UNITED
STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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SCHEDULE 14A INFORMATION
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Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
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Filed by a Party other than the
Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for
Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to
§240.14a-12
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Eagle
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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Payment of Filing Fee (Check the
appropriate box):
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No fee required.
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Fee computed on table below per
Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to
which transaction applies:
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Aggregate number of securities to
which transaction applies:
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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)
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Proposed maximum aggregate value of
transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary
materials.
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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.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration
Statement No.:
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Filing Party:
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Date Filed:
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7815 Woodmont Avenue
Bethesda, Maryland 20814
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
To be held May 20, 2010
TO THE SHAREHOLDERS OF EAGLE BANCORP, INC.:
The Annual Meeting of Shareholders of Eagle Bancorp, Inc.
(the Company), will be held at
The Hyatt Regency Bethesda
One Bethesda Metro Center
7400 Wisconsin Avenue
Bethesda, Maryland 20814
on Thursday, May 20, 2010 at 10:00 A.M.
for the following purposes:
1.
To elect nine (9) directors to serve until the
next Annual Meeting of Shareholders and until their successors are duly elected
and qualified;
2.
To ratify the appointment of Stegman &
Company as the Companys independent registered public accountants for the year
ended December 31, 2010;
3.
To vote on a non-binding advisory resolution approving
the compensation of our executive officers; and
4.
To transact any other business that may properly come
before the meeting or any adjournment or postponement of the meeting.
Shareholders of record as of the close of business on April 1,
2010 are entitled to notice of and to vote at the meeting or any adjournment or
postponement of the meeting.
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By Order of the
Board of Directors
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Jane E. Cornett,
Corporate Secretary
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April 12, 2010
Please sign, date and return your proxy promptly,
whether or not you plan to attend the meeting in person. No postage is required if mailed in the
United States in the enclosed envelope.
If you attend the meeting, you may, if you desire, revoke your proxy and
vote in person.
If your shares are not registered in your name, you will need
additional documentation from your recordholder in order to vote in person at
the meeting.
7815 Woodmont Avenue
Bethesda, Maryland
20814
ANNUAL MEETING OF SHAREHOLDERS
Proxy Statement
INTRODUCTION
This Proxy Statement is being sent to shareholders of
Eagle Bancorp, Inc., a Maryland corporation (the Company), in connection
with the solicitation of proxies by the Board of Directors of the Company for
use at the Annual Meeting of Shareholders, to be held at 10:00 A.M. on
Thursday, May 20, 2010, and at any adjournment or postponement of the
meeting. The purposes of the meeting
are:
1.
electing nine (9) directors to serve until the
next Annual Meeting of Shareholders and until their successors are duly elected
and qualified;
2.
ratifying the appointment of Stegman &
Company as the Companys independent registered public accountants for the year
ended December 31, 2010;
3.
voting on a non-binding advisory resolution approving
the compensation of our executive officers; and
4.
transacting any other business that may properly come
before the meeting or any adjournment or postponement of the meeting.
The meeting will be held at:
The Hyatt Regency Bethesda
One Bethesda Metro Center
7400 Wisconsin Avenue
Bethesda, Maryland 20814
This proxy statement and proxy card are being sent to
shareholders of the Company on or about April 12, 2010. A copy of the
Companys Annual Report on Form 10-K for the year ended December 31,
2009, which includes our audited financial statements, also accompanies this
proxy statement.
The cost of this proxy solicitation is being paid by
the Company. In addition to the use of
the mail, proxies may be solicited personally or by telephone by officers,
regular employees or directors of the Company or its subsidiary, EagleBank (the
Bank), who will not receive any special compensation for their services. The Company has engaged Laurel Hill Advisory
Group (Laurel Hill), a proxy solicitation firm, to assist it in connection
with the distribution of materials and the solicitation of votes. We will pay Laurel Hill a fee of $6,000, plus
reimbursement of its out-of-pocket expenses for its services. The Company may
also reimburse brokers, custodians, nominees and other fiduciaries for their
reasonable out-of-pocket and clerical costs for forwarding proxy materials to
their principals.
VOTING RIGHTS AND PROXIES
Voting Rights
Only shareholders
of record at the close of business on April 1, 2010, will be entitled to
notice of and to vote at the meeting or any adjournment or postponement of the
meeting. On that date, the Company had 19,633,763 shares of common stock, par
value $0.01 per share (the common stock) outstanding, held by approximately
3,500 total shareholders, including approximately 1,015 shareholders of record.
The common stock is the only class of the
Companys stock entitled
to vote in the election of directors generally, of which shares are
outstanding. Each share of common stock is entitled to one vote on all matters
submitted to a vote of the shareholders.
Shareholders do not have the right to cumulate votes in the election of
directors. The presence, in person or by proxy, of not less than a majority of
the total number of outstanding shares of common stock is necessary to constitute
a quorum at the meeting.
Proxies
Properly executed proxies received by the Company in
time to be voted at the meeting will be voted as specified by shareholders. In
the absence of specific instructions, proxies received will be voted
FOR
the election of the nominees for election as directors,
FOR
the ratification of the appointment of Stegman &
Company and
FOR
the non-binding advisory
resolution approving our executive compensation. Management does not know of
any matters that will be brought before the meeting, other than as described in
this proxy statement. If other matters
are properly brought before the meeting, the persons named in the proxy intend
to vote the shares to which the proxies relate in accordance with their best
judgment.
As a result of
changes in the rules of the New York Stock Exchange applicable to its
member firms, we expect that brokers will not vote shares on the election of
directors unless they receive instructions from the beneficial owners of the
shares they hold.
If you hold
your shares through a bank or broker, it is extremely important that you
instruct your record holder how to vote your shares.
The judges of election appointed by the Board of
Directors for the meeting will determine the presence of a quorum and will
tabulate the votes cast at the meeting. Abstentions will be treated as present
for purposes of determining a quorum, but as unvoted for purposes of
determining the approval of any matter submitted to the vote of shareholders.
If a broker indicates that it does not have discretionary authority to vote any
shares of common stock on a particular matter, such shares will be treated as
present for general quorum purposes, but will not be considered as present or
voted with respect to that matter.
Please sign, date, mark and return promptly the
enclosed proxy in the postage paid envelope provided for this purpose in order
to assure that your shares are voted. You may revoke your proxy at any time
before it is voted at the meeting:
·
by granting a later proxy with respect to the same
shares;
·
by sending written notice to Jane E. Cornett,
Corporate Secretary of the Company, at the address noted above, at any time
prior to the proxy being voted; or
·
by voting in person at the meeting.
Attendance at the meeting will not, in itself, revoke
a proxy. If your shares are held in the
name of your bank or broker, you will need additional documentation to vote in
person at the meeting. Please see the
voting form provided by your bank or broker for additional information
regarding the voting of your shares.
Many shareholders whose shares are held in an account
at a brokerage firm or bank will have the option to submit their proxies or
voting instructions electronically through the Internet or by telephone.
Shareholders should check the voting form or instructions provided by their
bank or broker to see which options are available. Shareholders submitting
proxies or voting instructions electronically should understand that there may
be costs associated with electronic access, such as usage charges from Internet
access providers and telephone companies that would be borne by the
shareholder. To revoke a proxy previously submitted electronically, a
shareholder may simply submit a new proxy at a later date before the submission
deadline indicated by your bank or broker, in which case, the later submitted
proxy will be recorded and the earlier proxy will be revoked.
Important Notice Regarding the Availability of
Proxy materials for the Annual Meeting of Shareholders to be held on May 20,
2010.
The proxy statement for the Annual Meeting is
attached. A copy of this proxy statement
and our Annual Report on Form 10-K for the year ended December 31,
2009 is available online at
http://materials.proxyvote.com/268948.
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VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
Securities Ownership of Directors, Nominees, Officers and Certain
Beneficial Owners
The following table sets forth certain information concerning the
number and percentage of whole shares of the Companys common stock
beneficially owned by its directors, executive officers whose compensation is
disclosed in this proxy statement, and by its directors and all executive
officers as a group, as of April 1, 2010. Except as otherwise indicated,
all shares are owned directly, the named person possesses sole voting and sole
investment power with respect to all such shares, and none of such shares are
pledged as security. Unvested shares of
restricted stock are included in ownership amounts. Except as set forth below, the
Company knows of no other person or persons who beneficially own in excess of
five percent of the Companys common stock. Further, the Company is not aware
of any arrangement which at a subsequent date may result in a change of control
of the Company.
Name
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Position
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Number of Shares
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Percentage(1)
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Directors
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Leslie M. Alperstein, Ph.D.
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Director of Company and Bank
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65,716
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(2)
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0.33
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%
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Dudley C. Dworken
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Director of Company and Bank
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242,008
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(3)
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1.23
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%
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Harvey M. Goodman
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Director of Company and Bank
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124,178
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(4)
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0.63
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%
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Neal R. Gross
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Director of Company and Bank
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860,981
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(5)
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4.38
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%
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Philip N. Margolius
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Director of Company and Bank
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259,138
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(6)
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1.32
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%
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Ronald D. Paul
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Chairman, President and Chief Executive Officer of Company; Chairman
and Chief Executive Officer of Bank
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1,202,376
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(7)
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6.09
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%
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Robert P. Pincus
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Director of Company and Bank
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138,719
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(8)
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0.70
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%
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Norman R. Pozez
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Director of Company and Bank
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145,536
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(9)
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0.74
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%
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Donald R. Rogers
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Director of Company and Bank
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64,640
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(10)
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0.33
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%
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Leland M. Weinstein
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Director of Company and Bank
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153,478
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(11)
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0.78
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%
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Other Named Executive Officers
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Martha Foulon-Tonat
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Executive Vice President, Chief Lending Officer of Bank
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109,422
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(12)
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0.56
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%
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James H. Langmead
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Executive Vice President, Chief Financial Officer of Company and Bank
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29,592
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(13)
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0.15
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%
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Thomas D. Murphy
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Executive Vice President, President
Retail Banking
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76,456
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(14)
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0.39
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%
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Susan G. Riel
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Senior Executive Vice President, Chief Operating Officer of Bank
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89,478
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(15)
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0.45
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%
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All directors and executive officers as a group (16
persons)
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3,631,653
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(16)
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18.10
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%
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Other 5% Shareholders
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Wellington Management Company, LLP
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998,640
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(17)
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5.09
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%
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(1)
Represents
percentage of 19,633,763 shares issued and outstanding as of April 1,
2010, except with respect to individuals holding options exercisable within 60
days of that date, in which event, represents percentage of shares issued and
outstanding plus the number of shares for which that person holds options exercisable
within 60 days of April 1, 2010, and except with respect to all directors
and executive officers of the Company as a group, in which case represents
percentage of shares issued and outstanding plus the number of shares for which
those persons hold such options. Certain shares beneficially owned by the
Companys directors and executive officers may be held in accounts with third
party firms, where such shares may from time to time be subject to a security
interest for margin credit provided in accordance with such firms policies.
(2)
Includes 60,538
shares of common stock held jointly and options to purchase 2,943 shares of
common stock.
(3)
Includes
options to purchase 3,575 shares of common stock, 67,692 shares held in a trust
of which Mr. Dworken is beneficiary, 30,996 shares held jointly, 26,369
shares held by his spouse and 111,998 shares held in trusts for the benefit of
members of his family.
(4)
Includes
options to purchase 7,169 shares of common stock, 77,444 shares held jointly
with Mr. Goodmans spouse, 16,168 shares held by or in trust for members
of his family, and 557 shares held by an estate over which Mr. Goodman has
voting power.
(5)
Includes
options to purchase 2,884 shares of common stock, 101,857 shares held by his
spouse, 28,720 held by his retirement plans for his spouses benefit, and
353,074 held by a family LLC.
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(6)
Includes
options to purchase 6,490 shares of common stock, 180,253 shares in trust
accounts for which Mr. Margolius has voting rights, 7,456 shares held by
his spouse and 25,788 held in a profit sharing account for which Mr. Margolius
is the beneficiary. Mr. Margolius is not standing for election at the
meeting.
(7)
Includes
options to purchase 101,211 shares of common stock and 290,142 shares held in
trust for his children. An aggregate of 374,538 shares are pledged as
collateral. Includes 82,257 shares held
by a third party trustee in trust for the benefit of family members of Mr. Paul,
as to which he disclaims beneficial ownership. Mr. Pauls business address
is c/o Ronald D. Paul Companies, 4416 East West Highway, Bethesda, Maryland
20814.
(8)
Includes
options to purchase 50,205 shares of common stock, 5,568 shares held by his
spouse and 6,129 shares held by a family LLC.
(9)
Includes 48,187
shares held jointly and 8,566 shares held by relatives, over which Mr. Pozez
has voting authority.
(10)
Includes
options to purchase 4,318 shares of common stock, 21,783 shares held by his
spouse and 22,308 shares held for the benefit of his children.
(11)
Includes
options to purchase 10,432 shares of common stock and 56,650 shares held
jointly.
(12)
Includes
options to purchase 53,153 shares of common stock and 3,082 shares held in
trust for minor children. Also includes
28,042 shares held by Ms. Foulon-Tonats spouse, as to which she disclaims
beneficial ownership.
(13)
Includes
options to purchase 18,835 shares of common stock and 4,419 shares held jointly
with Mr. Langmeads spouse.
(14)
Includes
options to purchase 52,101 shares of common stock and 836 shares held by his
spouse for their minor child.
(15)
Includes
options to purchase 55,863 shares of common stock and 20,801 shares held
jointly with her spouse.
(16)
Includes
options to purchase 427,046 shares of common stock.
(17)
Based on
beneficial ownership reported in Schedule 13G filed on February 12 2010,
and shares outstanding as of April 1, 2010. Wellington Management Company,
LLCs address is 75 State Street, Boston, Massachusetts 02109.
PROPOSAL 1 - ELECTION OF DIRECTORS
The Board of Directors has nominated nine (9) persons for election
as director at the meeting, for a one-year period until the 2011 Annual Meeting
of Shareholders and until their successors have been elected and qualified.
Each of the nominees for election as a director currently serves as a member of
the Board of Directors of the Company.
Unless authority is withheld, all proxies in response to this
solicitation will be voted for the election of the nominees listed below. Each nominee has indicated a willingness to
serve if elected. However, if any nominee becomes unable to serve, the proxies
received in response to this solicitation will be voted for a replacement
nominee selected in accordance with the best judgment of the persons named as proxies.
The Board of Directors has determined that each director and nominee for
election as director, other than Mr. Paul, is an independent director as
that term is defined in Rule 5605(a)(2) of The NASDAQ Stock Market
(NASDAQ). In making this determination, the Board of
Directors was aware of and considered the loan and deposit relationships with
directors and their related interests which the Company enters into in the
ordinary course of its business, and the arrangements which are disclosed under
Certain Relationships and Related Transactions in this proxy statement.
Vote Required and Board Recommendation.
Nominees receiving a plurality of the votes
cast at the meeting in the election of directors will be elected as director,
in the order of the number of votes received.
The Board of
Directors recommends that shareholders vote FOR each of the nominees for
election to the Companys Board of Directors.
Directors and Nominees for Election as Directors
Set forth below is certain information concerning the directors of the
Company, each of whom, other than Mr. Margolius, is a nominee for election
as director of the Company. Except as
otherwise indicated, the occupation listed has been such persons principal
occupation for at least the last five years. Each of the nominees for election
as a director of the Company also serves as a director of the Bank. Except as noted below, each nominee has
served as a director of the Company since its organization.
Leslie M. Alperstein, Ph.D.
Mr. Alperstein,
67, has been President of Washington Analysis LLC and its predecessor firm,
Washington Analysis Corp., a leading governmental policy investment research
group in Washington, D.C., since its inception in 1973. He has served as Executive Managing Director
and Director of Research of HSBC Securities, Inc., Director of Economic
and Investment Research for NatWest Securities, Prudential Securities, Shields
Model Roland, Inc. and Legg Mason & Co. His professional
memberships include the National Association of Business Economists, the
National Economists Club, and the Washington Society of Investment Analysts. Mr. Alperstein
was appointed to the Board of Directors in September 2003, and has served
as a director of the Bank since 2009. Mr. Alpersteins
knowledge and experience in the fields of economics and
4
investment
management make him uniquely qualified for the Board. His contributions are
important in the areas of asset-liability management, investment policy and
other strategic issues.
Dudley C. Dworken.
Mr. Dworken, 60, is a private investor
and real estate developer. Mr. Dworken was the owner of Curtis Chevrolet,
an automobile dealership in Washington, D.C.
Mr. Dworken was a Director of F&M Bank - Allegiance and its
predecessor, Allegiance Bank, N.A. (collectively Allegiance) from 1987 until October 1997,
and a director of Allegiance Banc Corporation from 1988 until its acquisition
by F&M National Corporation, which was subsequently acquired by BB&T
Corporation (F&M). Mr. Dworken
is an active member of numerous community, business, charitable and educational
institutions in the Washington, D.C./Montgomery County area. Mr. Dworken
has served as a director of the Company and Bank since 1999. In addition to his many years of service on
the boards of banking institutions, Mr. Dworken brings entrepreneurial
business knowledge and experience to the Board through his ownership and
operation of one of the largest automobile dealerships in Washington, DC. He is
a former Trustee of the Washington Area New Automobile Dealers
Association. He has intimate knowledge
of the Company through his experience as Chairman of the Companys audit
committee.
Harvey M. Goodman.
Mr. Goodman, 54, has been with The
Goodman, Gable, Gould Company, the Maryland based public insurance adjusting
firm where he serves as President, since 1977.
He is a director and past president of the National Association of
Public Insurance Adjusters, and is a principal, and formerly a director, of Adjusters
International, a national public adjusting firm. Mr. Goodman has served as a director of
the Company since 2007, and of the Bank since its organization. Mr. Goodman
brings both entrepreneurial experience and a wealth of knowledge of the
financial services industry, with a specialty in insurance. He possesses
valuable expertise in the areas of risk management and compliance. He has
expertise in corporate governance through his board service to organizations in
the insurance industry.
