<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 [ ]
<TABLE>
<S> <C>
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential for use of the
[ ] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to Rule 14a-12
</TABLE>
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 of 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
[PRELIMINARY PROXY STATEMENT]
PEOPLE'S BANCSHARES, INC.
545 PLEASANT STREET
NEW BEDFORD, MASSACHUSETTS 02740
TELEPHONE (508) 991-2601
Dear Stockholder:
You are cordially invited to attend the 2000 Annual Meeting of
Stockholders (the "Annual Meeting") of People's Bancshares, Inc. (the "Company")
to be held at Stone Forge Public House, 90 Paramount Drive, Raynham,
Massachusetts, at 10:00 a.m., local time, on Friday, June 16, 2000.
The Annual Meeting has been called for the following purposes:
1. To elect three (3) directors for a three-year term.
2. 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 April 28,
2000, 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" THE NOMINEES PROPOSED BY MANAGEMENT.
Very truly yours,
Richard S. Straczynski
President and Chief Executive Officer
____________, 2000
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
[PRELIMINARY PROXY STATEMENT]
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 JUNE 16, 2000
Notice Is Hereby Given that the Annual Meeting of Stockholders (the
"Annual Meeting") of People's Bancshares, Inc. (the "Company") will be held at
Stone Forge Public House, 90 Paramount Drive, Raynham, Massachusetts, at 10:00
a.m., local time, on Friday, June 16, 2000, for the following purposes:
1. To elect three (3) directors for a three-year term.
2. 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 Board of Directors has fixed the
close of business on Friday, April 28, 2000 as the record date for the
determination of stockholders entitled to notice of and to vote at the Annual
Meeting.
The above matter is described in detail in the accompanying Proxy
Statement.
By Order of the Board of Directors,
Terrence Gomes
Clerk
___________, 2000
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
[PRELIMINARY PROXY STATEMENT]
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 JUNE 16, 2000
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 Stone
Forge Public House, 90 Paramount Drive, Raynham, Massachusetts, at 10:00 a.m.,
local time, on Friday, June 16, 2000, 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 three (3) directors for a three-year term.
2. 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 May 1, 2000, in connection with the solicitation of proxies
for the Annual Meeting. The Board of Directors (the "Board") has fixed the close
of business on April 28, 2000 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 3,251,734 shares of Common Stock issued and 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 white proxy card 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 John R. Eaton, Dr. Loring C.
Johnson and Scott W. Ramsay, the Board of Directors' three nominees, for
directors. 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.
<PAGE> 5
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, 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.
SOLICITATION OF PROXIES
This solicitation of proxies for use at the Annual Meeting is being made
by the Board of Directors of the Company. The cost of soliciting proxies will be
borne by the Company. In addition to solicitation services to be provided by
Corporate Investor Communications ("CIC") as described below, proxies may be
solicited, in person or by telephone, by officers and regular employees of the
Company, who will receive no compensation for their services other than their
normal salaries. 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.
The Company has retained CIC at a fee estimated not to exceed $70,000,
plus reimbursement of reasonable out-of-pocket expenses, to assist in the
solicitation of proxies. The Company has also agreed to indemnify CIC against
certain liabilities and expenses, including liabilities under the Federal
securities laws. It is anticipated that approximately 25 employees of CIC may
solicit proxies.
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 a nominee for director (Proposal One).
Abstentions and broker non-votes will not be counted as voting at the Annual
Meeting with respect to Proposal One and, therefore, will not have an effect on
the outcome of Proposal One.
ANNUAL REPORT
The Company's Annual Report to Shareholders, including consolidated
financial statements of the Company for the fiscal year ended December 31, 1999,
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, 1999, 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 February 1, 2000 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
each nominee for director and (iii) all directors and executive officers as a
group (11 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>
Dearden, Maguire & Weaver 226,133(3) 6.60
One Tower Bridge, Suite 560
West Conshohocken, PA 19428
Dimensional Fund Advisors Inc. 168,669(4) 4.93
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
RCG Kingston Fund, L.L.C. 293,302(5) 8.57
c/o RCG Kingston, L.L.C.
