DIME FINANCIAL CORPORATION
NOTICE OF 1996 ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF DIME FINANCIAL CORPORATION:
Notice is hereby given that the 1996 Annual Meeting of Shareholders
of Dime Financial Corporation will be held at the Villa Capri in
Wallingford, Connecticut, at 10:30 a.m., on Wednesday, April 17, 1996, for
the purpose of considering and voting upon the following matters:
1. The election of three directors for a three-year term who, with
the seven directors whose terms of office do not expire at this
meeting, will constitute the full Board of Directors;
2. The approval of a Non-Qualified Stock Option Agreement, dated
May 9, 1995, pursuant to which Ralph D. Lukens, Chairman of the
Board of Directors, received an option to purchase 10,000
shares of the common stock of the Company at an exercise price
equal to the fair market value of the Company's common stock on
the date the option was granted, or $10.125 per share.
3. The approval of the 1996 Stock Option and Incentive Plan.
4. The approval of the 1996 Stock Option Plan for Outside
Directors.
5. The ratification of the appointment of KPMG Peat Marwick LLP as
independent public accountants for the fiscal year ending
December 31, 1996; and
6. Such other business as may properly be brought before the
meeting.
Only shareholders of record at the close of business on February 21,
1996, are entitled to notice of, and to vote at, the meeting.
BY THE ORDER OF THE BOARD
OF DIRECTORS
/s/ ELEANOR M. TOLLA
Eleanor M. Tolla
Secretary
March 8, 1996
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| WE URGE YOU TO 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 REVOKE YOUR PROXY AND VOTE IN PERSON. |
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DIME FINANCIAL CORPORATION
95 Barnes Road
Wallingford, Connecticut 06492
(203) 269-8881
PROXY STATEMENT
1996 ANNUAL MEETING OF SHAREHOLDERS
April 17, 1996
INTRODUCTION
GENERAL
This Proxy Statement is being furnished to the shareholders of Dime
Financial Corporation (the "Company") in connection with the solicitation
of proxies by the Board of Directors of the Company for use at the 1996
Annual Meeting of Shareholders of the Company to be held at the Villa
Capri at 906 North Colony Road in Wallingford, Connecticut, at 10:30
a.m. on Wednesday, April 17, 1996 (the "Meeting") and any adjournments
thereof. This Proxy Statement and the enclosed proxy card are first being
given or sent to shareholders on or about March 8, 1996.
The Company, a Connecticut corporation, operates principally as a
bank holding company for its wholly-owned subsidiary, The Dime Savings
Bank of Wallingford ("Dime").
RECORD DATE; VOTING RIGHTS
The Board of Directors of the Company has fixed the close of
business on February 21, 1996 as the record date (the "Record Date") for
determining holders of outstanding shares of Common Stock entitled to
notice of and to vote at the Meeting and any adjournments thereof. Only
holders of shares of Common Stock of record on the books of the Company at
the close of business on February 21, 1996 will be entitled to vote at the
Meeting and any adjournments thereof. As of the Record Date, there were
5,023,485 shares of Common Stock issued and outstanding, each of which is
entitled to one vote on each proposal submitted to a vote at the Meeting.
Pursuant to the Company's Bylaws, the holders of a majority of the
outstanding shares of Common Stock present in person or by proxy will
constitute a quorum for transacting business at the Meeting.
USE OF PROXIES, REVOCATION AND SOLICITATION
Shares of Common Stock represented by properly executed proxies
will, unless such proxies have previously been revoked, be voted at the
Meeting in accordance with the instructions indicated on the proxy card.
Proxies that contain no instructions to the contrary will be voted FOR the
election of the three nominees for director named in Proposal 1, FOR the
approval of the Non-Qualified Stock Option Agreement dated May 9, 1995
between the Company and Ralph D. Lukens, Chairman of the Board of
Directors, FOR the approval of the 1996 Stock Option and Incentive Plan,
FOR the approval of the 1996 Stock Option Plan for Outside Directors, FOR
the ratification of the appointment of KPMG Peat Marwick LLP as
independent public accountants for the fiscal year ending December 31,
1996, and in the discretion of the proxy holders as to other matters which
may properly come before the Meeting or any adjournments thereof. No
proposal scheduled to be voted upon at the Meeting will create appraisal
or similar rights under Connecticut law.
In certain circumstances, a shareholder will be considered to be in
attendance at the Meeting for quorum purposes, but will not be deemed to
have voted on a particular proposal or proposals. Such circumstances will
exist where a shareholder is present in person or by proxy, but
specifically abstains from voting, or where shares are represented at the
Meeting by a proxy conferring authority to vote on a certain proposal or
proposals but not on others. Such abstentions and non-votes have the
effect of a vote against the proposal that is the subject of the
abstention or non-vote.
A shareholder who executes and returns the enclosed proxy card has
the power to revoke such proxy at any time before it is voted at the
Meeting by filing with the Company an instrument revoking it, by filing a
duly executed proxy bearing a later date or by attending the Meeting and
voting by ballot in person. Attendance at the Meeting will not in and of
itself constitute the revocation of a proxy. Any shareholder proxy filings
before the Meeting should be either mailed or hand-delivered to Eleanor M.
Tolla, Corporate Secretary, Dime Financial Corporation, 95 Barnes Road,
Wallingford, CT 06492.
The Company will bear the costs of soliciting proxies from its
shareholders. In addition to this solicitation by mail, proxies may be
solicited by the directors, officers and employees of the Company or Dime
by personal interview, telephone or telegram for no compensation other
than their regular salaries. Arrangements will also be made with brokerage
houses and other 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 may reimburse such custodians,
nominees and fiduciaries for reasonable out-of-pocket expenses incurred in
connection therewith. The Company also has engaged Regan and Associates,
Inc. to assist in the solicitation of proxies. The estimated cost of such
solicitation services to be provided by Regan and Associates, Inc. is
$4,000.
PRINCIPAL SHAREHOLDERS OF THE COMPANY
The following table shows, as of February 1, 1996, those persons
(including any "group" as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "1934 Act")), known to
the Company to be the beneficial owner of more than five percent of the
Common Stock. In preparing the following table, the Company has relied on
information supplied by such persons in their Schedules 13D and 13G, filed
with the Securities and Exchange Commission (the "Commission"), and
information furnished by such persons in response to a questionnaire
distributed to such persons by the Company.
Name and Address
of Beneficial Owner Shares Beneficially Owned Percent of Class
- -----------------------------------------------------------------------------------
New Haven Savings Bank 260,700 5.2%
195 Church Street
New Haven, Connecticut 06510
First Union Corporation 255,000 5.1%
One First Union Center
Charlotte, North Carolina 28288
PROPOSAL 1
ELECTION OF A CLASS OF DIRECTORS
GENERAL
The Certificate of Incorporation and the Bylaws of the Company
provide for the election of directors by the shareholders. For this
purpose, the Board of Directors of the Company is divided into three
classes as nearly equal in number as possible. The terms of office of the
members of one class expire, and a successor class is to be elected, at
each annual meeting of shareholders. Vacant directorships may be filled,
until the expiration of the term of the vacated directorship, by the vote
of a majority of the directors then in office.
There are currently ten directors of the Company. Francis P. Feeney
retired as a director of the Company and Dime on December 19, 1995,
reducing the number of directors from 11 to 10. At its January, 1996
meeting, the Board of Directors determined not to take action pursuant to
the Company's Bylaws to fill the vacancy created by Mr. Feeney's
retirement and voted to reduce the number of directorships from 11 to 10.
The terms of three directors expire at the Meeting. Each of the
three incumbent directors, Rosalind F. Gallagher, Theodore H. Horwitz, and
Gary O. Olson, is nominated to be re-elected at the Meeting for a three-
year term, expiring at the annual meeting of shareholders in 1999. The
terms of the remaining two classes of directors expire at the annual
meetings of shareholders in 1997 and 1998, respectively, or when their
successors are otherwise duly elected.
In the event that any nominee for election as a director at the
Meeting is unable or declines to serve, which the Board of Directors has
no reason to expect, the persons named in the proxy will vote for a
substitute nominee designated by the present Board of Directors.
Pursuant to the Company's Bylaws, nominations of persons for
election to the Board of Directors may be made at a meeting of
shareholders by or at the direction of the Board of Directors or by any
shareholder of the Company entitled to vote for the election of directors
at a meeting who complies with certain notice procedures set forth in the
Bylaws. Such nominations, other than those made by or at the direction of
the Board of Directors, must be made pursuant to timely notice in writing
to the Secretary of the Company. To be timely, a shareholder's notice must
be delivered to or mailed and received at the principal executive offices
of the Company not less than 60 days or more than 90 days prior to the
date of a meeting; provided, however, that in the event that less than 50
days notice or prior public disclosure of the date of a meeting is given
or made to shareholders, notice by the shareholder to be timely must be
mailed or given to the Secretary of the Company not later than the close
of business on the seventh day following the day on which such notice of
the date of a meeting was mailed or such public disclosure was made. A
shareholder's notice must set forth (a) as to each person whom the
shareholder proposes to nominate for election or re-election as a
director, (i) the name, age, business address and residence address of
such person, (ii) the principal occupation or employment of such person,
(iii) the class and number of shares of Common Stock which are
beneficially owned by such person and (iv) any other information relating
to such person that is required to be disclosed in a solicitation of
proxies for election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended (including, without limitation, such person's written consent to
being named in the proxy statement of the Company as nominee and to
serving as a director if elected) and (b) as to the shareholder giving the
notice (i) the name and address, as they appear on the Company's books, of
such shareholder, and (ii) the class and number of shares of Common Stock
which are beneficially owned by such shareholder.
The following table sets forth certain information, as of February 1,
1996, regarding the nominees for re-election as directors at the
Meeting and directors whose terms of office will continue after the
Meeting. Except as indicated in the notes following the table below, the
nominees and the directors continuing in office had sole voting and
investment powers with respect to the shares of Common Stock listed as
being beneficially owned by them.
NOMINEES FOR ELECTION AT THE MEETING FOR A THREE-YEAR TERM EXPIRING IN 1999
Positions Held With the Current Shares of
Company and Dime; Has served Term Will Common Stock Percent of
Principal Occupation as a Expire At Beneficially Common Stock
During the Past Five Years Director the Annual Owned as of Beneficially
Name and Directorships Age Since (1) Meeting in February 1, 1996 Owned (2)
- -------------------------------------------------------------------------------------------------------------------------
Rosalind F. Gallagher Director of the Company and 51 1984 1996 (3) 13,861 (4)(5) .28%
Dime; President and Co-Owner
of Gallagher Travel Shoppe
Theodore H. Horwitz Director of the Company and 54 1986 (6) 1996 (3) 5,000 (7) .10%
Dime; President and Chief
Executive Officer of Veterans
Memorial Medical Center
Gary O. Olson Director of the Company and 66 1977 (6) 1996 (3) 12,198 (8) .24%
Dime; Of Counsel to the law
firm of Luby, Olson, Mango,
Gaffney and DeFrances, Director
of Meriden Cemetery Assoc.
DIRECTORS CONTINUING IN OFFICE
Richard H. Dionne Director of the Company and 51 1995 1997 60,000 (9) 1.2%
Dime; President and Chief
Executive Officer of the
Company and Dime; formerly
Chairman, President and Chief
Executive Officer of West Newton
Savings Bank, 1987 - 1994
Dr. Robert Nicoletti Director of the Company and 59 1985 1997 11,000 (4)(10) .22%
Dime; Superintendent of
Schools, Shepaug Valley
Regional School District 12
Richard D. Stapleton Director of the Company and 59 1974 (6) 1997 17,000 (11)(7) .34%
Dime; Director, Executive
Vice President, Secretary and
General Counsel of The Lane
Construction Corporation; Director,
Secretary and Asst. Treasurer of
Lane Industries, Inc.; Director,
President and Treasurer, The Ball
and Socket Manufacturing
Company, Inc.
Fred A. Valenti Director of the Company and 65 1974 1997 30,280 (4)(12) .60%
Dime; President of Valenti
Auto Sales, Inc. and Valenti
Leasing Co., Inc.; Vice President
of Valenti Motors, Village Ford,
Prestige Olds, and Bob Valenti
Chevy Olds, Inc.
M. Joseph Canavan Director of the Company and 52 1987 1998 11,350 (13)(14) .23%
Dime; President and Chief
Executive Officer of Diagnostic
Medical Laboratory, Inc.
William J. Farrell Director of the Company and 55 1988 1998 27,310 (13)(15) .54%
Dime; President, William J.
