Proxy Statement
SCHEDULE
14-A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed
by the Registrant [x]
Filed
by a Party other than the Registrant [ ]
Check
the appropriate box:
[
] Preliminary Proxy Statement
[x]
Definitive Proxy Statement
[
] Definitive Additional Materials
[
] Soliciting Material Pursuant to §240.14a-11(c) or
§240.14a-12
United
Financial Bancorp, Inc.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement)
Payment
of Filing Fee (Check the appropriate box):
[x]
No fee required.
[
] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[
] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[
] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1)
Title of each class of securities to which transaction
applies:
........................................................................
2)
Aggregate number of securities to which transaction
applies:
.......................................................................
3)
Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11:
.......................................................................
4)
Proposed maximum aggregate value of transaction:
........................................................................
[
] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or
the Form or Schedule and the date of its filing.
1)
Amount Previously Paid:
2)
Form, Schedule or Registration Statement No.:
3)
Filing Party:
4)
Date Filed:
United
Financial Bancorp, Inc.
June
12,
2006
Dear
Stockholder:
We
cordially invite you to attend the Annual Meeting of Stockholders of United
Financial Bancorp, Inc. (the “Company”). The Annual Meeting will be held at the
Springfield Marriott, 2 Boland Way, Springfield, Massachusetts at 10:00 a.m.
(local time) on July 20, 2006.
The
enclosed Notice of the Annual Meeting and Proxy Statement describe the formal
business to be transacted. During the Annual Meeting we will also report on
the
operations of the Company. Directors and officers of the Company, as well as
a
representative of our independent registered public accounting firm, will be
present to respond to any questions that stockholders may have. Also enclosed
for your review is our Annual Report to Stockholders, which contains detailed
information concerning the activities and operating performance of the Company.
The
business to be conducted at the Annual Meeting consists of the election of
three
directors to the Board of Directors of the Company, the approval of the 2006
United Financial Bancorp, Inc. Stock-Based Incentive Plan, and the ratification
of the appointment of Grant Thornton LLP as the independent registered public
accounting firm for the Company for the year ending December 31, 2006. For
the
reasons set forth in the Proxy Statement, the Board of Directors unanimously
recommends a vote “FOR” the election of directors, “FOR” the approval of 2006
United Financial Bancorp, Inc. Stock-Based Incentive Plan and “FOR” the
ratification of the appointment of the Company’s independent registered public
accounting firm.
On
behalf
of the Board of Directors, we urge you to sign, date and return the enclosed
proxy card as soon as possible, even if you currently plan to attend the Annual
Meeting. This will not prevent you from voting in person, but will assure that
your vote is counted if you are unable to attend the meeting. Your vote is
important, regardless of the number of shares that you own.
Sincerely,
/s/
Richard B. Collins
Richard
B. Collins
President
and Chief Executive Officer
P.O.
Box
9020
West
Springfield, MA 01090-9020
413-787-1700
United
Financial Bancorp, Inc.
95
Elm Street
West
Springfield, Massachusetts 01089
(413)
787-1700
NOTICE
OF
ANNUAL
MEETING OF STOCKHOLDERS
To
Be
Held On July 20, 2006
Notice
is
hereby given that the Annual Meeting of United Financial Bancorp, Inc. (the
“Company”) will be held at the Springfield Marriott, 2 Boland Way, Springfield,
Massachusetts at 10:00 a.m. (local time) on July 20, 2006.
A
Proxy
Card and a Proxy Statement for the Annual Meeting are enclosed.
The
Annual Meeting is for the purpose of considering and acting upon:
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1.
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the
election of three directors to the Board of
Directors;
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2.
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the
approval of the 2006
United Financial Bancorp, Inc. Stock-Based Incentive Plan;
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3. the
ratification of the appointment of Grant Thornton LLP as the independent
registered public accounting firm
for the
Company for the year ending December 31, 2006; and
such
other matters as may properly come before the Annual Meeting, or any
adjournments thereof. The Board of Directors is not aware of any other business
to come before the Annual Meeting.
Any
action may be taken on the foregoing proposals at the Annual Meeting on the
date
specified above, or on any date or dates to which the Annual Meeting may be
adjourned. Stockholders of record at the close of business on May 22, 2006
are
the stockholders entitled to vote at the Annual Meeting and any adjournments
thereof.
A
list of
stockholders entitled to vote at the Annual Meeting will be available at the
Company’s Main Office, 95 Elm Street, West Springfield, Massachusetts, for the
20 days immediately prior to the Annual Meeting. It also will be available
for
inspection at the meeting itself.
EACH
STOCKHOLDER, WHETHER HE OR SHE PLANS TO ATTEND THE ANNUAL MEETING, IS REQUESTED
TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD WITHOUT DELAY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. ANY PROXY GIVEN BY THE STOCKHOLDER MAY BE REVOKED AT
ANY
TIME BEFORE IT IS EXERCISED. A PROXY MAY BE REVOKED BY FILING WITH THE SECRETARY
OF THE COMPANY A WRITTEN REVOCATION OR A DULY EXECUTED PROXY BEARING A LATER
DATE. ANY STOCKHOLDER PRESENT AT THE ANNUAL MEETING MAY REVOKE HIS OR HER PROXY
AND VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE ANNUAL MEETING. HOWEVER,
IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN NAME,
YOU
WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER IN ORDER FOR YOU
TO
VOTE PERSONALLY AT THE ANNUAL MEETING.
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By
Order of the Board of Directors
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/s/
Diane P. Wilson
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Diane
P. Wilson
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Corporate
Secretary
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June
12,
2006
IMPORTANT:
THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF FURTHER
REQUESTS FOR PROXIES. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED STATES.
PROXY
STATEMENT
United
Financial Bancorp, Inc.
95
Elm Street
West
Springfield, Massachusetts 01089
(413)
787-1700
ANNUAL
MEETING OF STOCKHOLDERS
July
20,
2006
This
Proxy Statement is furnished in connection with the solicitation of proxies
on
behalf of the Board of Directors of United Financial Bancorp, Inc. (the
“Company”) to be used at the Annual Meeting of Stockholders of the Company (the
“Annual Meeting”), which will be held at the Springfield Marriott, 2 Boland Way,
Springfield, Massachusetts, on July 20, 2006, at 10:00 a.m. (local time), and
all adjournments of the Annual Meeting. The accompanying Notice of Annual
Meeting of Stockholders and this Proxy Statement are first being mailed to
stockholders on or about June 12, 2006.
REVOCATION
OF PROXIES
Stockholders
who execute proxies in the form solicited hereby retain the right to revoke
them
in the manner described below. Unless so revoked, the shares represented by
such
proxies will be voted at the Annual Meeting and all adjournments thereof.
Proxies solicited on behalf of the Board of Directors of the Company will be
voted in accordance with the directions given thereon. Where
no instructions are indicated, validly executed proxies will be voted “FOR” the
proposals set forth in this Proxy Statement for consideration at the Annual
Meeting.
The
Board
of Directors knows of no additional matters that will be presented for
consideration at the Annual Meeting. Execution of a proxy, however, confers
on
the designated proxy holders discretionary authority to vote the shares in
accordance with their best judgment on such other business, if any, that may
properly come before the Annual Meeting or any adjournments
thereof.
Proxies
may be revoked by sending written notice of revocation to the Secretary of
the
Company at the address shown above, delivering to the Company a duly executed
proxy bearing a later date, or attending the Annual Meeting and voting in
person. However, if you are a stockholder whose shares are not registered in
your own name, you will need appropriate documentation from your record holder
to vote personally at the Annual Meeting. The presence at the Annual Meeting
of
any stockholder who had returned a proxy shall not revoke such proxy unless
the
stockholder delivers his or her ballot in person at the Annual Meeting or
delivers a written revocation to the Secretary of the Company prior to the
voting of such proxy.
VOTING
SECURITIES AND VOTING PROCEDURES
Holders
of record of the Company’s common stock, par value $0.01 per share (the “Common
Stock”), as of the close of business on May 22, 2006 (the “Record Date”) are
entitled to one vote for each share then held, except as described below. As
of
the Record Date, the Company had 17,205,995 shares of common stock issued and
outstanding, 9,189,722 of which were held by United Mutual Holding Company
(the
“MHC”) and 8,016,273 of which were held by stockholders other than the MHC
(“Minority Stockholders”). The presence in person or by proxy of a majority of
the issued and outstanding shares of Common Stock entitled to vote is necessary
to constitute a quorum at the Annual Meeting. Broker non-votes and proxies
marked ABSTAIN will be counted for purposes of determining that a quorum is
present. In the event there are not sufficient votes for a quorum, or to approve
or ratify any matter being presented at the time of the Annual Meeting, the
Annual Meeting may be adjourned in order to permit the further solicitation
of
proxies. However, the presence by proxy of the MHC’s shares will assure a quorum
is present at the Annual Meeting.
In
accordance with the provisions of the Company’s Charter, record holders of
Common Stock who beneficially own in excess of 10% of the outstanding shares
of
Common Stock (the “Limit”) are not entitled to any vote with respect to the
shares held in excess of the Limit. The Limit does not apply to shares of common
stock held by the MHC.
As
to the
election of directors, the proxy card being provided by the Board of Directors
enables a stockholder to vote “FOR” the election of the three nominees proposed
by the Board of Directors or to “WITHHOLD AUTHORITY” to vote for the nominees
being proposed. Directors are elected by a plurality of votes cast, without
regard to either broker non-votes or proxies as to which the authority to vote
for the nominees being proposed is withheld.
As
to the
approval of the 2006 United Financial Bancorp, Inc. Stock-Based Incentive Plan
(the “Incentive Plan”), the proxy card being provided by the Board of Directors
enables a stockholder to: (i) vote “FOR” the approval of the Incentive Plan;
(ii) vote “AGAINST” the approval of the Incentive Plan; or (iii) “ABSTAIN” from
voting on the approval of the Incentive Plan. The approval of the Incentive
Plan
requires the affirmative vote of a majority of the shares present and voting
held by Minority Stockholders and by the affirmative vote of a majority of
the
total shares present and voting, in each case without regard to broker non-votes
or proxies marked “ABSTAIN.”
As
to the
ratification of the independent registered public accounting firm, the proxy
card being provided by the Board of Directors enables a stockholder to: (i)
vote
“FOR” the proposal; (ii) vote “AGAINST” the proposal; or (iii) “ABSTAIN” from
voting on the proposal. The ratification of the independent registered public
accounting firm must be approved by the affirmative vote of a majority of the
votes cast without regard to broker non-votes or proxies marked
“ABSTAIN.”
