Securities and Exchange Commission
Washington, D.C. 20549
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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e) (2)
[X] Definitive PProxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
NEW ENGLAND COMMUNITY BANCORP, INC.
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than 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)(1) 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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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>
[GRAPHIC OMITTED] NEW ENGLAND
COMMUNITY BANCORP
- ------------------------------------
March 20, 1999
Dear Shareholder:
I am pleased to invite you to the 1999 Annual Meeting of Shareholders of New
England Community Bancorp, Inc. ("NECB"), which will be held on Tuesday, April
20, 1999, at 10:00 a.m. at The Hartford Golf Club, 134 Norwood Drive, West
Hartford, Connecticut.
The accompanying Notice of Annual Meeting of Shareholders and proxy statement
contain the matters to be considered and acted upon. Please take a few moments
to familiarize yourself with these materials.
The Securities and Exchange Commission ("SEC") has urged companies to write
documents in everyday language that investors can understand. Again, this year
we have attempted to use "plain English" in preparing the documents to help make
them easier to read and understand.
I hope you will be able to attend the meeting but if you cannot do so, it is
important that your shares be represented and voted. I URGE YOU TO MARK, SIGN,
DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE RETURN ENVELOPE PROVIDED.
Sincerely yours,
/s/ David A. Lentini
- --------------------
David A. Lentini
Chairman, President and
Chief Executive Officer
<PAGE>
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
NOTICE OF ANNUAL MEETING ...................................... Cover
ATTENDANCE AND VOTING MATTERS ................................. 1
PERSONS OWNING MORE THAN FIVE PERCENT OF NECB STOCK ........... 2
THE NECB BOARD OF DIRECTORS ................................... 2
NECB STOCK OWNED BY DIRECTORS AND EXECUTIVE OFFICERS .......... 5
REPORT ON EXECUTIVE COMPENSATION .............................. 5
STOCK PERFORMANCE GRAPH ....................................... 7
COMPENSATION OF EXECUTIVE OFFICERS ............................ 8
OTHER INFORMATION RELATING TO DIRECTORS, NOMINEES AND EXECUTIVE
OFFICERS .................................................... 11
APPOINTMENT OF INDEPENDENT AUDITORS ........................... 12
OTHER MATTERS ................................................. 12
</TABLE>
<PAGE>
NEW ENGLAND COMMUNITY BANCORP, INC.
176 BROAD STREET
WINDSOR, CONNECTICUT 06095
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TUESDAY, APRIL 20, 1999,
10:00 A.M.
THE HARTFORD GOLF CLUB
134 NORWOOD DRIVE WEST
HARTFORD, CONNECTICUT
March 20, 1999
Fellow Shareholder:
You are cordially invited to attend the 1999 New England Community Bancorp
("NECB" or the "Company") Annual Meeting of Shareholders to:
o Elect the board of directors.
o Approve the appointment of Shatswell, MacLeod & Company, P.C. as
independent auditors for 1999.
o Conduct other business properly brought before the meeting.
Shareholders of record at the close of business on February 26, 1999 may
vote at the meeting.
Your vote is important. Whether you plan to attend or not, please sign,
date, and return the enclosed proxy card in the envelope provided. If you attend
the meeting and prefer to vote in person, you may do so.
I look forward to seeing you at the meeting.
By the Order of the Board of Directors,
/s/ Angelina J. McGillivray
---------------------------
Angelina J. McGillivray
Secretary
<PAGE>
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PROXY STATEMENT
- --------------------------------------------------------------------------------
THIS PROXY SOLICITATION IS BEING MADE BY THE BOARD OF DIRECTORS OF NECB
(the "NECB BOARD"). This proxy statement and form of proxy are first being sent
to security holders on March 20, 1999.
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ATTENDANCE AND VOTING MATTERS
- --------------------------------------------------------------------------------
VOTING METHODS
You can vote on matters to come before the meeting in three ways:
o You can come to the Annual Meeting and cast your vote, or
o You can vote by signing and returning the enclosed proxy card. If you do
so, the individuals named on the card will vote your shares in the manner
you indicate. If you do not indicate, your shares will be voted FOR the
directors and FOR the appointment of auditors.
o If you want to give your proxy to someone other than the individuals
noted on the proxy card, you may do so by crossing out the name of those
individuals and inserting the name of the individuals you are authorizing
to vote.