Farrell, C.P.A., a Professional
Corp.; Treasurer and Director
of Connecticut Enterprises, Inc.;
Advanced Medical Systems,
Inc.; Time Saver Business
Systems, Inc.; F.J. Properties,
Inc.; Consolidated International
Technologies LTD S.A. (16)
Ralph D. Lukens Chairman of the Boards of 66 1986 (6) 1998 11,744 (8)(17) .23%
Directors of the Company and
Dime; Retired Probate Court
Administrator for the State of
Connecticut
All Directors and Executive Officers as a Group (13 persons) 213,243 4.14%
- -------------------
<F1> Indicates first date of service on the Board of Directors of Dime,
City Savings Bank of Meriden, or the Company; unless otherwise
noted, all persons serving as directors became directors of the
Company on June 20, 1988 at the Company's organizational meeting.
City Savings Bank of Meriden was acquired by the Company on December 2,
1988 and merged with and into Dime at the close of business on
August 14, 1992.
<F2> For the purpose of calculating the percentage of Common Stock
beneficially owned for each of the persons and the group listed
above, the total number of shares of Common Stock outstanding
include all shares reserved for issuance upon the exercise of
options granted to such person or group pursuant to the stock option
plans that may be exercised within 60 days of the Record Date.
<F3> If re-elected, term will expire at the annual meeting of the
Company's shareholders in 1999.
<F4> Includes currently exercisable options to purchase 10,000 shares,
which options will expire, unless previously exercised, on July 16,
1996. Does not include options to purchase 10,000 shares granted
pursuant to the 1996 Stock Option Plan for Outside Directors, which
plan is subject to approval by the shareholders at the Meeting, and
which options, subject to such approval, are not exercisable prior
to July 1, 1996. See Proposal 4.
<F5> Includes 2,641 shares for which Mrs. Gallagher serves as custodian
for her children, but does not include 4,160 shares owned by her
spouse as to which shares Mrs. Gallagher disclaims beneficial
ownership.
<F6> Judge Lukens and Mr. Stapleton became directors of the Company and
Dime upon consummation of the acquisition of City Savings Bank of
Meriden by the Company on December 2, 1988, Mr. Olson became a
director of the Company and Dime on December 31, 1989, and Mr.
Horwitz became a director of the Company and Dime on January 1, 1991.
<F7> Includes currently exercisable options for 2,000 shares pursuant to
Dime's 1986 Stock Option Plan for Outside Directors. Does not
include options to purchase 10,000 shares granted pursuant to the
1996 Stock Option Plan for Outside Directors, which plan is subject
to approval by the shareholders at the Meeting, and which options,
subject to such approval, are not exercisable prior to July 1, 1996.
See Proposal 4.
<F8> Includes currently exercisable options to purchase 8,598 shares.
Does not include options to purchase 10,000 shares granted pursuant
to the Non-Qualified Stock Option Agreement with Mr. Lukens, which
agreement is subject to approval by the shareholders at the Meeting,
and which options, subject to such approval, are not exercisable
prior to May 9, 1996. See Proposal 2. Does not include options to
purchase 10,000 shares granted pursuant to the 1996 Stock Option
Plan for Outside Directors, which plan is subject to approval by the
shareholders at the Meeting, and which options, subject to such
approval, are not exercisable prior to July 1, 1996. See Proposal 4.
<F9> Includes currently exercisable options granted pursuant to Dime's
1986 Stock Option and Incentive Plan to purchase 50,000 shares.
<F10> Includes 1,000 shares owned jointly with spouse.
<F11> Does not include 2,000 shares owned by spouse and 2,000 shares owned
by minor children, as to which shares Mr. Stapleton disclaims
beneficial ownership.
<F12> Includes 10,000 shares owned jointly with spouse.
<F13> Includes currently exercisable options to purchase 5,000 shares
pursuant to certain Non-Qualified Stock Option Agreements between
Dime and Mr. Canavan and Mr. Farrell and 2,000 shares pursuant to
Dime's 1986 Stock Option Plan for Outside Directors. Does not
include options to purchase 10,000 shares granted pursuant to the
1996 Stock Option Plan for Outside Directors, which plan is subject
to approval by the shareholders at the Meeting, and which options,
subject to such approval, are not exercisable prior to July 1, 1996.
See Proposal 4.
<F14> Includes 4,000 shares owned jointly with spouse, but does not
include 200 shares owned by spouse, as to which Mr. Canavan
disclaims beneficial ownership.
<F15> Includes 6,190 shares as to which Mr. Farrell shares voting and
investment powers; 2,900 shares owned by F.J. Properties, Inc., of
which Mr. Farrell is a partner; 500 shares owned by Advanced Medical
Systems, Inc.'s profit sharing trust, of which Mr. Farrell is Co-
Trustee; and 10,000 shares owned by Connecticut Enterprises, Inc.,
of which Mr. Farrell is a director and Treasurer.
<F16> Mr. Farrell is the brother-in-law of Jeanne Carmody, the wife of
Robert Carmody, Senior Vice President of Dime.
<F17> Includes 946 shares as to which Judge Lukens shares voting and
investment powers.
-------------------
THE BOARD OF DIRECTORS AND ITS COMMITTEES
From January 1, 1995 through December 31, 1995, the Board of
Directors of the Company held twelve regular meetings and seven special
meetings. The committees of the Board of Directors of the Company for 1995
were the Audit Committee and the Personnel, Benefits, Nominating and Stock
Option Committee. During the first quarter of 1995, the Personnel,
Benefits and Stock Option Committee and the Nominating Committee, which
prior to that time had been separate committees, were combined to form the
Personnel, Benefits, Nominating and Stock Option Committee. The committees
of the Board of Directors of Dime for 1995 were a Loan Committee which
reviews loan policies and makes recommendations for Dime; a CRA Committee,
which monitors the Community Reinvestment Act activities of Dime on a
regular basis; an Asset Loss Control Committee, which monitors the
management of adversely classified assets, including non-performing loans
and foreclosed real estate; a Finance and Investment Committee, which
monitors Dime investments and finance matters; and a Planning Committee,
which monitors compliance with regulatory orders and addresses matters of
strategic and long term planning. Each incumbent director attended at
least 75 percent of the combined total of the meetings (held during the
period for which he or she has been a director) of the Boards of Directors
of the Company and Dime, and any committee(s) of the Boards of the Company
or Dime of which he or she was a member.
The Audit Committee met five times during 1995. The Audit Committee
reviews the examination reports of state and federal regulatory agencies,
the quarterly reports of the internal auditors of the Company and Dime,
and the annual reports of the independent public accountants, and reviews
the adequacy of the accounting, financial and operating controls of the
Company and Dime. The members of the Audit Committee for 1995 were Francis
P. Feeney, Theodore H. Horwitz, Robert Nicoletti, and Gary O. Olson.
The Personnel, Benefits, Nominating and Stock Option Committee met
five times during 1995. This Committee, sitting as the Nominating
Committee, recommends to the Board of Directors candidates for directors
to be elected either at meetings of the shareholders or to be appointed by
the Board of Directors from time to time for the purpose of filling any
vacancy among the directors. The Committee will consider nominees
recommended by shareholders but has no formal procedure for considering
such nominees. The Committee, sitting as the Personnel and Benefits
Committee, also recommends the compensation paid to the Company's
executive officers. The members of the Personnel, Benefits, Nominating and
Stock Option Committee for 1995 were M. Joseph Canavan, Francis P. Feeney,
Fred A. Valenti and Robert Nicoletti.
COMPENSATION AND RELATED MATTERS
The persons who serve on the Board of Directors of the Company also
serve on the Board of Directors of Dime. Directors who are officers of the
Company or Dime receive no additional compensation for serving as a
director. In 1995, non-employee directors of Dime received $400 for each
regular and special board meeting and $400 for each committee meeting that
they attended. Non-employee directors of the Company do not receive any
additional compensation. In addition, in 1995 non-employee directors of
Dime were paid an annual retainer of $6,000 and Ralph D. Lukens was paid
an additional annual retainer of $6,000 for services as Chairman of the
Board. For the first quarter of 1995, Mr. Lukens received an additional
stipend of $17,500 in consideration of his serving as acting Chief
Executive Officer of the Company following the death of John C. Shortell
in November 1994 until January 30, 1995, when Mr. Dionne was hired as
Chief Executive Officer of the Company and Dime and for additional
transitional services following the hiring of Mr. Dionne. In May of 1995,
the Board of Directors, in recognition of Mr. Luken's extraordinary
services to the Company and Dime, voted, subject to approval of the
shareholders at the Meeting, to grant to Mr. Lukens an option to acquire
10,000 shares of the Common Stock of the Company at its then fair market
value. (See Proposal 2 below)
At a meeting held on December 12, 1995, the Board of Directors voted
to increase the fees payable to non-employee directors commencing in
January 1996 by increasing the fee for attending each board or committee
meeting from $400 to $500, by increasing the annual retainer paid to each
non-employee director from $6,000 to $10,000, and by increasing the
additional annual retainer paid to the Chairman of the Board from $6,000
to $10,000. These changes, which represent the first increase in director
fees since 1991, were in accordance with the recommendation of the
Personnel and Benefits Committee which, among other things, relied upon a
report of William M. Mercer, Incorporated, a benefits consulting firm
retained by the Company to assist in a review of executive and director
compensation and benefits.
Executive Compensation
The following Summary Compensation Table shows the compensation of
the Company's President and Chief Executive Officer, Senior Vice President
and Chief Financial Officer, Senior Vice President - Retail, Bank
Operations and Administration, and Senior Vice President - Senior Loan and
Senior Credit Officer, earned in the 1995 fiscal year. (No such person was
employed by the Company prior to 1995.) No other officers of the Company
or Dime earned compensation exceeding $100,000 in 1995.
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Compensation Awards
-------------------------------- ----------
Securities
Name Underlying All Other
and Principal Salary Bonus Options Compensation
Position Year ($) ($) (#) ($)
- --------------------------------------------------------------------------------------------
Richard H. Dionne, 1995 (1) 198,846 (1) 75,000 50,000 1,076 (5)
President & Chief
Executive Officer
Albert E. Fiacre, Jr., 1995 (2) 88,846 (2) 35,000 15,000 493 (5)
Senior Vice President &
Chief Financial Officer
Timothy R. Stanton, 1995 (3) 80,385 (3) 35,000 15,000 431 (5)
Senior Vice President -
Retail, Bank Operations
and Administration,
Chief Operating Officer
Frank P. LaMonaca, 1995 (4) 44,423 (4) 25,000 15,000 246 (5)
Senior Vice President -
Senior Loan and
Senior Credit Officer
- -------------------
<F1> Mr. Dionne was hired on January 30, 1995. His annual base salary for
1995 was $220,000.
<F2> Mr. Fiacre was hired on March 3, 1995. His annual base salary for
1995 was $110,000.
<F3> Mr. Stanton was hired on April 3, 1995. His annual base salary for
1995 was $110,000.
<F4> Mr. LaMonaca was hired on July 31, 1995. His annual base salary for
1995 was $110,000.
<F5> Premiums paid by the Company in 1995 for term life insurance for
named executive.
-------------------
Options Granted in 1995. The following table shows the number and
value of options granted to Messrs. Dionne, Fiacre, Stanton and LaMonaca
in 1995.
OPTION GRANTS IN 1995
Potential Realizable Value
at Assumed Annual
Rates of Stock Price
Individual Grants Appreciation For Option Term
- --------------------------------------------------------------------------- ----------------------------
Number of % of Total
Securities Options
Underlying Granted to Exercise or
Options Employees Base Price Expiration
Name Granted in 1995 ($/Share) Date 5%($) 10%($)
- ------------------------------------------------------------------------------------------------
Richard H. Dionne 50,000(1) 49.26% 9.375 1/29/05 294,794 747,067
Albert E. Fiacre, Jr. 15,000(2) 14.78% 9.9375 3/2/05 93,745 237,567
Timothy R. Stanton 15,000(3) 14.78% 9.25 4/2/05 87,259 221,132
Frank P. LaMonaca 15,000(4) 14.78% 11.00 7/30/05 103,768 262,968
- -------------------
<F1> The options vest as to 25,000 shares on 1/30/95 and as to the
remaining 25,000 shares on 1/30/96.
<F2> The options vest as to 7,500 shares on 3/2/96 and as to the
remaining 7,500 shares on 3/2/97.
<F3> The options vest as to 7,500 shares on 4/2/96 and as to the
remaining 7,500 shares on 4/2/97.
<F4> The options vest as to 7,500 shares on 7/30/96 and as to the
remaining 7,500 shares on 7/30/97.
-------------------
Year-End Option Value Table. The following table shows the number
and value of unexercised options held by Messrs. Dionne, Fiacre, Stanton
and LaMonaca at December 31, 1995 to acquire shares of the Common Stock of
the Company. No options were exercised by Messrs. Dionne, Fiacre, Stanton
and LaMonaca in 1995.
