Form 10-K/A
SECURITIES
AND EXCHANGE COMMISSION
450
Fifth Street, N.W.
Washington,
D.C. 20549
FORM
10-K/A
(Amendment
No. 1)
ý
|
Annual
Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934 For the Fiscal Year Ended December 31,
2005
|
OR
o
|
Transition
Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934
|
For
the
transition period from _______________ to ______________________
Commission
File No. 000-51369
United
Financial Bancorp, Inc.
(Exact
name of registrant as specified in its charter)
|
Federal
|
83-0395247
|
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
|
|
incorporation
or organization)
|
Identification
Number)
|
|
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|
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95
Elm Street, West Springfield, Massachusetts
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01089
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|
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(Address
of Principal Executive Offices)
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Zip
Code
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(413)
787-1700
(Registrant’s
telephone number)
Securities
Registered Pursuant to Section 12(b) of the Act:
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None
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Securities
Registered Pursuant to Section 12(g) of the Act:
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Common
Stock, par value $0.01 per share
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|
(Title of Class)
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Indicate
by check mark whether the Registrant (1) has filed all reports required to
be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the
preceding twelve months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such requirements
for
the past 90 days. YES ý
NO
o.
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of Registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this
Form 10-K. ý.
Indicate
by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer o
|
Accelerated
filer o
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Non-accelerated
filer ý
|
Indicate
by check mark whether the Registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). YES
o
NO
ý
Indicate
by check mark if the Registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. YES o
NO
ý
Indicate
by check mark if the Registrant is a well-known seasoned issuer, as defined
in
Rule 405 of the Securities Act. YES o
NO
ý
As
of
April 27, 2006, there were issued and outstanding 17,205,995 shares of the
Registrant’s Common Stock.
The
aggregate market value of the voting and non-voting common equity held by
non-affiliates of the Registrant, computed by reference to the last sale price
on December 31, 2005, as reported by the Nasdaq National Market, was
approximately $79.8 million.
DOCUMENTS
INCORPORATED BY REFERENCE
None
EXPLANATORY
NOTE
This
Amendment Number One to the Registrant's Annual Report on Form 10-K is filed
to
include information that was to be filed supplementally by the
Registrant.
ITEM
10. Directors
and Executive Officers of the Registrant
United
Financial Bancorp, Inc.’s (the “Company”) Board of Directors is currently
composed of 12 members, and is divided into three classes with one class of
directors elected annually. Directors of the Company are generally elected
to
serve for a three-year period and until their respective successors shall have
been elected and shall qualify. The Board of Directors has nominated to serve
as
directors Kevin E. Ross, Robert A. Stewart, Jr. and Thomas H. Themistos each
of
whom is currently a member of the Board of Directors and each of whom has been
nominated to serve for a three-year period and until his successor has been
elected and shall qualify. Director George W. Jones and Donald G. Helliwell
will
be retiring from the Board of Directors in compliance with the age limitation
provision of the Company’s bylaws. The Company anticipates amending its bylaws
effective at the Annual Meeting to reduce the number of directors from twelve
to
ten members.
The
table
below sets forth certain information, as of March 31, 2006, regarding the
composition of the Company’s Board of Directors, including the terms of office
of Board members. It is intended that the proxies solicited on behalf of the
Board of Directors (other than proxies in which the vote is withheld as to
one
or more nominees) will be voted at the Annual Meeting for the election of the
nominees identified below. If the nominee is unable to serve, the shares
represented by all such proxies will be voted for the election of such
substitute as the Board of Directors may recommend. At this time, the Board
of
Directors knows of no reason why any of the nominees might be unable to serve,
if elected. Except as indicated herein, there are no arrangements or
understandings between any nominee and any other person pursuant to which such
nominee was selected.
Names
and Addresses (1)
|
Age(2)
|
Positions
Held
|
Director
Since(3)
|
Current
Term
to
Expire
|
Shares
of Common
Stock
Beneficially
Owned
(2)
(4)
|
Percent
of Class
|
|
|
|
|
|
|
|
NOMINEES
|
|
|
|
|
|
|
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Kevin
E. Ross
|
53
|
Director
|
1991
|
2006
|
2,500
|
*
|
Robert
A. Stewart, Jr.
|
55
|
Director
|
1991
|
2006
|
2,500
|
*
|
Thomas
H. Themistos
|
66
|
Director
|
2004
|
2006
|
2,400
|
*
|
|
DIRECTORS
CONTINUING IN OFFICE
|
|
|
|
|
|
|
|
Robert
W. Bozenhard, Jr.
|
71
|
Chairman
of the Board of Directors
|
1984
|
2007
|
10,000
|
*
|
Michael
F. Crowley
|
48
|
Director
|
2001
|
2007
|
15,000(5)
|
*
|
Carol
Moore Cutting
|
57
|
Director
|
2001
|
2007
|
2,650(6)
|
*
|
Carol
A. Leary
|
59
|
Director
|
2001
|
2007
|
5,000
|
*
|
Richard
B. Collins
|
63
|
Director,
President and Chief
Executive
Officer
|
2002
|
2008
|
30,000(7)
|
*
|
|
|
|
|
|
|
|
G.
Todd Marchant
|
67
|
Director
|
1991
|
2008
|
2,000(8)
|
*
|
Michael
F. Werenski
|
46
|
Director
|
1991
|
2008
|
30,000(9)
|
*
|
|
|
|
|
|
|
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DIRECTORS
NOT CONTINUING IN OFFICE
|
|
|
|
|
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George
W. Jones
|
72
|
Director
|
1985
|
2006
|
2,000(10)
|
*
|
Donald
G. Helliwell
|
72
|
Director
|
1975
|
2008
|
10,000
|
*
|
|
EXECUTIVE
OFFICERS WHO ARE NOT DIRECTORS
|
|
|
|
|
|
|
|
Keith
E. Harvey
|
58
|
Executive
Vice President,
Operations
and Retail Sales
|
N/A
|
N/A
|
10,000
|
*
|
Donald
F.X. Lynch
|
60
|
Executive
Vice President,
Chief
Financial Officer and
Corporate
Secretary
|
N/A
|
N/A
|
10,000
|
*
|
J.
Jeffrey Sullivan
|
42
|
Executive
Vice President and Chief Lending Officer
|
N/A
|
N/A
|
2,500
|
*
|
John
J. Patterson
|
59
|
Senior
Vice President, Risk
Management
|
N/A
|
N/A
|
3,577(11)
|
*
|
William
Clark
|
41
|
Senior
Vice President,
Residential
Lending
|
N/A
|
N/A
|
352
|
*
|
Laurie
J. Rollins
|
47
|
Vice
President,
Treasurer
|
N/A
|
N/A
|
1,000(12)
|
*
|
Dena
M. Hall
|
32
|
Vice
President, Marketing and
Community
Relations
|
N/A
|
N/A
|
170(13)
|
*
|
|
|
|
|
|
|
|
All
Directors and Executive
Officers
as a Group (19 persons)
|
|
|
|
|
146,987 (14)
|
0.85
|
(1)
|
The
mailing address for each person listed is 95 Elm Street, West Springfield,
Massachusetts 01089.
|
(2)
|
As
of March 31, 2006.
|
(3)
Reflects
initial appointment to the Board of Directors of the mutual predecessor of
United Bank.
