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 [ ] 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
Ambanc Holding Co., 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.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (set forth the amount on which the filing
fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
[ ] 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.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
AMBANC HOLDING CO., INC.
11 Division Street, P.O. Box 669, Amsterdam, New York 12010 (518) 842-7200
April 18, 2001
Dear Ambanc Stockholder:
On behalf of the Board of Directors and management of Ambanc Holding Co.,
Inc., we cordially invite you to attend our Annual Meeting of Stockholders. The
meeting will be held at 10:00 a.m., eastern time, on Friday, May 18, 2001, at
our offices at 11 Division Street, Amsterdam, New York. At the meeting, we will
report on the Company's operations and outlook for the year ahead.
An important aspect of the annual meeting process is the annual stockholder
vote on corporate business items. I urge you to exercise your rights as a
stockholder to vote and participate in this process.
We encourage you to attend the meeting in person. Whether or not you plan
to attend, however, please read the enclosed proxy statement and then complete,
sign and date the enclosed proxy card and return it in the accompanying postpaid
return envelope as promptly as possible. This will save us additional expense in
soliciting proxies to obtain a quorum and will ensure that your shares are
represented at the meeting.
Your Board of Directors and management are committed to the success of our
company and the enhancement of your investment. As President and Chief Executive
Officer, I want to express my appreciation for your confidence and support.
Very truly yours,
/s/John M. Lisicki
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John M. Lisicki
President and Chief Executive Officer
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AMBANC HOLDING CO., INC.
11 Division Street
Amsterdam, New York 12010-4303
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 18, 2001
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Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of Ambanc Holding Co., Inc. (the "Company") will be held at the
Company's offices at 11 Division Street, Amsterdam, New York, on Friday, May 18,
2001, at 10:00 a.m., Eastern Time.
A proxy card and a proxy statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
I. The election of four directors of the Company;
II. The ratification of the Ambanc Holding Co., Inc. 2001 Stock Option
Plan (the "2001 Stock Option Plan");
III. The ratification of the appointment of KPMG LLP as independent
auditors for the Company for the fiscal year ending December 31, 2001;
and
such other matters as may properly come before the Meeting or any adjournments
or postponements thereof. The Board of Directors is not aware of any other
business to come before the Meeting.
Action may be taken on these proposals at the Meeting on the date specified
above, or on any date or dates to which the Meeting may be adjourned or
postponed. Stockholders of record at the close of business on April 3, 2001 are
the stockholders entitled to vote at the Meeting and any adjournments or
postponements thereof. A complete list of stockholders entitled to vote at the
Meeting will be available for inspection by stockholders at the offices of the
Company during the ten days prior to the Meeting, as well as at the Meeting.
EACH STOCKHOLDER, WHETHER OR NOT HE OR SHE PLANS TO ATTEND THE MEETING, IS
REQUESTED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. ANY PROXY GIVEN BY THE STOCKHOLDER MAY BE REVOKED BY
FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION OR A PROXY BEARING
A LATER DATE. ANY STOCKHOLDER PRESENT AT THE MEETING MAY REVOKE HIS OR HER PROXY
AND VOTE IN PERSON ON EACH MATTER BROUGHT BEFORE THE MEETING. HOWEVER, IF YOU
ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN NAME, YOU WILL
NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER TO VOTE IN PERSON AT THE
MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Robert Kelly
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Robert Kelly
Secretary
Amsterdam, New York
April 18, 2001
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM AT THE MEETING. A
PRE-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES.
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PROXY STATEMENT
OF
AMBANC HOLDING CO., INC.
11 DIVISION STREET
AMSTERDAM, NEW YORK 12010-4303
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ANNUAL MEETING OF STOCKHOLDERS
MAY 18, 2001
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GENERAL
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This Proxy Statement is furnished in connection with the solicitation on
behalf of the board of directors of Ambanc Holding Co., Inc. of proxies to be
used at the Annual Meeting of Stockholders of the Company, to be held at the
Company's offices at 11 Division Street, Amsterdam, New York, on Friday, May 18,
2001, at 10:00 a.m., Eastern Time, and all adjournments or postponements of the
Meeting. The accompanying Notice of Meeting and form of proxy and this proxy
statement are first being mailed to stockholders on or about April 18, 2001. The
Company controls, as a wholly owned subsidiary, Mohawk Community Bank (the
"Bank").
At the Meeting, stockholders of the Company are being asked to consider and
vote upon (i) the election of four directors of the Company, (ii) the
ratification of the Ambanc Holding Co., Inc. 2001 Stock Option Plan (the "2001
Stock Option Plan") and (iii) the ratification of the appointment of KPMG LLP as
the Company's independent auditors for the fiscal year ending December 31, 2001.
Proxies and Proxy Solicitation
All shares of the Company's common stock represented at the Meeting by
properly executed proxies received prior to or at the Meeting, and not revoked,
will be voted at the Meeting in accordance with the instructions thereon. If no
instructions are indicated, properly executed proxies will be voted "FOR" the
election of the director nominees named in this proxy statement, "FOR" the
ratification of the 2001 Stock Option Plan and "FOR" the ratification of the
appointment of KPMG LLP. The Company does not know of any matters, other than as
described in the Notice of Annual Meeting, that are to come before the Meeting.
If any other matters are properly presented at the Meeting for action, the
persons named in the enclosed form of proxy and acting thereunder will have the
discretion to vote on such matters in accordance with their best judgment.
Any proxy given pursuant to this solicitation or otherwise may be revoked
by the stockholder giving it at any time before it is voted by delivering to the
Secretary of the Company at the above address, on or before the taking of the
vote at the Meeting, a written notice of revocation bearing a later date than
the proxy or a later dated proxy relating to the same shares of common stock or
by attending the Meeting and voting in person. Attendance at the Meeting will
not in itself constitute the revocation of a proxy.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of common stock. In addition to solicitation by mail,
directors, officers and employees of the Company and the Bank may solicit
proxies personally or by facsimile, telegraph or telephone, without additional
compensation.
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Voting Rights; Vote Required
Stockholders of record as of the close of business on April 3, 2001 (the
"Voting Record Date") will be entitled to one vote on each matter presented for
a vote at the Meeting for each share of common stock then held. A vote may be
exercised in person or by a properly executed proxy as discussed above.
Directors will be elected by a plurality of the votes cast in person or by proxy
at the Meeting. Ratification of the 2001 Stock Option Plan and ratification of
the appointment of KPMG LLP as the Company's independent auditors for the fiscal
year ending December 31, 2001 both require both the affirmative vote of a
majority of the votes cast in person or by proxy at the Meeting. The presence in
person or representation by proxy of at least one-third of the outstanding
shares of the common stock will constitute a quorum for purposes of the Meeting.
With regard to the election of directors, votes may be cast in favor of or
withheld from each nominee; votes that are withheld will be excluded entirely
from the vote and will have no effect. Abstentions may be specified on all
proposals except the election of directors and will be counted as present for
purposes of the item on which the abstention is noted. Abstentions on the
proposals to ratify the 2001 Stock Option Plan and to ratify the appointment of
KPMG LLP as the Company's independent auditors will have the effect of a
negative vote. A broker non-vote (i.e., proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owners or other persons as to certain proposals on which such beneficial owners
or persons are entitled to vote their shares but with respect to which the
brokers or nominees have no discretionary power to vote without such
instructions) will have no effect on the election of directors or ratification
of the 2001 Stock Option Plan or the ratification of the appointment of the
auditors. Brokers who do not receive instructions are entitled to vote on the
election of directors and the ratification of the appointment of the auditors.
Voting Securities and Principal Holders Thereof
As of the Voting Record Date, the Company had 4,532,433 shares of common
stock issued and outstanding. The following table sets forth, as of the Voting
Record Date, information regarding share ownership by the persons or entities
known by management to beneficially own more than five percent of the Company's
common stock and all directors and executive officers of the Company as a group.
See "Proposal I -Election of Directors" for information regarding share
ownership by the individual directors and certain executive officers.
Percent of Shares
Amount and Nature of of Common Stock
Name and Address of Beneficial Owner Beneficial Ownership Outstanding
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Ambanc Holding Co., Inc. 384,709(1) 8.7%
Employee Stock Ownership Plan
11 Division Street
Amsterdam, New York 12010
Dimensional Fund Advisors, Inc. 335,200(2) 7.4%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
2
Jewelcor Management, Inc., et al. 317,090(3) 7.0%
100 N. Wilkes-Barre Boulevard
Wilkes-Barre, Pennsylvania 18702
Seidman and Associates, L.L.C. 286,542(4) 6.3%
19 Veteri Place
Wayne, New Jersey 07470
Directors and executive officers of 1,029,028(5) 21.9%
the Company as a group (18 persons)
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(1) The amount reported represents shares of common stock held by the Ambanc
Holding Co., Inc. Employee Stock Ownership Plan (the "ESOP"). As of the
Voting Record Date, 193,780 shares of common stock under the ESOP had been
allocated to accounts of participants. RS Group Trust Company, as the
trustee of the ESOP, may be deemed to beneficially own the shares held by
the ESOP which have not been allocated to the accounts of participants or
which have been allocated but are not voted by the participants.
Participants in the ESOP have the right to direct the voting of shares
allocated to their accounts. Unallocated shares held by the ESOP are voted
by the plan trustee in the same manner that the plan trustee is directed to
vote by the majority of the plan participants who directed the plan trustee
as to the manner of voting the shares allocated to their plan accounts.
(2) As reported on a Schedule 13G filed with the Securities and Exchange
Commission (the "SEC") on February 2, 2001. The filer reports sole voting
and dispositive power with respect to all shares but disclaims beneficial
ownership of all shares of common stock.
(3) As reported by Jewelcor Management, Inc. ("JMI") and the other members of a
group formed with JMI under Section 13(d) of the Securities Exchange Act of
1934 based on an amended Schedule 13D filed with the SEC on September 20,
2000 and a Form 5 filed in February, 2001. JMI reported sole voting and
dispositive power over 308,440 shares. The other members of the group
reported beneficial ownership as follows: Mr. Seymour Holtzman, a director
of the Company and a member of this group: shared voting and dispositive
power over 4,886 shares; Mr. Holtzman's wife: none; Allison Holtzman
Garcia, Mr. Holtzman's daughter: sole voting and dispositive power over
1,535 shares; Custodial Account f/b/o Allison Holtzman Garcia ("AHG
Custodial Account"): sole voting and dispositive power over 1,374 shares;
Trust f/b/o Steven Holtzman, Mr. Holtzman's son ("SH Trust"): sole voting
and dispositive power over 160 shares; Custodial Account f/b/o Olivia
Garcia, Mr. Holtzman's granddaughter ("OG Custodial Account"), sole voting
and dispositive power over 160 shares; Custodial Account f/b/o Chelsea
Holtzman, Mr. Holtzman's granddaughter ("CH Custodial Account"): sole
voting and dispositive power over 535 shares; S.H. Holdings, Inc.: none;
Jewelcor: none.
(4) As reported by Seidman and Associates, L.L.C. and the other members of a
group formed with Seidman and Associates, L.L.C. under Section 13(d) of the
Securities Exchange Act of 1934 based on a Schedule 13D filed with the SEC
on August 25, 2000 and a Form 5 filed in February, 2001. Seidman and
Associates, L.L.C. reported sole voting and dispositive power over 113,497
shares. The other members of the group reported beneficial ownership as
follows: Mr. Lawrence B. Seidman, a director of the Company and a member of
this group: sole voting and dispositive power over 286,542 shares; Seidman
Investment Partnership, L.P.: sole voting and investment power over 36,170
shares; Seidman Investment Partnership II, L.P.: sole voting and investment
power over 36,750 shares; Kerrimatt, L.P.: sole voting and investment power
over 39,500 shares; Federal Holdings, L.L.C.: sole voting and investment
power over 30,250 shares; Pollack Investment Partnership, L.P.: sole voting
and investment power over 12,000 shares; discretionary clients: sole
voting and investment power over 18,000 shares.
(5) This amount includes shares held directly, as well as shares held jointly
with family members, shares held in retirement accounts, held in a
fiduciary capacity, held by certain of the group members' families, or held
by trusts of which the group member is a trustee or substantial
beneficiary, with respect to which shares the group member may be deemed to
have sole or shared voting and/or investment powers. This amount also
includes options to purchase 168,588 shares of common stock granted to
group members which are currently exercisable or which will become
exercisable within 60 days of the Voting Record Date. Includes shared
voting and dispositive power over 730,939 shares of common stock. In
addition, this amount includes the 317,090 shares owned by Mr. Holtzman and
the other members of his group described in footnote (2) and the 286,542
shares owned by Mr. Seidman and the other members of his group described in
footnote (4).
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PROPOSAL I - ELECTION OF DIRECTORS
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Approximately one-third of the Company's directors are elected annually to
serve for a three-year term or until their respective successors are elected and
qualified. The Company's board of directors (the "Board of Directors" or the
"Board") is currently comprised of fourteen directors, with five directors in
one class, whose terms will expire on the date of the Meeting, and five and four
directors in the two other classes, with terms that will expire in 2002 and
2003, respectively. One of the current directors whose term will expire this
year, Mr. Lauren T. Barnett, is retiring as Chairman of the Board and director
of the Company as of the date of the Meeting. Accordingly, stockholders will
elect four directors at the Meeting. The Company wishes to express its sincere
gratitude for the years of dedicated service and guidance provided by Director
"Bud" Barnett, who has served as Chairman of the Company's Board of Directors
since 1998 and a director since 1966.
In February 2001, the Company amended its bylaws regarding the age
qualification for directors. Under the amended bylaws, all persons are subject
to a qualification requirement whereby they will not be eligible for
appointment, election or reelection if they have reached the age of 76 years on
or before the date of such appointment, election or reelection.
In March 2001, the Board of Directors elected Director Lawrence B. Seidman
as Chairman of the Company's Board of Directors, effective as of the date of the
Meeting. In addition, the Board of Directors of the Bank elected President and
Chief Executive Officer and director John M. Lisicki as Chairman of the Board of
Directors of the Bank, effective as of the date of the Meeting.
