Bethel Bancorp
(d/b/a Northeast Bancorp)
158 Court Street
Auburn, Maine 04212
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held October 23, 1996
The Annual Meeting of Shareholders of Bethel Bancorp (the "Company") will
be held on Wednesday, October 23, 1996, at 6:00 p.m., Eastern Time, at the
Martindale Country Club, 527 Beech Hill Road, Auburn, Maine for the following
purposes:
1. To elect five directors for terms of three years each, to elect one
director for a term of two years and to elect one director for a term
of one year;
2. To consider and act upon a proposal to amend the Articles of
Incorporation of the Company to change its name to "Northeast
Bancorp."
3. To ratify the appointment of Baker Newman & Noyes, Limited Liability
Company as auditors for fiscal year 1997; and
4. To transact such other business as may properly come before the
meeting.
Shareholders of record at the close of business on September 13, 1996 are
entitled to notice of and to vote at the meeting.
A copy of the Annual Report for the fiscal year ended June 30, 1996 is
enclosed herewith.
By Order of the Board of Directors and President
Ariel Rose Gill
Clerk
September 20, 1996
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| IMPORTANT--Your Proxy Card is enclosed |
| |
| PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY IN |
| THE ENCLOSED STAMPED ENVELOPE WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE |
| MEETING. YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. |
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BETHEL BANCORP
(d/b/a Northeast Bancorp)
158 Court Street
Auburn, Maine 04212
(207) 777-5950
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
to be held on October 23, 1996
This Proxy Statement is furnished to shareholders of Bethel Bancorp (the
"Company") in connection with the solicitation by the Board of Directors of the
Company of proxies to be used at the Annual Meeting of Shareholders (the "Annual
Meeting") to be held on Wednesday, October 23, 1996 at 6:00 p.m., Eastern Time,
at the Martindale Country Club, 527 Beech Hill Road, Auburn, Maine, and at any
adjournments thereof.
If the enclosed form of proxy is properly executed and returned to the
Company in time to be voted at the Annual Meeting, the shares represented
thereby will be voted in accordance with the instructions marked thereon.
Executed but unmarked proxies will be voted "FOR" the nominees and proposals
presented in the attached Notice of Annual Meeting of Shareholders. Except for
procedural matters incident to the conduct of the Annual Meeting, the Company
does not know of any matters other than those described in the Notice of Annual
Meeting that are to come before the Annual Meeting. If any other matters are
properly brought before the Annual Meeting, the persons named in the
accompanying proxy will vote the shares represented by the proxies on such
matters as determined by a majority of the Board of Directors.
The presence of a shareholder at the Annual Meeting will not automatically
revoke such shareholder's proxy. However, shareholders may revoke a proxy at any
time prior to its exercise by filing with the Clerk of the Company a written
notice of revocation, by delivering to the Company a duly executed proxy bearing
a later date, or by attending the Annual Meeting and voting in person.
The cost of soliciting proxies in the form enclosed herewith will be borne
by the Company. In addition to the solicitation of proxies by mail, the Company,
through its directors, officers and regular employees, may also solicit proxies
personally or by telephone or telegraph. The Company will also request persons,
firms and corporations holding shares in their names or in the name of their
nominees, which are beneficially owned by others, to send proxy material to and
obtain proxies from the beneficial owners and will reimburse the holders for
their reasonable expenses in doing so.
It is anticipated that this Proxy Statement will be mailed to shareholders
on or about September 20, 1996.
The securities which can be voted at the Annual Meeting consist of shares
of the common stock, the Series A Preferred Stock and the Series B Preferred
Stock of the Company, with each share entitling its owner to one vote on all
matters.
REQUIRED VOTE FOR MATTERS
TO BE ACTED UPON AT ANNUAL MEETING
Under the Company's Articles of Incorporation, cumulative voting to elect
directors is not authorized. The close of business on September 13, 1996 (the
"Record Date") has been fixed by the Board of Directors as the record date for
the determination of shareholders entitled to vote at the Annual Meeting. There
were approximately 420 record holders of the Company's common stock as of that
date and the number of shares of common stock outstanding as of that date was
1,231,294. On the Record Date, there were 45,454 shares of Series A Preferred
Stock outstanding and 71,428 shares of Series B Preferred Stock, all held by one
record holder. Shares of the Company's common stock, Series A Preferred Stock
and Series B Preferred Stock have one vote per share on all matters. Under both
Maine law and the Company's bylaws, the presence, in person or by proxy, of at
least one-half of the outstanding shares of the Company's voting stock entitled
to vote is necessary to constitute a quorum at the Annual Meeting.
