SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER
THAN THE REGISTRANT [ ]
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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 sec. 240.14a-11(c) or sec. 240.14a-12
Northway Financial, 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)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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NORTHWAY
- --------- NORTHWAY FINANCIAL, INC.
FINANCIAL
April 18, 2005
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Northway Financial, Inc., to be held on Tuesday, May 31, 2005 at 2:00 p.m.
at The Town and Country Motor Inn, Route 2, Shelburne, New Hampshire 03581.
At the annual meeting you will be asked to consider and act upon the
following:
(1) to elect three (3) class II directors to serve until the 2008
Annual Meeting of Stockholders or until their successors are duly
elected and qualified; and
(2) to transact such other business as may come properly before the
meeting and any adjournments or postponements thereof.
I, along with the other members of the Board of Directors, look forward
to greeting you personally at the Annual Meeting. However, whether or not you
plan to attend personally and regardless of the number of shares you own, it is
important that your shares be represented. YOU ARE URGED TO PROMPTLY SIGN, DATE
AND MAIL THE ENCLOSED PROXY IN THE POSTAGE-PAID ENVELOPE PROVIDED FOR YOUR
CONVENIENCE.
This will not prevent you from voting in person but will assure that
your vote is counted if you are unable to attend.
Very truly yours,
/s/ William J. Woodward
William J. Woodward
Chairman of the Board
9 Main Street, Berlin, New Hampshire 03570/Telephone 603-752-1171
[logo]
NORTHWAY
- ---------
FINANCIAL
NORTHWAY FINANCIAL, INC.
9 MAIN STREET
BERLIN, NEW HAMPSHIRE 03570
TELEPHONE 603-752-1171
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, MAY 31, 2005
NOTICE IS HEREBY GIVEN THAT the Annual Meeting of Stockholders of
Northway Financial, Inc. will be held on Tuesday, May 31, 2005 at 2:00 p.m. at
The Town and Country Motor Inn, Route 2, Shelburne, New Hampshire 03581 for the
following purposes:
(1) To elect three (3) class II directors to serve until the 2008
Annual Meeting of Stockholders or until their successors are duly
elected and qualified; and
(2) To transact such other business as may come properly before the
meeting and any adjournments or postponements thereof.
The foregoing items are more fully described in the Proxy Statement
accompanying this Notice.
The Board of Directors has fixed the close of business on April 01,
2005 as the record date for determining stockholders entitled to notice of and
to vote at the Annual Meeting and any adjournments or postponements thereof.
Only holders of common stock of record at the close of business on that date
will be entitled to notice of and to vote at the Annual Meeting and any
adjournments or postponements thereof.
By Order of the Board of Directors
/s/ Joseph N. Rozek
Joseph N. Rozek
Secretary
Berlin, New Hampshire
April 18, 2005
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU
ARE REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF
YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU
HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
NORTHWAY FINANCIAL, INC.
9 MAIN STREET
BERLIN, NEW HAMPSHIRE 03570
TELEPHONE 603-752-1171
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, MAY 31, 2005
This Proxy Statement and accompanying form of proxy are furnished in
connection with the solicitation of proxies on behalf of the Board of Directors
of Northway Financial, Inc., a New Hampshire corporation (the "Company"), for
use in voting at the Annual Meeting of Stockholders (the "Meeting") to be held
at 2:00 p.m. on May 31, 2005, at The Town and County Motor Inn, Route 2,
Shelburne, New Hampshire 03581 and at any postponements or adjournments thereof.
This proxy statement and accompanying form of proxy were mailed on or about
April 18, 2005 to stockholders of record at the close of business on April 01,
2005 in connection with the solicitation.
At the close of business on April 01, 2005, there were outstanding and
entitled to vote 1,507,574 shares of the Company's common stock, par value of
$1.00 per share.
Each stockholder is entitled to one vote per share upon each matter
submitted at the Meeting. Only stockholders of record at the close of business
on April 01, 2005 shall be entitled to vote at the Meeting.
The proxies of holders of common stock are being solicited by the Board
of Directors. Stockholders are requested to complete, date, sign and promptly
return the accompanying proxy card in the enclosed envelope. Shares represented
by a properly executed proxy received prior to the vote at the Meeting and not
revoked will be voted at the Meeting as directed in the proxy. IF A PROXY IS
SUBMITTED AND NO DIRECTIONS ARE GIVEN, THE PROXY WILL BE VOTED "FOR" THE
APPROVAL OF THE PROPOSALS TO BE CONSIDERED AT THE MEETING.
A person giving the enclosed proxy may revoke it by filing an
instrument of revocation with Joseph N. Rozek, Secretary, Northway Financial,
Inc., 9 Main Street, Berlin, New Hampshire 03570. Any such person may also
revoke a proxy by filing a duly executed proxy bearing a later date, or by
appearing at the Meeting in person, notifying the Secretary, and voting by
ballot at the Meeting. Any stockholder of record attending the Meeting may vote
in person whether or not a proxy has been previously given, but the mere
presence (without notifying the Secretary) of a stockholder at the Meeting will
not constitute revocation of a previously given proxy.
The Company will bear the cost of soliciting proxies from the
stockholders, including mailing costs, and will pay all printing costs in
connection with this Proxy Statement. In addition to the use of the mails,
proxies may be solicited by the directors, officers, and certain employees of
the Company, and by personal interviews, telephone and facsimile. Such
directors, officers and employees will not receive additional compensation for
such solicitation but may be reimbursed for reasonable out-of-pocket expenses
incurred in connection therewith. The Company may also make arrangements with
brokerage houses and other custodians, nominees, and fiduciaries for the
forwarding of solicitation material to the beneficial owners of its common
stock. The Company may reimburse such custodians, nominees, and fiduciaries for
reasonable out-of-pocket expenses incurred in connection therewith.