Neal R. Gross
. Mr. Gross,
67, is founder, Chairman and Chief Executive Officer of Neal R. Gross &
Co. which provides court reporting services to attorneys, the federal
government, private organizations and individuals since 1977. Mr. Gross previously served as a director
of Century Bancshares, Inc., from 1995 until its acquisition by United
Bankshares, Inc. in 2001. Mr. Gross
has served a director of the Company since October 2008, and of the Bank
since 2001. Mr. Gross possesses management and financial experience through
his operation of a large court reporting service in Washington, DC for over 30
years. He brings extensive knowledge of
the banking industry though his board service with another bank and bank
holding company prior to joining the Board of the Company.
Philip N. Margolius.
Mr. Margolius,
69, a graduate of Dartmouth College and Yale Law School, is a partner in The
Margolius Firm, a law firm in Washington, D.C., and until 2003 was a principal
in the law firm of Margolius, Mallios and Rider, LLP. He specializes in estate planning, probate,
real estate, non-profit organizations. Mr. Margolius has been an adjunct
professor at the Washington College of Law at American University and lectures
to professional groups in the community on estate planning.
Washingtonian Magazine
named
him one of the areas leading real estate attorneys
.
Mr. Margolius has served as a director of the Company since 2003,
and of the Bank since 2000. Mr. Margolius
is not standing for reelection at the meeting.
Ronald D. Paul.
Mr. Paul,
54, is President, Chief Executive Officer and Chairman of the Board of
Directors of the Company. He has served
as Chairman since the end of May 2008, and prior to that time was Vice
Chairman and Chief Executive Officer since the organization of the Company. He also has served as Chairman of the Board
of Directors of the Bank since its organization. Since June 2006, he has served as Chief
Executive Officer of the Bank, and he served as Interim President of the Bank
from November 3, 2003 until January 26, 2004. Mr. Paul is President of Ronald D. Paul
Companies and RDP Management, which are engaged in the business of real estate
investment and management activities. He is active in private investments,
including as Chairman of Bethesda Investments, Inc., a private venture
capital fund. Mr. Paul was a
director of Allegiance from 1990 until September 1997, and a director of
Allegiance Banc Corporation from 1990 until its acquisition by F&M,
including serving as Vice Chairman of the Board of Directors from 1995. Mr. Paul is also active in various
charitable organizations, including serving as Vice Chairman of the Board of
Directors of the National Kidney Foundation from 1996 to 1997, and its Chairman
from 2002 to 2003. Mr. Pauls
qualifications for the Board include his entrepreneurial, management and real
estate expertise developed through his operation of a significant real estate
and property management company in the Washington metropolitan area. Mr. Paul
also has significant experience in corporate governance issues from his Board
service with both other
5
public
companies and major non-profit organizations. He has extensive knowledge of the
Company due to his service in Board and management positions since the
inception of the Company.
Robert P. Pincus.
Mr. Pincus,
63, serves as Vice Chairman of the Board of Directors of the Company and the
Bank. Prior to joining the Company in August 2008 upon the acquisition of
Fidelity & Trust Financial Corporation (Fidelity), Mr. Pincus
served as Chairman of its wholly owned subsidiary, Fidelity & Trust
Bank (F&T Bank) from 2005. He
presently serves as Chairman of the Board of Blackstreet Capital Partners, L.P.
and Chairman of Milestone Merchant Partners, LLC. He was Chairman of the Board of BB&T,
D.C. Metro Region and was Regional President from 1998 to 2002. From 1991 to 1998, Mr. Pincus was
President and Chief Executive Officer of Franklin National Bank of Washington,
D.C. From 1986 to 1991, Mr. Pincus
was the regional president of the D.C. metropolitan region of Sovran Bank. From 1971 to 1986, Mr. Pincus was with
DC National Bancorp, Inc., where he eventually rose to be President and
Chief Executive Officer, prior to its merger with Sovran Bank. Mr. Pincus is a Trustee of the
University of Maryland Foundation, Inc. and is a member of the board of
directors of Comstock Homebuilding Companies, Inc. Mr. Pincus brings to the Board a wealth
of experience in the worlds of commercial and investment banking. He has
previously served as CEO of two different community banks and as a senior
executive for major regional and national banks. He has a strong background in
many facets of the financial services industry, as well as mergers and
acquisitions. He has prior experience at both the Board and Audit Committee
level with other public companies.
Norman R. Pozez
. Mr. Pozez, 55, is the Chairman of The
Uniwest Companies, Uniwest Construction, Inc., and Uniwest Commercial
Realty, Inc. Mr. Pozez has
been in the real estate development field for over twenty years. Previously, Mr. Pozez
was Chief Operating Officer of The Hair Cuttery of Falls Church, Virginia and
is currently on the firms Board of Directors.
Mr. Pozez has also served as a Regional Director of Real Estate and
Construction for Payless ShoeSource.
During his tenure at Payless and for some years thereafter, Mr. Pozez
served on the Board of Directors of Bookstop, Inc., which was sold to
Barnes and Noble in 1989. Mr. Pozez
is a licensed Real Estate Broker in Washington, D.C., Maryland and
Virginia. Since 1979, Mr. Pozez has
been an active member of the International Council of Shopping Centers and is a
Board member of five not-for-profit organizations serving community needs in
and around the Washington, D.C. metropolitan area. Mr. Pozez served as Chairman of the
Board of Fidelity from April 2004 until February 2005, and as a
director of Fidelity from September 2007 until August 2008, when
Fidelity was acquired by the Company and he became a director of the Company
and Bank. Mr. Pozez qualifications
for Board service include 30 years of management experience at both regional
and national companies such as the Hair Cuttery and Payless ShoeSource. His
experience in both company operations and real estate are very beneficial in
light of the Companys business objectives. He has experience in corporate
governance through his prior board service with other companies and non-profit
organizations.
Donald R. Rogers.
Mr. Rogers,
64, has been engaged in the private practice of law since 1972 with the
Rockville, Maryland based firm Shulman, Rogers, Gandal, Pordy & Ecker,
P.A., of which he is a partner. Mr. Rogers
was a director of Allegiance from 1987 until October 1997. Mr. Rogers has served as a director of
the Company since 2007 and of the Bank since its organization. Mr. Rogers has vast business knowledge
and experience gained through his position as a senior partner and chair of the
commercial business practice for the largest law firm in Montgomery County, MD.
He has served as adviser to hundreds of privately owned businesses. He as
extensive knowledge of the Company through his Board service and that of the
Bank.
Leland M. Weinstein.
Mr. Weinstein, 47, has served as
President of Syscom Services, Inc., a technology consulting and
integration firm, since 1997. Previously, he spent thirteen years with
Automated Digital Systems (ADS), an integrator of duplication and fax
technologies, where he rose to president and owner of the company (he sold ADS
to Alco Standard Corporation, which became Ikon Office Solutions). Mr. Weinstein
has been appointed to advisory councils for Xerox, Intel/Dialogic, Sharp
Electronics, Captaris/Rightfax, Murata Business Systems, Brooktrout
Technologies, Panasonic Electronics and the technology council of the American
Society of Association Executives. He
was formerly a member of the Board of Governors of the University of Maryland
Alumni Association and is involved in numerous charities. Mr. Weinstein
has served as a director of the Company since 2005 and of the Bank since 1998. Mr. Weinstein
has vast business knowledge and experience gained through his position as
President of a successful technology based enterprise. His expertise in regards
to technology issues is valuable as it relates to the Companys business
development and operating strategies. He has extensive knowledge of the Company
through his service at the Board and committee level.
6
Election of Directors of the Bank
If elected, the nominees for election as directors intend to vote for
each of the nominees and the following persons to serve as directors of the
Bank. Each of the following persons currently serves as a director of the Bank.
Arthur H. Blitz.
Mr. Blitz,
69, an attorney engaged in private practice since 1971, is a principal in the
Bethesda, Maryland law firm of Paley, Rothman, Goldstein, Eig, Rosenberg &
Cooper, Chartered. Mr. Blitz was a
director of Allegiance at various times from 1987 to October 1997. Mr. Blitz has served as a director of
the Bank since 1998.
Steven L. Fanaroff.
Mr. Fanaroff, 50, is Vice President -
Chief Financial Officer of Magruder Holdings, Inc., a regional supermarket
chain, with which he has served since 1981.
Mr. Fanaroff served on the Board of Directors of Allegiance from
1990 until 1997. Mr. Fanaroff has served as a director of the Bank since
its organization.
Benson Klein.
Mr. Klein,
65, has been an attorney in Montgomery County since 1970, and a principal with
Ward & Klein, Chartered, since 1978.
Mr. Klein is also engaged in real estate investment activities in
Montgomery County. He served as a
director of Allegiance from 1996 to 1997 and previously served as a director of
Lincoln National Bank. Mr. Klein is
currently, and has been, a member of a variety of community, business and
charitable institutions in the Washington, D.C./Montgomery County area. Mr. Klein has served as a director of
the Bank since its organization.
Susan Lacz.
Ms. Lacz,
49, is a principal of Ridgewell Caterers.
Prior to joining the Board of Directors of the Bank upon the acquisition
of Fidelity, Ms. Lacz served as a director of F&T Bank from 2005 to
2008.
Bruce H. Lee.
Mr. Lee, 45, is President of Development
for Lee Development Group, a closely held family real estate business founded
in 1920 and based in downtown Silver Spring. He is principal broker of record
for Montgomery Land Company, LLC, which specializes in commercial sales,
leasing, and property management and the general partner of Montgomery 1936
Land Company LLC and General Manager of Acorn Self Storage. Mr. Lee was the charter president of the
Greater Silver Spring Chamber in 1993. Mr. Lee
was an elected Council member and Chairman of the Township of Chevy Chase
View. Mr. Lee has served as a
director of the Bank since 2000.
Thomas Roberson.
Mr. Roberson,
51, is a partner of Montouri & Roberson. Mr. Roberson specializes
in investment real estate. Mr. Roberson was a former Director of Laszlo N.
Tauber, M.D. & Associates, LLC and is a current director of the Laszlo
N. Tauber Trust. He served on the Board of BB&T, DC Metro Region until January 2006,
and was a director of F&T Bank until August 2008, when he joined the
Board of Directors of the Bank. Mr. Roberson
is a licensed General Real Property Appraiser, a Commercial Broker, and a tax
advocate for assessment appeals.
Benjamin N. Soto.
Mr. Soto,
41, is a principal of Premium Title and Escrow, LLC, a Washington D.C. based
law firm and title company he founded in 2000.
Prior to forming Premium, Mr. Soto was a partner in the firm of
Garza, Regan, Rosenblatt, PC, where he practiced real estate and bankruptcy
law. He frequently lectures to members
of the D.C. Bar, is a former chair of the Bankruptcy Section of the
National Bar Association, and in 2007, was appointed by Mayor Adrian Fenty to
serve on the D.C. Sports and Entertainment Commission. He is also a member of the D.C. Land Title
Association, Maryland Land Title Association, Better Business Bureau and the
D.C. Chamber of Commerce. Mr. Soto
has served as a director of the Bank since 2006.
James A. Soltesz.
Mr. Soltesz,
55, has served as Chief Executive Officer of Loiederman Soltesz Associates, Inc.,
a land development engineering and consulting firm since 1997. Mr. Soltesz serves on the Board of
Trustees of Georgetown Preparatory School, Mater Dei School, as a Life Director
of the Maryland-National Capital Area Building Industry Association, and
Catholic Charities Foundation. His firm
includes 280 people located in six offices throughout the metropolitan area of
Washington, D.C. Mr. Soltesz has
served as a director of the Bank since 2007.
Eric H. West.
Mr. West,
47, is a founding principal of West, Lane & Schlager/Oncor
International, specializing in tenant representation and strategic real estate
consulting in the Washington, D.C.
metropolitan
area. During his career, Mr. West has developed a specialty in
not-for-profit organizations and corporations, leading to
7
ongoing
relationships with such diverse groups as The National Council on the Aging,
The American Forest and Paper Association, The American Iron & Steel
Institute, among many others. Mr. West
has served as a director of the Bank since 2003.
Committees, Meetings and Procedures of the Board of Directors
Meetings.
The Board of
Directors of the Company met thirteen (13) times during 2009. All members of the Board of Directors of the
Company attended at least 75% of the meetings held by the Board of Directors
and by all committees on which such member served during the 2009 fiscal year
or any portion thereof.
Audit Committee.
The Board of Directors has a
standing Audit Committee. The Audit Committee is responsible for the selection,
review and oversight of the Companys independent registered public accounting
firm, occasionally referred to as the independent accountants, the approval
of all audit, review and attest services provided by the independent
accountants, the integrity of the Companys reporting practices and evaluation
of the Companys internal controls and accounting procedures. It also periodically reviews audit reports
with the Companys independent accountants. The Board of Directors has adopted
a written charter for the Audit Committee. A copy of the charter is available
on the Companys website at www.eaglebankcorp.com. The Audit Committee of the
Company is currently comprised of Mr. Dworken, the Chairman, and Messrs. Alperstein,
Gross, Pincus, Pozez and Weinstein. Each of the members of the Audit Committee
is independent, as determined under the definition of independence adopted by
NASDAQ for audit committee members in Rule 5605(c)(2)(A). During the 2009
fiscal year, the Audit Committee of the Company met seven (7) times. The Board of Directors has determined that Mr. Alperstein
is an audit committee financial expert as defined under regulations of the
Securities and Exchange Commission.
The Audit Committee is also responsible for the pre-approval of all
non-audit services provided by its independent accountants. Non-audit services are only provided by the
independent auditors to the extent permitted by law. Pre-approval is required unless a
de minimus
exception is met. To qualify
for the
de minimus
exception,
the aggregate amount of all such non-audit services provided to the Company
must constitute not more than five percent of the total amount of revenues paid
by the Company to its independent accountants during the fiscal year in which
the non-audit services are provided; such services were not recognized by the
Company at the time of the engagement to be non-audit services; and the
non-audit services are promptly brought to the attention of the committee and
approved prior to the completion of the audit by the committee or by one or
more members of the committee to whom authority to grant such approval has been
delegated by the committee.
Nominating Committee.
The Board of Directors has a standing nominating committee, consisting
of four members of the Board of Directors who are independent directors
within the meaning of NASDAQ Rule 5605(a)(2). The nominating committee is
currently comprised of Mr. Pozez, the Chairman, and Messrs. Margolius,
Pincus and Weinstein. The nominating committee is responsible for the
evaluation of nominees for election as director, the nomination of director
candidates for election by the shareholders and evaluation of sitting
directors. The Board of Directors has adopted a charter addressing the
nominations process. A copy of the charter is available on the Companys
website at www.eaglebankcorp.com.
The
Board has not developed a formal policy for the identification or evaluation of
nominees. In general, when the Board
determines that expansion of the Board or replacement of a director is
necessary or appropriate, the nominating committee will review, through
candidate interviews with members of the Board and management, consultation
with the candidates associates and through other means, a candidates honesty,
integrity, reputation in and commitment to the community, judgment, personality
and thinking style, willingness to invest in the Company, residence,
willingness to devote the necessary time, potential conflicts of interest,
independence, understanding of financial statements and issues, and the willingness
and ability to engage in meaningful and constructive discussion regarding
Company issues. The committee would review any special expertise, for example,
expertise that qualifies a person as an audit committee financial expert, and
membership or influence in a particular geographic or business target market,
or other relevant business experience. The Board of Directors and the
Nominating Committee have not established a specific diversity component in
their consideration of candidates for director. To date the Company has not
paid any fee to any third party to identify or evaluate, or to assist it in
identifying or evaluating, potential director candidates.
8
The
nominating committee will consider director candidates nominated by
shareholders during such times as the Company is actively considering obtaining
new directors, on the same basis as candidates proposed by the committee, the
Board or other sources. Candidates
recommended by shareholders will be evaluated based on the same criteria
described above. Shareholders desiring to suggest a candidate for consideration
should send a letter to the Companys Secretary and include: (a) a
statement that the writer is a shareholder (providing evidence if the persons
shares are held in street name) and is proposing a candidate for consideration;
(b) the name and contact information for the candidate; (c) a
statement of the candidates business and educational experience; (d) information
regarding the candidates qualifications to be director, including but not
limited to an evaluation of the factors discussed above which the Board would
consider in evaluating a candidate; (e) information regarding any
relationship or understanding between the proposing shareholder and the
candidate; (f) information regarding potential conflicts of interest; and (g) a
statement that the candidate is willing to be considered and willing to serve
as director if nominated and elected.
Because of the limited resources of the Company and the limited
opportunity to seek additional directors, there is no assurance that all
shareholder proposed candidates will be fully considered, that all candidates
will be considered equally, or that the proponent of any candidate or the
proposed candidate will be contacted by the Company or the Board, and no
undertaking to do so is implied by the willingness to consider candidates
proposed by shareholders.
Compensation Committee.
The Board of Directors of the Company has a
Compensation Committee (the Compensation Committee), consisting of all of the
members of the Board of Directors who are independent directors within the
meaning of NASDAQ Rule 5605(a)(2), other than Mr. Gross. The
Compensation Committee has the sole responsibility for determining executive
compensation, including that of the named executive officers. The Compensation
Committee makes determination with respect to salary levels, bonus compensation
and equity compensation awards for executive officers. In exercising its role,
the Compensation Committee considered information or recommendations provided
by the Compensation Committee of the Bank (the Bank Compensation Committee
and together with the Compensation Committee, the Compensation Committees),
which determined compensation policy for nonexecutive employees during
2009. During 2009, the Bank Compensation
Committee was comprised of Mr. Blitz, the Chairman, and Messrs. Dworken,
Paul, Pincus, Rogers and Weinstein. Mr. Paul did not participate in, or
remain present during, discussions of his compensation. The Board of Directors has adopted a charter
for the Compensation Committee. A copy of the charter is available on the
Companys website at www.eaglebankcorp.com.
During the 2009 fiscal year, the Compensation Committee met three (3) times.
During 2008 and early 2009, the Compensation Committee retained and
worked with Amalfi Consulting, Inc. (Amalfi), an executive compensation
and benefits consulting firm of national scope and reputation, to assist the
Company in evaluating executive compensation levels and the form of executive
compensation, and in connection with determining compensation levels for 2009.
