SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
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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(e)(2))
|X| Definitive proxy statement
|_| Definitive additional materials
|_| Soliciting material pursuant to Rule 14a-12
Berkshire Hills Bancorp, Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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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:
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|_| Fee paid previously with preliminary materials.
|_| 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.
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(4) Date Filed:
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April 2, 2001
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders
of Berkshire Hills Bancorp, Inc. The meeting will be held at the Crowne Plaza
Hotel, One West Street, Pittsfield, Massachusetts, on Thursday, May 3, 2001 at
10:00 a.m., local time.
The notice of annual meeting and proxy statement appearing on the
following pages describe the formal business to be transacted at the meeting.
Directors and officers of the Company, as well as a representative of Wolf &
Company, P.C., the Company's independent auditors, will be present to respond to
appropriate questions of stockholders.
It is important that your shares are represented at this meeting,
whether or not you attend the meeting in person and regardless of the number of
shares you own. To make sure your shares are represented, we urge you to
complete and mail the enclosed proxy card promptly. If you attend the meeting,
you may vote in person even if you have previously mailed a proxy card.
We look forward to seeing you at the meeting.
Sincerely,
/s/ James A. Cunningham, Jr.
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James A. Cunningham, Jr.
President and Chief Executive Officer
Berkshire Hills Bancorp, Inc.
24 North Street
Pittsfield, Massachusetts 01201
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Notice of Annual Meeting of Stockholders
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On Thursday, May 3, 2001, Berkshire Hills Bancorp, Inc. (the "Company")
will hold its annual meeting of stockholders at the Crowne Plaza Hotel, One West
Street, Pittsfield, Massachusetts. The meeting will begin at 10:00 a.m., local
time. At the meeting, the stockholders will consider and act on the following:
1. The election of six directors to serve for a term of three years;
2. The ratification of the appointment of Wolf & Company, P.C. as
independent auditors for the Company for the fiscal year ending
December 31, 2001; and
3. The transaction of any other business that may properly come before
the meeting.
NOTE: The Board of Directors is not aware of any other business
scheduled to come before the meeting.
Only stockholders of record at the close of business on March 15, 2001
are entitled to receive notice of the meeting and to vote at the meeting and any
adjournment or postponement of the meeting.
Please complete and sign the enclosed form of proxy, which is solicited
by the Board of Directors, and mail it promptly in the enclosed envelope. The
proxy will not be used if you attend the meeting and vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Rose A. Borotto
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Rose A. Borotto
Corporate Secretary
Pittsfield, Massachusetts
April 2, 2001
IMPORTANT: The prompt return of proxies will save the Company the expense of
further requests for proxies in order to ensure a quorum. A self-addressed
envelope is enclosed for your convenience. No postage is required if mailed in
the United States.
Berkshire Hills Bancorp, Inc.
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Proxy Statement
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This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Berkshire Hills Bancorp, Inc. (the
"Company") to be used at the annual meeting of stockholders of the Company. The
Company is the holding company for Berkshire Bank ("Berkshire Bank" or the
"Bank"). The annual meeting will be held at the Crowne Plaza Hotel, One West
Street, Pittsfield, Massachusetts, on Thursday, May 3, 2001, at 10:00 a.m.,
local time. This proxy statement and the enclosed proxy card are being mailed to
stockholders on or about April 2, 2001.
Voting and Proxy Procedure
Who Can Vote at the Meeting
You are entitled to vote your Company common stock if the records of
the Company show that you held your shares as of the close of business on March
15, 2001. If your shares are held in a stock brokerage account or by a bank or
other nominee, you are considered the beneficial owner of shares held in "street
name" and these proxy materials are being forwarded to you by your broker or
nominee. As the beneficial owner, you have the right to direct your broker on
how to vote. Your broker or nominee has enclosed a voting instruction card for
you to use in directing the broker or nominee on how to vote your shares.
As of the close of business on March 15, 2001, a total of 7,290,073
shares of Company common stock was outstanding. Each share of common stock has
one vote. As provided in the Company's Certificate of Incorporation, record
owners of the Company's common stock who beneficially own, either directly or
indirectly, in excess of 10% of the Company's outstanding shares, are not
entitled to any vote in respect of the shares held in excess of the 10% limit.
Attending the Meeting
If you are a stockholder as of the close of business on March 15, 2001,
you may attend the meeting. However, if you hold your shares in street name, you
will need proof of ownership to be admitted to the meeting. A recent brokerage
statement or letter from a bank or broker are examples of proof of ownership. If
you want to vote your shares of Company common stock held in street name in
person at the meeting, you will have to get a written proxy in your name from
the broker, bank or other nominee who holds your shares.
Vote Required
A majority of the outstanding shares of common stock entitled to vote
is required to be represented at the meeting in order to constitute a quorum for
the transaction of business. If you return valid proxy instructions or attend
the meeting in person, your shares will be counted for purposes of determining
whether there is a quorum, even if you abstain from voting. Broker non-votes
also will be counted for purposes of determining the existence of a quorum. A
broker non-vote occurs when a broker, bank or other nominee holding shares for a
beneficial owner does not vote on a particular proposal because the nominee does
not have discretionary voting power with respect to that item and has not
received voting instructions from the beneficial owner.
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In voting on the election of directors, you may vote in favor of all
nominees, withhold votes as to all nominees or withhold votes as to specific
nominees. Directors are elected by a plurality of the votes cast. This means
that the nominees receiving the greatest number of votes will be elected. Votes
that are withheld and broker non-votes will have no effect on the outcome of the
election.
In voting on the ratification of the appointment of Wolf & Company,
P.C. as independent auditors, you may vote in favor of the proposal, against the
proposal or abstain from voting. This matter will be decided by the affirmative
vote of a majority of the votes cast. Broker non-votes and abstentions will not
be counted as votes cast and will have no effect on the voting on this proposal.
Voting by Proxy
The Company's Board of Directors is sending you this proxy statement
for the purpose of requesting that you allow your shares of Company common stock
to be represented at the annual meeting by the persons named in the enclosed
proxy card. All shares of Company common stock represented at the meeting by
properly executed and dated proxies will be voted according to the instructions
indicated on the proxy card. If you sign, date and return a proxy card without
giving voting instructions, your shares will be voted as recommended by the
Company's Board of Directors. The Board of Directors recommends a vote "FOR"
each of the nominees and "FOR" ratification of Wolf & Company, P.C. as
independent auditors.
If any matters not described in this proxy statement are properly
presented at the annual meeting, the persons named in the proxy card will use
their judgment to determine how to vote your shares. This includes a motion to
adjourn or postpone the meeting in order to solicit additional proxies. If the
annual meeting is postponed or adjourned, your Company common stock may be voted
by the persons named in the proxy card on the new meeting date as well, unless
you have revoked your proxy. The Company does not know of any other matters to
be presented at the meeting.
