-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E9e5ngx37J/CilyV2O6raz5sU0tT0BYLwZCTX2sjSDOTXEEM/9ejcZ4pbAKXr/0M A6AjY+dKKZfB/PsoCcqMLQ== 0000737468-96-000004.txt : 19960321 0000737468-96-000004.hdr.sgml : 19960321 ACCESSION NUMBER: 0000737468-96-000004 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960430 FILED AS OF DATE: 19960320 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: WASHINGTON TRUST BANCORP INC CENTRAL INDEX KEY: 0000737468 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 050404671 STATE OF INCORPORATION: RI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-13091 FILM NUMBER: 96536526 BUSINESS ADDRESS: STREET 1: 23 BROAD ST CITY: WESTERLY STATE: RI ZIP: 02891 BUSINESS PHONE: 4013481200 DEF 14A 1 DEFINITIVE 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 [section sign]240.14a-11(c) or [section sign]240.14a-12 WASHINGTON TRUST BANCORP, INC. (Name of Registrant as Specified In Its Charter) (Name of Person(s) Filing Proxy Statement if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a- 6(i)(2) or Item 22(a)(2) of Schedule 14A. [ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. 1) Title of each class of securities to which transaction ap- plies: _________________________________________________________ 2) Aggregate number of securities to which transaction applies: _________________________________________________________ 3) Per unit price or other underlying value of transaction com puted 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: _______________________________________________________ (LOGO) WASHINGTON TRUST BANCORP, INC. 23 Broad Street, Westerly, Rhode Island 02891 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS To Be Held April 30, 1996 To the Shareholders of WASHINGTON TRUST BANCORP, INC. NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of WASHINGTON TRUST BANCORP, INC. (the "Corporation"), a Rhode Island corporation, will be held at the Westerly Library, 38 Broad Street, Westerly, Rhode Island on Tuesday, the 30th of April, 1996 at 11:00 a.m. for the purpose of considering and acting upon the following: 1. The election of four directors to serve for terms of three years; 2. The ratification of the selection of independent auditors to audit the Corporation's consolidated financial statements for the year ending December 31, 1996; and 3. Such other business as may properly come before the meeting, or any adjournment thereof. Only shareholders of record at the close of business on March 8, 1996 will be entitled to notice of and to vote at such meeting. The transfer books of the Corporation will not be closed. It is important that your shares be represented and voted whether or not you plan to be present. Therefore, if you do not expect to be present at the meeting, please sign, date, and fill in the enclosed proxy and return it by mail in the enclosed addressed envelope. By order of the Board of Directors Harvey C. Perry, II Harvey C. Perry, II Secretary March 18, 1996 WASHINGTON TRUST BANCORP, INC. 23 Broad Street Westerly, RI 02891 Telephone 401/348-1200 ANNUAL MEETING OF SHAREHOLDERS To Be Held April 30, 1996 PROXY STATEMENT The accompanying proxy is solicited by and on behalf of the Board of Directors of Washington Trust Bancorp, Inc. (the "Corporation") for use at the Annual Meeting of Shareholders to be held on April 30, 1996, and any adjournment thereof and may be revoked at any time before it is exercised by submission of another proxy bearing a later date, by attending the meeting and voting in person, or by notifying the Corporation of the revocation in writing to the Secretary, 23 Broad Street, Westerly, RI 02891. If not revoked, the proxy will be voted at the Annual Meeting in accordance with the instructions indicated on the proxy by the shareholder or, if no instructions are indicated, all shares represented by valid proxies received pursuant to this solicitation (and not revoked before they are voted) will be voted FOR Proposal Nos. 1 and 2 referred to herein. As of March 8, 1996, the record date for determining shareholders entitled to notice of and to vote at the Annual Meeting (the "Record Date"), there were issued and outstanding 2,880,432 shares of common stock, $.0625 par value (the "Common Stock"), of the Corporation. Each share of Common Stock is entitled to one vote per share on all matters to be voted upon at the meeting, with all holders of Common Stock voting as one class. A majority of the outstanding shares of Common Stock entitled to vote, represented in person or by proxy, will constitute a quorum for the transaction of business at the Annual Meeting. Abstentions and broker non-votes will be counted for purposes of determining if a quorum is present. With regard to the election of directors, votes may be cast in favor or withheld. Votes that are withheld will be excluded entirely from the vote and will have no effect. Abstentions may be specified on all proposals other than the election of directors and will be counted as present for purposes of the item on which the abstention is noted. Brokers who hold shares in street