UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.)
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[ ] 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
SBT Bancorp, 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 the Registrant)
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2
SBT BANCORP, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 8, 2007
To the Shareholders of SBT Bancorp, Inc.:
Notice is hereby given that the Annual Meeting of Shareholders of SBT
Bancorp, Inc. will be held at the main office of the Company's subsidiary, The
Simsbury Bank & Trust Company, 981 Hopmeadow Street, Simsbury, Connecticut on
Tuesday, May 8, 2007 at 5:00 p.m., local time. At the meeting, the shareholders
will consider and vote upon the following matters:
1. The election of five directors, four of whom shall serve as Class
II directors for a term expiring at the 2010 Annual Meeting and
one of whom shall serve as a Class III director for a term
expiring at the 2008 Annual Meeting.
2. The ratification of the appointment of Shatswell, MacLeod & Co.,
P.C., certified public accountants, as independent auditors for
SBT Bancorp, Inc. for the fiscal year ending December 31, 2007;
3. The transaction of such other business as may properly be brought
before the meeting or any adjournment or postponement thereof.
Only shareholders of record at the close of business on March 16, 2007
are entitled to notice of and to vote at the Annual Meeting and any and all
adjournments or postponements thereof.
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING. WE URGE
YOU TO SIGN, DATE AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON. SHAREHOLDERS OF RECORD WHO
ATTEND THE MEETING MAY REVOKE THEIR PROXY AND VOTE IN PERSON.
BY ORDER OF THE BOARD OF DIRECTORS
Simsbury, Connecticut Jane F. von Holzhausen,
April 12, 2007 Secretary
[THIS PAGE INTENTIONALLY LEFT BLANK]
SBT BANCORP, INC.
760 Hopmeadow Street
P.O. Box 248
Simsbury, CT 06070-0248
(860) 408-5493
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PROXY STATEMENT
OF
SBT BANCORP, INC.
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 8, 2007
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This Proxy Statement is furnished to Shareholders of SBT Bancorp, Inc.
(the "Company" or "we") in connection with the solicitation of proxies by the
Company's Board of Directors (the "Board") for use at the Annual Meeting of
Shareholders of the Company to be held at the main office of the Company's
subsidiary, The Simsbury Bank & Trust Company (the "Bank"), 981 Hopmeadow
Street, Simsbury, Connecticut, at 5:00 p.m. on May 8, 2007, and any and all
adjournments or postponements thereof (the "2007 Annual Meeting").
This Proxy Statement, the Notice of the 2007 Annual Meeting, the
enclosed form of proxy and the Annual Report to Shareholders for the year ending
December 31, 2006 for SBT Bancorp, Inc. (the "Annual Report") are first being
mailed to our shareholders on or about April 12, 2007. We will, upon written
request and without charge, furnish you with additional copies of the Annual
Report. Please address all such requests to us by mail to SBT Bancorp, Inc.,
Attention: Jane F. von Holzhausen, at the above address. The principal executive
offices of the Company are located at 760 Hopmeadow Street, P.O. Box 248,
Simsbury, Connecticut 06070-0248 (telephone number (860) 408-5493).
INFORMATION ABOUT SOLICITATION AND VOTING
A shareholder who executes the enclosed form of proxy may revoke it at
any time before it is voted by written notice of such revocation or a duly
executed proxy bearing a later date delivered to the Secretary of the Company at
the address set forth above or by attending the 2007 Annual Meeting and revoking
the proxy at such time. Attendance at the 2007 Annual Meeting will not itself
revoke a proxy. Shares represented by properly executed proxies will be voted at
the 2007 Annual Meeting in accordance with the specifications thereon.
Shareholders of record who are present at the 2007 Annual Meeting may vote by
ballot.
The expense of soliciting proxies in favor of the Company's proposals
will be borne by the Company. In addition to solicitation of proxies by mail,
proxies may also be solicited by telephone or personal contact by employees
and/or directors of the Company who will not receive additional compensation
therefore.
Only Shareholders of record at the close of business on March 16, 2007
(the "Record Date") are entitled to notice and to vote at the 2007 Annual
Meeting. On the Record Date, there were 848,459 outstanding shares of the
Company's common stock, no par value (the "Company common stock"). Each share of
common stock is entitled to one vote. The presence, in person or by proxy, of a
majority of the issued and outstanding shares of common stock on the Record
Date, or 424,230 shares, is necessary to constitute a quorum at the 2007 Annual
Meeting. Abstentions and broker non-votes are counted as present for
establishing a quorum. When a record holder (e.g., a bank or brokerage firm)
holding shares for a beneficial owner votes on one proposal but does not vote on
another proposal because the beneficial owner has not provided voting
instructions, this is referred to as a "broker non-vote."
If the shares you own are held in "street name" by a bank or brokerage
firm, your bank or brokerage firm, as the record holder of your shares, is
required to vote your shares according to your instructions. In order to vote
your shares, you will need to follow the directions your bank or brokerage firm
provides you.
If your shares are held in "street name," you must bring an account
statement or letter from your brokerage firm or bank showing that you are the
beneficial owner of the shares as of the record date in order to be admitted to
the Annual Meeting. To be able to vote your shares held in street name at the
Annual Meeting, you will need to obtain a proxy card from the holder of record.
With respect to the proposals at the 2007 Annual Meeting, the election
of directors and the approval of the appointment of the Company's independent
auditors, your broker is entitled to use its discretion in voting your shares,
even if you do not give your broker instructions as to how to vote.
The votes will be counted, tabulated and certified by Robert J. Bogino
and James T. Fleming. Each proxy received will be voted as directed. However, if
no direction is indicated, the proxy will be voted: in Item 1 FOR the election
to the Board of Directors of the four Class II director nominees and the one
Class III director nominee; in Item 2 FOR the ratification of Shatswell, MacLeod
& Co., P.C. as independent auditors; and on such other matters as may properly
come before the 2007 Annual Meeting in such manner as the persons so named in
the proxy shall decide.
We will report the voting results in our quarterly report on Form
10-QSB for the second quarter of 2007, which we expect to file with the
Securities and Exchange Commission, on or before August 14, 2007.
If you have any questions about the 2007 Annual Meeting or your
ownership of our common stock, please contact Jane F. von Holzhausen, our
corporate secretary, by mail at SBT Bancorp, Inc., Attention: Jane F. von
Holzhausen, Secretary, 760 Hopmeadow Street, P.O. Box 248, Simsbury, Connecticut
06070-0248, or by email to Ms. von Holzhausen's attention at
sbtinfo@simsburybank.com.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
To the knowledge of the Company, as of March 9, 2007, there is no
person who owns of record or beneficially five percent or more of the Company's
common stock.
The following table sets forth certain information with respect to the
beneficial ownership of the common stock of the Company as of February 12, 2007
by (i) each director and nominee for director of the Company, (ii) named
executive officers, and (iii) all directors and executive officers as a group.
Except as indicated by footnote, the persons named in the table have sole voting
and investment powers with respect to all shares shown as beneficially owned by
them. All persons listed are directors of both the Company and the Bank unless
noted otherwise.
