SCHEDULE 14A 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:
[X] Preliminary Proxy Statement
[_] 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 Section 240.14a-11(c) or Section 240.14a-12
PATRIOT NATIONAL BANCORP, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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<PAGE>
(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
PRELIMINARY COPY
PATRIOT NATIONAL BANCORP, INC.
900 Bedford Street
Stamford, Connecticut 06901
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
AND PROXY STATEMENT
To Be Held on June 14, 2000
----------------------
Notice is hereby given that the Annual Meeting of Shareholders of Patriot
National Bancorp, Inc. ("Bancorp") will be held at Luca's Steak House, 35 Church
Street, Greenwich, Connecticut 06830 at 10:00 A.M. on Wednesday, June 14, 2000
for the following purposes:
(1) To elect nine directors for the ensuing year;
(2) To consider and act upon a proposal to approve a private placement of
up to $6 million of Common Stock of Bancorp;
(3) To consider and act upon a proposal to ratify the appointment of
McGladrey & Pullen, LLP as independent accountants for the year ending December
31, 2000; and
(4) To transact such other business as may be properly brought before the
Annual Meeting.
The close of business on April 24, 2000 has been fixed as the record date
for the determination of shareholders entitled to notice of and to vote at the
Annual Meeting and at any adjournments thereof.
Whether or not you expect to be present at the meeting, please mark, date,
sign and return the enclosed form of proxy in the stamped and addressed envelope
provided. No postage is required. If you desire to vote your shares in person at
the meeting, your proxy will not be voted.
By Order of the Board of Directors
Fred DeCaro, Jr. Philip W. Wolford
Chairman of the Board President
Stamford, Connecticut
April 28, 2000
<PAGE>
PATRIOT NATIONAL BANCORP, INC.
900 Bedford Street
Stamford, Connecticut 06901
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PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 14, 2000
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INTRODUCTION
This Proxy Statement (this "Proxy Statement") is being furnished in
connection with the solicitation by the Board of Directors of Patriot National
Bancorp, Inc. ("Bancorp") of proxies from holders of Bancorp's Common Stock,
$2.00 par value ("Common Stock"), to be voted at the Annual Meeting of
Shareholders to be held on June 14, 2000 and at any adjournments thereof. The
time and place of the Annual Meeting, as well as the purposes therefor, are set
forth in the accompanying Notice of Annual Meeting. The approximate date on
which this Proxy Statement and the enclosed proxy are first being sent or given
to shareholders is May 5, 2000. In addition to solicitation by mail, directors,
officers and certain management employees of Bancorp may solicit by telephone or
in person the return of signed proxies from shareholders without additional
remuneration therefor.
Any proxy given by a shareholder may be revoked at any time before its
exercise, and any shareholder who executes and returns a proxy and who attends
the Annual Meeting may withdraw the proxy at any time before it is voted and
vote his or her shares in person. A proxy may be revoked by giving notice to the
Secretary of Bancorp in writing (at Bancorp's address indicated above) or in
open meeting prior to the taking of a vote.
Unless so revoked, the proxy will be voted at the Annual Meeting, and
unless authorization to vote for the election of directors or for any particular
nominee is withheld, the shares represented by such proxy will be voted FOR the
nominees set forth in this Proxy Statement with the votes cumulated as
determined by the proxy holders. If authorization to vote for any nominee or
nominees is withheld in a proxy, the votes of the shares represented thereby
will be distributed among the remaining nominees in the manner determined by the
persons named in the proxy, unless contrary instructions are given. Proxies
containing instructions on Proposal 2 (approval of a private placement of up to
$6 million of Common Stock) or Proposal 3 (the ratification of the appointment
of McGladrey & Pullen, LLP as independent accountants for 2000) will be voted in
accordance with such instructions. If no instructions are contained on Proposal
2 or Proposal 3, proxies will be voted FOR the proposal. Other than for
elections of directors where the holders of the Common Stock have cumulative
voting or as otherwise required by law or regulation, the By-laws of Bancorp
provides that all matters requiring shareholder action must be approved by
shareholders by a majority of the votes cast. Under the By-laws of Bancorp,
approval of Proposal 2 and Proposal 3 requires the affirmative vote of a
majority of the votes cast at the Annual Meeting. An abstention or a broker
non-vote will be counted for purposes of determining whether a quorum is present
but will not be counted as votes cast
VOTING SECURITIES AND PRINCIPAL HOLDERS
The record date for determining shareholders entitled to notice of and to
vote at the Annual Meeting and any adjournments thereof has been set as April
24, 2000 (the "Record Date"). As of the Record Date, there were 2,160,952 shares
of Common Stock outstanding and entitled to vote at the Annual Meeting. Each
share of Common Stock is entitled to one vote multiplied by the number of
directors to be elected with respect to the election of directors and to one
vote on each other matter submitted to the Annual Meeting.
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<PAGE>
Other than Angelo DeCaro who is the Chief Executive Officer and a director
of Bancorp and Fred DeCaro who is the Chairman of the Board, Executive Vice
President and a director of Bancorp, there is no person who, to the knowledge of
Bancorp's Board of Directors, owns beneficially more than 5% of the outstanding
Common Stock. Information as to the number of shares of Common Stock owned by
each director of Bancorp and by each nominee for election as a director of
Bancorp is set forth below under "ELECTION OF DIRECTORS."
To the knowledge of Bancorp, no arrangement exists the operation of which
might result in a change in control of Bancorp. However, Angelo DeCaro has filed
a Change of Bank Control Notice with the Federal Reserve Bank of New York
pursuant to which he is authorized to acquire up to 24.9% of the Common Stock.
