sales of securities.
EXECUTIVE COMPENSATION
The following tables set forth certain information with respect to Mr.
Morton's compensation. Mr. Morton is the Company's chief executive officer and
the only officer of the Company whose salary and bonus exceeded $100,000 in
1996. All amounts listed below were paid by the Bank to Mr. Morton in his
capacity as the Bank's President and Chief Executive Officer.
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<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- ---------------------------------------------------------------------------------------
Annual Compensation Long-Term
Compensation
--------------------------------------
Awards
---------------
Securities All Other
Name Underlying Compensation
and Salary Bonus Options/SARs ($)
Principal Position Year ($) ($) (#)
- ---------------------------------------------------------------------------------------
-----------------------------------------------------------------
Robert D. Morton,
<S> <C> <C> <C> <C> <C>
President 1996 156,180 30,000 (1) 12,500 (2) 4,946 (3)
-----------------------------------------------------------------
1995 147,340 26,000 (1) 10,000 (2) 22,655 (4)
-----------------------------------------------------------------
1994 139,000 25,000 (1) 10,000 (2) 4,620 (5)
- ---------------------------------------------------------------------------------------
</TABLE>
(1) Consists of cash distributions under the Bank's profit sharing plan.
(2) Consists only of securities underlying options. Neither the Company nor
the Bank has any plan pursuant to which Stock Appreciation Rights ("SARs")
may be granted to any person.
(3) Includes aggregate contributions of $4,500 made by the Bank to the Bank's
savings plan for Mr. Morton's benefit.
(4) Consists of an $18,035 reimbursement by the Bank for relocation expenses
and contributions of $4,620 made by the Bank to the Bank's savings plan
for Mr. Morton's benefit.
(5) Consists of contributions made by the Bank to the Bank's savings plan for
Mr. Morton's benefit.
Stock Options Granted in 1996.
The following table sets forth certain information regarding stock options
granted to the individual named in the Summary Compensation Table during 1996.
In addition, in accordance with the Commission's rules, the table also shows a
hypothetical potential realizable value of such options based on assumed rates
of annual compounded stock price appreciation of 5% and 10% from the date the
options were granted over the full option term. The assumed rates of growth were
selected by the Company for illustration purposes only, and are not intended to
predict future stock prices, which will depend upon market conditions and the
Company's future performance and prospects. Based upon the closing stock price
and the number of common shares outstanding at the end of 1996, an assumed
annual stock price appreciation of 10% would produce a corresponding aggregate
pretax gain over the full option term of approximately $92.2 million for the
Company's common shareholders.
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OPTION/SAR GRANTS IN LAST FISCAL YEAR (1)
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Potential Realizable
Individual Grants Value at
Assumed Annual Rates
of Stock
Price Appreciation
For Option
Term(2)
- --------------------------------------------------------------------------------
Percent
of Total
Options/
Number of SARs
Securities Granted
underlying to
Options/SARs Employees Exercise or
Granted in Fiscal Base Price Expiration 5% 10%
Name (#) Year ($/Sh) Date ($) ($)
- --------------------------------------------------------------------------------
Robert 12,500 16.08 22.32 12/11/06 175,460 444,653
D.
Morton,
President
- --------------------------------------------------------------------------------
(1) Neither the Company nor the Bank has any plan pursuant to which SARs may
be granted to any person.
(2) Potential Realizable Value is based on the assumed annual growth rates for
each of the grants shown over their ten-year option term. Actual gains, if
any, on stock option exercises are dependent on the future performance of
the Company's Common Stock. There can be no assurance that the amounts
reflected in this table will be achieved.
Aggregated Option Exercises in 1996 and Option Values at December 31,
1996. The following table sets forth certain information concerning stock option
exercises by the individual named in the Summary Compensation Table during 1996,
including the aggregate value of gains on the date of exercise. In addition,
this table includes the number of shares covered by both exercisable and
non-exercisable stock options as of December 31, 1996. Also reported are the
values for "in-the-money" options which represent the positive spread between
the exercise price of any such existing stock options and the closing market
price of the Common Stock at December 31, 1996.
-10-
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES (1)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value of
Number of Securities Unexercised
Shares Underlying Unexercised in-the-Money
Name Acquired Options/SARs at Fiscal Options/SARs at
on Exercise Value Realized Year-End Fiscal Year-End
(#) ($) (#) ($)
Exercisable/Unexercisable Exercisable/Unexercisable
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert D. 5,000 87,515 55,360/12,500 691,327/2,250
Morton,
President
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) Mr. Morton does not hold any SARs.
PENSION PLAN
The Bank maintains a noncontributory defined benefit pension plan that has
been qualified under the Internal Revenue Code of 1986, as amended (the "Code"),
and the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
The pension plan covers full-time employees of the Bank who have attained the
age of 21 and have completed at least one year of service with the Bank. In
general, the pension plan provides for monthly payments to or on behalf of each
covered employee upon such employee's normal retirement date after the later of
reaching the age of 65 or the fifth anniversary of the employee's participation
in the plan. The plan also provides the option of receiving early retirement
benefits, provided that the participant has reached the age of 55 and has at
least 10 years of service with the Bank.
Effective for benefits earned after June 30, 1989, benefit payments to a
participant are based upon (i) the employee's number of years of credited
service (up to a maximum of 30), (ii) his average cash compensation (excluding
bonuses and other special pay) for the 60 consecutive calendar months of highest
earnings during the last 120 consecutive calendar months preceding the
employee's retirement date, and (iii) his Social Security covered compensation.
A participant may choose from a variety of monthly payment options, including
payments for the participant's lifetime only, or for the participant's lifetime
and the lifetime of his surviving spouse.
Under the pension plan, the Bank makes an annual contribution for the
benefit of eligible employees to meet the funding requirements of the Code and
ERISA. Such contributions are computed on an actuarial basis. All of the
contributions to and all of the expenses involved in administering the pension
plan are paid entirely by the Bank. Although the Bank's employees no longer
contribute to the pension plan to help fund their benefits, they have previously
made such contributions.
-11-
<PAGE>
SOUTHINGTON SAVINGS BANK
DEFINED BENEFIT PENSION PLAN
ANNUAL PENSION BENEFITS
BASED ON YEARS OF SERVICE
- --------------------------------------------------------------------------------
Years of Service
--------------------------------------------------------------------
Remuner-
ation 10 15 20 25 30 35
- --------------------------------------------------------------------------------
$ 20,000 $ 3,000 $ 4,500 $ 6,000 $ 7,500 $ 9,000 $ 9,000
- --------------------------------------------------------------------------------
25,000 3,750 5,625 7,500 9,375 11,250 11,250
- --------------------------------------------------------------------------------
35,000 5,731 8,597 11,462 14,328 17,193 17,193
- --------------------------------------------------------------------------------
50,000 8,956 13,434 17,912 22,390 26,868 26,868
- --------------------------------------------------------------------------------
75,000 4,331 21,497 28,662 35,828 42,993 42,993
- --------------------------------------------------------------------------------
100,000 19,706 29,559 39,412 49,265 59,118 59,118
- --------------------------------------------------------------------------------
125,000 25,081 37,622 50,162 62,703 75,243 75,243
- --------------------------------------------------------------------------------
150,000 30,456 45,684 60,912 76,140 91,368 91,368
- --------------------------------------------------------------------------------
175,000 35,831 53,747 71,662 89,578 107,493 107,493
- --------------------------------------------------------------------------------
200,000 41,206 61,809 82,412 103,015 123,618 123,618
- --------------------------------------------------------------------------------
The above table reflects the benefit formula that is currently in effect for
those earning benefits after June 30, 1989. Effective for benefits earned on and
after June 30, 1994, the limit on an individual's compensation is $150,000, with
future indexing, under Section 401(a)(17) of the Code. The limits for 1994, 1995
and 1996 was $150,000. The limit for 1997 is indexed at $160,000.
