-----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, BgLfQHkJU/QVBrU/SMRnXA+u0X5ex/HIW5wc2ODmM/OkFmkNVJi+5e+ASRRLVuwI L5iPoH1xEC8iNPmpGXU0/w== 0000950135-99-001465.txt : 19990325 0000950135-99-001465.hdr.sgml : 19990325 ACCESSION NUMBER: 0000950135-99-001465 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990505 FILED AS OF DATE: 19990324 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WARREN BANCORP INC CENTRAL INDEX KEY: 0000830750 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036] IRS NUMBER: 043024165 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 000-17222 FILM NUMBER: 99571079 BUSINESS ADDRESS: STREET 1: 10 MAIN ST CITY: PEABODY STATE: MA ZIP: 01960 BUSINESS PHONE: 5085317400 MAIL ADDRESS: STREET 1: 10 MAIN STREET STREET 2: PO BOX 6159 CITY: PEABODY STATE: MA ZIP: 01961-6159 FORMER COMPANY: FORMER CONFORMED NAME: NORTHBANC CORP DATE OF NAME CHANGE: 19880503 DEF 14A 1 WARREN BANCORP, INC. DEFINITIVE PROXY STATEMENT 1 SCHEDULE 14A (RULE 14A-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ) Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
WARREN 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] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: (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: 2 WARREN BANCORP, INC. 10 Main Street, Peabody, Massachusetts 01960 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS To the Stockholders of Warren Bancorp, Inc. NOTICE IS HEREBY GIVEN that the Annual Meeting of the stockholders of Warren Bancorp, Inc. (the "Annual Meeting") will be held at the King's Grant Inn, Route 128, Danvers, Massachusetts, on Wednesday, May 5, 1999, at 10:00 A.M., local time, for the purpose of considering and voting upon the following matters: 1. Election of five Directors, each to serve for a three-year term until the 2002 Annual Meeting of stockholders; 2. Such other business as may properly come before the meeting. The Board of Directors has fixed the close of business on March 8, 1999 as the record date for determining the stockholders entitled to notice of and to vote at the Annual Meeting and any adjournments thereof. Only holders of common stock at the record date will be entitled to notice of and to vote at the Annual Meeting or any adjournments thereof. By the order of the Board of Directors Susan G. Ouellette, Clerk Peabody, Massachusetts March 26, 1999 WE URGE YOU TO SIGN AND RETURN THE ENCLOSED PROXY 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. 3 WARREN BANCORP, INC. 10 Main Street, Peabody, Massachusetts 01960 PROXY STATEMENT ANNUAL MEETING OF STOCKHOLDERS - MAY 5, 1999 This Proxy Statement is furnished to stockholders of Warren Bancorp, Inc. ("Bancorp" or the "Corporation") in connection with the solicitation of proxies by the Board of Directors of Bancorp for the Annual Meeting of Stockholders of Bancorp (the "Annual Meeting") on Wednesday, May 5, 1999, and any adjournments thereof. Stockholders are requested to complete, date, sign and promptly return the accompanying proxy card in the enclosed envelope. If the enclosed form of proxy is properly executed and returned to Bancorp in time to be voted at the Annual Meeting, the shares represented thereby will, unless such proxy has previously been revoked, be voted in accordance with the instructions marked thereon. Executed proxies with no instructions indicated thereon will be voted FOR the election of the nominees for Directors named below. Distribution of the Proxy Statement and the accompanying proxy materials commenced on or about April 1, 1999. The presence of a stockholder at the Annual Meeting will not automatically revoke that stockholder's proxy. A stockholder may, however, revoke a proxy at any time prior to the voting thereof on any matter (without, however, affecting any vote taken prior to such revocation) by filing with the Clerk of Bancorp a written notice of revocation, by delivering to Bancorp a duly executed proxy bearing a later date, or by attending the Annual Meeting and voting in person. All written notices of revocation and other communications with respect to revocation of proxies in connection with the Annual Meeting should be addressed as follows: Warren Bancorp, Inc., Post Office Box 6159, 10 Main Street, Peabody, Massachusetts 01961-6159, attention: Shareholder Relations Department. Bancorp's Annual Report to Stockholders for the year ended December 31, 1998, which includes Bancorp's Annual Report to the Securities and Exchange Commission on Form 10-K (without exhibits), is being mailed to stockholders with this Proxy Statement. The Annual Report to Stockholders is not part of the proxy materials. Bancorp will provide without charge to each person receiving a copy of this Proxy Statement a copy of the exhibits to its Annual Report on Form 10-K, upon written request. Request should be directed to Warren Bancorp, Inc., Post Office Box 6159, 10 Main Street, Peabody, Massachusetts 01961-6159, attention: Shareholder Relations Department. 4 VOTING SECURITIES The Board of Directors has fixed the close of business on March 8, 1999 as the record date (the "Record Date") for determining the stockholders entitled to notice of and to vote at the Annual Meeting and any adjournments thereof. On the Record Date there were 7,654,691 shares of Common Stock ("Common Stock") of Bancorp outstanding. As of the Record Date there were approximately 650 holders of record of the Common Stock. All such shares carry voting rights and all stockholders are entitled to cast one vote for each such share held of record at the close of business on the Record Date upon each matter properly brought before the Annual Meeting or any adjournment thereof. Holders of the Common Stock are not entitled to cumulative voting in the election of directors. A majority of the outstanding shares of Common Stock present in person or by proxy will constitute a quorum for transaction of business at the Annual Meeting. Shares with respect to which votes have been withheld from any director and shares abstaining from voting, and broker non-votes (i.e., shares represented in the meeting held by brokers on nominees as to which instructions have not been received from the beneficial owners entitled to vote such shares and with respect to which one or more but not all proposals, such brokers or nominees do not have discretionary voting power), will be counted for purposes of determining whether a quorum is present at the Annual Meeting for the transaction of business. Abstentions and broker non-votes will have no effect on the election of directors, since directors are elected by a plurality of shares voting at the Annual Meeting. 2 5 BENEFICIAL OWNERSHIP OF COMMON STOCK The table below sets forth, as of March 1, 1999, certain information about persons known to Bancorp to own, directly or beneficially, more than five percent of Bancorp's outstanding Common Stock.
