UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the
Registrant
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Filed by a
Party other than the Registrant
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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 Rule 14a-12
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Virginia Commerce 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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x
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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Title of each class 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
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Proposed maximum aggregate value of transaction:
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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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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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Date Filed:
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VIRGINIA COMMERCE BANCORP, INC.
5350 Lee Highway
Arlington, Virginia 22207
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held April 25, 2012
To the Stockholders:
The Annual Meeting of Stockholders of Virginia
Commerce Bancorp, Inc. (the Company) will be held at:
The Tower Club
8000 Towers Crescent Drive, Suite 1700
Vienna, Virginia 22182
on April 25, 2012, at 4:00 p.m. for the following purposes:
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(1)
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To elect as directors the nine (9) nominees named in the enclosed proxy statement to serve until their successors are duly elected and qualified;
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(2)
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To approve, in a non-binding advisory vote, the compensation of our executive officers;
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(3)
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To ratify the appointment of Yount, Hyde & Barbour, P.C. as the Companys independent registered public accountant for the fiscal year ending
December 31, 2012; and
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(4)
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To transact such other business as may properly come before the meeting or any adjournment or postponement of the meeting.
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Stockholders of record as of the close of business on March 9, 2012, 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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/s/ Kenneth R. Lehman
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Kenneth R. Lehman
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Secretary
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March 14, 2012
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 (provided that, if you hold your shares through a bank, broker or other holder of record and you wish to
vote in person, you must bring a legal proxy or brokers proxy card to the meeting as proof of your authority to vote the shares).
VIRGINIA COMMERCE BANCORP, INC.
5350 Lee Highway
Arlington, Virginia 22207
ANNUAL
MEETING OF STOCKHOLDERS
Proxy Statement
INTRODUCTION
This proxy statement is being sent to stockholders of Virginia Commerce Bancorp, Inc., a Virginia 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 Stockholders to be held at 4:00 p.m. on April 25, 2012, and at any adjournment or postponement of the meeting. The purposes of the meeting are:
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(1)
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electing as directors the nine (9) nominees named in this proxy statement to serve until their successors are duly elected and qualified;
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(2)
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approving, in a non-binding advisory vote, the compensation of our executive officers;
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(3)
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ratifying the appointment of Yount, Hyde & Barbour, P.C. (Yount, Hyde & Barbour) as the Companys independent registered public
accountant for the fiscal year ending December 31, 2012; and
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(4)
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transacting such other business as may properly come before the meeting or any adjournment or postponement of the meeting.
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The meeting will be held at:
The Tower Club
8000 Towers Crescent Drive, Suite 1700
Vienna, Virginia 22182
This proxy statement and proxy card are being sent to stockholders of the Company on or about March 21, 2012. A copy of our Annual Report on Form 10-K for the year ended December 31, 2011, which
includes our audited financial statements, also accompanies this proxy statement.
To obtain directions to attend the meeting
and vote in person, please contact Kate Carter at (703) 534-0700.
VOTING RIGHTS AND PROXIES
Voting Rights
Only
stockholders of record at the close of business on March 9, 2012, will be entitled to notice of and to vote at the meeting or any adjournment or postponement of the meeting. On that date, there were 31,809,053 shares of our common stock, par
value $1.00 per share, outstanding. At March 9, 2012, the outstanding common stock was held by approximately an aggregate of 2,500 beneficial stockholders, including 517 stockholders of record. The common stock is the Companys only class
of stock with general voting rights of which shares are outstanding. Each share of common stock is entitled to one vote on all matters submitted to a vote of the stockholders. Stockholders do not have the right to cumulate votes in the election of
directors. The presence at the meeting, 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.
1
Proxies
Properly executed proxies which are received by the Company in time to be voted at the meeting will be voted as specified by the stockholder giving the proxy. In the absence of specific instructions,
proxies received will be voted
FOR
the election of the nine (9) nominees for election as directors in Proposal 1,
FOR
the non-binding advisory resolution approving the compensation of our executive officers in Proposal 2, and
FOR
ratification of the appointment of Yount, Hyde & Barbour as the Companys independent registered public accountant in Proposal 3. Management does not know of any matters other than those described in this proxy statement
that will be brought before the meeting. 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.
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 and votes withheld (including broker non-votes discussed below) 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 stockholders.
Applicable rules determine whether proposals presented at stockholder meetings are routine or
non-routine. If a proposal is routine, a broker or other entity holding shares for an owner in street name generally may vote on the proposal without receiving voting instructions from the owner. If a proposal is non-routine, the broker or other
entity generally may vote on the proposal only if the owner has provided voting instructions. A broker non-vote occurs when a broker or other entity returns a signed proxy card but does not vote shares on a particular proposal because
the proposal is not a routine matter and the broker or other entity has not received voting instructions from the beneficial owner of the shares. The ratification of Yount, Hyde & Barbour as the Companys independent registered public
accountant for the fiscal year ending December 31, 2012 is considered a routine matter, while the election of directors and the non-binding advisory vote to approve executive compensation are considered to be non-routine matters.
With regard to the election of directors, votes may be cast in favor or withheld. If a quorum is present, the nominees receiving the
greatest number of affirmative votes cast in the election of directors, even though less than a majority, will be elected directors. Therefore, votes withheld and broker non-votes will have no effect.
Approval of any other matter (including the non-binding advisory vote to approve executive compensation and the ratification of the
Companys independent registered public accountant) requires an affirmative vote of a majority of the votes cast on the matter. Therefore, abstentions and broker non-votes will have no effect.
It is important that you vote. If your shares are held in street name, except for the ratification of the Companys independent
registered public accountant, your bank or broker may not vote your shares unless you provide them with voting instructions.
If you are a stockholder of record, please sign, date, mark and promptly return 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:
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by submitting a later proxy with respect to the same shares; or
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by sending written notice to Peter A. Converse, President and Chief Executive Officer of the Company, at the address noted above, at any time prior to
the proxy being voted; or
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by voting in person at the meeting.
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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. If your
shares are held in the name of your bank or broker, please follow the instructions provided by your bank or broker to revoke your proxy or change your vote.
Many stockholders 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.
Such stockholders
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should check the voting form or instructions provided by their bank or broker to see which options are available. Stockholders 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 stockholder. To revoke a proxy previously submitted electronically, a
stockholder may simply submit a new proxy at a later date before the taking of the vote at the meeting, in which case, the later submitted proxy will be recorded and the earlier proxy will be revoked.
The enclosed proxy is being solicited on behalf of the Board of Directors of the Company. The cost of this proxy solicitation is being
borne 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, who will not be compensated for any such services. Brokerage firms,
fiduciaries and other custodians who forward soliciting material to the beneficial owners of shares of common stock held of record by them will be reimbursed for their reasonable expenses incurred in forwarding such material. The Company has not
retained a professional proxy solicitor or other firm to assist it, for compensation, with the solicitation of proxies, although it may do so if deemed appropriate. Any proxy solicitor would be paid customary fees and expenses.
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on April 25, 2012.
This Proxy
Statement, Notice of Annual Meeting of Stockholders, form of proxy and our Annual Report for the year ended December 31, 2011, are also available online at:
http://www.snl.com/irweblinkx/GenPage.aspx?IID=4053565&GKP=205602
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VOTING SECURITIES AND PRINCIPAL HOLDERS
Securities Ownership of Directors and Officers
The following table sets
forth certain information as of March 9, 2012, concerning the number and percentage of shares of the Companys common stock beneficially owned by each director, nominee for director and executive officer named in the Summary Compensation
Table in this proxy statement and by the Companys directors and all executive officers as a group. In addition, the table includes information with respect to persons known to the Company who own or may be deemed to own more than five percent
of the Companys common stock as of March 9, 2012. 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. The Company knows of no other person or persons, other than street name nominee owners, who, beneficially or of record, 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.
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Directors and Nominees for Director:
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Number of Shares
Beneficially Owned
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Percentage of Class
Beneficially Owned
(1)
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Leonard Adler, Director
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1,007,720
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(2)
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3.14
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%
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Michael G. Anzilotti, Director
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133,792
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(3)
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0.42
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%
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Thomas A. Burdette, Director
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29,195
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0.09
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%
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Peter A. Converse, Director, President and Chief Executive Officer of the Company, President and Chief Executive Officer of the
Bank
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1,149,866
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(4)
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3.60
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%
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W. Douglas Fisher, Chairman of the Board of Directors
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735,522
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(5)
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2.31
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%
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David M. Guernsey, Vice Chairman of the Board of Directors
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389,916
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(6)
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1.22
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%
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Kenneth R. Lehman, Director and Secretary
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1,414,127
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(7)
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4.45
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%
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Norris E. Mitchell, Director
8560 Georgetown Pike
McLean, Virginia 22102
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1,718,278
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(8)
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5.30
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%
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Todd A. Stottlemyer, Director
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14,079
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(9)
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0.04
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%
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Named Executive Officers Who Are Not Directors:
(1
0
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Wilmer L. Tinley, Jr., Former Interim CFO
(11)
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Richard B. Anderson, Jr., Executive Vice President, CLO
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262,247
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(1
2
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0.82
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%
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Patricia M. Ostrander, Executive Vice President, CAO
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71,041
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(1
3
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0.22
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%
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Steven A. Reeder, Executive Vice President, CDO
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48,910
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(1
4
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0.15
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%
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All directors and executive officers as a group (15 persons)
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6,983,351
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(1
5
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20.93
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%
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Other 5% Stockholders
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Arthur L. Walters
4141 N. Henderson Road
Arlington, Virginia 22203
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2,297,085
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(1
6
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7..22
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%
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The Banc Funds Company. LLC
20 North Wacker Drive, Suite 3300
Chicago, Illinois 60606
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1,888,876
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(1
7
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5.93
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%
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(1)
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Based on 31,809,053 shares outstanding as of March 9, 2012, except with respect to individuals holding options or warrants to acquire common stock exercisable
within sixty days of March 9, 2012 (presently exercisable options and warrants), in which event this column represents the percentage of shares issued and outstanding as of March 9, 2012, plus the number of such options and warrants held
by such person, and in the case of all directors and the executive officers as a group, represents the percentage of shares outstanding as of March 9, 2012, plus the number of such options and warrants held by all such persons as a group.
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.
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(2)
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Includes presently exercisable options and warrants to acquire 265,195 shares of common stock, 198,133 shares held by Adler NN, LLC, over which shares Mr. Adler
has sole voting power, and 2,606 shares of restricted stock over which Mr. Adler has sole voting power but which cannot be transferred prior to vesting.
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(3)
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Includes presently exercisable options and warrants to acquire 90,834 shares of common stock, 38,594 shares held jointly by Mr. Anzilotti and his wife, over which
they share voting and investment power, and 3,768 shares of restricted stock over which Mr. Anzilotti has sole voting power but which cannot be transferred prior to vesting.
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(4)
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Includes presently exercisable options and warrants to acquire 174,739 shares of common stock, and 39,860 shares of restricted stock over which Mr. Converse has
sole voting power but which cannot be transferred prior to vesting. Mr. Converse has pledged 611,044 shares of common stock as collateral.
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(5)
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Includes presently exercisable options and warrants to acquire 96,538 shares of common stock, and 2,606 shares of restricted stock over which Mr. Fisher has sole
voting power but which cannot be transferred prior to vesting. Mr. Fisher has pledged 50,000 shares of common stock as collateral.
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(6)
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Includes presently exercisable options and warrants to acquire 126,538 shares of common stock, 10,265 shares held by Guernsey Office Products, Inc., of which
Mr. Guernsey is Chief Executive Officer and principal shareowner and over which shares Mr. Guernsey has sole voting power, and 2,606 shares of restricted stock over which Mr. Guernsey has sole voting power but which cannot be
transferred prior to vesting.
