UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities and Exchange Act of 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under 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)
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 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing
Party:
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(4) Date
Filed:
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2
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 12, 2009
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 12, 2009 at 5:00 p.m., local time. At the meeting, the shareholders
will consider and vote upon the following matters:
1. The election of three Class I directors for a term expiring at
the 2012 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, 2009;
3. The non-binding approval of the compensation of SBT Bancorp,
Inc.'s named executive officers as determined by the Personnel
Committee; and
4. 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 13, 2009
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 Gary R. Kevorkian,
April 10, 2009 Secretary
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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 12, 2009
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This Proxy Statement is furnished to shareholders of common stock 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 12, 2009, and any
and all adjournments or postponements thereof (the "2009 Annual Meeting").
This Proxy Statement, the Notice of the 2009 Annual Meeting, the
enclosed form of proxy and the Annual Report to Shareholders for the year ending
December 31, 2008 for SBT Bancorp, Inc. (the "Annual Report") are first being
mailed to shareholders of our common stock on or about April 10, 2009. 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: Gary R. Kevorkian, 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 of record of the common stock 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 2009
Annual Meeting and revoking the proxy at such time. Attendance at the 2009
Annual Meeting will not itself revoke a proxy. Shares represented by properly
executed proxies will be voted at the 2009 Annual Meeting in accordance with the
specifications thereon. Shareholders of record of the common stock who are
present at the 2009 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
therefor.
Only shareholders of record of the Company's common stock at the close
of business on March 13, 2009 (the "Record Date") are entitled to notice and to
vote at the 2009 Annual Meeting. On the Record Date, there were 864,976
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 432,489 shares, is necessary to
constitute a quorum at the 2009 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.
-1-
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 2009 Annual Meeting concerning the
election of directors, the approval of the appointment of the Company's
independent auditors and the non-binding approval of the compensation of the
Company's named executive officers (NEO) as determined by the Personnel
Committee, 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.
Directors will be elected by a plurality of the votes cast at the 2009
Annual Meeting. Thus, an abstention or a broker "non-vote" will have no effect
on the outcome of the vote on election of directors at the meeting. The
ratification of the appointment of Shatswell, MacLeod & Co., P.C. will be
approved if a majority of the votes cast are FOR the proposal. Abstentions and
broker "non-votes" will have no impact on the ratification of Shatswell, MacLeod
& Co., P.C. The non-binding proposal regarding the compensation of our named
executive officers will be approved if a majority of the votes cast are FOR the
proposal. Abstentions and broker "non-votes" will have no impact on the approval
of this advisory proposal.
The votes will be counted, tabulated and certified by Robert J. Bogino
and George B. Odlum, Jr., DMD. 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 three Class I director nominees;
in Item 2 FOR the ratification of Shatswell, MacLeod & Co., P.C. as independent
auditors; in Item 3 FOR the non-binding approval of the compensation of the
Company's named executive officers as determined by the Personnel Committee; and
on such other matters as may properly come before the 2009 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-Q
for the second quarter of 2009, which we expect to file with the Securities and
Exchange Commission, on or before August 14, 2009.
If you have any questions about the 2009 Annual Meeting or your
ownership of our common stock, please contact Gary R. Kevorkian, our corporate
secretary, by mail at SBT Bancorp, Inc., Attention: Gary R. Kevorkian,
Secretary, 760 Hopmeadow Street, P.O. Box 248, Simsbury, Connecticut 06070-0248,
or by email to Mr. Kevorkian's attention at sbtinfo@simsburybank.com.
IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 12, 2009
Under rules recently adopted by the Securities and Exchange Commission,
we are now furnishing proxy materials on the Internet in addition to mailing
paper copies of the materials to our shareholders. The following proxy materials
are available at http://www.simsburybank.com/aboutus-shareholders.php:
o Notice of Annual Meeting of Shareholders to be held May 12, 2009;
and
o Proxy Statement for the Annual Meeting of Shareholders to be held
May 12, 2009; and
o Annual Report for 2008.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to
the beneficial ownership of the common stock of the Company as of February 13,
2009 by (i) each director and nominee for director of the Company, (ii) named
executive officers, (iii) all directors and executive officers as a group and
(iv) a shareholder of record who beneficially owns five percent or more of the
Company's common stock. 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. All directors and executive
officers can receive mail in care of SBT Bancorp, Inc., 760 Hopmeadow Street,
P.O. Box 248, Simsbury, CT 06070. The address of the shareholder of record who
beneficially owns five percent or more of the Company's common stock is listed
below its name in the following table.
