<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
PEOPLE'S BANCSHARES, INC.
(Name of Registrant as Specified In Its Charter)
[ ]
(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)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] 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 of
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
PEOPLE'S BANCSHARES, INC.
545 PLEASANT STREET
NEW BEDFORD, MASSACHUSETTS 02740
TELEPHONE (508) 991-2601
Dear Stockholder:
You are cordially invited to attend the 1998 Annual Meeting of Stockholders
(the "Annual Meeting") of People's Bancshares, Inc. (the "Company") to be held
at The Holiday Inn, 195 Westgate Drive, Brockton, Massachusetts, at 9:00 a.m.,
local time, on Tuesday, May 19, 1998.
The Annual Meeting has been called for the following purposes:
1. To elect four (4) directors for a three-year term.
2. To consider and vote upon the ratification of the appointment of
Wolf & Company, P.C. as the Company's independent certified public
accountants for the current fiscal year.
3. To transact such other business as may properly come before the
meeting and any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on March 24, 1998,
as the record date for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT AT THE ANNUAL MEETING
YOU VOTE "FOR" PROPOSALS ONE AND TWO.
Very truly yours,
Richard S. Straczynski
President and Chief Executive Officer
April 17, 1998
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING. WHETHER
OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE COMPLETE AND SIGN
THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE ANNUAL
MEETING AND DESIRE TO WITHDRAW YOUR PROXY AND VOTE IN PERSON, YOU MAY DO SO.
<PAGE> 3
PEOPLE'S BANCSHARES, INC.
545 PLEASANT STREET
NEW BEDFORD, MASSACHUSETTS 02740
TELEPHONE (508) 991-2601
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 19, 1998
Notice Is Hereby Given that the Annual Meeting of Stockholders (the "Annual
Meeting") of People's Bancshares, Inc. (the "Company") will be held at The
Holiday Inn, 195 Westgate Drive, Brockton, Massachusetts, at 9:00 a.m., local
time, on Tuesday, May 19, 1998, for the following purposes:
1. To elect four (4) directors for a three-year term.
2. To consider and vote upon the ratification of the appointment of
Wolf & Company, P.C. as the Company's independent certified public
accountants for the current fiscal year.
3. To transact such other business as may properly come before the
meeting and any adjournments or postponements thereof.
Pursuant to the Company's By-laws (the "By-laws"), the Board of Directors
has fixed the close of business on March 24, 1998 as the record date for the
determination of stockholders entitled to notice of and to vote at the Annual
Meeting.
The above matters are described in detail in the accompanying Proxy
Statement.
By Order of the Board of Directors
Terrence Gomes
Clerk
April 17, 1998
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING. WHETHER
OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE COMPLETE AND SIGN
THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE ANNUAL
MEETING AND DESIRE TO WITHDRAW YOUR PROXY AND VOTE IN PERSON, YOU MAY DO SO.
<PAGE> 4
PEOPLE'S BANCSHARES, INC.
545 PLEASANT STREET
NEW BEDFORD, MASSACHUSETTS 02740
TELEPHONE (508) 991-2601
------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 19, 1998
VOTING, REVOCATION, AND SOLICITATION OF PROXIES
ANNUAL MEETING
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of People's Bancshares, Inc. (the "Company")
for use at the Annual Meeting of Stockholders of the Company to be held at The
Holiday Inn, 195 Westgate Drive, Brockton, Massachusetts, at 9:00 a.m., local
time, on Tuesday, May 19, 1998, and any adjournments or postponements thereof
(the "Annual Meeting"), for the purposes set forth in this Proxy Statement.
At the Annual Meeting, stockholders of the Company will be asked to
consider and vote upon the following matters:
1. To elect four (4) directors for a three-year term.
2. To consider and vote upon the ratification of the appointment of
Wolf & Company, P.C. as the Company's independent certified public
accountants for the current fiscal year.
3. To transact such other business as may properly come before the
meeting and any adjournments or postponements thereof.
RECORD DATE
This Proxy Statement is first being mailed to stockholders of the Company
on or about April 17, 1998, in connection with the solicitation of proxies for
the Annual Meeting. The Board of Directors (the "Board") has fixed the close of
business on March 24, 1998 as the record date for the determination of
stockholders entitled to notice of and to vote at the Annual Meeting and any
adjournments or postponements thereof (the "Record Date"). Only holders of the
Company's Common Stock at that time will be entitled to notice of and to vote at
the Annual Meeting and any adjournments or postponements thereof. As of the
Record Date, there were 3,309,786 shares of Common Stock outstanding and each
such share is entitled to one vote at the Annual Meeting.
PROXIES
Stockholders of the Company are requested to complete, date, sign and
promptly return the accompanying form of proxy in the enclosed envelope. Common
Stock represented by properly executed proxies received by the Company and not
revoked will be voted at the Annual Meeting in accordance with the instructions
contained therein. If instructions are not given therein, properly executed
proxies will be voted FOR the election of the nominees for director listed in
this Proxy Statement and FOR Proposal Two. It is not anticipated that any
matters other than those set forth in this Proxy Statement will be presented at
the Annual Meeting. If other matters are presented, proxies will be voted in
accordance with the best judgment of the proxy holders.
Any properly completed proxy may be revoked at any time before it is voted
by filing a written notice of such revocation with, or by delivering a duly
executed proxy bearing a later date to, the Clerk of the Company,
<PAGE> 5
or by attending the Annual Meeting and voting in person. Attendance at the
Annual Meeting will not in and of itself constitute revocation of a proxy.