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(7)
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Includes 552,039 shares held jointly by Mr. Lehman and his wife, over which they share voting and investment power, and 2,606 shares of restricted stock over which
Mr. Lehman has sole voting power but which cannot be transferred prior to vesting. Mr. Lehman has pledged 893,039 shares of common stock as collateral.
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(8)
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Includes presently exercisable options and warrants to acquire 613,570 shares of common stock, and 2,606 shares of restricted stock over which Mr. Mitchell has
sole voting power but which cannot be transferred prior to vesting. Mr. Mitchells options and warrants include 600,000 warrants owned by an LLC in which he has a 50% ownership interest. Mr. Mitchell disclaims beneficial ownership of
300,000 warrants attributable to the interests of other members of the LLC. Mr. Mitchell has pledged 150,000 shares of common stock as collateral.
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(9)
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Includes 2,606 shares of restricted stock over which Mr. Stottlemyer has sole voting power but which cannot be transferred prior to vesting.
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(10)
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Mr. Beauchesne, our former Chief Financial Officer, passed away on February 22, 2011.
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(11)
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Mr. Tinley served as Interim Chief Financial Officer from March 4, 2011 until February 20, 2012; he currently serves as Temporary Finance Support
Officer.
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(12)
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Includes presently exercisable options and warrants to acquire 101,181 shares of common stock, 7,761 shares of restricted stock over which Mr. Anderson has sole
voting power but which cannot be transferred prior to vesting and 107,447 shares held jointly by Mr. Anderson and his wife, over which they share voting and investment power.
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(13)
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Includes 44,886 presently exercisable options and 5,886 shares of restricted stock over which Ms. Ostrander has sole voting power but which cannot be transferred
prior to vesting.
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(14)
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Includes presently exercisable options to acquire 40,286 shares of common stock, 7,007 shares of restricted stock over which Mr. Reeder has sole voting power but
which cannot be transferred prior to vesting and 1,000 shares held jointly by Mr. Reeder and his wife, over which they share voting and investment power.
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(15)
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Includes presently exercisable options and warrants to acquire 1,974,691 shares of common stock. Includes 3,333 shares of restricted stock over which Mr. Merrill,
Executive Vice President and Chief Financial Officer has sole voting power but which cannot be transferred prior to vesting and 1,000 shares and 3,600 presently exercisable options held by Dennis M. Coombe, Executive Vice President Chief
Credit Officer.
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(16)
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Includes presently exercisable options and warrants to acquire 282,844 shares of common stock, 1,617,474 shares held jointly by Mr. Walters and his wife, Lilly D.
Walters, over which they share voting and investment power, 201,340 shares held by C.W. Cobb and Associates, of which Mr. Walters is President and over which shares Mr. Walters has sole voting power, and 1,093 shares of restricted stock
over which Mr. Walters has sole voting power but which cannot be transferred prior to vesting.
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(17)
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According to Schedule 13G filed with the Securities and Exchange Commission on February 9, 2012. The amount shown consists of 281,376 shares owned by Banc Fund VI
L.P., 588,045 shares owned by Banc Fund VII L.P., and 1,019,455 shares owned by Banc Fund VIII L.P. The Banc Funds Company, L.L.C. is the general partner of MidBanc VI L.P., MidBanc VII L.P., and MidBanc VIII L.P., which are the general partners of
Banc Fund VI L.P., Banc Fund VII L.P. and Banc Fund VIII L.P., respectively. The principal shareholder of The Banc Funds Company, L.L.C. is Charles J. Moore. Mr. Moore is the manager of Banc Fund VI L.P., Banc Fund VII L.P. and Banc Fund VIII
L.P. and has voting control and investment power over the shares of common stock owned by Banc Fund VI L.P., Banc Fund VII L.P. and Banc Fund VIII L.P.
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PROPOSAL 1 ELECTION OF DIRECTORS
Nine (9) directors will be
elected at the meeting for a one-year period until the 2013 Annual Meeting of Stockholders and until their successors have been elected and qualified. Unless authority is withheld, all proxies received 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 by the independent directors. Each of the nominees for election as director currently serves as a director. The Board of Directors has determined that each director who served during 2011 and each current director other than
Mr. Converse and Mr. Anzilotti is an independent director as that term is defined in Listing 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 Transactions with Management and
Related Parties and Committees, Meetings and Procedures of the Board of Directors Personnel and Compensation Committee Interlocks and Insider Participation in this proxy statement.
Vote Required
Directors are elected based on a plurality of the votes, which means that the nine (9) nominees receiving the most votes cast will be elected as directors.
The Board of Directors recommends that stockholders vote FOR each of the nominees listed below for election to the Board of Directors.
Director Qualifications
The following paragraphs provide information as of the date of this proxy statement about each nominee. The information presented includes information each director has given us about his age, all
positions he holds, his principal occupation and business experience for the past five years, and the names of other publicly-held companies of which he currently serves as a director or has served as a director during the past five years.
References to service as a director of the Company prior to 1999 refer to the year the individual joined the Board of Directors of the Bank, before the Banks reorganization into a holding company structure. In addition to the information
presented below regarding each nominees specific experience, qualifications, attributes and skills that led our Board to the conclusion that he should serve as director, we also believe that all of our director nominees have a reputation for
integrity, honesty and adherence to high ethical standards. They each have demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to the Company and our Board.
Nominees for Election as Directors
LEONARD ADLER, 76, Director since 1998
Mr. Adler is Chairman of the Board for Adler Financial Group (real estate and investments). Mr. Adler was principal owner of Total Crafts. Mr. Adler has served on the Virginia Commerce
Bancorp, Inc. Board since 1988. We believe Mr. Adlers principal qualifications to serve as a director include his extensive experience in real estate, acquisition, development and management.
5
MICHAEL G. ANZILOTTI, 62, Director since 2004
Mr. Anzilotti served as President of the Company from 2004 until his retirement on July 1, 2010. Prior to that,
Mr. Anzilotti was the President and CEO of First Virginia Bank from 1995 to 2004. Mr. Anzilotti has served and chaired numerous boards over the years, including the Virginia State Chamber of Commerce. Mr. Anzilotti has served on the
Virginia Commerce Bancorp, Inc. Board since 2004. We believe his qualifications to serve as a director stem from his extensive business experience including over 39 years of bank management.
THOMAS E. BURDETTE, 61, Director since 2011
Mr. Burdette is a
licensed certified public accountant and investment advisor. Mr. Burdette is the managing member of Burdette, Smith & Bish LLC, a firm providing certified public accounting and management consulting services since 1978.
Mr. Burdette previously served as a director and chairman of the audit committee for a Northern Virginia bank and is active in several local civic organizations. Mr. Burdette was appointed as a director in January 2011 upon recommendation
by several members of the Board, including management and non-management directors, and currently serves as the Chairman of the Audit Committee. We believe his qualifications to serve as a director stem from his extensive accounting and investing
advisor experience.
PETER A. CONVERSE, 61, President and Chief Executive Officer of the Company and the Bank; Director since 1994
Mr. Converse joined the Bank in 1994. Prior to that, Mr. Converse was the Senior Vice President/Chief Lending
Officer for Federal Capital Bank from March 1992 to December 1993; Senior Vice President of Bank of Maryland from October 1990 to March 1992; and Executive Vice President/Chief Lending Officer, Century National Bank from May 1986 to July 1990 and
Senior Vice President/Chief Lending Officer, Central National Bank from July 1979 to April 1986. Mr. Converse has served on the Virginia Commerce Bancorp, Inc. Board since 1994. We believe his qualifications to serve as a director stem from his
extensive banking experience of over 38 years.
W. DOUGLAS FISHER, 74, Chairman of the Board of Directors; Director since 1988
Mr. Fisher was a co-founder and Vice President of AZTECH Corporation, a local computer software and systems company
specializing in technology for membership associations nationwide, from 1969 to 1990 and 1992 to 1997. Mr. Fisher was Vice President of Executive Systems, Inc., a software and systems company, from 1990 to 1992. He retired in 1997. He served on
the Arlington Bank Board of Advisors from 1980 to 1986. He also served for 12 years on the board of the non-profit organization, American Running Association. Mr. Fisher has been a director of Virginia Commerce Bancorp, Inc. for 23 years and
was a founding director of the Bank in 1988. He has served as Chairman since 1999. Prior to that he served as the Banks Vice Chairman and Chairman of the Audit Committee. We believe his qualifications to serve as a director stem from his
extensive business experience in technology, banking, and finance and his service over the years on our Board.
DAVID M. GUERNSEY, 64, Vice
Chairman of the Board of Directors; Director since 1988
Mr. Guernsey is founder and CEO of Guernsey Office Products,
Inc., one of the largest independent office products dealers in the United States. Additionally, Mr. Guernsey serves on the board of Comstock Homebuilding Cos. (CHCI), a public company trading on NASDAQ. Mr. Guernsey is on the national
board of The National Federation of Independent Business (NFIB) serving as Chairman. NFIB is the nations largest member-based small business association. Mr. Guernsey has served on the Virginia Commerce Bancorp, Inc. Board since 1989,
currently serving as Vice-Chairman. We believe Mr. Guernseys qualifications to serve as a director include his extensive experience with public companies, broad management and market expertise and his success as an entrepreneur.
KENNETH R. LEHMAN, 53, Secretary of the Board of Directors; Director since 2009
Mr. Lehman is a private investor, attorney and banking entrepreneur. Mr. Lehman was an attorney with the Securities and Exchange
Commission (SEC) from 1988 through 1992, and in 1993 he co-founded a nationally recognized law firm that specializes in securities, mergers and acquisitions, and banking. Mr. Lehman retired from the firm in 2002. Since 2003, he has
co-founded three banks and, over the last five years, he has served as a director of several banks and bank holding companies including publicly traded Tower Bancorp, Inc., where he served as a director through February 2012, and Wayne Savings
Bancshares, Inc., where he served as a director from 2003 through 2007. Mr. Lehman has served on the Virginia Commerce Bancorp, Inc. Board since 2009. We believe Mr. Lehmans qualifications to serve as a director include his
experience as an attorney representing private and public financial institutions, his knowledge of banking and securities laws and regulations, his understanding of the banking industry including bank valuations and mergers and acquisitions, and his
service as a director of other banking institutions and public companies.
6
NORRIS E. MITCHELL, 75, Director since 1988
Mr. Mitchell is the co-owner of Gardner Homes Realtors and is an active investor in real estate throughout the state of Virginia.
Mr. Mitchell was a founding director and has served on the Board since 1988. We believe Mr. Mitchells qualifications to serve as a director include his extensive business and management background relating to real estate, property
management and finance.
TODD A. STOTTLEMYER, 48, Director since 2010
Mr. Stottlemyer is the Chief Executive Officer at Acentia since January 2011. Prior to that, Mr. Stottlemyer was Executive Vice
President and Chief Corporate Services Officer of the Inova Health System from 2009 through December 2010, President and Chief Executive Officer of the National Federation of Independent Business from 2006 through 2009, Chief Executive Officer and
Founder of Apogen Technologies, Inc., President of McGuireWoods Consulting, and Executive Vice President/Chief Financial and Administrative Officer of BTG, Inc., an information technology company from 1998 through 2000. Mr. Stottlemyer has
served on the Board since 2010. We believe Mr. Stottlemyers qualifications to serve as a director include his corporate executive management experience, especially as chief financial officer of a publicly traded company, where he was
responsible for investor relations and mergers and acquisitions, and his service as a director of other companies.
Committees, Meetings
and Procedures of the Board of Directors
Meetings.
