UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. _______)
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Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-12
New England Bancshares, Inc.
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11:
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[ ] Fee paid previously with preliminary materials.
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previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
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July 11, 2008
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders
of New England Bancshares, Inc. The meeting will be held at the Crowne Plaza
Hotel, One Bright Meadow Boulevard, Enfield, Connecticut on Thursday, August 14,
2008 at 1:00 p.m., local time.
The notice of annual meeting and proxy statement appearing on the
following pages describe the formal business to be transacted at the meeting.
Directors and officers of the Company, as well as a representative of Shatswell,
MacLeod & Company, P.C., the Company's independent auditors, will be present to
respond to appropriate questions of stockholders.
It is important that your shares are represented at this meeting,
whether or not you attend the meeting in person and regardless of the number of
shares you own. To make sure your shares are represented, we urge you to
complete and mail the enclosed proxy card promptly. If you attend the meeting,
you may vote in person even if you have previously mailed a proxy card.
We look forward to seeing you at the meeting.
Sincerely,
/s/ David J. O'Connor
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David J. O'Connor
Chief Executive Officer
New England Bancshares, Inc.
855 Enfield Street
Enfield, Connecticut 06082
(860) 253-5200
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Notice of Annual Meeting of Stockholders
- --------------------------------------------------------------------------------
On Thursday, August 14, 2008, New England Bancshares, Inc. (the
"Company") will hold its annual meeting of stockholders at the Crowne Plaza
Hotel, One Bright Meadow Boulevard, Enfield, Connecticut. The meeting will begin
at 1:00 p.m., local time. At the meeting, the stockholders will consider and act
on the following:
1. The election of four directors to serve for terms of three
years, the election of one director to serve for a term of two
years, and the election of two directors to serve for terms of
one year;
2. The ratification of the appointment of Shatswell, MacLeod &
Company, P.C. as independent auditors for the Company for the
fiscal year ending March 31, 2009; and
3. The transaction of any other business that may properly come
before the meeting.
NOTE: The Board of Directors is not aware of any other business
scheduled to come before the meeting.
Only stockholders of record at the close of business on June 23, 2008
are entitled to receive notice of and to vote at the meeting and any adjournment
or postponement of the meeting.
Please complete and sign the enclosed proxy card, which is solicited by
the Board of Directors, and mail it promptly in the enclosed envelope. The proxy
will not be used if you attend the meeting and vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Nancy L. Grady
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Nancy L. Grady
Corporate Secretary
Enfield, Connecticut
July 11, 2008
IMPORTANT: The prompt return of proxies will save the Company the expense of
further requests for proxies to ensure a quorum. A self-addressed envelope is
enclosed for your convenience. No postage is required if mailed in the United
States.
New England Bancshares, Inc.
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Proxy Statement
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This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of New England Bancshares, Inc. (the
"Company" or "New England Bancshares") to be used at the annual meeting of
stockholders of the Company. The Company is the holding company for Enfield
Federal Savings and Loan Association ("Enfield Federal") and Valley Bank. The
annual meeting will be held at the Crowne Plaza Hotel, One Bright Meadow
Boulevard, Enfield, Connecticut on Thursday, August 14, 2008 at 1:00 p.m., local
time. This proxy statement and the enclosed proxy card are being mailed to
stockholders of record on or about July 11, 2008.
Voting and Proxy Procedure
Who Can Vote at the Meeting
You are entitled to vote your Company common stock if the records of
the Company show that you held your shares as of the close of business on June
23, 2008. If your shares are held in a stock brokerage account or by a bank or
other nominee, you are considered the beneficial owner of shares held in "street
name" and these proxy materials are being forwarded to you by your broker or
nominee. As the beneficial owner, you have the right to direct your broker or
nominee how to vote.
As of the close of business on June 23, 2008, there were 5,985,792
shares of Company common stock outstanding. Each share of common stock has one
vote. The Company's Articles of Incorporation provide that a record owner of the
Company's common stock who beneficially owns, either directly or indirectly, in
excess of 10% of the Company's outstanding shares, is not entitled to vote the
shares held in excess of the 10% limit.
Attending the Meeting
If you are a stockholder as of the close of business on June 23, 2008,
you may attend the meeting. However, if you hold your shares in street name, you
will need proof of ownership to be admitted to the meeting. A recent brokerage
statement or a letter from a bank or broker are examples of proof of ownership.
If you want to vote your shares of Company common stock held in street name in
person at the meeting, you will have to get a written proxy in your name from
the broker, bank or other nominee who holds your shares.
Vote Required
A majority of the outstanding shares of common stock entitled to vote
is required to be represented at the meeting to constitute a quorum for the
transaction of business. If you return valid proxy instructions or attend the
meeting in person, your shares will be counted for purposes of determining
whether there is a quorum, even if you abstain from voting. Broker non-votes
also will be counted for purposes of determining the existence of a quorum. A
broker non-vote occurs when a broker,
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bank or other nominee holding shares for a beneficial owner does not vote on a
particular proposal because the nominee does not have discretionary voting power
with respect to that item and has not received voting instructions from the
beneficial owner.
In voting on the election of directors, you may vote in favor of all
nominees, withhold votes for all nominees or withhold votes as to any of the
nominees. There is no cumulative voting for the election of directors. Directors
are elected by a plurality of the votes cast at the annual meeting. This means
that the nominees receiving the greatest number of votes will be elected. Votes
that are withheld and broker non-votes will have no effect on the outcome of the
election.
In voting to ratify the appointment of Shatswell, MacLeod & Company,
P.C. as independent auditors, you may vote in favor of the proposal, against the
proposal or abstain from voting. To be approved, this matter requires the
affirmative vote of a majority of the votes cast at the annual meeting. Broker
non-votes and abstentions will not be counted as votes cast and will have no
effect on the voting on this proposal.
Voting by Proxy
The Company's Board of Directors is sending you this proxy statement to
request that you allow your shares of Company common stock to be represented at
the annual meeting by the persons named in the enclosed proxy card. All shares
of Company common stock represented at the meeting by properly executed and
dated proxies will be voted according to the instructions indicated on the proxy
card. If you sign, date and return a proxy card without giving voting
instructions, your shares will be voted as recommended by the Company's Board of
Directors. The Board of Directors recommends that you vote "FOR" each of the
nominees for director and "FOR" ratification of the appointment of Shatswell,
MacLeod & Company, P.C. as the Company's independent auditors for the 2009
fiscal year.
If any matters not described in this proxy statement are properly
presented at the annual meeting, the persons named in the proxy card will use
their judgment to determine how to vote your shares. This includes a motion to
adjourn or postpone the meeting to solicit additional proxies. If the annual
meeting is postponed or adjourned, your Company common stock may be voted by the
persons named in the proxy card on the new meeting date as well, provided such
new meeting occurs within 30 days of the annual meeting and you have not revoked
your proxy. The Company does not currently know of any other matters to be
presented at the meeting.
You may revoke your proxy at any time before the vote is taken at the
meeting. To revoke your proxy, you must either advise the Corporate Secretary of
the Company in writing before your common stock has been voted at the annual
meeting, deliver a later dated proxy or attend the meeting and vote your shares
in person by ballot. Attendance at the annual meeting will not in itself
constitute revocation of your proxy.
If your Company common stock is held in street name, you will receive
instructions from your broker, bank or other nominee that you must follow to
have your shares voted. Your broker, bank or other nominee may allow you to
deliver your voting instructions via the telephone or the Internet. Please
review the proxy card or instruction form provided by your broker, bank or other
nominee that accompanies this proxy statement.