(4)
See
definition of “beneficial ownership” in the table in “Security Ownership of
Certain Beneficial Owners.”
(5)
|
Includes
5,000 shares of common stock held in Mr. Crowley’s individual retirement
account, 4,000 shares of common held by Mr. Crowley as custodian
for his
son and 3,000 shares of common held by Mr. Crowley as custodian for
his
daughter.
|
(6)
|
Includes
2,500 shares of common stock held in Ms. Cutting’s individual retirement
account and 50 shares of common stock held by a
corporation.
|
(7)
|
Includes
15,000 shares of common stock held by Mr. Collins’
spouse.
|
(8)
|
Includes
2,000 shares of common stock held in a
trust.
|
(9)
|
Includes
4,600 shares held by Mr. Werenski’s spouse’s individual retirement
account, 5,600 held in Mr. Werenski’s individual retirement accounts and
200 shares held by Mr. Werenski’s
spouse.
|
(10)
|
Includes
2,000 shares of common stock held by Mr. Jones’ individual retirement
account.
|
(11)
|
Includes
1,777 shares of common stock held in Mr. Patterson’s individual retirement
account.
|
(12)
|
Includes
shares of common stock held in a joint account with Ms. Rollins’
son.
|
(13)
|
Includes
shares of common stock held in a joint account with Ms. Hall’s
spouse.
|
(14)
|
Includes
5,338 shares of common stock allocated to the accounts of executive
officers under the ESOP and excludes the remaining 609,236 shares
of
common stock (representing 3.5% of the shares of common stock outstanding
as of March 31, 2006) owned by the ESOP for the benefit of the employees
of the Company and the Bank. Under the terms of the ESOP, shares
of common
stock allocated to the account of employees are voted in accordance
with
the instructions of the respective employees. Unallocated shares
are voted
by the ESOP trustee in the manner calculated to most accurately reflect
the instructions it has received from the participants regarding
the
allocated shares, unless its fiduciary duties require
otherwise.
|
*
|
Less
than three-tenths of 1%.
|
The
principal occupation during the past five years of each director and executive
officer of the Company is set forth below. All directors and executive officers
have held their present positions for five years unless otherwise
stated.
Directors
Robert
W. Bozenhard, Jr.
is the
Chairman of the Board of Directors of the Company and United Bank (the “Bank”).
Mr. Bozenhard joined the Bank’s Board of Directors in 1984 and became Chairman
in 2003. Mr. Bozenhard is a partner with the law office of Bozenhard, Socha
& Ely in West Springfield, Massachusetts.
Richard
B. Collins
is
President and Chief Executive Officer of the Company and the Bank. Mr. Collins
joined the Bank in 2001 as President. Mr. Collins became the Chief Executive
Officer and joined the Bank’s Board of Directors in 2002. Prior to his
affiliation with the Bank, Mr. Collins was President and Chief Executive Officer
of First Massachusetts Bank, N.A.
Michael
F. Crowley
is
President of Crowley Real Estate Appraisers, Inc., located in Springfield,
Massachusetts.
Carol
Moore Cutting
is the
owner, President and General Manager of Cutting Edge Broadcasting Incorporated,
a radio station located in Northampton, Massachusetts.
Donald
G. Helliwell
is
retired. Prior to his retirement in 1987, Mr. Helliwell served as Chief
Executive Officer and owner of Westfield Coatings Corporation located in
Westfield, Massachusetts.
George
W. Jones
is
retired. Prior to his retirement in 1991, Mr. Jones served as President and
Chief Executive Officer of Eastern States Exposition, located in West
Springfield, Massachusetts.
Carol
A. Leary
is
President of Bay Path College, located in Longmeadow,
Massachusetts.
G.
Todd Marchant
is
retired. Prior to his retirement in 2005, Mr. Marchant was a financial
consultant with Grigsby and Smith, located in East Longmeadow,
Massachusetts.
Kevin
E. Ross
is Vice
President and Treasurer of Ross Insurance Agency, Inc., located in Holyoke,
Massachusetts.
Robert
A. Stewart, Jr.
is
President of Chase, Clarke, Stewart & Fontana, Inc., an insurance agency,
located in Springfield, Massachusetts.
Thomas
H. Themistos, CPA/PFS
is a
member of the firm Kostin, Ruffkess, Themistos & Dane, LLC, a regional
public accounting firm with offices in Springfield, Massachusetts, Farmington
and New London, Connecticut.
Michael
F. Werenski
is
President and Treasurer of Marion & Werenski Insurance and Real Estate
Agency, Inc., located in South Hadley, Massachusetts.
Executive
Officers of the Company Who Are Not Also Directors
Donald
F.X. Lynch
is
Executive Vice President, Chief Financial Officer and Secretary of the Company
and the Bank. Mr. Lynch joined the Bank in 1982.
Laurie
J. Rollins
is the
Treasurer of the Company and the Bank. She joined the Bank in 1988.
Executive
Officers of the Bank Who Are Not Also Directors
William
Clark is
Senior
Vice President, Residential Lending. Mr. Clark joined the Bank in 1998.
Dena
M. Hall is
the
Vice President of Marketing and Community Relations of the Bank. She joined
the
Bank in 2005. Previously, she was the Director of Marketing for Woronoco Savings
Bank.
Keith
E. Harvey is
the
Executive Vice President of Operations and Retail Sales of the Bank. Mr. Harvey
joined the Bank in 1984.
John
J. Patterson is
Senior
Vice President, Risk Management of the Bank. Mr. Patterson joined the Bank
in
1993.
J.
Jeffrey Sullivan joined
the Bank in 2003 as Executive Vice President and Chief Lending Officer. Prior
to
joining the Bank, Mr. Sullivan was Senior Vice President of Business Development
and Commercial Lending at the Bank of Western Massachusetts.
The
Audit Committee
The
Audit
Committee of the Company consists of directors Cutting, Leary, Helliwell, Ross,
Stewart and Themistos. Each member of the Audit Committee is considered
“independent” as defined in the Nasdaq corporate governance listing standards
and under Securities and Exchange Commission (the “SEC”) Rule 10A-3. The Board
of Directors has determined that Mr. Themistos qualifies as an “audit committee
financial expert” as that term is used in the rules and regulations of the SEC.
The duties and responsibilities of the Audit Committee include, among other
things:
|
·
|
retaining,
overseeing and evaluating an independent registered public accounting
firm
to audit the Company’s annual financial
statements;
|
|
·
|
in
consultation with the independent registered public accounting firm
and
the internal auditor, reviewing the integrity of the Company’s financial
reporting processes, both internal and
external;
|
|
·
|
approving
the scope of the audit in advance;
|
|
·
|
reviewing
the financial statements and the audit report with management and
the
independent registered public accounting
firm;
|
|
·
|
considering
whether the provision by the external auditors of services not related
to
the annual audit and quarterly reviews is consistent with maintaining
the
registered public accounting firm
independence;
|
|
·
|
reviewing
earnings and financial releases and quarterly reports filed with
the
SEC;
|
|
·
|
consulting
with the internal audit staff and reviewing management’s administration of
the system of internal accounting
controls;
|
|
·
|
approving
all engagements for audit and non-audit services by the independent
registered public accounting firm;
and
|
|
·
|
reviewing
the adequacy of the audit committee
charter.
|
The
Audit
Committee of the Company met four times during the year ended December 31,
2005.