AMOUNT AND NATURE OF NAME AND ADDRESS BENEFICIAL PERCENT OF BENEFICIAL OWNER OWNERSHIP OF CLASS Dimensional Fund Advisors, Inc.................................... 562,300 (1) 7.33% (3) 1299 Ocean Avenue Suite 650 Santa Monica, California 90401 Berger Associates, Inc........................................... 515,200 (2) 6.71% (3) 210 University Boulevard, Ste. 900 Denver, Colorado 80206
- ---------------------------------- (1) Based on information contained in Amendment No. 8 to a Schedule 13G filed by them with the Securities and Exchange Commission (the "Commission") on February 11, 1999, Dimensional Fund Advisors, Inc. ("Dimensional"), a registered investment advisor, is deemed to have beneficial ownership of 562,300 shares of Warren Bancorp, Inc. common stock as of December 31, 1998, 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 employee benefit plans, all of which Dimensional serves as investment manager. Dimensional disclaims beneficial ownership of all such shares. (2) Based on information contained in a Schedule 13G filed with the Commission on February 16, 1999 by Berger Associates, Inc. and certain affiliated entities, reporting beneficial ownership as of December 31, 1998. This Schedule 13G indicates that Berger Associates, Inc., a registered investment adviser, is the beneficial owner of 515,200 shares of Warren Bancorp, Inc. common stock as a result of acting as an investment advisor to several mutual funds and institutional clients. (3) Percentages as reported are based on the number of shares issued and outstanding at March 1, 1999. 3 6 The following table shows as of March 1, 1999, the number of shares of Bancorp's Common Stock owned beneficially by each nominee for director, each director, each of the individuals named in the Summary Compensation Table, and by all nominees, directors and executive officers of Bancorp as a group.
PERCENT BENEFICIALLY OF CLASS NAME OWNED (1) (IF OVER 1%) - ---- --------- ------------ Peter V. Bent ......................... 22,600(2) Stephen J. Connolly, IV ............... 109,600(3) 1.42% Francis L. Conway ..................... 20,000(4) Paul J. Curtin ........................ 20,000(5) Leo C. Donahue ........................ 118,311(6) 1.54% Robert R. Fanning, Jr ................. 15,600(7) Arthur E. Holden ...................... 29,400(8) Stephen R. Howe ....................... 45,200(9) John C. Jeffers ....................... 14,400(10) Stephen G. Kasnet ..................... 107,477(11) 1.40% Linda Lerner .......................... 14,400(12) Arthur E. McCarthy .................... 67,600(13) Arthur J. Pappathanasi ................ 11,400(14) Paul M. Peduto ........................ 127,911(15) 1.66% George W. Phillips .................... 190,000 2.47% John R. Putney ........................ 117,595(16) 1.53% John D. Smidt ......................... 52,800(17) Mark J. Terry ......................... 12,141(18) John H. Womack ........................ 13,300(19) All nominees, directors and executive officers as a group (19 persons) .................. 1,109,735 14.15%
- ---------------------- (1) Beneficial ownership of Common Stock has been determined in accordance with Rule 13d-3 under the Securities Act of 1934, as amended (the "1934 Act"). For purposes of this table a person is deemed to be the beneficial owner of Common Stock if that person has or shares voting power or investment power in respect of such Common Stock or has the right to acquire ownership within 60 days after March 1, 1999. Accordingly, the amounts shown on the table do not purport to represent beneficial ownership for any purpose other than compliance with the reporting requirements of the 1934 Act. Further, beneficial ownership as determined in this matter does not necessarily bear on the economic incidents of ownership of Common Stock. Voting power or investment power with respect to shares reflected on the table is not shared with others except as otherwise indicated. (2) Includes 4,200 shares held in a retirement trust for Mr. Bent. Also includes 10,000 shares held in a residuary trust of which Mr. Bent is a one-third beneficiary. Also includes options presently exercisable or exercisable within 60 days to purchase 4,800 shares under the Warren Bancorp, Inc. 1995 Incentive and Nonqualified Stock Option Plan. (3) Includes 95,600 shares owned in the name of Connolly Brothers, Inc., of which Mr. Connolly is President and sole stockholder. Also includes options presently exercisable or exercisable within 60 days to purchase 2,800 shares under the Warren Bancorp, Inc. 1986 and 1995 Incentive and Nonqualified Stock Option Plans. 4 7 (4) Includes 12,000 shares as to which Mr. Conway shares voting and investment power with his wife. Also includes options presently exercisable or exercisable within 60 days to purchase 8,000 shares under the Warren Bancorp, Inc. 1986 and 1995 Incentive and Nonqualified Stock Option Plans. (5) Includes 6,000 shares held in trust for the pension plan of Mr. Curtin. Also includes options presently exercisable or exercisable within 60 days to purchase 14,000 shares under the Warren Bancorp, Inc. 1986 and 1995 Incentive and Nonqualified Stock Option Plans. Mr. Curtin's wife owns an additional 14,000 shares as to which he disclaims beneficial ownership. (6) Voting and investment power is shared with his wife. Includes presently exercisable or exercisable within 60 days options to purchase 41,000 shares under the Warren Bancorp, Inc. 1986, 1991, 1995 and 1998 Incentive and Nonqualified Stock Option Plans. Also includes 4,671 shares allocated to the account of Mr. Donahue under the Bank's 401(k) Savings Plan. (7) Voting and investment power is shared with his wife. Includes options presently exercisable or exercisable within 60 days to purchase 2,800 shares under the Warren Bancorp, Inc. 1986 and 1995 Incentive and Nonqualified Stock Option Plans. (8) Includes 25,400 shares as to which Mr. Holden shares voting and investment power with his wife. Also, includes options presently exercisable or exercisable within 60 days to purchase 4,000 shares under the Warren Bancorp, Inc. 1986 and 1995 Incentive and Nonqualified Stock Option Plans. (9) Includes options presently exercisable or exercisable within 60 days to purchase 2,800 shares under the Warren Bancorp, Inc. 1986 and 1995 Incentive and Nonqualified Stock Option Plans. Mr. Howe is sole beneficiary of a testamentary trust which owns 8,800 shares as to which he disclaims beneficial ownership. (10) Includes options presently exercisable or exercisable within 60 days to purchase 10,400 shares under the Warren Bancorp, Inc. 1986 and 1995 Incentive and Nonqualified Stock Option Plans. (11) Includes 84,877 shares as to which Mr. Kasnet shares voting rights with his wife. Also includes 22,000 shares held in retirement trust