The presence in person or by proxy of the holders of a majority of the
issued and outstanding shares entitled to vote at the Meeting is required to
constitute a quorum. Abstentions and "broker non-votes" (as defined below) will
be counted as present for purposes of determining the presence or absence of a
quorum for the transaction of business at the Meeting, but as unvoted for
purposes of determining the approval of any matter submitted to the stockholders
for a vote. A "broker non-vote" is a proxy from a broker or other nominee
indicating that such person has not received instructions from the beneficial
owner or other person entitled to vote the shares which are the subject of the
proxy on a particular matter and with respect to which the broker or other
nominee does not have discretionary voting power.
The Company is a New Hampshire corporation and the parent of The Berlin
City Bank, a New Hampshire-chartered bank based in Berlin, New Hampshire
("BCB"), The Pemigewasset National Bank of Plymouth, New Hampshire, a national
bank based in Plymouth, New Hampshire ("PNB"), Northway Capital Trust I ("NCT
I"), a Delaware statutory business trust, and Northway Capital Trust II ("NCT
II"), a Delaware statutory business trust.
PROPOSAL ONE
ELECTION OF DIRECTORS
NOMINEES AND DIRECTORS CONTINUING IN OFFICE
The Company's Board of Directors is currently composed of nine members.
The Company's Amended and Restated Articles of Incorporation provide that
directors are to be divided into three classes, with all classes as nearly equal
as possible in size. Each director is elected for a three-year term and the
terms are staggered so that only one class is elected by the stockholders
annually.
At the Meeting, three directors will be elected to serve for a
three-year term until the 2008 Annual Meeting, and until their successors are
duly elected and qualified. The Board of Directors has nominated for election
Stephen G. Boucher, Barry J. Kelley, and Randall G. Labnon, all of whom are
current members of the Board of Directors. It is the intention of the persons
named in the accompanying form of proxy, or their substitutes, to vote for the
election of the foregoing nominees unless instructed to the contrary. The Board
of Directors believes that all of the nominees will be available and able to
serve as directors, but if for any reason any of the nominees named above should
not be available or able to serve, the proxies may exercise discretionary
authority to vote for one or more substitutes as the Board of Directors may
recommend. In the alternative, the Board of Directors may, if permitted by law
and the Amended and Restated Articles of Incorporation and Bylaws, amend the
Bylaws if necessary and reduce the size of the Board to eliminate the resulting
vacancy. The affirmative vote of a plurality of the votes cast is required for
the election of directors. Abstentions and broker non-votes will not be counted
as "votes cast" for purposes of electing directors and, therefore, will not
affect the election of the directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" ALL OF THE
NOMINEES FOR DIRECTOR OF THE COMPANY.
INFORMATION CONCERNING DIRECTORS AND NOMINEES
The following table sets forth the name and age, other positions held
with the Company, term of office and period served, business experience, and
certain other information, as of April 01, 2005, with respect to each nominee
and each director continuing in office. The information was provided by the
persons named.
Shares of
Common Stock Percent
Term Beneficially of Common
Name and Business Experience Director To Owned at Stock
for Past Five Years Age Since Expire Apr. 01, 2005(1) Ownership(1)
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NOMINEES OF THE BOARD
Boucher, Stephen G. 58 1999 2008 250 ****
Chief Executive Officer and
Chairman of the Board, Airmar
Technology Corp.;
Kelley, Barry J. 55 1997 2008 42,439 (2) 2.82%
President, White
Mountain Lumber, Co.
Labnon, Randall, G. 51 1997 2008 3,072 ****
General Manager, Town &
Country Motor Inn
DIRECTORS CONTINUING IN OFFICE
Anderson, Frederick C. 53 2002 2006 1,145 (3) ****
President and CEO, NH
Electric Cooperative, Inc.
Ward, Brien L. 52 2002 2006 167 (4) ****
Attorney
Adams, Fletcher W. 68 1997 2007 54,500 (5) 3.62%
Vice-Chairman of the Board,
Northway Financial, Inc.;
Chairman of the Board, The
Pemigewasset National Bank
of Plymouth, New Hampshire
Hanson, Jr., Arnold P. 55 1997 2007 19,312 (6) 1.28%
President, Isaacson
Structural Steel, Inc.
DIRECTORS CONTINUING IN OFFICE
Noyes, John H. 58 1997 2007 22,708 (7) 1.51%
President, Noyes Insurance
Agency, Inc.; President,
Central Square Insurance, Inc.
Woodward, William J. 59 1997 2007 89,088 5.91%
Chairman of the Board,
President, Chief Executive
Officer, Northway Financial,
Inc. and The Berlin City Bank;
Chief Executive Officer and
President, The Pemigewasset
National Bank of Plymouth,
New Hampshire
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**** Owns less than 1% of the Company's outstanding common stock.
(1) Included in the shares listed as "beneficially owned" and in the calculation of common stock ownership are
the following shares which the persons listed have the right to acquire prior to the expiration date shown
pursuant to vested stock options granted under the 1999 stock option and grant plan - Mr. Woodward (7,500
prior to June 15, 2009 and 8,500 prior to October 17, 2010) and Mr. Adams (3,500 prior to June 15, 2009).
(2) Includes 33,246 shares owned jointly with spouse and 3,135 shares owned by spouse for which Mr. Kelley may
be deemed the beneficial owner.
(3) Includes 104 shares owned jointly with son. (4) Shares owned jointly with spouse.
(5) Includes 51,000 shares held in trust for which Mr. Adams serves as trustee.
(6) Includes 19,000 shares held in a trust for which Mr. Hanson serves as trustee and 312 shares owned jointly
with spouse.
(7) Includes 12,185 shares held in a trust for which Mr. Noyes serves as trustee and 10,523 shares held in a
trust for which Mr. Noyes has Power of Attorney.
The Board of Directors has determined that the following directors:
Fletcher W. Adams, Arnold P. Hanson, Jr., John H. Noyes, Stephen G. Boucher,
Barry J. Kelley, Randall G. Labnon, Frederick C. Anderson, and Brien L. Ward,
who comprise a majority of the Board of Directors, are "independent" under the
Nasdaq Stock Market rules.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company held thirteen (13) meetings during
the calendar year ended December 31, 2004. All incumbent directors attended at
least 75% of the aggregate number of meetings of the Board of Directors and the
committees of which he was a member in 2004. Mr. John D. Morris, who was a
director until his death in March 2005, did not meet the threshold due to
illness.