AGGREGATE OPTIONS EXERCISABLE IN 1995
AND 12/31/95 OPTION VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at 12/31/95 (#) at 12/31/95(1)
---------------------------- ----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- --------------------------------------------------------------------------------------
Richard H. Dionne 25,000 25,000 $103,125 $103,125
Albert E. Fiacre, Jr. 0 15,000 $0 $ 53,438
Timothy R. Stanton 0 15,000 $0 $ 63,750
Frank P. LaMonaca 0 15,000 $0 $ 37,500
- -------------------
<F1> Market value of underlying securities at 12/31/95, minus the exercise price.
Employment Agreement
The Company and Dime have entered into an employment agreement (the
"Employment Agreement") with Richard H. Dionne, President and Chief
Executive Officer, whereby Mr. Dionne has agreed to remain in the employ
of the Company and Dime (the "Employers"), and the Employers have agreed
to retain Mr. Dionne's services for a period of thirty-six (36) months
from January 31, 1995 to January 31, 1998 (the "Term"). During the first
year of the Term, Mr. Dionne's base salary is set at the annual rate of
$220,000, and for the remainder of the Term his base salary is set at
$220,000 or such larger sum as the Board of Directors of Dime may from
time to time determine in connection with annual performance reviews. In
addition, Mr. Dionne will be eligible to earn annual bonus payments during
the Term that are conditional upon the achievement of individual or other
goals for the bonus period. Mr. Dionne's target incentive bonus will be
$60,000 for each calendar year of the Term. If during the Term Mr. Dionne
is terminated by the Employers other than for cause, disability, material
breach, as these terms are defined in the Employment Agreement, or death,
the Employers will pay to Mr. Dionne a lump sum severance payment equal to
the commuted value of Mr. Dionne's base salary in effect or authorized at
the time of the termination for the period remaining in the Term
(determined by discounting all payments at an agreed upon discount rate).
Mr. Dionne also would receive these benefits if he terminated his
employment for "good reason" as it is defined in the Employment Agreement.
He would not, however, receive any benefits under the Employment Agreement
if he is otherwise entitled to accept benefits provided for in the Change
of Control Agreement described below. As originally entered into, the
Employment Agreement provided for reimbursement of Mr. Dionne for up to
$50,000 for expenses incurred in relocating from Massachusetts to
Connecticut and for brokerage commission on the sale of Mr. Dionne's
Massachusetts residence. The Bank also agreed to pay for interim housing
expenses until relocation to Connecticut. Effective as of January 18,
1996, the Employment Agreement was amended by substituting for the
foregoing provisions a relocation allowance of $125,000 (inclusive of
moving expenses) but contingent on Mr. Dionne's relocation to Connecticut.
Change-In-Control Severance Agreements
The Company and Dime (the "Employers") also have entered into
change-in-control severance agreements (the "Change-In-Control
Agreements") with each of their four senior officers, Richard H. Dionne,
Albert E. Fiacre, Jr., Timothy R. Stanton, and Frank P. LaMonaca
(hereinafter "Executive" or "Executives").
For a period of two (2) years following a "change-in-control," as
defined in each Change-In-Control Agreement, the Executive would be
entitled to certain payments in the event of the termination of his
employment other than upon death, retirement or disability or by the
Employers for "cause," as defined in the Change-In-Control Agreement, or
in the event of a termination by the Executive for "good reason" ("Change-
In-Control Termination"). If the Executive terminates his employment
because of a reduction of his compensation, position, duties, or
responsibilities, the need to move his principal residence, the non-
payment by the Employers of any salary, bonus or other material benefit
due to the Executive, or a material breach of any material terms of
employment, such termination would be considered to be for "good reason."
Upon a Change-In-Control Termination, Mr. Dionne would be entitled
to, among other benefits, a lump sum severance benefit of 2.99 times the
average of the cash compensation received by Mr. Dionne from the Employers
in the most recent three (3) (or such lesser number as may exist) years in
which Mr. Dionne was employed prior to the date of his termination. In the
case of each of Messrs. Fiacre, Stanton and LaMonaca, the lump sum
severance benefit equals one (1) times the cash compensation received by
the Executive in the most recent calendar year of employment prior to
termination. (Compensation in 1995, if relevant for the foregoing
purposes, will be annualized.) In addition, all stock options granted to
each Executive under any plan of the Employers would become immediately
exercisable in full and remain so for a period of three (3) months from
the date of the Change-In-Control Termination. Benefits payable under the
change-in-control Agreement are subject, however, to the limitation
described in Section 280 G of the Internal Revenue Code of 1986, as
amended, if applicable.
The Change-In-Control Agreements also include a non-competition
covenant (the "Covenant") between each Executive and the Employers. In the
event of the termination of the Executive's employment with the Employers,
for a period of one (1) year the Executive agrees not to engage in
competitive activity with the Employers by becoming interested in any way
(except as an owner of stock in a public corporation in a nominal amount)
in any other business similar to that of the Employers or in any way in
competition with the Employers, or to lend his name to any business which
is, or as a result of the Executive's engagement or participation would
become competitive with the Employers, in any city or town where the
Employers operate a full service branch. The Covenant does not apply if
the Executive terminates his employment for good reason, or if the
Employers terminate his employment other than for cause, disability, or
material breach, as defined in the Change-In-Control Agreements.
Report of Personnel, Benefits, Nominating and Stock Option Committee
The following summarizes the Personnel, Benefits, Nominating and
Stock Option Committee Report on Executive Compensation for 1995.
DIME FINANCIAL CORPORATION
PERSONNEL, BENEFITS, NOMINATING AND STOCK OPTION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Company provides no compensation to its executive officers.
Rather, Dime provides their compensation. For this reason, the Personnel,
Benefits, Nominating and Stock Option Committee of Dime, sitting as the
Personnel and Benefits Committee, recommends the compensation paid to the
Company's executive officers.
Historically, the Committee has considered several factors when
determining executive officer compensation. The first factor is industry
data from a peer group of companies on the salary ranges and actual
incumbent salary for the positions under review. Another factor is the
financial performance of the Company with respect to previous years and
with respect to other publicly traded thrifts in Connecticut. Return on
average equity, return on average assets, deposit growth, and cash
dividends to shareholders represent some of the financial performance
elements considered.
In addition to basing salary decisions on the above factors, the
Committee also annually recommends to the full Board of Directors bonus
compensation to be paid under the Company's Profit Incentive Plan for the
current year and appropriate corporate performance targets under the Plan
for the coming year. Target bonus awards are established for the Company's
executive officers as a percentage of base salary. Bonuses are paid only
if the established corporate performance targets are met. While all of the
above factors play a role in the Committee's decisions regarding the
Profit Incentive Plan, the absolute level of profitability in the current
year and the payment of cash dividends to shareholders are significant
factors in determinations under the Profit Incentive Plan.
In 1995, the Company effected a major reorganization, which included
retention of a Chief Executive Officer and new senior management
personnel. Under the leadership of its new management personnel, the
Company implemented a number of programs authorized by the Board and
designed to improve the operating results of the Company and to position
the institution for future growth. The Company and its shareholders began
to experience the benefits of these programs in 1995.
In connection with, and to assist the Committee in conducting, the
performance evaluation of senior management for 1995, the Committee
authorized the retention of the benefits consulting firm of William M.
Mercer, Incorporated ("Mercer"). The Committee requested and received
Mercer's advice and recommendations concerning competitive levels of
senior executive salary, bonus and other benefits provisions among peer
groups that Mercer considered appropriate in the banking industry. Mercer
was also asked to analyze the Company's overall compensation plan for
competitiveness and to recommend a model for use by the Committee to
manage the compensation program in a sound manner. In a written report
prepared for the Committee (the "Mercer Report"), Mercer set forth its
conclusions and recommendations.
The Mercer Report recommends that base salary levels for the CEO and
other senior executive officers of the Company be established at levels
that are competitive in the marketplace and that both short-term incentive
compensation (bonus) awards and long-term incentive compensation programs
(stock option or other equity-based awards) be designed to recognize and
reward the achievement of individual and institutional performance goals,
as measured against established targets and peer group performance. The
Mercer Report recommends specific salary levels and short-term incentive
award ranges for the CEO and each of the other senior executive officers.
The Mercer Report recommends assessing performance awards on the basis of
factors such as achievement of financial performance objectives,
comparison of return on shareholders' equity to members of an appropriate
peer group, and the meeting of established individual performance goals.
In assessing competitive levels of base salary and bonus, the Mercer
Report reviewed data obtained from proxy statements and published surveys,
and selects comparative data from a peer group ("Peer Group") consisting
of six banking institutions in the States of Connecticut, Massachusetts
and Vermont, and four recognized executive compensation surveys (two
national, one New England and one Northeast). All of the foregoing
compensation data sources involve institutions with total assets between
$500 million and $1 billion. Institutions were selected giving
consideration, in part, to ROA and ROE at levels consistent with those of
the Company. The Peer Group selected by Mercer in the Mercer Report is not
the same group of institutions that comprise the KBW Index shown in the
Stock Performance Graph, which is a larger group of institutions with more
diverse characteristics.
The Committee considered the conclusions and recommendations in the
Mercer Report in reaching decisions with respect to 1995 CEO and other
executive officer compensation. The Committee determined to adjust base
salary levels to levels that it believes are competitive in the
marketplace. The Committee further determined to modify the Company's
incentive compensation program, over time, to increase the emphasis on
variable compensation in the form of performance-based bonuses and equity-
based awards. The Committee resolved that, overall, the Company's
executive compensation program should seek both to attract, retain and
motivate high quality and experienced senior executive talent and to
provide the necessary motivation to enhance Company performance and
resulting shareholder value.
Long-term equity-based incentive awards encourage officer retention
and tie executive opportunity for financial reward to the financial
success experienced by the Company's shareholders. Determinations
regarding individual grants of short-term and long-term compensation
awards are made by the Committee based on a subjective assessment of the
various factors cited above in this report. Generally, options granted as
long-term incentive are awarded so as to vest in annual increments
beginning on the first anniversary of the date of grant and to expire in
not more than ten years.
CEO Compensation. In 1995, the compensation of the Company's Chief
Executive Officer, Mr. Dionne, consisted of base salary, incentive bonus,
and performance stock option awards. Base salary was established as of the
date of hire in January at $220,000 per year, a short-term incentive
(bonus) target of $60,000 was established, and an equity option award was
made upon hiring. Based upon its assessment of Mr. Dionne's and the
Company's performance in 1995, measured against the factors described
above in this report, the Committee recommended, and the Board
subsequently approved, a 1995 bonus for Mr. Dionne of $75,000. The fact
that this amount exceeds the original $60,000 target reflects both the
Committee's assessment that Mr. Dionne's performance exceeded target
objectives.
Under Mr. Dionne's leadership in 1995, the Company reported net
income of $6.0 million, an increase of 28% over 1994. The increase in
earnings resulted directly from expense controls and other actions
recommended and implemented by senior management. In 1995, the levels of
both non-performing loans and non-performing assets declined, while the
ratio of reserves to non-performing loans increased. Operating expenses
declined by 25%. Shareholder equity, regulatory capital, total assets and
total deposits all increased. The Company's ROA increased to 0.95% from
0.71% in 1994 and the Company's ROE rose to 12.82% from 11.06% in 1994.
Finally, but importantly, the financial performance of the Company was
such as to permit action by the Board of Directors to reinstate the
quarterly dividend effective in the first quarter of 1996.
The Committee also established the 1996 base salary for Mr. Dionne
at $245,000, a level the Committee believes consistent with the
conclusions in the Mercer Report. To provide future incentive consistent
with Company and shareholder goals, the Committee approved, and the Board
subsequently ratified, a grant to Mr. Dionne of a non-qualified stock
option to purchase 25,000 shares of the Company's common stock, to be
effective on January 1, 1996, at an exercise price of $13-1/2 per share.
The option vests 50% on January 1, 1997 and 50% on January 1, 1998, or
100% in the event of the occurrence of a change-in-control of the Company
as defined in the option agreement. Mr. Dionne must be employed by the
Company in order to vest on the foregoing dates.
Other Senior Executive Officers. Compensation decisions with respect
to senior executive officers other than the CEO are also made by the
Committee by applying the factors described above in this report. In
addition, an important factor considered by the Committee is the
recommendation of the CEO with respect to each of the other senior
executive officers. In making his recommendation to the Committee, the CEO
also applies the above factors to the performance of each executive
officer.
In 1995, the compensation of the Company's senior executive officers
other than the CEO, Messrs. Fiacre, Stanton and LaMonaca, consisted of
base salary, incentive bonus, and performance stock option awards. Each of
Messrs. Fiacre, Stanton and LaMonaca was hired in 1995 at an annual base
salary of $110,000. Each also received, upon hiring, an option to acquire
15,000 shares of the Company's common stock. Based upon its assessment of
the factors described above in this report, the Committee recommended, and
the Board subsequently approved, a 1995 bonus for Messrs. Fiacre, Stanton
and LaMonaca of $35,000, $35,000 and $25,000, respectively (the lower
amount for Mr. LaMonaca reflecting only his shorter period of employment
in 1995). The Committee established the 1996 base salary for each of
Messrs. Fiacre, Stanton and LaMonaca at $122,500. The Committee also
approved, and the Board subsequently ratified, a grant of a non-qualified
stock option to each of Messrs. Fiacre, Stanton and LaMonaca to purchase
13,500 shares of the Company's common stock, to be effective on January 1,
1996, at an exercise price of $13-1/2 per share. The other terms of the
option agreements with these executive officers are similar to the terms
described above in Mr. Dionne's option agreement.