Management
of the Company anticipates that the MHC, the majority stockholder of the
Company, will vote all of its shares in favor of all the matters set forth
above. If the MHC votes all of its shares of common stock in favor of the
election of the three nominees proposed by the Board and in favor of the
ratification of Grant Thornton LLP as the Company’s independent registered
public accounting firm, the approval of each such proposal would be
assured.
Proxies
solicited hereby will be returned to the Company and will be tabulated by an
Inspector of Election designated by the Company’s Board of
Directors.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Persons
and groups who beneficially own in excess of five percent of the Common Stock
are required to file certain reports with the Securities and Exchange Commission
(the “SEC”) regarding such ownership. The following table sets forth, as of the
Record Date, 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.
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Amount
of Shares
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Owned
and Nature
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Percent
of Shares
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Name
and Address of
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of
Beneficial
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of
Common Stock
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Beneficial
Owners
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Ownership(1)
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Outstanding
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Principal
Stockholders:
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United
Mutual Holding Company
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9,189,722
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53.41%
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95
Elm Street
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West
Springfield, Massachusetts 01089
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United
Mutual Holding Company(2)
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9,340,020
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54.28%
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and
all Directors and Executive Officers
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as
a group (20 persons)
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_____________________________
(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 the Record Date. 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 the MHC. Excluding shares held by the MHC, the Company’s executive
officers and directors owned an aggregate of 150,298 shares, or 0.87% of the
outstanding shares.
PROPOSAL
1—ELECTION OF DIRECTORS
The
Company’s 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. Directors
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 authorized number of directors from twelve to ten members.
The
table
below sets forth certain information, as of the Record Date, 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.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES LISTED IN THIS
PROXY STATEMENT.
Names
and Addresses (1)
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Age(2)
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Positions
Held
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Director
Since(3)
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Current
Term
to
Expire
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Shares
of Common Stock
Beneficially
Owned on
Record
Date (4)
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Percent
of Class
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NOMINEES
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Kevin
E. Ross
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53
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Director
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1991
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2006
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2,500
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*
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Robert
A. Stewart, Jr.
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55
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Director
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1991
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2006
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2,500
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*
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Thomas
H. Themistos
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66
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Director
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2004
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2006
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2,400
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*
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DIRECTORS
CONTINUING IN OFFICE
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Robert
W. Bozenhard, Jr.
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71
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Chairman
of the Board of Directors
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1984
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2007
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10,000
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*
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Michael
F. Crowley
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48
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Director
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2001
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2007
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15,000(5)
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*
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Carol
Moore Cutting
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57
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Director
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2001
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2007
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2,650(6)
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*
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Carol
A. Leary
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59
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Director
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2001
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2007
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5,000
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*
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Richard
B. Collins
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63
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Director,
President and Chief
Executive
Officer
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2002
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2008
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30,000(7)
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*
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G.
Todd Marchant
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67
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Director
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1991
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2008
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2,000(8)
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*
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Michael
F. Werenski
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46
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Director
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1991
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2008
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30,000(9)
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*
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DIRECTORS
NOT CONTINUING IN OFFICE
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George
W. Jones
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72
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Director
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1985
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2006
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2,000(10)
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*
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Donald
G. Helliwell
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72
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Director
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1975
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2008
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10,000
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*
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EXECUTIVE
OFFICERS WHO ARE NOT DIRECTORS
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Keith
E. Harvey
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58
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Executive
Vice President,
Operations
and Retail Sales
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N/A
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N/A
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10,000
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*
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Donald
F.X. Lynch(11)
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60
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Executive
Vice President,
Chief
Financial Officer
and
Corporate Secretary
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N/A
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N/A
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10,000
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*
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Mark
A. Roberts(12)
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43
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Executive Vice President and
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N/A
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N/A
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1,500
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*
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J.
Jeffrey Sullivan
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42
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Executive
Vice President and
Chief
Lending Officer
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N/A
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N/A
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4,311
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*
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John
J. Patterson
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59
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Senior
Vice President, Risk
Management
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N/A
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N/A
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3,577(13)
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*
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William
Clark
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41
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Senior
Vice President,
Residential
Lending
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N/A
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N/A
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352
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*
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Laurie
J. Rollins
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47
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Vice
President,
Treasurer
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N/A
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N/A
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1,000(14)
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*
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Dena
M. Hall
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32
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Vice
President, Marketing and
Community
Relations
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N/A
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N/A
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170(15)
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*
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All
Directors and Executive
Officers
as a Group (20 persons)
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150,298(16)
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0.87
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(1)
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The
mailing address for each person listed is 95 Elm Street, West Springfield,
Massachusetts 01089.
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(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)
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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.
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(6)
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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.
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(7)
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Includes
15,000 shares of common stock held by Mr. Collins’
spouse.
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(8)
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Includes
2,000 shares of common stock held in a
trust.
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(9)
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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.
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(10)
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Includes
2,000 shares of common stock held by Mr. Jones’ individual retirement
account.
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(11)
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Mr.
Lynch left the Company, effective May 5,
2006.
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(12)
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Mr.
Roberts joined the Company on May 8,
2006.
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(13)
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Includes
1,777 shares of common stock held in Mr. Patterson’s individual retirement
account.
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_________________________________
(Footnotes
continue on following page)
_________________________
(14)
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Includes
shares of common stock held in a joint account with Ms. Rollins’
son.
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(15)
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Includes
shares of common stock held in a joint account with Ms. Hall’s
spouse.
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(16)
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Includes
5,337.553 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 the Record Date) 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.
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*
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Less
than three-tenths of 1%.
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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 and 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
was
Executive Vice President, Chief Financial Officer and Secretary of the Company
and the Bank. Mr. Lynch left the Company and the Bank on May 5, 2006.
Mark
A. Roberts
is the
Executive Vice President and Chief Financial Officer of the Company and the
Bank. He joined the Company and the Bank on May 8, 2006. He was most recently
the Vice President and Controller for The Connecticut Bank and Trust Company
in
Hartford, Connecticut and was the Vice President of Finance at Woronoco Savings
Bank for six years.
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 for 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.
Board
Independence
The
Board
of Directors has determined that, except as to Richard B. Collins, each member
of the Board of Directors is an “independent director” within the meaning of the
Nasdaq corporate governance listing standards. Mr. Collins is not considered
independent because he is the President and Chief Executive Officer of the
Company.
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”). The 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.
Meetings
and Committees of the Board of Directors
The
business of the Boards of Directors of the Company and the Bank is conducted
through meetings and activities of the Boards and their committees. The Board
of
the Company has the following committees: Audit Committee, Compensation
Committee, Executive Committee and Governance Committee. The Board of the Bank
has the following committees: Audit Committee, Compensation Committee, Executive
Committee, Loan Committee and Governance Committee.
During
the year ended December 31, 2005, the Board of Directors of the Company held
11
regular meetings and no special meetings; and the Board of Directors of the
Bank
held 12 regular meetings and no special meetings. During the year ended December
31, 2005, no director attended fewer than 75% of the total meetings
of
the
Boards of Directors and committees on which such director served with the
exception of the Executive Committee of the Bank, which met three times in
2005
on short notice to discuss the details of the pending acquisition of Levine
Financial Group. Director Jones missed two of these meetings and Director
Marchant missed one.
While
the
Company has no formal policy on director attendance at annual meetings of
stockholders, all directors are encouraged to attend. The Annual Meeting is
the
first annual meeting of the Company as a public company.
The
Governance Committee
The
Governance Committee of the Company consists of directors Cutting, Leary,
Helliwell, Ross, Stewart and Themistos. Each member of the Governance Committee
is considered “independent” as defined in the Nasdaq corporate governance
listing standards. The Company’s Board of Directors has adopted a written
charter for the Committee, which is available at the Company’s website at
www.bankatunited.com. The Committee did not meet during the year ended December
31, 2005.
The
functions of the Governance Committee include the following:
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to
lead the search for individuals qualified to become members of the
Board
and to select director nominees to be presented for stockholder
approval;
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to
review and monitor compliance with Nasdaq Stock Market listing
requirements for board
independence;
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to
make recommendations to the Board regarding the size and composition
of
the Board and develop and recommend to the Board criteria for the
selection of individuals to be considered for election or re-election
to
the Board; and
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to
review the committee structure and make recommendations to the Board
regarding committee membership.
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The
Governance Committee identifies nominees for the Board of Directors by first
evaluating the current members of the Board of Directors willing to continue
in
service. Current members of the Board with skills and experience that are
relevant to the Company’s business and who are willing to continue in service
are first considered for re-nomination, balancing the value of continuity of
service by existing members of the Board with that of obtaining a new
perspective. If any member of the Board does not wish to continue in service,
or
if the Committee or the Board decides not to re-nominate a member for
re-election, or if the size of the Board is increased, the Committee would
solicit suggestions for director candidates from all Board members. In addition,
the Committee is authorized by its charter to engage a third party to assist
in
the identification of director nominees. The Governance Committee would seek
to
identify a candidate who at a minimum satisfies the following
criteria:
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has
the highest personal and professional ethics and integrity and whose
values are compatible with the
Company’s;
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has
had experiences and achievements that have given him or her the ability
to
exercise and develop good business
judgment;
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is
willing to devote the necessary time to the work of the Board and
its
committees, which includes being available for Board and committee
meetings;
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is
familiar with the communities in which the Company operates and/or
is
actively engaged in community
activities;
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is
involved in other activities or interests that do not create a conflict
with his or her responsibilities to the Company and its stockholders;
and
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has
the capacity and desire to represent the balanced, best interests
of the
stockholders of the Company as a group, and not primarily a special
interest group or constituency.
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The
Governance Committee will also take into account whether a candidate satisfies
the criteria for “independence” under the Nasdaq corporate governance listing
standards and, if a nominee is sought for service on the Audit Committee, the
financial and accounting expertise of a candidate, including whether an
individual qualifies as an audit committee financial expert.
Procedures
for the Nomination of Directors by Stockholders
The
Governance Committee has adopted procedures for the submission of director
nominees by stockholders. If a determination is made that an additional
candidate is needed for the Board of Directors, the Governance Committee will
consider candidates submitted by the Company’s stockholders. Stockholders can
submit the names of qualified candidates for Director by writing to our
Corporate Secretary, at 95 Elm Street, West Springfield, Massachusetts 01089.
The Corporate Secretary must receive a submission
not less
than ninety (90)
days
prior to the anniversary date of the Company’s proxy materials for the preceding
year’s annual meeting.
