SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 |_| Soliciting Material Under Rule
|_| Confidential, For Use of the 14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|X| Definitive Additional Materials
First Litchfield Financial Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
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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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:
________________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
First Litchfield Financial Corporation
________________________________________________________________________________
4) Date Filed:
________________________________________________________________________________
April 19, 2004
Dear Shareholder:
On behalf of the Board of Directors of FIRST LITCHFIELD FINANCIAL
CORPORATION (the "Company") you are cordially invited to attend the Annual
Meeting of Shareholders of the Company to be held on Wednesday, May 19, 2004 at
3:00 p.m. at LaCupola Restaurant, 637 Bantam Road (Route 202), Litchfield,
Connecticut.
The Notice of the Annual Meeting and the Proxy Statement which are
enclosed, describe the matters to be voted upon at the meeting. In addition to
the specific items on our agenda, we will discuss generally the operations of
the Company and its subsidiary, The First National Bank of Litchfield (the
Bank). We welcome any appropriate questions you may have concerning the
Company and the Bank, and we will provide time during the meeting for questions
from shareholders.
The enclosed proxy is solicited on behalf of the Board of Directors of the
Company, and the expense of the solicitation will be borne by the Company. Any
person giving a proxy pursuant to this solicitation may revoke it at any time by
written notice given prior to the Annual Meeting of Shareholders or the proxy
may be withdrawn and you may vote in person should you attend the meeting. The
enclosed proxy will be voted OFORO the proposed slate of five (5) directors
unless marked to the contrary. The Board of Directors of the Company currently
consists of twelve (12) directors, five of whom have been nominated for
re-election at the 2004 Annual Meeting for a term of three (3) years. The
nominees for re-election are: George M. Madsen, Alan B. Magary, Gregory S.
Oneglia, William J. Sweetman and Patricia D. Werner. In addition, unless marked
to the contrary, the enclosed proxy will be voted "FOR" ratification of
appointment of McGladrey & Pullen, LLP, as the Company's independent auditors
for the year ending December 31, 2004.
We hope you will be able to attend the meeting, but if you cannot do so, it
is still important that your shares be represented at the Annual Meeting. Please
execute and date the enclosed proxy and return it as soon as possible in the
envelope provided.
Sincerely,
/s/ Joseph J. Greco
-----------------------
Joseph J. Greco
President and
Chief Executive Officer
A copy of the Company's Annual Report to Shareholders, including financial
statements of the Company for the fiscal year ending December 31, 2003, is
enclosed.
FIRST LITCHFIELD FINANCIAL CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
May 19, 2004
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 19, 2004
To the Shareholders of First Litchfield Financial Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of First
Litchfield Financial Corporation (the "Company") will be held at 3:00 p.m. on
Wednesday, May 19, 2004 at the LaCupola Restaurant, 637 Bantam Rd (Route 202),
Litchfield, Connecticut, for the following purposes:
1. To elect five (5) shareholders to the Board of Directors, each to serve
for a term of three (3) years and until their successors are elected and
qualified, as described in the Proxy Statement.
2. To ratify the appointment of McGladrey & Pullen, LLP as the Company's
independent auditors for the year ending December 31, 2004.
3. To transact such other business as may properly come before the meeting,
or any adjournments thereof.
Only those Shareholders of record at the close of business on the 6th day
of April, 2004 are entitled to notice of, and to vote at this Annual Meeting. A
list of those Shareholders will be available for inspection by shareholders for
ten (10) days preceding the meeting at the office of the Assistant Secretary of
the Company at the Company's main office, 13 North Street, Litchfield,
Connecticut, and will also be available for inspection by shareholders at the
meeting itself.
BY ORDER OF THE BOARD OF DIRECTORS OF
FIRST LITCHFIELD FINANCIAL CORPORATION
/s/ Stephen M. Riley, II
----------------------------------------
Stephen M. Riley, II
Assistant Secretary
April 19, 2004
SHAREHOLDERS ARE REQUESTED TO MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY AS
SOON AS POSSIBLE REGARDLESS OF WHETHER THEY PLAN TO ATTEND THE MEETING. ANY
PROXY GIVEN BY A SHAREHOLDER MAY BE REVOKED AT ANY TIME BEFORE IT IS EXERCISED,
AND ANY SHAREHOLDER WHO EXECUTES AND RETURNS A PROXY AND WHO ATTENDS THE ANNUAL
MEETING MAY WITHDRAW THE PROXY AT ANY TIME BEFORE IT IS VOTED AND VOTE HIS OR
HER SHARES IN PERSON. A PROXY MAY BE REVOKED BY GIVING NOTICE TO STEPHEN M.
RILEY, II, ASSISTANT SECRETARY OF FIRST LITCHFIELD FINANCIAL CORPORATION, IN
WRITING PRIOR TO THE TAKING OF A VOTE.
Proxy Statement of First Litchfield Financial Corporation
ANNUAL MEETING OF SHAREHOLDERS OF
FIRST LITCHFIELD FINANCIAL CORPORATION
May 19, 2004
SOLICITATION OF PROXIES
The enclosed proxy (the "Proxy") is solicited by the Board of Directors of
FIRST LITCHFIELD FINANCIAL CORPORATION (the "Company"), 13 North Street,
Litchfield, Connecticut, 06759, for use at the Annual Meeting of Shareholders,
to be held on Wednesday, May 19, 2004, and at any and all adjournments thereof.
Any Proxy given may be revoked at any time before it is actually voted on any
matter in accordance with the procedures set forth in the Notice of Annual
Meeting. This Proxy Statement and the enclosed form of Proxy are being mailed to
shareholders (the "Shareholders") on or about April 19, 2004. The cost of
preparing, assembling and mailing this Proxy Statement and the material enclosed
herewith is being borne by the Company. In addition to this solicitation by
mail, directors, officers and employees of the Company, and its subsidiary The
First National Bank of Litchfield (the "Bank"), without additional compensation,
may make solicitations personally or by telephone or telegraph. The Company will
reimburse banks, brokerage firms and others holding shares in their names or in
the names of nominees for their reasonable out-of-pocket expenses in forwarding
Proxies and Proxy materials to the beneficial owners of such shares.
