MID-COAST BANCORP, INC.
1768 Atlantic Highway, Box 589
Waldoboro, Maine 04572
Telephone (207) 832-7521
Notice of Annual Meeting of Shareholders to be held July 16, 1997
NOTICE IS HEREBY GIVEN to the Shareholders of Mid-Coast Bancorp, Inc.
("Bancorp" or the "Holding Company") that the Annual Meeting of such
Shareholders will be held at 3:00 p.m. on the 16th day of July, 1997 at the
Samoset Resort, Rockport, Maine, for the following purposes:
1. To vote upon the election of three directors for three-year terms each;
2. To consider and vote upon the Restricted Stock Plan (a copy of the
Restricted Stock Plan is attached as Appendix A).
3. To ratify the appointment of Baker Newman & Noyes as Independent
Auditors to Bancorp for the fiscal year 1998; and
4. To transact such other business as may properly come before the meeting
or any adjournment(s) thereof.
The date fixed by the Board of Directors as the record date for
determining shareholders entitled to notice of and to vote at the Annual
Meeting is the close of business on June 2, 1997.
By Order of the Board of Directors
/s/ WESLEY E. RICHARDSON
WESLEY E. RICHARDSON
President and Chief Executive Officer
June 6, 1997
Waldoboro, Maine
THE BOARD OF DIRECTORS URGES YOU TO SIGN, DATE AND RETURN YOUR PROXY CARD AS
SOON AS POSSIBLE, EVEN IF YOU CURRENTLY PLAN TO ATTEND THE ANNUAL MEETING.
YOU MAY REVOKE YOUR PROXY BY WRITTEN INSTRUMENT AT ANY TIME PRIOR TO THE
VOTE AT THE ANNUAL MEETING.
MID-COAST BANCORP, INC.
1768 Atlantic Highway, Box 589
Waldoboro, Maine 04572
Telephone: (207) 832-7521
PROXY STATEMENT
GENERAL STATEMENT
This Proxy Statement has been prepared in connection with the
solicitation of proxies by the Board of Directors of the Holding Company for
use at the Annual Meeting of Shareholders to be held July 16, 1997, and at
any adjournment(s) or postponements thereof (the "Meeting"). The Meeting
will be held at 3:00 p.m. at the Samoset Resort, Rockport, Maine. The
approximate date of mailing of this Proxy Statement is June 6, 1997.
RECORD DATE; VOTE REQUIRED FOR APPROVAL; SHAREHOLDER PROPOSAL
All persons who were shareholders of Bancorp at the close of business
on June 2, 1997 (the "Record Date") will be entitled to cast votes at the
Meeting. Voting may be by proxy or in person. As of the Record Date,
Bancorp had 231,494 shares of common stock, $1.00 par value, having one vote
each, outstanding. Bancorp has no other class of equity securities
outstanding.
Holders of one-third of the outstanding shares of common stock
entitled to vote, represented in person or by proxy, will constitute a
quorum for purposes of transacting business at the Meeting. All matters to
be voted on must be approved by the holders of a majority of the votes cast
in person or by proxy at the meeting. Abstentions, votes withheld from
nominees for directors and broker non-votes will be counted for purposes of
determining whether a quorum is present at the Meeting for purposes of
transacting business. With respect to matters to be voted on at the
Meeting, in determining whether the requisite number of holders have
approved any such matter, abstentions, as well as votes for and against the
matter, but not broker non-votes, will be included in the denominator or
base against which the number of favorable votes will be measured.
Each proxy solicited hereby, if properly executed, duly returned to
management and not revoked prior to the Meeting, will be voted at the
Meeting in accordance with the shareholder's instructions indicated thereon
or, in the absence of such direction, as determined by a majority of the
Board of Directors. Each shareholder shall have one vote for each share of
stock owned of record as of the Record Date.
A shareholder giving a proxy generally has the power to revoke the
proxy at any time before it is exercised by delivering to the Secretary of
the Holding Company (Dianne Y. Lawrence, Mid-Coast Bancorp, Inc., 1768
Atlantic Highway, Box 589, Waldoboro, Maine 04572) written instructions
revoking it. A duly executed proxy bearing a later date will be sufficient
to revoke an earlier proxy. A proxy executed by a shareholder who attends
the Meeting will be revoked only if the shareholder delivers written
instructions to that effect to the Secretary prior to the beginning of the
voting.
In addition to the solicitation of proxies through the mail, proxies
may be solicited by officers, directors and regular employees of the Holding
Company personally, by telephone or by further correspondence. The cost of
soliciting proxies from shareholders will be borne by the Holding Company.
A shareholder who wishes to present a proposal for action at the next
Annual Meeting of Shareholders of the Holding Company must submit a written
proposal to the Secretary of the Holding Company at its office, 1768
Atlantic Highway, Box 589, Waldoboro, Maine 04572 on or before February 6,
1998. If such proposal is in compliance with all of the requirements of
Rule 14a-8 of the Securities Exchange Act of 1934 (the "Exchange Act"), it
will be included in the proxy statement and set forth on the form of proxy
issued for the next Annual Meeting of Shareholders. It is urged that any
such proposals be sent by certified mail, return receipt requested.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
To the knowledge of management of Bancorp, the following shareholders
beneficially owned, directly or indirectly, more than 5% of Bancorp's common
stock as of May 16, 1997.
Amount and Nature
Name and Address of Beneficial Owner of Beneficial Ownership of Class
- ------------------------------------ ----------------------- --------
The Baupost Group, Inc. 13,586-Partnership 5.64%
P. O. Box 1288
Cambridge, MA 02238
The following table sets forth the amount and percentage of Bancorp's
common stock beneficially owned, directly or indirectly, by directors and
executive officers of the Holding Company individually and by directors and
executive officers of the Holding Company as a group, as of May 16, 1997.
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME OWNERSHIP(1) OF CLASS
---- ------------ --------
Robert E. Carter, Jr. 1,325 (2) .57
Samuel Cohen 8,701 (3) 3.74
Sharon E. Crowe 1,748 .76
Lincoln Davis 9,679 (4) 4.17
Ronald E. Dolloff 2,722 (5) 1.17
Lincoln O. Orff 8,003 (6) 3.45
Maynard A. Prock 5,244 (7) 2.27
Wesley E. Richardson 9,930 (8) 4.28
Robert W. Spear 5,528 (9) 2.38
Waite Weston 3,495(10) 1.51
Total owned by directors
and executive officers as
a group (10 persons) 56,375 24.35
<FN>
- --------------------
<F1> All shares are held individually unless otherwise indicated.
<F2> Includes 326 shares held individually by spouse, for which Mr. Carter
disclaims beneficial ownership, 263 shares held by his son, over which
Mr. Carter exercises voting and investment control, 168 shares held by
another son, over which Mr. Carter exercises voting and investment
control, and 179 stock options which are exercisable within 60 days.
<F3> Includes 7,658 shares held jointly with spouse and 1,043 stock options
which are exercisable within 60 days.
<F4> Includes 450 options which are exercisable in 60 days.
<F5> Includes 1,974 shares held jointly with spouse and 748 stock options
which are exercisable within 60 days.
<F6> Includes 7,308 shares held jointly with spouse and 695 stock options
which are exercisable within 60 days.
<F7> Includes 3,444 shares held jointly with spouse.
<F8> Includes 2,652 shares held jointly with spouse, 1,204 shares held
individually by spouse, for which Mr. Richardson disclaims beneficial
ownership, and 395 stock options which are exercisable within 60 days.
<F9> Includes 2,065 shares held jointly with spouse, 256 shares held
individually by spouse and 833 stock options which are exercisable
within 60 days.
<F10> Includes 2,678 shares held jointly with spouse and 450 stock options
which are exercisable within 60 days.
</FN>
PROPOSAL 1 - ELECTION OF DIRECTORS
The following table shows the name, age, and position during the past
five years of the three nominees for election as directors and the length of
time each has served as a director. The term of each director will be three
years.
Unless otherwise specified on the proxies received by the Holding
Company, it is intended that proxies received in response to this
solicitation will be voted in favor of the election of the persons named in
the following table to be directors of the Holding Company for three-year
terms, and until their successors are elected and qualified. There are no
arrangements or understandings between any nominee or director and any other
person pursuant to which any such person was or is selected as a director or
nominee.
Nominees for Three-Year Terms Expiring 2000
Director
Age Since Position
--- -------- --------
Sharon E. Crowe 42 1994 Director
Robert W. Spear 54 1976 Director
Waite W. Weston 56 1967 Director
SHARON E. CROWE, since 1988, has served as the Director of Safety for Crowe
Rope Company and is currently employed in the field of public relations and
marketing by Sebasticook Valley Hospital. In addition, she recently
founded a consulting firm specializing in safety and employee relations
issues. Ms. Crowe is a member and recent past president of Rockland Rotary
Club and is a Rotary International Paul Harris Fellow. She is also an
alumnus of the Leadership Maine Program.