3
Participants in Enfield Federal's ESOP and 401(k) Plan
If you participate in the Enfield Federal Savings and Loan Association
Employee Stock Ownership Plan (the "ESOP") or if you hold shares through the
Enfield Federal Savings and Loan Association Employees' Savings & Profit Sharing
Plan (the "401(k) Plan"), you will receive a vote authorization form for each
plan that reflects all the shares that you may direct the trustees to vote on
your behalf under the plans. Under the terms of the ESOP, the ESOP trustee votes
all shares held by the ESOP, but each participant in the ESOP may direct the
trustee how to vote the shares of New England Bancshares common stock allocated
to his or her account. The ESOP trustee, subject to the exercise of its
fiduciary duties, will vote all unallocated shares of common stock held by the
ESOP and allocated shares for which no timely voting instructions were received
in the same proportion as shares for which the trustee received timely voting
instructions. Under the terms of the 401(k) Plan, you are entitled to direct the
trustee how to vote the shares of New England Bancshares common stock credited
to your account in the 401(k) plan. The trustee will vote all shares of New
England Bancshares common stock for which no directions are given or for which
timely instructions were not received in the same proportion as shares for which
the trustee received voting instructions. The deadline for returning your voting
instructions to each plan's trustee is August 7, 2008.
Corporate Governance
General
The Company periodically reviews its corporate governance policies and
procedures to ensure that the Company meets the highest standards of ethical
conduct, reports results with accuracy and transparency and maintains full
compliance with the laws, rules and regulations that govern the Company's
operations. As part of this periodic corporate governance review, the Board of
Directors reviews and adopts best corporate governance policies and practices
for the Company.
Code of Ethics and Business Conduct
The Company has adopted a Code of Ethics and Business Conduct that is
designed to promote the highest standards of ethical conduct by the Company's
directors, executive officers and employees. The Code of Ethics and Business
Conduct requires that the Company's directors, executive officers and employees
avoid conflicts of interest, comply with all laws and other legal requirements,
conduct business in an honest and ethical manner and otherwise act with
integrity and in the Company's best interest. Under the terms of the Code of
Ethics and Business Conduct, directors, executive officers and employees are
required to report any conduct that they believe in good faith to be an actual
or apparent violation of the Code of Ethics and Business Conduct.
As a mechanism to encourage compliance with the Code of Ethics and
Business Conduct, the Company has established procedures to receive, retain and
treat complaints regarding accounting, internal accounting controls and auditing
matters. These procedures ensure that individuals may submit concerns regarding
questionable accounting or auditing matters in a confidential and anonymous
manner. The Code of Ethics and Business Conduct also prohibits the Company from
retaliating against any director, executive officer or employee who reports
actual or apparent violations of the Code of Ethics and Business Conduct.
4
Meetings of the Board of Directors
The Company conducts business through meetings of its Board of
Directors and through activities of its committees. The Board of Directors
generally meets quarterly and may have additional meetings as needed. During
fiscal 2008, the Board of Directors held nine meetings. All of the current
directors attended at least 75% of the total meetings of the Board of Directors
and the committees on which such directors served during fiscal 2008.
Committees of the Board of Directors
The following table identifies our standing committees and their
members. All members of each committee are independent in accordance with the
listing standards of the Nasdaq Stock Market, Inc. Each committee operates under
a written charter that is available in the Shareholder Information section of
the Company's website (www.enfieldfederal.com).
Audit Compensation Nominating
Director Committee Committee Committee
- ----------- ----------- ------------ ----------
Thomas O. Barnes.......................
Lucien P. Bolduc....................... X
Edmund D. Donovan......................
Peter T. Dow........................... X*
William C. Leary....................... X
Myron J. Marek.........................
Dorothy K. McCarty.....................
Robert L. Messier, Jr.(1) .............
David J. O'Connor......................
James J. Pryor(1) ..................... X
Richard K. Stevens..................... X X X*
Richard M. Tatoian..................... X* X
Number of Meetings in fiscal 2008...... 2 1 1
- --------------------------
* Denotes Chairperson
(1) Messrs. Pryor and Messier will retire from the Board of Directors
immediately following the Annual Meeting.
Audit Committee. The Audit Committee assists the Board of Directors in
its oversight of the integrity of New England Bancshares' processes and systems
of internal controls concerning accounting and financial reporting and in its
review of compliance with applicable laws and regulations. The committee is also
responsible for engaging New England Bancshares' independent auditor and its
internal auditor and monitoring their conduct and independence. The Board of
Directors has designated Lucien P. Bolduc as an audit committee financial expert
under the rules of the Securities and Exchange Commission. Mr. Bolduc is
independent under the listing standards of the Nasdaq Stock Market, Inc.
applicable to audit committee members. The report of the Audit Committee
required by the rules of the Securities and Exchange Commission is included in
this proxy statement. See "Audit Committee Report."
5
Compensation Committee. The Compensation Committee is responsible for
making recommendations to the full Board of Directors on all matters regarding
compensation and benefit programs. The Compensation Committee reviews all
compensation components for the Company's Chief Executive Officer and other
highly compensated executive officers' compensation including base salary,
annual incentive, long-term incentives/equity, benefits and other perquisites.
The Compensation Committee also reviews the recommendations of the Chief
Executive Officer in determining the compensation of other executive officers.
The Compensation Committee has made use of independent outside consultants with
specific banking industry expertise to assist the Committee in evaluating the
Company's executive total compensation elements as well as to develop a bank
peer group for comparison to assist the Committee in establishing compensation
levels. Decisions by the Compensation Committee with respect to the compensation
of executive officers are approved by the full Board of Directors.
Nominating Committee. The Nominating Committee assists the Board of
Directors in identifying qualified individuals to serve as Board members, in
determining the composition of the Board of Directors and its committees and in
monitoring a process to assess Board effectiveness. The Nominating Committee
also considers and recommends the nominees for director to stand for election at
the Company's annual meeting of stockholders. The procedures of the Nominating
Committee required to be disclosed by the rules of the Securities and Exchange
Commission are included in this proxy statement. See "Nominating Committee
Procedures."
Attendance at the Annual Meeting. The Board of Directors encourages
each director to attend annual meetings of stockholders. Seven Directors
attended the Annual Meeting in 2007.
6
Directors' Compensation
The following table sets forth the compensation received by
non-employee directors for their service on our Boards of Directors during
fiscal 2008.
Fees Earned or
Paid Stock Option All Other
Director In Cash Awards(1) Awards(2) Compensation(3) Total
- --------------------------------------------------------------------------------
Thomas O. Barnes $ 2,667 $ -- $ -- $ -- $ 2,667
Lucien P. Bolduc 10,880 15,134 11,157 61 37,232
Edmund D. Donovan 2,667 -- -- -- 2,667
Peter T. Dow 14,225 15,134 11,157 3,935 44,451
William C. Leary 12,875 8,641 4,433 61 26,010
Myron J. Marek 10,400 15,134 11,157 2,333 39,024
Dorothy K. McCarty 10,550 15,134 11,157 2,333 39,174
James J. Pryor(4) 9,067 -- -- -- 9,067
Richard K. Stevens 10,800 15,134 11,157 2,360 39,451
Richard M. Tatoian 11,000 15,134 11,157 2,360 39,651
- -----------------------------
(1) Reflects the dollar amount recognized for financial statement reporting
purposes in fiscal 2008 in accordance with Statement of Financial
Accounting Standard 123(R) ("SFAS 123(R)"). At March 31, 2008, the
aggregate number of unvested restricted stock award shares held in trust
was 2,692 for each of Ms. McCarty and Messrs. Bolduc, Dow, Marek, Stevens,
Tatoian and Leary.
(2) Reflects the dollar amount recognized for financial statement reporting
purposes in fiscal 2008 in accordance with FAS 123(R). The aggregate
outstanding stock options at March 31, 2008 was 19,852 for each of Ms.
McCarty and Messrs. Bolduc, Marek, Stevens ,Tatoian, and Dow, and 5,354 for
Mr. Leary.
(3) Reflects the dollar value of dividends paid on stock awards. Also includes
$3,874, $2,333, $2,333, $2,360 and $2,360 for Messrs. Dow and Marek, Ms.
McCarty and Messrs. Stevens and Tatoian, which represents the amount paid
and/or accrued in connection with the Enfield Federal Savings and Loan
Association Director Fee Continuation Plan. See "--Directors' Retirement
Plan."