The Company’s Board of Directors has adopted a written charter for the Audit
Committee of the Company. The charter is available at the Company’s website at
www.bankatunited.com.
Section
16(a) Beneficial Ownership Reporting Compliance
The
common stock of the Company is registered with the SEC pursuant to Section
12(g)
of the Securities Exchange Act of 1934 (the “Exchange Act”). Certain officers
and directors of the Company and beneficial owners of greater than 10% of the
Company’s common stock (“10% beneficial owners”) are required to file reports on
Forms 3, 4 and 5 with the SEC disclosing beneficial ownership and changes
in beneficial ownership of the common stock. SEC rules require disclosure in
the
Company’s Proxy Statement or Annual Report on Form 10-K of the failure of an
officer, director or 10% beneficial owner of the Company’s common stock to file
a Form 3, 4 or 5 on a timely basis. Based on the Company’s review of such
ownership reports, the Company believes that no officer or director of the
Company failed to timely file such ownership reports during the year ended
December 31, 2005.
Code
of Ethics
The
Company has adopted a Code of Ethics that is applicable to the officers,
directors and employees of the Company, including the Company’s principal
executive officer, principal financial officer, principal accounting officer
or
controller, or persons performing similar functions. The Code of Ethics is
available on the Company’s website at www.bankatunited.com.
Amendments to and waivers from the Code of Ethics will also be disclosed on
the
Company’s website. There were no such amendments or waivers in
2005.
ITEM
11. Executive
Compensation
Directors’
Compensation
Director
Fees.
Each of
the individuals who serve as a director of the Company currently serves as
a
director of the Bank and earns director fees in that capacity unless a Company
Board or committee meeting is on a separate day from a Bank Board or committee
meeting in which circumstance the same fees as would ordinarily be paid for
a
Bank Board or committee meeting would be paid to the directors. Each
non-employee director of the Bank is paid a fee of $950 per meeting attended,
with one excused paid absence allowed (for regularly scheduled meetings only)
during the course of the year. Each director serving on a Board committee is
paid a fee of $550 ($650 for audit committee) per meeting attended, except
for
committee chairpersons who receive a fee of $600 ($700 for audit committee)
per
meeting attended. The Chairman of the Board is paid an annual retainer of
$15,000 and all non-employee directors are paid annual retainers of $10,000.
All
non-employee directors also receive a fee of $550 when they attend “outside
workshops.”
Each
non-employee director of the Company who also serves as a member of the Board
of
Directors of the United Charitable Foundation is paid a fee of $250 per meeting.
The Foundation Board of Directors met one time in 2005. Directors Cutting,
Helliwell, Leary, Ross, Stewart, and Themistos each received $250 for attending
the meeting.
Directors
Fee Continuation Plan.
The Bank
has adopted a Directors Fee Continuation Plan that provides that upon attainment
of the normal retirement date (May 1st of the calendar year following the
expiration of the term during which the participant attains age 72), a
participant who has served as board chair and who is no longer serving as
director and has not been terminated for cause will be entitled to an annual
benefit payable for ten years of $24,000, reduced by 1/15 for each year of
service as a director less than 15. A participant who had attained normal
retirement age, has not served as board chair, is no longer serving as a
director and has not been terminated for cause will receive an annual benefit
payable for ten years of $15,000, reduced by 1/15 for each year of service
as a
director less than 15. In the event of death of the participant prior to receipt
of all benefits under the plan, any unpaid benefits will be paid to the
participant’s beneficiary.
A
participant who terminates service prior to attainment of his/her normal
retirement date and has not been terminated for cause will receive an annual
benefit determined as provided above. Such benefit will commence on May 1st
following the participant’s attainment of age 72. In the event of termination of
service due to disability prior to the normal retirement date, the participant
will be entitled to a normal retirement benefit payment, determined as though
the participant has served as a director until attaining the normal retirement
date, commencing on May 1st following attainment of age 72.
In
the
event of the participant’s death prior to his/her normal retirement date,
his/her beneficiary will receive a benefit determined as though the participant
had served as director until his/her normal retirement date. In the event of
termination for cause, no benefit will be paid under the plan.
Deferred
Income Agreements.
The Bank
maintains deferred income agreements (the “Agreement(s)”) with directors Donald
G. Helliwell, Robert W. Bozenhard, Jr., and George W. Jones (the “Director(s)”).
The Agreements allowed the Directors to defer their director fees during the
years 1985-1990, and to have such fees, plus interest, paid to the Directors
in
later years pursuant to the terms of the Agreements. Under the Agreements,
the
Bank will pay Directors Helliwell and Jones a total sum of $75,930, and Director
Bozenhard a total sum of $90,572, in 120 monthly installments of $633 and $755,
respectively. Payments commenced to Director Helliwell and Director Jones upon
their attainment of age 65, and to Director Bozenhard, Jr. upon his attainment
of age 67. In the event a Director should die before 120 payments have been
made, the Bank will make the remaining monthly payments to the Director’s
designated beneficiary or, if none, to his estate.
Executive
Compensation
The
following table sets forth the cash compensation paid and bonuses accrued as
well as certain other compensation paid or accrued for services rendered in
all
capacities during the years ended December 31, 2005 and 2004 to the Chief
Executive Officer of the Company and the Bank and the four other executive
officers of the Company or the Bank who received total annual compensation
in
excess of $100,000 (“Named Executive Officers”).
|
|
Long-term
Compensation
|
|
|
Annual
Compensation
|
Awards
|
Payout
|
|
Name
and Principal Position
|
Year
Ended
12/31(1)
|
Salary
|
Bonus
|
Other
Annual Compensation (2)
|
Restricted
Stock
Awards
|
Options/
SARS
(#)
|
LTIP
Payouts
|
All
Other Compensation(3)
|
Richard
B. Collins
President
and Chief Executive Officer
|
2005
2004
|
$330,022
283,815
|
$94,044
57,010
|
$
-
|
$
-
-
|
-
-
|
-
-
|
$10,500
10,250
|
Donald
F.X. Lynch,
Executive
Vice
President,
Chief
Financial
Officer and
Corporate
Secretary
|
2005
2004
|
163,279
164,163
|
45,362
32,903
|
-
|
-
-
|
-
-
|
-
-
|
8,164
8,202
|
Keith
E. Harvey
Executive
Vice
President
for
Operations
and Retail
Sales
|
2005
2004
|
160,898
146,163
|
37,802
24,468
|
-
|
-
-
|
-
-
|
-
-
|
8,044
7,308
|
J.
Jeffrey Sullivan
Executive
Vice
President
and Chief
Lending
Officer
|
2005
2004
|
161,230
151,423
|
37,802
25,228
|
-
|
-
-
|
-
-
|
-
-
|
8,061
842
|
John
J. Patterson
Senior
Vice President,
Risk
Management
|
2005
2004
|
133,638
133,252
|
24,769
17,801
|
-
|
-
-
|
-
-
|
-
-
|
6,682
6,663
|
__________________________________
(1)
Summary
compensation information is excluded for the year ended December 31, 2003 as
the
Company was not a public company during that year.