The pension plan covers a participant's cash compensation (excluding
bonuses and other special pay), which is approximately equivalent to the annual
compensation reported in the column entitled "Salary" in the "Summary
Compensation Table" above. The above table illustrates annual pension benefits
for an employee who retired at age 65 in 1996 and elects to have equal payments
paid over his lifetime, with no continuation to a spouse. The benefits listed in
the table are not subject to a deduction for Social Security or any other offset
amount. For the purposes of the pension plan, at June 30, 1996, Mr. Morton had 5
years of service.
SUPPLEMENTAL PENSION PLAN
Effective January 1, 1996, the Bank adopted a supplemental executive
retirement plan ("SERP") for Mr. Morton. Under the terms of the SERP, Mr. Morton
will receive a supplemental pension benefit at retirement equal to the excess
benefit which would have accrued if the Bank's defined benefit pension plan
benefit were calculated without regard to the compensation and benefit limits of
Sections 401(a)(17) and 415 of the Code.
Retirement benefits payable under the SERP may be paid in any form
permitted under the Bank's defined benefit pension plan, a lump sum payout, or a
fixed number of equal annual installments commencing when Mr. Morton begins
receipt of his benefits under the defined benefit pension plan.
The bank has funded its obligations under the SERP by purchasing a cash
surrender value life insurance policy on Mr. Morton.
-12-
<PAGE>
SAVINGS PLAN
In 1987, the Bank adopted a contributory defined contribution profit
sharing plan that is intended to be qualified under the Code and ERISA, and is
further intended to comply with the requirements of Section 401(k) of the Code.
The plan covers employees who have attained the age of 21 and have completed at
least one year of service with the Bank. Eligible employees may elect to defer
from 1% to 15% of their compensation (but, for 1996, not in excess of $9,500) by
means of payroll deduction. For employees earning over $60,000, the amount which
they may contribute may be further limited in any year to enable the savings
plan to meet certain tests imposed by the Code. Participants who work at least
500 hours during a calendar year also receive a Bank matching contribution equal
to, in the Bank's discretion, no more than 6% of their compensation for the
calendar year. Such participants received Bank matching contributions of 3% of
their compensation for 1996. Such participants will receive matching
contributions of 3% of their compensation for 1997. Participants are always 100%
vested in their contributions and Bank matching contributions.
Contributed sums are held in trust and invested by the trustee.
Participants receive a proportionate share of plan earnings or losses based upon
their investment selection and their account balances. Participants may request
a loan from their accounts in the plan subject to certain restrictions.
Generally, the amount of the loan may not exceed one-half of their interest in
the plan. Participants may request a withdrawal of their contributions in
certain circumstances. Otherwise, upon a participant's retirement, death,
disability or termination of employment, the participant's accounts may be paid
out in a lump sum.
EMPLOYMENT AGREEMENT
The Bank and Robert D. Morton, President and Chief Executive Officer of
the Company and the Bank, are parties to a three-year employment agreement,
which expires January 1, 2000. The term of the employment agreement extends
automatically for one additional year on each January 1, so that there are
successive three-year terms of employment, unless 90-days advance notice is
given by either party. The agreement provides, among other things, for an annual
review of Mr. Morton's salary, for merit increases at the discretion of the Bank
Board, and for participation in bonuses and employee benefit plans and fringe
benefits which are or may be adopted by the Bank for its executive employees.
The Bank Board may terminate Mr. Morton's employment agreement at any time
with or without cause. If he were terminated without cause, Mr. Morton would be
entitled to receive either a monthly payment over the remaining term of the
agreement or a lump sum amount equal to Mr. Morton's then current salary for the
remaining term of the agreement, discounted by one-half of one percent for each
month of the remaining term of the agreement. Such amounts would not be reduced
by any compensation which Mr. Morton might receive from new employment. If Mr.
Morton's employment is terminated within one year of a change in control of the
Company, either involuntarily by action of the Bank or by Mr. Morton, the
agreement provides for a lump sum severance payment to Mr. Morton on or before
his last day of employment with the Bank equal to three times the highest
compensation paid or payable to Mr. Morton with respect to any twelve
consecutive month period during the three years ending with the date of Mr.
Morton's termination. Severance payments would be reduced by any liability of
the Bank for any payments made for termination without cause but not for
compensation received for any new employment. The employment agreement also
contains a two-year covenant not to compete if Mr. Morton terminates his
employment without the consent of the Bank Board or more than one year after a
change in control of the Company and/or the Bank.
-13-
<PAGE>
TRANSACTIONS WITH MANAGEMENT
Mr. Frederick E. Kuhr, a member of the Board, is President and controlling
shareholder of Evergreen Nursery, Inc., which company provides landscaping and
snow removal services to the Bank. In 1996, the Bank paid Evergreen Nursery,
Inc. $70,217 for such services.
CERTAIN BUSINESS RELATIONSHIPS
Mr. Dennis J. Stanek, a member of the Board, is a Senior Vice President -
Investments of Tucker Anthony Incorporated ("Tucker Anthony"), which firm
provides securities brokerage services to the Bank. Mr. Stanek did not receive
any portion of the fees paid by the Bank to Tucker Anthony in connection with
these services during 1996. Tucker Anthony will continue to perform such
services in 1997.
For information concerning Mr. Kelley's relationship with the Bank, see
"Compensation Committee Interlocks and Insider Participation" below.
In the opinion of management, the services described in this section and
under "Transactions With Management" were provided on terms at least as
favorable as could be obtained from independent parties. The Company and the
Bank expect to continue to use the services of each of the above persons and
entities in the future.
INDEBTEDNESS OF MANAGEMENT AND OTHERS
The Bank has engaged and expects to engage in the future in banking
transactions in the ordinary course of business with directors and executive
officers of the Company and their associates and members of their respective
families. Such transactions are made on substantially the same terms, including
interest rates and collateral on loans, as those prevailing at the same time for
comparable transactions with others and do not involve more than the normal risk
of collectibility or present other unfavorable features.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company provides no cash compensation to its executive officers.
Instead, the Bank provides such compensation.
The Compensation Committee of the Company is responsible for developing
the Company's overall compensation philosophy and, together with the
Compensation Committee of the Bank, recommending the compensation of the Bank's
executive officers. The Compensation Committee's recommendations on executive
compensation are presented to the Bank Board and the Board for review and
approval.