With respect to the election of directors, both the bylaws of the Company
and Maine law provide that those candidates receiving the greatest number of
votes cast at a meeting of shareholders, duly called and at which a quorum is
present, shall be deemed elected. The bylaws provide that the directors shall be
divided into three classes as nearly equal in number as possible with each
director to be elected for a three-year term of office to expire at the third
succeeding annual meeting of shareholders after their election, except for
directors elected by the Board to fill a vacancy thereon, including a vacancy
created by an increase in the number of directors, who serve until the next
Annual Meeting of Shareholders. As a consequence of these provisions and the
prior action of the Board of Directors in increasing the number of directors
from 12 to 15, those five nominees for director to serve until 1999, the nominee
for director to serve until 1998 and the nominee for director to serve until
1997 receiving the greatest number of votes shall be deemed elected, regardless
of whether they receive a majority of the votes cast. Abstentions and broker
non-votes will be treated as not voting for the election of directors and will
have no effect in determining the nominees receiving the most affirmative votes.
With respect to an amendment to the Articles of Incorporation of a Maine
corporation, Maine law provides that a proposed amendment shall be adopted upon
receiving the affirmative vote of the holders of at least a majority of all
outstanding shares entitled to vote thereon. Holders of the Company's Series A
Preferred Stock and Series B Preferred Stock are not entitled to vote on the
proposed amendment to the Company's Articles as a class, and, therefore, the
proposed amendment will be approved upon receiving the affirmative vote of the
holders of a majority of the outstanding shares of the Company's common stock,
Series A Preferred Stock and Series B Preferred Stock voting together as one
class. Abstentions and broker non-votes will be treated as not voting for the
amendment to the Company's Articles and will have the same effect as a vote
against the proposed amendment.
As to matters other than the election of directors and amendment to the
Company's Articles of Incorporation that may be brought before the Annual
Meeting, Maine law provides that any corporate action be taken at a
shareholders' meeting at which a quorum is present shall be authorized by a
majority of the votes cast by the holders of shares entitled to vote on the
subject matter, except to the extent that a greater vote is required by law or
by the Company's articles or bylaws. The bylaws of the Company provide that the
holders of a majority in interest of the shares having voting rights represented
at a meeting of shareholders shall decide any question brought before such
meeting, provided a quorum is present. As to any matter other than the election
of directors or amendment to the Company's Articles of Incorporation,
abstentions and broker non-votes will be treated as not voting for such matter
and will have the same effect as a vote against the matter brought before the
shareholders at the Annual Meeting.
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of September 20, 1996, the following persons owned of record, or were
known to own beneficially, more than five percent (5%) of any class of the
outstanding shares of the Company:
Shares of the Company
Owned (Percentage
Name and Address of Outstanding Voting Stock)(1)
---------------- -------------------------------
Albert H. Desnoyers 132,694 (7.6%)
210 Washington Drive
Watchung, New Jersey 07060
Claude E. Savoie 101,700 (5.8%)
550 Sheldiac Road
Moncton, New Brunswick
Canada E1A 2T1
Ronald J. Goguen (2) 372,674 (21.4%)
111 St. George Street
Suite 200
Moncton, New Brunswick
Canada E1C 1T7
- --------------------
Shares of the Company's voting stock beneficially owned. A beneficial owner
of a security includes any person who, directly or indirectly, through any
contract, arrangement, understanding, relationship, or otherwise has or
shares the power to vote such security or the power to dispose of such
security. Included are shares owned by spouses and relatives living in the
same home as to which beneficial ownership may be disclaimed and shares
which may be obtained under warrants or upon the exercise of conversion
rights. Based on Schedules 13D and/or Forms 4 and 5 filed with the
Securities and Exchange Commission.
Includes 45,454 shares of Series A Preferred Stock, 71,428 shares of Series
B Preferred Stock, 120,478 shares of Common Stock, and a warrant to
purchase 133,764 shares of common stock at a price of $7.00 per share,
owned by Square Lake Holding Corporation ("Square Lake"), a Maine
corporation which is owned by a Canadian corporation of which Ronald Goguen
is a 95% shareholder and director and 1,550 shares of Common Stock held in
an individual retirement savings plan. Shares of the Series A Preferred
Stock and Series B Preferred Stock are convertible into shares of common
stock without further consideration at a ratio of two for one.