The Board of Directors of the Company met twelve (12) times
during 2011. All members of the Board of Directors attended at least 75% of the meetings held by the Board of Directors of the Company and by all committees on which such members served during the 2011 fiscal year or any portion thereof.
Board Leadership Structure and Risk Oversight
. The Company has separated the positions of Chief Executive Officer and Chairman of
the Board as a result of its determination that it is preferable at this time for an independent director to serve as Chairman of the Board. The Chairman of the Board supervises the implementation of the policies adopted or approved by the Board of
Directors and presides at all meetings of the Board. As directors continue to have more oversight responsibilities, especially in the area of risk management, the Company believes it is beneficial to have an independent Chairman of the Board whose
sole focus is on leading the Board. With guidance from the Chairman of the Board, the Chief Executive Officer is responsible for the day-to-day leadership and performance of the Company. The Company believes this structure provides strong leadership
for the Board while positioning the Chief Executive Officer as the leader of the Company. The Company also recognizes, however, that no single leadership model is appropriate at all times and, as a result, the Board periodically reviews its
leadership structure to determine whether changes are warranted.
The Company believes that its current leadership structure
allows the directors to provide effective oversight of the Companys risk management function by receiving and approving recommendations prepared by individuals responsible for risk management. The Audit Committee, comprised solely of
independent directors, assists the Board in fulfilling its oversight responsibilities by periodically reviewing and making recommendations to the Board regarding the adequacy and effectiveness of the Companys risk management and related
programs and activities. Mr. Fisher, the Chairman of the Board, serves on the Audit Committee and is appropriately positioned to include risk management issues on the agenda for Board meetings as circumstances warrant. As appropriate, the Board
members receive recommendations from the chairman of the Audit Committee regarding significant risks or exposures and the steps management has taken to minimize such risk to the Company. In addition, the Audit Committee also regularly communicates
with the independent chairman of each Board committee regarding the risks within that committees areas of responsibility. The Company believes that this leadership structure promotes effective Board oversight of risk management because, while
the Chief Executive Officer is ultimately accountable for the management of the Companys risks, Board committees, each chaired by an independent director, actively monitor the Companys risk management program, and are provided with the
information necessary to evaluate the specific risks relevant to each committees areas of responsibility.
Audit
Committee.
The Board of Directors has a standing Audit Committee, which is a joint committee of the Company and the Bank. The Audit Committee is responsible for the selection, review and oversight of the
7
Companys independent auditors, the approval of all audit, review and attest services provided by the independent auditors, the integrity of the Companys reporting practices, the
evaluation of the Companys risk management and related programs and activities, and the evaluation of the Companys internal controls and accounting procedures. It also periodically reviews audit reports with the Companys
independent auditors. The Audit Committee is currently comprised of Messrs. Burdette (Chairman), Fisher, Lehman and Mitchell. The same individuals served on the Audit Committee during 2011. Each of the current members of the Audit Committee is, and
each member who served on the Audit Committee in 2011 was, independent as determined under the definition of independence adopted by NASDAQ for audit committee members in Listing Rule 5605(c)(2)(A). 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.vcbonline.com under Investor Relations/Corporate Governance. During the 2011 fiscal year, the Audit Committee met seven
(7) times. The Board of Directors has determined that Mr. Burdette is an audit committee financial expert as defined under regulations of the SEC.
The Audit Committee is also responsible for the pre-approval of all non-audit services provided by the Companys independent auditors. Non-audit services are only provided by the Companys
independent auditors to the extent permitted by law. Pre-approval is required unless a
de minimis
exception is met. To qualify for the
de minimis
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 auditors 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.
Nominations.
The Board of
Directors does not have a standing Nominating Committee. It is the policy of the Board of Directors that all members of the Board of Directors who are independent within the meaning of NASDAQ Listing Rule 5605(a)(2) participate in the nomination of
directors, in order that the broadest viewpoints and perspectives may be brought into the evaluation of sitting directors, the decision whether to seek new directors and the determination and evaluation of potential candidates for nomination as
director. The Board of Directors has adopted a written charter addressing the nominations process. A copy of the charter is available on the Companys website at www.vcbonline.com under Investor Relations/Corporate Governance.
During the 2011 fiscal year, the independent directors performing the nominating function met one (1) time.
While there
are no formal procedures for stockholders to submit recommendations of director candidates, the Board of Directors, or those independent directors performing the nominating function, will consider director candidates recommended by stockholders in
writing during such times as the Board of Directors is actively considering adding new directors. Candidates recommended by stockholders will be evaluated based on the same criteria described below. Stockholders desiring to recommend a candidate for
consideration should send a letter to the Companys Secretary and include: (a) a statement that the writer is a stockholder (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 stockholder 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 stockholder proposed candidates will be fully considered, that all candidates will be considered equally, or that the proponent of any candidate or the recommended
candidate will be contacted by the Company or the Board, and no undertaking to do so is implied by the willingness to consider candidates recommended by stockholders. Any such recommendation must be received no later than January 1, 2013, in
order to be considered by the independent directors for the annual election of directors in 2013.
In addition, in accordance
with the Companys bylaws, any stockholder entitled to vote in the election of directors generally may nominate one or more persons for election as director(s) at a meeting of stockholders if the stockholder gives written notice of his or her
intent to make such nomination to the Secretary of the Company not later than (i) with respect to an election to be held at the annual meeting of stockholders, ninety days prior to the anniversary date of the immediately preceding annual
meeting (January 25, 2013 for the 2013 annual meeting of stockholders), and
8
(ii) with respect to an election to be held at a special meeting of the stockholders for the election of directors, the close of business on the seventh day following the date on which notice of
such meeting is first given to stockholders. In accordance with the Companys bylaws, notice of a stockholder nomination must include: (a) the name and address of the stockholder who intends to make the nomination and of the person or
persons to be nominated; (b) a representation that the stockholder is a holder of record of stock of the Company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons
specified in the notice; (c) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be
made by the stockholder; (d) such other information regarding each nominee proposed by such stockholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the SEC had the nominee been nominated, or
intended to be nominated, by the Board of Directors, including a discussion of the specific experience, qualifications, attributes or skills that led to the conclusion that the nominee should serve as director; and (e) the consent of each
nominee to serve as a director of the Company if so elected.
Criteria for Nominating Directors.
To date, the operations and management of the Company have not required significant expansion of the Board of Directors, and as such, the Board has not developed a formal policy for the identification or evaluation of nominees. In general, if
the Board determined that expansion of the Board or replacement of a director was necessary or appropriate, the Board expects that it would 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, willingness and ability to engage in meaningful and constructive discussion regarding Company issues, and personal qualities
considered by the Companys regulators. The Board believes it should include directors with diverse experience and business knowledge and reviews relevant business experience, taking into consideration such factors as a candidates special
expertise, including expertise that qualifies a person as an audit committee financial expert, membership or influence in a particular geographic or business target market, service on an Advisory Board of the Bank, and the candidates record,
if any, of past service as a director, to ensure an appropriately diverse set of viewpoints and perspectives that reflects the current needs of the Board at such time. In 2011, the Board amended the Companys bylaws to implement a mandatory
retirement age for directors. As amended, the bylaws provide that no person 80 years of age or older will be eligible for election, reelection or appointment to the Board, and no director may continue to serve on the Board beyond the date of the
meeting of stockholders immediately following his or her
80
th
birthday.
The Board has concluded that each director and director nominee possesses the personal traits described above. In considering the
director nominees individual experience, qualifications, attributes and skills, the Board has concluded that the appropriate experience, qualifications, attributes and skills are represented for the Board as a whole and for each of the
Boards committees. In addition, each director and director nominee possesses characteristics that led the Board to conclude that such person should serve as a director. The specific experience, qualifications, attributes and skills that the
Board believes each director and director nominee possesses are discussed under Proposal 1 in the section entitled Nominees for Election as Directors.
Personnel and Compensation Committee.
The Personnel and Compensation Committee is comprised of Messrs. Fisher, Guernsey and Stottlemyer (Chairman), each of whom also served during 2011 and is
independent within the meaning of NASDAQ Listing Rule 5605(a)(2). The Personnel and Compensation Committee is responsible for the adoption of the Companys personnel policies and establishing salary and compensation guidelines and levels for
all Company officers and personnel, as well as making recommendations to the Board of Directors regarding the salary and compensation of all executive officers. The Personnel and Compensation Committee is also responsible for annually recommending
to the Board of Directors the officers of the Company, evaluating the performance thereof and recommending the grant of options and other equity awards, under the Companys equity compensation plans. The Personnel and Compensation Committee
makes recommendations to the Board of Directors on salary, bonus and other compensation matters for executive officers. During the 2011 fiscal year, the Personnel and Compensation Committee met thirteen (13) times. The Board of Directors has
adopted a written charter for the Personnel and Compensation Committee. A copy of the charter is available on the Companys website at www.vcbonline.com under Investor Relations/Corporate Governance. See further information on
compensation below under Executive Officer Compensation.
9
Personnel and Compensation Committee Interlocks and Insider Participation.
No member
of the Personnel and Compensation Committee has served as one of our officers or employees 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 Personnel and 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 parties not related to the Bank, and not presenting more than the normal
risk of collectability or other unfavorable features, no member of the Personnel and Compensation Committee or any of their related interests has any material interest in any transaction involving more than $120,000 to which the Company or the Bank
is a party, except for Mr. Guernsey.
Mr. Guernsey is the founder and CEO of Guernsey Office Products, Inc., which
is one of the Companys suppliers of general office supplies and office furnishings. The Company paid $286,600 to Guernsey Office Products, Inc. during 2011 for office supplies and furnishings, and expects to continue purchasing such items from
Guernsey Office Products, Inc. during 2012.
Stockholder Communications.
Company stockholders who wish to communicate
with the Board of Directors or an individual director can write to Virginia Commerce Bancorp, Inc., 5350 Lee Highway, Arlington, Virginia 22207, Attention: Kate Carter, Assistant to the President and Chief Executive Officer. Your letter should
indicate that you are a stockholder, 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 believes it is
important for all directors to attend the annual meeting of stockholders in order to show their support for the Company and to provide an opportunity for stockholders to communicate any concerns to them. Accordingly, it is the policy of the Company
to encourage all directors to attend each annual meeting of stockholders unless they are unable to attend by reason of personal or family illness or pressing matters. All ten of the Companys serving directors attended the 2011 annual meeting
of stockholders.
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
stockholders 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
financial statements included in the Companys Annual Report on Form 10-K for the year ended December 31, 2011;
(2)
discussed with Yount, Hyde & Barbour, P.C. (Yount, Hyde & Barbour), the Companys independent auditors, the matters required to be discussed by statement of Auditing Standards No. 61,
Communications with
Audit Committees
, as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T; and
(3) received
the written disclosures and letter from Yount, Hyde & Barbour, as required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditors communications with the Audit Committee
concerning independence, and discussed with Yount, Hyde & Barbour, its independence.
10
Based on these reviews and discussions, the Audit Committee has recommended to the Board of Directors that
the audited financial statements be included in the Companys Annual Report on Form 10-K for the year ended December 31, 2011.
|
Members of the Audit Committee
|
|
Thomas E. Burdette, Chairman
|
W. Douglas Fisher
|
Kenneth R. Lehman
|
Norris E. Mitchell
|
11
Director Compensation
The following table sets forth information regarding compensation paid to or earned by non-employee directors during the fiscal year ended December 31, 2011.