The Bank's compensation program is comprised of a base salary, stock
options, an annual cash profit sharing program and customary retirement,
insurance and vacation benefits.
In establishing executive compensation, one of the Compensation
Committee's primary considerations is its review of industry data from peer
group surveys of salary ranges and incentive pay. The Bank's peer group is
determined based on company asset size, number of employees and geographical
considerations. The Compensation Committee exercises discretion and makes
judgments after considering all factors that are relevant to the success of the
Bank, including the achievement of objective targets relating to the Bank's
management and financial performance. The Compensation Committee considered the
following guidelines in establishing Mr. Morton's compensation: overall
leadership of the Bank and the Company; development of future strategies for the
Bank and the Company; implementation of strategic plans; achievement of
performance
-14-
<PAGE>
targets that reflect the continued financial success of the Bank and the Company
and overall shareholder value.
Mr. Morton received an annual merit increase of $8,840 for 1996 (or 6% of
his 1995 salary), which positioned him at 96% of the median salary paid to chief
executive officers in the Bank's asset size peer group.
The Compensation Committee establishes a profit sharing pool each year.
The size of the pool, which ranges from 0-8% of the Bank's net operating income,
is based on an analysis of the Bank's net operating results relative to its peer
group as well as the Bank's annual performance in attaining budgeted financial
goals. Distributions from the profit sharing pool are determined by grouping
grade levels and formulating group payouts against the total pool and then
against individual performance. All executives and employees share in the
distribution of the pool. The Compensation Committee relies heavily on the same
criteria used to recommend salary levels to recommend distributions from the
profit sharing pool. Mr. Morton and the Bank's executives are treated as a
"group" within the pool distribution and receive a discretionary payout from
this pool in line with their performance and level of accountability for the
Bank's performance. Each executive's payout is also based on current total cash
compensation relative to similar officers at the Bank's peers. Mr. Morton
received $30,000 within the first quarter of 1997 based on the Bank's
performance during 1996, which amounts to 8.6% of the total pool distributed to
all of the Bank's employees.
Stock options are granted to employees at all levels of the organization.
In recommending option grants for 1996, the Compensation Committee reviewed all
ownership of options and distributed new options to all officers, based on their
grade as well as total past options granted. In 1996, Mr. Morton received
options to purchase 12,500 shares of the Company's common stock, representing
16% of the total options distributed to all employees during 1996.
The Compensation Committee believes that executive compensation levels
during fiscal 1997 adequately reflect the Bank's compensation goals, policies
and philosophies. Effective for 1997, Mr. Morton's total compensation award
reflects the Compensation Committee's judgment based on its evaluation of Mr.
Morton's contribution to the Bank's 1996 operating results.
Walter J. Hushak David P. Kelley Frank R. Miller
Michael J. Karabin Joseph L. LaPorte Anthony S. Pizzitola
Andrew J. Meade
* * * *
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Hushak, Karabin, Kelley, LaPorte, Meade, Miller and Pizzitola
served as members of the Compensation Committee of the Company and the Bank
Board during the fiscal year ended December 31, 1996. As part of the Boards'
review of the Compensation Committee's recommendations, Mr. Morton participated
in the Boards' deliberations concerning executive officer compensation. Mr.
Morton did not participate in any such deliberations relating to his own
compensation.
Mr. Kelley is a partner of the law firm of Kelley, Crispino & Kania. He
received a retainer of $15,000 for acting as Bank Counsel in 1996. In 1996, the
Bank paid Kelley, Crispino & Kania fees for additional legal representation on
various matters. Mr. Kelley will receive a $17,000 retainer for acting as Bank
counsel in 1997. Kelley, Crispino & Kania continues to represent the Bank on
various legal matters.
Mr. Morton is the President of the Company and President and Chief
Executive Officer of the Bank.
-15-
<PAGE>
COMPENSATION OF DIRECTORS
The directors of the Company are also directors of the Bank. In 1996, each
director of the Bank, other then the President, received a fee of $350 for
attendance at each regular meeting of the Bank Board, $500 for attendance at
each director/officer seminar, and $300 for attendance at each meeting of a
committee of the Bank Board. Company board and committee meetings normally
immediately follow Bank meetings, and directors receive no additional
compensation for their services at such meetings. When a Company meeting does
not occur on the same day as a Bank meeting, the Company pays non-officer
directors for each meeting based upon the same rate schedule in effect for the
Bank.
In addition to his fees for attendance at Bank Board and committee
meetings, the Bank in 1996 also paid Walter J. Hushak $15,000 for services
rendered as Bank Chairman.
Directors who are not employees of the Company may participate in the 1993
Stock Option Plan (the "1993 Plan") and be awarded non-qualified stock options
("NQSO's"). The 1993 Plan provides that the Stock Option Committee of the Board
(the "Option Committee") may grant NQSO's to directors who are not members of
the Option Committee from time to time, in such amounts and on such conditions
as the Option Committee may determine. However, the exercise price of these
NQSO's may never be less than the fair market value of the underlying Common
Stock on the date the NQSO's are granted.
The 1993 Plan also provides for grants of NQSO's to members of the Option
Committee. Under the 1993 Plan, Option Committee members receive NQSO's to
purchase 250 shares of Common Stock on each December 1. Such options become
exercisable six months after the grant date and are exercisable for a period of
ten years following the grant date. The exercise price for Option Committee
members' NQSO's is the average of the highest and lowest price at which the
Common Stock is traded on the Nasdaq National Market tier of The Nasdaq Stock
Market on the grant date, or the most immediately preceding business day if
December 1 is not a business day.
Pursuant to the 1993 Plan, on December 1, 1996, Messrs. Karabin, Mann and
Meade were each granted NQSO's to purchase 250 shares of Common Stock at an
exercise price of $22.88 per share. These options become exercisable on June 1,
1997 and expire on December 1, 2006. Also pursuant to the 1993 Plan, on December
11, 1996, Messrs. Beauchemin, Hushak, Kelley, Kuhr, LaPorte, Miller, Pizzitola
and Stanek were each granted NQSO's to purchase 5,000 shares of Common Stock at
an exercise price of $22.32 per share. These options are currently exercisable
and expire on December 11, 2006.
If Proposal Number Two is approved at the Meeting, directors will
participate in the 1997 Stock Option Plan as described below under "Proposal
Two," and the remaining options available for grant under the 1993 Plan will be
canceled. Outstanding options under the 1993 Plan will not be affected by such
cancellation.
SHAREHOLDER RETURN PRESENTATION
The following graph compares the change in the Company's cumulative total
return on its Common Stock to (a) the change in the cumulative total return on
the stocks included in the Standard and Poor's 500 Index and (b) the change in
the cumulative total return on the stocks included in the Keefe, Bruyette &
Woods, Inc. New England Bank Index assuming an investment of $100 made on
December 31, 1991, in the Bank, the Company's sole subsidiary, and comparing
relative values on December 31, 1996. All of these cumulative total returns are
computed assuming the reinvestment of dividends at the frequency with which
dividends were paid during the period. Note that the Common Stock price
performance shown below should not be viewed as being indicative of future
performance.