The Company does not require Directors to attend the annual meeting of
stockholders. The Company does, however, schedule a meeting of its Board of
Directors on the same day as the annual meeting of stockholders to facilitate
each Director's attendance at the annual meeting of stockholders. Nine of the
ten members of the Company's Board of Directors attended the Company's annual
meeting of stockholders held May 25, 2004.
Directors of the Company are paid an annual retainer fee of $11,000 for
service on the Board. In addition, the Chairperson of the Audit and Compliance
Committee and the Chairperson of the Human Resources, Compensation and
Nominating Committee are paid an annual retainer fee of $8,500. Committee
members, including the Chairperson, are paid $600 for each Committee meeting
attended. Directors who also serve on the Executive Committee receive an
additional annual fee of $12,000. The Vice Chairman of the Board, Mr. Adams,
receives an annual fee of $32,000.
The following sets forth the current members of each of the standing
committees of the Board of Directors together with a brief description of the
function of each such committee.
EXECUTIVE/INVESTMENT COMMITTEE
MEMBERS: William J. Woodward, Chairman; Fletcher W. Adams, and John H.
Noyes
FUNCTION: The Executive/Investment Committee generally has the authority
to exercise the power of the full Board during intervals between
meetings of the Board.
NUMBER OF This Committee meets on a bi-weekly basis.
MEETINGS:
AUDIT AND COMPLIANCE COMMITTEE
MEMBERS: Arnold P. Hanson, Jr., Chairman; Frederick C. Anderson; Barry J.
Kelley and Brien L. Ward.
FUNCTION: This Committee oversees the activities of the Company's
Internal Auditor, its independent certified public accounting
firm, and activities of other accounting firms used on a project
basis. This Committee also reviews the results of each
regulatory examination. The Committee also provides oversight
for all compliance and loan review activities of the Company,
including those of the Corporate Compliance Officer. The Audit
and Compliance Committee operates under a written charter
adopted February 24, 2004 by the Board of Directors of the
Company.
The Board of Directors has determined that no member of the
Audit and Compliance Committee meets the specific qualifications
of an "audit committee financial expert" as defined in Item
401(h) of Regulation S-K promulgated by the Securities and
Exchange Commission. The Board believes that, taking into
account the relative breadth and complexity of the Company's
financial statements, the current members of the Audit and
Compliance Committee possess the requisite level of financial
expertise to perform their responsibilities effectively.
NUMBER OF
MEETINGS: This Committee met nine (9) times during the 2004 fiscal year.
HUMAN RESOURCES, COMPENSATION AND NOMINATING COMMITTEE
MEMBERS: Stephen G. Boucher, Chairman; Fletcher W. Adams; Randall G.
Labnon; and John H. Noyes.
FUNCTION: This Committee conducts annual and periodic reviews of director,
officer, and employee compensation in order to ensure that the
Company has the programs necessary to attract and retain
competent professionals at all levels. The Human Resources,
Compensation and Nominating Committee does not currently have a
written charter.
Further, this Committee selects nominees for election as
directors of the Company. This Committee nominated the persons
standing for election at the 2005 Annual Meeting.
Historically, the Company has not received any proposals from
stockholders recommending director candidates to be nominated
for membership on the Board of the Company. Consequently, the
Board of Directors has not viewed the development of a formal
policy regarding the consideration of any director candidates
recommended by stockholders to be necessary, and this Committee
does not have such a formal policy. A stockholder wishing to
nominate a director separately from the slate of directors
nominated by the Company should follow the procedures described
in this proxy statement under the heading "Stockholder
Proposals."
The Board of Directors has adopted, based on this Committee's
recommendations, certain guidelines regarding "Director Role and
Qualifications," that must be met by an individual in order to
be considered for nomination by this Committee to the Company's
Board of Directors. In addition to possessing strong personal
qualifications such as, good character, sound judgment,
diligence, and ability to think critically and strategically,
this Committee considers a broad range of other factors in
evaluating potential candidates for the Company's Board of
Directors. These factors include, without limitation,
specialized skills, knowledge, expertise, business contacts and
relationships, and the ability to commit appropriate time to the
duties of a director. The perceived needs of the overall Board
of Directors are also considered.
NUMBER OF
MEETINGS: This Committee met six (6) times during the 2004 fiscal year.
STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
Stockholders wishing to communicate with the Company's Board of Directors
should address their inquiries to the Company's Chief Financial Officer by mail
sent to the Company's main address at 9 Main Street, Berlin, New Hampshire
03570. The mailing envelope should contain a clear notification indicating that
the enclosed letter is a "Stockholder-Board Communication" or
"Stockholder-Director Communication." All such letters should clearly state
whether the intended recipients are all members of the Board or certain
specified individual Directors. All communications will be reviewed by the
Company's Chief Executive Officer who will determine whether the communication
will be relayed to the Board. Except for resumes, sales and marketing
communications, or notices regarding seminars or conferences, summaries of all
shareholder communications will be provided to the Board.
EXECUTIVE OFFICERS
The following sets forth information regarding the executive and key officers of
the Company and/or its subsidiaries, the position or office held by each of
them, and the date from which they have continually served as executive
officers. Pursuant to the by-laws of the Company, the President and Senior Vice
Presidents of the Company hold office until the first meeting of the Directors
following the next annual meeting of stockholders, or any special meeting held
in lieu thereof. Other officers shall hold office for the same term as described
above, unless a shorter term is specified in the vote electing or appointing
them.
Executive
Officer
Name Age Since
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William J. Woodward 59 1989
Chairman, President, and Chief Executive Officer
Northway Financial, Inc. and The Berlin City Bank;
and Chief Executive Officer and President, The
Pemigewasset National Bank of Plymouth, New
Hampshire
Mark C. Bechtold 48 2004
Senior Vice President, Northway Financial, Inc.