757 Third Avenue, 27th Floor
New York, NY 10017
Tontine Partners, L.P. 194,598(6) 5.68
200 Park Avenue, Suite 3900
New York, NY 10166
Colin C. Blair 104,150(7) 3.04
Frederick W. Adami, III 11,516(8) *
B. Benjamin Cavallo 223,272(9) 6.52
John R. Eaton 17,996(10) *
Terrence A. Gomes 5,016(11) *
Dr. Loring C. Johnson 11,391(12) *
Richard D. Matthews 28,319(13) *
Scott W. Ramsay 2,600(14) *
Davis H. Scudder 17,825(15) *
Stanley D. Siskind 14,117(16) *
Richard S. Straczynski 68,000(17) 1.99
All directors and executive officers as a group
(11 persons) 504,202(18) 14.73
</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, as amended (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.
3
<PAGE> 7
(2) For purposes of calculating the percentage of the outstanding shares of
Common Stock at February 1, 2000 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 February 1, 2000 through the
exercise of 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, together with the 1986
Employee Option Plan and the 1986 Director Option Plan, 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 13F Quarterly Report
filed January 15, 2000 by Dearden, Maguire & Weaver.
(4) Based solely upon information contained in the 13F Quarterly Report
filed December 31, 1999 by Dimensional Fund Advisors Inc.
(5) Based solely upon information contained in the Schedule 13D filed by
RCG Associates with the SEC on August 18, 1999, as amended through
March 17, 2000.
(6) Based solely upon information contained in the 13F quarterly report,
filed December 31, 1999 by Tontine Partners, L.P.
(7) Includes 23,500 shares which Mr. Blair has the right to acquire within
60 days of February 1, 2000, through the exercise of stock options
granted under the 1986 Employee Option Plan and 1996 Option Plan. Also
includes approximately 23,675 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.
(8) Includes 9,516 shares which Mr. Adami has the right to acquire within
60 days of February 1, 2000, through the exercise of stock options
granted under the 1986 Director Option Plan and 1996 Option Plan. Also
includes 1,500 shares owned by Mr. Adami jointly with his wife, and 500
shares owned by Mr. Adami's daughters.
(9) Includes 4,916 shares which Mr. Cavallo has the right to acquire within
60 days of February 1, 2000, through the exercise of 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.
(10) Includes 9,516 shares which Mr. Eaton has the right to acquire within
60 days of February 1, 2000, through the exercise of stock options
granted under the 1986 Director Option Plan and 1996 Option Plan. Also
includes 7,980 shares owned by Mr. Eaton jointly with his wife.
(11) Includes 4,916 shares which Mr. Gomes has the right to acquire within
60 days of February 1, 2000, through the exercise of stock options
granted under the 1986 Director Option Plan and 1996 Option Plan.
(12) Includes 9,516 shares which Dr. Johnson has the right to acquire within
60 days of February 1, 2000, through the exercise of stock options
granted under the 1986 Director Option Plan and 1996 Option Plan.
(13) Includes 9,516 shares which Mr. Matthews has the right to acquire
within 60 days of February 1, 2000, through the exercise of 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.
4
<PAGE> 8
(14) Includes 2,000 shares which Mr. Ramsay has the right to acquire within
60 days of February 1, 2000, through the exercise of stock options
granted under the 1986 Director Option Plan and 1996 Option Plan and
600 shares owned by Mr. Ramsay jointly with his wife.
(15) Includes 9,516 shares which Mr. Scudder has the right to acquire within
60 days of February 1, 2000, through the exercise of 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,
2,555 shares owned by Scudder Bros. Fuel Company, Inc., of which Mr.
Scudder is a principal and 1,200 shares owned by Campello Salvage of
which Mr. Scudder is a partner.
(16) Includes 4,916 shares which Mr. Siskind has the right to acquire within
60 days of February 1, 2000, through the exercise of stock options
granted under the 1986 Director Option Plan and 1996 Option Plan.