If you send in a proxy, and wish to change your vote, you can do so by
voting at the meeting, by sending in another proxy card with a later date, or by
giving written notice to the Secretary of NECB. Each share of Common Stock you
own entitles you to one vote. As of February 26, 1999, there were 7,031,054
shares of Common Stock outstanding.
THE QUORUM REQUIREMENT
A quorum of shareholders is necessary to hold a valid meeting. If at least
one-third of shareholders are present in person or by proxy, a quorum will
exist. Abstentions and broker non-votes are counted as present for establishing
a quorum. A broker non-vote occurs when a broker votes on some matters on the
proxy card but not on others because he does not have the authority to do so.
VOTE NECESSARY FOR ACTION
Directors are elected by a plurality vote of shares present at the meeting,
meaning that the director nominee with the most affirmative votes for a
particular slot is elected for that slot. In an uncontested election for
directors, the plurality requirement is not a factor. All other action is by an
affirmative vote of the majority of the shares present at the meeting.
1
<PAGE>
RECORD DATE
The NECB Board has set a record date to determine the date shareholders
must own their stock in order to be able to vote at the meeting. The date is
February 26, 1999. Each share entitles its owner to one vote. As of that date,
there were 7,031,054 shares of Common Stock outstanding.
MATTERS RAISED AT THE MEETING NOT INCLUDED IN THIS STATEMENT
We do not know of any matters to be acted upon at the meeting other than
those discussed in this statement. If any other matter is presented, proxy
holders will vote on the matter in their discretion.
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PERSONS OWNING MORE THAN FIVE PERCENT OF NECB STOCK
- --------------------------------------------------------------------------------
NECB is not aware of any shareholder that beneficially owns more than 5% of
the 7,031,054 shares of Common Stock outstanding as of February 26, 1999.
- --------------------------------------------------------------------------------
ELECTION OF DIRECTORS
- --------------------------------------------------------------------------------
A Board of eleven Directors is to be elected at this Annual Meeting to hold
office until the next Annual Meeting and the election and qualification of their
successors. The Governance Committee of the NECB Board has nominated the
following persons (the "Nominees"), and it is intended that proxies will be
voted in favor of all these persons. If, for any reason, any of the Nominees is
not able or willing to serve as a Director when the election occurs (a situation
which is not presently contemplated), it is intended that the proxy will be
voted for the election of a substitute nominee in accordance with the judgment
of the proxy holder.
THE NECB BOARD RECOMMENDS A VOTE "FOR" ALL NOMINEES FOR ELECTION AS
DIRECTORS
2
<PAGE>
NOMINEES FOR DIRECTOR
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
DIRECTOR OF
NAME AGE POSITIONS AND PRINCIPAL OCCUPATION COMMITTEE MEMBERSHIP NECB SINCE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John C. Carmon 51 President, Carmon Funeral Executive 1985
Homes, Inc.
- --------------------------------------------------------------------------------------------------------------
James A. Cotter, Jr. 59 Vice President, H.C. Asset/Liability 1998
Wainwright & Co., Inc.
- --------------------------------------------------------------------------------------------------------------
Gary J. DeNino 44 Marketing consultant Executive, 1995
Compensation
and Governance
- --------------------------------------------------------------------------------------------------------------
Frank A. Falvo 56 Executive Vice President Executive 1995
of NECB and President
and CEO of The Equity
Bank
- --------------------------------------------------------------------------------------------------------------
P. Anthony Giorgio, 57 President Audit 1998
Ph.D. ARG Resource
Management, LLC
- --------------------------------------------------------------------------------------------------------------
Dominic J. Ferraina 66 Chairman of the Board of Executive, 1986
New England Bank & Governance and
Trust Company, Practicing Compensation
Attorney
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John R. Harvey 51 Partner, Harvey & Audit 1995
Horowitz, P.C. (certified
public accountants)
- --------------------------------------------------------------------------------------------------------------
Solomon P. Kerensky 61 Partner, Kahan, Kerensky Asset/Liability 1998
& Capossela, LLP and Audit
(attorneys)
- --------------------------------------------------------------------------------------------------------------
David A. Lentini 52 Chairman, President and Executive 1993
CEO of NECB
- --------------------------------------------------------------------------------------------------------------
Angelina J. McGillivray 49 Manager, Coccomo Executive, 1993
Associates Realtors, LLC Compensation
and Governance
- --------------------------------------------------------------------------------------------------------------
J. Brian Smith 55 Vice President, Smith Asset/Liability 1998
Brothers Insurance, Inc. and Audit
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</TABLE>
3
<PAGE>
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CERTAIN INFORMATION REGARDING THE NECB BOARD
AND ITS COMMITTEES
- --------------------------------------------------------------------------------
MEETINGS AND COMMITTEES
During 1998, the NECB Board met sixteen times. Committees of the NECB Board
met as follows: The Community Reinvestment Act ("CRA") Committee met two times,
the Audit Committee met nine times, the Compensation Committee met three times
and the Governance Committee met nine times. In 1998, all NECB Board members
attended more than 75% of the meetings of the NECB Board and its committees on
which they serve.