The cost of soliciting proxies will be borne by the Company. In addition to
solicitation by mail, officers and regular employees of the Company, who will
receive no compensation for their services other than their salaries, may
solicit proxies personally or by telephone. Brokerage houses, nominees,
fiduciaries, and other custodians are requested to forward soliciting material
to the beneficial owners of shares held of record by them and will be reimbursed
for their expenses.
STOCKHOLDER VOTE REQUIRED
The presence, in person or by proxy, of at least a majority in interest of
the total number of outstanding shares of Common Stock is necessary to
constitute a quorum for transaction of business at the Annual Meeting.
Abstentions and "broker non-votes" will be counted as present for determining
the presence or absence of a quorum for the transaction of business at the
Annual Meeting. A "broker non-vote" is a proxy from a broker or other nominee
indicating that such person has not received instructions from the beneficial
owner or other person entitled to vote the shares on a particular matter with
respect to which the broker or other nominee does not have discretionary voting
power.
A quorum being present, the vote of a plurality of the votes cast at the
Annual Meeting is necessary to elect each of the nominees for director (Proposal
One). The vote of a majority of the votes cast at the Annual Meeting is required
to ratify the selection of Wolf & Company, P.C. as independent certified public
accountants of the Company (Proposal Two). Abstentions and broker non-votes will
not be counted as voting at the Annual Meeting and, therefore, will not have an
effect on the outcome of Proposals One and Two.
ANNUAL REPORT
The Company's Annual Report to Shareholders, including consolidated
financial statements of the Company for the fiscal year ended December 31, 1997,
is being mailed to stockholders of the Company together with this Proxy
Statement. The Annual Report, however, is not part of the proxy soliciting
material. ADDITIONAL COPIES OF THE ANNUAL REPORT AND COPIES OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1997, AS FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") (WITHOUT EXHIBITS) ARE
AVAILABLE UPON REQUEST, WITHOUT CHARGE, FROM THE COMPANY. SUCH REQUESTS SHOULD
BE DIRECTED TO PEOPLE'S BANCSHARES, INC., 545 PLEASANT STREET, NEW BEDFORD,
MASSACHUSETTS 02740, ATTENTION: SHAREHOLDER RELATIONS DEPARTMENT.
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<PAGE> 6
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of January 15, 1998 certain information
regarding the beneficial ownership of the Common Stock of the Company by (i)
each person known by the Company to own beneficially more than 5% of the Common
Stock, (ii) each director and executive officer of the Company and (iii) all
directors and executive officers as a group (14 persons). Except as otherwise
indicated, each person listed below has sole voting and investment power over
the shares of Common Stock shown as beneficially owned.
<TABLE>
<CAPTION>
PERCENT
AMOUNT AND NATURE OF COMMON
NAME OF OWNER OF BENEFICIAL OWNERSHIP(1) STOCK(2)
------------- -------------------------- ---------
<S> <C> <C>
Dimensional Fund Advisors Inc......................... 171,469(3) 5.18
1299 Ocean Avenue, 11th Floor, Santa Monica, CA
90401
Colin C. Blair........................................ 135,700(4) 4.10
Frederick W. Adami, III............................... 9,016(5) *
Virginia M. Burke..................................... 8,616(6) *
B. Benjamin Cavallo................................... 221,272(7) 6.69
John R. Eaton......................................... 15,496(8) *
Terrence Gomes........................................ 3,016(9) *
Fred W. Green......................................... 10,516(10) *
Dr. Loring C. Johnson................................. 9,391(11) *
Richard D. Matthews................................... 26,278(12) *
Scott W. Ramsay....................................... 200(13) *
Gerald R. Rodman...................................... 8,516(14) *
Davis H. Scudder...................................... 14,625(15) *
Stanley D. Siskind.................................... 12,117(16) *
Richard S. Straczynski................................ 35,000(17) 1.06
All directors and executive officers as a group (14
persons)............................................ 509,759(18) 15.40
</TABLE>
- ---------------
* The percentage of shares beneficially owned does not exceed one percent of
the class so owned.
(1) Beneficial ownership for purposes of this Proxy Statement is defined in
accordance with the requirements of Rule 13d-3 under the Securities
Exchange Act of 1934 (the "Exchange Act"), which provides that the
beneficial owner of a security includes any person who, directly or
indirectly, through any contract, arrangement, understanding, relationship
or otherwise, has or shares voting power or investment power with respect
to such security, or has the right to acquire such voting power or
investment power through the exercise of an option, warrant or right within
60 days.
(2) For purposes of calculating the percentage of the outstanding shares of
Common Stock at January 15, 1998 for each listed person or entity, the
number of shares of Common Stock includes shares that may be acquired by
such person or entity within 60 days of January 15, 1998 through the
exercise of vested stock options under the Company's Amended and Restated
Incentive and Nonqualified Stock Option Plan (the "1986 Employee Option
Plan"), the Company's Amended and Restated Directors' Stock Option Plan
(the "1986 Director Option Plan") and the Company's 1996 Stock Option and
Incentive Plan (the "1996 Option Plan" and collectively the "Stock Option
Plans") but does not include the number of shares underlying such options
held by any other person.
(3) Based solely upon information contained in the Schedule 13G filed by
Dimensional Fund Advisors Inc. with the Securities and Exchange Commission
on February 10, 1998.
(4) Includes 18,600 shares which Mr. Blair has the right to acquire within 60
days of January 15, 1998, through the exercise of vested stock options
granted under the 1986 Employee Option Plan and 1996 Option Plan. Also
includes approximately 22,600 shares which may be deemed beneficially owned
by Mr. Blair through his interest in the Bank's 401(k) plan, which invests
in the Company's Common Stock.
