ATTENTION ELECTRONIC FILERS
THIS REGULATION SHOULD BE READ IN CONJUNCTION WITH REGULATION S-T, WHICH
GOVERNS THE PREPARATION AND SUBMISSION OF DOCUMENTS IN ELECTRONIC FORMAT. MANY
PROVISIONS RELATING TO THE PREPARATION AND SUBMISSION OF DOCUMENTS IN PAPER
FORMAT CONTAINED IN THIS REGULATION ARE SUPERSEDED BY THE PROVISIONS OF
REGULATION S-T FOR DOCUMENTS REQUIRED TO BE FILED IN ELECTRONIC FORMAT.
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. ____________)
Filed by the registrant [x]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary proxy statement [X] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
- --------------------------------------------------------------------------------
NMBT CORP
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
Payment of filing fee (check the appropriate box)
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a(6(i)(1)and 0-11.
(1) Title of each class of securities Common Stock, par value $.01, of NMBT CORP
(2) Aggregate number of securities to which transaction applies:
N/A
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid: N/A
(2) Form, Schedule or Registration Statement No: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
<PAGE>
[GRAPH OMMITTED]
NOTICE OF ANNUAL
MEETING OF STOCKHOLDERS
TO BE HELD
MAY 5, 1998
AND
PROXY STATEMENT
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THIS MEETING. ACCORDINGLY, WE
URGE YOU TO COMPLETE, SIGN, DATE AND RETURN THE PROXY AS SOON AS POSSIBLE IN THE
ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
RETURNING YOUR PROXY DOES NOT DEPRIVE YOU OF YOUR RIGHT TO ATTEND THE MEETING
AND TO VOTE YOUR SHARES IN PERSON.
- --------------------------------------------------------------------------------
<PAGE>
[ NMBT LETTERHEAD ]
Dear Stockholder: April 3, 1998
On behalf of the Board of Directors, I cordially invite you to attend the
Annual Meeting of Stockholders of NMBT CORP (the "Company"), which will be held
at the Park Lane Office located at 100 Park Lane, New Milford, Connecticut on
Tuesday, May 5, 1998, at 7:00 p.m. local time. We look forward to seeing as many
stockholders as possible at this meeting.
At the Annual Meeting, Jack Straub will retire from the Board of Directors
after 23 years of service. Since the inception of the Company's operating
subsidiary, NMBT ("NMBT"), in 1975, Jack and NMBT have been synonymous. Jack was
one of the major forces that brought NMBT into existence. His hard work helped
make NMBT prosper in the early years. Jack served as Chairman of the Board from
1986 to 1997. Jack guided NMBT through rough economic times in the late eighties
and early nineties, the merger with Candlewood Bank and Trust Company in 1994
and ultimately to prosperity and record earnings. On behalf of the Board of
Directors, I would like to invite as many stockholders as possible to attend
this year's meeting to wish Jack farewell.
This year's Annual Meeting will also be the first since NMBT has been
reorganized into a subsidiary of the Company. In addition to the usual matters
to be voted upon, which include the election of directors and appointment of
auditors, we are also asking you to consider and vote upon an increase of
300,000 shares of Common Stock authorized for issuance to officers and directors
upon their exercise of options under NMBT's 1994 Stock Option Plan (the "1994
Plan"). Stock option grants, which are made under the 1994 Plan, constitute an
important incentive for key managerial employees of the Company and the
Company's operating subsidiary, NMBT. Option grants are a significant part of
NMBT's ability to attract, retain and motivate people whose skills and
performance are critical to the success of NMBT and the Company. The growth in
NMBT's business combined with the extension of stock option grants to more key
personnel, in the opinion of management, require the utilization of more shares
under the 1994 Plan.
Your vote is very important regardless of the amount of stock you own. We
hope you will attend the meeting, but whether or not you plan to be with us,
please sign and return the enclosed proxy card as soon as possible so that your
shares will be represented. I urge you to review the proxy materials carefully,
to vote FOR the director nominees, to vote FOR the proposal to authorize
additional shares for the 1994 Plan and to vote FOR the proposal to approve the
Company's auditors.
Sincerely,
Louis A. Funk, Jr.
Chairman of the Board
<PAGE>
NMBT CORP
55 MAIN STREET
NEW MILFORD, CONNECTICUT 06776-2400
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 5, 1998 AT 7:00 P.M.
- --------------------------------------------------------------------------------
To the Stockholders of NMBT CORP:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of NMBT CORP
(the "Company") will be held on Tuesday, May 5, 1998 at 7:00 p.m., at the Park
Lane Office, located at 100 Park Lane, New Milford, Connecticut, for the purpose
of considering and voting upon the following matters:
1. Election of Directors. To elect three directors to serve until the
Annual Meeting of Stockholders to be held in the year 2001, who, with
the six directors whose terms of office do not expire at this meeting,
will constitute the Company's full Board of Directors.
2. Amendment to 1994 Plan. To approve an amendment to NMBT's 1994 Stock
Option Plan to increase the number of shares issuable thereunder to
600,000.
3. Ratification of Appointment of Auditors. To ratify the directors'
appointment of Deloitte & Touche LLP as the Company's independent
auditors for the year ending December 31, 1998.
4. Other Business. To transact such other business as may properly be
brought before the Annual Meeting and any adjournment or postponement
thereof.
Only stockholders of record as of the close of business on March 24, 1998,
will be entitled to notice of and to vote at the Annual Meeting of Stockholders
and any adjournment or postponement thereof.
By Order of the Board of Directors,
NMBT CORP
JAY C. LENT
Secretary
New Milford, Connecticut
April 3, 1998
<PAGE>
NMBT CORP
55 MAIN STREET
NEW MILFORD, CONNECTICUT 06776-2400
- --------------------------------------------------------------------------------
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 5, 1998
- --------------------------------------------------------------------------------
INFORMATION CONCERNING THE SOLICITATION
This Proxy Statement is being furnished to the Stockholders of NMBT CORP, a
Delaware bank holding company (the "Company"), in connection with the
solicitation by the Board of Directors of the Company of proxies for use at the
Annual Meeting of Stockholders of the Company to be held on Tuesday, May 5, 1998
at 7:00 p.m. at the Park Lane Office located at 100 Park Lane, New Milford,
Connecticut, and at any adjournment or postponement thereof (the "Annual
Meeting"). The purpose of the Annual Meeting is to consider and vote upon the
following proposals: (i) to elect three directors for a three year term expiring
in the year 2001; (ii) to approve and adopt an amendment to NMBT's 1994 Stock
Option Plan (the "1994 Plan"); (iii) to approve the appointment by the Board of
Directors of Deloitte & Touche LLP as independent auditors of the Company for
the year ending December 31, 1998; and (iv) to transact such other business as
may properly be brought before the Annual Meeting and any adjournment or
postponement thereof.
Pursuant to the proposed amendment to the 1994 Plan, the number of shares
of Common Stock which would be available for issuance under the 1994 Plan would
be increased by 300,000 shares to 600,000. The principal executive offices of
the Company and its subsidiary, NMBT ("NMBT") are located at 55 Main Street, New
Milford, Connecticut 06776-2400. The telephone number of NMBT and the Company is
(860) 355-1171.