OUTSTANDING STOCK AND VOTING RIGHTS
The Board of Directors of the Company has fixed the close of business on
April 6, 2004 as the Record Date (the "Record Date") for the determination of
Shareholders entitled to notice of and to vote at the Annual Meeting. As of the
Record Date, 1,910,973 shares of the common stock of the Company (par value $.01
per share) were issued and outstanding and held of record by approximately 431
Shareholders (the "Common Stock"), each of which shares is entitled to one vote
on all matters to be presented at the Annual Meeting. The holders of one-third
of the Company's Common Stock must be present, in person or by proxy, at the
Annual Meeting to constitute a quorum. Abstentions and broker non-votes are not
treated as having voted in favor of any proposal and are counted as present for
establishing a quorum. No other class of the Company's capital stock is
outstanding or entitled to vote 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 Common Stock present in person or represented by proxy
and entitled to vote. The affirmative vote of the majority of the votes cast is
required to ratify the appointment of the Company's independent auditors.
Shareholders' votes will be tabulated by the persons appointed by the Board of
Directors to act as inspectors of election for the Annual Meeting.
If the enclosed form of Proxy is properly executed and returned to the
Company 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 FOR the election of the five (5)
nominees for election to the Board of Directors; and FOR ratification of
appointment of McGladrey & Pullen, LLP as the Company's independent auditors for
the year ending December 31, 2004. The Board of Directors does not know of any
matters other than those described in the Notice of Annual Meeting that are to
come before the Annual Meeting. If any other matters are properly brought before
the Annual Meeting, the persons named in the Proxy will vote the shares
represented by such Proxy upon such matters as determined by a majority of the
Board of Directors. The proxies confer discretionary authority to vote on any
matter of which the Company did not have notice at least 45 days prior to the
date of the Annual Meeting.
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS
The following table includes certain information as of April 1, 2004
regarding the principal shareholders (the "Principal Shareholders") of the
Company. With the exception of the Principal Shareholders listed below, the
Company is not aware of any beneficial owner of five percent (5%) or more of the
Company's Common Stock.
Percent of
Name and Address Number of Shares Outstanding
of Beneficial Owner Beneficially Owned (1) Common Stock
- ------------------- ---------------------- ------------
Donald K. Peck 135,091(2) 7.07%
Litchfield, CT
William J. Sweetman 102,937(3),(4) 5.39%
Litchfield, CT
Helen W. Buzaid 132,934 6.96%
Danbury, CT
- ----------
(1) The definition of beneficial owner includes any person who, directly
or indirectly, through any contract, agreement or understanding,
relationship or otherwise, has or shares voting power or investment
power with respect to such security.
(2) Includes shares owned by, or as to which voting power is shared with
spouse.
(3) Includes options to purchase 5,143 additional shares of the
Company's Common Stock.
(4) Includes 13,882 shares owned by an estate as to which individual has
voting power as fiduciary of said estate.
PROPOSAL (1)
ELECTION OF DIRECTORS
The Board of Directors of the Company is divided into three (3) classes,
each class being approximately equal in size. Each class of directors will stand
for re-election once every three (3) years. Directors are elected by a plurality
of the votes of shares present in person or represented by proxy at the meeting
and entitled to vote.
2
Pursuant to the Company's Certificate of Incorporation and Bylaws, the
Board has fixed the number of directorships at twelve (12). At this Annual
Meeting, five (5) directors are to be elected, each for a term of three (3)
years and until their successors are elected and qualified. The terms of
directors George M. Madsen, Alan B. Magary, Gregory S. Oneglia, William J.
Sweetman and Patricia D. Werner expire at the 2004 Annual Meeting. All nominees
are now serving as directors. Each of the five (5) directors whose terms expire
at this meeting, are nominated for re-election and each has indicated a
willingness to serve as a director. If any of them become unavailable, the Proxy
may be voted for a nominee or nominees who would be designated by the Board of
Directors.
There are no arrangements or understandings between any of the directors
or any other persons pursuant to which any of the above directors have been
selected as directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE FOR THE ELECTION OF ITS NOMINEES FOR
DIRECTOR
The following sets forth the name and age of each nominee (the first five
(5) directors listed), and each director who will continue his or her term of
office, the year in which each was first elected a director of the Company, and
the principal occupation and business experience of each during the past five
(5) years:
NOMINEES FOR ELECTION
Position Held with Expiration Date
Name & Age the Company of Current Term
- ---------- ------------------ ---------------
George M. Director of the Company 2004
Madsen and of the Bank since 1988 (1)
(70)
Alan B. Director of the Company 2004
Magary and of the Bank since 2002 (2)
(61)
Gregory S. Director of the Company 2004
Oneglia and of the Bank since 2002 (3)
(56)
William J. Director of the Company 2004
Sweetman and of the Bank since 1990 (4)
(57)
Patricia D. Director of the Company 2004
Werner and of the Bank since 1996 (5)
(57)
3
CONTINUING DIRECTORS
Position held with Expiration Date
Name & Age the Company of Current Term
- ---------- ------------------ ---------------
Clayton L. Director of the Company 2005
Blick since 1988 and of the
(86) Bank since 1953 (6)
Joseph J. President and Chief Executive 2006
Greco Officer and Director of the
(53) Company and of the Bank
since 2002 (7)
Perley H. Director of the Company 2006
Grimes, Jr. since 1988 and of the
(59) Bank since 1984 (8)
Kathleen A. Director of the Company 2005
Kelley since 2004 and of the
(51) Bank since 2004 (9)
Thomas A. Director of the Company 2006
Kendall and of the Bank since 1999 (3)(10)
(48)
Charles E. Director of the Company 2006
Orr since 1988 and of the
(68) Bank since 1981 (11)
H. Ray Director of the Company 2005
Underwood and of the Bank since 1998 (12)
(50)
- ----------
(1) Mr. Madsen is retired. He formerly served as President of Roxbury
Associates, Inc.
(2) Mr. Magary is retired. He served as principal of Magary Consulting
Services through December 1999.
(3) Mr. Oneglia is Vice-Chairman of O&G Industries, Inc. since 2000. Mr.
Oneglia served as President of O&G Industries, Inc. from 1997 to
2000, and served as Vice-President from 1976 to 1997.
(4) Mr. Sweetman is the President and Owner of Dwan & Co., Inc.
(5) Ms. Werner is the head of the Washington Montessori Association,
Inc.
(6) Mr. Blick is a Partner in the Law Firm of Cramer & Anderson.
(7) Mr. Greco has served as the President and Chief Executive Officer of
the Company and the Bank since June 2002. Mr. Greco served as
President and Chief Executive Officer of Marketing Solutions from
1998 to 2002, and served as Senior Vice President of Hudson United
Bancorp from 1993 to 1997.
(8) Mr. Grimes is a Partner in the Law Firm of Cramer & Anderson.
(9) Ms. Kelley is the principal in the firm Kelly & Company, CPA's. Ms.
Kelley was appointed by the Board on March 25, 2004 to fill the
vacancy created by the retirement of Mrs.Fuessenich.
(10) Mr. Kendall is a self employed investor.