The following table sets forth certain information, as of the Voting Record
Date, regarding each nominee for director and each current director whose term
of office extends beyond the date of the Meeting. The Board of Directors acting
as the nominating committee has recommended and approved the nominees identified
in the following table. It is intended that the proxies solicited on behalf of
the Board of Directors (other than proxies in which the vote is withheld as to a
nominee) will be voted at the Meeting "FOR" the election of the nominees
identified below. If a nominee is unable to serve, the shares represented by all
valid proxies will be voted "FOR" the election of such substitute nominee as the
Board of Directors may recommend. At this time, the Board of Directors knows of
no reason why a nominee might be unable to serve if elected. Except as disclosed
herein, there are no arrangements or understandings between any nominee and any
other person pursuant to which the nominee was selected.
4
Shares of
Current Common Stock Percent
Director Term to Beneficially of
Name Age(1) Position(s) Held in the Company Since(2) Expire Owned(3) Class(4)
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BOARD NOMINEES FOR TERM TO EXPIRE IN 2004
Daniel J. Greco 72 Director 1998 2001 19,106(5) *
John M. Lisicki 54 President and Chief Executive Officer 1998 2001 71,744(6) 1.6%
Charles S. Pedersen 75 Director 1977 2001 25,434(7) *
John A. Tesiero, Jr. 73 Director 1998 2001 28,562(8) *
DIRECTORS CONTINUING IN OFFICE
James J. Bettini, Sr. 46 Director 1998 2002 2,220(9) *
Seymour Holtzmann 65 Director 1999 2002 317,090(10) 7.0%
Allan R. Lyons 60 Director 1999 2002 1,419 *
Charles E. Wright 58 Director 1998 2002 2,320(11) *
William L. Petrosino 42 Director 1999 2002 59,174(12) 1.3%
John J. Daly 60 Director 1988 2003 29,168(13) *
Marvin R. LeRoy, Jr. 40 Director 1996 2003 15,820(14) *
Lawrence B. Seidman 53 Director 2000 2003 286,542(15) 6.3%
Ronald S. Tecler 62 Director 1998 2003 30,705(16) *
CERTAIN EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Benjamin Ziskin Senior Vice President 43,255(17) *
Thomas Nachod Senior Vice President 3,029(18) *
James J. Alescio Senior Vice President 30,218(19) *
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(1) As of December 31, 2000.
(2) Includes service as a director of the Bank.
(3) The nature of beneficial ownership for shares reported in this column is
sole voting and dispositive power, except as otherwise noted in these
footnotes. Included in the shares beneficially owned by the named
individuals are options to purchase shares of common stock, which are
currently exercisable or which will become exercisable within 60 days of
the Voting Record Date, as follows: Mr. Lisicki - 38,913 shares; Messrs.
Greco, Tecler and Tesiero - 7,782 shares; Messrs. Daly, LeRoy, and Pedersen
- 13,542 shares, Mr. Ziskin - 24,905 shares; Mr. Nachod - 2,000 shares; and
Mr. Alescio - 17,122 shares.
(4) An asterisk(*) indicates ownership of less than one percent.
(5) Includes shared voting and dispositive power over 7,134 shares.
(6) Includes shared voting and dispositive power over 26,198 shares.
(7) Includes shared voting and dispositive power over 2,500 shares.
(8) Includes shared voting and dispositive power over 5,834 shares.
(9) Includes shared voting and dispositive power over 600 shares.
(10) For detailed information regarding Mr. Holtzman's ownership, see footnote 2
to the table under "Voting Securities and Principal Holders Thereof."
(11) Includes shared voting and dispositive power over 700 shares.
(12) Includes shared voting and dispositive power over 23,400 shares.
(13) Includes shared voting and dispositive power over 2,611 shares.
(14) Includes shared voting and dispositive power over 1,020 shares.
(15) For detailed information regarding Mr. Seidman's ownership, see footnote 4
to the table under "Voting Securities and Principal Holders Thereof."
(16) Includes shared voting and dispositive power over 2,140 shares.
(17) Includes shared voting and dispositive power over 18,350 shares.
(18) Includes shared voting and dispositive power over 1,029 shares.
(19) Includes shares voting and dispositive power over 13,096 shares.
The business experience for at least the past five years of each nominee
and director continuing in office after the Meeting is set forth below.
Dr. Daniel J. Greco. Dr. Greco became a director of the Company and the
Bank following the merger with AFSALA. Prior to the merger, Dr. Greco had been a
director of Amsterdam Federal Bank,
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a subsidiary of AFSALA, since 1980, and a director of AFSALA since its formation
in 1996. Dr. Greco is a former school teacher and the retired superintendent of
the Greater Amsterdam School District. Dr. Greco serves on the Board of
Directors of the Amsterdam Memorial Hospital and Industries for Amsterdam, Inc.
and is active in the Rotary Club, the Elks Club, and the Boy Scouts of America.
John M. Lisicki. Mr. Lisicki became President and Chief Executive Officer
of the Company and the Bank upon consummation of the merger with AFSALA in
November 1998. Prior to the merger, Mr. Lisicki had served as President and
Chief Executive Officer of Amsterdam Federal Bank since 1983 and as President
and Chief Executive Officer of AFSALA since 1996. Mr. Lisicki is a current
member, Treasurer and past Chairman of the Board of Trustees of Amsterdam
Memorial Hospital, a member of the Board and former President of Industries for
Amsterdam, a member of the Board and former Vice President of the Amsterdam Free
Library, a member of the Board of the Sarah J. Sanford Home for Elderly Women,
former President of the Foundation of Liberty Enterprises, as well as a member
of its Board of Directors, and a former board member of Hospice Foundation, the
Amsterdam City Center and the Advisory Board of St. Mary's Hospital. Effective
May 18, 2001, Mr. Lisicki will become Chairman of the Board of Directors of the
Bank.
Charles S. Pedersen. Since 1985, Mr. Pedersen has been a manufacturers'
representative for various international fiberglass and related product
companies. Mr. Pedersen's office is located in Amsterdam, New York.
John A. Tesiero, Jr. Mr. Tesiero became a director of the Company and the
Bank following the merger with AFSALA. Prior to the Merger, Mr. Tesiero had
served as a director of Amsterdam Federal Bank since 1994 and of AFSALA since
1996. Mr. Tesiero is the sole owner and President and Chief Executive Officer of
Cranesville Block Co., Inc., a construction supply business selling ready mix
concrete, concrete block, sand, gravel and stone, located in Amsterdam, New
York.
James J. Bettini, Sr. Mr. Bettini is Executive Vice President of Operations
of Farm Family Holding Co., parent company of Farm Family Insurance, where he
has been employed since 1979. He is past president of the Albany Association of
Chartered Property and Casualty Underwriters, and served on the Amsterdam City
Zoning Board of Appeals and the Amsterdam Golf Commission.
Seymour Holtzman. Since 1990, Mr. Holtzman has served as Chairman and Chief
Executive Officer of each of the following companies: Jewelcor Management &
Consulting, Inc., a management and consulting firm in Wilkes-Barre,
Pennsylvania; C.D. Peacock, Inc., a jewelry company based in Chicago, Illinois;
Central European Capital Investors, Inc., an investment company operating in
eastern Europe; and S.A. Peck & Co., a mail order jewelry company based in
Chicago, Illinois. Mr. Holtzman has over 35 years of management experience, and
has been an investor in the banking and thrift industries since 1972. A
philanthropist, Mr. Holtzman has been honored as "Humanitarian of the Year" by
the Cardinal Cushing School and Training Center in Boston, Massachusetts and
"Man of the Year" by the B'nai B'rith Youth Services.
Allan R. Lyons. Mr. Lyons is the owner of 21st Century Strategic Investment
Planning, a company that Mr. Lyons began operating following his retirement in
December 1999 as the Chairman of the Board and Chief Executive Officer of Piaker
& Lyons, Vestal, New York. Mr. Lyons had served as Chairman of the firm's
personal financial planning committee and executive committee. Mr. Lyons had
worked for Piaker & Lyons since 1964, and had become an executive of the firm in
1968. Mr. Lyons is a member of the American Institute of CPAs, the New York
State Society of CPAs, and the International Association for Financial Planning.
He is on the board of advisors of the Binghamton University School
6
of Management, is a corporate member of United Health Services, and serves on
the endowment committee of the United Jewish Appeal of Broome County. Mr. Lyons
is a director of Officeland Inc., Retail Entertainment Group, Inc. and Franklin
Credit Management Corporation.
Charles E. Wright. Since 1976, Mr. Wright has been President of W.W. Custom
Clad, Inc., Canajoharie, New York, a metal finishing shop specializing in powder
coatings. Prior to that time, Mr. Wright was a sales representative for the
Industrial Coatings Division of Schenectady International in the New York and
New England regions and a teacher and vocational guidance counselor at
Canajoharie High School. Mr. Wright is a trustee of the Arkell Hall Foundation
in Canajoharie and the Foundation of St. Mary's Hospital in Amsterdam.
William L. Petrosino. Mr. Petrosino is a longtime local businessman in the
wholesale beverage industry, operating beverage companies in the Amsterdam,
South Glens Falls and Schenectady, New York areas. He has served as a director
of the Company since May 1999. He also owns and operates warehouse rental space
in Montgomery and Fulton Counties, as well as residential rental properties in
the Amsterdam area. Mr. Petrosino serves as the Chairman of the Board of
Directors of the Fulton-Montgomery-Schoharie Private Industry Council, and of
the Workforce Development Board. In addition, Mr. Petrosino serves as Chairman
of the Amsterdam City Planning Board, and is on the boards of directors of the
Montgomery County Economic Development Zone and Amsterdam Memorial Hospital.
John J. Daly. Mr. Daly is the Vice President and was a former owner of
Alpin Haus, Inc., a retail company located in Amsterdam, New York, which
specializes in the sale of recreational vehicles. Mr. Daly has been associated
with Alpin Haus since 1963.
Marvin R. LeRoy, Jr. Mr. LeRoy is Executive Director of the Alzheimer's
Association, Northeastern New York Chapter and is also Town/County Supervisor
for Saratoga County representing the Town of Clifton Park. Previously, he has
served as Development Officer for Skidmore College in Saratoga Springs,
Executive Director of the Kenwood Child Development Center in Albany, Executive
Director of the Amsterdam City Center (YMCA) and served as Executive Director of
the Montgomery County Youth Bureau, Planning Officer for the Montgomery County
Planning Department, and Director of the Montgomery County Veterans Services.
Mr. LeRoy is also active in the community, having served on over 25 boards and
councils throughout the Capital District.
Lawrence B. Seidman. Mr. Seidman has been a director of the Company since
March 2000. Since March 1999, Mr. Seidman has been the President, General
Counsel and a Director of Menlo Acquisition Corporation. Mr. Seidman is also
Manager of Seidman & Associates, L.L.C., President of Veteri Place Corp., the
sole General Partner of Seidman Investment Partnership, LP, Seidman Investment
Partnership II, LP, Manager, of Federal Holdings, L.L.C. and business consultant
to certain partnerships and individuals, including, but not limited to,
Kerrimatt, LP. He is also a director of CNY Financial Corporation and South
Jersey Financial Corporation, Inc. and their respective bank subsidiaries.
Effective May 18, 2001, Mr. Seidman will become Chairman of the Board of
Directors of the Company.
Mr. Seidman and certain affiliates (the "Seidman Group") were defendants in
a civil proceeding filed in federal district court by IBS Financial Corp. in
November 1996 in connection with a proxy contest, state law matters and
disclosure required under the federal securities laws. Following an appeal of
the district court decision, the Third Circuit Court of Appeals, in February
1998, reversed in part and remanded in part the lower court decision. The Court
of Appeals determined that a Schedule 13D filed by the Seidman Group had failed
to adequately disclose information about persons in control of the Seidman
Group. Pending the remand, an amended Schedule 13D was filed to provide
additional
7
disclosures about members of the Seidman Group. Thereafter, the federal district
court entered a Judgment After Remand which directed the inclusion of these
disclosures in the Schedule 13D.
Dr. Ronald S. Tecler. Dr. Tecler became a director of the Company and the
Bank following the merger with AFSALA Bancorp, Inc. ("AFSALA"). The Company
acquired AFSALA in November 1998. Prior to the merger, Dr. Tecler had been a
director of Amsterdam Federal Bank since 1994 and a director of AFSALA since
1996. Dr. Tecler is the majority stockholder of a professional corporation
engaged in the practice of dentistry in Amsterdam, New York and has practiced
dentistry since 1971. Dr. Tecler is the Chairman of the Board of the Amsterdam
Urban Renewal Agency, a board member of Industries for Amsterdam, Inc., the Vice
President of the Twin Rivers Boy Scouts Council, and is active in the Amsterdam
Rotary Club and the St. Mary's Hospital of Amsterdam Foundation.
Meetings and Committees of the Boards of Directors
Meetings and Committees of the Company. Meetings of the Company's Board of
Directors are generally held on a monthly basis. For the year ended December 31,
2000, the Board of Directors met twelve times. During 2000, no incumbent
director of the Company attended fewer than 75% of the aggregate of the total
number of Board meetings held while he was a director and the total number of
meetings held by the committees of the Board of Directors on which he served
during the period in which he served.
The Board of Directors of the Company has standing Compensation, Nominating
and Audit Committees.
The Company's Compensation and Benefits Committee is comprised of Directors
Bettini (Chairman), Leroy, Daly, Pedersen and Tesiero. The Compensation and
Benefits Committee is responsible for developing and making recommendations to
the Board of Directors with respect to the Company's executive compensation
policies as well as administering the Company's 1997 Stock Option and Incentive
Plan (the "1997 Stock Option Plan") and Recognition and Retention Plan (the
"RRP"). This committee met nine times during 2000.