(5) Includes 7,516 shares which Mr. Adami has the right to acquire within 60
days of January 15, 1998, through the exercise of vested stock options
granted under the 1986 Director Option Plan and 1996 Option Plan. Also
includes 1000 shares owned by Mr. Adami jointly with his wife, and 500
shares owned by Mr. Adami's daughters.
3
<PAGE> 7
(6) Includes 7,516 shares which Ms. Burke has the right to acquire within 60
days of January 15, 1998, through the exercise of vested stock options
granted under the 1986 Director Option Plan and 1996 Option Plan.
(7) Includes 2,916 shares which Mr. Cavallo has the right to acquire within 60
days of January 15, 1998, through the exercise of vested stock options
granted under the 1986 Director Option Plan and 1996 Option Plan. Also
includes 2,112 shares held by Mr. Cavallo's son, 115,514 shares held by Mr.
Cavallo's wife, and 55,060 shares held by a partnership in which Mr.
Cavallo is a partner.
(8) Includes 7,516 shares which Mr. Eaton has the right to acquire within 60
days of January 15, 1998, through the exercise of vested stock options
granted under the 1986 Director Option Plan and 1996 Option Plan. Also
includes 6,277 shares owned by Mr. Eaton jointly with his wife.
(9) Includes 2,916 shares which Mr. Gomes has the right to acquire within 60
days of January 15, 1998, through the exercise of vested stock options
granted under the 1986 Director Option Plan and 1996 Option Plan.
(10) Includes 7,516 shares which Mr. Green has the right to acquire within 60
days of January 15, 1998, through the exercise of vested stock options
granted under the 1986 Director Option Plan and 1996 Option Plan.
(11) Includes 7,516 shares which Dr. Johnson has the right to acquire within 60
days of January 15, 1998, through the exercise of vested stock options
granted under the 1986 Director Option Plan and 1996 Option Plan.
(12) Includes 7,516 shares which Mr. Matthews has the right to acquire within 60
days of January 15, 1998, through the exercise of vested stock options
granted under the 1986 Director Option Plan and 1996 Option Plan. Also
includes 4,871 shares owned by Mr. Matthews jointly with his wife.
(13) Includes 200 shares owned by Mr. Ramsay jointly with his wife.
(14) Includes 3,916 shares which Mr. Rodman has the right to acquire within 60
days of January 15, 1998, through the exercise of vested stock options
granted under the 1986 Director Option Plan and 1996 Option Plan. Also
includes 4,600 shares owned by Mr. Rodman jointly with his wife.
(15) Includes 7,516 shares which Mr. Scudder has the right to acquire within 60
days of January 15, 1998, through the exercise of vested stock options
granted under the 1986 Director Option Plan and 1996 Option Plan. Also
includes 340 shares owned by members of Mr. Scudder's immediate family and
2,555 shares owned by Scudder Bros. Fuel Company, Inc., of which Mr.
Scudder is a principal.
(16) Includes 2,916 shares which Mr. Siskind has the right to acquire within 60
days of January 15, 1998, through the exercise of vested stock options
granted under the 1986 Director Option Plan and 1996 Option Plan.
(17) Includes 27,500 shares which Mr. Straczynski has the right to acquire
within 60 days of January 15, 1998, through the exercise of vested stock
options granted under the 1996 Option Plan.
(18) Includes 111,366 shares which directors and executive officers have the
right to acquire within 60 days of January 15, 1998, through the exercise
of vested stock options granted under one or more of the Stock Option
Plans.
4
<PAGE> 8
PROPOSAL ONE
ELECTION OF DIRECTORS
The By-laws provide that the Board of Directors shall consist of not less
than three (3) individuals, to be divided into three classes as nearly equal in
size as possible, with the directors in each class serving a term of three years
and until their successors are duly elected and qualified. The Board of
Directors currently consists of thirteen directors. Mr. Fred W. Green, whose
term expires at the annual meeting, will not stand for re-election as a director
of the Company.
At the Annual Meeting, stockholders will be asked to vote on the election
of Class III Directors (Proposal One). The Nominating Committee of the Board of
Directors has nominated B. Benjamin Cavallo, Terrence Gomes, Gerald R. Rodman,
and Stanley D. Siskind for election as Class III Directors at the Annual
Meeting. Although it is anticipated that all of the nominees for director will
be available to serve as directors if elected, should any one or more of them be
unable to serve, the proxies may be voted for the election of substitute
nominees.
THE AFFIRMATIVE VOTE OF THE HOLDERS OF A PLURALITY OF THE SHARES OF COMMON
STOCK PRESENT OR REPRESENTED BY PROXY AND VOTING AT THE ANNUAL MEETING WILL BE
REQUIRED TO ELECT THE NOMINEES AS DIRECTORS.
RECOMMENDATION OF DIRECTORS
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT THE STOCKHOLDERS VOTE
FOR THE ELECTION OF THE FOUR NOMINEES PROPOSED BY MANAGEMENT AS DIRECTORS OF THE
COMPANY.