--------------------
ELECTION OF DIRECTORS
General
The Board of Directors of the Company presently consists of 15 persons.
Directors are elected for staggered terms of three years and until their
successors are elected and qualified, except for directors elected by the Board
to fill a vacancy thereon, including a vacancy created by an increase in the
number of directors, who serve until the next Annual Meeting of Shareholders.
The directors are divided into three classes of five directors each. The term of
office of only one class of directors expires in each year. There are no
arrangements or understandings between the Company and any person pursuant to
which any person has been elected as a director.
Effective July 1, 1996, the Board of Directors increased the number of
directors from 12 to 15 and elected 3 directors to fill the vacancies thereby
created to serve until the Annual Meeting. At the Annual Meeting, five directors
will be elected for three-year terms, one director will be elected for a
two-year term and one director will be elected for a one-year term. Unless
otherwise specified on 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 as directors of the nominees listed below. Although it is anticipated
that each nominee will be available to serve as a director, should any nominee
be unavailable to serve, proxies will be voted by the proxy holders in their
discretion for another person designated by the Board of Directors.
The following table sets forth certain information, some of which has been
obtained from the Company's records and some of which has been supplied by the
nominees and continuing directors, regarding the nominees for election to the
Board of Directors and the directors who will continue in office for the
remainder of their terms.
Shares of the Company
Beneficially Owned
(Percentage of Outstanding
Positions With the Company Voting Stock
and Present Principal Director in Parentheses Where
Name and Age Occupation or Employment Since Greater Than 1%) (1)
- ---------------------------- ------------------------------------ -------- --------------------------
Nominees to serve until 1999
James D. Delamater President and Chief Executive 1987 50,000 (2.9%)
Age 45 Officer of the Company.
Normand Houde President, Servants of the Cross, 1996 None
Age 61 a chuch; and director of the Alliance
of Love, a religious mission.
Philip C. Jackson Senior Vice President--Trust 1987 35,700 (2.0%)(2)
Age 51 Operations and Treasurer of the
Company.
Ronald C. Kendall Owner, Kendall Insurance, Inc. 1987 22,580 (1.3%)(3)
Age 64
Robert Morrell President, Brunswick Coal & 1990 2,000
Age 70 Lumber Co.
Directors whose terms expire in 1997
Norris T. Brown Retired. 1987 32,000 (1.8.%)
Age 80
Ronald J. Goguen President, Major Drilling 1990 372,674 (21.4%)(4)
Age 51 Group International. Mr. Goguen
is also a director of Roycefield
Resources, Ltd.
John W. Trinward, D.M.D. Chairman of the Board; Retired 1987 9,634 (5)
Age 71 Dentist.
Edmond J. Vachon Retired. Chairman of the Board 1987 32,850 (1.9%)(6)
Age 86 of Bethel Savings, 1975--1986;
President of Bethel Savings,
1973--1975; Headmaster--Emeritus,
Gould Academy.
Nominee to serve until 1997
Joseph Aldred Self-employed attorney. 1996 None
Age 66
Directors whose terms expire in 1998
John B. Bouchard President of Bouchard & Sons, 1996 4,400
Age 60 a construction contractor, and
Owner, John B. Bouchard Builder.
Judith W. Hayes President, Consumers Maine 1994 1,000
Age 40 Water Company, a water utility
serving various communities in
Maine.
Stephen W. Wight Owner and Manager, Sunday River 1987 11,500 (7)
Age 52 Inn, a resort hotel.
Dennis A. Wilson Owner, D. A. Wilson & Co., a 1989 28,200 (1.6%)
Age 61 trucking company.
Nominee to serve until 1998
A. William Cannan Executive Vice President and Chief 1996 20,141 (1.2%)
Age 54 Operating Officer of the Company
since 1993. President of Casco
Northern Bank, NA in Portland,
Maine from 1991 to 1993.
