-----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, NDBUs86LmI7xuj70arb0VoO15SZppllcO0Eg9FDnij6iJRK8NdwO6epTThSNB47A +UDm2r3adFeV1v1fCLqYTQ== 0000906197-96-000007.txt : 19960327 0000906197-96-000007.hdr.sgml : 19960327 ACCESSION NUMBER: 0000906197-96-000007 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960326 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PROGRESSIVE BANK INC CENTRAL INDEX KEY: 0000797507 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 141682661 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-15025 FILM NUMBER: 96538540 BUSINESS ADDRESS: STREET 1: 86 STATE ROUTE 22 CITY: PAWLING STATE: NY ZIP: 12564 BUSINESS PHONE: 9148551333 MAIL ADDRESS: STREET 1: P O BOX BB CITY: PAWLING STATE: NY ZIP: 12564 DEF 14A 1 PROGRESSIVE BANK, INC. 1301 Route 52, P. O. Box 7000 Fishkill, New York 12524 Telephone: (914) 897-7400 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS April 25, 1996 Notice is hereby given that the annual meeting of shareholders ("Annual Meeting") of Progressive Bank, Inc. ("Progressive") will be held at the main office of its subsidiary, Pawling Savings Bank, on Route 22, Pawling, New York, on Thursday, April 25, 1996 at 6:30 p.m. The purposes of the Annual Meeting are: 1. To elect four members of the Board of Directors of Progressive for three year terms; 2. To approve the selection of KPMG Peat Marwick LLP, independent certified public accountants, as Progressive's independent auditors for the forthcoming year; and 3. To transact any other business which may properly come before the meeting, or any adjournment thereof. Only shareholders of record at the close of business on March 15, 1996, are entitled to notice of, and to vote at, the meeting. By order of the Board of Directors, (Signature) Beatrice D. Parent Corporate Secretary WE URGE YOU TO SIGN AND RETURN THE PROXY IN THE ENCLOSED POSTAGE PREPAID ENVELOPE AS PROMPTLY AS POSSIBLE WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON. IF YOU DO ATTEND THE MEETING, YOU MAY THEN REVOKE YOUR PROXY AND VOTE IN PERSON. March 28, 1996 PROGRESSIVE BANK, INC. 1301 Route 52, P.O. Box 7000 Fishkill, New York 12524 Telephone: (914) 897-7400 PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS April 25, 1995 GENERAL INFORMATION This proxy statement ("Proxy Statement") is furnished in connection with the solicitation of Proxies by the Board of Directors of Progressive Bank, Inc. ("Progressive") for the annual meeting of shareholders ("Annual Meeting") of Progressive to be held on April 25, 1996 and at any adjournment thereof. The approximate date on which this Proxy Statement and the enclosed proxy card are first being sent or given to shareholders is March 28, 1996. Any shareholder submitting a Proxy may revoke it at any time before its exercise, and any shareholder who attends the Annual Meeting in person may withdraw the Proxy at any time before it is voted and vote his or her shares in person. A Proxy may be revoked by giving prior notice in writing to such effect to the Secretary of Progressive or by due execution of a Proxy bearing a later date. Shares represented by properly executed Proxies will be voted in accordance with directions indicated thereon. Proxies that contain no directions to the contrary will be voted FOR the election of the directors nominated by the Board of Directors and FOR the approval of the selection of KPMG Peat Marwick LLP as Progressive's independent auditors for the fiscal year ending December 31, 1996. Progressive is organized under the New York Business Corporation Law. Its only subsidiary is Pawling Savings Bank ("Pawling") which is a New York Savings Bank. Pawling is wholly owned by Progressive. In addition to solicitation by mail, directors, officers and employees of Progressive and Pawling may solicit Proxies from the shareholders of Progressive personally or by telephone or telegram without additional remuneration. Arrangements will be made with banks, brokerage firms and others to forward proxy materials to their principals and Progressive expects to reimburse them for their reasonable out of pocket expenses in handling proxy materials or beneficial owners of Progressive's common