(4) Mr. Pryor will retire from the Board of Directors immediately following the
Annual Meeting.
Cash Retainer and Meeting Fees for Non-Employee Directors. The
following table sets forth the applicable retainers and fees that will be paid
to our non-employee directors for their service on our Boards of Directors of
the Company, Enfield Federal and Valley Bank during fiscal 2008.
Annual Retainer for New England Bancshares Board Service..............$4,000
Annual Retainer for Enfield Federal Board Service.....................$4,000
Annual Retainer for Valley Bank Board Service.........................$3,000
Fee for Attendance at Enfield Federal Board Meetings..................$400 ($450 for Chairman)
Fee for Attendance at Valley Bank Board Meetings......................$250 ($300 for Chairman)
Fee for Attendance at Enfield Federal Committee Meetings (except
Executive Committee) .............................................$400 ($450 for Committee Chairman)
Fee for Attendance at Valley Bank Committee Meetings..................$150 ($200 for Committee Chairman)
Fee for Attendance at Enfield Federal Executive Committee Meeting.....$225 ($275 for Committee Chairman)
7
Directors' Retirement Plan. Enfield Federal established the Enfield
Federal Savings and Loan Association Director Fee Continuation Plan to provide
the directors serving on the board as of the date of the plan's implementation
with a retirement income supplement. The plan has five participants. Under the
plan, participants are entitled to an annual benefit, as of their retirement
date, of $1,000 for each full year of service as a director from June 1, 1995,
plus $250 for each full year of service as a director before June 1, 1995. The
maximum benefit under the plan is $6,000 per year, payable in ten annual
installments. For purposes of the plan, "retirement date" is defined as the June
1st following a director's 70th birthday. Upon an eligible retired director's
death, but before the ten payments have been made, Enfield Federal must pay the
director's beneficiary, at its option, a discounted lump sum payment equal to
the remaining payments or the remaining installment payments. If an active
eligible non-employee director dies before his or her retirement date, Enfield
Federal must pay the director's designated beneficiary a benefit equal to the
discounted value of the ten annual installments the director would have been
entitled to had he or she lived to his or her retirement date. The benefit is
payable, at Enfield Federal's discretion, in a lump sum or in ten annual
installments. Enfield Federal has acquired life insurance policies for each of
the eligible non-employee directors as an informal source of funding for its
obligations under the plan.
Stock Ownership
The following table provides information as of June 23, 2008, with
respect to persons known by the Company to be the beneficial owners of more than
5% of the Company's outstanding common stock. A person may be considered to own
any shares of common stock over which he or she has, directly or indirectly,
sole or shared voting or investing power. Percentages based upon 5,985,792
shares of the Company's common stock outstanding at June 23, 2008.
Number of Shares Percent of Common
Name and Address Owned Stock Outstanding
- ---------------- ---------------- -----------------
Enfield Federal Savings and Loan Association 417,646(1) 6.98%
Employee Stock Ownership Plan
855 Enfield Street
Enfield, Connecticut 06082
Investors of America, Limited Partnership 351,100(2) 5.87%
James F. Dierberg
Dierberg Operating Foundation, Inc.
135 North Meramec
Clayton, Missouri 63105
- -----------------------
(1) Includes 283,183 shares that have not been allocated to
participants' accounts. Under the terms of the ESOP, the ESOP
trustee will vote shares allocated to participants' accounts in
the manner directed by the participants. The ESOP trustee, subject
to its fiduciary responsibilities, will vote unallocated shares
and allocated shares for which no timely voting instructions are
received in the same proportion as shares for which the trustee
has received timely voting instructions from participants.
(2) Pursuant to a joint Schedule 13G filed by Investors of America,
Limited Partnership, James F. Dierberg and Dierberg Operating
Foundation, Inc. on May 4, 2007. Investors of America, Limited
Partnership reported beneficial ownership of 351,100 shares, James
F. Dierberg reported beneficial ownership of 15,000 shares and
Dierberg Operating Foundation, Inc. reported beneficial ownership
of 5,200 shares.
8
The following table provides information about the shares of our common
stock that may be considered to be owned by each of our directors and nominees
for director, by the executive officers named in the Summary Compensation Table,
and by all of our directors, nominees for director, and executive officers as a
group as of June 23, 2008. A person may be considered to own any shares of
common stock over which he or she has, directly or indirectly, sole or shared
voting or investment power. Unless otherwise indicated, none of the shares shown
have been pledged as collateral and each of the named individuals has sole
voting and investment power with respect to the shares shown.
Number of Shares That
Number of Shares May Be Acquired Percent of Common
Owned (excluding Within 60 Days by Stock Outstanding
Name options) (1)(2) Exercising Options ((3))
- ---------------------------------------- --------------------- ----------------------- -------------------
Thomas O. Barnes........................ 30,874 -- *
Mark J. Blum............................ 9,758 -- *
Lucien P. Bolduc........................ 13,299 15,569 *
Edmund D. Donovan....................... 15,687 -- *
Peter T. Dow............................ 22,282(4) 15,569 *
William C. Leary........................ 20,259 1,017 *
Myron J. Marek.......................... 19,021 5,354 *
Dorothy K. McCarty...................... 13,714 15,569 *
Robert L. Messier, Jr.(7) .............. 33,322 -- *
Scott D. Nogles......................... 27,724 7,483 *
David J. O'Connor....................... 76,253(5) 94,398 2.81%
John F. Parda........................... 26,703(6) 15,062 *
David J. Preleski....................... 3,576 -- *
James J. Pryor(7) ...................... 39,464 -- *
Richard K. Stevens...................... 31,223 15,569 *
Richard M. Tatoian...................... 13,530 15,569 *
All executive officers, directors, and
director nominees as a group (16
persons) ............................... 396,689 201,159 9.66%
- ---------------------------
* Less than 1% of shares outstanding
(1) Includes unvested shares of restricted stock held in trust under the New
England Bancshares, Inc. 2003 Stock-Based Incentive Plan and the New
England Bancshares, Inc. 2006 Equity Incentive Plan, with respect to which
the beneficial owner has voting but not investment power as follows:
Messrs. Bolduc, Dow, Leary, Marek, Stevens and Tatoian and Ms.
McCarty--2,692 shares; Mr. Nogles--4,000 shares; Mr. O'Connor--15,707
shares; and Mr. Parda--4,000 shares.
(2) Includes shares allocated under the Enfield Federal Savings and Loan
Association Employee Stock Ownership Plan, with respect to the individual
has voting but not investment power as follows: Mr. Nogles--4,657 shares;
Mr. O'Connor--15,303 shares; and Mr. Parda--8,064 shares.
(3) Based on 5,985,792 shares of our common stock outstanding as of June 23,
2008, plus the number of shares that each person may acquire within 60 days
by exercising stock options.
(4) Includes 13,120 shares held in a trust in which Mr. Dow shares voting and
investment power.
(5) Includes 703 shares held in trust in which Mr. O'Connor shares voting and
investment power.
(6) Includes 464 shares held in trust in which Mr. Parda shares voting and
investment power.
(7) Messrs. Pryor and Messier will retire from the Board of Directors
immediately following the Annual Meeting.
9
Proposal 1 -- Election of Directors
The Company's Board of Directors currently consists of 12 members. The
Board is divided into three classes, each with three-year staggered terms, with
approximately one-third of the directors elected each year. James J. Pryor and
Robert L. Messier, Jr. will retire from the Board of Directors immediately
following the Annual Meeting. The nominees for election this year are Peter T.
Dow, William C. Leary, Dorothy K. McCarty, Thomas O. Barnes, David J. Preleski,
Edmund D. Donovan, and Mark J. Blum. Messrs. Dow, Leary, Barnes, Donovan and Ms.
McCarty are current directors of the Company. Messrs. Dow and Leary and Ms.