You may revoke your proxy at any time before the vote is taken at the
meeting. To revoke your proxy you must either advise the Corporate Secretary of
the Company in writing before your common stock has been voted at the annual
meeting, deliver a later dated proxy or attend the meeting and vote your shares
in person by ballot. Attendance at the annual meeting will not in itself
constitute revocation of your proxy.
If your Company common stock is held in street name, you will receive
instructions from your broker, bank or other nominee that you must follow in
order to have your shares voted. Your broker or bank may allow you to deliver
your voting instructions via the telephone or the Internet. Please see the
instruction form that is provided by your broker, bank or other nominee and
which accompanies this proxy statement.
Participants in Berkshire Bank's ESOP
If you participate in the Berkshire Bank Employee Stock Ownership Plan
you will have received with this proxy statement a voting instruction form that
reflects all shares you may vote under the plan. Under the terms of the ESOP,
all shares held by the ESOP are voted by the ESOP trustee, but each participant
in the ESOP may direct the trustee how to vote the shares of Company common
stock allocated to his or her account. Unallocated shares of common stock held
by the ESOP and allocated shares for which no timely voting instructions are
received will be voted by the ESOP trustee in the same proportion as shares for
which the trustee has received voting instructions, subject to the exercise of
its fiduciary duties. The deadline for returning your voting instructions to the
plan's trustee is April 23, 2001.
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Stock Ownership
The following table provides information as of March 15, 2001, with
respect to persons known by the Company to be the beneficial owners of more than
5% of the Company's outstanding common stock. A person may be considered to own
any shares of common stock over which he or she has, directly or indirectly,
sole or shared voting or investing power.
Number of Shares Percent of Common
Name and Address Owned Stock Outstanding
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Berkshire Bank Employee Stock Ownership Plan 613,900(1) 8.4%
24 North Street
Pittsfield, Massachusetts
Berkshire Hills Charitable Foundation 568,427(2) 7.8%
24 North Street
Pittsfield, Massachusetts
DePrince, Race & Zollo, Inc. 490,500(3) 6.7%
201 South Orange Avenue, Suite 850
Orlando, FL 32801
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(1) Under the terms of the ESOP, the ESOP trustee will vote shares allocated to
participants' accounts in the manner directed by the participants. The ESOP
trustee, subject to its fiduciary responsibilities, will vote unallocated
shares and allocated shares for which no timely voting instructions are
received in the same proportion as shares for which the trustee has
received proper voting instructions from participants. As of March 15,
2001, 40,935 shares have been allocated to participants' accounts and
572,965 shares remain unallocated under the ESOP.
(2) The terms of the foundation's gift instrument require that all shares of
common stock held by the foundation must be voted in the same ratio as all
other shares of Company common stock on all proposals considered by
stockholders of the Company.
(3) Based on information filed in a Schedule 13G with the U.S. Securities and
Exchange Commission on February 14, 2001.
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The following table provides information about the shares of Company
common stock that may be considered to be owned by each director of the Company,
by the executive officers named in the Summary Compensation Table and by all
directors and executive officers of the Company as a group as of March 15, 2001.
A person may be considered to own any shares of common stock over which he or
she has, directly or indirectly, sole or shared voting or investment power.
Unless otherwise indicated, each of the named individuals has sole voting and
investment power with respect to the shares shown.
Number of
Shares Percent of
Owned Common Stock
Name (1)(2)(3)(4) Outstanding (5)
- ------- --------------- -----------------
Thomas O. Andrews................................................ 30,755 *
James A. Cunningham, Jr.......................................... 107,355(6) 1.5%
Michael P. Daly.................................................. 32,289 *
Thomas R. Dawson................................................. 12,255 *
Henry D. Granger................................................. 10,755 *
A. Allen Gray.................................................... 20,755 *
John Kittredge................................................... 7,755 *
Peter J. Lafayette............................................... 11,755(7) *
Edward G. McCormick.............................................. 15,755 *
Catherine B. Miller.............................................. 16,755(8) *
Michael G. Miller................................................ 41,255(9) *
Raymond B. Murray, III........................................... 18,630 *
Louis J. Oggiani................................................. 8,355(10) *
Charles F. Plungis, Jr........................................... 24,721 *
Robert S. Raser.................................................. 7,341(11) *
Susan M. Santora................................................. 23,722 *
Corydon L. Thurston.............................................. 11,055(12) *
Ann H. Trabulsi.................................................. 16,755(13) *
Robert A. Wells.................................................. 64,293(14) *
William E. Williams.............................................. 12,755(15) *
Anne Everest Wojtkowski.......................................... 7,755 *
All Executive Officers and Directors as a Group (21 persons)..... 502,821 6.9%
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*Represents less than 1% of shares outstanding
(1) Includes unvested shares of restricted stock awards held in trust as part
of the Berkshire Hills Bancorp, Inc. 2001 Stock-Based Incentive Plan, with
respect to which the beneficial owner has voting but not investment power
as follows: Messrs. Andrews, Dawson, Granger, Gray, Kittredge, Lafayette
McCormick, Miller, Murray, Oggiani, Raser, Thurston, Williams and Ms.
Miller, Ms. Trabulsi and Ms. Wojtkowski, each--5,755 shares; Mr.
Cunningham--76,737 shares; Mr. Daly--21,488 shares; Mr. Plungis--21,486
shares; Ms. Santora--21,486 shares; and Mr. Wells--36,834 shares.
(2) Includes shares allocated to the account of the individuals under the
Berkshire Bank ESOP, with respect to each individual has voting but not
investment power as follows: Mr. Cunningham--735 shares; Mr. Daly--722
shares; Mr. Plungis--735 shares; Ms. Santora--651 shares; and Mr.
Wells--735 shares.
(3) Includes shares held in trust as part of the Berkshire Bank Supplemental
Executive Retirement Plan, with respect to which the beneficial owner has
shared voting power as follows: Mr. Cunningham--883 shares and Mr.
Wells--524 shares.
(4) Includes shares held in trust in the Berkshire Bank 401(k) Plan as to
which each participant has investment but not voting power as follows: Mr.
Cunningham--25,000 shares; Mr. Daly--7,579 shares; Ms. Santora--1,585
shares; and Mr. Wells--25,000 shares.
(footnotes continued on following page)
4
(5) Based on 7,290,073 shares of Company common stock outstanding and entitled
to vote as of March 15, 2001.
(6) Includes 500 shares held by each of Mr. Cunningham's two children.
(7) Includes 2,460 shares held by Mr. Lafayette's spouse's individual
retirement account.
(8) Includes 1,000 shares held by Ms. Miller's spouse.
(9) Includes 500 shares held by Mr. Miller's spouse and 25,000 shares held by
a corporation in which Mr. Miller shares voting power.
(10) Includes 50 shares held by each of Mr. Oggiani's two children.
(11) Includes 405 shares held by Mr. Raser's spouse's individual retirement
account.