(17) Includes 49,500 shares which Mr. Straczynski has the right to acquire
within 60 days of February 1, 2000, through the exercise of stock
options granted under the 1996 Option Plan.
(18) Includes 137,328 shares which directors and executive officers have the
right to acquire within 60 days of February 1, 2000, through the
exercise of stock options granted under the Stock Option Plans.
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 ten directors.
At the Annual Meeting, stockholders will be asked to vote on the
election of Class II Directors (Proposal One). The Nominating Committee of the
Board of Directors has nominated John R. Eaton, Dr. Loring C. Johnson, and Scott
W. Ramsay for election as Class II 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 NOMINEES AS DIRECTORS.
RECOMMENDATION OF DIRECTORS
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT THE STOCKHOLDERS
VOTE FOR THE ELECTION OF THE THREE NOMINEES NOMINATED BY THE NOMINATING
COMMITTEE 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, 2000 are as follows:
5
<PAGE> 9
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
BOARD OF DIRECTORS' NOMINEES FOR
ELECTION AT THIS ANNUAL
MEETING:
CLASS II (TERM EXPIRES IN 2000):
John R. Eaton ................................. 64 Director
Dr. Loring C. Johnson.............................. 68 Director
Scott W. Ramsay.................................... 53 Director
CONTINUING DIRECTORS:
CLASS III (TERM EXPIRES IN 2001):
B. Benjamin Cavallo................................ 72 Director
Terrence Gomes..................................... 54 Director
Stanley D. Siskind................................. 69 Director
CLASS I (TERM EXPIRES IN 2002):
Frederick W. Adami, III............................ 55 Director and Chairman
Richard D. Matthews................................ 67 Director
Davis H. Scudder................................... 69 Director
Richard S. Straczynski............................. 53 Director, President & CEO
</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.
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. From
1965-1997, Mr. Eaton was a Vice President and the President of Thompson, Eaton &
Boyden Insurance Agency, Inc., Brockton, Massachusetts. Since 1997, Mr. Eaton
has been 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 a Vice President and Dean of Faculty and
Instruction of the college.
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.
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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, and is
currently the Executive Vice President of Financial Systems & Strategic Planning
of Shaw's Supermarkets, Inc.
Davis H. Scudder. Mr. Scudder has been a director since 1974. Mr.
Scudder is Executive Vice President and Treasurer of Scudder Bros. Fuel Company,
Inc., Brockton, Massachusetts.
Stanley D. Siskind. Mr. Siskind has been a director since 1972. Mr.
Siskind was formerly First Vice President at Rix-Dunnington, Inc., a retail
pharmacy chain, where he worked from 1956 to 1992.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors of the People's Savings Bank of Brockton, the
Company's wholly-owned bank subsidiary (the "Bank") held 13 meetings during the
fiscal year ended December 31, 1999. During 1999, each of the incumbent
directors attended more than 75% of the total number of meetings of the Bank's
Board and of the committees on which such director served.
The Board of Directors of the Company held 13 meetings during the
fiscal year ended December 31, 1999. During 1999, each of the incumbent
directors attended more than 75% of the total number of meetings of the
Company's 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 and the Compensation Committee of the Board of
Directors of the Bank.
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, and Straczynski. The Executive Committee held 30 meetings during 1999.
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 Messrs. Scudder, Matthews, Ramsay, and Siskind. The
Auditing Committee met four times during 1999.
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 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 if
such other requirements as are specified in the By-laws are followed. The
Nominating Committee consists of Messrs. Adami, Cavallo, Eaton, Gomes, and
Straczynski. The Nominating Committee met two times during 1999.
Option Committee. The Option Committee administers the Stock Option
Plans. The Option Committee consists of Messrs. Cavallo and Scudder. The Option
Committee met two times during 1999.
Compensation Committee of the Bank. 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. The Compensation Committee
consists of Messrs. Scudder, Cavallo, Gomes, Johnson and Ramsay. The
Compensation Committee met two times during 1999.
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
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<PAGE> 11
currently consists of Mr. Eaton. The Bank's Investment Committee consists of
Messrs. Eaton, Johnson Scudder and Siskind.