Director Compensation for 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
(1)
|
|
Fees Earned or
Paid in Cash
(2)
|
|
|
Stock
Awards
(3)
|
|
|
Option
Awards
(4)
|
|
|
Total
|
|
|
|
|
|
|
Leonard Adler
|
|
$
|
48,000
|
|
|
$
|
8,087
|
|
|
|
|
|
|
$
|
56,087
|
|
|
|
|
|
|
Michael G. Anzilotti
|
|
$
|
48,000
|
|
|
$
|
16,683
|
|
|
|
|
|
|
$
|
64,683
|
|
|
|
|
|
|
Thomas E. Burdette
|
|
$
|
48,000
|
|
|
|
|
|
|
|
|
|
|
$
|
48,000
|
|
|
|
|
|
|
W. Douglas Fisher
|
|
$
|
48,000
|
|
|
$
|
8,087
|
|
|
|
|
|
|
$
|
56,087
|
|
|
|
|
|
|
David M. Guernsey
|
|
$
|
48,000
|
|
|
$
|
8,087
|
|
|
|
|
|
|
$
|
56,087
|
|
|
|
|
|
|
Kenneth R. Lehman
|
|
$
|
48,000
|
|
|
$
|
8,087
|
|
|
|
|
|
|
$
|
56,087
|
|
|
|
|
|
|
Norris E. Mitchell
|
|
$
|
48,000
|
|
|
$
|
8,087
|
|
|
|
|
|
|
$
|
56,087
|
|
|
|
|
|
|
Todd A. Stottlemyer
|
|
$
|
48,000
|
|
|
$
|
8,087
|
|
|
|
|
|
|
$
|
56,087
|
|
|
|
|
|
|
Arthur L. Walters
(5)
|
|
$
|
16,000
|
|
|
$
|
8,087
|
|
|
|
|
|
|
$
|
24,087
|
|
(1)
|
The compensation received by Peter A. Converse, Chief Executive Officer of the Company, for his service as a director is reflected in the Summary Compensation Table
under Salary.
|
(2)
|
Includes fees for service as a director of the Bank, as applicable.
|
(3)
|
The amounts in this column reflect the aggregate grant date fair value of time-based restricted stock awards granted to the non-employee directors on February 23,
2011 (computed in accordance with FASB Accounting Standards Codification Topic 718 excluding the impact of estimated forfeitures), based on the closing price of the Companys stock on the date of grant. In 2011, each director was granted 1,366
shares of restricted stock, with the exceptions of Mr. Anzilotti who received 2,818 and Mr. Burdette who did not receive any shares. At December 31, 2011, each non-employee director held 1,366 shares of unvested time-based restricted
stock, with the exceptions of Mr. Anzilotti, who held 2,818 shares of unvested time-based restricted stock, and Mr. Burdette who did not hold any shares of restricted stock.
|
(4)
|
No options were granted to directors in 2011. At December 31, 2011, the non-employee directors had outstanding option awards, vested and unvested, of common stock
as follows: Mr. Adler 29,191 shares; Mr. Anzilotti 68,241 shares; Mr. Fisher 40,534 shares; Mr. Guernsey 47,622 shares; Mr. Lehman 0 shares; Mr. Mitchell 17,566 shares; and
Mr. Stottlemyer 0 shares.
|
(5)
|
Mr. Walters retired from the Board of Directors on April 27, 2011.
|
The Personnel and Compensation Committee annually reviews and evaluates the compensation of the Board of Directors, including the appropriate mix of cash and equity compensation, and recommends
adjustments to the Board of Directors when appropriate. During the fiscal year ended December 31, 2011, the directors each received a monthly fee of $4,000 to cover attendance at meetings of the Board of Directors of the Company and the Bank,
subject to forfeiture if more than one Board meeting was missed during the year. The directors received no separate compensation for attendance at committee meetings. For 2012, directors will receive a fee of $4,500 per month to cover attendance at
Company and Bank Board and committee meetings, subject to forfeiture if more than one Board meeting is missed during the year. Mr. Converse also received payment of these fees for Board service in 2011, which are reflected in the Summary
Compensation Table. However, beginning in 2012 Mr. Converse will not receive separate fees for Board service.
Non-employee directors are entitled to defer all or a portion of their fees pursuant to the Companys Deferred Compensation Plan
discussed below. No director deferred any fees in 2011 under the plan. The Company does not maintain any non-equity incentive plans or compensation programs, or defined benefit retirement plans, for directors.
In addition to cash compensation for service as directors, non-employee directors are also eligible to receive options and other equity
awards under the Companys equity compensation plan. Equity awards to the non-employee directors are typically granted in January or February each year, in an amount determined by the Board of Directors, based on the recommendation of the
Personnel and Compensation Committee. In February 2011, the Board of Directors, based on the recommendation of the Personnel and Compensation Committee, awarded each non-employee director 1,366 shares of restricted stock for their service during
2010, with the exception of Mr. Anzilotti who was awarded 2,818
12
shares of restricted stock. In determining the size of these awards, the Personnel and Compensation Committee and Board used the same approach that it used for determining the 2011 equity awards
granted to the executive officers, of granting equity awards with a value equal to approximately 20% of the directors cash compensation for 2010 (which for Mr. Anzilotti also includes cash compensation as President for part of 2010).
Mr. Burdette did not receive a restricted stock award in February 2011, as he did not join the Board until January 26, 2011. The restricted stock vests over five years, subject to accelerated vesting upon a change in control and upon
certain terminations of board service.
Executive Officers Who Are Not Directors
The following information is provided with respect to the current executive officers of the Company who are not directors.
|
|
|
|
|
Name
|
|
Age
|
|
Position
(1)
|
|
|
|
Richard B. Anderson, Jr.
|
|
57
|
|
Executive Vice President and Chief Lending Officer
|
|
|
|
Dennis M. Coombe
|
|
64
|
|
Executive Vice President and Chief Credit Officer
|
|
|
|
Christopher J. Ewing
|
|
52
|
|
Executive Vice President and Chief Operations Officer
|
|
|
|
Mark S. Merrill
|
|
35
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
Patricia M. Ostrander
|
|
45
|
|
Executive Vice President and Chief Administrative Officer
|
|
|
|
Steven A. Reeder
|
|
45
|
|
Executive Vice President and Chief Deposit Officer
|
1)
|
These are Bank-level titles. Mr. Merrill is also Chief Financial Officer of the Company.
|
Richard B. Anderson, Jr.
Mr. Anderson, Executive Vice President and Chief Lending Officer of the Bank, joined Virginia
Commerce Bank in May 1996. Prior to joining the Bank, Mr. Anderson was a Senior Vice President and Senior Commercial Loan Officer at Allegiance Bank, N.A., Bethesda, Maryland, (March 1987 to April 1996). Mr. Anderson has over 35 years of
managerial, administrative and operational lending experience.
Dennis M. Coombe
Mr. Coombe, Executive Vice
President and Chief Credit Officer of the Bank, joined Virginia Commerce Bank in November 2009. Prior to joining the Bank, Mr. Coombe was Executive Vice President of United Bank, Vienna, Virginia (February 2000 to November 2009), serving as
Chief Credit Officer, Market President and Senior Lending Officer. Mr. Coombe has over 43 years of management experience, including 40 years of bank lending and credit activities.
Christopher J. Ewing
Mr. Ewing, Executive Vice President and Chief Operations Officer, joined the Bank in November 2011 as
Interim Head of Operations and IT. Prior to joining the Bank, Mr. Ewing was Senior Vice President of Retail Banking Operations and Support Services for Beneficial Bank, Philadelphia, Pennsylvania (2010-2011). In this role Mr. Ewing was
responsible for the creation and execution of the Retail Operations Strategic Plan. Areas of responsibility included deposit operations, ACH & wires, debit cards services, ATM operations, internet banking and customer call center
management. Mr. Ewing also served as Managing Vice President/Executive Vice President, Branch Distribution Support and Training for Capital One Bank, McLean, Virginia (2007-2009). In this role, Mr. Ewing had Operational responsibility for
the organizations 1,000 branch network in an eight state market. Mr. Ewing specific responsibilities focused on branch technology, sales and teller operations, audit, risk management, regulatory compliance and retail training. Mr. Ewing
also served in varying Senior Management roles while employed at Commerce (TD) Bank, Mount Laurel, New Jersey (1999-2007). These roles included; Director of Back Office Operations, (item processing, Federal Reserve Bank settlement, mail center,
courier fleet management), Director of Branch Operations (front-end sales, operational controls, financial integrity) and Director of Branch Support (KYC verification, regulatory reporting, cash control and product management). In addition during
his tenure, Mr. Ewing managed the operations team that opened 200 DeNovo branches over a two year period. Mr. Ewing has over 26 years of experience in the financial services industry.
Mark S. Merrill
Mr. Merrill, Chief Financial Officer of the Company and Executive Vice President and Chief Financial
Officer of the Bank, joined the Company and the Bank in February 2012. Prior to joining the Company and the Bank, Mr. Merrill was Executive Vice President and Chief Financial Officer of Tower Bancorp, Inc., a publicly-traded bank holding
company based in Harrisburg, Pennsylvania, serving in this role from March 2009 to February 2012. As Chief Financial Officer of Tower Bancorp, Inc., Mr. Merrill was responsible for oversight of the companys finance, accounting, tax and
financial reporting functions, supervised the investment portfolio and asset-liability management
13
processes, and participated in the companys strategic planning, budgeting and modeling processes. Mr. Merrill also served as Executive Vice President of Graystone Tower Bank, beginning
in such role in March 2009, and served as Chief Financial Officer of Graystone Tower Bank from March 2009 to January 2011. Prior to the merger of Tower Bancorp, Inc. with Graystone Financial Corp., Mr. Merrill served as Executive Vice President
and Chief Financial Officer of Graystone Financial Corp. and Graystone Bank from July 2008 to March 2009 (collectively, Graystone), and served as Senior Vice President and Chief Financial Officer from July 2007 to June 2008, with
oversight for Graystones finance, accounting, tax and financial reporting functions. Mr. Merrill served as Chief Accounting and Risk Officer of Graystone Bank from May 2006 to June 2007 and was responsible for managing financial,
operational and compliance controls, evaluating the impact of new banking and accounting standards, and managing the annual budget process. Mr. Merrill has over 8 years of banking experience, primarily in CFO and accounting roles.
Patricia M. Ostrander
Ms. Ostrander, Executive Vice President and Chief Administrative Officer, joined the Bank in May 1994
as Loan Administration Officer. Prior to joining the Bank, Ms. Ostrander was a Loan Administration Officer at Tysons National Bank, McLean, Virginia (December 1992 to April 1994). Ms. Ostrander has over 23 years of managerial,
administrative and operational lending experience in the banking industry.
Steven A. Reeder
Mr. Reeder,
Executive Vice President and Chief Deposit Officer, joined the Bank in June 2005. Prior to joining the Bank, Mr. Reeder served as Senior Vice President and Retail Banking Manager for BB&Ts branch network in Loudoun, Prince William,
Stafford, and Spotsylvania counties. He served in a similar capacity with First Virginia Bank - Northern Virginia from 2001 until its merger with BB&T in 2003. Mr. Reeder has over 23 years of retail experience in the banking industry.
TRANSACTIONS WITH MANAGEMENT AND RELATED PARTIES
Some of the directors of the Company and Bank or companies with which they are associated, and some of the officers of the Company and
Bank, were customers of, and had banking transactions with, the Bank during the fiscal year ended December 31, 2011. The Company maintains written policies and procedures to strictly control all loans to insiders in accordance with Federal law
(Regulation O). Insiders include any executive officer, director, or principal stockholder and their affiliates and entities which such persons control. All loans and commitments to make loans to such persons by the Bank were made in the ordinary
course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with persons not related to the Company or the Bank and do not involve more than a 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. The maximum aggregate amount of loans (including lines of credit) to officers, directors and affiliates of the Company during 2011 amounted to $46,608,778 representing approximately 16.4% of the Companys total stockholders
equity. The aggregate amount outstanding on such loans at December 31, 2011 was $21,048,911. None of these loans has ever been reported as nonaccrual, past due, restructured or potential problem loans, and all of such loans are current as to
the payment of interest and principal. The Companys Compliance Officer provides an annual report to the Audit Committee on compliance with Regulation O and the Companys policies.