Richard T. Brunelle 62 1996
Senior Vice President, The Berlin City Bank and
The Pemigewasset National Bank of Plymouth, New
Hampshire
John A. Gobel 60 2004
Senior Vice President, Northway Financial, Inc.
Ronald P. Goudreau 51 2003
Senior Vice President, Northway Financial, Inc.,
The Berlin City Bank, and The Pemigewasset
National Bank of Plymouth, New Hampshire
Robert F. Howe 59 2003
Senior Vice President, The Berlin City Bank and
The Pemigewasset National Bank of Plymouth, New
Hampshire
Richard P. Orsillo 55 2001
Senior Vice President and Chief Financial Officer,
Northway Financial, Inc., The Berlin City Bank and
The Pemigewasset National Bank of Plymouth, New
Hampshire
John H. Stratton, Jr. 58 1990
Senior Vice President, Northway Financial, Inc.,
The Berlin City Bank, and The Pemigewasset
National Bank of Plymouth, New Hampshire
William J. Woodward has served as Chairman of the Board of Directors,
President and Chief Executive Officer of the Company since 1997. In addition,
he has served as President and Chief Executive Officer of BCB since 1994 and
has served as Chairman of the Board of Directors of BCB since 1989. He became a
Director of BCB in 1975. He has served as Chief Executive Officer of PNB since
2002, as President of PNB since 2004 and has served as a director of PNB since
1997.
Mark C. Bechtold has served as Senior Vice President since February
2004 and is responsible for the Human Resources and Organizational Development
division. Prior to joining the Company, he served as Vice President and Manager
of Human Resources of WICOR Americas, Inc. from May 1998 through January 2004.
Richard T. Brunelle has served as Senior Vice President of BCB since
April 1996 and PNB since 2001 and is responsible for the Commercial Lending
division. From 1991 until his promotion, Mr. Brunelle served BCB as Vice
President and Senior Commercial Lender.
John A. Gobel has served as Senior Vice President of Northway
Financial, Inc. since September 2004 and is responsible for the Information
Technology division. For the five years prior to joining the Company, Mr. Gobel
served as Vice President, Senior Technology Officer for Camden National Bank
Ronald P. Goudreau has served as Senior Vice President and Operations
Officer of the Company since 2003. He is responsible for both deposit and loan
operations. Prior to joining the Company, he served as Senior Compliance
Examiner of the Federal Deposit Insurance Corporation since 1992.
Robert F. Howe has served as Senior Vice President of BCB since
October 1998 and is responsible for the consumer lending division. From 1998
until September 2004, he was responsible for the indirect lending division.
Richard P. Orsillo has served as Senior Vice President and Chief
Financial Officer of the Company, BCB and PNB since 2002. From December 1998
until his promotion he served as Vice President and Corporate Controller of the
Company, BCB and PNB.
John H. Stratton, Jr. has served as Senior Vice President of the
Company since 2003 and is responsible for the retail banking division of both
subsidiary banks. Prior to assuming this position he served as Senior Vice
President of BCB since 1990 where he was responsible for the BCB retail banking
division.
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth, as of April 01, 2005, the beneficial
ownership of common stock by (i) each of the executive officers named under
"Executive Compensation" below and (ii) all directors and executive officers as
a group; and (iii) each person, including any group of persons, known by the
Company to beneficially own five percent (5%) or more of the outstanding common
stock. See "Information Concerning Directors and Nominees" above for the
beneficial ownership of common stock by Mr. Adams and other directors of the
Company.
Shares of Percent of
Common Stock Shares of
Beneficially Common Stock
Name Owned Ownership
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EXECUTIVE OFFICERS
William J. Woodward 89,088 5.91%
Richard T. Brunelle 5,050 ****
Richard P. Orsillo 1,627 ****
John H. Stratton, Jr. 6,432 ****
Mark C. Bechtold -- n/a
DIRECTORS AND EXECUTIVE OFFICERS 247,790 16.44%
AS A GROUP (16 PERSONS)
**** Owns less than 1% of the Company's common stock.
(1) Included in the shares listed as "beneficially owned" and in the
calculation of common stock ownership are the following shares which the
persons listed have the right to acquire prior to the expiration date
shown pursuant to vested stock options granted under the 1999 stock option
and grant plan - Mr. Woodward (7,500 prior to June 15, 2009 and 8,500
prior to October 17, 2010), Mr. Brunelle (2,000 prior to June 15, 2009 and
3,000 prior to October 17, 2010), Mr. Orsillo (1,500 prior to October 17,
2010), and Mr. Stratton (2,000 prior to June 15, 2009 and 3,000 prior to
October 17, 2010). Additionally, included in the shares listed as
"beneficially owned" and in the calculation of common stock ownership for
directors and executive officers as a group there are 2,000 shares which
other executive officers not listed have the right to acquire prior to
October 17, 2010, pursuant to vested stock options granted under The
Company's 1999 Stock Option and Grant Plan.