COMPENSATION OF DIRECTORS
Because each director of the Company is also a member of the Board of
Directors of the Bank and because the Company currently conducts no business
separate from the business of the Bank, directors of the Company currently
receive no cash compensation in their capacities as directors of the Company.
Directors of the Bank received $600 for each meeting of the Board of Directors
of the Bank they attended in 1999. The Clerk received an additional $300 for
each meeting of the Board of Directors that he attended in 1999. Directors
received a $7,000 annual retainer for being on the Board of the Directors of the
Bank in 1999. Members of the Bank's Executive Committee received an additional
annual committee fee of $14,400. Members of the Bank's Auditing Committee,
Nominating Committee, CRA Committee and Compensation Committee received $600 for
each committee meeting they attended in 1999. The Chairman of each of the Bank's
Auditing Committee, Nominating Committee, CRA Committee and Compensation
Committee each received an additional $100 per meeting, respectively. The
Chairman of the Board of Directors of the Bank received an annual fee of $12,000
in 1999 and an additional $100 per Board meeting. No such fees were paid to
directors or committee members who are also officers of the Bank or the Company.
Non-employee directors receive automatic grants of stock options upon
their joining the Board of Directors and annually thereafter 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, 2000 are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Richard S. Straczynski.... 53 President and Chief Executive Officer
Colin C. Blair............ 49 Chief Operating Officer and Chief
Financial Officer
</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 since
1993 and Chief Operating Officer since 1999. 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.
8
<PAGE> 12
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 is
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 for the Chief Executive
Officer and Chief Financial Officer 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 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's compensation in 1999 were
salary, cash incentive compensation and stock options. In determining the level
of compensation for Mr. Straczynski for 1999, the Committees reviewed the Bank's
compensation package compared to those of industry peers. The evaluation of Mr.
Straczynski's 1998 performance included an evaluation of his progress in
increasing the Company's return on average stockholders' equity and earnings,
improving the Company's marketing and image, growing the commercial lending and
retail banking function, improving our community visibility, and retaining key
personnel during a period of rapid change. Based upon this review, the salary
paid to Mr. Straczynski was increased effective January 1, 1999 to
$250,000.
The key components of Mr. Blair's compensation in 1999 were salary,
cash incentive compensation and stock options. The evaluation of Mr. Blair's
1998 performance included an evaluation of his progress in increasing return on
average shareholders' equity and earnings, integrating the Company'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. Based upon this review,
the salary paid to Mr. Blair was increased effective January 1, 1999 to
$175,000.
9
<PAGE> 13
Stock options granted to Messrs. Straczynski and Blair during 1999 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
B. Benjamin Cavallo
Scott Ramsay
Terrence Gomes
Dr. Loring C. Johnson
EXECUTIVE COMPENSATION
Summary Compensation Table. 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, 1999, 1998 and 1997 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 ALL
NAME AND UNDERLYING OTHER
PRINCIPAL POSITION YEAR SALARY (2)(3) BONUS OPTIONS COMPENSATION(4)
------------------ --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Richard S. Straczynski(1)............. 1999 $259,600 $ 131,250 15,000 $4,800
President and Chief............... 1998 $209,800 $ 84,000 10,000 $4,750
Executive Officer................. 1997 $123,322 $ 67,200 20,000 $ -
Colin C. Blair........................ 1999 $183,400 $ 78,750 11,000 $4,800
Chief Operating Officer and........ 1998 $148,600 $ 42,000 7,500 $4,750
and Chief Financial Officer....... 1997 $139,650 $ 39,375 5,000 $3,750
</TABLE>
- --------------
(1) Richard S. Straczynski was appointed President and Chief Executive
Officer effective on April 7, 1997.