-16-
<PAGE>
Bancorp Connecticut, Inc.
Keefe, Bruyette Woods, Inc.
Performance Graph Plot Points
KBW New
S&P 500 England BKCT
Date INDEX Bank Index Indexed
---- ----- ---------- -------
12/31/91 100.00 100.00 100.00
12/31/92 107.61 175.64 230.28
12/31/93 118.39 234.48 396.14
12/31/94 119.99 236.05 394.56
12/31/95 164.92 368.43 562.80
12/31/96 202.69 508.88 886.36
-17-
<PAGE>
THE ELECTION OF EACH NOMINEE REQUIRES THE AFFIRMATIVE VOTE OF A PLURALITY
OF THE SHARES PRESENT OR REPRESENTED AT THE MEETING. THE BOARD OF DIRECTORS
RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE ELECTION OF ALL NOMINEES.
PROPOSAL NUMBER TWO
APPROVAL OF THE COMPANY'S 1997 STOCK OPTION PLAN
The Board recommends the presentation at the Meeting of a proposal to
approve the 1997 Stock Option Plan (the "1997 Plan"). The 1997 Plan provides for
the grant of qualified and nonqualified stock options to key employees and
directors of the Company and its subsidiaries. A copy of the 1997 Plan is
attached as Exhibit A to this Proxy Statement. The material features of the 1997
Plan are summarized below. This summary is qualified in its entirety by
reference to the terms of the 1997 Plan set forth as Exhibit A.
PURPOSE
The purpose of the 1997 Plan is to provide an incentive to key employees
and directors of the Company and the Bank who are in a position to contribute
materially to the long term success of the Company and/or the Bank, to increase
such persons' interest in the Company's and the Bank's welfare and to aid in
attracting and retaining individuals with outstanding ability. The 1997 Plan
provides that 303,810 shares of Common Stock are authorized to be issued under
stock options. Neither (i) the amount of benefits that will be received by or
allocated to any person under the 1997 Plan nor (ii) the amount of benefits that
would have been received by or allocated to any person for the year ended
December 31, 1996 if the 1997 Plan had been in effect is determinable.
As of March 7, 1997, options were available to be granted on 3,810 shares
under the 1993 Plan (which is described earlier in this Proxy Statement). If the
1997 Plan is approved by the shareholders, all options which remain available
for grant under the 1993 Plan will be canceled. Outstanding options under the
1993 Plan will not be affected by such cancellation.
The adoption of the 1997 Plan is recommended at this time in order to make
available additional stock options for use in compensating key employees and
directors of the Company and its subsidiaries.
ADMINISTRATION
The 1997 Plan will be administered by the Board.
ELIGIBILITY
The 1997 Plan provides for grants to key employees (including officers) of
the Company and its subsidiaries (including the Bank) of "incentive stock
options" within the meaning of Section 422 of the Code and for grants of
nonqualified options to key employees and directors of the Company and its
subsidiaries. The Board has the authority to determine the persons to whom
options will be granted, the number of shares to be subject to each option,
whether options will be incentive or nonqualified, and the manner of exercise.
The aggregate fair market value (determined at the time of grant) of shares
issuable pursuant to incentive stock options which first become exercisable in
any calendar year by a key employee or director may not exceed $100,000.
Currently, approximately 140 persons are eligible to participate in the 1997
Plan.
-18-
<PAGE>
TERMS OF OPTIONS
Each option will be evidenced by a written stock option agreement between
the Company and the optionee and is generally subject to the terms and
conditions listed below, but specific terms may vary:
(i) Exercise of the Option. The Board determines when options granted
under the 1997 Plan may be exercised. An option is exercised by giving written
notice to the Company specifying the number of shares to be purchased and
tendering payment of the purchase price. Payment for shares issued upon exercise
of an option may consist of cash, check, exchange of shares of Common Stock held
at the time the option is exercised, or any combination thereof. In addition,
the applicable option agreements permit nonqualified options to be exercised by
surrendering part of the net value of the options, resulting in the holder's
receipt of a number of shares less than the number of shares subject to the
option agreement without the payment of cash or the surrender of other shares of
stock. This provision is commonly known as a "net exercise" or "cashless
exercise" provision. An option may not be exercised for a fraction of a share.
(ii) Option Price. Incentive stock options may not be granted at an
exercise price less than the fair market value of the Company's Common Stock on
the date of grant (or 110% of fair market value in the case of employees or
officers holding 10% or more of the voting stock of the Company). Nonqualified
stock options may not be granted at an exercise price less than the fair market
value of the Company's Common Stock on the date of grant. The closing price of
the Company's Common Stock on the Nasdaq National Market tier of The Nasdaq
Stock Market on March 20, 1997 was $23.625.
(iii) Termination of Employment. If the optionee's employment with the
Company or with a subsidiary of the Company is terminated, the term of any then
outstanding option held by such optionee shall extend for a period ending on the
earlier of the date on which such option would otherwise expire or three months
after such termination of employment (twelve months in the case of termination
due to disability). Such option will only be exercisable to the extent it was
exercisable as of the last day of such optionee's employment. The representative
of a deceased optionee's estate or beneficiaries thereof to whom the option has
been transferred shall have the right during the twelve month period following
the death or, if earlier, the remaining term of the option, to exercise any then
outstanding option in whole or in part.
(iv) Termination of Options. All options expire not more than ten years
from the date of grant or not more than five years from the date of grant in the
case of incentive stock options granted to an employee holding 10% or more of
the voting stock of the Company.
(v) Nontransferability of Options. An option granted under the 1997 Plan
is exercisable, during the optionee's lifetime, only by the optionee or the
optionee's conservator and is not transferable except by will or by the laws of
descent and distribution.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
If the Company's capitalization changes by reason of split-up, merger,
consolidation, reorganization, reclassification, recapitalization, or any other
capital adjustment, the Board shall make an adjustment to the options
outstanding under the 1997 Plan in an equitable manner.
-19-
<PAGE>
AMENDMENT AND TERMINATION
The Board may at any time alter, amend, suspend, discontinue or terminate
the 1997 Plan, provided that such action does not adversely affect the rights of
the optionees to options previously granted, and no amendment, without the
approval of the shareholders, shall increase the maximum number of shares which
may be awarded under the 1997 Plan in the aggregate, or modify the purchase
price of shares under the 1997 Plan or modify the eligibility requirements for
participation in the 1997 Plan.
In any event, the 1997 Plan will terminate in 2007.
FEDERAL INCOME TAX INFORMATION
Options granted under the 1997 Plan may be either "incentive stock
options," as defined in Section 422 of the Code, or nonqualified options.