The Committee also approved the granting of options to a number of
other officers of the Company at the same time. (Options for a total of
37,000 additional shares were granted to a total of 26 officers.) All of
the foregoing options, including those granted to the CEO and other senior
executive officers, were granted under the 1986 Stock Option and Incentive
Plan.
The Committee discussed the subject of setting incentive targets for
its senior executives in 1996, which, among other things, would be used as
measures for assessing 1996 performance and determining 1996 bonus awards.
The Committee determined that such incentive goals should be tied closely
to the strategic plan objectives for the Company for 1996 and the 1996
budget. The Committee decided to defer setting incentive targets until
these matters have been concluded.
Director Compensation. At the Committee's request, Mercer also
considered and addressed in the Mercer Report peer group comparisons and
recommendations with respect to compensation of outside Directors. The
Mercer Report recommended emphasis on stock-based compensation for
Directors. The Committee considered the fact that Directors' compensation
at the Company had not been increased for a number of years and that the
commitment to meetings had expanded in recent years. Based on these
factors, the Committee approved a recommendation, subsequently adopted by
the Board, to increase the per meeting fee for attendance at Board and
Committee meetings from $400 to $500 per meeting, to increase the retainer
fee for outside Directors from $6,000 to $10,000 per year, and to increase
the additional annual stipend for the Chairman of the Board from $6,000 to
$10,000. All of the foregoing increases were effective January 1, 1996.
The Committee believes that all of the foregoing amounts are consistent
with the findings in the Mercer Report.
The Committee discussed the fact that the 1986 Stock Option and
Incentive Plan and the 1986 Stock Option Plan for Outside Directors, each
adopted in 1986 for a period of ten years, would expire in July 1996. The
Committee considered alternative means of providing stock incentives to
officers and Directors and the benefits of coordinating executive and
management compensation with stockholder interests. The Committee reviewed
the proposed 1996 Stock Option and Incentive Plan and the proposed 1996
Stock Option Plan for Outside Directors. The Committee recommended
adoption of both plans.
If the 1996 Stock Option Plan for Outside Directors is approved by
the stockholders, effective as of January 1, 1996 each outside Director of
the Company on that date will receive an option for 10,000 shares of
Company common stock exercisable at $13-1/2 per share, the closing price
for the Company's stock on December 29, 1995 (the last trading day before
January 1, 1996).
Personnel, Benefits, Nominating and Stock Option Committee Members
Fred A. Valenti, Chairperson
M. Joseph Canavan
Francis P. Feeney
Robert Nicoletti
Personnel, Benefits, Nominating and Stock Option Committee Interlocks and
Insider Participation
The proxy regulations require the Company to disclose members of the
Personnel, Benefits, Nominating and Stock Option Committee who were
previously officers or employees of the Company or Dime, or who had an
interlocking relationship with a compensation committee of another entity.
Francis P. Feeney, a member of this Committee until his retirement on
December 19, 1995, retired in 1988 as President, Treasurer, and Chief
Executive Officer of Dime.
Employee Benefit Plan
Dime maintains a noncontributory, defined benefit pension plan which
is qualified under the Employee Retirement Income Security Act of 1974, as
amended, and covers employees and officers of the Company or Dime who have
attained the age of 21 years and in one year have completed at least 1,000
hours of service with the Company or Dime. The following table illustrates
annual pension benefits under the Pension Plan for retirement at 65 under
the most current plan provisions available for various levels of
compensation and years of services as of January 1, 1996.
ANNUAL PENSION BENEFIT (a)
BASED ON YEARS OF CREDITED SERVICE
Final Average Compensation (b) Years of Credited Service(f)
- ------------------------------ -----------------------------------------------------
10 15 20 25 30(c)
$ 25,000 $ 3,500 $ 5,250 $ 7,000 $ 8,750 $ 10,500
50,000 8,380 12,570 16,760 20,950 25,140
75,000 13,380 20,070 26,760 33,450 40,140
100,000 18,380 27,570 36,760 45,950 55,140
125,000 23,380 35,070 46,760 58,450 70,140
150,000 28,380 42,570 56,760 70,950 85,140
200,000 (e) 38,380 57,570 76,760 95,950 115,140
225,000 (e) 43,380 65,070 86,760 108,450 130,140(d)
- -------------------
<F1> (a) Calculated according to the following formula in effect through
December 31, 1995: 1.4% of final average compensation up to Social
Security Covered Compensation (1995 basis) plus 2% of final average
compensation in excess of Social Security Covered Compensation, all
multiplied by years of credited service.
<F2> (b) Average salary for highest 5 consecutive years.
<F3> (c) Maximum years of credited service is 30.
<F4> (d) Maximum benefit payable to a retiree age 65 in 1996 is $120,000.
<F5> (e) Maximum Allowable Compensation used to determine Benefits is
$150,000 in 1995 and $150,000 in 1996.
<F6> (f) As of December 31, 1995, the individuals listed in The Summary
Compensation Table had the following years of credited service: Mr.
Dionne, 1.0 years; Mr. Fiacre, 1.0 years; Mr. Stanton, 1.0 years;
Mr. LaMonaca, 0.4 years. If they remain in the employ of the Bank
through age 65, they will have 14.4, 20.2, 27.0 and 26.75 years of
credited service, respectively, under the Plan. The compensation of
Messrs. Dionne, Fiacre, Stanton and LaMonaca listed as "Salary" in
the Summary Compensation Table above counts as annual compensation
for purposes of the Plan.
-------------------
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Some of the directors and executive officers of the Company or Dime
are and have been customers of Dime and have had banking transactions with
Dime before and since January 1, 1995. Loans made to such persons, and to
corporations or organizations of which any of such persons is, directly or
indirectly, the beneficial owner of 10 percent or more of any class of
equity securities, if any, (i) were made in the ordinary course of Dime's
business, (ii) were made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons, and (iii) did not involve more
than the normal risk of collectibility or present other unfavorable
features.
As a matter of policy, loans are made to directors, officers and
employees of Dime in compliance with Regulation O of the Federal Reserve
Board regulations and Section 36a-263 of the Connecticut General Statutes
on substantially the same terms, including interest rates, as those of
comparable transactions prevailing at the time and do not involve more
than the normal risk of collectibility or present other unfavorable
features. On September 19, 1995, the Board of Directors of Dime passed a
resolution prohibiting future loans or personal endorsements to directors
or executive officers of the Company or Dime and their immediate family
members (as defined in Regulation O) and to require pre-approval by the
Board of Directors of any modification to existing relationships. The
Company and Dime had no loans outstanding as of February 21, 1996 to any
person known by the Company to be a beneficial owner of more than five
percent of the Common Stock.
Any business transactions of the Company or Dime with officers,
directors, employees, principal shareholders or affiliates of the Company
or Dime, have been and will be on terms no less favorable to the Company
or Dime than could have been or could be obtained from third parties. If a
director of the Company also was an executive officer or 10% shareholder
of another entity during 1995, then the Company neither paid to nor
received from such entity for property or services an amount in excess of
5% of either (1) the Company's gross consolidated revenues or (2) the
entity's gross consolidated revenues, unless the amounts paid for such
property or services were determined by competitive bids. Furthermore,
neither the Company, nor its subsidiaries were indebted to any such entity
in an aggregate amount exceeding 5% of the Company's total consolidated
assets.
COMPLIANCE WITH SECTION 16(a) OF THE 1934 ACT
Section 16(a) of the 1934 Act requires the Company's officers and
directors and persons who own more than ten percent of a registered class
of the Company's equity securities ("10% Shareholders") to file reports of
beneficial ownership of Company Common Stock and of changes in beneficial
ownership with the Commission and the NASD. Specific due dates are
prescribed for the filings. Officers, directors, and 10% Shareholders are
required by the Commission to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely on its copies of such forms received by the Company, or
written representations from certain reporting persons, the Company
believes that in fiscal 1995 all filing requirements applicable to its
officers, directors, and greater than ten percent beneficial owners were
properly and promptly satisfied.
PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total
shareholder return on the Company's Common Stock, based on the market
price of the Common Stock and assuming the reinvestment of dividends, with
the cumulative total return of companies on the NASDAQ Market Value Index
and the reported total return of companies on the KBW New England Savings
Bank Index.
FIVE YEAR TOTAL RETURN COMPARISON* AMONG
DIME FINANCIAL CORPORATION, NASDAQ AND KBW NEW ENGLAND SAVINGS BANK INDEX
The graph assumes a $100 investment on January 1, 1991 in the
Company's Common Stock, the NASDAQ Market Index and the KBW New England
Savings Bank Index.
LINE CHART GOES HERE
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
- -----------------------------------------------------------------------------------------------------
Dime Financial Corp. 100 69 141 175 202 312
KBW New England Savings Bank Index 100 176 308 412 414 647
NASDAQ Market Index 100 129 131 158 164 205
- -------------------
<F1> * Total return assumes reinvestment of all dividends.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES PRESENT, IN PERSON OR BY
PROXY, AND ENTITLED TO VOTE AT THE MEETING IS REQUIRED TO ELECT EACH
NOMINEE FOR DIRECTOR. THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS
THAT STOCKHOLDERS VOTE "FOR" THE ELECTION OF EACH NOMINEE.
PROPOSAL 2
NON-QUALIFIED STOCK OPTION AGREEMENT
The Company has entered into a Non-Qualified Stock Option Agreement
(the "Non-Qualified Stock Option Agreement") dated May 9, 1995, with Mr.
Ralph D. Lukens (referred to below as the "Optionee"), Chairman of the
Board of Directors of the Company and Dime. Pursuant to the Non-Qualified
Stock Option Agreement, the Optionee received, in consideration of
extraordinary services rendered by him to the Company and Dime in 1994 and
early 1995, an option to purchase 10,000 shares of Company Common Stock,
subject to approval by the shareholders of the Company. Such option was
not granted under the 1986 or the 1996 Stock Option Plan for Outside
Directors. 10,000 shares of Company Common Stock are reserved for issuance
upon exercise of options granted pursuant to the Non-Qualified Stock
Option Agreement.
Pursuant to the Non-Qualified Stock Option Agreement, the price per
share to be paid upon exercise of options is $10.125 (the "Exercise
Price"). The Exercise Price is equal to the fair market value of Company
Common Stock on the date the grant was made. The option is exercisable by
the Optionee in whole or in part upon tendering to the Company in cash or
by check a sum equal to the product of the number of shares for which the
option is being exercised and the Exercise Price. The option is first
exercisable on May 9, 1996, one year following the date of grant, and will
expire in ten years unless terminated earlier. If the Non-Qualified Stock
Option Agreement is not approved by the shareholders of the Company, the
option will be null and void as of the date of grant.
The exercise of an option by delivery of cash or a check in payment
of the Exercise Price will generally give rise to the receipt of ordinary
compensation income at the time of exercise for federal income tax
purposes taxable to the Optionee in an amount equal to the excess of the
fair market value of the shares of Company Common Stock acquired upon the
exercise of the option on the date of exercise over the Exercise Price for
such shares.
If shares of Company Common Stock acquired through the exercise of
an option are sold, then the gain or loss arising from such sale, based on
the difference between the amount realized upon such sale and the value of
such shares of Company Common Stock on the date compensation is realized,
will constitute capital gain or loss, provided that such Common Stock is
held as a capital asset.
The Company will be entitled to a deduction for federal income tax
purposes at the same time and in the same amount as the Optionee is
required to recognize ordinary compensation income as described above. To
the extent that the Optionee recognizes capital gains in the manner
described above, the Company will not be entitled to any corresponding
deduction for federal income tax purposes.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES PRESENT, IN PERSON OR BY
PROXY, AND ENTITLED TO VOTE AT THE MEETING IS REQUIRED TO APPROVE THE NON-
QUALIFIED STOCK OPTION AGREEMENT. THE BOARD OF DIRECTORS OF THE COMPANY
RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL OF THE NON-QUALIFIED
STOCK OPTION AGREEMENT.
PROPOSAL 3
APPROVAL OF THE 1996 STOCK OPTION
AND INCENTIVE PLAN
The Board of Directors of Dime Financial Corporation (the "Board")
has adopted the 1996 Stock Option and Incentive Plan (the "Plan"), and
recommends its approval by the stockholders. Subject to the foregoing
approval of the Plan by the stockholders, the effective date of the Plan
("Effective Date") is January 1, 1996. If approved by the stockholders the
following Plan will be in addition to and supplementary to the 1986 Plan.