(2) In 1999 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
10
<PAGE> 14
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 agreements with five of its officers that
provide for severance benefits upon a terminating event 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, 1999 to each of the named executive officers.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
OPTION/SAR GRANTS IN LAST FISCAL YEAR PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
----------------- ---------------
PERCENT OF
TOTAL OPTIONS
NUMBER OF GRANTED TO EXERCISE
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 15,000 34.6% $19.50 6/18/09 $183,952 $466,170
President and Chief
Executive Officer
Colin C. Blair 11,000 25.4% $19.50 6/18/09 $134,898 $341,858
Chief Operating Officer
and Chief Financial Officer
</TABLE>
- --------------------------------
Aggregated Option Exercises and Fiscal Year-End Option Values. The
following table sets forth exercises of stock options during the year ended
December 31, 1999 by each of the named executive officers and the fiscal
year-end value of unexercised options.
11
<PAGE> 15
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
VALUE UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES ACQUIRED REALIZED OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END
NAME ON EXERCISE (#) ($) (#) (1) ($)
- ---- ----------------- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Richard S. Straczynski -- -- 49,500 $ 99,875
President and Chief
Executive Officer
Colin C. Blair -- -- 23,500 0
Chief Operating Officer
and Chief Financial Officer
</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, 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 Internal Revenue Code of 1986. 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.
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.
12
<PAGE> 16
<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 1999 (plan year 11/01/98 - 10/31/99). 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 on or after
January 1, 1994.
The estimated credited years of service at December 31, 1999, was six
years for Mr. Blair and three years 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.
13
<PAGE> 17
PERFORMANCE GRAPH
The following graph provides a comparison of cumulative total
stockholder return for the period from December 30, 1994 through December 31,
1999, 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"),
the Standard & Poor's 500 Stock Index (the "S&P 500 Index") and the Nasdaq Stock
Market-Banks Index (the "Nasdaq (Banks) Index"). In previous years, the Company
selected the Nasdaq (US Companies) Index to compare its cumulative total
stockholder return. For fiscal year 1999, the Company has selected the S&P 500
Index to compare its cumulative total stockholder return because the Company
believes that this newly selected index provides a more meaningful comparison
for its stockholders than the Nasdaq (US Companies) Index which is heavily laden
with technology stocks. In accordance with the rules of the SEC, the Company has
also included the Nasdaq (US Companies) Index, which was the index used in the
immediately preceding year.
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 three indices, and the reinvestment of any
dividends. The historical information set forth below is not necessarily
indicative of future performance of the Common Stock.
[INSERT PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
12/30/94 12/29/95 12/31/96 12/31/97 12/31/98 12/31/99
<S> <C> <C> <C> <C> <C> <C>
People's $100.0 $221.9 $230.2 $494.3 $459.2 $413.1
Nasdaq (Banks) Index $100.0 $147.7 $191.0 $318.0 $285.3 $268.9
S&P 500 Index $100.0 $137.5 $168.9 $225.2 $289.4 $350.3
Nasdaq (US Companies) Index $100.0 $141.3 $173.9 $213.1 $300.3 $542.4
</TABLE>
RECENT DEVELOPMENTS; POTENTIAL PROXY CONTEST
On March 28, 2000, the RCG Kingston/Smyth Group ("Kingston") filed a
letter with the SEC addressed to the Company's stockholders in which Kingston
stated its intention to solicit proxies to elect three of their nominees as
directors at the Company's Annual Meeting, in opposition to the directors
nominated by the Company's Board of Directors. According to this letter,
Kingston proposes that the Company's stockholders elect Kingston's nominees,
Vincent A. Smyth, William G. Foster, Jr., and John R. Kennedy as directors of
the Company at the Annual Meeting.
YOUR BOARD OF DIRECTORS AND MANAGEMENT BELIEVE STRONGLY THAT ELECTING
KINGSTON'S CANDIDATES IS CONTRARY TO THE BEST INTERESTS OF THE COMPANY'S
STOCKHOLDERS. YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU REJECT KINGSTON'S
CANDIDATES AND VOTE FOR THE BOARD'S NOMINEES ON THE ENCLOSED WHITE PROXY CARD.
DO NOT SIGN ANY PROXY CARD SENT TO YOU BY KINGSTON.