See also, the description of Proposal 2.
PROPOSAL 1.
ELECTION OF DIRECTORS
Nominees
The number of directors to be elected at the Annual Meeting has been set at
nine by action of the Board of Directors in accordance with the Certificate of
Incorporation and the By-laws of Bancorp. The directors are elected annually by
the shareholders by ballot. With respect to the election of directors, the
holders of Common Stock have cumulative voting. Cumulative voting means that
each share of Common Stock is entitled to one vote multiplied by the number of
directors to be elected. Such votes may be cumulated and cast for a single
candidate or may be distributed among two or more candidates in the manner
selected by the shareholder. In the event a shareholder submitting a proxy does
not specify how the votes attributable to the shares represented thereby are to
be distributed, the persons named in the proxy will determine how such votes are
to be distributed among the candidates. The nominees receiving the largest
number of votes will be elected. Each director holds office until the next
Annual Meeting of Shareholders and until his or her successor is elected and
qualifies (or until his or her earlier resignation, death or removal). Each of
the nominees has consented to being named in this Proxy Statement and to serve
as a director if elected. Each of the nominees is currently a director of
Bancorp. Each of the directors also serves as a director of Bancorp's subsidiary
Patriot National Bank (the "Bank").
The persons named in the form of proxy to represent shareholders at the
Annual Meeting are Herbert A. Bregman, Michael Intrieri and Richard Naclerio and
each of them. It is the intention of the persons named in the proxy to vote FOR
the election of the nominees named herein unless authority to vote is withheld
with respect to one or more nominees. In the event that any nominee for director
should become unavailable for election for any reason, the persons named in the
proxy will consult with Bancorp's management and use their discretion in
deciding whether and how to vote the shares represented by such proxies.
The names of the nominees for election as directors are set forth below,
together with their principal occupations and employment, directorships in
companies with a class of securities registered pursuant to Section 12 of the
Securities Exchange Act of 1934 or subject to the requirements of Section 15(d)
of that Act and any company registered as an investment company under the
Investment Company Act of 1940, directorships in other companies, ages, lengths
of service as directors and the number and percentage of shares of Common Stock
beneficially owned by each as of April 1, 2000, based on information furnished
by the nominees. Each of the directors became a Director of Bancorp upon its
acquisition of the Bank in 1999. Service as a director for purposes of this
presentation includes the period of service as a director of the Bank prior to
Bancorp's acquisition of the Bank. Each of the persons named below has a
business address c/o Patriot National Bancorp, Inc., 900 Bedford Street,
Stamford, Connecticut 06901. There is no arrangement or understanding between
any director and any other person or persons
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<PAGE>
pursuant to which such director was or is to be selected as a director or
nominee. There is no family relationship between any director and any executive
officer of Bancorp or the Bank.
Each of the nominees has held the principal occupation listed for the past
five years, with the exception of Mr. Angelo DeCaro and Mr. Wolford.
<TABLE>
<CAPTION>
Position and Offices With Shares Beneficially
Bancorp Presently Held and Director Owned and Percent
Name Age Principal Occupations and Employment Since of Class(1)
---- --- ------------------------------------ ----- --------
<S> <C> <C> <C>
Herbert A. Bregman....... 70 Director of Bancorp and the Bank; practicing 1993 18,188(2)
Certified Public Accountant and manager of 0.84%
Bregman and Company, P.C., Stamford,
Connecticut.
Angelo DeCaro............ 57 Director of Bancorp and the Bank; CEO of 1998 346,321
Bancorp since its organization in December 16.03%
1999 and of the Bank since June 1999;
restaurateur from 1996 to present; former
Partner of Goldman, Sachs & Co. from 1979 to
1996.
Fred A. DeCaro, Jr....... 57 Chairman of the Board of Directors of Bancorp 1993 129,700(3)
and the Bank since their organization; 5.91%
Executive Vice President of Bancorp since
December, 1999 and of the Bank since March,
1996; Secretary of Bancorp since its
organization.
John A. Geoghegan........ 58 Director of Bancorp and the Bank; practicing 1998 5,917
attorney in Rye, New York; former Director of 0.27%
Barclays Bank, N.A. for over eighteen years.
L. Morris Glucksman...... 52 Director of Bancorp and the Bank; practicing 1993 55,924(4)
attorney in Stamford, Connecticut. 2.57%
Michael Intrieri......... 56 Director of Bancorp and the Bank; facilitator 1993 38,862(5)
in Stamford, Connecticut Public School System; 1.79%
Ed. D. in education and counseling; real
estate broker.
Richard Naclerio......... 68 Director of Bancorp and the Bank; real estate 1995 65,471(6)
developer; retired Chairman of RAN Consulting 3.01%
Corporation; private investor.
Salvatore Trovato........ 60 Vice Chairman of the Board of Directors of 1995 103,258(7)
Bancorp and the Bank; President of Trocom 4.72%
Construction, Inc., a construction company
specializing in bridges, tunnels and municipal
construction projects; director of Cyclone
Fence, Inc.
</TABLE>
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<TABLE>
<CAPTION>
Position and Offices With Shares Beneficially
Bancorp Presently Held and Director Owned and Percent
Name Age Principal Occupations and Employment Since of Class(1)
---- --- ------------------------------------ ----- --------
<S> <C> <C> <C>
Philip W. Wolford........ 52 Director of Bancorp and the Bank; President of 1994 19,246(8)
Bancorp since its organization; President of 0.89%
the Bank since September, 1994; Executive Vice
President and Chief Financial Officer of the
Bank from December, 1993 to September, 1994.
