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 (Amendment No. )
Filed by the registrant [ X ] File No. 0-14703
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[ X ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
NBT BANCORP INC.
----------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
KATHLEEN A. CALISHER
----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box)
[ X ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
[ X ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and indentify 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: $125
(2) Form, schedule or registration statement no.: Preliminary Proxy
Statement
(3) Filing party: Lawrence S. Lese
(4) Date filed: 02/21/95
NBT BANCORP INC.
NOTICE OF ANNUAL STOCKHOLDERS' MEETING
March 15, 1995
TO THE HOLDERS OF SHARES OF COMMON STOCK:
NOTICE IS HEREBY GIVEN that pursuant to call of its Directors,
the regular annual meeting of stockholders of NBT BANCORP INC. will
be held at the Norwich Senior High School auditorium located at Midland
Drive, Norwich, New York, on Saturday, April 22, 1995 at 11:00 a.m.,
for the purpose of considering and voting upon the following matters:
1. Election of Directors. To fix the number of directors at six and
elect the candidates listed in the Proxy Statement dated March
15, 1995.
2. A resolution to increase the number of authorized shares of
common stock to 12,500,000 and authorized shares of preferred
stock to 2,500,000.
3. Ratification of the Board of Directors' action of the selection
of independent public accountants for the year 1995.
4. A shareholder proposal to institute a salary and compensation
ceiling for the CEO of the Company, WHICH IS OPPOSED BY THE
BOARD OF DIRECTORS.
5. Transaction of such Other Business as may properly come before
the Meeting or any adjournment thereof.
By order of the Board of Directors
Daryl R. Forsythe
President and Chief Executive Officer
Richard I. Linhart
Vice President, Chief Financial
Officer and Treasurer
WE URGE YOU TO MARK, SIGN, AND RETURN THE ENCLOSED PROXY AS PROMPTLY
AS POSSIBLE-WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON.
IF YOU DO ATTEND THE MEETING, YOU MAY THEN WITHDRAW YOUR PROXY. ALSO,
YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE MEETING OR IN OPEN
MEETING UPON WRITTEN NOTIFICATION TO THE CHIEF EXECUTIVE OFFICER.
[THIS PAGE INTENTIONALLY LEFT BLANK]
NBT BANCORP INC.
52 South Broad Street
Norwich, New York 13815
This Proxy Statement is being furnished by NBT Bancorp Inc. (the
``Company''), a Delaware corporation, to its stockholders, in
connection with the solicitation by the Board of Directors of proxies
to be voted at the Annual Meeting of Stockholders to be held at 11:00
a.m., on April 22, 1995 (the ``Meeting''), at the Norwich Senior High
School auditorium located at Midland Drive, Norwich, New York 13815,
and at any adjournments thereof.
In the course of discussions in this Proxy Statement of
recommendations and solicitations of votes, the term ``Management''
refers to the Board of Directors of NBT Bancorp Inc., unless otherwise
required by the context.
The approximate date on which this Proxy Statement is first being
sent or given to stockholders is March 15, 1995.
A COPY OF FORM 10-K (ANNUAL REPORT) FOR 1994, FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION BY THE COMPANY MAY BE OBTAINED BY
STOCKHOLDERS WITHOUT CHARGE BY WRITTEN REQUEST TO RICHARD I. LINHART,
VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND TREASURER, NBT BANCORP
INC., 52 SOUTH BROAD STREET, NORWICH, NEW YORK 13815.
PROXY STATEMENT
Voting, Proxy Solicitation and Revocation
Your proxy is solicited by the Board of Directors for use at the
Meeting.
If the enclosed form of proxy is properly executed and returned
prior to or at the Meeting, and is not revoked prior to or at the
Meeting, all shares represented thereby will be voted at the Meeting
as specified in the proxy by the persons designated therein. Shares
represented by such returned, unrevoked proxies which are not marked
``AGAINST,'' ``ABSTAIN'' or ``WITHHELD'' will be voted ``FOR'' the
election of the nominees, "FOR" the Company's proposal to increase the
authorized stock of the Company, "FOR'' ratification of the Auditor,
and "AGAINST" the stockholder proposal relating to executive
compensation. Abstentions and broker non-votes are counted only for
purposes of determining whether a quorum is present at the Meeting, but
will not be counted as voting with respect to any matter as to which
the abstention or non-vote is indicated. The solicitation of proxies
will be by mail, but proxies may also be solicited by telephone,
telegraph or in person by officers and other employees of the Company.
The entire cost of this solicitation will be borne by the Company.
Should the Company, in order to solicit proxies, request the assistance
of other banks, brokerage houses and other custodians, nominees or
fiduciaries, the Company will reimburse such persons for their
reasonable expenses in forwarding the proxies and proxy material to the
beneficial owners of such shares. A stockholder may revoke his proxy
by a later proxy or by delivery of notice of revocation to the Chief
Executive Officer, in writing, at any time prior to the date and time
of meeting or in open meeting. Attendance at the Meeting will not in
and of itself revoke a proxy.
Shares Entitled to Vote
The Board of Directors has fixed the close of business on March
3, 1995, as the record date for the determination of stockholders
entitled to notice of, and to vote at, the Meeting. At the close of
business on such date, there were outstanding and entitled to vote at
the Meeting 8,012,344 shares of Common Stock, no par value, stated
value $1.00. Each of these outstanding shares is entitled to one vote
at the Meeting for all items set forth in the Notice. Shares held by
the Trust Division of The National Bank and Trust Company (``the
Bank'') as Sole Trustee may not be voted in the election of directors,
but may be voted on other matters.
Principal Beneficial Owners of Common Stock
No individual or group of individuals owns of record, or is known
to the Company to own beneficially, more than 5% of the Common Stock.
However, Cede & Co., a nominee of the Depository Trust Company, held
record ownership on behalf of various of its customers on December 31,
1994, of 2,246,986 shares, or 27.9%, of the outstanding shares. The
names of the beneficial owners of the shares held by those stockholders
are unknown to management. Furthermore, Drof & Company, a nominee for
The National Bank and Trust Company Employee Stock Ownership Plan, held
547,251 shares or 6.8%, of the outstanding shares on December 31, 1994.
These shares are voted by individual plan participants.
PROPOSAL NUMBER 1
Election of Directors
The By-laws of the Company provide that the number of Directors
authorized to serve until the next annual meeting of stockholders shall
be the number designated, at the Annual Meeting and prior to the
election of directors, by the stockholders entitled to vote for the
election of directors at that meeting. The Board has proposed and is
requesting the stockholders to approve its proposal that the number of
directors of the Company be set at six. A total of four persons have been
designated by the Board as nominees for election at this Meeting and are being
presented to the stockholders for election.
Nominations of candidates for election as directors of the
Company must be made in writing and delivered to or received by the
President of the Company within ten days after notice of any
Stockholders' meeting called for the election of directors. Such
notification shall contain the name and address of the proposed
nominee, the principal occupation of the proposed nominee, the number
of shares of Common Stock that will be voted for the proposed nominee
by the notifying stockholder, including shares to be voted by proxy,
the name and residence of the notifying stockholder and the number of
shares of Common Stock beneficially owned by the notifying stockholder.
The directors to be elected at the Meeting shall be determined by a
plurality vote of the shares represented in person or by proxy,
entitled to vote at the Meeting.
No person shall be eligible for election or elected as a director
who shall have attained the age of 72 years, except for Mr. Everett
Gilmour who was granted an exception to age 75 by resolution of the
Board of Directors amending the By-laws.
Nominations not made in accordance herewith may be disregarded
by the Chairman of the meeting.
The By-Laws of the Company permit the Board of Directors by a
majority vote, between annual meetings of the stockholders, to increase
the number of directors by not more than two members and to appoint
qualified persons to fill the vacancies created thereby.
The By-Laws of the Company provide for a classified Board of
Directors. The Board is divided into three equal classes. Each class
holds office for a term of three years, but only one class comes up for
election each year (except in those cases where vacancies occur in
other classes). The persons named below are being proposed as nominees
for election as directors for terms expiring at the annual meeting to
be held in 1997 and 1998, and until their successors are elected and
qualify. The persons named in the enclosed proxy intend to vote for
such nominees for election as directors, but if the nominees should be
unable to serve, proxies will be voted for such substitute nominees as
shall be designated by the Board of Directors to replace such nominees.