(2)
The
Company and the Bank also provide certain members of senior management with
the
use of an automobile, club membership dues and certain other personal benefits,
the aggregate value of which did not exceed the lesser of $50,000 or 10% of
the
total annual salary and bonus reported for each officer.
(3)
Represents
employer contributions under the Bank’s 401(k) Plan.
Benefit
Plans
Executive
Supplemental Compensation Agreements.
The Bank
has adopted Executive Supplemental Compensation Agreements for Messrs. Collins,
Harvey, Lynch and Patterson. The agreements provide that each executive will
receive benefits upon attaining normal retirement at age 65 (age 67 for Mr.
Collins) or later. The normal retirement benefit is equal to 60% of the
executive’s highest three years’ average base salary, reduced by the sum of the
following: (i) the executive’s annual benefit on a single life income basis from
the Bank’s defined benefit plan; (ii) the executive’s annual benefit on a single
life income basis attributable to employer contributions and earnings thereon
from the Bank’s 401(k) plan; (iii) the executive’s annual benefit on a
single life income basis resulting from participation in a qualified plan with
prior employers; and (iv) one half of the executive’s primary Social
Security benefit. Benefits under the agreements are payable on a monthly basis
over the longer of 180 months or the life of the executive. Annual normal
retirement benefits shall be at least $12,000 for Mr. Lynch. In the event the
executive dies after receiving the first payment and prior to receiving all
of
the payments under the agreement, the remaining payments will be made to the
executive’s designated beneficiary, if any, or to the executive’s estate.
Reduced benefits will be paid upon early retirement at age 62 (age 65 for Mr.
Collins).
In
the
event the executive dies while employed by the Bank, prior to attaining normal
retirement age and prior to the first payment date under the agreement, the
executive’s beneficiary will be entitled to a lump-sum payment. The Bank intends
to fund its obligations under the agreements through insurance and has purchased
split-dollar life insurance policies on the lives of the executives. In the
event that the insurer cannot meet its obligations under the policies for
Messrs. Collins and Harvey, the agreements provide that the corporation will
pay
the supplemental death benefit. The split-dollar policies will pay lump-sum
death benefits of at least $1.2 million and $600,000, respectively, to each
of
Mr. Collins’ and Mr. Harvey’s beneficiaries. Each of the agreements for Messrs.
Patterson and Lynch provides for pre-retirement death benefits equal to the
portion of the proceeds of a life insurance policy that exceeds the greater
of
(i) the cumulative premiums paid towards the policy less the economic benefits
charged to the executive as compensation paid by the Bank or (ii) the policy’s
cash surrender value.
In
the
event of disability prior to attaining normal retirement age, the executive
will
be entitled to supplemental compensation payable on a monthly basis over the
longer of 180 months or life, beginning at age 65 (age 62 for Mr.
Harvey).
An
executive may elect, prior to the calendar year in which payments are to begin,
any optional form of payment that is the actuarial equivalent of the benefit
and
the form of which is provided under the Bank’s pension plan, provided that if
the executive elects a lump-sum payment, the Bank may require that such payment
be made over a period of up to five years, plus interest compounded annually
at
6% per annum on the unpaid balance. The foregoing provisions of the Executive
Supplemental Compensation Agreements that permit the executive to elect an
optional form of retirement benefit in the year prior to payment will need
to be
amended and updated prior to December 31, 2006, in order to conform such
provisions to changes in the tax laws under new code Section 409A.
No
supplemental compensation will be paid to Messrs. Collins, Harvey, Lynch or
Patterson in the event employment is terminated for any reason other than normal
or early retirement, or disability.
For
the
year ended December 31, 2005, the Bank accrued benefits under the plan in the
amounts of $150,170.81, $8,316.98, $22,438.26 and $7,986.63 for Messrs. Collins,
Lynch, Harvey and Patterson, respectively.
Defined
Contribution Plan.
The Bank
maintains a defined contribution retirement plan through the Cooperative Banks
Employees Retirement Association (“CBERA”) (the “Plan”). All employees who have
attained age 21 and have completed one year of employment during which they
worked at least 1,000 hours must be enrolled in the Plan and begin making at
least the minimum pre-tax contribution of 1% of compensation. Participants
may
make additional pre-tax contributions up to a total of 50% of compensation,
and
may also elect to contribute on an after-tax basis (other than the required
1%
pre-tax amount). However, the maximum aggregate percentage of compensation
that
a participant may defer is 50% of compensation. Participants become immediately
100% vested in their employee contributions and earnings thereon. The Bank
will
make matching contributions equal to 100% of the participant’s first 5% of his
elective (pre-tax) or employee (after-tax) contributions. Employees may enter
the Plan as of the first day of the month following their date of hire, provided
such early enrollees will become eligible to receive the Bank’s matching
contributions only after satisfying the bank’s eligibility requirements.
Participants
become
vested in the Bank’s matching contributions at the rate of 20% per year,
starting upon completion of two years of vesting service, and become fully
vested after six years. They also become fully vested in the bank matching
contributions upon early, normal, or deferred retirement, or death. The Plan
permits participants to direct the investment of their accounts into various
investment options. Upon attainment of normal retirement age (age 65) or early
retirement age (age 62, or age 55 with five years of vesting service, or age
50
with 15 years of vesting service), participants may choose among various
retirement benefit options. The normal form of retirement benefit for
participants who are not married and who were participants prior to
January 1, 1989 is a single life annuity. The normal form of benefit for
participants who are married is a 100% joint and survivor annuity. Employees
who
became participants after December 31, 1988 or who waive the normal form of
benefit may elect the following forms of retirement benefit payments:
(i) payment of their entire vested account balance in a total distribution
or in installments, (ii) payment of their after-tax contributions and
transfer of their pre-tax contributions, matching contributions, and all
investment earnings to the Bank’s defined benefit plan to be paid as an annuity;
(iii) payment of their employee contribution account in a single payment and
transfer of their matching contribution account to the Bank’s defined benefit
plan to be paid as an annuity; or (iv) transfer their entire account balance
to
the Bank’s defined benefit plan to be paid as an annuity. The Plan permits loans
to participants.
Defined
Benefit Pension Plan.
The Bank
maintains a defined benefit retirement plan offered through CBERA. Employees
who
have attained age 21 and completed one year of employment during which they
worked at least 1,000 hours must be enrolled under the plan. The Bank annually
contributes an amount to the plan necessary to satisfy the minimum funding
requirements established under the Employee Retirement Income Security Act
of
1974, as amended (“ERISA”).