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Amount and Nature
Of Beneficial Percent
Name of Beneficial Owner Ownership Of Class
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Directors and Executive Officers
Robert J. Bogino, Vice Chairman 27,572 (1) 3.2%
James T. Fleming, Director 492 *
Martin J. Geitz, President, Chief 29,564 (2) 3.4%
Executive Officer and Director
Edward J. Guarco, Director 17,783 (3) 2.1%
Gary R. Kevorkian, Director 16,919 (4) 2.0%
George B. Odlum, Jr., DMD, Director 13,581 (5) 1.6%
Rodney R. Reynolds, Director 1,000 *
David W. Sessions, Director 15,736 (6) 1.8%
Penny R. Woodford, Director 2,262 (7) *
Lincoln S. Young, Chairman 18,612 (8) 2.2%
Anthony F. Bisceglio, Executive Vice 3,200 *
President, Chief Financial Officer and
Treasurer
Paul R. Little, Senior Vice President 7,000 (9) *
and Chief Lending Officer
All directors and executive officers
as a group (13 persons) 153,721(10) 17.2%
Principal Shareholder
Friedlander & Co., Inc. 52,900(11) 6.1%
322 East Michigan Street, Suite 250
Milwaukee, WI 53202
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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. Mr. Bogino disclaims beneficial
ownership of the shares beneficially owned by his spouse.
(2) Includes 21,000 shares which may be acquired within 60 days through the
exercise of stock options.
(3) 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, 4,000
shares in a trust of which Mr. Guarco owns 6.6%, 6,083 shares held by Mr.
Guarco, Mr. Guarco's mother and Mr. Guarco's brother as joint tenants
with right of survivorship, and 4,900 shares held by a limited liability
company in which Mr. Guarco, Mr. Guarco's mother and Mr. Guarco's brother
each have a one-third membership interest.
(4) Includes 9,581 shares held in trusts for which Mr. Kevorkian is trustee
including 970 shares in a trust for Mr. Kevorkian's spouse.
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(5) Includes 3,550 shares owned by Dr. Odlum's spouse. Dr. Odlum disclaims
beneficial ownership of the shares beneficially owned by his spouse.
(6) 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. Mr. Sessions disclaims
beneficial ownership of the shares beneficially owned by his children.
(7) Includes 1,660 shares owned jointly with Ms. Woodford's spouse.
(8) Includes 3,506 shares held in a trust for which Mr. Young is a Co-Trustee
and a beneficiary.
(9) Includes 7,000 shares which may be acquired within 60 days through the
exercise of stock options.
(10) Includes 28,000 in shares which directors and executive officers may
acquire beneficial ownership of within 60 days through the exercise of
stock options.
(11) Includes 1,700 shares owned by Theodore Friedlander III and is based on
information set forth in a Schedule 13G filed on February 17, 2009 by
Friedlander & Co., Inc. ("Friedlander & Co.") and Theodore Friedlander
III. Mr. Friedlander is a controlling person of Friedlander & Co. and as
such may be deemed to beneficially own the shares of common stock of the
Company beneficially owned by Friedlander & Co. Mr. Friedlander
beneficially owns less than 1% of the shares held by Friedlander & Co.
and disclaims beneficial ownership of all other shares held by
Friedlander & Co.
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. The size of the Board is currently set at 11 directors
comprised as follows: four Class I directors, three Class II directors and four
Class III directors. There are presently 10 persons serving as directors of the
Company with one vacancy for a Class I director that resulted from the death of
Barry Loucks in 2008. Proxies solicited from shareholders cannot be voted for a
greater number of persons than the number of nominees named in this Proxy
Statement.
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 three incumbent
Class I directors expire at the 2009 Annual Meeting.
At a meeting held on March 18, 2009, the Board of Directors voted
unanimously to recommend the following three persons for election to the Board
of Directors with terms expiring on the dates set forth below:
Nominee Class Term Expiration
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James T. Fleming Class I 2012 Annual Meeting of Shareholders
Edward J. Guarco Class I 2012 Annual Meeting of Shareholders
Penny R. Woodford Class I 2012 Annual Meeting of Shareholders
Each of the nominees currently serves as a director of the Company and
is nominated to serve for his or her term and until his 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.
-4-
If a quorum is present at the 2009 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 I
James T. Fleming (53) - Mr. Fleming is currently the President of the
Connecticut Automotive Retailers Association which position he has held since
March 2008. Prior to this he was Commissioner of the Department of Public
Utility Control, State of Connecticut, which position he held from 2007 to March
2008. Prior to this he was Commissioner of the Department of Public Works, State
of Connecticut, from 2003 to 2007 and Commissioner of Consumer Protection, State
of Connecticut. He is also a director of the Simsbury Cemetery Association, 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 (55) - 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.