The Company has not adopted a formal policy that covers the review and approval of related person transactions by its Board of Directors
that is separate from the Code of Ethics that applies to directors, officers and all employees of the Company. The Audit Committee reviews all proposed related party transactions for approval. During such a review, the Audit Committee will consider,
among other things, the related persons relationship to the Company, the facts and circumstances of the proposed transaction, the aggregate dollar amount of the transaction, the related persons relationship to the transaction and any
other material information. Those directors that are involved in a proposed related party transaction are excused from the Board and/or Audit Committee meeting during the discussion of and vote on the proposed transaction.
In September 2008, the Company entered into a Purchase Agreement pursuant to which it sold an aggregate of $25 million of 10.20% trust
preferred securities, liquidation amount $1,000 per security (the Preferred Securities), through VCBI Capital Trust IV, a newly formed trust subsidiary organized under Delaware law (the Trust), on a private placement
basis. In connection with the issuance of the Preferred Securities, the Company
14
issued warrants to purchase an aggregate of 1.5 million shares of its common stock to the purchasers of the Preferred Securities (the Warrants and collectively with the Preferred
Securities, the Securities). The Warrants have a term of five years from the date of issuance, and an exercise price of $6.83 per share, which is equal to 120% of the average closing price of the common stock for the five trading
days prior to the closing of the sale of the Securities. No additional consideration was received for the issuance of the Warrants. The gross proceeds to the Company of the sale and issuance of the Securities was $25 million. The sale of the
Securities was consummated on September 24, 2008.
All of the purchasers of the Securities were directors or executive
officers of the Company and/or the Bank, or such persons related parties. The directors and executive officers, or their related parties, purchased Securities as follows: Mr. Adler: $4,000,000 of Preferred Securities and 240,000 Warrants;
Mr. Anderson: $250,000 of Preferred Securities and 15,000 Warrants; Mr. Anzilotti: $500,000 of Preferred Securities and 30,000 Warrants; Mr. Beauchesne: $250,000 of Preferred Securities and 15,000 Warrants; Mr. Converse:
$1,000,000 of Preferred Securities and 60,000 Warrants; Mr. Fisher: $1,000,000 of Preferred Securities and 60,000 Warrants; Mr. Guernsey: $2,000,000 of Preferred Securities and 120,000 Warrants; Mr. Mitchell: $10,000,000 of Preferred
Securities and 600,000 Warrants; and Mr. Walters: $4,500,000 of Preferred Securities and 270,000 Warrants. The Company obtained a fairness opinion from an independent third party financial advisor with respect to the terms of the Securities.
The Company believes that the terms of the Securities and the issuance of Securities are on substantially the same terms as those prevailing at the time for comparable transactions with unrelated persons.
On March 21, 2011, the Company and Mr. Lehman entered into a securities purchase agreement, pursuant to which the Company
agreed to sell to Mr. Lehman an aggregate of 426,000 shares of Common Stock together with Series A Warrants and Series B Warrants to purchase a total of 852,000 shares of Common Stock, for gross proceeds of approximately $2.5 million.
Mr. Lehman received Series A Warrants to purchase up to 426,000 shares of Common Stock, and Series B Warrants to purchase up to 426,000 shares of Common Stock. The purchase price for each share of Common Stock and the related Series A Warrant
and Series B Warrant was $5.87, and each warrant has an exercise price of $5.62. The Series A Warrants were exercisable for a period of seven-months following the closing date and were exercised in full before they expired. The Series B
Warrants, also exercisable for a total of 426,000 shares of common stock, were exercisable for a period of twelve months following the closing date. As of December 31, 2011, no Series B Warrants had been exercised. In March 2012, Series B
Warrants were exercised in full. The Audit Committee and the Board of Directors approved this transaction in advance, with Mr. Lehman not participating in the deliberations.
Mr. Guernseys relationship with the Company disclosed above under Committees, Meetings and Procedures of the Board of
Directors Personnel and Compensation Committee Interlocks and Insider Participation was approved by the Board of Directors in accordance with the policies and procedures described above.
EXECUTIVE OFFICER COMPENSATION
Compensation Discussion and Analysis
In this Compensation Discussion and
Analysis (CD&A), we give an overview and analysis of our compensation program and policies, the material compensation decisions we have made under those programs and policies, and the material factors that we considered in making
those decisions. 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 2011 to Mr. Converse, the
Chief Executive Officer of the Company, Mr. Beauchesne, who served as the Companys Chief Financial Officer during part of 2011, Mr. Tinley, who served as the Companys Interim Chief Financial Officer during part of 2011, and the
three other most highly compensated executive officers of the Company (who are officers of the Bank) who received total compensation of $100,000 or more during the fiscal year ended December 31, 2011, referred to as our named executive
officers.
Compensation Objectives
The primary objective of the Personnel and Compensation Committee with respect to executive compensation is to tie annual and long-term cash and equity incentives to the achievement of measurable Company
and individual
15
performance objectives, thereby aligning the executives incentive with maintaining and increasing stockholder value. We attempt to achieve these objectives through compensation plans that
tie a substantial portion of our named executive officers overall compensation to our financial performance while limiting risk appropriately. Our compensation philosophy is to reward our executives with compensation at market competitive
rates, while rewarding outstanding Bank performance with above-average total compensation.
Process for Determining Executive Compensation
The Personnel and Compensation Committee generally recommends the compensation for our executive officers for approval by
the full Board of Directors. When circumstances warrant immediate action, however, as in the case of hiring Mr. Tinley as Interim Chief Financial Officer in March 2011, executive compensation decisions will be made by the Personnel and
Compensation Committee and then ratified by the full Board of Directors. In making compensation decisions and recommendations regarding executive officers other the Chief Executive Officer, the Personnel and Compensation Committee considers the
recommendations of the Chief Executive Officer.
Use of Compensation Consultant
In late 2010, the Personnel and Compensation Committee engaged the consultant services of Blanchard Chase
(Chase) to provide an updated executive compensation review for the Companys top six executives and to recommend potential improvements regarding existing practices for implementation in 2011. The Personnel and Compensation
Committee requested Chases review, as an objective third party, to summarize issues relative to topics such as competitive executive compensation and incentive practices with the intent to identify appropriate compensation levels. The review
utilized 2009 compensation data from 2010 proxies for a custom peer group of 24 publicly-traded banks
1
, the selection of which was based upon similarities in asset size (assets between $1.5 billion and $5.5 billion as of September 30, 2010) and geographic location (banks located in Delaware,
Maryland, North Carolina, New Jersey, New York, Pennsylvania, Virginia and West Virginia). Twenty of the 24 banks were also in the Companys peer group for 2010. For purposes of the review, Chase increased the executive compensation paid in
2009 for this peer group 6% (3% annually), to reflect general market movement in executive compensation from 2009 to 2011. The review compared the total compensation (salary, annual cash bonus, long-term incentives, all other compensation and
retirement benefits) of the Companys top six executives to the 50
th
percentile of the peer group. For cash compensation (salary and annual cash bonus) comparisons, Chase used a combination of industry survey data and the peer group.
The Personnel and Compensation Committee used the review from Chase to inform its executive compensation
determinations for 2011. In prior years, the Personnel and Compensation Committee generally targeted the Companys executive compensation to the 50
th
percentile level of the peer group, as increased by Chase. For 2011, however, the Personnel and Compensation Committee
recommended matching the 50
th
percentile of this peer
group for establishing the target bonus opportunity under the Executive Incentive Plan, but did not recommend basing salary or equity award decisions for 2011 on a particular percentile of the peer group.
In July 2011, the Personnel and Compensation Committee also engaged Chase to research supplemental executive retirement plans and
executive employment agreement provisions among the banks in the same peer group. Although the Personnel and Compensation Committee determined to defer any decisions regarding a supplemental executive retirement plan, the Personnel and Compensation
Committee used Chases research of executive employment agreement provisions in connection with the preparation of the new executive employment agreements that were entered into March 1, 2012 with six of the Companys executive
officers.
In addition to the executive compensation consulting services discussed above, during 2011 Chase also provided
limited non-executive compensation advice to management in connection with an analysis and design of a salary structure for the Companys non-executive officers. The Personnel and Compensation Committee was aware of managements engagement
of Chase for this project and concluded that it did not constitute a conflict of interest for Chase to provide this service to management. The total amount charged by Chase for this non-executive compensation project was $12,500.
1
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Community Bank System, Inc. (CBU), NBT Bancorp Inc. (NBTB), S&T Bancorp, Inc. (STBA), Union First Market Bankshares Corp. (UBSH), TowneBank (TOWN),
Carter Bank & Trust (CARE), Sandy Spring Bancorp, Inc. (SASR), Sun Bancorp, Inc. (SNBC), First Bancorp (FBNC), Tompkins Financial Corporation (TMP), Hampton Roads Bankshares, Inc. (HMPR), StellarOne Corporation (STEL), Hudson Valley Holding
Corp. (HUVL), Lakeland Bancorp, Inc. (LBAI), Bancorp, Inc. (TBBK), City Holding Company (CHCO), Sterling Bancorp (STL), First Community Bancshares, Inc. (FCBC), Metro Bancorp, Inc. (METR), Cardinal Financial Corporation (CFNL), Univest Corporation
of Pennsylvania (UVSP), Intervest Bancshares Corporation (IBCA), Eagle Bancorp, Inc. (EGBN) and First United Corporation (FUNC).
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16
Participation in Capital Purchase Program
On December 12, 2008, the Company sold a series of its preferred stock and warrants to purchase common stock to the United States
Department of Treasury (the Treasury) under the Troubled Asset Relief Program (TARP) Capital Purchase Program (CPP) created under the Emergency Economic Stabilization Act of 2008 (EESA). As a result of
its participation in the CPP, the Company became subject to certain executive compensation requirements of the EESA. In connection with the Companys participation in the CPP, on December 12, 2008, the Companys senior executive
officers at the time (the SEOs), who are the named executive officers in any year, 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 for participants in the CPP. The
restrictions and limitations of the EESA, as amended by the ARRA, were implemented by interim final rules setting forth the TARP standards on corporate governance and executive compensation, published by the Treasury and effective on June 15,
2009, as updated by technical corrections and by further guidance from the Treasury (collectively, TARP Standards). The period beginning on December 12, 2008, and continuing until the Company redeems the preferred stock issued in
the CPP transaction is referred to as the TARP Period. The restrictions and limitations, as applicable to the Company during a portion or all of the TARP Period, include:
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a prohibition on paying or accruing any bonus, retention award, or incentive compensation to the five most highly compensated employees of the Company
(whether or not SEOs) during the period beginning on June 15, 2009, and continuing until the preferred stock is redeemed, other than certain awards of restricted stock or restricted stock units, certain commission compensation, or bonuses
payable under existing written employment agreements in place as of February 11, 2009;
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a prohibition, during the period beginning on June 15, 2009, and continuing until the preferred stock is redeemed, on making any 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, other than compensation earned for services rendered or accrued benefits, and a
prohibition on the acceleration of vesting due to a departure or a change in control with respect to the named executive officers and the next five most highly compensated employees;
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subjecting bonus, incentive and retention payments made to the named executive officers during the TARP Period and to the Companys next twenty
most highly compensated employees during the period beginning June 15, 2009 and continuing until the preferred stock is redeemed, to repayment (clawback) if based on financial statements or any other performance metric criteria that are later
found to be materially inaccurate;
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a prohibition on providing formal or informal 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 during the period beginning June 15, 2009, and continuing until the preferred stock is redeemed;
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a limitation on the tax deductibility of the portion of a named executive officers annual compensation in excess of $500,000;
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a prohibition during the period beginning June 15, 2009, and continuing until the preferred stock is redeemed on any compensation plan that would
encourage manipulation of reported earnings, encourage behavior focused on short-term results rather than long-term value creation, or encourage the named executive officers to take unnecessary and excessive risks that could threaten the value of
the Company;
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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;
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17
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maintenance of an independent Personnel and Compensation Committee;
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establishment of and compliance with a company-wide policy regarding excessive or luxury expenditures, including entertainment or events, office and
facility renovations, aviation or other transportation services and other activities or events that are not reasonable expenditures for staff development, reasonable performance incentives or similar measures in the ordinary course of business;
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a requirement to include a say-on-pay proposal for a non-binding advisory vote of stockholders at annual meetings held during the TARP
Period, whereby stockholders vote, on a non-binding advisory basis, to approve (or disapprove) the compensation of executives as disclosed pursuant to the executive compensation disclosures included in the proxy statement;
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annual disclosure of certain perquisites and information regarding the Companys compensation consultant;
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a review by the Treasury of any bonus, retention awards or other compensation paid to the named executive officers and the next twenty most highly
compensated employees prior to February 17, 2009, to determine if such payments were inappropriate and negotiate for the reimbursement of such excess payments; and
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annual certifications by the Chief Executive Officer and Chief Financial Officer of compliance with the TARP Standards.
