<PAGE>
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 (S)240.14a-11(c) or (S)240.14a-12
NBB Bancorp, Inc.
(Name of Registrant as Specified In Its Charter)
NBB Bancorp, Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(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:*
(4) Proposed maximum aggregate value of transaction:
- --------
*Set forth the amount on which the filing is calculated and state how it was
determined.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
174 UNION STREET, NEW BEDFORD, MA02740-6366 (508) 996-5000
March 31, 1994
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of NBB
Bancorp, Inc. to be held on Wednesday, May 18, 1994 at 10:00 a.m., local time,
at the Hawthorne Country Club, 970 Tucker Road, North Dartmouth, Massachusetts.
The accompanying Notice of Annual Meeting of Stockholders and Proxy Statement
set forth the business to come before this year's meeting.
Whether or not you plan to attend the meeting, it is important that your
shares be represented at the Annual Meeting. Accordingly, we request that you
complete, sign, date, and mail the enclosed proxy in the envelope provided at
your earliest convenience.
Very truly yours,
/s/ Robert McCarter
Robert McCarter
Chairman of the Board, President,
and Chief Executive Officer
<PAGE>
NBB BANCORP, INC.
174 UNION STREET
NEW BEDFORD, MA 02740-6366
TELEPHONE: (508) 996-5000
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON WEDNESDAY, MAY 18, 1994
----------------
New Bedford, Massachusetts
March 31, 1994
Notice is Hereby Given that the Annual Meeting of Stockholders of NBB
Bancorp, Inc. (the "Annual Meeting") will be held on Wednesday, May 18, 1994 at
10:00 a.m., local time, at the Hawthorne Country Club, 970 Tucker Road, North
Dartmouth, Massachusetts, for the following purposes:
1. To elect a class of two directors to serve for a three-year term;
2. To ratify the appointment of KPMG Peat Marwick as independent auditors;
and
3. To transact such other business as may properly come before the meeting
and any adjournments thereof.
The Board of Directors has fixed the close of business on March 22, 1994 as
the record date for determining the stockholders entitled to receive notice of
and to vote at the Annual Meeting and any adjournments thereof. Only holders of
common stock of record at the close of business on that date will be entitled
to notice of and to vote at the Annual Meeting and any adjournments thereof.
By Order of the Board of Directors
Carol E. Correia
Secretary
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN, AND RETURN THE ENCLOSED PROXY CARD IN THE
ENVELOPE PROVIDED. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
<PAGE>
NBB BANCORP, INC.
174 UNION STREET
NEW BEDFORD, MA 02740-6366
TELEPHONE: (508) 996-5000
----------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON WEDNESDAY, MAY 18, 1994
----------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of NBB Bancorp, Inc. (the "Company") for use
at the annual meeting of stockholders of the Company to be held on Wednesday,
May 18, 1994 (the "Annual Meeting").
At the Annual Meeting, the stockholders of the Company will be asked to
consider and vote upon the following matters and to transact such other
business as may properly come before the meeting and any adjournments thereof:
(1) to elect a class of two directors, each for a three-year term and until
their successors are duly elected and qualified; and (2) to ratify the
appointment of KPMG Peat Marwick as independent auditors.
The Proxy Statement, the accompanying Notice of Annual Meeting, and form of
proxy are first being mailed to stockholders of the Company on or about April
1, 1994 in connection with the solicitation of proxies for the Annual Meeting.
The Board of Directors has fixed the close of business on March 22, 1994 as the
record date for determining stockholders entitled to notice of and to vote at
the Annual Meeting (the "Record Date"). As of the Record Date, there were
8,660,394 shares of Common Stock outstanding (the only class of voting
securities) and entitled to vote at the Annual Meeting and approximately 4,800
stockholders of record. Each stockholder is entitled to one vote for each share
held of record for each matter properly submitted at the Annual Meeting.
The presence, in person or by proxy, of at least a majority of the total
number of outstanding shares of Common Stock entitled to vote is necessary to
constitute a quorum for the transaction of business at the Annual Meeting. A
quorum being present, directors will be elected by a plurality of the shares
present in person or represented by proxy at the Annual Meeting and entitled to
vote on the election of directors. The affirmative votes of the holders of a
majority of the shares of the Common Stock represented and entitled to vote at
the Annual Meeting are necessary to ratify the appointment of KPMG Peat Marwick
as independent auditors. Abstentions and broker non-votes will have no effect
on the outcome of the election of directors. Abstaining from voting on a
proposal will have the same effect as voting against the proposal. However,
broker non-votes will not be included in the calculation of shares entitled to
vote for a proposal and will have no effect on the outcome.
Stockholders of the Company are requested to complete, date, sign, and 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 two nominees for directors listed
in this Proxy Statement (Item 1 on proxy), and for the ratification of the
appointment of KPMG Peat Marwick as independent auditors (Item 2 on proxy). It
is not anticipated that
<PAGE>
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 discretion of the proxy holders.
Any properly completed proxy may be revoked at any time before it is voted by
giving written notice of such revocation to the Secretary of the Company at the
Company's main office, or by signing and duly delivering a proxy bearing a
later date, or by attending the Annual Meeting and voting in person. Attendance
at the Annual Meeting will not in and of itself constitute a revocation of a
proxy.
The Annual Report of the Company, including financial statements for the
fiscal year ended December 31, 1993, is being mailed to stockholders of the
Company concurrently with this Proxy Statement. The Annual Report, however, is
not part of the proxy soliciting materials.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Company was incorporated in February 1988 to become the holding company
for New Bedford Institution for Savings ("the Bank") but did not commence any
activity until the holding company formation, which became effective on
December 1, 1988. The Board of Directors of the Company held six meetings
during 1993. Each director attended more than 75 percent of the total number of
meetings of the Board and of the committees of which he was a member. The
Company has standing Executive, Audit, and Stock Option Committees.