The EXECUTIVE COMMITTEE consists of six members. It meets only when there
is not time to submit urgent matters to the full NECB Board. During 1998, the
Committee did not meet because all matters otherwise reviewable by it were
reviewed by the entire NECB Board.
The AUDIT COMMITTEE consists of four independent non-employee members. It
meets regularly to review the conduct and actions of the Internal Audit
Department; and meets periodically with the outside auditing firm to review its
reports and findings. The Audit Committee reviews and recommends to the Board of
NECB all changes and modifications to NECB's operating policies. NECB's
operating policies are then distributed to and approved by the affiliated
companys' boards of directors.
The COMPENSATION COMMITTEE, consists of three independent non-employee
members of the NECB Board. It determines issues related to compensation programs
and policies including compensation actions for the Chief Executive Officer and
other executive officers (see Compensation Committee Report on Executive
Compensation).
The GOVERNANCE COMMITTEE consists of three members. The Governance
Committee was formed to assist the NECB Board with issues related to its
membership as well as issues related to the Articles of Incorporation and Bylaws
of the Company. Issues related to membership include, but are not limited to,
issues such as the size and membership of the NECB Board and its standing
committees. The Committee, acting as the nominating committee, met on February
11, 1999 and recommended the proposed slate of Nominees, as presented in this
proxy statement, for election at the 1999 Annual Meeting to serve as directors
of NECB.
The Governance Committee will consider additional nominees during the year
as corporate needs dictate, and will advise the NECB Board as to its
recommendations. The Governance Committee will consider recommendations by
shareholders for nomination as directors, provided such recommendations are
submitted in accordance with certain procedures set forth in NECB's Bylaws. A
copy of the Bylaws will be sent to any shareholder upon written request.
- --------------------------------------------------------------------------------
COMPENSATION OF DIRECTORS
- --------------------------------------------------------------------------------
For their service on the NECB Board during 1998, directors (other than
executive officers of NECB who are Board members) received an annual retainer of
$7,500, plus $750 for each Board meeting attended and $250 for each committee
meeting attended.
4
<PAGE>
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NECB STOCK OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
- --------------------------------------------------------------------------------
The following table shows, as of February 26, 1999, the number of shares of
Common Stock and the percent of outstanding Common Stock beneficially owned by
(i) each of the current directors, (ii) each of the executive officers named in
the Summary Compensation Table (on page 8), and (iii) all directors and
executive officers as a group.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME OWNERSHIP(1) OF CLASS(2)
- ------------------------------------------------------------ ---------------- ------------
<S> <C> <C>
John C. Carmon 22,396(3) 0.3%
James A. Cotter, Jr. 72,881 1.0%
Gary J. DeNino 30,346 0.4%
Frank A. Falvo 40,737(3) 0.6%
Dominic J. Ferraina 18,700(3) 0.3%
Donat A. Fournier 36,246(3) 0.5%
P. Anthony Giorgio 1,689 0.0%
Anson C. Hall 32,666(3) 0.5%
John R. Harvey 17,551(3) 0.2%
Solomon P. Kerensky 12,791 0.2%
David A. Lentini 70,770(3) 1.0%
Angelina J. McGillivray 275,784(4) 3.9%
J. Brian Smith 21,032 0.3%
All Directors and Executive Officers as a Group
(13 persons) 653,590 9.3%
--------- ---
</TABLE>
- --------------------------------------------------------------------------------
(1) Amounts shown include 26,400 shares that may be acquired by each of Messrs.
Falvo, Fournier, Hall and 39,600 by Mr. Lentini.