If an option granted under the 1997 Plan is an incentive stock option, the
optionee will recognize no income upon grant of the incentive stock option and
incur no tax liability due to the exercise unless the optionee is subject to the
alternative minimum tax. The Company will not be allowed a deduction for federal
income tax purposes as a result of the exercise of an incentive stock option
regardless of the applicability of the alternative minimum tax. Upon the sale or
exchange of the shares at least two years after grant of the option and one year
after transfer of the shares to the optionee by the Company any gain will be
treated as long-term capital gain. If these holding periods are not satisfied,
the optionee will recognize ordinary income equal to the difference between the
exercise price and the lower of the fair market value of the stock at the date
of the option exercise or the sale price of the stock. The Company will be
entitled to a deduction for federal income tax purposes in the same amount as
the ordinary income recognized by the optionee. Any gain recognized on such a
premature disposition of the shares in excess of the amount treated as ordinary
income will be characterized as capital gain. Currently, the tax rate on net
capital gain (net long-term capital gain minus net short-term capital loss) is
capped a 28%. Capital losses are allowed in full against capital gains plus
$3,000 of other income.
All other options which do not qualify as incentive stock options are
referred to as nonqualified options. An optionee will not recognize any taxable
income at the time he is granted a nonqualified option. However, upon its
exercise, the optionee will recognize ordinary income for tax purposes measured
by the then fair market value of the shares over the exercise price. The income
recognized by an optionee who is also an employee of the Company will be subject
to tax withholding by the Company by payment in cash or out of the current
earnings paid to the optionee. Upon resale of such shares by the optionee, any
difference between the sales price and the exercise price, to the extent not
recognized as ordinary income as provided above, will be treated as capital gain
or loss. Currently, the tax rate on net capital gain (net long-term capital gain
minus net short-term capital loss) is capped at 28%. Capital losses are allowed
in full against capital gains plus $3,000 of other income.
The Company will be entitled to a tax deduction in the same amount as the
ordinary income recognized by the optionee with respect to shares acquired upon
exercise of a nonqualified option.
The foregoing is only a summary of the effect of federal income taxation
upon the optionee and the Company with respect to the grant and exercise of
options under the 1997 Plan and does not purport to be complete. Reference
should be made to the applicable provisions of the Code. In addition, this
summary does not discuss the income tax laws of any municipality, state or
foreign country in which an optionee may reside.
-20-
<PAGE>
THE APPROVAL OF THE COMPANY'S 1997 STOCK OPTION PLAN REQUIRES THE
AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES OF COMMON STOCK PRESENT OR
REPRESENTED AT THE MEETING. THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE APPROVAL OF THE COMPANY'S 1997 STOCK OPTION PLAN.
PROPOSAL NUMBER THREE
RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND L.L.P.
AS INDEPENDENT ACCOUNTANTS FOR THE
FISCAL YEAR ENDING DECEMBER 31, 1997
The Board has entered into an agreement with Coopers & Lybrand L.L.P.,
independent certified public accountants, to be the Company's independent
accountants for the fiscal year ending December 31, 1997, subject to
ratification by the Company's shareholders. Coopers & Lybrand L.L.P. have been
the Company's independent certified public accountants since the Company's
formation on March 31, 1994, and the Bank's independent certified public
accountants since August, 1993. A representative of Coopers & Lybrand L.L.P. is
expected to be present at the Meeting to respond to appropriate questions and
will have the opportunity to make a statement if he or she desires to do so.
Unless otherwise directed, proxies will be voted in favor of ratification of the
appointment of Coopers & Lybrand L.L.P.
THE APPOINTMENT OF THE COMPANY'S INDEPENDENT ACCOUNTANTS MUST BE RATIFIED
BY THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES OF COMMON STOCK PRESENT OR
REPRESENTED AT THE MEETING. THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS.
SHAREHOLDER PROPOSALS
In order to be considered for inclusion in the proxy statement and form of
proxy relating to the Company's 1998 annual meeting, any proposal by a record
holder of Common Stock must be received by the Company at its principal
executive offices located at 121 Main Street, Southington, Connecticut 06489 on
or before December 10, 1997. A proponent of such a proposal must comply with the
proxy rules under the Securities Exchange Act of 1934.
SOLICITATION
The Company will bear all costs and expenses associated with soliciting
management proxies. In addition to the use of the mails, proxies may be
solicited by the directors, officers and regular employees of the Company and/or
the Bank by personal interview, telephone or telegram. Such directors, officers
and employees will not be additionally compensated for such solicitation but may
be reimbursed for out-of-pocket expenses incurred in connection therewith.
Arrangements will also be made with custodians, nominees and fiduciaries for the
forwarding of solicitation material to the beneficial owners of Common Stock
held of record by such persons, and the Company will reimburse such custodians,
nominees and fiduciaries for their reasonable out-of-pocket expenses incurred in
connection therewith.
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<PAGE>
OTHER MATTERS
As of the date of this Proxy Statement, the Board is not aware of any
other business or matters to be presented for consideration at the Meeting other
than as set forth in the Notice of Meeting attached to this Proxy Statement.
However, if any other business shall come before the Meeting or any adjournment
or postponement thereof and be voted upon, the enclosed proxy shall be deemed to
confer discretionary authority on the individuals named to vote the shares
represented by such proxy as to any such matters.
ANNUAL REPORT ON FORM 10-K
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH BENEFICIAL HOLDER OF ITS
COMMON STOCK ON THE RECORD DATE, UPON THE WRITTEN REQUEST OF ANY SUCH PERSON, A
COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1996, AS FILED WITH THE COMMISSION. ANY SUCH REQUEST SHOULD BE MADE
IN WRITING TO LESLEY A. DEANGELO, BANCORP CONNECTICUT, INC., 121 MAIN STREET,
SOUTHINGTON, CONNECTICUT 06489.
Southington, Connecticut
April 9, 1997
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<PAGE>
Exhibit A
BANCORP CONNECTICUT, INC.
1997 STOCK OPTION PLAN
I. ESTABLISHMENT OF PLAN; DEFINITIONS
1. Purpose. The purpose of the Bancorp Connecticut, Inc. 1997 Stock Option
Plan is to provide an incentive to key Employees and Directors of Bancorp
Connecticut, Inc. (the "Corporation") and its subsidiaries, including
Southington Savings Bank (the "Bank"), who are in a position to contribute
materially to the long-term success of the Corporation and the Bank, to increase
their interest in the Corporation's and Bank's welfare, and to aid in attracting
and retaining employees of outstanding ability.
2. Definitions. Unless the context clearly indicates otherwise, the
following terms shall have the meanings set forth below:
(a) "Bank" shall mean Southington Savings Bank, a Connecticut stock
savings bank.
(b) "Board" shall mean the Board of Directors of the Corporation.
(c) "Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time.
(d) "Corporation" shall mean Bancorp Connecticut, Inc., a Delaware
corporation.
(e) "Directors" shall mean members of the Board.
(f) "Disability" shall mean a medically determinable physical or mental
condition which causes an Employee or Director to be unable to
engage in any substantial gainful activity and which can be expected
to result in death or to be of long-continued and indefinite
duration.
(g) "Employee" shall mean any common law employee, including officers,
of the Corporation or the Bank as determined under the Code and the
Treasury Regulations thereunder.
(h) "Fair Market Value" on any day shall mean (i) the closing price for
one share of Stock or (ii) the average of the highest reported bid
and lowest reported asked price for one share of Stock as furnished
by The Nasdaq Stock Market or a similar organization, in each case
on such day. For example, if the highest reported bid were $8 per
share and the lowest reported asked price were $10 per share, the
Fair Market Value would be $9 per share.