5% HOLDER
Shares of Percent of
Common Stock Shares of
Beneficially Common Stock
Name and Address Owned(1) Ownership(1)
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1. Jeffrey L. Gendell(1) 146,801 9.74%
55 Railroad Avenue, 3rd Floor
Greenwich CT 06830
(1) Shares voting power through Tontine Financial Partners, L.P.; Tontine
Management, L.L.C.; and Tontine Overseas Associates, L.L.C.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and
long-term compensation for services rendered in all capacities to the Company
during the fiscal years ended December 31, 2004, 2003, and 2002, of those
persons who were, at December 31, 2004: (i) the chief executive officer of the
Company and (ii) the other four most highly compensated executive officers
(collectively, the "Named Executive Officers")
SUMMARY COMPENSATION TABLE
Annual Compensation
----------------------
Name and Other(2)
Principal Position Year Salary Bonus(1) Compensation
- -------------------------------------------------------------------------------
William J. Woodward 2004 $300,000 $ 6,500 $ 5,125
Chairman, President and 2003 276,000 30,520 4,000
Chief Executive Officer 2002 262,500 5,700 25,735
Richard T. Brunelle 2004 132,269 2,645 3,307
Senior Vice President 2003 125,193 5,008 2,408
Berlin City Bank and The 2002 120,289 2,406 2,221
Pemigewasset National
Bank of Plymouth, New
Hampshire
Richard P. Orsillo 2004 128,000 2,560 3,251
Senior Vice President 2003 121,000 4,840 2,420
and Chief Financial
Officer 2002 115,000 2,300 1,990
John H. Stratton, Jr. 2004 126,692 2,534 3,218
Senior Vice President 2003 122,462 4,898 2,449
2002 117,423 2,348 2,348
Mark C. Bechtold 2004 96,923 10,098 1,159
Senior Vice President 2003 -- -- --
2002 -- -- --
(1) The 2004 bonus granted to Mr. Bechtold includes an $8,000 one-time sign-on
bonus.
(2) The compensation reported in this column is comprised of: (a) amounts
allocated to the accounts of the Named Executive Officers in connection
with the Company's Profit Sharing Plan. During 2004 the amounts allocated
to the Company's Profit Sharing Plan were as follows: Mr. Woodward, $1,025;
Mr. Brunelle, $661; Mr. Orsillo, $640; Mr. Stratton, $633 and Mr. Bechtold,
$525. During 2003 and 2002 no amounts were allocated in connection with the
Company's Profit Sharing Plan.; (b) employer matching contributions
allocated to the accounts of the Named Executive Officers in connection
with the Company's 401(k) Plan; and (c) with respect to Mr. Woodward,
$7,015, which represents imputed income to Mr. Woodward associated with the
term portion of a split-dollar life insurance arrangement for 2002. With
respect to 2002, the reported compensation amount also includes $14,720,
which amounts represent benefits to Mr. Woodward of the remainder of the
premium payments by the Company under a split-dollar life insurance
arrangement prior to enactment of the Sarbanes-Oxley Act on July 30, 2002.
These amounts represent the interest the Company would have received had it
loaned the premium amounts to Mr. Woodward at a market rate of interest.
Effective May 29, 2003, the existing Executive Life program was terminated
and replaced with a Supplemental Executive Retirement Plan (SERP), which is
described under "Supplemental Executive Retirement Plan" below.
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
The following table shows stock option exercises by the Named
Executive Officers during the fiscal year ended December 31, 2004. In addition,
this table includes the number of shares covered by both exercisable and
unexercisable options as of December 31, 2004. Also reported are the values for
"in-the money" options, which represent the positive spread between the
exercise price of any such existing options and the year-end closing price of
the Company's common stock.
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options/
Options/SARs at FY- SARs at FY-End ($)
Shares Acquired Value Realized(1) End(#) Exercisable/ Exercisable/
Name On Exercise (#) ($) Unexercisable Unexercisable(1)
- -------------------------------------------------------------------------------------------------------------------
William J. Woodward 0 0 16,000/0 143,928/0
Richard T. Brunelle 0 0 5,000/0 46,825/0
Richard P. Orsillo 0 0 1,500/0 17,273/0
John H. Stratton, Jr. 0 0 5,000/0 46,825/0
Mark C. Bechtold 0 0 0/0 0/0
(1) Calculated using a market price of $34.14 per share.
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return
on the Company's common stock (assuming $100 was invested on September 30,
1997, the date when the Company's common stock became publicly traded, and all
dividends were reinvested) against (i) the cumulative total return of the S&P
Composite 500 Stock Index, and (ii) the NASDAQ Bank Stock Index.
[GRAPHIC OMITTED]
- -----------------------------------------------------------------------------------------------------------
12/31/97 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
- -----------------------------------------------------------------------------------------------------------
NWFI $100.00 $ 89.26 $ 86.73 $ 79.42 $101.46 $115.50 $129.67 $129.16
- -----------------------------------------------------------------------------------------------------------
S&P 500 100.00 126.67 151.40 136.05 118.31 90.66 114.58 124.88
- -----------------------------------------------------------------------------------------------------------
NASDAQ Bank Stocks 100.00 88.23 81.19 93.10 102.48 107.11 139.17 154.47
- -----------------------------------------------------------------------------------------------------------
EMPLOYMENT CONTRACTS
Mr. Woodward has entered into an employment agreement with the
Company. Pursuant to the employment agreement, he provides ongoing services to
the Company on a full-time basis for a period of three years. This term is
automatically renewed for a one year period commencing on each anniversary of
the agreement unless either he or the Company gives written notice to the other
electing not to extend the term. The employment agreement provides for annual
base salaries that are subject to increase from time to time in the discretion
of the Board of Directors. The employment agreement also provides that he is
entitled to participate in any incentive or bonus program established by the
Board of Directors, as well as other employee benefit plans which the Company
may from time to time have in effect for all or most of its senior executives.
In addition to certain confidentiality and non-compete provisions, the
agreement provides that if Mr. Woodward is terminated from full-time employment
with the Company without cause prior to the end of the respective term, then he
will be entitled to receive his base salary at the rate then in effect and
certain group health benefits for the remainder of such term (the "Termination
Benefits Period"); provided, that in the event he commences any employment or
self-employment during the Termination Benefits Period, the remaining amount of
base salary due, for the period from the commencement of such employment or
self-employment to the end of the Termination Benefit Period, will be reduced
by one-half of the salary he receives from such employment or self-employment.
In addition, if he receives benefits from such employment or self-employment
comparable to those benefits provided by the Company, the continuation of group
health benefits shall cease effective as of the date of commencement of such
employment or self-employment.
The employment agreement also provides for termination benefits if Mr.