Only stockholders of record as of the close of business on March 24, 1998
(the "Record Date") will be entitled to notice of and to vote at the Annual
Meeting and each stockholder shall have one vote on all proposals to be
presented at the Annual Meeting for each share of the Company Common Stock
registered in his or her name. There is no cumulative voting. On the Record Date
2,640,258 shares of the Company Common Stock were authorized, issued and
outstanding and held by 1,928 shareholders of record.
This Proxy Statement and the enclosed Form of Proxy, along with the 1997
Annual Report to Stockholders, are first being mailed to stockholders on or
about April 3, 1998.
<PAGE>
The enclosed proxy may be revoked at any time prior to being voted by the
submission of a written revocation or a duly executed proxy bearing a later
date, or by the stockholder's withdrawal of a previously submitted proxy and
personal vote by ballot at the Annual Meeting. Attendance at the Annual Meeting
will not in and of itself constitute the revocation of a proxy. Unless a proxy
is revoked and except as specified below, shares represented by a properly
executed proxy will be voted in accordance with any voting instructions given on
the proxy or, unless contrary instructions are given, will be voted "FOR" all
nominees listed in Proposal 1, "FOR" Proposal 2, "FOR" Proposal 3 and in
accordance with the determination of a majority of the Board of Directors as to
other matters properly brought before the Annual Meeting. On a matter for which
the "ABSTAIN" instruction is given by the Stockholder, shares will be voted
neither "FOR" nor "AGAINST".
A majority of the shares entitled to vote, present in person or represented
by proxy, constitutes a quorum of the stockholders. The presence of a quorum and
a plurality of the shares present, in person or by proxy, entitled to vote at
the Annual Meeting is required to elect directors. The affirmative vote of the
shares present, in person or by proxy, entitled to vote at the Annual Meeting is
required to approve the amendment to the 1994 Plan, the appointment of the
independent auditors and the approval of most other actions which may be taken
at the Annual Meeting. Abstentions to a proposal are considered shares present
and entitled to vote, and therefore have the same legal effect as a vote against
a matter presented at the Annual Meeting. Shares beneficially held in street
name are counted for quorum purposes if such shares are voted on at least one
matter to be considered at the meeting. Broker non-votes are neither counted for
purposes of determining the number of affirmative votes required for approval of
proposals nor voted for or against matters presented for stockholder
consideration. Consequently, so long as a quorum is present, such non-votes have
no effect on the outcome of any vote.
The expense of soliciting proxies will be borne by the Company. In addition
to solicitations by mail, officers and regular employees of the Company may
solicit proxies personally or by telephone, telegraph or other means without
additional compensation. The Company may reimburse brokerage firms and others
for their reasonable expenses in forwarding solicitation material to the
beneficial owners of the Company's stock held of record by such persons.
The principal officers and directors of the Company and NMBT, together with
their affiliates, beneficially owned, directly or indirectly, as of March 24,
1998, an aggregate of 358,357 shares of Company Common Stock (which number does
not include outstanding options to purchase the Company Common Stock),
constituting 13.6% of such shares outstanding and entitled to vote on that date.
Non employee directors own 336,738 shares of the Company Common Stock or 12.8%
of the total, and principal officers of the Company and NMBT own 21,619 of such
shares, or less than 1%.
ADDITIONAL COPIES OF THE 1997 ANNUAL REPORT TO STOCKHOLDERS AND THE 1997
ANNUAL REPORT ON FORM 10-K, INCLUDING FINANCIAL STATEMENTS AND SCHEDULES AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO THE SECURITIES
EXCHANGE ACT OF 1934, MAY BE OBTAINED WITHOUT CHARGE UPON WRITTEN REQUEST TO:
JAY C. LENT, NMBT, 100 PARK LANE, NEW MILFORD, CONNECTICUT 06776-2400.
2
<PAGE>
PRINCIPAL HOLDERS OF VOTING SECURITIES
The table below lists the only persons or groups believed by the Company to
be beneficial owners of more than five percent of any class of the Company's
voting securities as of the Record Date, March 24, 1998. In preparing the table,
the Company has relied upon information supplied to the Securities and Exchange
Commission by such persons and other information available to the Company.
<TABLE>
<CAPTION>
Number Of Shares Beneficially Owned
-----------------------------------
(a) (b) (c) % of Class
Title of Name and Address of With Sole Power With Shared Power Total of as of
Class Beneficial Owner to Vote & Invest to Vote & Invest (a) & (b) March 24, 1998(1)
----- ---------------- ---------------- ----------------- ------------ -----------------
<S> <C> <C> <C> <C>
Common Robert W. X. Martin 51,536 98,959 150,495 5.69%
42 Marwick Manor
New Milford, CT
</TABLE>
(1) For purposes of calculation, the percent of class is determined by dividing
column (c), total number of shares beneficially owned (inclusive of 3,000
shares which Mr. Martin has the right to acquire through the exercise of
stock options), by 2,643,258 (the total number of voting securities issued
and outstanding as of March 24, 1998 plus 3,000 shares for which Mr. Martin
is deemed to be the beneficial owner because he has the right to acquire
such shares through the exercise of stock options).
3
<PAGE>
STOCK OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information as of March 24, 1998 with
respect to the shares of the Company Common Stock beneficially owned by each
director, each executive officer of the Company and NMBT and by all directors
and executive officers as a group:
<TABLE>
<CAPTION>
Number Of Shares Beneficially Owned
-----------------------------------
(a) (b) (c) % of Class
Names and Position(s) With Sole Power With Shared Power Total of as of
With the Company and NMBT to Vote and Invest to Vote and Invest (a) and (b) March 24, 1998 (2)
------------------------- ------------------ ------------------ ----------- ------------------
<S> <C> <C> <C> <C>
Carrigan, Michael D. 109,201 (2) 1,372 110,573 (2) 4.03%
President & CEO
Dumas, Kevin L. 6,500 (3) 13,317 19,817 (3) 0.75%
Director
Fish, Deborah L. 100 (2) 55 155 (2) 0.01%
NMBT Vice President & Treasurer,
Treasurer of the Company
Funk, Louis A., Jr. 3,100 (3) 5,500 8,600 (3) 0.33%
Chairman of the Board
Greenhaus, Lawrence 15,155 (3) 6,241 21,396 (3) 0.81%
Vice Chairman of the Board
Henderson, Ruth 44,471 (3) 992 45,463 (3) 1.72%
Director
Lent, Jay C. 63,200 (2) 0 63,200 (2) 2.34%
Executive Vice President of NMBT,
Secretary & CFO of NMBT &
the Company
Maher, Peter R. 47,005 (2) 13,986 60,991 (2) 2.27%
Executive Vice President and
Chief Lending Officer of NMBT
Martin, Robert W.X. 51,536 (3) 98,959 150,495 (3) 5.69%
Director & Assistant Secretary
Pellegrini, Terry C. 3,000 (3) 6,019 9,019 (3) 0.34%
Director
Southworth, Walter G. 29,063 (3) 20,215 49,278 (3) 1.86%
Director
Straub, Jack W. 10,872 (4) 37,894 48,766 (4) 1.85%
Director
Taylor, Harry H., Jr. 3,840 (3) 5,595 9,435 (3) 0.36%
Director
Weinshank, Arthur C. 3,469 (3) 0 3,469 (3) 0.13%
Director
All directors and executive officers
as a group (14 persons) 390,512 (2) 210,145 600,657 (2) 20.84%
</TABLE>
- ----------
(1) The Board of Directors for the Company and NMBT are the same and except
where specifically indicated, positions stated above are the same for the
Company and NMBT.