</TABLE>
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(1) A "beneficial owner" of a security for purposes of Rule 13d-3 under the
Securities Exchange Act of 1934, as amended, includes any person who,
directly or indirectly, has or shares voting power and/or investment power,
although not necessarily the economic benefit, with respect to that
security. In addition, a person is deemed to be the beneficial owner of a
security which such person has the right to acquire within 60 days upon
exercise of an option or warrant.
(2) Includes 1,600 shares held by Elaine S. Bregman, Mr. Bregman's wife; also
includes 6,000 and 1,666 shares which Mr. Bregman has the right to acquire
within 60 days upon exercise of options and warrants, respectively.
(3) Includes 11,667 shares held in joint tenancy with Frances DeCaro, Mr.
DeCaro's wife, and 33,354 shares owned individually by Frances DeCaro; also
includes 34,000 shares which Mr. DeCaro has the right to acquire within 60
days upon exercise of options.
(4) Includes 3,200 shares held by Mr. Glucksman as Trustee for Roslyn
Glucksman, Mr. Glucksman's wife; 5,500 shares held by Mr. Glucksman as
Trustee for Rayna Glucksman, Mr. Glucksman's daughter; 5,500 shares held by
Mr. Glucksman as Trustee for Janna Glucksman, Mr. Glucksman's daughter;
1,000 shares held by Roslyn Glucksman, Mr. Glucksman's wife; 10,800 shares
held as Trustee for other than immediate family members; also includes
16,000 and 2,666 shares which Mr. Glucksman has the right to acquire within
60 days upon exercise of options and warrants, respectively.
(5) Includes 550 shares held by Karen Intrieri, Mr. Intrieri's wife; 1,800
shares held in joint tenancy with Karen Intrieri, Mr. Intrieri's wife; 600
shares held by Michael J. Intrieri, Mr. Intrieri's son; 600 shares held by
Jason Intrieri, Mr. Intrieri's son; 9,000 shares as trustee for the Estate
of Kathleen Duffy Intrieri; also includes 10,000 and 2,467 shares which Mr.
Intrieri has the right to acquire within 60 days upon exercise of options
and warrants, respectively.
(6) Includes 15,000 shares which Mr. Naclerio has the right to acquire within
60 days upon exercise of options.
(7) Includes 20,000 and 7,482 shares which Mr. Trovato has the right to acquire
within 60 days upon exercise of options and warrants, respectively.
(8) Includes 84 shares held in joint tenancy with Regine Vantieghem, Mr.
Wolford's wife; 83 shares held in joint tenancy with Jack A. Wolford, Mr.
Wolford's father; 83 shares held in joint tenancy with Kathryn Rachel
Wolford, Mr. Wolford's mother; includes 9,000 shares which Mr. Wolford has
the right to acquire within 60 days upon exercise of options.
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<PAGE>
The following table provides information concerning the executive officers
of Bancorp and the Bank.
Name Age Office Currently Held
Angelo DeCaro 57 Chief Executive Officer of Bancorp and the
Bank
Fred DeCaro, Jr. 57 Chairman of the Board, Executive Vice
President and Secretary of Bancorp and
Chairman of the Board and Executive Vice
President of the Bank
Philip W. Wolford 52 President of Bancorp and the Bank
Robert F. O'Connell 51 Executive Vice President and Chief
Financial Officer of Bancorp and the Bank
Martin G. Noble 50 Executive Vice President of the Bank
Marcus Zavattaro 35 Executive Vice President of the Bank
Todd Brown 36 Executive Vice President of the Bank
Ronald M. Moskwa 48 Vice President and Controller of Bancorp
and the Bank
Information about the business experience of Mr. A. DeCaro, Mr. F. DeCaro
and Mr. Wolford is set forth above.
Mr. O'Connell became Executive Vice President and Chief Financial Officer
of Bancorp and the Bank in 2000. From 1994 to 2000, he was Senior Vice President
and Chief Financial Officer of New Canaan Bank and Trust Company or
Treasurer/Senior Financial Officer for its successor, Summit Bank, New Canaan,
Connecticut.
Mr. Noble has been Executive Vice President and Senior Loan Officer of the
Bank since February 1999. From 1996 to 1999, he was Vice President and Manager -
Risk Management for Cityscape Corporation, a mortgage banking company, and from
1989 to 1996, he was Senior Vice President and Senior Loan Officer for Bank of
Great Neck or Senior Vice President - Underwriter for its successor, North Fork
Bank.
Mr. Zavattaro has been an Executive Vice President of the Bank since July
1999. From 1994 to July 1999, he was President of Pinnacle Financial Corp., a
mortgage broker.
Mr. Brown has been an Executive Vice President of the Bank since July 1999.
From 1994 to July 1999, he was Vice President of Pinnacle Financial Corp., a
mortgage broker.
Mr. Moskwa became Vice President and Controller of Bancorp in December 1999
and Vice President and Controller of the Bank in August 1998. From January 1998
to August 1998, he was Controller of Nutmeg Federal Savings Bank, and from 1996
to 1998, he was an Account Executive with ASE Group, Inc., a bank equipment
dealer. From 1994 to 1996, he was self employed as a financial consultant, and
from 1986 to 1994, he was Senior Vice President, Chief Financial Officer and
Chief Operating Officer of The Bank of Southington.