name for customers who are the beneficial owners of such shares have the authority to vote on certain "discretionary" items when they have not received instructions from such beneficial owners. Brokers that do not receive instructions are entitled to vote on the election of directors and the ratification of the selection of independent auditors. As a result, broker non-votes will have no effect on the outcome of the election of directors and the ratification of the selection of independent auditors. Management knows of no matters to be brought before the meeting other than those referred to. If any other business should properly come before the meeting, the persons named in the proxy will vote in accordance with their best judgment. The approximate date on which this Proxy Statement and accompanying proxy cards will first be mailed to shareholders is March 18, 1996. PRINCIPAL SHAREHOLDERS The Corporation knows of no person who beneficially owned more than five percent (5%) of the Corporation's outstanding Common Stock as of March 8, 1996. ELECTION OF DIRECTORS The Corporation's Board of Directors is divided into three classes, with each class serving staggered terms of three years, so that only one class is elected in any one year. This year, four directors are to be elected at the Annual Meeting to serve until the 1999 Annual Meeting and until their respective successors are elected and have qualified. Directors are elected by the affirmative vote of the majority of the shares of Common Stock entitled to vote thereon, represented in person or by proxy, at the Annual Meeting when a quorum is present. The nominees for election of directors at the Annual Meeting are Gary P. Bennett, Larry J. Hirsch, Mary E. Kennard and Joseph J. Kirby. Each of the nominees for director is presently a director of the Corporation. Each has consented to being named a nominee in this Proxy Statement and has agreed to serve as a director if elected at the Annual Meeting. In the event that any nominee is unable to serve, the persons named in the proxy have discretion to vote for other persons if such other persons are designated by the Board of Directors. The Board of Directors has no reason to believe that any of the nominees will be unavailable for election. NOMINEE AND DIRECTOR INFORMATION
Common Stock Shares Beneficially Owned on March 8, 1996 (2) -------------------------------- Common Years as Stock Vested Percent Name and Principal Occupation Director(1) Age Owned Options Total of Class - ----------------------------------------------------------------------------------------------- Terms Expiring in 1999 (if elected): Gary P. Bennett 2 54 150 1,125 1,275 0.04% President, Chief Executive Officer and Director, Analysis & Technology, Inc. (interactive multimedia training systems, information systems and engineering services) Larry J. Hirsch 2 57 1,643 1,125 2,768 0.09% President, Westerly Jewelry Co., Inc. (retailer) Mary E. Kennard, Esq. 2 41 264 875 1,139 0.04% Office of the University Counsel, The American University; Vice President and General Counsel of the University of Rhode Island ("URI") 1992-1994; various other positions with URI since 1987 Joseph J. Kirby 24 64 6,159 60,434 66,593 2.15% Chairman of the Board and Chief Executive Officer since 1996; President of the Corporation 1984-1995; President of the Bank 1982- 1995 Terms Expiring in 1997: Steven J. Crandall 13 43 449 8,250 8,699 0.28% Vice President, Ashaway Line & Twine Manufacturing Co. (manufacturer of tennis string, fishing line and surgical sutures) Richard A. Grills 13 63 78,363 8,250 86,613 2.80% Consultant and retired President, Bradford Dyeing Association, Inc. (textiles) James W. McCormick, Jr. 13 65 4,762 8,250 13,012 0.42% Former President, McCormick's, Inc. (retailer) Victor J. Orsinger, II 13 49 5,498 8,250 13,748 0.44% Partner, Orsinger & Nardone, Attorneys at Law James P. Sullivan, CPA 13 57 480 8,065 8,545 0.28% Finance Officer, Roman Catholic Diocese of Providence Neil H. Thorp 13 56 5,606 5,800 11,406 0.37% President, H.E. Thorp & Sons, Inc. (real estate) and President, Thorp & Trainer, Inc. (insurance) Terms Expiring in 1998: Katherine W. Hoxsie, CPA 5 47 14,864 8,250 23,114 0.75% Executive Vice President, Hoxsie Buick-Pontiac-GMC Truck, Inc.; formerly with the firm of Price Waterhouse Brendan P. O'Donnell 14 66 3,375 8,250 11,625 0.38% Retired manufacturing executive; formerly consultant Harris Graphics Corp. (printing presses) Joseph H. Potter (3) 14 62 9,359 29,737 39,096 1.26% Executive Vice President of the Corporation since 1984; Executive Vice President of the Bank since July 1982 Anthony J. Rose, Jr. 24 65 43,807 7,875 51,682 1.67% President, Technical Industries, Inc. (chemicals) John C. Warren (4) 0 50 2,000 1,338 3,338 0.11% President and Chief Operating Officer of the Corporation and the Bank since 1996; President and Chief Executive Officer of Sterling Bancshares Corporation 1990-1994, Chairman 1993-1994
In addition to the nominee and director information provided above, the following summarizes the security ownership of certain executive officers of the Corporation and the Bank who are not also directors of the Corporation:
Common Stock Shares Beneficially Owned on March 8, 1996 (2) -------------------------------- Common Percent Stock Vested of Owned Options Total Class --------------------------------------------- David V. Devault, CPA 1,242 13,831 15,073 0.49% Vice President and Chief Financial Officer Harvey C. Perry, II 2,699 10,973 13,672 0.44% Vice President and Secretary Robert G. Cocks, Jr. 147 6,675 6,822 0.22% Senior Vice President - Lending of the Bank Directors and Executive 184,624 215,633 400,257 12.93% Officers as a Group (22 persons) The Corporation was organized in 1984. The years indicated include the period the directors have been members of the Board of the Corporation's subsidiary, The Washington Trust Company of Westerly (the "Bank"), prior to 1984. "Beneficial ownership" means, pursuant to Securities and Exchange Commission ("SEC") regulations, the sole or shared power to vote, or to direct the voting of, a security and/or investment power with respect to a security (i.e., the power to dispose, or to direct the disposition, of a security) and/or the right to acquire such ownership within 60 days. Mr. Potter and Louis J. Luzzi, Vice President and Treasurer of the Corporation and the Bank, are first cousins. Mr. Warren was appointed to the Board of Directors on February 15, 1996.
Committees of the Board of Directors The Corporation's Board of Directors has the following committees: Executive Committee. The Executive Committee met 11 times in 1995 and, when the Board of Directors is not in session, is entitled to exercise all the powers and duties of the Board. Members of the Executive Committee are Directors O'Donnell (Chairman), Grills, Kirby, McCormick, Orsinger, Potter and Rose. Compensation Committee. The Compensation Committee, which met 3 times in 1995, is responsible for making recommendations concerning remuneration arrangements for senior management of the Corporation and the Bank. Members of the Compensation Committee are Directors O'Donnell (Chairman), Bennett, Grills, McCormick and Rose. Audit Committee. The Audit Committee, which met 5 times in 1995, is responsible for reviewing the adequacy of the Corporation's system of internal controls, its audit program, the performance and findings of its internal audit staff and action to be taken thereon by management, and reports of the independent auditors. Committee members are Directors McCormick (Chairman), Crandall, Hirsch and Hoxsie. Stock Option Committee. The Stock Option Committee met twice in 1995 and is responsible for the administration of the Corporation's Amended and Restated 1988 Stock Option Plan ("Stock Option Plan"). Committee members are Directors Bennett (Chairman), Kennard, O'Donnell and Sullivan. Nominating Committee. The Nominating Committee met 15 times in 1995 and is responsible for reviewing the qualifications of potential nominees for election to the Board of Directors of the Corporation and recommending to the shareholders the election of directors of the Corporation. The Nominating Committee was also responsible for assessing candidates for the position of President and Chief Operating Officer and recommending a selection to the Board of Directors, with the advice and counsel of the Chief Executive Officer. The Committee members are Directors O'Donnell (Chairman), Bennett, Grills, McCormick and Rose. Shareholders may make nominations for election as directors at any meeting called for such purpose provided that written notice has been given to the President of the Corporation not less than 14 nor more than 60 days prior to such meeting. Such notice shall set forth the name, age, business address and principal occupation of, and the number of shares of Common Stock beneficially owned by, each nominee. The Corporation's Board of Directors held 4 meetings in 1995. The Board of Directors of the Bank, the members of which are the same as the Corporation, held 12 meetings in 1995. During 1995, each member of the Corporation's Board attended at least 75% of the aggregate number of meetings of the Corporation Board, Bank Board and the Corporation Board committees of which such person was a member. Compensation Committee Interlocks and Insider Participation The Compensation Committee makes recommendations concerning remuneration arrangements for senior management of the Corporation and the Bank, subject to the approval of the Board of Directors. The Compensation Committee members are Directors O'Donnell (Chairman), Bennett, Grills, McCormick and Rose. The Stock Option Committee is responsible for the administration of the Corporation's Stock Option Plan. The Stock Option Committee members are Directors Bennett (Chairman), Kennard, O'Donnell and Sullivan. No members of the Compensation Committee or the Stock Option Committee are employees of the Corporation or the Bank. COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS Director Compensation During 1995, for each meeting of the Board of Directors of the Corporation and of the Bank attended, non-employee directors received $250 and $500, respectively. In addition, non-employee directors received $300 for each Corporation and Bank committee meeting attended (committee chairmen received $500 per meeting). However, directors attending more than one meeting in any one day (excluding meetings of the Board of Directors of the Corporation) were generally paid for only one of such meetings. In addition, non-employee directors received a $6,000 annual retainer. The Plan for Deferral of Directors' Fees adopted by the Corporation and the Bank effective March 1, 1988 provides standard arrangements pursuant to which directors may elect to defer all or part of their fees. Deferred fees earn interest and are payable in a lump sum or installments following termination of service as a director or attainment of a certain age. Deferred fees are unfunded obligations of the Bank. The Outside Director Retainer Continuation Plan adopted as of January 1, 1990 and amended as of December 17, 1992 provides retirement benefits to non-employee directors after leaving the Board of Directors. The benefit pays the regular quarterly retainer in effect at the time of retirement for as many quarters as the director served as such with the Corporation or a subsidiary. The benefit commences upon retirement and is reduced for retirement occurring before age 65. In the case of a director who dies before commencement of benefit payments, a surviving spouse will receive 50% of the benefit that would have been payable to the director. In the event of a retired director's death before completion of all payments due, a surviving spouse will receive the remaining payments reduced by 50%. Accrued and unpaid benefits under this plan are an unfunded obligation of the Bank. The Corporation's Stock Option Plan provides that a non-qualified option to purchase 1,500 shares of Common Stock shall automatically be granted to each person who is initially elected or re-elected a director of the Corporation as of the date of such election or re-election, at an option price equal to the fair market value of the Common Stock on such date. These options are exercisable in 25% installments commencing on the date of grant and on each anniversary date thereafter. In the event of a Change in Control of the Corporation (as defined in the Stock Option Plan) these options will become immediately exercisable in full. Executive Compensation The following table shows, for the fiscal years ended December 31, 1995, 1994 and 1993, the compensation of the Chief Executive Officer and the other executive officers of the Corporation and/or the Bank whose total annual salary and bonus exceeded $100,000 for the year ended December 31, 1995 (the "Named Executives"). SUMMARY COMPENSATION TABLE
Long-Term Compensation Annual Compensation Awards --------------------------------------- Number of Securities Name Underlying and Principal Options/ All Other Position Year Salary Bonus (1) SARs (2) Compensation (3) - --------------------------------------------------------------------------------------- Joseph J. Kirby 1995 $220,000 $81,400 8,544 $7,320(4) Chairman of the 1994 210,000 81,585 9,656 6,886 Board and Chief 1993 200,000 88,800 10,779 6,863 Executive Officer Joseph H. Potter 1995 $131,000 $36,620 3,816 $4,359 Executive Vice 1994 125,000 39,454 4,311 4,099 President 1993 119,000 35,700 6,413 4,084 David V. Devault 1995 $105,000 $26,316 4,078 $3,494 Vice President 1994 100,000 26,417 2,300 3,279 and Chief 1993 90,000 21,600 3,234 3,088 Financial Officer Harvey C. Perry, II 1995 $ 94,300 $23,455 1,831 $3,138 Vice President 1994 90,000 24,135 2,069 2,951 and Secretary 1993 80,000 19,008 2,874 2,745 Robert G. Cocks, Jr. 1995 $ 86,000 $20,729 1,670 $2,861 Senior Vice 1994 82,000 21,683 1,886 2,689 President - Lending 1993 78,000 18,650 2,802 1,434 of the Bank Bonus amounts represent amounts accrued for the years indicated under the Corporation's Short-Term Incentive Plan for its executive officers and other key employees (the "Incentive Plan"). The Incentive Plan provides for annual payments to participants up to a maximum percentage of base salary, which percentages vary among participants. None of the stock options granted to the Named Executives have tandem stock appreciation rights ("SARs"). The numbers of securities underlying stock options granted to the Named Executives have been adjusted to reflect a three-for-two stock split effected by the Corporation on August 31, 1994. Under the Bank's tax-qualified 401(k) plan (the "401(k) Plan") which covers all full-time salaried employees, the Bank matches 50% of each participant's first 2% of voluntary salary contributions and 100% of each participant's next 2% of salary contributions up to a maximum match of 3%. Includes $2,334 accrued under the Supplemental Pension Benefit and Profit Sharing Plan adopted by the Bank effective November 1, 1994 (the "Supplemental Plan") which provides for payments by the Bank of certain amounts which would have been contributed by the Bank under the 401(k) Plan, but for limitations on employer contributions contained in the Internal Revenue Code.