(2) For purposes of calculation, the percent of class is determined by dividing
column (c), total number of shares beneficially owned, by the sum of the
total number of voting securities issued and outstanding as of March 24,
1998 (2,640,258), plus the number of shares for which the individual or
group is deemed to be the beneficial owner because such individual has or,
where appropriate, the individuals comprising the group have the right to
acquire such shares through the exercise of stock options. The following
individuals and group held such options for the following numbers of shares
as of such date: Mr. Carrigan-106,200; Mr. Lent-60,000; Mr. Maher-47,000;
Mrs. Fish-100; and all directors & executive officers as a group-242,300.
The numbers set forth in the above chart give effect to the options.
(3) Gives effect to options to purchase 3,000 shares of Common Stock.
(4) Gives effect to options to purchase 2,000 shares of Common Stock.
4
<PAGE>
ELECTION OF DIRECTORS
(PROPOSAL ONE)
The Company's Bylaws provide for not less than five nor more than twelve
directorships, divided into three classes with each class being approximately
equal in size. At this Annual Meeting three Class III directors are being
nominated to serve for a term of three years until the Annual Meeting to be held
in the year 2001 and until their successors are elected and qualified. These
three directors, with the six directors remaining, will constitute the full
Board. The individuals comprising the Board of Directors of NMBT and the Company
are the same and usually hold meetings at the same time. Accordingly, references
to the Company Board and the NMBT Board are used interchangeably. Jack Straub
will retire as of the Annual Meeting for this year and the Board has already
determined to reduce the number of Class III directorships to three. The
Company's President, Mr. Carrigan, serves as an ex-officio director. Shares
represented by every properly executed proxy will be voted at the 1998 Annual
Meeting of Stockholders for the election of the proposed slate of directors,
except where the right to vote such shares is withheld as provided in the proxy
or otherwise instructed. The presence of a quorum and a plurality of the shares
present, in person or by proxy entitled to vote at the Annual Meeting is
required to elect directors. The directors of the Company also serve as the
directors of NMBT. All nominees are now serving as directors pursuant to their
previous election by the stockholders. Each candidate for the Board has been
nominated by the Board of Directors. The Board of Directors expects that, and
each of the nominees has indicated that, he or she will be available to serve as
director; however, in the event that any of them should become unavailable, it
is intended that a proxy may be voted for a nominee or nominees who would be
designated by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
PROPOSED NOMINEES.
The following tables set forth the names of the Board of Directors'
nominees for election as a director and those directors who will continue to
serve after the Annual Meeting. Also set forth is certain other information with
respect to each such person's age as of March 24, 1998, principal occupation or
employment during the past five years, the periods during which he or she has
served as a director of the Company and NMBT and positions currently held with
the Company and NMBT.
<TABLE>
<CAPTION>
Position(s) Held
Director Expiration of With the Company and
Nominees Age Since Current Term NMBT
- -------- --- ----- ------------ -------
CLASS III
<S> <C> <C> <C>
Ruth Henderson 68 1975 1998 Director
Terry C. Pellegrini 54 1994 1998 Director
Arthur C. Weinshank 47 1995 1998 Director
</TABLE>
5
<PAGE>
<TABLE>
Position(s) Held
Director Expiration of With the Company
Directors Continuing in Office Age Since Current Term and NMBT
- ------------------------------ --- -------- -------------- -----------------
CLASS II
<S> <C> <C> <C>
Robert W. X. Martin 67 1975 1999 Director and
Asst. Secretary
Walter G. Southworth 73 1975 1999 Director
Harry H. Taylor, Jr. 67 1993 1999 Director
Position(s) Held
Director Expiration of With the Company
Directors Continuing in Office Age Since Current Term and NMBT
- ------------------------------- --- ------- ------------- ---------------
CLASS I
Kevin L. Dumas 41 1995 2000 Director
Louis A. Funk, Jr. 55 1995 2000 Director and
Chairman
Lawrence Greenhaus 69 1975 2000 Director and
Vice Chairman
</TABLE>
BACKGROUND OF NOMINEES
Ruth Henderson has served on the Board of Directors since 1975. She is the
owner and operator of the Silo, a retail gourmet food and cooking business
headquartered in New Milford, Connecticut.
Terry C. Pellegrini has served on the Board of Directors since 1994. He has
been engaged in the private practice of law since 1969 and is a principal in the
law firm of Moots, Pellegrini, Spillane & Mannion, P.C.
Arthur C. Weinshank has served on the Board of Directors since 1995. He has
been engaged in the private practice of law since 1975 and is a principal in the
law firm of Cramer & Anderson LLP.
BACKGROUND OF DIRECTORS CONTINUING IN OFFICE
Kevin L. Dumas has served on the Board of Directors since 1995. He has been
engaged in the private practice of accounting since 1986.
6
<PAGE>
Louis A. Funk, Jr. has been a director since 1995. He was an owner and Vice
President of the Omaha Beef Co., Inc. of Danbury, Connecticut from 1968 to 1997.
Lawrence Greenhaus has been a director since 1975. He retired in 1994 after
practicing accounting for 44 years. He was a principal in the accounting firm of
Greenhaus, Riordan & Co. located in New Milford, Connecticut.
Robert W.X. Martin has been a director since 1975. He was the owner of
Martin Plumbing Supply, Inc. of New Milford, Connecticut, until his retirement
in 1978.
Walter G. Southworth has been a director since 1975. He was the owner of
Walter G. Southworth, Inc., the operator of a retail automobile dealership
located in New Milford, Connecticut from 1952 to 1989.
Harry H. Taylor, Jr. has been a director since 1993. He is the owner of
H.H. Taylor & Son, a retail building materials and hardware business located in
New Milford, Connecticut.
DIRECTORS' AFFILIATIONS
There are no reportable business or personal relationships or affiliations
between any director or nominee and the Company or its management. No nominee
for director serves as a director of any other company with a class of
securities registered under Section 12 of the Securities Exchange Act of 1934.
COMPENSATION OF DIRECTORS
Annual Fees and Meeting Fees. In 1997, each Director who was not an
employee of the Company or NMBT received an annual directors' retainer fee of
$8,500; a stipend of $250 for each board meeting attended; and a stipend of $75
for each committee meeting attended. Beginning in June, 1997 however, the
stipend for attending Loan Committee meetings was increased to $125 per meeting.
During 1997, the Chairman of the Board, Louis A. Funk, Jr., received an
additional stipend of $20,000 and the Chairman of the Audit and Personnel
Committees each received an additional stipend of $1,000. The Assistant
Secretary received an additional stipend of $2,500. Any Director who is an
employee of the Company or NMBT receives no additional compensation for his or
her service as a member of the Board or any Board committee.
Stock Option Grants. The Company has two stock option plans which were
approved by the stockholders. The option plans are for the benefit of directors,
officers and employees of NMBT. The option plans currently permit grants to
directors as specified in the plans. During 1997 options to purchase 3,000
shares of Common Stock were granted to each director.