The Executive Committee did not meet in 1993. The Audit Committee met four
times. The Executive and Audit Committees of the Bank met twenty-eight and six
times, respectively, during 1993.
The members of the Executive Committee of the Company are Messrs. McCarter,
Downey, and Stanton. The Executive Committee is vested with authority of the
Board of Directors in most matters between meetings of the Board.
The members of the Audit Committee of the Company are Messrs. Ades and
Tuttle. The Audit Committee reviews the annual financial statements of the
Company and the scope of the annual audit, monitors the Company's internal
financial and accounting controls, and recommends to the Board of Directors the
appointment of independent auditors.
The Bank has a Compensation Committee that determines the salaries and
incentive compensation to be paid to the Bank's executive officers. Messrs.
Tuttle, Ades, Downey, and Toomey, directors of the Bank, serve as the
Compensation Committee. The members of the Compensation Committee are also
members of the Company's Stock Option Committee. During 1993, the Compensation
Committee met twice.
The Board of Directors served as the Nominating Committee of the Company
which nominated the persons standing for election at the Annual Meeting. The
Nominating Committee held one meeting in January of 1994. The Nominating
Committee selects nominees for election as directors of the Company. The
Nominating Committee considers written recommendations of any stockholder of
record with respect to nominees for directors of the Company. In addition, the
Company's by-laws set forth procedures for stockholders to nominate candidates
for directors. Such procedures include the requirement that nominations be
received by the Secretary of the Company not less than 60 days nor more than
150 days prior to the date
2
<PAGE>
of the scheduled annual meeting; provided, however, that if less than 70 days'
notice or prior public disclosure of the date of the scheduled annual meeting
is given or made, notice must be so received not later than the close of
business on the tenth day following the earlier of the day on which such notice
was mailed or the day on which such public disclosure was made.
Directors of the Company receive a fee of $400 for each meeting of the Board
plus a retainer of $4,000 per year and a fee of $400 for each committee meeting
which they attend. Members of the Audit Committee also receive a retainer of
$1,500 per year. Directors who are also officers of the Company or salaried
employees of the Bank do not receive any fees for attendance at Board of
Directors' or committee meetings.
ELECTION OF A CLASS OF DIRECTORS
(ITEM 1 ON PROXY)
The Board of Directors of the Company is comprised of six members and is
divided into three classes, with the directors in each class serving for a term
of three years and until their successors are duly elected and qualified. As
the term of one class expires, a successor class is elected at each annual
meeting of stockholders.
At the Annual Meeting, a class of two directors will be elected to serve
until the 1997 annual meeting and until their successors are duly elected and
qualified. The Board of Directors has nominated Maurice F. Downey and Charles
T. Toomey as this class of directors (the "Nominees"). Each of the Nominees is
currently serving as a director of the Company. The Board of Directors
anticipates that each of the Nominees will stand for election and will serve,
if elected, as a director. However, if any person nominated by the Board of
Directors fails to stand for election or is unable to accept election, the
proxies will be voted for the election of such other person or persons as the
Board of Directors may recommend.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE ELECTION
OF THE TWO NOMINEES PROPOSED BY THE BOARD OF DIRECTORS OF THE COMPANY.
STOCKHOLDERS MAY NOT CUMULATE THEIR VOTES IN THE ELECTION OF DIRECTORS.
INFORMATION REGARDING NOMINEES AND DIRECTORS
The following table sets forth certain information, as of February 28, 1994,
with respect to the Nominees and those Continuing Directors of the Company
whose terms expire at the annual meetings of stockholders in 1995 and 1996,
based upon information furnished by them:
3
<PAGE>
NOMINEES FOR ELECTION AT 1994 ANNUAL MEETING
(CLASS WITH TERM EXPIRING IN 1997)
NAME, AGE, PRINCIPAL OCCUPATION FOR THE PAST FIVE YEARS, AND TERM OF OFFICE(1)
- ------------------------------------------------------------------------------
Maurice F. Downey
Mr. Downey, 63, is a practicing attorney with the firm of Downey & Downey,
P.C. in New Bedford and has served as the Bank's general counsel since
1969. Mr. Downey has been a director since 1969.
Charles T. Toomey
Mr. Toomey, 61, is a partner in Paul & Dixon Insurance Agency located in
New Bedford. Mr. Toomey has been a director since 1979.
CONTINUING DIRECTORS
(CLASS WITH TERM EXPIRING IN 1995)
Alan Ades
Mr. Ades, 63, is a private investor, and during the past five years, he has
also served as chairman of States Nitewear Inc., a clothing manufacturer
located in New Bedford. He has been a director since 1970.
John K. Stanton
Mr. Stanton, 71, is retired. Prior to his retirement, he was first vice
president and treasurer of Berkshire Hathaway, Inc., a textile
manufacturer. Mr. Stanton has been a director since 1958.
CONTINUING DIRECTORS
(CLASS WITH TERM EXPIRING IN 1996)
Robert McCarter
Mr. McCarter, 68, is the Chairman of the Board, President, and CEO of the
Company and the Chairman of the Board, President, and CEO of the Bank and
has served as CEO of the Bank since 1976. Mr. McCarter has been a director
since 1976.
Clifford H. Tuttle, Jr.
Mr. Tuttle, 63, is President, CEO, and director of Aerovox, Inc., a
manufacturer of electrical components headquartered in North Dartmouth. Mr.