for the benefit of Mr. Kasnet. Also includes options presently exercisable or exercisable within 60 days to purchase 600 shares under the Warren Bancorp, Inc. 1995 Incentive and Nonqualified Stock Option Plans. Mr. Kasnet's children own an additional 11,100 shares as to which he disclaims beneficial ownership. (12) Includes options presently exercisable or exercisable within 60 days to purchase 8,400 shares under the Warren Bancorp, Inc. 1995 Incentive and Nonqualified Stock Option Plan. (13) Includes options presently exercisable or exercisable within 60 days to purchase 4,600 shares under the Warren Bancorp, Inc. 1986 and 1995 Incentive and Nonqualified Stock Option Plans. Mr. McCarthy's wife owns an additional 30,000 shares as to which he disclaims beneficial ownership. (14) Includes options presently exercisable or exercisable within 60 days to purchase 4,800 shares under the Warren Bancorp, Inc. 1995 Incentive and Nonqualified Stock Option Plan. (15) Includes 99,360 shares as to which Mr. Peduto shares voting and investment power with his wife. Also includes options presently exercisable or exercisable within 60 days to purchase 18,640 shares under the Warren Bancorp, Inc. 1986, 1991, 1995 and 1998 Incentive and Nonqualified Stock Option Plans. Also includes 5,511 shares allocated to the account of Mr. Peduto under the Bank's 401(k) Savings Plan. 5 8 (16) Includes 87,160 shares as to which Mr. Putney shares voting and investment power with his wife. Also includes 6,400 shares held in retirement trust for the benefit of Mr. Putney. Also includes options presently exercisable or exercisable within 60 days to purchase 21,080 shares under the Warren Bancorp, Inc. 1986, 1991, 1995 and 1998 Incentive and Nonqualified Stock Option Plans. Also includes 2,955 shares allocated to the account of Mr. Putney under the Bank's 401(k) Savings Plan. (17) Includes 37,800 shares as to which Mr. Smidt shares voting and investment power with his wife. Also includes 12,200 shares held in retirement trust for the benefit of Mr. Smidt. Also includes options presently exercisable or exercisable within 60 days to purchase 2,800 shares under the Warren Bancorp, Inc. 1986 and 1995 Incentive and Nonqualified Stock Option Plans. Mr. Smidt's wife owns an additional 1,000 shares in a retirement trust as to which he disclaims beneficial ownership. (18) Includes options presently exercisable within 60 days to purchase 11,520 shares under the Warren Bancorp, Inc. 1995 and 1998 Incentive and Nonqualified Stock Option Plans. Also includes 621 shares allocated to the account of Mr. Terry under the Bank's 401(k) Savings Plan. (19) Includes options presently exercisable or exercisable within 60 days to purchase 4,600 shares under the Warren Bancorp, Inc. 1986 and 1995 Incentive and Nonqualified Stock Option Plans. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934 requires Bancorp's executive officers and directors and persons who own more than 10% of a registered class of Bancorp's equity securities to file reports of ownership and changes in ownership with the Securities and Exchange Commission ("SEC") and the National Association of Securities Dealers, Inc. Officers, directors and greater than 10% shareholders are required by SEC regulations to furnish Bancorp with copies of all Section 16(a) reports they file. To Bancorp's knowledge, based solely on review of the copies of such reports furnished to Bancorp and written representations that no other reports were required during the fiscal year ended December 31, 1998, all Section 16(a) filing requirements applicable to its executive officers, directors, and greater than 10% beneficial owners were satisfied. 6 9 ELECTION OF A CLASS OF DIRECTORS The Board of Directors of Bancorp presently consists of seventeen members and is divided into three classes as nearly equal in number as possible. The term of office of one class of Directors expires each year and their successors are elected at each annual meeting of stockholders for a term of three years and until their successors are duly elected and qualified. At the Annual Meeting, five Directors will be elected to serve until the 2002 annual meeting and until their respective successors are duly elected and qualified. The Board of Directors has nominated Peter V. Bent, Paul J. Curtin, Stephen R. Howe, Arthur E. McCarthy and John D. Smidt for election as Directors to serve until the 2002 annual meeting. Unless otherwise specified in the proxy, it is the intention of the persons named in the proxy to vote the shares represented by each properly executed proxy for the election of Messrs. Bent, Curtin, Howe, McCarthy and Smidt as Directors. Each of Messrs. Bent, Curtin, Howe, McCarthy and Smidt has agreed to stand for election and to serve if elected as a Director. However, if any person nominated by the Board of Directors fails to stand for election or is unable to accept election, the proxies will be voted for the election of such other person as the Board of Directors may recommend. The affirmative vote of holders of a plurality of the shares of Common Stock represented in person or by proxy at the Annual Meeting is necessary to elect the nominees as Directors. INFORMATION REGARDING NOMINEES AND DIRECTORS The following table sets forth for each of the five nominees for election as Directors at the Annual Meeting the nominee's name, age as of March 1, 1999, the nominee's principal occupation for at least the past five years and the year in which the nominee was first elected as a Director of Bancorp, based on information furnished by the nominee to Bancorp. Similar information is provided for those Directors whose terms expire at the annual meetings of the stockholders of Bancorp in 2000 and 2001. NOMINEES (TERMS TO EXPIRE IN 2002)
NAME AND PRINCIPAL OCCUPATION FOR DIRECTOR PAST FIVE YEARS; DIRECTORSHIPS AGE SINCE(1) - ------------------------------ --- -------- Peter V. Bent (3)....................................................................... 53 1995 Owner/Manager of Brown's Yacht Yard since prior to 1994. Paul J. Curtin (2)...................................................................... 54 1976 Certified public accountant in private practice since prior to 1994. Stephen R. Howe (3)..................................................................... 63 1976 Certified public accountant in private practice since prior to 1994. Arthur E. McCarthy (2)(4)............................................................... 63 1979 Vice President and Managing Director, Tucker Anthony, Inc. (investment advisors) since prior to 1994; Director, Tucker Anthony, Inc. John D. Smidt........................................................................... 56 1989 President and Treasurer, John Smidt Co., Inc. (contract leather finishing) since prior to 1994.