stock. Progressive may retain the services of Registrar and Transfer Company to aid in the solicitation of Proxies. Progressive will bear its own expenses and all other expenses in connection with the solicitation of Proxies for the Annual Meeting. VOTING SECURITIES The record date for determining shareholders entitled to vote at the Annual Meeting and any adjournment thereof has been set as March 15, 1996. As of the record date, there were 2,630,601 shares of common stock of Progressive, par value $1.00 ("Progressive Common Stock"), outstanding and entitled to vote at the Annual Meeting. Each share of Progressive Common Stock is entitled to one vote. There are no other classes of capital stock of Progressive outstanding. ELECTION OF DIRECTORS Progressive's Certificate of Incorporation and By-laws provide for a Board of Directors of such number of directors as may be fixed by the Board within the By-law proscription of not less than 10 nor more than 15. The Certificate of Incorporation provides that the Board of Directors shall be divided into three classes and each class shall have a three-year term. At the Annual Meeting one class of four directors will be elected to serve until the annual meeting held in 1999 and until their respective successors shall be elected and shall qualify. The name of each of the four director-nominees who are proposed to be elected at the Annual Meeting, is set forth below. None of the persons named below has any family relationship to any executive officer or to any other director of Progressive. In the event that any director-nominee should become unable or declines to serve, the persons named in the Proxy will vote for a substitute designated by the Board of Directors. NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS FOR THREE YEAR TERMS EXPIRING IN 1999
Year First Elected Name of Nominee Age Principal Occupation, Other Directorships a Director of and Position with Progressive Progressive Elizabeth P. Allen 53 Chairman of the Board of Directors of Pawling Savings Bank. 1986 Trustee and Vice Chairman of the Peale Center for Christian Living, a not-for-profit church corporation. Director of Pawling since 1985. George M. Coulter 67 Private practice of dentistry. Director of Pawling 1986 since 1971. Archibald A. Smith, III 47 Headmaster, Trinity Pawling School, Pawling, New York, a 1995 boys college preparatory independent school. Director of Pawling since 1995. Peter Van Kleeck 61 President and Chief Executive Officer of Progressive 1990 since 1991. From 1987 to 1990, Mr. Van Kleeck was President and Chief Operating Officer of Pawling and became Chief Executive Officer of Pawling in January 1991. Director of Pawling since 1987.
DIRECTORS WHOSE TERMS DO NOT EXPIRE UNTIL 1997 AND 1998
Year First Elected Name of Director Age Principal Occupation, Other Directorships a Director of and Position with Progressive Progressive Thomas C. Aposporos 43 Chairman of the Board of Progressive. Principal, Aposporos 1988 and Son, licensed real estate brokers. Director of Pawling since 1989. Donald B. Dedrick 74 Vice President of Donald B. Dedrick Agency, Inc., a 1986 general insurance agency. Retired Director of Pawling. Richard T. Hazzard 52 President, Lyman A. Beecher, Inc., d/b/a Beecher Funeral 1986 Home and Dwyer Funeral Home. Director of Pawling since 1978. Richard Novik 55 Owner and President of WKIP Broadcasting Corp. of 1986 Poughkeepsie, New York and Dutchess Communications Corp. Director of Pawling since 1985. John J. Page 57 President of H. G. Page & Sons, Inc., a building material 1986 supplier and owner of John Page Development Company. Director of Pawling since 1981. Roger W. Smith 56 President of Pawling Corporation, a manufacturer of rubber 1992 and plastic products. Director of Pawling since 1991. David A. Swinden 64 Executive Vice President of Imperial Schrade Corp., 1994 Ellenville, New York. Director of Pawling since 1994.
STOCK OWNERSHIP OF DIRECTORS AND OTHERS The following tables set forth the number of shares of Common Stock held by persons owning 5% or more of Progressive's Common Stock, by directors and nominees for director, and by directors and executive officers, as a group.
