SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential for Use of the Commission Only (as permitted by Rule
14a-6(a)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
DS BANCOR, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(2), or Item 22(a)(2) of
Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
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5) Total fee paid
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/ / Fee paid previously with preliminary materials.
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/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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[LOGO]
DS BANCOR, INC.
33 ELIZABETH STREET
DERBY, CONNECTICUT 06418
March 29, 1996
Dear Shareholder:
You are cordially invited to attend the 1996 annual meeting of shareholders
(the "Annual Meeting") of DS Bancor, Inc. (the "Corporation") to be held on
Wednesday, April 24, 1996, at 10:00 a.m., local time, at the Grassy Hill Lodge,
77 Sodom Lane, Derby, Connecticut.
The Annual Meeting has been called for the following purposes: (1) to elect
three directors for terms of three years each and one director for a term of one
year; (2) to ratify the appointment of Friedberg, Smith & Co., P.C. as
independent public accountants of the Corporation for the year ending December
31, 1996; and (3) to transact such other business as may properly come before
the Annual Meeting or any adjournments thereof.
It is important that your shares be represented at the Annual Meeting.
Whether or not you plan to attend the Annual Meeting, you are requested to
complete, date, sign and return the enclosed proxy card in the enclosed envelope
for which postage has been paid.
Very truly yours,
[SIGNATURE]
HARRY P. DIADAMO JR.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
[LOGO]
DS BANCOR, INC.
33 ELIZABETH STREET
DERBY, CONNECTICUT 06418
-------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 24, 1996
-----------------
NOTICE IS HEREBY GIVEN that the 1996 annual meeting of shareholders (the
"Annual Meeting") of DS Bancor, Inc. (the "Corporation") will be held at the
Grassy Hill Lodge, 77 Sodom Lane, Derby, Connecticut, on Wednesday, April 24,
1996, at 10:00 a.m., local time, for the following purposes:
1. To elect three directors for terms of three years each and one
director for a term of one year (Proposal 1);
2. To ratify the appointment by the Corporation's Board of Directors of
the firm of Friedberg, Smith & Co., P.C. as independent public accountants
of the Corporation for the year ending December 31, 1996 (Proposal 2); and
3. To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
Pursuant to the Corporation's bylaws, the Board of Directors of the
Corporation has fixed the close of business on March 15, 1996 as the record date
for the determination of shareholders entitled to notice of and to vote at the
Annual Meeting. Only record holders of Corporation common stock at the close of
business on that date are entitled to notice of and to vote at the Annual
Meeting or any adjournments thereof.
In the event that there are not sufficient votes to approve any one or more
of the foregoing proposals at the time of the Annual Meeting, the Annual Meeting
may be adjourned in order to permit further solicitation by the Corporation.
By Order of the Board of Directors
[SIGNATURE]
HARRY P. DIADAMO JR.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Derby, Connecticut
March 29, 1996
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT
YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE SIGN, DATE AND
COMPLETE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
[LOGO]
DS BANCOR, INC.
33 ELIZABETH STREET
DERBY, CONNECTICUT 06418
(203) 736-9921
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PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 24, 1996
-----------------
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
This Proxy Statement is furnished to shareholders of DS Bancor, Inc.
("Bancor" or the "Corporation") in connection with the solicitation of proxies
by the Board of Directors of Bancor for use at the annual meeting of
shareholders (the "Annual Meeting") to be held on Wednesday, April 24, 1996, at
10:00 a.m., local time, at the Grassy Hill Lodge, 77 Sodom Lane, Derby,
Connecticut, and at any adjournments thereof.
If the enclosed form of proxy is properly executed and returned to Bancor in
time to be voted at the Annual Meeting, the shares represented thereby will be
voted in accordance with the instructions marked thereon. EXECUTED BUT UNMARKED
PROXIES WILL BE VOTED (1) FOR PROPOSAL 1 TO ELECT THE FOUR NOMINEES OF THE BOARD
OF DIRECTORS AS DIRECTORS OF BANCOR; AND (2) FOR PROPOSAL 2 TO RATIFY THE
APPOINTMENT OF FRIEDBERG, SMITH & CO., P.C. AS INDEPENDENT PUBLIC ACCOUNTANTS OF
THE CORPORATION FOR THE YEAR ENDING DECEMBER 31, 1996. The Corporation is not
aware of any other matters that are proposed to be presented at the Annual
Meeting. However, if further business is properly presented, the persons named
in the accompanying proxy will vote such proxy as determined by a majority of
the Board of Directors.
The presence of a shareholder at the Annual Meeting will not automatically
revoke the shareholder's proxy. Shareholders may, however, revoke a proxy at any
time prior to its exercise by filing with the Secretary of the Corporation or
the presiding officer at the Annual Meeting a written notice of revocation, by
delivering to the Secretary of the Corporation or the presiding officer at the
Annual Meeting a duly executed proxy bearing a later date or by attending the
Annual Meeting and voting in person.
The cost of soliciting proxies will be borne by the Corporation. In addition
to use of the mails, proxies may be solicited personally or by telephone or
telegraph by officers, directors and employees of the Corporation or Derby
Savings Bank (the "Bank" or "Derby Savings") who will not be specially
compensated for such solicitation activities. Arrangements will also be made
with brokerage houses and other custodians, nominees and fiduciaries for
forwarding solicitation materials to the beneficial owners of shares held of
record by such persons, and the Corporation will reimburse such persons for
their reasonable expenses incurred in that connection. This Proxy Statement,
together with the enclosed proxy card, is initially being mailed to shareholders
on or about March 29, 1996.
The securities which can be voted at the Annual Meeting consist of shares of
common stock, par value $1.00 per share, of Bancor, with each share entitling
its holder to one vote on all matters, without any right to cumulative voting in
the election of directors. The close of business on March 15, 1996 has been
fixed by the Board of Directors as the record date for determination of
shareholders entitled to notice of, and to vote at, the Annual Meeting. On the
record date, 3,029,027 shares of Bancor common stock were outstanding and
eligible to be voted at the Annual Meeting.
1
The presence, in person or by proxy, of at least one-third of the total
number of outstanding shares of Bancor common stock entitled to vote is
necessary to constitute a quorum at the Annual Meeting. Assuming the presence of
a quorum at the Annual Meeting, directors will be elected by a plurality of the
votes of the shares of Bancor common stock present in person or represented by
proxy and entitled to vote and the affirmative vote of a majority of the votes
cast is required to ratify the appointment of the Corporation's independent
public accountants. Shareholders' votes will be tabulated by the persons
appointed by the Board of Directors to act as inspectors of election for the
Annual Meeting. Abstentions and broker non-votes will be treated as shares that
are present, or represented, and entitled to vote for purposes of determining
the presence of a quorum at the Annual Meeting. Broker non-votes will not be
counted as a vote cast or entitled to vote on any matter presented at the Annual
Meeting. Abstentions will not be counted in determining the number of votes cast
in connection with the ratification of the appointment of independent public
accountants.
A copy of the annual report to shareholders for the year ended December 31,
1995 accompanies this proxy statement. THE CORPORATION IS REQUIRED TO FILE AN
ANNUAL REPORT ON FORM 10-K FOR ITS FISCAL YEAR ENDED DECEMBER 31, 1995 WITH THE
SECURITIES AND EXCHANGE COMMISSION (THE "SEC"). SHAREHOLDERS MAY OBTAIN, FREE OF
CHARGE, A COPY OF SUCH ANNUAL REPORT ON FORM 10-K (WITHOUT EXHIBITS) BY WRITING
TO MR. JOHN F. COSTIGAN, SECRETARY, DS BANCOR, INC., 33 ELIZABETH STREET, DERBY,
CONNECTICUT 06418.
2
STOCK OWNED BY MANAGEMENT
The following table sets forth information as of March 15, 1996 with respect
to the amount of Bancor's common stock beneficially owned by each director of
Bancor, Bancor's Chief Executive Officer and the other most highly compensated
executive officers of Bancor and by all the directors and executive officers of
Bancor as a group.