As of February 21, 1996, 23,350 of the 360,000 shares originally
authorized for issuance under the 1986 Plan remained available for grants
in accordance with the 1986 Plan, but only until July 16, 1996, the
expiration date of the 1986 Plan. The following discussion is a summary of
the proposed Plan.
Purpose. The purpose of the Plan is to provide incentives to
selected full-time employees of Dime Financial Corporation (the "Company")
and its subsidiaries ("Related Companies"), to encourage stock ownership
by such employees, increasing their proprietary interest in the success of
the Company and encouraging them to remain employees of the Company or of
a Related Company. The Plan provides for Incentive Stock Options and
Nonqualified Stock Options (collectively "Options"). The Plan does not
provide for the issuance of stock appreciation rights.
Administration. The Plan will be administered by a Stock Option
Committee (the "Committee") appointed by the Board. The Committee will
consist of at least three individuals all of whom are disinterested
persons for purposes of Rule 16b-3 of the Securities Exchange Act of 1934,
as such Rule may be hereafter amended ("Rule 16b-3"). The Board, at its
pleasure, may remove members from or add members to the Committee.
In addition to the other powers granted to the Committee under the
Plan, the Committee has the power, subject to the terms of the Plan: (i)
to determine which of the eligible employees will be granted Options; (ii)
to determine the time or times when Options will be granted and to
determine the number of shares subject to each Option; (iii) to grant
Options; (iv) to accelerate or extend (except for Incentive Stock Options)
the date on which a previously granted Option may be exercised; (v) to
prescribe the form of agreement evidencing Options granted pursuant to the
Plan; and (vi) to construe and interpret the Plan and the agreements
evidencing Options granted pursuant to the Plan, and to make all other
determinations and take all other actions necessary or advisable for the
administration of the Plan.
Shares Subject to Options. The shares subject to Options shall be
either authorized and unissued shares or treasury shares. The aggregate
number of shares of Common Stock which may be issued pursuant to the Plan
is Three Hundred Ninety Thousand (390,000). Except as provided below, if
an Option expires or terminates for any reason, in whole or in part,
without being exercised, the number of shares as to which such expired or
terminated Option has not been exercised may again become available for
the grant of Options under the Plan.
Adjustment to Options. In the event of changes in the outstanding
Common Stock of the Company by reason of stock dividends, stock splits,
recapitalizations, mergers, consolidations, combinations or exchange of
shares, separations, reorganizations, or liquidations, the Committee will
make appropriate adjustments in the number of shares available under the
Plan in the aggregate and the maximum number of shares as to which Options
may be granted to any Participant. The Committee will also make
appropriate adjustment in the number of shares of Common Stock as to which
outstanding Options or portions thereof then unexercised, shall relate, so
that the Participant's proportionate interest is maintained as before the
occurrence of such events; such adjustment to be made without change in
the total price applicable to the unexercised portion of Options and with
a corresponding adjustment in the option price per share.
Eligibility. The individuals who are eligible to receive Options are
such full-time employees employed by the Company or a Related Company as
are selected by the Committee. Participants chosen to participate under
the Plan ("Participants") may be granted an Incentive Stock Option, a
Nonqualified Stock Option, or any combination thereof.
Incentive Stock Options. Section 422 of the Internal Revenue Code of
1986, as amended (the "Code") and the regulations promulgated thereunder
by the Internal Revenue Service prescribe certain conditions that must be
satisfied for an option to qualify for Incentive Stock Option treatment.
For example, the aggregate fair market value of the Common Stock
(determined at the time of the grant) for which an employee may be granted
Incentive Stock Options which first become exercisable in any calendar
year may not exceed $100,000. The $100,000 limitation applies in the
aggregate to options under all plans of the Company and Related Companies.
Moreover, Incentive Stock Options may not be granted to an employee
who, immediately before the grant, owns more than 10% of the total
combined voting power of all classes of stock of the Company or a Related
Company unless the option price is at least 110% of the fair market value
of the Common Stock subject to the Incentive Stock Option at the time such
option is granted and the option expires within five (5) years of the date
of the grant.
No Tandem Options. There shall be no terms and conditions under an
Option which provide that the exercise of an Incentive Stock Option
reduces the number of shares for which a Nonqualified Stock Option may be
exercised; and there shall be no terms and conditions under an Option
which provide that the exercise of a Nonqualified Stock Option reduces the
number of shares for which an Incentive Stock Option may be exercised.
Option Price. Incentive Stock Options must be granted at a price at
least equal to the fair market value of shares of Common Stock on the date
of the grant. Under the Plan, Nonqualified Stock Options must be granted
at a price at least equal to 50% of the fair market value of shares of
Common Stock on the date of the grant.
Exercise of Options. The period during which an Option may be
exercisable may not exceed ten (10) years from the date the Option is
granted; provided, however, that the Option may be terminated sooner in
the event of termination of employment, as described below. Subject to the
foregoing, the Committee may establish a period or periods with respect to
all or any part of the Option during which such Option may not be
exercised and at the time of a subsequent grant of an Option or at such
longer time as the Committee may determine accelerate the right of the
Participant to exercise all or any part of the Option not then
exercisable. The number of shares of Common Stock which may be purchased
at any one time shall be 100 shares, a multiple thereof or the total
number at the time purchasable under the Option. The exercise price shall
be payable on exercise of the Option in cash or by certified check, bank
draft or postal or express money order.
Death; Disability; Termination of Employment. If the Participant's
employment is terminated for any reason other than death or disability,
and in the case of a Nonqualified Stock Option, also retirement, any
outstanding Option will expire on the earlier of its expiration date or
three (3) months following such termination.
In the case of an Incentive Stock Option, if the Participant's
employment is terminated by reason of disability, any outstanding
Incentive Stock Option will expire on the earlier of its expiration date
or one (1) year after such termination. If the Participant's employment is
terminated by reason of death, the representative of the Participant's
estate or beneficiaries thereof to whom the Incentive Stock Option has
been transferred will have the right during the one (1) year period
following the date of the Participant's death to exercise any then
outstanding Options in whole or in part. In no way will the period for
exercising extend beyond the date on which such Option would otherwise
expire. The number of shares in respect to which an Option may be
exercised after the Participant's death will be the number of shares in
respect to which such Option could be exercised as of the date of death.
In the case of a Nonqualified Stock Option, if the Participant's
employment is terminated by reason of disability, retirement, or death,
there is no time limit on the date by which the Option must be exercised
other than the expiration date of the Option.
Stockholders' Rights. A Participant entitled to shares as a result
of the exercise of an Option will not be deemed to be, or have rights as,
a stockholder of the Company, except to the extent a stock certificate is
issued for such shares and then only from the date such certificate is
issued.
Amendment; Duration of Plan. The Board may from time to time suspend
or discontinue the Plan or revise or amend it in any respect whatsoever
except that, without the further approval of the shareholders, no such
revision or amendment shall (a) increase the number of shares of Common
Stock subject to the Plan, (b) decrease the price at which Options may be
granted, (c) remove the administration of the Plan from the Committee, (d)
modify the requirements as to eligibility for a grant of an Option, or (e)
materially increase the benefits accruing to the Participants under the
Plan.
Unless sooner terminated by the Board, the Plan will remain in
effect for a period of ten (10) years after the Effective Date of the
Plan. No Options may be granted after the termination of the Plan.
Transfer of Options. No Option may be assigned or transferred except
by will and/or by the laws of descent and distribution. Options may be
exercised during the life of any Participant only by such Participant.
Federal Income Tax Consequences. Options granted under the Plan may
be either Incentive Stock Options or Nonqualified Stock Options.
A Participant will not recognize income for federal income tax
purposes upon the grant of an Incentive Stock Option. If a Participant is
employed by the Company or a Related Company throughout the period ending
three (3) months (one (1) year for disabled Participants, and no limit for
deceased Participants) prior to the exercise of an Incentive Stock Option,
no income will be recognized upon the exercise of the Option. However, the
difference between the option price and the fair market value of the
Common Stock acquired on the date of the exercise will be included in
income for purposes of the alternative minimum tax to the extent provided
by Section 56(b)(3) of the Code. If no disposition of the Common Stock
acquired upon the qualifying exercise of the Incentive Stock Option occurs
until after more than two (2) years after the Incentive Stock Option was
granted and more than one (1) year after the transfer of such Common Stock
to the Participant, any gain or loss recognized upon such disposition will
be treated as long-term capital gain or loss.
The disposition of the Common Stock acquired upon the exercise of an
Incentive Stock Option within two (2) years after the Incentive Stock
Option was granted or within one (1) year after the transfer of the stock
to the Participant will be a disqualifying disposition, and the
Participant will generally recognize (i) ordinary compensation income for
federal income tax purposes in an amount equal to the excess of the fair
market value on the date of exercise of the Common Stock acquired over the
option price and (ii) short- or long-term capital gain (depending on how
long the Common Stock was held) to the extent the Common Stock is disposed
of in a sale or taxable exchange at a price in excess of the value of such
stock on the date of exercise. If the amount realized by the Participant
upon such a disposition is less than the value of the Common Stock on the
date of exercise, then the amount of income realized will be all
compensation income and will be limited to the excess of the amount
realized on the sale or exchange over the option price of the Common
Stock.
A Participant will not recognize income for federal income tax
purposes upon the grant of a Nonqualified Stock Option. Upon the exercise
of a Nonqualified Stock Option, a Participant will recognize ordinary
compensation income in an amount equal to the excess of the fair market
value of the Common Stock on the date of exercise over the option price.
Any gain or loss recognized by the Participant on the subsequent
disposition of the stock will be capital gain or loss.
The Company will generally be entitled to a deduction for federal
income tax purposes at the time and in the amount that ordinary
compensation income is realized by a Participant. To the extent that a
Participant recognizes capital gain as discussed above, the Company will
not be entitled to a deduction for federal income tax purposes.
Any Participant exercising an Option will be required to pay either
to the Company or a Related Company (as applicable) the amount of any
taxes the Company or Related Company is required by law to withhold with
respect to the exercise of such Option. The payment will be due on the
date the Company or Related Company is required by law to withhold such
taxes. The payment may also be made at the election of the Participant by
the surrender of shares then owned by the Participant, or the withholding
of shares otherwise to be issued to the Participant on exercise, in an
amount that would satisfy the withholding amount due. Any election made by
a Participant subject to Section 16(b) of the Securities Exchange Act of
1934, as amended, shall be in accordance with the requirements of Rule
16b-3 and any interpretations thereof of the Securities and Exchange
Commission. The value of the shares withheld or delivered will be equal to
the fair market value of the shares on the date of exercise. In the event
that payment is not made when due, the Company will have the right to
deduct, to the extent permitted by law, from any payment of any kind
otherwise due to the Participant from the Company or a Related Company,
all or part of the amount required to be withheld.
Because of the complexity of the provisions of the tax laws
applicable to stock options, the Company advises each Participant to
consult with a tax advisor as to the federal, state and local income and
other tax consequences of an exercise of an Option or of a disposition of
the shares so acquired, prior to such events.
Grants Under Plan. As of February 21, 1996, no grants of Options had
been authorized under the 1996 Plan. All officer option grants effective
on January 1, 1996, as described in the Personnel and Benefits Committee
Report on Executive Compensation, were granted under the 1986 Plan.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES PRESENT, IN PERSON OR BY
PROXY, AND ENTITLED TO VOTE AT THE MEETING IS REQUIRED TO APPROVE THE 1996
STOCK OPTION PLAN AND INCENTIVE PLAN. THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL OF THE 1996 STOCK OPTION
AND INCENTIVE PLAN.
PROPOSAL 4
APPROVAL OF THE 1996 STOCK OPTION
PLAN FOR OUTSIDE DIRECTORS
The Board of Directors of Dime Financial Corporation (the "Board")
has adopted the 1996 Stock Option Plan for Outside Directors (the "1996
Outside Directors' Plan" or the "Plan"), and recommends its approval by
the stockholders. Subject to the foregoing approval of the Plan by the
stockholders of the Company, the effective date of the Plan ("Effective
Date") is January 1, 1996. As of February 21, 1996, 18,000 of the 100,000
shares originally authorized for issuance under the 1986 Stock Option Plan
for Outside Directors remained available for grant in accordance until the
1986 Plan, but only until July 16, 1996, the expiration date of the 1986
Plan. The following discussion is a summary of the 1996 Outside Directors'
Plan.
Purpose. The purpose of the 1996 Outside Directors' Plan is to (1)
attract and retain the continued services of non-employee directors of
Dime Financial Corporation (the "Company") with the requisite
qualifications; (2) encourage such directors to secure or increase on
reasonable terms their stock ownership in the Company; and (3) promote
continuity of management and increased personal interest in the welfare of
the Company by those who are responsible for shaping and carrying out its
long-range plans and for securing its continued growth and financial
success.