Shares of Common Stock Owned Beneficially and Name and Address of 5% Shareholders of Record Percent of Class Builtland Partners 253,626 9.64% 1271 Avenue of the Americas New York, New York 10020 Peter B. Cannell & Co., Inc. 248,900 9.46% 919 Third Avenue New York, New York 10022 The Guardian Life Insurance 187,162 7.11% Company of America 201 Park Avenue South New York, New York 10003 Dimensional Fund Advisors, Inc. 167,500 6.37% 1299 Ocean Avenue, 11th Floor Santa Monica, California 90401
Options Directors and Nominees Exercisable Elizabeth P. Allen 12,156 -- 7,200 Thomas C. Aposporos 9,800 -- 7,200 George M. Coulter 28,035 1.07% 7,200 Donald B. Dedrick 11,665 -- 6,000 Harold Harris 22,058 -- 7,200 Richard T. Hazzard 12,608 -- 7,200 Armando Mostachetti 9,616 -- 7,200 Richard Novik 11,338 -- 7,200 John J. Page 26,708 1.02% 7,200 Archibald A. Smith, III 7,700 -- 7,200 Roger W. Smith 9,256 -- 7,200 David A. Swinden 7,488 -- 6,700 Peter Van Kleeck 35,107 1.33% 16,232 All directors, nominees for director and executive officers as a group (16 persons) 239,818 9.12% 124,406 Unless a percentage is specified, the amount of shares for each director does not exceed one percent of the class. A registered investment advisor. It has sole investments and voting power over 221,900 shares. An additional 27,000 shares are owned by individuals for which it has investment decision and voting power with a bank. Of said 27,000 shares, 16,000 are owned by the wife of Peter B. Cannell. Beneficial ownership is disclaimed by it. Includes affiliates Guardian Investors Services Corporation, The Guardian Park Avenue Fund, Inc., The Guardian Stock Fund, Inc. and The Guardian Employees' Incentive Savings Plan. Dimensional Fund Advisors, Inc. ("Dimensional"), a registered investment advisor, is deemed to have beneficial ownership of 167,500 shares of Progressive Bank, Inc. stock as of December 31, 1995, all of which shares are held in portfolios of DFA Investment Dimensions Group, Inc., a registered open-end investment company, or in series of the DFA Investment Trust Company, a Delaware business trust, or the DFA Group Trust and DFA Participation Group Trust, investment vehicles for qualified employees benefit plans, all of which Dimensional Fund Advisors, Inc. serves as investment manager. Dimensional disclaims beneficial ownership of all such shares. Shares issuable pursuant to options exercisable on or before May 24, 1996, are included in the shares shown in column headed "Shares of Common Stock Owned Beneficially and of Record". Retiring as Director prior to Annual Meeting. Includes 13,062 shares held by minor children living at home.
COMPARISON OF FIVE YEAR PERFORMANCE The following chart compares the yearly percentage change in Progressive's cumulative total shareholder return on its Common Stock during the five fiscal years ended December 31, 1995 with (1) the total cumulative return of all companies whose equity securities are traded on the NASDAQ market and (2) the total cumulative return of banking companies traded on the NASDAQ market. The comparison assumes $100 was invested on January 1, 1991 in the Company's Common Stock and in each of the foregoing indices and assumes reinvestment of dividends. GRAPH DATA PROVIDED BELOW
1990 1991 1992 1993 1994 1995 Progressive Bank, Inc. 100 123.97 363.64 550.41 780.99 996.69 NASDAQ 100 160.56 186.87 214.51 209.69 296.30 NASDAQ Banks 100 164.09 238.85 272.39 271.41 404.35
OTHER INFORMATION ABOUT THE BOARD AND CERTAIN COMMITTEES Progressive's Board of Directors has standing Audit, Nominating, and Human Resources Committees. The Audit Committee reviews examinations of Progressive and Pawling that are conducted by regulatory agencies and reviews audits of Progressive and Pawling by internal audit staff and independent auditors. It met five (5) times during 1995. In addition, audit matters were discussed at meetings of the Committee at which, on one occasion KPMG Peat Marwick LLP, Progressive's independent auditors, participated in the discussion. Its present members are George M. Coulter, Richard T. Hazzard, Archibald A. Smith, III, Roger W. Smith and David A. Swinden. The Human Resources Committee determines the personnel, salary, employee benefits policies and related matters for the officers and employees of Progressive and Pawling. It had five (5) meetings during 1995. The present members of the Committee are Thomas C. Aposporos, Harold Harris, Roger W. Smith, David A. Swinden and Peter Van Kleeck. The Nominating Committee reviews persons suggested as nominees for election as members of the Board and persons suggested as executive officers of Progressive and Pawling. It had two (2) meetings during 1995. In addition, the members carried out their duties as they met from time to time and discussed various persons proposed for corporate office. Its present members are Donald B. Dedrick, Richard T. Hazzard, Richard Novik, John J. Page and Roger W. Smith. The slate of directors of Progressive for election by shareholders at the Annual Meeting was recommended by the Nominating Committee and approved by the Board of Directors of Progressive. Any shareholder wishing to suggest nominees to the Board of Directors