Directors Fee Deferral Plan. In 1997, the Board of Directors approved a
Directors Fee Deferral Plan whereby Directors may defer their annual fees or a
25%, 50% or 75% portion thereof, until reaching the age of seventy. The deferred
benefits are paid over a fifteen year period commencing in the month following a
Director attaining seventy years of age. A lump sum
7
<PAGE>
payment, however, is due any Director terminated as a result of a change of
control, within thirty days of the termination. If a Director dies prior to
attaining age seventy, any deferred benefit relative to that Director is paid to
the deceased Director's estate or designated beneficiary. The Board of Directors
had previously adopted a deferred compensation plan for its Directors and
certain selected executive officers of NMBT (See "Compensation Pursuant to Plans
- - Officers'and Directors' Deferred Compensation Agreements")
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors met thirteen times during 1997. No director, nominee
or continuing director attended fewer than 75% of the aggregate of the total
number of meetings of the Board of Directors and the total number of meetings of
the committees of the Board on which he or she served (during the period for
which he or she was a director and for which he or she served on any such
committees).
To assist in the discharge of its responsibilities, the Board has
subcommittees which include an Audit Committee, an Investment Committee, a Loan
Committee and a Personnel Committee.
The Audit Committee, consisting of Directors Dumas (the Committee's
Chairman), Funk, Greenhaus, Martin, Straub and Taylor met 13 times during 1997.
This Committee recommends engagement of the independent auditors, reviews the
arrangement and scope of the audit, considers comments made by the independent
auditors regarding internal accounting controls, oversees the internal auditing
function, reviews internal accounting procedures and controls with NMBT's
financial staff and reviews non-audit services provided by the Company's
independent auditors.
The Investment Committee, consisting of Directors Carrigan, Funk,
Pellegrini (the Committee's Chairman), Southworth, Weinshank and Straub, met 4
times during 1997. The Investment Committee is responsible for overseeing the
adoption, revision and implementation of NMBT's investment and funds management
policies.
The Loan Committee, consisting of Directors Carrigan, Funk, Greenhaus (the
Committee's Chairman), Martin, Pellegrini and Straub met 17 times during 1997.
The Loan Committee is responsible for overseeing the adoption, revision and
implementation of NMBT's loan policies.
The Personnel Committee, consisting of Directors Dumas, Funk, Martin,
Southworth, Straub and Weinshank (the Committee's Chairman), met 9 times during
1997. This Committee reviews the personnel needs of NMBT and the Company with
senior management, reviews and approves recommendations on salary adjustments
for NMBT's officers and employees for submission to the Board of Directors,
makes recommendations to the Board of Directors concerning the granting of stock
options to NMBT's officers and employees, and oversees the NMBT's benefits and
retirement plans.
8
<PAGE>
MANAGEMENT
EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
executive officers of the Company and NMBT. Messrs. Carrigan, Lent and Maher
serve pursuant to employment agreements. See "Management-Employment Contracts."
<TABLE>
<CAPTION>
Age at
Name March 24, 1998 Position(s) Held
- ---- -------------- ----------------
<S> <C>
Michael D. Carrigan 46 President and Chief Executive Officer of NMBT and the Company
Jay C. Lent 39 Executive Vice President of NMBT, Chief Financial Officer and
Secretary of NMBT and the Company
Peter R. Maher 45 Executive Vice President and Chief Lending Officer of NMBT
Deborah L. Fish 47 Vice President and Treasurer of NMBT, Treasurer of the Company
</TABLE>
Michael D. Carrigan joined NMBT on January 4, 1993, as Executive Vice
President and assumed the responsibilities of President and Chief Executive
Officer on May 6, 1993. He was formerly an Executive Vice President, Senior
Lending Officer with UST Bank/Connecticut. He became President of the Company
immediately after its inception in 1997. His background includes over 20 years
of commercial lending and loan administration experience.
Jay C. Lent joined NMBT on October 22, 1990, as Executive Vice President
and Chief Financial Officer. In June, 1993, Mr. Lent was named Secretary of
NMBT. After the creation of the Company in 1997 he was named its Secretary.
Previously, Mr. Lent was a Senior Manager with Coopers & Lybrand, an
international accounting and consulting firm for eight years. He has also served
as Chief Financial Officer with First International Bancorp.
Peter R. Maher joined NMBT on April 19, 1993, as Senior Vice President and
Chief Lending Officer. In August, 1995 Mr. Maher was named Executive Vice
President and Chief Lending Officer. Mr. Maher has over 20 years of banking
experience, including commercial and consumer lending, branch administration and
bank operations. Prior to joining NMBT, Mr. Maher was a Senior Vice President
with UST Bank/Connecticut.
Deborah L. Fish joined NMBT in 1976 and has held various positions with
NMBT since that time. She was named Treasurer of NMBT in 1986 and Vice President
in 1987. She was named Treasurer of the Company in 1997.
9
<PAGE>
EMPLOYMENT CONTRACTS
NMBT has employment agreements with Messrs. Carrigan, Lent and Maher. Their
annual salary for the period ending December 31, 1998 is $165,000, $130,000 and
$110,000 respectively. The employment agreements provide for a term of one year
expiring December 31, 1998. The agreements also provide for one year extensions
unless terminated in accordance with the terms contained therein. Any increases
in salary paid during extension periods are determined at the discretion of the
Board of Directors.
Mr. Carrigan's agreement provides for the payment of cash severance equal
to three times his average annual gross income for the previous five years, less
one dollar, upon his voluntary termination for "good reason" (as defined
therein) or involuntary termination other than for "cause" (as defined therein)
within twelve months following a "change of control" (as defined therein). If
employment is terminated for "cause" or if Mr. Carrigan voluntarily terminates
his employment other than in connection with a "change in control," Mr. Carrigan
would be entitled to receive compensation only through the date of termination.
If his employment is terminated for any reason other than "for cause,"
disability, death or a "change in control," then Mr. Carrigan shall be paid the
greater of (i) his salary for the months remaining in the "term" (as defined
therein) of employment, (ii) an amount equal to his then current monthly salary
multiplied by the number of years (not to exceed twelve) of his employment, or
(iii) his salary for six months.
The agreements for Messrs. Lent and Maher, while substantially similar in
form to Mr. Carrigan's, provide for the payment of cash severance equal to one
times their average annual gross income for the previous five years, less one
dollar, upon their voluntary termination for "good reason" (as defined therein)
or involuntary termination within twelve months following a "change of control"
(as defined therein).