McCarty are current directors of Enfield Federal. Messrs. Dow, Barnes, Donovan,
Preleski and Blum are current directors of Valley Bank.
Each of the directors of the Company is considered independent under
the current listing standards of the Nasdaq Stock Market, Inc., except for David
J. O'Connor, who is an employee of the Company and Enfield Federal, and Mr.
Messier, who is an employee of the Company and Valley Bank. In addition Mr.
Blum, who is an employee of Valley Bank, will not be considered independent if
he is elected to the Company's Board of Directors. In determining the
independence of its directors, the Board considered transactions, relationships
or arrangements between the Company, Enfield Federal, Valley Bank and its
directors that are not required to be disclosed in this proxy statement under
the heading "Transactions with Related Persons," including loans with Enfield
Federal and Valley Bank.
It is intended that the proxies solicited by the Board of Directors
will be voted for the election of the nominees named above. If any nominee is
unable to serve, the persons named in the proxy card will vote your shares to
approve the election of any substitute proposed by the Board of Directors.
Alternatively, the Board of Directors may adopt a resolution to reduce the size
of the Board. At this time, the Board of Directors knows of no reason why any
nominee might be unable to serve.
The Board of Directors recommends a vote "FOR" the election of each of
the nominees.
Information regarding the nominees and the directors continuing in
office is provided below. Unless otherwise stated, each individual has held his
or her current occupation for the last five years. The age indicated in each
nominee's biography is as of March 31, 2008. There are no family relationships
among the directors or executive officers.
Nominees for Election of Directors
The nominees standing for election for terms of three years are:
Peter T. Dow was the President of Dow Mechanical Corporation, a
manufacturer of quality control inspection equipment, located in Enfield,
Connecticut, until 2005. Mr. Dow has been a consultant with Dow Gage LLC, which
provides consulting advice to manufacturing companies, since December 2005. Mr.
Dow was appointed Chairman of the Board of Directors of the Company and Enfield
Federal in April 2004. Age 68. Director of Enfield Federal since 1982.
William C. Leary has been a judge for the Probate Court of Windsor
Locks since 1971 and a partner with the firm of O'Malley, Deneen, Leary, Messina
and Oswecki since 1994. Mr. Leary served as the Chairman of the Board of Windsor
Locks Community Bank, FSL from March 2002 until its acquisition by Enfield
Federal in December 2003. Age 69. Director of the Company and Enfield Federal
since 2003.
10
Dorothy K. McCarty is a retired town clerk of Suffield, Connecticut.
Age 77. Director of the Company since 2002 and Enfield Federal since 1990.
Thomas O. Barnes is the Chairman of the Board of Barnes Group, Inc.
where he has been employed since 1993. Barnes Group, Inc. is a public company
involved in various manufacturing and distribution enterprises. Mr. Barnes is
currently Chairman of the Board of the Connecticut Children's Medical Center and
has served on many other boards of charitable organizations. Age 59. Director of
the Company since 2007 and Valley Bank since 1998.
The nominee standing for election for a term of two years is:
David J. Preleski is a principal in the law firm of Vitrano, Preleski &
Wynne, LLC where he has been employed since 1996. Attorney Preleski's previous
experience includes a twenty year career in banking with Bristol Savings Bank,
First Federal Bank and Webster Financial Corporation. He is a former President
and Corporator of Bristol Savings Bank and has experience as a legal liaison
with bank regulatory agencies. He is a Director of the New England Carousel
Museum and a Past President of the Board of Directors of the Family Center. Age
51. Director of Valley Bank since 1998.
The nominees standing for election for terms of one year are:
Edmund D. Donovan serves as Executive Vice President of Nickson
Industries, Inc., a Plainville, Connecticut manufacturer of automotive exhaust
hardware and has been in its employ since 1977. He is also involved in real
estate development in Southington, Connecticut. Age 63. Director of the Company
since 2007 and Valley Bank since 1998.
Mark J. Blum has over thirty years of banking experience. Mr. Blum was
Executive Vice President and Chief Financial Officer of Valley Bank from 2000
until 2007, when he became President of Valley Bank. Prior to joining Valley
Bank, he served as Executive Vice President and Chief Financial Officer of Eagle
Financial Corporation and its subsidiary, Eagle Bank. Mr. Blum is a Director of
Bristol Hospital, Director and Vice-Chair of the Main Street Community
Foundation, and the Past President of the Bristol Boys & Girls Club. Age 55.
Director of Valley Bank since 2007.
Directors Continuing in Office
The following directors have terms ending in 2009:
Lucien P. Bolduc is a certified public accountant with the accounting
firm of Mercik, Kuczarski & Bolduc, LLC located in Enfield, Connecticut. Age 48.
Director of the Company and Enfield Federal since 2002.
Myron J. Marek is a retired retail jeweler. Age 75. Director of the
Company since 2002 and Enfield Federal since 1987.
The following directors have terms ending in 2010:
David J. O'Connor has been the President and Chief Executive Officer of
Enfield Federal since 1999 and Chief Executive Officer of New England Bancshares
since 2002. Mr. O'Connor has over 38 years of banking experience in New England.
Before joining Enfield Federal, he was the Executive Vice President, Treasurer
and Chief Financial Officer of The Berlin City Bank, a community bank in New
Hampshire. Age 61. Director of the Company since 2002 and Enfield Federal since
1999.
11
Richard K. Stevens is owner and President of Leete-Stevens, Inc., a
funeral home located in Enfield, Connecticut. Age 61. Director of the Company
since 2002 and Enfield Federal since 1995.
Richard M. Tatoian is a self-employed attorney practicing in Enfield,
Connecticut. Age 61. Director of the Company since 2002 and Enfield Federal
since 1995.
Proposal 2 -- Ratification of Independent Auditors
The Audit Committee of the Board of Directors has appointed Shatswell,
MacLeod & Company, P.C. to be the Company's auditors for the 2009 fiscal year,
subject to ratification by stockholders. A representative of Shatswell, MacLeod
& Company, P.C. is expected to be present at the annual meeting to respond to
appropriate questions from stockholders and will have the opportunity to make a
statement should he or she desire to do so.
If the ratification of the appointment of the auditors is not approved
by a majority of the votes cast by stockholders at the annual meeting, other
independent public accountants may be considered by the Audit Committee of the
Board of Directors.
The Board of Directors recommends that stockholders vote "FOR" the
ratification of the appointment of Shatswell, MacLeod & Company, P.C. as
independent auditors.
Audit Fees
The following table sets forth the fees billed to the Company for the
fiscal years ending March 31, 2008 and 2007 by Shatswell, MacLeod & Company,
P.C.:
2008 2007
--------------------
Audit Fees................ $72,961 $65,500
Audit-Related Fees(1)..... -- 3,625
Tax Fees(2)............... 12,447 7,000
- --------------------------
(1) For fiscal 2007, consists of fees relating to the Company's acquisition of
First Valley Bancorp, Inc.
(2) Consists of tax filings and tax-related compliance and other advisory
services.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit
Services of Independent Auditor
The Audit Committee is responsible for appointing, setting compensation
and overseeing the work of the independent registered public accounting firm. In
accordance with its charter, the Audit Committee approves, in advance, all audit
and permissible non-audit services to be performed by the independent registered
public accounting firm. Such approval process ensures that the external auditor
does not provide any non-audit services to the Company that are prohibited by
law or regulation.
In addition, the Audit Committee has established a policy regarding
pre-approval of all audit and permissible non-audit services provided by the
independent registered public accounting firm. Requests for services by the
independent registered public accounting firm for compliance with the auditor
services policy must be specific as to the particular services to be provided.
The request may be made with respect to either specific services or a type of
service for predictable or recurring services. During
12
the year ended March 31, 2008, all services were approved, in advance, by the
Audit Committee in compliance with these procedures.
Audit Committee Report
The Company's management is responsible for the Company's internal
controls and financial reporting process. The independent auditors are
responsible for performing an independent audit of the Company's consolidated
financial statements and issuing an opinion on the conformity of those financial
statements with generally accepted accounting principles. The Audit Committee
oversees the Company's internal controls and financial reporting process on
behalf of the Board of Directors.