(11) Mr. Orr is retired. He served as President of New Milford
Volkswagen, Inc. until April 2002.
(12) Mr. Underwood is Secretary and Treasurer of Underwood Services, Inc.
4
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors of the Company met six (6) times in 2003. With the
exception of Thomas A. Kendall, all directors attended at least 75% of the
aggregate of the total number of meetings of the board of directors and the
total number of meetings held by all committees of the board on which such
director served during 2003. The Company does not maintain an attendance policy
for directors at the Company's Annual Meetings. Nine of the twelve directors of
the Company attended the Company's annual meeting on May 21, 2003.
In 2003, each director of the Company who was not an employee of the Bank,
received $300 for each Board meeting attended and $275 for each committee
meeting attended. The Chairman of the Board of Directors also receives an annual
retainer of $6,000 and each non-officer director of the Company also receives an
annual retainer of $5,000 for serving as a director. Directors who are employees
of the Bank receive no additional compensation for their services as members of
the Board or any board committee.
Board of Directors' Communications with Shareholders
While the Company's Board of Directors does not have a formal process for
shareholders to send communications to the Board, the volume of such
communications has historically been de minimus. Accordingly, the Board
considers the Company's informal process to be adequate to address the Company's
needs. Historically, such informal process has functioned as follows: A Board
recipient of a shareholder communication would forward same to the Chairman and
Chief Executive Officer for appropriate discussion by the Board and the
formulation of an appropriate response. Shareholders may forward written
communications to the Board by addressing such comments to the Board of
Directors of First Litchfield Financial Corporation, 13 North Street,
Litchfield, Connecticut 06759.
The Board of Directors has established several standing committees to
assist in the discharge of its responsibilities. All members are appointed
annually and serve until their successors are named. All committees report their
deliberations and recommendations to the Board. The principal responsibilities,
membership and number of meetings of each committee are described below.
Nominating Committee
The Nominating Committee met one (1) time in 2003. The current Committee
members, all of whom are "independent" in accordance with the independence
standards of the American Stock Exchange ("AMEX"), are: Perley H. Grimes, Jr.,
George M. Madsen, Charles E. Orr and H. Ray Underwood. This Committee reviews
and evaluates potential candidates for nomination to the Boards of Directors of
the Company and the Bank, respectively, and recommends proposed nominees for
election as members of the Boards of Directors and committees.
While the Nominating Committee does not have a formal charter or written
policy, the Company utilizes informal procedures and guidelines for the
selection and election of directors.
The procedure for nomination of directors by the Nominating Committee is
as follows:
1. The Nominating Committee, selected by the board from among its
members, identifies potential candidates with input from management
and other directors and obtains background information on candidate.
2. The Nominating Committee discusses proposed candidates with the
board before contacting such candidates.
3. The Nominating Committee approaches the candidate and if such
candidate is interested, he or she fills out the questionnaire.
5
4. After review of the questionnaire, the Nominating Committee decides
whether to nominate the candidate.
In addition, the Company's Bylaws include procedures for nominations by
shareholders. A copy of the Company's Bylaws is available by sending a written
request to or by calling Stephen M. Riley, II, Assistant Secretary, 13 North
Street, Litchfield, Connecticut 06759, (860) 567-6469. The Nominating
Committee's process for identifying and evaluating nominees for director,
including nominees recommended by shareholders, has historically operated
informally and without any differences in the manner in which nominees
recommended by shareholders are evaluated.
The Nominating Committee considers factors such as those summarized below
in evaluating Director candidates and believes that the Company's Bylaws and the
qualifications and considerations such as those enumerated below provide
adequate guidance and flexibility in evaluating candidates.
o Experience in business or a profession, either active currently or
recently retired, and ability to contribute sound judgment to Bank
matters.
o Participation in community affairs.
o Residency, whether home or business in the Company's primary
marketing area.
o Ability to refer desirable business to the Bank.
o Having integrity, ethical character and good reputation.
o Candidates must satisfy applicable qualifications set forth in the
Company's Bylaws.
o Candidates should be willing and able to attend board meetings and
board committees (of at least one committee) on a regular basis.
o Candidates should be independent and not have any significant
conflict of interest with the Company or the Bank which cannot be
satisfactorily handled by full disclosure and abstention of voting
when appropriate.
The Company has not paid a fee to any third party or parties to identify
or assist in identifying or evaluating potential nominees. The Nominating
Committee does not discriminate on the basis of sex, race, color, gender,
national origin, religion or disability in the evaluation of candidates. All
nominees for election as directors at the 2004 Annual Meeting were nominated by
the Nominating Committee and Board of Directors.
Compensation Committee
The Company does not have a Compensation Committee. Rather, the Bank has a
Compensation Committee. The Compensation Committee met three (3) times in 2003.
The current Committee members are: Alan B. Magary, Gregory S. Oneglia and
Patricia D. Werner. The Compensation Committee is responsible for developing
policies relating to employee compensation, benefits and incentives, annually
evaluating the president and chief executive officer, and making recommendations
concerning salaries and other types of compensation to the full Board of
Directors of the Bank.
Audit/Compliance and Security Committee
The Audit/Compliance and Security Committee (the Audit Committee) met five
(5) times in
6
2003. The current Committee members are: Alan B. Magary, Thomas A. Kendall, H.
Ray Underwood and Patricia D. Werner. In addition, the Bank's Auditor &
Compliance Officer, Stephen M. Riley, II, attends the Audit Committee Meetings.
Subject to the more detailed descriptions set forth in its Charter, this
Committee is responsible for oversight of the internal audit function, internal
accounting controls, security programs and selection of independent accountants.
As of the date of this Proxy Statement, each of the Audit Committee Members is
an "independent director" under the AMEX Listing Standards. The members of the
Audit Committee bring a range of education, business and professional experience
that is beneficial to the Audit Committee's function of the Company and the Bank
and is sufficient to enable the Audit Committee to fulfill its responsibility.
The Board has determined that at least one member of the Audit Committee
qualifies as an audit committee financial expert.
Audit Committee Report
The following Report of the Company's Audit Committee is provided in accordance
with the rules and regulations of the Securities and Exchange Commission (the
"SEC). Pursuant to such rules and regulations, this report shall not be deemed
"soliciting material," filed with the SEC, subject to Regulation 14A and 14C of
the SEC or subject to the liabilities of Section 18 of the Securities Exchange
Act of 1934 (the "Exchange Act").