AMOUNT AND NATURE OF
NAME AND POSITION(S) BENEFICIAL OWNERSHIP PERCENT OF STOCK
WITH THE CORPORATION (A) OUTSTANDING
- --------------------------------------------------------------- ---------------------- -----------------
Achille A. Apicella (b)........................................ 10,274 *
Director
Walter R. Archer Jr. (b)....................................... 23,311 *
Director
John F. Costigan (c)........................................... 6,085 *
Director and Secretary
Michael F. Daddona Jr. (d)..................................... 322,338 10.62%
Chairman of the Board
Harry P. DiAdamo Jr. (e)....................................... 161,931 5.11
Director, President and Chief Executive Officer
Angelo E. Dirienzo (f)......................................... 5,554 *
Director
Laura J. Donahue (b)........................................... 11,934 *
Director
Christopher H.B. Mills (g)..................................... 121,280 4.00
Director
John M. Rak (b)(h)............................................. 4,885 *
Director
John P. Sponheimer (i)......................................... 62,185 1.66
Director
Gary M. Tomkins................................................ 1,000 *
Director
Alfred T. Santoro (j).......................................... 116,150 3.69
Vice President and Chief Financial Officer
Thomas H. Wells (k)............................................ 34,608 1.13
Senior Vice President of Derby Savings Bank
Directors and executive officers as a group (13 persons)....... 886,535 26.46%
- ---------
* Less than one percent.
(a) In accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, a person is deemed to be the beneficial owner of a security for
purposes of the Rule if he or she has or shares voting power or investment
power with respect to such security or has the right to acquire such
ownership within 60 days after March 15, 1996. All persons shown in the
table have sole voting and investment power except as otherwise indicated.
The table includes 321,431 shares of Bancor's common stock subject to
outstanding stock options which are exercisable by directors and executive
officers of Bancor within 60 days of March 15, 1996.
(b) Includes 3,857 shares of Bancor common stock subject to stock options that
may be exercised within 60 days of March 15, 1996.
3
(c) Includes 6,085 shares for which Mr. Costigan has shared voting and
investment power with Virginia Costigan (wife).
(d) Includes 6,179 shares of Bancor common stock subject to stock options that
may be exercised within 60 days of March 15, 1996. Also includes 35,145
shares for which Mr. Daddona has shared voting and investment power with
Sharon Daddona (wife), 2,864 shares with Michael Daddona (son), 2,864 shares
with Marielle Daddona (daughter), and 2,864 shares with Michaela Daddona
(daughter).
(e) Includes 141,746 shares of Bancor common stock subject to stock options that
may be exercised within 60 days of March 15, 1996. Also includes shares for
which Mr. DiAdamo has shared voting and investment power as follows: 8,908
shares with Maureen E. DiAdamo (wife), 393 shares with Kevin DiAdamo (son),
and 443 shares with Christopher DiAdamo (son).
(f) Includes 1,546 shares for which Mr. Dirienzo has shared voting and
investment power with Claire S. Dirienzo (wife). Also includes 3,857 shares
of Bancor common stock subject to stock options that may be exercised within
60 days of March 15, 1996.
(g) Includes 5,403 shares of Bancor common stock subject to stock options that
may be exercised within 60 days of March 15, 1996. See also footnote (c) to
the Stock Owned By Principal Shareholders table set forth below.
(h) Includes shares for which Mr. Rak has shared voting and investment power as
follows: 786 shares with Monica Rak (wife), 51 shares with Aaron Rak (son)
and 40 shares with Michael Rak (son).
(i) Includes 3,857 shares of Bancor common stock subject to stock options that
may be exercised within 60 days of March 15, 1996 and 47,508 shares as to
which Mr. Sponheimer exercises voting power but shares ownership with his
law partner. Also includes shares for which Mr. Sponheimer has shared voting
and investment power as follows: 3,886 shares in trust for Brian Sponheimer
(son), 3,886 shares in trust for Brendon Sponheimer (son), 1,386 shares in
trust for Matthew Sponheimer (son), 831 shares in trust for Matthias Kasulis
(nephew), and 831 shares in trust for Benedict Kasulis (nephew). Does not
include 3,307 shares owned by Mary Ann Sponheimer (wife) as trustee for
Brian Sponheimer (son) as to which Mr. Sponheimer disclaims beneficial
ownership.
(j) Includes 115,922 shares of Bancor common stock subject to stock options that
may be exercised within 60 days of March 15, 1996.
(k) Includes 29,039 shares of Bancor common stock subject to stock options that
may be exercised within 60 days of March 15, 1996. Also includes 771 shares
for which Mr. Wells has shared voting and investment power with Phyllis H.
Wells (wife).
4
STOCK OWNED BY PRINCIPAL SHAREHOLDERS
The following table sets forth information with respect to the persons
believed by Bancor to be the beneficial owners of more than five percent of the
issued and outstanding shares of Bancor's common stock, based on the most recent
filing with the SEC by each such person or entity as of March 15, 1996 or other
information available to Bancor. All such persons have reported sole voting and
dispositive power over the entire number of shares reported as beneficially
owned by them, except as otherwise indicated.
AMOUNT AND NATURE OF PERCENT OF STOCK
NAME AND ADDRESS BENEFICIAL OWNERSHIP OUTSTANDING
- ----------------------------------------------------------------- -------------------- -----------------
Michael F. Daddona Jr. (a)....................................... 322,338 10.62%
156 Wild Rose Drive
Orange, CT 06477
Dimensional Fund Advisors, Inc. (b).............................. 195,730 6.46
1299 Ocean Avenue , 11th Floor
Santa Monica, CA 90401
JO Hambro & Company Limited (c).................................. 167,694 5.53
30 Queen Anne's Gate
London SW1H 9AL England
Harry P. DiAdamo Jr. (d)......................................... 161,931 5.11
33 Elizabeth Street
Derby, Connecticut 06418
- ---------
(a) Includes 43,737 shares for which Mr. Daddona has shared voting and
investment power with Sharon Daddona (wife), Michael Daddona (son), Marielle
Daddona (daughter) and Michaela Daddona (daughter). Also includes 6,179
shares of Bancor common stock subject to stock options that may be exercised
within 60 days of March 15, 1996.
(b) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 195,730 shares of Company
stock as of December 31, 1995, all of which shares are held in portfolios of
DFA Investment Dimensions Group Inc., a registered open-end investment
company, or in series of the DFA Investment Trust Company, a Delaware
business trust, or the DFA Group Trust and DFA Participation Group Trust,
investment vehicles for qualified employee benefit plans, all of which
Dimensional Fund Advisors, Inc. serves as investment manager. Dimensional
disclaims beneficial ownership of all such shares.
(c) Bancor has been advised by the reporting person that these shares are
beneficially owned as follows: (i) JO Hambro & Partners Limited ("Hambro
Partners"), Growth Financial Services Limited ("GFSL"), North Atlantic
Smaller Companies Investment Trust PLC (formerly Consolidated Venture Trust
PLC) ("NASCIT"), Christopher H.B. Mills, JO Hambro Investment Management
Limited ("Hambro Investment"), JO Hambro & Company Limited ("Hambro
Company") and JO Hambro Asset Management Limited ("Hambro Asset") own or
control, directly or indirectly, an aggregate of 160,808 shares or 5.31% of
the Corporation's outstanding common stock, as follows: (i) Mr. Mills
beneficially owns 115,877 shares, which amount includes the 5,627 shares he
personally owns and has sole voting and dispositive power over as well as
the 110,250 shares in respect of which he shares voting and dispositive
power with Hambro Partners by virtue of his role as chief executive and
co-investment adviser to NASCIT; (ii) NASCIT beneficially owns 110,250
shares and shares voting and dispositive power with Mr. Mills and Hambro
Partners, its co-investment advisers; (iii) GFSL shares voting and
dispositive power with NASCIT and Hambro Partners with respect to the
110,250 shares owned by NASCIT because of its agreement to provide to NASCIT
the services of Mr. Mills; (iv) Hambro Partners, as co-investment adviser to
NASCIT, shares voting and dispositive power with Mr. Mills and NASCIT with
respect to the 110,250 shares owned by NASCIT; (v) Hambro Investment
controls voting and dispositive power with respect to 51,817 shares owned by
a private client; (vi) Hambro Asset, by
5
virtue of its control of Hambro Partners and Hambro Investment, controls (in
the case of the 51,817 shares controlled by Hambro Investment) and shares
control of (in the case of the remaining 110,250 shares) the voting and
dispositive power with respect to the 162,067 shares controlled by Hambro
Partners and Hambro Investment; and (vii) Hambro Company, by virtue of its
control of Hambro Asset, controls (or, as the case may be, shares control
of) the voting and dispositive power with respect to the 162,067 shares
controlled by Hambro Asset or in respect of which Hambro Asset shares
control.