All directors and executive -- -- 653,238 (37.5%)(8)
officers as a group (20 persons)
- --------------------
Shares of the Company's voting stock beneficially owned. A beneficial owner
of a security includes any person who, directly or indirectly, through any
contract, arrangement, understanding, relationship, or otherwise has or
shares the power to vote such security or the power to dispose of such
security. Included are shares owned by spouses and relatives living in the
same home as to which beneficial ownership may be disclaimed, shares which
may be obtained under the Company's Stock Option Plans and shares which may
be obtained under warrants or upon the exercise of conversion rights. The
foregoing table includes 98,500 shares of the Company's Common Stock
subject to stock options, 116,882 preferred shares convertible into 233,764
common shares and 133,764 shares of the Company's Common Stock subject to a
warrant. Of such shares, Mr. Delamater has the right to acquire 24,000
shares subject to options, Mr. Cannan has the right to acquire 20,000
shares subject to options, Mr. Jackson has the right to acquire 24,000
shares subject to options, and Square Lake Holding Corporation, of which
Mr. Goguen is the beneficial owner, has the right to acquire 133,764 common
shares pursuant to a warrant and 233,764 common shares pursuant to
conversion rights applicable to the Company's preferred shares. See "Common
Stock Ownership of Certain Beneficial Owners," above.
Includes 3,900 shares owned by spouse and 900 shares owned by a child, as
to which beneficial ownership is disclaimed by Mr. Jackson.
Includes 1,850 shares owned by spouse, as to which beneficial ownership is
disclaimed by Mr. Kendall, and 17,800 shares held in trusts of which Mr.
Kendall is a trustee or beneficiary, as to which beneficial ownership of
9,200 shares is disclaimed by Mr. Kendall.
Includes 45,454 shares of Series A Preferred Stock, 71,428 shares of Series
B Preferred Stock, 120,478 shares of Common Stock, a warrant for 133,764
shares of common stock with an exercise price of $7.00 per share owned by
Square Lake and 1,550 shares of Common Stock held in an individual
retirement savings plan. See "Common Stock Ownership of Certain Beneficial
Owners," above.
Includes 534 shares owned by spouse, as to which beneficial ownership is
disclaimed by Mr. Trinward.
Includes 13,126 shares owned by spouse, as to which beneficial ownership is
disclaimed by Mr. Vachon.
Includes 4,200 shares owned by spouse and 1,500 shares owned by children,
as to which beneficial ownership disclaimed by Mr. Wight.
Includes 35,210 shares owned by spouses and members of immediate families,
as to which beneficial ownership has been disclaimed.
--------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEES
NAMED HEREIN.
Listed below is information concerning the executive officers of the
Company, other than Messrs. Delamater, Cannan and Jackson.
Positions with
Name and Age the Company Term of Office Officer Since
- --------------------- -------------------------------------------- -------------- -------------
Richard E. Wyman, Jr. Senior Vice President and Chief one year 1992
Age 40 Financial Officer
Henry Korsiak Senior Vice President--Operations one year 1993
Age 53
Marilyn Wyman Senior Vice President--Human Resources one year 1987
Age 45
Sterling Williams Senior Vice President--Commercial one year 1994
Age 44 Lending
Stephen Dill Senior Vice President--Retail Lending one year 1995
Age 55
Messrs. Delamater, Cannan and Jackson have served as officers of the
Company since 1987, 1993 and 1987, respectively. All officers are elected for a
term of one year.
Mr. Wyman had been Chief Financial Officer of Brunswick Federal Savings,
F.A., which was acquired by the Company in 1990, since October, 1988. Mr.
Korsiak joined ASI Data Services, Inc., a data processing subsidiary of the
Company, in December of 1993. Prior to joining ASI, Mr. Korsiak had been a
Manager of Systems Analysis for Fleet Services Corp. in New York and Rhode
Island since 1978. Prior to joining the Company in 1994, Mr. Williams had served
as a Vice President of Fleet Bank of Maine since 1984, where he was a Commercial
Loan Officer and Workout Officer in that Bank's Managed Asset Division. Mr. Dill
had served as Vice President for Retail Lending of the First National Bank of
Damariscotta since 1989 before joining the Company.
The Board of Directors of the Company held 11 meetings during the year
ended June 30, 1996. The Audit Committee of the Company consists of the entire
Board of Directors and held one meeting in fiscal 1996. The Company has no other
standing committees, other than the Personnel and Compensation Committee. The
Personnel and Compensation Committee, which advises the Board on issues of
compensation for directors and officers and administers certain stock plans of
the Company, consists of Directors Trinward, Goguen, Kendall, Hayes, Wilson and
Wight and held three meetings in fiscal 1996. In fiscal 1996, each director
attended at least 75% of all meetings of the Board of the Company and meetings
of any Committee of which he or she was a member.
Executive Compensation and Other Information
Summary Compensation Table. The following table sets forth cash
compensation for the Company's chief executive officer and each other executive
officer of the Company who received total annual compensation exceeding $100,000
for services rendered in all capacities to the Company and its subsidiaries
during the last three fiscal years.