Participants
in the plan become vested in their retirement benefits at the rate of 20% per
year, starting upon completion of two years of vesting service, and become
fully
vested after six years. They also become 100% vested upon early, normal, or
deferred retirement, or death. A participant’s retirement benefit is generally
based on 0.75% of the participant’s final average compensation (equal to the
average of the participant’s highest three consecutive calendar years’
compensation), plus 0.5% of the final average compensation in excess of the
participant’s covered compensation (equal to the average of the Social Security
Wage Bases in effect during the 35 years prior to the participant’s Social
Security normal retirement date), times all years of service from January 1,
1989. In the event an employee participated under a prior plan formula as of
December 31, 1988, any accrued benefits under that plan will be added to his
benefit under the current plan. Participants who retire early after age 62
will
be entitled to an unreduced accrued pension. The normal form of retirement
benefit for participants who are not married is a single life annuity. The
normal form of retirement benefit for participants who are married is a 100%
joint and survivor annuity. However, participants who are married and obtain
their spouse’s consent may elect to receive a single cash payment or an annuity.
In the event of a participant’s death, benefits normally will be paid to the
participant’s spouse unless the spouse consents to an alternative beneficiary in
writing, and the participant is at least 35 years old. In the event of death
prior to the participant’s attainment of early or normal retirement age, the
participant’s spouse may either defer receipt of the benefit until the
participant would have reached age 70½ or elect to receive a lump-sum payment.
For the 2005 plan year, the Bank made a contribution to the plan of
approximately $395,956.
The
following table indicates the annual retirement benefit that would be payable
under the plan upon retirement at age 65 in calendar year 2005, expressed in
the
form of a single life annuity for the final average salary and benefit service
classification specified below:
Final
Average
|
|
Years
of Service and Benefit Payable at Retirement Corporate
Table
|
|
Annual
Compensation
|
|
5
|
|
10
|
|
15
|
|
20
|
|
25
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
25,000
|
|
|
$
|
938
|
|
$
|
1,875
|
|
$
|
2,813
|
|
$
|
3,750
|
|
$
|
4,688
|
|
$
|
5,625
|
|
$
|
50,000
|
|
|
$
|
1,908
|
|
$
|
3,815
|
|
$
|
5,723
|
|
$
|
7,630
|
|
$
|
9,538
|
|
$
|
11,446
|
|
$
|
100,000
|
|
|
$
|
5,033
|
|
$
|
10,065
|
|
$
|
15,098
|
|
$
|
20,130
|
|
$
|
25,163
|
|
$
|
30,196
|
|
$
|
150,000
|
|
|
$
|
8,158
|
|
$
|
16,315
|
|
$
|
24,473
|
|
$
|
32,630
|
|
$
|
40,788
|
|
$
|
48,946
|
|
$
|
175,000
|
|
|
$
|
9,720
|
|
$
|
19,440
|
|
$
|
29,160
|
|
$
|
38,880
|
|
$
|
48,601
|
|
$
|
58,321
|
|
$
|
200,000
|
|
|
$
|
11,283
|
|
$
|
22,565
|
|
$
|
33,848
|
|
$
|
45,130
|
|
$
|
56,413
|
|
$
|
67,696
|
|
At
December 31, 2005, Messrs. Collins, Lynch, Harvey, Sullivan and Patterson had
4,
32, 21, 2, and 12 years of credited service, respectively, under the
plan.
Incentive
Plan.
The Bank
maintains an incentive plan that provides cash awards to employees in years
that
the Bank attains target performance levels. For purposes of determining awards
under the plan, the performance levels in 2005, were weighted 25% to
growth in core deposits, 25% to loan growth, and 50% to non-quantitative factors
evaluated at the discretion of the Compensation Committee. For
2006,
performance levels will be weighted 60% to growth in net income, 20% to growth
in deposits and 20% to loan growth. All active regular full-time, reduced
full-time, and regular part-time employees of the Bank, other than financial
service representatives, who are employed on the day plan payouts are approved
are eligible to receive awards under the plan. Awards under the plan range
from
0% to 40.5% of base salary and vary depending on the participant’s position
within the Bank. Awards under the plan are distributed during the first quarter
of the year following the plan year for which the awards are
granted.
For
2005,
awards under the plan to Messrs. Collins, Lynch, Harvey, Sullivan and Patterson
were $94,044, $45,362, $37,802, $37,802, and $24,769 respectively.
Employment
Agreement.
The Bank
and the Company have entered into an employment agreement with Richard B.
Collins, their President and Chief Executive Officer. The agreement has an
initial term of three years. Prior to the anniversary date of the agreement,
the
Board of Directors of the Bank will evaluate Mr. Collins’ performance under the
agreement, and will renew the agreement for an additional year so that the
remaining term will be three years, unless the Board of Directors gives him
notice of nonrenewal at least 30 days and not more than sixty (60) days prior
to
the anniversary date. The initial base salary for Mr. Collins under the
agreement is $340,000. In addition to the base salary, the agreement provides
for, among other things, participation in incentive plans and other employee
pension benefit and fringe benefit plans applicable to executive employees.
Under the agreement, Mr. Collins’ employment may be terminated for cause at any
time, in which event he would have no right to receive compensation or other
benefits for any period after termination.
Certain
events resulting in Mr. Collins’ termination or resignation will entitle him to
payments of severance benefits following termination of employment. Mr. Collins
will be entitled to severance benefits under the employment agreement in the
event (A) his employment is involuntarily terminated either prior to or
following a change in control (for reasons other than cause, death, disability
or retirement), (B) he resigns during the term of the agreement (whether before
or after a change in control) following (i) the failure to elect or reelect
or to appoint or reappoint him to his executive position, (ii) a
significant change in his functions, duties or responsibilities, or change
in
the nature or scope of his authority, (iii) the liquidation or dissolution
of
the Bank or the Company that would affect his status, (iv) a reduction in
his annual compensation or benefits or relocation of his principal place of
employment by more than 25 miles from its location as of the date of the
agreement or (v) a material breach of the agreement by the Bank, or
(C) he resigns employment at any time during the term of the agreement
following a change in control as a result of a failure to renew or extend the
agreement, then he would be entitled to a severance payment equal to three
times
the sum of his base salary and the highest rate of bonus awarded to him during
the prior three years, payable in a lump sum. In addition, he would be entitled,
at no expense to him, to the continuation of substantially comparable life,
medical, dental and disability coverage for 36 months following the date of
termination (or if sooner, the date he becomes eligible for Medicare coverage).
Mr. Collins will also receive a lump sum cash payment equal to the present
value
(discounted at 6%) of contributions that would have been made on his behalf
by
the Bank under its 401(k) plan and employee stock ownership plan and any other
defined contribution plans as if he had continued working for the 36-month
period following his termination of employment. In the event that his employment
has terminated for a reason entitling him to severance payments, Mr. Collins
would receive an aggregate severance payment of approximately $1,424,752 based
upon his current level of compensation.
Under
the
agreement, if Mr. Collins becomes disabled or incapacitated to the extent he
is
unable to perform his duties for six consecutive months, the Bank will continue
to pay his salary for the longer of one year, or the remaining term of the
agreement, reduced by payments to him under any applicable disability program.
In the event of his death, his estate or beneficiaries will be paid his base
salary for one year from his death, and will receive continued medical, dental,
family and other benefits for one year. Upon retirement at age 65 or such later
date determined by the Board of Directors, Mr. Collins will receive only those
benefits to which he is entitled under any retirement plan of the Bank to which
he is a party.