Tuttle has been a director since 1974.
- --------
(1) Includes service as director and as trustee of the Bank prior to its
conversion to stock form in 1987. Each of the Nominees and Continuing
Directors has served as a director of the Company since its incorporation
in February 1988, with the exception of Mr. Toomey, who became a director
in March 1989.
SECURITIES OF THE COMPANY OWNED BY MANAGEMENT
The following table sets forth the number of shares of the Company's Common
Stock and the percent of outstanding Common Stock beneficially owned as of
February 28, 1994, based upon information furnished by the named individuals,
with respect to (i) each director, (ii) each executive officer named in the
Summary
4
<PAGE>
Compensation Table below, and (iii) all directors and current executive
officers of the Company and the Bank as a group:
<TABLE>
<CAPTION>
AMOUNT OF BENEFICIAL
OWNERSHIP OF PERCENT OF
NAME COMMON STOCK(1) CLASS
---- -------------------- ----------
<S> <C> <C>
Alan Ades...................................... 33,900 (2) *
Maurice F. Downey.............................. 15,405 (3) *
William A. Flaherty............................ 19,500 (4) *
Irving J. Goss................................. 10,200 (5) *
Paul A. Lamoureux.............................. 27,300 (6) *
Robert McCarter................................ 150,233 (7) 1.68%
John K. Stanton................................ 14,315 (8) *
Charles T. Toomey.............................. 13,500 (9) *
Clifford H. Tuttle, Jr......................... 25,334(10) *
All directors and executive officers of the
Company and the Bank as a group (25 persons).. 520,697(11) 5.84%
Ronald S. LaStaiti.............................
(Former executive officer) 33,500 *
</TABLE>
- --------
* Less than 1 percent of outstanding shares of common stock.
(1) In accordance with Rule 13d-3 under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), a person is deemed to be the beneficial
owner, for purposes of this table, of any shares of Common Stock if he or
she has or shares voting power or investment power with respect to such
security, or has the right to acquire beneficial ownership at any time
within 60 days of February 28, 1994.
(2) Includes 6,000 shares owned by his spouse of which Mr. Ades disclaims
beneficial ownership and 1,500 shares which Mr. Ades has the right to
acquire under the Company's Stock Option Plan.
(3) Includes 675 shares held by family members of which Mr. Downey disclaims
beneficial ownership, 3,480 shares held in a retirement trust of which Mr.
Downey is a trustee, and 10,900 shares which Mr. Downey has the right to
acquire under the Company's Stock Option Plan.
(4) Includes 200 shares held in custody for minor children, 2,630 shares as to
which voting and investment power is shared with his spouse, and 11,100
shares which Mr. Flaherty has the right to acquire under the Company's
Stock Option Plan.
(5) Includes 9,200 shares which Mr. Goss has the right to acquire under the
Company's Stock Option Plan.
(6) Includes 4,000 shares held in custody for minor children, and 20,500
shares which Mr. Lamoureux has the right to acquire under the Company's
Stock Option Plan.
(7) Includes 17,899 shares as to which voting and investment power is shared
with his spouse, 5,700 shares owned by his spouse, 3,782 shares allocated
to Mr. McCarter under the Bank's ESOP, and 116,451 shares which Mr.
McCarter has the right to acquire under the Company's Stock Option Plan.
(8) Includes 815 shares owned by his spouse of which Mr. Stanton disclaims
beneficial ownership and 6,500 shares which Mr. Stanton has the right to
acquire under the Company's Stock Option Plan.
(9) Includes 6,000 shares which Mr. Toomey has the right to acquire under the
Company's Stock Option Plan.
(10) Includes 10,900 shares which Mr. Tuttle has the right to acquire under the
Company's Stock Option Plan.
5
<PAGE>
(11) Includes 195,251 shares for all Nominees, directors, and executive
officers of the Company and the Bank as a group, which they have the right
to acquire within 60 days of February 28, 1994, under options previously
granted pursuant to the Company's Stock Option Plan, and also includes
14,670 shares which have been allocated to the accounts of all executive
officers of the Company and the Bank as a group pursuant to the terms of
the Bank's ESOP.
EXECUTIVE OFFICERS OF THE COMPANY AND THE BANK
Robert McCarter has served as Chairman of the Board, President, and Chief
Executive Officer of the Company since 1988. He has also served as Chief
Executive Officer of the Bank since 1976 and Chairman of the Board of the Bank
since 1986. He served as President of the Bank from 1976 to 1988 and has served
as President of the Bank since September 1993. From 1962 to 1976, he served as
President and Chief Executive Officer of the Amherst Savings Bank. Mr. McCarter
is 68.
Irving J. Goss was elected Senior Vice President and Chief Financial Officer
of the Company and the Bank in December 1992. Prior to joining the Company and
the Bank, Mr. Goss was Comptroller at Fleet Financial Group. Mr. Goss is 50.
Paul A. Lamoureux has served as Treasurer and Senior Vice President of the
Bank since 1986. He is responsible for the Operations Division of the Bank. He
has been with the Bank since 1971. Mr. Lamoureux is 47.
William A. Flaherty has served as Senior Vice President of the Bank since
1987 and is in charge of the Commercial Loan Department. Prior to joining the
Bank in 1983, he served as a vice president of State Street Bank and Trust
Company of Boston. Mr. Flaherty is 47.
Frederick D. Healey was elected Senior Vice President of the Bank in May 1993
and is responsible for Retail Banking and Marketing. Prior to joining the Bank,
he served as senior vice president in charge of the retail division at South
Shore Bank. Mr. Healey is 47.