EXECUTIVE COMPENSATION
The following table sets forth the annual compensation for the highest paid
executive officers and directors of the Company and NMBT whose compensation for
1997 exceeded $100,000:
10
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Compensation Awards
Fiscal Annual Compensation Restricted -----------------------
------------------- Stock Securities LTIP All Other
Name and Principal Position(s) Year Salary($) Bonus ($) Awards Underlying Options (#) Payouts Compensation ($)
- ----------------------------- ---- --------- --------- ------ ---------------------- ------- ----------------
<S> <C> <C> <C> <C>
Michael D. Carrigan 1997 $155,000 $50,000 -- -- -- $ 10,517
President, Chief Executive 1996 145,000 50,000 -- -- -- 9,147
Officer and Director of 1995 135,000 40,000 -- -- -- 9,697
NMBT & the Company
Jay C. Lent 1997 130,000 35,000 -- -- -- 11,432
Executive Vice President of NMBT 1996 125,000 30,000 -- -- -- 8,801
Chief Financial Officer and 1995 120,000 30,000 -- -- -- 10,297
Secretary of NMBT & the Company
Peter R. Maher 1997 105,000 35,000 -- -- -- 9,832
Executive Vice President and 1996 100,000 30,000 -- -- -- 7,835
Chief Lending Officer of NMBT 1995 85,000 25,000 -- 10,000 -- 7,565
</TABLE>
COMPENSATION PURSUANT TO PLANS
PENSION PLAN
On June 1, 1991, NMBT instituted a qualified defined contribution pension
plan pursuant to section 401(k) of the Internal Revenue Code. Eligible
employees, those who have completed a minimum of one year of credited service,
may defer up to fifteen percent of their annual salary by contributions to the
qualified plan. NMBT matches the first 4% of an employee's contribution dollar
for dollar. NMBT has the discretion to make additional annual contributions to
the plan. An employee is vested in any amount deferred by the employee which is
contributed to the plan. NMBT's matching and discretionary contributions vest
over a 5-year period at the rate of 20% per year. Upon retirement or termination
of employment, a participant's vested account proceeds will be distributed in a
lump sum. The plan provides, in accordance with applicable laws and regulations,
for certain "hardship" withdrawals prior to termination of employment or
retirement.
11
<PAGE>
The following table sets forth the years of credited service and NMBT's
contributions to the 401(k) Plan on behalf of each executive officer whose
aggregate cash compensation was more than $100,000, and as to all eligible
participating employees as a group during the prior three fiscal years:
<TABLE>
<CAPTION>
Name of Executive or Number of Years of Fiscal Employer Contributions
Eligible Participating Employees Credited Service Year to the 401(k) Plan
- -------------------------------- ---------------- -------- -----------------------
<S> <C> <C> <C>
Michael D. Carrigan 4 1997 $ 10,517
1996 9,147
1995 9,697
Jay C. Lent 7 1997 11,432
1996 8,801
1995 10,297
Peter R. Maher 4 1997 9,832
1996 7,835
1995 7,565
All eligible participating
employees as a group--
(133) 1997 241,660
(131) 1996 227,909
(128) 1995 206,105
</TABLE>
STOCK OPTION PLANS
In 1988, the Board of Directors and the stockholders of NMBT adopted, and
the Connecticut Banking Commissioner approved, a Non-Statutory Stock Option Plan
for the benefit of directors, officers and employees of NMBT (the "1988 Plan")
and reserved 93,786 shares for issuance under the Plan. The 1988 Plan authorizes
the granting of stock options and stock appreciation rights (SARs). Options
granted under the 1988 Plan must be granted by the Board of Directors at a price
at or above 85% of the fair market value of a single share of the Company's
stock. To date options have been granted to purchase common stock at the fair
market value at the date of the grant. The term of each option may not exceed
five years from the date of grant. The number of SARs granted to a participant
may be equal to or less than the number of shares that the participant is
entitled to receive pursuant to the related option, and is reduced either by the
exercise thereof or by the number of shares of stock purchased by a participant
pursuant to the related options. No SARs have been granted under the 1988 Plan.
After March 29, 1998, the termination date of the 1988 Plan, no further options
can be granted under the 1988 Plan.
<PAGE>
In 1994, the Board of Directors and the stockholders adopted the 1994
Non-Qualified Stock Option Plan for employees, officers and directors of NMBT
(the "1994 Plan") and reserved 300,000 shares for issuance under the 1994 Plan.
The term of each option under the 1994 Plan may not exceed ten years from the
date of its grant.
The provisions of the 1994 Plan are identical to the provisions of the 1988
Plan, except that (1) the exercise price of options granted under the 1994 Plan
may not be lower than the fair market value of the shares on the date the
options are granted, (2) a participant may exercise the options for a six-month
(rather than a three-month) period following the participant's retirement or
death, and (3) the maximum option term is ten years, rather than five years,
from the date of grant. The 1994 Plan, like the 1988 Plan, authorizes the
granting of non-qualified stock options and SARs as a means of providing an
incentive to and encouraging ownership of the Company's common stock by
employees, officers and directors; of rewarding exemplary personnel; of
assisting the Company and NMBT in the recruitment of highly qualified personnel;
and of providing a mechanism of offering incentives to employees to continually
strive to improve NMBT's products and services and their contribution to the
performance of NMBT and the Company.
Simultaneously with the reorganization of NMBT into a wholly owned
subsidiary of the Company, the 1988 and 1994 Plans were amended to require the
Company to issue the Company common stock shares under the Plans (as opposed to
NMBT common stock shares) in the event of exercises under the respective Plans.
This was necessitated by the exchange of NMBT shares for the Company shares
which was approved at last year's Annual Meeting and has been since effectuated.
OPTION GRANTS
During 1997, 5,500 options were granted under the 1988 Plan at $12.75 per
share. These options were granted at their fair market value on their date of
grant, May 2, 1997, 500 of which were exercised. An additional 5,000 of these
options remain outstanding and are exercisable for a five year period ending May
2, 2002.
During 1997, NMBT granted 27,500 options under the 1994 Plan at $12.75 per
share. These options were granted at their fair market value on their date of
grant, May 2, 1997. A total of 25,000 of these options were exercisable for the
period beginning May 2, 1997 and ending August 9, 2004. A total of 2,500 of
these options were exercised in 1997.
No executive officer whose aggregate compensation was more than $100,000
received any grants of options under the 1988 or 1994 Plan during the fiscal
year ended December 31, 1997.
OPTION EXERCISES
The following table sets forth as to each executive officer whose aggregate
compensation was more than $100,000, certain information concerning the exercise
of stock options during the fiscal year ended December 31, 1997, and the value
of all unexercised options held by such individuals at such date:
<PAGE>
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN 1997 FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
Number of Value of
Shares Unexercised
Underlying In-The-Money
Unexercised Options
Options at Fiscal Fiscal Year-
Shares Acquired Value Year-End End
Name on Exercise Realized Exercisable Exercisable (2)
- ---- --------------- -------- ----------- ---------------
<S> <C> <C> <C> <C>
Michael D. Carrigan 6,100 $ 66,969(1) 112,400 $1,586,100
Jay C. Lent 12,000 134,625(1) 77,000 1,087,625
Peter R. Maher -- -- 47,000 624,250
</TABLE>
____________________________
(1) Market value of common stock at date of exercise, less the exercise price.
(2) Based on the $20.00 closing price of the Company's common stock as reported
on The Nasdaq SmallCap Market on December 31, 1997, minus the exercise
price.