The number of shares of Common Stock beneficially owned by Mr. A. DeCaro,
Mr. F. DeCaro and Mr. Wolford is set forth above in the table listing the
nominees for election as director. Messrs. O'Connell, Noble, Zavattaro, Brown
and Moskwa beneficially own 0, 746, 91,011, 60,674 and 396 shares of
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Common Stock, respectively (which includes no shares which can be acquired
within 60 days on exercise of options). In addition, Paul C. Settelmeyer, a
director of Bancorp and the Bank who is not standing for reelection at the
Annual Meeting, beneficially owns 33,231 shares of Common Stock. The directors
and executive officers of Bancorp beneficially own an aggregate of 968,945
shares of Common Stock (or 42.4%) (including 110,000 and 14,281 shares which
could be acquired within 60 days upon exercise of options and warrants,
respectively).
Meetings and Committees of the Board
During 1999, the Board of Directors of Bancorp met once. However, the
directors of Bancorp acted two times by written consent. During 1999, the Bank's
Board of Directors met 13 times. All nominees named herein attended at least 75%
of the total number of meetings of the Bank's Board of Directors and of those
Board committees on which he served.
The members of the Board of Directors devote time and talent to certain
standing and ad hoc committees of Bancorp and the Bank. Among these committees
are the Executive Committee, the Nominating Committee, the Audit, Credit Review
and Compliance Committee, the Loan Committee, the Asset, Liability and
Investment Committee and the Personnel Committee, whose members and principal
functions are described below. Following the acquisition by Bancorp of the Bank,
the Board of Directors of Bancorp established committees whose functions and
membership correspond to the committees of the Board of Directors of the Bank.
The committees of the Board of Directors of Bancorp did not meet during 1999.
The functions of the Executive Committee include monitoring the
implementation by management of policies established by the Board of Directors,
and exercising, when the Board of Directors is not in session, all other powers
of the Board of Directors that may lawfully be delegated, and reviewing for
approval any contracts with third parties authorized by the Board of Directors
prior to execution thereof. The members of the Executive Committee are currently
Messrs. A. DeCaro, F. DeCaro, Geoghegan, Glucksman and Trovato. During 1999, the
Executive Committee of the Bank did not meet.
The functions of the Nominating Committee, which was established in 1999,
include recommending qualified candidates for director positions and evaluating
the performance of directors. The members of the Nominating Committee are
currently Messrs. Bregman, F. DeCaro, Intrieri, Settelmeyer and Trovato. The
Nominating Committee did not meet in 1999. The Nominating Committee will
consider responsible recommendations by shareholders of candidates to be
nominated as directors of Bancorp. All such recommendations must be in writing
and addressed to the Secretary of Bancorp and must provide the information about
the candidate which Bancorp would need to include in any proxy statement for the
election of directors as well as the consent of the candidate to being named in
the proxy material and to serving if elected. By accepting a shareholder
recommendation for consideration, the Nominating Committee does not undertake to
adopt or to take any action concerning the recommendation or to give the
proponent its reasons for any action or failure to act.
The functions of the Audit, Credit Review and Compliance Committee include
reviewing and recommending policies regarding internal audit and credit review,
establishing and implementing policies to comply with applicable regulations,
monitoring compliance with investment policies, examining at least once each
calendar year and within fifteen months of the last examination the affairs of
the Bank or causing suitable examinations to be made by auditors responsible
only to the Board of Directors and reporting the result of such examination in
writing to the Board of Directors at its next regular meeting thereafter. The
members of the Audit, Credit Review and Compliance Committee are currently
Messrs. Bregman, Glucksman, Naclerio and Settelmeyer. During 1999, the Audit,
Credit Review and Compliance Committee of the Bank met seven times.
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The functions of the Loan Committee include the discount and purchase of
bills, notes and other evidences of debt, buying and selling bills of exchange,
examining, reviewing and approving loans and discounts, exercising authority
regarding loans and discounts, and exercising, when the Board of Directors is
not in session, all other powers of the Board of Directors regarding extensions
of credit that may lawfully be delegated. The members of the Loan Committee are
currently Messrs. A. DeCaro, Feit, Geoghegan, Settelmeyer and Wolford. During
1999, the Loan Committee of the Bank met 39 times.
The functions of the Asset, Liability and Investment Committee include
ensuring adherence to the investment policies of the Bank, recommending
amendments thereto, purchasing and selling securities, exercising authority
regarding investments and liquidity and exercising, when the Board of Directors
is not in session, all other powers of the Board of Directors regarding
investment activities that may lawfully be delegated. The members of the Asset,
Liability and Investment Committee are currently Messrs. Bregman, A. DeCaro,
Feit, Trovato, and Wolford. During 1999, the Asset & Liability and Investment
Committee of the Bank met 10 times.