Gayle A. Johnston has served as Senior Vice President of the Bank since 1986.
She is responsible for Human Resources. She joined the Bank in 1970. Ms.
Johnston is 50.
Carol E. Correia has served as Secretary of the Company since 1988, and as
Vice President in charge of Administration and Clerk of the Bank since 1987.
She has been with the Bank since 1976. Ms. Correia is 37.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
NBB Bancorp, Inc. is a one-bank holding company that has no paid employees.
All references to "executives" in this report refer to the executives of New
Bedford Institution for Savings (the "Bank").
The Bank contracts with a salary consultant, Thomas Warren & Associates,
Inc., to make annual recommendations for salary grades and ranges for both
exempt and non-exempt positions. These recommendations, which are based on
surveys of banks of comparable type and size, are compared to salary surveys
published by banking associations and other organizations. In addition, certain
committee members
6
<PAGE>
also receive compensation data from similar sources within their own
professions, thereby expanding the information available to them.
The Board of Directors and the Committee are of the opinion that the
performance of the executives has a direct bearing on the performance of the
Company. Therefore, the compensation program is designed to attract and
motivate competent bank executives whose interests are aligned with the goals
of the Bank and the stockholders.
The executive compensation program consists of a base salary, a short-term
performance cash incentive plan, and a long-term stock option plan. The success
of the Bank over a five-year period, with emphasis on the latest year, is
considered when determining compensation. Two major factors are considered when
judging the success of the Bank. The first and most important factor is the
comparison of numeric data of the Bank to that of peer banks located throughout
New England. Although the banks included in the KBW New England Savings Bank
Index used in the Shareholder Return Performance Graph presented below are not
identical to those used by the Bank and its salary consultant in compiling peer
bank information, in both cases they are a representative cross-section of the
New England savings banks and there is substantial overlap. The Committee feels
it important that any index used for performance comparisons consist of savings
banks located in New England. The large number of savings bank acquisitions in
New England during the past year, particularly in Massachusetts, has required a
changing index. The numeric data used for comparison includes, but is not
limited to, return on assets, return on equity, asset growth, asset quality,
operating efficiency ratio, and capital position. This information is available
from a wide variety of sources, including regularly published reports of
banking associations, reports of investment firms' bank analysts, material
purchased from compensation consultants, and reports of government regulatory
agencies. The second factor considered is the progress of the Bank toward
achieving non-numeric strategic objectives related to mergers and acquisitions,
technological improvements in the Bank's operations, employee development, and
community contribution.
The Committee makes a subjective evaluation of the Bank's performance
relative to the numeric data of the peer banks and the non-numeric strategic
goals. Except for the fact that cash incentive awards may only be granted if
the Bank's return on assets exceeds the average for peer banks, no weighting
factor is used in making the evaluation. The Committee also makes a subjective
evaluation of each executive's contribution to the success of the Bank when
determining compensation packages.
BASE SALARY
The 1993 salaries of the executive officers were determined in December 1992,
based upon salary ranges recommended by the Bank's compensation consultant and
approved for use during 1993 by the Committee. The Committee has followed a
conservative policy of establishing base salaries near the midpoint of the
salary ranges approved by the Committee, except in those cases where the
outstanding performance and contribution of an executive warrants additional
consideration. In such cases, the salaries are still established within the
approved salary ranges.
Under employment agreements with the Company, Messrs. McCarter and Goss shall
be paid base salaries of not less than $275,000 and $145,000, respectively. In
1993, they received base salaries of $362,500 and $145,000, respectively. See
"Employment Agreements and Special Termination Agreements."
Effective August 31, 1993, Mr. LaStaiti, formerly Executive Vice President of
the Company and President and Chief Operating Officer of the Bank, resigned
from all positions with the Company, the Bank,
7
<PAGE>
and subsidiaries thereof. Pursuant to a severance agreement dated as of June
10, 1993, Mr. LaStaiti was paid a lump sum payment in an amount equal to three
months' salary and ownership of an automobile used by Mr. LaStaiti and owned by
the Bank was transferred to him. The agreement allows Mr. LaStaiti to be paid
up to six additional months' salary beginning December 1, 1993, provided he is
not engaged in employment or self-employment for a total of at least 25 hours
during the month. Mr. LaStaiti's stock options became fully vested upon his
termination and were exercised thereafter. Mr. LaStaiti benefits under the
SBERA plan and the ESOP plan were not vested by the date of his termination
and, therefore, were forfeited.
PERFORMANCE CASH INCENTIVE PLAN
The cash incentive awards for 1993 were determined in December of 1993, based
upon the Bank's performance for that year, and paid in January 1994. Because
the payment was for 1993 performance, it is included in the summary
compensation table for that year.
The cash incentive plan allows for a maximum incentive payment ranging from
20 to 40 percent of the base salary, depending on the level of each executive's
responsibility. The plan allows the Committee, or in certain circumstances the
CEO, to adjust the award of individual executives. Any adjustments made cannot
increase the overall total cost to the Bank of the incentive payment. Before a
cash incentive award can be made, the Bank's return on assets must exceed the
average for the peer banks. If it has been determined to make cash incentive
awards, the other numeric and non-numeric factors are considered in determining
the percentage of the maximum incentive payment that will be made to individual
executives. No weighting factor is used in making that determination.
The Committee's subjective evaluation of the Bank's performance for 1993 as
compared to its peer group resulted in a cash incentive payment of the maximum
amount for each executive officer. A more detailed explanation of the
evaluation appears in the section titled "Compensation of the Chief Executive
Officer."