It is believed that each nominee is available for election. The names
of the nominees for election for the terms as shown and certain
information as to each of them are as follows:
Number of
Principal Occupation During Common Shares Percent
Past Five Years and Other Director Beneficially Owned of Shares
Name Date of Birth Directorships (a) Since on 12/31/94 Outstanding
- ---- ------------- --------------------------- -------- -------------- -----------
Election of Directors for terms expiring in 1998:
- -------------------------------------------------
Daryl R. Forsythe 08/02/43 President & CEO of NBT Bancorp 1992 2,710 (1) *
Inc., since January 1995 8,066 (2) .10%
President & CEO of The 890 (2)(b) *
National Bank and Trust Co.,
since January 1995
Vice President and General
Manager---Simmonds Precision
Engine Systems, a subsidiary
of BF Goodrich Aerospace for more
than 5 years previous thereto
Director of The National Bank
and Trust Co. since 1988
Everett A. Gilmour 05/22/21 Chairman of NBT Bancorp Inc., 1986 53,283 (1) .66%
beginning January 1995 2,529 (2) *
Retired Chairman of NBT 1,485 (2)(b) *
Bancorp Inc. for more than
5 years previous thereto
Directorships:
Security Mutual Life
Ins.Co. of NY;
Preferred Mutual Ins. Co.(c);
Deposit Telephone Co.;
NYS Electric & Gas Co.;
Delaware Otsego Corp.;
The National Bank
and Trust Co. since 1962
Election of Directors for terms expiring in 1997:
- -------------------------------------------------
Andrew S. Kowalczyk, Jr. 09/27/35 Partner-Kowalczyk, Tolles, 1994 1,423 (1) *
Deery & Soja, attorneys
Director of The National
Bank and Trust Co. since 1994
John C. Mitchell 05/07/50 President and CEO--- 1994 4,805 (1) *
I.L. Richer Co. (agri. business) 2,046 (2)(b) *
Directorships:
Preferred Mutual Ins. Co.;
The National Bank
and Trust Co. since 1993
Directors with terms expiring in 1996:
- --------------------------------------
Peter B. Gregory 05/07/35 Retired Dentist 1987 44,394 (1) .55%
Director of The National Bank 6,238 (1)(b) *
and Trust Co. since 1978 15,158 (2)(b) .19%
Paul O. Stillman 01/15/33 Chairman, President & CEO--- 1986 13,990 (1) .17%
Preferred Mutual Ins. Co., Inc. (c) 365 (2)(b) *
Directorships:
Excess Mutual Reinsurance Co.;
NAMIC Insurance Co.;
Preferred Mutual Ins. Co. (c);
Leatherstocking Cooperative
Ins. Co;
The National Bank and
Trust Co. since 1977
Executive Officers of NBT Bancorp Inc.
Other Than Directors who are Officers
Number of
Present Position Common Shares Percent
Date of and Principal Beneficially Owned ofShares
Name Date of Birth Employment Position Last Five Years on 12/31/94 Outstanding
- ---- ------------- ---------- ------------------------ ------------- -----------
Richard I. Linhart 09/14/43 10/21/91 Vice President, Chief Financial 2,147 (1) *
Officer & Treasurer of NBT 789 (1)(b) *
Bancorp Inc. since October 1991 16,450 (3) .2%
Executive Vice President, Chief
Administrative and Financial
Officer and Treasurer of the
Bank since December 1993
Executive Vice President,
Treasurer & Chief Financial
Officer of the Bank since
October 1991
Executive Vice President, Chief
Financial Officer of Bank
of Ireland First Holdings, Inc.,
Manchester, NH, 1987-1991
Frederick H. Weismann 10/11/48 04/06/92 Executive Vice President, Chief 2,000 (1) *
Banking and Credit Officer of 354 (1)(b) *
the Bank since December 1993 11,543 (3) .14%
Executive Vice President and
Chief Credit Officer of the Bank
since April 1992
President and Chief Operating
Officer of HILCO, Inc., a
wholly-owned subsidiary of the
Bank of Ireland First Holdings,
Inc., Manchester, NH, 1991-1992
Executive Vice President and Head
of Credit Administration of
Dartmouth Bank, Manchester, NH,
1987-1991
Deborah H. Allen 07/14/55 03/30/86 Senior Vice President, Human 1,153 (1) *
Resources for the Bank since 1,827 (1)(b) *
November 1993. 13,430 (3) .17%
Senior Vice President, Branch
Administration for the Bank 1992.
Vice President of the Bank 1989-1992.
All directors and executive officers as a group beneficially
owned 207,630 shares as of December 31, 1994, which represented 2.6%
of total shares outstanding, including shares owned by spouses and
minor children, as to which beneficial ownership is disclaimed, and
options exercisable within sixty days.
NOTES:
(a) The business experience of each director during the past five
years was that typical to a person engaged in the principal
occupation listed for each.
(b) The information under this caption regarding ownership of
securities is based upon statements by the individual nominees,
directors, and officers and includes shares held in the names of
spouses and minor children as to which beneficial ownership is
disclaimed. These indirectly held shares total in number 29,152
for the spouses and for minor children. In the case of officers
and officer directors, shares of the Company's stock held in The
National Bank and Trust Company Employee Stock Ownership Plan as
of December 31, 1994, are included.
(c) Preferred Mutual Insurance Company, of which Paul O. Stillman is
President and Chief Executive Officer and Director, and Everett
A. Gilmour and John C. Mitchell, are Directors, owns 88,662
shares; Messrs. Stillman, Gilmour, and Mitchell disclaim any
beneficial ownership of any such shares.
(1) Sole voting and investment authority.
(2) Shared voting and investment authority.
(3) Shares under option from NBT Bancorp Inc. Stock Option Plan
which are exercisable within sixty days of December 31, 1994.
* Less than .1%
Board Meetings and Committees of the Board
During 1994, there were eight meetings of the Board of Directors.
Each member, except Mr. Simon, attended at least 75% of the meetings
of the Board and those committees on which he served. Mr. Simon was
named to the Board of Directors in May 1994. Subsequently, his
employment and residence changed and, as a result, Mr. Simon determined
not to stand for election at the Meeting. The full Board performed the
duties of the Executive Committee. The following committees perform a
dual role for the Company and The National Bank and Trust Company.
Nominating and Organization Committee:
Chairman: Paul O. Stillman
Members: Dr. Peter B. Gregory
Everett A. Gilmour
This committee, which met two times during 1994, nominates
directors for election for the Company and the Bank. The committee also
functions to insure a successful evolution of management at the senior
level.
Compensation and Benefits Committee:
Chairman: Paul O. Stillman
Members: John C. Mitchell
Daryl R. Forsythe (resigned from Committee in
December 1994)
William Sluiter
Dr. Peter B. Gregory
Irwin B. Simon
This committee has the responsibility of reviewing the salaries
and other forms of compensation of the key executive personnel of the
Company and the Bank. The committee met nine times in 1994. The
committee administers the Company's stock option and incentive plans.
Audit, Compliance and Loan Review Committee:
Chairman: Daryl R. Forsythe (resigned from Committee in
December 1994)
Members: William Sluiter
John C. Mitchell (became Chairman of Committee on
January 1, 1995)
Richard F. Monroe
The Audit, Compliance and Loan Review Committee represents the
Board of Directors in fulfilling its statutory and fiduciary
responsibilities for independent examinations of the Company including
monitoring accounting and financial reporting practices and financial
information distributed to stockholders and the general public.
Further, the committee determines that the Company operates within
prescribed procedures in accordance with adequate administrative,
operating and internal accounting controls. It also makes
recommendations to the Board with respect to the appointment of
independent auditors for the following year. This committee met four
times in 1994.
Directors and Executive Officers must, under Section 16 (a) of
the Securities Exchange Act of 1934, file certain periodic reports of
changes in beneficial ownership of Company securities. The Bank
endeavors to assist. Directors and Executive Officers in filing the
required reports. To the Company's knowledge all filing requirements
under the Securities Exchange Act were satisfied.
Compensation of Directors and Officers
Board of Directors Fees
For 1994, members of the Board of Directors received a $2,000
annual retainer and $600 per Board meeting attended. Board members also
received $600 for each committee meeting attended. Chairmen of the
committees received $900 for each committee meeting attended. Officers
of the Company, who are also Directors, do not receive any fees.
Executive Compensation
The following table sets forth information concerning the chief
executive officer of the Company and the most highly compensated
executive officers, other than the chief executive officer, of the
Company or the Bank who were serving as executive officers at the end
of 1994 and whose total annual salary and bonus exceeded $100,000 in
1994.
SUMMARY COMPENSATION TABLE
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
----------------------------------------- ------ -------
Securities
Name and Other Annual Underlying LTIP All Other
Principal Position Year Salary Bonus Compensation(3) Options(4) Payouts Compensation(7)
- ------------------ ---- ------ ----- --------------- ---------- ------- ---------------
Joseph J. Butare, Jr., 1994(1) $350,000 $ 28,825 25,935 $-0- $ 9,802 (6)
President, Chairman 1993 341,450 98,089 26,680 -0- 16,509 (6)
of the Board, and 1992 325,862 118,717 31,255 -0- 18,308 (6)
Chief Executive Officer
of the Bank and
the Company
Richard I. Linhart, 1994 $150,000 $ 12,173 10,290 $-0- $ 7,500 (6)
Executive Vice 1993 130,004 34,444 9,812 -0- 11,868 (6)
President, Chief 1992 122,122 39,534 -0- -0- -0-
Administrative and
Financial Officer and
Treasurer of the Bank
and Vice President,
Chief Financial Officer
and Treasurer of the
Company
Frederick H. Weismann, 1994 $145,000 $ 11,411 9,870 $-0- $ 8,253 (6)
Executive Vice 1993 124,998 31,761 9,481 -0- 5,172 (6)
President, Chief 1992(2) 85,381 22,771 11,576 (5) -0- 20,000 (5)
Banking and Credit
Officer of the Bank
NOTES:
(1) Mr. Butare's employment with the Company and the Bank terminated
effective December 31, 1994.
(2) Mr. Weismann commenced employment with the Company in April 1992.
(3) Individual amounts, and in the aggregate, are immaterial.
(4) Grant amount adjusted for the 5% stock dividends in December
1992, 1993 and 1994.
(5) Received as inducement to join the Company.