During 2009, the Compensation Committee retained Blanchard Chase LLC
(Blanchard Chase) for these purposes, as the consultants with whom the
Compensation Committee worked moved to that firm.
Compensation Committee Interlocks
and Insider Participation.
No member of the
Compensation Committee has served as an officer or employee of the Company or
Bank at any time. None of our executive officers serve as a member of the
compensation committee of any other company that has an executive officer
serving as a member of our Board of Directors.
None of our executive officers serve as a member of the board of
directors of any other company that has an executive officer serving as a
member of the Compensation Committee. Except for loans and deposit transactions
in the ordinary course of business made on substantially the same terms,
including interest rates and collateral, as those for comparable transactions
with unaffiliated parties, and not presenting more than the normal risk of
collectability or other unfavorable features, no member of the Compensation
Committee or any of their related interests has any material interest in any transaction
involving more than $120,000 to which the Company is a party.
Board Leadership Structure and Risk Oversight Role.
The role of Chairman of the
Board of Directors and Chief Executive Officer of the Company are currently
held by the same person, Mr. Paul. The foregoing structure is not mandated
by any provision of law or our articles of incorporation or bylaws. The Board
of Directors reserves the right to establish a different structure in the
future. The Board of Directors currently
believes that this structure is the most appropriate leadership structure for
the Company. Under the Companys bylaws, the official role and power of the
Chairman is limited, and is related largely to the conduct of meetings of the
Board of Directors and shareholders.
9
The
Board of Directors believes that the Chief Executive Officer is in the best
position to be aware of major issues facing the Company on a day-to-day and
long-term basis, and is in the best position to identify key risks and
developments facing the Company that may need to be brought to the full Boards
attention. Further, a combined Chairman/Chief Executive Officer position
eliminates the potential for confusion as to who leads the Company, providing
the Company with a single public face in dealing with shareholders,
employees, regulators, analysts and other constituencies. To date, this structure has worked
successfully for the Company. The Board
of Directors does not have a designated lead director. However, members of
the Board of Directors are active in their oversight of management.
The
Board of Directors of the Company, all of the members of which are also members
of the Board of Directors of the Bank, is actively involved in the Companys
and Banks risk oversight activities. These directors, as well as the directors
of the Bank, working through numerous committees of the Company and Bank,
review and approve the policies of the Company and Bank.
Shareholder Communications.
Company shareholders who wish to communicate with the Board of Directors
or an individual director can write to Eagle Bancorp, Inc., 7815 Woodmont
Avenue, Bethesda, Maryland 20814, Attention: Jane E. Cornett, Corporate
Secretary. Your letter should indicate that you are a shareholder, and whether
you own your shares in street name. Depending on the subject matter, management
will: (a) forward the communication to the director or directors to whom
it is addressed; (b) handle the inquiry directly or delegate it to
appropriate employees, such as where the communication is a request for
information, a stock related matter, or a matter related to ordinary course
matters in the conduct of the Companys banking business; or (c) not
forward the communication where it is primarily commercial or political in
nature, or where it relates to an improper, frivolous or irrelevant topic.
Communications which are not forwarded will be retained until the next Board
meeting, where they will be available to all directors.
Director Attendance at the Annual
Meeting.
The Board of Directors
believes it is important for all directors to attend the annual meeting of
shareholders in order to show their support for the Company and to provide an
opportunity for shareholders to communicate any concerns to them. Accordingly,
it is the policy of the Company to encourage all directors to attend each
annual meeting of shareholders unless they are unable to attend by reason of
personal or family illness or pressing matters. Eight (8) of the Companys
directors in office at the time attended the 2009 annual meeting of
shareholders.
Audit Committee Report
The Audit Committee has been appointed to assist the Board of Directors
in fulfilling the Boards oversight responsibilities by reviewing the financial
information that will be provided to the shareholders and others, the systems
of internal controls established by management and the Board and the
independence and performance of the Companys audit process.
The Audit Committee has:
(1)
reviewed and discussed with
management the audited consolidated financial statements included in the
Companys Annual Report on Form 10-K;
(2)
discussed with Stegman &
Company, the Companys independent registered public accounting firm, the
matters required to be discussed by Statement on Auditing Standards No. 61,
as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T;
and
(3)
has received the written
disclosures and letter from Stegman & Company as required by the
applicable requirements of the Public Company Accounting Oversight Board
regarding the independent accountants communications with the Audit Committee
regarding independence, and has discussed with Stegman & Company, its
independence.
Based on these reviews and discussions, the Audit Committee has
recommended to the Board of Directors that the audited consolidated financial
statements be included in the Companys Annual Report on Form 10-K for the
10
year
ended December 31, 2009. The Audit
Committee has also considered whether the amount and nature of non-audit
services provided by Stegman & Company is compatible with the
auditors independence.
Members of the Audit Committee
Dudley
C. Dworken, Chairman
|
Robert
P. Pincus
|
Leslie
M. Alperstein
|
Norman
R. Pozez
|
Neal
R. Gross
|
Leland
M. Weinstein
|
Director Compensation
The following table sets forth information regarding compensation paid
to, or earned by, non-employee directors of the Company during the fiscal year
ended December 31, 2009 for service as members of the Company and Bank
Boards of Directors. Members of the
Board of Directors who are employees do not receive additional cash
compensation for service on the Board of Directors.
Name(1)
|
|
Fees
Earned or
Paid in
Cash
|
|
Stock
Awards(2)
|
|
Option
Awards(3)(4)
|
|
All
Other
Compensation
|
|
Total
|
|
Leslie M. Alperstein, Ph.D.
|
|
$
|
11,850
|
|
$
|
9,951
|
|
$
|
|
|
$
|
|
|
$
|
21,801
|
|
Dudley C. Dworken
|
|
$
|
54,550
|
|
$
|
9,951
|
|
$
|
|
|
$
|
|
|
$
|
64,501
|
|
Harvey M. Goodman
|
|
$
|
15,450
|
|
$
|
9,951
|
|
$
|
|
|
$
|
|
|
$
|
25,401
|
|
Neal R. Gross
|
|
$
|
16,050
|
|
$
|
9,951
|
|
$
|
|
|
$
|
|
|
$
|
26,001
|
|
Philip N. Margolius
|
|
$
|
19,350
|
|
$
|
9,951
|
|
$
|
|
|
$
|
|
|
$
|
29,301
|
|
Robert P. Pincus
|
|
$
|
220,000
|
|
$
|
9,951
|
|
$
|
109,350
|
|
$
|
26,600
|
(5)
|
$
|
312,701
|
|
Norman R. Pozez
|
|
$
|
13,650
|
|
$
|
9,951
|
|
$
|
|
|
$
|
|
|
$
|
23,601
|
|
Donald R. Rogers
|
|
$
|
13,650
|
|
$
|
9,951
|
|
$
|
|
|
$
|
|
|
$
|
23,601
|
|
Leland M. Weinstein
|
|
$
|
21,450
|
|
$
|
9,951
|
|
$
|
|
|
$
|
|
|
$
|
31,401
|
|
(1)
Does not include
$31,250 paid to the former Chairman of the Board of Directors for Board service
through the date of the 2009 annual meeting of shareholders and $224,250 paid
upon termination of his Board service and fee agreement.
(2)
Represents the
grant date fair value of shares of restricted stock granted to directors during
2009.
(3)
Represents the
grant date fair value of option awards received during 2009. Please refer to note 13 to the Companys
Consolidated Financial Statements for the year ended December 31, 2009 for
a discussion of the assumptions used in calculating the grant date fair value.
(4)
At December 31,
2009, the non-employee directors had outstanding option awards, vested and
unvested, to purchase shares of common stock as follows: Mr. Alperstein
2,943 shares; Mr. Dworken 3,575 shares; Mr. Goodman 8,225 shares;
Mr. Gross 2,884 shares; Mr. Margolius 6,490 shares; Mr. Pincus
93,405 shares; Mr. Pozez 0 shares; Mr. Rogers 4,318 shares and Mr. Weinstein
10,432 shares.
(5)
Represents car
allowance of $1,250 per month and $11,600 of payments to defer the cost of
health and life insurance.
During 2009, each non-employee director of the Company and Bank, other
than Mr. Pincus, received an annual retainer of $5,000 in cash ($7,500 if
a member of both the Company and Bank Board of Directors), plus a cash fee of
$300 for each meeting attended of the Board of Directors of the Company, the
Board of Directors of the Bank or a committee of the Board of the Company or
the Bank ($400 per meeting of a committee if serving as chair of the
committee). Commencing in March 2009,
non-employee directors serving as the chair of a committee received an
additional annual retainer of $1,000 to $3,000 per committee for such service.
Additionally, in June 2009, each member of the Company Board of Directors,
other than Mr. Paul and Mr. Pincus, was granted 1,284 shares of
restricted stock, and each member of only the Bank Board of Directors was
granted 855 shares of restricted stock.
All of such restricted shares vest in three substantially equal
installments, commencing on the first anniversary of the date of grant. In
2009, an aggregate of $166,000 in cash retainers and meeting fees were paid to
members of the Board of Directors of the Company (other than Mr. Paul and Mr. Pincus)
for service on the Board of Directors of the Company and Bank, and $87,300 was
paid to members of only the Board of Directors of the Bank for such
service. Additionally, an aggregate of
$255,500 was paid to the former Chairman of the Board of the Company for
service through the date of the 2009 annual meeting, and upon termination of his
service, in accordance with the terms of his fee agreement.
11
During 2010, non-employee directors, other than Mr. Pincus, are
currently entitled to receive the same cash retainer and meeting fees.
In
connection with the acquisition of Fidelity, Mr. Pincus and the Bank
entered into an agreement pursuant to which he is retained to serve as Vice
Chairman of the Board of Directors of the Company and Bank. Under that
agreement, Mr. Pincus receives an annual payment, $220,000 during 2009 and
currently $280,000, subject to annual increase to reflect, at a minimum, the
increase in the consumer price index, in lieu of all other cash fees for
service on the Board of Directors. Mr. Pincus will also be eligible to
receive incentive bonuses pursuant to Board approved plans, and to a car
allowance of $1,250 per month, $800 per month as a health insurance allowance
and $10,000 per year as a life insurance allowance. The agreement has a term
extending until August 31, 2011, subject to automatic renewal for a one
year term unless either party gives 60 days notice of nonrenewal. In the event
of early termination of the agreement by the Bank without cause, or as a result
of Mr. Pincus death or disability, or as a result of nonrenewal by the
Bank, Mr. Pincus (or his estate) would be entitled to receive continued
payment of retainer compensation and car allowance for one year, subject to his
continued compliance with the confidentiality, noncompete and nonsolicitation
provisions of the agreement. The agreement provides that during the term and
for a period of eighteen months after termination, Mr. Pincus will not in
any capacity: (i) render any services to a bank or financial services
business, including but not limited to any consumer savings, commercial
banking, insurance or trust business, or a savings and loan or mortgage
business, or other business in which the Bank has invested significant
resources in anticipation of commencing, or to any person or entity that is
attempting to form such a business if it operates any office, branch or other
facility that is (or is proposed to be) located within a thirty-five mile
radius of the location of any branch of the Company or Bank or their
affiliates; or (ii) induce or attempt to induce any customers, suppliers,
officers, employees, contractors, consultants, agents or representatives of, or
any other person that has a business relationship with, the Company or Bank or
their affiliates, to discontinue, terminate or reduce the extent of their
relationship with such entity or to solicit any such customer for any
competitive product or service, or otherwise solicit any customer or employee
of the Company, or the Bank.
Under
the agreement, in the event that: (i) Mr. Pincus is terminated
without cause after a change in control; (ii) his title, duties or
position are materially reduced within twelve months after a change in control,
without his consent, such that he would not have materially comparable
compensation benefits and responsibilities, and not have his primary worksite
moved more than twenty five miles, and such change is not cured within thirty
days of notice of termination; or (iii) he voluntary terminates the
agreement within the thirty day period following twelve months after a change
in control, Mr. Pincus would be entitled to receive a lump sum payment
equal to 2.99 times his highest rate of base compensation in effect within the
twelve months prior to termination, subject to adjustment to avoid adverse tax
consequences resulting from characterization of such payment for tax purposes
as a parachute payment. If Mr. Pincus
were entitled to receive the termination benefits as of December 31, 2009,
he would receive approximately $657,800.
The Company does not maintain any discretionary bonus or non-equity
incentive plans or compensation programs, deferred compensation, defined
contribution or defined benefit retirement plans, for non-employee directors,
or in which such directors may participate.
Executive Officers Who Are Not Directors
Set forth below is certain information regarding persons who are
executive officers of the Company or the Bank and who are not directors of the
Company. Except as otherwise indicated,
the occupation listed has been such persons principal occupation for at least
the last five years.
Michael T. Flynn.
Mr. Flynn,
62, has served as Executive Vice President and Chief Operating Officer of the
Company since June 2006, previously served as President - District of
Columbia Division of the Bank, from June 2006 until August 2008, was
President of the Bank from January 2004 until June 2006. Mr. Flynn has over 38 years experience
in the banking industry in the Washington, D.C. and Maryland region. Prior to
joining EagleBank in January 2004, he was the Washington region executive
for Mercantile Bankshares Corporation from April 2003. He previously was
the Director of Strategic Planning for Allfirst Financial, Inc., and prior
to that held several executive level positions for Bank of America and
predecessor companies. He has been involved in community affairs throughout his
career, particularly educational groups including the American Institute of
Banking and the Corcoran
12
College of Art &
Design. He is a Director of the Workforce Investment Council of the District of
Columbia and the Maryland Banking School.
Martha Foulon-Tonat
. Ms. Foulon-Tonat, 54, Executive Vice
President and Chief Lending Officer of the Bank, served at Allegiance from January 1990
to December 1997. Her duties
included being Senior Vice President and Chief Lending Officer. Prior to her service at Allegiance, Ms. Foulon-Tonat
served at various commercial banks in the area. She has over 30 years
experience in the commercial banking industry.
James H. Langmead
. Mr. Langmead,
60, Executive Vice President and Chief Financial Officer of the Company since January 2007,
and Executive Vice President and Chief Financial Officer of the Bank since January 2005,
previously served as Chief Financial Officer of Sandy Spring Bank and Sandy
Spring Bancorp. Mr. Langmead, a Certified Public Accountant, served in
various financial and senior management roles with Sandy Spring Bank from 1992
through 2004. Prior to that time, Mr. Langmead managed the finance group
at the Bank of Baltimore. He has over 39 years experience in the commercial
banking industry.
Thomas D. Murphy.
Mr. Murphy,
62, is currently President Retail Banking, and previously served as President
- Montgomery County Division of the Bank since June 2006, and Executive
Vice President - Chief Operating Officer of the Bank. He served at Allegiance from
September 1994, including as Executive Vice President and Chief Operating
Officer from December 1995 until November 1997. Prior to his service at Allegiance, he served
in the same position at First Montgomery Bank from August 1991 until its
acquisition by Sandy Spring National Bank of Maryland in December 1993,
and he served as a Vice President of that organization until September 1994.
Mr. Murphy has 35 years experience in the commercial banking industry.
Active in community affairs, he is past president of the Bethesda-Chevy Chase
Chamber of Commerce.
Susan G. Riel.
Ms. Riel,
60, is currently Senior Executive Vice President - Chief Operating Officer of
the Bank, and was formerly Executive Vice President - Chief Operating Officer
of the Bank and Chief Administrative Officer, and previously served as
Executive Vice President - Chief Operating Officer of Columbia First Bank, FSB
from 1989 until that institutions acquisition by First Union Bancorp in
1995. Ms. Riel has over 30 years of
experience in the commercial banking industry.
Janice L. Williams.
Ms. Williams, 53, Executive Vice
President and Chief Credit Officer of the Bank, has been employed with the Bank
as Credit Officer, Senior Credit Officer, and Chief Credit Officer since
2003. Prior to employment with the Bank, Ms. Williams served with
Capital Bank, Sequoia Bank, and American Security Bank. Additionally, Ms. Williams,
a graduate of Georgetown University Law Center and a Member of the Maryland
Bar, was previously employed in the private practice of law in Maryland.
EXECUTIVE COMPENSATION
Compensation Disclosure and Analysis
The Company is committed to
responsible compensation practices and strives to balance sound risk management
and the need to compensate its employees competitively for proven
performance. In this discussion and
analysis, we describe how the Company has compensated our named executives to
both comply with restrictions under regulations adopted by the United States
Department of the Treasury (the Treasury) applicable to companies
participating in programs under the Troubled Asset Relief Program (TARP), and
to reward them given our strong performance in 2009. We also have added some important protections
for shareholders and other stakeholders that will likely stay in place even
after we have repaid TARP. These actions
include designating a senior risk officer to review all incentive compensation
plans, formalizing a luxury expenditure policy and adding clawback provisions
to our incentive compensation plans. If
2009 performance is found to be based on materially inaccurate performance
criteria, incentive compensation for 2009 will be forfeited and/or recovered.
Later
in this proxy statement under the heading Executive Compensation Tables, you
will find a series of tables containing specific information about the
compensation earned or paid in 2009 to Mr. Paul, the Chief Executive
Officer of the Company, Mr. Langmead, the Chief Financial Officer, and the
three most highly compensated executive officers of the Company (including
officers of the Bank) who received total compensation of $100,000 or
13
more
during the fiscal year ended December 31, 2009, referred to as our named
executive officers or named executives.
Impact of Participation in Capital Purchase Program.
On December 5,
2008, the Company sold a series of its preferred stock and warrants to purchase
common stock to the Treasury under the Capital Purchase Program established
under TARP (the CPP). As a result of its participation in the CPP, the
Company became subject to the executive compensation requirements of the
Emergency Economic Stabilization Act of 2008 (EESA). In connection with the
Companys participation in the CPP, on December 5, 2008, the Companys
seven senior executives, including our named executive officers, executed
waivers consenting to the restrictions and limitations required by the EESA.