DIRECTORS OF THE COMPANY
The directors of the Company, their positions with the Company and their
ages as of April 15, 1998 are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
NOMINEES FOR ELECTION AT THIS ANNUAL MEETING:
CLASS III (TERM EXPIRES IN 1998):
B. Benjamin Cavallo......................................... 70 Director
Terrence Gomes.............................................. 52 Director
Gerald R. Rodman............................................ 65 Director
Stanley D. Siskind.......................................... 67 Director
CONTINUING DIRECTORS:
CLASS I (TERM EXPIRES IN 1999):
Frederick W. Adami, III..................................... 53 Director
Richard D. Matthews......................................... 64 Director
Davis H. Scudder............................................ 67 Director
Richard S. Straczynski...................................... 51 Director
CLASS II (TERM EXPIRES IN 2000):
Virginia M. Burke........................................... 55 Director
John R. Eaton............................................... 62 Director
Dr. Loring C. Johnson....................................... 66 Director
Scott W. Ramsay............................................. 51 Director
</TABLE>
BIOGRAPHICAL INFORMATION
Frederick W. Adami, III. Mr. Adami has been a director since 1975. Mr.
Adami has been an attorney in the law firm of Reed, Adami & Kaiser in Brockton,
Massachusetts since 1988.
5
<PAGE> 9
Virginia M. Burke. Ms. Burke has been a director since 1994. Ms. Burke was
employed at NYNEX from 1968 to 1994. At retirement she was Manager of Regional
Public Affairs for NYNEX.
B. Benjamin Cavallo. Mr. Cavallo has been a director since 1995. Mr.
Cavallo has been an insurance broker since 1959 and is a partner at Cavallo &
Signoriello Insurance Agency, Mansfield, Massachusetts.
John R. Eaton. Mr. Eaton has been a director since 1975. Mr. Eaton is
Executive Vice President of A.L. Cushman & Son, Inc., Brockton, Massachusetts.
Terrence Gomes. Mr. Gomes has been a director since 1995. Mr. Gomes has
been on the faculty of Massasoit Community College, Brockton, Massachusetts
since 1982 and is currently Dean of Faculty and Instruction.
Dr. Loring C. Johnson. Dr. Johnson has been a director since 1984. Dr.
Johnson has been an orthodontist since 1966 and is currently practicing in
Easton, Massachusetts.
Richard D. Matthews. Mr. Matthews has been a director since 1993. Mr.
Matthews is President and Treasurer of R.D. Matthews Construction Company, Inc.,
Hanover, Massachusetts and has been a real estate developer and building
contractor since 1959.
Scott W. Ramsay. Mr. Ramsay has been a director since 1997. Mr. Ramsay has
been Senior Vice President of Shaw's Supermarkets, Inc. since 1991.
Gerald R. Rodman. Mr. Rodman has been a director since 1994. Mr. Rodman
has been a partner at the End Zone Motor Inn and Lounge since 1983 and is
formerly Vice President and Partner at Rodman Ford Sales, Foxboro,
Massachusetts.
Davis H. Scudder. Mr. Scudder has been a director since 1974. Mr. Scudder
is President of Scudder Bros. Fuel Company, Inc., Brockton, Massachusetts.
Stanley D. Siskind. Mr. Siskind has been a director since 1972. Mr.
Siskind was formerly Executive Vice President at Rix-Dunnington, Inc., a retail
institutional pharmacy chain, which he founded in 1956 and continued until his
retirement in 1992.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors of the Bank held 17 meetings during the fiscal year
ended December 31, 1997. During 1997, each of the incumbent directors attended
more than 75% of the total number of meetings of the Board and of the committees
on which such director served.
The Board of Directors of the Company held 17 meetings during the fiscal
year ended December 31, 1997. During 1997, each of the incumbent directors
attended more than 75% of the total number of meetings of the Board and of the
committees on which such director served.
The following is a description of the Executive Committee, the Auditing
Committee, the Nominating Committee, and the Option Committee of the Board of
Directors of the Company.
Executive Committee. The Executive Committee has broad authority to
transact such business as might otherwise come before the full Board of
Directors. The Executive Committee is composed of Messrs. Adami, Cavallo, Gomes,
Johnson, Rodman and Scudder. The Executive Committee held 25 meetings during
1997.
Auditing Committee. The Auditing Committee has authority to nominate the
Company's independent certified public accountants, make the annual audit of the
Company and its subsidiaries, present its audit report to the Board of
Directors, report to the Board of Directors on its review of the Treasurer's
report of the Company's financial position and results of operations, and review
the general policies and procedures utilized by the Company and its subsidiaries
with respect to internal accounting and financial controls and accounting and
reporting principles and practices applied by the Company. The Auditing
Committee consists of Ms. Burke and Messrs. Eaton, Matthews and Siskind. The
Auditing Committee met three times during 1997.
Nominating Committee. The Nominating Committee recommends to the Board of
Directors candidates for membership on the Board of Directors. The Nominating
Committee will consider nominees
6
<PAGE> 10
recommended by stockholders, but only if such recommendations are received by
the Company not more than 90 days and not less than 60 days prior to the
anniversary date of the previous annual meeting, and such other requirements as
are specified in the By-laws are followed. The Nominating Committee consists of
Messrs. Adami, Eaton, Gomes, Green, and Siskind. The Nominating Committee met
two times during 1997.
Option Committee. The Option Committee administers the Stock Option Plans.
The Option Committee consists of Ms. Burke and Messrs. Cavallo, Green, Rodman
and Scudder. The Option committee met two times during 1997.
COMPENSATION OF DIRECTORS
Given that each director is a member of the Board of Directors of the
Company and of the Board of Directors of the Bank and the fact that the Company
currently conducts no business other than the business of the Bank, directors of
the Company currently receive no compensation in their capacities as directors
of the Company. Each of the members of the Company's Executive Committee,
Auditing Committee and Nominating Committee also serves as a member of the
equivalent committee of the Bank. The Bank's CRA Committee consists of Ms. Burke
and Mr. Eaton. The Bank's Investment Committee consists of Messrs. Adami, Eaton,
Matthews, Rodman and Siskind.