ROBERT W. SPEAR, the Vice Chairman of the Board, owns and operates Spear
Farm, Inc., a 450 acre dairy and crop operation. Mr. Spear is Chairman of
the Board of Selectmen for the Town of Nobleboro, Maine, and is State
Representative for District 79 in the Maine House of Representatives.
WAITE W. WESTON, the Chairman of the Board, owns and operates Weston's
Hardware, a family business that has been in existence since 1921.
While management has no reason to believe that any of the nominees for the
office of director will, prior to the date of the meeting, refuse or become
unable to accept the nomination, if any such nominee should refuse or become
unable to accept, it is the intention of the persons named in the proxy to
vote for such other person or persons for office of director as management
may recommend.
DIRECTORS WHO WILL CONTINUE IN OFFICE AFTER THE MEETING
Director Term
Name Since * Expires Age
---- -------- ------- ---
Samuel Cohen 1990 1999 57
Lincoln Davis, III 1977 1998 51
Ronald E. Dolloff 1988 1999 61
Lincoln O. Orff 1990 1999 66
Maynard A. Prock 1992 1998 56
Wesley E. Richardson 1989 1998 54
<FN>
- --------------------
<F1> * Includes service as director of the Bank prior to the formation of the
Holding Company.
</FN>
SAMUEL COHEN is an attorney in Waldoboro. He is a past member of the
Waldoboro Planning Board and the M.S.A.D. #40 School Board. He is currently
a member of the American Legion, the Masons, the Lincoln County Bar
Association and the Maine Trial Lawyers Association. Mr. Cohen is also a
member of the Maine and Massachusetts Bars.
LINCOLN DAVIS, III owns and operates Stetson & Pinkham Mercury outboard boat
dealership in Waldoboro.
RONALD E. DOLLOFF retired as the principal of Medomak Valley High School in
1994. Mr. Dolloff has been employed in education since 1956 and is a
retired member of the Maine and National Secondary Principals Associations.
Mr. Dolloff is a former selectman, assessor and acting Town Manager of
Waldoboro and currently serves as treasurer, organist and minister of the
Waldoboro United Methodist Church.
LINCOLN O. ORFF is a real estate broker in Jefferson, Maine. He is a Past
Master of the Riverside Lodge, Past Patron of the Eastern Star and the
former owner of the Tilton Agency, an insurance agency located in Jefferson,
Maine. He served 34 years as First Selectman of Jefferson and he also
serves as the secretary of The Windsor Agricultural Fair.
MAYNARD A. PROCK owns and operates Prock Marine, a marine construction firm.
Mr. Prock has operated the business since 1962 with his three brothers.
WESLEY E. RICHARDSON has been President, Chief Executive Officer and
Treasurer of the Bank since 1985. He is President of Tanglewood, a 4H camp,
a trustee of Northeast Healthcare and a member of the Rockland Rotary. Mr.
Richardson is also Director of Warren Cable Co.
The Board of Directors and Its Committees
As required by Section 14 of Article II of the Holding Company's
bylaws, the Board of Directors shall act as a nominating committee for
selecting nominees for election as directors. Except in the case of a
management nominee substituted as a result of the death or other incapacity
of a management nominee, the nominating committee shall deliver written
nominations to the Secretary at least 20 days prior to the date of the
Meeting. Upon delivery, such nominations shall be posted in a conspicuous
place in the offices of the Holding Company. No nominations for directors
(except those made by the nominating committee) shall be voted upon at the
Meeting unless shareholders submit in writing and deliver such nominations
to the principal executive offices of the Holding Company not less than 30
nor more than 90 days prior to the date of the Meeting. In the event that
less than 40 days prior notice or public disclosure of the date of the
Meeting is given to shareholders, written nominations by shareholders must
be delivered to the principal executive offices no later than the close of
business on the tenth day following the day on which notice of the annual
meting was given. Upon delivery, such nominations shall be posted in a
conspicuous place in the offices of the Holding Company. Ballots bearing
the names of all persons nominated by the nominating committee and by
shareholders shall be provided for use at the Meeting. However, if the
nominating committee shall fail or refuse to act at least 20 days prior to
the Meeting, nominations for directors may be made at the Meeting by any
shareholder entitled to vote and shall be voted upon.
During the Holding Company's fiscal year ended March 31, 1997, the
Board of Directors held 15 regular meetings. The directors of the Holding
Company do not receive any fees from the Holding Company for attendance at
these meetings.
The Chairman and Vice Chairman of the Board of Directors of the Bank
receive annual retainers of $2,000 and $1,000, respectively. Directors of
the Bank receive $250 for each board meeting attended, and $50 for each
committee meeting attended. Committee appointments are made yearly in
August of the given fiscal year. The Bank's Board of Directors met 15 times
and during the fiscal year ended March 31, 1997, each director attended at
least 75% of the aggregate number of meetings of the Board of Directors and
all committees of which such director was a member.
The Board of Directors has a standing Security Committee which is
responsible for assessing the adequacy of the value of real estate pledged
as collateral for mortgage loans. The Security Committee consists of
Messrs. Spear, Orff, and Dolloff . During the fiscal year, the Security
Committee met 50 times. The Bank also has an Executive Committee which
consists of Messrs. Spear, Weston, Dolloff, Cohen and Richardson. The
Executive Committee, when the Board of Directors is not in session, has and
may exercise all of the authority of the Board of Directors except that the
Executive Committee shall not have the authority of the Board of Directors
with reference to: the declaration of dividends; the amendment of the
charter or bylaws of the Bank; recommending to the shareholders a plan of
merger, consolidation, or conversion; the sale, lease or other disposition
of all or substantially all of the property and assets of the Bank otherwise
than in the usual and regular course of its business; a voluntary
dissolution of the Bank; a revocation of any of the foregoing; or the
approval of a transaction in which any member of the Executive Committee,
directly or indirectly, has any material beneficial interest. During the
fiscal year, the Executive Committee met 12 times.
The full Board of Directors functions as the Holding Company's audit
committee. The audit committee ensures that internal controls are adequate
and that financial disclosures made by management portray the Holding
Company's and the Bank's financial condition and results of operations. The
committee also maintains contact with, and nominates the independent
auditor.
Finally, the Bank has a Compensation Committee which is responsible
for establishing guidelines for management and employee compensation. The
Compensation Committee met ten times during the fiscal year ended March 31,
1997. The Compensation Committee consists of Ms. Crowe and Messrs. Prock,
Orff and Richardson. Mr. Richardson abstains from voting on all matters
relating to his compensation.
Executive Officers Who Are Not Directors
ROBERT E. CARTER, JR., 46, has been Vice President of the Bank since 1988
and Vice President of the Holding Company since its incorporation. Mr.
Carter is a former director of the Waldo Theatre and serves on community
scholarship committees.
Remuneration
During the fiscal year ended March 31, 1997, the Holding Company did
not pay any compensation to its officers and directors.
The following table provides certain summary information concerning
compensation paid or accrued by the Bank to or on behalf of the Holding
Company's President, Treasurer and Chief Executive Officer for the last
three fiscal years ended March 31, 1997.
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------------------ ------------------------------------------------------
AWARDS PAYOUTS
----------------------- ----------
Securities
Other Restricted Underlying
Name and Principal Annual Stock Options/ LTIP All Other
Position Year Salary Bonus Compensation(1) Award(s) SARs Payouts(2) Compensation(3)
- --------------------- ---- ------- ------- --------------- ---------- ---------- ---------- ---------------
Wesley E. Richardson 1997 $82,067 0 $3,600 N/A N/A N/A $2,637
President, Treasurer 1996 $82,067 $ 8,730 $3,600 N/A N/A N/A $1,584
and C.E.O. 1995 $77,422 $12,600 $3,600 N/A N/A N/A $1,284
<FN>
- --------------------
<F1> Includes an annual mileage allowance for Mr. Richardson.
<F2> Neither the Holding Company nor the Bank has a Long-term Incentive
Plan.
<F3> Includes amounts paid on behalf of Mr. Richardson for group life
insurance and medical coverage. In addition, the Bank makes an annual
contribution to its benefit plan on behalf of Mr. Richardson and all
other eligible employees. The plan administrator, Financial
Institutions Retirement Fund, is unable to determine the contribution
made by the Bank attributable to Mr. Richardson or any other employee
individually. See discussion under "Pension Plan."