Penny R. Woodford (64) - 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.
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 II Directors, Terms Expiring at the 2010 Annual Meeting of Shareholders
Martin J. Geitz (52) - Mr. Geitz is the President and Chief Executive Officer of
the Company and the Bank, and has held these positions 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 from 2000 to 2003. He is Chairman of the Board of the Hartford Economic
Development Corporation, a Trustee of McLean and of the Simsbury Free Library,
and a board member of Bloomfield Chamber of Commerce and the Charter Oak State
College Foundation.
Gary R. Kevorkian (55) - Mr. Kevorkian has been the Secretary of the Company
since 2007 and a director of the Company since 1994. He is an Attorney-at-Law in
his own practice in Granby, Connecticut, since 1981. Mr. Kevorkian is not an
employee of the Company and is not compensated for his service as the Company's
Secretary.
George B. Odlum, Jr., DMD (69) - Dr. Odlum was a family practice dentist in
Simsbury, Connecticut, where he had practiced dentistry from 1968 until his
retirement in 2007. 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.
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Class III Directors, Terms Expiring at the 2011 Annual Meeting of Shareholders
Robert J. Bogino (66) - 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.
Rodney R. Reynolds (69) - Mr. Reynolds was a co-founder of Equistrides
Therapeutic Riding Center, Inc., a non-profit organization that provided
services to people with disabilities, and served as co-manager and trustee of
that organization from 2000 to 2006. Mr. Reynolds served as a director of the
Trust Company of Connecticut, an investment management and trust services
company, from 1990 to 2005. 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 Company since 2007.
David W. Sessions (58) - 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 also is a
member of the Board of Finance of the Town of New Hartford, Chairman of the
Architectural Review Committee of the Town of New Hartford and of the New
Hartford Town Democratic Committee. He has been a director of the Company since
1992.
Lincoln S. Young (74) - 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.
Non-Director Executive Officers
Anthony F. Bisceglio (61) - 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, serves on the Economic Policy
Survey Panel of the National Association for Business Economics and is a member
of the American Finance Association. He is a past Board member of the Financial
Managers Society and past Chairman of its Strategic Issues Council.
Paul R. Little (49) - Mr. Little is a Senior Vice President and Chief Lending
Officer of the Bank, which positions he has held since 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.
Howard R. Zern (62) - Mr. Zern is a Senior Vice President and Chief Retail
Banking, Operations & Technology Officer of the Bank, which positions he has
held since 2008. Prior to joining the Bank, he was Executive Vice President of
Bank of America, from which he retired in 2005. Mr. Zern is a director of Stony
Brook University Alumni Association and formerly Vice Chairman of TheaterWorks,
Treasurer of the Artists Collective in Hartford and Chairman of the Urban League
of Greater Hartford.
Audit and Compliance Committee Financial Expert
The Board has determined that the Company currently has at least one
audit committee financial expert serving on its Audit and Compliance Committee.
That person is Robert J. Bogino. Mr. Bogino is "independent," as that term is
defined in Rule 4200(a)(15) of the Financial Industry Regulatory Authority's
listing standards.
-6-
Independence of Directors and Director Nominees
The following directors and director nominees are independent in
accordance with Rule 4200(a)(15) of the Financial Industry Regulatory
Authority's 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, Penny R. Woodford and Lincoln S. Young.
Board Committees
The Company has established five standing committees of the Board of
Directors - the Audit and Compliance Committee, the Corporate Governance
Committee, the Executive Committee, the Investment Services Committee and the
Personnel Committee, which performs functions that are similar to those of a
compensation committee.
Audit and Compliance Committee of the Company. 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 Financial
Industry Regulatory Authority's listing standards. The Audit and Compliance
Committee operates pursuant to a written charter adopted by the Board. The Audit
and Compliance Committee met seven times during 2008.
Corporate Governance Committee of the Company. 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 Financial Industry Regulatory Authority's listing standards. The members
of the Corporate Governance Committee are Messrs. Young (Chair), Bogino and
Fleming and Ms. Woodford. The Corporate Governance Committee operates pursuant
to a written charter adopted by the Board. The Corporate Governance Committee
met seven times during 2008.
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: Gary R. Kevorkian, 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 the ability 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 and Conflicts of
Interest Policy. All directors are subject to mandatory retirement from service
on the Company's Board of Directors upon reaching seventy-six years of age.
-7-
Executive Committee of the Company. 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.
Bogino (Chair), Geitz, Odlum, Sessions and Young. The Executive Committee met 12
times during 2008.