Directors of the Bank received $500 for each meeting of the Board of
Directors of the Bank they attended in 1997. The Clerk received an additional
$200 for each meeting of the Board of Directors that he attended in 1997.
Directors received a $5,000 annual retainer for being on the Board of the
Directors of the Bank in 1997. Members of the Bank's Executive Committee
received an annual fee of $12,000. Members of the Bank's Auditing Committee,
Nominating Committee, CRA Committee and Compensation Committee received $500 for
each committee meeting they attended in 1997. The Chairman of the Board of
Directors received an annual fee of $10,000 in 1997, $100 per Board meeting and
$15,000 in 1997 for time spent in connection with the resignation of the
Company's then President and Chief Executive Officer. The Chairmen of the Bank's
Audit Committee, Nominating Committee and Compensation Committee received an
additional $100 for each of the meetings they attended in 1997. No such fees
were paid to directors or committee members who are also officers of the Bank.
The Clerk is not considered an officer for these purposes.
Non-employee directors receive automatic grants of stock options annually
and upon their joining the Board of Directors pursuant to a formula contained in
the 1996 Option Plan.
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company, their positions with the Company and
their ages as of April 15, 1998 are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Richard S. Straczynski............. 51 President and Chief Executive Officer
Colin C. Blair..................... 47 Chief Financial Officer and Treasurer
</TABLE>
Richard S. Straczynski. Mr. Straczynski was appointed President and Chief
Executive Officer effective April 7, 1997. Mr. Straczynski served as President
and Chief Operating Officer of the Hibernia Savings Bank of Quincy,
Massachusetts from 1995 until 1997. Prior to that he served as a Regional
President of Citizens Bank of Massachusetts, as a Regional President for the
Bank of New England and its successor Fleet Bank of Massachusetts, N.A., and as
an Executive Vice President for the Bank of New England.
Colin C. Blair. Mr. Blair has served as Chief Financial Officer of the
Bank since 1993. Mr. Blair was previously employed from 1991 to 1993 by Coopers
& Lybrand, a public accounting firm, where he worked for the Chairman of its
National Banking Group as a consultant. Prior to that time, he was employed for
10 years by KPMG Peat Marwick, a public accounting firm, as a Certified Public
Accountant specializing in providing services to financial institutions.
7
<PAGE> 11
REPORT ON EXECUTIVE COMPENSATION
The executive compensation program of the Company and its subsidiaries has
three primary components: base salary, cash incentive compensation, and stock
options. The Compensation Committee of the Bank is responsible for reviewing the
performance and administering the salaries and cash incentives of senior
management, approving broad personnel policies and overseeing the Bank's
compensation and benefit programs, with the exception of the administration of
the Stock Option Plans, which is the responsibility of the Option Committee of
the Company. The composition of these committees is identical and includes the
outside directors of the Company and the Bank over whose names this report has
been made. The Committees strive to balance short-term and long-term objectives
in establishing performance criteria. The Committees evaluate performance
against such criteria before determining changes in salary, cash incentive
payments, and option awards.
In early 1995, the Compensation Committee engaged KPMG Peat Marwick to
review the salary structure for the Bank's Chief Executive Officer and Chief
Financial Officer to help develop an incentive-based compensation plan to ensure
their retention and tie their compensation more closely to quantifiable
performance objectives. The resulting plan recognized that the Bank had restored
its financial health and would continue to pursue profitable growth
opportunities. Thus since 1996, incentive compensation has been primarily based
upon the Company's return on average equity compared to its peers, upon the
Company's growth in pre-tax revenues, and upon individual performance
objectives. The Compensation Committee uses various industry salary surveys to
establish salary ranges for the other senior executives of the Company's
subsidiaries based upon its evaluation of their effectiveness. Management then
uses such surveys to establish salary ranges for most officer positions.
The key components of Mr. Straczynski compensation in 1997 we are salary,
cash incentive compensation and stock options. In determining the level of
compensation for Mr. Straczynski for 1997, the Committees reviewed the Bank's
compensation package compared to those of industry peers.
The evaluation of Mr. Blair's 1996 performance included an evaluation of
his progress in integrating the Bank's operations, growing and improving the
profitability of its mortgage banking operations, improving the profitability of
its investment portfolio, upgrading its technology and developing other new
sources of revenue. The review of the CFO's performance was initiated in
Compensation Committee meetings of June and December 1996. Based upon this
review, the salary paid to Mr. Blair was increased effective January 1, 1997.
Stock options granted to Messrs. Straczynski and Blair during 1997 were
granted at the market price of the common stock of the Company on the grant
date. Grants made to these officers were based upon assessments of individual
performance as well as comparison to peer group compensation packages.
Submitted by:
Davis H. Scudder, Chairman
Virginia M. Burke
B. Benjamin Cavallo
Fred W. Green
Gerald R. Rodman
8
<PAGE> 12
EXECUTIVE COMPENSATION
Summary Compensation. Executive officers of the Company currently receive
no compensation in their capacities as executive officers of the Company but are
compensated as employees of the Bank. The following summary compensation table
sets forth information concerning compensation during the years ended December
31, 1997, 1996 and 1995 for services rendered in all capacities awarded to,
earned by or paid to the Bank's Chief Executive Officer and Chief Financial
Officer.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(2)(3) BONUS OPTIONS COMPENSATION(4)
- --------------------------- ---- ------------ ------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Richard S. Straczynski(1)................. 1997 $123,322 $67,200 20,000 $ --
President and Chief 1996 -- -- -- --
Executive Officer 1995 -- -- -- --
Colin C. Blair............................ 1997 $139,650 $39,375 5,000 $3,750
Chief Financial Officer 1996 133,400 37,500 13,600 1,250
and Treasurer 1995 104,500 20,900 8,500 3,533
</TABLE>
- ---------------
(1) Richard S. Straczynski was appointed President and Chief Executive Officer
effective on April 7, 1997.