may forward their suggestions along with nominating information to: Beatrice D. Parent, Secretary, Progressive Bank, Inc., 1301 Route 52, P.O. Box 7000, Fishkill, New York 12524-7000. To be eligible for election to the Board of Directors the following information concerning a proposed nominee must be submitted in writing to Progressive's Secretary on a date not earlier than one hundred eighty days prior to and not later than the date set forth below: (i) name; (ii) business address; (iii) residence address; (iv) present occupation or employment and the name, principal business and address of any corporation or other organization in which said employment is carried on; (v) information as to all occupations, positions, offices or employments during the last ten years, giving starting and ending dates of each and the name, principal business and address of any business corporation or other business organization in which each said occupation, position, office or employment was carried on; (vi) a statement as to whether such person has been a participant in any proxy contest involving Progressive or any other corporation within the past ten years and the principals, subject matter, the relationship of such person to the principals and outcome of such contest; (vii) a statement as to whether or not during the past ten years such person has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) and if so the dates, nature of conviction, name and location of court, and penalty imposed or other disposition of the case; and (viii) the amount of Progressive's Common Stock held by such person beneficially, directly or indirectly, or of record but not beneficially. The final date for submission of proposed nominees for election at the 1997 annual meeting of shareholders is November 25, 1996. On August 11, 1992, Progressive and the members of the Board of Directors were named as defendants in a stockholders' derivative suit commenced by David Freer, Jr., a shareholder seeking to declare the March 8, 1991 retirement agreement entered into among Progressive, Pawling and E. Hale Mayer, former Chairman of the Board, President and Chief Executive Officer of Progressive, null and void. The plaintiff demands that payments made to Mr. Mayer under said Agreement be returned and that the individual members of the Board provide an accounting. The Agreement provided for termination of Mr. Mayer's Employment Contract and for payment to him of $300,000 in a lump sum, monthly payment of his salary for the balance of 1991 and monthly payments to him in 1992, 1993 and 1994 of $80,000, per annum. This action is still pending as of the date hereof. Subject to the limitations specified by statute, each Director is the beneficiary of an indemnification agreement with Progressive pursuant to which Progressive has undertaken their defense and will, subject to statutory limitations, reimburse individual Directors for losses and costs incurred by them arising out of their activities as members of the Board. In 1994 the Court granted Progressive and its Directors summary judgment dismissing the complaint. Mr. Freer has appealed that decision. In February 1996 his appeal was denied. During 1995 all Directors and Officers made timely filings with respect to Form 4 Reports. In making this statement Progressive has relied on the written representations of its incumbent Directors and Officers. During 1995, there were 13 meetings of the Board of Directors of Progressive. The only absences were 3 directors, one meeting each. No Director attended fewer than 75% of the meetings of the Board of Directors and the Committees of which they were a member, in the aggregate, in 1995. HUMAN RESOURCES COMMITTEE REPORT The Committee performs, in addition to other duties, the process of determining the compensation to be paid to the President and Chief Executive Officer and to other officers. Mr. Van Kleeck's compensation is based upon an employment contract entered into in 1994. At that time, the then constituted Committee approved a base salary amount which it deemed to be consistent with the base salary paid to executives of similar rank and expertise at banking institutions which the Committee considered to be comparable. The Committee, in hiring new officers, applies the same compensation approach as in the case of Mr. Van Kleeck. Raises and bonuses for officers are based on the Committee's overall review of the performance of the individual officer viewed in the circumstances of the profits of the business for the year in question. In 1993 the Board approved an executive incentive plan pursuant to which performance goals are set annually and incentive compensation is paid on the basis of the degree of achievement of such goals. In 1993, the Company adopted a formal Stock Option Grant Program linked to the attainment of the goals set for the above referenced Incentive Plan. Submitted by the Committee as constituted in 1995: Chairman Roger W. Smith, Thomas Aposporos, Harold Harris, David A. Swinden and Peter Van Kleeck. EXECUTIVE OFFICERS Each executive officer is appointed by the respective Directors of each company and serves until his or her successor is duly chosen and qualified.