(2) For purposes of this calculation, the number of shares of Common Stock used
includes shares outstanding as of February 26, 1999 of 7,031,054 plus any
shares subject to options granted to that individual and exercisable within
sixty (60) days of February 26, 1999.
(3) Includes shares owned by, or as to which voting power is shared with,
spouse, children, or affiliates.
(4) Includes 46,213 shares owned by John A. Coccomo Sr., Foundation for the
Blind, Inc., a charitable trust of which Mrs. McGillivray is a trustee as
to which ownership has been disclaimed by Mrs. McGillivray.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
REPORT ON EXECUTIVE COMPENSATION
- -------------------------------------------------------------------------------
The Compensation Committee is composed of three independent non-employee
members of the NECB Board who initiate all compensation actions for the Chief
Executive Officer ("CEO") and recommend the compensation for all executive
officers.
NECB's executive compensation programs are designed to be market
competitive in order to attract and retain highly qualified and experienced
executives who are motivated to enhance shareholder value. In 1998, the
Committee's compensation recommendations with respect to the CEO and other
executive officers as defined in the Summary Compensation Table (the "Named
Executive Officers") continued to be driven by NECB's strategy to place emphasis
on variable compensation. In order to link the Named Executive Officers' pay
closely with the interests of NECB's shareholders, this variable compensation
takes the form of performance-based awards and equity awards. NECB's goal is to
ensure that the total pay for each of the Named Executive Officers reflects the
executive's position, duties and level of responsibility and is comparable to
the compensation paid to executives in similar positions at financial
institutions of NECB's size
5
<PAGE>
(measured by total assets). This group is not the same as the index used for the
purposes of comparing total shareholder return under the Stock Performance Graph
below.
The amounts paid to each of the Named Executive Officers in the form of
base salary and short and long-term incentive awards are discretionary based
upon the Committee's assessment of certain quantitative and qualitative factors.
For 1998 compensation purposes, the Committee considered: (1) NECB's performance
in 1997, as measured by the growth in net assets and net income; and (2) the
increased market value of the Company.
Long-term incentive awards, consisting of incentive and nonqualified stock
options, act as a retention tool and serve to link the executive officers'
opportunity for financial reward with that of the shareholders. They ensure that
short-term performance is adequately balanced with the achievement of
longer-range objectives, which are in the best interests of the shareholders.
The purpose is to stimulate key managerial employees, who are in a position to
materially contribute to the long-term success of NECB, by allowing such
individuals to acquire or increase their proprietary interest in NECB and also
to enable NECB to attract and retain such key employees.
CEO COMPENSATION
In 1998, NECB's most highly compensated Named Executive Officer was David
A. Lentini, President and Chief Executive Officer. The Committee reviewed Mr.
Lentini's performance and determined that he met or exceeded all objectives in
1998. The Committee also discussed 1999 business objectives for Mr. Lentini. Mr.
Lentini's cash compensation for 1998 included a base salary of $252,500 and a
bonus of $88,500. The Committee exercised its judgment in determining the amount
of Mr. Lentini's award and took into account certain quantitative and
qualitative factors described above. Mr. Lentini was not present during the
Committee's discussion concerning his compensation. The Committee's decision was
unanimously accepted by the NECB Board.
This report is furnished by members of the Compensation Committee.
Gary J. DeNino Dominic J. Ferraina Angelina J. McGillivray
6
<PAGE>
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STOCK PERFORMANCE GRAPH
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The Stock Performance Graph compares the yearly percentage change in the
cumulative total shareholder return on the Company's Common Stock against both a
broad-market index (the Nasdaq National Market) and an industry index (SNL
Securities' New England Bank Index), for the five-year period from December 31,
1993 through December 31, 1998. The graph assumes that on December 31, 1993 $100
was invested in Common Stock of NECB and the indices and that dividends were
reinvested.
[GRAPHIC OMITTED]
[FIGURES BELOW REPRESENT PLOT POINTS FOR CHART]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
PERIOD ENDING
- --------------------------------------------------------------------------------------------------
INDEX 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
New England Community Bancorp 100.00 221.47 281.65 431.96 797.44 640.06
- --------------------------------------------------------------------------------------------------
NASDAQ-Total US 100.00 97.75 138.26 170.01 208.58 293.21
- --------------------------------------------------------------------------------------------------
SNL New England Bank Index 100.00 96.10 157.58 214.87 342.02 374.29
- --------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
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COMPENSATION OF EXECUTIVE OFFICERS
- --------------------------------------------------------------------------------
The following table shows, for the years ended December 31, 1998, 1997 and
1996, the compensation of the Chief Executive Officer and the three other most
highly compensated executive officers of NECB who were serving as executive
officers at year-end 1997. The persons named in the table are referred to in
this proxy statement as the "Named Executive Officers."