Amount and
Nature
Of Beneficial Percent
Name of Beneficial Owner Addresses Ownership Of Class
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Robert J. Bogino, Vice Chairman 22 Daventry Hill Road 27,572 (1) 3.1%
Avon, CT 06001
James T. Fleming, Director 7 Simscroft Place 492 (2) *
Simsbury, CT 06070
Martin J. Geitz, President, Chief Executive 318 Strickland Street 14,274 (3) 1.6%
Officer and Director Glastonbury, CT 06033
Edward J. Guarco, Director 22 R East Street 6,800 (4) *
Granby, CT 06035
Gary R. Kevorkian, Director 8 Apple Lane 16,619 (5) 1.9%
Simsbury, CT 06070
Amount and
Nature
Of Beneficial Percent
Name of Beneficial Owner Addresses Ownership Of Class
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Barry R. Loucks, Director 57 Summit Drive 14,087 (6) 1.6%
Windsor, CT 06095
George B. Odlum, Jr., DMD, Director 1 Westledge Road 13,581 (7) 1.5%
W. Simsbury, CT 06092
Rodney R. Reynolds, Director (of Bank only) 160 Granville Road 0 *
North Granby, CT 06060
David W. Sessions, Director 105 Turnbull Road 15,736 (8) 1.8%
New Hartford, CT 06057
Jane F. von Holzhausen, Director and Secretary 29 Chimney Corner Circle 11,248 (9) 1.3%
Guilford, CT 06437
Penny R. Woodford, Director 687 West Avon Road 2,262 (10) *
Avon, CT 06001
Lincoln S. Young, Chairman 60 Pine Hill Road 18,612 (11) 2.1%
New Hartford, CT 06057
Anthony F. Bisceglio, Executive Vice President and 418 Olde Stage Road 10,500 (12) 1.2%
Chief Financial Officer Glastonbury, CT 06033
Terry L. Boulton, Senior Vice President and Chief 36 Laurel Lane 300 *
Retail Banking Officer Simsbury, CT 06070
Paul R. Little, Senior Vice President and Chief 344 Toll Gate Road 0 *
Lending Officer Berlin, CT 06037
All directors and executive officers
(as a group) 152,083 (13) 17.2%
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* Less than 1%
(1) Includes 6,600 shares owned jointly with Mr. Bogino's spouse, 822 shares
held in a trust of which Mr. Bogino serves as trustee, 2,084 shares in
trusts for two of his children for which Mr. Bogino serves as the trustee
and 11,500 shares owned by his spouse. Includes 1,000 shares which may be
acquired within 60 days through the exercise of stock options. Mr. Bogino
disclaims beneficial ownership of the shares beneficially owned by his
spouse.
(2) Includes 266 shares which may be acquired within 60 days through the
exercise of stock options.
(3) Includes 7,000 shares which may be acquired within 60 days through the
exercise of stock options.
(4) Includes 1,200 shares owned jointly with Mr. Guarco's spouse, 600 shares
held by both Mr. and Mrs. Guarco as custodians for their daughter and 4,000
shares in a trust of which Mr. Guarco owns 6.6%. Includes 1,000 shares
which may be acquired within 60 days through the exercise of stock options.
(5) Includes 9,426 shares held in trusts for which Mr. Kevorkian is trustee and
280 shares owned by Mr. Kevorkian's spouse.
(6) Shares held with Mr. Loucks's spouse as joint tenants in common.
(7) Includes 3,550 shares owned by Dr. Odlum's spouse. Dr. Odlum disclaims
beneficial ownership of the shares beneficially owned by his spouse.
(8) Includes 1,564 shares owned jointly with Mr. Sessions's spouse, 1,357
shares owned by a private corporation owned by Mr. Sessions and his
siblings and 1,252 shares owned by his children. Includes 1,000 shares
which may be acquired within 60 days through the exercise of stock options.
Mr. Sessions disclaims beneficial ownership of the shares beneficially
owned by his children.
(9) Includes 6,590 owned jointly with Ms. von Holzhausen's spouse. Includes
1,000 shares which may be acquired within 60 days through the exercise of
stock options.
(10) Includes 1,660 shares owned jointly with Ms. Woodford's spouse.
(11) Includes 3,506 shares owned by Mr. Young's spouse. Includes 1,000 shares
which may be acquired within 60 days through the exercise of stock options.
Mr. Young disclaims beneficial ownership of the shares beneficially owned
by his spouse.
(12) Includes 10,500 shares which may be acquired within 60 days through the
exercise of stock options.
(13) Includes 34,800 shares which directors and executive officers may acquire
beneficial ownership of within 60 days through the exercise of stock
options.
DISCUSSION OF PROPOSALS
ITEM 1
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ELECTION OF DIRECTORS
As of the date of this Proxy Statement, the Company's Certificate of
Incorporation provides that the Board of Directors shall be divided into three
classes, as nearly equal in number as possible, with each class having a
three-year term. There are currently 11 persons serving as directors of the
Company. Four of these are Class I directors, four are Class II directors and
three are Class III directors. There is also one vacant Class III directorship
that was created when the Board of Directors voted unanimously to create an
additional directorship on March 21, 2007. The terms of the classes are
staggered so that the term of a class expires at each annual meeting of the
Company. The terms of the four incumbent Class II directors expire at the 2007
Annual Meeting.
At meetings held on February 14, 2007 and March 21, 2007, the Board of
Directors voted unanimously to recommend the following five persons for election
to the Board of Directors with terms expiring on the dates set forth below:
Nominee Class Term Expiration
----------------------------------- ------------ -------------------------------------------
Martin J. Geitz Class II 2010 Annual Meeting of Shareholders
Gary R. Kevorkian Class II 2010 Annual Meeting of Shareholders
George B. Odlum, Jr., DMD Class II 2010 Annual Meeting of Shareholders
Jane F. von Holzhausen Class II 2010 Annual Meeting of Shareholders
Rodney R. Reynolds Class III 2008 Annual Meeting of Shareholders
Each of the nominees other than Rodney R. Reynolds currently serves as
a director of the Company and is nominated to serve for his or her term and
until his or her successor is elected and qualified. In the event that any of
the nominees become unable to serve, an event which the Board does not expect,
the shares represented by proxy may be voted for a substitute nominee to be
designated by the Board or a committee thereof, unless the proxy withholds
authority to vote for all nominees.
If a quorum is present at the 2007 Annual Meeting, the election of
directors will require the affirmative vote of a plurality of the votes cast.
Abstentions by shareholders and broker non-votes with respect to the election of
directors will not be included in determining whether nominees have received the
vote of such plurality. Certain information about the business experience of the
director nominees, including their service as directors of other corporations,
is listed below. References to terms of service as a director or officer of the
Company include service as a director or officer of the Bank prior to the date
of the holding company reorganization on March 2, 2006.
Director Nominees, Class II
Martin J. Geitz (50) - Mr. Geitz is the President and Chief Executive Officer of
the Company and the Bank, which positions he has held since 2004. He has been a
director of the Company since 2005. He was formerly a Vice President with
Massachusetts Mutual Life Insurance Company until 2004 and was the President,
Chief Executive Officer and Chief Financial Officer of Cigna Bank & Trust
Company, which positions he held from 2000 to 2003, and prior to that held a
variety of positions with Fleet Boston Financial since 1984. He is also Chairman
of the Board of the Hartford Economic Development Corporation, Board member of
McLean Foundation, the Simsbury Historical Society, the Charter Oak State
College Foundation and Board member and Treasurer of the Simsbury Free Library.
Gary R. Kevorkian (53) - Mr. Kevorkian is an Attorney-at-Law in his own practice
in Granby, Connecticut, since 1981. He has been a director of the Company since
1994.
George B. Odlum, Jr., DMD (67) - Dr. Odlum is a family practice dentist in
Simsbury, Connecticut, where he has practiced dentistry since 1968. He is the
retired President and Board member of the Horace Wells Club. Dr. Odlum has been
a director of the Company since 1992 and formerly served as the Company's
Secretary.
Jane F. von Holzhausen (62) - Ms. von Holzhausen is the Secretary of the Company
and the Bank and has served as a director since 1994. She is Vice President of
Operations, Southwest Region, of Prudential Connecticut Realty which position
she has held since December 2006; prior to that she was the Sales Manager of
that organization's office in Avon, Connecticut since 1998. She is the former
President of Valley Properties, Inc. d/b/a Coldwell Banker Valley Properties,
which she owned from 1988 to 1998.