The
submission must include the following information:
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a
statement that the writer is a stockholder and is proposing a candidate
for consideration by the Governance
Committee;
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the
name and address of the stockholder as he or she appears on the Company’s
books, and number of shares of the Company’s common stock that are owned
beneficially by such stockholder (if the stockholder is not a holder
of
record, appropriate evidence of the stockholder’s ownership will be
required);
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the
name, address and contact information for the candidate, and the
number of
shares of common stock of the Company that are owned by the candidate
(if
the candidate is not a holder of record, appropriate evidence of
the
stockholder’s ownership should be
provided);
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a
statement of the candidate’s business and educational
experience;
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such
other information regarding the candidate as would be required to
be
included in the proxy statement pursuant to SEC Regulation
14A;
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a
statement detailing any relationship between the candidate and any
customer, supplier or competitor of the
Company;
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detailed
information about any relationship or understanding between the proposing
stockholder and the candidate; and
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a
statement that the candidate is willing to be considered and willing
to
serve as a Director if nominated and
elected.
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A
nomination submitted by a stockholder for presentation by the stockholder at
an
annual meeting of stockholders must comply with the procedural and informational
requirements described in “Other Matters and Advance Notice Procedures.” No
submission for Board nominees was received by the Company for the Annual
Meeting.
Stockholder
Communications with the Board
A
stockholder of the Company who wishes to communicate with the Board of Directors
or with any individual Director can write to the Corporate Secretary of the
Company, at 95 Elm Street, West Springfield, Massachusetts 01089, Attention:
Board Administration. The letter should indicate that the author is a
stockholder and if shares are not held of record, should include appropriate
evidence of stock ownership. Depending on the subject matter, management
will:
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forward
the communication to the Director or Directors to whom it is
addressed;
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attempt
to handle the inquiry directly, for example where it is a request
for
information about the Company or it is a stock-related matter; or
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not
forward the communication if it is primarily commercial in nature,
relates
to an improper or irrelevant topic, or is unduly hostile, threatening,
illegal or otherwise inappropriate.
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At
each
Board meeting, management will present a summary of all communications received
since the last meeting that were not forwarded and make those communications
available to the Directors on request.
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.
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 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:
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retaining,
overseeing and evaluating an independent registered public accounting
firm
to audit the Company’s annual financial
statements;
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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;
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approving
the scope of the audit in advance;
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reviewing
the financial statements and the audit report with management and
the
independent registered public accounting
firm;
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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;
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reviewing
earnings and financial releases and quarterly reports filed with
the
SEC;
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consulting
with the internal audit staff and reviewing management’s administration of
the system of internal accounting
controls;
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approving
all engagements for audit and non-audit services by the independent
registered public accounting firm;
and
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reviewing
the adequacy of the audit committee
charter.
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The
Audit
Committee of the Company met five 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
and is
included as Appendix A to this Proxy Statement.
Audit
Committee Report
Management
has the primary responsibility for the Company’s internal controls and financial
reporting processes. The independent registered public accounting firm is
responsible for performing an independent audit of the Company’s consolidated
financial statements in accordance with auditing standards generally accepted
in
the United States and issuing a report thereon. The Audit Committee’s
responsibility is to monitor and oversee these processes.
In
accordance with rules established by the SEC, the Audit Committee of the Company
has prepared the following report for inclusion in this Proxy
Statement:
As
part
of its ongoing activities, the Audit Committee has:
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reviewed
and discussed with management and the independent registered public
accounting firm the Company’s audited consolidated financial statements
for the year ended December 31,
2005;
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discussed
with the independent registered public accounting firm of the Company
the
matters required to be discussed by Statement on Auditing Standards
No.
61, Communications
with Audit Committees,
as amended; and
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received
the written disclosures and the letter from the independent registered
public accounting firm required by Independence Standards Board Standard
No. 1, Independence
Discussions with Audit Committees,
and has discussed with the independent registered public accounting
firm
their independence.
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Based
on
the review and discussions referred to above, the Audit Committee recommended
to
the Board of Directors that the audited consolidated financial statements be
included in the Company’s Annual Report on Form 10-K for the year ended December
31, 2005. In addition, the Audit Committee recommended that the Board of
Directors appoint Grant Thornton LLP as the Company’s independent registered
public accounting firm for the year ending December 31, 2006, subject to the
ratification of this appointment by the stockholders.
This
report shall not be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
as
amended, except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
This
report has been provided by the Audit Committee:
Carol
Moore Cutting
Carol
A.
Leary
Donald
G.
Helliwell
Kevin
E.
Ross
Robert
A.
Stewart, Jr.
Thomas
H.
Themistos
Stock
Performance Graph
Set
forth
hereunder is a stock performance graph comparing (a) the cumulative total
return on the Common Stock for the period beginning on July 13, 2005 through
December 31, 2005, (b) the cumulative 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 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 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:
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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;
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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;
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annual
compensation percentage increases available to all staff;
and
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the
terms of employment and severance agreements/arrangements for executive
officers, including any change of control and indemnification
agreements.
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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 Plan 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. It is included as Proposal 2 of this
document.
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 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 the 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 Executive
Officers (as defined below) 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:
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Carol
Moore Cutting
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Carol
A. Leary
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Donald
G. Helliwell
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Kevin
E. Ross
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Robert
A. Stewart, Jr.
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Thomas
H. Themistos
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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 Bank 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. 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). Mr. Lynch departed from the Bank on May 5, 2006. In connection
therewith, the Bank amended Mr. Lynch's Executive Supplemental Compensation
Agreement to provide for an early retirement benefit commencing at age 62.
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. The
agreement for Mr. Patterson 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 Section 409A of the Internal
Revenue Code.
No
supplemental compensation will be paid to Messrs. Collins, Harvey 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 $150,171, $8,317, $22,438 and $7,987 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 45% 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 thirty days and not more
than
sixty 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 bonus programs
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 two of its executive vice
presidents, 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.
Harvey and Sullivan would receive an aggregate of $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 Company’s 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
Options. Except
for the Incentive Plan to be considered by stockholders at the Annual Meeting,
the Company has not previously adopted an option plan for the award of options
exercisable for shares of common stock of the Company, and no such options
were
outstanding at December 31, 2005 or exercised in the year ended December 31,
2005.
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 $809,901 as of the record date. 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.
PROPOSAL
2—APPROVAL OF THE 2006 UNITED FINANCIAL BANCORP, INC. STOCK-BASED INCENTIVE
PLAN
The
Board
of Directors has adopted, subject to stockholder approval, the 2006 United
Financial Bancorp, Inc. Stock-Based Incentive Plan (the “Incentive Plan”), to
provide officers, employees and directors of the Company and the Bank with
additional incentives to promote the growth and performance of the Company.
The
following is a summary of the material features of the Incentive Plan, which
is
qualified in its entirety by reference to the provisions of the Incentive Plan,
attached hereto as Appendix B.
General
The
Incentive Plan will remain in effect for a period of ten years following
adoption by stockholders. The Incentive Plan authorizes the issuance of up
to
1,180,330 shares of Company common stock pursuant to grants of incentive and
non-statutory stock options, stock appreciation rights and restricted stock
awards, provided that no more than 337,237 shares may be issued as restricted
stock awards, and no more than 843,093 shares may be issued pursuant to the
exercise of stock options.
The
Incentive Plan will be administered by a committee (the “Committee) appointed by
the Chairman of the Board of Directors, which will include two or more
disinterested directors of the Company who must be “non-employee directors,” as
that term is defined for purposes of Rule 16b of the Securities Exchange Act
of
1934. The Committee has full and exclusive power within the limitations set
forth in the Incentive Plan to make all decisions and determinations regarding
the selection of participants and the granting of awards; establishing the
terms
and conditions relating to each award; adopting rules, regulations and
guidelines for carrying out the Incentive Plan’s purposes; and interpreting and
otherwise construing the Incentive Plan. The Incentive Plan also permits the
Board of Directors or the Committee to delegate to one or more officers of
the
Company the Committee’s power to (i) designate officers and employees who will
receive awards, and (ii) determine the number of awards to be received by them.
Eligibility
Employees
and outside directors of the Company or its subsidiaries are eligible to receive
awards under the Incentive Plan.
Types
of Awards
The
Committee may determine the type and terms and conditions of awards under the
Incentive Plan. Awards may be granted in a combination of incentive and
non-statutory stock options, stock appreciation rights or restricted stock
awards, as follows.
Stock
Options.
A
stock
option gives the recipient or “optionee” the right to purchase shares of common
stock at a specified price for a specified period of time. The exercise price
may not be less than the fair market value on the date the stock option is
granted. Fair market value for purposes of the Incentive Plan means the final
sales price of Company’s common stock as reported on the NASDAQ National Market
on the date the option is granted, or if the Company’s common stock was not
traded on such date, then on the day prior to such date or on the next preceding
day on which the Company’s common stock was traded, and without regard to
after-hours trading activity. However, if the Company’s common stock is not
reported on the NASDAQ stock market (or over-the-counter market), fair market
value will mean the average sale price of all shares of Company common stock
sold during the 30-day period immediately preceding the date on which such
stock
option was granted, and if no shares of stock have been sold within such 30-day
period, the average sale price of the last three sales of Company common stock
sold during the 90-day period immediately preceding the date on which such
stock
option was granted. The Committee will determine the fair market value if it
cannot be determined in the manner described above.
Stock
options are either “incentive” stock options or “non-qualified” stock options.
Incentive stock options have certain tax advantages and must comply with the
requirements of Section 422 of the Internal Revenue Code. Only employees are
eligible to receive incentive stock options. Shares of common stock purchased
upon the exercise of a stock option must be paid for in full at the time of
exercise (i) either in cash or with stock of the
Company
that was owned by the participant for at least six months prior to delivery,
or
(ii) by reduction in the number of shares deliverable pursuant to the stock
option, or (iii) subject to a “cashless exercise” through a third party. Cash
may be paid in lieu of any fractional shares under the Incentive Plan and
generally no fewer than 100 shares may be purchased on exercise of an award
unless the total number of shares available for purchase or exercise pursuant
to
an award is less than 100 shares. Stock options are subject to vesting
conditions and restrictions as determined by the Committee.
Stock
Appreciation Rights.
Stock
appreciation rights may be granted in tandem with stock options and give the
recipient the right to receive a payment in Company common stock of an amount
equal to the excess of the fair market value of a specified number of shares
of
Company common stock on the date of the exercise of the stock appreciation
rights over the fair market value of the common stock on the date of grant
of
the stock appreciation right, as set forth in the recipient’s award agreement.
Stock appreciation rights will not be granted unless (i) the stock appreciation
right is settled solely in Company common stock; and (ii) there is no further
ability to defer the income received on the exercise of the stock appreciation
right.
Stock
Awards.
Stock
awards under the Incentive Plan will be granted only in whole shares of common
stock. Stock awards will be subject to conditions established by the Committee
which are set forth in the award agreement. Any stock award granted under the
Incentive Plan will be subject to vesting as determined by the Committee. Awards
will be evidenced by agreements approved by the Committee, which set forth
the
terms and conditions of each award.