The Company's Nominating Committee, consisting of the entire Board of
Directors, reviews the terms of the directors and makes nominations for
directors to be voted on by stockholders. The Nominating Committee generally
meets once a year. Nominations of persons for election to the Board of Directors
may be made only by or at the direction of the Board of Directors or by any
stockholder entitled to vote for the election of directors who complies with the
notice procedures set forth in the Company's Bylaws. Pursuant to the Company's
Bylaws, nominations by stockholders must be delivered in writing to the
Secretary of the Company at least 90 days prior to the date of the annual
meeting, except that if less than 100 days' notice of the date of the meeting is
given or made to stockholders, nominations must be delivered no later than the
close of business on the tenth day following the earlier of the day on which
notice of the meeting was mailed or the day on which the meeting date was
announced. The Nominating Committee met two times in 2000 for the purpose of
making nominations for directors to be voted on by stockholders at the Meeting.
REPORT OF THE AUDIT COMMITTEE
The Ambanc Holding Co., Inc. Board of Directors' Audit Committee is
comprised of five directors who are not officers of the Company. The Audit
Committee held two meetings during 2000. Under currently applicable rules, each
member of the Audit Committee is considered independent. The Board
8
of Directors has adopted a written charter for the Audit Committee, which is
included as Appendix A to this Proxy Statement.
The Audit Committee has reviewed and discussed the Company's audited
consolidated financial statements for the year ended December 31, 2000 with
management and KPMG. The Audit Committee has also discussed with KPMG the
matters required by Statement on Auditing Standards No. 61, Communication with
Audit Committees. The Audit Committee has received from KPMG the written
disclosures and the letter regarding KPMG's independence, as required by
Independence Standards Board Standard No. 1, Independence Discussions with Audit
Committees. Fees for services provided by the independent accountants for the
2000 fiscal year are as follows: audit fees (including quarterly reviews) -
$142,900; financial information systems design and implementation fees - none;
and all other fees (primarily tax compliance and advisory services and audits of
the Company's employee benefit plans) - $177,000. The Audit Committee discussed
KPMG's independence with KPMG and has considered whether the non-audit services
provided by KPMG during the year ended December 31, 2000 were compatible with
maintaining KPMG's independence.
Based on the Audit Committee's discussions with management and KPMG, and
its review of the information described in the preceding paragraph, the Audit
Committee recommended to the Board of Directors that the audited consolidated
financial statements be included in the Annual Report on Form 10-K for the year
ended December 31, 2000, for filing with the Securities and Exchange Commission.
By the Audit Committee of the Board of Directors of Ambanc Holding Co.,
Inc.:
Charles S. Pedersen, Chairman, James J. Bettini, John J. Daly,
Marvin R. LeRoy, Jr. and Ronald S. Tecler
Meetings and Committees of the Bank. The Bank's Board of Directors meets at
least monthly and held twelve meetings during the year ended December 31, 2000.
During 2000, no incumbent director of the Bank attended fewer than 75% of the
aggregate of the total number of Board meetings held while he was a director and
the total number of meetings held by the committees of the Board of Directors on
which he served during the period in which he served.
Director Compensation
Directors of the Company did not receive any remuneration during 2000 for
service on the Company's Board of Directors or any committees of the Company's
Board of Directors. Each non-employee director of the Bank, however, received
during 2000 an annual fee of $16,000 in cash for service on the Board of
Directors of the Bank. Non-employee directors serving on the Bank's Executive,
Audit, Personnel and Strategic Planning Committees also received during 2000,
$300 in cash for each committee meeting attended. Each director of the Company
also currently serves as a director of the Bank. Of the annual fee for the
Bank's non-employee directors, up to 100% may be paid in shares of the Company's
common stock issued pursuant to the RRP (with one-twelfth of the annual share
amount vesting each month), and the remaining amount paid in cash.
The Bank has established a deferred compensation program for the benefit of
certain of its non-employee directors. This program permits participating
directors to defer a portion of their Board fees over a five-year period.
Pursuant to agreements entered into with participating directors, upon the later
of the first year after the end of the five-year period or the director reaching
65 years of age, the director (or in the event of death, his designated
beneficiary) will receive an annual cash payment for a period of
9
up to 10 years based upon the amount of fees deferred. In order to balance the
expected payments under the deferred compensation plan, the Bank has purchased
whole life insurance policies on the lives of the participating directors. While
the Bank will make the annual payments to participating directors over the ten
year period, the lump sum death benefits payable on the insurance policies
should be sufficient to repay the Bank for the benefits paid to the
participating directors with a modest return, provided actuarial assumptions
regarding life expectancies are accurate. The current directors participating in
the deferred compensation program are Directors Daly and Barnett. Each of these
directors has completed his five-year deferral period.
Executive Compensation
The following table sets forth information concerning the compensation paid to
certain executive officers of the Company and the Bank. No other executive
officer earned a salary and bonus in excess of $100,000 during 2000.
SUMMARY COMPENSATION TABLE
Annual Compensation(1) Long Term Compensation
------------------------------------- ------------------------
Restricted Securities
Other Annual Stock Underlying All Other
Name and Salary Bonus Compensation Award(s) Options/SARs Compensation
Principal Position Year $ ($) $(2) ($) (#) ($)
------------------- ---- ------ ------- ------------ ---------- ------------ ------------
John M. Lisicki, President 2000 $205,000 $27,707 $ -- $ -- 20,000 $69,688(3)
and Chief Executive Officer 1999 170,000 36,658 -- -- -- 68,035
1998 19,615(1) -- -- -- -- 19,370
Benjamin Ziskin 2000 $100,000 $15,585 $ -- $ -- 10,000 $28,583(4)
Senior Vice President 1999 85,000 20,619 -- -- -- 28,782
Thomas Nachod 2000 $100,000 $15,585 $ -- $ -- 10,000 $21,410(5)
Senior Vice President 1999 85,000 20,619 -- -- -- 668
James J. Alescio 2000 $100,000 $10,390 $ -- $ -- 10,000 $19,981(6)
Senior Vice President
- -------------------
(1) For Mr. Lisicki, employment with the Company and the Bank commenced on
November 16, 1998. For Messrs. Ziskin, Nachod and Alescio, none earned a
salary and bonus of more than $100,000 for 1998. Mr. Alescio did not earn
more than $100,000 in 1999.
(2) None of the persons listed received any additional benefits or perquisites
which, in the aggregate, exceeded the lesser of 10% of the person's salary
and bonus, or $50,000.
(3) For 2000 and 1999, this amount consists of the value, at December 31, 2000
and 1999, of shares allocated to his ESOP account ($29,423 and $31,799,
respectively), the value of term life insurance ($937 and $564,
respectively) paid by the Bank for the individual under a group plan and
the accrual of $39,328 and $35,672, respectively, by the Bank for a
supplemental retirement plan. For 1998 this amount consists of a $9,807
payment for unused vacation time, the value, at December 31, 1998, of
shares allocated to his ESOP account ($6,248) and the accrual of $3,315 by
the Bank for a supplemental retirement plan.
(4) For 2000 and 1999, this amount consists of the value, at December 31, 2000
and 1999, of shares allocated to his ESOP account ($20,626 and $21,823,
respectively), the value of term life insurance ($802 and $174,
respectively) paid by the Bank for the individual under a group plan and
the accrual of $7,155 and $6,785, respectively, by the Bank for a
supplemental retirement plan.
(5) For 2000 and 1999, this amount consists of the value, at December 31, 2000,
of shares allocated to his ESOP account ($20,608 in 2000 only) and the
value of term life insurance ($802 and $668, respectively) paid by the Bank
for the individual under a group plan.
(6) For 2000, this amount consists of the value, at December 31, 2000, of
shares allocated to his ESOP account ($19,179) and the value of term life
insurance ($802) paid by the Bank for the individual under a group plan.
10
The following tables set forth additional information concerning options
granted under the 1997 Stock Option Plan to certain executive officers.
Option Grants in Last Fiscal Year
---------------------------------
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term
------------------------------------------------------------- -----------------------------
Percent of Total
Number of Options Granted
Options to Employees in Exercise Price Expiration
Name Granted Fiscal Year ($/Share) Date 5% ($) 10% ($)
---- ------- ----------- --------- ---- ------ -------
John M. Lisicki 20,000 30% $15.53 10/27/10 195,400 495,000
Benjamin Ziskin 10,000 15% $15.53 10/27/10 97,700 247,500
Thomas Nachod 10,000 15% $15.53 10/27/10 97,700 247,500
James J. Alescio 10,000 15% $15.53 10/27/10 97,700 247,500
The following table sets forth certain information concerning the aggregate
number and value of the stock options held by certain executive officers at
December 31, 2000. No stock appreciation rights have been granted by the Company
to date.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
- --------------------------------------------------------------------------------------------------------------
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options/SARs in-the-Money Options/SARs
Acquired on Value at Fiscal Year-End at Fiscal Year-End
Name Exercise Realized (#) ($)(1)
(#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
- --------------------------------------------------------------------------------------------------------------
John M. Lisicki -- -- 38,913/20,000 132,499/16,900
Benjamin Ziskin -- -- 24,905/10,000 84,802/8,450
Thomas Nachod -- -- 2,000/10,000 5,750/8,450
James J. Alescio -- -- 17,122/10,000 58,300/8,450
- ---------------------
(1) Represents the aggregate market value of the stock options as of December
31, 2000, based on the difference between the market price per share of the
common stock ($16.375, the closing price per share of the common stock as
reported on the Nasdaq Stock Market on December 31, 2000), and the exercise
price of the exercisable stock options ($12.97 per share for Mr. Lisicki,
$12.97 per share for Messrs. Ziskin and Alescio and $13.50 per share for
Mr. Nachod) and the exercise price of $15.53 per share for each
individual's unexercisable stock options.
Defined Benefit Pension Plan
The Bank sponsors a defined benefit pension plan for its employees (the
"Pension Plan"). All future benefit accruals and participation in the Pension
Plan have been frozen as of November 30, 2000. A participant must complete five
years of service before attaining a vested interest in his or her retirement
11
benefits, after which the participant is 100% vested. The Pension Plan is funded
solely through contributions made by the Bank.
The benefit provided to a participant at normal retirement age (generally
age 65) is based on the average of the participant's basic annual compensation
during the 36 consecutive months of service within the last 120 completed months
of a participant's service which yields the highest average compensation
("average annual compensation"). The annual benefit provided to a participant
who retires at age 65 is equal to 2% of average annual compensation for each
year of service without offset of the participant's anticipated Social Security
benefits. An individual's annual benefit is limited to 70% of his or her annual
average compensation.
The annual benefit provided to participants (i) at early retirement age
(generally age 60) with five years of service who elect to defer the payment of
their benefits to normal retirement age, (ii) at early retirement age with ten
years of service who elect to receive payment of their benefits prior to normal
retirement age or (iii) who postpone annual benefits beyond normal retirement
age, are calculated basically the same as the benefits for normal retirement
age, with annual average compensation being multiplied by 2% for each year of
such individual's actual years of service. A participant eligible for early
retirement benefits who does not meet the requirements set forth above will have
his or her benefits adjusted as further described in the Pension Plan. The
Pension Plan also provides for disability and death benefits.
The following table sets forth, as of December 31, 2000, estimated annual
pension benefits for individuals at age 65 payable in the form of a life annuity
under the most advantageous plan provisions for various levels of compensation
and years of service. The figures in this table are based upon the assumption
that the Pension Plan continues in its present form.
PENSION PLAN TABLE
Years of Credited Service
-----------------------------------------------------------
Remuneration 15 20 25 30 35
- ------------ ------- ------- ------- ------- -------
$ 75,000 $22,500 $30,000 $37,500 $45,000 $52,500
100,000 30,000 40,000 50,000 60,000 70,000
125,000 37,500 50,000 62,500 75,000 87,500
150,000 45,000 60,000 75,000 90,000 105,000
175,000(1) 48,000 64,000 80,000 96,000 112,000
- -------------
(1) 2000 annual earnings for computation of pension benefits are limited to
$160,000 by Internal Revenue Service regulations.
At December 31, 2000, Mr. Lisicki, Mr. Ziskin and Mr. Alescio each had two
years of credited service under the Pension Plan and Mr. Nachod had one year of
credited service.
Employment Agreements
The Bank has entered into a three year employment agreement with Mr.
Lisicki. The agreement provides for a minimum annual base salary of $205,000,
and for the payment of bonuses in the discretion of the Board of Directors of
the Bank. The term of the agreement may be extended for an additional year (in
addition to the then-remaining term) on each anniversary of the commencement
date, subject to approval of the Board of Directors of the Bank. The agreement
entitles Mr. Lisicki to participate in all employee benefit and retirement plans
in which the Bank's executive officers participate.
12
Under the agreement, if Mr. Lisicki's employment were "involuntarily
terminated" by the Bank other than in connection with or within twelve months
after a change in control of the Bank or the Company or for cause, then (i) the
Bank would be required to pay to Mr. Lisicki during the remaining term of the
agreement his salary at the rate in effect as of the date of termination and
(ii) the Bank would be required to provide to Mr. Lisicki during the remaining
term of the agreement substantially the same benefits as the Bank maintained for
its executive officers immediately prior to the date of termination. The
agreement provides that if Mr. Lisicki's employment were involuntarily
terminated in connection with or within 12 months after a change in control, Mr.
Lisicki would be entitled to receive from the Bank a lump sum payment in cash of
an amount equal to 299% of Mr. Lisicki's "base amount" and, for the remaining
term of the agreement, substantially the same health benefits as the Bank
maintained for its executive officers immediately prior to the change in
control. Under the agreement, "involuntary termination" means termination of Mr.
Lisicki's employment without his express written consent, and also includes a
material diminution of his current duties, responsibilities and benefits
(including not being elected or re-elected to the Board of Directors of the Bank
or the Company).
Mr. Lisicki's employment agreement was amended by the Board of Directors in
November 2000. The agreement with Mr. Lisicki was amended to (i) extend the
expiration term of the agreement to November 16, 2003, (ii) provide
indemnification to Mr. Lisicki for legal fees and expenses (up to the maximum
amount permitted by law) incurred by him in the event that it is necessary for
him to enforce his rights under the agreement and (iii) guaranty the payment to
Mr. Lisicki by the Company of any Termination Payment (as defined in the
agreement) in the event that the Bank fails to make such payment in a timely
manner in accordance with the agreement.