Upon
termination of Mr. Collins’ employment other than in connection with a change in
control, he agrees not to compete with the Bank for a period of one year
following termination of his employment within 25 miles of any existing branch
of the Bank or any subsidiary of the Company, or within 25 miles of any office
for which the Bank, or a subsidiary has filed an application for regulatory
approval to establish an office.
Change
in Control Agreements.
The Bank
has entered into change in control agreements with its three executive vice
presidents, Donald F.X. Lynch, Keith E. Harvey and J. Jeffrey Sullivan. The
agreements provide certain benefits to these individuals in the event of a
change in control of the Bank or the Company. Each of the agreements provides
for a term of 36 months. Commencing on each anniversary date, the Board of
Directors may extend the agreements for an additional year. The agreements
provide certain protections against termination without cause in the event
of a
change in control (as defined in the agreements). These protections are
frequently offered by financial institutions, and the Board of Directors has
determined that the Bank would be at a competitive disadvantage in attracting
and retaining key employees if it does not offer similar
protections.
Under
each of the agreements, following a change in control of the Company or the
Bank, an officer is entitled to a payment if the officer’s employment is
involuntarily terminated during the term of the agreement, other than for cause,
as defined, death or disability. Involuntary termination includes the officer’s
termination of employment during the term of the agreement and following a
change in control as the result of a demotion, loss of title, office or
significant authority, reduction in the officer’s annual compensation or
benefits, or relocation of the officer’s principal place of employment by more
than 25 miles from its location immediately prior to the change in control.
In
addition, for the first 12 months following a change in control, if the Bank
(or
its successor) fails to renew the agreement, the officer can voluntarily resign
and receive the severance payment. In the event that an officer is entitled
to
receive payments pursuant to the agreement, the officer will receive a cash
payment of up to a maximum of two times the sum of his base salary and highest
rate of bonuses awarded to him over the prior three years, subject to applicable
withholding taxes. Under the proposed agreements, Messrs. Lynch, Harvey and
Sullivan would receive an aggregate of $460,936, $437,653 and $421,076,
respectively, upon a change in control, based upon their current levels of
compensation. In addition to the severance payment, each officer is entitled
to
receive life, medical and dental coverage for a period of up to 24 months from
the date of termination (or if sooner, the date on which the officer becomes
eligible for Medicare coverage), as well as a lump sum cash payment equal to
the
present value (discounted at 6%) of contributions that would have been made
on
his behalf by the Bank under its 401(k) plan and employee stock ownership plan
and any other defined contribution plans as if the executive had continued
working for the 24-month period following his termination of employment.
Notwithstanding any provision to the contrary in the agreement, payments under
the agreement are limited so that they will not constitute an excess parachute
payment under Section 280G of the Internal Revenue Code.
Employee
Stock Ownership Plan and Trust.
The
Board of Directors of the Bank has adopted an employee stock ownership plan,
and
the Board of Directors of the Company has ratified the loan to the employee
stock ownership plan. Employees who are at least 21 years old with at least
one
year of employment with the Bank are eligible to participate. The employee
stock
ownership plan trust borrowed funds from the Company and used those funds to
purchase 641,301 shares of Company common stock in the initial public offering.
Collateral for the loan is the common stock purchased by the employee stock
ownership plan. The loan will be repaid principally from Bank discretionary
contributions to the employee stock ownership plan over a period of
20 years. The loan documents provide that the loan may be repaid over a
shorter period, without penalty for prepayments. The interest rate for the
loan
is a floating rate equal to the prime rate. Shares purchased by the employee
stock ownership plan are held in a suspense account for allocation among
participants as the loan is repaid.
Contributions
to the employee stock ownership plan and shares released from the suspense
account in an amount proportional to the repayment of the employee stock
ownership plan loan are allocated among employee stock ownership plan
participants on the basis of compensation in the year of allocation. Benefits
under the plan vest at the rate of 20% per year, starting upon completion of
two
years of credited service, and are fully vested upon completion of six years
of
credited service, with credit given to participants for years of credited
service with the Bank’s mutual predecessor. A participant’s interest in his
account under the plan will also fully vest in the event of termination of
service due to a participant’s early or normal retirement, death, disability, or
upon a change in control (as defined in the plan). Vested benefits are payable
generally in the form of common stock, or to the extent participants’ accounts
contain cash, benefits are paid in cash. Pursuant to SOP 93-6, the Company
is
required to record compensation expense each year in an amount equal to the
fair
market value of the shares released from the suspense account. In the event
of a
change in control, the employee stock ownership plan will terminate.
Stock
Performance Graph
Set
forth
hereunder is a stock performance graph comparing (a) the cumulative total
return on the Company’s common stock for the period beginning on July 13, 2005
through December 31, 2005, (b) thecumulative total return on stocks
included in the SNL Thrift Index over such period, (c) the cumulative total
return on stocks included in the Russell 2000 Index over such period, and
(d)
the cumulative total return on stocks included in the MHC Index over such
period.
The
cumulative total return on the Company’s common stock was computed assuming the
reinvestment of cash dividends during the period and is expressed in dollars
based on an assumed initial investment of $100.
There
can
be no assurance that the Company’s common stock’s performance will continue in
the future with the same or similar trend depicted in the graph. The Company
will not make or endorse any predictions as to future stock
performance.
Compensation
Committee Interlocks and Insider Participation
The
full
Board of Directors of the Bank approves the salaries to be paid each year to
officers of the Bank at the level of Vice President and higher, based on the
recommendations of the Compensation Committee. Richard B. Collins is a director
of the Company in addition to being the President and Chief Executive officer
of
the Company and of the Bank. Mr. Collins does not participate in the Board
of
Directors’ determination of compensation for his office.
Report
of the Compensation Committee of the Board of Directors on Executive
Compensation
Under
rules established by the SEC, the Company is required to provide certain data
and information regarding compensation and benefits provided to its Chief
Executive Officer and other executive officers. The disclosure requirements
for
the Chief Executive Officer and other executive officers include a report
explaining the rationale and considerations that led to fundamental executive
compensation decisions affecting those individuals. In fulfillment of this
requirement, the Compensation Committee of the Board of Directors has prepared
the following report.
The
Compensation Committee is appointed by the Board of Directors of the Company
to
assist the Board in fulfilling its responsibilities related to the development
of criteria and goals for the Company’s executive officers and the review and
approval of the compensation and benefits of the Company’s executive officers.
Annually, the Committee reviews the compensation level of the executive officers
of the Company and the Bank and recommends changes to the Board of Directors.
The Compensation Committee is composed entirely of non-employee directors.
The
Committee may ask members of management or others, including legal counsel,
to
attend meetings or to provide relevant information.
The
Compensation Committee’s authority and responsibilities include, but are not
limited to reviewing, evaluating and recommending the following:
|
·
|
Company
objectives relevant to the Chief Executive Officer and the cash and
equity
compensation of the Chief Executive Officer; evaluating the Chief
Executive Officer’s performance relative to established goals; and
reviewing, evaluating and recommending to the full Board of Directors
Chief Executive Officer
compensation.
|
|
·
|
Goals
relevant to the compensation of the Company’s executive officers and
reviewing such officers’ performance in light of these goals and
determining (or recommending to the full Board for determination)
such
officers’ cash and equity compensation based on this
evaluation.
|
|
·
|
Annual
compensation percentage increases available to all
staff.
|
|
·
|
The
terms of employment and severance agreements/arrangements for executive
officers, including any change of control and indemnification
agreements.
|
The
Committee is also responsible for administering the Company’s benefit plans
related to any stock option plan or recognition and retention plan adopted
by
the Company, the Company’s Employee Stock Ownership Program and various other
benefit plans, as well as retaining and/or terminating the engagement of any
compensation and benefit consultants or legal counsel used to assist the
Committee in fulfilling its responsibilities.