(12) Includes 100 shares held by each of Mr. Thurston's three children.
(13) Includes 1,000 shares held by Ms. Trabulsi's spouse.
(14) Includes 1,100 shares held by Mr. Wells' spouse.
(15) Includes 2,500 shares held by a corporation in which Mr. Williams shares
voting power.
Proposal 1 -- Election of Directors
The Company's Board of Directors consists of eighteen members. Sixteen
directors are independent and two directors are officers. The Board is divided
into three classes with three-year staggered terms, with one-third of the
directors elected each year. The nominees for election this year are Henry D.
Granger, Edward G. McCormick, Raymond B. Murray, III, Robert A. Wells, Ann H.
Trabulsi and Anne Everest Wojtkowski, each of whom is a director of the Company
and the Bank.
It is intended that the proxies solicited by the Board of Directors
will be voted for the election of the nominees named above. If any nominee is
unable to serve, the persons named in the proxy card would vote your shares to
approve the election of any substitute proposed by the Board of Directors.
Alternatively, the Board of Directors may adopt a resolution to reduce the size
of the Board. At this time, the Board of Directors knows of no reason why any
nominee might be unable to serve.
The Board of Directors recommends a vote "FOR" the election of all of
the nominees.
Information regarding the nominees and the directors continuing in
office is provided below. Unless otherwise stated, each individual has held his
current occupation for the last five years. The age indicated in each nominee's
biography is as of December 31, 2000. There are no family relationships among
the directors or executive officers. The indicated period for service as a
director includes service as a director of the Bank.
Nominees for Election of Directors
The nominees standing for election are:
Henry D. Granger is the owner of Northeast Technical Associates, Inc.,
a real estate appraisal firm, located in Great Barrington, Massachusetts. Age
64. Director since 1985.
Edward G. McCormick is the managing partner of the law firm of
McCormick, Murtagh, Marcus & Smith, located in Great Barrington, Massachusetts.
Age 53. Director since 1994.
Raymond B. Murray, III is the vice president and co-owner of Ray
Murray, Inc., a regional wholesale equipment distributor for propane, natural
and industrial gas markets located in Lee, Massachusetts. Age 54. Director since
1991.
Robert A. Wells is the Chairman of the Board of the Company and Bank
and Chairman of the Board of Berkshire Hills Charitable Foundation and Greater
Berkshire Charitable Foundation. Mr. Wells served as
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President and Chief Executive Officer of Berkshire County Savings Bank prior to
its merger with Great Barrington Savings Bank in May 1997. Age 61. Director
since 1976.
Ann H. Trabulsi is a community volunteer serving on various
not-for-profit boards, including Berkshire Medical Center and Berkshire Health
Systems. Age 65. Director since 1976.
Anne Everest Wojtkowski is a professor of engineering at Berkshire
Community College. Age 65. Director since 1973.
Directors Continuing in Office
The following directors have terms ending in 2002:
Thomas O. Andrews is the President and Chief Executive Officer of H.S.
Andrews Insurance Agency in Great Barrington, Massachusetts. Age 62. Director
since 1980.
A. Allen Gray is a vice president and general counsel of General
Dynamics Defense Systems, Inc., a government contractor located in Pittsfield,
Massachusetts. Age 56. Director since 1996.
Catherine B. Miller is a former partner and vice president of Wheeler &
Taylor, Inc., an insurance agency with offices in Stockbridge, Great Barrington
and Sheffield, Massachusetts. Age 59. Director since 1983.
Michael G. Miller has served as the President of South Mountain
Products, a food importer located in Pittsfield, Massachusetts since 1997. Mr.
Miller was retired from 1995 until 1997. Mr. Miller served as President and
Chief Executive Officer of EPC Holding, a newspaper publishing company located
in Pittsfield, Massachusetts prior to his two-year retirement. Age 58. Director
since 1989.
Louis J. Oggiani is a general practice attorney with a private office
in Great Barrington, Massachusetts. Age 49. Director since 1995.
William E. Williams is the President of W.E. Williams Paving, Inc., a
company located in West Stockbridge, Massachusetts, providing all types of
excavating and paving services throughout Berkshire County and surrounding
areas. Mr. Williams is also a partner of Williams Leasing and Williams J.V.,
both of which own and hold land, located in West Stockbridge, Massachusetts. Age
49. Director since 1992.
The following directors have terms ending in 2003:
James A. Cunningham, Jr. serves as President and Chief Executive
Officer of the Bank and the Company and the President of the Board of Berkshire
Hills Charitable Foundation and Greater Berkshire Charitable Foundation. Mr
Cunningham was President and Chief Executive Officer of Great Barrington Savings
Bank prior to its merger with Berkshire County Savings Bank in May 1997. Age 50.
Director since 1990.
Thomas R. Dawson is a self-employed certified public accountant. Age
53. Director since 1993.
John Kittredge is a retired vice president of Crane and Company, Inc.,
a paper manufacturer located in Dalton, Massachusetts. Age 72. Director since
1974.
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Peter J. Lafayette is the President of Berkshire Housing Development
Corporation, a non-profit housing developing and consulting organization and the
President of Berkshire Housing Services, Inc., a property management company,
both of which are located in Pittsfield, Massachusetts. Age 53. Director since
1996.
Robert S. Raser has been an account executive with the Windsor
Marketing Group, a retail marketing firm located in Windsor Locks, Connecticut
since January 2001. From May to November 2000, Mr. Raser was an inventory
control manager with County Curtains located in Stockbridge, Massachusetts. From
January 1990 to March 2000, Mr. Raser was the President of Carr Brothers
Hardware Co., Inc. located in Great Barrington, Massachusetts. Age 44. Director
since 1996.
Corydon L. Thurston serves as executive vice president of Berkshire
Broadcasting, Inc., which owns and operates three radio stations in North Adams
and Great Barrington, Massachusetts. Age 48. Director since 1988.
Meetings and Committees of the Board of Directors
The Company and the Bank conduct business through meetings of their
Boards of Directors and through activities of their committees. The Board of
Directors of the Company and the Bank generally meet monthly and may have
additional meetings as needed. During 2000, the Board of Directors of the
Company and the Bank held 15 meetings. All of the current directors of the
Company and the Bank attended at least 75% of the total number of the Company's
and the Bank's board meetings held and committee meetings on which such
directors served during 2000.
The Board of Directors of the Company maintains the following
committees:
Audit Committee. The Audit Committee, consisting of Messrs. Dawson,
Gray, Raser and Williams, assists the Board of Directors in its oversight of the
integrity of the Company's processes and systems of internal control concerning
accounting and financial reporting and reviews compliance with applicable laws
and regulations. The Committee is also responsible for engaging the Company's
independent auditors and its internal auditor and monitoring their conduct and
independence. The Audit Committee met five times in 2000.