The Bank has nearly identical agreements with two year terms that expire in
November 2001 for each of Messrs. Ziskin, Nachod and Alescio. The base salary
under these agreements are $100,000 and also provide for a lump sum payment of
299% of the individual's base amount in the event of termination following a
change in control of the Company or the Bank.
Supplemental Retirement Plans
The Bank maintains a supplemental retirement plan ("SERP") for the benefit
of Mr. Lisicki, which was adopted by Amsterdam Federal Bank in connection with
the termination of Amsterdam Federal Bank's defined benefit retirement plan in
fiscal 1994, and amended as of March 17, 1998. The purpose of the SERP is to
furnish Mr. Lisicki with supplemental post-retirement benefits in addition to
those which will be provided to him under the Bank's 401(k) Plan. (Amsterdam
Federal Bank's 401(k) Plan, in which Mr. Lisicki participated, was merged into
the Bank's 401(k) Plan during fiscal 1999. Mr. Lisicki is a participant in the
Bank's 401(k) plan). It is intended that Mr. Lisicki's benefits under the SERP,
when added to his benefits under the Bank's 401(k) Plan, will be approximately
equal to the benefits Mr. Lisicki would have received under the terminated
defined benefit retirement plan. Annually, a sum equal to 16.90% of Mr.
Lisicki's annual salary is expensed and funded by the Bank to a reserve account
("Deferred Compensation Account") for the purpose of providing to him the target
benefits under the SERP. Upon Mr. Lisicki's termination of employment with the
Bank (other than for cause), the supplemental retirement benefits consisting of
the then-current value of all amounts credited to Mr. Lisicki's Deferred
Compensation Account will be payable to him. The SERP provides that the Bank may
pay the benefits either as a single lump sum payment, by purchasing a straight
life or joint and survivor annuity, or in monthly installments over five, ten or
fifteen years. Upon receipt of benefits under the SERP, under current federal
income tax laws, Mr. Lisicki will recognize ordinary income in the amount of the
benefits he receives and the Bank will be entitled to a tax deduction for the
amount of benefits paid as compensation expense at that time.
13
The Bank maintains a nearly identical SERP for the benefit of Senior Vice
President Ziskin. Mr. Ziskin's SERP, however, provides for a Deferred
Compensation Account equal to 6.19%.
Compensation Committee Interlocks and Insider Participation
The Company's Compensation and Benefits Committee is comprised of Directors
Bettini (Chairman), Leroy, Daly, Pedersen and Tesiero. No executive officer of
the Company is, or was during 2000, an executive officer of another company
whose board of directors has a comparable committee on which one of the
Company's executive officers serves. None of the executive officers of the
Company is, or was during 2000, a member of a comparable compensation committee
of a company of which any of the directors or executive officers of the Company
is an executive officer.
Compensation and Benefits Committee Report
The Compensation and Benefits Committee (the "Committee") is responsible
for the establishment, oversight and administration of executive compensation
and executive and director incentive plans. The Committee is composed entirely
of outside directors.
Executive Compensation Philosophy
The executive compensation program is designed to achieve two principal
objectives. First, the program is intended to be fully competitive so as to
attract, motivate and retain talented executives. Secondly, the program is
intended to align executive compensation with the values and objectives,
business strategy, management initiatives, and the business and financial
performance of the Company. The Committee's philosophy is to pay competitive
annual salaries to executive officers, coupled with incentives that will result
in overall compensation for executive officers that will fluctuate depending
upon, and be commensurate with, the Company's actual performance in relation to
the financial goals established by the Committee and ratified by the Board of
Directors at the beginning of each year. These incentives consist of annual cash
incentive compensation and long-term stock compensation, consisting primarily of
stock grants and stock options.
The Committee assesses the competitiveness of its executives' compensation
by referring, at least annually, to a survey which compares and examines a
variety of compensation-related data furnished by a prominent international
consulting firm for the financial industry. The Committee also periodically
reviews the compensation policies of other similarly situated companies, as set
forth in various industry publications, to determine whether the Company's
compensation decisions are competitive within its industry. Based upon this
information, the Committee believes that it has established a program to:
o Support a performance-oriented environment that rewards performance
not only with respect to the Company's goals but also the Company's
performance as compared to that of others in the industry;
o Attract and retain key executives critical to the long-term success of
the Company and the Bank;
o Integrate compensation programs with both the Company's annual and
long-term strategic planning and measuring processes; and
14
o Reward executives for long-term strategic management and the
enhancement of stockholder value.
In making compensation decisions the Committee also focuses on the
individual contributions of executives of the Company and the Bank. The
Committee uses its discretion to set executive compensation as, in its judgment,
external, internal or individual circumstances dictate.
Annual Salaries
Salary ranges governing executives are established annually based upon
competitive data and other information pertinent to the geographic area,
especially in the banking field. Within the ranges, salaries vary based upon an
individual's level of responsibility, impact on the business, work experience,
performance, tenure and potential for advancement within the Company and the
Bank. Annual salaries for newly-hired executives are determined at the time of
hire, taking into account all of the foregoing, except tenure. The chief
executive officer and other executive officers generally receive salary increase
consideration at 12-15 month intervals for purposes of business performance
comparisons. Salary adjustments for the chief executive officer and other
executives are subject to approval by the full Board, based upon the
recommendations of the Committee.
Annual Incentives/Bonuses
The Board of Directors established a Senior Management Salary Incentive
Plan in 1999 and this plan continued in effect for 2000. The purpose of the plan
is to meet and exceed financial goals to promote a superior level of performance
relative to the bank's competition in its market area. Through payment of
incentive compensation beyond base salaries, the plan provides reward for
meeting and exceeding the bank's financial goals as well as recognition of
individual achievements for plan participants.
In the event that quarterly net income exceeds $700,000, the plan
provides for the payment of an award of 7.14% times the net income above
$700,000. Awards are to be distributed 40% to Mr. Lisicki, the President and
Chief Executive Officer, and 22.5% each to Messrs. Ziskin and Nachod, Senior
Vice Presidents of the Bank, and 15% to Mr. Alescio, Senior Vice President and
Chief Financial Officer. The maximum aggregate bonus amount was set at $300,000
for the year.
Long-Term Incentives
The Company's 1997 Stock Option Plan and RRP, which were approved by
stockholders in 1997, are the Company's long-term incentive plans for executive
officers, directors and employees of the Company and the Bank. The objectives of
the program are to align executive and stockholder long-term interests by
creating a strong and direct link between executive pay and the Company's
performance, and to enable such individuals to develop and maintain a
significant, long-term stock ownership position in the Company's common stock.
Awards are made at a level calculated to be competitive with the thrift
industry. For information regarding option grants made during 2000, see
"Executive Compensation" above.
Submitted by the Compensation and Benefits Committee of the Company:
James J. Bettini (Chairman), John J. Daly, Marvin R. LeRoy, Jr.,
Charles S. Pedersen and John A. Tesiero, Jr.
15
Stockholder Return Performance Presentation
The line graph below compares the cumulative total shareholder return on
the Company's common stock to the cumulative total return of a broad index of
The Nasdaq Stock Market and a savings and loan industry index for the period
from December 27, 1995 (the date the Company became a public company) through
December 31, 2000. Data for the Nasdaq and Saving and Loan indices were
calculated by Media General Financial Services. The graph assumes the investment
of $100.00 on December 27, 1995 and the reinvestment of all dividends.
[GRAPHIC OMITTED]
Plotting Points
- -----------------------------------------------------------------------------------------------------
12/27/95 12/29/95 12/31/96 12/31/97 12/31/98 12/31/99 12/29/00
-------- -------- -------- -------- -------- -------- --------
Ambanc Holding Co. Inc. $100.00 $101.09 $112.50 $188.61 181.25 $153.82 $176.61
Savings and Loan Index 100.00 100.00 130.51 219.43 192.36 154.64 250.67
Nasdaq Market Index 100.00 100.00 124.27 152.00 214.39 378.12 237.67
- -----------------------------------------------------------------------------------------------------
Certain Transactions
Lease Agreements. Director John A. Tesiero, Jr. is a principal owner of the
Amsterdam Riverfront Center, which has leased two properties to the Bank. One
property is used as an operations center, and the other is used as a branch
office. Each lease agreement has a term of five years, expiring in 2003, with an
option to renew after expiration for an additional five years. The lease
payments by the Bank are equivalent to the market rate at the time the lease
agreements were executed. The Bank is expected to pay in the aggregate
approximately $125,000 in lease payments under both agreements over the terms of
the leases.
16
Loans. The Company has followed a policy of granting consumer loans and
loans secured by the borrower's personal residence to officers, directors and
employees. Loans to directors must be approved by a majority of the
disinterested directors. Residential loans and any loan in excess of $100,000 to
an executive officer must be approved by a majority of the Board of Directors.
All loans to executive officers and directors are made in the ordinary course of
business and on the same terms and conditions as those of comparable
transactions prevailing at the time, in accordance with the Company's
underwriting guidelines, and do not involve more than the normal risk of
collectibility or present other unfavorable features.
- --------------------------------------------------------------------------------
PROPOSAL II - RATIFICATION OF THE 2001 STOCK OPTION PLAN
- --------------------------------------------------------------------------------
General
The Company's Board of Directors has adopted the 2001 Stock Option Plan.
The 2001 Stock Option Plan is subject to ratification by the Company's
stockholders. Pursuant to the 2001 Stock Option Plan, up to 434,000 shares of
Common Stock, approximately 9.6% of the Common Stock presently outstanding, are
to be reserved for issuance by the Company upon exercise of stock options that
may be granted to officers, directors, employees and other persons from time to
time. The purpose of the 2001 Stock Option Plan is to attract and retain
qualified personnel for positions of substantial responsibility and to provide
additional incentive to them to promote the success of the business of the
Company and the Bank. The 2001 Stock Option Plan, which is effective as of
February 23, 2001, subject to ratification by the stockholders of the Company,
provides for a term of ten years, after which time no awards may be made. The
following summary of the material features of the 2001 Stock Option Plan is
qualified in its entirety by reference to the 2001 Stock Option Plan attached as
Appendix B to this proxy statement.
The 2001 Stock Option Plan will be administered by the Board of Directors
or a committee of not less than two non-employee directors appointed by the
Company's Board of Directors and serving at the pleasure of the Board (the
"Option Committee"). The Option Committee will select the individuals to be
granted options (the "Optionees") and the number of options to be granted.
Grants are provided at no cost to the Optionees. It is anticipated that grants
will constitute either Incentive Stock Options (options that afford favorable
tax treatment to recipients upon compliance with certain restrictions pursuant
to Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") and
that do not normally result in tax deductions to the Company) or Non-Incentive
Stock Options (options that do not afford recipients favorable tax treatment
under Code Section 422). Option shares may be paid for in cash, shares of Common
Stock, or a combination of both. The Company will receive no monetary
consideration for the granting of stock options under the 2001 Stock Option
Plan. Further, the Company will receive no consideration upon exercise other
than the option exercise price per share.
Shares issuable under the 2001 Stock Option Plan may be from authorized but
unissued shares, treasury shares or shares purchased in the open market. An
Option which expires, becomes unexercisable, or is forfeited for any reason
prior to its exercise will again be available for issuance under the 2001 Stock
Option Plan. The 2001 Stock Option Plan will continue in effect for a term of
ten years from the date it is adopted by the Company.
Interest of Certain Persons
Employees, officers, and directors of the Company and the Bank have an
interest in the ratification of the 2001 Stock Option Plan because they may be
eligible to receive the award of Options in the future.
17
See "Voting Securities and Principal Holders Thereof" for information regarding
the number of shares of Common Stock beneficially owned by executive officers
and Directors.
Stock Options
The Option Committee may grant either Incentive Stock Options or
Non-Incentive Stock Options. In general, if an Optionee ceases to serve as an
employee of the Company for any reason other than disability or death, an
exercisable Incentive Stock Option will be exercisable for three months
following the cessation of employment but in no event after the expiration date
of the Option, except as may otherwise be determined by the Option Committee at
the time of the award. In the event of the disability or death of an Optionee
during employment, an exercisable Incentive Stock Option will continue to be
exercisable for one year and two years, respectively, to the extent exercisable
by the Optionee immediately prior to the Optionee's disability or death but only
if, and to the extent that, the Optionee was entitled to exercise Incentive
Stock Options on the date of termination of employment. The Option Committee may
determine that Incentive Stock Options not exercised within such time periods
may nevertheless remain exercisable thereafter and be deemed Non-Incentive Stock
Options. The terms and conditions of Non-Incentive Stock Options relating to an
Optionee's termination of employment or service, retirement, disability, or
death will be determined by the Option Committee, in its sole discretion, at
that time unless those terms and conditions were specifically determined at the
time of grant of the Options.
The exercise price for the purchase of Common Stock subject to an Option
may not be less than one hundred percent (100%) of the Fair Market Value of the
Common Stock covered by the Option on the date of grant. For purposes of
determining the Fair Market Value of the Common Stock, the exercise price per
share of the Option will be not less than the mean between the last bid and ask
price on the date the Option is granted or, if there is no bid and ask price on
said date, then on the immediately prior business day on which there was a bid
and ask price. If no bid and ask price is available, then the exercise price per
share will be determined in good faith by the Option Committee. If the Common
Stock is listed on a national securities exchange (currently, the Common Stock
is not listed on a national securities exchange) at the time of the granting of
an Option, then the exercise price per share of the Option will be not less than
the average of the highest and lowest selling price of the Common Stock on the
exchange on the date an Option is granted or, if there were no sales on that
date, then the exercise price will be not less than the mean between the last
bid and ask price on that date. If an officer or employee owns more than ten
percent of the outstanding Common Stock at the time an Incentive Stock Option is
granted, then the exercise price will not be less than one hundred and ten
percent (110%) of the Fair Market Value of the Common Stock at the time the
Incentive Stock Option is granted. No more than $100,000 of Incentive Stock
Options can become exercisable for the first time in any one year for any one
person. The Option Committee may impose additional conditions upon the right of
an Optionee to exercise any Option which are not inconsistent with the terms of
the 2001 Stock Option Plan or the requirements for qualification as an Incentive
Stock Option, if the Option is intended to qualify as an Incentive Stock Option.