</FN>
Compliance with Section 16(a) of the Exchange Act
Section 16 of the Exchange Act requires the Holding Company's
executive officers and directors, and any person owning more than ten
percent (10%) of a class of the Holding Company's stock, to file certain
reports of ownership and changes in ownership with the Securities and
Exchange Commission ("SEC"). Based solely upon a review of the reports
filed with the SEC and furnished to the Holding Company, as well as
information furnished to the Holding Company by various reporting persons,
the Holding Company believes it has complied fully with Section 16. The
Holding Company is aware of no other transactions during the fiscal year
ended March 31, 1997 giving rise to filing obligations under Section 16(a)
as to which filings were not timely made.
Employment Agreement
On March 31, 1993, the Bank and the Holding Company entered into an
employment agreement with Wesley E. Richardson as President of the Bank and
the Holding Company. The employment agreement provides for an automatic
extension for an additional year on each anniversary date of the employment
agreement, commencing with the second anniversary date, unless contrary
notice is given by the Bank, the Holding Company or Mr. Richardson. The
base salary payable to Mr. Richardson under the employment agreement for
fiscal year 1997 was $82,067. The employment agreement also provides for
participation in discretionary bonuses, stock option, retirement and other
benefit plans.
In addition, the employment agreement provides for a severance payment
equal to 2.99 times the average annual compensation paid to Mr. Richardson
and includable in his gross income, for federal income tax purposes, during
the five calendar years preceding the taxable year in which the date of
termination occurs in the event of termination of employment by Mr.
Richardson for "good reason" following a change in control of the Holding
Company or the Bank. "Good reason" includes a breach by either the Holding
Company or the Bank of the agreement and, subsequent to a change in control
of the Holding Company or the Bank, the assignment of Mr. Richardson to
duties inconsistent with those performed immediately prior to the change in
control, a change in Mr. Richardson's reporting responsibilities, title of
office, a reduction in annual salary or failure of the Bank or the Holding
Company to continue for him any bonus, benefit or compensation plan. The
term "change in control" as defined in the agreement includes, but is not
limited to, the following: (1) the acquisition of beneficial ownership by
certain individuals of 25% or more of the combined voting power of the
Holding Company's or the Bank's then outstanding securities; or (2) during
any period of two consecutive years, a change in the majority of the Board
of Directors of the Holding Company or the Bank for any reason unless the
election of each new director was approved by at least two-thirds of the
directors then still in office who were directors at the beginning of the
period.
If Mr. Richardson terminates his employment for good reason following
a change in control, such severance payments will be paid in a lump sum on
or before the fifth day following the date of termination. However, if the
severance payment would be deemed to constitute an "excess parachute
payment" under Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"), the severance payment will be reduced to the extent necessary
to ensure that no portion of the severance payment is subject to the excise
tax imposed by Section 4999 of the Code.
If Mr. Richardson terminates his employment at any time for breach of
contract by the Bank or the Holding Company, which termination is not
preceded by a change of control, or the Bank or the Holding Company
terminates his employment for other than just cause, he will receive
periodic severance payments over a period not to exceed two years in the
amount not to exceed 2.99 times his current salary in effect at the date of
termination.
The agreement with Mr. Richardson, to the extent that it increases the
cost of any acquisition of control of the Holding Company, could be deemed
to have an anti-takeover effect. Assuming that Mr. Richardson continues to
earn his current base salary, his maximum severance payments upon a change
in control will approximate $233,202. As a result, the agreement may tend
to perpetuate existing management by discouraging takeover attempts which
may be deemed by certain shareholders to be in their best interest and which
might be at prices in excess of the then current market value of the common
stock.
Certain Transactions and Relationships with Management and Others
The Bank has extended real estate or consumer loans to certain of its
directors, officers and employees. These loans are made in the ordinary
course of business on substantially the same terms, including interest rates
and collateral, as those prevailing at the time of comparable transactions
with other persons and, in the judgement of management, do not involve more
than the normal risk of noncollectibility or other unfavorable features. In
this regard, extension of credit to executive officers and directors is in
full compliance with Section 22(h) of the Federal Reserve Act.
Pension Plan
The Bank maintains a qualified, noncontributory, defined benefit
pension plan (the "Pension Plan") for the benefit of its employees. The
Pension Plan is administered by the Financial Institutions Retirement Fund.
All employees participate in the Pension Plan upon the attainment of age 21
and the completion of one year of service. Retirement benefits are fully
vested after five years of service or age 65. There are no deductions for
Social Security or other offset amounts under the Pension Plan.
Beginning July 1, 1991, the Pension Plan changed to an integrated plan
with Social Security. The current plan uses the year of birth of a
participant employee as an additional factor in calculating the retirement
benefit, along with the highest five consecutive years' average salary, and
the number of years of benefit service.
The Pension Plan provides an early retirement allowance for
participants who commence benefits prior to age 65 after becoming partially
or fully vested. The vested accrued benefit otherwise payable at age 65 is
reduced by applying an early retirement factor based on the participants age
and vesting service when payments begin. Provisions in the Pension Plan
allows for benefits to be delayed after age 65.
The Pension Plan is qualified under Section 401(a) of the Code and is
being administered in accordance with all applicable legal requirements.
The Bank makes contributions in an amount sufficient to fund the
Pension Plan's normal cost of pension benefits and the one-year term cost of
death and disability benefits and to amortize unfunded accrued liabilities
to the extent required by law.
The following table illustrates annual pension benefits for a
participant retiring in 1997 at age 65, for various levels of compensation
and years of service.
ANNUAL PENSION BENEFITS BASED ON YEAR OF SERVICE
Average
Compensation 15 Years 20 Years 30 Years 40 Years
------------ -------- -------- -------- --------
$ 20,000 $ 3,000 $ 4,000 $ 6,000 $ 8,000
40,000 6,814 9,086 13,627 18,170
60,000 11,314 15,086 22,627 30,170
80,000 15,814 21,086 31,627 42,170
100,000 20,314 27,086 40,627 54,170
Estimated annual retirement benefits under the Bank's pension plan at
the normal retirement date computed upon the basis of present salary level
would be $23,843 for Mr. Richardson. Mr. Richardson presently has 13 years
of service for purposes of the Pension Plan.
401(k) Plan
On April 21, 1994, the Bank adopted a 401(k) plan for the benefit of
the Bank's employees. The Plan is a tax-exempt, trusteed savings plan
sponsored by the Financial Institutions Thrift Plan. Generally, an employee
is eligible to become a Participant on the first day of the month after she
completes one year of employment and becomes 21 years of age. Participants
may elect to make personal contributions from 1% to 15% of their eligible
compensation to the Plan. Beginning in July 1996, the Bank approved a
matching contribution to Participants in the 401(k) Plan. The Bank matches
50% of the first 6% invested by the Participant employee.
Stock Option Plan
The Holding Company has in effect an Option Plan, under which an
amount equal to 10% of the common stock of the Holding Company is reserved
from the authorized but unissued common stock of the Holding Company for
future issuance upon exercise of stock options granted to certain key
employees and to directors of the Holding Company and the Bank from time to
time. The purpose of the Option Plan is to encourage the retention of such
key employees and directors by facilitating their purchase of a stock
interest in the Holding Company. The Option Plan is intended to provide for
the granting of "incentive stock options" under Section 422A of the Code to
employees and non-incentive stock options to directors who are not employees
of the Holding Company or the Bank.
The Option Plan is administered by the Option Committee of the Holding
Company's Board of Directors. The Committee selects the employees from the
Bank and the Holding Company to whom options are to be granted and the
number of shares to be granted.
Employees selected by the Committee receive, at no cost to them,
options under the Option Plan. The option exercise price will be equal to
the fair market value of the shares on the date of the grant, and no option
will be exercisable after the expiration of 10 years from the date it is
granted. The fair market value of the shares will be determined by the
Options Committee as specified in the Option Plan. The optionee cannot
transfer or assign any option other than by will or in accordance with the
laws of decent and distribution, and the option may be exercised only by the
employee during the employee's lifetime. Section 422A of the Code limits
option grants by providing that during the term of the Option Plan, no grant
may be made to any employee owning more than 10% of the shares unless the
exercise price is at least 110% of the shares' fair market value and such
option is not exercisable more than five years following the option grant.
The aggregate fair market value of the stock for which any employee may be
granted options in any calendar year may generally not exceed $100,000 plus
any "unused limit carryover" ($50,000 per year for each prior year of
employment up to three years).
The Holding Company receives no monetary consideration for granting
incentive stock options. Upon the exercise of options, the Holding Company
receives payment from optionees in exchange for shares issued. Payment may
be made by cash, shares of common stock or a combination of both.