The following table contains information concerning the grant of stock options pursuant to the Corporation's Stock Option Plan to the Named Executives during the fiscal year ended December 31, 1995. OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants ------------------------------------------------------ Percent of Number of Total Potential Realizable Value Securities Options/SARs at Assumed Annual Rates of Underlying Granted to Exercise Stock Price Appreciation Options/ Employees or Base for Option Term SARs in Fiscal Price Per Expiration -------------------------- Name Granted (1) Year Share Date 5%(2) 10%(3) - ----------------------------------------------------------------------------------------------------- Joseph J. Kirby 8,544 24.41% $25.75 5/12/2005 $138,362 $350,636 Joseph H. Potter 3,816 10.90% $25.75 5/12/2005 $ 61,796 $156,604 David V. Devault 4,078 11.65% $25.75 5/12/2005 $ 66,039 $167,357 Harvey C. Perry, II 1,831 5.23% $25.75 5/12/2005 $ 29,651 $ 75,142 Robert G. Cocks, Jr. 1,670 4.77% $25.75 5/12/2005 $ 27,044 $ 68,535 All options granted to the Named Executives were granted on May 12, 1995 under the Stock Option Plan. There are no SARs attached thereto. The options become exercisable in 25% installments commencing on the date of grant and on each anniversary date thereafter, so long as employment with the Corporation continues. If a Change in Control (as defined in the Stock Option Plan) were to occur, the options would become immediately exercisable in full. $25.75 at 5% annually for 10 years = $41.95 $25.75 at 10% annually for 10 years = $66.80
The following table sets forth information with respect to the Named Executives concerning the exercise of options during the fiscal year ended December 31, 1995 and unexercised options held as of the end of the 1995 fiscal year. AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
Number of Securities Value of Unexercised In-the- Underlying Unexercised Money Options/SARs at Number of Options/SARs at FY-End (1) FY-End (1)(2) Shares Acquired Value ----------------------------------------------------------- Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable - ----------------------------------------------------------------------------------------------------------------- Joseph J. Kirby 5,750 $47,202 60,434 13,932 $798,647 $106,936 Joseph H. Potter -0- -$0- 29,737 6,621 $398,814 $ 54,077 David V. Devault -0- -$0- 15,072 5,018 $199,773 $ 34,237 Harvey C. Perry, II 1,696 $14,134 11,973 3,128 $164,143 $ 25,152 Robert G. Cocks, Jr. -0- -$0- 6,675 2,898 $100,619 $ 23,655 There are no SARs attached to the stock options held by the Named Executives. Value based on the fair market value of the Corporation's Common Stock on December 31, 1995 ($29.75) minus the exercise price.