Generally,
all awards, except non-statutory stock options, granted under the Incentive
Plan
will be nontransferable except by will or in accordance with the laws of
intestate succession. Stock awards may be transferable pursuant to a qualified
domestic relations order. At the Committee’s sole discretion, non-statutory
stock options may be transferred for valid estate planning purposes that are
permitted by the Internal Revenue Code and the Securities Exchange Act of 1934,
as amended. During the life of the participant, awards can only be exercised
by
him or her. The Committee may permit a participant to designate a beneficiary
to
exercise or receive any rights that may exist under the Incentive Plan upon
the
participant’s death.
The
Incentive Plan generally, as well as the granting and vesting of awards under
the Incentive Plan specifically, are subject to applicable OTS
regulations.
Change
in Control.
Upon
the
occurrence of an event constituting a change in control of the Company as
defined in the Incentive Plan, all stock options will become fully vested,
and
all stock awards then outstanding will vest free of restrictions.
Tax
Consequences
The
following are the material federal tax consequences generally arising with
respect to awards granted under the Incentive Plan. The grant of an option
will
create no tax consequences for an optionee or the Company. The optionee will
have no taxable income upon exercising an incentive stock option and the Company
will receive no deduction when an incentive stock option is exercised. Upon
exercising a non-statutory stock option, the optionee must recognize ordinary
income equal to the difference between the exercise price and the fair market
value of the stock on the date of exercise, and the Company will be entitled
to
a deduction for the same amount. The tax treatment for an optionee on a
disposition of shares acquired through the exercise of an option depends on
how
long the shares have been held and whether such shares were acquired by
exercising an incentive stock option or a non-statutory stock option. Generally,
there will be no tax consequences to the Company in connection with the
disposition of shares acquired pursuant to an option, except that the Company
may be entitled to a deduction if shares acquired pursuant to an incentive
stock
option are sold before the required holding periods have been
satisfied.
With
respect to other awards granted under the Incentive Plan that are settled either
in cash or in stock, the participant must recognize ordinary income equal to
the
cash or the fair market value of shares or other property received and the
Company will be entitled to a deduction for the same amount. With respect to
awards that are settled in stock the participant must recognize ordinary income
equal to the fair market value of the shares received at the time the shares
became transferable or not subject to substantial risk of forfeiture, whichever
occurs earlier. The Company will be entitled to a deduction for the same
amount.
There
are
nine outside directors of the Company (excluding retiring directors Helliwell
and Jones) and 193 employees eligible to participate in the Incentive Plan.
The
amount of stock awards or stock options to be allocated to Named Executive
Officers, non-executive directors or non-executive employees are indeterminable
at this time.
PROPOSAL
3—RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC
ACCOUNTING
FIRM
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 Bank’s
mutual holding company reorganization 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 during the past two
fiscal years that are not described above.
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.
In
order
to ratify the selection of Grant Thornton, LLP as the independent registered
public accounting firm for the 2006 year, the proposal must receive a majority
of the votes cast, without regard to broker non-votes or proxies marked
“ABSTAIN.” The
Board of Directors recommends a vote “FOR” the ratification of Grant Thornton,
LLP as the Company’s independent registered public accounting firm for the 2006
year.
STOCKHOLDER
PROPOSALS
In
order
to be eligible for inclusion in the proxy materials for next year’s Annual
Meeting of Stockholders, any stockholder proposal to take action at such meeting
must be received at the Company’s executive office, 95 Elm Street, West
Springfield, Massachusetts 01089, no later than February 15, 2007. Any such
proposals shall be subject to the requirements of the proxy rules adopted under
the Securities Exchange Act of 1934.
OTHER
MATTERS AND ADVANCE NOTICE PROCEDURES
The
Board
of Directors is not aware of any business to come before the Annual Meeting
other than the matters described above in this proxy statement. However, if
any
matters should properly come before the Annual Meeting, it is intended that
holders of the proxies will act as directed by a majority of the Board of
Directors, except for matters related to the conduct of the Annual Meeting,
as
to which they shall act in accordance with their best judgment. The Board of
Directors intends to exercise its discretionary authority to the fullest extent
permitted under the Securities Exchange Act of 1934.
The
Bylaws of the Company provide an advance notice procedure for certain business
or nominations to the Board of Directors to be brought before an annual meeting.
In order for a stockholder to properly bring business before an annual meeting,
or to propose a nominee to the Board, the stockholder must give written notice
to the Secretary of the Company not less than five days prior to the date of
the
annual meeting. No other proposal shall be acted upon at the annual meeting.
A
stockholder may make any other proposal at the annual meeting and the same
may
be discussed and considered, but unless stated in writing and filed with the
Secretary at least five days prior to the annual meeting, the proposal will
be
laid over for action at an adjourned, special or annual meeting taking place
30
days or more thereafter.
The
date
on which the next Annual Meeting of Stockholders is expected to be held is
April
19, 2007. Accordingly, advance written notice of business or nominations to
the
Board of Directors to be brought before the 2007 Annual Meeting of Stockholders
must be made in writing and delivered to the Secretary of the Company no later
than April 13, 2007.
The
cost
of solicitation of proxies in the form enclosed herewith will be borne by the
Company. Proxies also may be solicited personally or by mail, telephone or
telegraph by the Company’s directors, officers and employees, without additional
compensation therefor. The Company also will request persons, firms and
corporations holding shares in their names, or in the names of their nominees
which are beneficially owned by others, to send proxy materials to and to obtain
proxies from such beneficial owners, and will reimburse such holders for their
reasonable expenses in doing so.
A
COPY OF THE COMPANY’S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
2005 WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE RECORD DATE
UPON
WRITTEN OR TELEPHONIC REQUEST TO DENA M. HALL, VICE PRESIDENT, UNITED FINANCIAL
BANCORP, INC., 95 ELM STREET, WEST SPRINGFIELD, MASSCHUSETTS 01089, OR CALL
AT
413-787-1700.
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BY
ORDER OF THE BOARD OF DIRECTORS
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|
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/s/
Diane P. Wilson
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|
|
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Diane
P. Wilson
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Corporate
Secretary
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West
Springfield, Massachusetts
June
12,
2006
APPENDIX
A
UNITED
FINANCIAL BANCORP, INC.
Audit
Committee Charter
I.
Purpose
The
Audit
Committee (the “Committee”) is a committee of the Board of Directors (the
“Board”) of United Financial Bancorp, Inc. (the “Company”). Its primary function
is to assist the Board in monitoring:
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·
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the
integrity of the Company’s financial
statements
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·
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the
qualifications and independence of the Company’s independent
auditor
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·
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the
performance of the Company’s internal audit function and independent
auditor
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·
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the
Company’s disclosure controls and system of internal controls over
financial reporting
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The
Committee should foster adherence to, and encourage continuous improvement
of,
the Company’s policies, procedures and practices. The Committee should also
provide an open avenue of communication among financial and senior management,
the internal audit function, the independent auditor and the Board.
The
Committee has the authority, to the extent it deems necessary or appropriate,
to
retain independent legal, accounting or other advisors. The Company shall
provide for appropriate funding, as determined by the Committee, for payment
of
compensation to the independent auditor for the purpose of rendering or issuing
an audit report and to any advisors employed by the Committee.
The
Committee will report regularly to the Board. The Committee shall review and
assess the adequacy of this Charter annually and recommend any proposed changes
to the Board for approval.
II.
Composition and Meetings
The
Committee shall be comprised of at least three members, as determined by the
Board. Each Committee member shall be an independent director of the Board,
as
defined by all applicable rules and regulations, including the listing standards
of Nasdaq, and free from any relationship (including disallowed compensatory
arrangements) that, in the opinion of the Board, would interfere with the
exercise of his or her independent judgment as a member of the
Committee.
All
members of the Committee shall be able to read and understand fundamental
financial statements, including a company’s balance sheet, income statement and
cash flow statement. The Board shall determine whether at least one member
of
the Committee qualifies as an “audit committee financial expert” in compliance
with criteria established by the Nasdaq Stock Market, Inc. and other relevant
regulations. The existence of such member, including his or her name and whether
he or she is independent, shall be disclosed in periodic filings as may be
required by the SEC.
The
members of the Committee shall be elected by the Board and shall serve until
their successors are duly elected and qualified. Unless a Chair is elected
by
the full Board, the members of the Committee may designate a Chair by majority
vote of the full Committee membership.
The
Committee shall meet at least quarterly or more frequently as circumstances
dictate. Each regularly scheduled meeting shall conclude with an executive
session of the Committee, absent members of management and on such terms and
conditions as the Committee may choose. As part of its responsibility to foster
open communication, the Committee will meet periodically with management, the
internal auditor and the independent auditor in separate executive sessions
to
discuss any matters that the Committee or each of those parties believe should
be discussed privately. The Committee will meet quarterly with the independent
auditor and management to discuss the Company’s financial
statements.
III.
Duties and Responsibilities
The
Committee, to the extent it deems necessary or appropriate, shall:
Financial
Statement and Disclosure Matters
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·
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Review
and discuss with management and the independent auditor the Company’s
annual audited financial statements, including disclosures made in
management’s discussion and analysis, and recommend to the Board whether
the audited financial statements should be included in the Company’s Form
10-K.
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·
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Review
and discuss with management and the independent auditor the Company’s
quarterly financial statements prior to the filing of the Company’s Form
10-Q, including the results of the independent auditor’s review of the
quarterly financial statements.
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·
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Review
and discuss with management and the independent auditor the certifications
of the Company’s chief executive officer and chief financial officer about
any significant deficiencies in the design or operation of internal
controls or material weaknesses therein and any fraud involving management
or other employees who have a significant role in the Company’s internal
controls, as required by the Sarbanes-Oxley Act of 2002 (Sections
302 and
906), and the relevant reports rendered by the independent
auditor.
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·
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Discuss
with management and the independent auditor significant financial
reporting issues and judgments made in connection with the preparation
of
the Company’s financial statements, including any significant changes in
the Company’s selection or application of accounting principles, any major
issues as to the adequacy of the Company’s internal controls and any
special steps adopted in light of material control
deficiencies.
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·
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Review
and discuss quarterly reports from the independent auditor
on:
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(a)
all
critical accounting policies and practices used or to be used;
(b)
all
alternative treatments of financial information within generally accepted
accounting principles that have been discussed with management, ramifications
of
the use of such alternative disclosures and treatments, and the treatment
preferred by the independent auditor; and
(c)
other
material written communications between the independent auditor and management,
such as any management letter or schedule of unadjusted
differences.
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·
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Discuss
with management the Company’s earnings press releases, including the use
of “pro forma” or “adjusted” non-GAAP information, as well as financial
information and earnings guidance provided to analysts and ratings
agencies. Such discussions may be on general terms (i.e., discussion
of
the types of information to be disclosed and the type of presentation
to
be made).