Director Nominee, Class III
Rodney R. Reynolds (67) - Mr. Reynolds has been nominated to fill the Company's
vacant Class III directorship. Mr. Reynolds was the co-founder of Equistrides
Therapeutic Riding Center, Inc. and served as co-manager and trustee of that
organization from 2000 to 2006. Mr. Reynolds was self-employed as a commercial
real estate developer and owner/manager of real estate from 1984 to 2006. He has
served as a Director of the Bank (but not the Company) since March 2007 when he
was elected to fill the vacancy resulting from the death of Owen P. Murphy. Mr.
Reynolds was also a Founding Director of the Trust Company of Connecticut,
serving from 1990 to 2005.
INFORMATION ABOUT OUR DIRECTORS
Certain information about the business experience of the remaining
incumbent directors and the non-director officers of the Company, including
their service as directors of other companies, is listed below. References to
terms of service as a director or officer of the Company include service as a
director or officer of the Bank prior to the date of the holding company
reorganization on March 2, 2006.
Class III Directors, Terms Expiring at the 2008 Annual Meeting of Shareholders
Robert J. Bogino (64) - Mr. Bogino is the Vice Chairman of the Company and the
Bank and has been a director of the Company since 1994. Mr. Bogino previously
served as the Company's Secretary. He was the president and co-owner of Bogino &
DeMaria, Inc. in Avon, Connecticut, an insurance agency of which he was a
founder in 1972. In 2003, he became a Vice President of the Watson Group, an
insurance agency in Wethersfield until his retirement in 2004.
David W. Sessions (56) - Mr. Sessions is the President and Treasurer of the
Casle Corporation, headquartered in Avon, Connecticut, a commercial design-build
development and construction company which he co-founded in 1981. He is also
Chairman of the New Hartford Architectural Review Committee, a member of the New
Hartford Town Democratic Committee, a Board Member of the Wheeler Clinic as well
as the Licia and Mason Beekley Community Library. He has been a director of the
Company since 1992.
Lincoln S. Young (72) - Mr. Young is the Chairman of the Company and has been a
director since 1994. Mr. Young previously served as the Company's Secretary. He
is the retired Chief Executive Officer of Turbine Engine Services Corp., a jet
engine servicing company, a position he held until 1995. Mr. Young is a director
of the New England Air Museum and a Board Member of the Licia and Mason Beekley
Community Library.
Class I Directors, Terms Expiring at the 2009 Annual Meeting of Shareholders
James T. Fleming (51) - Mr. Fleming is currently the Commissioner of the
Department of Public Works, State of Connecticut, which position he accepted
after leaving his former position as the Commissioner of the Consumer Protection
Agency, State of Connecticut, which he held from 1999 until 2003. Prior to that
position, Mr. Fleming was the Director of Community Relations for Asea Brown
Boveri, Inc., which position he held until 1998. He was a member of Connecticut
House and Senate from 1981 until 1999. His is also Vice President of the
Simsbury Volunteer Fire District and is a Corporator of Saint Francis Hospital.
He has been a director of the Company since 1992.
Edward J. Guarco (53) - Mr. Guarco is a Vice President of State Line Oil, in
Granby, Connecticut, where he has been employed since 1976. He also serves as
Vice President of the Independent Connecticut Petroleum Association and as a
Board member of the Granby Development Commission and the Granby Chamber of
Commerce. He has been a director of the Company since 1998.
Barry R. Loucks (64) - Mr. Loucks is the former President and Chief Executive
Officer of the Bank, which positions he held since the Bank's in-organization
stage in 1994, and which he retired from in 2004. He is a Trustee of the Nutmeg
Big Brothers/Big Sisters and the Metropolitan Hartford YMCA; he is also a Board
Member of McLean Foundation and of New England Certified Development
Corporation-CT. He has been a director of the Company since 1994.
Penny R. Woodford (62) - Ms. Woodford is an Agent with the Coldwell Banker
Residential Brokerage, which position she has held since 2003, prior to that she
was an Agent with DeWolf Companies since 1996 and Westledge Real Estate since
1983. She is Chairman of the Nominating Committee of the Avon Republican Town
Committee. She has been a director of the Company since 1992.
Non-Director Executive Officers
Anthony F. Bisceglio (59) - Mr. Bisceglio is an Executive Vice President of the
Company and the Bank, positions he has held since January 2005 as well as Chief
Financial Officer and Treasurer of the Company and the Bank, which positions he
has held since 1995. Prior to joining the Bank in 1995, he was Vice President
and Group Financial Officer of Shawmut National Corporation and Chief Financial
Officer of Shawmut Bank of Rhode Island. He is also on the Connecticut Bankers
Association's Management Development Committee, is a Board member of the
Financial Managers Society and Chairman of its Strategic Issues Council, serves
on the Economic Policy Survey Panel of the National Association for Business
Economics and is a member of the American Finance Association.
Terry L. Boulton (50) - Ms. Boulton is a Senior Vice President and Chief Retail
Banking Officer of the Bank, which positions she has held since 2005. Prior to
joining the Bank, she held a variety of positions including as a Vice President
of Bank of America, formerly Fleet Bank, N.A. where she was employed since 1988.
She is past-president of the Simsbury/Granby Rotary Club and the Simsbury
Chamber of Commerce.
Paul R. Little (47) - Mr. Little is a Senior Vice President and Chief Lending
Officer of the Bank, which positions he accepted in April 2006. Prior to joining
the Bank, he served as Vice President of Commercial Real Estate Lending at
Liberty Bank since 2004; from 1993 to 2004 he was Vice President of Real Estate
Loans for New Alliance Bank, formerly Savings Bank of Manchester where he had
been employed since 1990.
Charles D. Forgie (64) - Mr. Forgie was an Executive Vice President and Chief
Lending Officer of the Bank, which positions he held from 1995 until his
retirement from the Company on August 31, 2006. Prior to joining the Bank in
1995, he was Vice President of Commercial Lending at Fleet Bank, N.A.
Audit Committee Financial Expert
The Board has determined that the Company currently has at least one
audit committee financial expert serving on its Audit Committee. That person is
Robert J. Bogino. Mr. Bogino is "independent," as that term is defined in Rule
4200(a)(15) of the National Association of Securities Dealers' listing
standards.
Independence of Directors and Director Nominees
The following directors and director nominees are independent in
accordance with Rule 4200(a)(15) of the National Association of Securities
Dealers' listing standards: Robert J. Bogino, James T. Fleming, Edward J.
Guarco, Gary R. Kevorkian, George B. Odlum, Jr., DMD, David W. Sessions, Rodney
R. Reynolds, Jane F. von Holzhausen, Penny R. Woodford and Lincoln S. Young.
Board Committees and 2006 Meetings
The Company has established three standing committees of the Board of
Directors: the Audit and Compliance Committee, the Corporate Governance
Committee, and the Executive Committee.
The Company does not have a standing compensation committee.
Compensation of the Company's directors is determined by the Corporate
Governance Committee. Compensation of the Company's executive officers is
determined by the Personnel Committee, which is a committee of the board of
directors of the Bank. The members of this committee are Messrs. Sessions
(Chair), Guarco, Kevorkian and Young. The Personnel Committee met four times in
2006. In determining the compensation of the Bank's employees, including the
Company's executive officers, the Personnel Committee considers the
recommendations of Martin J. Geitz, President and CEO of the Company and the
Bank. The Board of Directors has determined that it is appropriate not to have a
standing compensation committee because the Company's executive officers are
compensated primarily by the Bank and the Bank has a standing committee that is
responsible for making compensation determinations.