On
February 17, 2009, the President of the United States signed into law the
American Reinvestment and Recovery Act of 2009 (ARRA). The ARRA amended,
among other things, the EESA by directing the Treasury to issue regulations
implementing additional restrictions and limitations on executive compensation
paid or accrued by participants in the CPP. The restrictions and limitations of
the EESA, as amended, were implemented by interim final rules setting
forth the standards on corporate governance and executive compensation,
published by the Treasury and effective on June 15, 2009, as updated by
subsequently issued technical corrections and guidance (collectively, the TARP
Restrictions). The TARP Restrictions,
which are applicable during any period while the Company still has financial
assistance under the CPP outstanding, include:
·
a prohibition on paying or accruing any
bonus, retention award, or incentive compensation to the five most highly
compensated employees of the Company, other than in the form of long-term
restricted stock in an amount not greater than one-third of the employees
total compensation;
·
a prohibition on making any golden parachute
payments to the named executive officers and the Companys next five most
highly compensated employees, for departure from the Company or upon a change
in control of the Company;
·
a prohibition on any compensation plan that
would encourage manipulation of reported earnings, or encourage the named
executive officers to take unnecessary and excessive risks that could threaten
the value of the Company;
·
a requirement to conduct semi-annual reviews
of the named executive officer and employee compensation plans to ensure they
do not contain such prohibited features;
·
a prohibition on tax gross-ups or other
reimbursements for the payment of taxes to the named executive officers and the
Companys next twenty most highly compensated employees;
·
a limitation on the tax deductibility of the
portion of an named executive officers annual compensation in excess of
$500,000;
·
a requirement for the repayment, or clawback,
of any bonus, incentive and retention payments made to the named executive
officers or the next twenty most highly compensated employees, if based on
financial statements or any other performance metric criteria that is later
found to be materially inaccurate;
·
establishment by the Board of a company-wide
policy regarding excessive or luxury expenditures; and
·
a requirement to include a proposal for a
non-binding vote of shareholders at annual meetings on the compensation of
executives as disclosed pursuant to the executive compensation disclosures included
in the proxy statement.
The
TARP Restrictions have necessarily impacted our compensation practices, as
noted in the following discussion. We believe that the Company has fully
complied with the TARP Restrictions in connection with its 2009 compensation.
Compensation Objectives.
The primary
objectives of the Board of Directors with respect to executive compensation is
to tie annual and long-term cash and stock incentives to the achievement of
measurable Company and individual performance objectives, thereby aligning the
named executives incentive with maintaining and increasing shareholder
value. We attempt to achieve these
objectives through pay for performance compensation policies and programs
that put a significant portion of our named executives officers overall
compensation at risk. Potentially 10% to 35% of total compensation (at target
levels) is intended to be in the form of cash bonuses and equity compensation
awards in order to focus executives on both short and long term financial performance.
We also recognize that ours is a highly competitive market for executive
officers, and that we compete for personnel against local community banks and
14
against
national, regional and local institutions that operate in the entire
metropolitan Washington D.C. area, and in surrounding markets. We did not
provide our named executives with cash bonuses or incentive payments for 2009,
and complied with the TARP Restrictions.
We have sought, instead, to provide all of our named executives with
equivalent value in the form of long-term restricted stock which is compliant
with the TARP Restrictions.
Compensation Philosophy.
Our compensation philosophy
is to reward our executives with total compensation at or above market
commensurate with our performance. In
2009 we changed our compensation philosophy to target base salaries for named
executives at the market median (50
th
percentile).
This was a reduction from our previous philosophy to pay base salaries
at the 75
th
percentile of our peer group due to our
competitive market in the DC area. Our
goal under our current philosophy is to provide meaningful incentives through
pay for performance programs that pay at the market median for budgeted
performance and at the 75
th
percentile or higher when
performance expectations are exceeded. Since we are a participant in the CPP,
we are limited in our compensation mix and realize that this may impact our
current pay for performance strategy for some of our named executives.
The Role of Consultants.
In 2008, the Companys
Compensation Committee (in this discussion, the Committee) retained Amalfi to
assist the Committee with a competitive analysis of executive compensation in
connection with the determination of compensation levels for 2009. During 2009, the Committee retained Blanchard
Chase following the relocation of the consultants with whom the Committee had
worked to that firm. The Committee engaged Blanchard Chase in the fourth
quarter of 2009, to assist with a competitive analysis of executive
compensation. Both Amalfi and Blanchard
Chase reported directly to the Committee and did not provide any
non-compensation related services or products to the Committee or the
Bank. Consultants have provided the
Committee with annual updates on market competitive pay for executives and
directors since 2006. We further discuss our peer group and benchmarking
process later in this Compensation Discussion and Analysis. In addition to benchmark analysis, Blanchard
Chase has assisted the Bank with the executive annual and long-term incentive
programs, and provided the Committee guidance on, and compliance with, the TARP
Restrictions.
The Role of Management.
Input from
the Chief Executive Officer is considered by the Committee and the
Bank Compensation Committee regarding the criteria to be used to determine base
salary, bonuses and other benefits for
named executive officers other than
the Chief Executive Officer. Although input from
the Chief Executive Officer is considered by the Committee,
the Committee exercises final authority on compensation matters for all named
executive officers. The Chief Executive
Officer is not present at Committee meetings during discussion and deliberations
regarding his own compensation.
Compensation Components.
The key components of our
2009 executive compensation program for all named executive officers consist of
a base salary, performance-based compensation plans, including our Senior
Executive Incentive Plan, a performance-based cash bonus plan, a long-term
equity based compensation plan, and a 401(k) Plan. We do not have any
nonqualified deferred compensation or supplemental executive benefits in place
for our executives.
Base Salary.
The Board of Directors
believes that base salary for named executive officers should be targeted at
market competitive levels. Base
salaries are reviewed annually and adjusted from time to time, based on our
review of market data and assessment of Company and individual executive
performance. With the exception of Ms. Riel, Senior Executive Vice
President and Chief Operating Officer of the Bank, none of our named executives
received base salary increases in 2009 due to market conditions. During 2009, we reorganized our reporting structure
and responsibilities of our senior management team, as a result of which Ms. Riel
was promoted mid-year and her salary was increased 13.37% to reflect her
increased responsibility, the new reporting structure and the fact that her
base salary was below the market median as shown by the market study performed
in 2008. In 2009, the following base
salary increases were provided for the named executive officers.
Name
|
|
Title
|
|
2008
Base
|
|
2009
Base
|
|
Increase
|
|
Ronald D. Paul
|
|
President
and Chief Executive Officer
|
|
$
|
350,000
|
|
$
|
350,000
|
|
|
|
Martha Foulon-Tonat
|
|
EVP
Chief Lending Officer
|
|
$
|
243,100
|
|
$
|
243,100
|
|
|
|
James H. Langmead
|
|
EVP
Chief Financial Officer
|
|
$
|
243,100
|
|
$
|
243,100
|
|
|
|
Thomas D. Murphy
|
|
President
Retail Banking
|
|
$
|
243,100
|
|
$
|
243,100
|
|
|
|
Susan G. Riel
|
|
Senior
EVP Chief Operating Officer of Bank
|
|
$
|
243,100
|
|
$
|
275,600
|
|
13.37
|
%
|
15
The Compensation Committee has approved base salary increases for 2010
based on the Banks performance for 2009. Please refer to Executive
Compensation Tables Employment Agreements below for additional information
on current salaries.
Senior Executive Incentive Plan.
The Senior Executive
Incentive Plan was established to reward our executives for achieving
predefined performance goals. In 2009,
all named executive officers participated in the Senior Executive Incentive
Plan. Under the plan, an executive is
eligible to earn a percentage of his or her base salary based on achievement of
Company and individual performance objectives.
During 2009, participating executives could earn target incentives
ranging from 10% to 35% of their base salary. As noted below in the discussion
of our peer group, our performance in 2009 was strong. Many of our financials were in the 80
th
- 90
th
percentiles
of our peers. As a result of our
performance, we hit our target level for net income under the Senior Executive
Incentive Plan, and at least threshold levels for a number of the specific
measurement criteria. Accordingly the
Committee approved annual incentive payouts that were, except for Mr. Paul,
slightly below target performance levels for the named executives as shown in
the table below. Mr. Paul earned an
incentive award equal to approximately 49% of base salary, reflecting the Company
meeting target goals for net income and efficiency ratio, as adjusted, and his
significantly exceeding his personal performance goals, resulting in a maximum
award for that metric, which constituted 35% of his incentive payment
potential.
Name
|
|
Title
|
|
2009
Annual Incentive
Target Award
|
|
Maximum
Annual Award
|
|
Actual
2009
Payout
|
|
Ronald D. Paul
|
|
President and Chief Executive Officer
|
|
35
|
%
|
70
|
%
|
49.6
|
%
|
Martha Foulon-Tonat
|
|
EVP Chief Lending Officer
|
|
25
|
%
|
40
|
%
|
19.4
|
%
|
James H. Langmead
|
|
EVP Chief Financial Officer
|
|
10
|
%
|
15
|
%
|
8.7
|
%
|
Thomas D. Murphy
|
|
President Retail Banking
|
|
20
|
%
|
30
|
%
|
14.0
|
%
|
Susan G. Riel
|
|
Senior
EVP Chief Operating Officer of the Bank
|
|
20
|
%
|
40
|
%
|
17.2
|
%
|
In order for the named executive to receive any portion of the
potential aggregate incentive payout, the Company must maintain satisfactory
regulatory ratings and reviews.
Additionally, no amounts are payable if the Company does not achieve at
least 80% of the consolidated net income goal.
Then, component portions of the aggregate potential payment may be
earned, based upon the degree of achievement of designated performance targets
for the other metrics described below.
The measures to which each named executives award is subject may vary
depending on the executives area of responsibility. Each component portion of
the potential incentive payment is subject to payment only if the threshold is
met or exceeded in total, with no provision for partial or graduated payments
for below threshold performance levels. We pay, however, on a pro rata basis
for actual performance results that fall between threshold, target and maximum
levels. The actual amount which an individual named executive officer may
receive may therefore be equal to or below the amount or percentage indicated in
the table above.
For 2009, we expanded the number of performance metrics used to gauge
Company performance, and to which a portion of each named executives
compensation under the Senior Executive Officer Plan is tied. The following table indicates the relative
weight of Companywide and personal performance goals for each named executive
officer.
Weighting of Performance Criteria by Officer
Name
|
|
Company-Wide
Performance
|
|
Personal Performance or
Compensation Committee
Discretion
|
|
Ronald D. Paul
|
|
65
|
%
|
35
|
%
|
Martha Foulon-Tonat
|
|
80
|
%
|
20
|
%
|
James H. Langmead
|
|
80
|
%
|
20
|
%
|
Thomas D. Murphy
|
|
80
|
%
|
20
|
%
|
Susan G. Riel
|
|
80
|
%
|
20
|
%
|
The table below reflects the percentage weighting of each metric
applicable to each of the named executives. For example, 50% of Mr. Pauls
target incentive payment of 35% of base salary is contingent on meeting the
designated net operating income target.
If the target is met, but not exceeded by an amount sufficient to reach
the maximum payout,
16
he
would receive 17.5% of salary in respect of that component. The target level of the same factor may be
different for different named executives.
Other performance metrics, not described below, are applicable to senior
executives who are not named executive officers.
The Board of Directors reserves the right to grant a discretionary
bonus in addition to the performance related incentive payment, or to award all
or a portion of the aggregate potential incentive payment where the targets are
not met, based upon extenuating factors.
The Committee reserves the right to adjust the actual results for any
metric to reflect extraordinary, unbudgeted or nonrecurring items or expenses
which inappropriately affect, positively or negatively, a participants
incentive payment opportunity. During
2009, the Committee adjusted net income and efficiency ratio targets for
extraordinary expenses and losses in inactive subsidiaries. In 2009, we achieved at least 80% of the net
income target and achieved at least threshold performance in 13 of the 15
Company wide metrics listed below, therefore amounts paid to named executive
officers pursuant to the Senior Executive Incentive Plan for 2009 performance
ranged from approximately 8% to 49% of base salary.
2009 Senior Executive Incentive Bonus
Plan Metrics and Weighting
|
|
Chief
Executive
Officer
|
|
Chief
Lending
Officer
|
|
Chief
Financial
Officer
|
|
President
Retail
Banking
|
|
Chief
Operating
Officer
|
|
Net operating income/Earnings per share
|
|
50
|
%
|
12
|
%
|
16
|
%
|
12
|
%
|
12
|
%
|
Efficiency ratio
|
|
15
|
%
|
|
|
16
|
%
|
|
|
16
|
%
|
Net interest margin
|
|
|
|
|
|
12
|
%
|
|
|
|
|
Total loan growth
|
|
|
|
16
|
%
|
|
|
|
|
|
|
Quarterly average of non-performing assets
|
|
|
|
16
|
%
|
|
|
|
|
|
|
Demand deposit/Total deposits
|
|
|
|
|
|
|
|
16
|
%
|
|
|
Money market deposits/Total deposits
|
|
|
|
|
|
|
|
16
|
%
|
|
|
Lender generated core deposit growth
|
|
|
|
12
|
%
|
|
|
|
|
|
|
Average rate on interest bearing deposits
|
|
|
|
|
|
12
|
%
|
8
|
%
|
|
|
Average interest rate on investments
|
|
|
|
|
|
8
|
%
|
|
|
|
|
Average interest rate on loans
|
|
|
|
12
|
%
|
|
|
|
|
|
|
Percentage growth in non-interest loan income -
2009 over 2008
|
|
|
|
12
|
%
|
|
|
|
|
|
|
Percentage growth in service charge income - 2009
over 2008
|
|
|
|
|
|
|
|
16
|
%
|
16
|
%
|
Maximum % increase in salary/benefit expense- 2009
over 2008
|
|
|
|
|
|
|
|
8
|
%
|
20
|
%
|
Maximum % increase in other expenses- 2009 over
2008
|
|
|
|
|
|
16
|
%
|
4
|
%
|
16
|
%
|
Personal performance/Discretionary
|
|
35
|
%
|
20
|
%
|
20
|
%
|
20
|
%
|
20
|
%
|
The target level for the efficiency ratio was 62.77%; for net interest
margin was 3.62%; and for interest on investments was 4.55%. The target level
for growth in non-interest loan income was 25.61%; and for non-interest service
charge income was 57.64%. The target
levels for loan related, deposit growth related and expense related metrics are
not disclosed in order to prevent competitive harm to the Company. Target levels for all metrics are based upon the Companys budget goals,
which are established by determining the expected financial position and
results of operations of the Company at the end of the budget year, in light of
the available resources of the Company, market conditions, anticipated interest
rates, competitive factors and other anticipated economic and financial
conditions, and adjusting the budgeted results of operation, deposit and loan
totals and performance ratios to reflect improvement. The Committee and Board of Directors
considers these goals aggressive in regards to expected performance and
industry standards, particularly in light of the difficult economic climate
during 2009. The establishment of budget goals and performance targets for
compensation plan purposes in one year, and the changes in such goals and
targets from year to year, is not intended to provide any guidance or
indication as to operating performance or results in any future period, and readers
should not extrapolate past goals to predict future performance goals or
targets.
The incentives earned under the
Senior
Executive Incentive Plan
for
2009 performance were paid in long-term restricted stock compliant
with the TARP Restrictions. At a minimum,
compliant long-term restricted stock must have a minimum period of two years
from grant during which it remains forfeitable if the recipient is no longer
17
performing
substantial services, other than as a result of death or disability, and may
not become transferable prior to repayment of TARP assistance in full, or in
increments of 25% of the original amount of TARP assistance. The value of permitted bonus awards of
long-term restricted stock may not exceed one-third of an employees total
compensation for the year.
Equity Compensation.
We believe that our
long-term interests are best advanced by aligning the interests of our
executive officers with the interests of our shareholders. Accordingly, subject
to compliance with the provisions of the TARP Restrictions which limit our
ability to grant options and other incentive awards, we may award stock
options, stock appreciation rights (SARS) and restricted stock to our
executive officers pursuant to our 2006 Stock Plan, which was adopted by our
shareholders in 2006.
2009 Equity Grants.
In 2009, the Committee awarded stock options
to the named executives which took into consideration the Companys 2008
performance. In addition, the Board
approved an additional one time equity award in the form of incentive stock
options to named executives to reward them for their role in the acquisition of
Fidelity, which took place in 2008. The options awarded were based on the
overall performance of the individual executive and the role the individual
executive played in the acquisition, the time devoted to the acquisition, and
the day to day responsibilities the executive had during this period in
addition to the acquisition. The total economic value of these one-time awards
to the named executives ranged from $10,000 to $100,000 based on each executives
involvement and time commitment to merger related issues. Prior to 2010, Mr. Paul
had declined any increase in his base salary since 2006, but had received stock
options and/or restricted stock in order to tie his potential compensation to
increases in shareholder value as reflected in the stock price. In 2009 he received an award of restricted
stock and stock options. These awards have a five year ratable vesting
schedule. These awards were made prior to final TARP Restrictions were released
by the Treasury on June 15, 2009.
The table below shows the equity awards granted to named executives in
2009 based on 2008 performance.
Equity Grants in 2009
|
|
Stock Options
|
|
Restricted
Stock
|
|
Ronald D. Paul
|
|
51,737
|
|
30,763
|
|
Martha Foulon-Tonat
|
|
21,200
|
|
|
|
James H. Langmead
|
|
20,200
|
|
|
|
Thomas D. Murphy
|
|
9,400
|
|
|
|
Susan G. Riel
|
|
32,000
|
|
|
|
All executive officers as group (7 persons)
|
|
180,337
|
|
30,763
|
|
2010 Equity Grants.
During the period while we have assistance
under the CPP outstanding, equity awards must be made in the form of long-term
restricted stock for those named executives that are one of the five highest
compensated employees. Based on 2009
performance, the Committee approved discretionary awards of long-term
restricted stock for the named executive officers in January 2010. The fair value of these grants ranged from
15% to 20% of the named executives base salary, other than for Mr. Paul,
who received only a minimal grant of approximately 1% of total compensation, in
order to comply with the TARP Restrictions.
The shares of long-term restricted stock granted in 2010 which reflect
amounts earned under the Senior Executive Incentive Plan are not vested or
transferable prior to the redemption in full of the Companys CPP preferred
stock, or a minimum period of two years from grant, whichever is later. The
portion reflecting the value of discretionary cash bonuses and/or option grants
vest over five years, 60% on the second anniversary of the date of grant, and
20% on the third and fourth anniversaries, provided that no amount shall vest
prior to the redemption in full of the Companys CPP preferred stock.