Woodward's employment with the Company is terminated under certain
circumstances following a "change of control." If within 18 months following a
change of control of the Company, his employment is terminated by the Company
or its successor or by himself following the occurrence of certain adverse
actions taken with respect to his employment, or if his employment is
terminated without cause, the Company must, in lieu of any other termination
benefits described above, pay to him (or his estate, if applicable) a lump-sum
payment equal to 2.99 times his "base amount" (within the meaning of section
280G of the Internal Revenue Code of 1986, as amended).
KEY EMPLOYEE AGREEMENTS
The Company and its subsidiaries have entered into Key Employee
agreements with a number of the senior officers of the Company. These
agreements provide for payments to the officer upon the officer's termination
or resignation in connection with certain specified actions adverse to the
officer's employment status following a change in control of the Company. The
amount of such payments ranges from 1.0 to 1.5 times such officer's annual
compensation.
PENSION PLANS
The Company maintains a noncontributory defined benefit pension plan
covering all full-time and part-time employees who work at least 1,000 hours,
have completed one year of service and have attained the age of 21. Vesting
will occur after 5 years, and age 65 will be the normal retirement age. Early
retirement may be taken, however, after age 55.
The following table illustrates estimated annual pension benefits for
retirement at age 65 under the most advantageous plan provisions available for
the various levels of compensation and years of service, limited to 30. The
figures in this table are calculated based on the sum of one percent of final
average earnings up to a covered compensation limit, plus 0.65 percent of final
average earnings in excess of covered compensation, times years of service
since January 1, 1999, up to 30. Final average earnings are defined as the five
consecutive years out of the employee's last ten years of employment during
which compensation is highest. Covered compensation for the purpose of this
calculation is currently $48,696.
AVERAGE
COMPENSATION YEARS OF SERVICE
- -------------------------------------------------------------------------------
15 20 25 30+
- -------------------------------------------------------------------------------
$125,000 $26,190 $34,920 $43,649 $52,379
$150,000 32,377 43,170 53,962 64,754
$170,000 37,327 49,770 62,212 74,654
$175,000 38,565 51,420 64,274 77,129
$200,000 44,752 59,670 74,587 89,504
$225,000 45,495 60,660 75,824 90,989
$250,000 45,495 60,660 75,824 90,989
The compensation used to determine retirement benefits under the
pension plan is calculated on the same basis as compensation set forth in the
Summary Compensation Table except that under federal tax laws a maximum of
$210,000 of compensation may be recognized. Benefits payable under the plan are
not offset by social security benefits. The Named Executive Officers have each
been credited with six years of service since January 1, 1999 with the
exception of Mr. Bechtold who has been credited with zero years of service. In
addition, Mr. Brunelle and Mr. Stratton are entitled to receive a benefit from
the pension plan based on the benefit formula and their compensation and
service in effect as of December 31, 1998. The annual amount of this frozen
benefit payable at age 65 in the form of a single life annuity is as follows:
Mr. Brunelle: $8,416 and Mr. Stratton: $13,433.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Effective May 29, 2003, the existing Executive Life program sponsored
by the Company was terminated and replaced with a Supplemental Executive
Retirement Plan (SERP). The existing Split Dollar Life Insurance policy
designed to support the Executive Life program is now fully owned by Northway.
This policy will be maintained by Northway and is used as the benchmark for the
newly established SERP.
This SERP is an "account balance" type plan designed to provide
retirement income to Mr. Woodward. Pre-retirement, Northway credits the
participant's account with a contribution at the end of each calendar year.
Contributions to the account are equal to the excess (if any) of the gain in
the associated life insurance contract over the cost of the funds expense as
defined in the SERP. Contributions are not guaranteed by the Company.
The total retirement SERP benefit is as follows: Upon Mr. Woodward's
termination of employment for reasons other than death or for cause, the
account balance is paid out to him in ten (10) equal annual installments on the
first day of the month following the month in which employment is terminated.
Upon death after retirement, the unpaid account balance, if any, is paid out in
a lump sum to the named beneficiary. During retirement, an additional
retirement payment, based on the policy gains associated with the prior
calendar year, will also be paid on an annual basis until the executive's
death. In the event of Mr. Woodward's death while employed by the Company, the
SERP permits a death benefit of $2,000,000 be paid to his beneficiary.
The SERP does not guarantee any benefit payment to Mr. Woodward. Any
such payment is contingent upon the investment performance of the underlying
Company-Owned Life Insurance contract. The potential benefit payment under the
SERP could range from zero to a benefit that was deemed to be competitive with
plans offered by other financial institutions. The actual benefit will depend
upon when CEO Woodward retires and how the underlying insurance contract has
performed.
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth information regarding securities authorized for
issuance under the Company's equity compensation plans as of December 31, 2004:
Number of securities
Number of securities remaining available
to be issued Weighted-average for future issuance under
upon exercise of exercise price of equity compensation plans
outstanding options, outstanding options, (excluding securities
Plan category warrants and rights warrants and rights reflected in column (a))
- ------------- --------------------- -------------------- ------------------------
(a) (b) (c)
Equity compensation
plans approved by
security holders 38,000 $ 24.96 127,750
Equity compensation
plans not approved
by security holders - - -
--------------------- -------------------- ------------------------
Total 38,000 $ 24.96 127,750
===================== ==================== ========================
REPORT OF THE AUDIT AND COMPLIANCE COMMITTEE
The Board of Directors has established an Audit and Compliance
Committee, whose members, as of December 31, 2004, are Arnold P. Hanson, Jr.,
Chairman; Frederick C. Anderson; Barry J. Kelly; and Brien L. Ward. The Board
of Directors has determined that the members of the Audit and Compliance
Committee are "independent" under the rules of the Nasdaq Stock Market.
During 2004, the Audit and Compliance Committee reviewed and discussed
the audited financial statements with the Company's management and discussed
with Shatswell, MacLeod & Company, P.C., the Company's independent auditors,
the matters required to be discussed by SAS No. 61 (Communication with Audit
Committees) as amended by SAS No. 90 (Audit Committee Communications).