The functions of the Personnel Committee include reviewing and recommending
policies with respect to a comprehensive personnel policy, staffing
requirements, personnel compensation and benefits issues and performance review
of certain identified officer positions. The Personnel Committee also reviews
management's implementation of established policies and personnel compliance
issues. The members of the Personnel Committee are currently Messrs. F. DeCaro,
Feit, Geoghegan, Glucksman, Intrieri, Naclerio and Wolford. During 1999, the
Personnel Committee of the Bank met six times.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
Bancorp's officers and directors, and persons who own more than 10% of Bancorp's
Common Stock, to file reports of ownership and changes in ownership of Bancorp's
securities with the Office of the Comptroller of the Currency. Officers,
directors and greater than 10% beneficial owners are required by applicable
regulations to furnish Bancorp with copies of all forms they file pursuant to
Section 16(a). Based solely upon a review of the copies of the forms furnished
to Bancorp, and written representations from certain reporting persons that no
Forms 5 were required, Bancorp believes that during 1999, filing requirements
under Section 16(a) applicable to its officers and directors were not complied
with in a timely manner for the following: five filings by Angelo DeCaro
relating to eight transactions; three filings by Herbert Bregman relating to six
transactions, two filings by Fred DeCaro, Jr. relating to five transactions;
three filings by John Geoghegan relating to three transactions; three filings by
L. Morris Glucksman relating to six transactions; three filings by Michael
Intrieri relating to six transactions; [three filings by Ronald Moskwa relating
to three transactions;] four filings by Paul Settelmeyer relating to four
transactions; one filing by Salvatore Trovato relating to one transaction; and
one filing by Philip Wolford relating to one transaction. Messrs. Naclerio,
Noble, Zavattaro and Brown have not filed Forms 3.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Compensation of Directors
Directors of Bancorp do not receive compensation for service as members of
the Board of Directors or committees thereof. However, directors of the Bank
receive a fee of $400 for each meeting of the Board of Directors attended, and
$300 for each meeting of a standing committee of the Board of Directors
attended.
During 1999, the Bank granted options to certain of its directors in
accordance with the 1999 Stock Option Plan of the Bank which was approved by the
shareholders of the Bank at its 1999 Annual Meeting of
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Shareholders. Pursuant to this Plan, Messrs. Bregman, F. DeCaro, Glucksman,
Intrieri, Naclerio, Trovato and Wolford received options to purchase 6,000,
34,000, 16,000, 10,000, 15,000, 20,000 and 9,000 shares, respectively. Each of
these options has a term of ten years and is currently exercisable.
The Bank had adopted a policy whereby members of its Board of Directors who
were in office immediately prior to the 1997 Annual Meeting of Shareholders
would receive, upon retirement from the Board of Directors prior to reaching the
Bank's mandatory retirement age for Board members of 72, or upon other
termination of service as a Board member, other than removal for cause, 1,500
restricted shares of Common Stock in equal annual installments of 500 shares
over the consecutive three-year period following such retirement; provided that
in order to receive such shares such individual must serve on and attend the
meetings of the advisory board of the Bank during such three-year period.
Individuals who first became directors after the Bank's 1997 Annual Meeting
of Shareholders and continue as directors of Bancorp will be entitled to shares
of Common Stock upon retirement from the Board of Directors prior to reaching
Bancorp's mandatory retirement age for Board members of 72, or upon other
termination of service as a Board member, other than removal for cause, in the
same amount and on the same terms and conditions set forth above, except that
such Board members must serve as Board members for five years prior to being
eligible for such shares of Common Stock. Bancorp has assumed the Bank's
obligations under these policies and will issue Common Stock in accordance with
them.
Cash Compensation of Executive Officers
The following table sets forth the aggregate cash compensation for services
in all capacities paid by the Bank and Bancorp for the years ended December 31,
1999, 1998 and 1997, to Angelo DeCaro, Philip W. Wolford and Fred A. DeCaro, Jr.
(the "Named Executive Officers"). No other executive officer of Bancorp or the
Bank received compensation for 1999 in excess of $100,000.
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SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
-------------------------------- -------------------------------------------------------
Awards Payouts
------------------------- --------------------------
Other
Annual Restricted Securities
Compen- Stock Underlying LTIP All Other
Name and Salary Bonus sation Award(s) Options/ Payouts Compensation
Principal Position Year ($) ($) ($) ($) SARs (#) ($) ($)
------------------ ---- --------- --------- ---------- ----------- -------- ----------- --------------
<S> <C> <C> <C>
Angelo DeCaro, 1999 20,947 2,899(2)
Director and
Chief Executive
Officer (1)
Philip W. Wolford, 1999 135,177 1,500(2) 9,000
President 1998 132,100 1,000 9,800(2)
1997 132,000 500
Fred A. DeCaro, Jr., 1999 129,485 34,000
Executive Vice 1998 83,888 1,000 9,900(2)
President 1997 30,471
</TABLE>
(1) Mr. A. DeCaro became Chief Executive Officer of Bancorp and the Bank in
1999.
(2) Represents compensation for attendance at meetings of the Board of
Directors and committees hereof.
Other Remuneration
Neither Bancorp nor the Bank afforded any personal benefits for executive
officers during 1999 that might be attributable to normal management or
executive fringe benefits such as automobiles.
Options
The following table sets forth information as to options granted to the
Named Executive Officers during 1999. The options granted to the Named Executive
Officers in 1999 are all currently exercisable.
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<TABLE>
<CAPTION>
Option/SAR Grants In Last Fiscal Year
----------------------------------------------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term
-------------------------------------------------------------------------------- ----------------------------
% of Total
Number of Options/
Securities SARs Granted Exercise
Underlying to Employees or Base
Options in Fiscal Price Expiration
Name Granted (#) Year ($/Sh) Date 5% ($) 10% ($)
-------------- ------------- -------------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Angelo DeCaro -- -- -- -- -- --
Philip W.
Wolford 9,000 7.24% 10.25 8-17-09 58,050 147,240
Fred A. 24,244 19.51% 10.13 8-17-09 159,283 399,541
DeCaro 9,756 7.85% 10.25 8-17-09 62,926 159,608
</TABLE>
The following table sets forth information as to options exercised by the
Named Executive Officers during 1999 and the option values as of December 31,
1999.