Administration. The 1996 Outside Directors' Plan will be
administered by a committee (the "Committee"), composed of at least three
members of the Board. Each member of the Committee must be a disinterested
person under Rule 16b-3. The Committee will have the authority to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to it and to make all other determinations with respect to the
administration of the Plan. The Committee, however, will have no
discretion to determine the non-employee directors who will receive
options, the number of shares subject to options, the terms upon which,
the times at which, or the period within which shares may be acquired or
options may be acquired and exercised.
Shares Subject to Options. A maximum of One Hundred Ten Thousand
(110,000) authorized but unissued shares of Common Stock have been
reserved for issuance upon the exercise of options under the 1996 Outside
Directors' Plan; provided, however, that such amount may be adjusted for
stock dividends, stock splits, recapitalizations, mergers, consolidations,
combinations or exchanges of shares, separations, reorganizations or
liquidations; and provided further, however, that the number of shares so
reserved may from time to time be reduced to the extent that a
corresponding number of treasury shares are set aside for issuance upon
the exercise of options under the Plan.
Eligibility. Options may be granted only to members of the Board who
are not otherwise employees of the Company or any of its subsidiaries on
the date of the grant ("Participants").
Grant of Options. Each individual who is a Participant on the
Effective Date of the 1996 Outside Directors' Plan (subject to approval of
the Plan by the stockholders) will receive an automatic grant of an option
to purchase Ten Thousand (10,000) shares of Common Stock. Directors who
are newly elected to the Board after the Effective Date will receive an
automatic grant of an option to purchase Ten Thousand (10,000) shares of
Common Stock on the date they become a director (or, if elected by the
Board, on the date of the annual meeting of the stockholders immediately
following such date). If the Plan is not approved by the stockholders at
the Meeting, the Plan and all options granted under the Plan will become
null and void and be of no effect. Notwithstanding the above, automatic
grants under the Plan only will be made if the director is a Participant
on the applicable date of the grant and such automatic grant shall be
subject to pro rata reduction to the extent that the number of shares of
Common Stock subject to future grant under the Plan is not sufficient to
make the full automatic grants required to be made pursuant to the Plan on
such date.
Option Price. The per share price to be paid by a Participant upon
the exercise of an option will be equal to the fair market value of a
share of the Common Stock on the last trading date preceding the date of
the grant.
Exercise of Options. No option may be exercised until six (6) months
after it is granted, and options must be exercised within the period of
ten (10) years following the Effective Date, irrespective of the date of
the grant. In addition, options granted to directors who have not been
elected by the stockholders may not be exercised unless and until such
individuals have been elected as directors by the stockholders. An option
is exercised by (i) a written notice to the Company of intent to exercise
the option with respect to a specified number of shares, and (ii) payment
to the Company of the amount of the option exercise price for the number
of shares with respect to which the option is then exercised. The number
of shares which may be purchased at any one time shall be One Hundred
(100) shares, a multiple thereof, or the total number at the time
purchasable under the option. The exercise price may be paid in cash or by
certified check, bank draft, or postal or express money order.
Death; Disability; Termination of Employment. If the Participant's
status as a director is terminated for any reason other than death,
disability or retirement upon attaining age seventy-two (72), any
outstanding option held by the Participant will expire on the earlier of
its expiration date or three (3) months following such termination. If a
Participant's status as a director is terminated by death, disability or
retirement upon attaining age seventy (70), the Participant, the
representative of the Participant's estate, or the beneficiaries of the
estate to whom the option has been transferred, may exercise the option
until the date on which the option would otherwise expire.
Stockholder's Rights. A Participant entitled to shares as a result
of the exercise of an option will not be deemed to be, or have rights as,
a stockholder of the Company, except to the extent a stock certificate is
issued for such shares and then only from the date the certificate is
issued.
Amendment; Duration of Plan. The Board may from time to time suspend
or discontinue the 1996 Outside Directors' Plan or revise it or amend it
in any respect whatsoever; provided, however, that any amendment requiring
stockholder approval under Rule 16b-3 shall not be made without the
further approval of the stockholders of the Company. Under Rule 16b-3 as
currently in effect, stockholder approval would be necessary if the Board
(a) increased the aggregate number of shares which may be issued under
options pursuant to the provisions of the Plan (except for adjustment
provisions); (b) increased the maximum term of outstanding options; (c)
changed the class of individuals eligible to receive options; or (d)
otherwise materially increased the benefits accruing to Participants under
the Plan. Additionally, the Plan provides that certain provisions may not
be amended more than once every six (6) months. No such suspension,
discontinuance, revision or amendment of the Plan may affect a previously
granted option without the consent of the Participant or the transferee of
the Participant, unless necessary to comply with applicable law.
Unless sooner terminated by the Board, the Plan will remain in
effect for a period of ten (10) years after the Effective Date of the
Plan. No options may be granted after the termination of the Plan.
Transfer of Options. No option may be assigned or transferred except
by will and/or by the laws of descent and distribution. Options may be
exercised during the life of any Participant only by such Participant.
Federal Income Tax Consequences. Upon the exercise of an option
under the Plan, a Participant will recognize ordinary compensation income
in an amount equal to the excess of the fair market value of the Common
Stock on the date of the exercise over the option price. Any gain or loss
recognized by the Participant on the subsequent disposition of the stock
will be capital gain or loss.
The Company will be entitled to a deduction for federal income tax
purposes at the same time and in the same amount as a Participant is
required to recognize ordinary compensation income as described above. To
the extent that a Participant recognizes capital gain as described above,
the Company will not be entitled to a deduction for federal income tax
purposes.
Grants Under Plan. Under the terms of the 1996 Plan, if the 1996
Plan is approved by shareholders at the Meeting, each outside Director of
the Company on January 1, 1996 (all Directors except Mr. Dionne) will be
granted, effective as of that date, an option to acquire 10,000 shares of
common stock of the Company at an exercise price of $13-1/2 per share, the
closing price of the Common Stock on December 29, 1995 (the last trading
date before January 1, 1996).
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES PRESENT, IN PERSON OR BY
PROXY, AND ENTITLED TO VOTE AT THE MEETING IS REQUIRED TO APPROVE THE 1996
STOCK OPTION PLAN FOR OUTSIDE DIRECTORS. THE BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL OF THE 1996
STOCK OPTION PLAN FOR OUTSIDE DIRECTORS.
PROPOSAL 5
RATIFICATION OF THE APPOINTMENT OF
KPMG PEAT MARWICK LLP
AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR
ENDING DECEMBER 31, 1996
The Board of Directors of the Company has renewed the Company's
arrangements with KPMG Peat Marwick LLP, Independent Certified Public
Accountants, to be the Company's independent public accountants for the
fiscal year ending December 31, 1996, subject to ratification by the
Company's shareholders. A representative of KPMG Peat Marwick LLP is
expected to be present at the Annual Meeting to respond to shareholders'
questions and to have the opportunity to make a statement if he or she
desires to do so.
SHAREHOLDER PROPOSALS
Proposals of shareholders of the Company intended to be presented at
the 1997 annual meeting of shareholders of the Company must be received by
the Company not later than November 8, 1996 to be included in the
Company's proxy statement and form of proxy relating to that meeting. Any
such proposal must comply with Rule 14a-8 promulgated by the Commission
under the 1934 Act.
OTHER MATTERS
At the time of preparation of this Proxy Statement, the Board of
Directors of the Company knew of no matter to be presented for action at
the Meeting other than as set forth in the Notice of Annual Meeting of
Shareholders and described in this Proxy Statement. If any other matters
properly come before the Meeting, the proxies have discretionary authority
to vote their shares according to their best judgment.
By order of the Board of Directors
/s/ ELEANOR M. TOLLA
Eleanor M. Tolla
Secretary
March 8, 1996
A COPY OF THE COMPANY'S 1995 ANNUAL REPORT TO SHAREHOLDERS IS
ENCLOSED. A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING
THE FINANCIAL STATEMENTS AND THE FINANCIAL STATEMENT SCHEDULES, AS
REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR 1995,
WILL BE PROVIDED WITHOUT CHARGE TO ANY SHAREHOLDER UPON THE WRITTEN
REQUEST OF SUCH SHAREHOLDER. REQUESTS SHOULD BE ADDRESSED TO ELEANOR
TOLLA, SECRETARY, DIME FINANCIAL CORPORATION, 95 BARNES ROAD, WALLINGFORD,
CONNECTICUT 06492.
APPENDICES
PROXY DIME FINANCIAL CORPORATION PROXY
1996 ANNUAL MEETING OF SHAREHOLDERS -- APRIL 17, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of DIME FINANCIAL CORPORATION, a
Connecticut corporation, hereby appoints Robert Nicoletti, Ph.D. and
Richard D. Stapleton and each of them the proxies of the undersigned with
full power of substitution to vote at the Annual Meeting of Shareholders
of the Company to be held at the Villa Capri, Wallingford, Connecticut, at
10:30 a.m. on Wednesday, April 17, 1996, and at any adjournment or
adjournments thereof (the "Meeting"), with all the power which the
undersigned would have if personally present, hereby revoking any proxy
heretofore given. A majority of said proxies or their substitutes who
attend the Meeting (or if only one shall be present, then that one) may
exercise all of the powers hereby granted. The undersigned hereby
acknowledges receipt of the proxy statement for the Meeting and instructs
the proxies to vote as directed on the reverse side.
The Board of Directors recommends a vote "FOR" Proposals 1, 2, 3, 4
and 5.
PLEASE MARK, SIGN AND DATE ON THE REVERSE SIDE
[X] Please mark
votes as in
this example.
THIS PROXY, WHEN PROPERLY SIGNED, WILL BE VOTED IN THE MANNER DIRECTED. IF
NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL
NOMINEES LISTED BELOW, FOR THE APPROVAL OF THE NON-QUALIFIED STOCK OPTION
AGREEMENT, FOR APPROVAL OF THE 1996 STOCK OPTION AND INCENTIVE PLAN, FOR
APPROVAL OF THE 1996 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS, FOR THE
RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP FOR THE FISCAL
YEAR ENDING DECEMBER 31, 1996 AND IN THE DISCRETION OF THE PROXY HOLDERS
AS TO ANY OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING.
1. To elect the nominees for directors:
Nominees: Rosalind F. Gallagher, Theodore H. Horwitz, and Gary O. Olson.
[ ] FOR [ ] WITHHELD
[ ] __________________________________
FOR all nominees except as noted above
[ ] MARK HERE IF
YOU PLAN TO
ATTEND THE
MEETING
[ ] MARK HERE FOR
ADDRESS CHANGE
AND NOTE BELOW
2. To approve the Non-Qualified Stock Option Agreement dated May 9, 1995
between the Company and Ralph D. Lukens, Chairman of the Board of
Directors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To approve the 1996 Stock Option and Incentive Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To approve the 1996 Stock Option Plan for Outside Directors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. To ratify the appointment of KPMG Peat Marwick LLP as independent
auditors for the fiscal year ending December 31, 1996.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. With discretionary authority upon such other matters as may properly
come before the Meeting.
Please sign exactly as your name appears on this proxy card. When signing
as attorney, executor, trustee or guardian, please give your full title.
Signature: _______________________________________ Date _______________
Signature: _______________________________________ Date _______________
AS ADOPTED
December 12, 1995
DIME FINANCIAL CORPORATION
--------------------------
1996 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
--------------------------------------------
1. Purpose.
-------
The purpose of this 1996 Stock Option Plan For Outside Directors (the
"Plan") is to attract and retain the continued services of non-employee
directors of Dime Financial Corporation (the "Company") with the requisite
qualifications and to encourage such directors to secure or increase on
reasonable terms their stock ownership in the Company. The Board of Directors
of the Company (the "Board") believes that the granting of options (the
"Options") under the Plan will promote continuity of management and increased
personal interest in the welfare of the Company by those who are responsible
for shaping and carrying out the long-range plans of the Company and securing
its continued growth and financial success.
2. Effective Date of the Plan.
--------------------------
This Plan shall become effective on the later of January 1, 1996 and the
date it is approved by the Board of Directors of the Company (the "Effective
Date"), provided, however, that if the Plan is not approved by vote of the
shareholders of the Company at the 1996 Annual Meeting of Shareholders of the
Company, this Plan and all Options granted hereunder shall be null and void
and shall be of no effect.
3. Stock Subject to Plan.
---------------------
110,000 in the aggregate of the authorized but unissued shares of the
Company's common stock (the "Shares") and/or treasury shares shall be reserved
for issuance under the Plan upon the exercise of Options. If any Options
expire or terminate for any reason without having been exercised in full, the
unpurchased Shares subject thereto shall again be available for the grant of
Options.