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·
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Discuss
with management and the independent auditor the effect of regulatory
and
accounting initiatives as well as off-balance sheet structures on
the
Company’s financial statements.
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·
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Discuss
with management the Company’s major financial risk exposures and the steps
management has taken to monitor and control such exposures, including
the
Company’s risk assessment and risk management
policies.
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·
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Review
with management, corporate counsel and the independent auditor the
status
of legal matters, including the significance of such matters on the
Company’s financial statements, and the adequacy of disclosures regarding
such matters in the Company’s financial statements and SEC
filings.
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·
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Review
with management and the independent auditor and pre-approve all
related-party transactions and determine that all required disclosures
are
included in the Company’s annual report and annual proxy
statement.
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·
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Review
with the independent auditor the matters required to be discussed
by
Statement on Auditing Standards No. 61 relating to the conduct of
the
audit, any difficulties encountered in the course of the audit, any
restrictions on the scope of activities or access to requested
information, and any significant disagreements with
management.
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Independent
Auditor
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·
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Appoint,
compensate and oversee the work performed by the independent auditor
for
the purpose of preparing an audit report on the Company’s financial
statements or related work. Review the performance of the independent
auditor and remove the independent auditor if circumstances warrant.
The
independent auditor shall report directly to the Committee and the
Committee shall oversee the resolution of disagreements between management
and the independent auditor in the event they arise.
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·
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Consider
whether the auditor’s performance of permissible non-audit services is
compatible with the auditor’s
independence.
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·
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Review
and evaluate the lead partner of the independent auditor team. Ensure
the
rotation of the lead audit partner and the audit partner responsible
for
reviewing the audit as required by
law.
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·
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Obtain
and review a report from the independent auditor at least annually
regarding:
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(a)
the
internal quality control procedures of the independent auditor’s
firm;
(b)
any
material issues raised by the most recent internal quality control review,
peer
review or by any inquiry or investigation by governmental or professional
authorities, within the preceding five years, respecting one or more independent
audits carried out by the firm, and any steps taken to deal with any such
issues; and
(c)
all
relationships between the independent auditor and the Company.
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·
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Review
and pre-approve both audit and non-audit services to be provided
by the
independent auditor (other than with respect to non-significant exceptions
permitted by the Sarbanes-Oxley Act of 2002) in accordance with the
Company’s pre-approval policy.
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·
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Meet
with the independent auditor prior to the audit to discuss the planning
and staffing of the audit. Employees or former employees of the
independent auditor who participated in any capacity in the audit
of the
Company will not be hired by the Company unless (a) it is determined
that
such a hiring would not violate any rules and regulations and (b)
the
hiring is pre-approved by the
Board.
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Internal
Audit
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·
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Review
and advise on the appointment and replacement of the senior internal
audit
executive, if any.
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·
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Review
activities, organizational structure and qualifications of the internal
audit function.
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·
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Review
the significant reports to management prepared by the internal auditor
and
management’s responses.
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·
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Review
the internal audit charter, if any, annually and recommend changes,
if
any.
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·
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Review
periodically with the independent auditor the budget, staffing and
responsibilities of the internal audit
function.
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·
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Review
periodically with the internal auditor any significant difficulties,
disagreements with management or scope restrictions encountered
in the
course of the function’s work.
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Other
Responsibilities
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·
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Discuss
with management and the independent auditor any correspondence
with
regulators or governmental agencies and any reports that raise
material
issues regarding the Company’s financial statements or accounting
policies.
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·
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Establish
procedures for the receipt, retention and treatment of complaints
received
by the Company regarding accounting, internal accounting controls
or
auditing matters, and the confidential, anonymous submission by
employees
of concerns regarding questionable accounting or auditing
matters.
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IV.
Limitation of Audit Committee’s Role
While
the
Committee has the responsibilities and powers set forth in this Charter,
it is
not the duty of the Committee to plan or conduct audits or to determine that
the
Company’s financial statements and disclosures are complete and accurate and are
in accordance with generally accepted accounting principles and applicable
rules
and regulations. These are the responsibilities of management and the
independent auditor.
APPENDIX
B
UNITED
FINANCIAL BANCORP, INC.
2006
STOCK-BASED INCENTIVE PLAN
1. PURPOSE
OF PLAN.
The
purposes of this 2006 Stock-Based Incentive Plan are to provide incentives
and
rewards to employees and directors who are largely responsible for the success
and growth of United Financial Bancorp, Inc. and its Affiliates, and to assist
all such entities in attracting and retaining experienced and qualified
directors, executives and other key employees.
2.
DEFINITIONS.
(a) “Affiliate”
means any “parent corporation” or “subsidiary corporation” of the Company, as
such terms are defined in Sections 424(e) and 424(f) of the Code.
(b) “Award”
means one or more of the following: Restricted Stock Awards, Stock Options
and
other types of Awards, as set forth in Section 6 of the Plan.
(c) “Award
Agreement” means the agreement between the Company or an Affiliate and a
Participant evidencing an Award under the Plan.
(d) “Bank”
means United Bank and any successor to United Bank.
(e) “Board
of
Directors” means the board of directors of the Company.
(f) “Change
in Control” means a change in control of a nature that:
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(i)
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would
be required to be reported in response to Item 5.01 of the Current
Report
on Form 8-K, as in effect on the date hereof, pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”);
or
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(ii)
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results
in a Change in Control of the Bank or the Company within the meaning
of
the Home Owners’ Loan Act, as amended (“HOLA”), and applicable rules and
regulations promulgated thereunder, as in effect at the time of the
Change
in Control; or
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(iii)
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without
limitation such a Change in Control shall be deemed to have occurred
at
such time as: (a) any “person” (as the term is used in Sections 13(d) and
14(d) of the Exchange Act) is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of
securities of the Company representing 25% or more of the combined
voting
power of the Company’s outstanding securities except for any securities
purchased by the Bank’s employee stock ownership plan or trust; or (b)
individuals who constitute the Board on the date hereof (the “Incumbent
Board”) cease for any reason to constitute at least a majority thereof,
provided that any person becoming a director subsequent to the date
hereof
whose election was approved by a vote of at least three-quarters
of the
directors comprising the Incumbent Board, or whose nomination for
election
by the Company’s stockholders was approved by the same Nominating
Committee serving under an Incumbent Board, shall be, for purposes
of this
clause (b), considered as though he were a member of the Incumbent
Board;
or (c) a plan of reorganization, merger, consolidation, sale of all
or
substantially all the assets of the Bank or the Company or similar
transaction in which the Bank or Company is not the surviving institution
occurs; or (d) a proxy statement is distributed soliciting proxies
from
stockholders of the
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Company,
by someone other than the current management of the Company, seeking stockholder
approval of a plan of reorganization, merger or consolidation of the Company
or
similar transaction with one or more corporations as a result of which shares
of
the Company are exchanged for or converted into cash or property or securities
not issued by the Company pursuant to such plan of reorganization or merger;
or
(e) a tender offer is made for 25% or more of the voting securities of the
Company and the shareholders owning beneficially or of record 25% or more of
the
outstanding securities of the Company have tendered or offered to sell their
shares pursuant to such tender offer and such tendered shares have been accepted
by the tender offeror. Notwithstanding anything in this subsection to the
contrary, a Change in Control shall not be deemed to have occurred upon the
conversion of the Company’s mutual holding company parent to stock form, or in
connection with any reorganization used to effect such a
conversion.
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(g)
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“Code”
means the Internal Revenue Code of 1986, as
amended.
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(h)
|
“Committee”
means the committee designated, pursuant to Section 3 of the Plan,
to
administer the Plan.
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(i)
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“Common
Stock” means the common stock of the Company, par value $0.01 per
share.
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(j)
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“Company”
means United Financial Bancorp, Inc. the stock holding company of
the
Bank, and any entity that succeeds to the business of United Financial
Bancorp, Inc.
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(k)
|
“Director
Emeritus” means a former member of the Board who has been appointed to the
status of Director Emeritus by the Board of the Company or the
Bank.
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(l)
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“Disability”
means the inability to engage in any substantial gainful activity
by
reason of any medically determinable physical or mental impairment
which
can be expected to result in death or which lasted or can be expected
to
last for a continuous period of not less than 12 months. An individual
shall not be considered to be permanently and totally disabled unless
he
furnishes proof of the existence thereof in such form and manner,
and at
such times, as the Secretary of the Treasury may require, in accordance
with Section 22(e)(3) of the Code.
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(m)
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“Employee”
means any person employed by the Company or an Affiliate. Directors
who
are also employed by the Company or an Affiliate shall be considered
Employees under the Plan.
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(n)
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“Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
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(o)
|
“Exercise
Price” means the price at which an individual may purchase a share of
Common Stock pursuant to an Option.
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(p)
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“Fair
Market Value” means, when used in connection with the Common Stock on a
certain date, the final sales price of the Common Stock as reported
on the
Nasdaq stock market (or over-the-counter market) on such date, or
if the
Common Stock was not traded on such date, then on the day prior to
such
date or on the next preceding day on which the Common Stock was traded,
and without regard to after hours trading activity; provided, however,
that if the Common Stock is not reported on the Nasdaq stock market
(or
over the counter market), Fair Market Value shall mean the average
sale
price of all shares of Common Stock sold during the 30-day period
immediately preceding the date on which such stock option was granted,
and
if no shares of stock have been sold within such 30-day period, the
average sale price of
|
the
last
three sales of Common Stock sold during the 90-day period immediately preceding
the date on which such stock option was granted. In the event Fair Market Value
cannot be determined in the manner described above, then Fair Market Value
shall
be determined by the Committee. The Committee is authorized, but is not
required, to obtain an independent appraisal to determine the Fair Market Value
of the Common Stock.
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(q)
|
“Incentive
Stock Option” means a Stock Option granted under the Plan, that is
intended to meet the requirements of Section 422 of the
Code.
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|
(r)
|
“Non-Statutory
Stock Option” means a Stock Option granted to an individual under the Plan
that is not intended to be and is not identified as an Incentive
Stock
Option, or an Option granted under the Plan that is intended to be
and is
identified as an Incentive Stock Option, but that does not meet the
requirements of Section 422 of the
Code.
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|
(s)
|
“OTS”
means the Office of Thrift
Supervision.
|
|
(t)
|
“Option”
or “Stock Option” means an Incentive Stock Option or a Non-Statutory Stock
Option, as applicable.
|
|
(u)
|
“Outside
Director” means a member of the Board(s) of Directors of the Company or an
Affiliate who is not also an
Employee.