No federal income tax consequences will be incurred by the Holding
Company at the time incentive stock options are granted or exercised, unless
the optionee incurs liability for ordinary income tax treatment upon
exercise of the option, as discussed below, in which case the Holding
Company would be entitled to a deduction equal to the optionee's ordinary
income attributable to the options. Provided the employee holds the shares
received on exercise of the stock option for the longer of two years after
the option was granted or one year after it was exercised, the optionee will
realize capital gain (or loss) equal to the proceeds on disposition less the
option exercise price paid for shares. However, if the employee sells the
shares prior to the expiration of the holding period, the employee must
recognize compensation income (and the Holding Company may deduct
compensation expense) in the year of disposition equal to the difference
between the fair market value of the shares on the date of exercise and the
exercise price (not to exceed the gain determined without regard to these
rules). In this situation any appreciation between the exercise of the
options and the ultimate disposition will also be recognized as capital gain
upon disposition.
In addition to the tax consequences discussed above, the excess of the
option price over the fair market value of the optioned stock at the time of
the option exercise is required to be treated by an incentive optionee as an
item of tax preference for purposes of the alternative minimum tax.
The Holding Company has granted options to purchase an aggregate of
4,812 shares of common stock of the Holding Company to non-employee members
of the Board of Directors of the Holding Company. Options with respect to
395 shares have been granted to Mr. Richardson and options with respect to
4,756 shares have also been granted to other executive officers and
employees as a group. These options are exercisable at a price per share
ranging from $7.40 to $14.05.
The following table provides information with respect to the named
executive officers concerning the exercise of options during the last fiscal
year and unexercised options held as of the end of last year:
Value of
Number of Unexercised
Unexercised In-the-Money
Shares Options at Options at
Acquired FY-End (#) FY-End
on Exercisable/ Value Exercisable/
Name Exercise(#) Realized Unexercisable(1) Unexercisable
---- ----------- ------------ ---------------- -------------
Wesley E. Richardson N/A $ N/A 395 $3,276 (2)
<FN>
- --------------------
<F1> All of Mr. Richardson's stock options are immediately exercisable.
<F2> Based upon a market price of $ 19.50 per share at May 16, 1997, minus
the exercise price.
</FN>
PROPOSAL 2 - APPROVE THE ADOPTION OF THE RESTRICTED STOCK PLAN
The Company has adopted, subject to the approval by stockholders of
the Company, the Recognition and Retention Plan of Mid-Coast Bancorp (the
"RRP"). The RRP provides for restricted stock awards ("Awards") to certain
officers, employees and outside directors of the Company, the Bank or any
affiliate approved by the Board. The RRP is not subject to ERISA and is not
a tax-qualified plan under the Code. The principal provisions of the RRP
are summarized below. The full text of the RRP is set forth as Appendix A
to this Proxy Statement, to which reference is made, and the summary
provided below is qualified in its entirety by such reference.
Vote Required
Under the Company's Bylaws, the affirmative vote of a majority of the
shares present and entitled to vote at a meeting at which a quorum is
present is required for approval by stockholders. Shares as to which the
"ABSTAIN" box has been selected on the Proxy Card will be counted as present
and entitled to vote and, accordingly, will have the effect of a vote
against Proposal 2. Shares underlying broker non-votes will not be counted
as having been voted in person or by proxy and will not be counted as
present and entitled to vote, and will therefore have no effect on the vote
for any other purposes with respect to Proposal 2. If approved by
stockholders, the RRP will take effect, and Awards granted thereunder may be
effective, as of the date of the shareholder approval (the "RRP Effective
Date"). If shareholder approval is not obtained, the RRP will not be
implemented.
Purpose of the RRP
The purpose of the RRP is to promote the growth and profitability of
the Company, to provide certain key officers, employees and directors of the
Company and its affiliates with an incentive to achieve corporate
objectives, to attract and retain individuals of outstanding competence and
to provide such individuals with an equity interest in the Company. The
Board of Directors of the Company intends to establish a reserve of Awards
under the RRP for future use in attracting persons for employment at the
Company.
Description of the RRP
Administration. The members of the Compensation Committee who are
Disinterested Directors (the "RRP Committee") will administer the RRP and
will determine, within the limitations of the RRP, the officers and
employees to whom Awards will be granted, the number of shares subject to
each Award, the terms of such Awards (including provisions regarding
exercisability and acceleration of exercisability) and the procedures by
which the Awards shall be exercised. Awards to outside directors will be
determined by automatic formula grant and the RRP Committee has no
discretion over the material terms of such grants. Subject to certain
specific limitations and restrictions set forth in the RRP, the RRP
Committee has full and final authority to interpret the RRP, to prescribe,
amend and rescind rules and regulations, if any, relating to the RRP and to
make all determinations necessary or advisable for the administration of the
RRP. The costs of administering the RRP will be borne by the Company and
not charged to any grant of an Award nor to any participating director,
officer or employee.
Stock Subject to the RRP. The Company will establish a trust
("Trust") and will contribute, or cause to be contributed, to the Trust,
from time to time, such amounts of money or property as shall be determined
by the Board, in its discretion. No contributions by participants will be
permitted. A trustee will invest the assets of the Trust in Common Stock
and in such investments including savings accounts, time or other interest
bearing deposits in or other interest bearing obligations of the Company, in
such proportions as shall be determined by the RRP Committee. In no event
shall the assets of the Trust be used to purchase more than 9,207 shares of
Common Stock. The aggregate fair market value of the Common Stock to be
purchased for the RRP was $ 179,537, based on the closing sales price per
share of $ 19.50 on The Nasdaq Stock Market as of May 16, 1997. It is
currently anticipated that the Trust will purchase Common Stock on the open
market, but may also purchase from the Company or in private transactions.
Eligibility. Any employee of the Company, the Bank or any affiliate
approved by the Board who is selected by the RRP Committee is eligible to
participate in the RRP as an "Eligible Individual." As of the Record Date,
there were 7 Eligible Individuals. Members of the Board or of the Board of
Directors of the Bank or any affiliate approved by the Board who are not
employees or officers of the Company, the Bank or such affiliate are
eligible to participate as an "Eligible Director." As of the Record Date,
there were 8 Eligible Directors.
Awards to Outside Directors. On the RRP Effective Date, each Eligible
Director will receive an Award of 300 shares. On the first anniversary of
the grant, and on each anniversary thereafter, 20% of such shares will vest
until all 300 shares are fully vested.
Awards to Officers and Employees. After the RRP Effective Date, the
RRP Committee may, in its discretion, grant Awards of restricted stock to
Eligible Individuals, up to a maximum of 6,807 shares. The RRP Committee
will determine at the time of the grant the number of shares of Common Stock
subject to an Award and the vesting schedule applicable to the Award and
may, in its discretion, establish other terms and conditions applicable to
the Award. The RRP Committee intends that a portion of the shares held
under the RRP will be placed in reserve for future use in attracting future
employees.
Terms and Conditions of Awards. Stock subject to Awards is held in
trust pursuant to the RRP until vested. An individual to whom an Award is
granted is entitled to exercise voting rights and receive cash dividends
with respect to stock subject to Awards granted to him whether or not
vested. The RRP Committee will exercise voting rights with respect to
shares in the Trust that have not been allocated to reflect the voting
directions of shares granted under the RRP. Each individual to whom an
Award is granted is entitled to direct the manner of response to any tender
offer, exchange offer or other offer made to stockholders with respect to
stock subject to Awards granted to such person whether or not vested. If no
direction is given, the shares will not be tendered or exchanged. For
shares that are not allocated in connection with an Award, the RRP Committee
will direct the Trustee to respond to reflect the responses given with
respect to shares allocated in connection with Awards.
The shares covered by an Award will become vested in accordance with
the terms of the Award and as soon as practicable following such vesting,
the Trustee will transfer the shares to the recipient. The shares covered
by an Award will vest according to a vesting schedule established by the RRP
Committee; however, any shares covered by the Award will become 100% vested
as of the date of the recipient's death or disability or change in control.
If an individual covered by an Award terminates employment or ceases to be a
director for reasons other than death or disability, the individual forfeits
all rights to his unvested shares remaining in the RRP trust. Individuals
may designate a beneficiary to receive distributions on account of death.
Mergers and Reorganizations. The number of shares available under the
RRP and the Awards will be adjusted to reflect any merger, consolidation or
business reorganization in which the Company is the surviving entity and to
reflect any stock split, stock dividend or other event generally affecting
the number of shares. If a merger, consolidation or other business
reorganization occurs and the Company is not the surviving entity, the
Trustee will hold any money, stock, securities or other property received in
the trust fund, and adjusting any award by allocating such money, stock,
securities or other property to the Eligible Director or Eligible
Individual.
Termination or Amendment of the RRP
The Board may suspend or terminate the RRP in whole or in part at any
time by giving written notice of such suspension or termination to the RRP
Committee, but the RRP may not be terminated while there are outstanding
Awards that may thereafter become vested. Upon the termination of the RRP,
the Trustee shall make distributions from the Trust in such amounts and to
such persons as the RRP Committee may direct and shall return the remaining
assets of the Trust, if any, to the Company.