Timing and Pricing of Equity
Awards
. Equity compensation awards for
named executive officers and employees are generally approved in January or
early February of each year.
Awards may be made periodically for new hires during the year. Awards are based on a number of criteria
including the Banks performance, the relative rank of the employee within the
Company and his or her specific contributions to the success of the Company.
The grant date is established when the Committee approves the grant and
all key terms have been established and communicated to award recipients. We set the exercise price for our stock
options as the average of the high and low stock price on the grant date. Our
equity award process is independent of any consideration of the timing of the
release of material nonpublic information, including with respect to the
determination of grant dates or stock option
18
exercise
prices. Similarly, we expect that the
release of material nonpublic information will not be timed with the purpose or
intent to affect the value of executive compensation.
Peer Groups &
Benchmarking.
In the
fourth quarter of 2009, Blanchard Chase was engaged to provide an updated
market analysis on executive compensation level. Blanchard Chase utilized 2009 proxy data for
a peer group of 17 publicly traded banks, the selection of which was based upon
similarities in asset size, markets and region.
We use this as our primary peer group for compensation comparisons. Proxies filed in 2009 reflected compensation
earned in 2008. The study used a 4% annual aging factor. The Committee also reviews data from a
smaller peer group of six banks in close geographic proximity to the
Company. The Committee believes it is
prudent to look at this subgroup as an additional market reference as it is
these competitors from which we could potentially draw or lose talent.
Peer Groups.
The 2009 proxy peer group is
listed below. Financial data reflects
information at and for the year ended December 31, 2009, and is from SNL
Financial and Company filings. As summarized below, the Companys financial
performance in 2009 was very strong relative to our peers.
Company Name
|
|
City
|
|
State
|
|
Total
Assets
2009
($000)
|
|
Asset
Growth
3 Yr
(%)
|
|
ROAA
2009
(%)
|
|
ROAE
2009
(%)
|
|
Net
Interest
Margin
2009
(%)
|
|
Efficiency
Ratio
2009
(%)
|
|
NPAs/
Assets
2009
(%)
|
|
Total
Return
2009
(%)
|
|
United
Bankshares, Inc.*
|
|
Charleston
|
|
WV
|
|
7,805,101
|
|
16.19
|
|
0.85
|
|
8.81
|
|
3.55
|
|
50.24
|
|
1.18
|
|
82.92
|
|
Sandy
Spring Bancorp, Inc.*
|
|
Olney
|
|
MD
|
|
3,630,478
|
|
39.07
|
|
-0.42
|
|
-3.82
|
|
3.29
|
|
63.70
|
|
3.36
|
|
44.13
|
|
TowneBank
|
|
Portsmouth
|
|
VA
|
|
3,606,451
|
|
64.33
|
|
0.78
|
|
6.11
|
|
3.29
|
|
67.10
|
|
1.24
|
|
3.97
|
|
First
Bancorp
|
|
Troy
|
|
NC
|
|
3,545,356
|
|
65.93
|
|
1.95
|
|
19.24
|
|
3.81
|
|
57.83
|
|
7.24
|
|
56.02
|
|
Hampton
Roads Bankshares, Inc.
|
|
Norfolk
|
|
VA
|
|
3,085,711
|
|
547.85
|
|
0.94
|
|
7.63
|
|
3.89
|
|
61.84
|
|
10.77
|
|
-72.28
|
|
StellarOne
Corporation
|
|
Charlottesville
|
|
VA
|
|
3,033,101
|
|
86.54
|
|
-0.28
|
|
-1.99
|
|
3.39
|
|
73.72
|
|
2.87
|
|
23.85
|
|
Virginia
Commerce Bancorp, Inc.*
|
|
Arlington
|
|
VA
|
|
2,725,297
|
|
39.82
|
|
-1.22
|
|
-13.89
|
|
3.43
|
|
56.33
|
|
5.92
|
|
116.50
|
|
Metro
Bancorp, Inc.
|
|
Harrisburg
|
|
PA
|
|
2,147,759
|
|
15.07
|
|
-0.09
|
|
-1.34
|
|
3.96
|
|
85.49
|
|
2.12
|
|
-20.94
|
|
FNB
United Corp.
|
|
Asheboro
|
|
NC
|
|
2,101,296
|
|
15.74
|
|
-5.20
|
|
-59.02
|
|
3.60
|
|
74.79
|
|
14.09
|
|
-38.34
|
|
Cardinal
Financial Corporation*
|
|
McLean
|
|
VA
|
|
1,976,185
|
|
20.61
|
|
0.57
|
|
5.53
|
|
2.94
|
|
69.68
|
|
0.29
|
|
73.08
|
|
NewBridge
Bancorp
|
|
Greensboro
|
|
NC
|
|
1,946,526
|
|
97.07
|
|
-0.74
|
|
-8.87
|
|
3.18
|
|
85.33
|
|
4.22
|
|
170.37
|
|
First
United Corporation*
|
|
Oakland
|
|
MD
|
|
1,743,736
|
|
29.23
|
|
-0.67
|
|
-11.01
|
|
3.56
|
|
62.92
|
|
5.06
|
|
-41.43
|
|
Capital
Bank Corporation
|
|
Raleigh
|
|
NC
|
|
1,734,668
|
|
21.95
|
|
-0.40
|
|
-4.62
|
|
3.14
|
|
79.21
|
|
4.59
|
|
-20.80
|
|
First
Mariner Bancorp*
|
|
Baltimore
|
|
MD
|
|
1,384,552
|
|
9.60
|
|
-1.69
|
|
-53.81
|
|
2.43
|
|
104.26
|
|
4.71
|
|
80.00
|
|
Commonwealth
Bankshares, Inc.
|
|
Norfolk
|
|
VA
|
|
1,276,503
|
|
78.48
|
|
-2.26
|
|
-25.71
|
|
3.30
|
|
62.00
|
|
10.70
|
|
-26.57
|
|
Shore
Bancshares, Inc.
|
|
Easton
|
|
MD
|
|
1,156,516
|
|
22.30
|
|
0.65
|
|
5.39
|
|
3.90
|
|
64.43
|
|
1.78
|
|
-17.46
|
|
Republic
First Bancorp, Inc.
|
|
Philadelphia
|
|
PA
|
|
1,008,642
|
|
-0.02
|
|
-1.22
|
|
1.00
|
|
3.13
|
|
106.92
|
|
3.93
|
|
-49.84
|
|
Average
|
|
|
|
|
|
2,180,621
|
|
68.22
|
|
-0.64
|
|
-8.96
|
|
3.36
|
|
72.70
|
|
5.30
|
|
18.32
|
|
25th Percentile
|
|
|
|
|
|
1,384,552
|
|
15.74
|
|
-1.22
|
|
-13.13
|
|
3.14
|
|
79.21
|
|
7.19
|
|
-26.57
|
|
50th Percentile
|
|
|
|
|
|
1,976,185
|
|
29.23
|
|
-0.42
|
|
-3.82
|
|
3.30
|
|
67.10
|
|
4.59
|
|
3.97
|
|
75th Percentile
|
|
|
|
|
|
3,033,101
|
|
65.93
|
|
0.57
|
|
5.39
|
|
3.60
|
|
62.00
|
|
2.87
|
|
56.02
|
|
Eagle
Bancorp, Inc.
|
|
Bethesda
|
|
MD
|
|
1,805,504
|
|
133.43
|
|
0.65
|
|
6.60
|
|
3.85
|
|
64.01
|
|
1.50
|
|
82.09
|
|
Percent Rank
|
|
|
|
|
|
|
|
94
|
%
|
81
|
%
|
89
|
%
|
84
|
%
|
66
|
%
|
91
|
%
|
91
|
%
|
*
Comprises supplemental peer group.
Market Comparison.
The 2009 executive
compensation review was requested by the Committee to assist in discussions
regarding year end compensation decisions including base salary increases for
2010, and both annual and long term incentive payouts for 2009 performance. The market study revealed that Mr. Pauls
base salary was 13% below the market median, which is consistent with the
previous years study. Ms. Riels
and Ms. Foulon-Tonats base salaries were just under the market median,
while the rest of the named executive officers had base salaries near the 75
th
percentile. Cash compensation for 2009 was
also below the market median for Mr. Paul by 21% and near the market
median for Ms. Riel. The rest of
the executive teams cash compensation in 2009 ranged between the 60
th
- 95
th
market
percentiles. Equity grants in 2009 for each of the named executives were market
competitive and improved market
19
positioning. The Company does not provide significant
executive benefits or perquisites, thus total compensation levels for the named
executives were reasonable and not deemed to be excessive.
Based on this study and our performance in 2009, we made the following
compensation decisions for 2010.
·
The Committee agreed to
increase named executives base salaries for 2010 based on their individual
performance and their market standing in the recent compensation study. Our aim is to continue with an overall
compensation philosophy that targets base salaries at the market median and to
establish competitive variable compensation through our performance incentive
plans. However, while we are subject to
the TARP Restrictions, we have less flexibility and expect to be required to
place greater emphasis on base salary and less on incentive compensation in
order to maintain our goal of competitive overall compensation levels. With
respect to Mr. Paul, his base salary increase reflected a three year
absence of salary increases, and a base salary which significantly lagged his
market peers.
·
We are continuing to use the
Senior Executive Incentive Plan as a measure of incentive compensation, and
established performance goals for 2010 using the metrics utilized for 2009,
with some modification of percentage weighting, based on each named executives
areas of responsibility. The intent of
these modifications is to place greater emphasis on asset quality, fee income
and expense control. We expect we will
pay our incentive compensation awards for our most highly compensated employees
and our named executives in long-term restricted stock compliant with the TARP
Restrictions.
401(k) Plan.
Our 401(k) Plan allows
all officers and employees of the Company working 1,000 hours or more in a
calendar year to defer a portion of their compensation, and provides a match of
up to 3% of their base salaries, subject to certain IRS limitations. While the
decision to match employee contributions is discretionary, all employees
receive the same percentage match.
Effective February 2009, we reduced our match to 1.25%, but
reinstated the 3% match in January 2010.
Additional Employee Benefit
Plans.
The Bank also provides
additional benefit programs to employees including health and dental insurance,
life and long term and short term disability insurance.
Employment and Severance
Arrangements.
Each of our
named executive officers has an employment agreement which contains provisions
for payments upon a change in control of the Company, and provides for
noncompetition and nonsolicitation provisions benefiting the Company under
certain circumstances. These agreements
are described in detail under the caption Employment Agreements. The Committee believes that the agreements
provide continuity of executive management, employment security which is
conducive to maximum employee effort and valuable protections for the Company
and its executive officers. All
termination and change in control payments are subject to elimination in
accordance with the TARP Restrictions.
Inter-Relationship of Elements of
Total Compensation.
The various
elements of the compensation package are not interrelated. For example, if it
does not appear as though the target bonus will be achieved, the size of equity
compensation awards will not be affected. While the potential size of an
element of compensation may be expressed as a percentage of base or total
compensation, there is no significant interplay of the various elements of
total compensation between each other. If awards that are granted in one year become
less valuable, or less likely of vesting, the amount of the bonus or base
compensation to be paid the executive officer for the next year is not impacted. Similarly, if equity awards
become extremely valuable, the amount of base compensation or bonus to be
awarded for
the next year
is not affected. While the Board has
discretion to make exceptions to any base compensation or bonus payouts under
existing plans, it has not approved any exceptions to the plans with regard to
any executive officers.
Equity Ownership Guidelines.
We have no equity or
security ownership requirements or guidelines for executive officers, however,
all of the executive officers own common stock or options to purchase common
stock pursuant to our equity compensation plans.
20
Risk
Analysis of Incentive Compensation Programs
In
setting compensation, the Compensation Committees of the Company and Bank also
consider the risks to the Companys shareholders and the achievement of our goals
that may be inherent in our compensation programs. Although a significant
portion of some employees compensation is performance-based and at-risk, we
believe our compensation program is appropriately structured and does not pose
a material risk to the Company. The Compensation Committees of the Company and
the Bank met with our senior risk officer to identify and discuss any risks
associated with named executive officer compensation plans and other employee
incentive compensation plans. The report below outlines our process and the
steps taken to mitigate any risks that were uncovered in our discussions.
Executive Compensation Plan Risk Assessment.
Our senior risk
officer has reviewed all incentive programs, including the Senior Executive
Incentive Plan and the 2006 Stock Plan, and named executive employment
agreements with the Committees, and concluded that none of them considered
individually or as a group, presented any material threat to our capital or
earnings, encouraged taking undue or excessive risks, or encouraged
manipulation of financial data in order to increase the size of an award. These conclusions were based on the
following:
·
The Senior Executive Incentive Plan is a
formal performance-based plan in which the Committee is deeply involved. The Committee establishes Company-wide goals
early in the performance year and communicates these performance goals to the
full Board for their review and approval.
We use a balance of Company-wide goals and individual or departmental
goals and customize the goals each year based on each executives functional
responsibility. The Committee is active in setting and approving the bank-wide
goals each year. The Chief Executive Officer provides input on weighting of
departmental or individual goals for his direct reports. Once these are
presented to the Committee, the Committee will discuss and approve, or revise
the goals for the other named executives.
·
When setting actual goals, we consider not
only our annual budget, but our strategic initiatives and peer performance,
which we believe mitigates risk and keeps executives focused on the long-term
success of the Company. The Committee reviews these performance evaluations
each year, not only to determine final award payouts, but to discuss
developmental opportunities for our named executives. In addition, for any payout to occur, we must
have satisfactory regulatory ratings and reviews.
·
We believe that target and maximum awards are reasonable and competitive
based on market research that was provided by our compensation consultant. We
also pay out on a pro-rata basis for actual performance results that fall in
between threshold, target and maximum levels. We believe this reduces the
likelihood of an executive misstating numbers to reach the next award level or
withholding information to count towards the next performance year.
·
With the adoption of a clawback policy in
early 2009 under the Senior Executive Incentive Plan, which allows us to
recover all or part of a cash or stock incentive award in certain cases of
inaccurate financial statement information that resulted in a restatement of
our financial statements, or on a fraudulent, willful or grossly negligent
misrepresentation, such activities would not be rewarded.
·
The individual named executive officer
employment agreements, which had previously been reviewed by the Compensation
Committees, and which have not been materially modified, provide for the
payment to the each named executive officer of base salaries, certain insurance
benefits, car allowances, and eligibility for participation in our incentive
plans, equity compensation plans and other compensation programs we may adopt,
as well as certain benefits and payments upon termination or a change in
control. None of the agreements provides
for any specific mandatory variable or incentive pay, or any other conditional
compensation. As such, the Committee
believes that none of such agreements present any material threat to our
capital or earnings, encourage taking undue or excessive risks, or encourage
manipulation of financial data in order to increase the size of an award.
Non Executive Compensation Plan Risk Assessment.
Our senior risk
officer reviewed incentive programs in which employees who are not executive
officers participate, with the Compensation Committees. It was concluded that none of these programs
presented any material threat to our capital or earnings, encouraged taking
undue or excessive risks, or encouraged manipulation of financial data in order
to increase the size of an award. The following incentive compensation plans
were reviewed:
21
·
Three producer incentive plans were reviewed;
the Retail Banking, C&I Lending and Commercial Real Estate Lending (CRE). Under these plans, certain employees are
compensated with cash incentives calculated as a specific percentage of salary
or of qualifying loans, deposits and other business they produce. A portion of
the potential compensation under these plans is tied to individual and/or team
performance and paid on an annual basis.
There are also components, such as the collection of loan fees and the
expansion of existing, or the establishing of new, customer deposit accounts,
that are paid quarterly. We believe intrinsic features of these plans protect
us against unnecessary risk taking, including: (i) the plan modifier that
reduces or eliminates incentive payouts when asset quality measures decline or
fall below minimum acceptable levels; (ii) having the individual
production payout paid on an annual basis, which allows us to modify incentive
payouts at the end of the year in light of asset quality issues or other
adverse developments; (iii) a cap (30 to 35%) on the annual individual
producer portion of the plans, which is reasonable relative to market.
·
Consumer Lending and Bank to Business (B2B)
Management Incentive Plan. This plan
rewards the management of these departments providing they meet established
departmental production goals. Department managers can earn 10% to 30% of their
salary based on goal achievement, to be paid on an annual basis. We believe this range of opportunity is
reasonable and there are sufficient checks and balances within these separate
departments regarding underwriting these loans, either credit scored or
adhering to established loan policy guidelines, restricting the ability of
individual lenders to take unnecessary or excessive risks.
Clawback
provisions were added to all incentive compensation plans. All of our incentive plans call for the
employee to be in good standing with no adverse written performance
documentation. Once an employee receives
adverse written documentation for performance, they are ineligible to receive
incentive payments for a minimum of 90 days.
Compensation Committee Report
We have reviewed and discussed the foregoing Compensation Disclosure
and Analysis with management. Based on our review and discussion with
management we have recommended to the Board of Directors that the Compensation
Disclosure and Analysis be included in this proxy statement and incorporated by
reference in our annual report on Form 10-K for the year ended December 31,
2009.
The Compensation Committee certifies that: (1) it has reviewed
with the senior risk officer the named executive officer compensation plans and
has made all reasonable efforts to ensure that these plans do not encourage
named executive officers to take unnecessary and excessive risks that threaten
the value of the Company; (2) it has reviewed with the senior risk officer
the Companys employee compensation plans and has made all reasonable efforts
to limit any unnecessary risks these plans pose to the Company; and (3) it
has reviewed the Companys employee compensation plans to eliminate any
features of these plans that would encourage the manipulation of reported
earnings of the Company to enhance the compensation of any employee.
Members of the Compensation Committee
Philip N. Margolius, Chairman
|
Robert
P. Pincus
|
Leslie M. Alperstein, Ph.D.
|
Norman
R. Pozez
|
Dudley C. Dworken
|
Donald
R. Rogers
|
Harvey M. Goodman
|
Leland
M. Weinstein
|
This report shall not be deemed to be incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, and shall not otherwise be deemed
filed under such acts.
