DIME FINANCIAL CORPORATION
NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF DIME FINANCIAL CORPORATION:
Notice is hereby given that the 1997 Annual Meeting of Shareholders of
Dime Financial Corporation will be held at the Yankee Silversmith Inn in
Wallingford, Connecticut, at 10:00 a.m., on Wednesday, April 23, 1997, for
the purpose of considering and voting upon the following matters:
1. The election of four directors for a three-year term who, with the
six directors whose terms of office do not expire at this meeting,
will constitute the full Board of Directors;
2. The ratification of the appointment of KPMG Peat Marwick LLP as
independent public accountants for the fiscal year ending December
31, 1997; and
3. Such other business as may properly be brought before the meeting.
Only shareholders of record at the close of business on February 21,
1997, 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 12, 1997
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.
DIME FINANCIAL CORPORATION
95 Barnes Road
Wallingford, Connecticut 06492
(203) 269-8881
PROXY STATEMENT
1997 ANNUAL MEETING OF SHAREHOLDERS
April 23, 1997
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 1997 Annual
Meeting of Shareholders of the Company to be held at the Yankee Silversmith
Inn at 1033 N. Colony Road in Wallingford, Connecticut, at 10:00 a.m. on
Wednesday, April 23, 1997 (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 12, 1997.
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, 1997 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, 1997 will be entitled to vote at the Meeting and any
adjournments thereof. As of the Record Date, there were 5,135,887 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 four nominees for director named in Proposal 1, FOR the ratification of
the appointment of KPMG Peat Marwick LLP as independent public accountants
for the fiscal year ending December 31, 1997, 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. If a proxy indicates that a shareholder abstains from voting
or that shares are not to be voted on a particular proposal, the shares will
not be counted as having been voted on that proposal, and those shares will
not be reflected in the final tally of votes cast with respect to that
proposal.
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
$1,600.
PRINCIPAL SHAREHOLDERS OF THE COMPANY
The following table shows, as of February 1, 1997, 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
- ------------------- ------------------------- ----------------
The Sachs Company 462,400 9.0%
1346 South Third Street
Louisville, Kentucky 40208
First Union Corporation 281,500 5.5%
One First Union Center
Charlotte, North Carolina 28288
FMR Corp. 270,300 5.3%
82 Devonshire Street
Boston, Massachusetts 02109
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. The terms of four
directors expire at the Meeting. Each of the four incumbent directors,
Richard H. Dionne, Dr. Robert Nicoletti, Richard D. Stapleton and Fred A.
Valenti, is nominated to be re-elected at the Meeting for a three-year term,
expiring at the annual meeting of shareholders in 2000. The terms of the
remaining two classes of directors expire at the annual meetings of
shareholders in 1998 and 1999, 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,
1997, 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 2000
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, 1997 Owned(2)
- ------------------------------------------------------------------------------------------------------------------------------
Richard H. Dionne Director of the Company and 52 1995 1997(3) 103,750(4) 1.91%
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 60 1985 1997(3) 11,000(5)(6) .20%
Dime; Superintendent of
Schools, Shepaug Valley
Regional School District 12
(Retired)
Richard D. Stapleton Director of the Company and 60 1974(7) 1997(3) 27,000(8)(9) .50%
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 66 1974 1997(3) 40,280(5)(10) .74%
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.
DIRECTORS CONTINUING IN OFFICE
M. Joseph Canavan Director of the Company and 54 1987 1998 21,350(11)(12) .39%
Dime; President and Chief
Executive Officer of Diagnostic
Medical Laboratory, Inc.
William J. Farrell Director of the Company and 56 1988 1998 26,810(11)(13) .49%
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. (14)
Ralph D. Lukens Chairman of the Boards of 67 1986(7) 1998 32,277(15)(9) .59%
Directors of the Company and
Dime; Retired Probate Court
Administrator for the State of
Connecticut
Rosalind F. Gallagher Director of the Company and 52 1984 1999 13,861(16) .26%
Dime; President and Co-Owner
of Gallagher Travel Shoppe;
Co-owner of The Card Gals, LLC
Theodore H. Horwitz Director of the Company and 55 1986(7) 1999 15,000(9) .28%
Dime; President and Chief
Executive Officer of Veterans
Memorial Medical Center
Gary O. Olson Director of the Company and 67 1977(7) 1999 22,198(9) .41%
Dime; Of Counsel to the law
firm of Luby, Olson, Mango,
Gaffney and DeFrances, Director
and President of Meriden Cemetery
Association
All Directors and Executive Officers as a Group (19 persons) 403,181(17) 7.42%
- --------------------
<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 2000.