Audit and Compliance Committee. The Audit and Compliance Committee has
oversight responsibility for and reviews all financial and other reports
provided by the Company's independent auditors and the Company's internal audit
firm. The Audit and Compliance Committee evaluates and selects the independent
auditor subject to shareholder ratification. The Audit and Compliance Committee,
in its meetings with the Company's auditors, discusses and approves the audit
and compliance scope and reviews all audit findings. The members of the Audit
and Compliance Committee are Messrs. Odlum (Chair), Bogino, Fleming, Guarco and
Ms. Woodford. All members of the Audit and Compliance Committee are independent
in accordance with Rule 4200(a)(15) of the National Association of Securities
Dealers' listing standards. The Audit and Compliance Committee met four times
during 2006. The Audit and Compliance Committee Charter was included in the
proxy statement delivered to shareholders in 2006.
Corporate Governance Committee. The Corporate Governance Committee
functions as the nominating committee for director candidates, identifies
qualified individuals to become members of the Company's Board of Directors,
determines the composition of the Board of Directors and its committees,
monitors and assesses the effectiveness of the Board of Directors, develops and
implements the Company's corporate governance guidelines and reviews and
recommends director compensation. All members of the Corporate Governance
Committee are independent as that term is defined in Rule 4200(a)(15) of the
National Association of Securities Dealers' listing standards. The members of
the Corporate Governance Committee are Messrs. Young (Chair), Bogino, Fleming
and Ms. von Holzhausen. The Corporate Governance Committee met five times during
2006. The Corporate Governance Committee Charter was included in the proxy
statement delivered to shareholders in 2006.
The Corporate Governance Committee has a formal policy regarding the
consideration of director candidates recommended by shareholders which sets
forth the minimum qualifications of suitable nominees for director as well as
approved processes for identifying and evaluating nominees. The Corporate
Governance Committee will consider any director candidate recommended by
shareholders in accordance with the standards set forth in its Charter. Such
suggestions, together with appropriate biographical information, should be
submitted to: SBT Bancorp, Inc., Attn: Jane F. von Holzhausen, Secretary, 760
Hopmeadow Street, P.O. Box 248, Simsbury, Connecticut 06070. Possible candidates
who have been suggested by shareholders are evaluated by the Corporate
Governance Committee in the same manner as are other possible candidates.
The general criteria used to establish the traits, abilities and
experience that the Corporate Governance Committee looks for in determining
candidates for election to the Board include highest ethical character,
independence from Management, ability to represent all shareholders of the
Company, ability to exercise sound business judgment, relevant expertise and
experience that would benefit the Company and be able to offer advice and
guidance to the Chief Executive and the Board. The board as a whole should be a
diverse body, with diversity reflecting age, gender, background and professional
experience. Key among the criteria is a director's existing ties to the
Company's markets and adherence to Company's Code of Ethics. All directors are
subject to mandatory retirement from service on the Company's Board of Directors
upon reaching seventy-six years of age.
Executive Committee. The Executive Committee is responsible for the
general supervision of the Company's affairs between meetings of the full Board,
oversees the Company's investments, asset/liability management, budget and
capital planning and reviews the Company's interest rate sensitivity and deposit
and loan pricing. The Executive Committee also is responsible for overseeing the
Company's information technology planning, security and development. The members
of the Executive Committee are Messrs. Loucks (Chair), Bogino, Geitz, Odlum,
Sessions, Young and Ms. von Holzhausen. The Executive Committee met 12 times
during 2006.
The Board held 13 meetings, including the annual meeting, during 2006.
All of the Company's incumbent directors attended at least 75% of the aggregate
of (i) the total number of meetings of the Board of Directors and (ii) the total
number of meetings held by the Committees of the Board of Directors on which
such directors served during 2006. Mr. Murphy, who served as a director of the
Bank prior to the March 2, 2006 reorganization, did not attend any meetings in
2006.
Attendance at the Annual Meeting. Board members are expected to attend
the Company's annual meeting of shareholders. Ten of the Company's 11 directors
attended the May 9, 2006 annual meeting of shareholders of the Company.
Shareholder Communications
The Board of Directors has a formal process in place for shareholder
communication to the Board of Directors or any individual director. Shareholders
wishing to communicate with the Board of Directors or any individual director
may write to SBT Bancorp, Inc., Secretary, 760 Hopmeadow Street, P.O. Box 248,
Simsbury, Connecticut 06070. All communications received of a relevant nature
will be forwarded to the full Board or appropriate individual director as
directed. The Board of Directors believes this approach is reasonable in light
of the relatively small number of Shareholders of the Company and the relatively
small number of communications the Board expects to receive in the foreseeable
future.
Code of Ethics
The Company has adopted a Code of Ethics that applies to all employees,
officers and directors. The Company will supply a copy of the Code of Ethics
upon written or oral request. To obtain a copy please write to us at SBT
Bancorp, Inc., 760 Hopmeadow Street, P.O. Box 248, Simsbury, Connecticut
06070-0248 or call the Company at (860) 408-5493.
COMPENSATION AND OTHER MATTERS
Executive Compensation
The following table presents information relating to the compensation
of the Company's CEO and the other executive officers named below for the fiscal
year ended December 31, 2006 and 2005.
Summary Compensation Table
Name and principal Year Salary Bonus Stock Option awards Nonequity Non- All other Total
position awards incentive qualified Compen-
plan deferred sation
compen- earnings
sation
- ---------------------------------------------------------------------------------------------------------------------------------
Martin J. Geitz 2006 $183,443 (1) $ 0 (2) $0 $ 0 $0 $0 $ 18,452 (3) $201,895
President & Chief 2005 $172,204 $ 22,275 (4) $0 $ 60,179 (5) $ 12,591 (6) $267,249
Executive Officer
Anthony F. Bisceglio 2006 $122,074 $ 5,133 (2) $ 7,802 (7) $135,009
Executive Vice 2005 $117,445 $ 14,500 (4) $ 7,062 (7) $139,007
President & Chief
Financial Officer
Charles D. Forgie 2006 $118,328 (8) $ 6,638 (8) $120,006 (9) $244,972
Executive Vice 2005 $113,010 $ 13,276 (4) $ 4,541 (10) $130,827
President & Chief
Lending Officer (8)
Terry L. Boulton 2006 $102,496 $ 2,023 (2) $ 15,354 (11) $ 3,892 (12) $123,765
Senior Vice President 2005 $ 93,258 $ 10,500 (4) $ 315 (13) $104,073
& Chief Retail Banking
Officer
(1) Mr. Geitz also serves as a director, but did not receive any compensation
for those services.
(2) 2006 performance bonus to be paid in 2007.
(3) Includes Mr. Geitz's personal use of a Bank-leased automobile, annual dues
for country club membership, employer match of 401k Plan contributions and
employer-paid premiums for group term life insurance in excess of $50,000.
(4) 2005 performance bonus paid in 2006.
(5) The dollar value of the stock options was determined using the calculation
explained in Footnote 15 of the Consolidated Financial Statements appearing
in the Company's 2006 Annual Report. Options may not be exercised in full
or in part prior to the expiration of one year from the date of grant. One
third of the options become exercisable on each of the first through third
annual anniversary dates of the grant.
(6) Includes Mr. Geitz's personal use of a Bank-leased automobile, annual dues
for country club membership and employer-paid premiums for group term life
insurance in excess of $50,000.
(7) Includes Mr. Bisceglio's employer match of 401k Plan contributions,
employer-paid premiums for group term life insurance in excess of $50,000
and the present value of the Supplemental Executive Retirement Plan
benefit.