FIRST LITCHFIELD FINANCIAL CORPORATION
AUDIT COMMITTEE REPORT
The Audit Committee has reviewed and discussed the Company's audited
financial statements for the fiscal year ended December 31, 2003 with
management. The Audit Committee has also reviewed and discussed with McGladrey &
Pullen, LLP ("McGladrey"), the Company's independent auditors, certain matters
specified in Statement on Auditing Standards No. 61, communication with Audit
Committees, as may be modified or supplemented.
The Audit Committee has received the written disclosures and the letter
from McGladrey required by Independence Standards Board Standard No. 1, as may
be modified or supplemented, and has discussed McGladrey's independence with
respect to the Company with McGladrey.
Based on the review and discussions referred to in this audit committee
report, the Audit Committee recommended to the Board of Directors that the
Company's audited financial statements be included in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 2003 for filing with the
SEC.
First Litchfield Financial Corporation
Audit Committee
Thomas A. Kendall, Chairman
Alan B. Magary
H. Ray Underwood
Patricia D. Werner
7
COMMON STOCK OWNED BY DIRECTORS AND
EXECUTIVE OFFICERS
The following table sets forth the number and percentage of Common Stock
beneficially owned by each current Director, each of the Executive Officers
named in the Summary Compensation Table, and the Directors and Executive
Officers as a group at April 1, 2004.
Common Shares
Name Of Beneficially Owned
Beneficial Owner At April 1, 2004 (1) Percent of Class
- ---------------- -------------------- ----------------
Clayton L. Blick 14,027(3) .73%
Joseph J. Greco 1,035 .05%
Perley H. Grimes, Jr 15,693(2) .82%
Kathleen A. Kelley 200 .01%
Thomas A. Kendall 668 .04%
George M. Madsen 16,749(6) .88%
Alan B. Magary 220(3) .01%
Gregory S. Oneglia 10,875(3) .57%
Charles E. Orr 14,645(3) .77%
William J. Sweetman 102,937(4) 5.39%
H. Ray Underwood 2,182 .01%
Patricia D. Werner 4,007(5) .21%
Carroll A. Pereira 17,294(3),(7) .91%
Revere H. Ferris 40,406(8) 2.27%
Joelene E. Smith 234 .01%
All Directors and Executive 241,172 12.62%
Officers as a group (16 persons)
Footnotes on next page
8
- ----------
(1) The definition of beneficial owner includes any person who, directly
or indirectly, through any contract, agreement or understanding,
relationship or otherwise has or shares voting power or investment
power with respect to such security.
(2) Includes options to purchase 2,080 shares of Common Stock.
(3) Includes shares owned by, or as to which voting power is shared
with, spouse or children.
(4) Includes 13,882 shares owned by an estate as to which individual has
voting power as fiduciary of said estate. In addition, the total for
Mr. Sweetman includes options to purchase 5,143 shares of Common
Stock.
(5) Includes options to purchase 3,583 shares of Common Stock.
(6) Includes options to purchase 1,560 shares of Common Stock.
(7) Includes options to purchase 17,074 shares of Common Stock.
(8) Includes options to purchase 8,940 shares of Common Stock. In
addition, the total for Mr. Ferris includes 19,092 shares of Common
Stock held in trusts for which Mr. Ferris serves as trustee.
EXECUTIVE OFFICERS
The following table sets forth information concerning the current
Executive Officers of the Company and/or the Bank. Unless otherwise indicated,
each person has held the same or a comparable position for the last five years.
Name and Age Position Held with the Company and/or Bank
------------ ------------------------------------------
Joseph J. Greco (53) President, Chief Executive Officer
and Director of the Company and of the Bank
since 2002 (1)
Carroll A. Pereira (48) Treasurer of the Company, Senior Vice President
and Chief Financial Officer of the Bank since
1984
Joelene E. Smith (45) Senior Vice President and Operations Officer of
the Bank since 2003 (2)
Revere H. Ferris (63) Senior Vice President and Senior Loan Officer
of the Bank since 1997
John S. Newton (65) Senior Vice President and Trust Officer of the
Bank since 1999
(1) Mr. Greco has served as President and Chief Executive of the Company
and Bank since June 17, 2002. Prior to joining the Bank and Company,
Mr. Greco served as President and CEO of Marketing Solutions from
1998 to 2002, and served as Senior Vice President of Hudson United
Bancorp from 1993 to 1997.
(2) Ms. Smith has served as Senior Vice President and Operations Officer
of the Bank since 2003. Prior to that,Ms. Smith served as VP of
Operations and Information Systems and in similar capacities since
her employment with the Bank in 1977.
9
EXECUTIVE COMPENSATION
The following table provides certain information regarding the
compensation paid by the Company and the Bank to certain Executive Officers of
the Company and the Bank for services rendered in all capacities during the
fiscal years ended December 31, 2003, 2002 and 2001. Other than the Named
Executive Officers set forth below (the "Named Executive Officers"), no other
individual employed by the Company and/or the Bank received aggregate
compensation of $100,000 or more during the fiscal year ended December 31, 2003.
Summary Compensation Table
Long Term Compensation
- -----------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Awards Payouts
Securities
Restricted Underlying
Other Annual Stock Options/ All Other
Name and Principal Compensation Awards SARs LTIP Compensation
Position Year Salary($)(1)(2) Bonus($) ($) ($) (#) Payout($) ($)
- -----------------------------------------------------------------------------------------------------------------------------------
Joseph J. Greco 2003 $177,985 $ 23,580(4)
President and Chief 2002 $ 90,197(3) $10,000 $ 5,796(5)
Executive Officer of the
Bank and Company
Revere H. Ferris
Senior Vice President and 2003 $113,786 $ 14,837(6)
Senior Loan Officer of the 2002 $110,631 $ 10,622(7)
Bank 2001 $106,716 $ 8,679(8)
John S. Newton 2003 $129,115 $ 16,090(9)
Senior Vice President and 2002 $125,822 $ 11,018(10)
Trust Officer of the Bank 2001 $119,700 $ 8,883(11)
Carroll A. Pereira
Treasurer of the Company, 2003 $111,327 $ 15,544(12)
Senior Vice President and 2002 $108,147 $ 10,706(13)
Chief Financial Officer of the 2001 $100,787 $ 8,403(14)
Bank
Philip G. Samponaro
Secretary, Senior Vice 2003 $114,329 $ 67,675(15)
President, Chief Administrative 2002 $111,143 $ 10,786(16)
Officer and Cashier of the Bank 2001 $106,196 $ 8,679(17)
and Secretary of the Company
Footnotes on next page
10
- ----------
(1) The Company furnishes the Named Executive Officers with certain
non-cash compensation and other personal benefits aggregating less
than 10% of their cash compensation.