In this context, the Audit Committee has met and held discussions with
management and the independent auditors. Management represented to the Audit
Committee that the Company's consolidated financial statements were prepared in
accordance with generally accepted accounting principles and the Audit Committee
has reviewed and discussed the consolidated financial statements with management
and the independent auditors. The Audit Committee discussed with the independent
auditors matters required to be discussed by Statement on Auditing Standards No.
61 (Communication With Audit Committees), including the quality, not just the
acceptability, of the accounting principles, the reasonableness of significant
judgments and the clarity of the disclosures in the financial statements.
In addition, the Audit Committee has received the written disclosures
and the letter from the independent auditors required by the Independence
Standards Board Standard No. 1 (Independence Discussions With Audit Committees)
and has discussed with the independent auditors the auditors' independence from
the Company and its management. In concluding that the auditors are independent,
the Audit Committee considered, among other factors, whether the non-audit
services provided by the auditors were compatible with its independence.
The Audit Committee discussed with the Company's independent auditors
the overall scope and plans for their audit. The Audit Committee meets with the
independent auditors, with and without management present, to discuss the
results of its examination, its evaluation of the Company's internal controls,
and the overall quality of the Company's financial reporting.
In performing all of these functions, the Audit Committee acts only in
an oversight capacity. In its oversight role, the Audit Committee relies on the
work and assurances of the Company's management, which has the primary
responsibility for financial statements and reports, and of the independent
auditors who, in their report, express an opinion on the conformity of the
Company's financial statements to generally accepted accounting principles. The
Audit Committee's oversight does not provide it with an independent basis to
determine that management has maintained appropriate accounting and financial
reporting principles or policies, or appropriate internal controls and
procedures designed to assure compliance with accounting standards and
applicable laws and regulations. Furthermore, the Audit Committee's
considerations and discussions with management and the independent auditors do
not assure that the Company's financial statements are presented in accordance
with generally accepted accounting principles, that the audit of the Company's
financial statements has been carried out in accordance with generally accepted
auditing standards or that the Company's independent auditors are in fact
"independent."
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the board has approved,
that the audited consolidated financial statements be included in the Company's
Annual Report on Form 10-K for the year ended March 31, 2008 for filing with the
Securities and Exchange Commission. The Audit Committee also has approved,
subject to
13
stockholder ratification, the selection of the Company's independent auditors,
for the fiscal year ending March 31, 2009.
Audit Committee of the Board of Directors of New England Bancshares, Inc.
Richard M. Tatoian (Chairman)
Lucien P. Bolduc
Richard K. Stevens
14
Executive Compensation
Summary Compensation Table
The following information is furnished for Messrs. O'Connor, Parda,
Nogles and Messier. No other executive officer of New England Bancshares
received compensation of $100,000 or more during the year ended March 31, 2008.
- ----------------------------------------------------------------------------------------------------------
Stock Option All Other
Name and Awards Awards Compensation
Principal Position Year Salary ($) Bonus ($) ($)(1)(2) ($)(3)(4) ($)((6)) Total ($)
- ----------------------------------------------------------------------------------------------------------
David J. O'Connor 2008 $250,000 $60,000 $88,311 $79,867 $71,555 $549,733
Chief Executive ------------------------------------------------------------------------------
Officer 2007 231,000 55,000 72,728 68,608 85,878 512,393
- ----------------------------------------------------------------------------------------------------------
John F. Parda 2008 113,000 13,000 26,102 19,002 38,406 209,510
Executive Vice President ------------------------------------------------------------------------------
and Chief Loan Officer 2007 105,000 12,000 22,634 10,589 46,364 196,360
- ----------------------------------------------------------------------------------------------------------
Scott D. Nogles 2008 120,000 20,000 12,840 12,982 34,040 199,862
Executive Vice President ------------------------------------------------------------------------------
and Chief Financial Officer 2007 110,000 18,000 7,486 7,401 40,072 182,959
- ----------------------------------------------------------------------------------------------------------
Robert L. Messier, Jr. (5) 2008 144,615 25,000 --- --- 14,032 183,647
President
----------------------------------------------------------------------------------------------------
- -------------------
(1) Reflects the dollar amount recognized for financial statement reporting
purposes in accordance with SFAS 123(R). Amounts represent the vesting of
10,693, 3,368 and 1,000 shares of restricted stock in fiscal 2008 for
Messrs. O'Connor, Parda and Nogles, respectively, multiplied by the closing
stock price of each award on the date of grant. The weighted average stock
price for each award is $8.76, $8.31 and $12.84 for Messrs. O'Connor, Parda
and Nogles, respectively. When shares become vested and are distributed
from the trust in which they are held, the recipient will also receive an
amount equal to accumulated cash and stock dividends (if any) paid with
respect thereon, plus earnings thereon.
(2) Reflects the dollar amount recognized for financial statement reporting
purposes in accordance with SFAS 123(R). Amounts represent the vesting of
9,057, 2,951 and 583 shares of restricted stock in fiscal 2007 for Messrs.
O'Connor, Parda and Nogles, respectively, multiplied by the closing stock
price of each award on the date of grant. The weighted average stock price
for each award is $8.03, $7.67 and $12.84 for Messrs. O'Connor, Parda and
Nogles, respectively. When shares become vested and are distributed from
the trust in which they are held, the recipient will also receive an amount
equal to accumulated cash and stock dividends (if any) paid with respect
thereon, plus earnings thereon.
(3) Reflects the dollar amount recognized for financial statement reporting
purposes in accordance with SFAS 123(R). Amounts represent the vesting of
26,733, 4,642 and 3,221 stock options in fiscal 2008 for Messrs. O'Connor,
Parda and Nogles, respectively, multiplied by the fair value of each option
using the Black-Scholes option pricing model. The weighted average fair
value of each stock option is $3.20, $4.09 and $4.03 for Messrs. O'Connor,
Parda and Nogles, respectively.
(4) Reflects the dollar amount recognized for financial statement reporting
purposes in accordance with SFAS 123(R). Amounts represent the vesting of
22,643, 3,309 and 1,888 stock options in fiscal 2007 for Messrs. O'Connor,
Parda and Nogles, respectively, multiplied by the fair value of each option
using the Black-Scholes option pricing model. The weighted average fair
value of each stock option is $3.03, $3.20 and $3.92 for Messrs. O'Connor,
Parda and Nogles, respectively.
(5) Compensation amounts for Mr. Messier are for the period of July 12, 2007 to
March 31, 2008.
(6) Details of the amounts reported in the "All Other Compensation" column for
2008 and 2007 are provided in the tables that follow:
15
- ----------------------------------------------------------------------------------------------------
Item: 2008 All Other Compensation Mr. O'Connor Mr. Parda Mr. Nogles Mr. Messier
- ----------------------------------------------------------------------------------------------------
Employer contribution to 401(k) plan $ 6,758 $ 3,300 $ 3,600 $ 4,299
- ----------------------------------------------------------------------------------------------------
Market value of allocations under the
employee stock ownership plan 32,933 18,003 19,829 --
- ----------------------------------------------------------------------------------------------------
Value of insurance premiums under endorsement
method split-dollar life insurance 5,956 -- -- --
arrangement
- ----------------------------------------------------------------------------------------------------
Value of life insurance policy 869 551 574 344
- ----------------------------------------------------------------------------------------------------
Dividends paid on stock awards 358 91 91 --
- ----------------------------------------------------------------------------------------------------
Perquisites(a) 24,681 16,461 9,946 9,389
- ----------------------------------------------------------------------------------------------------
Total $71,555 $38,406 $34,040 $14,032
- ----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Item: 2007 All Other Compensation Mr. O'Connor Mr. Parda Mr. Nogles
- -----------------------------------------------------------------------------------------------------
Employer contribution to 401(k) plan $ 6,848 $ 3,113 $ 3,233
- -----------------------------------------------------------------------------------------------------
Market value of allocations under the employee 48,347 25,431 25,831
stock ownership plan
- -----------------------------------------------------------------------------------------------------
Value of insurance premiums under endorsement 5,693 -- --
method split-dollar life insurance arrangement
- -----------------------------------------------------------------------------------------------------
Value of life insurance policy 1,123 670 682
- -----------------------------------------------------------------------------------------------------
Dividends paid on stock awards 812 227 --
- -----------------------------------------------------------------------------------------------------
Perquisites(a) 23,055 16,923 10,326
- -----------------------------------------------------------------------------------------------------
Total $85,878 $46,364 $40,072
- -----------------------------------------------------------------------------------------------------
- -----------------
(a) Perquisites include insurance premiums, club dues, personal use of company
car and spousal travel expense for Mr. O'Connor; insurance premiums, car
allowance and spousal travel expense for Mr. Parda; and insurance premiums
for Mr. Nogles.