PARTICIPANTS ON BEHALF OF THE COMPANY
Because Kingston has stated an intention to solicit proxies to elect
three of their nominees as directors, the rules of the SEC require the Company
to provide to its stockholders certain additional information with respect to
participants (as defined in Schedule 14A promulgated pursuant to the Exchange
Act in the Company's proxy solicitation). Pursuant to those rules, the members
of the Board of Directors are, and certain employees and agents of the Company
may be deemed to be, participants. Unless otherwise indicated below, the address
of the participants described below is the address of the Company's principal
executive offices. Except as indicated below, no participant has purchased or
sold or otherwise acquired or disposed of any shares of Common Stock of the
Company in the last two years. Information with respect to the participant's
beneficial ownership of the Company's Common Stock is as of February 1, 2000.
None of the participants listed below are the record owners of shares of Common
Stock of the Company which are not beneficially owned by such person.
Richard S. Straczynski is a director and has been the Chief Executive
Officer and President of the Company since April 7, 1997. Mr. Straczynski is the
beneficial owner of 68,000 shares of Common Stock of the Company which
14
<PAGE> 18
includes (a) 49,500 shares of Common Stock which he has the right to acquire
within 60 days of February 1, 2000 pursuant to the exercise of stock options
granted under the 1996 Option Plan and (b) ADD IN ANY PURCHASES AND SALES WITHIN
PAST TWO YEARS, DATE AND AMOUNT.
Frederick W. Adami, III is a director of the Company. Since 1988, Mr.
Adami has been an attorney in the law office of Reed, Adami & Kaiser located at
1325 Belmont Street, Brockton, Massachusetts. Mr. Adami is the beneficial owner
of 11,516 shares of Common Stock of the Company, which includes (a) 9,516 shares
of Common Stock which Mr. Adami has the right to acquire within 60 days pursuant
to the exercise of vested stock options granted under the 1986 Director Option
Plan and 1996 Option Plan, (b) 1,500 shares owned by Mr. Adami jointly with his
wife and (c) 500 shares held by Mr. Adami's daughters. Of these shares, 250
shares of Common Stock were purchased by Mr. Adami in 1998 and 250 shares of
Common Stock were purchased in 1999.
B. Benjamin Cavallo is a director of the Company. Since 1959, Mr.
Cavallo has been an insurance broker and is a partner at Cavallo & Signoriello
Insurance Agency located at 190 Chauncy Street, Mansfield, Massachusetts.
Mr. Cavallo is the beneficial owner of 223,272 shares of Common Stock of the
Company which includes (a) 4,916 shares which Mr. Cavallo has the right to
acquire within 60 days of February 1, 2000 through the exercise of vested stock
options granted under the 1986 Director Option Plan and 1996 Option Plan,
(b) 2,112 shares held by Mr. Cavallo's son, (c) 115,514 shares held by
Mr. Cavallo's wife and (d) 55,060 shares held by a partnership in which
Mr. Cavallo is a partner.
John R. Eaton is a director of the Company. From 1965-1997, Mr. Eaton
was a Vice President and the President of Thompson, Eaton & Boyden Insurance
Agency, Inc. in Brockton, Massachusetts. Since 1997, Mr. Eaton has been the
Executive Vice President of A.L. Cushman & Son, Inc., located at 1776 Main
Street, Brockton, Massachusetts. Mr. Eaton is the beneficial owner of 17,996
shares of Common Stock of the Company which includes (a) 9,516 shares of Common
Stock which Mr. Eaton has the right to acquire within 60 days of February 1,
2000 through the exercise of vested stock options granted under the 1986
Director Option Plan and 1996 Option Plan and (b) 7,980 shares owned by Mr.
Eaton jointly with his wife. Of these shares, Mr. Eaton purchased 400 shares of
Common Stock in 1998.
Terrence A. Gomes is a director of the Company. Mr. Gomes has been on
the faculty of Massasoit Community College located at 1 Massasoit Blvd.,
Brockton, Massachusetts and is currently a Vice President and Dean of Faculty
and Instruction of the college. Mr. Gomes is the beneficial owner of 5,016
shares of Common Stock of the Company which includes 4,916 shares of Common
Stock which Mr. Gomes has the right to acquire within 60 days of
February 1, 2000, through the exercise of vested stock options granted under
the 1986 Director Option Plan and 1996 Option Plan.