Investment Services Committee of the Company. The Investment Services
Committee has oversight of the performance of the Bank's wholly-owned
subsidiary, SBT Investment Services, Inc., reviews the financial and market
performance of the subsidiary offering non-deposit products, including review
and approval of the selection of and contracts with third party broker/dealers,
review of all product types sold, appointment of Bank Management to fill needed
roles, recommendation of prudent policies and procedures, setting of commission
structures and oversight of compliance with applicable regulations. The
Committee also evaluates opportunities in the marketplace for enhancing the
Company's offering of non-deposit products and services. The members of the
Investment Services Committee are Messrs. Young (Chair), Bogino, Geitz,
Kevorkian, Reynolds. The Investment Services Committee met 7 times in 2008.
Personnel Committee of the Company. The Personnel Committee performs
functions that are similar to those of a compensation committee. The Personnel
Committee determines the compensation of the Bank's employees, which include the
Company's executive officers. 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 members of the Personnel Committee are Messrs.
Sessions (Chair), Guarco, Kevorkian, Reynolds and Young. All members of the
Personnel Committee are independent in accordance with Rule 4200(a)(15) of the
Financial Industry Regulatory Authority's listing standards. The Personnel
Committee does not have a written charter. The Personnel Committee met 10 times
in 2008.
Availability of Committee Charters
The Audit and Compliance Committee and the Corporate Governance
Committee each operates pursuant to a separate written charter adopted by the
Board. Each committee reviews its charter at least annually. The two committee
charters can be viewed at http://www.simsburybank.com/aboutus-shareholders.php.
Each charter is also available in print to any shareholder who requests it. The
information contained on the website is not incorporated by reference or
otherwise considered a part of this document.
Board Meetings
The Board held 18 meetings, including the annual meeting, during 2008.
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 2008.
Board members are expected to attend the Company's annual meeting of
shareholders. All of the Company's 10 directors attended the May 13, 2008 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., Gary R. Kevorkian, 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.
-8-
Code of Ethics and Conflicts of Interest Policy
The Company has adopted a Code of Ethics and Conflicts of Interest
Policy that applies to all employees, officers and directors. The Company will
supply a copy of the Code of Ethics and Conflicts of Interest Policy 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 two other executive officers (NEOs) named below for
the fiscal year ended December 31, 2008 and 2007.
Summary Compensation Table
Name and principal Year Salary Bonus Stock Option Non-equity Non- All other Total
position awards awards incentive qualified Compen-
plan deferred sation
compen- earnings
sation
- ------------------------------------------------------------------------------------------------------------------------------------
Martin J. Geitz 2008 $181,390 (1) $0 (2) $0 $60,179 (4) $0 $0 $19,183 (6) $260,752
President & Chief 2007 $179,587 (1) $23,739 (3) $0 $60,179 (5) $0 $0 $14,329 (6) $277,834
Executive Officer
Anthony F. Bisceglio 2008 $129,735 $0 (2) $0 $0 $0 $0 $5,637 (7) $135,372
Executive Vice 2007 $127,370 $17,373 (3) $0 $0 $0 $0 $2,886 (7) $147,629
President & Chief
Financial Officer
Paul R. Little 2008 $123,147 $0 (2) $0 $28,401 (8) $0 $0 $4,297 (10) $155,845
Senior Vice President & 2007 $121,557 $10,804 (3) $0 $18,934 (9) $0 $0 $1,855 (10) $153,150
Chief Lending Officer
(1) Mr. Geitz also serves as a director, but did not receive any compensation
for those services.
(2) Estimated 2008 performance bonus to be paid in 2009.
(3) 2007 performance bonus paid in 2008.
(4) The dollar value of the stock options was determined using the calculation
explained in Footnote 17 of the Consolidated Financial Statements appearing
in the Company's 2008 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.
(5) The dollar value of the stock options was determined using the calculation
explained in Footnote 16 of the Consolidated Financial Statements appearing
in the Company's 2007 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, employer match of 401k Plan contributions 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 and
employer-paid premiums for group term life insurance in excess of $50,000.
(8) The dollar value of the stock options was determined using the calculation
explained in Footnote 17 of the Consolidated Financial Statements appearing
in the Company's 2008 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.
(9) The dollar value of the stock options was determined using the calculation
explained in Footnote 16 of the Consolidated Financial Statements appearing
in the Company's 2007 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.
(10) Includes Mr. Little's employer match of 401k Plan contributions and
employer-paid premiums for group term life insurance in excess of $50,000.
-9-
The Personnel Committee is responsible for reviewing the performance
and establishing the 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,
Reynolds and Young.