(2) All employees of the Bank, including the above Named Executive
Officers, are eligible after 1 year of service to participate in the
Bank's 401(k) deferred compensation plan. The Bank's contribution of
up to 50% of the first 4% of each employee's voluntary salary
reduction contributed to the 401(k) plan becomes immediately vested.
The Officer's compensation above is without deduction for their
401(k) contribution.
(3) Mr. Greco began serving as President and Chief Executive Officer of
the Company and the Bank on June 17, 2002.
(4) Amount includes the Bank's matching contribution to the Bank's
401(k) plan for the benefit of the Named Executive Officer, $1,800.
Additionally, the amount includes $21,780 awarded to Mr. Greco
pursuant to the Bank's Long Term Incentive and Deferred Compensation
Plan. (See "Long Term Incentive and Deferred Compensation Plans.")
(5) The amount includes $5,796 awarded to Mr. Greco pursuant to the
Bank's Long Term Incentive and Deferred Compensation Plan. (See
"Long Term Incentive and Deferred Compensation Plans.")
(6) Amount includes the Bank's matching contribution to the Bank's
401(k) plan for the benefit of the Named Executive Officer, $1,604.
Additionally, amount includes $13,233 awarded to Mr. Ferris pursuant
to the Bank's Long Term Incentive and Deferred Compensation Plan.
(See "Long Term Incentive and Deferred Compensation Plans.")
(7) Amount includes the Bank's matching contribution to the Bank's
401(k) plan for the benefit of the Named Executive Officer, $3,155.
Additionally, amount includes $7,467 awarded to Mr. Ferris pursuant
to the Bank's Long Term Incentive and Deferred Compensation Plan.
(See "Long Term Incentive and Deferred Compensation Plans.")
(8) Amount includes the Bank's matching contribution to the Bank's
401(k) plan for the benefit of the Named Executive Officer, $3,063.
Additionally, amount includes $5,616 awarded to Mr. Ferris pursuant
to the Bank's Long Term Incentive and Deferred Compensation Plan.
(See "Long Term Incentive and Deferred Compensation Plans.")
(9) Amount includes the Bank's matching contribution to the Bank's
401(k) plan for the benefit of the Named Executive Officer. $2,282.
Additionally, amount includes $13,808 awarded to Mr. Newton pursuant
to the Bank's Long Term Incentive and Deferred Compensation Plan.
(See "Long Term Incentive and Deferred Compensation Plans.")
(10) Amount includes the Bank's matching contribution to the Bank's
401(k) plan for the benefit of the Named Executive Officer, $3,228.
Additionally, amount includes $7,790 awarded to Mr. Newton pursuant
to the Bank's Long Term Incentive and Deferred Compensation Plan.
(See "Long Term Incentive and Deferred Compensation Plans.")
11
- ----------
Footnotes continued from previous page
(11) Amount includes the Bank's matching contribution to the Bank's
401(k) plan for the benefit of the Named Executive Officer, $3,135.
Additionally, amount includes $5,748 awarded to Mr. Newton pursuant
to the Bank's Long Term Incentive and Deferred Compensation Plan.
(See "Long Term Incentive and Deferred Compensation Plans.")
(12) Amount includes the Bank's matching contribution to the Bank's
401(k) plan for the benefit of the Named Executive Officer, $2,205.
Additionally, amount includes $13,339 awarded to Ms. Pereira
pursuant to the Bank's Long Term Incentive and Deferred Compensation
Plan. (See "Long Term Incentive and Deferred Compensation Plans.")
(13) Amount includes the Bank's matching contribution to the Bank's
401(k) plan for the benefit of the Named Executive Officer, $3,180.
Additionally, amount includes $7,526 awarded to Ms. Pereira pursuant
to the Bank's Long Term Incentive and Deferred Compensation Plan.
(See "Long Term Incentive and Deferred Compensation Plans.")
(14) Amount includes the Bank's matching contribution to the Bank's
401(k) plan for the benefit of the Named Executive Officer, $2,985.
Additionally, amount includes $5,418 awarded to Ms. Pereira pursuant
to the Bank's Long Term Incentive and Deferred Compensation Plan.
(See "Long Term Incentive and Deferred Compensation Plans.")
(15) Amount includes the Bank's matching contribution to the Bank's
401(k) plan for the benefit of the Named Executive Officer, $2,208.
Additionally, amount includes $13,362 awarded to Mr. Samponaro
pursuant to the Bank's Long Term Incentive and Deferred Compensation
Plan. (See "Long Term Incentive and Deferred Compensation Plans.")
Additionally, the amount includes $52,105 which can be attributed to
the exercise of stock options by the Named Executive Officer. Mr.
Samponaro retired on March 31, 2004.
(16) Amount includes the Bank's matching contribution to the Bank's
401(k) plan for the benefit of the Named Executive Officer, $3,247.
Additionally, amount includes $7,539 awarded to Mr. Samponaro
pursuant to the Bank's Long Term Incentive and Deferred Compensation
Plan. (See "Long Term Incentive and Deferred Compensation Plans.")
(17) Amount includes the Bank's matching contribution to the Bank's
401(k) plan for the benefit of the Named Executive Officer, $3,063.
Additionally, amount includes $5,616 awarded to Mr. Samponaro
pursuant to the Bank's Long Term Incentive and Deferred Compensation
Plan. (See "Long Term Incentive and Deferred Compensation Plans.")
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR
Values
The following table sets forth information regarding stock options that
were exercised, if any, during the last fiscal year, and unexercised stock
options held by the Named Executive Officers. The number of options and the per
share exercise prices have been adjusted to reflect stock splits and dividends.
Number of Value of Unexercised
Securities Underlying In-the-Money
Unexercised Options/SARs
Shares Acquired Value Realized Options/SARs at FY-End (#) At FY-End ($)(1)
Name on Exercise (#) ($)(2) Exercisable/Unexercisable (3) Exercisable/Unexercisable (3)
- --------------------------------------------------------------------------------------------------------------------------
Revere H. Ferris 0 0 8,940 $ 80,594
Carroll A. Pereira 0 0 17,074 $ 188,288
Philip G. Samponaro 3,885 52,105 17,074 $ 188,288
- ----------
(1) Represents the difference between the fair market value price of the
Company's Common Stock at December 31, 2003, $21.75, and the
exercise price of options, multiplied by the number of options. No
SARs have been granted by the Company. Options are in the money if
the fair market value of the underlying securities exceeds the
exercise or base price of the options.
(2) Represents the difference between the closing bid price of the
Company's common stock on the date the options
12
are exercised and the exercise price of options, multiplied by the
number of options.
(3) All options are exercisable.