(d) Includes 141,746 shares of Bancor common stock subject to stock options that
may be exercised within 60 days of March 15, 1996. Also includes 9,744
shares for which Mr. DiAdamo has shared voting and investment power with
Maureen DiAdamo (wife), Kevin DiAdamo (son) and Christopher DiAdamo (son).
ELECTION OF DIRECTORS
(PROPOSAL 1)
The Corporation's certificate of incorporation provides for a minimum of
nine directors and a maximum of 16. The number of directors of the Corporation
is currently set at 11. Pursuant to the Corporation's certificate of
incorporation, the Board of Directors is divided into three classes, with the
number of directors in each class to be as nearly equal in number as possible.
In 1996, the Board of Directors was re-staggered, effective as of the Annual
Meeting, as follows: three directors (terms of office expiring at the 1999
annual meeting); four directors (terms of office expiring at the 1998 annual
meeting); and four directors (terms of office expiring at the 1997 annual
meeting). As a result, the Annual Meeting three directors will be elected to
terms of three years each and one director will be elected for a term of one
year.
Unless otherwise specified on the proxy, it is the intention of the persons
named in the proxy to vote the shares represented by each proxy for the election
as directors of the nominees listed below. The Board of Directors believes that
such nominees will stand for election and will serve if elected as directors.
If, however, any person nominated by the Board of Directors fails to stand for
election or is unable to accept election, the proxies will be voted for the
election of such other person or persons as the Board of Directors may
recommend. Assuming the presence of a quorum at the Annual Meeting, directors
will be elected by a plurality of the votes of the shares of Bancor common stock
present in person or represented by proxy and entitled to vote at the Annual
Meeting. There are no cumulative voting rights in the election of directors.
There are no arrangements or understandings between the Corporation and any
person pursuant to which such person has been nominated or elected as a
director.
INFORMATION AS TO NOMINEES AND CONTINUING DIRECTORS. The following table
sets forth the names of the four nominees for election as directors and the
names of the seven other directors whose terms of office will continue after the
Annual Meeting. Also set forth is certain other information, some of which has
been supplied by the directors, with respect to each nominee's or director's
principal occupation or employment
6
during the past five years, his or her age, the periods during which he or she
has served as a director of the Corporation and positions currently held with
the Corporation. All of the directors, except Mr. Mills, serve as directors of
Derby Savings.
AGE AT DECEMBER
31, DIRECTOR FOR TERM POSITION(S) HELD
NAMES 1995 SINCE EXPIRING WITH THE CORPORATION
- ----------------------------------------------- ----------------- ----------- ----------- -----------------------------
NOMINEES FOR 3-YEAR TERMS:
Walter R. Archer Jr............................ 65 1990 1999 Director
Laura J. Donahue............................... 47 1986 1999 Director
John M. Rak.................................... 49 1986 1999 Director
NOMINEE FOR 1-YEAR TERM:
Harry P. DiAdamo Jr............................ 52 1986 1997 President, Chief Executive
Officer and Director
TERM
CONTINUING DIRECTORS: EXPIRES
-----------
Michael F. Daddona Jr.......................... 42 1991 1997 Chairman of the Board
Christopher H.B. Mills......................... 43 1988 1997 Director
John P. Sponheimer............................. 48 1988 1997 Director
Achille A. Apicella............................ 52 1986 1998 Director
John F. Costigan............................... 65 1986 1998 Director and Secretary
Angelo E. Dirienzo............................. 65 1986 1998 Director
Gary M. Tomkins................................ 46 1996 1998 Director
The principal occupations for the past five years of each of the Board of
Directors' four nominees and the seven other directors whose terms of office
will continue after the Annual Meeting are set forth below:
WALTER R. ARCHER JR., a director of Derby Savings since 1988, became a
director of the Corporation in 1990. He serves on the Executive, Nominating and
Stock Option Committees. Mr. Archer is founder of Burtville Associates, a real
estate holding company, and Archer Landfill Service Company, both in Derby. A
corporator of Hewitt Memorial Hospital, Mr. Archer also serves as an executive
board member and assistant treasurer of the Housatonic Council, Boy Scouts of
America. He received that organization's first annual Good Scout Award several
years ago, and in February 1996 received the Silver Beaver Citation for
distinguished service to youth.
LAURA J. DONAHUE, a director of Derby Savings since 1979, has been engaged
in the practice of law in Derby since 1973 and is presently with the law firm of
Donahue & Donahue. Ms. Donahue is a member of the Audit/Ethics, Executive and
Nominating Committees. She is a trustee of Hewitt Memorial Hospital, a director
of Hewitt Management Corporation, a service company which manages long term care
facilities, a trustee and secretary of Friend A. Russ Fund, Inc., an educational
and charitable organization, and a director of Derby Neck Library. Ms. Donahue
is also an Advisory Board member of the Katharine A. Matthies Foundation, a
privately endowed organization which awards funding to groups striving to
improve the quality of life in the Lower Naugatuck Valley. She is also a member
of the Grievance Panel of the Superior Court for the Judicial District of New
Haven.
JOHN M. RAK, a director of Derby Savings since 1984, operates a real estate
and appraisal company under his own name in Derby and is a consultant to
Insurance Management Incorporated. He is chairman of the Stock Option Committee
and serves on the Audit/Ethics, Executive and Nominating Committees. Mr. Rak is
chairman of the City of Derby's Economic Development Commission, a director of
Derby Neck Library, treasurer and past president of Housatonic Council, Boy
Scouts of America and trustee of Johnson Trust of Tulsa, Oklahoma, which
benefits scouting programs in the Naugatuck Valley.
7
HARRY P. DIADAMO JR., President and Chief Executive Officer of the
Corporation and the Bank, has been a director of Derby Savings since 1980 and
served as Chairman of the Board from March 1984 to March 1985. He became
President, Treasurer and Chief Executive Officer of the Bank in October 1984.
Mr. DiAdamo is also a member of the Executive Committee of the Corporation. He
recently completed his second two-year term on the Board of the Federal Home
Loan Bank of Boston where he also served as chairman of its Audit Committee and
as a member of the Finance Committee. Mr. DiAdamo is a member of the Mortgage
Finance Committee of America's Community Bankers, and the Executive and
Legislative Committees of the Connecticut Bankers Association, as well as a
director of the Savings Bank Life Insurance Company and Griffin Health Services,
and treasurer and an Advisory Board member for WSHU Public Radio. He is
president of the Shelton Educational Fund, and Endowment Fund chairman and past
president of the board of Notre Dame High School in West Haven. Mr. DiAdamo is
also a member of the New Britain Downtown Council and a Corporator of the Valley
United Way, as well as past chairman of that organization's annual campaign.