No shares of Common Stock will be issued upon the exercise of an Option
until full payment has been received by the Company, and no Optionee will have
any of the rights of a stockholder of the Company until shares of Common Stock
are issued to the Optionee. Upon the exercise of an Option, the Option
Committee, in its sole and absolute discretion, may make a cash payment to the
Optionee, in whole or in part, in lieu of the delivery of shares of Common
Stock. The cash payment will be equal to the difference between the Fair Market
Value of the Common Stock on the date of the Option exercise and the exercise
price per share of the Option and will be in exchange for the cancellation of
the Option.
18
The 2001 Stock Option Plan provides that the Board of Directors of the
Company may authorize the Option Committee to direct the execution of an
instrument providing for the modification, extension or renewal of any
outstanding option, provided that no modification, extension or renewal will
confer on the Optionee any right or benefit which could not be conferred on the
Optionee by the grant of a new Option at that time, and will not materially
decrease the Optionee's benefits under the Option without the Optionee's
consent, except as otherwise provided under the 2001 Stock Option Plan.
Awards
The Board or the Option Committee will from time to time determine the
officers, directors, employees and other persons who will be granted awards, the
award to be granted to any participant, whether the awards will be Incentive
Stock Options and/or Non-Incentive Stock Options and the specific terms of such
awards. In making this determination, the Board or the Option Committee may
consider several factors including prior and anticipated future job duties and
responsibilities, job performance, the Company's financial performance and a
comparison of awards given by other financial institutions. Participants who
have been granted an award may be granted additional awards. Under the 2001
Stock Option Plan, Options may be 100% exercisable upon a participant's death,
disability, retirement or upon a change in control (as defined in the 2001 Stock
Option Plan) of the Company or the Bank.
At the present time, no determination has been made as to the granting of
any awards under the Plan. It is anticipated that when such awards are made by
the Option Committee, such awards shall be earned over a four-year period, vest
immediately upon death, disability or retirement of the option holder and upon a
change in control of the Company.
Effect of Mergers, Change of Control and Other Adjustments and Anti-Takeover
Aspects
Subject to any required action by the stockholders of the Company, within
the sole discretion of the Option Committee, the aggregate number of shares of
Common Stock for which Options may be granted hereunder or the number of shares
of Common Stock represented by each outstanding Option will be proportionately
adjusted for any increase or decrease in the number of issued and outstanding
shares of Common Stock resulting from a subdivision or consolidation of shares
or the payment of a stock dividend or any other increase or decrease in the
number of shares of Common Stock effected without the receipt or payment of
consideration by the Company. Subject to any required action by the stockholders
of the Company, in the event of any change in control, recapitalization, merger,
consolidation, exchange of shares, spin-off, reorganization, tender offer,
partial or complete liquidation or other extraordinary corporate action or
event, the Option Committee, in its sole discretion, will have the power, prior
to or subsequent to the action or events, to (i) appropriately adjust the number
of shares of Common Stock subject to each Option, the exercise price per share
of the Option, and the consideration to be given or received by the Company upon
the exercise of any outstanding Options; (ii) cancel any or all previously
granted Options, provided that appropriate consideration is paid to the Optionee
in connection therewith; and/or (iii) make other adjustments in connection with
the 2001 Stock Option Plan as the Option Committee, in its sole discretion,
deems appropriate. However, no action may be taken by the Option Committee
without the consent of the Optionee that would cause Incentive Stock Options
granted pursuant to the 2001 Stock Option Plan to fail to meet the requirements
of Section 422 of the Code.
The Option Committee will at all times have the power to accelerate the
exercise date of all unvested Options granted (if any) under the 2001 Stock
Option Plan. In the case of a change in control of the Company, all outstanding
options become immediately exercisable. A change in control is defined to
include (i) the sale of all, or a material portion, of the assets of the
Company; (ii) the merger or
19
recapitalization of the Company if the Company is not the surviving entity;
(iii) a change in control of the Company; or (iv) the acquisition, directly or
indirectly, of the beneficial ownership of 25% or more of the outstanding voting
securities of the Company by any person, trust, entity, or group. This
limitation does not apply to the purchase of shares by underwriters in
connection with a public offering of Company stock or the purchase of shares of
up to 25% of any class of securities of the Company by a tax-qualified employee
stock benefit plan.
In the event of a change in control, the Option Committee and the Board of
Directors will take one or more of the following actions to be effective as of
the date of the change in control: (i) provide that Options will be assumed, or
equivalent options will be substituted, ("Substitute Options") by the acquiring
or succeeding corporation (or an affiliate thereof), provided that: (A) any
Substitute Options exchanged for Incentive Stock Options meet the requirements
of Section 424(a) of the Code, and (B) the shares of stock issuable upon the
exercise of Substitute Options constitute securities registered in accordance
with the Securities Act of 1933, as amended, ("1933 Act") or the securities are
exempt from registration in accordance with Sections 3(a)(2) or 3(a)(5) of the
1933 Act, (collectively, "Registered Securities"), or in the alternative, if the
securities issuable upon the exercise of Substitute Options will not constitute
Registered Securities, then the Optionee will receive, upon the change in
control, a cash payment for each Option surrendered equal to the difference
between (1) the Fair Market Value of the consideration to be received for each
share of Common Stock in the change in control multiplied by the number of
shares of Common Stock subject to surrendered Options, and (2) the aggregate
exercise price of all surrendered Options, or (ii) in the event of a transaction
under the terms of which the holders of the Common Stock of the Company will
receive upon consummation thereof a cash payment (the "Merger Price") for each
share of Common Stock exchanged in the change in control, to make or to provide
for a cash payment to the Optionees equal to the difference between (A) the
Merger Price times the number of shares of Common Stock subject to Options held
by each Optionee (to the extent then exercisable at prices not in excess of the
Merger Price) and (B) the aggregate exercise price of all of the surrendered
Options.
The provisions of the 2001 Stock Option Plan related to a change in control
of the Company could have an anti-takeover effect by making it more costly for a
potential acquiror to obtain control of the Company due to the higher number of
shares outstanding following the exercise of Options. The power of the Option
Committee to make adjustments, including adjusting the number of shares subject
to Options and canceling Options, prior to or after the occurrence of an
extraordinary corporate action, allows the Option Committee to adapt the 2001
Stock Option Plan to operate in changed circumstances, to adjust the 2001 Stock
Option Plan to fit a smaller or larger company, and to permit the issuance of
Options to new management following extraordinary corporate action. However,
this power of the Option Committee also has an anti-takeover effect, by allowing
the Option Committee to adjust the 2001 Stock Option Plan in a manner to allow
the present management of the Company to exercise more options and hold more
shares of the Company's Common Stock, and to possibly decrease the number of
Options available to new management of the Company.
Although the 2001 Stock Option Plan may have an anti-takeover effect, the
Company's Board of Directors did not adopt it specifically for anti-takeover
purposes. The 2001 Stock Option Plan could render it more difficult to obtain
support for stockholder proposals opposed by the Company's Board and management
in that recipients of Options could choose to exercise Options and thereby
increase the number of shares for which they hold voting power. Also, the
exercise of Options could make it easier for the Board and management to block
the approval of certain transactions requiring the voting approval of 80% of the
Common Stock. In addition, the exercise of Options could increase the cost of an
acquisition by a potential acquiror.
20
Transferability
An award of Options under the 2001 Stock Option Plan generally shall not be
transferable by a participant other than by will or the laws of interstate
succession or pursuant to a domestic relations order. However, with consent of
the Option Committee, a participant may be permitted to transfer or assign a
Non-Incentive Stock Option for valid estate planning purposes as permitted under
the Code and a participant may designate a person or his or her estate,
beneficiary of any Option which the participant would then be entitled, in the
event of the death of the employee.
Amendment and Termination
The Board of Directors may alter, suspend or discontinue the 2001 Stock
Option Plan, except that no action of the Board may increase the maximum number
of shares of Common Stock issuable under the 2001 Stock Option Plan, materially
increase the benefits accruing to Optionees under the 2001 Stock Option Plan or
materially modify the requirements for eligibility for participation in the 2001
Stock Option Plan unless the action of the Board is subject to approval or
ratification by the stockholders of the Company.
Possible Dilutive Effects
The Common Stock issuable may either be authorized but unissued shares
of Common Stock, treasury shares or shares purchased in the open market. Because
the stockholders of the Company do not have preemptive rights, to the extent
that the Company funds the 2001 Stock Option Plan, in whole or in part, with
authorized but unissued shares or treasury shares, the interests of current
stockholders will be diluted. If upon the exercise of all of the Options, the
Company delivers newly issued shares of Common Stock or treasury shares (i.e.,
434,000 shares of Common Stock), then the dilutive effect to ownership of
current stockholders would be approximately 8.7%.
Federal Income Tax Consequences
Under present federal tax laws, awards under the 2001 Stock Option Plan
will have the following consequences:
1. The grant of an Option will not by itself result in the recognition of
taxable income to an Optionee or entitle the Company to a tax
deduction at the time of grant.
2. The exercise of an Option which is an "Incentive Stock Option" within
the meaning of Section 422 of the Code generally will not, by itself,
result in the recognition of taxable income to an Optionee or entitle
the Company to a deduction at the time of exercise. However, the
difference between the Option exercise price and the Fair Market Value
of the Common Stock on the date of Option exercise is an item of tax
preference which may, in certain situations, trigger the alternative
minimum tax for an Optionee. An Optionee will recognize capital gain
or loss upon resale of the shares of Common Stock received pursuant to
the exercise of Incentive Stock Options, provided that the shares are
held for at least one year after transfer of the shares or two years
after the grant of the Option, whichever is later. Generally, if the
shares are not held for that period, the Optionee will recognize
ordinary income upon disposition in an amount equal to the difference
between the Option exercise price and the Fair Market Value of the
Common Stock on the date of exercise, or, if less, the sales proceeds
of the shares acquired pursuant to the Option.
21
3. The exercise of a Non-Incentive Stock Option will result in the
recognition of ordinary income by the Optionee on the date of exercise
in an amount equal to the difference between the exercise price and
the Fair Market Value of the Common Stock acquired pursuant to the
Option.
4. The Company will be allowed a tax deduction for federal tax purposes
equal to the amount of ordinary income recognized by an Optionee at
the time the Optionee recognizes ordinary income.
5. In accordance with Section 162(m) of the Code, the Company's tax
deductions for compensation paid to the most highly paid executives
named in the Company's proxy statement may be limited to no more than
$1 million per year, excluding certain "performance-based"
compensation. The Company intends for the award of Options under the
2001 Stock Option Plan to comply with the requirement for an exception
to Section 162(m) of the Code applicable to stock option plans so that
the Company's deduction for compensation related to the exercise of
Options would not be subject to the deduction limitation set forth in
Section 162(m) of the Code.
Accounting Treatment
The Company expects to use the "intrinsic value based method" as
prescribed by APB Opinion 25. Accordingly, neither the grant nor the exercise of
an Option under the 2001 Stock Option Plan currently requires any charge against
earnings under generally accepted accounting principles. Common Stock issuable
pursuant to outstanding Options under the 2001 Stock Option Plan will be
considered outstanding for purposes of calculating earnings per share on a
diluted basis, using the treasury stock method.
Stockholder Ratification
Stockholder ratification of the 2001 Stock Option Plan is being sought in
order to qualify the 2001 Stock Option Plan for the granting of Incentive Stock
Options in accordance with the Code, to meet the requirements of The Nasdaq
Stock Market upon which the Common Stock is listed and to enable Optionees to
qualify for certain exemptive treatment from the short-swing profit recapture
provisions of Section 16(b) of the 1934 Act. An affirmative vote of the holders
of a majority of the total votes cast at the Meeting in person or by proxy is
required to constitute stockholder ratification of this Proposal II.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE RATIFICATION
OF THE 2001 STOCK OPTION PLAN.
- --------------------------------------------------------------------------------
PROPOSAL III - RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
The Board of Directors has appointed KPMG LLP to be the Company's
independent auditors for the fiscal year ending December 31, 2001 subject to
ratification of such appointment by the Company's stockholders at the Meeting. A
representative of KPMG LLP is expected to attend the Meeting to respond to
appropriate questions and will have an opportunity to make a statement.
22
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS "FOR" THE RATIFICATION
OF THE APPOINTMENT OF KPMG LLP AS THE COMPANY'S AUDITORS FOR THE FISCAL YEAR
ENDING DECEMBER 31, 2001.
- --------------------------------------------------------------------------------
SECTION 16(a) BENEFICIAL REPORTING COMPLIANCE
- --------------------------------------------------------------------------------
Section 16(a) of the 1934 Act requires the Company's officers and
directors, and persons who own more than ten percent of the Common Stock, to
file reports of ownership and changes in ownership of the Common Stock, on Forms
3, 4, and 5, with the Securities and Exchange Commission ("SEC") and to provide
copies of those Forms 3, 4, and 5 to the Company. The Company is not aware of
any beneficial owner, as defined under Section 16(a), of more than ten percent
of the Common Stock.
Based upon a review of the copies of the forms furnished to the Company, or
written representations from certain reporting persons that no Forms 5 were
required, the Company believes that all Section 16(a) filing requirements
applicable to its executive officers and directors were complied with during the
fiscal year ended December 31, 2000.