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
---------------------------------------------------
LONG-TERM
COMPENSATION
- ------------------------------------------------------------------- AWARDS -------------------
NAME AND ANNUAL COMPENSATION OPTIONS / ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) SARS (#) COMPENSATION ($)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
David A. Lentini 1998 $252,500 $88,500 $29,906(1)
Chairman, President and Chief 1997 192,500 61,500 66,000 23,927
Executive Officer 1996 175,000 30,800 44,000 19,345
- ---------------------------------------------------------------------------------------------------
Frank A. Falvo 1998 $185,000 $68,833 $19,190(2)
Executive Vice President 1997 165,000 47,833 33,000 15,048
1996 150,000 26,400 33,000 4,167
Donat A. Fournier 1998 $155,000 $68,833 $17,422(3)
Vice President and Senior 1997 137,500 47,833 33,000 20,866
Loan Officer 1996 125,000 26,400 33,000 14,549
- ---------------------------------------------------------------------------------------------------
Anson C. Hall 1998 $155,000 $68,833 $22,406(4)
Vice President, Chief 1997 132,116 47,833 33,000 23,300
Financial Officer and Treasurer 1996 100,000 17,600 33,000 11,472
- ---------------------------------------------------------------------------------------------------
</TABLE>
(1) During 1998, NECB contributed $8,000 and $13,725 into the Company's 401(k)
Plan and Supplemental Executive Retirement Plan respectively. Additionally,
NECB paid life and disability insurance premiums in the amount of $4,559
and $3,622, respectively, for the benefit of Mr. Lentini.
(2) During 1998, NECB contributed $6,709 and $6,033 into the Company's 401(k)
Plan and Supplemental Executive Retirement Plan respectively. Additionally,
NECB paid life and disability insurance premiums in the amount of $3,708
and $2,740 respectively, for the benefit of Mr. Falvo.
(3) During 1998, NECB contributed $6,716 and $4,333 into the Company's 401(k)
Plan and Supplemental Executive Retirement Plan respectively. Additionally,
NECB paid life and disability insurance premiums in the amount of $1,944
and $4,429 respectively, for the benefit of Mr. Fournier.
(4) During 1998, NECB contributed $8,000 and $4,333 into the Company's 401(k)
Plan and Supplemental Executive Retirement Plan respectively. Additionally,
NECB paid life and disability insurance premiums in the amount of $4,739
and $5,334, respectively, for the benefit of Mr. Hall.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
There were no grants of stock options or SARs made during the year ended
December 31, 1998 to any of the Named Executive Officers.
Under the 1996 Incentive and Nonqualified Compensatory Stock Option Plan
(the "1996 Plan"), the Committee may grant either Incentive Stock Options or
Non-Statutory Stock Options to key managerial employees to purchase shares of
Common Stock of the Company. The option
8
<PAGE>
price is fixed by the Committee at the time of the grant and may not be less
than 100 percent of the fair market value of the stock, as determined by the
Committee, in good faith as of the grant date. Each option may be exercised in
five equal annual installments commencing from the date set forth in the Stock
Option Agreement for such options; provided, however, that no option be
exercised beyond ten years after the date of the grant.
- --------------------------------------------------------------------------------
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS
SHARES FY-END (#) AT FY-END (#)
ACQUIRED VALUE REALIZED
NAME ON EXERCISE (#) ($)1 EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
David A. Lentini none none 39,600 70,400 $317,988 $332,112
Frank A. Falvo none none 26,400 39,600 $229,482 $213,048
Donat A. Fournier none none 26,400 39,600 $299,482 $213,048
Anson C. Hall none none 26,400 39,600 $299,482 $213,048
</TABLE>
- --------------------------------------------------------------------------------
(1) Value realized is the difference between the fair market value of the
Common Stock at the date of exercise and the exercise price of the option
exercised.
(2) Value is the difference between the fair market value of the Common Stock
at year-end and the exercise price of the option.