The Board may amend or revise the RRP in whole or in part at any time,
but if the amendment or revision (i) materially increases the benefits
accruing under the RRP, (ii) materially increases the number of Shares which
may be issued under the RRP or (iii) materially modifies the requirements as
to eligibility for Awards under the RRP, such amendment or revision will be
subject to approval by the shareholders of the Company. Subject to these
above provisions, the Board will also have broad authority to amend the RRP
to take into account changes in applicable securities and tax laws and
accounting rules, as well as other developments.
Federal Income Tax Consequences
The following discussion is intended only as a summary and does not
purport to be a comprehensive description of the federal tax laws,
regulations and policies affecting the Company and recipients of Awards that
may be granted under the RRP. Any descriptions of the provisions of any
law, regulation or policy contained herein are qualified in their entirety
by reference to the particular law, regulation or policy. Any change in
applicable law or regulation or in the policies of various taxing
authorities may have a material effect on the discussion contained herein.
The RRP does not constitute a qualified plan under Section 401(a) of the
Code.
The award of Common Stock under the RRP does not result in federal
income tax consequences to either the Company or the award recipient. Upon
the vesting of an award and the distribution of the vested shares, the award
recipient will generally be required to include in ordinary income, for the
taxable year in which the vesting date occur, an amount equal to the fair
market value of the shares on the vesting date, and the Company will
generally be allowed to claim a deduction, for compensation expense, in a
like amount. To the extent that dividends are paid with respect to unvested
shares held under the RRP and distributed to the award recipient, such
dividend amounts will likewise be includable in the ordinary income of the
recipient and allowable as a deduction, for compensation expense, to the
Company. Section 162(m) of the Code limits the Company's deductions of
compensation in excess of $1,000,000 per year for the chief executive
officer and the four other most highly paid executives named in its proxy
statement. No executive of the Company currently receives compensation
subject to this limitation. Compensation amounts resulting from the award
and vesting of shares will be subject to this deduction limitation, if such
amount when added to other includable compensation exceeds $1,000,000.
Dividends declared and paid with respect to vested shares, as well as any
gain or loss realized upon an award recipient's disposition of the shares,
will be treated as dividend income and capital gain or loss, respectively,
in the same manner as for other stockholders.
The foregoing statements are intended to summarize the general
principles of current federal income tax law applicable to Awards that may
be granted under the RRP. State and local tax consequences may also be
significant.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
APPROVAL OF THE RECOGNITION AND RETENTION PLAN OF MID-COAST BANCORP.
NEW PLAN BENEFITS
RECOGNITION AND RETENTION PLAN OF MID-COAST BANCORP
The following table discloses the benefits that will be received by
directors (and may be received by others) under the RRP if the stockholders
approve Proposal 2.
RRP(1)(2)
----------------
Name/Position # $ Value
------------- ----- -------
Wesley E. Richardson/Chief Executive Officer, 2,400 $46,800
President and Treasurer
All Executive Officers as a Group 3,800 $74,100
All Non-Executive Directors as a Group 2,400 $46,800
All Non-Executive Employees as a Group(3) 0 0
<FN>
- --------------------
<F1> As of the Record Date, no grants have been made under the RRP. It is
not determinable at this time what benefits, if any, each of the
persons or groups listed above will receive under such plan. The
numbers in the table reflect the RRP Committee's intentions of grants
to be made upon the RRP Effective Date. It is intended that all
Awards will vest proportionally over a period of five years. The
dollar value is based on a price per share of $ 19.50 (the closing
sale price for Common Stock as reported on the Nasdaq Stock Market on
May 16, 1997).
<F2> On the RRP Effective Date, each Eligible Outside Director, including
outside directors who are nominees, will receive an Award of 300
Shares. The dollar value is based on a price per Share of $ 19.50
(the closing sale price for Common Stock as reported on The Nasdaq
Stock Market on May 16, 1997). The actual value of the benefits under
this Plan will depend on the fair market value of a share on the RRP
Effective Date, which is indeterminable at this time.
<F3> As of the date of this Proxy Statement, no determination has been made
as to whether other employees will receive grants or, if so, the
amount of such grants.
</FN>
PROPOSAL 3 - RATIFICATION OF BAKER NEWMAN & NOYES AS INDEPENDENT AUDITORS
Article VII of the Holding Company's bylaws provides that the Holding
Company shall be subject to an annual audit as of the end of its fiscal year
by independent public accountants appointed by and responsible to the Board
of Directors. The Board of Directors has appointed the accounting firm of
Baker Newman & Noyes to perform such annual audit and recommends a vote FOR
the ratification of such appointment.
A representative of Baker Newman & Noyes will be present at the
Meeting. The representative will have an opportunity to make a statement,
if so desired, and will be available to answer appropriate questions.
Nearly all fees paid to Baker Newman & Noyes during the year ended
March 31, 1997 were for services performed in connection with examination of
the Holding Company's consolidated financial statements. Baker Newman &
Noyes also prepared the Holding Company's United States Corporation Income
Tax Return and Maine Corporate Income Tax Return. The Board of Directors
specifically authorized Baker Newman & Noyes to perform such functions.
Neither of the reports of the Company's independent auditors on its
financial statements for either of the past two years contained an adverse
opinion or a disclaimer of opinion, nor were such reports qualified or
modified as to uncertainty, audit scope or accounting principles.
ANNUAL REPORT AND FINANCIAL STATEMENTS
A copy of the Holding Company's Annual Report to Shareholders for the
year ended March 31, 1997 was mailed to shareholders in conjunction with the
mailing of the Proxy Statement. Additional copies of the Holding Company's
Annual Report to Shareholders may be obtained by written request to the Vice
President of the Holding Company at the address indicated below. Such
Annual Report is part of the proxy solicitation materials.
UPON RECEIPT OF A WRITTEN REQUEST OF ANY PERSON WHO, ON THE RECORD DATE, WAS
RECORDED OWNER OF THE HOLDING COMPANY'S COMMON STOCK OR WHO REPRESENTS IN
GOOD FAITH THAT HE OR SHE WAS ON SUCH DATE THE BENEFICIAL OWNER OF SUCH
STOCK ENTITLED TO VOTE AT THE ANNUAL MEETING OF SHAREHOLDERS, THE HOLDING
COMPANY WILL FURNISH TO SUCH PERSONS, WITHOUT CHARGE, A COPY OF ITS ANNUAL
REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED MARCH 31, 1997, AND THE
EXHIBITS THERETO REQUIRED TO BE FILED WITH THE SEC UNDER THE EXCHANGE ACT.
ANY SUCH REQUEST SHOULD BE MADE IN WRITING TO ROBERT E. CARTER, JR., MID-
COAST BANCORP, INC., 1768 ATLANTIC HIGHWAY, BOX 589, WALDOBORO, MAINE 04572.
THE FORM 10-KSB IS NOT PART OF THE PROXY SOLICITATION MATERIALS.
APPENDIX A
RECOGNITION AND RETENTION PLAN
OF
MID-COAST BANCORP, INC.
ARTICLE I
PURPOSE
Section 1.1 General Purpose of the Plan.
The purpose of the Plan is to promote the growth and profitability of
Mid-Coast Bancorp, Inc. and to provide eligible directors, certain key
officers and employees of Mid-Coast Bancorp, Inc. with an incentive to
achieve corporate objectives, to attract and retain directors, key officers
and employees of outstanding competence and to provide such officers and
employees with an equity interest in Mid-Coast Bancorp, Inc. The Company
intends for a portion of the shares reserved under this Plan to be reserved
to attract officers and directors.
ARTICLE II
DEFINITIONS
The following definitions shall apply for the purposes of this Plan,
unless a different meaning is plainly indicated by the context:
Section 2.1 Award means a grant of Shares to an Eligible Employee or
Eligible Director pursuant to section 5.1 or 5.2.
Section 2.2 Award Date means, with respect to a particular Award, the
date specified by the Committee in the notice of the Award issued to the
Eligible Director or Eligible Employee by the Committee, pursuant to section
5.1 or 5.2.
Section 2.3 Bank means Waldoboro Bank, F.S.B., a federally chartered
stock savings bank, and any successor thereto.
Section 2.4 Beneficiary means the Person designated by an Eligible
Director or Eligible Employee pursuant to section 6.2, to receive
distribution of any Shares available for distribution to such Eligible
Director or Eligible Employee, in the event such Eligible Director or
Eligible Employee dies prior to receiving distribution of such Shares.
Section 2.5 Board means the Board of Directors of Mid-Coast Bancorp,
Inc.