Long-Term
Compensation
Annual Compensation Awards
-------------------- ---------------
Securities
Fiscal Other Annual Underlying All Other
Name and Principal Position Year Salary($) Bonus($) Compensation($)(1) Options/SARs(2) Compensation($)
- --------------------------- ------ --------- -------- ------------------ --------------- ---------------
James D. Delamater 1996 126,000 2,000 3,133 0 10,013(3)
Director, President and 1995 110,000 15,000 9,712 4,000 10,228(4)
Chief Executive Officer 1994 93,000 3,256 9,939 0 8,546(5)
of the Company
A. William Cannan 1996 115,000 9,000 6,434 0 9,640(6)
Director, Executive Vice 1995 106,000 13,102 4,237 20,000 9,629(7)
President and Chief
Operating Officer
- --------------------
The values listed in this column include amounts for memberships in civic,
social and professional associations, use of automobiles furnished by the
Company and director's fees.
Amounts listed in this column reflect the application of anti-dilution
provisions of options granted prior to the Company's December, 1995 100%
stock dividend.
Includes $528 in term life insurance premiums paid on behalf of Mr.
Delamater, $7,569 in direct contributions and a $1,916 matching
contribution under the Company's 401(k) Savings and Retirement Plan.
Includes $537 in term life insurance premiums paid on behalf of Mr.
Delamater, $8,038 in direct contributions and a $1,653 matching
contribution under the Company's 401(k) Savings and Retirement Plan.
Includes $486 in term life insurance premiums paid on behalf of Mr.
Delamater, $6,643 in direct contributions and a $1,417 matching
contribution under the Company's 401(k) Savings and Retirement Plan.
Includes $497 in term life insurance premiums paid on behalf of Mr. Cannan,
$7,285 in direct contributions and a $1,858 matching contribution under the
Company's 401(k) Savings and Retirement Plan.
Includes $492 in term life insurance premiums paid on behalf of Mr. Cannan,
$7,569 in direct contributions and a $1,568 matching contribution under the
Company's 401(k) Savings and Retirement Plan.
--------------------
Director Compensation. All directors of the Company also serve as directors
of Northeast Bank, F.S.B., the Company's banking subsidiary ("Northeast Bank").
Each director receives a combined annual retainer from the Company and Northeast
Bank of $1,000. In addition, each director receives $500 per Board meeting
attended and $200 for each Board committee meeting attended which is not held on
the same day as a Board meeting. Directors receive only one meeting fee when
meetings of the Board of the Company and the Board of Northeast Bank are held on
the same day. The Chairman of the Board receives an additional annual retainer
of $1,000 for serving as such.
Stock Option Plans. 1987 Stock Option Plan. On March 20, 1987, the Board of
Directors of the Company adopted the Bethel Bancorp 1987 Stock Option Plan (the
"1987 Option Plan") as a performance incentive for directors, officers and other
employees of the Company and its subsidiaries. The 1987 Option Plan became
effective upon consummation of the conversion of the Company from mutual to
stock form, subject to the approval of the stockholders of the Company. The
Company's shareholders ratified the Option Plan at the 1988 Annual Meeting.
The 1987 Option Plan is administered by the Personnel and Compensation
Committee which recommends to the Board of Directors the persons to whom options
will be granted, the number of shares, the types of options and other terms and
conditions of the options.
Both "incentive stock options" and "nonqualified stock options" may be
granted pursuant to the 1987 Option Plan. The Company intends that the
"incentive stock options" granted under the 1987 Option Plan will qualify under
Section 422A of the Internal Revenue Code. Incentive stock options may only be
granted to employees of the Company and its subsidiaries. The market value of
shares covered by incentive stock options (determined as of the date of grant)
first exercisable under incentive stock options is limited to $100,000 per
calendar year. An optionee will not be deemed to receive taxable income upon
grant or exercise of an incentive stock option. Any gain realized at the time of
sale of shares acquired upon exercise of an incentive stock option will
constitute long-term capital gain to the optionee if the optionee holds the
stock for the longer of two years from the date the option was granted or one
year after the option was exercised. If the optionee holds the stock for a
shorter time, all gain upon disposition of the stock is ordinary income. No gain
or loss will be recognized by the Company as a result of the grant or exercise
of incentive stock options. In the case of nonqualified stock options, which may
be granted to employees and non-employee directors, an optionee will be deemed
to receive taxable income at ordinary income rates upon exercise of a
nonqualified stock option in an amount equal to the difference between the
exercise price and the fair market value of the common stock on the date of
exercise. The amount of such taxable income will be a tax deductible expense to
the Company.