Executive Compensation Tables
The
following table sets forth a comprehensive overview of the compensation for Mr. Paul,
the President of the Company, Mr. Langmead, the Chief Financial Officer of
the Company, and the three most highly compensated
22
executive
officers of the Company (including officers of the Bank) who received total
compensation of $100,000 or more during the fiscal year ended December 31,
2009.
Summary Compensation Table
Name and Principal Position
|
|
Year
|
|
Salary
|
|
Bonus(1)
|
|
Stock
Awards(2)
|
|
Option
Awards(2)
|
|
Non-Equity
Incentive Plan
Compensation
|
|
All
Other
Compensation
|
|
Total
|
|
Ronald D. Paul, President
and Chief Executive Officer of the Company; Chief Executive Officer of the
Bank
|
|
2009
|
|
$
|
350,000
|
|
$
|
1,573
|
(3)
|
$
|
195,037
|
|
$
|
95,041
|
|
$
|
173,425
|
(3)
|
$
|
26,596
|
(4)
|
$
|
841,672
|
|
|
2008
|
|
$
|
350,000
|
|
$
|
74,115
|
|
$
|
|
|
$
|
130,542
|
|
$
|
|
|
$
|
|
|
$
|
554,657
|
|
|
2007
|
|
$
|
350,000
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
350,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James H. Langmead,
Executive
Vice President, Chief Financial
Officer of the Company and Bank
|
|
2009
|
|
$
|
243,100
|
|
$
|
36,463
|
(3)
|
$
|
|
|
$
|
40,905
|
|
$
|
21,249
|
(3)
|
$
|
17,116
|
(5)
|
$
|
358,833
|
|
|
2008
|
|
$
|
243,100
|
|
$
|
|
|
$
|
|
|
$
|
16,682
|
|
$
|
44,118
|
|
$
|
20,465
|
(6)
|
$
|
324,365
|
|
|
2007
|
|
$
|
231,525
|
|
$
|
20,000
|
|
$
|
3,944
|
|
$
|
11,577
|
|
$
|
|
|
$
|
19,697
|
(7)
|
$
|
286,743
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Martha Foulon-Tonat,
Executive
Vice President Chief Lending
Officer of the Bank
|
|
2009
|
|
$
|
243,100
|
|
$
|
36,463
|
(3)
|
$
|
|
|
$
|
42,930
|
|
$
|
47,093
|
(3)
|
$
|
13,402
|
(8)
|
$
|
383,088
|
|
|
2008
|
|
$
|
243,100
|
|
$
|
|
|
$
|
|
|
$
|
15,103
|
|
$
|
39,334
|
|
$
|
16,898
|
(9)
|
$
|
314,374
|
|
|
2007
|
|
$
|
231,525
|
|
$
|
12,500
|
|
$
|
3,944
|
|
$
|
11,577
|
|
$
|
|
|
$
|
16,653
|
(10)
|
$
|
276,198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas D. Murphy,
Executive
Vice President of the Company;
President Retail Banking
|
|
2009
|
|
$
|
243,100
|
|
$
|
36,463
|
(3)
|
$
|
|
|
$
|
19,035
|
|
$
|
34,155
|
(3)
|
$
|
18,048
|
(11)
|
$
|
350,801
|
|
|
2008
|
|
$
|
243,100
|
|
$
|
|
|
$
|
|
|
$
|
13,345
|
|
$
|
33,597
|
|
$
|
21,447
|
(12)
|
$
|
311,489
|
|
|
2007
|
|
$
|
231,525
|
|
$
|
12,500
|
|
$
|
3,944
|
|
$
|
11,577
|
|
$
|
|
|
$
|
21,479
|
(13)
|
$
|
281,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Susan G. Riel, Senior
Executive
Vice President Chief Operating
Officer of the Bank
|
|
2009
|
|
$
|
275,600
|
|
$
|
55,724
|
(3)
|
$
|
|
|
$
|
64,800
|
|
$
|
47,486
|
(3)
|
$
|
16,954
|
(14)
|
$
|
460,564
|
|
|
2008
|
|
$
|
243,100
|
|
$
|
|
|
$
|
|
|
$
|
16,682
|
|
$
|
46,423
|
|
$
|
20,350
|
(15)
|
$
|
326,555
|
|
|
2007
|
|
$
|
231,525
|
|
$
|
27,500
|
|
$
|
3,944
|
|
$
|
11,577
|
|
$
|
|
|
$
|
20,367
|
(16)
|
$
|
294,912
|
|
(1)
Reflects amounts earned
pursuant to the discretionary awards under Companys Senior Executive Incentive
Plan, except for
Mr. Paul in respect of 2008. Amounts shown are
earned and accrue in the year indicated and are paid in the following year.
(2)
Represents the grant date
fair value of awards of restricted stock or performance based restricted stock
(in the case of Stock Awards) and options and SARs (in the case of Option
Awards) granted during 2009. Please
refer to note 13 to the Companys Consolidated Financial Statements for the
year ended December 31, 2009 for a discussion of the assumptions used in
calculating the grant date fair value.
(3)
In accordance with the
requirements of the TARP Restrictions, the amounts shown were paid in the form
of long-term restricted stock based upon the fair value of the common stock
on the date of grant, $10.35.
(4)
Includes $18,000 car
allowance, $5,000 insurance premium and
$3,596 401(k) matching contribution.
(5)
Includes $9,000 car
allowance, $4,584 insurance premium and $3,532 401(k) matching
contribution.
(6)
Includes $9,000 car
allowance, $4,172 insurance premium and $7,293 401(k) matching
contribution.
(7)
Includes $9,000 car
allowance, $3,799 insurance premium and $6,898 401(k) matching
contribution.
(8)
Includes $9,000 car
allowance, $970 insurance premium and $3,532 401(k) matching contribution.
(9)
Includes $9,000 car
allowance, $909 insurance premium and $6,928 401(k) matching contribution.
(10)
Includes $9,000 car
allowance, $909 insurance premium and $6,744 401(k) matching contribution.
(11)
Includes $9,000 car
allowance, $5,534 insurance premium and $3,514 401(k) matching
contribution.
(12)
Includes $9,000 car
allowance, $5,534 insurance premium and $6,913 401(k) matching
contribution.
(13)
Includes $9,000 car
allowance, $5,534 insurance premium and $6,945 401(k) matching
contribution.
(14)
Includes $9,000 car
allowance, $4,422 insurance premium and $3,532 401(k) matching
contribution.
(15)
Includes $9,000 car
allowance, $4,422 insurance premium and $6,928 401(k) matching
contribution.
(16)
Includes $9,000 car
allowance, $4,422 insurance premium and $6,945 401(k) matching
contribution.
The
Company does not maintain (i) any defined benefit retirement plans, or (ii) any
nonqualified deferred compensation programs or arrangements.
Employment Agreements.
The Company and Mr. Paul
are parties to an employment agreement governing his service and compensation
as President and Chief Executive Officer of the Company.
The
current term of Mr. Pauls employment agreement expires on December 31,
2012. On each December 31, the term of the agreement automatically extends
for one additional year, unless Mr. Paul has given notice of his intention
not to renew the term. Under his agreement, Mr. Paul is entitled to
receive a current annual base salary of $542,000, subject to periodic increase.
While this reflects significant increase over Mr. Pauls prior salary of
$350,000, Mr. Paul had not had a salary increase since mid-2006, and the
size of the increase reflects the significant increase in the size of the
Companys operations, his increased responsibilities and efforts, and the fact
that his compensation was significantly below that of chief executives
23
of
companies in the Companys peer group.
In January 2009, Mr. Paul was granted incentive options to
purchase 51,737 shares of common stock, and 30,763 shares of restricted stock. Mr. Paul
may receive additional grants of options or restricted stock, and may also
receive a bonus in the discretion of the Board of Directors, subject to the
limitations on bonuses and incentive payments under the TARP Restrictions
during any period when the Company has any securities issued under the CPP held
by the Treasury or another agency of the Federal government. The compensation
under Mr. Pauls employment agreement is in lieu of all other cash fees
for service on the Boards of Directors or any committees of the Company and the
Bank. In the event of termination of Mr. Pauls
employment for any reason other than for cause (as defined), Mr. Paul (or
his estate), is entitled to receive an amount in cash equal to 2.99 times his
then current base salary, subject to certain limitations in the event that his
termination occurs in connection with a change in control (as defined) of the
Company or the Bank, and subject to the provisions of the TARP Restrictions
prohibiting golden parachutes. In
addition, subject to the effect of such provisions, all of Mr. Pauls
options will immediately vest upon any termination.
If Mr. Paul were entitled to receive the termination benefits as
of December 31, 2009, he would receive approximately $1,050,000, or
approximately $718,761 if the termination were in connection with a change in
control. Additionally, in the event of any termination, all of the unvested
options and restricted stock held by Mr. Paul will accelerate and become
immediately exercisable. At December 31,
2009, the inherent value of Mr. Pauls unvested options and restricted
stock was $535,763.
Each of the four other named executive officers has an employment
agreement with the Bank. Each of the agreements expires August 31, 2011.
The table below sets forth the base salary as of December 31, 2009, amount
of Bank paid life insurance (at standard rates), and annual car allowance to
which the named executive officers are entitled. The other named executive officers have
current base salaries as follows: Ms. Foulon-Tonat - $255,000; Mr. Langmead
- $250,000; Mr. Murphy - $255,000; Ms. Riel - $305,000. Each of these officers is also entitled to
participation in all other health, welfare, benefit, stock, option and bonus
plans, if any, generally available to all officers and employees of the Bank or
the Company. Under each agreement if the
officers employment is terminated without cause for reasons other than death,
disability or in connection with a change of control (as defined), he/she would
be entitled to receive continued payment of base salary through the end of the
term of his/her agreement, subject to his/her compliance with the noncompete
and nondisturbance provisions of the agreement. These payments, and the change
in control payment payments discussed below, are potentially subject to
limitation or elimination in accordance with the TARP Restrictions. Each
agreement: (i) limits the executives severance compensation in connection
with an involuntary termination or in connection with any bankruptcy,
liquidation or receivership of the Company to the amount permitted under Section 280G
of the Internal Revenue Code; and (ii) provides for the recovery by the
Company of payments based on financial statements or other criteria that are
later proven to be materially inaccurate. Each of these requirements applies
during the period that the Treasury owns any securities acquired under the CPP.
The noncompete and nondisturbance provisions of the agreements (the Noncompete
Provisions) provide that: (i) for 180 days after termination, or until
the end of the original term of the agreement, whichever is earlier, the
officer will not in any capacity render any services to a bank or savings and
loan or a holding company of a bank or savings and loan, or to any person or
entity that is attempting to form a bank, with respect to any office, branch or
other facility that is (or is proposed to be) located within a thirty-five (35)
mile radius of the location of the Companys headquarters; and (ii) for
twelve (12) months after the last date of employment, the officer will not,
directly or indirectly, induce or attempt to induce any customers, suppliers,
officers, employees, contractors, consultants, agents or representatives of, or
any other person that has a business relationship with, the Company or any of
its parent, subsidiaries and affiliates to discontinue, terminate or reduce the
extent of their relationship with the Company and/or any such parent,
subsidiary or affiliate or to take any action that would disrupt or otherwise
be disadvantageous to any such relationship, or otherwise solicit any customer
or employee of the Company. The amount
to which each of the named executive officers would be entitled to if he/she
were terminated, other than for cause or in connection with a change in
control, as of December 31, 2009 is set forth in the fifth column of the
table below.
In the event of termination of the other named executive officers
respective employment, or reduction in his/her compensation or position or
responsibilities within 120 days before or after a change in control, or the
voluntary termination of employment within the 30 day period following 120 days
after a change in control, each of
24
the
other named executive officers would be entitled to receive a lump sum payment
equal to 2.99 times his/her base salary, subject to adjustment to avoid adverse
tax consequences resulting from characterization of such payment for tax
purposes as a parachute payment, and all unvested stock options, SARs and
restricted stock awards would immediately vest and become exercisable. The
amount of the cash payment which each of the other named executive officers
would be entitled to receive if the change in control termination benefits were
paid as of December 31, 2009 (without adjustment for other amounts which
might be payable as a result of the change in control) is set forth in column 6
of the table below, the value of the accelerated equity awards is set forth in
column 7 of the table below, and the sum of these two amounts is set forth in
column 8.
Column Number
|
1
|
|
2
|
|
3
|
|
4
|
|
5
|
|
6
|
|
7
|
|
8
|
|
Name and Title
|
|
Base
Salary
|
|
Car
Allowance
|
|
Bank
Paid Life
Insurance (at
standard rates)(1)
|
|
Payment
Following
Termination
Without Cause(2)
|
|
Cash
Payment
Upon
Termination in
Connection with
a Change in
Control(2)
|
|
Value of
Equity
Awards
Accelerated
Upon a Change
in Control(3)
|
|
Sum of
Amounts
Payable Upon a
Change in
Control (Sum of
Columns 6 and 7)
|
|
Martha Foulon-Tonat,
Executive Vice President Chief Lending Officer of the Bank
|
|
$
|
243,101
|
|
$
|
9,000
|
|
$
|
750,000
|
|
$
|
405,166
|
|
$
|
682,252
|
|
$
|
119,448
|
|
$
|
801,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James H. Langmead,
Executive Vice President, Chief Financial Officer of the Company and Bank
|
|
$
|
243,101
|
|
$
|
9,000
|
|
$
|
750,000
|
|
$
|
405,166
|
|
$
|
728,696
|
|
$
|
115,318
|
|
$
|
844,014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas D. Murphy,
Executive Vice President of the Company; President Retail Banking
|
|
$
|
243,101
|
|
$
|
9,000
|
|
$
|
750,000
|
|
$
|
405,166
|
|
$
|
722,062
|
|
$
|
70,714
|
|
$
|
792,776
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Susan G. Riel, Senior
Executive Vice President Chief Operating Officer of the Bank
|
|
$
|
275,600
|
|
$
|
9,000
|
|
$
|
750,000
|
|
$
|
459,000
|
|
$
|
707,365
|
|
$
|
164,052
|
|
$
|
871,417
|
|
(1)
The cost of this benefit is
reflected under All Other Compensation in the Summary Compensation Table, and
the amount paid in respect of each officer is reflected in the footnotes to
that table.
(2)
Subject to limitation or
elimination as a result of Treasury regulations under the CPP.
(3)
Reflects the excess of the
last trade price for the Companys common stock on December 31, 2009 over
the exercise or strike price of unvested options and SARs, plus the last trade
price of unvested shares of restricted stock (assuming vesting of the maximum
number of shares subject to the award). Out of the money options and SARs have
been excluded from the calculation.
Grants of Plan-Based Awards
The
following table presents information regarding awards made during 2009 to named
executive officers under the Companys 2006 Stock Plan and Senior Executive
Incentive Plan.
|
|
|
|
Estimated
Future
Payouts Under Non-
Equity Incentive Plan
Awards
|
|
All
Other Stock
Awards: Number
of Shares of Stock
|
|
All
Other Option
Awards: Number
of Securities
Underlying
|
|
Exercise
or Base
Price of Option
|
|
Grant
Date Fair
Value of Stock
and Option
|
|
Name
|
|
Grant
Date
|
|
Target
|
|
or Units
|
|
Options
|
|
Awards
|
|
Awards
|
|
Ronald
D. Paul
|
|
1/8/2009
|
|
$
|
122,500
|
|
30,763
|
|
51,737
|
|
$
|
6.34
|
|
$
|
273,731
|
|
James
H. Langmead
|
|
1/8/2009
|
|
$
|
24,310
|
|
|
|
20,200
|
|
$
|
6.34
|
|
$
|
40,905
|
|
Martha
Foulon-Tonat
|
|
1/8/2009
|
|
$
|
60,775
|
|
|
|
21,200
|
|
$
|
6.34
|
|
$
|
42,920
|
|
Thomas
D. Murphy
|
|
1/8/2009
|
|
$
|
60,775
|
|
|
|
9,400
|
|
$
|
6.34
|
|
$
|
19,035
|
|
Susan
G. Riel
|
|
1/8/2009
|
|
$
|
55,120
|
|
|
|
32,000
|
|
$
|
6.34
|
|
$
|
64,800
|
|
Under the 2006 Stock Plan, the Company can make awards of stock
options, stock appreciation rights (SARs) and restricted stock to employees
of the Company and Bank, including all of the named executive officers. The
payouts under non-equity incentive plan awards reflected in the table represent
the maximum amount of formula payment which the named executive officer could
have earned with respect to 2009 performance under the Senior Executive
Incentive Plan if each of the performance targets established by the Board of
Directors in its capacity as compensation committee were achieved. The aggregate amount which could be earned,
at the target level, represented, in 2009, 10% - 35% of salary. A portion of
the aggregate amount is subject to the achievement of designated Company or
divisional performance targets. Each
such portion is subject to payment only if the target is
25
met
or exceeded in total, with no provision for partial or graduated payments. The targets were established with the
expectation that the goals were stretch goals, representing performance
standards in excess of expected results. Through 2008, Mr. Paul did not
participate in the Senior Executive Incentive Plan. The amounts paid pursuant to the Senior Executive
Incentive Plan in respect of 2009 are reflected in the Summary Compensation
Table above, and represented from 8.7% to 49.6% of base salary for the named
officers. In accordance with the TARP
Restrictions, the amounts shown were paid in the form of long-term restricted
stock based upon the fair value of the common stock on the date of grant,
$10.35.