Section 2.6 Change of Control means any of the following events:
(a) approval by the stockholders of Mid-Coast Bancorp, Inc. of a
transaction that would result in the reorganization, merger or
consolidation of Mid-Coast Bancorp, Inc. with one or more other
persons, other than a transaction following which:
(i) at least 51% of the equity ownership interests of the
entity resulting from such transaction are beneficially owned
(within the meaning of Rule 13d-3 promulgated under the Exchange
Act) in substantially the same relative proportions by persons
who, immediately prior to such transaction, beneficially owned
(within the meaning of Rule 13d-3 promulgated under the Exchange
Act) at least 51% of the outstanding equity ownership interests
in Mid-Coast Bancorp, Inc.; and
(ii) at least 51% of the securities entitled to vote
generally in the election of directors of the entity resulting
from such transaction are beneficially owned (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) in
substantially the same relative proportions by persons who,
immediately prior to such transaction, beneficially owned
(within the meaning of Rule 13d-3 promulgated under the Exchange
Act) at least 51% of the securities entitled to vote generally
in the election of directors of Mid-Coast Bancorp, Inc.;
(b) the acquisition of all or substantially all of the assets of
Mid-Coast Bancorp, Inc. or beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the
outstanding securities of Mid-Coast Bancorp, Inc. entitled to vote
generally in the election of directors by any person or by any persons
acting in concert, or approval by the stockholders of Mid-Coast
Bancorp, Inc. of any transaction which would result in such an
acquisition;
(c) a complete liquidation or dissolution of Mid-Coast Bancorp,
Inc., or approval by the stockholders of Mid-Coast Bancorp, Inc. of a
plan for such liquidation or dissolution;
(d) the occurrence of any event if, immediately following such
event, at least 50% of the members of the Board of Directors of Mid-
Coast Bancorp, Inc. do not belong to any of the following groups:
(i) individuals who were members of the Board of Directors
of Mid-Coast Bancorp, Inc. on the Effective Date of this Plan;
or
(ii) individuals who first became members of the Board of
Directors of Mid-Coast Bancorp, Inc. after the Effective Date of
this Plan either:
(A) upon election to serve as a member of the Board
of Directors of Mid-Coast Bancorp, Inc. by affirmative
vote of three-quarters of the members of such Board, or of
a nominating committee thereof, in office at the time of
such first election; or
(B) upon election by the stockholders of Mid-Coast
Bancorp, Inc. to serve as a member of the Board of Mid-
Coast Bancorp, Inc., but only if nominated for election by
affirmative vote of three-quarters of the members of the
Board of Directors of Mid-Coast Bancorp, Inc., or of a
nominating committee thereof, in office at the time of
such first nomination;
provided, however, that such individual's election or nomination
did not result from an actual or threatened election contest
(within the meaning of Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or other actual or threatened
solicitation of proxies or consents (within the meaning of Rule
14a-11 of Regulation 14A promulgated under the Exchange Act)
other than by or on behalf of the Board of Mid-Coast Bancorp,
Inc.; or
(e) any event which would be described in section 2.6(a), (b),
(c) or (d) if the term "Bank" were substituted for the term "Mid-Coast
Bancorp, Inc." therein.
In no event, however, shall a Change of Control be deemed to have occurred
as a result of any acquisition of securities or assets of Mid-Coast Bancorp,
Inc., the Bank, or a subsidiary of either of them, by Mid-Coast Bancorp,
Inc., the Bank, or a subsidiary of either of them, or by any employee
benefit plan maintained by any of them. For purposes of this section 2.6,
the term "person" shall have the meaning assigned to it under sections
13(d)(3) or 14(d)(2) of the Exchange Act.
Section 2.7 Code means the Internal Revenue Code of 1986 (including
the corresponding provisions of any succeeding law).
Section 2.8 Committee means the Committee described in section 3.1.
Section 2.9 Company means Mid-Coast Bancorp, Inc., a corporation
organized and existing under the laws of the State of Delaware, and any
successor thereto, the Bank and any successor thereto and, with the prior
approval of the Board, and subject to such terms and conditions as may be
imposed by the Board, any other savings bank, savings and loan association,
bank, corporation, financial institution or other business organization or
institution.
Section 2.10 Disability means a condition of total incapacity, mental
or physical, for further performance of duty with the Company which the
Committee shall have determined, on the basis of competent medical evidence,
is likely to be permanent.
Section 2.11 Disinterested Board Member means a member of the Board
who (a) is not a current employee of the Company, (b) does not receive
remuneration from the Company or a subsidiary, either directly or
indirectly, in any capacity other than as a director and (c) does not
possess an interest in any other transaction, and is not engaged in a
business relationship for which disclosure would be required pursuant to
Items 404(a) or (b) of the proxy solicitation rules of the Securities and
Exchange Commission. The term Disinterested Board Member shall be
interpreted in such manner as shall be necessary to conform to the
requirements of section 162(m) of the Code and Rule 16b-3 promulgated under
the Exchange Act.
Section 2.12 Effective Date means the date the Plan is approved by the
stockholders.
Section 2.13 Eligible Director means a member of the board of
directors of Mid-Coast Bancorp, Inc. who is not also an employee of any
Company.
Section 2.14 Eligible Employee means any employee whom the Committee
may determine to be a key officer or employee of the Company and select to
receive an Award pursuant to the Plan.
Section 2.15 Exchange Act means the Security and Exchange Act of 1934,
as amended.
Section 2.16 Person means an individual, a corporation, a bank, a
savings bank, a savings and loan association, a financial institution, a
partnership, an association, a joint-stock company, a trust, an estate, an
unincorporated organization and any other business organization or
institution.
Section 2.17 Plan means the Recognition and Retention Plan of Mid-
Coast Bancorp, Inc., as amended from time to time.
Section 2.18 Share means a share of common stock of Mid-Coast Bancorp,
Inc., par value $1.00 per share.
Section 2.19 Trust means the legal relationship created by the Trust
Agreement pursuant to which the Trustee holds the Trust Fund in trust. The
Trust may be referred to as the "Restricted Stock Plan Trust of Mid-Coast
Bancorp, Inc."
Section 2.20 Trust Agreement means the agreement between Mid-Coast
Bancorp, Inc. and the Trustee therein named or its successor pursuant to
which the Trust Fund shall be held in trust.
Section 2.21 Trust Fund means the corpus (consisting of contributions
paid over to the Trustee, and investments thereof), and all earnings,
appreciations or additions thereof and thereto, held by the Trustee under
the Trust Agreement in accordance with the Plan, less any depreciation
thereof and any payments made therefrom pursuant to the Plan.
Section 2.22 Trustee means the Trustee of the Trust Fund from time to
time in office. The Trustee shall serve as Trustee until it is removed or
resigns from office and is replaced by a successor Trustee or Trustees
appointed by Mid-Coast Bancorp, Inc.
ARTICLE III
ADMINISTRATION
Section 3.1 Committee.
The Plan shall be administered by a Committee consisting of the
members of the Compensation Committee of Mid-Coast Bancorp, Inc. who are
Disinterested Board Members. If fewer than two members of the Compensation
Committee are Disinterested Board Members, then the Board shall appoint to
the Committee such additional Disinterested Board Members as shall be
necessary to provide for a Committee consisting of at least two
Disinterested Board Members.
Section 3.2 Committee Action.
The Committee shall hold such meetings, and may make such
administrative rules and regulations, as it may deem proper. A majority of
the members of the Committee shall constitute a quorum, and the action of a
majority of the members of the Committee present at a meeting at which a
quorum is present, as well as actions taken pursuant to the unanimous
written consent of all of the members of the Committee without holding a
meeting, shall be deemed to be actions of the Committee. All actions of the
Committee shall be final and conclusive and shall be binding upon the
Company and all other interested parties. Any Person dealing with the
Committee shall be fully protected in relying upon any written notice,
instruction, direction or other communication signed by the secretary of the
Committee and one member of the Committee, by two members of the Committee
or by a representative of the Committee authorized to sign the same in its
behalf.
Section 3.3 Committee Responsibilities.
Subject to the terms and conditions of the Plan and such limitations
as may be imposed by the Board, the Committee shall be responsible for the
overall management and administration of the Plan and shall have such
authority as shall be necessary or appropriate in order to carry out its
responsibilities, including, without limitation, the authority:
(a) to interpret and construe the Plan, and to determine all
questions that may arise under the Plan as to eligibility for Awards
under the Plan, the amount of Shares, if any, to be granted pursuant
to an Award, and the terms and conditions of such Award;
(b) to adopt rules and regulations and to prescribe forms for
the operation and administration of the Plan; and
(c) to take any other action not inconsistent with the
provisions of the Plan that it may deem necessary or appropriate.
Section 3.4 Maximum Shares Under the Plan.
The maximum number of Shares under the Plan shall be 9,207.
ARTICLE IV
THE TRUST FUND
Section 4.1 Contributions.