<F4> Includes 10,000 shares owned jointly with spouse; also currently
exercisable options granted pursuant to Dime's 1986 and 1996 Stock
Option and Incentive Plan to purchase 93,750 shares.
<F5> Includes currently exercisable options to purchase 10,000 shares
granted pursuant to the 1996 Stock Option Plan for Outside
Directors.
<F6> Includes 1,000 shares owned jointly with spouse.
<F7> Mr. Stapleton and Judge Lukens 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.
<F8> 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.
<F9> Includes options to purchase 2,000 shares granted pursuant to the 1986
Stock Option Plan for Outside Directors. Also includes options to
purchase 10,000 shares granted pursuant to the 1996 Stock Option
Plan for Outside Directors.
<F10> Includes 10,000 shares owned jointly with spouse.
<F11> 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 10,000 shares granted
pursuant to the 1996 Stock Option Plan for Outside Directors. Also
includes options to purchase 2,000 shares granted to Mr. Canavan and
Mr. Farrell, respectively, under the 1986 Stock Option Plan for
Outside Directors.
<F12> 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.
<F13> Includes 6,910 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.
<F14> Mr. Farrell is the brother-in-law of Jeanne Carmody, the wife of
Robert Carmody, Senior Vice President of Dime.
<F15> Includes 7,553 shares owned jointly with spouse and options to
purchase 10,000 shares granted pursuant to the Non-Qualified Stock
Option Agreement with Mr. Lukens.
<F16> 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.
Also includes options to purchase 10,000 shares granted pursuant to
the 1996 Stock Option Plan for Outside Directors.
<F17> Includes 33,125 shares beneficially owned by Albert E. Fiacre, Jr.,
Senior Vice President and Chief Financial Officer, representing .61%
of Common Stock outstanding; such shares include 25,125 shares
subject to options granted pursuant to Dime's 1986 and 1996 Stock
Option and Incentive Plan. Also includes 25,125 shares beneficially
owned by Timothy R. Stanton; Senior Vice President - Retail, Bank
Operations and Administration and Chief Operating Officer,
representing .46% of Common Stock outstanding; such shares include
17,625 shares subject to options granted pursuant to Dime's 1986 and
1996 Stock Option and Incentive Plan. In addition, includes 25,125
shares beneficially owned by Frank P. LaMonaca, Senior Vice
President and Senior Loan and Senior Credit Officer, representing
.32% of Common Stock outstanding; such shares include 17,625 shares
subject to options granted pursuant to Dime's 1986 and 1996 Stock
Option and Incentive Plan.
____________________
THE BOARD OF DIRECTORS AND ITS COMMITTEES
From January 1, 1996 through December 31, 1996, the Board of Directors
of the Company held eleven regular meetings and six special meetings. The
committees of the Board of Directors of the Company for 1996 were the Audit
Committee and the Personnel, Benefits, Nominating and Stock Option
Committee. The committees of the Board of Directors of Dime for 1996 were a
Loan Committee which reviews loan policies and makes recommendations for
Dime; a Finance and Investment Committee, which monitors Dime investments
and finance matters; a Planning Committee, which monitors compliance with
regulatory orders and addresses matters of strategic and long term planning;
and a Contributions Committee. 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 four times during 1996. 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 1996 were Theodore H.
Horwitz, Robert Nicoletti, and Gary O. Olson.
The Personnel, Benefits, Nominating and Stock Option Committee met two
times during 1996. 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 1996 were M.
Joseph Canavan, 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 1996, non-employee directors of Dime received $500 for the
annual meeting, for each regular and special board meeting and for each
committee meeting that they attended. In addition, in 1996 non-employee
directors of Dime were paid an annual retainer of $10,000 and Ralph D.
Lukens was paid an additional annual retainer of $10,000 for services as
Chairman of the Board.
Executive Compensation
The following Summary Compensation Table shows the compensation of the
Company's President and Chief Executive Officer, Senior Vice President and
Chief Financial Officer, Senior Vice President - Retail, Bank Operations and
Administration, and Senior Vice President - Senior Loan and Senior Credit
Officer (the "Named Executive Officers"), earned in the 1995 and 1996 fiscal
years. (No such person was employed by the Company prior to 1995.)