(i) "Grantee" shall mean an Employee or Director granted a Stock Option
under this Plan.
(j) "Incentive Stock Option" shall mean an option granted pursuant to
the Incentive Stock Option provisions as set forth in Part II of
this Plan.
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<PAGE>
(k) "Non-Qualified Stock Option" shall mean an option granted pursuant
to the Non-Qualified Stock Option provisions as set forth in Part
III of this Plan.
(l) "Plan" shall mean the Bancorp Connecticut, Inc. 1997 Stock Option
Plan as set forth herein and as amended from time to time.
(m) "Stock" shall mean authorized but unissued shares of the Common
Stock of the Corporation or reacquired shares of the Corporation's
Common Stock.
(n) "Stock Option" shall mean an option granted pursuant to this Plan to
purchase shares of Stock.
(o) "Ten Percent Shareholder" shall mean an Employee who at the time a
Stock Option is granted owns stock possessing more than ten percent
(10%) of the total combined voting power of all stock of the
Corporation or of its parent or subsidiary corporation.
3. Shares of Stock Subject to this Plan. Subject to the provisions of Section 2
of Part IV, the Stock which may be issued or transferred pursuant to Stock
Options granted under this Plan and the Stock which is subject to outstanding
but unexercised Stock Options under this Plan shall not exceed 303,810 shares in
the aggregate. If a Stock Option shall expire or terminate for any reason, in
whole or in part, without being exercised, the number of shares of Stock as to
which such expired or terminated Stock Option shall not have been exercised may
again become available for the grant of Stock Options. There shall be no terms
and conditions in a Stock Option which provide that the exercise of an Incentive
Stock Option reduces the number of shares of Stock for which an outstanding
Non-Qualified Stock Option may be exercised; and there shall be no terms and
conditions in a Stock Option which provide that the exercise of a Non-Qualified
Stock Option reduces the number of shares of Stock for which an outstanding
Incentive Stock Option may be exercised.
4. Administration of this Plan. This Plan shall be administered by the Board.
Subject to the express provisions of this Plan, the Board shall have authority
to interpret this Plan, to prescribe, amend, and rescind rules and regulations
relating to it, to determine the terms and provisions of Stock Option
agreements, and to make all other determinations necessary or advisable for the
administration of this Plan. Any controversy or claim arising out of or related
to this Plan shall be determined unilaterally by and at the sole discretion of
the Board.
5. Amendment or Termination. The Board may, at any time, alter, amend, suspend,
discontinue, or terminate this Plan; provided, however, that such action shall
not adversely affect the right of Grantees to Stock Options previously granted
and no amendment, without the approval of the stockholders of the Corporation,
shall increase the maximum number of shares which may be awarded under this Plan
in the aggregate, or modify the purchase price of shares under this Plan or the
eligibility requirements for participation in this Plan.
6. Effective Date and Duration of this Plan. Subject to the approval of the
stockholders of the Corporation on or before such date, this Plan shall become
effective on May 15, 1997. This Plan shall terminate at the close of business on
May 14, 2007 and no Stock Option may be granted under this Plan thereafter, but
such termination shall not affect any Stock Option theretofore granted.
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<PAGE>
II. INCENTIVE STOCK OPTIONS
1. Granting of Incentive Stock Options.
(a) Only Employees shall be eligible to receive Incentive Stock Options
under this Plan.
(b) The purchase price of each share of Stock subject to an Incentive
Stock Option shall not be less than 100% of the Fair Market Value of
a share of the Stock on the date the Incentive Stock Option is
granted; provided, however, that the purchase price of each share of
Stock subject to an Incentive Stock Option granted to a Ten Percent
Shareholder shall not be less than 110% of the Fair Market Value of
a share of the Stock on the date the Incentive Stock Option is
granted.
(c) No Incentive Stock Option shall be exercisable more than ten years
from the date such Incentive Stock Option is granted; provided,
however, that an Incentive Stock Option granted to a Ten Percent
Shareholder shall not be exercisable more than five years from the
date the Incentive Stock Option was granted.
(d) The Board shall determine and designate from time to time those
Employees who are to be granted Incentive Stock Options and specify
the number of shares of Stock subject to each Incentive Stock
Option.
(e) The Board, in its sole discretion, shall determine whether any
particular Incentive Stock Option shall become exercisable in one or
more installments, specify the installment dates, and, within the
limitations herein provided, determine the total period during which
the Incentive Stock Option is exercisable. Further, the Board may
make such other provisions as may appear generally acceptable or
desirable to the Board or necessary to qualify its grants under the
provisions of Section 422 of the Code.
(f) The Board may grant at any time new Incentive Stock Options to an
Employee who has previously received Incentive Stock Options or
other options, whether such prior Incentive Stock Options or other
options are still outstanding, have previously been exercised in
whole or in part, or are canceled in connection with the issuance of
new Incentive Stock Options. The exercise price of the new Incentive
Stock Options may be established by the Board without regard to the
existing Incentive Stock Options or other options.
(g) Notwithstanding any other provisions hereof, the aggregate Fair
Market Value (determined at the time the option is granted) of the
Stock with respect to which Incentive Stock Options are exercisable
for the first time by any Employee during any calendar year (under
all such plans of the Corporation and the Bank and any parent or
subsidiary corporation of either) shall not exceed $100,000. To the
extent that such $100,000 limit shall be exceeded in any calendar
year, any such Stock Options exercisable for the first time in
excess of such limitation shall be treated as Non-Qualified Stock
Options.
2. Exercise of Incentive Stock Options. The exercise price of an Incentive
Stock Option shall be payable on exercise of the option (i) in cash or by check,
bank draft or postal or express money order,
A-3
<PAGE>
(ii) by the surrender of Stock then owned by the Grantee, or (iii) partially in
accordance with clause (i) and partially in accordance with clause (ii) of this
Section. Shares of Stock so surrendered in accordance with clause (ii) or (iii)
shall be valued at the Fair Market Value thereof on the date of exercise,
surrender of such Stock to be evidenced by delivery of the certificate(s)
representing such shares in such manner, and endorsed in such form, or
accompanied by stock powers endorsed in such form, as the Corporation may
determine.
3. Termination of Employment.
(a) If a Grantee's employment is terminated other than by Disability or
death, the term(s) of any then outstanding Incentive Stock Option(s)
held by the Grantee shall extend for a period ending on the earlier
of (i) the date established by the Board at the time of grant or
(ii) three months after such termination of employment, and such
Incentive Stock Option shall be exercisable to the extent it was
exercisable as of the date of termination of employment.
(b) If a Grantee's employment is terminated by reason of Disability, the
term of any then outstanding Incentive Stock Option held by the
Grantee shall extend for a period ending on the earlier of (i) the
date established by the Board at the time of grant or (ii) twelve
months after the Grantee's last date of employment, and such
Incentive Stock Option shall be exercisable to the extent it was
exercisable as of such last date of employment.