Employment Agreements
The Bank maintains employment agreements with the following named
executive officers: Messrs. Geitz, Bisceglio and Little. 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 such
terms are defined in the Employment 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) a lump sum cash payment 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. Notwithstanding
anything to the contrary set forth in Mr. Geitz's Employment Agreement, any
payments due to Mr. Geitz as a result of his termination of employment may be
delayed for up to six months after his termination of employment if the Bank
determines that the delay is necessary to comply with Section 409A of the
Internal Revenue Code. In the event that payments are delayed, the Bank will pay
5% simple interest on such delayed payments to Mr. Geitz.
-10-
Anthony F. Bisceglio, Executive Vice President, Treasurer and Chief
Financial Officer - Anthony F. Bisceglio is an at-will employee of the Company
and the Bank. He is entitled to receive paid vacation of 28 days per year and to
participate in the Bank's benefit plans, including its medical plan, dental plan
and 401k retirement plan. The Bank 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 such terms are defined in the Change in Control 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) a lump sum
cash payment 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.
Notwithstanding anything to the contrary set forth in Mr. Bisceglio's Change in
Control Agreement, any payments due to Mr. Bisceglio as a result of his
termination of employment may be delayed for up to six months after his
termination of employment if the Bank determines that the delay is necessary to
comply with Section 409A of the Internal Revenue Code. In the event that
payments are delayed, the Bank will pay 5% simple interest on such delayed
payments to Mr. Bisceglio.
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 of the Company or the Bank, Mr. Bisceglio
would be credited with five years of service with respect to the Supplemental
Executive Retirement Agreement.
Paul R. Little, Senior Vice President and Chief Lending Officer - Paul
R. Little is an at-will employee of the Bank. He is entitled to receive paid
vacation of 28 days per year and to participate in the Bank's benefit plans,
including its medical plan, dental plan and 401k retirement plan. The Bank has
entered into a Change in Control Severance Agreement with Mr. Little dated
December 30, 2008. Under the Change in Control Severance Agreement, Mr. Little
is entitled to the following compensation if his position is terminated as a
result of a Change in Control (as such term is defined in the Change in Control
Severance Agreement): (1) a lump sum payment equal to two years of base salary
and bonus; (2) accelerated vesting of his stock options and any other
performance related incentive compensation awards; and (3) 24 months of coverage
of health benefits on the same terms as were provided prior to termination.
Notwithstanding anything to the contrary set forth in Mr. Little's Change in
Control Severance Agreement, any payments due to Mr. Little as a result of his
termination of employment may be delayed for up to six months after his
termination of employment if the Bank determines that the delay is necessary to
comply with Section 409A of the Internal Revenue Code.
Effect of Current Financial Crisis - Participation in Treasury's Capital
Purchase Program
-11-
On March 27, 2009, we entered into a Securities Purchase Agreement with
the United States Department of the Treasury that provides for our participation
in the Capital Purchase Program ("CPP") under the Treasury's Troubled Assets
Relief Program ("TARP"). CPP participants must accept several NEO
compensation-related limitations that are associated with this Program. On March
27, 2009, each of our NEOs agreed in writing to accept the CPP compensation
standards and thereby cap or eliminate some of their contractual or legal
rights. The provisions agreed to were as follows:
o No Golden Parachute Payments. "Golden parachute payment" under the CPP
means a severance payment resulting from involuntary termination of
employment, or from bankruptcy of the employer, that exceeds three
times the terminated employee's average annual base salary over the
five years prior to termination. Our NEOs have agreed to forego all
golden parachute payments for as long as two conditions remain true:
They remain "senior executive officers" (CEO and the next two
highest-paid executive officers), and the Treasury continues to hold
our equity or debt securities we issued to it under the CPP (the period
during which the Treasury holds those securities is the "CPP Covered
Period").
o Recovery of Bonus, Retention Awards, and Incentive Compensation if
Based on Certain Material Inaccuracies. Our NEOs have also agreed to a
"clawback provision," which means that we can recover any bonus,
retention award or incentive compensation paid during the CPP Covered
Period that is later found to have been based on materially inaccurate
financial statements or other materially inaccurate measurements of
performance.
o No Compensation Arrangements that Encourage Excessive Risks. During the
CPP Covered Period, we are not allowed to enter into compensation
arrangements that encourage NEOs to take "unnecessary and excessive
risks that threaten the value" of our company. To make sure this does
not happen, the Personnel Committee is required to meet at least once a
year with our senior risk officers to review our executive compensation
arrangements in the light of our risk management policies and
practices.
o Limitation on Federal Income Tax Deductions. During the CPP Covered
Period, we are not allowed to take federal income tax deductions for
compensation paid to senior executive officers in excess of $500,000
per year.