OFFICERS' AND DIRECTORS' DEFERRED COMPENSATION AGREEMENTS
In 1985 and 1986, the Board of Directors of NMBT approved Deferred
Compensation Agreements for its directors and selected executive officers. These
agreements permitted the directors and selected executive officers to defer a
portion of their cash compensation for a period of four years during which time
such deferred amounts were invested by NMBT in life insurance contracts on the
lives of the directors and executives. NMBT is the beneficiary of such insurance
contracts. Directors were also permitted to enter into similar agreements with
NMBT to defer a portion of their annual retainer fees for a period of four years
during which time such deferred amounts were invested by NMBT in life insurance
contracts on the lives of such directors. The amounts to be received by the
directors are not limited to the amounts initially deferred by the directors and
invested in the life insurance contracts. NMBT is the beneficiary on such
policies which will provide NMBT with the funds to pay the benefits owed by NMBT
to the director upon the director's death, disability or when the director
reaches age 65, 68 or 70 (normal retirement age).
Distributions under the plan are payable by NMBT as either a lump sum, in a
maximum of ten equal annual installments, or in either 120 or 180 equal monthly
installments depending upon the basis for the distribution. In cases of death,
attaining normal retirement age or other terminations, lump sum distributions or
installment payments are authorized. Hardship distributions may also be
requested. Retirement distributions would occur upon the director's attaining
normal retirement age. NMBT's aggregate distributions in 1997 pursuant to this
plan totaled $144,577. As of December 31, 1997, the amount of deferred
compensation accrued under these agreements aggregated $1,064,823.
Although NMBT may be obligated for certain cash payments prior to the
receipt of proceeds from the purchased life insurance policies under its
Deferral Compensation Agreements approved in 1985 and 1986, the actuaries have
calculated that NMBT should ultimately be reimbursed in whole from such life
insurance proceeds.
<PAGE>
In 1997, the Board of Directors of NMBT adopted a Supplemental Executive
Retirement and Deferred Compensation Plan to provide its senior executive
officers and directors with additional retirement and tax deferral benefits to
the extent benefits under the qualified retirement plans of NMBT are limited by
applicable law or regulation. The Supplemental Plan will permit additional
deferral of compensation and matching contributions (as determined by the
Company's Personnel Committee) to the extent the supplemental deferral had been
made into NMBT's 401(k) Plan.
REPORT OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Board of Directors as a whole makes decisions on compensation for
executive officers (with Mr. Carrigan not participating in decisions concerning
his compensation). The Board is currently comprised of ten members. Because the
business of the Company currently consists of the business of NMBT only, no
separate cash compensation is paid to the executive officers of the Company. No
members of the Board who participated in these decisions are employed by the
Company or NMBT, neither do any of these members have an interlocking
relationship with a compensation committee of another entity, nor do they
participate in any of the Company's or NMBT's executive compensation plans.
In addition, the Personnel Committee, none of whose members are employees
of the Company or NMBT, makes recommendations to the Board of Directors
concerning the grant of stock options to employees, including director and
non-director executive employees. Based on these recommendations, the Board of
Directors makes decisions regarding the grant of any such options (with Mr.
Carrigan not participating in decisions concerning himself). This Committee also
makes recommendations to the Board of Directors on compensation for other
officers and employees and on other benefit plans for employees of the Company
and NMBT.
The Board of Directors does not have formal compensation policies. The
Board does, however, consider the Company's and NMBT's performance, the
accomplishment of business objectives, and the individual's contribution to
earnings and shareholder value in setting senior officer compensation levels.
The Board also considers the compensation paid by peer group institutions with
the goal of being competitive in the attraction and retention of qualified
executives. The two principal components of executive officers' compensation are
salary and stock options granted under the Company's 1994 Plan. The Board
considers granting bonuses only when it determines that performance is
exceptional, and only after consideration of such factors as performance for
such year compared to prior years, and the time and effort exerted by
management. These decisions are made on a judgmental basis, and not according to
a specific formula. The Board chose to recognize the performance by Messrs.
Carrigan, Lent and Maher in the 1997 fiscal year by the payment of a cash bonus
as reflected in the Summary Compensation Table.
15
<PAGE>
COMPANY STOCK PERFORMANCE
The following graph shows a five-year comparison of cumulative total return
for the Company's stock (NMBT's stock prior to November 25, 1997), the Standard
& Poor's 500 Composite Index and the Nasdaq Bank Index, which is a published
industry index. Notwithstanding any statement to the contrary in any of the
Company's previous or future filings with the Securities and Exchange
Commission, the graph shall not be incorporated by reference into any such
filings.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG NMBT CORP, THE NASDAQ BANK
INDEX AND THE S & P 500 INDEX
[GRAPHIC OMITTED]
- -----------------------FISCAL YEAR ENDING-----------------------------
COMPANY 1992 1993 1994 1995 1996 1997
NMBT CORP 100 200.00 204.17 330.57 431.13 700.64
PEER GROUP 100 114.04 113.63 169.22 223.41 377.43
BROAD MARKET 100 110.08 111.54 153.45 188.69 251.64
THE PEER GROUP CHOSEN WAS:
NASDAQ BANKING INDEX
THE BROAD MARKET INDEX CHOSEN WAS:
AN INDEX OF THE COMPANIES ON THE S&P 500
* $100 Invested on 12/31/92 in Stock or Index -- Including Reinvestment of
Dividends.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1997, non-employee directors Dumas, Funk, Martin, Southworth,
Straub and Weinshank served as members of the Personnel Committee which oversees
the granting of options under the 1994 Plan and the 1988 Plan. None of the
Personnel Committee members or Named Executive Officers have any relationships
which must be disclosed under this caption.
16
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors and executive officers, and holders of more
than 10% of the Company's Common Stock, to file with the Securities and Exchange
Commission (the "SEC") initial reports of ownership and reports of changes in
ownership of Company Common Stock and other equity securities of the Company.
Such officers, directors and 10% stockholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely on a review of such forms that it received, or written
representations from reporting persons that no other reports were required for
such persons, the Company believes that, since becoming subject to SEC
jurisdiction in late 1997, all Section 16(a) filing requirements were satisfied
on a timely basis.
AMENDMENT TO THE 1994 STOCK OPTION PLAN
(PROPOSAL TWO)
The Personnel Committee (the "Committee"), a committee of the Board
comprised solely of non-employee directors of the Company, has recommended to
the Board of Directors and the Board, subject to the approval of stockholders,
has approved an amendment (the "Amendment") to NMBT's 1994 Non-Qualified Stock
Option Plan for Employees, Officers and Directors to increase the number of
shares issuable thereunder from its present 300,000 shares to 600,000 shares (an
increase of 300,000 shares). Options already granted pursuant to the 1994 Plan
are not affected by the proposed Amendment. Adoption of the Amendment is subject
to the approval of a majority of the shares of The Company's Common Stock which
are present in person or by proxy and entitled to vote at the Annual Meeting.
The 1994 Plan was previously approved by stockholders at the 1994 Annual
Meeting.
GENERAL
The 1994 Plan allows the granting of stock options ("Options") and SARs to
eligible 1994 Plan participants.
The total number of shares currently authorized to be issued pursuant to
Options granted under the 1994 Plan is 300,000. As of March 24, 1998, 262,600
shares are subject to Options currently outstanding under the 1994 Plan, and no
shares remain available for Options to be granted in the future. If an Option
expires or is canceled without having been fully exercised or vested, the
unvested or canceled shares generally will again be available for grants of
Options. The number of shares available for grant under the 1994 Plan,
outstanding Options and SARs, the formula for granting Options, and the
numerical limits for individual grants will be adjusted as appropriate to
reflect any stock splits, recapitalizations, reorganizations or other relevant
changes to the capital structure of the Company.