In addition, the Audit and Compliance Committee has also received from
the independent auditors the written disclosures and the letter required by the
Independence Standards Board Standards No. 1 (Independence Discussions with the
Audit Committee) and has discussed with the auditors their independence and
received from the auditors disclosures regarding their independence.
The Audit and Compliance Committee has recommended to the Board of
Directors that the audited financial statements be included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2004, based on its
review and the discussions described above.
When considering the auditors' independence, the Company's Audit and
Compliance Committee considered and concluded that the provision of the
non-audit services above is compatible with maintaining the auditor's
independence.
Submitted by the members of the Audit and Compliance Committee.
Arnold P. Hanson, Jr., Chairman Frederick C. Anderson
Barry J. Kelley Brien L. Ward
THE FOREGOING REPORT SHALL NOT BE DEEMED TO BE "SOLICITING MATERIAL" OR TO BE
"FILED" WITH THE SECURITIES AND EXCHANGE COMMISSION AND SHOULD NOT BE DEEMED
INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE
THIS PROXY STATEMENT INTO ANY FILING UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT TO THE
EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE
AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
FEES PAID TO INDEPENDENT AUDITORS
The following table presents fees for professional audit services rendered by
Shatswell, MacLeod & Company, P.C. for the audit of the Company's annual
financial statements for 2004 and 2003, and fees billed for other services
rendered by Shatswell, MacLeod & Company, P.C.
2004 2003
---- ----
Audit Fees $96,850 $84,900
Tax Fees 11,800 11,500
All Other Fees(1) 6,000 5,500
(1) Fees for certification of The Retirement Plan for the Employees of Northway
Financial and for The Northway Financial, Inc. 401(k) and Profit Sharing
Plan.
The Audit and Compliance Committee pre-approves all auditing services
and the terms thereof (which may include providing comfort letters in
connection with securities underwritings) and non-audit services (other than
non-audit services prohibited under Section 10A(g) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") or the applicable rules of the
Securities and Exchange Commission or the Public Company Accounting Oversight
Board) to be provided to the Company by the independent auditor; provided,
however, the pre-approval requirement is waived with respect to the provision
of non-audit services for the Company if the "de minimus" provisions of Section
10A(i)(1)(B) of the Exchange Act are satisfied. There were no services provided
under the "de minimus" provision in 2004. The authority to pre-approve
non-audit services may be delegated to one or more members of the Audit
Committee, who shall present all decisions to pre-approve an activity to the
full Audit and Compliance Committee at its first meeting following such
decision
REPORT OF THE HUMAN RESOURCES, COMPENSATION AND NOMINATING COMMITTEE
GENERAL POLICIES
The Board of Directors has established a Human Resources,
Compensation, and Nominating Committee whose responsibility is to recommend to
the Board of Directors the approval of: (i) programs relating to compensation
and benefits for all employees; (ii) compensation levels for all executive
officers, including the Chief Executive Officer, (iii) nomination of Directors
to serve on the Board of Directors of the parent company and its subsidiaries,
and (iv) remuneration of Directors for their service on the Boards of the
parent company and its subsidiaries. The Committee also will approve all of the
strategic objectives assigned to the Chief Executive Officer, and will monitor
and track throughout each year the progress made by the Chief Executive Officer
toward achievement of those objectives. As of the date of the Meeting, this
Committee will be comprised of four outside Directors whom the Board of
Directors has determined to be "independent" under the rules of the Nasdaq
Stock Market.
The base salary for the executive officers is set at an amount within
an established salary range that reflects the executive's position, duties and
level of responsibility. The salary range consists of minimum and maximum
levels distributed around an average of base salaries paid to executives who
hold substantially similar positions within a selected peer group. Any bonuses
are designed to reward executives for performance and are based primarily on
the Company's financial results.
CEO COMPENSATION
In connection with Mr. Woodward's employment agreement described
above, the Company engaged a bank compensation consultant to act as its advisor
in the matter of executive compensation. This consultant specializes in
compensation matters for New England financial institutions and maintains an
extensive data base for banks in various asset size groups.
Using a variety of established surveys concerning bank salaries, the
Company's consultant recommended a competitive salary range for Mr. Woodward. In
connection with Mr. Woodward's employment agreement, the consultant's
recommendation was subsequently approved by the Board. In accordance with the
General Policies summarized above, no incentive performance bonus was awarded to
CEO Woodward for the year ended December 31, 2004. Bonus awards are based on a
number of factors including growth, profitability, and the achievement of
specific goals approved by the Board of Directors. In 2004, CEO Woodward
recommended to the Board of Directors that no incentive bonus be paid to
Management based upon the financial performance of the Company. The Board of
Directors concurred.
Submitted by the members of the Human Resources and Compensation
Committee.
Stephen G. Boucher, Chairman Fletcher W. Adams
Randall G. Labnon John H. Noyes
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has, during its ordinary course of business, made loans to
directors and executive officers. Loans are made on substantially the same
terms, including rates and collateral, as those prevailing at the time for
comparable transactions with other persons and do not involve more than the
normal risk of collectibility or present other unfavorable features. The Company
has had (and expects to have in the future) banking transactions with directors,
executive officers, principal stockholders, and their associates on the same
terms (including interest rates and collateral on loans) as those prevailing at
the same time for comparable transactions with others, and do not involve more
than the normal risk of collectibility or present other unfavorable features.
The largest aggregate amount of such extensions of credit to directors,
executive officers, principal stockholders, and their associates during the
period of January 1, 2004 through December 31, 2004 was $658,975. The aggregate
amount owing to the Company from such individuals on December 31, 2004 was
$637,064, or 1.29% of stockholders' equity. As mentioned above, these loans were
made on the same terms for comparable transactions with others.
There were no executive officers or directors whose direct or indirect
liability to the Company exceeded 10% of stockholders' equity at any time during
the year.
During 2004 the Company received services from certain directors and their
affiliated business or professional entities, which either totaled $60,000 or
represented more than 5% of that firm's gross revenue, as follows: New Hampshire
Electric Cooperative, of which Frederick C. Anderson is President, provided
electric services totaling $79,000.