Effect of the Current Financial Crisis - Restrictions Added by 2009 Stimulus Act
On February 17, 2009, President Obama signed the American Recovery and
Reinvestment Act of 2009 (the "Stimulus Act") into law. The Stimulus Act
modified the compensation-related limitations contained in the CPP, created
additional compensation-related limitations and directed the Secretary of the
Treasury to establish standards for executive compensation applicable to
participants in the TARP. The compensation-related limitations modified by the
Stimulus Act which are subject to standards to be established by the Secretary
of the Treasury are as follows:
o No Severance Payments. Under the Stimulus Act, "golden parachutes" were
redefined as any severance payment resulting from involuntary
termination of employment, or from bankruptcy of the employer, except
for payments for services performed or benefits accrued. Consequently
under the Stimulus Act, we are prohibited from making any severance
payment during the CPP Covered Period to our "senior executive
officers" (defined in the Stimulus Act as the NEOs) and our next five
most highly compensated employees.
o Recovery of Bonus, Retention Awards and Incentive Compensation if Based
on Certain Material Inaccuracies. The Stimulus Act also contains the
"clawback provision" discussed above but extends its application to any
bonus, retention award or awards and incentive compensation paid to any
of our senior executive officers or our next 20 most highly compensated
employees during the CPP Covered Period that is later found to have
been based on materially inaccurate financial statements or other
materially inaccurate measurements of performance.
-12-
o No Compensation Arrangements that Encourage Earnings Manipulation.
Under the Stimulus Act, during the CPP Covered Period, we are not
allowed to enter into compensation arrangements that encourage
manipulation of our reported earnings to enhance the compensation of
any of our employees.
o Limit on Incentive Compensation. The Stimulus Act contains a provision
that prohibits the payment or accrual during the CPP Covered Period of
any bonus, retention award or incentive compensation to our most highly
compensated employee other than awards of long-term restricted stock
that (i) do not fully vest during the CPP Covered Period, (ii) have a
value not greater than one-third of the total annual compensation of
the award recipient and (iii) are subject to such other restrictions as
may be determined by the Secretary of the Treasury. We do not know
whether awards of incentive stock options are covered by this
prohibition. The prohibition on bonus, incentive compensation and
retention awards does not preclude payments required under written
employment contracts entered into on or prior to February 11, 2009.
o Personnel Committee Functions. The Stimulus Act requires that our
Personnel Committee be comprised solely of independent directors and
that it meet at least semiannually to discuss and evaluate our employee
compensation plans in light of an assessment of any risk posed to us
from such compensation plans.
o Compliance Certifications. The Stimulus Act also requires a written
certification by our Chief Executive Officer and Chief Financial
Officer of our compliance with the provisions of the Stimulus Act.
These certifications must be contained in the Company's Annual Report
on Form 10-K beginning with the Annual Report on Form 10-K for the
fiscal year ending December 31, 2009.
o Treasury Review of Bonuses Previously Paid. The Stimulus Act directs
the Secretary of the Treasury to review all compensation paid to our
senior executive officers and our next 20 most highly compensated
employees to determine whether any such payments were inconsistent with
the purposes of the Stimulus Act or were otherwise contrary to the
public interest. If the Secretary of the Treasury makes such a finding,
the Secretary of the Treasury is directed to negotiate with the CPP
recipient and the subject employee for appropriate reimbursements to
the federal government with respect to compensation and bonuses found
to be excessive.
o Say on Pay. Under the Stimulus Act, the SEC is required to promulgate
rules requiring an advisory, non-binding say on pay vote by the
shareholders on executive compensation at the annual meeting during the
CPP Covered Period. The Company will comply with the provisions of the
Stimulus Act and its implementing regulations in all respect, which
includes the submission of "Item 3: Non-Binding Vote on Compensation of
Named Executive Officers" set forth in this proxy statement.
Outstanding Equity Awards at Fiscal Year-End
-13-
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 Un-exercisable underlying
unexercised
unearned
options
(#)
- -------------------------------------------------------------------------------------------------------------
Martin J. Geitz, 21,000 (1) 0 0 $31.500 12/20/2015
President & Chief
Executive Officer
Anthony F. Bisceglio, 0 0 0 $0
Executive Vice
President,
Treasurer
& Chief Financial
Officer
Paul R. Little, 3,500 (2) 7,000 (2) 0 $30.000 5/16/2017
Senior Vice
President
& Chief Lending
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
5/17/2008, 5/17/2009 and 5/17/2010. 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.