- --------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
- --------------------------------------------------------------------------------
In order to be eligible for inclusion in the Company's proxy materials for
its 2002 Annual Meeting of Stockholders, any stockholder proposal to take action
at the 2002 Annual Meeting must be received at the main office of the Company,
11 Division Street, Amsterdam, New York 12010-4312, no later than December 19,
2001. Any proposal submitted will be subject to the requirements of the proxy
rules adopted under the Securities Exchange Act of 1934, as amended, and, as
with any stockholder proposal (regardless of whether included in the Company's
proxy materials), the Company's Certificate of Incorporation and Bylaws and
Delaware law. Under the proxy rules, in the event that the Company receives
notice of a stockholder proposal to take action at the 2002 Annual Meeting that
is not submitted for inclusion in the Company's proxy materials, or is submitted
for inclusion but is properly excluded from the Company's proxy materials, the
persons named in the form of proxy sent by the Company to its stockholders
intend to exercise their discretion to vote on the proposal in accordance with
their best judgment if notice of the proposal is not received at the main office
of the Company by the Deadline (as defined below). In addition to the provision
of the proxy rules regarding discretionary voting authority described in the
preceding sentence, the Company's Bylaws provide that if notice of a stockholder
proposal to take action at the 2002 Annual Meeting is not received at the main
office of the Company by the Deadline, the proposal will not be recognized as a
matter proper for submission to the Company's stockholders and will not be
eligible for presentation at the 2002 Annual Meeting. The "Deadline" means March
19, 2002; however, in the event the 2002 Annual Meeting is held before April 28,
2002 or after July 14, 2002, the "Deadline" means the close of business on the
later of the 60th day prior to the date of the 2002 Annual Meeting or the tenth
day following the day on which notice of the 2002 Annual Meeting is first mailed
or public announcement of the date of the 2002 Annual Meeting is first made.
- --------------------------------------------------------------------------------
OTHER MATTERS
- --------------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before the
Meeting other than the matters described above in this Proxy Statement. Should
any other matters properly come before the Meeting, it is intended that holders
of the proxies will act in accordance with their best judgment.
23
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 2000 WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE
RECORD DATE UPON WRITTEN REQUEST TO THE SECRETARY, AMBANC HOLDING CO., INC., 11
DIVISION STREET, AMSTERDAM, NEW YORK 12010-4303.
24
Appendix A
Ambanc Holding Co., Inc.
Audit Committee Charter
I. Audit Committee Purpose
The Audit Committee is appointed by the Board of Directors to assist
the Board in fulfilling its oversight responsibilities. The Audit
Committee has three primary duties and responsibilities:
o Monitor the integrity of the Company's financial reporting
process and systems of internal control.
o Monitor the independence and performance of the Company's
independent auditors and internal audit department.
o Facilitate communication amon the independent auditors,
management, the internal audit department, and the Board of
Directors.
The Audit Committee has the authority to conduct any investigation
appropriate to fulfill its responsibilities, and it has direct access
to the independent auditors, as well as to anyone in the Company. The
Audit Committee has the ability to retain, at the Company's expense,
special legal, accounting, or other consultants or experts it deems
necessary in the performance of its duties.
II. Audit Committee Composition and Meetings
Audit Committee members shall meet the requirements of the National
Market of The Nasdaq Stock Market, Inc. The Audit Committee shall be
comprised of at least three (3) directors as determined by the Board,
each of whom shall be independent non-executive directors free from any
relationship that would interfere with the exercise of their
independent judgment. All members of the Committee must have a basic
knowledge of finance and accounting, and be able to read and understand
fundamental financial statements, and at least one member of the
Committee must have accounting or related financial management
expertise.
Audit Committee members will be appointed by the Board. If an Audit
Committee chairperson is not designated or present, the members of the
Committee may designate a chairperson by majority vote of the Committee
membership.
The Committee shall meet at least three times annually, or more
frequently as circumstances dictate. The Committee should meet
privately in executive session at least annually with management, the
director of the internal audit department, the independent auditors,
and as a Committee to discuss any matters that the Committee or each of
these groups believe should be discussed. The Committee should also
meet in executive session at each meeting, unless the chairperson
determines that it is not necessary.
A-1
III. Audit Committee Responsibilities and Duties
Review Procedures
1. Review and reassess the adequacy of this charter at least
annually. Submit this charter to the Board of Directors for
approval and have the document published at least every three
years in accordance with Securities and Exchange Commission (SEC)
regulations.
2. Review the Company's annual audited consolidated financial
statements prior to filing with the SEC. This review should
include discussion with management and the independent auditors
of significant issues regarding accounting principles, practices,
and judgments. Also, the Audit Committee shall review the results
of the annual audit and receive the required communications in
accordance with Statement on Auditing Standards (SAS) No. 61 from
the independent auditors. Based on such reviews and discussions,
the Audit Committee shall advise the Board whether it recommends
that the audited consolidated financial statements be included in
the Company's Form 10-K to be filed with the SEC.
3. Request that the independent auditors review the Company's
quarterly financial results and Form 10-Q's in accordance with
SAS No. 71 prior to filing, and update any material changes in
the SAS No. 61 information on a quarterly basis. The chairperson
of the Committee may represent the entire Audit Committee for
purposes of any material updates to the SAS No. 61 information.
4. Annually prepare a report to shareholders as required by the SEC.
The report should be included in the Company's annual proxy
statement.
Independent Auditors
5. The independent auditors are ultimately accountable to the Audit
Committee and the Board of Directors. The Audit Committee shall
review the independence and performance of the auditors and
annually recommend to the Board of Directors the appointment of
the independent auditors and the compensation to be paid, or
approve any discharge of auditors when circumstances warrant.
6. On an annual basis the Committee must received from the
independent auditors a formal written statement concerning their
independence. The Committee should review and discuss with the
independent auditors all significant relationships that they have
with the Company that could impair the auditors' independence.
7. Review the independent auditors' audit plan - discuss scope,
reliance upon management and the internal audit department, and
the general audit approach.
A-2
Internal Audit Department and Legal Matters
8. Review the budget, plan, changes in plan, activities,
organizational structure, and qualifications of the internal
audit department, as needed.
9. Review the appointment and performance of the senior internal
audit executive.
10. Review reports prepared by the internal audit department together
with management's response and follow-up to these reports.
11. Review as necessary with management or the Company's legal
counsel, any legal matters that could have a significant impact
on the Company's consolidated financial statements.
Other Audit Committee Responsibilities
12. Perform any other activities consistent with this charter, the
Company's by-laws, and governing law, as the Audit Committee or
the Board deems necessary or appropriate.
13. Maintain minutes of meetings and periodically report to the Board
of Directors on significant results of the foregoing activities.
A-3
Appendix B
AMBANC HOLDING CO., INC.
2001 STOCK OPTION PLAN
1. Purpose of the Plan. The Plan shall be known as the AMBANC HOLDING CO.,
-------------------
INC. 2001 Stock Option Plan (the "Plan"). The purpose of the Plan is to attract
and retain qualified personnel for positions of substantial responsibility and
to provide additional incentive to officers, directors, employees and other
persons providing services to the Company, the Bank or any present or future
Parent or Subsidiary of the Company, the Bank to promote the success of the
business. The Plan is intended to provide for the grant of "Incentive Stock
Options," within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code") and Non-Incentive Stock Options, options that do
not so qualify. The provisions of the Plan relating to Incentive Stock Options
shall be interpreted to conform to the requirements of Section 422 of the Code.
2. Definitions. The following words and phrases when used in this Plan with
-----------
an initial capital letter, unless the context clearly indicates otherwise, shall
have the meaning as set forth below. Wherever appropriate, the masculine pronoun
shall include the feminine pronoun and the singular shall include the plural.
"Award" means the grant by the Committee of an Incentive Stock Option
or a Non-Incentive Stock Option, or any combination thereof, or grants of Stock
Options made in accordance with Section 9(a) of the Plan.
"Bank" or "Savings Bank" shall mean Mohawk Community Bank, or any
successor corporation thereto.
"Board" shall mean the Board of Directors of the Company, or any
successors thereto.
"Change in Control" shall mean: (i) the sale of all, or a material
portion, of the assets of the Company or the Bank; (ii) the merger or
recapitalization of the Company whereby the Company is not the surviving entity;
(iii) a change in control of the Company, as otherwise defined or determined by
the Office of Thrift Supervision ("OTS") or regulations promulgated by it; or
(iv) the acquisition, directly or indirectly, of the beneficial ownership
(within the meaning of that term as it is used in Section 13(d) of the
Securities Exchange Act of 1934 and the rules and regulations promulgated
thereunder) of twenty-five percent (25%) or more of the outstanding voting
securities of the Company by any person, trust, entity or group. This limitation
shall not apply to the purchase of shares by underwriters in connection with a
public offering of Company stock, or the purchase of shares of up to 25% of any
class of securities of the Company by a tax-qualified employee stock benefit
plan. The term "person" refers to an individual or a corporation, partnership,
trust, association, joint venture, pool, syndicate, sole proprietorship,
unincorporated organization or any other form of entity not specifically listed
herein.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
regulations promulgated thereunder.
"Committee" shall mean the Board or the Stock Option Committee
appointed by the Board in accordance with Section 5(a) of the Plan.
"Common Stock" shall mean the common stock of the Company, or any
successor or parent corporation thereto.
"Company" shall mean AMBANC HOLDING CO., INC.
"Continuous Employment" or "Continuous Status as an Employee" shall
mean the absence of any interruption or termination of employment with the
Company or any present or future Parent or Subsidiary of the Company. Employment
shall not be considered interrupted in the case of sick leave, military leave or
any other leave of absence approved by the Company or in the case of transfers
between payroll locations, of the Company or between the Bank, its Parent, its
Subsidiaries or a successor.
"Director" shall mean a member of the Board of the Company, or any
successor or Parent thereto.
"Director Emeritus" shall mean a person serving as a director emeritus,
advisory director, consulting director, or other similar position as may be
appointed by the Board of Directors of the Bank or the Company from time to
time.
"Disability" means (a) with respect to Incentive Stock Options, the
"permanent and total disability" of the Employee as such term is defined at
Section 22(e)(3) of the Code; and (b) with respect to Non-Incentive Stock
Options, any physical or mental impairment which renders the Participant
incapable of continuing in the employment or service of the Company, the Bank or
any present or future Parent or Subsidiary of the Company in his then current
capacity as determined by the Committee.
"Effective Date" shall mean February 23, 2001.
"Employee" shall mean any person employed by the Company, the Bank, or
any present or future Parent or Subsidiary of the Company.
"Fair Market Value" shall mean: (i) if the Common Stock is traded
otherwise than on a national securities exchange, then the Fair Market Value per
Share shall be equal to the mean between the last bid and ask price of such
Common Stock on such date or, if there is no bid and ask price on said date,
then on the immediately prior business day on which there was a bid and ask
price. If no such bid and ask price is available, then the Fair Market Value
shall be determined by the Committee in good faith; or (ii) if the Common Stock
is listed on a national securities exchange, then the Fair Market Value per
Share shall be not less than the average of the highest and lowest selling price
of such Common Stock on such exchange on such date, or if there were no sales on
said date, then the Fair Market Value shall be not less than the mean between
the last bid and ask price on such date.
B-2
"Incentive Stock Option" or "ISO" shall mean an option to purchase
Shares granted by the Committee pursuant to Section 8 hereof which is subject to
the limitations and restrictions of Section 8 hereof and is intended to qualify
as an incentive stock option under Section 422 of the Code.
"Non-Incentive Stock Option" or "Non-ISO" shall mean an option to
purchase Shares granted pursuant to Section 9 hereof, which option is not
intended to qualify under Section 422 of the Code.
"Option" shall mean an Incentive Stock Option or Non-Incentive Stock
Option granted pursuant to this Plan providing the holder of such Option with
the right to purchase Common Stock.
"Optioned Stock" shall mean stock subject to an Option granted pursuant
to the Plan.
"Optionee" shall mean any person who receives an Option or Award
pursuant to the Plan.
"Parent" shall mean any present or future corporation which would be a
"parent corporation" as defined in Sections 424(e) and (g) of the Code.
"Participant" means any director, officer or employee of the Company,
the Bank, or any Parent or Subsidiary of the Company or any other person
providing a service to the Company who is selected by the Committee to receive
an Award, or who by the express terms of the Plan is granted an Award.
"Plan" shall mean the AMBANC HOLDING CO., INC. 2001 Stock Option Plan.
"Retirement" shall mean termination of service in all capacities as an
Employee, Director and Director Emeritus following attainment of not less than
age 55 and completion of not less than ten years of Service to the Company.
Service to the Company rendered prior to the Effective Date shall be recognized
in determining eligibility to meet the requirements of Retirement under the
Plan.
"Share" shall mean one share of the Common Stock.
"Subsidiary" shall mean any present or future corporation which
constitutes a "subsidiary corporation" as defined in Sections 424(f) and (g) of
the Code.
3. Shares Subject to the Plan. Except as otherwise required by the
-----------------------------
provisions of Section 13 hereof, the aggregate number of Shares with respect to
which Awards may be made pursuant to the Plan shall not exceed 434,000 Shares.
Such Shares may either be from authorized but unissued shares or shares
purchased in the market for Plan purposes. If an Award shall expire, become
unexercisable, or be forfeited for any reason prior to its exercise, new Awards
B-3
may be granted under the Plan with respect to the number of Shares as to which
such expiration has occurred.
4. Six Month Holding Period.
------------------------
Subject to vesting requirements, if applicable, except in the event of
death or Disability of the Optionee or a Change in Control of the Company, a
minimum of six months must elapse between the date of the grant of an Option and
the date of the sale of the Common Stock received through the exercise of such
Option.
5. Administration of the Plan.
--------------------------
(a) Composition of the Committee. The Plan shall be administered by the
Board of Directors of the Company or a Committee which shall consist of not less
than two Directors of the Company appointed by the Board and serving at the
pleasure of the Board. All persons designated as members of the Committee shall
meet the requirements of a "Non-Employee Director" within the meaning of Rule
16b-3 under the Securities Exchange Act of 1934, as amended, as found at 17 CFR
Section 240.16b-3.