Mid-Coast Bancorp, Inc. shall contribute, or cause to be contributed,
to the Trust, from time to time, such amounts of money or property as shall
be determined by the Board, in its discretion. No contributions by Eligible
Employees or Eligible Directors shall be permitted.
Section 4.2 The Trust Fund.
The Trust Fund shall be held and invested under the Trust Agreement
with the Trustee. The provisions of the Trust Agreement shall include
provisions conferring powers on the Trustee as to investment, control and
disbursement of the Trust Fund, and such other provisions not inconsistent
with the Plan as may be prescribed by or under the authority of the Board.
No bond or security shall be required of any Trustee at any time in office.
Section 4.3 Investments.
The Trustee shall invest the Trust Fund in Shares and in such other
investments as may be permitted under the Trust Agreement, including savings
accounts, time or other interest bearing deposits in or other interest
bearing obligations of the Company, in such proportions as shall be
determined by the Committee; provided, however, that in no event shall the
Trust Fund be used to purchase more than 9,207 Shares. Notwithstanding the
immediately preceding sentence, the Trustee may temporarily invest the Trust
Fund in short-term obligations of, or guaranteed by, the U.S. Government or
an agency thereof, or the Trustee may retain the Trust Fund uninvested or
may sell assets of the Trust Fund to provide amounts required for purposes
of the Plan.
ARTICLE V
AWARDS
Section 5.1 To Eligible Directors.
On the Effective Date, each Person who is then an Eligible Director
shall be granted an Award of 300 Shares.
Section 5.2 To Eligible Employees.
Subject to section 5.8 and such limitations as the Board may from time
to time impose, the number of Shares as to which an Eligible Employee may be
granted an Award shall be determined by the Committee in its discretion;
provided however, that in no event shall the number of Shares allocated to
an Eligible Employee in an Award exceed the number of Shares then held in
the Trust and not allocated in connection with other Awards.
Section 5.3 Awards in General.
Subject to the limitations of section 5.8, the Committee may, in its
discretion, make an Award of Shares held in the Trust Fund to an Eligible
Employee. Any such Award shall be evidenced by a written notice issued by
the Committee to the Eligible Employee or Eligible Director, which notice
shall:
(a) specify the number of Shares covered by the Award;
(b) specify the Award Date;
(c) specify the dates on which such Shares shall become
available for distribution to the Eligible Employee or Eligible
Director, in accordance with sections 6.1 and 6.2; and
(d) contain such other terms and conditions not inconsistent
with the Plan as the Board may, in its discretion, prescribe.
Section 5.4 Share Allocations.
Upon the grant of an Award to an Eligible Employee or an Eligible
Director, the Committee shall notify the Trustee of the Award and of the
number of Shares subject to the Award. Thereafter, until such time as the
Shares subject to such Award become vested or are forfeited, the books and
records of the Trustee shall reflect that such number of Shares are being
held for the benefit of the Award recipient.
Section 5.5 Dividend Rights.
(a) Any cash dividends or distributions declared and paid with
respect to Shares in the Trust Fund that are, as of the record date
for such dividend, allocated to an Eligible Employee or Eligible
Director in connection with an Award shall be held in the Trust Fund
and distributed to such Eligible Employee or Eligible Director (with
any earnings attributable thereto) at the time paid. Any cash
dividends declared and paid with respect to Shares that are not, as of
the record date for such dividend, allocated in connection with any
Award shall, at the direction of the Committee, be held in the Trust
or used to pay the administrative expenses of the Plan, including any
compensation due to the Trustee.
(b) Any dividends or distributions declared and paid with
respect to Shares in property other than cash shall be held in the
Trust Fund. If, as of the record date for such dividend or
distribution, the Shares with respect to which it is paid are
allocated to an Eligible Employee or Eligible Director in connection
with an Award, the property so distributed shall be similarly
allocated such Eligible Employee or Eligible Director in connection
with such Award and shall be held for distribution or forfeiture in
accordance with the terms and conditions of the Award.
Section 5.6 Voting Rights.
(a) Each Eligible Employee or Eligible Director to whom an Award
has been made that is not fully vested shall have the right to direct
the manner in which all voting rights appurtenant to the Shares
related to such Award will be exercised while such Shares are held in
the Trust Fund. Such a direction shall be given by completing and
filing, with the inspector of elections, the Trustee or such other
person who shall be independent of the Company as the Committee shall
designate in the direction, a written direction in the form and manner
prescribed by the Committee. If no such direction is given by an
Eligible Employee or Eligible Director, then the voting rights
appurtenant to the Shares allocated to him shall not be exercised.
(b) To the extent that the Trust Fund contains Shares that are
not allocated in connection with an Award, all voting rights
appurtenant to such Shares shall be exercised by the Trustee in such
manner as the Committee shall direct to reflect the voting directions
given by Eligible Employee or Eligible Directors with respect to
Shares allocated in connection with their Awards.
(c) The Committee shall furnish, or cause to be furnished, to
each Eligible Employee or Eligible Director, all annual reports, proxy
materials and other information furnished by Mid-Coast Bancorp, Inc.,
or by any proxy solicitor, to the holders of Shares.
Section 5.7 Tender Offers.
(a) Each Eligible Employee or Eligible Director to whom an Award
has been made that is not fully vested shall have the right to direct,
with respect to the Shares related to such Award, the manner of
response to any tender offer, exchange offer or other offer made to
the holders of Shares. Such a direction shall be given by completing
and filing, with the inspector of elections, the Trustee or such other
person who shall be independent of the Company as the Committee shall
designate in the direction, a written direction in the form and manner
prescribed by the Committee. If no such direction is given by an
Eligible Employee or Eligible Director, then the Shares shall not be
tendered or exchanged.
(b) To the extent that the Trust Fund contains Shares that are
not allocated in connection with an Award, all responses to tender,
exchange and other offers appurtenant to such Shares shall be given by
the Trustee in such manner as the Committee shall direct to reflect
the responses given by Eligible Employee or Eligible Directors with
respect to Shares allocated in connection with their Awards.
(c) The Committee shall furnish, or cause to be furnished, to
each Eligible Employee or Eligible Director, all information furnished
by the offeror to the holders of Shares.
Section 5.8 Limitations on Awards.
(a) Notwithstanding anything in the Plan to the contrary, no
Award shall be granted under the Plan prior to the approval of
shareholders under section 8.8 hereof.
(b) An Award by its terms shall not be transferable by the
Eligible Employee or Eligible Director other than by will or by the
laws of descent and distribution, and the Shares granted pursuant to
such Award shall be distributable, during the lifetime of the
Recipient, only to the Recipient, except to the extent provided
otherwise pursuant to the terms of a Qualified Domestic Relations
Order.
ARTICLE VI
VESTING AND DISTRIBUTION OF SHARES
Section 6.1 Vesting of Shares Granted to Eligible Directors.
The Shares subject to each Award granted to Eligible Directors under
the Plan shall become vested as follows: (i) twenty percent (20%) of such
Shares shall become vested upon the April 1 following the date the Plan is
approved by shareholders pursuant to section 9.8; (ii) 20% of such Shares
shall become vested on each April 1 thereafter until all 300 shares have
become vested; provided, however, that the Eligible Director has remained a
director of the Employer during the entire period commencing with the date
the Plan is approved by shareholders pursuant to section 8.8 and ending on
the applicable vesting date; and provided, further, an Award shall become
100% vested upon the Award holder's death, Disability or Change in Control.
Section 6.2 Vesting of Shares Granted to Eligible Employees.
Subject to the terms and conditions of the Plan, each Award made to an
Eligible Employee under the Plan shall become vested at the times and upon
the conditions specified by the Committee in the Award notice; provided,
however, that an Award shall become fully vested on the date of the Award
holder's death, Disability, Retirement or Change in Control.
Section 6.3 Designation of Beneficiary.
An Eligible Employee or Eligible Director who has received an Award
may designate a Beneficiary to receive any undistributed Shares that are, or
become, available for distribution on, or after, the date of his death.
Such designation (and any change or revocation of such designation) shall be
made in writing in the form and manner prescribed by the Committee. In the
event that the Beneficiary designated by an Eligible Employee or Eligible
Director dies prior to the Eligible Employee or Eligible Director, or in the
event that no Beneficiary has been designated, any undistributed Shares that
are, or become, available for distribution on, or after, the Eligible
Employee or Eligible Director's death shall be paid to the executor or
administrator of the Eligible Employee or Eligible Director's estate, or if
no such executor or administrator is appointed within such time as the
Committee, in its sole discretion, shall deem reasonable, to such one or
more of the spouse and descendants and blood relatives of such deceased
person as the Committee may select.
Section 6.4 Manner of Distribution.