Little's offer letter agreement and the Company's 1998 Stock Plan.
Director Compensation
-14-
The Company has adopted a Director Compensation Plan for non-employee
directors. During 2008, 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 2008.
Director Compensation
Name Fees Stock Option Non-equity Non- All other Total
earned awards awards incentive qualified Compensation
or paid plan deferred
in cash compen- compensation
sation earnings
- ------------------------------------------------------------------------------------------------------------------------
Robert J. Bogino $19,750 $0 $0 $0 $0 $0 $19,750
James F. Fleming $11,800 $0 $0 $0 $0 $0 $11,800
Edward J. Guarco $13,000 $0 $0 $0 $0 $0 $13,000
Gary R. Kevorkian $15,700 $0 $0 $0 $0 $0 $15,700
Barry R. Loucks (1) $6,317 $0 $0 $0 $0 $0 $6,317
George B. Odlum $13,600 $0 $0 $0 $0 $0 $13,600
Rodney R. Reynolds $14,050 $0 $0 $0 $0 $0 $14,050
David W. Sessions $17,650 $0 $0 $0 $0 $0 $17,650
Penny R. Woodford $13,000 $0 $0 $0 $0 $0 $13,000
Lincoln S. Young $20,050 $0 $0 $0 $0 $0 $20,050
(1) Mr. Loucks passed away on May 11, 2008 while serving as a director.
Stock Option Plan
The Company currently issues options to purchase shares of its common
stock under the SBT Bancorp 1998 Stock Plan. As of March 13, 2009, there are
options outstanding to purchase an aggregate of 51,189 shares of the Company's
authorized but unissued common stock at a price of between $15.650 and $36.550
per share and which will expire between the years 2011 and 2017. There were no
options granted to the Company's named executives during the year ended December
31, 2008.
The following table sets forth the total number of securities
authorized for issuance under equity compensation plans as of December 31, 2008.
Number of securities Number of securities remaining
to be issued upon Weighted-average available for future issuance
exercise of exercise price of under equity compensation
outstanding options, outstanding options, plans (excluding securities
warrants and rights warrants and rights reflected in column (a))
(a) (b) (c)
---------------------- ---------------------- --------------------------------
Equity compensation plans
approved by shareholders 51,189 $30.33 10,870
Equity compensation plans not
approved by shareholders 0 0 0
---------------------- ---------------------- --------------------------------
Total 51,189 $30.33 10,870
====================== ====================== ================================
-15-
Compensation Committee Interlocks and Insider Participation
The members of the Personnel Committee are Messrs. Sessions (Chair),
Guarco, Kevorkian, Reynolds and Young. Messrs. Sessions, Guarco and Kevorkian,
or their affiliates, have engaged in loan transactions with the Bank, as
discussed below, in "Certain Transactions." No other relationships required to
be reported under the rules promulgated by the Securities and Exchange
Commission exist with respect to members of our Personnel Committee.
Certain Transactions with Related Persons
During 2008 and 2007, certain of the Company's and the Bank's current
directors, executive officers and their affiliates had outstanding loans from
the Bank. The largest aggregate amount of such loans outstanding during the
period from January 1, 2008 to February 13, 2009 was on April 21, 2008 in an
aggregate amount of $4,061,214, which represented 23.38% of the Bank's equity on
that date, and approximately 2.40% 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 2008 and 2007 the Bank paid $61,548 and $61,939, 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, $9,392 and $9,784
were for real estate taxes on the property during 2008 and 2007, respectively.
The Bank believes this to represent a fair market value lease. During 2007, the
Bank paid $1,369 in maintenance costs related to the Bank's main office to Casle
Corporation, a company of which David W. Sessions, one of its directors, is a
principal. There were no expenses paid to Casle Corporation in 2008.
Policy and Procedures for Review, Approval or Ratification of Related Person
Transactions
Our related person transaction practices and policies between the
Company or any of its subsidiaries and an executive officer, director or an
immediate family member are currently governed by the Company's Code of Ethics
and Conflicts of Interest Policy (the "Code of Ethics"). In the ordinary course
of business, directors (or a business in which the director is a partner,
director, shareholder or executive officer) may provide services to the Company
or to customers of the Bank. We require our directors and executive officers to
complete a questionnaire, annually, to provide information specific to related
party transactions.
Once we become aware of a proposed or a recurring activity with a
related party, it is referred to the Chairman of the Board of Directors and the
Chief Executive Officer who are authorized to determine whether the activity
constitutes a conflict of interest and to act upon that determination. A
transaction with a related party shall be consummated or shall continue only if
such transaction is in accordance with the guidelines set forth in the Code of
Ethics. Any material related person transaction involving officers will be
disclosed to the Chief Executive Officer and any material related party
transactions involving the Chief Executive Officer or a director will be
disclosed to the Chairman of the Corporate Governance Committee.