(6) In 1994, 1993, and 1992 the Bank contributed $420,000, $765,000,
and $927,700 respectively to the Bank's Employees' Stock
Ownership Plan (``ESOP''). With the 1994 contribution, the Bank
as trustee of the ESOP will purchase shares of Common Stock of
the Company at the fair market value on the dates of purchase
and will allocate these shares to the accounts of the
participants. The amount shown includes the amount allocated to
the named executive. The maximum compensation eligible for the
ESOP contribution is $150,000.
(7) Includes matching contributions by the Company or the Bank
pursuant to the Company's and Bank's IRC Section 401(k)
retirement plan.
Option Grants Information
The following table presents information concerning grants of
stock options made during 1994 to each of the executive officers named
in the Summary Compensation Table above.
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term (2)
-------------------------------------------------------------- ---------------------------
# of
Securities % of Total
Underlying Options Granted Exercise
Options to Employees Price Expiration
Name Granted(1) in Fiscal Year ($/Sh) Date 5% 10%
- ---- ---------- ---------------- -------- ---------- -------- --------
Joseph J. Butare, Jr.(3) 25,934 34.9% $16.90 February 2004 $275,645 $698,540
Richard I. Linhart 10,290 13.9% $16.90 February 2004 $109,365 $277,153
Frederick H. Weismann 9,870 13.3% $16.90 February 2004 $104,902 $265,841
NOTES:
(1) Non-qualified options were granted at fair market value on the
date of grant. Options become 40% vested after one year from
grant date and vest 20% each year thereafter.
(2) The potential realizable value of each grant of options,
assuming that the market price of the underlying security
appreciates in value from the date of grant to the end of the
option term, is presented at the indicated annualized rates.
The assumed growth rates in price in the Company's stock are not
necessarily indicative of actual performance that may be
expected. The amounts exclude the cost by the executive to
exercise such options.
(3) Mr. Butare's employment by the Company and the Bank terminated
on December 31, 1994. In accordance with the provisions of Mr.
Butare's employment agreement, all unvested options became
vested options. In connection with the Company's and the Bank's
discharge of their severance obligations under the employment
agreement with Mr. Butare, in January 1995 Mr. Butare exercised
options to purchase 123,798 shares of Company stock and resold
the underlying shares to the Company at $16.19 per share, the
fair market value on the date of sale. Furthermore, the Company
and the Bank have retained Mr. Butare as a consultant, and in
connection therewith the Company has granted Mr. Butare an
option, expiring January 31, 1997, to purchase 123,798 shares of
the Company's common stock at $16.19 per share, the fair market
value of the Company's stock on the date of grant. Finally, the
option to purchase 25,935 shares of Company stock, which is
shown in the table, expired due to the termination of Mr.
Butare's employment; this option was replaced by a new option to
purchase 25,935 shares of the Company's common stock at $16.90
per share, expiring January 31, 1997.
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End
Option Values
The following table presents information concerning the exercise
of stock options during 1994 by each of the executive officers named
in the Summary Compensation Table above, and the value at December 31,
1994, of unexercised options that are exercisable within sixty days of
December 31, 1994.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at FY-End(2) at FY-End(2)
---------------------- --------------------
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized(1) Unexercisable Unexercisable
- ---- --------------- ----------- ------------- -------------
Joseph J. Butare, Jr. -0- $ -0- 149,733/-0-(4) $624,021/$-0-(4)
Richard I. Linhart 2,000(3) $12,178 16,450/14,201 $ 67,234/$43,431
Frederick H. Weismann 2,000(3) $11,940 11,543/13,622 $ 34,043/$40,570
NOTES:
(1) Represents difference between the fair market value of the
securities underlying the options and the exercise price of the
options on the date of exercise.
(2) Represents difference between the fair market value of the
securities underlying the options and the exercise price of the
options at December 31, 1994.
(3) The options were exercised and the shares now held by the
executives in accordance with the Company's Executive Stock
Ownership Plan. The Plan, adopted in 1994, requires Messrs.
Linhart and Weismann to own outright 2,000 shares by December
31, 1994, and requires Company executives over the next five
years to own shares equal to twice salary in the case of Mr.
Forsythe and equal to salary in the cases of Messrs. Linhart and
Weismann.
(4) Mr. Butare's employment by the Company and the Bank terminated
on December 31, 1994. In January 1995 Mr. Butare exercised and
sold all in-the-money options. The value received by Mr. Butare
upon exercise and sale was $585,000.
Retirement Plan
The following table presents information with respect to the
pension plan of the Company and the Bank. The table shows estimated
annual benefits payable upon retirement in specified compensation and
years of service classifications for participants retiring on December
31, 1994.
Years of Participation
--------------------------------------------------------------
Final Average
Earnings 10 Years 20 Years 30 Years 40 Years
- ------------- ---------- ----------- ----------- -----------
$15,000 N $ 2,507.00 $ 5,132.00 $ 7,757.00 $ 10,382.00
Q 2,332.00 4,773.00 7,215.00 9,656.00
$25,000 N 4,200.00 8,575.00 12,950.00 17,325.00
Q 3,906.00 7,976.00 12,045.00 16,114.00
$40,000 N 7,179.00 14,179.00 21,179.00 28,179.00
Q 6,677.00 13,188.00 19,699.00 26,210.00
$70,000 N 13,138.00 25,388.00 37,638.00 49,888.00
Q 12,220.00 23,614.00 35,008.00 46,401.00
$100,000 N 19,097.00 36,597.00 54,097.00 71,597.00
Q 17,762.00 34,039.00 50,316.00 66,593.00
$200,000 N 29,028.00 55,278.00 81,528.00 107,778.00
Q 26,999.00 51,415.00 75,830.00 100,246.00
$300,000 N 29,028.00 55,278.00 81,528.00 107,778.00
Q 26,999.00 51,415.00 75,830.00 100,246.00
$400,000 N 29,028.00 55,278.00 81,528.00 107,778.00
Q 26,999.00 51,415.00 75,830.00 100,246.00
$500,000 N 29,028.00 55,278.00 81,528.00 107,778.00
Q 26,999.00 51,415.00 75,830.00 100,246.00
N=Normal Form of Benefit for a Single Participant-5 Years Certain and
Continuous.
Q=Normal Form of Benefit for a Married Participant-Qualified Joint and
Survivor (50% of benefit payable to spouse at death of Participant).
Spouse's age assumed to be equal to Participant's age for above
calculations.
The Company has in effect a non-contributory pension plan for all
eligible employees which is self-administered. Eligible employees are
those who work in excess of 1,000 hours per year, have completed one
year of service and have attained age 21. The plan is qualified under
Section 401(a) of the Internal Revenue Code. Employer contributions to
the plan are computed on an actuarial basis using the projected unit
credit cost method including amortization of any past service costs
over a thirty-year period. Pension costs are funded as accrued. No
contribution is required for the plan year ending September 30, 1994.
The plan provides for 100% vesting after seven years of qualified
service. Earnable compensation for the plan is defined as fixed basic
annual compensation, including bonuses, overtime and other taxable
compensation, but excluding the Company's cost for any public or
private employee benefit plan, including this retirement plan. Benefit
computations are based on an average final compensation amount which
is the average annual earnable compensation during the five consecutive
year period in an employee's last ten years of qualified service which
produces the highest such average.
For each year of qualified service an employee will be entitled
to a basic plan and an excess annual retirement allowance. The basic
annual allowance is equal to 1.75% for service through September 30,
1989, and 1.6% for service from October 1, 1989, through December 31,
1994, and 1.25% thereafter of his Highest Consecutive 5 year Average
Compensation, times his years of creditable service to a maximum of 40
years (30 years maximum service after December 31, 1994) plus an excess
annual allowance of .6% of his Excess Compensation which is defined as
the excess of the participant's Highest Consecutive 5 year Average
Compensation above the participant's Covered Compensation determined
by a table provided by the IRS. The excess benefit is limited to 35
years. The benefits listed above in the pension plan table are subject
to any deduction for Social Security or other offset amounts. As of
December 31, 1994, the end of the plan year, the executive officers
named in the Summary Compensation Table above were credited with the
following years of service for purposes of the above table: Joseph J.
Butare, Jr. (5), Richard I. Linhart (4), and Frederick H. Weismann (3).
Employment Contracts and Termination of Employment
Until December 31, 1994 the Company and the Bank had an
employment agreement with Mr. Butare (herein, the ``Agreement'') which
provides for his employment as Chairman, President and Chief Executive
Officer of the Company and the Bank at a minimum annual salary of
$350,000. It also provided that, upon termination of his active
full-time employment with the Company and the Bank, he will not enter
into competition with the Company and the Bank within a specified
geographic area for a period of three years. The Agreement further
provided that if it were terminated by the Company and the Bank for any
reason other than Mr. Butare's death, disability or discharge for
cause, or if the Agreement were not extended by mutual agreement, and
he then resigned his positions with the Company and/or the Bank within
sixty days of his notification of such action, then Mr. Butare would
be entitled to receive all compensation and benefits as provided in the
Agreement as if he had continued to be employed for the balance of the
then existing term of the Agreement, but in any event for not less than
two years; and in such event, any outstanding unvested stock options
would become immediately vested. Mr. Butare's employment with the
Company and the Bank terminated effective at the close of business on
December 31, 1994. In connection with the discharge of severance
obligations of the Company and the Bank under the Agreement with Mr.