(a) As soon as practicable following the date any Shares granted
pursuant to an Award become vested pursuant to sections 6.1 and 6.2,
the Committee shall take such actions as are necessary to cause the
transfer of record ownership of the Shares that have become vested
from the Trustee to the Award holder and shall cause the Trustee to
distribute to the Award holder all property other than Shares then
being held in connection with the Shares being distributed.
(b) The Company's obligation to deliver Shares with respect to
an Award shall, if the Committee so requests, be conditioned upon the
receipt of a representation as to the investment intention of the
Eligible Employee or Eligible Director or Beneficiary to whom such
Shares are to be delivered, in such form as the Committee shall
determine to be necessary or advisable to comply with the provisions
of applicable federal, state or local law. It may be provided that
any such representation shall become inoperative upon a registration
of the Shares or upon the occurrence of any other event eliminating
the necessity of such representation. The Company shall not be
required to deliver any Shares under the Plan prior to (i) the
admission of such Shares to listing on any stock exchange on which
Shares may then be listed, or (ii) the completion of such registration
or other qualification under any state or federal law, rule or
regulation as the Committee shall determine to be necessary or
advisable.
Section 6.5 Taxes.
The Company, the Committee or the Trustee shall have the right to
require any person entitled to receive Shares pursuant to an Award to pay
the amount of any tax which is required to be withheld with respect to such
Shares, or, in lieu thereof, to retain, or to sell without notice, a
sufficient number of Shares to cover the amount required to be withheld.
ARTICLE VII
AMENDMENT AND TERMINATION
Section 7.1 Termination.
The Board may suspend or terminate the Plan in whole or in part at any
time by giving written notice of such suspension or termination to the
Committee; provided, however, that the Plan may not be terminated while
there are outstanding Awards that may thereafter become vested. Upon the
termination of the Plan, the Trustee shall make distributions from the Trust
Fund in such amounts and to such persons as the Committee may direct and
shall return the remaining assets of the Trust Fund, if any, to Mid-Coast
Bancorp, Inc.
Section 7.2 Amendment.
The Board may amend or revise the Plan in whole or in part at any
time.
Section 7.3 Adjustments in the Event of a Business Reorganization.
(a) In the event of any merger, consolidation, or other business
reorganization (including but not limited to a Change of Control) in
which Mid-Coast Bancorp, Inc. is the surviving entity, and in the
event of any stock split, stock dividend or other event generally
affecting the number of Shares held by each person who is then a
holder of record of Shares, the number of Shares held in the Trust
Fund, including Shares covered by Awards, shall be adjusted to account
for such event. Such adjustment shall be effected by multiplying such
number of Shares by an amount equal to the number of Shares that would
be owned after such event by a person who, immediately prior to such
event, was the holder of record of one Share; provided, however, that
the Committee may, in its discretion, establish another appropriate
method of adjustment.
(b) In the event of any merger, consolidation, or other business
reorganization (including but not limited to a Change of Control) in
which Mid-Coast Bancorp, Inc. is not the surviving entity, the Trustee
shall hold in the Trust Fund any money, stock, securities or other
property received by holders of record of Shares in connection with
such merger, consolidation, or other business reorganization. Any
Award with respect to which Shares had been allocated to an Eligible
Employee or Eligible Director shall be adjusted by allocating to the
Eligible Employee or Eligible Director receiving such Award the amount
of money, stock, securities or other property received by the Trustee
for the Shares allocated to such Eligible Employee or Eligible
Director.
(c) Nothing in this section 7.3 shall be deemed to change the
otherwise applicable vesting schedule for any Eligible Employee or
Eligible Director.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Status as an Employee Benefit Plan.
This Plan is not intended to satisfy the requirements for
qualification under section 401(a) of the Code or to satisfy the
definitional requirements for an "employee benefit plan" under section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended. It is
intended to be a non-qualified incentive compensation program that is exempt
from the regulatory requirements of the Employee Retirement Income Security
Act of 1974, as amended. The Plan shall be construed and administered so as
to effectuate this intent.
Section 8.2 No Right to Continued Employment.
Neither the establishment of the Plan nor any provisions of the Plan
nor any action of the Board or the Committee with respect to the Plan shall
be held or construed to confer upon any Eligible Employee any right to a
continuation of employment by the Company. The Company reserves the right
to dismiss any Eligible Employee or otherwise deal with any Eligible
Employee to the same extent as though the Plan had not been adopted.
Section 8.3 Construction of Language.
Whenever appropriate in the Plan, words used in the singular may be
read in the plural, words used in the plural may be read in the singular,
and words importing the masculine gender may read as referring equally to
the feminine or the neuter. Any reference to an Article or section number
shall refer to an Article or section of this Plan unless otherwise
indicated.
Section 8.4 Governing Law.
The Plan shall be construed and enforced in accordance with the laws
of the State of Maine without giving effect to the conflict of laws
principles thereof, except to the extent that such laws are preempted by the
federal laws of the United States of America.
Section 8.5 Headings.
The headings of Articles and sections are included solely for
convenience of reference. If there is any conflict between such headings
and the text of the Plan, the text shall control.
Section 8.6 Non-Alienation of Benefits.
The right to receive a benefit under the Plan shall not be subject in
any manner to anticipation, alienation or assignment, nor shall such right
be liable for or subject to debts, contracts, liabilities, engagements or
torts, except to the extent provided in a Qualified Domestic Relations
Order.
Section 8.7 Notices.
Any communication required or permitted to be given under the Plan,
including any notice, direction, designation, comment, instruction,
objection or waiver, shall be in writing and shall be deemed to have been
given at such time as it is personally delivered or 5 days after mailing if
mailed, postage prepaid, by registered or certified mail, return receipt
requested, addressed to such party at the address listed below, or at such
other address as one such party may by written notice specify to the other:
(a) If to the Stock Compensation Committee:
Mid-Coast Bancorp, Inc.
1768 Atlantic Highway
Box 589
Waldoboro, Maine 04572
Attention: Corporate Secretary
(b) If to an Eligible Employee, to the Eligible Employee's
address as shown in the Company's personnel records.
Section 8.8 Approval of Shareholders.
The Plan and all Awards granted hereunder shall be conditioned on the
approval of the Plan by the affirmative vote of the majority of the Shares
present in person or represented by proxy and entitled to vote at a meeting
for which a quorum is present, which meeting is duly noticed and held of
Mid-Coast Bancorp, Inc. No Award under the Plan shall be granted, nor shall
any Shares be purchased or distributed, prior to such approval.
REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
MID-COAST BANCORP, INC.
UNDERSIGNED Shareholder(s) of MID-COAST BANCORP, INC. (the
"Corporation"), 1768 Atlantic Highway, Waldoboro, Maine 04572, hereby
appoint(s) Wesley E. Richardson and Samuel Cohen as their designees, with
full powers of substitution, proxies of the undersigned to cast all votes
which the undersigned would be entitled to vote at the Annual Meeting of the
Shareholders of the Corporation to be held at 3:00 p.m. on July 16, 1997 at
the Samoset Resort, Rockport, Maine, and all adjournments or postponements
thereof, with all powers the undersigned would possess if personally present,
and particularly (without limiting the generality of the foregoing) to vote
and act.
1. Election of the following Directors for three year terms each:
Sharon E. Crowe, Robert W. Spear, Waite W. Weston.
FOR all nominees WITHHOLD AUTHORITY (INSTRUCTIONS: To withhold authority to vote for any individual
listed above (except as to vote for all nominees nominee, write that nominee's name on the space provided below.)
marked to the contrary.) listed above.
[ ] [ ] ----------------------------------------------------------------
2. Approval and Adoption of the Restricted Stock Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to ratify the appointment of Baker Newman & Noyes as the
Corporation's independent certified public accountants for fiscal year
1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
NOTE: THE CORPORATION KNOWS OF NO OTHER BUSINESS TO COME BEFORE THE MEETING.
The Proxy Holders intend to vote FOR the Directors and proposals listed
herein unless marked to the contrary. If any other business should come before
the meeting, this Proxy will be voted in accordance with the best judgment of
the Proxy Holders. This Proxy will be used only at the July 16, 1997 Annual
Meeting or any adjournment(s) or postponements thereof.
Undersigned hereby acknowledge(s) receipt of the Notice of Annual Meeting
of Shareholders and accompanying Proxy Statement dated June 6, 1997 prior to
signing this Proxy.
The Board of Directors recommends a vote FOR all matters to be voted on.
Please sign, date and return today in the envelope provided. PLEASE SIGN
EXACTLY AS SHOWN ON THE REVERSE SIDE OF THIS PROXY. ONLY ONE SIGNATURE IS
NEEDED FOR JOINT OWNERSHIP.
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Signature
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Signature
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Date
[ ] I (We) plan to attend the annual meeting.