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 three Class I directors of the Company shall require the
affirmative vote of a plurality of the votes cast at the 2009 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.
FLEMING AND GUARCO AND MS. WOODFORD TO THE BOARD OF DIRECTORS.
-16-
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, 2009. Shatswell, MacLeod & Co.,
P.C. served as the Company's independent auditors for the fiscal year ended
December 31, 2008 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 2009 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.
2008 2007
------------------ ------------------
Audit Fees $62,012 $60,025
Audit-Related Fees (1) $0 $0
Tax Fees (2) $6,539 $6,596
All Other Fees $0 $0
------------------ ------------------
Total $68,551 $66,621
================== ==================
(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 2008 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, 2009 (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 2009.
-17-
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, 2008
consolidated financial statements. The Audit and Compliance Committee also
discussed with the independent auditors the matters required by Statement on
Auditing Standards No. 61, as amended (Communication with Audit Committees). The
Audit and Compliance Committee also received written disclosures and the letter
from the independent auditors required by applicable requirements of the Public
Company Accounting Oversight Board regarding the independent auditors'
communications with the Audit and Compliance Committee concerning independence,
and 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-K for the last fiscal
year filed.
The Board has adopted a written charter for the Audit and Compliance
Committee, which is attached as Appendix A to this Proxy Statement.
Audit Committee
George B. Odlum, Jr., DMD (Chairman)
Robert J. Bogino
James T. Fleming
Edward J. Guarco
Penny R. Woodford
ITEM 3
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NON-BINDING VOTE ON COMPENSATION OF NAMED EXECUTIVE OFFICERS
We believe that our compensation policies and procedures are
competitive, are focused on pay-for-performance principles and are strongly
aligned with the long-term interests of our shareholders. We also believe that
both we and our shareholders benefit from responsive corporate governance
policies and constructive and consistent dialogue. The proposal described below,
commonly known as a "Say on Pay" proposal, gives you as a shareholder the
opportunity to endorse or not endorse the compensation for our named executive
officers by voting to approve or not approve such compensation as described in
this proxy statement.
On February 17, 2009, President Obama signed the American Recovery and
Reinvestment Act of 2009 (the "Stimulus Act") into law. The Stimulus Act
requires, among other things, every participant in the Troubled Asset Relief
Program to permit a non-binding shareholder vote to approve the compensation of
the participant's executives. Accordingly, we are asking you to approve the
compensation of the Company's named executive officers as described under
"COMPENSATION AND OTHER MATTERS" in this proxy statement. Under the Stimulus
Act, your vote is advisory and will not be binding upon the Board. However, the
Personnel Committee will take into account the outcome of the vote when
considering future executive compensation arrangements.
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Recommendation of the Board of Directors
The Board of Directors intends to vote all proxies held by it in favor
of approving the compensation of the named executive officers as determined by
the Personnel Committee.
THE BOARD RECOMMENDS UNANIMOUSLY A VOTE "FOR" THE NON-BINDING APPROVAL
OF THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS AS DETERMINED BY THE
PERSONNEL COMMITTEE.
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, 2008, and on written representations by certain officers and
directors, the Company has determined that Gary Kevorkian failed to file a Form
4 on a timely basis for the purchase of 323 shares of our common stock on April
25, 2008 (the Form 4 was filed on May 8, 2008) and that no other Reporting
Person was delinquent with respect to his or her reporting obligations.
OTHER MATTERS
The Board knows of no other business to be brought before the 2009
Annual Meeting. If, however, any other business should properly come before the
2009 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 2010
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
11, 2010. 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.
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Any proposal intended to be presented by a shareholder at the Company's
2010 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 2010 Annual Meeting, which is expected to be held on
May 11, 2010. 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 2010 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 2010 Annual Meeting the proposal
must be received by the Company not later than December 4, 2009 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
19, 2010 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 Gary R. Kevorkian,
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-K REPORT
The financial statements of the Company as of and for the year ended
December 31, 2008 are contained in the Company's Annual Report on Form 10-K
filed with the Securities and Exchange Commission on or before March 31, 2009.
The Annual Report on Form 10-K is not to be considered as a part of this proxy
soliciting material. Copies of Company's Annual Report on Form 10-K will be
forwarded without charge upon written request to Gary R. Kevorkian, 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 Gary R. Kevorkian, Secretary
April 10, 2009
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