All options granted under the 1987 Option Plan will be required to have an
exercise price per share equal to at least the fair market value of a share of
common stock on the date the option is granted. No option granted will be
exercisable (i) more than three months after the date on which the optionee
ceases to perform services for the Company (except that in the event of
disability, options may be exercisable for up to one year thereafter), or (ii)
10 years after the option is granted in the case of incentive stock options.
Payment for shares purchased pursuant to an option may be made in cash or check
or, if the option agreement permits, by delivery and assignment to the Company
of shares of common stock of the Company, including shares which may be obtained
upon exercise of the option, having a fair market value equal to the aggregate
exercise price, or by any combination of the foregoing.
1989 Stock Option Plan. On June 28, 1989, the Board of Directors of the
Company adopted the Bethel Bancorp 1989 Stock Option Plan (the "1989 Option
Plan") as a performance incentive for the directors, officers and other
employees of the Company and its subsidiaries. The 1989 Option Plan became
effective upon ratification by the Company's shareholders at the 1989 Annual
Meeting. The 1989 Option Plan is essentially identical to the 1987 Option Plan
and is administered by the Personnel and Compensation Committee of the Board of
Directors of the Company.
1992 Stock Option Plan. On September 2, 1992, the Board of Directors of the
Company adopted the Bethel Bancorp 1992 Stock Option Plan (the "1992 Option
Plan") as a performance incentive for the directors, officers and other
employees of the Company and its subsidiaries. The 1992 Option Plan became
effective upon ratification by the Company's shareholders at the 1992 Annual
Meeting. The 1992 Option Plan is essentially identical to the 1989 Stock Option
Plan and is administered by the Personnel and Compensation Committee of the
Board of Directors of the Company.
No stock options were granted under any Plan during fiscal 1996 to Messrs.
Delamater and Cannan. The Company has not granted stock appreciation rights
("SARs") to any executive officer.
The following table sets forth certain information with respect to
outstanding stock options held by Messrs. Delamater and Cannan.
FY-End Option/SAR Values
Number of
Securities Underlying Value of Unexercised
Unexercised Options/SARs in-the-money Options/SARs
Shares at Fiscal Year-End(#) at Fiscal Year-End($)
Acquired on Value Exercisable/ Exercisable/
Name Exercise(#) Realized($) Unexercisable Unexercisable
- ------------------ ----------- ----------- ------------------------ -------------------------
James D. Delamater 22,000 176,000 24,000/0 144,300/0
A. William Cannan 0 0 20,000/0 25,000/0
1994 Employee Stock Purchase Plan. On August 31, 1994, the Board of
Directors of the Company adopted the Bethel Bancorp 1994 Employee Stock Purchase
Plan (the "1994 Stock Purchase Plan"), which was approved by the shareholders of
the Company at the 1994 Annual Meeting.
The 1994 Stock Purchase Plan is administered by the Board's Personnel and
Compensation Committee and provides for twenty quarterly offerings of common
stock to employees. Participating employees will purchase shares with
accumulated payroll deductions. Each employee of the Company or its subsidiaries
who is age 21 and who has completed one year of service, with 1,000 hours of
service, is eligible to participate in the 1994 Stock Purchase Plan, except for
certain employees with substantial stock interests in the Company, taking into
account rights to purchase stock accruing under the 1994 Stock Purchase Plan.
The purchase price of a share of common stock sold pursuant to each quarterly
offering will be not less than the fair market value per share on the date of
exercise. The Board of Directors of the Company may change the purchase price
for any offering to a percentage of fair market value not more than 100% and not
less than 85%.
The 1994 Stock Purchase Plan terminates five years from the commencement of
the plan, unless sooner discontinued or terminated.
401(k) Employee Savings Plan. The Company maintains a 401(k) profit-sharing
plan. The 401(k) Employee Savings Plan, as amended, provides that the Company
shall make a contribution in each plan year in an amount to be determined by the
Company, not in excess of the Company's net profits for that year. The Company's
contribution is allocated among eligible employees in proportion to each
eligible employee's salary for such plan year. Any employee who has completed
one year of service and has attained the age of 21 is considered an eligible
employee under the plan. Under the plan, the Company also makes matching
contributions on behalf of employees who elect to participate in the plan by
contributing a portion of their compensation to the plan. For the year ended
June 30, 1996, the Company's profit sharing plan expense was $135,800.