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The restrictions and limitations of the TARP Standards required the Company to implement certain changes to its 2009, 2010 and 2011
executive compensation as noted in the following discussion.
Compensation Components
The key components of our executive compensation program consist of a base salary and performance-based compensation in the form of an
annual cash bonus and equity grants. Base salary and bonus, or cash compensation, have comprised the substantial portion of total executive compensation.
2011 Say on Pay Vote
When recommending executive compensation and
compensation policies, the Personnel and Compensation Committee took into account the results of the shareholders non-binding advisory vote on executive compensation of our named executive officers that took place in April 2011. In that vote,
our shareholders approved the executive compensation as disclosed in the proxy statement for the 2011 Annual Meeting of Shareholders. The Personnel and Compensation Committee believes that the result of this advisory vote (approximately 82% of the
votes cast for approval of the executive compensation) is a strong expression of the shareholders general satisfaction with our current executive compensation programs. Therefore, the Personnel and Compensation Committee has continued to apply
the same principals in determining the amounts and types of executive compensation.
Base Salary
The Personnel and Compensation Committee believes that base salary for named executive officers should be targeted at market competitive
levels while rewarding outstanding Bank performance with above-average total compensation. Base salaries are reviewed annually and adjusted from time to time, based on the Personnel and Compensation Committees review of market data and
assessment of Company and individual executive performance, with input from the Chief Executive Officer. For 2010, based on the recommendation of the Personnel and Compensation Committee, the Board determined that the base salaries for the Chief
Executive Officer and Chief Lending Officer would remain unchanged. However, the Personnel and Compensation Committee and Board determined that base salaries for Ms. Ostrander and Mr. Reeder should be increased to more appropriate market
levels in light of promotions each received in 2010 including new responsibilities. The salary increases took effect in two phases, with the first increase effective January 1, 2010, and the second increase effective July 1, 2010.
Ms. Ostranders total annual increase reflected a change of 38.2% and Mr. Reeders reflected a change of 27.4%. For 2011, the Personnel and Compensation Committee recommended that base salary increases for the named executive
officers be limited to 3% in
18
keeping with the Companys decision to hold average salary increases for 2011 for non-executive officers to 3% in the aggregate. As a result, the Board approved an annual increase of $11,430
for Mr. Converse, an annual increase of $7,004 for Mr. Anderson, an annual increase of $5,500 for Ms. Ostrander and an annual increase of $6,300 for Mr. Reeder. Mr. Tinley was serving in an interim capacity in 2011 and,
therefore, did not receive an annual increase in base salary.
Annual Bonus
In addition to base salary, the Company awards annual cash bonuses to the executive officers. In October 2011, upon the
recommendation of the Personnel and Compensation Committee, the Board of Directors approved a formal, annual cash bonus program for the executive officers, called the Virginia Commerce Bancorp, Inc. Executive Incentive Plan (the Executive
Incentive Plan). The Executive Incentive Plan is a calendar-year plan that provides for the potential payment of annual cash bonus awards to designated executive officers of the Company and its subsidiaries (Participants)
based on the achievement of corporate, department and/or individual performance goals established by the Board of Directors and a subjective assessment of each Participants individual performance by the Board of Directors each year. Cash bonus
awards under this plan will typically be paid in February of each year, based on the achievement and assessment with respect to the preceding year, and subject to discretion of the Personnel and Compensation Committee and the Board of Directors.
The Board of Directors believes that the structure of the Executive Incentive Plan aligns the compensation of the
Companys executive officers with the interests of shareholders and creates value for the Company by rewarding achievement of important performance goals within an appropriate risk setting. In designing the Executive Incentive Plan, the
Personnel and Compensation Committee and Board of Directors evaluated various measures and factors of performance, and determined that the primary corporate performance goal under the Executive Incentive Plan should be the Companys budgeted
amount of net income available to common stockholders for the plan year (the NI Goal). No bonus awards can be earned for a plan year unless the Company achieves a minimum percentage of the NI Goal for that plan year. The
maximum bonus award that may be earned by a Participant under the Executive Incentive Plan for any plan year (consisting of Base Bonus plus any Add-on Bonus, as defined below) is 100% of the Participants Base Salary (as defined below).
The Board of Directors selected Mr. Converse, Mr. Anderson, Ms. Ostrander and Mr. Reeder to participate
in the Executive Incentive Plan in 2011. Due to his status as one of the Companys most highly compensated employees, the Executive Incentive Plan provides that any bonus award earned by Mr. Converse will be paid in shares of restricted
stock (or other equity award) that complies with the TARP Standards. Mr. Tinley was serving in an interim capacity in 2011 and, therefore, did not participate in the plan.
Participants are eligible to earn a cash bonus award consisting of a base bonus award (the Base Bonus) and an add-on bonus
award. The targeted amount of the Base Bonus is equal to a percentage of the Participants annual base salary in effect on the date the bonus targets are established (the Target Bonus and such salary, the Base Salary),
subject to increase or decrease based on the achievement of the corporate, department and/or individual performance goals established by the Board of Directors, as well as the Board of Directors subjective assessment of individual performance,
in each case based upon the recommendation of the Personnel and Compensation Committee. A Participants total potential assessment for a plan year is 100% of the assessment criteria. The assessment criteria for the Chief Executive
Officers Base Bonus for a plan year are as follows: achievement of corporate goals (80%) and subjective assessment of individual performance (20%). The assessment criteria for all other Participants Base Bonus are as follows:
achievement of corporate goals (60%), achievement of individual/department goals (25%), and subjective assessment of individual performance (15%). The corporate goals for a plan year will be the same for all Participants other than the Chief
Executive Officer, whose corporate goals may vary, and may relate to matters such as net income available to common stockholders, loan and deposit growth, net charge-offs, asset quality, return on equity, return on assets, margins, productivity,
soundness or customer satisfaction. The NI Goal for a plan year represents 60% of the Chief Executive Officers total potential assessment, and 40% of all other Participants total potential assessment.
In addition to any Base Bonus amount earned, each Participant will be eligible to earn an add-on bonus if the Company exceeds the NI Goal
for the year by a percentage selected by the Board of Directors (the Excess NI Goal). If the Companys net income available to common stockholders for the year equals or exceeds the Excess NI Goal, the Participant will earn an
add-on bonus amount (the Add-on Bonus) equal to the percentage by which the NI Goal is exceeded, multiplied by the Participants Base Salary. The Board of Directors, in its sole discretion, may increase or decrease the percentage of
the Add-on Bonus on the same basis for all participants.
19
When approving the Executive Incentive Plan in October 2011, the Board
of Directors established Target Bonus amounts and various weightings among corporate and individual performance goals for each Participant, based upon the recommendation of the Personnel and Compensation Committee. The percent of Base Salary
used for the Target Bonus amount for each named executive officer was determined by reference to the percent of base salary earned as a bonus for the equivalent position at the 50
th
percentile of the peer group. The Target Bonus amount for each Participant for 2011 is set forth in the table below.
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Name
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Target Bonus (as percent of Base Salary)
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Peter A. Converse
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45
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%
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Richard B. Anderson, Jr.
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23
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%
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Patricia M. Ostrander
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27
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%
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Steven A. Reeder
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35
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%
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Upon the recommendation of the Personnel and Compensation Committee, the Board of Directors established
the Companys budgeted 2011 net income available to common stockholders as the NI Goal for the 2011 plan year, and selected 90% as the minimum percentage achievement of the NI Goal for bonuses to be earned for 2011, and 110% as the Excess NI
Goal that must be exceeded for Add-on Bonuses to be earned. The Board of Directors also established as corporate goals for 2011, the NI Goal and the Companys 2011 budgeted amounts for net loan growth (or, for Mr. Converse only, net loan
growth and net commercial and industrial loan growth), net deposit growth, the ratio of non-performing assets to total assets, and net charge-offs.
The Board of Directors set individual or department goals for 2011 for the non-CEO Participants as follows:
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for Mr. Anderson, the Companys 2011 budgeted amounts for net loan growth, net commercial and industrial loan growth, gross loan fee income,
ratio of non-performing assets to total assets, and net charge-offs;
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for Ms. Ostrander, various administrative objectives including development of a salary administration program, completion of the internal audit,
risk management initiatives, development and implementation of training programs, and consumer affairs regulatory ratings; and
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for Mr. Reeder, the Companys 2011 budgeted amounts for net deposit growth, net demand deposit growth, and retail non-interest income, as
well as goals for cross-selling ratio and customer service measures.
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20
The components of the total assessment percentage for each Participant are set forth in the table
below.
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Assessment
Percentage
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Peter A. Converse
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Corporate Performance (incl. NI Goal)
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80
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%
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Subjective Evaluation
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|
20
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%
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Total
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100
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%
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Richard B. Anderson, Jr.
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|
Corporate Performance (incl. NI Goal)
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|
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60
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%
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Individual Performance
|
|
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25
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%
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Subjective Evaluation
|
|
|
15
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%
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Total
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100
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%
|
Patricia M. Ostrander
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|
Corporate Performance (incl. NI Goal)
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|
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60
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%
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Individual Performance
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25
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%
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Subjective Evaluation
|
|
|
15
|
%
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Total
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100
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%
|
Steven A. Reeder
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|
Corporate Performance (incl. NI Goal)
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60
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%
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Individual Performance
|
|
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25
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%
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|
Subjective Evaluation
|
|
|
15
|
%
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|
Total
|
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|
100
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%
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In February 2012, upon the recommendation of the Personnel and Compensation Committee, which reviewed
relevant performance evaluations from the Chief Executive Officer with respect to the non-CEO Participants, the Board of Directors reviewed performance against the corporate performance goals (including the NI Goal) and the individual performance
goals and reviewed the subjective assessment of individual performance for each Participant. The corporate performance goals for 2011 and achievement with respect to those goals, as approved by the Board of Directors, is set forth in the table
below.