STOCK OPTION PLAN
The Company has a Stock Option Plan for the purpose of providing a long-term
performance incentive to, and encourage the continued employment of, the
directors and the executives of the Company and the Bank. The directors believe
that having this proprietary interest in the Company aligns the interest of the
executives and the directors more closely with the stockholders. The Stock
Option Plan requires that the exercise price of the stock be the fair market
value as determined by the closing price on the date of the grant.
Awards of stock options are recommended by the Committee to the Company
directors for approval. The number of options recommended at the end of 1993
and approved was based on a subjective evaluation of the level of
responsibility of each executive, the performance of the Bank, the practice of
similar size banks in granting stock options, based on information received
from the compensation consultant and collected by the Bank, and the market
price of the stock, as well as the overall compensation package of each
officer. In recognition of these factors, including the Bank's strong
performance in 1993, the Committee recommended the granting of a modest
increase in the number of stock options granted to the officers in 1992, except
for Mr. McCarter who received the same number of options as in the prior year
and for Mr. Goss who received a larger grant of options in 1992 in connection
with his joining the Company. The Committee believes that the 1993 option
grants are comparable to stock option grants made to officers of similar size
banks.
8
<PAGE>
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Base Salary
As a result of the Bank's performance and the Committee's evaluation of the
CEO's performance in 1992, it was voted that his salary for 1993 be established
at the top of the salary range recommended by the compensation consultant and
approved by the Committee. The base salary for 1993 was established at
$365,000.
The Committee considered the following performance accomplishments of 1992 in
establishing the compensation package for Mr. McCarter and the other executive
officers: the Bank had a return on assets based on income from operations of
1.17 percent, one of the highest in its peer group; total return for the
Company was higher than the index of the S&P 500 and significantly higher than
an index of 18 New England savings banks used as a peer group by Keefe,
Bruyette & Woods, Inc., a firm that specializes in bank equities; the Bank made
its second major regulatory acquisition of another bank and thereby expanded
its market area into Rhode Island, which made it the largest savings bank in
Massachusetts and the sixth largest bank in the state. The Bank continued to be
recognized by bank stock analysts of national companies for its financial
strength. The Committee also felt the Bank made significant progress in its
non-numeric strategic goals.
Performance Cash Incentive
In determining the short-term performance incentive payment for 1993 for all
executive officers, including the chief executive officer, the Committee
evaluated the Bank's performance accomplishments for that year. Return on
assets based on income from operations at 1.17 percent was above the average of
the peer banks, asset quality had significantly improved, and the operating
efficiency ratio was the second lowest in the peer group. In addition,
significant progress had been made in a number of areas such as the
assimilation of the bank acquired in 1992 which included the closing of four
offices. In addition, a number of significant technological improvements had
been made within the Bank. All executive officers received the maximum award
under the plan, with the chief executive officer receiving 40 percent of base
salary, or $146,000.
Stock Options
In recognition of his continuing leadership of the Company and the Bank, the
Committee recommended and the directors approved a grant of 25,000 stock
options to Mr. McCarter. Based upon the Committee's research of options granted
to CEO's of peer group banks, this number of options was considered to be a
reasonable number for this position in order to provide a long-term performance
incentive.
The Bank's Compensation Committee (the "Committee") consists of Clifford H.
Tuttle, Jr., Chairman, Alan Ades, Maurice F. Downey, and Charles T. Toomey.
Messrs. Tuttle, Ades, and Downey are members of the Board of Directors and the
Executive Committee of the Bank and are directors of the Company. Mr. Toomey is
a director of the Bank and of the Company. In 1993, the Bank purchased certain
of its insurance policies through the Paul & Dixon Insurance Agency, of which
Mr. Toomey is a partner.
The Bank purchases certain of its insurance policies through the Paul & Dixon
Insurance Agency. Charles T. Toomey, a director of the Company and the Bank, is
a partner in the Paul & Dixon Insurance Agency. Fees and commissions for
policies purchased in 1993 totaled $138,162. However, approximately
9
<PAGE>
$49,000 of those payments related to prior year policy renewals, while
approximately $90,000 represented actual expenses incurred and paid during
1993. The Company believes that such commissions and fees are at rates
customary in the industry. The Company has sought and received bids from
several insurers as part of its overall insurance program.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Bank's Compensation Committee (the "Committee") consists of Clifford H.
Tuttle, Jr., Chairman, Alan Ades, Maurice F. Downey, and Charles T. Toomey,
Messrs. Tuttle, Ades, and Downey are members of the Board of Directors and the
Executive Committee of the Bank and are directors of the Company. Mr. Toomey is
a director of the Bank and of the Company. In 1993, the Bank purchased certain
of its insurance policies through the Paul & Dixon Insurance Agency, of which
Mr. Toomey is a partner.
The Bank purchases certain of its insurance policies through the Paul & Dixon
Insurance Agency, Charles T. Toomey, a director of the Company and the Bank, is
a partner in the Paul & Dixon Insurance Agency. Fees and commissions for
policies purchased in 1993 totaled $138,162. However, approximately $49,000 of
those payments related to prior year policy renewals, while approximately
$90,000 represented actual expenses incurred and paid during 1993. The Company
believes that such commissions and fees are at rates customary in the industry.
The Company has sought and received bids from several insurers as part of its
overall insurance program.
Clifford H. Tuttle, Jr., Chairman
Alan Ades
Maurice F. Downey
Charles T. Toomey
10
<PAGE>
SHAREHOLDER RETURN PERFORMANCE GRAPH
The Securities and Exchange Commission requires that the Company include in
its Proxy Statement line-graph presentation comparing cumulative, five-year
shareholder returns for the Company's Common Stock with a broad-based market
index and either a nationally recognized industry standard or an index of peer
companies selected by the Company. The Company has compared its performance
with the S&P 500 Index and The Index of Total Return for the KBW New England
Savings Bank Index. The returns shown assume the reinvestment of dividends.