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SAR's at Options/SAR's
FY-End ($) at FY-End ($)
Shares Acquired on Exercisable/ Exercisable/
Name Exercise (#) Value Realized (#) Unexercisable Unexercisable
--------------------- --------------------- ---------------------- -------------------- -----------------
<S> <C> <C> <C> <C>
Angelo DeCaro -- -- -- --
Philip W.
Wolford -- -- 9,000/0 21,420 / 0
Fred A. -- -- 24,244/0 60,610 / 0
DeCaro 9,756/0 23,219 / 0
</TABLE>
-10-
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In the ordinary course of business, Bancorp has made loans to officers and
directors (including loans to members of their immediate families and loans to
companies of which a director owns 10% or more). In the opinion of management,
all of such loans were made in the ordinary course of business of Bancorp on
substantially the same terms, including interest rates and collateral
requirements, as those then prevailing for comparable transactions with other
persons and did not involve more than the normal risk of collectibility or
present other unfavorable features.
In 1995, the Bank entered into a lease with 999 Bedford Street Corporation
pursuant to which the Bank leases additional parking space for a remaining term
of five years at an annual rent of $18,000. Messrs. Intrieri, Naclerio, Trovato
and F. DeCaro each owns a 20.0% interest in 999 Bedford Street Corporation, Mr.
Wolford owns a 5% interest in such corporation. In the opinion of a committee of
the Board of Directors of the Bank, none of whom was a director, officer or
shareholder of 999 Bedford Street Corporation, the rent payable by the Bank was
not, as of the date the lease was entered into, more than fair market value
based on the prices of comparable parking facilities in the area. The lease
between the Bank and 999 Bedford Street Corporation was approved by the Board of
Directors of the Bank, including a majority of the directors who are
disinterested with respect to such lease.
The Bank has entered into a sublease with one of its directors, L. Morris
Glucksman, Esq., for approximately 1,100 square feet of space in the building at
900 Bedford Street at a rental rate equal to the rental rate paid from time to
time by the Bank. The term of the sublease with Mr. Glucksman expires in2004.
PROPOSAL 2.
APPROVAL OF PROPOSED PRIVATE PLACEMENT OF UP TO $6 MILLION OF COMMON STOCK
Description of the Proposed Transaction
For the purpose of raising additional capital for Bancorp and the Bank,
Bancorp proposes to sell up to $6 million of its Common Stock. The additional
Common Stock would be sold only to accredited investors in a transaction exempt
from the registration requirements of the Securities Act of 1933, as amended
(the "Securities Act"), pursuant to the exemption contained in Regulation D
under the Securities Act. Shareholders of Bancorp generally will have no rights
to purchase any of the shares offered in the proposed private placement. The
sale of Common Stock in the proposed private placement may occur in one or more
closings. Even if the proposed private placement is approved at the Annual
Meeting, Bancorp may not be successful in selling the shares proposed to be
offered.
The purchase price per share of Common Stock sold would be the average of
the [closing bid] price per share for the ten trading days prior to the date of
sale. Based on the average of the [closing bid] price for the ten trading days
ended April 13, 2000, the purchase price would be $[______] per share. If $6
million of Common Stock were sold at $[_____], Bancorp would issue approximately
[_______] shares which would increase the number of shares outstanding by
[____]%. The maximum number of shares which might be sold in the proposed
private placement will depend on whether Bancorp is successful in attracting
investors who qualify to participate in the offering. The actual purchase price
for any additional shares sold in the proposed private placement will depend on
future market activity.
Two individuals who are not currently substantial shareholders of Bancorp
have indicated a willingness to enter into a firm commitment to purchase an
aggregate of 350,000 shares in the proposed private placement, subject to
approval of the private placement by the shareholders at the Annual Meeting and
subject to compliance by such individuals with any applicable regulatory
requirements. The 350,000 shares could be purchased by the two individuals
directly or by other purchasers qualified to participate in
-11-
<PAGE>
the private placement who are introduced to Bancorp by these individuals. Any
shares sold directly to these individuals would be sold at a price equal to 96%
of the price otherwise applicable to the private placement. (Based on the
applicable average for the ten trading days ended April 13, 2000, these
individuals would pay $[_____] per share.) These individuals would also receive
a commission equal to 4% of the selling price for any of the 350,000 shares
which are purchased by purchasers (other than themselves) who are introduced to
Bancorp by these individuals. Based on the commitment of these individuals, one
or both of them could own more than 5% of the Common Stock to be outstanding
following consummation of the proposed private placement.
The issuance of additional shares in the proposed private placement would
result in dilution of the voting power of those shareholders who are not able to
participate in the offering. In addition, the issuance of additional shares
could result in a reduction in reported earnings per share in future periods.
Bancorp's Board of Directors will have the authority to determine both who
is permitted to purchase shares in the proposed private placement and the number
of shares allocated to each purchaser. In the discretion of Bancorp's Board of
Directors, purchasers of Common Stock in the proposed private placement will
probably include Angelo DeCaro, the Chief Executive Officer and a director of
Bancorp and the Bank, and may include other directors of Bancorp or officers of
Bancorp or the Bank. See, "Participation by Directors and Officers."