The
compensation program for the Company’s executive officers and other employees
historically has consisted of two key elements: base salary and annual incentive
plan payouts. In addition, in 2006 the Board of Directors recommended adoption
of a stock-based incentive plan to provide the officers, employees and directors
of the Company and the Bank with additional incentives to promote the growth
and
performance of the Company. That plan is subject to stockholder approval and
will be considered and voted on by stockholders at the Company’s 2006 Annual
Meeting of Stockholders.
Base
Salaries.
Base
salary levels and changes to such levels reflect a variety of factors, including
the results of the Compensation Committee’s review of reports from independent
consulting firms as well as compensation surveys prepared by banking
associations and professional firms. For 2005, as in past years, the
Compensation Committee consulted with a nationally recognized compensation
consulting firm to aid in establishing Bank-wide compensation levels. In
addition, in 2005, the Compensation Committee also obtained a summary of
compensation paid to executives of similarly-sized financial institutions in
the
New England and Mid-Atlantic Regions. As a result of its review of that summary,
the Committee concluded that base salaries and annual incentives offered by
the
Bank to executive officers were within the competitive range of
similarly-situated financial services companies.
The
Committee annually reviews the performance of the Chief Executive Officer and
other executive officers and approves changes to base compensation based on
such
review. Factors considered by the Committee in
2005
included each executive officer’s performance
relative to the strategic goals of the Company, general managerial oversight
of
the Company, the quality of communications with the Board of Directors, the
Company’s record of compliance with regulatory requirements, and the officer’s
self-assessment of his or her achievement of performance goals. The Compensation
Committee also considers the executive officer’s attainment of extraordinary
goals that may be identified by the Compensation Committee from year
to
year. In 2005, the Committee established goals related to the Company’s
then-impending initial public offering. The increases to base compensation
for
the Company’s executive officers reflected their achievements related to the
Company’s successful offering as well as their increased levels of
responsibility at the newly-public Company.
While
the
Committee does not generally, and did not in 2005, use strict numerical formulas
to determine changes in compensation for the Chief Executive Officer and other
executive officers, and while it weighs a variety of different factors in its
deliberations, it emphasized in 2005 and expects to continue to emphasize the
profitability and scope of the Company’s operations, the experience, expertise
and management skills of the Chief Executive Officer and other executive
officers and their roles in the future success of the Company, as well as the
compensation surveys discussed above. While each of the quantitative and
non-quantitative factors described above was considered by the Committee, such
factors were not assigned a specific weight in evaluating the performance of
the
Chief Executive Officer and other executive officers. Rather, all factors were
considered.
Incentive
Plan Payouts.
The
Company’s Incentive Plan is designed to recognize and reward employees for their
collective contributions to the Company’s success. The Incentive Plan focuses on
the financial measures that the Board of Directors has determined are critical
to Company’s growth and profitability.
The
Compensation Committee approves the goals and objectives set forth in the
Company’s Incentive Plan and establishes annually the level of incentive plan
amount, if any, to be awarded to employees, including executive officers under
the plan. The aggregate amount of incentive payments available for distribution
to employees in any year is based on the performance of the Company as measured
against certain pre-established quantitative thresholds. Specifically, incentive
payments are based on the Company’s ability to meet stated loan and deposit
growth targets as well as non-quantitative factors evaluated at the discretion
of the Compensation Committee. Once the aggregate incentive payment amount
is
established, individual incentive payments to employees, including executive
officers, are calculated based on the employee’s base salary. In 2005, the
incentive payments for the year ended December 31, 2005 to the Named Executives
are indicated in the table under “Executive Compensation.”
In
2005,
the full Board of Directors (without the participation of Mr. Collins)
determined the compensation of the Chief Executive Officer based on
recommendations of the Compensation Committee. Factors considered by the
Compensation Committee in recommending the Chief Executive Officer’s 2005 base
salary included his individual performance, the performance of the Company
under
his direction and
the
advancement of the Company’s strategic goals. In 2005, with respect to Mr.
Collins, the Committee recommended to the full Board of Directors a $64,855
increase in base salary to $340,000. Based on the calculations described above
for the Incentive Plan, the Committee also recommended a $37,034 increase in
Mr.
Collins’ annual incentive award to $94,044. The full Board of Directors adopted
the recommendation of the Compensation Committee.
This
report has been provided by the Compensation Committee:
Carol
Moore Cutting
|
Carol
A. Leary
|
Donald
G. Helliwell
|
Kevin
E. Ross
|
Robert
A. Stewart, Jr.
|
Thomas
H. Themistos
|
ITEM
12. Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
Persons
and groups who beneficially own in excess of five percent of the common stock
of
the Company are required to file certain reports with the SEC regarding such
ownership. The following table sets forth, as of March 31, 2006, the shares
of
common stock beneficially owned by each person who was the beneficial owner
of
more than five percent of the Company’s outstanding shares of common stock,
including shares owned by its directors and executive officers as a group.
For
security ownership of management, please see “Item 10. Directors and Executive
Officers of the Registrant” above.
|
Amount
of Shares
|
|
|
|
Owned
and Nature
|
|
Percent
of Shares
|
Name
and Address of
|
of
Beneficial
|
|
of
Common Stock
|
Beneficial Owners
|
Ownership(1)
|
|
Outstanding
|
|
|
|
|
Principal
Stockholders:
|
|
|
|
|
|
|
|
United
Mutual Holding Company
|
9,189,722
|
|
53.4%
|
95
Elm Street
|
|
|
|
West
Springfield, Massachusetts 01089
|
|
|
|
|
|
|
|
United
Mutual Holding Company(2)
|
9,336,709
|
|
54.26%
|
and
all Directors and Executive Officers
|
|
|
|
as
a group (19 persons)
|
|
|
|
_____________________________
(1)
A
person
is deemed to be the beneficial owner, for purposes of this table, of any shares
of common stock if he has shared voting or investment power with respect to
such
security, or has a right to acquire beneficial ownership at any time within
60
days from March 31, 2006. As used herein, “voting power” is the power to
vote or direct the voting of shares and “investment power” is the power to
dispose or direct the disposition of shares. Includes all shares held directly
as well as by spouses and minor children, in trust and other indirect ownership,
over which shares the named individuals effectively exercise sole or shared
voting and investment power.
(2)
The
Company’s executive officers and directors are also executive officers and
directors of United Mutual Holding Company (the “MHC”). Excluding shares held by
the MHC, the Company’s executive officers and directors owned an aggregate of
146,987 shares, or 0.85% of the outstanding shares.