Butare upon the termination of his employment, the Company and the Bank
paid Mr. Butare approximately $823,000. In connection therewith, the
Company agreed to employ Mr. Butare as a consultant from time to time
until December 31, 1996 at specified rates for each day for which his
services as a consultant are retained and granted Mr. Butare a stock
option to purchase 123,798 shares of the Company's common stock. The
option price was the market price of the Company's stock on the date
of grant. In addition, the Company replaced and thereby, in effect,
extended until January 31, 1997 the option to purchase 25,935 shares
at an exercise price of $16.90 per share, which had been issued to Mr.
Butare during 1994. This option would have expired on January 31, 1995
according to its terms due to the termination of Mr. Butare's
employment on December 31, 1994.
Change In Control Agreements
The Company has entered into change-in-control agreements with
Messrs. Forsythe, Linhart, and Weismann. The agreements provide in
general that, in the event that the Company or the Bank is acquired by
another company or any of certain other changes in control of the
Company or the Bank should occur and further if within 24 months from
the date of such acquisition or change in control the particular
executive's employment with the Company or the Bank is terminated
without cause or if the executive's base salary is reduced or his
duties or responsibilities are changed (except in a promotion), the
terminated executive will be entitled to receive severance pay equal
to 2.99 times a base amount in the case of Mr. Forsythe and twice a
base amount in the cases of Messrs. Linhart and Weismann. An
executive's base amount for these purposes is his average annual
compensation includible in his gross taxable income for the five years
preceding the year in which the change in control occurs (or, if he has
been employed by the Company for less than those five years, for the
number of those years during which he has been employed by the Company,
with any partial year annualized), including base salary, non-deferred
amounts under annual incentive, long-term performance, and profit-
sharing plans, distributions of previously deferred amounts under such
plans, and ordinary income recognized with respect to stock options.
Each agreement is effective until December 31, 1997, in the case of Mr.
Forsythe, and December 31, 1996, in the cases of Messrs. Linhart and
Weismann, and each agreement is automatically renewed for one
additional year commencing at December 31, 1995 (for Mr. Forsythe) or
1994 (for Messrs. Linhart and Weismann) and each December 31
thereafter.
Supplemental Retirements Benefits
The Company agreed in January 1995 to provide Messrs. Forsythe,
Linhart, and Weismann with supplemental retirement benefits ("SERP").
The SERPs will provide that annual supplemental benefits at normal
retirement will be equal to 65% of the individual's average base salary
and bonuses for the five salary years immediately preceding the date
of retirement, less the sum of annual amounts payable to the individual
under (a) the Company's pension plan, (b) the Company's ESOP, (c)
social security, and (d) the pension plan of former employers, as the
case may be. Details of the plans are currently being designed and the
annual costs are not expected to be material.
Daryl R. Forsythe Employment
Mr. Forsythe was hired effective January 1, 1995 as president and
chief executive officer of the Company and the Bank. Mr. Forsythe is
employed at will without a written employment contract at an annual
salary of $240,000. As an executive officer, Mr. Forsythe is eligible
to participate in the Company's and the Bank's various employee benefit
plans, including the Executive Incentive Compensation Plan, the Stock
Option Plan, the retirement plan, the ESOP, the IRC Section 401(k)
plan, and the various health and life insurance plans.
Compensation Committee Interlocks and Insider Participation
Joseph J. Butare, Jr., the former Chief Executive Officer,
President, and Chairman of the Board of the Company, was not a member
of the Company's compensation and benefits committee during 1994. Mr.
Butare served as a director on the Board of Preferred Mutual Insurance
Company. Mr. Stillman, a director of the Company, who serves on the
Compensation and Benefits Committee and is Chairman of that committee,
is Chairman, President and Chief Executive Officer of Preferred Mutual
Insurance Company.
Compensation Committee Report On Executive Compensation
The primary responsibility of the Compensation and Benefits
Committee (``Committee'') is to design, implement, and administer all
facets of the compensation and benefits programs of the Company for all
employees. The Committee is composed entirely of non-employee
directors. The Committee approves executive compensation, approves
participants who are eligible for the Executive Incentive Compensation
Plan, sets the Plan targets for each year and approves payouts thereon,
awards stock option grants, approves the annual contribution to the
Employee Stock Ownership Plan for all employees, and determines the
terms of the CEO's employment annually. All actions of the Committee
are presented to the Board of Directors for approval. The Committee has
been particularly active in the past several years in ensuring that
executive compensation, among other things, is aligned to shareholder
interests. The objective of the Company's executive compensation
program is to develop and maintain executive reward programs which
contribute to the enhancement of shareholder value, while attracting
and retaining key executives who are critical to the long-term success
of the Company. It is expected that total compensation will vary
annually, based on Company and individual performance.
The Compensation Committee hired a personnel consultant in 1994
who is independent and unassociated with the Company, the CEO, or any
member of the Board or management to assist in setting the total
compensation package of senior management.
The philosophy of the Committee in approving executive
compensation is based on the following:
* Set base salaries that are commensurate with the individual's
responsibility, experience, and contribution to the Company.
* Ensure that salaries are competitive within the industry so as
to be able to attract and retain highly qualified executives.
* Promote a pay for performance culture.
* Design a total compensation package that includes a base salary,
an annual incentive plan, and a stock option plan that
encourages share ownership, all of which are linked with
shareholder interests.
The Company's executive compensation program, discussed in detail
below, is made up of both fixed (base salary) and variable (incentive)
compensation elements. Variable compensation consists of annual cash
incentives and stock option grants. The Committee and the management
of the Company believe that variable compensation should be based both
on short-term and long-term measurements and be directly and visibly
tied to Company performance, thus introducing substantial risk in the
payout level of the incentive plan.
The Committee believes it is critical to the ongoing success of
the Company that its executives continue to be among the most highly
qualified and talented available to lead the organization in the
creation of shareholder value. To assist the Committee in carrying out
its responsibilities, it engages an unaffiliated outside salary and
benefits consultant to advise the Committee and ensure its practices
are consistent within the industry, consistent with the goals and
objectives of the Company, and fairly applied throughout the Company.
In reviewing executive compensation, the Committee considered a
variety of factors including the Company's 1992, 1993, and to the
extent available, 1994 performance. Executive compensation, other than
the CEO's, is reviewed in July of each year. While net income in 1993
increased 6% over 1992, the earnings in the first half of 1994 were
disappointing to the Company. In response thereto, the Company took
corrective action by reducing the full-time equivalent employment by
60 through staff reductions, branch closures and a selected reduction
in branch hours. At the same time, scheduled merit salary increases
were deferred four months for all employees except Senior and Executive
Vice Presidents. For these officers, merit increases were deferred
from July 1, 1994, to January 1, 1995, or a six month salary freeze.
Other factors considered in executive compensation, without any
specific weight given individually, were growth in Company assets from
$950 million to over $1 billion, maintenance of capital ratios well in
excess of regulatory guidelines, receipt of a "blue ribbon" and a "five
star" rating by outside firms on the safety and soundness of the Bank,
satisfactory reports from regulatory examinations, and very favorable
asset quality ratios. Also considered were successful expansions into
several new markets and the strong market capitalization of the Company
which has increased 63% from December 1991 to December 1994. The
Company also considered the Bank's risk assessment classification
(based upon the Bank's level of regulatory capital) and supervisory
risk factors assigned by the Office of the Comptroller of the Currency,
utilized by the Federal Deposit Insurance Corporation in determining
the amount of deposit insurance assessments the Bank will pay.
Finally, the Committee considered the economic condition in Upstate New
York and in the individual markets served by the Bank and the impact
on the earnings.
Base Salary. As noted above, the Company deferred executive base
salaries reviews in 1994 due to lower earnings. Interim adjustments may
be made when significant changes in responsibility occur. Although not
specifically weighted, the performance of each executive, the level of
responsibility, and current inflationary indices were considered. The
salary of each executive officer is maintained within salary ranges
(established by the salary and benefits consultant) which are based
upon responsibility, experience, and individual performance. Mr.
Butare's contract came up for review on December 1, 1994. After
considerable discussion between the Board and Mr. Butare, Mr. Butare
elected to resign to pursue other interests. In January 1995, the
Company paid Mr. Butare a lump sum settlement of approximately $823,000
pursuant to the terms of his contract, the December 1994 agreement
between the Company and Mr. Butare, and other negotiated terms. Mr.
Forsythe was hired to replace Mr. Butare at an annual base salary of
$240,000. No written employment agreement was entered into between the
Company or the Bank and Mr. Forsythe.
Executive Incentive Compensation Plan. The Committee, working with an
outside salary and benefits consultant designed the current incentive
plan that would link the payout with shareholder interests. The Plan
is reviewed annually by the Committee. Upon implementation of the Plan
for 1992, the Board of Directors terminated the One-Year and Three-Year
Incentive Plans and installed an annual Executive Incentive
Compensation Plan (``EICP'') that is more closely linked to shareholder
value. There are three components to the potential award within the
Plan: Return on Assets is a 40% component; Return on Equity is a 40%
component; and the dollar increase in net income over the prior year
is a 20% component. The Plan has a minimum Return on Assets achievement
requirement before any payout is possible. There are participating
levels within the Plan which range from the maximum payout being 50%
of salary for the CEO (the highest level) to 10% of salary at the
lowest level. Each level has a corporate performance component and an
individual performance component. At the highest level the corporate
component is 100% and the personal component is 0% whereas at the
lowest participating level the corporate component is 30% and the
personal component is 70%. As discussed in the Compensation Table, Mr.