7 10 OTHER DIRECTORS (TERMS TO EXPIRE IN 2000)
NAME AND PRINCIPAL OCCUPATION FOR DIRECTOR PAST FIVE YEARS; DIRECTORSHIPS AGE SINCE(1) - ------------------------------ --- -------- Stephen J. Connolly, IV (4)............................................................ 49 1989 President, Connolly Brothers, Inc. (building contractors) since prior to 1994. Robert R. Fanning, Jr. (2)(3)(4)....................................................... 56 1988 President and Chief Executive Officer of Northeast Health Systems, Inc. since 1995; President and Chief Executive Officer of Cape Ann and Northeast Health Systems, Inc., 1994 to 1995; President and Chief Executive Officer, Beverly Hospital Corporation since prior to 1994; President and Chief Executive Officer, Northeast Health Systems, Inc. since prior to 1994 to 1994; Director, Health Care Property Investors since prior to 1994. John C. Jeffers (3).................................................................... 68 1968 Vice President, Jeffers Millwork, since 1994. Mr. Jeffers was President and Treasurer of Jeffers Lumber Corporation since prior to 1994 to 1994. Paul M. Peduto......................................................................... 49 1988 Treasurer of Bancorp and Executive Vice President, Chief Financial Officer and Treasurer of the Bank since prior to 1994. John R. Putney......................................................................... 55 1997 President and Chief Executive Officer of Bancorp and the Bank since 1998; Executive Vice President of Bancorp and the Bank, 1997; Senior Vice President for Corporate Banking and Senior Lending Officer of the Bank since prior to 1994 to 1997.
OTHER DIRECTORS (TERMS TO EXPIRE IN 2001)
NAME AND PRINCIPAL OCCUPATION FOR DIRECTOR PAST FIVE YEARS; DIRECTORSHIPS AGE SINCE(1) - ------------------------------ --- -------- Francis L. Conway (3)................................................................... 58 1978 President and Treasurer, F.L. Conway & Sons, Inc. (funeral home) since prior to 1994. Arthur E. Holden (2)(4)................................................................. 70 1978 President, Holden Oil., Inc. and Vice President, Holden Bottled Gas, Inc. since prior to 1994.
8 11
NAME AND PRINCIPAL OCCUPATION FOR DIRECTOR PAST FIVE YEARS; DIRECTORSHIPS AGE SINCE (1) - ------------------------------ --- --------- Stephen G. Kasnet(2)(4).............................................................. 53 1983 Chairman of the Board of Bancorp and Bancorp's wholly-owned subsidiary, Warren Five Cents Savings Bank (the "Bank"), since prior to 1994; President, Pioneer Global Investments, 1998 to present; President, Pioneer Real Estate Advisors, Inc. since 1995 to present; President, Pioneer Global Institutional Advisors, 1997-1998; President, Management Board, Pioneer Polish Real Estate Fund, since 1997 to present; Executive Vice President, The Pioneer Group, 1998-present; Vice President, Pioneer Group, (mutual fund complex, real estate investment management), 1995 to 1998; Managing Director of First Winthrop Corporation and Winthrop Financial Associates (real estate investment and management), since prior to 1994 to 1995; Director, Bradley Real Estate Inc.; Trustee and Vice President, Pioneer Real Estate Shares; Trustee and Vice President, Pioneer Real Estate Shares (Dublin). Linda Lerner (3)..................................................................... 60 1995 Retired since 1995. President of Jilcraft, Inc. (business communications) since prior to 1994 to 1995. Arthur J. Pappathanasi (3)........................................................... 60 1995 President and Chief Executive Officer of West Lynn Creamery, Inc. and Richdale Dairy Stores, Inc. since prior to 1994. George W. Phillips................................................................... 60 1991 Retired; President and Chief Executive Officer of Bancorp and the Bank since prior to 1994 to 1997. John H. Womack....................................................................... 54 1989 President and Chief Executive Officer, TJM Enterprise, Inc., (formerly JJS Services, Inc.) since 1998; President and Chief Executive Officer, JJS Services, Inc. (janitorial services) since prior to 1994 to 1998; President, Peabody Paper & Industrial Supply since prior to 1994. Mr. Womack was President of Classical Foods, Inc. which filed for bankruptcy on June 20, 1996.