The graph comparing the NBB Bancorp, Inc. index of total return for the period
from 12/31/88 to 12/31/93 with the S&P 500 and a peer group of banks in New
England was plotted using the indexed returns shown below.
<TABLE>
<CAPTION>
[GRAPH APPEARS HERE]
INDEX OF TOTAL RETURN (12/31/88=100)
- -------------------------------------------------------------------------------
S&P 500 KBW New England NBB Price Plus
DATE INDEX Savings Bank Index Indexed Cumulative Dividends
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
12/31/88 100.00 100.00 100.00 $14.750
3/31/89 107.06 110.07 106.64 $15.730
6/30/89 116.49 110.33 111.59 $16.460
9/30/89 128.92 103.75 109.76 $16.190
12/31/89 131.52 84.45 103.69 $15.295
- -------------------------------------------------------------------------------
3/31/90 127.52 77.02 95.08 $14.025
6/30/90 135.46 68.78 96.64 $14.255
9/30/90 116.87 48.61 68.54 $10.110
12/31/90 127.23 42.37 72.64 $10.715
- -------------------------------------------------------------------------------
3/31/91 145.57 61.59 91.53 $13.500
6/30/91 145.16 53.37 84.98 $12.535
9/30/91 152.82 62.70 100.47 $14.820
12/31/91 165.43 74.38 118.51 $17.480
- -------------------------------------------------------------------------------
3/31/92 161.17 97.35 141.63 $20.890
6/30/92 164.11 100.84 145.59 $21.475
9/30/92 169.15 99.99 160.58 $23.685
12/31/92 177.49 130.65 215.59 $31.800
- -------------------------------------------------------------------------------
3/31/93 185.21 144.92 231.63 $34.165
6/30/93 186.08 136.62 228.31 $33.675
9/30/93 190.85 176.90 286.85 $42.310
12/31/93 194.22 174.41 281.12 $41.465
- -------------------------------------------------------------------------------
Source: KEEFE, BRUYETTE & WOODS, INC.
</TABLE>
EXECUTIVE COMPENSATION
No separate compensation is being paid to the executive officers of the
Company, all of whom are executive officers of the Bank and receive
compensation as such.
The following table sets forth the cash compensation paid by the Bank for
services rendered in all capacities during the fiscal years ended December 31,
1991, 1992, and 1993 to the Bank's chief executive officer and the three other
most highly compensated executive officers, plus one former executive officer,
of
11
<PAGE>
the Company and the Bank whose total salary and bonus compensation exceeded
$100,000 for the fiscal year ended December 31, 1993:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
---------------------------
OTHER LONG-TERM
ANNUAL COMPENSATION ALL OTHER
NAME AND COMPEN- AWARDS COMPEN-
PRINCIPAL POSITION YEAR SALARY BONUS(1) SATION(2) OPTIONS(3) SATION(4)
------------------ ---- -------- -------- --------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Robert McCarter......... 1993 $362,500 $146,000 -- 25,000 $ 6,513
Chairman, President, 1992 300,000 120,000 -- 25,000 822,410(5)
and CEO of the Company 1991 275,000 75,000 -- 10,000 9,274
and Chairman,
President, and CEO of
the Bank
Irving J. Goss.......... 1993 145,000 43,500 -- 5,000 1,152
SVP, Treasurer, and CFO 1992 2,231 5,000 -- 20,000 --
of the Company and the 1991 -- -- -- -- --
Bank(6)
Paul A. Lamoureux....... 1993 87,546 26,100 -- 5,000 4,017
SVP of the Bank 1992 83,000 25,000 -- 3,500 4,696
1991 80,000 15,000 -- 1,500 4,435
William A. Flaherty..... 1993 84,815 24,600 -- 5,000 4,001
SVP of the Bank 1992 78,800 20,000 -- 3,000 4,924
1991 78,600 10,000 -- 0 4,622
Ronald S. LaStaiti...... 1993 132,039 0 -- 0 42,923(7)
(Former executive offi- 1992 180,000 35,000 -- 3,500 5,129
cer) 1991 176,000 20,000 -- 3,000 6,226
</TABLE>
- --------
(1) Represents awards made under the Bank's salary incentive plan.
(2) Perquisites and other personal benefits paid to each named executive
officer in each instance aggregated less than 10 percent of the total
annual salary and bonus and, therefore, are omitted from the table as
permitted by the rules of the Securities and Exchange Commission.
(3) Represents stock options granted under the Company's Stock Option Plan as
follows:
Grant date: December 16, 1993 Exercise price: $36.875
Grant date: December 21, 1992 Exercise price: $28.500
Grant date: December 22, 1992 Exercise price: $28.625
Grant date: October 16, 1991 Exercise price: $11.875
(4) The amounts in this column include the following: (a) insurance premiums
paid for term life insurance for the named executives of the Company and
the Bank: $3,192 for Mr. McCarter, $1,152 for Mr. Goss, $696 for Mr.
Lamoureux, $680 for Mr. Flaherty, and $708 for Mr. LaStaiti; (b) the value
of shares allocated under the Company's Employees' Stock Ownership Plan
(ESOP). During 1993, 19,677 shares of Common Stock were allocated under the
ESOP for the benefit of 349 participants, including the following number of
shares for the named executive officers of the Company and the Bank: 231
for Mr. McCarter, 231 for Mr. Lamoureux, and 231 for Mr. Flaherty.