Butare's bonus earned in 1994 in accordance with the performance
components established in the EICP based on 1994 Company performance,
mathematically computed to $28,825 or 16% of the maximum potential
payout and down significantly from the $98,000 earned in 1993.
Depending on the achievement of personal objectives, the remaining
executive officers received approximately similar percentages of their
maximum payout potential.
Stock Option Plan. In order to provide long-term incentives to key
employees, including executive officers, to encourage share ownership
by key officers, and to retain and motivate key officers to further
shareholder returns, the Company has a Stock Option Plan. The Committee
believes that stock options, which provide value to participants only
when the Company's shareholders benefit from stock price appreciation,
are an important component of the Company's executive compensation
program. The number of options currently held by an officer is not a
factor in determining individual grants. The Company has adopted an
Executive Stock Ownership Plan which has set a target of stock
ownership by the CEO and the two Executive Vice Presidents. Within a
five year period beginning January 1, 1995, the CEO of the Company
should own shares in the Company with a market value equal to at least
two times the then current salary of the CEO and the two Executive Vice
Presidents hold shares with a market value equal to their base salary.
In addition, the Company asked the two Executive Vice Presidents to own
outright 2,000 shares by December 31, 1994, in furtherance of this
program which they have complied. The value of stock options granted
in 1994 range from 125% of base compensation at the CEO level down to
25% of base compensation. ``Value'' is determined by multiplying the
number of options granted by the fair market value of the Company's
Common Stock which underlies such options on the date of the grant.
With respect to the options granted in 1994 to the CEO and to all other
executive officers, the Committee in making the awards considered the
various factors referred to above, especially the positive growth of
the Company, its financial condition, and profitability. The Committee
did not apply any specific weighing to the factors considered. The
number of options which the Committee granted to the CEO and other
executive officers was based upon individual performance and level of
responsibility, subject to Committee-imposed restrictions. Thus, option
grants in January 1994 for persons slotted in level 1 or above of the
EICP (Messrs. Butare, Linhart, and Weismann) were not permitted to
exceed 125% of salary for Mr. Butare and 115% of salary for Mr. Linhart
and Mr. Weismann. The Committee determined that the award level must
be sufficient in size to provide a strong incentive for executives to
work for long-term business interests of the Company, thereby creating
additional shareholder value resulting from the appreciation of the
Company's stock, and to become significant owners of the Company.
Options are granted at the fair market value of the Company's stock at
the time of grant. Under the 1993 Plan, options vest at the rate of 40%
after one year of date of grant and an additional 20% each year
thereafter. Since an option only gives the officer the right to buy
these option shares at a fixed price over a future period, the
compensation value is derived by the incentive to increase shareholder
value in the future; hence, the motivation to improve the Company's
performance.
Members of the Compensation and Benefits Committee
Paul O. Stillman - Chairman
Daryl R. Forsythe (resigned December 1994)
William Sluiter
Dr. Peter B. Gregory
John C. Mitchell
Irwin B. Simon
Performance Graph
The following graph compares the cumulative total shareholder
return (i.e. price change, reinvestment of cash dividends and stock
dividends received) on the Company's Common Stock against the
cumulative total return of the NASDAQ Stock Market (US Companies) Index
and the Index for NASDAQ Financial Stocks. The stock performance graphs
assume that $100 was invested on December 31, 1989. The graph further
assumes the reinvestment of dividends into additional shares of the
same class of equity securities at the frequency with which dividends
are paid on such securities during the relevant fiscal year. The yearly
points marked on the horizontal axis correspond to December 31 of that
year. Each of the referenced indices is calculated in the same manner.
All are market-capitalization-weighted indices, so companies judged by
the market to be more important (i.e., more valuable) count for more
in all indices.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG NBT BANCORP INC.,
THE INDEX FOR NASDAQ FINANCIAL STOCKS, AND THE NASDAQ STOCK MARKET (US COMPANIES) INDEX.
[GRAPH APPEARS HERE]
NASDAQ NASDAQ
Measurement Period Financial Market Index
(Fiscal Year Covered) NBT BANCORP INC. Stocks Index (US Companies)
- --------------------- ---------------- ---------------- --------------
4Q89 $100 $100 $100
1Q90 $100 $ 93 $ 97
2Q90 $106 $ 91 $103
3Q90 $104 $ 71 $ 77
4Q90 $101 $ 77 $ 85
1Q91 $ 89 $ 94 $110
2Q91 $ 87 $100 $109
3Q91 $ 81 $109 $122
4Q91 $ 85 $119 $136
1Q92 $ 85 $131 $141
2Q92 $ 93 $139 $131
3Q92 $106 $147 $136
4Q92 $111 $170 $159
1Q93 $131 $186 $162
2Q93 $131 $182 $165
3Q93 $135 $201 $178
4Q93 $145 $197 $181
1Q94 $147 $194 $173
2Q94 $133 $206 $165
3Q94 $134 $212 $179
4Q94 $156 $198 $177
On March 17, 1992, the Company listed its Common Stock on the
NASDAQ National Market System. Prior to this listing the Company's
Common Stock was traded on the over-the-counter (``OTC'') ``pink
sheets''. Since the listing, the number of market makers who are active
in trading the Company's stock has increased from three to fourteen.
The Company believes that by its being listed on the NASDAQ system its
shareholders have a more readily accessible market to buy or sell the
Company's stock. Many of the Company's peers are also listed on this
exchange. The graph below represents the cumulative total returns of
the Company's stock compared with the NASDAQ Stock Market (US
Companies) and the Index for NASDAQ Financial Stocks since March 17,
1992, the date the Company first began trading on the NASDAQ National
Market System exchange. For purposes of the graph below, the NASDAQ
indices were set to $100 on March 17, 1992.
Cumulative Total Return Since NASDAQ listing 3/17/92
[GRAPH APPEARS HERE]
NASDAQ NASDAQ
Measurement Period Financial Market Index
(Fiscal Year Covered) NBT BANCORP INC. Stocks Index (US Companies)
- --------------------- ---------------- -------------- ----------------
1Q92 $100 $100 $100
2Q92 $120 $108 $ 90
3Q92 $125 $114 $ 94
4Q92 $130 $131 $109
1Q93 $151 $144 $111
2Q93 $152 $141 $113
3Q93 $160 $156 $123
4Q93 $176 $153 $124
1Q94 $170 $150 $119
2Q94 $162 $160 $114
3Q94 $158 $164 $123
4Q94 $172 $153 $122
Employees' Stock Ownership Plan
The Company sponsors a non-contributory, IRS qualified Employees'
Stock Ownership Plan. The plan is administered by the Bank and plan
investments are primarily in the Company's Common Stock. The stock is
voted by the plan's Trustees only as participants direct the Trustees
to vote by properly executing a proxy. At December 31, 1994, the plan
owned 547,251 shares of the Company's Common Stock, 6.8% of total
shares outstanding.
Employees eligible to participate in the plan are those who work
in excess of 1,000 hours per year, have completed one year of service
and have attained age 21. The plan provides for partial vesting of an
employee's interest in the plan at approximately 20% per year, with
100% vesting being achieved after seven years of qualified service.
Discretionary contributions, as determined annually by the Board
of Directors, are made by the Company to a separate trust for the
benefit of the participating employees. Annual contributions may not
exceed amounts deductible for Federal income tax purposes. Employer
contributions are allocated among all participants in proportion that
each participant's compensation for the plan year bears to the total
compensation of all participants for the plan year. (Compensation for
the plan is defined as fixed basic annual compensation, including
bonuses, overtime and other taxable compensation, but excluding the
Company's cost for any public or private employee benefit plan,
including the retirement, executive incentive compensation and ESOP
plans.) The Board of Directors may amend the plan at any time.
The value of a participant's account is the total of allocated
employer contributions, plus the earnings on those contributions, plus
or minus any gain or loss on the investment of the contributions.
Normal retirement age under the plan is 65. The plan also
provides for early retirement at age 55 and disability retirement at
any age. In the event a participant dies before retiring under the
plan, the value of his account in the plan will be paid to his
beneficiary.
A participant's retirement benefit under the plan is the value
of his account at the date of retirement. Effective January 1, 1985,
the normal form of retirement benefit for a married employee is a joint
and survivor annuity; for an employee who is not married, a lump sum
distribution of cash. Other available retirement options are: 1)
installment payments of cash and 2) distribution of the account value
in employer securities, both subject to obtaining spousal waivers.
As a qualified plan (under current law) employer contributions
and plan earnings are not currently taxed to employees; retirement
benefits will be taxable to employees when received from the plan.
401(k) Plan
The Company and the Bank have adopted an IRC Section 401(k)
retirement plan. All employees of the Company and the Bank are
eligible to participate in the plan. The plan provides that any
employee may elect to defer up to 4% of his salary for retirement and
that the Company or the Bank will provide a matching contribution of
25% (50% after December 31, 1994) of the employee's deferred amount.
In 1994, the Company or the Bank provided matching contributions to Mr.
Butare of $2,302, Mr. Linhart of $-0-, and Mr. Weismann of $1,004.
These payments are reflected in the Summary Compensation Table.