- ------------------------------- (1) The year shown indicates the beginning of the period during which each of the above-named persons has continuously served as a Director of Bancorp. When used in this Proxy Statement, the term "Director" shall include Directors of Bancorp who were Directors of the Bank prior to its reorganization into holding company form in 1988 and Trustees of the Bank prior to the Bank's conversion to stock form of organization in 1986. (2) Member of the Executive Committee. (3) Member of the Finance, Audit and Compliance Committee. (4) Member of the Nominating Committee. 9 12 THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD The Board of Directors of Bancorp held 8 meetings during 1998. During 1998 each incumbent Director, except Peter V. Bent, Robert R. Fanning, Jr. and John H. Womack, attended 75 percent or more of the total of all meetings of the Board of Directors and the committees of the Board of Directors on which each served during the period for which he or she served. The standing committees of the Board include: an Executive Committee; a Finance, Audit and Compliance Committee and a Nominating Committee. The Finance, Audit and Compliance Committee, and the Nominating Committee are described below. The Executive Committee of Bancorp, acting jointly with the Executive Committee of the Bank, which do not include any employee Directors, is responsible for all compensation matters. FINANCE, AUDIT AND COMPLIANCE COMMITTEE. At December 31, 1998, the Finance, Audit and Compliance Committee consisted of Peter V. Bent, Francis L. Conway, Robert R. Fanning, Jr., Stephen R. Howe, Chairman, John C. Jeffers, Linda Lerner, and Arthur J. Pappathanasi. The Finance, Audit and Compliance Committee reviews and approves the adequacy of management reporting and financial and accounting control systems, as well as monitoring compliance with state and federal laws and regulations. The Committee also approves the selection of independent public accountants, reviews audit and compliance examinations and reports, and approves and monitors appropriate action based upon these reports, and reviews and advises with respect to material transactions with Directors or officers. In addition, the Committee reviews and approves matters relating to financial management and the capital markets. Meetings are held as necessary to accomplish the objectives of the Committee, and in 1998 the Committee met twice. NOMINATING COMMITTEE. At December 31, 1998, the Nominating Committee consisted of Stephen J. Connolly, IV, Robert R. Fanning, Jr., Arthur E. Holden, Stephen G. Kasnet and Arthur E. McCarthy, Chairman. The Nominating Committee met once during 1998. The Nominating Committee selects nominees for election as Directors; determines committee assignments and recommends for Board approval the policy regarding directors' compensation. Meetings are held as necessary to accomplish the objectives of the Nominating Committee. The Nominating Committee will consider written recommendations from any stockholder of record with respect to nominees for Directors of Bancorp. Such nominations must be delivered to or mailed to and received by Bancorp at its principal executive office no later than March 6, 2000 and no earlier than December 7, 1999 to be considered at the 2000 annual meeting. To submit a nomination, a stockholder should send the nominee's name and the appropriate supporting information required by Bancorp's By-laws to Susan G. Ouellette, Clerk, at Bancorp's principal executive office (see "Stockholder Proposals"). 10 13 EXECUTIVE OFFICERS The following table sets forth as of March 1, 1999 the names and ages of all executive officers of Bancorp and its subsidiary, the Bank, the positions and offices held by each of them with Bancorp and the Bank, the period during which he has served as such, and the business experience of each during the previous five years.
POSITIONS HELD AND BUSINESS EXPERIENCE DURING NAME THE PREVIOUS FIVE YEARS AGE - ---- ----------------------- --- John R. Putney President and Chief Executive 55 Officer of Bancorp and the Bank since 1998; Director of Bancorp and the Bank since 1997; Executive Vice President of Bancorp and the Bank, 1997; Senior Vice President for Corporate Banking and Senior Lending Officer of the Bank since prior to 1994 to 1997. Paul M. Peduto Treasurer and Director of Bancorp 49 and Executive Vice President, Chief Financial Officer, Treasurer and Director of the Bank since prior to 1994. Leo C. Donahue Senior Vice President for Personal Banking of the 49 Bank since prior to 1994. Mark J. Terry Senior Vice President for Corporate Banking and 48 Senior Lending Officer of the Bank since 1998; Senior Vice President, Commercial Real Estate, 1996-1997; Senior Vice President, Commercial Real Estate, Eastern Bank, since prior to 1994 to 1996.