(b) Powers of the Committee. The Committee is authorized (but only to
the extent not contrary to the express provisions of the Plan or to resolutions
adopted by the Board) to interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to the Plan, to determine the form and content of
Awards to be issued under the Plan and to make other determinations necessary or
advisable for the administration of the Plan, and shall have and may exercise
such other power and authority as may be delegated to it by the Board from time
to time. A majority of the entire Committee shall constitute a quorum and the
action of a majority of the members present at any meeting at which a quorum is
present shall be deemed the action of the Committee. In no event may the
Committee revoke outstanding Awards without the consent of the Participant.
The President of the Company and such other officers as shall be
designated by the Committee are hereby authorized to execute written agreements
evidencing Awards on behalf of the Company and to cause them to be delivered to
the Participants. Such agreements shall set forth the Option exercise price, the
number of shares of Common Stock subject to such Option, the expiration date of
such Options, and such other terms and restrictions applicable to such Award as
are determined in accordance with the Plan or the actions of the Committee.
(c) Effect of Committee's Decision. All decisions, determinations and
interpretations of the Committee shall be final and conclusive on all persons
affected thereby.
6. Eligibility for Awards and Limitations.
--------------------------------------
(a) The Committee shall from time to time determine the officers,
Directors, employees and other persons who shall be granted Awards under the
Plan, the number of Awards to be granted to each such persons, and whether
Awards granted to each such
B-4
Participant under the Plan shall be Incentive Stock Options and/or Non-Incentive
Stock Options. In selecting Participants and in determining the number of Shares
of Common Stock to be granted to each such Participant, the Committee may
consider the nature of the prior and anticipated future services rendered by
each such Participant, each such Participant's current and potential
contribution to the Company and such other factors as the Committee may, in its
sole discretion, deem relevant. Participants who have been granted an Award may,
if otherwise eligible, be granted additional Awards.
(b) The aggregate Fair Market Value (determined as of the date the
Option is granted) of the Shares with respect to which Incentive Stock Options
are exercisable for the first time by each Employee during any calendar year
(under all Incentive Stock Option plans, as defined in Section 422 of the Code,
of the Company or any present or future Parent or Subsidiary of the Company)
shall not exceed $100,000. Notwithstanding the prior provisions of this Section
6, the Committee may grant Options in excess of the foregoing limitations,
provided said Options shall be clearly and specifically designated as not being
Incentive Stock Options.
(c) In no event shall Shares subject to Options granted to non-employee
Directors in the aggregate under this Plan exceed more than 30% of the total
number of Shares authorized for delivery under this Plan pursuant to Section 3
herein or more than 5% to any individual non-employee Director; provided,
however, no such Options are specifically reserved for award to non-employee
Directors. In no event shall Shares subject to Options granted to any Employee
exceed more than 35% of the total number of Shares authorized for delivery under
the Plan.
7. Term of the Plan. The Plan shall continue in effect for a term of ten
----------------
(10) years from the Effective Date, unless sooner terminated pursuant to Section
18 hereof. No Option shall be granted under the Plan after ten (10) years from
the Effective Date.
8. Terms and Conditions of Incentive Stock Options. Incentive Stock Options
-----------------------------------------------
may be granted only to Participants who are Employees. Each Incentive Stock
Option granted pursuant to the Plan shall be evidenced by an instrument in such
form as the Committee shall from time to time approve. Each Incentive Stock
Option granted pursuant to the Plan shall comply with, and be subject to, the
following terms and conditions:
(a) Option Price.
(i) The price per Share at which each Incentive Stock Option
granted by the Committee under the Plan may be exercised shall not, as to any
particular Incentive Stock Option, be less than the Fair Market Value of the
Common Stock on the date that such Incentive Stock Option is granted.
(ii) In the case of an Employee who owns Common Stock representing
more than ten percent (10%) of the outstanding Common Stock at the time the
Incentive Stock Option is granted, the Incentive Stock Option exercise price
shall not be less than one hundred and ten percent (110%) of the Fair Market
Value of the Common Stock on the date that the Incentive Stock Option is
granted.
B-5
(b) Payment. Full payment for each Share of Common Stock purchased upon
the exercise of any Incentive Stock Option granted under the Plan shall be made
at the time of exercise of each such Incentive Stock Option and shall be paid in
cash (in United States Dollars), Common Stock or a combination of cash and
Common Stock. Common Stock utilized in full or partial payment of the exercise
price shall be valued at the Fair Market Value at the date of exercise. The
Company shall accept full or partial payment in Common Stock only to the extent
permitted by applicable law. No Shares of Common Stock shall be issued until
full payment has been received by the Company, and no Optionee shall have any of
the rights of a stockholder of the Company until Shares of Common Stock are
issued to the Optionee.
(c) Term of Incentive Stock Option. The term of exercisability of each
Incentive Stock Option granted pursuant to the Plan shall be not more than ten
(10) years from the date each such Incentive Stock Option is granted, provided
that in the case of an Employee who owns stock representing more than ten
percent (10%) of the Common Stock outstanding at the time the Incentive Stock
Option is granted, the term of exercisability of the Incentive Stock Option
shall not exceed five (5) years.
(d) Exercise Generally. Except as otherwise provided in Section 10
hereof, no Incentive Stock Option may be exercised unless the Optionee shall
have been in the employ of the Company, the Bank, or any present or future
Parent or Subsidiary of the Company at all times during the period beginning
with the date of grant of any such Incentive Stock Option and ending on the date
three (3) months prior to the date of exercise of any such Incentive Stock
Option. The Committee may impose additional conditions upon the right of an
Optionee to exercise any Incentive Stock Option granted hereunder which are not
inconsistent with the terms of the Plan or the requirements for qualification as
an Incentive Stock Option. Except as otherwise provided by the terms of the Plan
or by action of the Committee at the time of the grant of the Options, the
Options will be first exercisable at the rate of 25% on the one year anniversary
of the date of grant and 25% annually thereafter during such periods of service
as an Employee, Director or Director Emeritus.
(e) Cashless Exercise. Subject to vesting requirements, if applicable,
an Optionee who has held an Incentive Stock Option for at least six months may
engage in the "cashless exercise" of the Option. Upon a cashless exercise, an
Optionee shall give the Company written notice of the exercise of the Option
together with an order to a registered broker-dealer or equivalent third party,
to sell part or all of the Optioned Stock and to deliver enough of the proceeds
to the Company to pay the Option exercise price and any applicable withholding
taxes. If the Optionee does not sell the Optioned Stock through a registered
broker-dealer or equivalent third party, the Optionee can give the Company
written notice of the exercise of the Option and the third party purchaser of
the Optioned Stock shall pay the Option exercise price plus any applicable
withholding taxes to the Company.
(f) Transferability. An Incentive Stock Option granted pursuant to the
Plan shall be exercised during an Optionee's lifetime only by the Optionee to
whom it was granted and shall not be assignable or transferable otherwise than
by will or by the laws of descent and distribution.
B-6
9. Terms and Conditions of Non-Incentive Stock Options. Each Non-Incentive
---------------------------------------------------
Stock Option granted pursuant to the Plan shall be evidenced by an instrument in
such form as the Committee shall from time to time approve. Each Non-Incentive
Stock Option granted pursuant to the Plan shall comply with and be subject to
the following terms and conditions.
(a) Option Price. The exercise price per Share of Common Stock for each
Non-Incentive Stock Option granted pursuant to the Plan shall be at such price
as the Committee may determine in its sole discretion, but in no event less than
the Fair Market Value of such Common Stock on the date of grant as determined by
the Committee in good faith.
(b) Payment. Full payment for each Share of Common Stock purchased upon
the exercise of any Non-Incentive Stock Option granted under the Plan shall be
made at the time of exercise of each such Non-Incentive Stock Option and shall
be paid in cash (in United States Dollars), Common Stock or a combination of
cash and Common Stock. Common Stock utilized in full or partial payment of the
exercise price shall be valued at its Fair Market Value at the date of exercise.
The Company shall accept full or partial payment in Common Stock only to the
extent permitted by applicable law. No Shares of Common Stock shall be issued
until full payment has been received by the Company and no Optionee shall have
any of the rights of a stockholder of the Company until the Shares of Common
Stock are issued to the Optionee.
(c) Term. The term of exercisability of each Non-Incentive Stock Option
granted pursuant to the Plan shall be not more than ten (10) years from the date
each such Non-Incentive Stock Option is granted.
(d) Exercise Generally. The Committee may impose additional conditions
upon the right of any Participant to exercise any Non-Incentive Stock Option
granted hereunder which is not inconsistent with the terms of the Plan. Except
as otherwise provided by the terms of the Plan or by action of the Committee at
the time of the grant of the Options, the Options will be first exercisable at
the rate of one-third on the date of grant and one-third annually thereafter
during such periods of service as an Employee, Director or Director Emeritus.
(e) Cashless Exercise. Subject to vesting requirements, if applicable,
an Optionee who has held a Non-Incentive Stock Option for at least six months
may engage in the "cashless exercise" of the Option. Upon a cashless exercise,
an Optionee shall give the Company written notice of the exercise of the Option
together with an order to a registered broker-dealer or equivalent third party,
to sell part or all of the Optioned Stock and to deliver enough of the proceeds
to the Company to pay the Option exercise price and any applicable withholding
taxes. If the Optionee does not sell the Optioned Stock through a registered
broker-dealer or equivalent third party, the Optionee can give the Company
written notice of the exercise of the Option and the third party purchaser of
the Optioned Stock shall pay the Option exercise price plus any applicable
withholding taxes to the Company.
(f) Transferability. Unless otherwise determined by the Committee in
accordance with this Section, any Non-Incentive Stock Option granted pursuant to
the Plan shall be exercised during an Optionee's lifetime only by the Optionee
to whom it was granted and shall
B-7
not be assignable or transferable otherwise than by will or by the laws of
descent and distribution. The Committee may, however, in its sole discretion,
permit transferability or assignment of a Non-Incentive Stock Option by a
Participant if such transfer or assignment is, in its sole determination, for
valid estate planning purposes and such transfer or assignment is permitted
under the Code. For purposes of this Section, a transfer for valid estate
planning purposes includes, but is not limited to: (a) a transfer to a revocable
intervivos trust as to which the Participant is both the settlor and trustee, or
(b) a transfer for no consideration to: (i) any member of the Participant's
Immediate Family, (ii) any trust solely for the benefit of members of the
Participant's Immediate Family, (iii) any partnership whose only partners are
members of the Participant's Immediate Family, and (iv) any limited liability
corporation or corporate entity whose only members or equity owners are members
of the Participant's Immediate Family. For purposes of this Section, "Immediate
Family" includes, but is not necessarily limited to, a Participant's parents,
grandparents, spouse, children, grandchildren, siblings (including half bothers
and sisters), and individuals who are family members by adoption. Nothing
contained in this Section shall be construed to require the Committee to give
its approval to any transfer or assignment of any Non-Incentive Stock Option or
portion thereof, and approval to transfer or assign any Non-Incentive Stock
Option or portion thereof does not mean that such approval will be given with
respect to any other Non-Incentive Stock Option or portion thereof. The
transferee or assignee of any Non-Incentive Stock Option shall be subject to all
of the terms and conditions applicable to such Non-Incentive Stock Option
immediately prior to the transfer or assignment and shall be subject to any
other conditions proscribed by the Committee with respect to such Non-Incentive
Stock Option.
10. Effect of Termination of Employment, Disability, Death and Retirement
-----------------------------------------------------------------------
on Incentive Stock Options.
- --------------------------
(a) Termination of Employment. In the event that any Optionee's
employment with the Company, the Bank, or other present or future Parent or
Subsidiaries shall terminate for any reason, other than Disability, death or
Retirement, all of any such Optionee's Incentive Stock Options, and all of any
such Optionee's rights to purchase or receive Shares of Common Stock pursuant
thereto, shall automatically terminate on (A) the earlier of (i) or (ii): (i)
the respective expiration dates of any such Incentive Stock Options, or (ii) the
expiration of not more than three (3) months after the date of such termination
of employment; or (B) at such later date as is determined by the Committee at
the time of the grant of such Award based upon the Optionee's continuing status
as a Director or Director Emeritus of the Bank or the Company, but only if, and
to the extent that, the Optionee was entitled to exercise any such Incentive
Stock Options at the date of such termination of employment, and further that
such Award shall thereafter be deemed a Non-Incentive Stock Option. In the event
that a Subsidiary ceases to be a Subsidiary of the Company, the employment of
all of its employees who are not immediately thereafter employees of the Company
shall be deemed to terminate upon the date such Subsidiary so ceases to be a
Subsidiary of the Company.
(b) Disability. In the event that any Optionee's employment with the
Bank, the Company, or any present or future Parent or Subsidiaries of the
Company shall terminate as the result of the Disability of such Optionee, such
Optionee may exercise any Incentive Stock Options
B-8
granted to the Optionee pursuant to the Plan at any time prior to the earlier of
(i) the respective expiration dates of any such Incentive Stock Options or
(ii) the date which is one (1) year after the date of such termination of
employment, but only if, and to the extent that, the Optionee was entitled to
exercise any such Incentive Stock Options at the date of such termination of
employment.
(c) Death. In the event of the death of an Optionee, any Incentive
Stock Options granted to such Optionee may be exercised by the person or persons
to whom the Optionee's rights under any such Incentive Stock Options pass by
will or by the laws of descent and distribution (including the Optionee's estate
during the period of administration) at any time prior to the earlier of (i) the
respective expiration dates of any such Incentive Stock Options or (ii) the date
which is two (2) years after the date of death of such Optionee but only if, and
to the extent that, the Optionee was entitled to exercise any such Incentive
Stock Options at the date of death. For purposes of this Section 10(c), any
Incentive Stock Option held by an Optionee shall be considered exercisable at
the date of his death if the only unsatisfied condition precedent to the
exercisability of such Incentive Stock Option at the date of death is the
passage of a specified period of time. At the discretion of the Committee, upon
exercise of such Options the Optionee may receive Shares or cash or a
combination thereof. If cash shall be paid in lieu of Shares, such cash shall be
equal to the difference between the Fair Market Value of such Shares and the
exercise price of such Options on the exercise date.