(8) Retired August 31, 2006; salary and bonus payments per employment
agreement.
(9) Includes Mr. Forgie's employer match of 401k Plan contributions,
employer-paid premiums for group term life insurance in excess of $50,000
and the present value of the Supplemental Executive Retirement Plan
benefit. Upon Mr. Forgie's retirement on August 31, 2006, he became
entitled to receive a supplemental pension. Per Mr. Forgie's employment
agreement he is entitled to receive 20 annual payments of $10,000 each.
Additional information regarding this pension is provided in the
"Employment Agreements" section below.
(10) Includes Mr. Forgie's employer match of 401k Plan contributions,
employer-paid premiums for group term life insurance in excess of $50,000
and the present value of the Supplemental Executive Retirement Plan
benefit.
(11) The dollar value of the stock options was determined using the calculation
explained in Footnote 15 of the Consolidated Financial Statements appearing
in the Company's 2006 Annual Report. Options may not be exercised in full
or in part prior to the expiration of one year from the date of grant. One
third of the options become exercisable on each of the first through third
annual anniversary dates of the grant.
(12) Includes Ms. Boulton's employer match of 401k Plan contributions and
employer-paid premiums for group term life insurance in excess of $50,000.
(13) Includes Ms. Boulton's employer-paid premiums for group term life insurance
in excess of $50,000.
The Personnel Committee is a Committee of the Bank's board of directors
and is responsible for reviewing the performance and establishing the
compensation of the Bank's compensation of the Bank's officers and key
employees, including the Company's executive officers. The Committee relies upon
industry information, including surveys of similarly sized and located
institutions, gathered by Management at the Committee's request, and targets the
Bank's compensation to be generally at the level of its peer group institutions.
The members of this committee are Messrs. Sessions (Chair), Guarco, Kevorkian
and Young.
Employment Agreements
The Bank maintains employment agreements with Messrs. Geitz, Bisceglio
and Forgie and Ms. Boulton. The continued success of the Company and the Bank
depends to a significant degree on the skills and competence of these officers.
These agreements are with the Bank, not the Company.
Martin J. Geitz, President and Chief Executive Officer - The Bank
entered into an Employment Agreement with Martin J. Geitz effective October 4,
2004. The term of that agreement is the earlier to occur of Mr. Geitz attaining
the age of sixty-five or the termination of Mr. Geitz's contract voluntarily or
upon some other basis. Mr. Geitz is to be paid a salary of $170,000, subject to
adjustment by the Board. In addition, Mr. Geitz is entitled to an annual bonus
in an amount and form set by the Board. Option grants are discussed in the
footnotes of the Summary Compensation Table and the Outstanding Equity Awards
Table. Mr. Geitz is entitled to: (1) participate in the Bank's comprehensive
health insurance and major medical coverage; (2) participate in any long-term
disability insurance plan and pension plan maintained by the Bank; (3) paid
vacation of four weeks per year; (4) the use of an automobile for business
purposes; (5) membership in a private "country" or similar golf club; and (6)
attendance at two banking trade association conventions per year, including the
cost of attendance and travel for Mr. Geitz and his spouse. The Bank may
terminate Mr. Geitz's employment at any time without notice. The Bank may give
up to sixty days' prior notice of the termination. If such notice is given to
Mr. Geitz, the Bank may require him to remain in the employ of the Bank for the
period of notice given. If the Bank terminates Mr. Geitz's employment for other
than Cause or due to a Change in Control or potential Change in Control (as each
event is defined in the agreement), Mr. Geitz shall be entitled to receive a
lump sum payment equal to the aggregate of: (1) twelve months of Mr. Geitz's
then current salary base salary; (2) an amount equal to bonus to which he would
have been entitled under the agreement had a Change of Control occurred; (3)
payment for any accrued but unused vacation time; and (4) payment of Mr. Geitz's
medical insurance for twelve months following his termination. This lump sum
amount shall be reduced by any compensation Mr. Geitz receives for other
employment after the termination of his employment with the Bank. Mr. Geitz may
voluntarily terminate his employment on ninety days' prior notice to the Bank,
however, notice need not be given where the termination has been approved by the
Board of Directors or there has been a material breach of the Bank's obligations
under the agreement. If Mr. Geitz fails to meet the terms of the agreement
concerning his voluntary termination, the Bank will be entitled to enjoin Mr.
Geitz's employment with any significant competitor of the Bank for a period of
twelve months. In the event of a Change in Control or Potential Change in
Control of the Bank or the Company, Mr. Geitz would be entitled to receive (1)
credit for his years of service to the Bank plus five additional years for
purposes of vesting and calculation of benefits under any benefit plan of the
Bank or a successor thereto; (2) twelve months notice of termination during
which time he shall receive payment at his then current salary and the highest
bonus received by Mr. Geitz during the preceding thirty-six months, provided
that if the Change in Control occurs prior to December 31, 2005 the amount of
the bonus will equal $25,000; (3) at Mr. Geitz's election, either a lump sum
cash payment or twelve monthly period payments in an amount equal to the sum of
Mr. Geitz's then current salary plus the highest bonus he had received during
the preceding 36 months; and (4) outplacement services in an amount not to
exceed $10,000. Mr. Geitz is not entitled to receive compensation or other
benefits for any period after termination for Cause.
Anthony F. Bisceglio, Executive Vice President, Treasurer and Chief
Financial Officer - The Bank entered into an Employment Agreement with Anthony
F. Bisceglio dated February 6, 2004. The term of that Agreement is three years.
Mr. Bisceglio is to be paid a base salary of $102,846, or such larger sum as the
Board may decide. In addition, Mr. Bisceglio is entitled to an annual bonus in
an amount and form set by the Board. Option grants are discussed in the
footnotes of the Summary Compensation Table and the Outstanding Equity Awards
Table. Mr. Bisceglio also is entitled to (1) comprehensive health insurance and
major medical coverage, (2) participation in any long-term disability insurance
plan and pension plan maintained by the Bank, (3) paid vacation of at least four
weeks per year, and (4) reimbursement of all travel and other reasonable
business expenses. If Mr. Bisceglio's employment with the Bank is terminated for
other than Cause or Disability, or if he voluntarily terminates his employment
for Good Reason, Mr. Bisceglio shall be entitled to receive (1) his base salary
in effect at the time for a period of six months following termination, less the
amount of any severance pay, (2) an amount equal to one-half the highest bonus
he received during the preceding 36 months, (3) crediting of additional service
as may be required to vest any form of compensation previously granted to Mr.
Bisceglio, and (4) the continuation of health benefits he was receiving at the
time of termination for six months following termination. If Mr. Bisceglio
accepts these payments, he agrees that he will not, for a period of six months
following termination, perform any services or accept any remuneration or
compensation as an officer, director, employee, agent or consultant with any
depository or other financial institution which maintains its main office in the
Farmington Valley of Connecticut.
The Bank also has entered into a Change in Control Agreement with Mr.
Bisceglio dated July 30, 1999. That Agreement provides for payment to Mr.
Bisceglio in the event of a Change in Control or Potential Change in Control (as
those terms are defined in the Agreement) of the Company or the Bank. Under
those circumstances, Mr. Bisceglio would be entitled to receive (1) credit for
his years of service to the Bank plus five years for purposes of vesting and
calculation of benefits under any benefit plan of the Bank or a successor
thereto, (2) twelve months notice of termination during which time he shall
receive payment at his then current salary and the highest bonus received by Mr.
Bisceglio during the preceding 36 months, (3) at Mr. Bisceglio's election,
either a lump sum cash payment or twelve monthly period payments in an amount
equal to the sum of Mr. Bisceglio's then current salary plus the highest bonus
he had received during the preceding 36 months, and (4) outplacement services in
an amount not to exceed $10,000.