4. Administration.
--------------
The Plan shall be administered by the Committee referred to in Section 5
hereof. Subject to the provisions of the Plan, the Committee shall have
complete authority in its discretion to interpret the Plan, to prescribe,
amend and rescind rules and regulations relating to it and to make all other
determinations necessary or advisable for the administration of the Plan;
provided, however, that the Committee shall have no discretion to determine
the non-employee directors who will receive Options, the number of Shares
subject to Options, the terms upon which, the times at which or the periods
within which Shares may be acquired or the Options may be acquired and
exercised.
5. Committee.
---------
The Committee shall consist of at least three members of the Board each
of whom shall be a disinterested person as defined in Rule 16b-3 under the
Securities Exchange Act of 1934, and as such Rule may be hereafter amended.
Each member of the Committee shall be a person who is not an employee of the
Company or any subsidiary of the Company, and who has not received a grant of
an option to acquire common stock of the Company since the beginning of the
preceding fiscal year under any plan maintained by the Company other than this
Plan. The Committee shall be appointed by the Board, which may at any time
and from time to time remove any member of the Committee, with or without
cause, appoint additional members to the Committee and fill vacancies, however
caused, in the Committee. A majority of the members of the Committee shall
constitute a quorum. All determinations of the Committee shall be made by a
majority of its members. Any decision or determination of the Committee
reduced to writing and signed by all of the members of the Committee shall be
fully effective as if it had been made at a meeting duly called and held.
6. Eligibility.
-----------
An Option may be granted only to members of the Board who are not
otherwise employees of the Company or any of its subsidiaries on the date of
grant (the "Participants").
7. Grant of Options and Option Price.
---------------------------------
(a) Participants on the Effective Date. Each individual
who is a Participant on the Effective Date shall automatically be
granted on the Effective Date an Option to purchase 10,000 Shares.
(b) Future Participants. Directors who are newly elected
to the Board after the Effective Date shall receive an automatic
grant of an Option to purchase 10,000 Shares on the date of such
election (or, if elected by the Board, on the date of the annual
meeting of the shareholders of the Company immediately following
such election); provided, that such automatic grant shall only be
made if the director is a Participant on such date, and such
automatic grant shall be subject to pro rata reduction to the
extent that the number of Shares subject to future grant under the
Plan is not sufficient to make the full automatic grants required
to be made pursuant to the Plan on such date.
(c) Price. The initial per Share price to be paid by a
Participant upon the exercise of an Option shall be equal to the
fair market value of a Share on the date of grant. For the
purposes hereof, the fair market value of a Share on any date
shall be equal to the last reported sales price for the Shares as
reported on the NASDAQ National Market System on such date (or if
no trading occurred on that date, on the next preceding date on
which there was trading), as made available for publication by the
National Association of Securities Dealers Automated Quotation
System, or if no such prices are available, the fair market value
as determined by rules to be adopted by the Committee.
8. Option Period.
-------------
Participants shall be granted Options which are exercisable for a period
which expires ten (10) years after the Effective Date, irrespective of the
date of grant. Notwithstanding the foregoing, no Option granted under this
Plan shall be exercisable until six (6) months after the grant thereof, and no
Option granted to a Participant who has not ever been elected to the Board by
the shareholders shall be exercisable unless and until such Participant shall
have been so elected.
9. Exercise of Option.
------------------
Subject to Section 8, an Option may be exercised in whole or in part at
any time after the date it is granted and only by a written notice of intent
to exercise the Option with respect to a specified number of Shares and
payment to the Company in cash or by certified check, bank draft or postal or
express money order, of the amount of the Option exercise price for the number
of Shares with respect to which the Option is then exercised. The number of
Shares which may be purchased at any one time shall be 100 Shares, a multiple
thereof, or the total number at the time purchasable under the Option.
10. Transferability.
---------------
No Option shall be assignable or transferable except by will and/or by
the laws of descent and distribution and, during the life of any Participant,
each Option granted to the Participant may be exercised only by the
Participant.
11. Ceasing to be a Director.
------------------------
(a) Termination. If a Participant terminates service as a
director for any reason other than those set forth in clause (b)
below, any outstanding Option held by the Participant shall
terminate on the earlier of the date on which such Option would
otherwise expire or three (3) months after such termination.
(b) Disability, Death or Retirement. If a Participant's
service as a director is terminated by disability (which condition
constitutes total disability under the federal Social Security
Acts), death, or retirement upon attaining age seventy-two (72),
the Participant or the representative of the Participant's estate
or beneficiaries thereof to whom the Option has been transferred
shall have the right to exercise any outstanding Option until the
date on which such Option would otherwise expire.
12. Duration of Plan.
----------------
Unless sooner terminated, the Plan shall remain in effect for a period
of ten years after the Effective Date and shall thereafter terminate. No
Options may be granted after the termination of this Plan; provided, however,
that termination of the Plan shall not affect any Options previously granted,
which Options shall remain in effect until exercised, surrendered or
cancelled, or until they have expired, all in accordance with their terms.
13. Changes in Capital Structure, etc.
---------------------------------
In the event of changes in the outstanding common stock of the Company
by reasons of stock dividends, stock splits, recapitalizations, mergers,
consolidations, combination or exchange of shares, separations,
reorganizations, or liquidations, the number of Shares available under the
Plan in the aggregate and the number of Shares as to which Options may be
granted to any Participant shall be correspondingly adjusted by the Committee.
In addition, the Committee shall make appropriate adjustments in the number of
Shares as to which outstanding Options, or portions thereof then unexercised,
shall relate, to the end that the Participant's appropriate interest shall be
maintained as before the occurrence of such event; such adjustment shall be
made without change in the total price applicable to the unexercised portion
of Options and with a corresponding adjustment in the option price per Share.
14. Rights as Shareholder.
---------------------
A Participant entitled to Shares as a result of the exercise of an
Option shall not be deemed for any purpose to be, or have rights as, a
shareholder of the Company 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.
15. Expenses.
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The expenses of this Plan shall be paid by the Company.
16. Compliance with Applicable Law.
------------------------------
Notwithstanding anything herein to the contrary, the Company shall not
be obligated to cause to be issued or delivered any certificates evidencing
Shares to be delivered pursuant to the exercise of an Option, unless and until
the Company is advised by its counsel that the issuance and delivery of such
certificates is in compliance with all applicable laws and regulations of
governmental authority. The Company shall in no event be obligated to
register any securities pursuant to the Securities Act of 1933 (as now in
effect or as hereafter amended) or to take any other action in order to cause
the issuance and delivery of such certificates to comply with any such law or
regulation. The Committee may require, as a condition of the issuance and
delivery of such certificates and in order to ensure compliance with such laws
and regulations, that the Participant make such covenants, agreements and
representations as the Committee, in its sole discretion, deems necessary or
desirable.
17. Application of Funds.
--------------------
Any cash proceeds received by the Company from the sale of Shares
pursuant to options will be used for general corporate purposes.
18. Amendment of the Plan.
---------------------
The Board may from time to time suspend or discontinue this Plan or
revise or amend it in any respect whatsoever; provided, however, that any
amendment requiring stockholder approval under Rule 16b-3, as in effect on the
Effective Date and as it may be subsequently amended, shall not be made
without the further approval of the shareholders of the Company; and provided,
further, that the provisions of Sections 6 and 7 of this Plan may not be
amended more than once every six (6) months, except as otherwise provided in
or permitted by Rule 16b-3. No such suspension, discontinuance, revision or
amendment shall in any manner affect any grant theretofore made without the
consent of the Participant or the transferee of the Participant, unless
necessary to comply with applicable law.
AS ADOPTED
December 12, 1995
DIME FINANCIAL CORPORATION
1996 STOCK OPTION AND INCENTIVE PLAN
I. GENERAL
1. Purpose. This 1996 Stock Option and Incentive Plan (the "Plan") of
Dime Financial Corporation (the "Company") is intended to advance the
interests of the Company by providing certain employees with an
additional incentive, encouraging stock ownership by such employees,
increasing their proprietary interest in the success of the Company
and encouraging them to remain employees.
2. Definitions. Whenever used herein, the following terms shall have
the meanings set forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as it may be
amended from time to time.
(c) "Committee" means the Stock Option Committee appointed by the
Board to administer this Plan pursuant to Section 3 hereof.
(d) "Dime Group" means the Company, a parent corporation or
subsidiary corporation of the Company, or a corporation, or a
parent corporation or subsidiary corporation of such
corporation, issuing or assuming an Option in a transaction of
the type described in Section 425(a) of the Code. The terms
"parent corporation" and "subsidiary corporation" shall have
the meanings assigned to such terms by Section 425 of the Code.
(e) "Disability" means a permanent and total disability as defined
in Section 422(c)(6) of the Code.
(f) "Fair Market Value" means last reported sales price for the
Shares as reported on the NASDAQ National Market System on the
date as of which the determination is made (or if no trading
occurred on that date, on the next preceding date on which
there was trading), as made available for publication by the
National Association of Securities Dealers Automated Quotation
System, or if no such prices are available, the fair market
value as determined by rules to be adopted by the Committee.
(g) "Incentive Stock Option" means an Option granted pursuant to
the Incentive Stock Option provisions as set forth in Part II
of this Plan.
(h) "Nonqualified Stock Option" means an Option granted pursuant to
the Nonqualified Stock Option provisions as set forth in Part
III of this Plan.
(i) "Option" means an option to purchase shares under this Plan.
(j) "Participant" means an individual to whom an Option is granted
under this Plan.
(k) "Rule 16b-3" means Rule 16b-3 under the Securities Exchange Act
of 1934, and as such Rule may be hereafter amended.
(l) "Shares" means shares of the Company's common stock.
3. Administration. This Plan shall be administered by a Stock Option
Committee appointed by the Board. The Committee shall consist of at
least three individuals, each of whom is a disinterested person as
defined in Rule 16b-3. The Board, at its pleasure, may remove
members from or add members to the Committee. A majority of
Committee members shall constitute a quorum of members, and the
actions of the majority shall be final and binding on the whole
Committee.
In addition to the other powers granted to the Committee under this
Plan, the Committee shall have the power, subject to the terms of
this Plan: (i) to determine which of the eligible employees shall be
granted Options; (ii) to determine the time or times when Options
shall be granted and to determine the number of Shares subject to
each Option; (iii) to grant Options; (iv) to accelerate or extend
(except for Incentive Stock Options) the date on which a previously
granted Option may be exercised; (v) to prescribe the form of
agreement evidencing Options granted pursuant to this Plan; and (vi)
to construe and interpret this Plan and the agreements evidencing
Options granted pursuant to this Plan, and to make all other
determinations and take all other actions necessary or advisable for
the administration of this Plan.
4. Eligibility. The individuals who shall be eligible to receive
Options shall be such full-time employees employed by a member of the
Dime Group as shall be selected by the Committee. Participants
chosen to participate under this Plan may be granted an Incentive
Stock Option, a Nonqualified Stock Option, or any combination
thereof.
5. Shares Subject to This Plan. The Shares subject to Options shall be
either authorized and unissued Shares or treasury Shares. The
aggregate number of Shares which may be issued pursuant to this Plan
shall be 390,000. Except as provided below, if an Option shall
expire and terminate for any reason, in whole or in part, without
being exercised, the number of Shares as to which such expired or
terminated Option shall not have been exercised may again become
available for the grant of Options.
6. No Tandem Options. There shall be no terms and conditions under an
Option which provide that the exercise of an Incentive Stock Option
reduces the number of Shares for which a Nonqualified Stock Option
may be exercised; and there shall be no terms and conditions under an
Option which provide that the exercise of a Nonqualified Stock Option
reduces the number of Shares for which an Incentive Stock Option may
be exercised.
II. INCENTIVE STOCK OPTION PROVISIONS
1. Grant of Incentive Stock Options. Subject to the provisions of this
Part II, the Committee shall from time to time determine those
individuals eligible pursuant to Section 4 of Part I to whom
Incentive Stock Options shall be granted and the number of Shares
subject to, and terms and conditions of, such Options. The aggregate
option price of incentive stock options (as defined in Section 422 of
the Code) granted to an individual (under all plans of the Dime
Group) which are exercisable for the first time in a calendar year
shall not exceed $100,000. Anything herein to the contrary
notwithstanding, no Incentive Stock Option shall be granted to an
employee if, at the time the Incentive Stock Option is granted, such
employee owns stock possessing more than 10% of the total combined
voting power of all classes of stock of any member of the Dime Group
unless the option price is at least 110% of the Fair Market Value of
the Shares subject to the Incentive Stock Option at the time the
Incentive Stock Option is granted and the Incentive Stock Option is
not exercisable after the expiration of five (5) years from the date
the Incentive Stock Option is granted.
2. Terms and Conditions of Incentive Stock Options. Each Incentive
Stock Option shall be evidenced by an option agreement which shall be
in such form as the Committee shall from time to time approve, and
which shall comply with and be subject to the following terms and
conditions:
(a) Number of Shares. Each Incentive Stock Option agreement shall
state the number of shares covered by the agreement.