Compensation Committee. The Compensation Committee, consisting of
Messrs. Murray and Thurston, Ms. Miller and Ms. Trabulsi makes recommendations
to the full Board of Directors on all matters regarding compensation and fringe
benefits. The Compensation Committee met one time in 2000.
Nominating Committee. The Company's Nominating Committee for the 2001
Annual Meeting consisted of Messrs. Cunningham, Murray, Thurston and Wells and
Ms. Miller and Ms. Trabulsi. The Nominating Committee considers and recommends
the nominees for director to stand for election at the Company's Annual Meeting
of Stockholders. The Company's Bylaws provide for stockholder nominations of
directors. These provisions require such nominations to be made pursuant to
timely written notice to the Secretary of the Company. The stockholders' notice
of nominations must contain all information relating to the nominee which is
required to be disclosed by the Company's Bylaws and by the Securities Exchange
Act of 1934. See "Stockholder Proposals." The Nominating Committee met on
January 9, 2001.
Directors' Compensation
Fees. Non-employee directors of the Bank each receive an annual
retainer of $7,500 and members of the Executive Committee receive an additional
$1,500. In addition, non-employee directors receive $500 for each board meeting
attended, $750 for each Executive Committee meeting attended, $500 for each
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Community Reinvestment Act or Audit Committee meeting attended and $250 for each
Trust Committee meeting attended. The Company does not pay separate fees for
service on its Board of Directors.
Executive Compensation
Summary Compensation Table
The following information is furnished for the President and Chief
Executive Officer and the four other highest paid executive officers of
Berkshire Bank who received a salary and bonus of $100,000 or more during the
year ended December 31, 2000.
Annual Compensation (1)
----------------------------------
All Other
Name and Position Year (2) Salary (3) Bonus Compensation
- ----------------- --------- ----------- -------- -------------
James A. Cunningham, Jr. ............................ 2000 $320,000 $64,000 $ 99,331(4)
President and Chief Executive Officer 1999 260,400 52,080 68,221
Robert A. Wells...................................... 2000 250,000 50,000 105,793(4)
Chairman of the Board 1999 248,750 45,000 81,674
Charles F. Plungis, Jr. ............................. 2000 140,750 35,187 28,336(5)
Senior Vice President, Treasurer and 1999 110,775 22,155 16,197
Chief Financial Officer
Michael P. Daly...................................... 2000 139,250 27,850 23,073(5)
Executive Vice President- Senior Loan Officer 1999 116,601 23,320 12,582
Susan M. Santora..................................... 2000 125,510 25,102 25,738(5)
Executive Vice President-Retail Banking 1999 109,140 32,742 15,543
(1) Does not include the aggregate amount of perquisites and other benefits,
which was less than $50,000 or 10% of the total annual salary and bonus
reported.
(2) Compensation information for the 1998 fiscal year has been omitted because
Berkshire Bank was neither a public company nor a subsidiary of a public
company at that time.
(3) Includes $23,750 of directors' fees for Mr. Wells for 1999. Mr. Wells no
longer receives board fees.
(4) Consists of employer contributions to Berkshire Bank's 401(k) plan of
$5,100 and ESOP allocations with a market value of $11,576 each for
Messrs. Cunningham and Wells. Includes share allocations under Berkshire
Bank's supplemental executive retirement plan with a market value of
$13,907 and $8,253 for Messrs. Cunningham and Wells, respectively. Also
consists of the economic benefit of employer-paid premiums on split-dollar
life insurance arrangements entered into with Messrs. Cunningham and
Wells, respectively. Berkshire Bank expects to recover all of the premium
payments it made with respect to the life insurance policies purchased in
connection with such arrangements.
(5) Consists of employer contributions of $4,222, $4,178 and $3,765 to
Berkshire Bank's 401(k) plan, employer service costs of $12,538, $7,523
and $11,720 to Berkshire Bank's defined benefit plan and ESOP allocations
with a market value of $11,576, $11,372 and $10,253 for Messrs. Plungis
and Daly and Ms. Santora, respectively.
Employment Agreements
Berkshire Bank and Berkshire Hills maintain employment agreements with
Messrs. Cunningham, Wells, Daly, Plungis and Ms. Santora. The employment
agreements are intended to ensure that Berkshire Bank and Berkshire Hills will
be able to maintain a stable and competent management base. The continued
success of Berkshire Bank and Berkshire Hills depends to a significant degree on
the skills and competence of these officers.
8
The employment agreements provide for three-year terms that
automatically extend on a daily basis unless the Board of Directors or the
executive gives the other party written notice of non-renewal. The employment
agreements provide for base salaries for Messrs. Cunningham, Wells, Daly, and
Plungis and Ms. Santora of $332,800, $250,000, $144,820, $146,380 and $130,530,
respectively, which are reviewed at least annually. In addition to the base
salary, the employment agreements provide for, among other things, participation
in stock and employee benefit plans and fringe benefits applicable to executive
personnel.
The employment agreements provide for termination by Berkshire Bank or
Berkshire Hills for cause, as defined in the employment agreements, at any time.
If Berkshire Bank or Berkshire Hills chooses to terminate an executive's
employment for reasons other than for cause, or if an executive resigns from
Berkshire Bank or Berkshire Hills after specified circumstances that would
constitute constructive termination, the executive or, if the executive dies,
his or her beneficiary, would be entitled to receive an amount equal to the
remaining base salary and incentive compensation payments due to the executive
for the remaining term of the employment agreement and the contributions that
would have been made on the executive's behalf to any employee benefit plans of
Berkshire Bank and Berkshire Hills during the remaining term of the employment
agreement. Berkshire Bank and Berkshire Hills would also continue and/or pay for
the executive's life, health, dental and disability coverage for the remaining
term of the employment agreement. Upon termination of the executive's employment
under these circumstances, the executive must adhere to a one year
non-competition restriction.
Under the employment agreements, if voluntary (upon circumstances
discussed in the agreements) or involuntary termination follows a change in
control of Berkshire Bank or Berkshire Hills, the executive or, if the executive
dies, his or her beneficiary, would be entitled to a severance payment equal to
the greater of: (1) the payments due for the remaining term of the agreement; or
(2) three times the average of the executive's compensation for the five
preceding taxable years. Berkshire Bank and Berkshire Hills would also continue
the executive's life, health, and disability coverage for thirty-six months.
Even though both the Berkshire Bank and Berkshire Hills employment agreements
provide for a severance payment if a change in control occurs, the executive
would not receive duplicative payments or benefits under the agreements. The
executive would also be entitled to receive a certain tax indemnification
payment if payments under the employment agreements or otherwise trigger
liability under the Internal Revenue Code for the excise tax applicable to
"excess parachute payments." Under applicable law, the excise tax is triggered
by change in control-related payments which equal or exceed three times the
executive's average annual compensation over the five years preceding the change
in control. The excise tax equals 20% of the amount of the payment in excess of
the executive's average compensation over that preceding five-year period.