11 14 EXECUTIVE COMPENSATION COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION The Executive Committees (the "Committees") of the Boards of Directors of Bancorp and the Bank, which are comprised of the same individuals, are responsible for compensation policies and decisions. Bancorp does not pay any separate compensation to the Chief Executive Officer or executive officers of Bancorp, all of whom are executive officers of the Bank and receive compensation in such capacities. Neither John R. Putney nor Paul M. Peduto is or was a member of the Executive Committee of Bancorp or the Bank. The Committees' policy with regard to executive compensation is as follows: Salaries and perquisites, other than bonuses and option grants, are based in part on the Committees' subjective evaluation of (a) publicly available information concerning salaries and perquisites earned by individuals with comparable responsibilities and positions at other public companies and (b) the performance of Bancorp and the Bank and individual executive officers. The salary and perquisites paid to the Chief Executive Officer in 1998 are specified in a December 1997 employment agreement between the Chief Executive Officer and Bancorp and the Bank (see "Executive Compensation (Salary and Bonus Payments, Options Granted and Other) - Employment Agreement - John R. Putney," below). In the case of compensation for executive officers other than the Chief Executive Officer, the Committees rely to a large extent upon the recommendations of the Chief Executive Officer. Because the Committees believe that employment opportunities for executive officers are not necessarily limited to or coextensive with the financial institutions included in the Keefe, Bruyette & Woods New England Bank Index shown in the performance graph below, its review of compensation information includes companies not included in this industry index. Bonuses and option grants to the Chief Executive Officer and other executive officers are intended to provide annual and long-term compensation incentives. Bonuses and option grants are awarded to executive officers other than the Chief Executive Officer based mainly on the financial performance of Bancorp and the Bank and on financial performance compared to targets for the business segment for which each executive is responsible. In the case of the Chief Executive Officer, financial performance is compared to targets for Bancorp and the Bank as a whole. These targets are related mainly to net income, return on stockholders' equity and credit quality. Bonuses were paid after the Committees reviewed the financial performance of the Bank for 1998. Stock option grants are intended to create incentives for the long-term growth and financial success of Bancorp and the Bank and to increase the commonality of interest between management and Bancorp's shareholders and are granted as and when determined appropriate by the Committees. Stock option awards during 1998 reflect the Committees' review of the Bank's financial performance. The level of bonuses and stock options awarded to individuals is not based on any formula; instead, a general determination is made based on the above factors and, in the case of executive officers other than the Chief Executive Officer, the recommendations of the Chief Executive Officer. MEMBERS OF THE EXECUTIVE COMMITTEE(S) Paul J. Curtin Robert R. Fanning, Jr. Arthur E. Holden, Chairman Stephen G. Kasnet Arthur E. McCarthy 12 15 EXECUTIVE COMPENSATION (SALARY AND BONUS PAYMENTS, OPTIONS GRANTED AND OTHER) The following table sets forth the executive compensation paid for services in all capacities to Bancorp, the Bank and its subsidiaries during calendar years 1996, 1997 and 1998 for the Chief Executive Officer and all other executive officers. SUMMARY COMPENSATION TABLE (1996-1998)
Annual Compensation Long term compensation Name and principal position Other annual Awards All other December 31, 1998 Year Salary($) Bonus($) compensation($) Options(# of Shs.) compensation($) John R. Putney* 1998 182,000 42,000 15,000 20,813(1)(5) President, Chief Executive 1997 126,815 32,000 - 7,000 21,184 Officer and Director of 1996 100,846 24,000 - 5,300 13,258 Warren Bancorp, Inc., and Warren Five Cents Savings Bank Paul M. Peduto 1998 132,115 17,000 11,600 20,456(2)(5) Treasurer and Director of 1997 133,019 14,000 - 5,800 21,889 Warren Bancorp, Inc.; 1996 124,277 12,500 - 5,300 16,608 Executive Vice President, Chief Financial Officer, Treasurer and Director of Warren Five Cents Savings Bank Leo C. Donahue 1998 102,927 12,000 10,600 11,307(3)(5) Senior Vice President for 1997 103,617 9,000 - 5,300 16,364 Personal Banking of 1996 96,700 10,000 - 5,300 10,645 Warren Five Cents Savings Bank Mark J. Terry** 1998 110,288 27,500 11,600 12,418(4) Senior Vice President for 1997 111,000 37,000 - 4,000 19,084 Corporate Banking of 1996 2,827 - - 5,000 Warren Five Cents Savings Bank
* Mr. Putney was elected President and CEO of Bancorp and the Bank effective January 1, 1998. ** Mr. Terry was employed as of December, 1996. He was elected Senior Vice President and Senior Lending Officer of the Bank effective January 1, 1998. - ------------------ (1) Consists of contribution of $15,172 to Mr. Putney's 401(k) account and premium paid for a split-dollar life insurance policy in the amount of $5,641. (2) Consists of contribution of $14,430 to Mr. Peduto's 401(k) account and premium paid for a split-dollar life insurance policy in the amount of $6,026. (3) Consists of contribution of $11,307 to Mr. Donahue's 401(k) account (4) Consists of contribution of $12,418 to Mr. Terry's 401(k) account. (5) Owns a split-dollar life insurance policy provided by Bancorp. The ownership of the policy is structured so that upon the death of the executive, Bancorp will be reimbursed for the cumulative premium amounts paid. The result is that over the life of the program there is minimal cost to Bancorp. 