(d) Incentive Stock Options Deemed Exercisable. For purposes of
Sections 10(a), 10(b) and 10(c) above, any Incentive Stock Option held by any
Optionee shall be considered exercisable at the date of termination of
employment if any such Incentive Stock Option would have been exercisable at
such date of termination of employment without regard to the Disability or death
of the Participant.
(e) Termination of Incentive Stock Options; Vesting Upon Retirement.
Except as may be specified by the Committee at the time of grant of an Option,
to the extent that any Incentive Stock Option granted under the Plan to any
Optionee whose employment with the Company or the Bank terminates shall not have
been exercised within the applicable period set forth in this Section 10, any
such Incentive Stock Option, and all rights to purchase or receive Shares of
Common Stock pursuant thereto, as the case may be, shall terminate on the last
day of the applicable period. Notwithstanding the foregoing, the Committee may
authorize at the time of the grant of an Option that such Award shall be
immediately 100% exercisable upon the Retirement of the Optionee.
11. Effect of Termination of Employment, Disability, Death or Retirement on
-----------------------------------------------------------------------
Non-Incentive Stock Options. The terms and conditions of Non-Incentive Stock
- ----------------------------
Options relating to the effect of the Retirement or other termination of an
Optionee's employment or service, Disability of an Optionee or his death shall
be such terms and conditions as the Committee shall, in its sole discretion,
determine at the time of termination of service, unless specifically provided
for by the terms of the Agreement at the time of grant of the Award.
B-9
12. Withholding Tax. The Company shall have the right to deduct from all
----------------
amounts paid in cash with respect to the cashless exercise of Options under the
Plan any taxes required by law to be withheld with respect to such cash
payments. Where a Participant or other person is entitled to receive Shares
pursuant to the exercise of an Option, the Company shall have the right to
require the Participant or such other person to pay the Company the amount of
any taxes which the Company is required to withhold with respect to such Shares,
or, in lieu thereof, to retain, or to sell without notice, a number of such
Shares sufficient to cover the amount required to be withheld.
13. Recapitalization, Merger, Consolidation, Change in Control and Other
-----------------------------------------------------------------------
Transactions.
- ------------
(a) Adjustment. Subject to any required action by the stockholders of
the Company, within the sole discretion of the Committee, the aggregate number
of Shares of Common Stock for which Options may be granted hereunder, the number
of Shares of Common Stock covered by each outstanding Option, and the exercise
price per Share of Common Stock of each such Option, shall all be
proportionately adjusted for any increase or decrease in the number of issued
and outstanding Shares of Common Stock resulting from a subdivision or
consolidation of Shares (whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of shares, or
otherwise) or the payment of a stock dividend (but only on the Common Stock) or
any other increase or decrease in the number of such Shares of Common Stock
effected without the receipt or payment of consideration by the Company (other
than Shares held by dissenting stockholders).
(b) Change in Control. All outstanding Awards shall become immediately
exercisable in the event of a Change in Control of the Company. In the event of
such a Change in Control, the Committee and the Board of Directors will take one
or more of the following actions to be effective as of the date of such Change
in Control:
(i) provide that such Options shall be assumed, or equivalent options
shall be substituted, ("Substitute Options") by the acquiring or succeeding
corporation (or an affiliate thereof), provided that: (A) any such Substitute
Options exchanged for Incentive Stock Options shall meet the requirements of
Section 424(a) of the Code, and (B) the shares of stock issuable upon the
exercise of such Substitute Options shall constitute securities registered in
accordance with the Securities Act of 1933, as amended, ("1933 Act") or such
securities shall be exempt from such registration in accordance with Sections
3(a)(2) or 3(a)(5) of the 1933 Act, (collectively, "Registered Securities"), or
in the alternative, if the securities issuable upon the exercise of such
Substitute Options shall not constitute Registered Securities, then the Optionee
will receive upon consummation of the Change in Control transaction a cash
payment for each Option surrendered equal to the difference between (1) the Fair
Market Value of the consideration to be received for each share of Common Stock
in the Change in Control transaction times the number of shares of Common Stock
subject to such surrendered Options, and (2) the aggregate exercise price of all
such surrendered Options, or
B-10
(ii) in the event of a transaction under the terms of which the holders
of the Common Stock of the Company will receive upon consummation thereof a cash
payment (the "Merger Price") for each share of Common Stock exchanged in the
Change in Control transaction, to make or to provide for a cash payment to the
Optionees equal to the difference between (A) the Merger Price times the number
of shares of Common Stock subject to such Options held by each Optionee (to the
extent then exercisable at prices not in excess of the Merger Price) and (B) the
aggregate exercise price of all such surrendered Options in exchange for such
surrendered Options.
(c) Extraordinary Corporate Action. Notwithstanding any provisions of
the Plan to the contrary, subject to any required action by the stockholders of
the Company, in the event of any Change in Control, recapitalization, merger,
consolidation, exchange of Shares, spin-off, reorganization, tender offer,
partial or complete liquidation or other extraordinary corporate action or
event, the Committee, in its sole discretion, shall have the power, prior or
subsequent to such action or event to:
(i) appropriately adjust the number of Shares of Common Stock
subject to each Option, the Option exercise price per Share of Common Stock, and
the consideration to be given or received by the Company upon the exercise of
any outstanding Option;
(ii) cancel any or all previously granted Options, provided that
appropriate consideration is paid to the Optionee in connection therewith;
and/or
(iii) make such other adjustments in connection with the Plan as
the Committee, in its sole discretion, deems necessary, desirable, appropriate
or advisable; provided, however, that no action shall be taken by the Committee
which would cause Incentive Stock Options granted pursuant to the Plan to fail
to meet the requirements of Section 422 of the Code without the consent of the
Optionee.
(d) Acceleration. The Committee shall at all times have the power to
accelerate the exercise date of Options previously granted under the Plan.
(e) Non-recurring Dividends. Upon the payment of a special or
non-recurring cash dividend that has the effect of a return of capital to the
stockholders, the Option exercise price per share shall be adjusted
proportionately and in an equitable manner.
Except as expressly provided in Sections 13(a), 13(b) and 13(e) hereof, no
Optionee shall have any rights by reason of the occurrence of any of the events
described in this Section 13.
14. Time of Granting Options. The date of grant of an Option under the Plan
------------------------
shall, for all purposes, be the date on which the Committee makes the
determination of granting such Option. Notice of the grant of an Option shall be
given to each individual to whom an Option is so granted within a reasonable
time after the date of such grant in a form determined by the Committee.
B-11
15. Effective Date. The Plan shall became effective upon the date of
---------------
approval of the Plan by the Board of the Company (February 23 , 2001).
16. Ratification by Stockholders. The Plan shall be ratified by
-------------------------------
stockholders of the Company within twelve (12) months before or after the date
the Plan is approved by the Board.
17. Modification of Options. At any time and from time to time, the Board
-----------------------
may authorize the Committee to direct the execution of an instrument providing
for the modification of any outstanding Option, provided no such modification,
extension or renewal shall confer on the holder of said Option any right or
benefit which could not be conferred on the Optionee by the grant of a new
Option at such time, or shall not materially decrease the Optionee's benefits
under the Option without the consent of the holder of the Option, except as
otherwise permitted under Section 18 hereof.
18. Amendment and Termination of the Plan.
-------------------------------------
(a) Action by the Board. The Board may alter, suspend or discontinue
the Plan, except that no action of the Board may increase (other than as
provided in Section 13 hereof) the maximum number of Shares permitted to be
optioned under the Plan, materially increase the benefits accruing to
Participants under the Plan or materially modify the requirements for
eligibility for participation in the Plan unless such action of the Board shall
be subject to approval or ratification by the stockholders of the Company.
(b) Change in Applicable Law. Notwithstanding any other provision
contained in the Plan, in the event of a change in any federal or state law,
rule or regulation which would make the exercise of all or part of any
previously granted Option unlawful or subject the Company to any penalty, the
Committee may restrict any such exercise without the consent of the Optionee or
other holder thereof in order to comply with any such law, rule or regulation or
to avoid any such penalty.
19. Conditions Upon Issuance of Shares; Limitations on Option Exercise;
----------------------------------------------------------------------
Cancellation of Option Rights.
- -----------------------------
(a) Shares shall not be issued with respect to any Option granted under
the Plan unless the issuance and delivery of such Shares shall comply with all
relevant provisions of applicable law, including, without limitation, the
Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder, any applicable state securities laws and the requirements of any
stock exchange upon which the Shares may then be listed.
(b) The inability of the Company to obtain any necessary
authorizations, approvals or letters of non-objection from any regulatory body
or authority deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares issuable hereunder shall relieve the Company of
any liability with respect to the non-issuance or sale of such Shares.
B-12
(c) As a condition to the exercise of an Option, the Company may
require the person exercising the Option to make such representations and
warranties as may be necessary to assure the availability of an exemption from
the registration requirements of federal or state securities law.
(d) Notwithstanding anything herein to the contrary, upon the
termination of employment or service of an Optionee by the Company or its
Subsidiaries for "cause" as determined by the Board of Directors, all Options
held by such Participant shall cease to be exercisable as of the date of such
termination of employment or service.
(e) Upon the exercise of an Option by an Optionee (or the Optionee's
personal representative), the Committee, in its sole and absolute discretion,
may make a cash payment to the Optionee, in whole or in part, in lieu of the
delivery of shares of Common Stock. Such cash payment to be paid in lieu of
delivery of Common Stock shall be equal to the difference between the Fair
Market Value of the Common Stock on the date of the Option exercise and the
exercise price per share of the Option. Such cash payment shall be in exchange
for the cancellation of such Option. Such cash payment shall not be made in the
event that such transaction would result in liability to the Optionee or the
Company under Section 16(b) of the Securities Exchange Act of 1934, as amended,
and regulations promulgated thereunder.
20. Reservation of Shares. During the term of the Plan, the Company will
----------------------
reserve and keep available a number of Shares sufficient to satisfy the
requirements of the Plan.
21. Unsecured Obligation. No Participant under the Plan shall have any
---------------------
interest in any fund or special asset of the Company by reason of the Plan or
the grant of any Option under the Plan. No trust fund shall be created in
connection with the Plan or any grant of any Option hereunder and there shall be
no required funding of amounts which may become payable to any Participant.
22. No Employment Rights. No Director, Employee or other person shall have
--------------------
a right to be selected as a Participant under the Plan. Neither the Plan nor any
action taken by the Committee in administration of the Plan shall be construed
as giving any person any rights of employment or retention as an Employee,
Director or in any other capacity with the Company, the Bank, or any present or
future Parent or Subsidiary.
23. Governing Law. The Plan shall be governed by and construed in
--------------
accordance with the laws of the State of New York, except to the extent that
federal law shall be deemed to apply.
B-13
Ambanc Holding Co., Inc.
Amsterdam, New York
Annual Meeting of Stockholders May 18, 2001
The undersigned hereby appoints the members of the Board of Directors of
Ambanc Holding Co., Inc. (the "Company") with full powers of substitution, to
act as attorneys and proxies for the undersigned to vote all shares of common
stock, par value $.01 per share (the "Common Stock"), of Ambanc Holding Co.,
Inc. which the undersigned is entitled to vote at the Annual Meeting of
Stockholders to be held at the Company's offices at 11 Division Street,
Amsterdam, New York, at the date and time set forth in the Notice of Annual
Meeting and at any and all adjournments and postponements thereof, as instructed
hereon.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE ELECTION OF ALL OF THE NOMINEES LISTED AND FOR THE
RATIFICATION OF THE APPOINTMENT OF KPMG LLP. IF ANY OTHER BUSINESS IS PRESENTED
AT THE MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN THEIR
BEST JUDGMENT.
I. Election of four directors FOR all nominees
for terms of three years. listed (except as WITHHOLD AUTHORITY
marked to the to vote for all
Nominees: contrary below) nominees listed
-------- --------------- ------------------
Daniel J. Greco
John M. Lisicki |_| |_|
Charles S. Pedersen
John A. Tesiero, Jr.
(Instructions: To withhold authority to vote for one or more but not all
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nominees, mark the "FOR" box, and write the name(s) of the nominee(s) for whom
you wish to withhold your vote in the space provided below. To withhold
authority to vote for all nominees, mark the 'WITHHOLD AUTHORITY" box.
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II. Ratification of Ambanc Holding Co., Inc. 2001 Stock Option Plan.
FOR AGAINST ABSTAIN
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|_| |_| |_|
III. Ratification of the appointment of KPMG LLP as independent auditors for the
fiscal year ending December 31, 2001.
FOR AGAINST ABSTAIN
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|_| |_| |_|
In their discretion, the proxies are authorized to vote on any other
business that may properly come before the Meeting or any adjournment or
postponement thereof.
The Board of Directors recommends a vote "For" all of the above proposals.
This proxy may be revoked at any time before it is voted by delivering to
the Secretary of the Company, on or before the taking of the vote at the
Meeting, a written notice of revocation bearing a later date than the proxy or a
later dated proxy relating to the same shares of Company Common Stock, or by
attending the Meeting and voting in person. Attendance at the Meeting will not
in itself constitute the revocation of this proxy. If this proxy is revoked as
described above, then the power of the attorneys and proxies named herein shall
be deemed terminated and of no further force and effect.
The undersigned acknowledges receipt from the Company, prior to the
execution of this Proxy, of the Notice of the Annual Meeting, the related Proxy
Statement and the Company's Annual Report to Stockholders for the fiscal year
ended December 31, 2000.
PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL THIS PROXY IN ENCLOSED
POSTAGE-PAID ENVELOPE.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
|_| Please check here if you plan to attend the Meeting.
Dated: , 2001
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SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
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PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
Please sign exactly as your name appears on this form of proxy. When signing as
attorney, executor, administrator, trustee, or guardian, please give your full
title. If shares are held jointly, each holder should sign.
PLEASE COMPLETE, SIGN, DATE, AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.