MICHAEL F. DADDONA JR., a director of the Corporation and Derby Savings Bank
since 1991, became Chairman of the Board of the Corporation and the Bank in
November 1992. Mr. Daddona is the owner/ general manager of Automated Services,
a vending machine and food distribution company he founded in Milford,
Connecticut in 1972. He is also the managing partner of M & M Realty, a real
estate holding company. Mr. Daddona is chairman of the Executive Committee and
also serves on the Stock Option Committee. A corporator for Hewitt Memorial
Hospital and a member of the United Way Founders Club, he is a benefactor of the
Toys for Tots program and the Christian Children's Fund. He is also the
president and founder of Perfect Christmas. Mr. Daddona received the Spirit of
Milford Award, presented by the United Way, for his generous commitment to the
children of that community.
CHRISTOPHER H.B. MILLS became a director of the Corporation in 1988 and
currently serves as a member of the Executive Committee. He is chief executive
of North American Smaller Companies Trust PLC ("NASCIT"), a London investment
trust company whose investment manager is JO Hambro & Partners Limited ("Hambro
Partners"). Mr. Mills' services are provided by an agreement between NASCIT and
Growth Financial Services Limited. Mr. Mills serves as a director of 15
companies in the United Kingdom, as well as the following companies in the
United States: American Plastic Technologies Inc. (plastics), Avanti Inc.
(petroleum industry), CelluTissue Industries (paper industry), Copy Duplicating
Products Inc. (office equipment), Magic Seasoning Blends Inc. (food
preparations), Oak Industries Inc. (electronics), PNG Corporation (gas
distribution) and W-H Holdings Inc. (petrochemical, refinery and oil industry
services).
JOHN P. SPONHEIMER, who became a director of the Corporation and Derby
Savings in 1988, has been a partner in the Ansonia, Connecticut law firm of
Hoyle & Sponheimer since 1978. He is Chairman of the Nominating Committee and
also serves on the Executive Committee. Mr. Sponheimer was a member of the
Connecticut State Legislature from 1975 to 1981, and served as chairman of the
Banking Committee of the Connecticut General Assembly and as a member of the
Special Committee on Interstate Banking of the General Assembly from 1980 to
1982.
ACHILLE A. APICELLA, a director of Derby Savings Bank since 1983, is
president of the certified public accounting firm of Apicella, Testa & Company
P.C. in Shelton, Connecticut. Mr. Apicella chairs the Audit/ Ethics Committee.
He is a director and vice chairman of Hewitt Management Corporation, a service
company which manages long term health facilities, and serves as trustee and
vice president of Hewitt Memorial Hospital and as corporator of Valley United
Way, Griffin Hospital, and Boys & Girls Club of the Lower Naugatuck Valley. Mr.
Apicella is also a member of the Connecticut Society of Certified Public
Accountants and American Institute of Certified Public Accountants.
JOHN F. COSTIGAN, Secretary of the Corporation and the Bank, joined the
staff of Derby Savings in 1961 and has been a director of the Bank since 1975.
He had served in various capacities of increasing responsibility, and from
October 1984 until his retirement in September 1995 had been the Bank's
Executive Vice President and Chief Operating Officer. Mr. Costigan serves on the
Audit/Ethics, Deferred Compensation and Nominating Committees of the
Corporation. He is president of Friend A. Russ Fund, Inc. of Shelton, an
educational and charitable organization, and chairman of the Advisory Council
for Tele-Media of Western
8
Connecticut, a cable television company located in Seymour, Connecticut. He is
chairman of a commission exploring ways to restore the Sterling Opera House, a
Derby landmark that is listed on the National Register, and also serves on the
Finance Committee of St. Mary's parish in Derby. He is past trustee and past
vice chairman of Griffin Health Services Corporation, and past trustee and past
chairman of Griffin Hospital, a community hospital located in Derby. In 1994 he
received the Charles H. Flynn Humanitarian Award for volunteer service that has
raised the quality of life in the community, and in 1974 the Valley Chamber of
Commerce Gold Seal Award for outstanding community service.
ANGELO E. DIRIENZO, a director of Derby Savings since 1979, retired in 1992
after serving five years as superintendent of Schools in Sherman, Connecticut.
He had previously served as School Superintendent in Oxford, Connecticut and in
Derby. He is presently a Special Educational Consultant for the New Fairfield
Board of Education. Dr. Dirienzo is a member of the Audit/Ethics Committee. He
is an Adjunct Professor at Western Connecticut State University, and has chaired
the Scholarship Committee of the New Haven County Sheriffs' Association since
its inception in 1972. A past president of Griffin Hospital, he currently serves
as a Corporator there and at Hewitt Memorial Hospital as well as the Valley
United Way. Dr. Dirienzo is also a member of the Connecticut Superintendents'
Association, the American Association of College and University Professors,
American Association of School Administrators, and a life member of the
Connecticut Association of Public School Superintendents. He is a member of the
board of the Olde Derby Historical Society and a director of the Derby Neck
Library.
GARY M. TOMPKINS was elected a director of the Company in February 1996 to
fill a vacancy on the Board resulting from the recent death of John J. Brennan.
Affiliated with Automated Services since 1987, Mr. Tompkins has been an
executive assistant for the past eight years and is also currently serving in
the capacity of Operations Director of Marketing and Sales. He serves as an
advisory member of Perfect Christmas and as cochairman of the Perfect Christmas
Toy Distribution Committee of the Milford United Way.
MANAGEMENT RECOMMENDS A VOTE FOR APPROVAL
OF MANAGEMENT'S NOMINEES FOR DIRECTOR
COMPENSATION OF DIRECTORS
Non-management directors of Bancor receive $400 for each Board of Directors
meeting attended, $350 for each committee meeting attended and $150 for each
"mini-meeting". Assuming attendance at not less than three of the four regular
meetings of the board, a stipend of $12,000 per annum is paid to the chairman of
the Board of Directors. Compensation to non-management directors of Derby
Savings is $12,000 per annum ($26,000 per annum for the chairman of the board),
assuming attendance at not less than nine of the 12 regular meetings of the
board, plus $400 for each special meeting of the Bank's Board of Directors, $350
for each committee meeting and $150 for each "mini-meeting" attended. Mr.
Daddona also receives $150 for each meeting of the advisory boards of the New
Britain/Hartford and New Haven/Fairfield divisions of the Bank attended. Mr. Rak
receives a like amount for each meeting of the New Britain/Hartford advisory
board he attends. Directors who are officers of Bancor or Derby Savings receive
no additional compensation for serving as directors or attending meetings of the
board or its committees.
Pursuant to the terms of the 1994 Stock Option Plan approved by shareholders
at the 1994 annual meeting, each non-employee director of the Corporation who
was serving on the board on February 28, 1994, the effective date of the Plan
(each director of the Company except Messrs. DiAdamo and Costigan) was granted a
ten-year nonqualified option to purchase 1,653 shares of the Corporation's
common stock. The per-share option exercise price of each of those options was
$21.78, which equaled the fair market value of a share of common stock on the
effective date of the Plan, as determined in accordance with the Plan.
Thereafter, subject to the availability of shares, on the date of the first
meeting of the board next following the 1994 Annual Meeting and following each
annual meeting of shareholders of the Corporation thereafter, an option to
purchase 1,102 shares of Corporation common stock will be granted to each person
who is then
9
serving as a non-employee director of the Corporation. If the number of shares
remaining available for grant is insufficient to make any such annual option
grants, the annual option grants for that year shall be correspondingly reduced
on a pro rata basis.
In 1986, the Bank established a deferred compensation plan for the benefit
of its directors. This plan is no longer available to the members of the Board
of Directors. Directors were entitled to defer all or a portion of the fees paid
to them as directors of the Bank over a four-year period. Directors who were
officers of the Bank could have also participated in the plan and pursuant to
the plan could have deferred compensation paid to them as officers of the Bank.
Although there was no limitation in the plan on the amount of compensation that
could have been deferred by directors who were also officers of the Bank,
directors who participated in the plan only deferred compensation in an amount
which approximated the fees that would have been paid to them if they were
non-management directors of the Bank.
Under the plan, a director who has participated in the plan for four years
or who reaches the age of 65, whichever is later (the "Retirement Date"), and
who is still serving as a director, is entitled to receive benefits payable in
monthly installments over a ten-year period. The aggregate amount of the
benefits payable to a director is actuarially determined using mortality tables.