Outstanding Equity Awards at Fiscal Year-End
The
following table sets forth, on an award by award basis, information concerning
all awards of stock options, SARs and restricted stock held by named executive
officers at December 31, 2009. All
options and SARs were granted with an exercise or base price of 100% of market
value as determined in accordance with the applicable plan. The number of
shares subject to each award and the exercise or base price have been adjusted
to reflect all stock dividends, and stock splits effected after the date of
such award, but have not otherwise been modified.
|
|
Option
Awards
|
|
Stock
Awards
|
|
Name
|
|
Number
of
Securities
Underlying
Unexercised
Options
Exercisable
|
|
Number
of
Securities
Underlying
Unexercised
Options
Unexercisable
|
|
Option
Exercise
Price
|
|
Option
Expiration
Date
|
|
Number
of
Shares or Units
of Stock that
Have Not
Vested
|
|
Market
Value of
Shares or Units of
Stock that have
Not Vested
|
|
Equity
Incentive Plan
Awards:
Number of
Unearned
Shares, Units
or Other Rights
That Have Not
Vested
|
|
Equity
Incentive
Plan Awards:
Market or
Payout Value of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested(1)
|
|
Ronald
D. Paul
|
|
2,031
|
(2)
|
|
|
$
|
3.0740
|
|
3/30/2010
|
|
|
|
|
|
|
|
|
|
|
|
2,031
|
(2)
|
|
|
$
|
3.0740
|
|
6/29/2010
|
|
|
|
|
|
|
|
|
|
|
|
2,031
|
(2)
|
|
|
$
|
2.9780
|
|
9/29/2010
|
|
|
|
|
|
|
|
|
|
|
|
2,031
|
(2)
|
|
|
$
|
3.2200
|
|
12/30/2010
|
|
|
|
|
|
|
|
|
|
|
|
1,911
|
(2)
|
|
|
$
|
3.2660
|
|
3/30/2011
|
|
|
|
|
|
|
|
|
|
|
|
1,054
|
(2)
|
|
|
$
|
5.9170
|
|
6/29/2011
|
|
|
|
|
|
|
|
|
|
|
|
1,007
|
(2)
|
|
|
$
|
6.1860
|
|
9/29/2011
|
|
|
|
|
|
|
|
|
|
|
|
1,144
|
(2)
|
|
|
$
|
5.4600
|
|
12/30/2011
|
|
|
|
|
|
|
|
|
|
|
|
617
|
(2)
|
|
|
$
|
6.4550
|
|
1/30/2012
|
|
|
|
|
|
|
|
|
|
|
|
617
|
(2)
|
|
|
$
|
7.0740
|
|
2/27/2012
|
|
|
|
|
|
|
|
|
|
|
|
620
|
(2)
|
|
|
$
|
8.4720
|
|
3/30/2012
|
|
|
|
|
|
|
|
|
|
|
|
617
|
(2)
|
|
|
$
|
8.2030
|
|
4/29/2012
|
|
|
|
|
|
|
|
|
|
|
|
617
|
(2)
|
|
|
$
|
8.3380
|
|
5/30/2012
|
|
|
|
|
|
|
|
|
|
|
|
620
|
(2)
|
|
|
$
|
7.8270
|
|
6/29/2012
|
|
|
|
|
|
|
|
|
|
|
|
617
|
(2)
|
|
|
$
|
6.0520
|
|
7/30/2012
|
|
|
|
|
|
|
|
|
|
|
|
617
|
(2)
|
|
|
$
|
6.7560
|
|
8/30/2012
|
|
|
|
|
|
|
|
|
|
|
|
620
|
(2)
|
|
|
$
|
6.4550
|
|
9/29/2012
|
|
|
|
|
|
|
|
|
|
|
|
617
|
(2)
|
|
|
$
|
6.6430
|
|
10/30/2012
|
|
|
|
|
|
|
|
|
|
|
|
617
|
(2)
|
|
|
$
|
6.7560
|
|
11/29/2012
|
|
|
|
|
|
|
|
|
|
|
|
620
|
(2)
|
|
|
$
|
7.3480
|
|
12/30/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,382
|
(3)
|
1,193
|
(3)
|
$
|
11.8680
|
|
1/15/2013
|
|
|
|
|
|
|
|
|
|
|
|
617
|
(2)
|
|
|
$
|
7.5310
|
|
1/30/2013
|
|
|
|
|
|
|
|
|
|
|
|
617
|
(2)
|
|
|
$
|
7.9720
|
|
2/27/2013
|
|
|
|
|
|
|
|
|
|
|
|
620
|
(2)
|
|
|
$
|
7.3960
|
|
3/30/2013
|
|
|
|
|
|
|
|
|
|
|
|
617
|
(2)
|
|
|
$
|
7.3800
|
|
4/29/2013
|
|
|
|
|
|
|
|
|
|
|
|
617
|
(2)
|
|
|
$
|
7.3960
|
|
5/31/2013
|
|
|
|
|
|
|
|
|
|
|
|
620
|
(2)
|
|
|
$
|
8.0690
|
|
6/29/2013
|
|
|
|
|
|
|
|
|
|
|
|
617
|
(2)
|
|
|
$
|
7.3590
|
|
7/30/2013
|
|
|
|
|
|
|
|
|
|
26
|
|
Option
Awards
|
|
Stock
Awards
|
|
Name
|
|
Number
of
Securities
Underlying
Unexercised
Options
Exercisable
|
|
Number
of
Securities
Underlying
Unexercised
Options
Unexercisable
|
|
Option
Exercise
Price
|
|
Option
Expiration
Date
|
|
Number
of
Shares or Units
of Stock that
Have Not
Vested
|
|
Market
Value of
Shares or Units of
Stock that have
Not Vested
|
|
Equity
Incentive Plan
Awards:
Number of
Unearned
Shares, Units
or Other Rights
That Have Not
Vested
|
|
Equity
Incentive
Plan Awards:
Market or
Payout Value of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested(1)
|
|
|
|
617
|
(2)
|
|
|
$
|
7.7460
|
|
8/30/2013
|
|
|
|
|
|
|
|
|
|
|
|
620
|
(2)
|
|
|
$
|
8.1760
|
|
9/29/2013
|
|
|
|
|
|
|
|
|
|
|
|
617
|
(2)
|
|
|
$
|
9.3380
|
|
10/30/2013
|
|
|
|
|
|
|
|
|
|
|
|
617
|
(2)
|
|
|
$
|
9.2520
|
|
11/29/2013
|
|
|
|
|
|
|
|
|
|
|
|
44,616
|
(4)
|
|
|
$
|
9.5050
|
|
12/30/2013
|
|
|
|
|
|
|
|
|
|
|
|
4,207
|
(2)
|
|
|
$
|
9.5050
|
|
12/30/2013
|
|
|
|
|
|
|
|
|
|
|
|
4,207
|
(2)
|
|
|
$
|
9.5050
|
|
12/30/2013
|
|
|
|
|
|
|
|
|
|
|
|
620
|
(2)
|
|
|
$
|
9.5050
|
|
12/30/2013
|
|
|
|
|
|
|
|
|
|
|
|
12,688
|
(5)
|
20,312
|
(5)
|
$
|
17.0140
|
|
10/17/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,500
|
(6)
|
$
|
11.8680
|
|
1/15/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51,737
|
(7)
|
$
|
6.3400
|
|
1/07/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,763
|
(8)
|
$
|
322,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Martha
Foulon-Tonat
|
|
|
|
4,468
|
(9)
|
$
|
15.2050
|
|
2/28/2010
|
|
|
|
|
|
|
|
|
|
|
|
6,506
|
(10)
|
|
|
$
|
3.1700
|
|
7/06/2010
|
|
|
|
|
|
|
|
|
|
|
|
9,109
|
(10)
|
|
|
$
|
5.5710
|
|
5/15/2011
|
|
|
|
|
|
|
|
|
|
|
|
4,647
|
(10)
|
|
|
$
|
5.4060
|
|
12/04/2011
|
|
|
|
|
|
|
|
|
|
|
|
5,111
|
(10)
|
|
|
$
|
7.4450
|
|
5/18/2013
|
|
|
|
|
|
|
|
|
|
|
|
9,295
|
(10)
|
|
|
$
|
9.9350
|
|
1/11/2014
|
|
|
|
|
|
|
|
|
|
|
|
9,295
|
(10)
|
|
|
$
|
10.8980
|
|
1/13/2015
|
|
|
|
|
|
|
|
|
|
|
|
3,299
|
(11)
|
1,651
|
(11)
|
$
|
11.8680
|
|
1/15/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,200
|
(11)
|
$
|
6.3400
|
|
1/08/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
762
|
(12)
|
$
|
7,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James
H. Langmead
|
|
9,295
|
(10)
|
|
|
$
|
11.0650
|
|
1/03/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,468
|
(9)
|
$
|
15.2050
|
|
2/28/2010
|
|
|
|
|
|
|
|
|
|
|
|
3,666
|
(11)
|
1,834
|
(11)
|
$
|
11.8680
|
|
1/15/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,200
|
(11)
|
$
|
6.3400
|
|
1/08/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
762
|
(12)
|
$
|
7,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas
D. Murphy
|
|
|
|
4,468
|
(9)
|
$
|
15.2050
|
|
2/28/2010
|
|
|
|
|
|
|
|
|
|
|
|
15,615
|
(10)
|
|
|
$
|
5.5710
|
|
5/15/2011
|
|
|
|
|
|
|
|
|
|
|
|
6,506
|
(10)
|
|
|
$
|
5.4060
|
|
12/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
5,111
|
(10)
|
|
|
$
|
7.4450
|
|
5/18/2013
|
|
|
|
|
|
|
|
|
|
|
|
9,295
|
(10)
|
|
|
$
|
9.4140
|
|
1/03/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,295
|
(10)
|
|
|
$
|
10.8980
|
|
1/13/2015
|
|
|
|
|
|
|
|
|
|
|
|
2,933
|
(11)
|
1,467
|
(11)
|
$
|
11.8680
|
|
1/15/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,400
|
(11)
|
$
|
6.3400
|
|
1/08/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
762
|
(12)
|
$
|
7,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Susan
G. Riel
|
|
|
|
4,468
|
(9)
|
$
|
15.2050
|
|
2/28/2010
|
|
|
|
|
|
|
|
|
|
|
|
6,506
|
(10)
|
|
|
$
|
3.1700
|
|
7/06/2010
|
|
|
|
|
|
|
|
|
|
|
|
9,109
|
(10)
|
|
|
$
|
5.5710
|
|
5/15/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27
|
|
Option
Awards
|
|
Stock
Awards
|
|
Name
|
|
Number
of
Securities
Underlying
Unexercised
Options
Exercisable
|
|
Number
of
Securities
Underlying
Unexercised
Options
Unexercisable
|
|
Option
Exercise
Price
|
|
Option
Expiration
Date
|
|
Number
of
Shares or Units
of Stock that
Have Not
Vested
|
|
Market
Value of
Shares or Units of
Stock that have
Not Vested
|
|
Equity
Incentive Plan
Awards:
Number of
Unearned
Shares, Units
or Other Rights
That Have Not
Vested
|
|
Equity
Incentive
Plan Awards:
Market or
Payout Value of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested(1)
|
|
|
|
4,647
|
(10)
|
|
|
$
|
5.4060
|
|
12/4/2011
|
|
|
|
|
|
|
|
|
|
|
|
5,111
|
(10)
|
|
|
$
|
7.4450
|
|
5/18/2013
|
|
|
|
|
|
|
|
|
|
|
|
9,295
|
(10)
|
|
|
$
|
9.9350
|
|
1/11/2014
|
|
|
|
|
|
|
|
|
|
|
|
9,295
|
(10)
|
|
|
$
|
10.8980
|
|
1/13/2015
|
|
|
|
|
|
|
|
|
|
|
|
3,666
|
(11)
|
1,834
|
(11)
|
$
|
11.8680
|
|
1/15/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,000
|
(11)
|
$
|
6.3400
|
|
1/08/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
762
|
(12)
|
$
|
7,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Based
on the $10.47 closing price of the common stock on December 31, 2009.
|
(2)
|
Vested
immediately upon grant.
|
(3)
|
Represents
grants of stock options pursuant to Companys 2006 Stock Plan in
Mr. Pauls capacity as a director. Vests in three annual installments
commencing on the date of grant.
|
(4)
|
Represents
grant of stock options pursuant to Companys 1998 Stock Option Plan. Vests in installments, commencing with an
installment of 4,206 shares immediately upon grant,
three annual
installments of 10,520 shares on January 15, 2004 through 2006 and a
final installment of 8,850 shares on January 15, 2007.
|
(5)
|
Represents
grant of stock options pursuant to Companys 2006 Stock Plan. Vests in installments, commencing with an
installment of 933 shares on January 1, 2007, five annual installments
of 5,877 shares on January 1, 2008 through 2012 and a final installment
of 2,679 shares on January 1, 2013.
|
(6)
|
Represents
grants of stock options pursuant to Companys 2006 Stock Plan in
Mr. Pauls capacity as an officer. Vests in installments, commencing
with an installment of 4,584 shares on January 16, 2013, two annual
installments of 8,426 shares on January 16, 2017 and 2018, and a final
installment of 6,064 shares on January 16, 2016.
|
(7)
|
Represents
grants of stock options pursuant to Companys 2006 Stock Plan in
Mr. Pauls capacity as an officer. Vests in installments, commencing
with an installment of 4,421 shares on January 1, 2016 and three annual
installments of 15,772 shares on January 1, 2017 through 2019.
|
(8)
|
Vests
in five substantially equal installments commencing on the first anniversary
of the date of grant.
|
(9)
|
Represents
grant of SARs pursuant to the Companys 2006 Stock Plan. Vests in its entirety on February 1,
2010 if the grantee is continuously employed by the Company through such
date. These SARs were out of the money at the vesting date and expired
without value or the issuance of shares.
|
(10)
|
Represents
grant of stock options pursuant to the Companys 1998 Stock Option Plan. All options have a term of 10 years from
the date of grant. Except as otherwise
indicated, vested in two equal installments, the first on the date of grant
and the second on the first anniversary thereof.
|
(11)
|
Represents
grants of stock options pursuant to the Companys 2006 Stock Plan. Vests in five substantially equal annual
installments, commencing on the first anniversary of the date of grant.
|
(12)
|
Represents
threshold level grant of performance based restricted stock pursuant to the
Companys 2006 Stock Plan. Vests,
subject to satisfaction of designated performance conditions, on
February 1, 2010. These awards vested at the threshold level.
|
28
Options Exercised and Stock
Vested
The
following table sets forth information regarding options exercised by the named
executive officers during 2009, and the aggregate amount realized upon such
exercises, based on the difference between the closing market price on the
exercise date and the exercise or base price.
|
|
Option
Awards
|
|
Stock
Awards
|
|
Name
|
|
Number
of Shares
Acquired on
Exercise
|
|
Value
Realized on
Exercise
|
|
Number
of Shares
Acquired on
Vesting
|
|
Value
Realized on
Vesting
|
|
Ronald D. Paul
|
|
|
|
|
|
|
|
|
|
Martha Foulon-Tonat
|
|
|
|
|
|
|
|
|
|
James H. Langmead
|
|
|
|
|
|
|
|
|
|
Thomas D. Murphy
|
|
9,759
|
|
$
|
62,544
|
|
|
|
|
|
Susan G. Riel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee Benefit Plans.
The Bank provides a benefit
program which includes health and dental insurance, life and long term and
short term disability insurance and a 401(k) plan under which the Company
makes matching contributions up to 3% of an employees salary, for all officers
and employees working 1,000 hours or more in a calendar year.
Equity Compensation Plans.
The Company maintains two
equity compensation plans, the 1998 Stock Option Plan (the 1998 Plan) and the
2006 Stock Plan (the 2006 Stock Plan), each of which has been approved by
shareholders. The purpose of each plan
is to attract, retain, and motivate key officers, employee and directors of the
Company and the Bank by providing them with a stake in the success of the
Company as measured by the value of its shares. In connection with the
acquisition of Fidelity, the Company assumed Fidelitys option plans. Options
to purchase an aggregate of 215,585 shares of common stock (as adjusted) were
assumed in connection with the acquisition, of which 152,619 remained
outstanding as of December 31, 2009. No further options can be granted
under the 1998 Plan or Fidelitys plans.
Under the 2006 Stock Plan, as amended, an aggregate of 1,215,000 shares
of common stock (as adjusted) are subject to issuance upon the exercise of
incentive stock options (ISOs), non-incentive stock options (Non-ISOs) and
SARs, and the award of shares of restricted stock to such employees as the
Committee may designate, and for the issuance of Non-ISOs or restricted stock
to directors and advisory board members of the Company, the Bank, and their
affiliates. In the event of any merger, consolidation, recapitalization,
reorganization, reclassification, stock dividend, split-up, combination of
shares or similar event in which the number or kind of shares is changed
without receipt or payment of consideration by the Company, the number and kind
of shares of stock as to which options, SARs and restricted stock may be
awarded under the 2006 Stock Plan, the affected terms of all outstanding
options, SARs and shares of restricted stock, and the aggregate number of
shares of common stock remaining available for grant under the 2006 Stock Plan
will be adjusted.
The 2006 Stock Plan is administered by a committee (the Stock Option
Committee), appointed by the Board of Directors of the Company, consisting of
not less than three (3) members of the Board. Members of the Stock Option
Committee must be independent within the meaning of the listing requirements of
NASDAQ, may not be employees, and serve at the pleasure of the Board of
Directors. The members of the
Compensation Committee serve as the Stock Option Committee.
The
2006 Stock Plan has a term of ten years from May 26, 2006, its effective
date, after which date no awards may be granted. The maximum term for an option or SAR is ten
years from its date of grant, except that the maximum term of an ISO may not
exceed five years if the optionee owns more than 10% of the common stock on the
date of grant. The expiration of the 2006 Stock Plan, or its termination by the
Committee, will not affect any award then outstanding.
The
exercise price of options under the 2006 Stock Plan may not be less than 100%
of the fair market value of the common stock on the date of grant. In the case of an optionee who owns more than
10% of the outstanding common stock on the date of grant, such option price may
not be less than 110% of fair market value of the shares. The base price
29
of
SARs may not be less than 100% of the fair market value of the common stock on
the date of grant. If the common stock
is listed on a national securities exchange (including the NASDAQ Stock Market)
on the date of grant, then the market value per share will be not less than the
average of the highest and lowest selling price. In the event that the fair
market value per share of the common stock falls below the exercise price of
previously granted options, the Committee will have the authority, with the
consent of the optionee, to cancel outstanding options and to issue new options
with an exercise price equal to the then current fair market price per share of
the common stock, provided that no such repricing will occur without
ratification or approval by the shareholders.
Restricted stock is an award
of shares of common stock that is subject to forfeiture, restrictions against transfer,
meeting specific corporate or individual performance or achievement standards
or goals, or other conditions or restrictions set forth in an award agreement.