The Bank maintains a qualified defined benefit pension plan (the "Pension Plan") for salaried employees of the Corporation and the Bank. The Internal Revenue Code limits the compensation amount used in determining the annual benefits payable from qualified plans to an individual. However, the Bank has adopted a Supplemental Pension Benefit and Profit Sharing Plan, effective November 1, 1994 (the "Supplemental Plan"), which provides for payments by the Bank of certain amounts which employees of the Bank would have received under the Pension Plan in the absence of such limitations in the Internal Revenue Code. Benefits payable under the Supplemental Plan are an unfunded obligation of the Bank. The following table shows the annual benefits payable upon retirement, assuming retirement at age 65 in 1995, under the Pension Plan and the Supplemental Plan as it relates to the Pension Plan. The benefits shown are straight- life annuity amounts not reduced by a joint survivorship benefit which is available. PENSION PLAN TABLE
Years of Service Average Annual --------------------------------------------------------------- Pension Compensation 15 20 25 30 35 - ---------------------------------------------------------------------------------------- $100,000 $25,223 $ 33,630 $ 42,038 $ 50,446 $ 58,853 125,000 32,160 42,880 53,601 64,321 75,041 150,000 39,098 52,130 65,163 78,196 91,228 175,000 46,035 61,380 76,726 92,071 107,416 200,000 52,973 70,630 88,288 105,946 123,603 225,000 59,910 79,880 99,851 119,821 139,791 250,000 66,848 89,130 111,413 133,696 155,978 275,000 73,785 98,380 122,976 147,571 172,166 300,000 80,723 107,630 134,538 161,446 188,353 325,000 87,660 116,880 146,101 175,321 204,541 350,000 94,598 126,130 157,663 189,196 220,728
Annual payments to an employee retiring at age 65 are based on the average highest 36 consecutive months of pension compensation. Pension compensation consists of base salary, plus, in the case of the Named Executives and certain other key employees, payments pursuant to the Incentive Plan. Such amounts are shown in the Salary and Bonus columns of the Summary Compensation Table. The benefit is the sum of (i) 1.2% of pension compensation multiplied by the number of years of service, plus (ii) .65% of pension compensation in excess of the Social Security covered compensation level multiplied by the number of years of service. In 1995 the covered Social Security compensation level was $25,920. The years of service accrued for purposes of the Pension Plan in 1995 for the Named Executives were: Mr. Kirby, 32 years; Mr. Potter, 37 years; Mr. Devault, 9 years; Mr. Perry, 21 years, and Mr. Cocks, 3 years. COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE JOINT REPORT ON EXECUTIVE COMPENSATION The Compensation Committee administers the executive compensation program of the Corporation under the supervision of the Board of Directors. The success of the Corporation is highly dependent on hiring, developing and training qualified people who feel encouraged to perform for the good of the shareholders, the community, the Corporation and customers. The compensation program is designed to support the following underlying principles: * Compensation is a mechanism for ensuring that the Corporation attracts, motivates, rewards and retains the best people. * Total compensation dollars are managed as an investment by allocating these dollars where the Corporation receives its best return. * Employees are rewarded commensurate with their contribution to the success of the Corporation. * Base salary is a mechanism which allows the Corporation to attract employees who provide the skills and capabilities necessary to manage its business. In order to achieve the aforementioned objectives, prior to the beginning of the fiscal year, the Corporation engaged an independent compensation consultant (the "Consultant") to update certain information provided by the Consultant as part of a comprehensive industry compensation study performed by the Consultant in 1992 (the "1992 Study"). The 1992 Study included a review of short and long-term incentive practices in the banking industry as well as a review of salaries of officer positions in comparable companies. The executive compensation program consists of three elements: base salary, short-term incentive compensation and long- term incentives. Base Salary. Base salary for all executive officers is determined by the Compensation Committee, subject to approval of the full Board of Directors. Salary levels were developed by the Compensation Committee for each executive officer's position based on an analysis of compensation level information from various industry sources. In the case of the Chief Executive Officer, Executive Vice President and Chief Financial Officer, the Compensation Committee also reviewed competitive compensation levels at approximately thirty domestic financial institutions ranging in size (based on total assets) from $250 million to $1.2 billion (the "Compensation Peer Group"). Approximately 60% of the Compensation Peer Group members are located in the Northeast and 40% are located throughout the rest of the country. The selection of these institutions was based on certain criteria including asset size, similar operating lines of business and listing on Nasdaq. The institutions in the Compensation Peer Group are not included in the KBW Eastern Regional Bank Sub-index used in the Performance Graph set forth herein. In addition, with respect to the Chief Executive Officer's salary, the Compensation Committee received input from the Consultant. The general policy of the Compensation Committee is to attempt to position executive base salary