The plan also provides for the payment of pre-retirement disability benefits in
the event that a director is disabled as a result of illness or injury to the
extent that he or she is unable to perform his or her usual service to the Board
of Directors. Benefit payments pursuant to this provision of the plan would be
paid in the same manner and amount as normal retirement benefits under the plan.
In the event of a director's death prior to reaching the Retirement Date, the
plan provides for the payment of benefits to the designated beneficiary of the
director on a monthly basis over a ten-year period in an aggregate amount
actuarially determined using mortality tables. The plan provides that if the
service of a director is terminated voluntarily or involuntarily prior to the
Retirement Date, the director is entitled to receive all amounts deferred plus
interest thereon at a rate of 10% per annum. Of the active directors, Mr.
Costigan is the only director currently receiving benefits under this plan
($1,949 per month). Mr. Direinzo, who became eligible to begin receiving
payments under the plan in September 1995 upon his attaining age 65, has elected
to further defer receipt of any benefits under the plan until September 2000.
The amount of Mr. Dirienzo's benefit is $552 per month.
During 1995, the Company and the Bank each adopted Deferred Compensation
Plans for Directors pursuant to which directors of the Company and the Bank who
are not full-time employees may elect to defer all or any portion of his or her
annual retainer or any board or committee fees or other compensation. Amounts
deferred are credited with interest compounded monthly. The interest crediting
rate equals the one-year U.S. Treasury bill rate, as reported in THE WALL STREET
JOURNAL, plus 50 basis points, adjusted monthly. The plan generally provides for
a lump sum distribution of the director's account balance within 60 days
following termination of service (although director participant's may elect to
receive their account balances in ten annual equal installments, if so elected
by the director). The following directors have elected to defer all or a portion
of their compensation under these plans: Messrs. Archer (100%), Costigan (100%),
Daddonna (100%) and Dirienzo (35%).
BOARD OF DIRECTORS COMMITTEES AND NOMINATIONS BY SHAREHOLDERS
The Board of Directors of the Corporation has designated Messrs. Archer,
Daddona, DiAdamo, Donohue, Mills, Rak and Sponheimer as the Executive Committee
of the Board. Mr. Daddona currently serves as Chairman of the Executive
Committee. The Executive Committee, when the Board of Directors is not in
session, has and may exercise all of the power and authority of the Board of
Directors except as limited pursuant to Article IV, Section 2 of the
Corporation's bylaws, pursuant to which the Executive Committee may not, among
other things, amend the Corporation's certificate of incorporation or bylaws,
adopt an agreement of merger or consolidation, or recommend to the shareholders
the sale, lease or exchange of all or substantially all of the Corporation's
assets or the dissolution of the Corporation. During 1995, the Executive
Committee did not meet.
The Board of Directors of the Corporation has appointed an Audit/Ethics
Committee, whose members are Messrs. Apicella, Costigan, Dirienzo and Rak and
Ms. Donahue. Mr. Apicella serves as Chairman of the Audit/Ethics Committee. The
Committee reviews the Corporation's financial statements and reviews the
10
report of the annual audit by the Corporation's independent accountants prior to
submission of that report to the full Board of Directors. The Audit/Ethics
Committee also reviews management's response to the independent accountant's
report. The Audit/Ethics Committee annually reviews the Corporation's contract
with its independent accountants and makes recommendations to the Board of
Directors regarding renewal of that contract. Additionally, the Committee
administers the Corporation's ethics policy for directors, officers and
employees. During 1995, the Audit/Ethics Committee met six times.
The Board of Directors of the Corporation has appointed a standing Stock
Option Committee consisting of Messrs. Archer, Daddona and Rak with Mr. Rak
serving as Chairman. The Stock Option Committee administers the Corporation's
stock option plans. During 1995, the Stock Option Committee met three times.
Messrs. Archer, Costigan, Rak and Sponheimer and Ms. Donahue currently serve
as the Nominating Committee for selecting the nominees of the board for election
as directors. Mr. Sponheimer currently serves as chairman of the Nominating
Committee. The Nominating Committee met one time in 1995.
Shareholders of Bancor may nominate directors pursuant to timely notice in
writing to the secretary of Bancor in accordance with Bancor's bylaws. To be
timely, a shareholder's notice must be delivered to or mailed and received at
the principal executive offices of the Corporation not less than 30 nor more
than 90 days prior to the Annual Meeting; provided, however, that in the event
less than 45 days' notice or prior public disclosure of the date of the meeting
is given or made to shareholders, notice by the shareholder to be timely must be
so received by Bancor not later than the close of business on the 15th day
following the day on which notice of the date of the meeting was mailed or such
public disclosure was made. Under the Corporation's bylaws, shareholder
nominations for the Annual Meeting will be required to have been received on or
before April 15, 1996 in order to be timely. A shareholder's notice of
nomination must set forth certain information specified in Article III, Section
13 of Bancor's bylaws concerning each person the shareholder proposes to
nominate for election and the shareholder giving the notice. The bylaws provide
that no person shall be eligible for election as a director of Bancor unless
nominated in accordance with the procedures set forth in Article III, Section 13
of the bylaws.
During 1995 the Corporation's Board of Directors held four quarterly
meetings and three special meeting(s) and the Bank's Board of Directors held
twelve regular monthly meetings and five special meetings. No incumbent director
attended fewer than 75 percent of the total number of meetings of the Board of
Directors of the Corporation and the total number of meetings held by all
committees of the Board of Directors of the Corporation on which he served,
except for Mr. Mills who attended five of seven meetings (71.4 percent).
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Because the business of the Corporation currently consists of the business
of Derby Savings, no separate cash compensation is paid to the executive
officers of the Corporation, all of whom are executive officers of Derby Savings
and receive compensation as such. The following table shows, for 1995, 1994 and
1993, the cash compensation paid by Derby Savings, as well as certain other
compensation paid or accrued for those years, to the chief executive officer and
each of the three other highest paid executive officers of Derby Savings whose
cash compensation (salary and bonus) exceeded $100,000.
11
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
AWARDS
--------------
ANNUAL COMPENSATION SECURITIES
------------------------------- UNDERLYING ALL OTHER
NAME AND FISCAL SALARY OPTIONS/SARS COMPENSATION
PRINCIPAL POSITION(S) YEAR ($) BONUS ($) (#) ($)
- ------------------------------ ------- --------- --------- -------------- --------------
Harry P. DiAdamo Jr. ......... 1995 $ 255,973 $ 25,000 68,250 $2,250 (a)
President, Chief Executive 1994 246,040 -- 10,000 2,250
Officer and Director 1993 232,113 -- 19,000 3,491
John F. Costigan (b) ......... 1995 135,900 -- -- 1,944 (a)
Executive Vice President, 1994 156,543 -- 2,500 2,250
Chief Operating Officer, 1993 153,362 -- 4,000 2,317
Secretary and Director
Alfred T. Santoro ............ 1995 150,258 20,000 42,000 12,250 (a)(c)
Vice President and Chief 1994 138,427 -- 5,000 2,139
Financial Officer 1993 139,584 -- 11,000 2,163
Thomas H. Wells .............. 1995 130,592 5,023 -- 2,068 (a)
Senior Vice President of 1994 125,569 -- -- 1,916
Derby Savings Bank 1993 112,291 -- 2,500 1,717
- ----------
(a) Includes employer matching contributions made in 1995 to the Bank's thrift
plan for the account of each individual.
(b) Mr. Costigan retired as Executive Vice President and Chief Operating Officer
of the Company and the Bank in September 1995. Salary information for 1995
includes $10,533 of director's fees and fees paid Mr. Costigan for recording
Board minutes subsequent to his retirement. Of this amount, $9,133 has been
deferred by him under the Deferred Compensation Plans for Directors adopted
by the Company and the Bank in 1995.