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(v)
|
“Participant”
means an Employee or Outside Director who is granted an Award pursuant
to
the terms of the Plan.
|
|
(w)
|
“Plan”
means this United Financial Bancorp, Inc. 2006 Stock-Based Incentive
Plan.
|
|
(x)
|
“Restricted
Stock” means shares of Common Stock that may be granted under the Plan
that are subject to forfeiture until satisfaction of the conditions
of
their grant.
|
|
(y)
|
“Restricted
Stock Award” means an Award of shares of Restricted Stock granted to an
individual pursuant to Section 6(c) of the
Plan.
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|
(z)
|
“Retirement”
means retirement from employment or service on or after any of the
following: (i) the attainment of age 65 by an Employee or Outside
Director; (ii) the attainment of age 55 and the completion of 15
years of
employment or service as an Employee or Outside Director; or (iii)
the
completion of 25 years of employment or service as an Employee or
Outside
Director; provided, however, that unless the Committee specifies
otherwise, an Employee who is also a member of the Board of Directors,
shall not be deemed to have retired until both service as an Employee
and
as a member of the Board of Directors has ceased. An Outside Director
will
be deemed to have retired under the provisions of this Plan only
if the
Outside Director has terminated service on the Board(s) of Directors
of
the Company and any Affiliate in accordance with applicable Company
policy, following the provision of written notice to such Board(s)
of
Directors of the Outside Director’s intention to
retire.
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|
(aa)
|
“Stock
Appreciation Right” means the right, as defined in Section 6(b), that
may be granted to a Participant in tandem with the grant of a Stock
Option.
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(a)
Committee.
The
Committee shall administer the Plan. The Committee shall consist of two or
more
disinterested directors of the Company, who shall be appointed by the Chairman
of the Board of Directors. A member of the Board of Directors shall be deemed
to
be disinterested only if he or she satisfies: (i) such requirements as the
Securities and Exchange Commission may establish for non-employee directors
administering plans intended to qualify for exemption under Rule 16b-3 (or
its
successor) of the Exchange Act; and (ii) if, considered appropriate by the
Board of Directors in its sole discretion, such requirements as the Internal
Revenue Service may establish for outside directors acting under plans intended
to qualify for exemption under Section 162(m)(4)(C) of the Code. The Board
of
Directors or the Committee may also delegate, to the extent permitted by
applicable law and not inconsistent with Rule 16b-3, to one or more officers
of
the Company, its powers under this Plan to (a) designate the officers and
employees of the Company who will receive Awards and (b) determine the number
of
Awards to be received by them, pursuant to a resolution that specifies the
total
number of rights or Options that may be granted under the delegation, provided
that no officer may be delegated the power to designate himself or herself
as a
recipient of such Options or rights.
(b)
Role
of Committee.
Subject
to paragraph (a) of this Section 3, the Committee shall:
|
(i)
|
select
the individuals who are to receive grants of Awards under the
Plan;
|
|
(ii)
|
determine
the type, number, vesting requirements and other features and conditions
of Awards made under the Plan;
|
|
(iii)
|
interpret
the Plan and Award Agreements (as defined below);
and
|
|
(iv)
|
make
all other decisions related to the operation of the
Plan.
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(c)
Award
Agreements.
Each
Award granted under the Plan shall be evidenced by a written agreement (i.e.,
an
“Award Agreement”). Each Award Agreement shall constitute a binding contract
between the Company or an Affiliate and the Participant, and every Participant,
upon acceptance of an Award Agreement, shall be bound by the terms and
restrictions of the Plan and the Award Agreement. The terms of each Award
Agreement shall be set in accordance with the Plan, but each Award Agreement
may
also include any additional provisions and restrictions determined by the
Committee. In particular, and at a minimum, the Committee shall set forth in
each Award Agreement:
|
(i)
|
the
type of Award granted;
|
|
(ii)
|
the
Exercise Price for any Option;
|
|
(iii)
|
the
number of shares or rights subject to the
Award;
|
|
(iv)
|
the
expiration date of the Award;
|
|
(v)
|
the
manner, time and rate (cumulative or otherwise) of exercise or
vesting of
the Award; and
|
|
(vi)
|
the
restrictions, if any, placed on the Award, or upon shares which
may be
issued upon the exercise or vesting of the
Award.
|
The
Chairman of the Committee and such other directors and employees as shall be
designated by the Committee are hereby authorized to execute Award Agreements
on
behalf of the Company or an Affiliate and to cause them to be delivered to
the
recipients of Awards granted under the Plan.
4.
ELIGIBILITY.
Subject
to the terms of the Plan, Employees and Outside Directors, as the Committee
shall determine from time to time, shall be eligible to participate in the
Plan.
5. SHARES
OF COMMON STOCK SUBJECT TO THE PLAN; SHARE LIMITS.
(a)
Shares
Available.
Subject
to the provisions of Section 8, the capital stock that may be delivered
under this Plan shall be shares of the Company’s Common Stock, which may be
issued directly by the Company from authorized but unissued shares or treasury
shares or shares purchased by the Plan in the open market.
(b)
Share
Limits.
Subject
to adjustments, if any, provided in Section 9, the maximum number of shares
of Common Stock that may be delivered pursuant to Awards granted under this
Plan
(the “Share Limit”) equals 1,180,330 shares. The following limits also apply
with respect to Awards granted under this Plan:
|
(i)
|
Subject
to adjustment pursuant to Section 9 hereof, the maximum number of
shares of Common Stock that may be delivered pursuant to Stock Options
granted under this Plan is 843,093 shares. The maximum aggregate
number of
shares of Common Stock that may be issued pursuant to the exercise
of
Incentive Stock Options is 843,093. The maximum number of Stock Options
that may be awarded to any Employee is 252,927 Stock Options. For
these
purposes, only the net number of shares issued pursuant to the exercise
of
a Stock Option are counted against the maximum number of
shares.
|
|
(ii)
|
Subject
to adjustment pursuant to Section 9 hereof, the maximum number of
shares of Common Stock that may be delivered pursuant to Restricted
Stock
Awards granted under this Plan is 337,237
shares.
|
(c)
Reissue
of Awards and Shares.
Shares
that are subject to or underlie Awards which expire or for any reason are
cancelled or terminated, are forfeited, fail to vest, or for any other reason
are not paid or delivered under this Plan shall again be available for
subsequent Awards under this Plan. Shares that are exchanged by a Participant
or
withheld by the Company as full or partial payment in connection with any Award
under the Plan, as well as any shares exchanged by a Participant or withheld
by
the Company to satisfy the tax withholding obligations related to any Award
under the Plan, shall be available for subsequent Awards under this
Plan.
(d)
Reservation
of Shares; No Fractional Shares; Minimum Issue.
The
Company shall at all times reserve a number of shares of Common Stock sufficient
to cover the Company’s obligations and contingent obligations to deliver shares
with respect to Awards then outstanding under this Plan. No fractional shares
shall be delivered under this Plan. The Committee may pay cash in lieu of any
fractional shares in settlements of Awards under this Plan. No fewer than 100
shares may be purchased on exercise of any Award unless the total number
purchased or exercised is the total number at the time available for purchase
or
exercise under the Award.
6.
AWARDS.
The
Committee shall determine the type or types of Award(s) to be made to each
selected eligible individual. Awards may be granted singly, in combination
or in
tandem. Awards also may be made in combination or in tandem with, in replacement
of, as alternatives to, or as the payment form for grants or
rights
under any other employee or compensation plan of the Company. The types of
Awards that may be granted under this Plan are:
(a)
Stock
Options.
The
Committee may, subject to the limitations of this Plan and the availability
of
shares of Common Stock reserved but not previously awarded under the Plan,
grant
Stock Options to Employees and Outside Directors, subject to terms and
conditions as it may determine, to the extent that such terms and conditions
are
consistent with the following provisions:
|
(i)
|
Exercise
Price.
The Exercise Price shall not be less than one hundred percent (100%)
of
the Fair Market Value of the Common Stock on the date of
grant.
|
|
(ii)
|
Terms
of Options.
In no event may an individual exercise an Option, in whole or in
part,
more than ten (10) years from the date of
grant.
|
|
(iii)
|
Non-Transferability.
Unless otherwise determined by the Committee, an individual may not
transfer, assign, hypothecate, or dispose of an Option in any manner,
other than by will or the laws of intestate succession. The Committee
may,
however, in its sole discretion, permit the transfer or assignment
of a
Non-Statutory Stock Option, if it determines that the transfer or
assignment is for valid estate planning purposes and is permitted
under
the Code and Rule 16b-3 of the Exchange Act. For purposes of this
Section
6(a), a transfer for valid estate planning purposes includes, but
is not
limited to, transfers:
|
|
(1)
|
to
a revocable inter vivos trust, as to which an individual is both
settlor
and trustee;
|
|
(2)
|
for
no consideration to: (a) any member of the individual’s Immediate Family;
(b) a trust solely for the benefit of members of the individual’s
Immediate Family; (c) any partnership whose only partners are members
of
the individual’s Immediate Family; or (d) any limited liability
corporation or other corporate entity whose only members or equity
owners
are members of the individual’s Immediate
Family.
|
|
(3)
|
For
purposes of this Section, “Immediate Family” includes, but is not
necessarily limited to, a Participant’s parents, grandparents, spouse,
children, grandchildren, siblings (including half brothers and sisters),
and individuals who are family members by adoption. Nothing contained
in
this Section shall be construed to require the Committee to give
its
approval to any transfer or assignment of any Non-Statutory Stock
Option
or portion thereof, and approval to transfer or assign any Non-Statutory
Stock Option or portion thereof does not mean that such approval
will be
given with respect to any other Non-Statutory Stock Option or portion
thereof. The transferee or assignee of any Non-Statutory Stock Option
shall be subject to all of the terms and conditions applicable to
such
Non-Statutory Stock Option immediately prior to the transfer or assignment
and shall be subject to any other conditions prescribed by the Committee
with respect to such Non-Statutory Stock
Option.
|
(iv)
Special Rules for Incentive Stock Options.
Notwithstanding the foregoing provisions, the following rules shall further
apply to grants of Incentive Stock Options:
|
(1)
|
If
an Employee owns or is treated as owning, for purposes of Section
422 of
the Code, Common Stock representing more than ten percent (10%) of
the
total combined voting securities of the Company at the time the Committee
grants the Incentive Stock Option (a “10% Owner”), the Exercise Price
shall not be less than one hundred ten percent (110%) of the Fair
Market
Value of the Common Stock on the date of
grant.
|
|
(2)
|
An
Incentive Stock Option granted to a 10% Owner shall not be exercisable
more than five (5) years from the date of
grant.
|
|
(3)
|
To
the extent the aggregate Fair Market Value of shares of Common Stock
with
respect to which Incentive Stock Options are exercisable for the
first
time during any calendar year under the Plan or any other stock option
plan of the Company, exceeds $100,000, or such higher value as may
be
permitted under Section 422 of the Code, Incentive Stock Options
in excess
of the $100,000 limit shall be treated as Non-Statutory Stock Options.