(2) In 1997 the Bank provided Mr. Straczynski and Mr. Blair with $800 and $700
per month automobile allowances, respectively. The Bank reimbursed all
officers for business-related expenses incurred, and, in addition, paid
membership dues for its principal officers to certain organizations. The
Company is unable to state with certainty the amount of these items that may
be attributable to personal use. However, the Company believes that the
amount that may be so attributable is less than $50,000 and is less than 10%
of the compensation reported in this table with respect to each named
executive officer.
(3) The amount of contributions by the Bank to the Savings Banks Employees
Retirement Association defined benefit retirement plan with respect to any
one officer or group of officers is not and cannot readily be separately or
individually calculated by the regular actuaries for the retirement plan.
(4) Consists of employer contributions to 401(k) plan.
Special Termination Agreements. The Bank and the Company have entered into
special termination agreements with Mr. Straczynski and Mr. Blair that provide
severance benefits to Mr. Straczynski and Mr. Blair if their employment is
terminated under certain circumstances following a change of control. The
agreements generally provide that a "change in control" has occurred if (i)
there has occurred a change in control within the meaning of Item 1 of Form 8-K
promulgated under the Exchange Act; (ii) any person becomes a beneficial owner,
directly or indirectly, of securities of either employer, representing
twenty-five percent (25%) or more of the total number of votes that may be cast
for the election of directors of such employer; (iii) during any period of two
consecutive years, individuals who are Continuing Directors (as defined in the
special termination agreements) cease for any reason to constitute at least a
majority of the Board of Directors of either the Bank or the Company; or (iv)
the stockholders of either employer approve certain mergers or consolidations of
such employer with any other corporation, a plan of complete liquidation of such
employer, or an agreement for the sale or disposition of all or substantially
all of the assets of such employer.
If a "terminating event" occurs within three years after there is a change
of control, each of Mr. Straczynski and Mr. Blair will be generally entitled
under his special termination agreement to a lump sum cash payment equal to
three times his average annual compensation over the five most recent years of
his employment with the Company or the Bank, as the case may be. A "terminating
event" includes termination of employment by either employer for any reason
other than death, deliberate dishonesty, or conviction of certain crimes. A
"terminating event" also includes resignation of the officer following a
significant change in the officer's responsibilities, a decrease in the
officer's annual compensation, or certain relocations of the offices of either
employer. The Bank is a party to similar agreements with several other officers
of the Bank. People's Mortgage Corporation, a wholly-owned subsidiary of the
Bank, has entered into employment
9
<PAGE> 13
agreements with four of its officers that provide for severance benefits upon
termination following a change of control of People's Mortgage Corporation.
Stock Option Grants. The following table sets forth information concerning
individual grants of stock options made during the year ended December 31, 1997
to each of the named executive officers.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------------------------------- VALUE AT ASSUMED
PERCENT OF ANNUAL RATES OF STOCK
TOTAL OPTIONS PRICE APPRECIATION
NUMBER OF GRANTED TO EXERCISE FOR OPTION TERM
SECURITIES UNDERLYING EMPLOYEES IN OR BASE EXPIRATION ---------------------
NAME OPTIONS GRANTED(#) FISCAL YEAR PRICE DATE 5% 10%
- ---- --------------------- ------------- -------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Richard S. Straczynski..... 20,000 24.3% $11.625 4/07/07 $146,218 $375,045
President and Chief
Executive Officer
Colin C. Blair............. 5,000 6.1% $ 20.00 11/19/07 $ 52,889 $158,374
Chief Financial Officer
and Treasurer
</TABLE>
Aggregated Option Exercises and Fiscal Year-End Option Values. The
following table sets forth exercises of stock options during the year ended
December 31, 1997 by each of the named executive officers and the fiscal
year-end value of unexercised options.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES ACQUIRED OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END
NAME ON EXERCISE(#) (#)(1) ($)
- ---- --------------- -------------------------- --------------------
<S> <C> <C> <C>
Richard S. Straczynski.................. 0 20,000 222,500
President and Chief
Executive Officer
Colin C. Blair.......................... 38,500 18,600 192,250
Chief Financial Officer
and Treasurer
</TABLE>
- ---------------
(1) All options are currently exercisable.
PENSION PLAN
The Bank provides a tax-qualified, defined benefit retirement plan (the
"Pension Plan") for all eligible employees through the Savings Banks Employees
Retirement Association ("SBERA"), an unincorporated association comprised of
savings banks operating within Massachusetts and other organizations providing
services to or for savings banks. Each employee of the Bank automatically
becomes a participant in the Pension Plan once he or she has attained age 21 and
has completed at least one full year of service, consisting of at least 1,000
hours, beginning with his or her initial date of employment with the Bank.
The Bank-funded retirement benefits provided to each participant at age 65
under the Pension Plan are based on the average of the participant's highest
three consecutive years of compensation during his or her last ten years at the
Bank (his "Average Compensation"). Compensation is defined as wages that would
be reported on the participant's Form W-2, except that bonuses are not included
under compensation where they would cause compensation to exceed the amount
specified in Section 414(q) of the Code. The participant's retirement benefits
will be equal to 1.25% of the participant's Average Compensation for each year
of service with the Bank up to a maximum of 25 years, plus 0.6% of the excess of
the participant's Average Compensation over the amount of his or her Covered
Compensation at age 65 for each year of service with the Bank up to a maximum of
25 years. Covered Compensation is calculated based on the average of 35 years of
Social Security taxable wages up to and including the participant's projected
retirement age. Normal retirement age under the Pension Plan is 65. However, a
reduced early retirement benefit is payable under certain conditions to a
participant who retires between the ages of 50 and 65.