Stock Option Plan
The Board of Directors adopted Stock Option Plans in 1986 and in
1993, which were subsequently approved by the Company's stockholders
at the 1987 and 1993 Annual Meetings, respectively. The purposes of the
plans are to encourage ownership of capital stock of the Company by
officers and other key employees of the Company and its subsidiaries
in order to help the Company attract and retain in its service persons
of exceptional competence, to furnish added incentives for them to
increase their efforts on behalf of the Company, and to gain for the
Company the advantages inherent in key employees having an ownership
interest in the Company. Pursuant to the approval of the 1993 Stock
Option Plan, the 1986 plan was ``frozen'' and no new options or stock
appreciation rights may be granted under that plan.
Options may be issued to full-time key employees (officers,
whether or not they are Directors, and Directors who are also
employees, including, but not limited to, President, Chief Executive
Officer, Branch Manager, Department Head or Division Manager) of the
Company or any subsidiary. Any employee of the Company or any
subsidiary may be determined to be a key employee and may be granted
an option at the discretion of the Board of Directors.
The Plan permits the grant of either non-qualified stock options
or incentive stock options as determined by the Board of Directors. The
grants, when exercised, may not exceed any limit specified by the
Internal Revenue Code, Section 422A, or $100,000 annually, whichever
is smaller, in the event that the optionee has incentive stock options.
The exercise price and expiration dates with respect to each
option are determined by the Compensation and Benefits Committee, but
in no event may the price be less than 100% of the fair market value
of the Company's Common Stock. ``Fair Market Value'' is defined as the
average between the highest and lowest quoted selling prices of the
Common Stock on the National Market System of NASDAQ on the date of
grant with respect to incentive stock options, and on the five
preceding trading days prior to the grant with respect to nonqualified
options. Payment of the exercise price may be made by check or, with
the consent of the Company, by delivery of shares of Common Stock of
the Company, having fair market value equal to the exercise price or
by the purchaser's fully-secured promissory note, bearing interest at
such rate as may be determined by the Board of Directors. No option may
be transferred, and each option is exercisable only by the optionee
during its term in accordance with the provisions of the grant,
provided he is currently employed by, or retired from, the Company or
one of its subsidiaries. In the event that an optionee dies or becomes
permanently disabled, an option will become exercisable in full on the
date of death or determination of disability, and such option will
remain exercisable by the optionee or his legal representative for six
months after the date of death or disability. In the event that an
optionee's employment by the Company is terminated for reasons other
than retirement, disability or death, an option may be exercised within
thirty days of termination of employment to the extent that it was
exercisable at the date of such termination. No option granted under
the Plan may extend for a period exceeding ten years from the date of
the grant, and the Committee will determine the sequence in which
grants may be exercised.
The Plan is administered by the Compensation and Benefits
Committee. The Board may, in its discretion, at any time, or from time
to time, while the Plan is operative, make changes therein or
amendments thereto without stockholder approval which, in its opinion,
are not inconsistent with the purpose of the Plan, including, but not
limited to, changes in the allocation of benefits which may increase
the cost to the Company. The Plan contains provisions for adjustments
in the event of stock splits, stock dividends and similar changes.
As of December 31, 1994, 762,915 shares of the Company's Common
Stock have been reserved for issuance under the Plan. In 1994,
non-qualified options, which expire in 2004, for 72,240 shares were
granted to 14 key employees, at option prices of $16.90 to $14.94.
Grants to executive officers were as follows: Mr. Butare 25,935 shares;
Mr. Linhart 10,290 shares; and Mr. Weismann 9,870 shares; and all
executive officers (4 persons) as a group 50,295 shares. Options for
355,666 shares were outstanding at December 31, 1994 with option prices
ranging from $9.46 to $16.90 per share for all officers as a group. All
options were at 100% of fair market value as of date of the grant.
Options and option prices have been adjusted for all stock dividends
to date.
Options outstanding as of December 31, 1994 are as follows: Mr.
Butare, options of 149,733 shares, priced from $9.93 to $16.90; Mr.
Linhart, options of 30,651 shares, priced at $9.46 to $16.90; and Mr.
Weismann, options of 25,165 shares, priced at $9.72 to $16.90.
Under current law, a participant who received non-qualified stock
options or incentive stock options, will not realize any income, nor
will the Company receive a deduction, for Federal income tax purposes,
in the year of the grant. Ordinary income will be realized by the
recipient of an option at the time shares are transferred, or cash paid
to him, pursuant to his exercise of a non-qualified stock option. In
the case of a non-qualified stock option, the amount of such income
will be equal to the difference between the option price and the fair
market value of the shares of common stock on the date of exercise.
Executive Incentive Compensation Plan
The Company adopted, effective January 1, 1992, an Executive
Incentive Compensation Plan (hereinafter, the ``Plan'') to promote
individual motivation for the achievement of the Company's financial
and operating objectives and to aid in attracting and retaining highly
qualified personnel. Pursuant to the Plan, officers of the Bank are
eligible to receive cash in the event certain performance criteria are
satisfied. The operation of the Plan is predicated on the Bank's
attaining and exceeding management performance goals. The goals consist
of return on average assets, return on shareholder's equity, and profit
improvement. Unless a participant elects to have all or a portion of
his award deferred, distribution of awards will be made in cash during
the first quarter after year-end. All distributions must be approved
by the Compensation and Benefits Committee. This committee has broad
discretion in determining who will be eligible to receive incentive
compensation awards and has full power and authority to interpret,
manage, and administer the Plan. The Plan provides that the President
and Chief Executive Officer of the Company will recommend to the
committee the amounts to be awarded to individual participants. The
President and Chief Executive Officer may also recommend a change
beyond the formula to a bonus award to a participant. The committee has
the authority to amend such recommendation.
Bonus awards are made pursuant to an established formula. An
employee will be placed into a particular level, according to the
participant's office and responsibility. Depending upon the particular
level, the award will range from 0% to 10% of the participant's regular
salary at the lowest level to 0% to 50% of the salary at the highest
level. The formula provides that the financial criteria necessary for
plan operation consist of return on average assets (40% component),
return on equity (40% component), and profit improvement (20%
component). Incentive distributions will be based upon attainment of
corporate performance goals to establish the total awards. The total
awards, in turn, will be determined by reference to both corporate and
individual components. The corporate component will be determined by
attainment of corporate goals (as established by the committee) and the
individual component will be determined by attainment of individual
goals (objectives mutually agreed upon between participants and the
superior and approved by the Chief Executive Officer). The corporate
component will range from 100% for the highest level (the President and
Chief Executive Officer) to 30% for the lowest level, whereas the
individual component will range from 0% for the highest level to 70%
for the lowest level.
The Plan provides that, in order that the Chief Executive Officer
will own such number of shares of Company Common Stock as will equal
two times his current base salary and that the executive vice
presidents will own that number of shares of Company Common Stock as
will equal their respective current base salary. If the officer
utilizes at least 50% of his bonus awarded under the Plan in a
particular year for the purchase of Company Common Stock then the
Company will reimburse the taxes withheld from such portion, until that
required level of ownership is reached.
The amount of incentive compensation awards to the individuals
named in the Summary Compensation Table is included in the "Bonus"
column of that table. Payments of bonuses for 1994 pursuant to the Plan
were made January 1995.
Personal Benefits
During the past fiscal year, no director, officer or principal
stockholder or members of their respective families received any
banking services or other benefits, including use of any staff,
facilities or properties of the Company, not directly related to job
performance and not generally available to all employees of the
Company. Health insurance and group life insurance are routinely
provided all staff members.
Related Party Transactions
The Bank has had, and expects in the future to have, transactions
in the ordinary course of business with directors and officers of the
Company and of the Bank on the same terms as those prevailing at the
time for comparable transactions with others. The Bank has extended
credit to its directors and officers and their business interests. The
total of these loans was $1,615,266, $1,631,403 and $3,330,297 at
December 31, 1992, 1993, and 1994 respectively, representing 1.7%,
1.7%, and 3.4% of equity capital at those dates. The highest aggregate
amounts outstanding on such loans during 1992, 1993 and 1994, were
$1,692,590, $1,794,037 and $4,189,790 which represented 1.7%, 1.9% and
4.3% of equity capital at those interim dates.
All outstanding loans made by the Bank to such persons were made
in the ordinary course of business on substantially the same terms,
including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons, and, in the
opinion of management, do not present more than normal risk of
collectability or present other unfavorable features. Based upon the
information available to it, the Bank does not consider that any of the
officers or directors of the Bank or the Company had a material
interest in any transactions during the last year, except as stated
above, or have such an interest in any proposed transactions.
The footnotes to the financial statements, which appear in the
Company's Annual Report, include certain loan balances not set forth
in the preceding paragraph. Loan balances referred to in the footnotes
include loans made to companies that are only affiliated with the Bank
or the Company because a director or executive officer of the Bank or
the Company served as a director of such company. The aggregate amounts
of these other loan balances, included in the footnotes, but not
included in the amounts set forth in the preceding paragraph, were
$1,660,371 at December 31, 1992, $2,467,923 at December 31, 1993 and
$1,186,343 at December 31, 1994.