Payments to the executive under Berkshire Bank's employment agreement
are guaranteed by Berkshire Hills if payments or benefits are not paid by
Berkshire Bank. Payment under Berkshire Hills' employment agreement would be
made by Berkshire Hills. All reasonable costs and legal fees paid or incurred by
the executive in any dispute or question of interpretation relating to the
employment agreements will be paid by Berkshire Bank or Berkshire Hills,
respectively, if the executive is successful on the merits in a legal judgment,
arbitration or settlement. The employment agreements also provide that Berkshire
Bank and Berkshire Hills will indemnify the executive to the fullest extent
legally allowable.
Pension Plan
Berkshire Bank sponsors a pension plan for its employees who are 21
years old and have completed 1,000 hours of service in a consecutive 12-month
period. However, the accrual of benefits under the Pension Plan have been frozen
as of February 28, 2000, and the Bank has taken steps to terminate the plan as
of March
9
31, 2001. In connection with the termination of the pension plan, all
participants will become fully vested in their accrued benefits.
For fiscal 2000, a participant's normal benefit under the pension plan
equals the sum of (1) 1.35% of the participant's average compensation (generally
defined as the average taxable compensation for the three consecutive years that
produce the highest average) divided by the number of years of service the
participant has under the plan up to 25 years of service, plus (2) 0.6% of the
excess of the participant's average compensation over the participant's covered
compensation (the social security taxable wage base for the 35 years ending in
the year the participant becomes eligible for non-reduced social security
benefits) for each year of service under the plan up to 25 years of service.
Participants may retire at or after age 65 and receive their full benefit under
the plan. Participants may also retire early at age 62, at age 55 with ten years
of service or at age 50 with 15 years of service under the plan and receive a
reduced retirement benefit. Pension benefits are payable in equal monthly
installments for life, or for married persons, as a joint survivor annuity over
the lives of the participant and spouse. Participants may also elect a lump sum
payment with the consent of their spouse.
The following table indicates the annual employer-provided retirement
benefit payable under the pension plan upon retirement at age 65 to a
participant electing to receive his pension benefit in the standard form of
benefit, assuming various specified levels of plan compensation and various
specified years of credited service. Under the Internal Revenue Code, maximum
annual benefits under the pension plan are limited to $140,000 per year and
annual compensation for benefit calculation purposes is limited to $170,000 per
year for the 2001 calendar year.
Average Years of Service
Annual -------------------------------------------------------------
Compensation 10 15 20 25 30 35+
------------ ------- ------- ------- ------- ------- -------
$ 50,000 $ 7,644 $11,465 $15,287 $19,109 $19,109 $19,109
75,000 12,519 18,778 25,037 31,297 31,297 31,297
100,000 17,394 26,090 34,787 43,484 43,484 43,484
125,000 22,269 33,403 44,537 55,672 55,672 55,672
150,000 27,144 40,715 54,287 67,859 67,859 67,859
175,000 31,044 46,565 62,087 77,609 77,609 77,609
200,000 31,044 46,565 62,087 77,609 77,609 77,609
300,000 31,044 46,565 62,087 77,609 77,609 77,609
400,000 31,044 46,565 62,087 77,609 77,609 77,609
The benefits listed on the table above for the pension plan are not
subject to a reduction for Social Security benefits or any other offset amount.
As of December 31, 2000, Messrs. Cunningham, Wells, Daly, Plungis and Ms.
Santora had 27.75, 39.75, 14.50, 25.50 and 15 years of service, respectively,
for purposes of the pension plan.
Other Retirement Arrangements
Berkshire Bank maintains a supplemental retirement arrangement with Mr.
Cunningham to provide a specified level of benefits upon Mr. Cunningham's
retirement from Berkshire Bank. Berkshire Bank has also entered into a separate
agreement with Mr. Wells to provide similar benefits. The arrangements are
designed to provide Messrs. Cunningham and Wells with an annual retirement
benefit at age 60 equal to 70% of the average of the three consecutive years
during which each of the executive's compensation is the highest. Benefits under
the supplemental arrangement are reduced by the benefits the executives would
receive under
10
the pension plan, the 401(k) plan, social security and split-dollar life
insurance arrangements under which the executives are entitled to share in the
policy cash value at retirement.
The reports of the Compensation Committee and the Audit Committee and
the stock performance graph shall not be deemed incorporated by reference by any
general statement incorporating by reference this proxy statement into any
filing under the Securities Act or the Exchange Act, except as to the extent
that the Company specifically incorporates this information by reference, and
shall not otherwise be deemed filed under such Acts.
Executive Compensation
Compensation Committee Report on Executive Compensation. Under the
rules established by the Securities and Exchange Commission, the Company is
required to provide certain data and information in regard to the compensation
and benefits provided to the Company's Chief Executive Officer and the other
executive officers of the Company. The disclosure requirements for the Chief
Executive Officer and the other executive officers include the use of tables and
a report explaining the rationale and considerations that led to fundamental
compensation decisions affecting those individuals. In fulfillment of this
requirement, the Company's Compensation Committee, at the direction of the Board
of Directors, has prepared the following report for inclusion in this proxy
statement.
Compensation Practices and Policies. The Company does not pay direct
cash compensation to the executive officers of the Company. However, the
Company's executives are also executives of the Bank and are compensated by the
Bank, as determined by the Compensation Committee of the Bank. The members of
the Compensation Committee are four non-employee members of the Board of
Directors. Mr. Cunningham, President and Chief Executive Officer of the Company
and the Bank, provides analysis and recommendations as to executive compensation
for members of the senior management team other than himself.
The Company's executive compensation practices are intended to attract
and retain qualified executives, to recognize and reward individual
contributions and achievement and to offer a compensation package that is
competitive in the financial industry and motivational to each individual
executive. In furtherance of these objectives, the Company and the Bank maintain
a compensation program for executive officers which consist of a base salary and
a bonus. The salary levels are intended to be consistent and competitive with
the practices of other comparable financial institutions and each executive's
level of responsibility. In making its determination, the Compensation Committee
utilizes surveys of compensation paid to executive officers performing similar
duties for depository institutions and their holding companies with particular
focus on the level of compensation paid by institutions of comparable size and
characteristics primarily in the New England Region of the United States. Salary
increases are aimed at reflecting the overall performance of the Company and the
Bank and the performance of the individual executive officer.
All executive officers participate in the Bank's Incentive Compensation
Plan (Bonus Plan). Factors included in determining a bonus include the Bank's
financial performance as well as individual performance of those participants.
In addition, the named executive officers participate in other benefit plans
available to all employees including, the 401(k) Plan and the ESOP. In addition,
executive officers may be selected to participate in supplemental benefit plans
as well as the Stock-Based Incentive Plan.