Dr. Loring C. Johnson is a director of the Company. Dr. Johnson has
been an orthodontist since 1966 and is currently practicing at 25 Belmont
Street, South Easton, Massachusetts. Dr. Johnson is the beneficial owner of
11,391 shares of Common Stock of the Company which includes 9,516 shares
of Common Stock which Dr. Johnson has the right to acquire within 60 days of
February 1, 2000 through the exercise of vested stock options granted under
the 1986 Director Option Plan and 1996 Option Plan.
Richard D. Matthews is a director of the Company. Mr. Matthews is
President and Treasurer of R.D. Matthews Construction Company, Inc. located at
24 Rockland Street, Hanover, Massachusetts and has been a real estate developer
and building contractor since 1959. Mr. Matthews is the beneficial owner of
28,319 shares of Common Stock of the Company which includes (a) 9,516 shares of
Common Stock which Mr. Matthews has the right to acquire within 60 days of
February 1, 2000 through the exercise of stock options granted under the 1986
Director Option Plan and 1996 Option Plan, (b) 4,871 shares owned jointly with
his wife and (c) 41 shares of Common Stock which Mr. Matthews purchased in 1998.
Scott W. Ramsay is a director of the Company. Mr. Ramsay has been
Senior Vice President of Shaw's Supermarkets, Inc. located at 140 Laurel Street,
East Bridgewater, Massachusetts since 1991, and is currently Executive Vice
President of Financial Systems & Strategic Planning of Shaw's Supermarkets, Inc.
Mr. Ramsay is the beneficial owner of 2,600 shares of Common Stock of the
Company which (a) includes 2,000 shares of Common Stock which Mr. Ramsay has the
right to acquire within 60 days of February 1, 2000,
15
<PAGE> 19
through the exercise of vested options granted under the 1986 Director Option
Plan and 1996 Option Plan and (b) 600 shares owned jointly with his wife. Of
these shares, Mr. Ramsay purchased 400 shares in 1998.
Davis H. Scudder is a director of the Company. Mr. Scudder is Executive
Vice President of Scudder Bros. Fuel Company, Inc. located at 157 Clinton
Street, Brockton, Massachusetts. Mr. Scudder is the beneficial owner of 17,825
shares of Common Stock of the Company which includes (a) 9,516 shares which Mr.
Scudder has the right to acquire within 60 days of February 1, 2000 through the
exercise of vested options granted under the 1986 Director Option Plan and 1996
Option Plan, (b) 340 shares owned by Mr. Scudder's immediate family, (c) 2,555
shares owned by Scudder Bros. Fuel Company, Inc., of which Mr. Scudder is a
principal, and (d) 1,200 shares owned by Campello Salvage, of which Mr. Scudder
is a partner. Of these shares, Mr. Scudder purchased 1,200 shares of Common
Stock in 1999.
Stanley D. Siskind is a director of the Company. Mr. Siskind was
formerly First Vice President at Rix- Dunnington, Inc., a retail pharmacy chain,
where he worked from 1956 to 1992. Mr. Siskind is the beneficial owner of 14,117
shares of Common Stock of the Company which includes 4,916 shares of Common
Stock which Mr. Siskind has the right to acquire within 60 days of February 1,
2000 through the exercise of vested stock options granted under the 1986
Director Option Plan and 1996 Option Plan.
Colin C. Blair joined the Company in 1993 as the Company's Chief
Financial Officer. Since 1999 he has served as Chief Financial Officer and Chief
Operating Officer. Mr. Blair is the beneficial owner of 104,150 shares of Common
Stock, which includes 23,500 shares of Common Stock which Mr. Blair has the
right to acquire within 60 days of February 1, 2000 through the exercise of
vested stock options under the 1986 Employee Option Plan and 1996 Option Plan
and (b) 23,675 shares held in the Company's 401(k) Plan. Mr. Blair exercised
options to purchase 13,600 shares of Common Stock in 1998 and purchased an
additional 31,075 shares of Common Stock in 1998. Mr. Blair sold 66,125 and
15,000 shares of Common Stock in 1998 and 1999, respectively.