levels in the middle of the range of base salary levels for comparable executives in the Compensation Peer Group. Base salary levels for the individual executive officers were developed based on technical, managerial and human relations skills, problem solving capabilities and level of accountability. The Chief Executive Officer's base salary for 1995 was increased 4.8% over the previous year based on the Compensation Committee's subjective assessment of the Chief Executive Officer's performance as well as a review of the Chief Executive Officers' salaries in the Compensation Peer Group. Short-Term Incentive Plan. The Short-Term Incentive Plan (the "Incentive Plan") provides for the payment of additional cash compensation to officers based on the achievement of target levels of return on equity and/or the achievement of individual objectives. Under the Incentive Plan, return on equity is measured against both shareholder expectations, as established by the Board, and the performance of the Compensation Peer Group in order to provide objective links between performance and pay. The Compensation Committee establishes performance measures for the Incentive Plan which take into account both the return on equity achieved by the Corporation and that achieved by the Compensation Peer Group in determining the level of payout to be made under the Incentive Plan. The Compensation Committee's policy is to periodically review these performance measures and adjust them as appropriate. The target payout for the Chief Executive Officer is based solely on the return on equity component. The target payout for other participants includes a portion based on the return on equity measurement and a portion based on the achievement of individual performance goals. The total target payout for each executive officer ranged from 37% (for the Chief Executive Officer) to 20% of base salary. These targets are also adjusted upward or downward by a multiplier which is tied to the performance measurement levels. In 1995, the Corporation's return on equity, as measured against the Compensation Peer Group and the targets established by the Compensation Committee, entitled the executive officers to a payout for 1995 performance of 100% of the return on equity portion of the target payout for each officer. Payouts based on the achievement of individual performance goals were subjectively determined by each participant's supervisor. Long-Term Incentives. After the 1992 Study, the Consultant recommended that stock option awards be granted on an annual basis and be based on a percentage of base salary so that the aggregate exercise price with respect to the grant equals up to one times the Chief Executive Officer's base salary on an annual basis, with generally lesser amounts for other officers. This element of compensation is viewed as a desirable long-term compensation method because it closely links the interest of management with shareholder value and aids in the retention and motivation of executives to improve long-term stock market performance. Stock options are granted for Common Stock at prevailing market prices and will only have value if the Corporation's Common Stock price increases. During 1995, the Stock Option Committee granted non-qualified stock options to certain key officers of the Corporation and the Bank. In fixing the grant of stock options to executive officers other than the Chief Executive Officer, the Stock Option Committee reviewed the Chief Executive Officer's recommendations for individual awards, which were based on the individual executive officer's level of responsibility and contribution towards achievement of the Corporation's business plan and objectives. In 1995 the Stock Option Committee awarded the Chief Executive Officer options with an aggregate exercise price equal to 100% of his base salary, based on their subjective assessment of the Chief Executive Officer's performance in promoting and enhancing shareholder value. The Stock Option Committee also took into account the aggregate number of options awarded to the Chief Executive Officer to date and the aggregate value of such shares. The Corporation does not have a target level of equity holdings by executives. The foregoing report has been furnished by the Compensation Committee and the Stock Option Committee. Compensation Committee: Stock Option Committee: Brendan P. O'Donnell (Chairman) Gary P. Bennett (Chairman) Gary P. Bennett Mary E. Kennard, Esq. Richard A. Grills Brendan P. O'Donnell James W. McCormick, Jr. James P. Sullivan, CPA Anthony J. Rose, Jr. SHAREHOLDER RETURN PERFORMANCE PRESENTATION Set forth below is a line graph comparing the cumulative total shareholder return on the Corporation's Common Stock against the cumulative total return of the Nasdaq Stock Market (U.S.) and the Keefe, Bruyette & Woods, Inc. ("KBW") Eastern Regional Bank Sub-index for the five years ended December 31, 1995. Comparison of Five Year Cumulative Total Return (The line graph referred to in the preceding paragraph appears in this space in the proxy filed in paper format that will be provided to shareholders. The following table provides the data points necessary to describe this graphic via EDGAR.)
1990 1991 1992 1993 1994 1995 ------------------------------------------------------ Washington Trust Bancorp, Inc. $100.00 $114.71 $179.42 $263.97 $360.01 $497.62 Nasdaq Stock Market (U.S.) $100.00 $160.56 $186.87 $214.51 $209.69 $296.30 KBW Eastern Regional Banks $100.00 $175.86 $242.86 $253.27 $224.84 $381.66 Assumes that the value of Washington Trust Bancorp, Inc. Common Stock and each index was $100 on December 31, 1990. Total return assumes reinvestment of dividends.