Reasons for the Proposed Sale of Common Stock
The Board of Directors of Bancorp determined that the proposed private
placement would be in the best interests of Bancorp and its shareholders for a
variety of reasons. These reasons include:
o Based on the growth of the Bank's assets, additional capital is needed
for the Bank to be considered "well capitalized" for regulatory
purposes. As of December 31, 1999, Bancorp's total risk-based capital
ratio was 9.90%. To be considered "well capitalized," a bank holding
company's or a bank's total risk-based capital ratio must be at least
10%. The Board of Directors of Bancorp believes that it is important
for both Bancorp and the Bank to be considered "well capitalized" for
regulatory purposes.
o Successful completion of the proposed private placement would allow
Bancorp to raise additional capital in a timely and economical manner.
o In 1999, federal legislation was enacted which may have a substantial
impact on Bancorp, the Bank and the financial services industry. This
legislation would permit Bancorp, under certain conditions (including
the registration of Bancorp as a financial holding company), to engage
in additional businesses not historically permitted to bank holding
companies. The portion of the net proceeds of the proposed private
placement retained by Bancorp (rather than contributed to the capital
of the Bank) would permit Bancorp to take advantage of potential
opportunities to expand its business into new areas. While Bancorp has
reviewed preliminarily types of additional businesses which might be
attractive, Bancorp has not determined that it will pursue
opportunities in any particular area. Neither Bancorp nor the Bank has
any agreement or agreement in principle to acquire any business or to
engage in any business de novo.
Use of Proceeds
A portion of the net proceeds of the proposed private placement will be
contributed by Bancorp as additional capital to the Bank. Bancorp's objective
would be to make contributions from its capital to the capital of the Bank
sufficient for the Bank to be considered "well capitalized" for regulatory
purposes. Based on the Bank's assets as of December 31, 1999 and the Bank's
total risk-based capital on that date, Bancorp would make an initial capital
contribution of approximately $[INSERT] to the Bank.
-12-
<PAGE>
The balance of the net proceeds of the proposed private placement would be
retained by Bancorp for working capital and other general corporate purposes.
Such uses might include pursuit of new or additional business opportunities or
making additional capital contributions to the Bank.
Participation by Directors and Officers
If the proposed private placement is approved by the shareholders at the
Annual Meeting and is consummated, the Board of Directors of Bancorp will have
the discretion to determine who is permitted to purchase shares in the offering
and the number of shares purchased by each participant. Angelo DeCaro, the Chief
Executive Officer and a director of Bancorp and the Bank, has indicated that he
would offer to purchase approximately [INSERT NUMBER] shares of Common Stock in
the proposed private placement. The Board of Directors of Bancorp currently
anticipates that, if Mr. DeCaro offers to purchase shares in the proposed
private placement, he would be permitted to do so. Other directors or officers
of Bancorp or the Bank, including Fred A. DeCaro, may offer to purchase Common
Stock in the proposed private placement. The Board of Directors of Bancorp
anticipates that, if any such offers were made, Bancorp would accept such offers
to the extent practicable.
Angelo DeCaro currently owns 346,321 shares (or 16.03%) of the Common Stock
outstanding. If the $6 million of Common Stock is sold and if Mr. DeCaro
purchases [INSERT NUMBER] of shares, his ownership would increase to [INSERT
NUMBER] (or [INSERT PERCENT]) of the Common Stock outstanding after consummation
of the private placement). Based on a Change of Bank Control Notice filed by Mr.
DeCaro with the Federal Reserve Bank of New York relating to the Common Stock,
Mr. DeCaro has the authority to acquire up to 24.9% of the Common Stock without
further regulatory approval.
Vote Required and Recommendation of the Board of Directors
Approval of the proposed private placement requires the affirmative vote of
a majority of the votes cast at the Annual Meeting, assuming a quorum is
present.
THE BOARD OF DIRECTORS OF BANCORP RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
APPROVAL OF THE PROPOSED PRIVATE PLACEMENT.
PROPOSAL 3.
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors of Bancorp has selected McGladrey & Pullen, LLP,
independent accountants, to audit the books, records and accounts of Bancorp for
the year ending December 31, 2000. In accordance with a resolution of the Board
of Directors, this selection is being presented to the shareholders for
ratification or rejection at the Annual Meeting.
The firm of McGladrey & Pullen, LLP has served as independent accountants
of Bancorp since its organization and is considered to be well qualified.
Bancorp has been advised by McGladrey & Pullen, LLP that it has no direct
financial interest nor any material indirect financial interest in Bancorp other
than that arising from the firm's employment as independent accountants. It is
expected that a representative of McGladrey & Pullen, LLP will attend the Annual
Meeting and will have the opportunity to make a statement and be available to
respond to appropriate questions.
If the shareholders do not ratify the selection of McGladrey & Pullen, LLP,
the selection of independent accountants will be reconsidered by the Board of
Directors.
The Board of Directors recommends that you vote "FOR" Proposal 3.
-13-
<PAGE>
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Any shareholder who intends to present a proposal at the Annual Meeting of
Shareholders to be held in 2001 is advised that, in order for such proposal to
be included in the Board of Directors' proxy material for such meeting, the
proposal must be received by Bancorp at its principal executive office no later
than January 8, 2001 directed to Philip W. Wolford, Patriot National Bancorp,
Inc., 900 Bedford Street, Stamford, Connecticut 06901.
If any shareholder proposes to make any proposal at the 2001 Annual Meeting
which proposal will not be included in Bancorp's proxy statement for such
meeting, such proposal must be received by March 21, 2001 to be considered
timely for purposes of Rule 14a-4(c) under the Securities Exchange Act of 1934
(the "Exchange Act"). The form of proxy distributed by the Board of Directors
for such meeting will confer discretionary authority to vote on any such
proposal not received by such date. If any such proposal is received by such
date, the proxy statement for the meeting will provide advice on the nature of
the matter and how Bancorp intends to exercise its discretion to vote on each
such matter.