Employment Agreements. Enfield Federal and New England Bancshares each
maintain an employment agreement with Mr. O'Connor. The employment agreements
are intended to ensure that New England Bancshares and Enfield Federal will be
able to retain Mr. O'Connor's services. The continued success of New England
Bancshares and Enfield Federal depends to a significant degree on the skills and
competence of Mr. O'Connor.
The employment agreements each provide for a three-year term. The
Enfield Federal employment agreement is renewable on an annual basis following a
review of Mr. O'Connor's performance by the Board of Directors. The New England
Bancshares employment agreement renews daily. The employment agreements provide
that Mr. O'Connor's base salary will be reviewed at least annually. Mr.
O'Connor's current base salary is $300,000.
In addition to the base salary, Mr. O'Connor's employment agreements
provide for, among other things, participation in stock benefit plans and other
fringe benefits applicable to executive personnel. Under the terms of both of
the employment agreements, Mr. O'Connor will be entitled to receive a severance
benefit if he is terminated by Enfield Federal or New England Bancshares without
cause or he voluntarily terminates for reasons constituting constructive
termination under the agreements. The severance benefit he would be entitled to
is equal to the base salary payments due to him for the remaining term of the
employment agreement and the contributions that would have been made on his
behalf to any employee benefit plans of New England Bancshares and Enfield
Federal during the
16
remaining term of the employment agreement. The employment agreements also
provide for a severance benefit if Mr. O'Connor's employment is voluntarily
(upon circumstances discussed in the agreement) or involuntarily terminated
following a change in control of New England Bancshares or Enfield Federal. The
severance payment would be equal to the greater of: (1) the payments due for the
remaining term of the agreement; or (2) three times the average of Mr.
O'Connor's five preceding taxable years' annual compensation. In addition to a
severance payment, New England Bancshares or Enfield Federal would also be
required to continue and/or pay for Mr. O'Connor's life, health, dental and
disability coverage for thirty-six months following his termination of
employment in connection with a change in control.
Mr. O'Connor would also be entitled to receive an additional tax
indemnification payment under the New England Bancshares employment agreement if
payments under the agreements or any other payments triggered liability under
the Internal Revenue Code as an excise tax constituting "excess parachute
payments." Under applicable law, the excise tax is triggered by change in
control-related payments that equal or exceed three times the executive's
average annual compensation over the five years preceding the change in control.
The excise tax equals 20% of the amount of the payment in excess of one times
the executive's average compensation over the preceding five-year period.
Payments to Mr. O'Connor under the Enfield Federal employment agreement
are guaranteed by New England Bancshares if payments or benefits are not paid by
Enfield Federal. Payment under the New England Bancshares employment agreement
will be made by New England Bancshares. Even though both the Enfield Federal and
the New England Bancshares employment agreements provide for a severance payment
if a change in control occurs, Mr. O'Connor would only be entitled to receive a
severance payment under one agreement. The employment agreements also provide
that Enfield Federal and New England Bancshares will indemnify Mr. O'Connor to
the fullest extent legally allowable.
The employment agreements restrict Mr. O'Connor from competing against
New England Bancshares or Enfield Federal for a period of one year from the date
of termination of the agreement if Mr. O'Connor is terminated without cause,
except if such termination occurs after a change in control.
Change in Control Agreements. Enfield Federal currently maintains a
two-year change in control agreement with each of Messrs. Parda and Nogles. Each
year, the Board of Directors may extend the term of each agreement for an
additional one-year period. Each agreement provides that if involuntary
termination or, under certain circumstances, voluntary termination follows a
change in control of the Company or Enfield Federal, the executive would be
entitled to receive a severance payment equal to 2.99 times his "base amount,"
as defined under the Internal Revenue Code. Enfield Federal would also continue
and/or pay for life, health and disability coverage for twenty-four months
following termination. Payments to the executive under each agreement will be
paid by the Company if payments (or other benefits) are not paid by Enfield
Federal.
Supplemental Executive Retirement Plans. Enfield Federal maintains the
Executive Supplemental Retirement Plan, as amended and restated, to provide Mr.
O'Connor with, upon his attainment of age 65, an annual retirement benefit of
$172,796 payable in equal monthly installments over a period equal to the later
of: (1) 20 years following Mr. O'Connor's retirement or termination of
employment for reason other than cause; or (2) Mr. O'Connor's lifetime. If Mr.
O'Connor voluntarily terminates his employment with Enfield Federal, Mr.
O'Connor will be entitled to receive at age 65 the balance of his accrued
benefit under the plan. If Mr. O'Connor is discharged from Enfield Federal for
reasons other than cause, he will be entitled to his annual benefit upon the
attainment of age 65. If Mr. O'Connor dies before the completion of benefit
payments under the plan, his beneficiary will receive the remaining installments
due from the plan. If a change in control occurs (as defined in the plan),
followed by Mr. O'Connor's voluntary or involuntary termination of employment
with Enfield Federal, Mr. O'Connor will receive a lump sum payment equal to the
actuarial equivalent of the benefit he would have
17
received at age 65. The lump sum payment will be made within 30 days following
Mr. O'Connor's termination of employment in connection with a change in control.
Enfield Federal has established a rabbi trust to hold the insurance
policies purchased to satisfy the obligations of Enfield Federal with respect to
the Executive Supplemental Retirement Plan. Until the plan benefits are paid to
Mr. O'Connor, creditors may make claims against the trust's assets if Enfield
Federal becomes insolvent. As of March 31, 2008, Enfield Federal had accrued
$1.0 million for its liabilities under this plan.
In addition to the Executive Supplemental Retirement Plan, Enfield
Federal maintains the Enfield Federal Savings and Loan Association Supplemental
Executive Retirement Plan. This plan provides restorative payments to designated
executives who are prevented from receiving the full benefits under the ESOP or
the full matching contribution under the 401(k) Plan due to the legal
limitations imposed on tax-qualified plans. The Board of Directors of Enfield
Federal has designated Mr. O'Connor to participate in the plan. In addition to
providing for benefits lost under the ESOP and the 401(k) Plan, the supplemental
executive retirement plan also provides supplemental benefits to participants
upon a change in control (as defined in the plan) before the complete scheduled
repayment of the ESOP loan. Generally, upon such an event, the supplemental
executive retirement plan will provide the participant with a benefit equal to
what the participant would have received under the ESOP had he or she remained
employed throughout the term of the ESOP loan, less the benefits actually
provided.
Valley Bank entered into a Supplemental Executive Retirement Agreement
with Robert L. Messier in 2004 to provide annual supplemental retirement
payments to the executive in the amount of $25,000 over a fifteen-year period.
The amount of annual payments was increased to $28,000 in 2005 and to $30,000 in
2006. The agreement currently provides for the payment of an annual supplemental
retirement benefit of $30,000, payable in monthly installments of $2,500 each
for 180 consecutive months. Payment of the supplemental retirement benefit will
commence upon termination of Mr. Messier's employment with Valley Bank due to
his resignation, discharge, death, retirement or for any other reason. In the
event of Mr. Messier's death prior to the full payment of the supplemental
retirement benefit, Valley Bank will pay a survivor benefit to the executive's
spouse. In the event the executive's spouse dies prior to receiving the full
amount due under the agreement, the benefit's remaining value will be paid to
her estate.