(c) Includes annual premium expense of $10,000 for $500,000 of split dollar life
insurance purchased by the Bank on the life of the executive officer in
1995. Under the split dollar life insurance arrangement, the Bank is the
owner of the policy and the beneficiary of death benefits equal to the
greater of the cash surrender value of the policy or the premiums paid by
the Bank. The executive officer's estate would receive the excess of the
death benefit over such amount in the event of his death. The split dollar
arrangement may be terminated by the Bank or the executive officer at any
time and terminates automatically upon any termination of the executive
officer's employment with the Bank (other than his death). Upon any such
termination of employment, the executive officer would be entitled to
purchase the policy from the Bank at the greater of the cash surrender value
of the policy or the premiums paid by the Bank.
OPTION GRANTS
The following table contains information with respect to grants of stock
options to each of the named executive officers during 1995.
OPTION GRANTS IN 1995 FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
--------------------------------------------- VALUE
% OF AT ASSUMED ANNUAL
TOTAL RATES
OPTIONS OF STOCK PRICE
GRANTED APPRECIATION FOR
TO EXERCISE OPTION
OPTIONS EMPLOYEES OR BASE TERM (a)
GRANTED IN FISCAL PRICE EXPIRATION ---------------------
NAME (#) YEAR ($/SH) DATE 5% ($) 10% ($)
- ------------------------------ --------- --------- --------- --------- --------- ---------
Harry P. DiAdamo Jr........... 68,250 54.2% $ 25.00 9/19/05 $1,073,051 $2,719,323
John F. Costigan.............. -- -- -- -- -- --
Alfred T. Santoro............. 42,000 33.3 25.00 9/19/05 660,339 1,673,430
Thomas H. Wells............... -- -- -- -- -- --
- ---------
(a) Estimated market value of underlying securities at assumed annual rates of
stock price appreciation for option term minus the exercise price.
12
OPTION/SAR EXERCISES AND HOLDINGS
The following table sets forth the 1995 year end value of all unexercised
in-the-money options and stock appreciation rights ("SARs") held by the named
executive officers. All options and SARs held by the named executive officers as
of December 31, 1995 are presently exercisable. SARs were granted in tandem with
options granted under the Corporation's 1985 stock option plan. The Company's
1994 stock option plan does not provide for the grant of SARs.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
VALUE OF SECURITIES
UNDERLYING
NUMBER OF SECURITIES UNEXERCISED
SHARES ACQUIRED VALUE REALIZED UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/
NAME ON EXERCISE (#) ($) OPTIONS/SARS AT FY-END (#) SARS AT FY-END ($)(a)
- -------------------------- ----------------- ----------------- -------------------------- ---------------------
Harry P. DiAdamo Jr....... -- -- 141,746 $ 759,264
John F. Costigan.......... 2,756 $ 5,655 -- --
Alfred T. Santoro......... -- -- 85,922 430,551
Thomas H. Wells........... -- -- 29,039 303,563
- ---------
(a) Market value of underlying securities at exercise or year-end minus the
exercise or base price.
EMPLOYMENT AND CHANGE-IN-CONTROL AGREEMENTS
Derby Savings and the Corporation have entered into an employment agreement
with Harry P. DiAdamo Jr. The current term of Mr. DiAdamo's employment agreement
is through December 31, 1999. On each December 31, unless the Bank, the
Corporation or the employee has previously given written notice to the contrary,
an additional one-year period is added to the term of the agreement. The
employment agreement provided for an initial annual salary with a six percent
minimum annual increase in subsequent years. In 1995, Mr. DiAdamo's annual
salary pursuant to his employment agreement was $251,143. The employment
agreement also provides, among other things, for participation in discretionary
bonuses as authorized by the Board of Directors and for participation in
pension, stock option and other benefits applicable to executive personnel.
Mr. DiAdamo's employment agreement may be terminated for cause at any time
by the Board of Directors. His employment agreement is also terminable by the
Corporation or the Bank without cause, whereupon the employee would be entitled
to a lump sum cash payment equal to the full amount of his salary for the
remaining term of the agreement, and continuation for the remaining term of the
agreement of all vested retirement or employee benefits and then existing fringe
benefits. The employee has no right to terminate his employment agreement prior
to the end of the term without approval of the boards of directors of the Bank
and the Corporation except in connection with or within two years after a
"change in control" of the Corporation or the Bank, in which case Mr. DiAdamo
would receive a severance payment of three times average annual compensation
based on the prior five-year period. The agreement includes an employee covenant
not to compete for a period of the lesser of one year or the balance of the term
plus six months in the event the employee terminates his employment during the
term of the agreement without board approval. Under the terms of the agreement,
if the employment of Mr. DiAdamo were terminated by the Bank or the Corporation
other than for cause or by the employee during 1996, the severance payment which
Mr. DiAdamo would receive is $1,165,000. If his employment was terminated in
1996 voluntarily or involuntarily in connection with or within two years after a
"change in control," Mr. DiAdamo would be entitled to receive a severance
payment of approximately $990,000.
As defined in the agreement, a "change in control" will be deemed to have
occurred if (i) any person becomes the beneficial owner of 20% or more of the
total number of voting shares of the Corporation; (ii) any person becomes the
beneficial owner of 10% or more, but less than 20%, of the total number of
voting shares of the Corporation if the Board of Directors determines that such
beneficial ownership constitutes or will constitute control of the Corporation;
(iii) any person (other than the persons named as
13
proxies solicited on behalf of the Board of Directors of the Corporation) holds
revocable or irrevocable proxies, as to the election or removal of two or more
directors of the Corporation, for 25% or more of the total number of voting
shares of the Corporation; (iv) any person has commenced a tender or exchange
offer, or entered into an agreement or received an option, to acquire beneficial
ownership of 20% or more of the total number of voting shares of the
Corporation; or (v) as a result of, or in connection with, any cash tender or
exchange offer, merger, or other business combination, sale of assets or
contested election or any combination of the foregoing transactions, the persons
who were directors of the Corporation before such transaction shall cease to
constitute at least two-thirds of the Board of Directors of the Corporation or
any successor institution. A "change in control" of the Bank will be deemed to
have taken place if the Corporation's beneficial ownership of the total number
of voting shares of the Bank is reduced to less than 50% unless the transaction
that causes such reduction is approved by two-thirds of the Board of Directors
of the Bank. For purposes of the foregoing, the term "person" includes an
individual, a corporation, a partnership, a trust, or a group acting in concert.
The Bank and the Corporation have entered into severance payment agreements
with Alfred T. Santoro and Thomas H. Wells which generally provide that in the
event the employee's employment is terminated, voluntarily or involuntarily
(other than by normal retirement, disability or death), in connection with or
within two years after a change in control of the Bank or the Corporation, they
would be entitled to receive lump sum cash severance payments. The amount of
this payment would equal approximately three times the employee's average annual
compensation includible in his income for federal income tax purposes with
respect to the five-year period prior to the change in control of the Bank or
the Corporation. For purposes of the agreements, the term "change in control"
has a definition substantially the same definition of "change in control" in Mr.
DiAdamo's employment agreement. Under the terms of the severance payment
agreements, if the employment of Messrs. Santoro and Wells were terminated by
the Bank or the Corporation in 1996, in connection with a change in control, the
severance payment which each would receive is $455,000 and $376,000,
respectively.
REPORT ON EXECUTIVE COMPENSATION
Pursuant to the rules adopted by the SEC designed to enhance the disclosure
of company policies toward executive compensation, set forth below is a report
submitted by the Executive Compensation Committee of the Board of Directors of
the Bank and the stock option committee of the Board of Directors of the
Corporation addressing executive officer compensation policies for 1995. As
noted above, because the business of the Corporation currently consists of the
business of the Bank, no separate cash compensation is paid to the executive
officers of the Corporation.
During 1995, decisions on compensation (other than stock options) for
Messrs. DiAdamo and Costigan were made by the Bank's Board of Directors (with
Messrs. DiAdamo and Costigan not participating (based upon the recommendations
of the Executive Compensation Committee of the Board. Decisions on compensation
paid to other executive officers of the Bank (other than stock options) were
made by Messrs. DiAdamo and Costigan. Decisions as to the grant of stock options
are made by the Stock Option Committee of the Board of Directors of the
Corporation.