The Bank entered into a Supplemental Executive Retirement Agreement
with Mr. Bisceglio dated April 23, 2001. This Agreement provides that upon Mr.
Bisceglio's retirement on or after attaining age 65, the Bank shall pay him a
supplemental annual pension of $10,000, payable in equal monthly installments,
for a period of twenty years. Upon Mr. Bisceglio's death, while still actively
employed with the Bank, his designated beneficiary shall receive an annual
survivor's benefit equal to $10,000, payable in equal monthly installments, for
a period of twenty years. Upon Mr. Bisceglio's death, while receiving the
supplemental annual pension, his designated beneficiary shall receive the
remaining equal monthly payments which would have been due to Mr. Bisceglio.
Furthermore, upon a Change in Control (as defined in his Employment Agreement)
of the Company or the Bank, Mr. Bisceglio would be credited with five years of
service with respect to the Supplemental Executive Retirement Agreement.
Charles D. Forgie, retired Executive Vice President and Chief Lending
Officer - The Bank entered into an employment agreement with Charles D. Forgie
dated February 6, 2004 which was replaced and superceded by an amended
employment agreement dated November 15, 2005. The term of the amended agreement
commenced on November 15, 2005 and continued until August 31, 2006. Under the
agreement, Mr. Forgie was to be paid a base salary of $114,022 per year, or such
larger sum as the Board may decide. In addition, Mr. Forgie was eligible to
receive a year-end bonus in an amount to be determined by the Board of
Directors. Mr. Forgie was also entitled to (1) comprehensive health insurance
and major medical coverage, (2) participation in any long-term disability
insurance plan and pension plan maintained by the Bank, (3) paid vacation of at
least four weeks per year, and (4) reimbursement of all travel and other
reasonable business expenses. If Mr. Forgie's employment with the Bank was
terminated for other than Cause or Disability, or if he voluntarily terminated
his employment for Good Reason, Mr. Forgie was to be entitled to receive (1) his
base salary in effect at the time for a period of six months following
termination, less the amount of any severance pay, (2) an amount equal to
one-half the 2005 annual bonus paid to Mr. Forgie, (3) crediting of additional
service as may be required to vest any form of compensation previously granted
to Mr. Forgie, and (4) the continuation of health benefits he was receiving at
the time of termination for eighteen months following termination. If Mr.
Forgie's employment was terminated by reason of retirement, he was to be
entitled to receive (1) his base salary in effect at the time through February
28, 2007, (2) an amount equal to one-half the 2005 annual bonus paid to Mr.
Forgie and (3) the continuation of health benefits he was receiving at the time
of his retirement through March 1, 2008. If, following his termination, Mr.
Forgie accepted the compensation described in the preceding two sentences, he
agreed that he would not, for a period of three years following termination,
perform any services or accept any remuneration or compensation as an officer,
director, employee, agent or consultant with any depository or other financial
institution which maintains an office in the Farmington Valley of Connecticut.
Mr. Forgie retired as an executive officer of the Bank on August 31, 2006.
The Bank also has entered into a Change in Control Agreement with Mr.
Forgie dated July 30, 1999. That Agreement provided for payment to Mr. Forgie in
the event of a Change in Control or Potential Change in Control (as those terms
are defined in the Agreement) of the Company or the Bank. Under those
circumstances, Mr. Forgie would be entitled to receive (1) credit for his years
of service to the Bank plus five years for purposes of vesting and calculation
of benefits under any benefit plan of the Bank or a successor thereto, (2)
twelve months notice of termination during which time he shall receive payment
at his then current salary and the highest bonus received by Mr. Forgie during
the preceding 36 months, (3) at Mr. Forgie's election, either a lump sum cash
payment or twelve monthly period payments in an amount equal to the sum of Mr.
Forgie's then current salary plus the highest bonus he had received during the
preceding 36 months, and (4) outplacement services in an amount not to exceed
$10,000.
The Bank entered into a Supplemental Executive Retirement Agreement
with Mr. Forgie dated April 23, 2001. This Agreement provided that upon Mr.
Forgie's retirement and attaining full vesting, the Bank shall pay him a
supplemental annual pension of $10,000, payable in equal monthly installments,
for a period of twenty years. Upon Mr. Forgie' death, while still actively
employed with the Bank, his designated beneficiary would receive an annual
survivor's benefit equal to $10,000, payable in equal monthly installments, for
a period of twenty years. Upon Mr. Forgie's death, while receiving the
supplemental annual pension, his designated beneficiary would receive the
remaining equal monthly payments which would have been due to Mr. Forgie.
Furthermore, upon a Change in Control (as defined in his Employment Agreement)
of the Company or the Bank, Mr. Forgie would be credited with five years of
service with respect to the Supplemental Executive Retirement Agreement.
Terry L. Boulton, Senior Vice President and Chief Retail Banking
Officer - The Bank entered into a Change in Control Agreement with Terry L.
Boulton dated December 23, 2005. That Agreement provides for payment to Ms.
Boulton in the event that her employment is terminated by the Bank without
"Cause" or by Ms. Boulton with "Good Reason" within 12 months following a
"Change in Control" of the Bank or the Company (as those terms are defined in
the Agreement). Under those circumstances, Ms. Boulton would be entitled to
receive payment in an amount equal to two times the sum of (1) her annual base
salary and (2) her annual target bonus. Additionally, under those circumstances,
Ms. Boulton would be entitled to (1) immediate vesting of any outstanding stock
options, (2) continued health insurance benefits for a period of 24 months, (3)
an amount equal to the amounts that the Bank would have contributed on Ms.
Boulton's behalf to any 401(k) Plan or similar plan that the Bank may have in
effect for the 24-month period following her termination, and (4) outplacement
services in an amount not to exceed $10,000. Option grants are discussed in the
footnotes of the Summary Compensation Table and the Outstanding Equity Awards
Table.
Outstanding Equity Awards at Fiscal Year-End
Name Option awards
Number of Number of Equity Option Option
securities securities incentive exercise expiration
underlying underlying plan price date
unexercised unexercised awards: ($)
options options Number of
(#) (#) securities
Exercisable Unexercisable underlying
unexercised
unearned
options
(#)
- ------------------------------------------------------------------------------------------------------------------------
Martin J. Geitz, 7,000 (1) 14,000 (1) 0 $31.500 12/20/2015
President & Chief
Executive Officer
Anthony F. Bisceglio, 10,500 (2) 0 0 $13.625 5/19/2008
Executive Vice
President & Chief
Executive Officer
Charles D. Forgie, 0 (3) 0 0 n/a n/a
Executive Vice
President & Chief
Lending Officer,
Retired
Terry L. Boulton, 0 10,500 (4) 0 $29.000 6/21/2016
Senior Vice President
& Chief Retail Banking
Officer
(1) Options vest at the rate of 33 1/3% per year, with vesting dates of
12/21/2006, 12/21/2007 and 12/21/2008. Vesting is conditioned on the named
individual remaining an employee until the end of each vesting period.
Vesting may be accelerated under the circumstances described in Mr. Geitz's
employment agreement and the Company's 1998 Stock Plan.
(2) Options vest at the rate of 33 1/3% per year, with vesting dates of
5/20/1999, 5/20/2000 and 5/20/2001. Vesting is conditioned on the named
individual remaining an employee until the end of each vesting period.
Vesting may be accelerated under the circumstances described in Mr.
Bisceglio's employment agreement and the Company's 1998 Stock Plan.
(3) There were no outstanding options as of 12/31/2006.
(4) Options vest at the rate of 33 1/3% per year, with vesting dates of
6/22/2007, 6/22/2008 and 6/22/2009. Vesting is conditioned on the named
individual remaining an employee until the end of each vesting period.