(c) If a Grantee's employment is terminated by reason of death, the
representative of the Grantee's estate or beneficiaries thereof to
whom the Incentive Stock Option has been transferred shall have the
right, during the period ending on the earlier of (i) the date
established by the Board at the time of grant or (ii) twelve months
after the date of the Grantee's death, to exercise any then
outstanding Incentive Stock Options in whole or in part. If a
Grantee dies without having fully exercised any then outstanding
Incentive Stock Options, the representative of the Grantee's estate
or beneficiaries thereof to whom the Incentive Stock Options have
been transferred shall have the right to exercise such Incentive
Stock Options in whole or in part until such Incentive Stock Options
expire.
III. NON-QUALIFIED STOCK OPTIONS
1. Granting of Non-Qualified Stock Options.
(a) Employees shall be eligible to receive Non-Qualified Stock Options
under this Plan. Directors who are not also Employees shall also be
eligible to receive Non-Qualified Stock Options.
(b) The purchase price of each share of Stock subject to a Non-Qualified
Stock Option shall not be less than 100% of the Fair Market Value of
a share of the Stock on the date the Non-Qualified Stock Option is
granted.
(c) No Non-Qualified Stock Option shall be exercisable more than ten
years from the date such Non-Qualified Stock Option is granted.
A-4
<PAGE>
(d) The Board shall determine and designate from time to time those
Employees and Directors who are to be granted Non-Qualified Stock
Options and specify the number of shares of Stock subject to each
Non-Qualified Stock Option.
(e) The Board, in its sole discretion, shall determine whether any
particular Non-Qualified Stock Option shall become exercisable in
one or more installments, specify the installment dates, and, within
the limitations herein provided, determine the total period during
which the Non-Qualified Stock Option is exercisable. Further, the
Board may make such other provisions as may appear generally
acceptable or desirable to the Board.
(f) The Board may grant at any time new Non-Qualified Stock Options to
an Employee or Director who has previously received Non-Qualified
Stock Options or other options, whether such prior Non-Qualified
Stock Options or other options are still outstanding, have
previously been exercised in whole or in part, or are canceled in
connection with the issuance of new Non-Qualified Stock Options.
2. Exercise of Non-Qualified Stock Options. The exercise price of a
Non-Qualified Stock Option shall be payable on exercise of the option (i) in
cash or by check, bank draft or postal or express money order, (ii) by the
surrender of Stock then owned by the Grantee, or (iii) partially in accordance
with clause (i) and partially in accordance with clause (ii) of this Section.
Shares of Stock so surrendered in accordance with clause (ii) or (iii) shall be
valued at the Fair Market Value thereof on the date of exercise, surrender of
such Stock to be evidenced by delivery of the certificate(s) representing such
shares in such manner, and endorsed in such form, or accompanied by stock powers
endorsed in such form, as the Corporation may determine. In addition, payment
may be made by surrender of shares of Stock issuable upon the exercise of the
Non-Qualified Stock Option. If a Grantee elects this method of payment, the
number of shares of Stock issuable upon the exercise of the Non-Qualified Stock
Option shall be computed in accordance with the following formula:
X = Y(A-B)
A
The following definitions apply:
X shall mean the number of shares of Stock to be issue
Y shall mean the number of Non-Qualified Stock Options to be exercised
A shall mean the Fair Market Value of a share of Stock on the date of
exercise
B shall mean the per share exercise price for the Non-Qualified Stock
Options to be exercised
3. Termination of Employment/Cessation of Directorship.
(a) If a Grantee's employment is terminated or a Director Grantee ceases
to be a Director (other than by Disability or death), the term(s) of
any then outstanding Non-Qualified Stock Option(s) held by the
Grantee shall extend for a period ending on the earlier of (i) the
date established by the Board at the time of grant or (ii) three
months after such termination of employment or cessation of being a
Director, and such Non-Qualified
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<PAGE>
Stock Option shall be exercisable to the extent it was exercisable
as of the date of termination of employment or cessation of being a
Director.
(b) If a Grantee's employment is terminated by reason of Disability or a
Director Grantee ceases to be a Director by reason of Disability,
the term of any then outstanding Non-Qualified Stock Option held by
the Grantee shall extend for a period ending on the earlier of (i)
the date established by the Board at the time of grant or (ii)
twelve months after the Grantee's last date of employment or
cessation of being a Director, and such Non-Qualified Stock Option
shall be exercisable to the extent it was exercisable as of such
last date of employment or cessation of being a Director.
(c) If a Grantee's employment is terminated by reason of death or a
Director Grantee ceases to be a Director by reason of death, the
representative of the Grantee's estate or beneficiaries thereof to
whom the Non-Qualified Stock Option has been transferred shall have
the right, during the period ending on the earlier of (i) the date
established by the Board at the time of grant or (ii) twelve months
after the date of the Grantee's death, to exercise any then
outstanding Non-Qualified Stock Options in whole or in part. If a
Grantee dies without having fully exercised any then outstanding
Non-Qualified Stock Options, the representative of the Grantee's
estate or beneficiaries thereof to whom the Non-Qualified Stock
Options have been transferred shall have the right to exercise such
Non-Qualified Stock Options in whole or in part until such
Non-Qualified Stock Options expire.
IV. GENERAL PROVISIONS
1. Substitution of Options. In the event of a corporate merger or consolidation,
or the acquisition by the Corporation of property or stock of an acquired
corporation or any reorganization or other transaction qualifying under Section
424 of the Code, the Board may, in accordance with the provisions of such
Section 424, substitute Stock Options under this Plan for stock options under
the plan of the acquired corporation provided (i) the excess of the aggregate
fair market value of the shares subject to the new Stock Options immediately
after the substitution over the aggregate exercise price of such Stock Options
is not more than the similar excess immediately before such substitution and
(ii) the new Stock Option does not give the Employee or Director additional
benefits, including without limitation any extension of the exercise period.
2. Adjustment Provisions.
(a) If a dividend shall be declared upon the Stock payable in shares of
the Corporation's common stock, the number of shares of Stock then
subject to any Stock Option outstanding under this Plan and the
number of shares reserved for the grant of Stock Options pursuant to
this Plan shall be adjusted by adding to each such share the number
of shares which would be distributable in respect thereof if such
shares had been outstanding on the date fixed for determining the
stockholders of the Corporation entitled to receive such share
dividend.
(b) If the shares of Stock outstanding are changed into or exchanged for
a different number or kind of shares or other securities of the
Corporation or of another corporation, whether
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<PAGE>
through reorganization, recapitalization, split-up, reverse stock
split, combination of shares, merger, or consolidation, then there
shall be substituted for each share of Stock subject to any such
Stock Option and for each share of Stock reserved for the grant of
Stock Options pursuant to this Plan the number and kind of shares or
other securities into which each outstanding share of Stock shall
have been so changed or for which each such share shall have been
exchanged.
(c) If there shall be any change, other than as specified above in this
Section 2, in the number or kind of outstanding shares of Stock or
of any shares or other securities into which such shares shall have
been changed or for which they shall have been exchanged, then if
the Board shall, in its sole discretion, determine that such change
equitably requires an adjustment in the number or kind of shares
theretofore reserved for the grant of Stock Options pursuant to this
Plan and of the shares then subject to Stock Options, such
adjustment shall be made by the Board and shall be effective and
binding for all purposes of this Plan and of each Stock Option
outstanding thereunder.