17
<PAGE>
PURPOSE OF THE PLAN
The 1994 Plan is intended to attract, motivate, and retain (1) employees of
NMBT and its affiliates, and (2) officers and directors of NMBT and the Company.
The 1994 Plan authorizes the granting of nonqualified stock options and SARs as
a means of: (i) providing an incentive to and encouraging ownership of the
Company's common stock by employees, officers, and directors (thereby aligning
their interests more closely with those of the Company's stockholders); (ii)
rewarding exemplary personnel; (iii) assisting in the recruitment of highly
qualified personnel; and (iv) providing a mechanism for offering incentives to
employees to continually strive to improve products and services and their
contributions to performance. The Board of Directors believes that the Company
needs to adopt the proposed Amendment to the 1994 Plan (increasing the number of
shares reserved for issuance) to assist it in accomplishing these objectives.
Under the provisions of the 1994 Plan the exercise price of the Options
granted thereunder may not be lower than the fair market value of the shares on
the date the Options are granted and, while Options granted under the 1994 Plan
are not assignable (and generally will not be exercisable if the optionee's
employment terminates for any reason), a participant or his representatives may
exercise the Options for a six month period following the participant=s
retirement or death.
Accordingly, the Board believes that the approval of the Amendment by the
stockholders is in the best interests of NMBT, the Company and its stockholders
and requests shareholder approval of the Amendment and the reservation of an
additional 300,000 shares of the Company's common stock for issuance thereunder.
DESCRIPTION OF MAIN FEATURES OF THE PLAN AS AMENDED
The 1994 Plan, provides for two types of awards: (1) Nonqualified Stock
Options ("Options") and (2) Stock Appreciation Rights. Each such Option or SAR
will be made on such terms and conditions consistent with the 1994 Plan as the
Committee may determine.
An SAR entitles the holder, upon exercise of the right, to the appreciation
resulting from the excess of the fair market value of a share of stock on the
exercise date over the option exercise price of the related Option.
Shares of the Company's Common Stock authorized for issuance under the 1994
Plan, as proposed to be amended, are authorized but unissued shares. Any shares
subject to Options which expire or are terminated unexercised become available
again for issuance under the 1994 Plan.
18
<PAGE>
Employees, officers and directors (whether or not they are employees) are
eligible to receive Options and SARs under the 1994 Plan. Members of the Board
of Directors could receive a benefit by the adoption of the 1994 Plan and,
therefore, have an interest in this Amendment. No promises of Options under the
1994 Plan have been made to any person, nor is it possible at this time to
determine the total number of Options to be received by all employees, officers
and directors as a group. The Company and NMBT have nine directors who are not
employees and approximately 184 employees, including officers.
Unless sooner terminated, the 1994 Plan will remain in effect and options
may be granted pursuant to it until 2004, the date 10 years from the date the
plan was initially approved by the stockholders. Outstanding Options granted
under the 1994 Plan will however be exercisable for any period determined by the
Board, but not longer than a maximum period of 10 years from the date granted.
The 1994 Plan is administered by the Personnel Committee of the Board of
Directors which consists of outside directors. The Committee will recommend to
the Board how, and under what conditions and restrictions Options should be
granted, and the full Board of Directors will decide whether or not to grant
such Options and to approve the terms of their issuance. Committee members may
not recommend Options for themselves and individual directors may not vote on
Options for their personal benefit. The Committee has not considered or
recommended the granting of any additional Options to any persons and will not
unless and until the Amendment is approved by the Company's stockholders. The
Committee is also authorized to interpret the 1994 Plan, in the event of
ambiguities.
The Board may terminate or amend the 1994 Plan with respect to any shares
as to which Options have not been granted. The Board may not terminate, alter or
impair any Option or SAR previously granted under the 1994 Plan. Neither the
Committee nor the Board may increase the number of shares reserved for issuance
pursuant to the 1994 Plan, except as a result of changes in the Company's
capitalization resulting, for example, from stock splits, consolidations, or
combination of shares, or make other material changes to the 1994 Plan without
the approval of the Company's stockholders.
The number of Options granted to an optionee pursuant to the 1994 Plan will
be adjusted as a result of changes in the Company's capitalization resulting
from a stock split, recapitalization, consolidation, combination of shares,
merger, or other relevant change in the Company's capitalization (excluding,
however, stock dividends).
FEDERAL INCOME TAX CONSEQUENCES
Upon the exercise of an Option, an optionee will recognize ordinary
compensation income in an amount equal to the excess of the fair market value of
the stock on the date of the exercise over the Option price. Any gain or loss
recognized by the optionee on the subsequent disposition of the stock will be
capital gain or loss.
19
<PAGE>
The exercise of an SAR will result in the recognition of ordinary income by
the participant upon exercise in an amount equal to the amount of cash received
and for the fair market value on the date of transfer of the shares acquired
pursuant to the exercise.
There will generally be no tax effect at the time of the granting of an
Option or SAR. The Company will be entitled to a deduction for federal income
tax purposes at the same time and in the same amount as an optionee is required
to recognize ordinary compensation income as described above. To the extent that
an optionee recognizes capital gain as described above, the Company will not be
entitled to a deduction for federal income tax purposes.
AMENDMENT OF THE PLAN
The Board generally may amend or terminate the 1994 Plan at any time and
for any reason, but certain material amendments must be approved by
stockholders.
APPROVAL OF THE PROPOSED AMENDMENT REQUIRES THE AFFIRMATIVE VOTE OF A
MAJORITY OF SHARES PRESENT, IN PERSON OR BY PROXY, AT THE MEETING AND ENTITLED
TO VOTE.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
AMENDMENT OF THE PLAN.
CERTAIN TRANSACTIONS
The Company and NMBT have had and expect to have in the future banking
transactions in the ordinary course of business with directors, officers,
stockholders and their associates. These transactions are made on substantially
the same terms, including interest rates and collateral on loans, as those
prevailing at the same time for comparable transactions with others, and do not
involve more than the normal risk of collectibility or present other unfavorable
features at the time such loans are made. The highest aggregate amount of loans
to all officers and directors of the Company and NMBT and their associates as a
group was $3,063,638 on April 15, 1997, or 13.41% of stockholders' equity. There
were no standby letters of credit to related parties outstanding at year end.
RATIFICATION OF DIRECTORS' APPOINTMENT
OF INDEPENDENT AUDITORS
(PROPOSAL THREE)
The Board of Directors has appointed the firm of Deloitte & Touche LLP as
the Company's independent auditors to serve for the fiscal year ending December
31, 1998. A representative of Deloitte & Touche LLP will be available to answer
appropriate questions at the Annual Meeting and will be afforded the opportunity
to make a statement, if he wishes to do so. Deloitte & Touche LLP is an
internationally known firm and known as one of the "Big Six" accounting firms.
The Company is being served by the Stamford, Connecticut office.
20
<PAGE>
In 1997, Deloitte & Touche LLP provided the Company certain services, in
addition to conducting the annual audit of the Company's financial statements.