Agreements with Management
While there are no employment contracts between the Company and any of its
Executive Officers, there are change of control agreements between the Bank and
its Executive Officers. These agreements provide that in certain instances, if
the Executive Officer is terminated or reassigned within twenty-four (24) months
following the occurrence of a change of control (as such term is defined in the
Change of Control Agreements), then such individual shall be entitled to receive
an amount as provided by such agreement equal to twenty-four (24) months salary,
reasonable legal fees and expenses incurred by the Executive Officer as a result
of such termination or reassignment, and continued participation in certain
benefit plans.
Agreements with Employees
While there are no employment contracts between the Company and any of its
employees, there are change of control agreements between the Bank and
twenty-three (23) employees who have been employed by the Bank for more than ten
years. These agreements provide that in certain instances, if the employee is
terminated or reassigned within six (6) months following the occurrence of a
change of control (as such term is defined in the Change of Control Agreements),
then such individual shall be entitled to receive an amount as provided by such
agreement equal to six (6) months salary, reasonable legal fees and expenses
incurred by the employee as a result of such termination or reassignment, and
continued participation in certain benefit plans.
Long Term Incentive and Deferred Compensation Plans
The Bank has entered into Long Term Incentive Retirement Agreements (the
"Executive Incentive Agreements") with its Executive Officers to encourage the
Executives to remain employees of the Bank. The Executive Incentive Agreements
will trigger the award of deferred bonuses to the its Executive Officers if
specified Bank performance objectives are achieved, based upon a formula
approved by the Board of Directors and upon which tax deferred earnings will
accrue at rates which will generally range between 4% and 15%. Amounts are
awarded after the end of each fiscal year. Such awards will immediately vest 20%
per additional year of service subsequent to the year with respect to which the
award is granted with 100% vesting upon a change in control, termination without
cause, or at normal retirement or at age 55 with 20 years of service. If the
Executive Officer dies while serving as an executive officer of the Bank, the
amount payable to the participant's beneficiary is projected to be equivalent to
the participant's projected retirement benefit (as defined in the Executive
Incentive Agreements) if the Bank acquires and maintains a corporate life
insurance policy on the life of the participant at the time of death (see
below). Upon retirement, the Executive Officer's total deferred compensation,
including earnings thereon, may be paid out in one lump sum, or paid in equal
annual installments over fifteen (15) years.
The Bank has entered into Long Term Incentive Retirement Agreements with
each of its Directors (the "Director Incentive Agreements") to reward past
service and encourage continued service of each Director. In addition, in
December 2002, the Bank entered into Long Term Incentive Retirement Agreements
with two newly appointed directors, Gregory S. Oneglia and Alan B. Magary. The
Director Incentive Agreements will award a director with a right to earn and
defer the receipt of a bonus in an amount or percentage of director and retainer
fees, and have earnings accrue
13
on such amounts at a rate anticipated to be between 4% and 15% and generally
equivalent to the appreciation in the Company's stock price over the period of
time for which the fees are deferred pursuant to the Director Incentive
Agreements if specified Bank performance objectives are achieved. All amounts in
the Director Incentive Agreements will immediately vest 20% per additional year
of service with 100% vesting upon a change in control, at normal retirement or
full term years of service. If a participant dies while serving as an outside
director of the Bank, the amount payable to the participant's beneficiary is
projected to be equivalent to the participant's projected retirement benefit (as
defined in the Director Incentive Agreements) if the Bank has acquired and
maintains a corporate life insurance policy on the life of the participant at
the time of death (see below). Upon retirement, the Director's total deferred
compensation, including earnings thereon, may be paid out in one lump sum, or
paid in equal annual installments over ten (10) years.
In concert with the Executive and Director Incentive Agreements, the Bank
has invested $6. 9 million in universal cash surrender value life insurance.
Insurance policies were acquired on the lives of each of the Bank's Executive
Officers, four (4) non-senior officers and all but two (2) of the Bank's
directors which are designed to recover the costs of the Bank's Executive and
Director Incentive Agreements. The policy death benefit has been structured to
indemnify the Bank against the death benefit provision of these benefit
agreements. The policies were paid with a single premium. Policy cash values
will earn interest at a current rate of approximately 4.6% and policy mortality
costs will be charged against the cash value monthly. There are no load or
surrender charges associated with the policies.
1994 Stock Option Plan For Officers and Outside Directors
On May 4, 1994, Shareholders approved a stock option plan for officers and
outside directors of the Company and the Bank, respectively (the "1994 Stock
Option Plan"). The Plan expired on May 4, 1999.
Pursuant to the 1994 Stock Option Plan, in January 1995, the Board of
Directors granted stock options to the Secretary, Mr. Samponaro which as a
result of stock splits and dividends allows him to purchase 3,885 shares of the
Company's Common Stock at $6.10 per share. Mr. Samponaro retired March 31, 2004.
Mr. Samponaro exercised these options during 2003. In January 1996, the Board
granted stock options to Ms. Pereira and Mr. Samponaro which as a result of
stock splits and dividends allow each such individual to purchase 4,067 shares
of the Company's Common Stock at $7.78 per share. In March 2004, Mr. Samponaro
exercised these options in accordance with the plan. In January 1997, the Board
granted stock options to Ms. Pereira and Mr. Samponaro which as a result of
stock splits and dividends allow such individuals to purchase 4,067 shares of
Common Stock at an exercise price of $9.24 per share. In January 1998, the Board
granted stock options to Ms. Pereira and Messrs. Ferris and Samponaro which as a
result of stock splits and dividends allow such individuals to each purchase
4,470 shares of Common Stock at an exercise price of $10.97 per share. In
January, 1999, the Board granted options to each of these individuals, which as
a result of a stock dividend, allows each individual to purchase 4,470 shares at
an exercise price of $14.50 per share.
Pursuant to the 1994 Stock Option Plan, with the exception of Patricia D.
Werner who became a director in 1996, H. Ray Underwood who became a Director in
1998, Thomas A. Kendall who became a Director in 1999, Gregory S. Oneglia and
Alan B. Magary, who both became directors in 2002, and Kathleen A. Kelley who
became a director in 2004, each outside director who is not an officer of the
Company or the Bank ("Outside Director") as well as retired Directors Clock and
Field,
14
received stock options, which are presently exercisable, to purchase shares of
the Company's Common Stock. More specifically, in May 1994, each Outside
Director was granted options, which as a result of stock splits and dividends,
allow such individuals to purchase 3,067 shares of Common Stock at $5.29 per
share. Directors Blick, Madsen and Orr exercised these options during 2003.