The decisions made by the Compensation Committee as to executive
compensation are discretionary. However, a written performance review is
prepared and includes an assessment of performance against certain individual
and Bank goals established at the beginning of the year which are adjusted as
necessary. All
11
decisions by the Compensation Committee relating to compensation affecting
executive officers of the Bank are reviewed by the full Board of Directors.
Chief Executive Compensation. The Chief Executive Officer's salary and
bonus are determined by the Compensation Committee substantially in accordance
with the policies described above relating to all executive officers of the
Company and the Bank. Certain quantitative and qualitative factors were reviewed
to determine the Chief Executive Officer's compensation. In addition to the
review of the Chief Executive's performance, the Compensation Committee
established the total compensation for the Chief Executive Officer after
reviewing an analysis of the Chief Executive Officer's base salary in comparison
to other institutions selected by the Compensation Committee with specific
considerations given to the level of the Bank's performance and operations in
comparison to peer institutions which consisted primarily of similarly
structured financial institutions operating in the New England Region of the
United States.
Catherine B. Miller Corydon L. Thurston
Raymond B. Murray, III Ann H. Trabulsi
Audit Committee Report
The Audit Committee of the Board of Directors is responsible for
assisting the Board of Directors in fulfilling its responsibility to the
stockholders relating to corporate accounting, reporting practices and the
quality and integrity of the financial reports of the Company. Additionally, the
Audit Committee selects the auditors and reviews their independence and their
annual audit. The Audit Committee is comprised of four directors, each of whom
is independent under American Stock Exchange listing standards. The Audit
Committee acts under a written charter adopted by the Board of Directors, a copy
of which is attached to this proxy statement as Appendix A.
The Audit Committee reviewed and discussed the annual financial
statements with management and the independent accountants. As part of this
process, management represented to the Audit Committee that the financial
statements were prepared in accordance with generally accepted accounting
principles. The Audit Committee also received and reviewed written disclosures
and a letter from the accountants concerning their independence as required
under applicable standards for auditors of public companies. The Audit Committee
discussed with the accountants the contents of such materials, the accountant's
independence and the additional matters required under Statement on Auditing
Standards No. 61. Based on such review and discussions, the Audit Committee
recommended that the Board of Directors include the audited consolidated
financial statements in the Company's Annual Report on Form 10-K for the year
ended December 31, 2000 for filing with the Securities and Exchange Commission.
Thomas R. Dawson Robert S. Raser
A. Allen Gray William E. Williams
12
Stock Performance Graph
The following graph compares the cumulative total stockholder return on
the Company common stock with the cumulative total return on the American Stock
Exchange Major Market Index and with the SNL $500 Million - $1 Billion Thrift
Index. The graph assumes that $100 was invested at the close of business on June
28, 2000, the initial day of trading of the Company's common stock. Total return
assumes the reinvestment of all dividends.
[GRAPHIC - GRAPH - PLOTTED POINTS LISTED BELOW]
Period Ended
-----------------------------------------------
6/28/00 6/30/00 9/30/00 12/31/00
--------- --------- --------- ----------
Berkshire Hills Bancorp, Inc.......................... $100.00 $103.55 $116.75 $128.77
The American Stock Exchange Major Market Index........ 100.00 99.99 101.96 95.91
The SNL $500 Million - $1 Billion Thrift Index........ 100.00 100.47 112.87 116.54
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who own more than 10% of
any registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
These individuals are required by regulation to furnish the Company with copies
of all Section 16(a) reports they file.
13
Based solely on its review of the copies of the reports it has received
and written representations provided to the Company from the individuals
required to file the reports, the Company believes that each of its executive
officers and directors has complied with applicable reporting requirements for
transactions in Company common stock during the fiscal year ended December 31,
2000, with the exception of one amended Form 4 filed by Mr. Miller with respect
to a purchase transaction which, was reported later than required.
Transactions with Management
Loans and Extensions of Credit
Federal regulations generally require that all loans or extensions of
credit to executive officers and directors of a depository institution must be
made on substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with the general
public and must not involve more than the normal risk of repayment or present
other unfavorable features. Loans made to a director or executive officer in
excess of the greater of $25,000 or 5% of the Bank's capital and surplus (up to
a maximum of $500,000) must be approved in advance by a majority of the
disinterested members of the Board of Directors. In addition, Massachusetts law
regulates the granting of loans to officers and directors of the Bank.
All loans made to the Company's and Bank's officers and directors are
made on the same terms and conditions offered to the general public. Berkshire
Bank's policy provides that all loans made by Berkshire Bank to its executive
officers and directors be made in the ordinary course of business, on
substantially the same terms, including collateral, as those prevailing at the
time for comparable transactions with other persons and may not involve more
than the normal risk of collectibility or present other unfavorable features. As
of December 31, 2000, Berkshire Bank's executive officers, directors and their
immediate family members had loans with outstanding balances totaling $4.8
million in the aggregate. All such loans were made by Berkshire Bank in the
ordinary course of business, with no favorable terms and such loans do not
involve more than the normal risk of collectibility or present unfavorable
features.
The Company intends that all transactions in the future between the
Company and its executive officers, directors, holders of 10% or more of the
shares of any class of its common stock and affiliates thereof, will contain
terms no less favorable to the Company than could have been obtained by it in
arms length negotiations with unaffiliated persons and will be approved by a
majority of independent outside directors of the Company not having any interest
in the transaction.
Other Transactions
During fiscal 2000, Berkshire Bank retained Northeast Technical
Associates, Inc, of which Henry D. Granger is the owner, for real estate
appraisals. Payment to Mr. Granger's company for these services totaled $45,255
during the year.
Proposal 2 -- Ratification of Independent Auditors
The Board of Directors has appointed Wolf & Company, P.C. to be its
auditors for the 2001 fiscal year, subject to ratification by stockholders. A
representative of Wolf & Company P.C. is expected to be present at the annual
meeting to respond to appropriate questions from stockholders and will have the
opportunity to make a statement should he or she desire to do so.
14
If the ratification of the appointment of the auditors is not approved
by a majority of the votes cast by stockholders at the annual meeting, other
independent public accountants may be considered by the Board of Directors. The
Board of Directors recommends that stockholders vote "FOR" the ratification of
the appointment of auditors.
Audit Fees
The aggregate fees the Company paid to Wolf & Company, P.C. for the
annual audit and for the review of the Company's Forms 10-Q for the fiscal year
2000 totaled $197,850.
All Other Fees
The aggregate fees the Company paid to Wolf & Company, P.C. for all
other non-audit services, including fees for tax-related services, during fiscal
year 2000 totaled $64,748.
The Audit Committee believes that the non-audit fees paid to Wolf &
Company, P.C. are compatible with maintaining Wolf & Company, P.C.'s
independence.
Miscellaneous
The cost of solicitation of proxies on behalf of the Board will be
borne by the Company. In addition to the solicitation of proxies by mail,
Georgeson Shareholder Communications Inc., a proxy solicitation firm, will
assist the Company in soliciting proxies for the annual meeting. The Company
will pay a fee of $4,500, plus out-of-pocket expenses for these services.