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Corporate Performance Goal
|
|
Goal
|
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|
Performance
Achieved
|
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Net Income Available to Common Stockholders (NI Goal)
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$
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21,151,956
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$
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21,790,668
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Net Loan Growth
(non-CEOs)
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|
$
|
111,551,029
|
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|
$
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(42,897,785
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)
|
Net Loan Growth & Net C&I Growth
(CEO only)
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|
$
$
|
111,551,029 &
14,987,742
|
|
|
$
$
|
(42,897,785
33,782,058
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)
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Net Deposit Growth
|
|
$
|
103,798,866
|
|
|
$
|
45,524,208
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|
NPAs/Total Assets
|
|
|
1.78% or less
|
|
|
|
1.63
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%
|
Net Charge-Offs
|
|
$
|
22,000,000 or less
|
|
|
$
|
28,562,071
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The total achievement percentage for each Participant for 2011, as determined by the Board of Directors
on the recommendation of the Personnel and Compensation Committee was for Mr. Converse, 83.5%, Mr. Anderson, 70%, Ms. Ostrander, 82%, and Mr. Reeder, 77%.
Because the Company did not exceed the NI Goal for 2011, upon the recommendation of the Personnel and Compensation Committee, the Board of Directors determined that no Add-on Bonuses were earned for 2011
under the Executive Incentive Plan.
21
In February 2012, based on the results and assessments described above, upon the
recommendation of the Personnel and Compensation Committee, the Board of Directors approved bonus awards for Mr. Converse, Mr. Anderson, Ms. Ostrander and Mr. Reeder under the Executive Incentive Plan of $147,456, $38,439,
$42,188 and $58,293, respectively, provided, however, that due to his status as one of the Companys most highly compensated employees, Mr. Converses bonus award was to be paid in shares of restricted stock that comply with the TARP
Standards, calculated using the closing price of the Companys common stock on the date of grant, and limited to the maximum number of shares he could receive without exceeding the annual limit permitted under the TARP Standards. After applying
this limit, Mr. Converses bonus award was the equivalent in value to $140,990.
Equity Awards
We believe that our long-term interests are best advanced by aligning the interests of our executives and key non-executive officers with
the interests of our stockholders. Accordingly, we have granted options and restricted stock awards to our executives pursuant to our 1998 Stock Option Plan and 2010 Equity Plan. Options that have been granted under these plans are incentive stock
options granted at fair market value at the date of grant.
Equity awards typically are recommended by the Personnel and
Compensation Committee for approval by the Board in January or February each year, and periodically for certain key new officer hires during the year. The Personnel and Compensation Committee makes equity award recommendations, with input from the
Chief Executive Officer (except in the case of awards to the Chief Executive Officer), based on a number of criteria, including the relative rank of the executive within the Company and the Personnel and Compensation Committees subjective
evaluation of the individuals specific contributions to the success of the Company during the prior year.
We believe that options and restricted stock awards serve to enhance stockholder value by aligning the interests of our executives with those of the stockholders and also by helping to retain our named
executive officers through extended vesting periods. As with awards of annual cash bonuses discussed above, equity awards are approved by the Board based on the Personnel and Compensation Committees recommendation. The Personnel and
Compensation Committee has discretion in making these recommendations, but is guided by ranges within tiers according to each officers position. For 2011, these guideline ranges were generally targeted to the 50
th
percentile of the peer group and were from 15% to 35% of base salary
for the named executive officers. In February 2011, the Personnel and Compensation Committee recommended and the Board approved stock option awards to each of the named executive officers, with the exception of Mr. Converse and Mr. Tinley,
determined by multiplying their 2010 salary by 20% and dividing the product by the current Black Scholes value for the Companys common stock. Based on a recommended valuation of one restricted share equaling every three option shares,
Mr. Converse, who is not eligible to receive stock options as one of the Companys five most highly compensated employees under the TARP Standards, received a restricted stock award of shares equal to one third of option shares at 20% of
his 2010 base salary. Mr. Tinley was serving in an interim capacity in 2011 and, therefore, did not receive an equity award.
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 number of options or restricted stock that will
be granted may not be affected. There is no significant interplay of the various elements of total compensation between each other. If options that are granted in one year become underwater, the amount of the bonus or base compensation to be paid
the executive officer for the next year is not impacted. Similarly, if options or restricted stock becomes extremely valuable, the amount of base compensation or bonus to be awarded for the next year is not affected.
401(k) Plan
Our 401(k)
Plan allows substantially all full-time officers and employees of the Bank to defer a portion of their compensation, and provides for a discretionary match of up to 6% of their base salaries and bonus amounts, subject to certain IRS limitations.
While the decision to match employee contributions is discretionary, in general, all employees receive the same percentage match. The Bank did not provide a match for 2009. In 2010 and 2011, the Bank provided for a discretionary match of up to 3% of
officer and employee base salaries for 2010 and 2011.
22
Perquisites
The Company believes that reasonable perquisites are necessary to attract and retain talented executives. For the named executive officers, these perquisites include payment of premiums on medical and
dental insurance, and a long-term care policy, a car allowance or use of a company-owned car, and annual club dues for membership at a golf or social club so that the executive has an appropriate entertainment forum for customers and appropriate
interaction within the community. The Company believes these perquisites are not material to the overall compensation of the named executive officers and that providing such perquisites is necessary to attract and retain talented executives because
many of the Companys competitors offer similar benefits. All perquisites received by the named executive officers are reviewed annually by the Personnel and Compensation Committee.
Stock Ownership and Clawback Policy
We have not adopted formal stock
ownership requirements for our executive officers and directors. We encourage our executive officers and directors to make investments in our Company stock as a long term investment, but do not have a policy related to any required or target levels
of investment. All of the current executive officers and directors own common stock and most hold options to purchase common stock, with the exception of Mark Merrill who currently holds only restricted stock. Pursuant to the TARP Standards, the
Company has adopted a policy providing that any bonus, incentive or retention payment made to a named executive officer or any of the Companys next twenty most highly compensated employees during the TARP Period will be subject to repayment if
the payment is based on financial statements or any other performance metric criteria that are later found to be materially inaccurate.
Employment Agreements; Severance/Change of Control Arrangements
During 2011, no named executive officer had any written employment or severance arrangement, or any agreement providing for a payment upon a change of control of the Company. Since the beginning of his
tenure at the Company, Mr. Converse and the Personnel and Compensation Committee have had an oral agreement to provide him with a change of control benefit, which would pay him one year of base salary in the event of his termination or certain
other events, following a change of control of the Company.
On March 1, 2012, the Company and the Bank entered into an
employment agreement with the Chief Executive Officer setting forth the terms and conditions of his employment (the CEO Agreement), and the Bank entered into employment agreements with the Chief Lending Officer, the Chief Deposit Officer
and the Chief Administrative Officer (collectively, with the CEO Agreement, the Agreements). Each Agreement is effective as of March 1, 2012, with an initial term that continues until February 28, 2014, and renews for
successive one-year periods unless either party provides written notice of non-renewal.
Payments and benefits under each
Agreement are subject to compliance with the TARP Standards and to certain bank regulatory requirements. The Agreements provide for annual base salary, subject to periodic review and adjustment by the Companys Board of Directors or its
designees for the Chief Executive Officer, and by the Banks Board of Directors or its designees for the Chief Lending Officer, Chief Deposit Officer and Chief Administrative Officer. Each Agreement provides that the executive is eligible to
receive equity awards in accordance with the terms and conditions of the Companys 2010 Equity Plan (the 2010 Equity Plan), and is eligible to participate in the Executive Incentive Plan, the Companys annual bonus plan for
executives. In addition, each Agreement provides that the executive is eligible to participate in any employee benefit plans maintained by the Bank (or by the Company and the Bank for the Chief Executive Officer) for the benefit of its senior
executives, such as group medical, disability and life insurance, vacation and sick leave, and a retirement plan. Each Agreement also provides that the executive will be reimbursed for reasonable business expenses. The CEO Agreement also provides
that the Company will pay or reimburse the Chief Executive Officer for country club fees and dues.
The CEO Agreement provides
that the Company will provide the Chief Executive Officer with the use of a car during the term of the agreement and will pay all operational expenses, including taxes, insurance, gasoline, oil, maintenance and other similar expenses. Each Agreement
other than the CEO Agreement provides that the executive will receive a monthly car allowance of $500 during the term of the Agreement.
23
The CEO Agreement provides for an initial annual base salary of $471,292. The Agreement for
the Chief Lending Officer provides for an initial annual base salary of $276,925. The Agreement for the Chief Deposit Officer provides for an initial annual base salary of $250,000. The Agreement for the Chief Administrative Officer provides for an
initial annual base salary of $210,000.
Each Agreement provides that if the executives employment is terminated due to
Incapacity (as defined in the Agreement), the executive is entitled to (1) any unpaid base salary for the time worked through the date of termination; (2) any incentive or bonus compensation due and owing pursuant to the terms of any
incentive or bonus plan; and (3) any benefits due and owing pursuant to the terms of any other plans, policies or programs (the payments and benefits described in (1) through (3) are collectively referred to as the Accrued
Obligations), and, if the termination occurs on or after October 1 of a calendar year but before the end of that year, the executive will be eligible to receive a portion of the annual bonus, if any, to which he or she would have been
entitled under the Executive Incentive Plan for that year (the Pro-Rata Bonus). Each Agreement provides that if the executives employment is terminated due to death, his or her spouse or estate is entitled to the Accrued
Obligations, the Pro-Rata Bonus, and the continued payment of the executives then-current salary for three months.
Each
Agreement other than the CEO Agreement provides that if the executives employment is terminated without Cause (as defined in the Agreements) or if the executive terminates his or her employment for Good Reason (as defined in the Agreements),
the executive is entitled to (1) the Accrued Obligations; and, if the executive delivers a general release to the Bank, he or she will be entitled to (2) the continued payment of his or her then-current salary for the remaining term of the
agreement or for 12 months, whichever is greater; (3) the Pro-Rata Bonus; (4) up to 12 months of continued health care coverage for the executive and his or her spouse and dependents, subject to certain limitations; and
(5) accelerated vesting of outstanding equity awards under the 2010 Equity Plan (the payments and benefits described in (1) through (5) are collectively referred to as the Severance Benefits). The CEO Agreement includes
the same provisions (including the requirement that the Chief Executive Officer deliver a general release to the Company and the Bank in order to be entitled to the payments and benefits described in (2) through (5)), except that the Severance
Benefits for the Chief Executive Officer will include up to 18 months of continued health care coverage for the Chief Executive Officer and his spouse and dependents, subject to certain limitations. Each Agreement provides that the Severance
Benefits shall cease if the executive fails to comply with certain covenants following the termination of his or her employment. For the remaining term of the agreement or for 12 months after his or her employment ceases, whichever is greater, the
executive will not engage in Competition (as defined in the Agreements) with the Bank (or with the Company or the Bank for the Chief Executive Officer) (the Non-Competition Covenant) and, during that same period, will not solicit, divert
or do business with certain depositors or customers of the Bank if the purpose is to provide products or services that compete with the Bank (the Non-Piracy Covenant). In addition, for a period of 12 months after his or her employment
ceases, the executive will not hire or solicit for hire or induce any person to cease his or her employment with the Bank (or with the Company or the Bank for the Chief Executive Officer), if the purpose is to compete with the Company and/or the
Bank (the Non-Solicitation Covenant). Finally, for a period of five years after his or her employment ceases, or for such longer period as may be required by law, the executive will not use or disclose the confidential information of the
Bank (or of the Company or the Bank for the Chief Executive Officer) except as described in the Agreement (the Non-Disclosure Covenant). In the event the executive violates the Non-Competition Covenant, the Non-Piracy Covenant, the
Non-Solicitation Covenant or the Non-Disclosure Covenant, the Severance Benefits shall cease to be paid, provided that, in the event the Bank (or the Company and the Bank for the Chief Executive Officer) are not permitted to pay the Severance
Benefits as a result of the TARP Standards or bank regulatory requirements, the period of the Non-Competition Covenant and the Non-Piracy Covenant shall be reduced to six months from the date the executives employment ceases.