PENSION PLAN
During 1996, the Company converted its defined contribution plan into a
401(k) Plan (the "Plan"). Employees over the age of 21 and with one year of
service are eligible to participate in the Plan. The Company matches employee
contributions to the Plan on the following basis: 100% of the first 3% of
employee contributions and 50% of the next 2%. Both employee and Company matches
immediately vest in the Plan. Additionally, funds which were previously not
vested in the defined contribution plan vested upon transfer into the Plan. The
Plan was modified on January 1, 1999 to permit investment in NECB shares
purchased in the open market through a registered broker dealer engaged by NECB
to provide such service to the members of the plan.
EMPLOYMENT AGREEMENTS
NECB entered into employment agreements with Messrs. Lentini, Fournier and
Hall in August 1994 and with Mr. Falvo in August 1996.
Except for the name, salary and anniversary date, each agreement is
substantially identical. Each provides that beginning on the first anniversary
of its execution, and annually thereafter, the agreement automatically extends
for one additional year unless canceled by either party. Each agreement will
terminate two years from the date of the last extension. Under each agreement,
the named executive receives an annual base salary, which is fixed by the NECB
Board each year. Each agreement also provides that the NECB Board may pay an
incentive bonus to the named executive at its option, and the amount of such
bonus is discretionary and will be determined by the NECB Board.
9
<PAGE>
EXECUTIVE RETENTION AGREEMENTS
NECB entered into Executive Retention Agreements with each Named Executive
Officer on October 16, 1997. The agreements are substantially identical. Each
agreement provides that if there is a "Change in Control", and the Company
terminates the executive's employment without "Cause" or the Executive
terminates his employment for "Good Reason", NECB shall pay the Executive a lump
sum equal to the sum of (i) three times the annual compensation in the case of
Mr. Lentini, and two times for all other executive officers, (ii) the pro rata
share of the Executive's incentive bonus for the year in which the termination
occurs, and (iii) the amount he would have received as a matching contribution
under the Company's 401(k) Plan if he had received the amounts set forth in (i)
and (ii) over the respective years and had made contributions to the Company's
401(k) Plan based on those amounts at the contribution rate in effect at the
time of the Change in Control.
In addition, NECB will transfer clear title to the automobile it is
providing to the Executive; all stock options and restricted stock of the
Executive will immediately vest; the Company will pay the Executive any
difference between federal and Connecticut income and capital gains tax on any
income realized on options which are not eligible to be Incentive Stock Options;
will provide the Executive with outplacement assistance for a year, but not in
excess of 15% of his base salary; and for three years following termination,
provide the Executive with a country club membership and continue all benefits
and service credit for benefits for any plans maintained by the Company prior to
the Change in Control that are "welfare plans" or "pension plans" as defined in
ERISA.
Further, the Company will pay an amount equal to any tax the Executive is
subject to by reason of such payments under Section 4999 of the Internal Revenue
Code, plus an amount equal to the federal and state tax which will be imposed on
the Executive as a result of the receipt of such payment.
A "Change in Control" is defined as ownership of 35% or more of the voting
power of the Common Stock, a merger for cash or securities or one in which NECB
is not the surviving entity, unless the NECB shareholders' proportionate
interest in the surviving Company is unchanged, a sale, lease or other transfer
of all or substantially all the assets of NECB, or if continuing directors do
not constitute at least a 70% majority of the NECB Board in any 24-month period.
The ownership of 35% or more of the voting power can be determined not to be a
Change of Control by a 70% vote of the continuing directors. "Cause" is defined
as an intentional act of harm against the Company. "Good Reason" is defined as a
reduction in the Executive's position, responsibilities, authority, salary,
other compensation, employee benefit plan or a change in place of employment, a
transfer of the Company's business or assets to an entity which does not assume
the agreement, or the breach of the Agreement by the Company.