Offices Held with Executive Name (Age) Progressive and Pawling Officer Since Peter Van Kleeck (61) President, Chief Executive Officer and a Director of both 1987 Progressive and Pawling J. Donald Weand, Jr. (49) Senior Vice President, Chief Lending Officer of Pawling 1991 Robert A. Gabrielsen (37) Senior Vice President, Chief Financial Officer of Pawling 1991 and Treasurer of Progressive Robert Apple (40) Vice President of Progressive 1990
All of the executive officers have been employed by Progressive or Pawling for more than 5 years except for Messrs. Weand and Gabrielsen. Mr. Weand joined Pawling in 1991. Prior thereto from 1989 to 1991 he was President, Director and CEO of a Stamford, Connecticut bank. Mr. Gabrielsen also joined Pawling in 1991. From 1986 to 1991 he was Senior Vice President of the Administrative Division and Chief Financial Officer of an Albany, New York bank. The following table sets forth information as to compensation paid to each Executive Officer whose annual salary and bonus exceeded $100,000: SUMMARY COMPENSATION TABLE Long Term Annual Compensation Compensation Awards Annual All Other Name and Principal Position Year Salary Incentive Options Compensation Peter Van Kleeck, 1995 $232,179 $45,000 31,000 $13,457 President and CEO 1994 212,306 6,750 4,732 11,001 1993 200,414 69,900 -0- 12,225 J. Donald Weand, Jr., 1995 $133,920 $20,000 13,333 $7,690 Senior Vice President, 1994 113,153 27,000 3,756 5,793 Chief Lending Officer 1993 99,616 10,000 -0- 6,438 Robert A. Gabrielsen, 1995 $114,503 $20,000 13,333 $6,835 Senior Vice President, 1994 96,624 27,000 3,622 5,347 Chief Financial Officer 1993 92,222 10,000 -0- 5,942 Neither Progressive nor Pawling has a Restricted Stock Plan, Stock Appreciation Rights Plan or a Long Term Incentive Plan. Non-cash remuneration and personal benefits paid by Progressive and Pawling are not disclosed as they do not exceed the lesser of $50,000 or 10% of the compensation reported in the above chart for any person named. In 1993, Pawling established a formal incentive plan, in lieu of the prior discretionary bonus arrangement, pursuant to which the Board annually sets performance targets, the attainment of which entitles eligible executives to incentive compensation based on levels of achievement in respect to the targets. Company contribution to Retirement Plan for benefit of named officer. In 1993, Peter Van Kleeck elected to take payment in that year of $54,000, which ordinarily would have been paid to him in 1994. See 1995 Stock Option Grants to Executive Officers.