Split-Dollar Life Insurance. Enfield Federal maintains a split-dollar
life insurance arrangement to provide Mr. O'Connor with a death benefit. Under
the terms of the arrangement, title and ownership of the life insurance policy
resides with Enfield Federal and Enfield Federal pays all of the insurance
premiums. Upon Mr. O'Connor's death, his beneficiaries will be entitled to 25%
of the total proceeds, less the cash value of the policy. Enfield Federal will
be entitled to the remaining life insurance proceeds. Enfield Federal will be
entitled at all times to the cash surrender value of the life insurance policy.
18
Outstanding Equity Awards at Fiscal Year-End
The following table provides information concerning unexercised options
and stock awards that have not vested as of March 31, 2008 for each named
executive officer. The number of options reflect the exchange of an option to
purchase one share of former New England Bancshares common stock for an option
to purchase 2.3683 shares of current New England Bancshares common stock on
December 28, 2005 in connection with the Company's second-step conversion. A
corresponding adjustment was also made to each option's exercise price. In
addition, restricted stock award numbers reflect the exchange of 2.3683 shares
of restricted stock for each share of restricted stock granted prior to the
second-step conversion.
- ------------------------------------------------------------------------------------------------------------------
Option Awards Stock Awards
- ------------------------------------------------------------------------------------------------------------------
Number of Number of
Securities Securities Number of Market Value of
Underlying Underlying Option Shares or Units Shares or Units
Unexercised Unexercised Exercise Option of Stock That of Stock That
Options (#) Options (#) Price Expiration Have Not Vested Have Not Vested
Name Exercisable Unexercisable ($) Date (#) ($)(1)
- ------------------------------------------------------------------------------------------------------------------
David J. O'Connor 9,817 39,268(2) $12.84 9/11/16 15,707 (2) $176,704
84,581(3) -- 6.40 2/11/13 -- --
- ------------------------------------------------------------------------------------------------------------------
John F. Parda --(4) 5,000(4) 13.29 4/9/17 4,000(2) $ 45,000
800(2) 3,200(2) 12.84 9/11/16 -- --
3,789(2) 948(5) 8.17 5/10/14 -- --
9,473(3) -- 6.40 2/11/13 -- --
- ------------------------------------------------------------------------------------------------------------------
Scott D. Nogles --(4) 5,000(4) 13.29 4/9/17 4,000(2) $ 45,000
800(2) 3,200(2) 12.84 9/11/16 -- --
5,683(5) 1,421(5) 8.17 5/10/14 -- --
- ------------------------------------------------------------------------------------------------------------------
- ---------------------------------------
(1) The market value of unvested restricted stock is based upon the closing
price of the Company's common stock on March 31, 2008, of $11.25 per share.
(2) Granted pursuant to the New England Bancshares, Inc. 2006 Equity Incentive
Plan and vest in five equal annual installments commencing on September 11,
2007.
(3) Granted pursuant to the New England Bancshares, Inc. 2003 Stock-Based
Incentive Plan and vest in five equal annual installments commencing on
February 11, 2004.
(4) Granted pursuant to the New England Bancshares, Inc. 2006 Equity Incentive
Plan and vest in five equal annual installments commencing on April 9,
2008.
(5) Granted pursuant to the New England Bancshares, Inc. 2003 Stock-Based
Incentive Plan and vest in five equal annual installments commencing on May
10, 2005.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who own more than 10% of
any registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
These individuals are required by regulation to furnish the Company with copies
of all Section 16(a) reports they file.
Based solely on its review of the copies of the reports it has received
and written representations provided to the Company from the individuals
required to file the reports, the Company believes that each of its executive
officers and directors has complied with applicable reporting requirements for
transactions in Company common stock during the fiscal year ended March 31,
2008.
19
Transactions with Related Persons
The Sarbanes-Oxley Act of 2002 generally prohibits loans by the Company
to its executive officers and directors. However, the Sarbanes-Oxley Act
contains a specific exemption from such prohibition for loans by Enfield Federal
or Valley Bank to its executive officers and directors in compliance with
federal banking regulations. Federal regulations require that all loans or
extensions of credit to executive officers and directors of insured financial
institutions must be made on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
transactions with other persons and must not involve more than the normal risk
of repayment or present other unfavorable features. Enfield Federal and Valley
Bank are therefore prohibited from making any new loans or extensions of credit
to executive officers and directors at different rates or terms than those
offered to the general public. Notwithstanding this rule, federal regulations
permit Enfield Federal or Valley Bank to make loans to executive officers and
directors at reduced interest rates if the loan is made under a benefit program
generally available to all other employees and does not give preference to any
executive officer or director over any other employee.
The Audit Committee of the Board of Directors periodically reviews a
summary of the Company's transactions with directors and executive officers of
the Company and with firms that employ directors, as well as other related
person transactions, to recommend to the disinterested members of the Board of
Directors that the transactions are fair, reasonable and within Company policy
and should be ratified and approved. Besides including such requirement in the
Audit Committee Charter, the Company does not maintain written policies or
procedures for the review, approval or ratification of certain transactions with
related persons. However, in accordance with banking regulations, the Board of
Directors reviews all loans made to a director or executive officer in an amount
that, when aggregated with the amount of all other loans to such person and his
or her related interests, exceed the greater of $25,000 or 5% of the Company's
capital and surplus (up to a maximum of $500,000) and such loan must be approved
in advance by a majority of the disinterested members of the Board of Directors.
Additionally, pursuant to the Company's Code of Ethics and Business Conduct, all
executive officers and directors of the Company must disclose any existing or
emerging conflicts of interest to the Company's legal counsel. Such potential
conflicts of interest include, but are not limited to, the following: (1) the
Company conducting business with or competing against an organization in which a
family member of an executive officer or director has an ownership or employment
interest and (2) the ownership of more than 1% of the outstanding securities or
1% of total assets of any business entity that does business with or is in
competition with the Company.
Nominating Committee Procedures
General
It is the policy of the Nominating Committee of the Board of Directors
of the Company to consider director candidates recommended by stockholders who
appear to be qualified to serve on the Company's Board of Directors. The
Nominating Committee may choose not to consider an unsolicited recommendation if
no vacancy exists on the Board of Directors and the Nominating Committee does
not perceive a need to increase the size of the Board of Directors. To avoid the
unnecessary use of the Nominating Committee's resources, the Nominating
Committee will consider only those director candidates recommended in accordance
with the procedures set forth below.
20
Procedures to be Followed by Stockholders
To submit a recommendation of a director candidate to the Nominating
Committee, a stockholder should submit the following information in writing,
addressed to the Chairman of the Nominating Committee, care of the Corporate
Secretary, at the main office of the Company:
1. The name of the person recommended as a director candidate;
2. All information relating to such person that is required to be
disclosed in solicitations of proxies for election of
directors pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended;
3. The written consent of the person being recommended as a
director candidate to being named in the proxy statement as a
nominee and to serving as a director if elected;
4. As to the stockholder making the recommendation, the name and
address of such stockholder as they appear on the Company's
books; provided, however, that if the stockholder is not a
registered holder of the Company's common stock, the
stockholder should submit his or her name and address along
with a current written statement from the record holder of the
shares that reflects ownership of the Company's common stock;
and
5. A statement disclosing whether such stockholder is acting with
or on behalf of any other person and, if applicable, the
identity of such person.
In order for a director candidate to be considered for nomination at
the Company's annual meeting of stockholders, the recommendation must be
received by the Nominating Committee at least 120 calendar days before the date
the Company's proxy statement was released to stockholders in connection with
the previous year's annual meeting, advanced by one year.