Vesting may be accelerated under the circumstances described in Ms.
Boulton's employment agreement and the Company's 1998 Stock Plan.
Director Compensation
The Company has adopted a Director Compensation Plan for non-employee
directors. During 2006, directors were compensated for service by means of: (1)
an annual retainer of $4,000 per director; (2) $450 for each Board meeting
attended in person; and (3) $150 for each standing committee meeting attended in
person. That compensation rate structure remains in effect. No individual
arrangements were granted during 2006.
Director Compensation
Name Fees Stock Option Non-equity Non- All other Total
earned awards awards incentive qualified Compensation
or plan deferred
paid compen- compen-
in sation sation
cash earnings
- -------------------------------------------------------------------------------------------------------------------
Robert J. Bogino $16,150 $0 $0 $0 $0 $0 $16,150
James F. Fleming $11,150 $0 $0 $0 $0 $0 $11,150
Edward J. Guarco $10,250 $0 $0 $0 $0 $0 $10,250
Gary R. Kevorkian $12,350 $0 $0 $0 $0 $0 $12,350
Barry R. Loucks $15,050 $0 $0 $0 $0 $0 $15,050
George B. Odlum $10,550 $0 $0 $0 $0 $0 $10,550
David W. Sessions $15,200 $0 $0 $0 $0 $0 $15,200
Jane F. von Holzhausen $10,700 $0 $0 $0 $0 $0 $10,700
Penny R. Woodford $10,100 $0 $0 $0 $0 $0 $10,100
Lincoln S. Young $16,850 $0 $0 $0 $0 $0 $16,850
Stock Option Plan
The Company currently issues options to purchase shares of its common
stock under the SBT Bancorp 1998 Stock Plan. As of February 12, 2007, there are
options outstanding to purchase an aggregate of 61,363 shares of the Company's
authorized but unissued common stock at a price of between $13.625 and $36.550
per share and which will expire between the years 2008 and 2016. This includes
10,500 options granted to the Company's named executives during the year ended
December 31, 2006.
The following table sets forth the total number of securities
authorized for issuance under equity compensation plans as of December 31, 2006.
Number of securities
remaining available for
Number of securities future issuance under
to be issued upon Weighted-average equity compensation
exercise of exercise price of plans (excluding
outstanding options, outstanding options, securities reflected in
warrants and rights warrants and rights column (a))
(a) (b) (c)
----------------------- ----------------------- -----------------------
Equity compensation plans
approved by shareholders 68,927 $25.22 16,117
Equity compensation plans not
approved by shareholders 0 0 0
----------------------- ----------------------- -----------------------
Total 68,927 $25.22 16,117
======================= ======================= =======================
Committee Interlocks and Insider Participation in Compensation Decisions
There are no interlocking relationships where (a) an executive officer
of the Company served as a member of the compensation committee on another
entity, one of whose executive officers served on the Corporate Governance
Committee of the Company; (b) an executive officer served as a director of
another entity, one of whose executive officers served on the Corporate
Governance Committee of the Company; or (c) an executive officer of the Company
served as a member of the compensation committee of another entity, one of whose
executive officers served as a Director of the Company.
Certain Transactions
During 2006 and 2005, certain of the Company's and the Bank's current
directors, executive officers and their affiliates had outstanding loans from
the Bank. Mr. Forgie had such a loan; he retired from the Bank on August 31,
2006. The largest aggregate amount of such loans outstanding during the period
from January 1, 2006 to February 12, 2007 was on February 6-7, 2007 in an
aggregate amount of $3,401,518 (including Mr. Forgie's relationship) and
$3,230,407 (excluding his relationship), which represented 20.9% (including Mr.
Forgie's relationship) and 19.9% (excluding his relationship) of the Bank's
equity on that date, and approximately 2.18% (including Mr. Forgie's
relationship) and 2.07% (excluding his relationship) of the Bank's outstanding
loans as of that date. All such loans were made in the ordinary course of the
Bank's business, were made on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
transactions with other persons and did not involve more than the normal risk of
collectability or present other unfavorable features.
During 2006 and 2005 the Bank paid $58,194 and $65,089, respectively,
for rent and related expenses of the Bank's Granby branch office to Granby
Pharmacy Shoppers Plaza, LLC, a company of which Mr. Kevorkian, one of the
Company's directors, is a principal. Of these amounts paid, $4,802 and $9,255
were for real estate taxes on the property during 2006 and 2005, respectively.
The Bank believes this to represent a fair market value lease. During 2006, the
Bank paid $375,876 in construction costs and related fees for the Bank's
Bloomfield and Canton branch offices to a company of which David W. Sessions,
one of its directors, is a principal. Of this amount, $359,204 was for
Bloomfield and $16,672 was for Canton.
Recommendation of the Board of Directors
The Board of Directors intends to vote all proxies held by it in favor
of all director nominees, unless shareholders direct otherwise. Election to the
Board of the four Class II directors and one Class III director of the Company
shall require the affirmative vote of a plurality of the votes cast at the 2007
Annual Meeting. Abstentions and broker non-votes with respect to the election of
directors will not be included in determining whether nominees have received the
votes of such plurality.
THE BOARD RECOMMENDS UNANIMOUSLY A VOTE "FOR" ELECTION OF MESSRS.
GEITZ, KEVORKIAN, ODLUM AND REYNOLDS AND MS. VON HOLZHAUSEN TO THE BOARD OF
DIRECTORS.
ITEM 2
------
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Audit and Compliance Committee has selected Shatswell, MacLeod &
Co., P.C. as independent auditors to audit the financial statements of the
Company for the fiscal year ending December 31, 2007. Shatswell, MacLeod & Co.,
P.C. served as the Company's independent auditors for the fiscal year ended
December 31, 2006 and has reported on the Company's financial statements for
such year. Prior to the reorganization that occurred on March 2, 2006,
Shatswell, MacLeod & Co., P.C. served as the independent auditor of the Bank.
A representative of Shatswell, MacLeod & Co., P.C. is expected to be
present at the 2007 Annual Meeting and will have the opportunity to make a
statement if he or she desires to do so and will be available to respond to
appropriate questions from Shareholders.
The Audit and Compliance Committee has not developed detailed
pre-approval policies because all engagements of independent accountants for
audit and non-audit services must be approved by the Audit and Compliance
Committee.
Principal Accountant Fees and Services
The following table reflects the aggregate fees billed for the last two
fiscal years for professional services by the principal accountant of the
Company and the Bank for the audit of their respective annual financial
statements and the aggregate fees billed in each of the last two fiscal years
for professional services rendered by such principal accountant for tax
compliance, tax advice and tax planning.
2006 2005
-------------- --------------
Audit Fees $55,436 $53,742
Audit Related Fees (1) $0 $777
Tax Compliance Fees (2) $5,259 $5,241
All Other Fees $0 $0
-------------- --------------
Total $60,695 $59,760
============== ==============
(1) Non-financial statement audits.
(2) Preparation of tax returns and estimates for each year.
All of the fees paid to Shatswell, MacLeod & Co., P.C. in 2006 were pre-approved
by the Audit & Compliance Committee.
Recommendation of the Board of Directors
The Board of Directors intends to vote all proxies held by it in favor
of ratifying the selection of Shatswell, MacLeod & Co., P.C. as the Company's
independent auditors for the year ending December 31, 2007 (unless shareholders
direct otherwise).
THE BOARD RECOMMENDS UNANIMOUSLY A VOTE "FOR" RATIFICATION OF THE
SELECTION OF THE FIRM OF SHATSWELL, MACLEOD & CO., P.C. AS INDEPENDENT AUDITORS
FOR THE COMPANY FOR 2007.