13 16 EMPLOYMENT AGREEMENT - JOHN R. PUTNEY. Mr. Putney, who currently serves as President and Chief Executive Officer and a director of Bancorp and the Bank, entered into an employment agreement with Bancorp and the Bank effective January 1, 1998, the date he began serving as President and Chief Executive Officer. The agreement is for an initial two-year term and automatically extends for an additional one-year period on each anniversary. Mr. Putney may terminate the agreement upon 90 days notice to the Bank subject to an obligation not to solicit Bank customers on behalf of businesses engaged in banking or mortgage lending or encourage Bank customers to terminate or adversely modify their business relationship with the Bank. Mr. Putney is currently paid at a rate of $190,000 per year. The agreement provides for base salary adjustments and bonuses each year. Under the agreement the Bank also provides Mr. Putney with the use of an automobile and customary insurance and retirement benefits. CONSULTING AGREEMENT CONSULTING AGREEMENT - GEORGE W. PHILLIPS. Mr. Phillips, who served as President, Chief Executive Officer and director of Bancorp and the Bank from prior to 1994 to 1997 and currently serves as a director of Bancorp, entered into a consulting agreement with Bancorp effective January 1, 1998. For his services Mr. Phillips is paid at a rate of $50,000 per year and has agreed to waive director fees and other benefits during the term of the agreement. The agreement expires May 31, 2000, and may be terminated for any reason by either party with 60 days prior notice. SEVERANCE ARRANGEMENTS EMPLOYMENT AGREEMENT - JOHN R. PUTNEY. The employment agreement between John R. Putney and Bancorp and the Bank provides that upon a "non-hostile change of control" the term of the employment agreement shall automatically convert to a term of three years from the date of the "change of control" and automatically extend for an additional one-year period on each anniversary. "Non-hostile change of control" is defined in the agreement and generally refers to a 25 percent or more change in ownership of the Common Stock of Bancorp which is consented to by a two-thirds vote of the directors of Bancorp. SPECIAL TERMINATION AGREEMENTS. Bancorp and the Bank have entered into severance agreements with Leo C. Donahue, Paul M. Peduto, John R. Putney and Mark J. Terry. Each severance agreement provides severance pay benefits to the relevant officer if his employment is terminated under certain circumstances following a "change of control." "Change of control" is defined in each agreement and generally refers to a 25 percent or more change in ownership of the Common Stock of Bancorp or the Bank which, in some cases, is not consented to by the Board of Directors. If there is such a "change of control" at any time during the term of the agreement, and thereafter the officer's employment were terminated either by Bancorp or the Bank other than for "cause" or by the officer following the officer's demotion, the officer's loss of title or office, or a reduction in the officer's annual compensation, the officer would generally be entitled to receive a lump sum cash payment equal to approximately three times his average annual compensation over his five most recent years of employment with Bancorp or the Bank. The agreements terminate upon the earliest of termination of the officer's employment by Bancorp and the Bank for cause, the officer's resignation or termination for any reason prior to a change in control, or resignation after a change in control except for reasons just described. STOCK OPTION AGREEMENTS. Stock option agreements with Leo C. Donahue, Paul M. Peduto, John R. Putney and Mark J. Terry provide that currently exercisable stock options shall immediately vest in full and become exercisable upon a "change of control," as defined in such stock option agreements. 14 17 STOCK OPTIONS The following tables show, as to the executive officers named in the Summary Compensation Table, information regarding options granted during 1998 and option values at December 31, 1998. OPTION GRANTS IN 1998
Individual Grants Potential realizable value Percent of at assumed annual rates total of stock price appreciation Options options granted Exercise or for option term(1) Granted to employees base price Expiration (# of Shs.) in 1998 ($/Sh) date 5%($) 10%($) John R. Putney 15,000 9.35% $12.375 6/24/05 $75,568 $176,102 Paul M. Peduto 11,600 7.23% $12.375 6/24/05 $58,439 $136,186 Leo C. Donahue 10,600 6.60% $12.375 6/24/05 $53,401 $124,446 Mark J. Terry 11,600 7.23% $12.375 6/24/05 $58,439 $136,186
(1) The potential gain is calculated from the closing price of Common Stock on the date of grants to executive officers. These amounts represent assumed rates of appreciation only. Actual gains, if any, on stock option exercises and common stock holdings depend entirely on the future performance of the Common Stock and overall market conditions. AGGREGATED OPTIONS EXERCISED IN 1998 AND THE YEAR-END VALUE OF UNEXERCISED OPTIONS
Value of Number of unexercised in-the- Shares unexercised options money options acquired on at year-end 1998(#) at year-end 1998($)(1) exercise Value Exercisable/ Exercisable/ Name (# of Shs.) Realized($) Unexercisable Unexercisable John R. Putney 37,160 $334,810 21,080/26,960 $55,700/$33,693 Paul M. Peduto 34,160 $308,616 18,640/22,600 $111,360/$30,989 Leo C. Donahue 55,000 588,438 41,000/21,400 $165,618/$31,270 Mark J. Terry 0 0 11,520/18,080 $12,800/$11,700
(1) The value of unexercised options is calculated using the difference between the option exercise price and the closing price of the common Stock reported by the Nasdaq Stock Market on December 31, 1998 ($9.0625 per share), multiplied by the number of shares for which the option is exercisable. 15 18 RETIREMENT BENEFITS EXECUTIVE SUPPLEMENTAL RETIREMENT ARRANGEMENT. An Executive Supplemental Retirement Arrangement between George W. Phillips and Bancorp and the Bank provides that Mr. Phillips is entitled to receive annual pension benefits of $62,400 beginning January 1, 1998. DIRECTORS' COMPENSATION Directors of Bancorp receive $350 for each Board meeting that they attend. Members of the Board committees and committee chairmen receive $300 for each meeting that they attend. Directors of the Bank receive $350 for each Board meeting they attend. Committee members and committee chairmen receive $300 for each committee meeting they attend. In addition, each Director receives an annual fee of $3,000. Stephen G. Kasnet, who is Chairman of the Board of Bancorp and the Bank, in addition to receiving compensation for Board and committee meeting attendance, also receives an annual fee of $12,500. Employees of Bancorp or the Bank who are also Directors of Bancorp or the Bank do not receive directoral fees. Each Director receives stock options for 3,000 shares of Bancorp Common Stock per year under the 1995 Incentive and Nonqualified Stock Option Plan, exercisable at the fair market value of Bancorp's Common Stock on the date of grant. In addition, any new directors will receive a one-time grant of stock options for 6,000 shares of Bancorp Common Stock. George W. Phillips, who is a director of Bancorp, has agreed to waive director fees and receipt of options. (See Consulting Agreement - George W. Phillips, above). Copies of the aforementioned agreements, plans and documents discussed under "Executive Compensation" are available for inspection at Bancorp's office, 10 Main Street, Peabody, Massachusetts 01960. 16 19 COMPARISON OF CUMULATIVE TOTAL RETURN AMONG WARREN BANCORP, INC., THE TOTAL RETURN INDEX FOR THE NASDAQ STOCK MARKETS (U.S. COMPANIES), AND THE KEEFE, BRUYETTE AND WOODS TOTAL RETURN INDEX FOR NEW ENGLAND BANKS. [LINE GRAPH] INDEX OF TOTAL RETURN