Process for Identifying and Evaluating Nominees
The process that the Nominating Committee follows to identify and
evaluate individuals to be nominated for election to the Board of Directors is
as follows:
Identification. For purposes of identifying nominees for the Board of
Directors, the Nominating Committee relies on personal contacts of the committee
members and other members of the Board of Directors, as well as its knowledge of
members of the communities served by Enfield Federal and Valley Bank. The
Nominating Committee will also consider director candidates recommended by
stockholders in accordance with the policy and procedures set forth above. The
Nominating Committee has not previously used an independent search firm to
identify nominees.
Evaluation. In evaluating potential nominees, the Nominating Committee
determines whether the candidate is eligible and qualified for service on the
Board of Directors by evaluating the candidate under certain criteria, which are
described below. If such individual fulfills these criteria, the Nominating
Committee will conduct a check of the individual's background and interview the
candidate to further assess the qualities of the prospective nominee and the
contributions he or she would make to the Board.
21
Qualifications. The Nominating Committee has adopted a set of criteria
that it considers when it selects individuals to be nominated for election to
the Board of Directors. A candidate must meet the eligibility requirements set
forth in the Company's Bylaws, which include an age limitation requirement and a
requirement that the candidate not have been subject to certain criminal and
regulatory actions. A candidate also must meet any qualification requirements
set forth in any Board or committee governing documents.
If the candidate is deemed eligible for election to the Board of
Directors, the Nominating Committee will then evaluate the prospective nominee
to determine if he or she possesses the following qualifications, qualities or
skills:
o contributes to the range of talent, skill and expertise appropriate
for the Board;
o financial, regulatory and business experience, knowledge of the
banking and financial service industries, familiarity with the
operations of public companies and ability to understand financial
statements;
o familiarity with the Company's market area and participation and
ties to local businesses and local civic, charitable and religious
organizations;
o personal and professional integrity, honesty and reputation;
o the ability to represent the best interests of the stockholders of
the Company and the best interests of the institution;
o the ability to devote sufficient time and energy to the performance
of his or her duties;
o independence under applicable Securities and Exchange Commission and
listing definitions; and
o current equity holdings in the Company.
The Committee will also consider any other factors the Nominating
Committee deems relevant, including age, diversity, size of the Board of
Directors and regulatory disclosure obligations.
With respect to nominating an existing director for re-election to the
Board of Directors, the Nominating Committee will consider and review an
existing director's Board and committee attendance and performance; length of
Board service; experience, skills and contributions that the existing director
brings to the Board; and independence.
Submission of Business Proposals
and Stockholder Nominations
The Company must receive proposals that stockholders seek to include in
the proxy statement for the Company's next annual meeting no later than March
13, 2009. If next year's annual meeting is held on a date more than 30 calendar
days from August 14, 2009, a stockholder proposal must be received by a
reasonable time before the Company begins to print and mail its proxy
solicitation for such annual meeting. Any stockholder proposals will be subject
to the requirements of the proxy rules adopted by the Securities and Exchange
Commission.
22
The Company's bylaws provide that, in order for a stockholder to make
nominations for the election of directors or proposals for business to be
brought before the annual meeting, a stockholder must deliver notice of such
nominations and/or proposals to the Secretary not less than 90 days before the
date of the annual meeting. However, if less than 100 days' notice or prior
public disclosure of the date of the annual meeting is given to stockholders,
such notice must be received not later than the close of business of the tenth
day following the day on which notice of the date of the annual meeting was
mailed to stockholders or prior public disclosure of the meeting date was made.
A copy of the bylaws may be obtained from the Company.
Stockholder Communications
The Company encourages stockholder communications to the Board of
Directors and/or individual directors. All communications from stockholders
should be addressed to New England Bancshares, Inc., 855 Enfield Street,
Enfield, Connecticut 06082. Communications to the Board of Directors or to
individual directors should be in the care of Nancy L. Grady, Corporate
Secretary. Communications regarding financial or accounting policies should be
sent to the Chair of the Audit Committee. All other communications should be
sent to the Chair of the Nominating Committee.
Miscellaneous
The Company will pay the cost of this proxy solicitation. The Company
will reimburse brokerage firms and other custodians, nominees and fiduciaries
for reasonable expenses incurred by them in sending proxy materials to the
beneficial owners of the Company. Additionally, directors, officers and other
employees of the Company may solicit proxies personally or by telephone. None of
these persons will receive additional compensation for these activities.
The Company's Annual Report to Stockholders has been included with this
proxy statement. Any stockholder who has not received a copy of the Annual
Report may obtain a copy by writing to the Corporate Secretary of the Company.
The Annual Report is not to be treated as part of the proxy solicitation
material or as having been incorporated by reference into this proxy statement.
If you and others who share your address own your shares in "street
name," your broker or other holder of record may be sending only one annual
report and proxy statement to your address. This practice, known as
"householding," is designed to reduce our printing and postage costs. However,
if a shareholder residing at such an address wishes to receive a separate annual
report or proxy statement in the future, he or she should contact the broker or
other holder of record. If you own your shares in "street name" and are
receiving multiple copies of our annual report and proxy statement, you can
request householding by contacting your broker or other holder of record.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Nancy L. Grady
----------------------------------
Nancy L. Grady
Corporate Secretary
Enfield, Connecticut
July 11, 2008
23
REVOCABLE PROXY
NEW ENGLAND BANCSHARES, INC.
ANNUAL MEETING OF STOCKHOLDERS
August 14, 2008
1:00 p.m., Local Time
-----------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints the official proxy committee of New
England Bancshares, Inc. (the "Company"), consisting of Lucien P. Bolduc, Myron
J. Marek, David J. O'Connor, Richard K. Stevens, Richard M. Tatoian or any of
them, with full power of substitution in each, to act as proxy for the
undersigned, and to vote all shares of common stock of the Company which the
undersigned is entitled to vote only at the Annual Meeting of Stockholders to be
held on August 14, 2008 at 1:00 p.m., local time, at the Crowne Plaza Hotel, One
Bright Meadow Boulevard, Enfield, Connecticut and at any and all adjournments
thereof, with all of the powers the undersigned would possess if personally
present at such meeting as follows:
1. The election as directors of all nominees listed (unless the "For All Except"
box is marked and the instructions below are complied with).
Peter T. Dow, William C. Leary, Dorothy K. McCarty, Thomas O. Barnes, David
J. Preleski, Edmund D. Donovan, and Mark J. Blum.
FOR ALL
---
[_]
FOR WITHHOLD EXCEPT
--- ------------- --------
[_] [_] [_]
INSTRUCTION: To withhold your vote for any individual nominee, mark "FOR ALL
EXCEPT" and write that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
2. The ratification of the appointment of Shatswell, MacLeod & Company P.C. as
independent auditors of New England Bancshares, Inc. for the fiscal year ending
March 31, 2009.
FOR AGAINST ABSTAIN
--- -------- --------
[_] [_] [_]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE
LISTED PROPOSALS.
This proxy is revocable and will be voted as directed, but if no
instructions are specified, this proxy, properly signed and dated, will be voted
"FOR" each of the proposals listed. If any other business is presented at the
Annual Meeting, including whether or not to adjourn the meeting, this proxy will
be voted by the proxies in their judgment. At the present time, the Board of
Directors knows of no other business to be presented at the Annual Meeting. This
proxy also confers discretionary authority on the Proxy Committee of the Board
of Directors to vote with respect to the election of any person as director
where the nominees are unable to serve or for good cause will not serve and
matters incident to the conduct of the meeting.
Dated:
------------------------ -----------------------------
SIGNATURE OF STOCKHOLDER
-------------------------------
SIGNATURE OF CO-HOLDER (IF ANY)
The above signed acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Annual Meeting of Stockholders, a Proxy
Statement and an Annual Report to Stockholders.
Please sign exactly as your name appears on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder may sign but only one signature
is required.
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PLEASE COMPLETE, DATE, SIGN AND PROMPTLY MAIL THIS PROXY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.