10
<PAGE> 14
The following table illustrates annual pension benefits for retirement at
age 65 under the most advantageous provisions of the Pension Plan available for
various levels of compensation and years of service. The figures in this table
are based upon the assumption that the Pension Plan continues in its present
form and certain other assumptions regarding social security benefits and
compensation trends.
<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------------------------------
REMUNERATION(1) 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- --------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$ 20,000............................ $ 2,500 $ 3,750 $ 5,000 $ 6,250 $ 6,250 $ 6,250
40,000............................ 5,941 8,912 11,883 14,853 14,853 14,853
60,000............................ 9,641 14,462 19,283 24,103 24,103 24,103
80,000............................ 13,341 20,012 26,683 33,353 33,353 33,353
100,000............................ 17,041 25,562 34,083 42,603 42,603 42,603
120,000............................ 20,741 31,112 41,483 51,853 51,853 51,853
125,000............................ 21,666 32,499 43,333 54,166 54,166 54,166
150,000(2)......................... 26,291 39,437 52,583 65,728 65,728 65,728
</TABLE>
- ---------------
(1) Based on age 65 retirement in 1997 (plan year 11/01/97 - 10/31/98). The
annual pension benefit is computed on the basis of a straight-life annuity.
(2) Federal law does not permit defined benefit pension plans to recognize
compensation in excess of $150,000 for plan years beginning in 1994.
The estimated credited years of service at December 31, 1997, was four
years for Mr. Blair and one year for Mr. Straczynski.
If a participant makes any voluntary contributions, the participant's
retirement benefits will be increased to reflect such contributions and any
earnings or losses to the Pension Plan on such contributions.
The Pension Plan provides that death benefits shall be paid to the
beneficiary or beneficiaries of any participant who dies before he retires. The
death benefit payable will be equal to the value of the deceased participant's
voluntary contributions (adjusted to reflect any earnings or losses) plus the
present value of his accrued benefit under the Pension Plan as funded by Company
contributions.
11
<PAGE> 15
PERFORMANCE GRAPH
The following graph provides a comparison of cumulative total stockholder
return for the period from December 31, 1992 through December 31, 1997, among
the common stock of the Company (before February 8, 1996, the Bank), the Nasdaq
Stock Market-US Companies Index (the "Nasdaq (US Companies) Index") and the
Nasdaq Stock Market-Banks Index (the "Nasdaq (Banks) Index"). These indices are
prepared for Nasdaq by the Center for Research in Security Prices (CRSP) at the
University of Chicago. The Performance Graph assumes an investment of $100 in
each of the common stock of the Company (before February 8, 1996, the Bank) and
the two indices, and the reinvestment of any dividends. The historical
information set forth below is not necessarily indicative of future performance
of the Common Stock.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
Measurement Period NASDAQ NASDAQ (US
(Fiscal Year Covered) People's (Banks) Index Companies) Index
<S> <C> <C> <C>
12/31/92 $100.00 $100.00 $100.00
12/31/93 97.00 129.40 114.70
13/31/94 115.20 130.80 111.10
13/30/95 255.50 189.40 155.40
13/29/96 265.10 239.00 190.70
12/31/97 569.20 390.90 232.00
</TABLE>
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Pursuant to Section 16(a) of the Exchange Act and SEC regulations, the
Company's executive officers and directors must file reports of ownership and
changes in ownership with the SEC and the Nasdaq Stock Market, Inc. and furnish
the Company with copies of all Section 16(a) reports they file. To the Company's
knowledge, based solely on review of the copies of such reports furnished to the
Company, Messrs. Blair, Straczynski, Eaton, Scudder, Siskind, Matthews and
Rodman each failed to file one report on Form 4 during 1997, in each case
regarding a single transaction.
CERTAIN TRANSACTIONS
Certain directors and officers of the Company and the Bank and members of
their immediate families are at present, as in the past, customers of the Bank
and have transactions with the Bank in the ordinary course of business. In
addition, certain of the directors are at present, as in the past, also
directors, officers or shareholders of corporations or members of partnerships
which are customers of the Bank and which have transactions with the Bank in the
ordinary course of business. Such transactions with directors and officers of
12
<PAGE> 16
the Company and the Bank and with such corporations and partnerships are on
terms comparable to those charged to other customers of the Bank. Included in
such transactions are loans to directors and officers and their associates which
were made in the ordinary course of business, on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons and which did not involve more than
the normal risk of collectibility or present other features unfavorable to the
Bank. The outstanding principal balance of such loans to directors and officers
and their associates totaled $2,794,560, or 9.07% of the Company's stockholders'
equity, at December 31, 1997.
Mr. Adami's law firm was retained by the Bank to provide certain services
in 1997. In 1997, the Bank paid $70,916.90 to Mr. Adami's law firm for such
services.