COST OF SOLICITATION
Bancorp will bear the cost of preparing, assembling and mailing the notice,
proxy statement and proxy for the Annual Meeting. Solicitation of proxies will
be primarily through the use of the mails, but regular employees of Bancorp may
solicit proxies by personal contact, by telephone or by telegraph without
additional remuneration therefor. Bancorp has retained Regan & Associates, Inc.
to assist in soliciting proxies at an estimated cost of $5,000, plus
out-of-pocket expenses not to exceed $2,500. Banks, brokerage houses and other
institutions, nominees or fiduciaries will be notified and supplied with
sufficient copies of proxies, proxy soliciting material and annual reports in
order to obtain authorization for the execution of proxies by their beneficial
holders. Bancorp will, upon request, reimburse banks, brokerage houses and other
institutions, nominees and fiduciaries for their reasonable expenses in
forwarding proxy material to their beneficial holders. All expenses associated
with the solicitation of proxies in the form enclosed will be borne by Bancorp.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows of no
other matters to be voted upon at the Annual Meeting. Because Bancorp did not
receive advance notice of any shareholder proposal in accordance with the time
limit specified in Rule 14a-4(c) under the Exchange Act, it will have
discretionary authority to vote on any shareholder proposal presented at the
Annual Meeting. If any other matters properly come before the Annual Meeting, it
is the intention of the persons named in the enclosed proxy to vote said proxy
in accordance with their judgment on such matters.
ANNUAL REPORT ON FORM 10-KSB
BANCORP, UPON WRITTEN REQUEST, WILL PROVIDE WITHOUT CHARGE TO EACH PERSON
ENTITLED TO VOTE AT THE ANNUAL MEETING A COPY OF ITS ANNUAL REPORT ON FORM
10-KSB FOR THE YEAR ENDED DECEMBER 31, 1999, INCLUDING THE FINANCIAL STATEMENTS
AND SCHEDULES THERETO. WRITTEN REQUESTS MUST BE DIRECTED TO:
Robert F. O'Connell
Patriot National Bancorp, Inc.
900 Bedford Street
Stamford, Connecticut 06901
-14-
<PAGE>
COPIES OF SAID ANNUAL REPORT ON FORM 10-KSB WILL NOT INCLUDE THE EXHIBITS
THERETO, BUT WILL INCLUDE A LIST DESCRIBING THE EXHIBITS NOT INCLUDED, COPIES OF
WHICH WILL BE AVAILABLE AT A COST OF ONE DOLLAR PER PAGE.
By Order of the Board of Directors
Stamford, Connecticut PHILIP W. WOLFORD
April 28, 2000 President
-15-
<PAGE>
[PRELIMINARY COPY]
REVOCABLE PROXY
PATRIOT NATIONAL BANCORP, INC.
|X| PLEASE MARK VOTES
AS IN THIS EXAMPLE
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS FOR ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD JUNE 14, 2000
The undersigned hereby appoints Herbert A. Bregman, Michael Intrieri and
Richard Naclerio, and each of them, as proxies for the undersigned with full
powers of substitution to vote all shares of the Common Stock, par value $2.00
(the "Common Stock"), of Patriot National Bancorp, Inc. ("Bancorp") which the
undersigned may be entitled to vote at the Annual Meeting of Shareholders of
Bancorp to be held at Luca's Steak House, 35 Church Street, Greenwich,
Connecticut 06830, at 10:00 A.M., on June 14, 2000 or any adjournment thereof as
follows:
For All
For Withhold Except
1. Election of directors. |_| |_| |_|
Proposal to elect the persons
listed below as directors of
Bancorp.
Herbert A. Bregman, Angelo DeCaro, Fred A. DeCaro, Jr., John A. Geoghegan, L.
Morris Glucksman, Michael Intrieri, Richard Naclerio, Salvatore Trovato and
Philip W. Wolford
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name(s) in the space provided below.
For Against Abstain
2. Proposal to approve a private |_| |_| |_|
placement of up to $6 million of
Common Stock of Bancorp.
For Against Abstain
3. Proposal to ratify the |_| |_| |_|
appointment of McGladrey &
Pullen, LLP as independent
accountants for the year ending
December 31, 2000.
In their discretion the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting of Shareholders or any
adjournment thereof.
To help our preparations for the meeting,
please check here if you plan to attend. [_]
The undersigned acknowledges receipt of the Notice of Annual Meeting and Proxy
Statement.
Please be sure to sign and date Date this Proxy in the box below.
Date ------------------
--------------------------------------------------------------
--------------------------------------------------------------
Shareholder sign above Co-holder (if any) sign above
Detach above card, sign, date and mail in postage paid
envelope provided
PATRIOT NATIONAL BANCORP, INC.
<PAGE>
PLEASE ACT PROMPTLY
MARK, SIGN, DATE & MAIL YOUR PROXY CARD TODAY
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE SHAREHOLDER. IF NO DIRECTION IS SPECIFIED, THIS PROXY WILL BE VOTED "FOR"
THE ELECTION OF ALL NOMINEES LISTED IN PROPOSAL 1 AND "FOR" PROPOSALS 2 AND 3.
THE VOTES ENTITLED TO BE CAST BY THE SHAREHOLDER WILL BE DIVIDED AMONG THE
NOMINEES FOR WHOM THE PROXIES ARE AUTHORIZED TO VOTE IN SUCH MANNER AS MAY BE
DETERMINED BY THE PROXIES. Please sign exactly as your name(s) appear(s) hereon.
When signing as attorney, executor, administrator, trustee, guardian or for a
corporation, please give your full title as such. If shares are owned jointly,
both owners should sign.