Moreover, in June 1995, each Outside Director was granted options, which as a
result of stock splits and dividends, allow such individuals to purchase 520
shares of Common Stock at $6.19 per share. Director Orr exercised those options
during 2003. In June 1996, each Outside Director was granted options, which as a
result of stock splits and dividends, allow such individuals to purchase 520
shares of Common Stock at $8.41 per share. Director Orr exercised those options
during 2003. In June 1997, each Outside Director was granted options, which as a
result of stock splits and dividends, allow such individuals to purchase 520
shares of Common Stock at an exercise price of $9.33 per share. Director Orr
exercised those options during 2003. In June 1998, each Outside Director was
granted options, which as a result of a stock dividend, allow each individual to
purchase 520 shares of Common Stock at an exercise price of $13.12. Director Orr
exercised those options during 2003. Patricia D. Werner has options to purchase
3,583 shares of Common Stock consisting of options to acquire 3,063 shares at
$9.37 per share and options to acquire 520 shares at $13.12 per share. In May of
2003, retired Directors Clock and Field exercised all remaining options in
accordance with the plan. In accordance with the plan, in January 2004,
Directors Blick, Fuessenich, Grimes, Madsen exercised options to purchase a
total of 9,689 shares of common stock.
401(k) Plan
The Bank offers an employee savings plan under Section 401(k) of the
Internal Revenue Code. Currently, the Bank makes matching contributions equal to
50% of participant contributions up to the first 4% of pre-tax compensation of a
contributing participant. During 2002, the Bank made matching contributions
equal to 75% of participant contributions up to the first 4% of pre-tax
compensation of a contributing participant. Participants vest immediately in
both their own contributions and the Bank's contributions. Employee savings plan
expense was $54,632 for 2003 and $91,349 for 2002.
Noncontributory Defined Benefit Pension Plan
The Bank has a noncontributory defined benefit pension plan that covers
substantially all employees who have completed one year of service and have
attained age 21. The benefits are based on years of service and the employee's
compensation during the last five (5) years of employment. The Bank's funding
policy is to contribute amounts to the Plan sufficient to meet the minimum
funding requirements set forth in ERISA, plus such additional amounts as the
Bank may determine to be appropriate from time to time.
Directors' Fees Plan
The Company offers Directors the option to defer their Directors' fees. If
deferred, the fees are held in a trust account with the Bank. The Bank has no
control over the trust. The cost of the related trust assets and corresponding
liability was $349,160 and $339,284 at December 31, 2003, and 2002,
respectively.
15
CERTAIN TRANSACTIONS WITH DIRECTORS AND MANAGEMENT
The Bank has had and expects to have in the future, transactions in the
ordinary course of its business with Directors, Officers, principal shareholders
and their associates, on substantially the same terms, including interest rates
and collateral on loans, as those prevailing at the same time for comparable
transactions with others, on terms that do not involve more than the normal risk
of collectibility or present other unfavorable features. The aggregate dollar
amount of these loans was $2,579,194 and $2,264,522 at December 31, 2003 and
2002, respectively. During 2003, $512,009 of new loans were made, and repayments
totaled $230,501. At December 31, 2003, all loans to Officers, Directors,
principal shareholders and their associates were performing in accordance with
the contractual terms of the loans.
During 2003 and 2002, the Bank paid The Business Center a total of
$119,908 and $106,522, respectively for purchases of office supplies, equipment
and courier services. The owner of The Business Center is the spouse of Clayton
L. Blick, who is a Director of the Company and the Bank.
Clayton L. Blick and Perley H. Grimes, Jr., both of whom are Directors of
the Company and the Bank, are partners in Cramer & Anderson, a law firm which
renders certain legal services to the Bank in connection with various matters.
During 2003 and 2002, the Bank paid Cramer & Anderson $72,537 and $97,651,
respectively for legal services rendered, a portion of which was reimbursed to
the Bank by third parties.
Gregory Oneglia, Director of the Company and the Bank, is a one-sixth
owner of property that is leased by the Bank for a branch. During 2003 and 2002,
the Bank paid rent expense for that property in the amount of $7,050 and $588,
respectively which represents Mr. Oneglia's percentage of ownership in the
property.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires that the Company's directors,
executive officers, and any person holding more than ten percent (10%) of the
Company's Common Stock file with the SEC reports of ownership and changes in
ownership of the Company's Common Stock and that such individuals furnish the
Company with copies of the reports.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons, with the exception of
the following, the Company believes that all of its executive officers and
directors complied with all Section 16(a) filing requirements applicable to
them:
Mr. Greco filed one Form 4 late to reflect one transaction; Mr. Ferris
filed one Form 4 late which reflected one transaction; and Mr. Samponaro filed
one Form 4 late to reflect two transactions.
16
PROPOSAL (2)
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
The Audit Committee, in its capacity as a committee of the Board of
Directors has selected McGladrey & Pullen, LLP as independent auditors to audit
the consolidated financial statements of the Company for the fiscal year ending
December 31, 2004. McGladrey & Pullen, LLP has served as the accountants for the
Company for the fiscal year ended December 31, 2003. McGladrey & Pullen, LLP's
opinion on the Consolidated Financial Statements of First Litchfield Financial
Corporation and subsidiary for the year ended December 31, 2003 is included in
the First Litchfield Financial Corporation 2003 Annual Report on Form 10-KSB.
During the period covering the fiscal year ended December 31, 2003,
McGladrey & Pullen, LLP and RSM McGladrey, Inc. performed the following
professional services:
First Litchfield Financial Corporation
Principal Accountant Fees and Services
Years Ended December 31, 2003 and 2002
Description 2003 2002
- -------------------------------------------------------- ------- -------
Audit Fees, consist of fees for professional services
rendered for the audit of the consolidated financial
statements and review of financial statements included
in quarterly reports on Form 10-QSB and services
connected with statutory and regulatory filings or
engagements. $87,433 $86,221
Audit-related Fees are fees principally for professional
services rendered for the audits of the FHLB Qualified
Collateral Report and the financial statements
of Common Trust Fund A, and consultations on various
accounting matters. $ 9,950 $13,327
Tax Service Fees consist of fees for tax return
preparation, planning and tax advice for the Company
and Common Trust Fund A. $ 9,925 $ 8,625
All Other Fees $ 0 $ 0
17
Independence
The Audit Committee of the Board of Directors of the Company has
considered and determined that the provision of services rendered by McGladrey &
Pullen, LLP relating to audit related and tax service matters above, is
compatible with maintaining the independence of such accountants.
A representative of McGladrey & Pullen, LLP will be available at the
Annual Meeting to answer questions and will be afforded the opportunity to make
a statement if he or she desires to do so.
Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services of
Independent Auditor
The Audit Committee's policy is to pre-approve all audit and non-audit
services provided by the independent auditors, other than those listed under the
de minimus exception. These services may include audit services, audit-related
services, tax services and other services. Pre-approval is detailed as to a
particular service or category of services, and is generally subject to a
specific budget. The Audit Committee has delegated pre-approval authority to its
Chairman when expeditious delivery of services is necessary. The independent
auditors and management are required to report to the full Audit Committee
regarding the extent of services provided by independent auditors in accordance
with this pre-approval, and the fees for the services performed to date. None of
the audited-related fees, tax fees or other fees paid in 2003 and 2002 were
approved per the Audit Committee's pre-approval policies.
Required Vote For Ratification of the Independent Auditors
The affirmative vote of a majority of the shares represented at the
meeting is required to ratify the appointment of the independent auditors for
the year ending December 31, 2004.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS
VOTE FOR RATIFICATION OF THE INDEPENDENT AUDITORS
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of the
Company does not know of any other matters to be presented for action by the
shareholders at the 2004 Annual Meeting. If, however, any other matters not now
known are properly brought before the meeting, the persons named in the
accompanying Proxy will vote such Proxy in accordance with the determination of
a majority of the Board of Directors.
PROPOSALS OF SHAREHOLDERS
Under the Company's Bylaws, for business proposed by a shareholder (other
than director nomination) to be a proper subject for action at an Annual Meeting
of Shareholders, in addition to any requirement of law, the shareholder must
timely request that the proposal be included in the Company's proxy statement
for the meeting. The Company received no such request from any shareholder with
respect to the 2004 Annual Meeting.
18
In order to be included in the Company's proxy statement and form of proxy
for the 2005 Annual Meeting of Shareholders and in order to be a proper subject
for action at that meeting, proposals of shareholders intended to be presented
to that meeting must be received at the Company's principal executive offices by
December 19, 2004, pursuant to proxy soliciting regulations of the SEC. The
SEC's rules contain standards as to what shareholder proposals are required to
be in the proxy statement. Any such proposal will be subject to 17 C.F.R.
ss.240.14a-8 of the rules and regulations promulgated by the SEC. Nothing in
this paragraph shall be deemed to require the Company to include in its proxy
statement and form of proxy for such meeting any shareholder proposal which does
not meet the requirements of the SEC in effect at the time. In addition, under
the Company's Bylaws, shareholders who wish to nominate a director or bring
other business before an annual meeting must comply with the following:
You must be a shareholder of record and must have given timely notice in
writing to the Secretary of the Company.
Your notice must contain specific information required in the Company's
Bylaws.
Any other proposal for consideration by shareholders at the Company's 2005
annual meeting of shareholders must be delivered to, or mailed to and received
by, the Company's Assistant Secretary of the Company not less than 45 days nor
more than 90 days prior to the date of the meeting if the Company gives at least
30 days notice or prior public disclosure of the meeting date to shareholders.
Shareholder proposals should be mailed to: Assistant Secretary, Stephen M.
Riley, II, First Litchfield Financial Corporation, P.O. Box 578, 13 North
Street, Litchfield, Connecticut 06759.
ANNUAL REPORT TO SHAREHOLDERS
The Company files with the Securities and Exchange Commission Annual
Reports on Form 10-KSB. A copy of the Company's Annual Report on Form 10-KSB,
without exhibits and Annual Report to Shareholders, including consolidated
financial statements, may be obtained without charge upon written request to:
Carroll A. Pereira, Treasurer, First Litchfield Financial Corporation, P.O. Box
578, 13 North Street, Litchfield, Connecticut 06759.
By Order of the Board of Directors
April 19, 2004 Stephen M. Riley, II
Assistant Secretary
19
PROXY FOR 2004 ANNUAL MEETING OF FIRST LITCHFIELD FINANCIAL CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
FIRST LITCHFIELD FINANCIAL CORPORATION
The undersigned holder(s) of the Common Stock of First Litchfield Financial
Corporation (the Company) do hereby nominate, constitute and appoint Herbert L.
Curtiss, Jr. and Arthur B. Webster of Litchfield County, Connecticut, jointly
and severally, as our proxies with full power of substitution, for us and in our
name, place and stead to vote all the Common Stock of said Company, standing in
our name on its books on April 6, 2004 at the Annual Meeting of its shareholders
to be held at the LaCupola Restaurant, 637 Bantam Road (Route 202), Litchfield,
Connecticut on Wednesday, May 19, 2004 at 3:00 p.m. or at any adjournment
thereof with all the powers the undersigned would possess if personally present,
as follows:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS (1) & (2)
(1) ELECTION OF DIRECTORS:
To re-elect the following five (5) Directors to the Board of Directors
each to serve for a term of three (3) years and until their successors are
elected and qualified, as described in the Proxy Statement (Nominees:
George M. Madsen, Alan B. Magary, Gregory S. Oneglia, William J. Sweetman
and Patricia D. Werner).
|_| FOR ALL NOMINEES |_| WITHHOLD AUTHORITY |_| FOR ALL NOMINEES
TO VOTE FOR ALL NOMINEES EXCEPT AS WRITTEN
BELOW:
_____________________________
_____________________________
(2) APPOINTMENT OF AUDITORS:
To ratify the appointment of McGladrey & Pullen, LLP as the Company's
independent auditors for the year ending December 31, 2004.
|_| FOR |_| AGAINST |_| ABSTAIN
(3) OTHER BUSINESS:
To transact such other business as may properly come before the meeting,
or any adjournments thereof. Management knows of no other business to be
presented by or on behalf of the Company or its management at the meeting.
However, if any other matters are properly brought before the meeting, the
persons named in this Proxy or their substitutes will vote in accordance
with the determination of a majority of the Board of Directors.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATION INDICATED. IF NO
SPECIFICATION IS INDICATED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES LISTED IN PROPOSAL 1; "FOR" THE RATIFICATION OF THE COMPANY'S
APPOINTMENT OF INDEPENDENT AUDITORS (PROPOSAL 2); AND IN ACCORDANCE WITH THE
DETERMINATION OF A MAJORITY OF THE BOARD OF DIRECTORS AS TO ANY OTHER MATTERS.
DATE: _________________________ PLEASE SIGN, DATE AND RETURN
__________________________________(L.S.)
__________________________________(L.S.)
Please sign exactly as name appears.
When shares are held in more than one
name, including joint tenants, each
party should sign. When signing as
attorney, executor, administrator,
trustee or guardian, give full title as
such.
THIS PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE MEETING BY WRITTEN NOTICE
TO THE COMPANY OR MAY BE WITHDRAWN AND YOU MAY VOTE IN PERSON
SHOULD YOU ATTEND THE ANNUAL MEETING
PLEASE SIGN AND RETURN