Fair Market Value shall be determined as of the date of grant for
each
Incentive Stock Option.
|
|
(4)
|
Each
Award Agreement for an Incentive Stock Option shall require the individual
to notify the Committee within ten (10) days of any disposition of
shares
of Common Stock under the circumstances described in Section 421(b)
of the
Code (relating to certain disqualifying
dispositions).
|
(b)
Stock
Appreciation Rights. A Stock Appreciation Right is the right to receive a
payment in Common Stock equal to the excess of the Fair Market Value of a
specified number of shares of Common Stock on the date the Stock Appreciation
Right is exercised over the Fair Market Value of the Common Stock on the date
of
grant of the Stock Appreciation Right as set forth in the applicable award
agreement. No Stock Appreciation Right shall be granted unless (i) the
Stock Appreciation Right is settled solely in Common Stock of the Company and
(ii) there is no opportunity to further defer the income received on the
exercise of the Stock Appreciation Right.
(c)
Restricted
Stock Awards.
The
Committee may make grants of Restricted Stock Awards, which shall consist of
the
grant of some number of shares of Common Stock to an individual upon such terms
and conditions as it may determine, to the extent such terms and conditions
are
consistent with the following provisions:
|
(i)
|
Grants
of Stock.
Restricted Stock Awards may only be granted in whole shares of Common
Stock.
|
|
(ii)
|
Non-Transferability.
Except to the extent permitted by the Code, the rules promulgated
under
Section 16(b) of the Exchange Act or any successor statutes or
rules:
|
|
(1)
|
The
recipient of a Restricted Stock Award grant shall not sell, transfer,
assign, pledge, or otherwise encumber shares subject to the grant
until
full vesting of such shares has occurred. For purposes of this section,
the separation of beneficial ownership and legal title through the
use of
any “swap” transaction is deemed to be a prohibited
encumbrance.
|
(2)
Unless
otherwise determined by the Committee, and except in the event of the
Participant’s death or pursuant to a qualified domestic relations order, a
Restricted Stock Award grant is not transferable and may be earned only by
the
individual to whom it is granted during his or her lifetime. Upon the death
of a
Participant, a Restricted Stock Award is transferable by will or the laws of
descent and distribution. The designation of a beneficiary shall not constitute
a transfer.
|
(3)
|
If
the recipient of a Restricted Stock Award is subject to the provisions
of
Section 16 of the Exchange Act, shares of Common Stock subject to
the
grant may not, without the written consent of the Committee (which
consent
may be given in the Award Agreement), be sold or otherwise disposed
of
within six (6) months following the date of
grant.
|
|
(iii)
|
Issuance
of Certificates.
The Company shall cause to be issued a stock certificate evidencing
such
shares, registered in the name of the Participant to whom the Restricted
Stock Award was granted; provided, however, that the Company may
not cause
a stock certificate to be issued unless it has received a stock power
duly
endorsed in blank with respect to such shares. Each stock certificate
shall bear the following legend:
|
“The
transferability of this certificate and the shares of stock represented hereby
are subject to the restrictions, terms and conditions (including forfeiture
provisions and restrictions against transfer) contained in the United Financial
Bancorp, Inc. 2006 Stock-Based Incentive Plan and the related Award Agreement
entered into between the registered owner of such shares and United Financial
Bancorp, Inc. or its Affiliates. A copy of the Plan and Award Agreement is
on
file in the office of the Corporate Secretary of United Financial Bancorp,
Inc.”
This
legend shall not be removed until the individual becomes vested in such shares
pursuant to the terms of the Plan and Award Agreement. Each certificate issued
pursuant to this Section 6(c) shall be held by the Company or its
Affiliates, unless the Committee determines otherwise.
|
(iv)
|
Treatment
of Dividends.
Participants are entitled to all dividends and other distributions
declared and paid on all shares of Common Stock subject to a Restricted
Stock Award, from and after the date such shares are awarded or from
and
after such later date as may be specified by the Committee in the
Award
Agreement, and the Participant shall not be required to return any
such
dividends or other distributions to the Company in the event of forfeiture
of the Restricted Stock Award.
|
|
(v)
|
Voting
of Restricted Stock Awards.
Participants who are granted Restricted Stock Awards may vote all
unvested
shares of Common Stock subject to their Restricted Stock
Awards.
|
7.
PAYMENTS;
CONSIDERATION FOR AWARDS.
(a)
Payments.
Payment
for Awards may be made in the form of cash, Common Stock, or combinations
thereof as the Committee shall determine, and with such restrictions as it
may
impose.
(b)
Consideration
for Awards.
The
Exercise Price for any Award granted under this Plan or the Common Stock to
be
delivered pursuant to an Award, as applicable, may be paid by means of any
lawful consideration as determined by the Committee, including, without
limitation, one or a combination of the following methods:
|
(i)
|
cash,
check payable to the order of the Company, or electronic funds
transfer;
|
|
(ii)
|
the
delivery of previously owned shares of Common
Stock;
|
|
(iii)
|
reduction
in the number of shares otherwise deliverable pursuant to the Award;
or
|
|
(iv)
|
subject
to such procedures as the Committee may adopt, pursuant to a “cashless
exercise” with a third party who provides financing for the purposes of
(or who otherwise facilitates) the purchase or exercise of
Awards.
|
In
no
event shall any shares newly issued by the Company be issued for less than
the
minimum lawful consideration for such shares or for consideration other than
consideration permitted by applicable state law. In the event that the Committee
allows a Participant to exercise an Award by delivering shares of Common Stock
previously owned by such Participant and unless otherwise expressly provided
by
the Committee, any shares delivered which were initially acquired by the
Participant from the Company (upon exercise of a stock option or otherwise)
must
have been owned by the Participant at least six months as of the date of
delivery. Shares of Common Stock used to satisfy the Exercise Price of an Option
shall be valued at their Fair Market Value on the date of exercise. The Company
will not be obligated to deliver any shares unless and until it receives full
payment of the Exercise Price and any related withholding obligations under
Section 10(e), or until any other conditions applicable to exercise or
purchase have been satisfied. Unless expressly provided otherwise in the
applicable Award Agreement, the Committee may at any time eliminate or limit
a
Participant’s ability to pay the purchase or Exercise Price of any Award or
shares by any method other than cash payment to the Company.
8.
EFFECT
OF TERMINATION OF SERVICE ON AWARDS.
(a)
General.
The
Committee shall establish the effect of a termination of employment or service
on the continuation of rights and benefits available under an Award or this
Plan
and, in so doing, may make distinctions based upon, among other things, the
cause of termination and type of Award. Unless the Committee shall specifically
state otherwise at the time an Award is granted, all Awards to an Employee
or
Outside Director shall vest immediately upon such individual’s death, Disability
or Retirement.
(b)
Events Not Deemed Terminations of Employment or Service.
Unless
Company policy or the Committee provides otherwise, the employment relationship
shall not be considered terminated in the case of (a) sick leave, (b)
military leave, or (c) any other leave of absence authorized by the Company
or
the Committee; provided that, unless reemployment upon the expiration of such
leave is guaranteed by contract or law, such leave is for a period of not more
than 90 days. In the case of any Employee on an approved leave of absence,
continued vesting of the Award while on leave may be suspended until the
Employee returns to service, unless the Committee otherwise provides or
applicable law otherwise requires. In no event shall an Award be exercised
after
the expiration of the term set forth in the Award Agreement.
(c)
Effect
of Change of Affiliate Status.
For
purposes of this Plan and any Award, if an entity ceases to be an Affiliate
of
the Company, a termination of employment or service shall be deemed to have
occurred with respect to each individual who does not continue as an Employee
or
Outside Director with another entity within the Company after giving effect
to
the Affiliate’s change in status.
9.
ADJUSTMENTS; ACCELERATION UPON A CHANGE IN CONTROL.
(a)
Adjustments.
Upon, or
in contemplation of, any reclassification, recapitalization, stock split
(including a stock split in the form of a stock dividend) or reverse stock
split
(“stock split”); any merger, combination, consolidation, or other
reorganization; any spin-off, split-up, or similar extraordinary dividend
distribution with respect to the Common Stock (whether in the form of securities
or property); any exchange of Common Stock or other securities of the Company,
or any similar, unusual or extraordinary corporate transaction affecting the
Common Stock; or a sale of all or substantially all the business or assets
of
the Company in its entirety; then the Committee shall, in its sole discretion,
in such manner, to such extent (if any) and at such times as it deems
appropriate and equitable under the circumstances:
|
(i)
|
proportionately
adjust any or all of: (1) the number and type of shares of Common
Stock
(or other securities) that thereafter may be made the subject of
Awards
(including the specific Share Limits, maximums and numbers of shares
set
forth elsewhere in this Plan); (2) the number, amount and type of
shares
of Common Stock (or other securities or property) subject to any
or all
outstanding Awards; (3) the grant, purchase, or Exercise Price of
any or
all outstanding Awards; (4) the securities, cash or other property
deliverable upon exercise or payment of any outstanding Awards; or
(5) the performance standards applicable to any outstanding Awards;
or
|
|
(ii)
|
make
provision for a cash payment or for the assumption, substitution
or
exchange of any or all outstanding Awards, based upon the distribution
or
consideration payable to holders of the Common
Stock.
|
(b)
Valuation
Methodologies.
The
Committee may adopt such valuation methodologies for outstanding Awards as
it
deems reasonable in the event of a cash or property settlement and, in the
case
of Options, may base such settlement solely upon the excess if any of the per
share amount payable upon or in respect of such event over the Exercise Price
or
base price of the Award. With respect to any Award of an Incentive Stock Option,
the Committee may not make an adjustment that causes the Option to cease to
qualify as an Incentive Stock Option without the consent of the affected
Participant.
(c)
Committee
Action.
Upon
any of the events set forth in Section 9(a), the Committee may take such
action prior to such event to the extent that the Committee deems the action
necessary to permit the Participant to realize the benefits intended to be
conveyed with respect to the Awards in the same manner as is or will be
available to stockholders of the Company generally. In the case of any stock
split or reverse stock split, if no action is taken by the Committee, the
proportionate adjustments contemplated by Section 9(a)(i) above shall
nevertheless be made.
(d)
Automatic
Acceleration of Awards.
Upon a
Change in Control of the Company, each Option then outstanding shall become
fully vested and all Restricted Stock Awards then outstanding shall fully vest
free of restrictions.
10.
MISCELLANEOUS
PROVISIONS.
(a)
Compliance
with Laws.