Transactions with Management
Certain of the directors and executive officers of the Company are at
present, as in the past, customers of Northeast Bank, F.S.B. ("Northeast") and
have transactions with Northeast in the ordinary course of business. In
addition, certain of such persons are at present also owners or officers of
corporations and business trusts, or are members of partnerships, which are
customers of Northeast and which have transactions, including loans, with
Northeast in the ordinary course of business. Such loans are on substantially
the same terms, including interest rates and collateral, as those prevailing at
the time for comparable transactions with others and do not involve more than
the normal risk of collectibility or present other unfavorable features. The
aggregate amount of such loans was $1,625,626 at June 30, 1996. Northeast
expects, in the future, to have banking transactions in the ordinary course of
business with the Company's executive officers and directors, and their
associates, on substantially the same terms, including interest rates and
collateral on loans, as those prevailing at the same time for comparable
transactions with unaffiliated persons.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors to file reports of ownership and changes in ownership
with the Securities and Exchange Commission. Officers and directors are required
by SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.
Based solely on a review of the copies of such forms filed with the
Commission since June 30, 1995 and furnished to the Company and written
representations that no additional forms were required, the Company believes
that all of its officers and directors complied with all Section 16(a) filing
requirements applicable to them, except that each of Mr. Houde and Mr. Aldred
filed late one Form 3 in connection with his election to the Board of Directors.
Neither Mr. Houde nor Mr. Aldred owns any shares of Bethel Bancorp stock.
AMENDMENT TO ARTICLES
At the Annual Meeting, the Company's shareholders will be requested to
approve an amendment to the Articles of Incorporation, as amended, of the
Company to officially change the name of the Company to "Northeast Bancorp." The
resolution that will be offered at the meeting to effect this amendment has been
approved by the Board of Directors of the Company and is set forth in Appendix A
to this Proxy Statement.
On July 1, 1996, following receipt of necessary regulatory approvals, the
two bank operating subsidiaries of the Company, Bethel Savings Bank, F.S.B. and
Brunswick Federal Savings, F.A. were merged into a single entity which adopted
the name "Northeast Bank, F.S.B." At the same time, the Company adopted the
assumed name of "Northeast Bancorp" and has been operating under that assumed
name since July 1, 1996. As a result of recent acquisitions and of the merger,
the territory served by the Company's bank subsidiary has expanded well beyond
the area originally served by Bethel Savings Bank, F.S.B. or Brunswick Federal
Savings, F.A. The continuation of either of these local names for the Company's
banking subsidiary following the merger would not have reflected the regional
areas served by, or broad services available from, the Company's combined bank
subsidiary. As a result, the Board of Directors of the Company, in connection
with approving the merger of its two banking subsidiaries, approved the change
in name of the resulting bank to Northeast Bank, F.S.B. Adoption of the
amendment to the Articles of Incorporation to change the name of the Company to
"Northeast Bancorp" would allow for consistent identification of the Company and
its operating subsidiary and more accurately reflect the regional nature of the
Company's business.
In the event that the proposed amendment to the Articles of Incorporation
is not approved by the requisite number of shareholders as described above under
the caption "REQUIRED VOTE FOR MATTERS TO BE ACTED UPON AT ANNUAL MEETING," the
official name of the Company would remain "Bethel Bancorp," but the Company
would continue to operate under the assumed name of "Northeast Bancorp."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Baker, Newman & Noyes, Limited
Liability Company ("Baker, Newman & Noyes"), independent certified public
accountants, as the auditors for the Company for the current fiscal year ending
June 30, 1997. Baker, Newman & Noyes has acted as the Company's principal
accountants since February 6, 1995. At the meeting, shareholders will vote upon
a proposal to ratify the selection of Baker, Newman & Noyes as auditors. In the
event shareholders holding a majority of the shares entitled to vote represented
at the meeting fail to ratify the selection of Baker, Newman & Noyes as
auditors, the Board of Directors will reevaluate its selection and may choose
another firm to serve as auditors for fiscal year 1997.
It is expected that a representative of Baker, Newman & Noyes will be
present at the meeting to respond to appropriate questions relating to the audit
for the fiscal year ended June 30, 1996 or to the Company's financial
statements. The firm's representative will have the opportunity to make a
statement if he or she desires to do so.
KPMG Peat Marwick LLP was previously the principal accountants for the
Company. On February 6, 1995, that firm's appointment as principal accountants
was terminated and Baker, Newman & Noyes, Limited Liability Company was engaged
as principal accountants. The decision to change accountants was approved by the
Board of Directors on February 6, 1995.