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Compensation Awards
-------------------- ------------
Other Securities
Name Annual Underlying All Other
and Principal Salary Bonus Compensation Options Compensation
Position Year ($) ($) ($) (#) ($)
- -------------------------------------------------------------------------------------------------------
Richard H. Dionne, 1996 244,519 155,000 126,563(5) 50,000 1,075(6)
President & Chief
Executive Officer 1995(1) 198,846(1) 75,000 -- 50,000 1,076(6)
Albert E. Fiacre, Jr., 1996 122,260 75,000 -- 27,000 587(6)
Senior Vice President &
Chief Financial Officer 1995(2) 88,846(2) 35,000 -- 15,000 493(6)
Timothy R. Stanton, 1996 122,260 60,000 -- 27,000 587(6)
Senior Vice President -
Retail, Bank Operations 1995(3) 80,385(3) 35,000 -- 15,000 431(6)
and Administration,
Chief Operating Officer
Frank P. LaMonaca, 1996 122,260 60,000 -- 27,000 587(6)
Senior Vice President -
Senior Loan and 1995(4) 44,423(4) 25,000 -- 15,000 246(6)
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> No reportable perquisites nor other personal benefits were paid to any
of the Named Executive Officers except for Mr. Dionne. The amount
reported for Mr. Dionne includes a relocation allowance in 1996 of
$120,524 and $6,039 for personal use of a Company provided vehicle.
<F6> Premiums paid by the Company for term life insurance for Named
Executive Officer.
Options Granted in 1996. The following table shows the number and
value of options granted to Messrs. Dionne, Fiacre, Stanton and LaMonaca in
1996.
OPTION GRANTS IN 1996
Potential Realizable Value
at Assumed Annual
Rates of Stock Price
Individual Grants Appreciation For Option Term
- -------------------------------------------------------------------------- ----------------------------
Number of % of Total
Securities Options
Underlying Granted to Exercise or
Options Employees Base Price Expiration
Name Granted in 1996 ($/Share) Date 5%($) 10%($)
- -------------------------------------------------------------------------------------------------
Richard H. Dionne 25,000(1) 11.68% 13.500 1/1/06 212,252 537,888
12,500(2) 5.84% 15.625 7/2/06 122,831 311,278
12,500(3) 5.84% 16.750 12/18/06 131,675 333,690
------------------ -------------------
Total 50,000 23.36% -- 466,758 1,182,856
Albert E. Fiacre, Jr. 13,500(4) 6.30% 13.500 1/1/06 114,616 290,460
6,750(5) 3.16% 15.625 7/2/06 66,329 168,090
6,750(6) 3.16% 16.750 12/18/06 71,104 180,193
------------------ -------------------
Total 27,000 12.62% -- 252,049 638,743
Timothy R. Stanton 13,500(4) 6.30% 13.500 1/1/06 114,616 290,460
6,750(5) 3.16% 15.625 7/2/06 66,329 168,090
6,750(6) 3.16% 16.750 12/18/06 71,104 180,193
------------------ -------------------
Total 27,000 12.62% -- 252,049 638,743
Frank P. LaMonaca 13,500(4) 6.30% 13.500 1/1/06 114,616 290,460
6,750(5) 3.16% 15.625 7/2/06 66,329 168,090
6,750(6) 3.16% 16.750 12/18/06 71,104 180,193
------------------ -------------------
Total 27,000 12.62% -- 252,049 638,743
- --------------------
<F1> The options vest as to 12,500 shares on 1/1/97.
<F2> The options vest as to 6,250 shares on 7/2/96 and, as to the remaining
6,250 shares, on 1/2/97.
<F3> The options vest as to 6,250 shares on 12/18/96 and, as to the
remaining 6,250 shares, on 6/18/97.
<F4> The options vest as to 6,750 shares on 1/1/97 and, as to the remaining
6,750 shares, on 1/1/98.
<F5> The options vest as to 3,375 shares on 1/2/97 and, as to the remaining
3,375 shares, on 7/2/97.
<F6> The options vest as to 3,375 shares on 6/18/97 and, as to the remaining
3,375 shares, on 12/18/97.
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, 1996 to acquire shares of the Common Stock of the
Company. No options were exercised by Messrs. Dionne, Fiacre, Stanton and
LaMonaca in 1996.