The following table sets forth information as to options exercised by the officers named in the Summary Compensation Table and the December 31, 1995 value of unexercised options: AGGREGATED OPTION EXERCISES IN 1995 AND DECEMBER 31, 1995 OPTIONS VALUES
Value of Unexercised in Number of Unexercised The Money Options at Shares Acquired Value Options at 12/31/95 12/31/95 on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable Peter Van Kleeck, 2,500 $21,688 16,232 17,000 $ 91,476 $63,750 President and CEO J. Donald Weand, Jr., -- -- 12,089 7,000 125,464 26,250 Sr Vice President and Chief Lending Oficer Robert A. Gabrielsen, 2,000 44,000 9,955 7,000 71,390 26,250 Sr. Vice President Chief Financial Officer Shareholders should be aware that the above Executives continue to hold the shares received by them upon exercise of their options and therefore the "value realized" and "value of unexercised options" are paper profits and they have the same risk of profit or loss as any other shareholder.
1995 STOCK OPTION GRANTS TO EXECUTIVE OFFICERS
Potential Realized Value at Date of # of Shares Exercise Expiration Assumed Rates of Stock Price Growth Name Grant Granted Price Date 5% 10% Peter Van Kleeck 01/18/95 6,000 $23.625 01/18/05 $ 89,146 $ 225,913 08/08/95 25,000 25.75 08/08/05 404,851 1,025,972 J. Donald Weand, Jr. 01/18/95 3,333 23.625 01/18/05 49,520 125,495 08/08/95 10,000 25.75 08/08/05 161,940 410,389 Robert A. Gabrielsen 01/18/95 3,333 23.625 01/18/05 49,520 125,495 08/08/95 10,000 25.75 08/08/05 161,940 410,389 Robert Apple 01/18/95 1,000 23.625 01/18/05 14,858 37,652 Gains, if any, will depend on actual market performance of the Common Stock. To the extent gains occur, all shareholders will benefit commensurately. Of such amount, 8,000 shares vested immediately, 8,000 shares will vest August 1996 and 9,000 shares will vest August 1997. Of such amount, 3,000 shares vested immediately, 3,000 shares will vest August 1996 and 4,000 shares will vest August 1997.
Directors Compensation In 1995 Progressive and Pawling Board members received meeting attendance fees of $400 each. In addition, Board members also receive an annual retainer fee of $5,000 per annum for each Board member and payment of a stipend of $2,500 per month to the Chairman of the Board of Progressive and $1,500 per month to the Chairman of Pawling. In 1995, Mr. Aposporos and Ms. Allen were paid stipends of $30,000 and $18,000, respectively. Mr. Van Kleeck does not receive any such payments. Board members also receive non-qualified stock options (See Heading "Directors Non-Qualified Stock Option Plan"). Directors of Progressive, but not Pawling, who have been a director at least five years, are entitled to retirement or severance benefits upon leaving the Board in an amount equal to the amount of the annual Progressive retainer fee multiplied by the number of years of service as a Director, but not more than fifteen years. Employment Agreements Mr. Van Kleeck has an Employment Agreement which expires on December 31, 1999. This Agreement provides that Mr. Van Kleeck will receive a base salary of $231,000 subject to increases and bonuses as may be granted by the Board of Directors from year to year. Under the Agreement, Mr. Van Kleeck may defer a portion of his salary. In the event of a change of control, he would, upon termination, as defined, receive his salary for the remainder of the term plus if such termination occurs during the last three years of the term, an amount equal to thirty-six months salary less the salary for the number of months to the end of the term net of excise tax if applicable. In 1993 Pawling entered into severance agreements with Messrs. Weand and Gabrielsen which provided for each of them that in the event of a change in control of Progressive or Pawling and his termination within two years thereafter that he would be entitled to a severance payment equal to approximately three times his average annual compensation for his employment period but not averaged over more than five years. Pension Plan Benefits Progressive maintains a non-contributory defined benefit pension plan through the RSI Retirement Trust (the "Plan"). The Plan covers full-time employees who have attained the age of 21 years and completed at least one year of service with Progressive or Pawling. The annual normal retirement benefit is equal to a percentage of the employee's average annual compensation during the 60 consecutive calendar months within the final 120 consecutive calendar months of the employee's credited service affording the highest such average, multiplied by the number of years of credited service with a maximum annual benefit of 60%. Retirement benefit payments are comprised of three components: for service prior to October 1, 1990, 2% times years of credited service times average annual earnings; for service subsequent to September 30, 1990 and prior to July 1, 1993, 1.667% times years of credited service times average annual earnings; and for service subsequent to June 30, 1993, 1.5% times years of credited service times average annual earnings. Under the pension plan, Progressive makes an annual contribution for the benefit of eligible employees, computed on an actuarial basis. The following table indicates annual benefits payable upon retirement for various levels of compensation and periods of service under the Plan. The benefit amounts listed in the table are not subject to any deduction for Social Security or other offsets.