PROPOSAL NUMBER 2
Proposal to Increase the Number of Authorized Shares of Common Stock
and Preferred Stock
By resolution dated February 21, 1995, the Board of Directors
declared it advisable and in the best interests of the Company to amend
the Company's Certificate of Incorporation (the "Certificate") to
increase the number of shares of stock that the Company has the
authority to issue to an aggregate of 15,000,000 shares, of which
12,500,000 shares would be common stock and 2,500,000 shares would be
preferred stock, and directed that the amendment to the Certificate be
submitted to a vote of the stockholders at the Meeting. If the
proposal is adopted, Article Fourth of the Certificate, as amended,
will be further amended to read as follows:
"FOURTH: The total number of shares of all classes of
capital stock which the Corporation shall have the
authority to issue is Fifteen Million (15,000,000) shares,
consisting of Twelve Million Five Hundred Thousand
(12,500,000) shares of Common Stock having no par value,
stated value $1.00 per share and Two Million Five Hundred
Thousand (2,500,000) shares of Preferred Stock having no
par value, stated value $1.00 per share."
The Certificate currently authorizes the issuance of up to
12,000,000 shares, consisting of 10,000,000 shares of common stock and
2,000,000 shares of preferred stock. As of March 1, 1995, the Company
had 8,013,488 shares of common stock and no shares of preferred stock
outstanding. In addition, as of the same date approximately 903,618
shares of common stock were reserved for issuance as follows:
approximately 762,915 shares for issuance under the Company's stock
option plans and 140,703 shares for issuance under the employee stock
purchase and dividend reinvestment plan. Moreover, the Company has
reserved 100,000 shares of preferred stock for possible issuance
pursuant to the Company's stockholder rights plan, adopted in November
1994. The Company has also historically declared a 5% common stock
dividend each December.
The Board of Directors believes that is in the best interests of
the Company and its stockholders to increase the number of authorized
shares of common stock and preferred stock in order to have additional
shares available for issuance to meet a variety of business needs as
they may arise and to enhance the Company's flexibility in connection
with possible future actions. These business needs and actions may
include stock dividends, stock splits, employee benefit programs,
corporate business combinations, funding of business acquisitions, and
other corporate purposes. Although the Board periodically considers
transactions such as those listed above, it currently does not have
plans to issue any significant amount of such common stock or preferred
stock, except as described in the preceding paragraph. The terms of
the preferred stock to be authorized, including dividend rates,
conversion prices, voting rights, redemption prices, maturity dates,
and similar matters, will be determined by the Board of Directors
without any further authorization by the stockholders.
The authorized shares of common stock and preferred stock in
excess of those presently issued will be available for issuance at such
times and for such purposes as the Board of Directors may deem
advisable without further action by the Company's stockholders, except
as may be required by applicable laws or regulations. In this regard,
the rules of the National Association of Securities Dealers, Inc. with
respect to securities of companies approved for trading on the NASDAQ
National Market System, upon which the Company's common stock trades,
currently requires stockholder approval of (a) acquisition transactions
where the present or potential issuance of shares could result in an
increase of 20% or more in the number of shares of common stock
outstanding, (b) a stock option or purchase plan to be established
pursuant to which stock may be acquired by officers or directors, and
(c) a transaction pursuant to which the issuance would result in a
change of control. The Board does not intend to issue any stock except
on terms or for reasons which the Board deems to be in the best
interests of the Company. Because the holders of the Company's common
stock do not have preemptive rights, the issuance of common stock
otherwise than on a pro-rata basis to all current stockholders would
reduce the current stockholders' proportionate interests. However, in
any such event, stockholders wishing to maintain their interests may
be able to do so through normal market purchases. Any future issuance
of common stock or preferred stock will be subject to the rights of
holders of outstanding shares of any preferred stock which the Company
may issue in the future. While the issuance of shares in certain
instances may have the effect of forestalling a hostile takeover, the
Board does not intend or view the increase in authorized common stock
or preferred stock as an anti-takeover measure, nor is the Company
aware of any proposed or contemplated transaction of this type, and
this amendment to the Certificate is not being recommended in response
to any specific effort of which the Company is aware to obtain control
of the Company.
Adoption of the amendment to the Certificate requires the
affirmative vote of the holders of a majority of the outstanding shares
of Common Stock in person or by proxy and entitled to vote. Abstention
from voting on this amendment (including broker non-vote) has the same
legal effect as a vote "against" this amendment. The Board of
Directors unanimously recommends a vote FOR the proposal to amend the
Certificate to increase the number of shares of common stock and
preferred stock that the Company is authorized to issue. Proxies will
be voted FOR unless stockholders specify otherwise in their proxies.
In connection with this proposal, the Company recommends that
each stockholder consider the financial statements of the Company as
set forth in the Company's 1994 Annual Report to Stockholders, a copy
of which is being furnished to each stockholder together with this
proxy statement.
PROPOSAL NUMBER 3
Proposal to Ratify the Board of Directors Action in Selection of
KPMG Peat Marwick as Auditor for the Company
The Board of Directors upon the recommendation of the Audit,
Compliance and Loan Review Committee has appointed KPMG Peat Marwick
as independent public accountants of the Company to examine the
financial statements for the fiscal year ending December 31, 1995. KPMG
Peat Marwick has served as the Company's independent public accountants
since January 1987. Ratification of such employment will require the
affirmative vote of the holders of a majority of the shares represented
at the Meeting in person or by proxy and entitled to vote. The Board
of Directors recommends a vote FOR Proposal Number 3. In the event the
stockholders fail to ratify this employment, it will be considered as
a directive to the Board of Directors to select other auditors for the
current year.
Representatives of KPMG Peat Marwick are expected to be present
at the Meeting and will have an opportunity to make a statement if they
desire to do so. They will also be available to respond to appropriate
questions.
PROPOSAL NUMBER 4
Proposal to Adopt a Stockholder Resolution Regarding Executive
Compensation
Clifford C. Robitelle, P.O. Box 611, Norwich, New York 13815,
owner of 2,770 shares of NBT Bancorp, Inc., Common Stock has given
notice that he intends to propose a resolution as follows:
"Resolved, that the shareholders recommend that the Board of
Directors institute a salary and compensation ceiling such that the CEO
of the Company shall receive:
"1. A base salary which is less than the 50th percentile of
the base salaries of CEOs from as least five (5) peer
banks headquartered in Upstate New York.
"2. An incentive compensation with a maximum payout of one-
third (1/3) of his base salary and with minimum targets
for Return on Assets and Return on Equity which are
greater than median ratios of the five (5) peer banks.
"3. Awards under the stock option plan which are comparable in
value to grants awarded to CEOs of peer banks, but limited
to the number of shares beneficially owned by the CEO.
"Supporting statements:
"Mr. Butare's base salary through November 30, 1994, was
$350,000. In comparison to 1989, the base salary has increased by
$100,000 or 40%. This increase was excessive and resulted in an
exorbitant rate of pay for a CEO in the Upstate New York banking
industry.
"Mr. Butare's incentive compensation has a maximum payout of one-
half (1/2) his base salary. In 1989, the incentive compensation
maximum payout was approximately one-third (1/3) of the CEOs base
salary. By comparison, there has been an increase from approximately
$82,500 to $175,000, or 112%.
"The explanation given in the 1994 Proxy Statement for
determining Mr. Butare's salary beginning December 1, 1992, stated that
the Committee considered 'the performance of the Company (12% increase
in earnings over 1991)'. However, on December 1, the Company's 1992
year-end results were unknown.
"The 1994 Proxy Statement expounds that 'it is expected that
total compensation will vary annually, based on Company and individual
performance . . . thus introducing substantial risk in the payout level
of the incentive plan'. Mr. Butare's total compensation has not varied
in direct proportion to the Company's performance. There is no
substantial risk of incentive compensation when minimum performance
targets for Return on Assets and Return on Equity are below the median
ratios of peer banks.
"There was strong stockholder support shown at last year's Annual
Meeting for a stockholder proposal to institute a desired level of
stock ownership for executive officers in order to participate in the
stock option plan. If the CEO has a personal financial risk by owning
a significant number of shares, there is a benefit to stockholders.
"According to the 1994 Proxy Statement, 'to assist the Committee
in carrying out its responsibilities, it engages an unaffiliated
outside salary and benefits consultant'. Mr. Butare acknowledged at
last year's Annual Meeting that the consultant which designed the
incentive plan and established salary ranges was a long-time associate
and his college classmate at Harvard University.
"There is no shortage of qualified executives who would be
willing to accept and do as good a job as Mr. Butare under the
aforementioned pay ceiling.
"If you AGREE, please mark your proxy FOR this resolution;
otherwise, it is automatically voted against unless you have marked to
abstained."
BOARD OF DIRECTORS RECOMMENDATION
The Company disclaims any responsibility for the accuracy or
content of the proposal and supporting statement, which are presented
as received from the stockholder.
The Board of Directors unanimously recommends a vote AGAINST this
proposal. The Board of Directors believes that adoption of the
proposal would significantly reduce the Company's ability to attract
and retain talented executives who can lead the Company and direct its
business efforts in an increasingly competitive environment. The Board
of Directors also believes that the performance of the Company, rather
than the performance of the Company's competitors, ought to be the
prime determinant of the level at which the chief executive officer of
the Company is compensated.