10
<PAGE>
- --------------------------------------------------------------------------------
OTHER INFORMATION RELATING TO DIRECTORS, NOMINEES AND
EXECUTIVE OFFICERS
- --------------------------------------------------------------------------------
Some of the directors and executive officers of NECB and its subsidiaries
and companies or organizations with which they are associated, have had, and may
have in the future, banking transactions with the subsidiaries in the ordinary
course of their business. All such loans are currently performing in accordance
with their terms. Total loans to directors and executive officers of NECB, their
affiliates, and associates, outstanding during the past three years, were as
follows:
<TABLE>
<CAPTION>
DECEMBER 31, TOTAL INDEBTEDNESS OUTSTANDING
- ----------------------------------------------------
<S> <C>
1998 $1,342,272
1997 $2,746,000
1996 $2,596,000
- -----------------------------------------------------
</TABLE>
Federal banking laws and regulations limit the aggregate amount of
indebtedness which banks may extend to bank insiders. Pursuant to such laws and
regulations, the subsidiaries may extend credit to executive officers,
directors, principal shareholders or any related interest of such persons, if
the extension of credit to such persons is in an amount that, when aggregated
with the amount of all outstanding extensions of credit to such individuals,
does not exceed the subsidiaries' unimpaired capital and unimpaired surplus. As
of December 31, 1998, 1997 and 1996 the aggregate amounts of extensions of
credit to insiders were well below this limit.
All such banking transactions were on the same terms, including interest
rates and collateral on loans, as those prevailing at the same time for
comparable transactions with others and, on terms that do not involve more than
the normal risk of collectibility or present other unfavorable features.
During 1998, the Company retained Dominic J. Ferraina, Director of NECB and
Chairman of New England Bank and Trust Company, to perform certain legal
services. The firm of Kahan, Kerensky & Capossela, LLC was also engaged by the
Company to perform certain legal work. The Firm of Smith Brothers Insurance,
Inc., of which Director J. Brian Smith is a principal, was employed as agent of
record in connection with the purchase of certain insurance policies. The firm
of Coccomo Associates Realtors, LLC with which Director Angelina J. McGillivray
is associated, was employed to represent the Company in the sale of certain real
estate acquired by foreclosure in the ordinary course of business.
COMPLIANCE WITH 16(A) FILINGS
Section 16(a) of the Securities Exchange Act of 1934, requires NECB's
directors, executive officers, and persons who own more than 10% of NECB's
Common Stock, to file with the Securities and Exchange Commission (the "SEC")
reports of beneficial ownership and changes in beneficial ownership of NECB
Common Stock. Executive officers, directors and greater than 10% shareholders
are required by regulations of the SEC to furnish NECB with copies of all
Section 16(a) forms they file. In 1998, all required reports of beneficial
ownership were timely filed, based upon a review of the copies of such reports
furnished to NECB and representations that no other reports were required to be
filed.
11
<PAGE>
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APPOINTMENT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
Shatswell, MacLeod & Company, P.C. ("Shatswell, MacLeod & Company")
independent accountants, has been selected by the NECB Board to serve as
independent accountants for NECB for the fiscal year ending December 31, 1999.
Although shareholders will vote upon the ratification of the selection of
Shatswell, MacLeod & Company, and the Audit Committee will review the selection
if it is not ratified, the NECB Board will have the right to continue to retain
Shatswell, MacLeod & Company as independent accountants in any event if it
desires to do so.
A representative of Shatswell, MacLeod & Company will be present at the
Annual Meeting to respond to appropriate questions and may make a statement if
he or she desires to do so.
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OTHER MATTERS
- --------------------------------------------------------------------------------
The NECB Board does not know of any other matters which might come before
the Annual Meeting of Shareholders; however, if any other matters should
properly come before the meeting or any adjournment(s) thereof, it is the
intention of the persons named in the accompanying form of proxy to vote thereon
in accordance with their judgment.
SHAREHOLDER PROPOSALS FOR THE 2000 MEETING
Under NECB's Bylaws, for business proposed by a shareholder (other than
director nomination) to be a proper subject for action at an Annual Meeting of
Shareholders, in addition to any requirement of law, the shareholder must timely
request (by Certified Mail-Return Receipt Requested) that the proposal be
included in the Company's proxy statement for the meeting, and such request must
satisfy all of the provisions of Rule 14a-8 under the Securities Exchange Act of
1934. NECB received no such request from any shareholder with respect to the
1999 Annual Meeting.
In order to be included in NECB's proxy statement and form of proxy for the
2000 Annual Meeting of Shareholders and in order to be a proper subject for
action at that meeting, proposals of shareholders intended to be presented to
that meeting must be received at NECB's principal executive offices by November
20, 1999. Shareholder proposals should be mailed to the NECB Corporate
Secretary, P.O. Box 130, Windsor, Connecticut 06095.