These services consisted primarily of income tax advice, corporate tax return
preparation and audits and tax filings relative to pension plans. The Audit
Committee of the Board of Directors approved these services and considered their
possible effect on the independence of Deloitte & Touche LLP before these
services were rendered.
REQUIRED VOTE FOR RATIFICATION OF INDEPENDENT AUDITORS
To ratify the Directors' appointment of the independent auditors, the
affirmative vote of the shares present, in person or by proxy entitled to vote
at the Annual Meeting is required.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
RATIFICATION.
STOCKHOLDERS' PROPOSALS FOR 1997 MEETING
Any proposal which a stockholder intends to present to the 1999 Annual
Meeting of Stockholders, must be received by the Secretary of the Company on or
before January 5, 1999 in order to be considered for inclusion in the Company's
Proxy Statement and Form of Proxy relating to the 1999 Annual Meeting.
ALL OTHER MATTERS WHICH MAY COME BEFORE THE MEETING
As of the date of this Proxy Statement, the Board of Directors knows of no
business that will be presented for consideration at the meeting other than that
which has been referred to herein. As to other business, if any, that may
properly come before the meeting, the persons named in the accompanying Form of
Proxy will vote such Proxy in accordance with the determination of a majority of
the Board of Directors.
By Order of the Board of Directors,
NMBT CORP
JAY C. LENT
Secretary
New Milford, Connecticut
April 3, 1998
21
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations thereunder. In accordance therewith, the Company files reports,
proxy statements and other information with the FDIC. Such reports, proxy
statements and other information filed by the Company should be available for
inspection and copying, upon payment of prescribed fees, at the public reference
facilities maintained by the FDIC at 550 17th Street, Room F-643, N.W.,
Washington, D.C. 20429 and should be available for inspection in the Public
Inspection File maintained by the Public Information Department of the Federal
Reserve Bank in New York at 33 Liberty Street, New York, New York 10045. Bank
Common Stock is quoted on the Nasdaq SmallCap Market tier of the Nasdaq Stock
Market under the Symbol: The Company, and such reports, proxy statements and
other information concerning the Company also are available for inspection at
the offices of Nasdaq, 33 Whitehall Street, New York, New York 10004 and for
inspection and copying at the offices of Nasdaq, 1735 K Street, N.W.,
Washington, D.C. 20006-1500.
It is expected that the Company will be subject to the informational
requirements of the Exchange Act and in accordance therewith will file reports,
proxy statements and other information with the Securities and Exchange
Commission (the "SEC"). Such reports, proxy statements and other information,
when filed, can be inspected and copied at the SEC's Public Reference Section,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional
Offices of the SEC: New York Regional Office, Room 1028, Federal Building, 26
Federal Plaza, New York, New York 10006; and Chicago Regional Office, Everett
McKinley Dirksen Building, 219 South Dearborn Street, Chicago, Illinois 60604.
Copies of such material can also be obtained from the Public Reference Section
of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
NO AGENT, OFFICER OR DIRECTOR OF THE COMPANY OR ANY OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED IN
THIS PROXY STATEMENT AND PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY.
THIS PROXY STATEMENT AND PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE
WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH, INCLUDING THE PLAN AND THE
PROPOSED CERTIFICATE OF INCORPORATION AND BY-LAWS OF THE COMPANY. UPON WRITTEN
OR ORAL REQUEST, A COPY OF ANY AND ALL OF THE INFORMATION THAT HAS BEEN
INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT AND PROSPECTUS (NOT INCLUDING
EXHIBITS TO SUCH INFORMATION UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED
BY REFERENCE INTO SUCH INFORMATION) WILL BE PROVIDED WITHOUT CHARGE TO SUCH
PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS PROXY STATEMENT AND
PROSPECTUS IS DELIVERED. REQUESTS FOR COPIES SHOULD BE DIRECTED TO JAY C. LENT,
THE NEW MILFORD BANK & TRUST COMPANY, 100 PARK LANE, NEW MILFORD, CONNECTICUT
06776-2400 (TELEPHONE (860) 355-1171). IN ORDER TO ASSUME TIMELY DELIVERY OF THE
DOCUMENTS, ANY REQUEST SHOULD BE MADE BY MAY 16, 1997.
<PAGE>
- APPENDIX -
PROXY
NMBT CORP
55 MAIN STREET
NEW MILFORD, CONNECTICUT, 06776-2400
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints JAY C. LENT and DEBORAH L. FISH, or either
of them, the true and lawful attorneys for the undersigned, with power of
substitution to each, to vote all the shares of stock of NMBT CORP (the
"Company") standing in the name of the undersigned on the books of the Company
as of the Record Date, March 24, 1998, at the Annual Meeting of Stockholders to
be held at the Park Lane Office, 100 Park Lane, New Milford, Connecticut, on
Tuesday, May 5, 1998 at 7:00 p.m., or at any adjournment or adjournments
thereof, with all the power the undersigned would possess if personally present,
in respect to the following matters as more fully described in the accompanying
Proxy Statement to Stockholders.
This proxy will be voted as directed by the stockholder on the reverse side
of this proxy card.
UNLESS CONTRARY DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED "FOR" ALL
NOMINEES LISTED IN PROPOSAL 1, "FOR" PROPOSAL 2, "FOR" PROPOSAL 3 AND IN
ACCORDANCE WITH THE DETERMINATION OF A MAJORITY OF THE BOARD OF DIRECTORS AS TO
OTHER MATTERS PROPERLY BROUGHT BEFORE THE ANNUAL MEETING. THE PROXY MAY BE
REVOKED AT ANY TIME PRIOR TO THE MEETING BY WRITTEN NOTICE TO THE COMPANY, OR
MAY BE WITHDRAWN AND YOU MAY VOTE IN PERSON SHOULD YOU ATTEND THE ANNUAL
MEETING.
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1. To elect three Directors to serve until the Ruth Henderson, Terry C.Pellegrini and
Annual Meeting of Stockholders to be held in Arthur C. Weinshank
the year 2001 who, with the six Directors --------------------------------------------
whose terms of office do not expire at this (Names of each nominee)
meeting, will constitute the full Board.
FOR all nominee WITHHOLD
(except as marked authority to vote
to the contrary) for all nominees
[ ] [ ] (INSTRUCTION: To withhold authority to vote for
any individual nominee(s), write that nominee's
names(s) in the space provided below.)
2. To approve an Amendment to the 1994 Stock 3. To ratify the Directors' appointment of
Option Plan of the Company's operating Deloitte & Touche LLP as the Company's
subsidiary,NMBT, in order to increase the independent auditors for the year ending
number of shares issuable thereunder to December 31, 1998.
600,000.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
[ ] [ ] [ ] [ ] [ ] [ ]
4. To transact such other business as may
properly be brought before the Annual Meeting
or any adjournments thereof.
Dated:____________________________________________
__________________________________________________
Signed
__________________________________________________
Signed
Please sign exactly as name appears hereon. When
signing as attorney, executor, administrator,
trustee, or guardian, please give full title as
such. If more than one name is shown, including
the case of joint tenants, each party should sign.
Proxies executed by a corporation or partnership
should be signed in the corporate or partnership
name by a duly authorized officer or partner.
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