The Committee has discretion at the time of making a restricted stock grant to
determine a period of up to five years during which the shares granted will be
subject to restrictions, and the conditions that must be satisfied in order for
the shares of restricted stock to become unrestricted (i.e., vested and
nonforfeitable). For example, the Committee may condition vesting upon a
recipients continued employment or upon the recipients attainment of specific
corporate, divisional, or individual performance or achievement standards or
goals. However, the minimum vesting period for restricted stock is three years
if the vesting is based solely on the passage of time and continued employment,
although vesting may occur ratably over such period; and the minimum
measurement date for vesting of restricted stock based upon performance
criteria is one year. Notwithstanding the foregoing, the Committee may award
shares of restricted stock having terms which comply with TARP Restrictions.
Until a recipients interest
vests, restricted stock is nontransferable and forfeitable. Nevertheless, the
recipient may be entitled to vote the restricted stock and to receive dividends
and other distributions made with respect to restricted stock grants that are
issued subject to forfeiture in the event that the vesting conditions are not
met, as opposed to shares that are issued only upon satisfaction of the
conditions. To the extent that a recipient becomes vested in restricted stock
and has satisfied applicable income tax withholding obligations, the Company
will deliver unrestricted shares of common stock to the recipient. At the end
of the restriction period, the recipient will forfeit to the Company any issued
shares of restricted stock as to which the recipient did not earn a vested
interest during the restriction period, i.e. where the performance based
conditions are not met.
Change in Control.
Notwithstanding
the provisions of any option, SAR or restricted stock award which provide for
its exercise or vesting in installments or subject to conditions, all awards
will be immediately exercisable and fully vested upon the occurrence of a
change in control. At the time of a
change in control that does not constitute a transaction, the participant
shall, at the discretion of the Committee, be entitled to receive cash in an
amount equal to the excess of the fair market value of the common stock subject
to an option or SAR over the exercise price of such shares, in exchange for the
cancellation of such options and SARs by the optionee. Notwithstanding the previous sentence, in no
event may an option or SAR be cancelled in exchange for cash, within the
six-month period following the date of its grant.
In
the event of a change in control that is a transaction, all awards of
options, SARs and restricted stock must be surrendered, and with respect to
each award surrendered, the Board will in its sole and absolute discretion
determine whether the holder of the surrendered award will receive: (1) an
award for the number and kind of shares into which each outstanding share
(other than shares held by dissenting shareholders) is changed or exchanged,
together with an appropriate adjustment to the exercise price; (2) the
number and kind of shares into which each outstanding share (other than shares
held by dissenting shareholders) is changed or exchanged in the transaction that
are equal in market value to the excess of the market value on the date of the
transaction of the shares subject to the option or SAR, over the exercise
price; or (3) a cash payment (from the Company or the successor
corporation) in an amount equal to the excess of the market value on the date
of the transaction of the shares subject to the option or SAR over the exercise
price.
For
purposes of the 2006 Stock Plan, change in control means any one of the
following events: (1) the acquisition of ownership, holding or power to
vote more than 50% of the Banks or Companys voting stock; (2) the
acquisition of the power to control the election of a majority of the Banks or
Companys directors; (3) the exercise of a controlling influence over the
management or policies of the Bank or the Company by any person or by persons
acting as a group (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934); or (4) the failure of Continuing
Directors to constitute at least two-thirds of the Board of Directors of the
Company or the Bank (the Company Board) during any period of two consecutive
years. For purposes of this Plan, Continuing Directors shall
30
include
only those individuals who were members of the Company Board at the Effective
Date and those other individuals whose election or nomination for election as a
member of the Company Board was approved by a vote of at least two-thirds of
the Continuing Directors then in office.
The decision of the Committee as to whether a change in control has
occurred shall be conclusive and binding. Transaction means: (i) the
liquidation or dissolution of the Company; (ii) a merger or consolidation
in which the Company is not the surviving entity; or (iii) the sale or
disposition of all or substantially all of the Companys assets. No adjustment
upon a change in control, a transaction or otherwise may be made in such a
manner as to constitute a modification, within the meaning of Section 424(h) of
the Code, of outstanding ISOs. If, by
reason of any such adjustments, an optionee becomes entitled to new,
additional, or different shares of stock or securities, such new, additional,
or different shares of stock or securities shall thereupon be subject to all of
the conditions and restrictions which were applicable to the shares pursuant to
the option before the adjustment was made.
As of December 31, 2009, the Company had options, SARs which may
only be settled by the issuance of stock, and performance based restricted
stock awards with respect to an aggregate of 1,291,408 shares of common stock
issued and outstanding under all equity compensation plans. The SARS subsequently expired without value
or the issuance of any shares. The
performance based restricted stock awards vested at the threshold level,
resulting in the issuance of an aggregate of 3,048 shares of common stock to
named executive officers, and 3,825 shares to all executive officers. Subsequent to December 31, 2009, 10,000
shares of restricted stock were issued to Mr. Pincus, and restricted stock
was issued to our executive officers as set forth below:
Name
|
|
Restricted
Stock Granted
|
|
Ronald D. Paul
|
|
16,908
|
|
Martha Foulon-Tonat
|
|
8,073
|
|
James H. Langmead
|
|
5,576
|
|
Thomas D. Murphy
|
|
6,823
|
|
Susan G. Riel
|
|
9,972
|
|
All executive officers as group (7 persons)
|
|
54,136
|
|
All of the shares of restricted stock to named executive officers
granted subsequent to December 31, 2009 are long-term restricted stock
which comply with the requirements of the TARP Restrictions. As such, the
shares of long-term restricted stock granted in 2010 reflecting amounts earned
under the Senior Executive Incentive Plan are not vested or transferable prior
to the redemption in full of the Companys CPP preferred stock, with a minimum
period of two years from grant. The
portion reflecting the value of discretionary cash bonuses and/or option grants
vest over five years, 60% on the second anniversary of the date of grant, and
20% on the third and fourth anniversaries, provided that no amount shall vest
prior to the redemption in full of the Companys CPP preferred stock.
Certain Relationships and Related Transactions
The Bank has had, and expects to have in the future, banking
transactions in the ordinary course of business with some of the Companys
directors, executive officers, and employees and their associates. In the past, all of such transactions have
been on substantially the same terms, including interest rates, maturities and
collateral requirements as those prevailing at the time for comparable
transactions with non-affiliated persons and did not involve more than the
normal risk of collectability or present other unfavorable features. Loans to insiders require approval by the
Board of Directors, with any interested director not participating. The Company also applies the same standards
to any other transaction with an insider. Additionally, loans and other related
party transactions involving Company directors must be reviewed and approved by
the Audit Committee.
The maximum aggregate amount of loans (including lines of credit) to
officers, directors and affiliates of the Company during the year ended December 31,
2009 amounted to $18.1 million, representing approximately 9.6% of the Companys
total shareholders equity at December 31, 2009. In the opinion of the Board of Directors, the
terms of these loans are no less favorable to the Bank than terms of the loans
from the Bank to unaffiliated parties.
On December 31, 2009, $16.5 million of loans were outstanding to
individuals who, during 2009, were officers, directors or affiliates of the
Company. At the time each loan was made,
management believed that these loans involved no more than the normal risk of
collectability and did not present other unfavorable features. None of such loans were classified as
Substandard, Doubtful or Loss.
31
The Bank leases certain office space, at a current monthly base rental
of $46,716, excluding certain pass through expenses, from limited liability
companies in which a trust for the benefit of Mr. Pauls children has an
85% interest in one instance and a 51% interest in another.
Mr. Rogers is a partner in the law
firm Shulman, Rogers, Gandal, Pordy & Ecker, P.A. which has provided,
and continues to provide, legal services to the Company and its subsidiaries.
During 2009 and 2008, the Company and its subsidiaries paid aggregate fees of
approximately $745,712 and $428,215 to that firm
.
Ryan Riel, the adult son of Ms. Riel, is employed by the Bank as a
loan officer. During 2009 and 2008, Mr. Riels
compensation was $125,000, plus incentive bonus payments and awards of stock
options. Mr. Riels compensation is
determined on the same basis as all other comparable employees, and is
determined by the Bank Compensation Committee, without any participation or
input by Ms. Riel.
PROPOSAL 2 RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of
Directors has selected Stegman & Company (Stegman) as the Companys
independent registered public accounting firm to audit the Companys financial
statements for the fiscal year ending December 31, 2010. Stegman has audited the financial statements
of the Company since its organization.
Representatives of Stegman are expected to be present at the meeting and
available to respond to appropriate questions. The representatives also will be
provided with an opportunity to make a statement, if they desire.
Services provided to the Company and its subsidiaries by Stegman
in 2009 are described under Fees Paid to Independent Accounting Firm below.
Additional information regarding the Audit Committee is provided in the Report
of the Audit Committee and under the caption Election of Directors -
Committees, Meetings and Procedures of the Board of Directors.
The
Board of Directors recommends that shareholders vote FOR the ratification of
the appointment of Stegman as the Companys independent registered public
accounting firm.
The
affirmative vote of a majority of votes cast on the proposal is required for
adoption of the ratification of the appointment of the independent registered
public accounting firm.
If the shareholders fail to ratify this
appointment, the Audit Committee will reconsider whether to retain Stegman, and
may retain Stegman or another firm, without resubmitting the matter to
shareholders.
Fees Paid to Independent Accounting Firm
Audit Fees.
During 2009,
the aggregate amount of fees billed to the Company by Stegman for services
rendered by it for the audit of the Companys financial statements and review
of financial statements included in the Companys reports on Form 10-Q,
and for services normally provided in connection with statutory and regulatory
filings was $146,175. In 2008, Stegman billed $120,786 for such services.
AuditRelated Fees.
During 2009, the aggregate
amount of fees billed to the Company by Stegman for services related to the
performance of audit services was $38,070.
These services included an audit of
the Companys 401(k) plan and services in connection with the securities
and regulatory filings relating to the Companys capital raising
transactions. During 2008, the aggregate
amount of fees billed to the Company by Stegman for services related to the
performance of audit services was $76,580.
These services included an audit of the Companys 401(k) plan and
services in respect of securities and regulatory filings related to the
Fidelity acquisition and accounting and tax advice relating to the acquisition.
Tax Fees.
During 2009,
the aggregate amount of fees billed to the Company by Stegman for tax advice,
compliance and planning services was $19,068.
In 2008, Stegman billed $10,450 for such services.
All Other Fees.
Stegman did not
bill the Company any amounts for other services in 2009 or 2008.
32
None of the engagements of Stegman to provide
services other than audit services was made pursuant to the
de minimus
exception to the pre-approval
requirement contained in the rules of the Securities and Exchange
Commission and the Companys audit charter.
PROPOSAL 3 - NON-BINDING ADVISORY VOTE ON EXECUTIVE
COMPENSATION
On
February 17, 2009, the President of the United States signed into law the
American Recovery and Reinvestment Act of 2009 (ARRA). ARRA revised Section 111
of the Emergency Economic Stabilization Act to require any recipient of funds
under TARP to permit a separate shareholder vote to approve the compensation of
executives, as disclosed pursuant to the compensation disclosure rules of
the Securities and Exchange Commission. As a result, the Company is providing
shareholders with the opportunity to cast a non-binding advisory vote at the
meeting to approve the compensation of the Companys executives. This proposal,
commonly known as a Say-on-Pay proposal, gives shareholders the opportunity
to endorse or not endorse our executive pay program through the following
resolution:
RESOLVED
, that the shareholders
approve the overall executive compensation policies and procedures employed by
the Company, as described in Compensation Discussion and Analysis and the
tabular disclosure regarding named executive officer compensation (together
with the accompanying narrative disclosure) in this proxy statement for the
2010 Annual Meeting.
Because
this vote is advisory, it will not be binding upon the Board of Directors.
However, the Compensation Committee will take into account the outcome of the
vote when considering future executive compensation arrangements. Under the
ARRA, the vote may not be construed as overruling a decision by such the Board
of Directors, or to create or imply any additional fiduciary duty by the Board.
Shareholders are encouraged to read the sections of
this proxy statement titled Compensation Discussion and Analysis and the
tabular disclosure regarding named executive officer compensation, together
with the accompanying narrative disclosure.
Vote Required
The affirmative vote of a majority of the votes cast
at the meeting on the proposal is required for the approval of this proposal.
It is expected that all of the shares of the
common stock entitled to vote on the proposal over which directors of the
Company exercise voting power will be voted for the proposal.
We
believe are compensation policies are strongly aligned with the long-term
interests of the Company and its shareholders.
As such,
the Board of
Directors recommends that shareholders vote FOR approval of this non-binding
advisory resolution.
FORM 10-K ANNUAL REPORT
The Company will provide, without charge, to any shareholder of record
entitled to vote at the meeting or any beneficial owner of common stock
solicited hereby, a copy of its Annual Report on Form 10-K for the year
ended December 31, 2009 filed with the Securities and Exchange Commission,
upon the written request of such shareholder. Requests should be directed to
Jane E. Cornett, Corporate Secretary, at the Companys executive offices, 7815
Woodmont Avenue, Bethesda, Maryland 20814.
33
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF
1934
Section 16(a) of the Securities Exchange Act of 1934 requires
the Companys directors and executive officers, and persons who own more than ten
percent of the common stock, to file reports of ownership and changes in
ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission, and
to provide the Company with copies of all Forms 3, 4, and 5 they file.
Based
solely upon the Companys review of the copies of the forms which it has
received and written representations from the Companys directors, executive
officers and ten percent shareholders, the Company is not aware of any failure
of any such person to comply with the requirements of Section 16(a),
except that one Form 4 reporting eight transactions for Mr. Alperstein,
one form 4 reporting two transactions for Mr. Gross; two Forms 4 reporting
an aggregate of five transactions for Mr. Murphy, one Form 4
reporting three transactions for Mr. Weinstein, and one Form 4
reporting one transaction for each of Mr. Flynn, Ms. Foulon-Tonat, Mr. Langmead,
Mr. Paul, Mr. Pincus, Ms. Riel, Mr. Rogers and Ms Williams,
were not filed in a timely manner.
OTHER MATTERS
The Board of Directors of the Company is not aware of any other matters
to be presented for action by shareholders at the meeting. If, however, any other matters not now known
are properly brought before the meeting or any adjournment thereof, the persons
named in the accompanying proxy will vote such proxy in accordance with their
judgment on such matters.
SHAREHOLDER PROPOSALS
All shareholder proposals to be presented for consideration at the next
annual meeting and to be included in the Companys proxy materials must be
received by the Company no later than December 13, 2010. Shareholder proposals for nominations for
election as director must be received by the Company no later than January 12,
2011. In order to be eligible for consideration at the next annual meeting of
shareholders, the Company must receive notice of shareholder proposals for
business other than the election of directors to be conducted at the annual
meeting which are not proposed to be included in the Companys proxy materials
not less than thirty and not more than ninety days before the date of the
annual meeting, or if less than forty five days notice of the meeting is given,
by the earlier of two days before the meeting and fifteen days after the notice
of the meeting is mailed.
|
|
By
Order of the Board of Directors
|
|
|
|
|
|
|
|
|
Jane
E. Cornett, Corporate Secretary
|
April 12,
2010
34
FRONT
PROXY - EAGLE BANCORP, INC.
This Proxy is solicited on behalf of the Board of
Directors
The undersigned hereby makes, constitutes and appoints Arthur H. Blitz
and Bruce H. Lee, and each of them (with the power of substitution), proxies
for the undersigned to represent and to vote, as designated below, all shares
of common stock of Eagle Bancorp, Inc. (the Company) which the
undersigned would be entitled to vote if personally present at the Companys
Annual Meeting of Shareholders to be held on May 20, 2010 and at any
adjournment or postponement of the meeting.
This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder.
If no direction is made, this proxy will be voted
FOR
all of the nominees set forth on the reverse side,
FOR
the proposal to ratify the appointment of the independent registered public
accounting firm and
FOR
the
resolution approving the Companys executive compensation.
In addition,
this proxy will be voted at the discretion of the proxy holder(s) upon any
other matter which may properly come before the meeting or any adjournment or
postponement of the meeting.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
BACK
Annual Meeting Proxy Card
A. Election
of Directors
The Board of Directors recommends a vote FOR the listed nominees.
|
|
For
|
|
Withhold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01 - Leslie M. Alperstein
|
|
o
|
|
o
|
|
|
|
|
02 - Dudley C. Dworken
|
|
o
|
|
o
|
|
|
|
|
03 - Harvey M. Goodman
|
|
o
|
|
o
|
|
|
|
|
04 - Neal R. Gross
|
|
o
|
|
o
|
|
|
|
|
05 - Ronald D. Paul
|
|
o
|
|
o
|
|
|
|
|
06 - Robert P. Pincus
|
|
o
|
|
o
|
|
|
|
|
07 - Norman R. Pozez
|
|
o
|
|
o
|
|
|
|
|
08 - Donald R. Rogers
|
|
o
|
|
o
|
|
|
|
|
09 - Leland M. Weinstein
|
|
o
|
|
o
|
|
|
|
|
B. Issue
The Board of Directors recommends a vote FOR the following proposal.
|
|
For
|
|
Against
|
|
Abstain
|
|
|
|
|
|
|
|
Proposal to
ratify the appointment of Stegman & Company as the Companys
independent registered public accounting firm
|
|
o
|
|
o
|
|
o
|
C. Issue
The Board of Directors recommends a vote FOR the following proposal.
|
|
For
|
|
Against
|
|
Abstain
|
|
|
|
|
|
|
|
Non-binding
advisory resolution approving the compensation of our executive officers
|
|
o
|
|
o
|
|
o
|
Please check here if you plan to attend the Annual
Meeting.
o
Authorized Signatures Sign Here This section
must be completed for your instructions to be executed.
Important: Please date and sign
your name as addressed, and return this proxy in the enclosed envelope. When signing as executor, administrator,
trustee, guardian, etc., please give full title as such. If the shareholder is a corporation, the
proxy should be signed in the full corporate name by a duly authorized officer
whose title is stated.
Signature 1 Please keep signature within the box
|
|
Signature 2
Please keep signature within the box
|
|
Date (mm/dd/yyyy)
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