12
<PAGE>
GENERAL
The cost of solicitation of proxies, including the cost of reimbursing
brokerage houses and other custodians, nominees or fiduciaries for forwarding
proxies and proxy statements to their principals, will be borne by NECB. NECB
files with the Securities and Exchange Commission Annual Reports on Form 10-K. A
copy of the report for 1998 will be furnished, without exhibits and without
charge, to any shareholder sending a written request to Anson C. Hall, Vice
President, Chief Financial Officer and Treasurer, New England Community Bancorp,
Inc., P.O. Box 130, Windsor, CT, 06095.
Submitted by order of the Board of Directors,
/s/ Angelina J. McGillivray
---------------------------
Angelina J. McGillivray
Secretary
13
<PAGE>
HARTFORD GOLF CLUB
134 Norwood Road o West Hartford, CT o 860 423-5229
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[GRAPHIC OMITTED]
HEADING EAST ON ROUTE 84-T
Take EXIT 43, PARK ROAD. At end of ramp, turn right. At first light, turn left
onto TROUT BROOK DRIVE. Go 2.2 miles and turn right at light onto ALBANY AVE. Go
through 1 light and then down another 6 blocks. Turn left onto NORWOOD ROAD. The
Hartford Golf Club is located at end of NORWOOD.
HEADING WEST ON ROUTE 84-
Take EXIT 44, PROSPECT AVENUE. At the end of the ramp, turn right and then first
left at light onto PROSPECT AVENUE and follow to end. Turn left onto ALBANY
AVENUE. Go through 1 light and then down another 2 blocks. Turn right onto
NORWOOD ROAD. The Hartford Golf Club is located at end of NORWOOD.
HEADING SOUTH ON ROUTE 91-
Take EXIT 35B/ROUTE 218 Windsor. At end of ramp, turn right and proceed to
intersection with BLOOMFIELD AVENUE/ROUTE 189. Turn left at light onto ROUTE 189
SOUTH. At 6th light, turn right onto ROUTE 44/ALBANY AVE. Go through 2 lights
and then down another 2 blocks.Turn right onto NORWOOD ROAD. The Hartford Golf
Club is located at end of NORWOOD.
HEADING NORTH ON ROUTE 91-
Take EXIT 32A to ROUTE 84 WEST. Follow directions "Heading West on Route 84".
<PAGE>
REVOCABLE PROXY
NEW ENGLAND COMMUNITY BANCORP, INC.
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
ANNUAL MEETING OF STOCKHOLDERS
APRIL 20, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints James A. Cotter, Jr. and Solomon Kerensky, or
either of them, proxies, with full power of substitution to each, to represent
and vote all stock that the undersigned is entitled to vote at the Annual
Meeting of Stockholders of New England Community Bancorp, Inc. to be held on
April 20, 1999 at 10:00 a.m. at The Hartford Golf Club, 134 Norwood Drive, West
Hartford, Connecticut, or at any adjournments thereof, for the purposes set
forth below:
PROPOSITION 1-ELECTION OF DIRECTORS For Withhold For all Except
To serve until the 2000 Meeting [ ] [ ] [ ]
JOHN C. CARMON, JAMES A. COTTER, JR., GARY J. DENINO, FRANK A. FALVO,
DOMINIC J. FERRAINE, P. ANTHONY GIORGIO, JOHN R. HARVEY, SOLOMON KERENSKY,
DAVID A. LENTINI, ANGELINA J. MCGILLIVRAY AND J. BRIAN SMITH
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK "FOR
ALL EXCEPT" AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
- --------------------------------------------------------------------------------
For Against Abstain
[ ] [ ] [ ]
PROPOSITION 2 - To Approve the Appointment of Shatswell, Macleod & Company, P.C.
as Independent Auditors for 1999.
For Against Abstain
[ ] [ ] [ ]
PROPOSITION 3 - Conduct other business properly brought before the Meeting.
IF NO BOX IS MARKED, THIS PROXY WILL BE VOTED
"FOR" EACH OF THE PROVISIONS.
Please be sure to sign and date this Proxy in the box below.
Date
- --------------------------------------------------------------------------------
Stockholder sign above Co-holder (if any) sign above
o DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED. o
NEW ENGLAND COMMUNITY BANCORP, INC.
- --------------------------------------------------------------------------------
Please sign your name exactly as it appears on this proxy. All joint owners
should sign. Persons signing as executors, administrators, trustees, etc. should
so indicate.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