Proxies may also be solicited personally or by telephone by directors, officers
and other employees of the Company and the Bank without any additional
compensation. The Company will also request persons, firms and corporations
holding shares in their names or in the name of their nominees, which are
beneficially owned by others, to send proxy materials to and obtain proxies from
the beneficial owners and will reimburse those record holders for their
reasonable expenses in doing so.
The Company's Annual Report to Stockholders has been mailed to all
persons who were stockholders as of the close of business on March 15, 2001. Any
stockholder who has not received a copy of the Annual Report may obtain a copy
by writing to the Secretary of the Company. The Annual Report is not to be
treated as part of the proxy solicitation material or as having been
incorporated by reference into this proxy statement.
A copy of the Company's Form 10-K for the fiscal year ended December
31, 2000, as filed with the Securities and Exchange Commission will be furnished
without charge to all persons who were stockholders as of the close of business
on March 15, 2001 upon written request to Rose A. Borotto, Corporate Secretary,
Berkshire Hills Bancorp, Inc., 24 North Street, Pittsfield, Massachusetts 01201.
15
Stockholder Proposals
To be considered for inclusion in the Company's proxy statement and
form of proxy relating to the 2002 Annual Meeting of Stockholders, a stockholder
proposal must be received by the Secretary of the Company at the address set
forth on the Notice of Annual Meeting of Stockholders not later than December 3,
2001. If such Annual Meeting is held on a date more than 30 calendar days from
May 3, 2002, a stockholder proposal must be received by a reasonable time before
the proxy solicitation for such Annual Meeting is made. Any such proposal will
be subject to 17 C.F.R. ss. 240.14a-8 of the Rules and Regulations under the
Securities Exchange Act of 1934.
The Bylaws of the Company, a copy of which may be obtained from the
Company, set forth the procedures by which a stockholder may properly bring
business before a meeting of stockholders. Pursuant to the Bylaws, only business
brought by or at the direction of the Board of Directors may be conducted at a
special meeting. The Bylaws of the Company provide an advance notice procedure
for a stockholder to properly bring business before an annual meeting. The
stockholder must give written advance notice to the Secretary of the Company not
less than ninety (90) days before the date originally fixed for such meeting;
provided, however, that in the event that less than one hundred (100) days
notice or prior public disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be received not later
than the close of business on the tenth day following the date on which the
Company's notice to stockholders of the annual meeting date was mailed or such
public disclosure was made. In order for a stockholder to bring business before
the Company's 2002 Annual Meeting of Stockholders, the Company would have to
receive notice of such business no later than February 2, 2002 assuming the 2002
annual meeting is held on May 3, 2002 and that the Company provides at least 100
days notice of the date of the meeting by mailing or public disclosure. The
advance notice by a stockholder must include the stockholder's name and address,
as it appears on the Company's record of stockholders, a brief description of
the proposed business, the reason for conducting such business at the annual
meeting, the class and number of shares of the Company's common stock that are
beneficially owned by such stockholder and any material interest of such
stockholder in the proposed business. In the case of nominations to the Board of
Directors, certain information regarding the nominee must be provided. Nothing
in this paragraph shall be deemed to require the Company to include in its proxy
statement or the proxy relating to any annual meeting any stockholder proposal
which does not meet all of the requirements for inclusion established by the
Securities and Exchange Commission in effect at the time such proposal is
received.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Rose A. Borotto
-------------------
Rose A. Borotto
Corporate Secretary
Pittsfield, Massachusetts
April 2, 2001
16
APPENDIX A
BERKSHIRE HILLS BANCORP, INC.
AUDIT COMMITTEE CHARTER
Mission Statement
The committee's role is to assist the board of directors in overseeing
all material aspects of Berkshire Hills Bancorp, Inc.'s (the "Company")
financial reporting, internal control and audit functions, including a
particular focus on the qualitative aspects of financial reporting to
stockholders, on compliance with significant applicable legal, ethical, and
regulatory requirements and to ensure the objectivity of the financial
statements. The role also includes maintenance of strong, positive working
relationships with management, the external and internal auditors, counsel, and
other committee advisors.
Organization
Committee Composition. The committee shall consist of at least three
board members, all of whom shall be independent of management and the Company.
Committee members shall have: (1) knowledge of the primary industries in which
the Company operates; and (2) the ability to read and understand financial
statements, including the balance sheet, income statement, statement of cash
flows and key performance indicators. At least one member of the committee,
preferably the chairperson, must have past employment experience in finance or
accounting, requisite professional certification in accounting or other
comparable experience or background that results in the individual's financial
sophistication, including being or having been a chief executive officer, chief
financial officer or other senior officer with financial oversight
responsibilities. Committee appointments, including selection of the committee
chairperson, shall be approved annually by the full board.
Meetings. The committee shall meet at least quarterly. Additional
meetings shall be scheduled as considered necessary by the committee or
chairperson. A quorum of the committee shall be declared when a majority of the
appointed members of the committee are in attendance.
External Resources. The committee shall be authorized to access
internal and external resources, as required, to carry out its responsibilities.
Roles and Responsibilities
Communication with the Board of Directors and Management
o The chairperson and others on the committee shall, to the
extent appropriate, have contact throughout the year with
senior management, the board of directors, the external and
internal auditors and legal counsel, as applicable, to
strengthen the committee's knowledge of relevant current and
prospective business issues, risks and exposures. This will
include requests by the committee that members of management,
counsel, the internal and external auditors, as applicable,
participate in committee meetings, as necessary, to carry out
the committee's responsibilities.
A-1
o The committee, with input from management and other key
committee advisors, shall develop an annual plan, which shall
include an agenda and procedures for the review of the
Company's quarterly financial data, its year end audit, the
procedures and results of the internal audit and the review of
the independence of its accountants.
o The committee, through the committee chairperson, shall report
periodically, as deemed necessary, but at least semi-annually,
to the full board.
o The committee shall make recommendations to the full board
regarding the compensation to be paid to the external auditors
and its views regarding the retention of the auditors for the
upcoming fiscal year.
Review of the Internal Audit
o The internal audit function shall be responsible to the board
of directors through the committee.
o The committee shall review and assess the annual internal
audit plan, including the activities and organizational
structure of the internal audit function.
o The committee shall meet with the internal auditors, at least
annually, to review the status of the internal audit
activities, any significant findings and recommendations by
the internal auditors and management's response.
o If the internal auditors identify significant issues relative
to the overall board responsibility that have been
communicated to management but, in their judgment, have not
been adequately addressed, they shall communicate these issues
to the committee and the committee shall inform the full
board, if, after its consideration, the committee concurs with
the judgment of the internal auditors.