AGGREGATE OPTIONS EXERCISABLE IN 1996
AND 12/31/96 OPTION VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at 12/31/96(#) at 12/31/96(1)
--------------------------- ---------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---------------------------------------------------------------------------------
Richard H. Dionne 62,500 37,500 $407,031 $107,031
Albert E. Fiacre, Jr. 7,500 34,500 $ 54,844 $119,813
Timothy R. Stanton 7,500 34,500 $ 60,000 $124,969
Frank P. LaMonaca 7,500 34,500 $ 46,875 $111,844
- --------------------
<F1> Market value of underlying securities at 12/31/96, 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-In-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. Mr. Dionne relocated to Connecticut in May of 1996.
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 1996.
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.
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.
CEO Compensation. In 1996, 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 at
$245,000 per year. Based upon its assessment of Mr. Dionne's and the
Company's performance in 1996, measured against the factors described above
in this report, the Committee recommended, and the Board subsequently
approved, a 1996 bonus for Mr. Dionne of $155,000.
Under Mr. Dionne's leadership in 1996, the Company reported net income
of $12.5 million, an increase of 106% over 1995. The increase in earnings
resulted directly from expense controls and other actions recommended and
implemented by senior management. In 1996, 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
18.8%. Shareholder equity, regulatory capital, total assets and total
deposits all increased. The Company's ROA increased to 1.82% from 0.95% in
1995 and the Company's ROE rose to 22.19% from 12.82% in 1995.
The Committee also established the 1997 base salary for Mr. Dionne at
$253,600. During 1996, the Committee approved, and the Board subsequently
ratified, a non-qualified stock option grant of 25,000 shares effective
January 1, 1996 with an exercise price of $13.50 per share. All options of
this grant have vested as of the Record Date. The Committee approved, and
the Board subsequently ratified a non-qualified stock option grant of 12,500
shares in July of 1996 with an exercise price of $15.63. All options of
this grant have vested as of the Record Date. The Committee also approved,
and the Board subsequently ratified, a non-qualified stock option grant of
12,500 shares in December of 1996 with an exercise price of $16.75 with
6,250 options vesting on December 18, 1996 and the remaining 6,250 options
vesting on June 18, 1997. 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 1996, the compensation of the Company's other senior executive
officers, Messrs. Fiacre, Stanton and LaMonaca, consisted of base salary,
incentive bonus, and performance stock option awards. Each of Messrs.
Fiacre, Stanton and LaMonaca had an annual base salary of $122,500 in 1996.
During 1995, the Committee approved, and the Board subsequently ratified, a
non-qualified stock option grant to Messrs. Fiacre, Stanton and LaMonaca to
purchase 13,500 shares each effective January 1, 1996 with an exercise price
of $13.50 per share. This grant has vested as to 6,750 shares as of the
Record Date and vests as to 6,750 shares on January 1, 1998. In July of
1996, the Committee approved, and the Board subsequently ratified, non-
qualified stock option grants to Messrs. Fiacre, Stanton and LaMonaca to
purchase 6,750 shares each effective on July 2, 1996 with an exercise price
of $15.63 per share. The grant has vested as to 3,375 shares as of the
Record Date and vests as to 3,375 shares on July 2, 1997. The Committee
also approved, and the Board subsequently ratified, non-qualified stock
option grants to Messrs. Fiacre, Stanton, and LaMonaca to purchase 6,750
shares effective December 18, 1996 with an exercise price of $16.75 per
share. This grant vests as to 3,375 shares on June 18, 1997 and as to 3,375
shares on December 18, 1997.
The Committee also approved the granting of options to a number of
other officers of the Company at the same time. All options, including
those granted to the CEO and other senior executive officers, were granted
under either the 1986 or the 1996 Stock Option and Incentive Plan.
The Committee discussed the subject of setting incentive targets for
its senior executives in 1997, which, among other things, would be used as
measures for assessing 1997 performance and determining 1997 bonus awards.
The Committee determined that such incentive goals should be tied closely to
the strategic plan objectives for the Company for 1997 and the 1997 budget.
Personnel, Benefits, Nominating and Stock Option Committee Members
Fred A. Valenti, Chairperson
M. Joseph Canavan
Robert Nicoletti
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, 1997.