RELATIONSHIP WITH INDEPENDENT AUDITORS
Shatswell, MacLeod & Company, P.C. was the Company's independent auditing
firm for 2004. Representatives of Shatswell, MacLeod & Company, P.C. are
expected to be present at the meeting to respond to stockholders' questions and
will have the opportunity to make a statement if they so desire. The firm of
Shatswell, MacLeod & Company, P.C. has served as the Company's independent
auditing firm since September 30, 1997.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, as
amended, and Regulations of the Securities and Exchange Commissions (the "SEC"),
the Company's officers and directors must file reports of ownership and changes
in ownership with the SEC and the Nasdaq Stock Market, Inc. and furnish the
Company with copies of all Section 16(a) reports they file. To our knowledge,
John H. Noyes inadvertently failed to file a timely report on one occasion
representing one transaction. A Form 5 relating to this transaction was
subsequently filed.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, it is
intended that proxies in the accompanying form will be voted in respect thereof
in accordance with the judgment of the person or persons voting the proxies.
MISCELLANEOUS
A copy of the Company's Annual Report to Stockholders, including financial
statements has been mailed to all stockholders of record as of the close of
business on April 01, 2005. Any stockholder who has not received a copy of such
Annual Report or would like to obtain a copy of the Company's Annual Report on
Form 10-K may do so, free of charge, by writing to Richard P. Orsillo, Senior
Vice President & Chief Financial Officer, c/o Northway Financial, Inc., 9 Main
Street, Berlin, NH 03570. Alternatively, this report is available free of charge
on the Company's website at www.northwayfinancialinc.com as soon as reasonably
practicable after such material is electronically filed with or furnished to the
Securities and Exchange Commission. Such Annual Report is not to be treated as a
part of the proxy solicitation material or as having been incorporated herein by
reference.
STOCKHOLDER PROPOSALS
The Company's Bylaws provide that any director nominations and new business
proposals intended to be submitted by stockholders in connection with an Annual
Meeting of Stockholders must be filed, delivered to, or mailed to and received
by, the Company at its principal executive office not less than 75 days nor more
than 120 days prior to the anniversary date of the immediately preceding Annual
Meeting (the "Anniversary Date") or, in other words, no later than March 17,
2006 and no earlier than January 31, 2006; provided, however, that in the event
the Annual Meeting is scheduled to be held on a date more than 30 days before
the Anniversary Date or more than 60 days after the Anniversary Date, a
stockholder's notice shall be timely if delivered to, or mailed to and received
by, the Company at its principal executive office not later than the close of
business on the later of (1) the 75th day prior to the scheduled date of such
Annual Meeting and (2) the 15th day following the day on which public
announcement of the date of such Annual Meeting is first made by the Company.
Any proposal should be sent to, and a copy of the applicable provision(s) of the
Bylaws may be obtained, without charge, upon written request to, Joseph N.
Rozek, Secretary, of the Company at its principal executive office in Berlin,
New Hampshire. The proposal must also comply with the other requirements of the
Company's Bylaws. Proxies solicited by the Board of Directors will confer
discretionary voting authority with respect to these proposals, subject to SEC
rules governing the exercise of this authority.
In addition to the foregoing, in accordance with the rules of the SEC, any
proposal that a stockholder intends to present at the annual meeting of
stockholders in 2006 must be received by the Company not less than 120 calendar
days prior to the anniversary date of the immediately preceding proxy statement,
or December 19, 2005, to be eligible for inclusion in the proxy statement and
form of proxy relating to such meeting. These proposals must also comply with
the rules of the SEC governing the form and content of proposals in order to be
included in the Company's proxy statement and form of proxy.
By Order of the Board of Directors
/s/ Joseph N. Rozek
Joseph N. Rozek
Secretary
Berlin, New Hampshire
April 18, 2005
SKU# NRT-PS-05
DETACH HERE ZNTH22
PROXY
NORTHWAY FINANCIAL, INC.
9 MAIN STREET, BERLIN, NEW HAMPSHIRE 03570
PROXY FOR COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Joseph N. Rozek and Richard P. Orsillo, and
each of them, proxies with full power of substitution to vote for and on behalf
of the undersigned at the Annual Meeting of Stockholders of Northway Financial,
Inc. ("Northway"), to be held at the Town & Country Motor Inn, Route 2,
Shelburne, New Hampshire, on May 31, 2005 at 2:00 p.m., and at any adjournment
or postponements thereof, hereby granting full power and authority to act on
behalf of the undersigned at said meeting or any adjournment or postponement
thereof. The undersigned revokes any proxy previously given in connection with
such meeting and acknowledges receipt of Notice of the Annual Meeting of
Stockholders and Northway's 2004 Annual Report to Stockholders.
- ----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ----------- -----------
NORTHWAY FINANCIAL, INC.
C/O EQUISERVE TRUST COMPANY N.A.
P.O. BOX 8694
EDISON, NJ 08818-8694
DETACH HERE ZNTH21
- -- PLEASE MARK
X VOTES AS IN
- -- THIS EXAMPLE.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO
INSTRUCTIONS ARE INDICATED, THE UNDERSIGNED'S VOTES WILL BE CAST "FOR" EACH OF SUCH MATTERS. PLEASE SIGN AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.
1. Proposal to elect (01) Stephen G. Boucher, (02) Such other business as may properly come before the
Barry J. Kelley and (03) Randall G. Labnon for a meeting or any adjournments or postponements thereof.
three year term to continue until the 2008 Annual
Meeting of Stockholders, and until the successor of
each is duly elected and qualified.
FOR ------- WITHHELD -------
ALL FROM ALL
NOMINEES ------- NOMINEES -------
- -------
- -------
-------------------------------------------
For all nominees except as noted above
-----
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT.
-----
For joint accounts, each owner should sign. Executors,
administrators, trustees, corporate officers and others
acting in a representative capacity should give full
title or authority.
Signature: ________________________ Date: ___________________ Signature: ____________________________ Date: ___________________