INDEBTEDNESS AND OTHER TRANSACTIONS The Bank has had transactions in the ordinary course of business, including borrowings, with certain directors and executive officers of the Corporation and their associates, all of which were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons, and did not involve more than the normal risk of collectibility or present other unfavorable features when granted. During 1995, the Bank paid approximately $65,656 in legal fees related to collection matters to the law firm of Orsinger & Nardone, of which Mr. Orsinger, a member of the Board of Directors, is a partner. RATIFICATION OF SELECTION OF AUDITORS The ratification of KPMG Peat Marwick to serve as independent auditors of the Corporation for the current fiscal year ending December 31, 1996, will be submitted to the Annual Meeting. Such ratification requires the affirmative vote of a majority of the shares of Common Stock entitled to vote thereon, represented in person or by proxy, at the Annual Meeting when a quorum is present. Representatives of KPMG Peat Marwick will be present at the Annual Meeting, will have the opportunity to make a statement if they so desire and will be available to answer appropriate questions. The Board of Directors recommends a vote "FOR" this proposal. COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires the Corporation's officers and directors, and persons who own more than 10% of a registered class of the Corporation's equity securities ("Insiders"), to file reports of ownership and changes in ownership with the SEC. Insiders are required by SEC regulations to furnish the Corporation with copies of all Section 16(a) reports they file. Based solely upon a review of the copies of such reports furnished to the Corporation, the Corporation believes that during 1995 all Section 16(a) filing requirements applicable to its Insiders were complied with. SHAREHOLDER PROPOSALS Any shareholder who wishes to submit a proposal for presentation to the 1997 Annual Meeting of Shareholders must submit the proposal to the Corporation, 23 Broad Street, Westerly, Rhode Island 02891, Attention: Secretary, not later than November 16, 1996 for inclusion, if appropriate, in the Corporation's Proxy Statement and the form of proxy relating to the 1997 Annual Meeting. FINANCIAL STATEMENTS The financial statements of the Corporation are contained in the 1995 Annual Report to Shareholders, which has been provided to the shareholders concurrently herewith. Such report and the financial statements contained therein are not to be considered as a part of this soliciting material. OTHER BUSINESS The management knows of no matters to be brought before the meeting other than those referred to, but if any other business should properly come before the meeting, the persons named in the proxy intend to vote in accordance with their best judgment. INCORPORATION BY REFERENCE To the extent that this Proxy Statement has been or will be specifically incorporated by reference into any filing by the Corporation under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, the sections of the Proxy Statement entitled "Compensation Committee and Stock Option Committee Joint Report on Executive Compensation" and "Shareholder Return Performance Presentation" shall not be deemed to be so incorporated, unless specifically otherwise provided in any such filing. ANNUAL REPORT ON FORM 10-K Copies of the Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 1995 as filed with the Securities and Exchange Commission are available to shareholders without charge upon written request addressed to David V. Devault, Vice President and Chief Financial Officer, Washington Trust Bancorp, Inc., 23 Broad Street, Westerly, Rhode Island 02891. EXPENSE OF SOLICITATION OF PROXIES The cost of solicitation of proxies, including the cost of reimbursing brokerage houses and other custodians, nominees or fiduciaries for forwarding proxies and Proxy Statements to their principals, will be borne by the Corporation. Solicitation may be made in person or by telephone or telegraph by officers or regular employees of the Corporation, who will not receive additional compensation therefor. In addition, the Corporation has retained Morrow & Co., Inc. to assist in the solicitation of proxies for a fee of $3,500 plus customary expenses. Submitted by order of the Board of Directors, Harvey C. Perry, II Harvey C. Perry, II Secretary Westerly, Rhode Island March 18, 1996 WASHINGTON TRUST BANCORP, INC. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints Brendan P. O'Donnell, Victor J. Orsinger and Joseph H. Potter, or any one or more of them, attorneys with full power of substitution to each for and in the name of the undersigned, with all powers the undersigned would possess if personally present to vote the Common Stock of the undersigned in Washington Trust Bancorp, Inc. at the Annual Meeting of its shareholders to be held April 30, 1996 or any adjournment thereof. The Board of Directors recommends that you instruct the proxies to vote FOR all of the proposals. 1. ELECTION OF DIRECTORS: Nominees: Gary P. Bennett, Larry J. Hirsch, Mary E. Kennard, Esq. and Joseph J. Kirby [ ] FOR all nominees [ ] WITHHOLD AUTHORITY to (except as indicated) vote for all nominees (INSTRUCTION: To withhold authority to vote for any individual nominee or nominees, write such nominee's or nominees' name(s) in the space provided below.) - -------------------------------------------------------------------------- 2. To ratify the selection of KPMG Peat Marwick as auditors of the Corporation for the fiscal year ending December 31, 1996. [ ] FOR [ ] AGAINST [ ] ABSTAIN 3. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting or any adjournment thereof. This proxy when properly executed will be voted in the manner directed herein by the shareholder. If no direction is made, this proxy will be voted FOR Proposal Nos. 1 and 2. PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. Dated: , 1996 -------------------------------- Signature -------------------------------- Signature if held jointly Please sign exactly as name appears. When shares are held in more than one name, including joint tenants, each party should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. -----END PRIVACY-ENHANCED MESSAGE-----