ANNUAL PENSION BENEFIT (a)
BASED ON YEARS OF CREDITED SERVICE
Final Average
Compensation(b) Years of Credited Service(f)
- --------------- -------------------------------------------------------------------------
10 15 20 25 30 35 40(c)
$ 25,000 $ 2,500 $ 3,750 $ 5,000 $ 6,250 $ 7,500 $ 8,750 $ 10,000
50,000 6,150 9,225 12,300 15,375 18,450 21,525 24,600
75,000 9,900 14,850 19,800 24,750 29,700 34,650 39,600
100,000 13,650 20,475 27,300 34,125 40,950 47,775 54,600
125,000 17,400 26,100 34,800 43,500 52,200 60,900 69,600
150,000 21,150 31,725 42,300 52,875 63,450 74,025 84,600
200,000 28,650 42,975 57,300 71,625 85,950 100,275 114,600
250,000(e) 36,150 54,225 72,300 90,375 108,450 126,525 144,600(d)
- --------------------
<Fa> Calculated according to the following formula in effect through
December 31, 1996: 1.0% of final average compensation up to Social
Security Covered Compensation (1996 basis) plus 1.5% of final
average compensation in excess of Social Security Covered
Compensation, all multiplied by years of credited service.
<Fb> Average salary for highest 5 consecutive years.
<Fc> Maximum years of credited service is 40.
<Fd> Maximum benefit payable to a retiree age 65 in 1997 is $150,000.
<Fe> Maximum Allowable Compensation used to determine Benefits is $150,000
in 1996 and $160,000 in 1997.
<Ff> As of December 31, 1996, the individuals listed in The Summary
Compensation Table had the following years of credited service: Mr.
Dionne, 2.0 years; Mr. Fiacre, 2.0 years; Mr. Stanton, 2.0 years;
Mr. LaMonaca, 1.4 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, 1996. 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, 1997 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 1996, 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 1996 all filing requirements applicable to its officers,
directors, and greater than ten percent beneficial owners were properly and
promptly satisfied.
PERFORMANCE GRAPH
Set forth on the following page, 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 U.S.
Market Value Index, the NASDAQ Bank Index and the reported total return of
companies on the KBW New England Savings Bank Index. This year the NASDAQ
Bank Index was added to the graph to provide another relevant peer group
with which to compare the Company's performance. The NASDAQ Bank Index
represents the total return of all Banks traded on the NASDAQ exchange.
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, 1992 in the
Company's Common Stock, the NASDAQ Market Index and the KBW New England
Savings Bank Index.
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
---------------------------------------------------------------
Dime Financial Corp. 100.00 204.17 252.08 291.67 450.00 586.06
KBW Bank Index 100.00 175.64 234.48 236.05 368.43 508.88
NASDAQ Bank Index 100.00 145.55 165.99 165.39 246.32 325.61
NASDAQ U.S. Index 100.00 116.38 133.60 130.59 184.68 227.17
<F*> Total return assumes reinvestment of all dividends.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES PRESENT, IN PERSON OR BY
PROXY, AND VOTING 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
RATIFICATION OF THE APPOINTMENT OF
KPMG PEAT MARWICK LLP
AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR
ENDING DECEMBER 31, 1997
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, 1997, 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 1998 annual meeting of shareholders of the Company must be received by
the Company not later than November 7, 1997 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 12, 1997
A COPY OF THE COMPANY'S 1996 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 1996, 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.
DETACH HERE
PROXY
DIME FINANCIAL CORPORATION
1997 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of DIME FINANCIAL CORPORATION, a
Connecticut corporation, hereby appoints Gary O. Olson and William J.
Farrell 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 Yankee Silversmith Inn, Wallingford, Connecticut, at 10:00
a.m. on April 23, 1997 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 and 2.
PLEASE MARK, SIGN AND DATE ON THE REVERSE SIDE
DETACH HERE
[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 RATIFICATION OF THE APPOINTMENT OF KPMG PEAT
MARWICK LLP FOR THE FISCAL YEAR ENDING DECEMBER 31, 1997 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: Richard H. Dionne, Robert Nicoletti, Ph.D.
Richard D. Stapleton, Fred A. Valenti
FOR WITHHELD
[ ] [ ]
[ ]_________________________________________________
For all nominees except as noted on the line above
2. To ratify the appointment of KPMG Peat Marwick FOR AGAINST ABSTAIN
LLP as independent auditors for the fiscal year [ ] [ ] [ ]
ending December 31, 1997.
3. With discretionary authority upon such other matters as may properly come
before the Meeting.
MARK HERE FOR ADDRESS CHANGE [ ] MARK HERE IF YOU PLAN TO [ ]
AND NOTE AT LEFT ATTEND 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:______