This
Plan, the granting and vesting of Awards under this Plan,
the
offer, issuance and delivery of shares of Common Stock, the acceptance of
promissory notes and/or the payment of money under this Plan or under Awards
are
subject to all applicable federal and state laws, rules and regulations
(including, but not limited to, state and federal securities laws) and to such
approvals by any listing, regulatory or governmental authority as may, in the
opinion of securities law counsel for the Company, be necessary or advisable
in
connection therewith. The person acquiring any securities under this Plan will,
if requested by the Company, provide such assurances and representations to
the
Company as may be deemed necessary or desirable to assure compliance with all
applicable legal and accounting requirements.
(b)
Claims.
No
person shall have any claim or rights to an Award (or additional Awards, as
the
case may be) under this Plan, subject to any express contractual rights to
the
contrary (set forth in a document other than this Plan).
(c)
No
Employment/Service Contract.
Nothing
contained in this Plan (or in any other documents under this Plan or in any
Award Agreement) shall confer upon any Participant any right to continue in
the
employ or other service of the Company, constitute any contract or agreement
of
employment or other service or affect an Employee’s status as an
employee-at-will, nor interfere in any way with the right of the Company to
change a Participant’s compensation or other benefits, or terminate his or her
employment or other service, with or without cause. Nothing in this
Section 10(c), however, is intended to adversely affect any express
independent right of such Participant under a separate employment or service
contract other than an Award Agreement.
(d)
Plan
Not Funded.
Awards
payable under this Plan shall be payable in shares of Common Stock or from
the
general assets of the Company. No Participant, beneficiary or other person
shall
have any right, title or interest in any fund or in any specific asset
(including shares of Common Stock, except as expressly provided otherwise)
of
the Company by reason of any Award hereunder. Neither the provisions of this
Plan (or of any related documents), nor the creation or adoption of this Plan,
nor any action taken pursuant to the provisions of this Plan shall create,
or be
construed to create, a trust of any kind or a fiduciary relationship between
the
Company and any Participant, beneficiary or other person. To the extent that
a
Participant, beneficiary or other person acquires a right to receive payment
pursuant to any Award hereunder, such right shall be no greater than the right
of any unsecured general creditor of the Company.
(e)
Tax
Withholding.
Upon
any exercise, vesting, or payment of any Award, or upon the disposition of
shares of Common Stock acquired pursuant to the exercise of an Incentive Stock
Option prior to satisfaction of the holding period requirements of Section
422
of the Code, the Company shall have the right, at its option, to:
|
(i)
|
require
the Participant (or the Participant’s personal representative or
beneficiary, as the case may be) to pay or provide for payment of
at least
the minimum amount of any taxes which the Company may be required
to
withhold with respect to such Award or payment;
or
|
|
(ii)
|
deduct
from any amount otherwise payable in cash to the Participant (or
the
Participant’s personal representative or beneficiary, as the case may be)
the minimum amount of any taxes which the Company may be required
to
withhold with respect to such cash
payment.
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In
any
case where a tax is required to be withheld in connection with the delivery
of
shares of Common Stock under this Plan, the Committee may, in its sole
discretion (subject to Section 10(a)) grant (either at the time of the Award
or
thereafter) to the Participant the right to elect, pursuant to such rules and
subject to such conditions as the Committee may establish, to have the Company
reduce the number of shares to be delivered by the number of shares necessary
to
satisfy the minimum applicable
withholding
obligation on exercise, vesting or payment, valued in a consistent manner at
their Fair Market Value. In no event shall the shares withheld exceed the
minimum whole number of shares required for tax withholding under applicable
law. The Company may, with the Committee’s approval, accept one or more
promissory notes from any Participant in connection with taxes required to
be
withheld upon the exercise, vesting or payment of any Award under this Plan;
provided, however, that any such note shall be subject to terms and conditions
established by the Committee and the requirements of applicable
law.
(f)
Effective
Date, Termination and Suspension, Amendments.
This
Plan
is effective upon receipt of shareholder approval. Unless earlier terminated
by
the Board, this Plan shall terminate at the close of business on the day before
the tenth anniversary of the effective date. After the termination of this
Plan
either upon such stated expiration date or its earlier termination by the Board,
no additional Awards may be granted under this Plan, but previously granted
Awards (and the authority of the Committee with respect thereto, including
the
authority to amend such Awards) shall remain outstanding in accordance with
their applicable terms and conditions and the terms and conditions of this
Plan.
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(i)
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Termination;
Amendment.
Subject to applicable laws and regulations, the Board of Directors
may, at
any time, terminate or, from time to time, amend, modify or suspend
this
Plan, in whole or in part; provided, however, that no amendment may
have
the effect of repricing Options. No Awards may be granted during
any
period that the Board of Directors suspends this
Plan.
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(ii)
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Stockholder
Approval.
Any amendment to this Plan shall be subject to stockholder approval
to the
extent then required by applicable law or any applicable listing
agency or
required under Sections 162, 422 or 424 of the Code to preserve the
intended tax consequences of this Plan, or deemed necessary or advisable
by the Board.
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(iii)
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Limitations
on Amendments to Plan and Awards.
No amendment, suspension or termination of this Plan or change affecting
any outstanding Award shall, without the written consent of the
Participant, affect in any manner materially adverse to the Participant
any rights or benefits of the Participant or obligations of the Company
under any Award granted under this Plan prior to the effective date
of
such change. Changes, settlements and other actions contemplated
by
Section 9 shall not be deemed to constitute changes or amendments for
purposes of this
Section 10(f).
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(g)
Governing Law; Compliance with Regulations; Construction;
Severability.
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(i)
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Governing
Law.
This Plan, the Awards, all documents evidencing Awards and all other
related documents shall be governed by, and construed in accordance
with,
the laws of the Commonwealth of Massachusetts, except to the extent
that
federal law shall apply.
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(ii)
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Federal
Regulations.
This Plan is subject to the requirements of 12 C.F.R. Part 575.
Notwithstanding any other provision in this Plan, no shares of Common
Stock shall be issued with respect to any Award to the extent that
such
issuance would cause the Company’s mutual holding company to fail to
qualify as a mutual holding company under applicable federal
regulations.
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(iii)
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Severability.
If a court of competent jurisdiction holds any provision invalid
and
unenforceable, the remaining provisions of this Plan shall continue
in
effect.
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(iv)
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Plan
Construction; Rule 16b-3.
It is the intent of the Company that the Awards and transactions
permitted
by Awards be interpreted in a manner that, in the case of Participants
who
are or may be subject to Section 16 of the Exchange
Act,
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qualify,
to the maximum extent compatible with the express terms of the Award, for
exemption from matching liability under Rule 16b-3 promulgated under the
Exchange Act. Notwithstanding the foregoing, the Company shall have no liability
to any Participant for Section 16 consequences of Awards or events affecting
Awards if an Award or event does not so qualify.
(h)
Captions.
Captions
and headings are given to the sections and subsections of this Plan solely
as a
convenience to facilitate reference. Such headings shall not be deemed in any
way material or relevant to the construction or interpretation of this Plan
or
any provision thereof.
(i)
Non-Exclusivity
of Plan.
Nothing
in this Plan shall limit or be deemed to limit the authority of the Board of
Directors or the Committee to grant Awards or authorize any other compensation,
with or without reference to the Common Stock, under any other plan or
authority.
[Signature
page follows]
IN
WITNESS WHEREOF, United Financial Bancorp, Inc. has caused the Plan to be
executed by its duly authorized officers and the corporate seal to be affixed
and duly attested as of the __________ day of ___________________,
2006.
Date
Approved by Stockholders:__________________________
Effective
Date: __________________________________
ATTEST:
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UNITED
FINANCIAL BANCORP, INC.
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Secretary
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ý PLEASE
MARK VOTES
AS
IN
THIS EXAMPLE
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REVOCABLE
PROXY
UNITED
FINANCIAL BANCORP, INC.
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For
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With-
hold
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For
All
Except
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ANNUAL
MEETING OF STOCKHOLDERS
JULY
20, 2006
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1. The
election as Directors of all nominees listed below, each to serve
for a
three-year term.
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o
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o
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o
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The
undersigned hereby appoints the official proxy committee consisting
of the
Board of Directors with full powers of substitution to act as
attorneys
and proxies for the undersigned to vote all shares of Common
Stock of
United Financial Bancorp, Inc. (the “Company”) which the undersigned is
entitled to vote at the Annual Meeting of Stockholders (“Annual Meeting”)
to be held at the Springfield Marriott, 2 Boland Way, Springfield,
Massachusetts 01115 on July 20, 2006, at 10:00 a.m. The official
proxy
committee is authorized to cast all votes to which the undersigned
is
entitled as follows:
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Kevin
E. Ross
Robert
A. Stewart, Jr.
Thomas
H. Themistos
INSTRUCTION:To
withhold authority to vote for any individual - nominee, mark “For All
Except”and write that nominee’s name in the space provided
below.
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For
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Against
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Abstain
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2. The
approval of the 2006 United Financial Bancorp, Inc. Stock-Based
Incentive
Plan.
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o
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o
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o
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3. The
ratification of the appointment of Grant Thornton
LLP as independent registered public accounting firm for the Company
for
the year ending December 31, 2006.
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o
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o
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o
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The
Board of Directors recommends a vote “FOR” Proposals 1, 2 and
3.
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THIS
PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3. IF ANY OTHER
BUSINESS
IS PRESENTED AT SUCH ANNUAL MEETING, THIS PROXY WILL BE VOTED
AS DIRECTED
BY A MAJORITY OF THE BOARD OF DIRECTORS. AT THE PRESENT TIME,
THE BOARD OF
DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL
MEETING.
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Please
be sure to sign and date this Proxy in the box
below
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Date |
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Stockholder
sign above
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Co-holder
(if any) sign
above)
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^
Detach above card, sign, date and mail in postage paid envelope
provided. ^
UNITED
FINANCIAL BANCORP, INC.
THIS
PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should
the above-signed be present and elect to vote at the Annual Meeting
or at
any adjournment thereof and after notification to the Secretary
of the
Company at the Annual Meeting of the stockholder’s decision to terminate
this proxy, then the power of said attorneys and proxies shall
be deemed
terminated and of no further force and effect. This proxy may also
be
revoked by sending written notice to the Secretary of the Company
at the
address set forth on the Notice of Annual Meeting of Stockholders,
or by
the filing of a later proxy prior to a vote being taken on a particular
proposal at the Annual Meeting.
The
above-signed acknowledges receipt from the Company prior to the
execution
of this proxy of notice of the Annual Meeting, a proxy statement
dated
June 12, 2006 and audited financial statements.
Please
sign exactly as your name appears on this card. When signing as
attorney,
executor, administrator, trustee or guardian, please give your
full
title.
Please
complete and date this proxy and return it promptly
in
the enclosed postage-prepaid
envelope.
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IF
YOUR
ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED BELOW
AND
RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.