16
<PAGE> 20
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 a review of the copies of such reports furnished to
the Company, all Section 16(a) filing requirements applicable to its executive
officers, directors and greater than 10% stockholders were satisfied except that
Messrs. Blair and Scudder each inadvertently failed to file one report on Form 4
during 1999, 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
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 $1,218,569, or 2.98% of the Company's stockholders'
equity, at December 31, 1999.
Mr. Adami's law firm was retained by the Bank to provide certain
services in 1999. In 1999, the Bank paid $56,698.83 to Mr. Adami's law firm for
such services.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The firm of Wolf & Company, P.C. ("Wolf & Co.") has served as the
Company's independent certified public accountants for the fiscal year ending
December 31, 1999. 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.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 2001 Annual
Meeting of Stockholders of the Company must be received in writing by the
Company at its principal office on or before January 1, 2001, for inclusion in
its proxy statement and form of proxy relating to the meeting. Pursuant to the
By-laws of the Company, for the 2001 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 June 16,
2001; provided, however, that in the event the Annual Meeting is scheduled to be
held on a date more than 30 days before June 16, 2001 or more than 60 days after
June 16, 2001, 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,
17
<PAGE> 21
Massachusetts 02740. The Company's ability to exercise discretionary voting
authority with respect to shareholder proposals will be subject to certain
requirements of the Securities and Exchange Commission.
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, the proxy holders have discretionary authority to vote their shares
according to their best judgment.
VOTING INFORMATION
YOUR VOTE IS IMPORTANT. PLEASE SIGN, DATE AND MAIL PROMPTLY THE
ENCLOSED WHITE PROXY CARD IN THE ENCLOSED SELF-ADDRESSED STAMPED ENVELOPE. YOUR
BOARD OF DIRECTORS URGES YOU TO VOTE "FOR" ITS NOMINEES ON THE ENCLOSED WHITE
PROXY CARD. PLEASE DO NOT SIGN AND RETURN ANY PROXY CARD SENT TO YOU BY
KINGSTON.
It is not necessary to check any boxes if you wish to vote in
accordance with your Board's recommendations. Simply, sign, date and return the
enclosed WHITE proxy card.
If your shares are held in "street name," immediately instruct your
broker or the person responsible for your account to sign a WHITE proxy card on
your behalf. You should also sign, date and mail your WHITE proxy card
immediately upon receipt from your broker or bank, using the postage-paid
envelope provided. Please do so for each account you maintain. If you have
further questions or need assistance, please call:
CORPORATE INVESTOR COMMUNICATIONS, INC.
111 Commerce Road
Carlstadt, New Jersey 07072
CALL TOLL FREE (800) [________]
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
REQUESTED TO SIGN, DATE AND MAIL THE ENCLOSED WHITE PROXY CARD IN THE ENCLOSED
ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. PLEASE ACT
TODAY.
By Order of the Board of Directors,
Terrence Gomes
Clerk
______________, 2000
18
<PAGE> 22
X PLEASE MARK
--- VOTES AS IN THIS
EXAMPLE.
<TABLE>
<S> <C> <C> <C> <C>
PEOPLE'S BANCSHARES, INC. 1. Election of Directors. For All With- For All
Nominees hold Except
Mark box at right if an address change or comment has been John R. Eaton
noted on the reverse side of this card. Dr. Loring C. Johnson [ ] [ ] [ ]
Scott W. Ramsay
CONTROL NUMBER: 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 nominees(s). Your shares will be voted for the
remaining nominee(s).
2. 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 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 or
postponements thereof.
</TABLE>
Please be sure to sign and date this Proxy. Date
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Stockholder sign here Co-owner sign here
DETACH CARD DETACH CARD
<PAGE> 23
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 10:00 a.m., local time, on Friday, June 16, 2000 at Stone Forge
Public House, 90 Paramount Drive, Raynham, Massachusetts, 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 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, 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?
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