ITEM
13. Certain
Relationships and Related Transactions
Transactions
with Certain Related Persons
All
transactions between the Company and its executive officers, directors, holders
of 10% or more of the shares of its common stock and affiliates thereof, are
on
terms no less favorable to the Company than could have been obtained by it
in
arm’s-length negotiations with unaffiliated persons. The balance of loans
outstanding to directors, executive officers and their related interests
amounted to $1,071,141 at December 31, 2005. The Sarbanes-Oxley Act of 2002
generally prohibits an issuer from: (i) extending or maintaining credit; (ii)
arranging for the extension of credit; or (iii) renewing an extension of credit
in the form of a personal loan for an officer or director. There are several
exceptions to this general prohibition, however, one of which is applicable
to
the Company. Namely, this prohibition does not apply to loans made by a
depository institution that is insured by the FDIC and is subject to the insider
lending restrictions of the Federal Reserve Act. All loans to the Company’s
directors and officers by the Bank are made in conformity with the Federal
Reserve Act and regulations promulgated thereunder.
ITEM
14. Principal
Accountant Fees and Services
The
Audit
Committee of the Board of Directors of the Company has approved the engagement
of Grant Thornton, LLP to be the Company’s independent registered public
accounting firm for the 2006 year, subject to the ratification of the engagement
by the Company’s stockholders. At the Annual Meeting, stockholders will consider
and vote on the ratification of the engagement of Grant Thornton, LLP for the
Company’s year ending December 31, 2006. A representative of Grant Thornton, LLP
is expected to attend the Annual Meeting to respond to appropriate questions
and
to make a statement, if deemed appropriate.
Stockholder
ratification of the selection of the independent registered public accounting
firm is not required by the Company’s bylaws or otherwise. However, the Board of
Directors is submitting the selection of the independent registered public
accounting firm to the stockholders for ratification as a matter of good
corporate practice. If the stockholders fail to ratify the independent
registered public accounting firm selected by the Audit Committee, the Audit
Committee will reconsider whether or not to retain that firm. Even if the
selection is ratified, the Audit Committee in its discretion may direct the
appointment of a different independent accounting firm at any time during the
year if it determines that such change is in the best interests of the Company
and its stockholders.
Audit
Fees.
During
2005 the fees billed for professional services rendered by Grant Thornton,
LLP
were $444,023. Such fees include fees related to the Company’s filing of the
registration statement on Form S-1 of $226,273 and the audit of the Company’s
annual financial statements and for the review of the consolidated financial
statements, including the Company’s quarterly reports on Forms 10-Q, of
$217,750. During 2004, the fees billed for professional services rendered
by Grant Thornton, LLP for the audit of the Company’s annual financial
statements were $195,000.
Audit-Related
Fees.
During
2005 there were no fees billed for professional services by Grant Thornton,
LLP
that are reasonably related to the performance of the audit. During 2004, fees
billed for professional services by Grant Thornton, LLP related to the mutual
holding company conversion were $17,198.
Tax
Fees.
During
the past two years the fees billed for professional services by Grant Thornton,
LLP for tax services such as tax advice, tax planning, tax compliance and the
review of tax returns were $20,907 for 2005 and $9,000 for 2004. All tax fees
billed by Grant Thornton, LLP during 2005 were pre-approved by the Audit
Committee.
All
Other Fees.
There
were no fees billed to the Company by Grant Thornton, LLP that are not described
above during the past two fiscal years.
The
Audit
Committee considered whether the provision of non-audit services was compatible
with maintaining the independence of its independent registered public
accounting firm. The Audit Committee concluded that performing such services
in
2005 did not affect the independent registered public accounting firm’s
independence in performing its function as auditors of the Company’s financial
statements.
Policy
on Audit Committee Pre-Approval of Audit and Non-Audit Services of Independent
Auditor
The
Audit
Committee’s policy is to pre-approve all audit and non-audit services provided
by the Company’s independent registered public accounting firm. These services
may include audit services, audit-related services, tax services and other
services. Pre-approval is generally provided for up to one year and any
pre-approval is detailed as to particular service or category of services and
is
generally subject to a specific budget. The Audit Committee has delegated
pre-approval authority to its Chairman when expedition of services is necessary.
The independent registered public accounting firm and management are required
to
periodically report to the full Audit Committee regarding the extent of services
provided by the independent registered public accounting firm in accordance
with
this pre-approval, and the fees for the services performed to date.
SIGNATURES
Pursuant
to the requirements of Section 13 of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
|
UNITED
FINANCIAL BANCORP, INC.
|
|
|
|
|
|
|
Date:April
28, 2006
|
By:
|
/s/
Richard B. Collins
|
|
|
Richard
B. Collins
|
|
|
Chief
Executive Officer, President and Director
|
|
|
(Duly
Authorized Representative)
|
Pursuant
to the requirements of the Securities Exchange of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.
Signatures
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/
Richard B. Collins
|
|
Chief
Executive Officer,
|
|
April
28, 2006
|
Richard
B. Collins
|
|
President
and Director (Principal
|
|
|
|
|
Executive
Officer)
|
|
|
|
|
|
|
|
/s/
Donald F.X. Lynch
|
|
Executive
Vice President and
|
|
April
28, 2006
|
Donald
F. X. Lynch
|
|
Chief
Financial Officer (Principal
|
|
|
|
|
Financial
and Accounting
|
|
|
|
|
Officer)
|
|
|
|
|
|
|
|
/s/
Robert W. Bozenhard, Jr.
|
|
Chairman
of the Board
|
|
April
28, 2006
|
Robert
W. Bozenhard, Jr.
|
|
|
|
|
|
|
|
|
|
/s/
Michael F. Crowley
|
|
Director
|
|
April
28, 2006
|
Michael
F. Crowley
|
|
|
|
|
|
|
|
|
|
/s/
Carol Moore Cutting
|
|
Director
|
|
April
28, 2006
|
Carol
Moore Cutting
|
|
|
|
|
|
|
|
|
|
/s/
Donald G. Helliwell
|
|
Director
|
|
April
28, 2006
|
Donald
G. Helliwell
|
|
|
|
|
|
|
|
|
|
/s/
George W. Jones
|
|
|
|
April
28, 2006
|
George
W. Jones
|
|
Director
|
|
|
|
|
|
|
|
/s/
Carol A. Leary
|
|
Director
|
|
April
28, 2006
|
Carol
A. Leary
|
|
|
|
|
|
|
|
|
|
/s/
G. Todd Marchant
|
|
Director
|
|
April
28, 2006
|
G.
Todd Marchant
|
|
|
|
|
|
|
|
|
|
/s/
Kevin E. Ross
|
|
Director
|
|
April
28, 2006
|
Kevin
E. Ross
|
|
|
|
|
|
|
|
|
|
/s/
Robert A. Stewart, Jr.
|
|
Director
|
|
April
28, 2006
|
Robert
A. Stewart, Jr.
|
|
|
|
|
|
|
|
|
|
/s/
Thomas H. Themistos
|
|
Director
|
|
April
28, 2006
|
Thomas
H. Themistos
|
|
|
|
|
|
|
|
|
|
/s/
Michael F. Werenski
|
|
Director
|
|
April
28, 2006
|
Michael
F. Werenski
|
|
|
|
|
18