(d) In the case of any such substitution or adjustment as provided for
in this Section 2, the exercise price set forth in each outstanding
Stock Option for each share covered thereby prior to such
substitution or adjustment will be the exercise price for all shares
or other securities which shall have been substituted for such share
or to which such share shall have been adjusted pursuant to this
Section 2, and such exercise price per share shall be adjusted
accordingly.
(e) No adjustment or substitution provided for in this Section 2 shall
require the Corporation to sell a fractional share, and the total
substitution or adjustment with respect to each outstanding Stock
Option shall be limited accordingly.
(f) Upon any adjustment made pursuant to this Section 2 the Corporation
will, upon request, deliver to the Grantee a certificate setting
forth the exercise price thereafter in effect and the number and
kind of shares or other securities thereafter purchasable on the
exercise of such Stock Option.
3. General.
(a) Each Stock Option shall be evidenced by a written instrument
containing such terms and conditions, not inconsistent with this
Plan, as the Board shall approve.
(b) The granting of a Stock Option in any year shall not give the
Grantee any right to similar grants in future years or any right to
be retained in the employ of the Corporation or any of it
subsidiaries, and all Employees shall remain subject to discharge to
the same extent as if this Plan were not in effect.
(c) No Grantee, and no beneficiary or other person claiming under or
through such Grantee, shall have any right, title or interest by
reason of any Stock Option to any particular assets of the
Corporation, or any shares of Stock allocated or reserved for the
purposes of this Plan or subject to any Stock Option except as set
forth herein. The Corporation shall not be required to establish any
fund or make any other segregation of assets to assure the payment
of any Stock Option.
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<PAGE>
(d) No right under this Plan shall be subject to anticipation, sale,
assignment, pledge, encumbrance, or charge except by will or the
laws of descent and distribution, and a Stock Option shall be
exercisable during the Grantee's lifetime only by the Grantee or the
Grantee's conservator.
(e) Notwithstanding any other provision of this Plan or agreements made
pursuant thereto, the Corporation's obligation to issue or deliver
any certificate or certificates for shares of Stock under a Stock
Option, and the transferability of Stock acquired by exercise of a
Stock Option, shall be subject to all of the following conditions:
(i) The effectiveness of any registration or other qualification
of such shares under any state or federal law or regulation,
or the maintaining in effect of any such registration or other
qualification which the Board shall, in its absolute
discretion upon the advice of counsel, deem necessary or
advisable;
(ii) The obtaining of any other consent, approval, or permit from
any state or federal governmental agency which the Board
shall, in its absolute discretion upon the advice of counsel,
determine to be necessary or advisable; and
(iii) Each stock certificate issued pursuant to a Stock Option shall
bear the following legend:
"The transferability of this certificate and the shares of
Stock represented hereby are subject to restrictions, terms
and conditions contained in the Bancorp Connecticut, Inc. 1997
Stock Option Plan, and an Agreement between the registered
owner of such Stock and Bancorp Connecticut, Inc. A copy of
the Plan and Agreement are on file in the office of the
Secretary of Bancorp Connecticut, Inc."
(f) All payments to Grantees or to their legal representatives shall be
subject to any applicable tax, community property, or other statutes
or regulations of the United States or of any state having
jurisdiction thereof. The Grantee may be required to pay to the
Corporation the amount of any withholding taxes which the
Corporation is required to withhold with respect to a Stock Option
or its exercise. If such payment is not made when due, the
Corporation shall have the right to deduct, to the extent permitted
by law, from any payment of any kind otherwise due to such person
all or part of the amount required to be withheld.
(g) In the case of a grant of a Stock Option to any Employee of a
subsidiary of the Corporation, the Corporation may, if the Board so
directs, issue or transfer the shares, if any, covered by the Stock
Option to the subsidiary, for such lawful consideration as the Board
may specify, upon the condition or understanding that the subsidiary
will transfer the shares to the Employee in accordance with the
terms of the Stock Option specified by the Board pursuant to the
provisions of this Plan. For purposes of this Section 3(g), a
subsidiary shall mean any subsidiary corporation of the Corporation
as defined in Section 424 of the Code.
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<PAGE>
(h) A Grantee entitled to Stock as a result of the exercise of a Stock
Option shall not be deemed for any purpose to be, or have rights as,
a stockholder of the Corporation by virtue of such exercise, except
to the extent a stock certificate is issued therefor and then only
from the date such certificate is issued. No adjustments shall be
made for dividends or distributions or other rights for which the
record date is prior to the date such stock certificate is issued.
The Corporation shall issue any stock certificates required to be
issued in connection with the exercise of a Stock Option with
reasonable promptness after such exercise.
(i) The grant or exercise of Stock Options granted under this Plan shall
be subject to, and shall in all respects comply with, applicable
Connecticut law relating to such grant or exercise, or to the number
of shares which may be beneficially owned or held by any Grantee.
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<PAGE>
BANCORP CONNECTICUT, INC.
121 Main Street
Southington, Connecticut 06489
Proxy for the Annual Meeting of Shareholders
to be held at 2:00 p.m. on May 14, 1997
Elks Club of Southington, 114 Main Street, Southington, Connecticut
The undersigned hereby appoints Anthony Priore, Jr., Secretary and
Treasurer, and Stephan M. Settino, or any of them, attorneys and proxies
for the undersigned with power of substitution, to act and to vote,
with the same force and effect as the undersigned, all shares the
undersigned is entitled to vote at the Annual Meeting of Shareholders of
Bancorp Connecticut, Inc. to be held on May 14, 1997, and any and all
adjournments thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Please mark, sign and date your proxy on the reverse side.
<PAGE>
[X] Please mark your |
votes as in this |
example. ----
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OF THE BELOW PROPOSALS.
WITHHOLD AUTHORITY
FOR FOR ALL NOMINEES
Proposal 1. [ ] [ ]
Election of
Directors for a
three year
term expiring in 2000:
Andrew J. Meade, Frank R. Miller, Robert D. Morton, Dennis J. Stanek
TO WITHHOLD AUTHORITY FOR INDIVIDUAL NOMINEE(S). Write individual
nominee(s) name(s) below.
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
Proposal 2. Approval of the 1997 Stock Option Plan [ ] [ ] [ ]
Proposal 3. Ratification of the appointment of [ ] [ ] [ ]
Coopers & Lybrand LLP as independent
accountants.
Such persons (or their substitutes) are directed to vote as indicated in this
proxy and are authorized to vote in their discretion upon any other business
which properly comes before the meeting or any adjournment thereof.
IF NO CHOICE IS SPECIFIED, SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR
ALL NOMINEES, PROPOSAL 2 AND PROPOSAL 3.
Please sign and date this proxy and promptly return it in the envelope provided.
I WILL ATTEND THE ANNUAL MEETING [ ]
Signature(s)___________________________________________ Date___________________
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