(5) Mr. McCarter's Executive Supplemental Retirement Agreement entitled him to
benefits at his normal retirement age of 65, which was attained in 1990. No
additional benefits under this agreement accrued after that date. In 1991,
when Mr. McCarter agreed to extend his employment, the directors voted that
12
<PAGE>
he could exercise his right to receive a lump-sum payout prior to his
retirement. As reported in last year's proxy statement, Mr. McCarter
exercised that right in 1992 and received $815,495 in full satisfaction of
the Bank's obligations under the Executive Supplemental Retirement
Agreement. The full amount of this payment was accrued by the Bank during
the years through December 31, 1991 and did not result in any further
expense in 1992.
(6) Mr. Goss joined the Company and the Bank in December 1992 as Senior Vice
President and Chief Financial Officer.
(7) On August 31, 1993, Mr. LaStaiti terminated his employment with the Company
and the Bank. As part of his termination, he was paid severance payments
which totaled $42,923. His ESOP shares were forfeited and his options were
vested and exercised.
<TABLE>
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE
---------------------------------------------- VALUE AT
ASSUMED ANNUAL
NUMBER OF TOTAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(3)
OPTIONS EMPLOYEES IN PRICE EXPIRATION -------------------
NAME GRANTED(1) FISCAL YEAR(2) PER SHARE DATE 5% 10%
---- ---------- -------------- --------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Robert McCarter......... 25,000 28.7% $36.875 12/15/03 $579,859 $1,469,469
Irving J. Goss.......... 5,000 5.7% 36.875 12/15/03 115,971 293,894
William A. Flaherty..... 5,000 5.7% 36.875 12/15/03 115,971 293,894
Paul A. Lamoureux....... 5,000 5.7% 36.875 12/15/03 115,971 293,894
Ronald S. LaStaiti
(Former executive
officer)............... -- -- --
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
- --------
(1) All options were granted on December 16, 1993, at an exercise price per
share equal to the fair market value of the Company's Common Stock on that
date. All options granted in 1993 were exercisable on the date of grant or
became exercisable on January 1, 1994, except that the options granted to
Mr. Goss will become exercisable as to 350, 2,700, and 1,950 shares on
January 1, 1997, 1998, and 1999, respectively.
(2) Other options granted include 47,000 to ten other officers of the Bank.
(3) The assumed annual rates of appreciation of 5 and 10 percent would result
in the price of the Company's stock increasing to $60.07 and $95.65,
respectively. Over the last five years, the market price of the Company's
stock has increased at a compound rate of 20.27 percent.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
AT FISCAL AT FISCAL
SHARES YEAR-END YEAR-END
ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert McCarter......... 5,000 $128,322 112,951 22,150 1,938,754 $191,044
Irving J. Goss.......... 1,000 10,625 5,800 18,200 49,300 113,450
William A. Flaherty..... 7,400 177,660 11,100 0 100,363 0
Paul A. Lamoureux....... 1,500 22,500 20,500 0 304,438 0
Ronald S. LaStaiti
(Former executive
officer)............... 31,500 650,875 0 0 0 0
</TABLE>
13
<PAGE>
RETIREMENT PLAN FOR EMPLOYEES
The Bank provides a retirement plan for its eligible employees through the
Savings Banks Employees Retirement Association ("SBERA"), an unincorporated
association of 1) savings banks operating within Massachusetts and 2) other
organizations providing services to or for savings banks. SBERA's sole purpose
is to enable the participating employers to provide pensions and other benefits
for their employees.
The following table illustrates annual pension benefits under SBERA for
retirement at age 65:
<TABLE>
<CAPTION>
ANNUAL PENSION BENEFIT BASED ON YEARS OF SERVICE
-------------------------------------------------------
AVERAGE 30 OR
COMPENSATION(1) 10 YEARS 15 YEARS 20 YEARS 25 YEARS MORE YEARS
--------------- --------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
$ 20,000 $ 2,600 $ 3,900 $ 5,200 $ 6,500 $ 7,500
40,000 6,037 9,056 12,074 15,093 18,111
60,000 9,737 14,606 19,474 24,343 29,211
80,000 13,437 20,156 26,874 33,593 40,311
100,000 17,137 25,706 34,274 42,843 51,411
120,000 20,837 31,256 41,674 52,093 62,511
140,000 24,537 36,806 49,074 61,343 73,611
150,000 26,387 39,581 52,774 65,968 79,161
160,000 28,237 42,356 56,474 70,593 84,711
170,000 30,087 45,131 60,174 75,218 90,261
200,000 35,637 53,456 71,274 89,093 106,911
235,840 and
above(2) 42,267 63,401 84,535 105,669 115,641(3)
</TABLE>
- --------
(1) Average compensation for purposes of this table is based on the three years
immediately preceding retirement. Compensation for such purposes means
compensation listed in the "Salary" and "Bonus" columns of the Summary
Compensation Table set forth above plus all other taxable compensation,
subject to the cap imposed under the Internal Revenue Code.
(2) The maximum compensation that may be used in 1993 to calculate benefits
under the Bank's retirement plan is $235,840.
(3) The maximum annual benefit permissible under the Internal Revenue Code in
effect on December 31, 1993 is $115,641 subject to cost-of-living
adjustments.
The estimated years of service at 65 for purposes of the pension plan for the
four executive officers named in the Summary Compensation Table are: 29 for Mr.
McCarter including prior service with another savings bank, 15 for Mr. Goss, 41
for Mr. Lamoureux and 28 for Mr. Flaherty. Annual pension amounts shown are not
subject to any offset for Social Security benefits. Mr. LaStaiti's years of
service prior to his resignation were not sufficient for his benefits under the
plan to become vested.