Years of Benefit Service Final Average Salary 10 15 20 25 30 $ 75,000 11,250 16,875 22,500 28,125 33,750 95,000 14,250 21,375 28,500 35,625 42,750 115,000 17,250 25,875 34,500 43,125 51,750 135,000 20,250 30,375 40,500 50,625 60,750 150,000 22,500 33,750 45,000 56,250 67,500
Total Retirement Benefit is limited to 60% of Average Annual Earnings For 1995 Maximum Compensation as per IRC Section 401(a)(17) is limited to $150,000. Maximum Benefit payable under the qualified plan for 1995 is $120,000. At December 31, 1995, both Peter Van Kleeck and Robert Apple had approximately 8 years of service credited in the Plan. Messrs. Weand and Gabrielsen both had less than 5 years of credited service. 401(k) Plan Progressive maintains a 401(k) Plan under which it matches 50% of the first 5% of non-highly compensated employee contributions to the Plan with highly compensated employees matched at the rate of 50% of the first 3%. In 1995 its contributions to the Plan for Executive Officers were as follows: Peter Van Kleeck $1,738, J. Donald Weand, Jr. $2,063, Robert A. Gabrielsen $1,846 and Robert Apple $1,396. Employee Stock Option Plan Progressive has an Amended and Restated Incentive Stock Option Plan (the "Employees Plan") for key employees of Progressive and Pawling. The Employees Plan was approved by the Shareholders at the annual meeting of shareholders held on March 30, 1988. The Employees Plan is administered by a committee composed of three members of the Board of Directors, none of whom may be eligible to participate in the Plan. 250,000 shares of Progressive Common Stock (less any issued upon the exercise of options) are reserved for issuance under the Employees Plan. Such amount is subject to adjustment to prevent dilution. Options may be granted for the purchase of shares at not less than 100 percent of the fair market value of a share of Progressive Common Stock on the date the option is granted. Options granted under the Employees Plan are Incentive Stock Options intended to meet the requirements of Section 422A of the Code. No option may be exercised after the expiration of ten years from the date it was granted, and no option may be granted under the Employees Plan after January 12, 1998. Directors Non-Qualified Stock Option Plan In 1992 the Board of Directors adopted a Non-Qualified Stock Option Plan pursuant to which each director in office at the date of the adoption of the Plan received, and based upon certain criteria directors elected in the future will receive, an option for 3,200 shares of Progressive Common stock at market value. A total of 3,200 options were granted under the Plan in 1995. In 1993, the Board of Directors adopted a 1993 Non-Qualified Stock Option Plan for Directors (the "Plan"). Under the Plan a committee of disinterested persons may grant options to the individual directors. Each grant when made may not be made at a price per share less than the current market value of Progressive stock. A total of 75,000 shares may be granted under the Plan which has a term of ten years. Transactions With Management Some of the executive officers and directors of Progressive and Pawling, as well as firms and companies with which they are associated, are and have been customers of Pawling. As a stock savings bank, Pawling is authorized under the New York Banking Law and regulations to make loans to its executive officers and directors and to the executive officers and directors of Progressive and Pawling in any amount, but such loans must be approved by the Board of Directors of Pawling or an authorized committee. If such loan is secured by a first lien on a residence of such executive officer or director, or if the principal amount of the loan, when aggregated with the unpaid principal amount of all other loans by Pawling to the executive officer or director, exceeds $25,000 or 5% of its capital stock, surplus funds and undivided profits, whichever is higher, the approval of Pawling's Board of Directors is required. Also, loans to an executive officer or director in excess of $500,000 in the aggregate may only be made if the approval of the Board of Directors of Pawling has been obtained. Loans to executive officers and directors are made on substantially the same terms, including interest rates, as those of comparable