(b) Option Price and Method of Payment. The option price of each
Incentive Stock Option shall be no less than the Fair Market
Value of the Shares on the date the Incentive Stock Option is
granted. The option price shall be payable on exercise of the
Option in cash or by certified check, bank draft or postal or
express money order.
(c) Option Period.
(i) General. The period during which an Incentive Stock
Option shall be exercisable shall not exceed ten (10)
years from the date such Incentive Stock Option is
granted; provided, however, that such Option may be
sooner terminated in accordance with the provisions of
this Section 2(c). Subject to the foregoing, the
Committee may establish a period or periods with respect
to all or any part of the Incentive Stock Option during
which such Option may not be exercised and at the time of
a subsequent grant of an Incentive Stock Option or at
such longer time as the Committee may determine
accelerate the right of the Participant to exercise all
or any part of the Incentive Stock Option not then
exercisable. The number of Shares which may be purchased
at any one time shall be 100 Shares, a multiple thereof
or the total number at the time purchasable under the
Incentive Stock Option. Notwithstanding any other
provision of the Plan, in no event shall any Incentive
Stock Option be exercisable prior to the date of approval
of the Plan by the shareholders of the Company as
provided in Section IV.1 of the Plan.
(ii) Termination of Employment. If the Participant ceases to
be an employee of any member of the Dime Group for any
reason other than Disability or death, any then
outstanding Incentive Stock Option held by the
participant shall terminate on the earlier of the date on
which such Option would otherwise expire or three (3)
months after such termination of employment, and such
Option shall be exercisable, prior to its termination, to
the extent it was exercisable as of the date of
termination of employment.
(iii) Disability. If a Participant's employment is terminated
by reason of Disability, any then outstanding Incentive
Stock Option held by the Participant shall terminate on
the earlier of the date on which such Option would
otherwise expire or one (1) year after such termination
of employment, and such Option shall be exercisable,
prior to its termination, to the extent it was
exercisable as of the date of termination of employment.
(iv) Death. If a Participant's employment is terminated by
death, the representative of the Participant's estate or
beneficiaries thereof to whom the Option has been
transferred shall have the right during the one (1) year
period following the date of the Participant's death to
exercise any then outstanding Incentive Stock Options in
whole or in part. The number of Shares in respect of
which an Incentive Stock Option may be exercised after a
Participant's death shall be the number of shares in
respect to which such Option could be exercised as of the
date of the Participant's death. In no event may the
period for exercising an Incentive Stock Option extend
beyond the date on which such Option would otherwise
expire.
(d) Non-transferability. An Incentive Stock Option shall not be
transferable or assignable by the Participant other than by
will or the laws of descent and distribution and shall be
exercisable during the Participant's lifetime only by the
Participant.
(e) Separate Agreements. Nonqualified Options may not be granted
in the same agreement as an Incentive Stock Option.
III. NONQUALIFIED STOCK OPTION PROVISIONS
1. Grant of Nonqualified Stock Options. Subject to the provisions of
this Part III, the Committee shall from time to time determine those
individuals eligible pursuant to Section 4 of Part I to whom
Nonqualified Stock Options shall be granted and the number of Shares
subject to, and terms and conditions of, such Options.
2. Terms and Conditions of Nonqualified Stock Options. Each Nonqualified
Stock Option shall be evidenced by an option agreement which shall be
in such form as the Board shall from time to time approve, and which
shall comply with and be subject to the following terms and
conditions:
(a) Number of Shares. Each Nonqualified Stock Option agreement
shall state the number of Shares covered by the agreement.
(b) Option Price and Method of Payment. The option price of each
Nonqualified Stock Option shall be such price as the Committee,
in its discretion, shall establish, or in the absence of any
action by the Committee, shall be the Fair Market Value of the
Shares on the last trading date before the date the
Nonqualified Stock Option is granted; provided however, that
the option price may not be less than the greater of 50% of the
Fair Market Value of the Shares on the date the Nonqualified
Stock Option is granted or the par value, if any, of the
Shares. The option price shall be payable on exercise of the
Option in cash or by certified check, bank draft or postal or
express money order.
(c) Option Period.
(i) General. The period during which a Nonqualified Stock
Option shall be exercisable shall not exceed ten (10)
years from the date such Nonqualified Stock Option is
granted; provided, however, that such Option may be
sooner terminated in accordance with the provisions of
this Section 2(c). Subject to the foregoing, the
Committee may establish a period or periods with respect
to all or any part of the Nonqualified Stock Option
during which such Option may not be exercised and at the
time of a subsequent grant of a Nonqualified Stock Option
or at such longer time as the Committee may determine
accelerate the right of the Participant to exercise all
or any part of the Nonqualified Stock Option not then
exercisable. The number of Shares which may be purchased
at any one time shall be 100 Shares, a multiple thereof
or the total number at the time purchasable under the
Nonqualified Stock Option. Notwithstanding any other
provision of the Plan, in no event shall any Nonqualified
Stock Option be exercisable prior to the date of approval
of the Plan by the shareholders of the Company as
provided in Section IV.1 of the Plan.
(ii) Termination of Employment. If the Participant ceases to
be an employee of any member of the Dime Group for any
reason other than Disability, retirement or death, any
outstanding Nonqualified Stock Option held by the
Participant shall terminate on the earlier of the date on
which such Option would otherwise expire or three (3)
months after such termination of employment, and such
Option shall be exercisable, prior to its termination, to
the extent it was exercisable as of the date of
termination of employment.
(iii) Disability or Retirement. If a Participant's employment
is terminated by Disability or retirement (as permitted
by any retirement plan maintained by a member of the Dime
Group in which the Participant participates), any then
outstanding Nonqualified Stock Option held by the
Participant shall terminate on the date such Option would
otherwise expire in accordance with its terms, and such
Option shall be exercisable, prior to its termination, to
the extent it was exercisable as of the date of
termination of employment.
(iv) Death. If a Participant's employment is terminated by
death, any then outstanding Nonqualified Stock Options
held by the Participant shall terminate on the date such
Option would otherwise expire in accordance with its
terms, and such Option shall be exercisable, prior to its
termination, by the representative of the Participant's
estate or beneficiaries thereof to whom the Option has
been transferred. The number of Shares in respect to
which a Nonqualified Stock Option may be exercised after
a Participant's death shall be the number of Shares in
respect of which such Option could be exercised as of the
date of the Participant's death.
(d) Non-transferability. A Nonqualified Stock Option shall not be
transferable or assignable by the Participant other than by
will or the laws of descent and distribution, and shall be
exercisable during the Participant's lifetime only by the
Participant.
IV. MISCELLANEOUS
1. Effective Date. This Plan shall become effective on the later of
January 1, 1996 and the date it is approved by the Board of Directors
of the Company (the "Effective Date"), provided, however, that if the
Plan is not approved by vote of the shareholders of the Company at
the 1996 Annual Meeting of Shareholders of the Company, this Plan and
all Options granted hereunder shall be null and void and shall be of
no effect.
2. Duration of Program. Unless sooner terminated, the Plan shall remain
in effect for a period of ten years after the Effective Date and
shall thereafter terminate. No Incentive Stock Options or
Nonqualified Stock Options may be granted after the termination of
this Plan; provided however, that except as otherwise provided in
Section 1 of this Part IV, termination of the Plan shall not affect
any Options previously granted, which such Options shall remain in
effect until exercised, surrendered or cancelled, or until they have
expired, all in accordance with their terms.
3. Changes in Capital Structure, etc. In the event of changes in the
outstanding common shares of the Company by reasons of stock
dividends, stock splits, recapitalizations, mergers, consolidations,
combinations or exchange of shares, separations, reorganizations, or
liquidations, the number of Shares available under the Plan in the
aggregate and the maximum number of Shares as to which Options may be
granted to any Participant shall be correspondingly adjusted by the
Committee. In addition, the Committee shall make appropriate
adjustments in the number of Shares as to which outstanding Options,
or portions thereof then unexercised, shall relate, to the end that
the Participant's proportionate interest shall be maintained as
before the occurrence of such events; such adjustment shall be made
without change in the total price applicable to the unexercised
portion of Options and with a corresponding adjustment in the option
price per Share.
4. Rights as Shareholder. A Participant entitled to Shares as a result
of the exercise of an Option shall not be deemed for any purpose to
be, or have rights as, a shareholder of the Company 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.
5. Expenses. The expenses of this Plan shall be paid by the Company.
6. Withholding. Any person exercising an Option shall be required to
pay to the appropriate member of the Dime Group the amount of any
taxes such member is required by law to withhold with respect to the
exercise of such Option. Such payment shall be due on the date such
member is required by law to withhold such taxes. Such payment may
also be made at the election of the optionee by the surrender of
Shares then owned by the optionee, or the withholding of Shares
otherwise to be issued to the optionee on exercise, in an amount that
would satisfy the withholding amount due. Any election so made by
optionees subject to Section 16(b) of the Securities Exchange Act of
1934, as amended, shall be in accordance with the requirements of
Rule 16b-3(e) under such Act and any interpretations thereof of the
Securities and Exchange Commission. The value of such Shares
withheld or delivered shall be equal to the Fair Market Value of such
Shares on the date of exercise. In the event that such payment is
not made when due, the Company shall have the right to deduct, to the
extent permitted by law, from any payment of any kind otherwise due
to such person from any member of the Dime Group, all or part of the
amount required to be withheld.
7. Compliance with Applicable Law. Notwithstanding anything herein to
the contrary, the Company shall not be obligated to cause to be
issued or delivered any certificates evidencing Shares to be
delivered pursuant to the exercise of an Option, unless and until the
Company is advised by its counsel that the issuance and delivery of
such certificates is in compliance with all applicable laws and
regulations of governmental authority. The Company shall in no event
be obligated to register any securities pursuant to the Securities
Act of 1933 (as now in effect or as hereafter amended) or to take any
other action in order to cause the issuance and delivery of such
certificates to comply with any such law or regulation. The
Committee may require, as a condition of the issuance and delivery of
such certificates and in order to ensure compliance with such laws
and regulations, that the Participant make such covenants, agreements
and representations as the Committee, in its sole discretion, deems
necessary or desirable.
8. Application of Funds. Any cash proceeds received by the Company from
the sale of Shares pursuant to Options will be used for general
corporate purposes.
9. Amendment of the Plan. The Board may from time to time suspend or
discontinue this Plan or revise or amend it in any respect whatsoever
except that, without approval of the shareholders, no such revision
or amendment shall (a) increase the number of Shares subject to this
Plan, (b) decrease the price at which Options may be granted, (c)
remove the administration of this Plan from the Committee, (d) modify
the requirements as to eligibility for a grant of an Option, or (e)
materially increase the benefits accruing to the participants under
this Plan. No such suspension, discontinuance, revision or amendment
shall in any manner affect any grant theretofore made without the
consent of the Participant or the transferee of the participant,
unless necessary to comply with applicable law.
DIME FINANCIAL CORPORATION
NON-QUALIFIED STOCK OPTION AGREEMENT
In consideration of his extraordinary past services as Chairman of
the Board of Directors of Dime Financial Corporation (the "Company"),
RALPH D. LUKENS (the "Optionee") is hereby granted an option to purchase
10,000 shares of the Common Stock of the Company at a price of $10.125 per
share (the "Option"), such price per share being equal to 100% of the fair
market value of a share of Common Stock at the time this Option is granted
(the "Option Price").
Reference is made, and this Option is subject to, all the terms of
The Dime Savings Bank of Wallingford 1986 Stock Option Plan for Outside
Directors (the "Plan"), a true copy of which is attached hereto. Although
this Option is subject to the terms of the Plan, the Option is not a grant
pursuant to the Plan and the 10,000 shares of Common Stock subject to the
Option are not to be included in the limitations provided by Section 3 of
the Plan. For purposes of Section 11(b) of the Plan, this Option shall be
considered to have been granted pursuant to Section 7(a) of the Plan.
This Option expires 10 years from the date hereof and is subject to
any earlier termination as provided in the Plan. This Option may not be
exercised prior to May 9, 1996, one year from the date hereof. If this
Non-Qualified Stock Option Agreement is not approved by the shareholders
of the Company prior to May 9, 1996, this Option shall be null and void as
of the date of this grant.
The Option may be exercised solely by payment of the Option Price in
cash or by certified check, bank draft or postal or express money order.
The Option is not transferable by the Optionee except by will and by
the laws of descent and distribution and is exercisable during the
Optionee's lifetime only by such Optionee.
The Optionee hereby accepts the Option as specified above.
Dated as of this 9th day of May, 1995.
THE DIME FINANCIAL CORPORATION
By: --------------------------
Its President
OPTIONEE
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RALPH D. LUKENS