The Bank's executive compensation policies provide competitive levels of
compensation designed to integrate pay with the Bank's and the Corporation's
annual and long term performance goals. Underlying this objective are the
following concepts: supporting an individual pay-for-performance policy that
differentiates compensation levels based on corporate, business unit, and
individual performance; motivating key senior officers to achieve strategic
business objectives and rewarding them for that achievement; providing
compensation opportunities which are competitive to those offered in the
marketplace, thus allowing the Bank and the Corporation to compete for and
retain talented executives who are critical to the Bank's and the Corporation's
long term success; and aligning the interests of executives with the long term
interests of the Corporation's shareholders.
Executive compensation consists of three components: cash compensation,
including base salary and cash bonuses; long term incentive compensation in the
form of stock options; and executive and retirement benefits. The components are
intended to provide incentives to achieve short term and long term objectives
14
and to reward exceptional performance. Performance is evaluated not only with
respect to earnings but also with respect to comparable industry performance,
the accomplishment of business objectives, and the individual's contribution to
earnings and shareholder value.
CASH COMPENSATION. Pursuant to his employment agreement with the
Corporation and the Bank, Mr. DiAdamo annually is entitled to receive a minimum
six percent increase in his base salary. For 1995, Mr. DiAdamo received an
increase in his base salary of six percent, as determined by the Board after
evaluation of the factors set forth above. Messrs. Santoro and Wells received
increases of three percent and four percent, respectively, as determined by
Messrs. DiAdamo and Costigan after evaluation of the above criteria.
Each year, upon review of the recommendations of the Bank's Ad Hoc Committee
on Bonuses, the board determines whether to award discretionary bonuses to
executive officers. In 1995, the Ad Hoc Committee on Bonuses was comprised of
all directors of the Bank with the exception of Messrs. DiAdamo and Costigan.
The board considers granting bonuses only when it determines that performance is
meritorious and exceptional, and only after consideration of such factors as the
Bank's overall performance for such year, especially when compared to peer
institutions, and the time and talent exerted by management. Bonuses awarded in
1995 to the executive officers ranged up to thirteen percent of base salary.
STOCK OPTIONS. To encourage growth in shareholder value, stock options are
granted by the Corporation from time to time under the Corporation's stock
option plan to officers and other employees. During 1995, the Company granted a
total of 126,000 stock options, including an aggregate of 110,250 options to two
of the Company's executive officers. All options that were granted during 1995
had an exercise price of $25.00 per share and will expire in 2005.
EXECUTIVE AND RETIREMENT BENEFITS. In addition to the compensation
described above, the executive officers receive all normal employee fringe
benefits, as well as benefits under the Bank's thrift plan and pension plan. The
Bank also provides automobile allowances to executive officers, club memberships
(in the case of Messrs. DiAdamo and Costigan), and pays life and disability
insurance premiums for Mr. DiAdamo.
CEO COMPENSATION. As noted above, under the terms of Mr. DiAdamo's
employment agreement, Mr. DiAdamo is entitled to a six percent minimum annual
increase in salary. In 1995, Mr. DiAdamo received a salary increase of six
percent and a bonus of $25,000. During 1995, Mr. DiAdamo also received a grant
of a ten-year stock option for 68,250 shares of Corporation common stock. The
per share exercise price was $25.00, which equaled the fair market value of a
share of Corporation common stock on the date of grant. The Board believes the
compensation Mr. DiAdamo received for 1995 appropriately rewards Mr. DiAdamo for
the results he achieved during that year.
EXECUTIVE COMPENSATION
COMMITTEE OF THE STOCK OPTION COMMITTEE OF THE
BOARD OF DIRECTORS BOARD OF DIRECTORS OF THE
OF THE BANK CORPORATION
Walter R. Archer Jr., Chairman John M. Rak, Chairman
Achille A. Apicella Walter R. Archer Jr.
Angelo E. Dirienzo Michael F. Daddona Jr.
Michael F. Daddona, Jr., ex
officio
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. DiAdamo and Costigan serve on the Board of Directors of the Bank. As
such, they participate in compensation decisions with respect to the Bank's
executive officers. Neither Mr. DiAdamo nor Mr. Costigan participate or vote in
decisions on their own compensation.
During 1995, the Bank paid $11,436 in legal fees to the law firm of Donahue
& Donahue, of which Laura J. Donahue, a director of the Corporation and the
Bank, is a partner. Effective February 1996, the law firm of Hoyle & Sponheimer,
of which John Sponheimer is a partner, became corporate counsel to the Bank.
Such firm receives a retainer of $2,000 per month.
15
COMPARATIVE COMPANY PERFORMANCE
The following graph shows a five year comparison of cumulative total returns
for the Corporation, the Nasdaq National Stock Market and the KBW New England
Savings Bank Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
D.S. BANCOR,
INC. NASDAQ STOCK MARKET KBW NEW ENGLAND BANK INDEX
Dec-90 100.00 100.00 100.00
100.00 129.92 145.37
57.40 126.41 125.96
62.42 143.30 147.99
Dec-91 76.84 160.56 175.57
135.27 165.60 229.78
148.26 154.28 238.01
151.75 160.62 235.98
Dec-92 200.55 186.87 308.34
207.69 190.37 342.04
170.19 194.03 322.44
233.65 210.38 417.52
Dec-93 259.61 214.51 411.65
297.11 205.49 433.03
343.26 195.89 510.16
305.76 212.10 487.09
Dec-94 256.73 209.69 414.42
293.79 228.49 465.28
314.99 261.36 528.58
321.05 292.82 604.84
Dec-95 324.36 296.30 646.81
DEC-90 DEC-91 DEC-92 DEC-93 DEC-94 DEC-95
D.S. Bancor, Inc. 100.00 76.84 200.55 259.61 256.73 324.38
NASDAQ Stock Market Index 100.00 160.56 186.87 214.51 209.69 296.30
KBW New England Savings Bank Index 100.00 175.57 308.34 411.65 414.42 646.81
Assumes $100 invested on December 31, 1990 with full reinvestment of
dividends, if any.
PENSION PLAN
The following table sets forth estimated annual retirement benefits of
representative years of service and annual compensation under the Company's
pension plan.
PENSION PLAN TABLE
YEARS OF SERVICE (a)
-----------------------------------------------------
REMUNERATION 15 20 25 30 35
- ---------------- --------- --------- --------- --------- ---------
$ 125,000 $ 33,900 $ 45,200 $ 56,500 $ 67,800 $ 70,925
150,000 41,400 55,200 69,000 82,800 86,550
or more
- ---------
(a) For participants aged 65 retiring in 1995 and based on 1995 Social Security
benefit levels. Pension benefits payable beginning January 1, 1996 are
currently subject to a statutory maximum of $120,000 per year, subject to
cost of living adjustments. Additionally, annual compensation earned in
excess of $150,000 (subject to cost of living adjustments) may not be used
in the calculation of retirement benefits.
At December 31, 1995, Messrs. DiAdamo, Santoro and Wells had 10, 9 and 20
years, respectively, of credited service.
Contributions to the pension plan are determined on an actuarial basis for
the benefit of all qualifying employees. Employees become eligible for
participation on attainment of age 21 and the accumulation of 1,000 hours of
employment in a year. Annual normal retirement benefits are computed at the rate
of 60 percent of the participant's final earnings less 50 percent of the
participant's social security amount for participants with exactly 30 years of
credited service.
16
For participants with more than 30 years of credited service, annual normal
retirement benefits are computed as for participants with exactly 30 years of
credited service plus 1/2 of 1 percent of the participant's final earnings for
each year (up to ten) of credited service in excess of 30 years. For
participants with less than 30 years of credited service, annual normal
retirement benefits are computed by multiplying the annual normal retirement
benefit of a participant with exactly 30 years of credited service by the ratio
that the number of that participant's years of credited service bears to 30. The
plan also provides for optional early retirement benefits within ten years of a
participant's normal retirement date provided the participant has completed 15
years of credited service.