EMPLOYMENT AGREEMENTS AND SPECIAL TERMINATION AGREEMENTS
The Company, the Bank, and Mr. McCarter are parties to an Employment
Agreement dated September 20, 1989, which provides that Mr. McCarter will serve
as Chairman of the Board, President, and Chief Executive Officer of the Company
and Chairman and Chief Executive Officer of the Bank for a term continuing
until December 31, 1991. The Agreement was amended on April 17, 1991 to extend
the term of
14
<PAGE>
Mr. McCarter's employment until the date of the Company's annual meeting in
1994. The Agreement may be terminated with or without cause by a two-thirds
vote of the Board of Directors of the Company and the Bank. In the event Mr.
McCarter's employment is terminated without cause, he will generally be
entitled to draw his salary and benefits for a period of one year.
The Company, the Bank, and Irving J. Goss are parties to an Employment
Agreement dated December 22, 1992, which provides that Mr. Goss will serve as
Senior Vice President and Chief Financial Officer of the Bank and the Company.
The Employment Agreement has an initial term of one year, which will be
automatically renewed for successive one-year terms unless 60 days' notice is
given by either party prior to the end of any term. In the event of the
termination of Mr. Goss' employment without cause, he will be entitled to a
severance payment equal to twelve months of his then monthly salary.
The Company and the Bank entered into Special Termination Agreements dated
October 31, 1989 and October 31, 1993, with certain of their officers including
each of the two officers named in the Summary Compensation Table, and one dated
December 22, 1992 with Mr. Goss. These Agreements provide that if there is a
"Change in Control" of the Company (as defined in the Agreements), and if
during the three-year period following such Change in Control the officer's
employment is terminated for any reason other than for "cause," or the officer
terminates his or her own employment following a demotion, reduction in
compensation or similar event, the officer will be entitled to receive a lump-
sum payment equal to approximately three times his or her annual compensation.
CERTAIN RELATIONSHIPS AND RELATED 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 stockholders 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 were on
terms comparable to those charged to other customers of the Bank. Included in
such transactions were 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 Bank purchases certain of its insurance policies through the Paul & Dixon
Insurance Agency. Charles T. Toomey, a director of the Company and the Bank, is
a partner in the Paul & Dixon Insurance Agency. Fees and commissions for
policies purchased in 1993 totaled $138,162. However, approximately $49,000 of
those payments related to prior year policy renewals, while approximately
$90,000 represented actual expenses incurred and paid during 1993. The Company
believes that such commissions and fees are at rates customary in the industry.
The Company has sought and received bids from several insurers as part of its
overall insurance program. See "Compensation Committee Report on Executive
Compensation--Compensation Committee Interlocks and Insider Participation."
15
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(ITEM 2 ON PROXY)
The firm of KPMG Peat Marwick served as the Company's independent auditors
for the fiscal year ended December 31, 1993. Subject to the ratification by the
stockholders, the Board of Directors has reappointed KPMG Peat Marwick as
independent auditors to audit the financial statements of the Company for the
current fiscal year. A representative of KPMG Peat Marwick is expected to be
present at the Annual Meeting. The representative will be available to respond
to appropriate questions and will be given the opportunity to make a statement
if the representative so desires.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK AS INDEPENDENT AUDITORS.
OTHER MATTERS
PRINCIPAL STOCKHOLDERS
The following table presents information as to the entities known to the
Company to be beneficial owners of more than 5 percent of the Common Stock of
the Company as of February 11, 1994:
<TABLE>
<CAPTION>
SHARES
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED PERCENT OF CLASS
- ------------------------------------ ------------------ ----------------
<S> <C> <C>
Pioneering Management Corporation(1)....... 841,332 6.26%
60 State Street
Boston, MA 02114
United States National Bank of Galves-
ton(2).................................... 496,959 5.70%
2201 Market Street
Galveston, TX 77550
</TABLE>
- --------
(1) The Company has relied on information set forth in a Schedule 13G dated
February 11, 1994 and filed with the Securities and Exchange Commission.
(2) The Company has relied on information set forth in a Schedule 13G dated
February 9, 1994 and filed with the Securities and Exchange Commission.
EXPENSES OF SOLICITATION
The Company will pay the entire expense of soliciting proxies for the Annual
Meeting. Morrow & Co. has been retained to assist in the solicitation of
proxies and will be compensated in the estimated amount of $4,000 plus
reasonable out-of-pocket expenses. In addition to such solicitation and
solicitation by use of the mails, certain directors, officers, and regular
employees of the Company and the Bank (who will receive no compensation for
their services other than their regular compensation) may solicit proxies by
telephone, telegram, or personal interview. Banks, brokerage houses,
custodians, nominees, and other fiduciaries have been requested to forward
proxy materials to the beneficial owners of shares held of record by them and
will be reimbursed for their expenses.
16
<PAGE>
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 1995 annual meeting
must be received by the Company on or before November 30, 1994 in order to be
considered for inclusion in the Company's proxy statement and form of proxy for
that meeting. Any such proposal should be mailed to Carol E. Correia,
Secretary, NBB Bancorp, Inc., 174 Union Street, New Bedford, Massachusetts
02740-6366.
OTHER MATTERS
The Board of Directors does not know of any matters other than those
described in this Proxy Statement which will be presented for action at the
Annual Meeting. If other matters are presented, proxies will be voted in
accordance with the best judgement of the proxy holders.
BY ORDER OF THE BOARD OF DIRECTORS
Carol E. Correia
Secretary
New Bedford, Massachusetts
March 31, 1994
17