As noted above in the Report of the Compensation and Benefits
Committee, the Company in its compensation programs is committed to the
fundamental principles of pay for performance, improved stockholder
returns, and industry competitiveness. Details with respect to the
compensation policies of the Company are contained in the Report. The
Compensation and Benefits Committee has adopted a compensation
philosophy that relates the level of chief executive officer compensa-
tion to the Company's success in meeting annual goals, rewards
individual achievement, and is competitive with other companies in the
financial services industry with which the Company competes for
executive talent. The Company believes that this philosophy enables
it to attract and retain the most qualified individuals to lead the
Company's business undertakings.
In determining the chief executive officer's compensation, the
Compensation and Benefits Committee relies on competitive data and
carefully assesses the Company's overall performance and individual
achievement. As discussed in the Compensation Committee Report On
Executive Compensation, a key element of executive compensation
structure is the philosophy of "pay for performance." This means that
there is a significant upside as well as downside risk in such an
individual's compensation, depending on the Company's performance,
financial and otherwise.
Accordingly, the Board of Directors believes that the criteria
that are currently in place, to ensure that the compensation of the
Company's chief executive officer is fair and closely linked to the
Company's performance, are superior to criteria that in effect base the
compensation of the chief executive officer on the performance of a
group of peer banks rather than on the performance of the Company
itself. It is not practical to establish an arbitrary limit on chief
executive officer compensation that is based on the performance of, and
other compensation criteria established by, banks other than the
Company.
Much of the proposal focuses upon Mr. Butare's compensation
arrangements and the performance of the Company under Mr. Butare's
leadership. Mr. Butare's employment as president and chief executive
officer terminated on December 31, 1994, so the proponent's supporting
statement has been rendered moot.
The Company retained Mr. Forsythe as president and chief
executive officer effective as of January 1, 1995. He serves without
a contract, at will of the Board, and is being paid a 1995 salary that
is less than 70 percent of Mr. Butare's 1994 salary. The Company has
in place various incentive programs, in which Mr. Forsythe
participates. With the hiring of Mr. Forsythe, as with the retention
of previous executives, the Company's compensation philosophy with
respect to its chief executive officer is to provide him with various
incentive benefits which will allow him to realize additional
compensation if the Company performs in accordance with the standards
established by the Board.
The Board is of the opinion that the proposal misstates certain
facts and omits facts which would present a more accurate picture of
the Company's compensation policies and practices.
The chief executive officer who preceded Mr. Butare, Mr. Stone,
left the Company in December 1990 at a salary of $331,000. Upon Mr.
Stone's departure, Mr. Butare was hired at a salary of $301,000, or
$30,000 less than that of his predecessor. Mr. Butare's 1994 salary
was about 16 percent higher than his 1990 salary, an aggregate increase
equivalent to three annual salary increases of 5.2 percent during Mr.
Butare's four-year tenure. Thus, Mr. Butare's 1994 salary increased
by 16 percent (equivalent to 5.2 percent per year) over his 1991 salary
and by 6 percent (equivalent to 1.4 percent per year) over Mr. Stone's
1990 salary.
The proponent's choice of 1989 as a measuring year is not
gratuitous. The Company was a significantly different banking
institution for most of 1989 than it currently is. The Company
acquired four banks in late 1989; as a result of these acquisitions,
other acquisitions, and internal growth, the Company in 1994 is twice
as large as the Company in 1989. Still, to measure from Mr. Stone's
1989 salary of $299,017, Mr. Butare's 1994 salary increased by 17
percent (equivalent to 3.2 percent per year).
In fixing Mr. Butare's salary, the Compensation Committee had
retained an independent benefits consultant of high standing, who
despite the proponent's statements to the contrary was not a college
classmate of Mr. Butare's and has never had any association with Mr.
Butare. The consultant extracted relevant information from a specialty
database maintained by a nationally recognized research firm and
reported to the committee that the annual compensation of chief
executive officers for banks in the $1 billion to $2 billion assets
range was as follows:
All Chief Executive Officers of Banks
in $1 Billion - $2 Billion Assets Range:
High $941,602
Median $325,862
Mean Average $350,929
Bank Chief Executive Officer Salary
by Return on Average Assets
$1 Billion - $2 Billion Assets Range
ROAA ROAA ROAA
.75-1.0% 1.0-1.25% 1.25-1.5%
-------- --------- ---------
High $735,000 $513,000 $517,000
Median $374,000 $306,000 $343,000
Mean Average $364,000 $303,000 $372,000
With respect to the proponent's statements on chief executive
officer incentive compensation, in which he cites an increase from
$82,500 in 1989 to $175,000 for an unspecified year the Company assumes
to be 1994, it is important to note that the comparison drawn by the
proponent relates to the theoretical maximum payout to the chief
executive officer, if the highest targets under the applicable plan
were reached -- not what was actually earned and paid under the results
of the particular year. It is true that between 1989 and 1994 the
Company raised the theoretical maximum payout under the incentive
compensation program to 50 percent of salary, in order to foster a "pay
for performance" culture. It is also important to observe the actual
amounts paid out in incentive compensation.
During his tenure, Mr. Butare's incentive compensation varied
based on the Company's performance: his bonus was $118,700 in 1992,
$98,000 in 1993, and $28,825 in 1994. By way of comparison, in 1989
Mr. Stone received $55,000 for deferred compensation, other
compensation, and employee benefit plans, a level that reflected the
depressive effect on 1989 earnings of the major acquisitions made in
late 1989. Still, actual incentive compensation for the chief
executive officer in 1994 was 48 percent lower than in 1989 and in fact
clearly reflected the 1994 earnings decline, as it had been designed
to do. Had the Company's earnings in 1994 been much higher, the
incentive compensation to the chief executive officer would have risen
commensurately.
Accordingly, a vote AGAINST this proposal is recommended.
Proxies will be so voted unless stockholders specify otherwise in their
proxies. A majority of shares represented at the Meeting in person or
by proxy and entitled to vote is required for adoption of the proposal.
Stockholder Proposals
We anticipate mailing the proxy materials for the 1996 Annual
Meeting on or about March 15, 1996. If any security holder wishes a
proposal to be considered for inclusion in the 1996 Proxy Statement,
this material must be received by the Chief Executive Officer no later
than November 10, 1995.
Other Matters
Management does not know of any other matters which may come
before the Meeting. However, if any matters properly come before the
Meeting, it is the intention of the persons named in the enclosed proxy
to vote such proxy in accordance with the recommendations of the Board
of Directors. It is important that proxies be returned promptly.
Therefore, the stockholders who do not expect to attend in person are
urged to mark, date, sign and return the enclosed proxy in the
accompanying postage paid envelope.
By Order of the Board of Directors
Daryl R. Forsythe
President and Chief Executive Officer
Richard I. Linhart
Vice President, Chief Financial Officer
and Treasurer
Dated: March 15, 1995
[APPENDIX]
[FORM OF PROXY]
PROXY FOR 1995 ANNUAL MEETING OF NBT BANCORP INC.
This Proxy is Solicited by the Board of Directors
KNOWN ALL MEN BY THESE PRESENTS that I (we), the undersigned
Stockholder(s) of NBT Bancorp Inc. (the "Company"), do hereby nominate,
constitute and appoint William H. Dudley and Josephine F. Johnson or
any one of them (with full power to act alone), my true and lawful
attorney(s) with full power of substitution, for me and in my name,
place and stead to vote all the Common Stock of said Company, standing
in my name on its books March 3, 1995, at the Annual Meeting of its
Stockholders to be held at Norwich Senior High School, Midland Drive,
Norwich, New York 13815 on April 22, 1995, at 11:00 a.m., or at any
adjournments thereof, with all the powers the undersigned would possess
if personally present.
This Proxy, when properly executed, will be voted as directed below.
In the absence of any direction, the shares represented hereby shall
be voted to fix the number of Directors at six, for the election of the
nominees listed, for the increase in the number of authorized shares of
common stock and preferred stock, for ratification of the independent
public accountants, and against the shareholder proposal regarding
executive compensation.
Comments/Address Changes:___________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
[continued and to be signed and dated on reverse side]
Please mark your
[ X ] votes as in this
example.
FOR WITHHOLD
ALL DIRECTORS FROM ALL DIRECTORS
1) Election of Directors.
Fix the number of
Directors at six and the [ ] [ ]
election of the nominees
listed below:
For terms expiring in 1998: For terms expiring in 1997: The Board of Directors recommends a
Daryl R. Forsythe Andrew S. Kowalczyk, Jr. vote FOR the Nominees.
Everett A. Gilmour John C. Mitchell If you do not wish your shares voted
"FOR" a particular nominee, draw a
line through that person's name at
left.
2) Approval to increase the number of authorized FOR WITHHOLD ABSTAIN
shares of common stock to 12,500,000 and autho-
rized shares of preferred stock to 2,500,000. [ ] [ ] [ ]
The Board of Directors recommends a vote FOR the
increase of authorized shares.
3) Approval of the appointment of KPMG Peat
Marwick as Auditor of the Company for 1995.
The Board of Directors recommends a vote for [ ] [ ] [ ]
APPROVAL.
4) Shareholder proposal to institute a salary and
compensation ceiling for the CEO of the Company.
The Board of Directors recommends a vote AGAINST. [ ] [ ] [ ]
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before such meeting or any adjournment
or postponed thereof.
SIGNATURE(S) _____________________________ DATE ____________________
NOTE: Please sign exactly as name appears hereon. Joint owners should
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
Mark box at right if comments or
address change have been noted on the [ ]
reverse side of this card.