In connection with the audits of the two fiscal years ended June 30, 1994
and the subsequent interim period through February 6, 1995, there were no
disagreements with KPMG Peat Marwick LLP on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedures,
which disagreements if not resolved to their satisfaction would have caused them
to make reference in connection with their opinion to the subject matter of the
disagreement.
The audit reports of KPMG Peat Marwick LLP in the consolidated financial
statements of the Company as of and for the years ended June 30, 1994 and 1993
did not contain any adverse opinion or disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope, or accounting principles.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
SELECTION OF BAKER, NEWMAN & NOYES AS AUDITORS.
SHAREHOLDER PROPOSALS
To be included in the Proxy Statement for the next annual meeting,
shareholder proposals must be received by May 23, 1997.
The Company's Articles of Incorporation require shareholders to comply with
certain provisions in nominating persons for election to the Board of Directors.
In general, advance notice of a proposed nomination is required to be received
by the Secretary of the Company not less than 30 days nor more than 60 days
prior to any meeting of the shareholders. The Articles contain certain other
procedures which must be followed in making such nominations.
OTHER MATTERS
Management knows of no other matters to be brought before the meeting.
However, should any other matter requiring a vote of the shareholders properly
come before the meeting, the persons named in the enclosed proxy intend to vote
the proxy in accordance with their best judgment, discretionary authority to do
so being included in the proxy.
By Order of the Board of Directors and President
Ariel Rose Gill
Clerk
A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND THE SCHEDULES THERETO, IS
AVAILABLE WITHOUT CHARGE TO ANY SHAREHOLDER UPON WRITTEN REQUEST TO ARIEL ROSE
GILL, SECRETARY, BETHEL BANCORP, 158 COURT STREET, AUBURN, MAINE 04212. COPIES
OF THE EXHIBITS TO THE REPORT, WHICH ARE VOLUMINOUS, WILL BE FURNISHED UPON THE
PAYMENT OF A REASONABLE FEE TO OFFSET THE COST OF REPRODUCTION AND MAILING.
APPENDIX A
RESOLUTION FOR SHAREHOLDERS' MEETING
VOTED: That the Articles of Incorporation of the Corporation, as heretofore
amended, shall be further amended by striking the word "BETHEL" as it
appears in ARTICLE FIRST thereof and substituting therefor the word
"NORTHEAST."
PROXY This proxy is solicited by the Board of Directors PROXY
of
BETHEL BANCORP
Proxy for Annual Meeting of Shareholders--October 23, 1996
The undersigned hereby appoints Ariel Rose Gill and Sterling G. Williams,
and each of them severally, proxies of undersigned, with full power of
substitution, to vote all the shares of voting capital stock of Bethel Bancorp
(the "Company") that the undersigned is entitled to vote, at the Annual Meeting
of shareholders of the Company to be held on October 23, 1996, and at any
adjournments thereof.
The Board of Directors recommends a vote FOR proposals 1, 2 and 3.
1. Election of Directors.
The nominees of the Board of Directors are as follows:
Nominees to Serve until 1999: Nominee to Serve until 1998: Nominee to Serve until 1997:
- -------------------------------------------------------- ---------------------------- ----------------------------
James D. Delameter Normand Houde Philip C. Jackson A. William Cannan Joseph Aldred
Ronald C. Kendall Robert Morrell
[ ] FOR all the nominees listed above [ ] AGAINST all the nominees listed above
[ ] FOR election of Directors, except vote withheld from the following nominees:
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2. Proposal to amend the Company's Articles of Incorporation to change
its name to "Northeast Bancorp."
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to ratify the appointment of Baker, Newman & Noyes, Limited
Liability Company as auditors for fiscal year 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This Proxy will be voted as directed herein. IF NO DIRECTION IS GIVEN, THIS
PROXY WILL BE VOTED FOR THE NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSALS 2
and 3. Discretionary authority is hereby conferred upon the proxies with respect
to such other matters as may legally come before the meeting. The undersigned
hereby revokes any proxy heretofore given by the undersigned to vote at the
Annual Meeting or any adjournment thereof.
Please check if you plan to attend the
meeting [ ]
Dated: ----------------------------, 1996
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Signature(s)
Please sign here personally. If the stock
is registered in more than one name, each
joint owner or fiduciary should sign
personally. Only authorized officers
should sign for a corporation.