AUDIT AND COMPLIANCE COMMITTEE REPORT
The Audit and Compliance Committee of the Board is responsible for
providing independent, objective oversight of the Company's accounting
functions, internal controls and financial reporting process. The Audit and
Compliance Committee is comprised of five directors, each of whom is independent
as defined by the National Association of Securities Dealers' listing standards.
The members of the Audit and Compliance Committee are the same as the members of
the Bank's Audit and Compliance Committee.
Management is responsible for the Company's internal controls and
financial reporting process. The Company's independent auditors, Shatswell,
MacLeod & Co., P.C., are responsible for performing an independent audit of the
Company's consolidated financial statements in accordance with auditing
standards generally accepted in the United States of America and to issue a
report thereon. The Audit and Compliance Committee's responsibility is to
monitor and oversee the financial reporting and audit processes.
In connection with these responsibilities, the Company's Audit and
Compliance Committee, as the successor to the Bank, met with management and the
independent auditors to review and discuss the Company's December 31, 2006
consolidated financial statements. The Audit and Compliance Committee also
discussed with the independent auditors the matters required by Statement on
Auditing Standards No. 61 (Communication with Audit Committees). The Audit and
Compliance Committee also received written disclosures and the letter from the
independent auditors required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and the Audit and Compliance
Committee discussed with the independent auditors that firm's independence.
Based upon the Audit and Compliance Committee's discussions with
management and the independent accountants, and its review of the information
described in the preceding paragraph, the Audit and Compliance Committee
recommended that the Board include the audited consolidated financial statements
of the Company in the Company's annual report on Form 10-KSB for the last fiscal
year filed.
The Board has adopted a written charter for the Audit & Compliance
Committee which was included in the proxy statement delivered to shareholders in
2006.
Audit Committee
George B. Odlum, Jr., DMD (Chairman)
Robert J. Bogino
James T. Fleming
Edward J. Guarco
Penny R. Woodford
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors, executive officers and persons who
beneficially own more than 10% of the Company's common stock ("Reporting
Persons") to file certain reports concerning their beneficial ownership of the
Company's common stock with the Securities and Exchange Commission (the "SEC").
Prior to the bank holding company reorganization on March 2, 2006, these reports
were filed by Reporting Persons of the Bank with the Federal Deposit Insurance
Corporation (the "FDIC"). Based solely upon the Company's review of its
Reporting Persons' Forms 3, 4 and 5 filed with the SEC during and for the year
ended December 31, 2006, and on written representations by certain officers and
directors, the Company has determined that the following Reporting Persons were
delinquent with respect to their reporting obligations: Terry L. Boulton did not
timely report the acquisition of stock options acquired on June 22, 2006; and
Paul R. Little did not timely file an initial statement of beneficial ownership
of securities.
OTHER MATTERS
The Board knows of no other business to be brought before the 2007
Annual Meeting. If, however, any other business should properly come before the
2007 Annual Meeting, the persons named in the accompanying proxy will vote the
proxy as in their discretion they may deem appropriate, unless they are directed
by the proxy to do otherwise.
SHAREHOLDER PROPOSALS AND NOMINATIONS
Shareholders entitled to vote for the election of directors at the 2008
Annual Meeting may make nominations of individuals for election to the Board.
Such nominations shall be made in writing, and shall be delivered or mailed and
received by the Secretary of the Company not less than 90 nor more than 130
calendar days prior to such Annual Meeting, which is expected to be held on May
13, 2008. The Board's Corporate Governance Committee considers such nominations.
Such written nominations shall contain the following information, to
the extent known to the nominating Shareholder: (1) the name, age, business and
residence address of each proposed nominee; (2) the principal occupation or
employment of each proposed nominee; (3) the total number of shares of common
stock of the Company that are beneficially owned by each proposed nominee; (4)
the name and address of the nominating Shareholder; (5) the total number of
shares of common stock of the Company owned by the nominating Shareholder; (6) a
representation that the Shareholder is a holder of record of stock of the
Company entitled to vote at such meeting and intends to appear in person or by
proxy at the meeting to nominate the person or persons specified in the notice;
and (7) a description of all arrangements or understandings between the
Shareholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
the Shareholders. Nominations by beneficial owners of stock of the Company who
are not record holders must be accompanied by evidence satisfactory to the
Secretary of the Company showing that such nominating persons are entitled to
act with respect to such shares. Nominations that are not made in accordance
with these procedures shall be deemed void. The credentials and qualifications
of all nominees also are subject to review by the Board.
Any proposal intended to be presented by a Shareholder at the Company's
2008 Annual Meeting of Shareholders which is not a nomination to the Board must
be presented to the Company in writing, and must be delivered or mailed and
received by the Secretary of the Company not less than 90 nor more than 130
calendar days prior to the 2008 Annual Meeting, which is expected to be held on
May 13, 2008. Such notice shall include: (1) a brief description of the business
desired to be brought before the Annual Meeting and the reasons for conducting
such business at the 2008 Annual Meeting; (2) the name and address, as they
appear on the Company's records, of the Shareholder proposing such business; (3)
the number of shares of the Company's common stock which are beneficially owned
by the Shareholder; and (4) any material interest of the Shareholder in such
business.
In order for a shareholder proposal to be included in the proxy
statement and form of proxy for the Company's 2008 Annual Meeting the proposal
must be received by the Company not later than January 24, 2008 and comply with
all the requirements of Rule 14a-8 of the Securities Exchange Act of 1934. In
addition, if the Company is not notified of a shareholder proposal by February
24, 2008 then the proxies held by management of the Company may provide the
discretion to vote against such shareholder proposal, even though such proposal
is not included in the proxy statement and form of proxy.
Nominations and proposals should be addressed to Jane F. von
Holzhausen, Secretary, SBT Bancorp, Inc., 760 Hopmeadow Street, P.O. Box 248,
Simsbury, Connecticut 06070-0248. It is suggested that such nominations and
proposals be sent by Certified Mail-Return Receipt Requested.
ANNUAL REPORT ON FORM 10-KSB REPORT
The financial statements of the Company as of and for the year ended
December 31, 2006 are contained in the Company's Annual Report on Form 10-KSB
filed with the Securities and Exchange Commission on or before March 31, 2007.
The Annual Report is not to be considered as a part of this proxy soliciting
material. Copies of Company's Annual Report on Form 10-KSB will be forwarded
without charge upon written request to Jane F. von Holzhausen, Secretary, SBT
Bancorp, Inc., 760 Hopmeadow Street, P.O. Box 248, Simsbury, Connecticut
06070-0248.
DELIVERY OF DOCUMENTS TO SECURITY HOLDERS SHARING AN ADDRESS
The Company intends to deliver one Proxy Statement to multiple
Shareholders of the Company sharing an address, unless we receive contrary
instructions from one or more of such Shareholders. Upon written or oral request
we will provide a separate copy of the Company's Proxy Statement to a
Shareholder sharing an address with another Shareholder to which a single copy
of the Proxy Statement were sent. To request an additional copy of the Proxy
Statement, please call the Company at (860) 408-5493 or write to us at SBT
Bancorp, 760 Hopmeadow Street, P.O. Box 248, Simsbury, Connecticut 06070-0248.
In the future, if you wish to receive a separate copy of the Company's Proxy
Statement, please call or write to us at the number and address listed above.
Similarly, Shareholders sharing an address who are receiving multiple copies of
the Company's Proxy Statement and who wish to receive only one copy of these
materials at their address can so request by contacting us at the same telephone
number and address.
By order of the Board of Directors
Simsbury, Connecticut Jane F. von Holzhausen, Secretary
April 12, 2007
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