A participant's final earnings equals the highest average annual earnings
received in any five consecutive years during the last ten years before the
normal retirement date. Years of credited service equals the number of years of
employment, not including the first year of service, between ages 25 (for an
employee who became a participant prior to July 1, 1985, otherwise age 21) and
65. For participants retiring at normal or early retirement dates, a pension
equal to 50 percent of the participant's retirement income is payable to the
surviving spouse. As an alternative to the 50 percent continuation, a
participant when he or she retires may elect to pay 100 percent to the
participant's spouse or 66-2/3 percent to the spouse and retain 33-1/3 percent
of the benefit.
CERTAIN TRANSACTIONS
Derby Savings makes loans to its directors, officers, members of their
immediate families and other employees and holders of five percent or more of
the issued and outstanding shares of Bancor's common stock for the financing of
their homes as well as for home improvement and consumer loans. The Bank also
makes loans to business entities with which such shareholders of Bancor,
directors or officers of the Bank or members of their immediate families may be
associated. It is the Bank's policy that these loans are made in the ordinary
course of business and neither involve more than normal risk of collectability
nor present other unfavorable features. These loans are made on substantially
the same terms (including interest rate, fees and collateral) as those
prevailing at the time for comparable transactions with non-affiliated persons
and have been made in compliance with the requirements of state and federal law
applicable to loans to such persons. As of December 31, 1995 loans to holders of
five percent or more of Bancor's issued and outstanding common stock, directors
and executive officers of Derby Savings and their affiliated businesses totaled
approximately $674,000.
For a description of certain transactions regarding the Bank and Ms. Donahue
and Mr. Sponheimer, see "Compensation Committee Interlocks and Insider
Participation."
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
(PROPOSAL 2)
The Board of Directors has appointed the firm of Friedberg, Smith & Co.,
P.C. to continue as independent public accountants for the Corporation for the
year ending December 31, 1996. Friedberg, Smith & Co., P.C. has been acting as
independent public accountants of the Corporation since its formation in 1987
and for Derby Savings since 1982. Unless otherwise indicated, properly executed
proxies will be voted in favor of ratifying the appointment of Friedberg, Smith
& Co., P.C., independent public accountants, to audit the books and accounts of
the Corporation and its subsidiary for the year ending December 31, 1996. No
determination has been made as to what action the Board of Directors would take
if the shareholders do not ratify the appointment.
Assuming the presence of a quorum at the Annual Meeting, the affirmative
vote of the holders of at least a majority of the votes cast at the Annual
Meeting is required to ratify the appointment of Friedberg, Smith & Co., P.C. as
the Corporation's independent public accountants for the year ending December
31, 1996.
Representatives of Friedberg, Smith & Co., P.C. will be present at the
Annual Meeting. They will be given an opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions.
17
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF
APPOINTMENT OF THE INDEPENDENT PUBLIC ACCOUNTANTS.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 1997 annual
meeting of shareholders must be received by Bancor at its principal executive
offices on or before November 29, 1996 in order to be considered for inclusion
in its proxy statement and form of proxy relating to the 1996 annual meeting.
Nothing in this paragraph should be deemed to require the Corporation to include
in its proxy statement and proxy relating to the 1997 annual meeting any
shareholder proposal which may be omitted from the Corporation's proxy materials
pursuant to applicable regulations of the SEC in effect at the time such
proposal is received.
The bylaws of Bancor provide that in order for any director nominations and
new business to be properly brought before an annual meeting by a shareholder,
the shareholder must have given timely notice thereof in writing to the
secretary of the Corporation. To be timely, a shareholder's notice must be
delivered to or mailed and received at the principal executive offices of Bancor
not less than 30 nor more than 90 days prior to the date of the meeting;
provided, however, that in the event less than 45 days' notice or prior public
disclosure of the date of the meeting is given or made to shareholders, notice
by the shareholder to be timely must be so received not later than the close of
business on the 15th day following the day on which such notice of the date of
the annual meeting was mailed or such public disclosure was made. A
shareholder's notice must set forth certain information specified in Article II,
Section 3 of Bancor's bylaws with respect to each matter the shareholder
proposes to bring before the annual meeting. Bancor's bylaws provide that no
business shall be conducted at an annual meeting except in accordance with the
procedures set forth in Article II, Section 3 of the bylaws.
OTHER MATTERS
As of the date of this proxy statement, the Board of Directors of Bancor
knows of no matters to be brought before the Annual Meeting other than those
specifically listed in the Notice of Annual Meeting of Shareholders. However, if
further business is properly presented, the persons named in the accompanying
proxy will vote such proxy as determined by a majority of the Board of
Directors.
The Board of Directors of Bancor urges each shareholder, whether or not he
or she intends to be present at the Annual Meeting, to complete, sign and return
the enclosed proxy as promptly as possible.
By Order of the Board of Directors
[SIGNATURE]
HARRY P. DIADAMO JR.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Derby, Connecticut
March 29, 1996
18
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TABLE OF CONTENTS
PAGE
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Solicitation, Voting and Revocability of
Proxies...................................... 1
Stock Owned by Management...................... 3
Stock Owned by Principal Shareholders.......... 5
Election of Directors.......................... 6
Executive Compensation and Other Information... 11
Ratification of Appointment of Independent
Public Accountants........................... 17
Shareholder Proposals.......................... 18
Other Matters.................................. 18
[LOGO]
DS BANCOR, INC.
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PROXY STATEMENT
MARCH 29, 1996
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DS BANCOR, INC.
33 ELIZABETH STREET, DERBY, CONNECTICUT 06418
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS--April 24, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of DS Bancor, Inc. (the "Corporation") hereby
appoints John F. Costigan and Alfred T. Santoro, and each of them, with full
power of substitution, as proxies to cast all votes, as designated below, which
the undersigned shareholder is entitled to cast at the 1996 annual meeting of
shareholders (the "Annual Meeting") to be held on April 24, 1996 at 10:00 a.m.,
local time, at the Grassy Hill Lodge, 77 Sodom Lane, Derby, Connecticut, and at
any adjournments thereof, upon the following matters.
This proxy will be voted as directed by the undersigned shareholder. UNLESS
CONTRARY DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES LISTED IN PROPOSAL 1, FOR PROPOSAL 2 AND IN ACCORDANCE WITH THE
RECOMMENDATIONS OF A MAJORITY OF THE BOARD OF DIRECTORS AS TO OTHER MATTERS.
The undersigned shareholder hereby acknowledges receipt of the Notice of Annual
Meeting and Proxy Statement and hereby revokes any proxy or proxies heretofore
given. This proxy may be revoked at any time prior to its exercise.
(CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE)
(Continued from reverse side)
/X/ Please mark your
votes as in this
example.
FOR ALL NOMINEES LISTED WITHHOLD AUTHORITY
(EXCEPT AS MARKED TO THE TO VOTE FOR ALL NOMINEES
CONTRARY BELOW) LISTED
1. To elect three / / / /
directors each for a
three-year term and
one director for a
one year term.
NOMINEES (three year terms): Walter R. Archer, Jr.
Laura J. Donahue
John M. Rak
NOMINEE (one-year term): Harry P. DiAdamo Jr.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
________________________________________________________________________________
2. To ratify the appointment by the FOR AGAINST ABSTAIN
Corporation's Board of Directors of / / / / / /
the firm of Friedberg, Smith & Co.,
P.C. as independent public accoun-
tants of the Corporation for the year
ending December 31, 1996.
If you receive more than one proxy
card, please date, sign and return all
cards in the accompanying envelope.
Dated: ________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please date and sign here exactly as name appears at left. When signing as
attorney, administrator, trustee or guardian, give full title as such; and when
stock has been issued in the name of two or more persons, all should sign.)