PROPOSAL TWO
RATIFICATION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
At the Annual Meeting, stockholders will be asked to consider a proposal to
ratify the appointment of the Company's independent certified public accountants
(Proposal Two). The Auditing Committee of the Board of Directors has appointed
the firm of Wolf & Company, P.C. ("Wolf & Co.") to serve as the Company's
independent certified public accountants for the current fiscal year ending
December 31, 1998. Wolf & Co. has no direct or indirect financial interest in
the Company, nor has it had any connection with the Company in the capacity of
promoter, underwriter, voting trustee, director, officer or employee. Before
services are rendered by Wolf & Co., they are approved by, and the possible
effect on the independence of the accountants is considered by, the Auditing
Committee.
A representative of Wolf & Co. will be present at the Annual Meeting and
will be available to respond to appropriate questions and may make a statement
if he or she so desires.
THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE SHARES OF COMMON
STOCK PRESENT OR REPRESENTED BY PROXY AND VOTING AT THE ANNUAL MEETING WILL BE
REQUIRED TO RATIFY THE APPOINTMENT OF WOLF & CO. AS THE COMPANY'S INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS FOR THE CURRENT FISCAL YEAR ENDING DECEMBER 31,
1998.
RECOMMENDATION OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF WOLF & CO.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 1998 Annual
Meeting of Stockholders of the Company must be received in writing by the
Company at its principal office on or before January 19, 1999, for inclusion in
its proxy statement and form of proxy relating to the meeting. Pursuant to the
By-laws of the Company, for the 1999 Annual Meeting of Stockholders, any
director nominations and new business submitted by stockholders must be
delivered to, or mailed to and received by, the Company at its principal
executive office not less than 60 days nor more than 90 days prior to May 19,
1999; provided, however, that in the event the Annual Meeting is scheduled to be
held on a date more than 30 days before May 19, 1999 or more than 60 days after
May 19, 1999, a stockholder's notice shall be timely if delivered to, or mailed
to and received by, the Company at its principal executive office not later than
the close of business on the later of (A) the 60th day prior to the scheduled
date of such Annual Meeting or (B) the 10th day following the day on which
public announcement of the date of such Annual Meeting is first made by the
Company. Any such proposal should be mailed to: Clerk, People's Bancshares,
Inc., 545 Pleasant Street, New Bedford, Massachusetts 02740.
13
<PAGE> 17
OTHER MATTERS
At the time of the preparation of this proxy material, the Board of
Directors of the Company does not know of any other matter to be presented for
action at the Annual Meeting. If any other matters should come before the
meeting, proxy holders have discretionary authority to vote their shares
according to their best judgment.
By Order of the Board of Directors
Terrence Gomes
Clerk
April 17, 1998
14
<PAGE> 18
<TABLE>
<S> <C>
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
- ------------------------------------------------------------ 1. Proposal to elect Directors for a three year term.
PEOPLE'S BANCSHARES, INC. For All With- For All
- ------------------------------------------------------------ B. Benjamin Cavallo Nominees hold Except
Terrence Gomes / / / / / /
Mark box at right if an address change or comment / / Gerald R. Rodman
has been noted on the reverse side of this card. Stanley D. Siskind
If you do not wish your shares voted "For" a particular nominee,
RECORD DATE SHARES: mark the "For All Except" box and strike a line through the
name(s) of the nominee(s). Your shares will be voted for the
remaining nominee(s).
2. Proposal to ratify the appointment For Against Abstain
of Wolf and Company, P.C. as / / / / / /
independent certified public
accountants of the Company.
3. To transact such other business as may properly come before
the meeting or any adjournment thereof.
------------- The undersigned stockholder(s) authorize(s) the proxies to vote
Please be sure to sign and date this Proxy. Date on the above matter as indicated and to vote, in their
- ------------------------------------------------------------ discretion, upon such other matters as may properly come before
the Annual Meeting or any adjournments thereof.
- ------Stockholder sign here-----------Co-owner sign here----
DETACH CARD DETACH CARD
</TABLE>
<PAGE> 19
<TABLE>
<S> <C>
PEOPLE'S BANCSHARES, INC.
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned stockholder of People's Bancshares, Inc. (the "Company") hereby appoints George M. Custodio and Maureen A. Gregory,
or either of them acting singly, as proxies to cast all votes which the undersigned stockholder is entitled to cast at the Annual
Meeting of Stockholders (the "Annual Meeting") to be held at 9:00 a.m., local time, on Tuesday, May 19, 1998 at The Holiday Inn,
195 Westgate Drive, Brockton, Massachusetts 02401, and at any adjournments or postponements thereof. The undersigned stockholder
hereby revokes any proxy or proxies heretofore given.
This proxy will be voted as directed by the undersigned stockholder. UNLESS CONTRARY DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
"FOR" THE ELECTION OF THE NOMINEES LISTED IN PROPOSAL 1 AND "FOR" PROPOSAL 2 AND IN ACCORDANCE WITH THE DETERMINATION OF THE PROXY
HOLDERS AS TO OTHER MATTERS. The undersigned stockholder hereby acknowledges receipt of the Notice of Annual Meeting and Proxy
Statement.
The undersigned stockholder may revoke this proxy at any time prior to its exercise by filing a written notice of revocation with,
or by delivering a duly executed proxy bearing a later date to, the Clerk of the Company or by attending the Annual Meeting of
Stockholders.
- ------------------------------------------------------------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) on the books of the Company. Joint owners should each sign personally. Trustees and
other fiduciaries should indicate the capacity in which they sign, and where more than one name appears, a majority must sign. If a
corporation or partnership, this signature should be that of an authorized officer who should state his or her title.
- ------------------------------------------------------------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ---------------------------------------------------------------- --------------------------------------------------------------
- ---------------------------------------------------------------- --------------------------------------------------------------
- ---------------------------------------------------------------- --------------------------------------------------------------
</TABLE>