WARREN BANKCORP, WARREN NASDAQ KB&W(1) INC. PRICE PLUS BANCORP, U.S. COMPANIES NEW ENGLAND CUMULATIVE DIVIDENDS INC. (INDEXED) INDEX BANK INDEX -------------------- ------------- -------------- ----------- 12/31/93 $ 3.625 100.00 100.00 100.00 12/31/94 4.000 110.34 97.75 100.67 12/31/95 5.802 160.06 138.26 157.13 12/31/96 8.066 222.51 170.01 217.03 12/31/97 12.955 357.39 208.30 373.11 12/31/98 10.840 299.03 293.52 344.79
- ------------ (1) Keefe, Bruyette & Woods, Inc. (KB&W) is an investment banking firm specializing in banks and bank stock. Included in its published index are total returns for 18 New England banks which were chosen by Keefe Bruyette & Woods for their range of asset size, market capitalization and geographical dispersion. 17 20 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The Bank makes and has made loans to certain of its officers and Directors and their associates. All of such loans were made in the ordinary course of business and were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons. Management believes that such loans did not involve more than the normal risk of collectibility or present other unfavorable features. Certain loans or other extensions of credit to principal officers and Directors must be approved by the Bank's Loan Committee and the Board of Directors, and reported annually to the Massachusetts Commissioner of Banks. In addition, the Bank is subject to regulations of the Federal Deposit Insurance Corporation which (i) require that such loans to principal officers be made on the same rates, terms and conditions as loans to unaffiliated persons, and (ii) impose reporting requirements, approval procedures and limits on the amounts of such loans. As a matter of policy, the Bank also makes certain loans to other employees. 18 21 INDEPENDENT PUBLIC ACCOUNTANTS The firm of Arthur Andersen LLP has served as Bancorp's independent public accountants since 1997. Representatives of Arthur Andersen LLP have accepted an invitation to attend the Annual Meeting. They will have an opportunity to make a statement should they so desire and will be available to respond to appropriate questions. OTHER MATTERS The cost of soliciting proxies will be paid by Bancorp. In addition to solicitation by mail, officers and employees of the Bank, who will receive no compensatoin for theirs ervices other than their salaries, may solicit proxies by telephone, telegraph or personal interview. Brokerage houses, nominees, fiduciaries and other custodians are requested to forward soliciting matieral to the beneficial owners of shares held of record by them and will be reimbursed for their expeneses. It is not anticipated that matters other than those set forth in the Notice of Annual Meeting and described in this Proxy Statement will be brought before the Annual Meeting, but if any such matters are properly presented, the persons named in the proxy will vote in accordance with their best judgment. STOCKHOLDER PROPOSALS Stockholder proposals intended to be presented at the next annual meeting of stockholders must be received by Bancorp on or before November 30, 1999 in order to be considered for inclusion in Bancorp's proxy statement. These proposals must also comply with the rules of the SEC governing the form and content of proposals in order to be included in Bancorp's proxy statement and form of proxy and should be directed to: Clerk, Warren Bancorp, Inc., 10 Main Street, Peabody, MA 01960. A stockholder who wishes to present a proposal at the next annual meeting of stockholders, other than a proposal to be considered for inclusion in Bancorp's proxy statement described above, must deliver the proposal to Bancorp at the address above. Bancorp must receive the proposal not earlier than December 7, 1999 and not later than March 6, 2000. The proposal must also comply with the other requirements contained in Bancorp's By-laws, including supporting documentation and other information. 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. By order of the Board of Directors Susan G. Ouellette, Clerk March 26, 1999 19 22 [X] PLEASE MARK VOTES REVOCABLE PROXY AS IN THIS EXAMPLE WARREN BANCORP, INC. PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 5, 1999 THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS The undersigned hereby constitutes and appoints Stephen G. Kasnet, John R. Putney and Paul M. Peduto, and each of them, as Proxies of the undersigned, with full power of substitution, and authorizes each of them to represent and to vote all shares of Common Stock of Warren Bancorp, Inc. (the "Company"), held by the undersigned at its close of business on March 8, 1999, at the Annual Meeting of Stockholders to be held on Wednesday, May 5, 1999, at 10:00 a.m., at the King's Grant Inn, Route 128, Danvers, Massachusetts, or at any adjournments or postponements thereof. ------------------------------ Please be sure to sign and date Date this Proxy in the box below. - --------------------------------------------------------------------- - --- Stockholder sign above -------- Co-holder (if any) sign above --- WITH- FOR ALL FOR HOLD EXCEPT Proposal #1: To elect FIVE Directors to hold office [ ] [ ] [ ] until the 2002 Annual Meeting of Stockholders and until their successors are duly elected and qualified: PETER V. BENT ARTHUR E. MCCARTHY PAUL J. CURTIN JOHN D. SMIDT STEPHEN R. HOWE INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK "FOR ALL EXCEPT" AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW. - -------------------------------------------------------------------------------- WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSAL 1, AND THE PROXIES ARE EACH AUTHORIZED IN THEIR DISCRETION TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF. A STOCKHOLDER WISHING TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS NEED ONLY SIGN AND DATE THIS PROXY AND RETURN IT IN THE POSTAGE-PAID ENVELOPE PROVIDED. * DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED. * WARREN BANCORP, INC. 10 MAIN STREET, PEABODY, MASSACHUSETTS 01960 - -------------------------------------------------------------------------------- The above signed hereby acknowledge(s) receipt of the accompanying Notice of Annual Meeting of Stockholders and the Proxy Statement with respect thereof and hereby revoke(s) any proxy or proxies heretofore given. This proxy may be revoked at any time before it is exercised. Please sign name exactly as shown. When there is more than one holder, each should sign. When signing as attorney, administrator, executor, guardian or trustee, please add your title as such. If executed by a corporation, the proxy should be signed by a duly authorized person, stating his or her title or authority. PLEASE ACT PROMPTLY SIGN, DATE & MAIL YOUR PROXY CARD TODAY - -------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----