transactions prevailing at the time and do not involve more than the normal risk of collectability or present other unfavorable features. Mr. Archibald A. Smith, III is Headmaster of Trinity Pawling School which has a $1.0 million line of credit from Pawling. Its current borrowing under the line of credit is $400,000. It maintains accounts with Pawling in excess of $200,000 from time to time. Mr. Thomas C. Aposporos is currently acting as a real estate broker involving Pawling in two transactions, which if consumated, could result in the payment to his firm of up to $17,000 in fees. INDEPENDENT AUDITORS At the meeting a vote of the shareholders will be taken for the ratification of the selection of the firm of KPMG Peat Marwick LLP, independent public accountants, as auditors for the fiscal year ending December 31, 1996. It is expected that representatives from KPMG Peat Marwick LLP will be present at the Annual Meeting and will be afforded an opportunity to make a statement if they desire. They are expected to be available to respond to appropriate questions from shareholders. SHAREHOLDER PROPOSALS Any shareholder who intends to present a proposal at Progressive's 1997 annual meeting of shareholders is advised that, in order for such proposal to be considered for inclusion in management's proxy material for such meeting, the proposal must be directed to the Secretary of Progressive and received by Progressive at its principal executive office not later than November 25, 1996. GENERAL Unless contrary instructions are indicated on the Proxy, all shares of Common Stock represented by valid Proxies received pursuant to this solicitation (and not revoked before they are voted) will be voted FOR the election of the nominees for Directors named herein and in favor of the proposals discussed above. The Board of Directors knows of no business other than that set forth above to be transacted at the Annual Meeting, but if other matters requiring a vote of shareholders arise, the persons designated as Proxies will vote the shares of Common Stock represented by the Proxies in accordance with their judgment on such matters. If a shareholder specifies a different choice on the Proxy, his or her shares of Common Stock will be voted in accordance with the specification so made. By order of the Board of Directors, (Signature) Beatrice D. Parent, Secretary Pawling, New York March 28, 1996 PROXY CARD Proxy PROGRESSIVE BANK, INC. [ X ] PLEASE MARK VOTES AS IN THIS EXAMPLE This Proxy is Solicited on Behalf of the Board of Directors The undersigned hereby appoints Robert Apple and Beatrice D. Parent or either of them, Proxies, with full power of substitution to each, to represent and vote all stock that the undersigned is entitled to vote at the Annual Meeting of Shareholders of Progressive Bank, Inc., to be held on April 25, 1996 at 6:30 p.m. at Pawling Savings Bank, Route 22, Pawling, New York, or at any adjournments thereof upon the matters described in the accompanying Proxy Statement and upon other business that may properly come before the meeting or any adjournment thereof. Said Proxies are directed to or refrain from voting as checked below upon the matters listed below, and otherwise in their discretion. [ ] For [ ] Against [ ] Abstain 1. Election of Directors for all nominees listed below (except as indicated to the contrary below). Elizabeth P. Allen George M. Coulter Archibald A. Smith, III Peter Van Kleeck INSTRUCTION: To withhold authority to vote for any individual nominee write that nominee's name in the space provided below. [ ] For [ ] Against [ ] Abstain 2. PROPOSAL TO APPROVE THE APPOINTMENT OF KPMG PEAT MARWICK LLP as the independent auditors for the current fiscal year. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE ABOVE PROPOSALS. PLEASE SIGN, DATE AND RETURN THIS PROXY. This proxy may be revoked at any time before it is voted. Please Date, sign and return in the enclosed postage-paid envelope. Date Signature Signature if held jointly Detach above card, sign, date and mail in postage paid envelope provided. PROGRESSIVE BANK, INC. Please sign exactly as the name appears above. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person. PLEASE ACT PROMPTLY SIGN, DATE & MAIL YOUR PROXY CARD TODAY -----END PRIVACY-ENHANCED MESSAGE-----