Review of the External Audit
o The committee shall meet with the external auditors, at least
annually, who shall report all relevant issues to the
committee.
o The external auditors, in their capacity as independent public
accountants, shall be responsible to the board of directors
and the audit committee as representatives of the
stockholders.
o The committee shall review the annual financial statements,
including the overall scope and focus of the annual audit.
This review shall include a determination of whether the
annual financial statements are consistent with the
information known to committee members. This review shall also
include a review of key financial statement issues and risks,
their impact or potential effect on reported financial
information, the processes used by management to address such
matters, related auditor views and the basis for audit
conclusions. Any important conclusions concerning the year-end
audit work shall be discussed by the committee and reported to
the full board well in advance of the public release of the
annual financial statements.
A-2
o The committee shall annually review the performance
(effectiveness, objectivity and independence) of the external
auditors. The committee shall ensure receipt of a formal
written statement from the external auditors consistent with
standards set by the Independence Standards Board.
Additionally, the committee shall discuss with the auditor any
relationships or services that may affect auditor objectivity
or independence. If the committee is not satisfied with the
auditors' assurances of independence, it shall take or
recommend to the full board appropriate action to ensure the
independence of the external auditor.
o The committee shall review any important recommendations on
financial reporting, controls, other matters and management's
response.
o If the external auditors identify significant issues relative
to the overall board responsibility that have been
communicated to management but, in their judgment, have not
been adequately addressed, they shall communicate these issues
to the committee and the committee shall inform the full
board, if, after its consideration, the committee concurs with
the judgment of the external auditors.
Reporting to Stockholders
o The committee should be briefed on the processes used by
management in producing its interim financial statements and
review and discuss with management any questions or issues
concerning the statements. Any important issues on interim
financial statements shall be discussed by the committee well
in advance of the public release of the interim financial
statements, and, if deemed appropriate in the discretion of
the committee, reported to the full board.
o The committee will ensure that management requires that the
external auditors review the financial information included in
the Company's interim financial statements before the Company
files its quarterly reports with the Securities and Exchange
Commission.
o The committee shall review all major financial reports in
advance of filings or distribution, including the annual
report.
o The committee shall annually provide a written report of its
activities and findings, a copy of which shall be included
within the proxy statement for the annual meeting. The report
shall appear over the names of the audit committee. Such
report shall be furnished to and approved by the full board of
directors prior to its inclusion in the proxy statement. The
report will state whether the committee: (1) has reviewed and
discussed the audited financial statements with management;
(2) has discussed with the independent auditors the matters to
be discussed by Statement of Auditing Standards No. 61; (3)
has received the written disclosures and the letter from the
independent auditors regarding the independence required by
Independence Standards Board Standard No. 1; (4) has discussed
with the auditors their independence; and (5) based on the
review and discussion of the audited financial statements with
management and the independent auditors, has recommended to
the board of directors that the audited financial statements
be included in the Company's annual report on Form 10-K.
o The Company shall disclose that the committee is governed by a
written charter, a copy of which has been approved by the full
board of directors. The committee shall review the charter
annually, assess its adequacy and propose appropriate
amendments to the full board
A-3
of directors. A copy of the charter shall be filed as an
appendix to the proxy statement at least every three years.
o The Company shall also disclose in its proxy statement the
independence of the committee. To the extent that the board
appoints a non-independent director to the committee, the
Company will disclose the nature of the relationship of the
non-independent director and the reasons for appointing the
non-independent director to the committee in the next proxy
statement.
Regulatory Examinations
o The committee shall review the results of examinations by
regulatory authorities and management's response to such
examinations.
Committee Self Assessment and Education
o The committee shall review, discuss, and assess its own
performance as well as the committee role and
responsibilities, seeking input from senior management, the
full board and others.
o The committee shall review significant accounting and
reporting issues, including recent professional and regulatory
pronouncements and understand their impact on the Company's
business, results of operation and financial statements.
While the committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the committee to plan or conduct audits or to
determine that the Company's financial statements are complete and accurate and
in accordance with generally accepted accounting principles. This is the
responsibility of management and the external auditor. Nor is it the duty of the
committee to conduct investigations, to resolve disagreements, if any, between
management and the independent auditor or to assure compliance with laws and
regulations.
A-4
PLEASE MARK VOTES
[ X ] AS IN THIS EXAMPLE
REVOCABLE PROXY
BERKSHIRE HILLS BANCORP, INC.
ANNUAL MEETING OF STOCKHOLDERS
May 3, 2001-10:00 a.m. Local Time
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints the official proxy committee of Berkshire
Hills Bancorp, Inc. (the "Company"), consisting of Catherine B. Miller, Raymond
B. Murray III, Corydon L. Thurston and Ann M. Trabulsi, or any of them with full
power of substitution in each, to act as proxy for the undersigned, and to vote
all shares of common stock of the Company which the undersigned is entitled to
vote only at the Annual Meeting of Stockholders to be held on May 3, 2001, at
10:00 a.m., local time, at the Crowne Plaza Hotel, One West Street, Pittsfield,
Massachusetts and at any and all adjournments thereof, with all of the powers
the undersigned would possess if personally present at such meeting as follows:
_________________________________________
Please be sure to sign and date Date
this Proxy in the box below.
________________________________________________________________________________
________Stockholder sign above_________Co-holder (if any) sign above____________
1. The election as directors of all nominees listed (unless the "For All
Except" box is marked and the instructions below are complied with).
For All
For Withhold Except
[_] [_] [_]
Henry D. Granger, Edward G. McCormick, Raymond B. Murray, III, Robert A.
Wells, Ann H. Trabulsi and Anne Everest Wojtkowski
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name on the line provided below.
- --------------------------------------------------------------------------------
2. The ratification of the appointment of Wolf & Company, P.C. as independent
auditors of Berkshire Hills Bancorp, Inc. for the fiscal year ending
December 31, 2001.
For Against Abstain
[_] [_] [_]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED
PROPOSALS.
This proxy is revocable and will be voted as directed, but if no
instructions are specified, this proxy, properly signed and dated, will be voted
"FOR" each of the proposals listed. If any other business is presented at the
Annual Meeting, including whether or not to adjourn the meeting, this proxy will
be voted by the proxies in their best judgment. At the present time, the Board
of Directors knows of no other business to be presented at the Annual Meeting.
This proxy also confers discretionary authority on the Board of Directors to
vote with respect to the election of any person as director where the nominees
are unable to serve or for good cause will not serve and matters incident to the
conduct of the meeting.
=> Detach above card, sign, date and mail in postage paid envelope provided. =>
BERKSHIRE HILLS BANCORP, INC.
The above signed acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Annual Meeting of Stockholders, a Proxy
Statement dated April 2, 2001 and an Annual Report to Stockholders.
Please sign exactly as your name appears on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder may sign but only one signature
is required.
PLEASE COMPLETE, DATE, SIGN AND PROMPTLY MAIL THIS PROXY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
HAS YOUR ADDRESS CHANGED?
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