Each Agreement other than the CEO Agreement provides that if the executives employment is terminated without Cause within one year
following a Change of Control (as defined in the Agreements) or if the executive terminates his or her employment for Good Reason within one year following a Change of Control, then, instead of the Severance Benefits described above, the executive
is entitled to (1) the Accrued Obligations; and, if the executive delivers a general release to the Bank, he or she will be entitled to (2) an amount equal to two times his or her then-current salary, payable over 24 months; (3) the
Pro-Rata Bonus; and (4) up to 24 months of continued health care coverage for the executive and his or her spouse and dependents, subject to certain limitations (the payments and benefits described in (1) through (4) are collectively
referred to as the Change of Control Benefits). The CEO Agreement includes the same provisions (including the requirement that the Chief Executive Officer deliver a general
24
release to the Company and the Bank in order to be entitled to the payments and benefits described in (2) through (4)), except that the Change of Control Benefits for the Chief Executive
Officer will include 2.99 times his then-current salary and up to 36 months of continued health care coverage for the Chief Executive Officer and his spouse and dependents, subject to certain limitations. In the event the executives employment
is terminated without Cause within one year following a Change of Control or if the executive terminates his or her employment for Good Reason within one year following a Change of Control, the executive will be obligated to comply with the
Non-Competition Covenant, the Non-Piracy Covenant, the Non-Solicitation Covenant and the Non-Disclosure Covenant, provided that the period of the Non-Competition Covenant and the Non-Piracy Covenant shall be increased to 24 months from the date the
executives employment ceases for such reason within one year following a Change of Control, and provided further that, in the event the Bank (or the Company and the Bank for the Chief Executive Officer) are not permitted to pay the Change of
Control Benefits as a result of the TARP Standards or bank regulatory requirements, the Non-Competition Covenant and the Non-Piracy Covenant shall be eliminated. In the event the executive violates the Non-Competition Covenant (if applicable and as
extended to 24 months), the Non-Piracy Covenant (if applicable and as extended to 24 months), the Non-Solicitation Covenant or the Non-Disclosure Covenant, the Change of Control Benefits shall cease to be paid.
Each Agreement provides that it is intended that any payment made or benefit provided to the executive under the agreement shall not
constitute an excess parachute payment within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the Code). If the Companys auditors determine that any payment or benefit to be made or
provided to the executive in connection with a Change of Control would be nondeductible by the Bank (or by the Company or the Bank for the Chief Executive Officer) under Section 280G of the Code, then the amounts payable under the Agreement and
all other agreements between the executive and the Bank (or between the executive and the Company and the Bank for the Chief Executive Officer) will be reduced to one dollar less than the maximum amount which may be paid without causing such payment
or benefit to be nondeductible. Each Agreement also provides that all of its provisions are to be construed so as to comply with the requirements of Section 409A of the Code or to comply with an exemption from the application of
Section 409A of the Code.
Each Agreement provides that if the executives employment is terminated for Cause or if
the executive terminates his or her employment other than for Good Reason, regardless whether the termination occurs within one year following a Change of Control, the executive is entitled to the payment of any unpaid base salary for the time
worked through the date of termination and the payment of any benefits due and owing pursuant to the terms of any plans, policies or programs.
The above summary of the material terms of the Agreements is qualified in its entirety by reference to the Agreements attached as exhibits to the Current Report on Form 8-K filed by the Company on March
[6], 2012.
As a result of the TARP Standards, each Agreement provides for certain payments and benefits that the executive
will be unable to accrue or receive while he or she is an SEO and/or one of the Companys top five most highly compensated employees prior to the time the Company repays the investment it received under the CPP (the end of the TARP Period).
Each Agreement contains a CPP catch-all provision that essentially provides the payments and benefits will be limited or prohibited to the extent required by the TARP Standards. Until the end of the TARP Period, executives who are
considered SEOs (which for 2012 includes each executive whose Agreement is described above) generally are unable to receive or accrue any payments, benefits or accelerated vesting of equity awards triggered by a Change of Control or by a departure
from the Company or Bank, as applicable, other than compensation earned for services rendered or accrued benefits. In addition, until the end of the TARP Period, executives who are among the Companys top five most highly compensated employees
(which for 2012 includes the Chief Executive Officer) generally are prohibited from receiving any bonus, incentive compensation or retention awards, other than certain long-term restricted stock and/or restricted stock units under the 2010 Equity
Plan. The base salaries and fringe benefits provided under the Agreements are not limited by the TARP Standards.
Under the
terms of the Companys outstanding options and restricted stock, all unvested options and restricted stock fully vests upon a change of control and upon certain terminations of employment. However, during the TARP Period, the TARP Standards
prohibit the acceleration of vesting of equity awards held by the named executive officers and the Companys next five most highly compensated employees due to a departure or most change of control events.
25
Risk Considerations in our Compensation Program
In setting compensation, our Personnel and Compensation Committee also considers the risks to the Companys stockholders and to the
achievement of our goals that may be inherent in our compensation program. Although a significant portion of some employees compensation is performance-based and at-risk, we believe our compensation program, including our
compensation policies and practices, is appropriately structured, does not encourage imprudent risk-taking behavior, is consistent with maintaining the organizations safety and soundness, and does not involve risks that are reasonably likely
to have a material adverse effect on the Company.
Together with the Companys senior risk officer, and as described
further below, the Personnel and Compensation Committee undertook assessments of our compensation program in light of the business risks present in our operations. We considered the following elements of our employee compensation policies and
practices when evaluating whether our compensation program encourages our employees to take inappropriate risks:
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The employee compensation plans are designed to align incentive compensation to the Companys strategic long-term goals.
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We set performance goals that we believe are reasonable in light of past performance and market conditions.
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The time-based vesting over five years for our long-term incentive awards, even after achievement of any performance criteria, ensures that our
executives interests align with those of our stockholders for the long-term performance of the Company.
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Assuming achievement of at least a minimum level of performance, payouts under our performance-based plans result in some compensation at levels below
full target achievement, rather than an all-or-nothing approach.
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The performance-based plans include several performance measures rather than placing undue reliance on a single performance measure, to ensure that the
plans reward behavior in accordance with the Companys overall strategic goals.
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Many employee compensation plans provide for reductions in the amount of incentive compensation in certain circumstances, which reduces the focus on
short-term results.
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The Personnel and Compensation Committee generally retains discretion over incentive payments made under our compensation program and does not approve
payments that reward inappropriate risk-taking behavior.
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The Company has implemented controls and monitoring systems to ensure that incentive payments are appropriately calculated, approved and verified.
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Personnel and Compensation Committee Report
The Personnel and Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management and, based on such review and discussions, the Personnel and
Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.
26
At least twice a year during the TARP Period, the senior risk officer, with input from
senior management, conducts a risk assessment of the Companys senior executive officer (SEO) compensation plans and employee compensation plans and presents the analysis and conclusions to the Personnel and Compensation Committee.
The Personnel and Compensation Committee certifies that:
|
(1)
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It has reviewed with the senior risk officer the SEO compensation plans and has made all reasonable efforts to ensure that these plans do not encourage SEOs to take
unnecessary and excessive risks that threaten the value of the Company;
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(2)
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It has reviewed with the senior risk officer the employee compensation plans and has made all reasonable efforts to limit any unnecessary risks these plans pose to the
Company; and
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(3)
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It has reviewed the 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.
|
In addition to their salaries, the Companys SEOs are eligible
to receive performance-based compensation in the form of cash and/or equity awards. During 2011, no SEO had any written employment or severance arrangement, or any agreement providing for a payment upon a change of control of the Company. Since the
beginning of his tenure at the Company, Mr. Converse and the Personnel and Compensation Committee have had an oral agreement to provide him with a change of control benefit, which would pay him one year of base salary in the event of his
termination or certain other events, following a change of control of the Company. On March 1, 2012, the Company and the Bank entered into an employment agreement with Mr. Converse and the Bank entered into employment agreements with
Mr. Anderson, Mr. Reeder and Ms. Ostrander. Payments and benefits under each of these employment agreements are subject to compliance with the TARP Standards and to certain bank regulatory requirements. Among other things, the
employment agreements provide that these SEOs are eligible to receive equity awards under the 2010 Equity Plan and are eligible to participate in the Executive Incentive Plan. The Personnel and Compensation Committee considered the potential risks
involved in providing these SEOs with performance-based compensation and determined that the employment agreements encourage and reward only behavior that is consistent with the Companys long-term strategic goals. The employment agreements
provide for a reasonable level of base salary so that no SEO is encouraged to take unnecessary and excessive risks. Equity awards under the 2010 Equity Plan (and outstanding stock options under the 1998 Stock Option Plan) generally vest over five
years, which provides an appropriate focus on long-term value creation rather than short-term results. The Executive Incentive Plan appropriately emphasizes Company-level goals and includes a variety of goals which reward several different types of
beneficial behavior within an appropriate risk setting. Finally, the Company retains significant discretion in the granting of any cash bonuses and equity awards to the SEOs and does not approve the payment of performance-based compensation that
would reward unnecessary or excessive risk-taking. In addition, the SEO compensation plans are subject to a provision requiring the SEOs to return to the Company any bonus, incentive compensation or retention award based on materially inaccurate
financial statements or any other materially inaccurate performance metric criteria. The Personnel and Compensation Committee has determined that the SEO compensation plans do not encourage the SEOs to take unnecessary and excessive risks that
threaten the value of the Company.
The Company has employment or compensation agreements with the Companys four most
highly compensated employees other than Mr. Converse, and as is typical for companies in the banking industry, the Company offers incentive compensation programs for its business development officers, branch managers, residential mortgage
lenders and commercial and real estate loan officers. Certain employees other than the SEOs also participate in various annual bonus plans and are eligible to receive equity awards under the 2010 Equity Plan, and others are eligible for a
discretionary bonus as determined by the Personnel and Compensation Committee. The Personnel and Compensation Committee maintains discretion over participation in all of these plans and does not approve incentive payments that reward behavior that
unnecessarily exposes the Company to risk. In addition, performance-based bonus plans provide payouts at various levels of achievement and reflect a variety of financial and non-financial performance measures. In addition, many of these plans take
into account the quality of the results achieved by employees and provide for reductions in the amount of incentive compensation in certain circumstances. In addition, the compensation plans applicable to the twenty most highly compensated employees
after the SEOs are subject to the same provision requiring the return to the Company of any bonus, incentive compensation or retention award based on materially inaccurate financial statements or any other materially inaccurate performance metric
criteria. Further,
27
the employee compensation plans are generally subject to a system of controls within the Company to ensure that inappropriate incentive payments are not made. The Personnel and Compensation
Committee has determined that the employee compensation plans do not unnecessarily expose the Company to risks or encourage the manipulation of reported earnings of the Company.
The Personnel and Compensation Committee will discuss, evaluate and review the SEO compensation plans at least twice a year during the
TARP Period with the senior risk officer to ensure the plans do not encourage SEOs to take unnecessary and excessive risks that could threaten the value of the Company. In addition, the committee will discuss, evaluate and review the employee
compensation plans at least twice a year during the TARP Period with the senior risk officer to identify and limit any feature that unnecessarily exposes the Company to risk or encourages the manipulation of reported earnings to enhance an
employees compensation.
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Members of the Personnel and Compensation Committee
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Todd A. Stottlemyer, Chairman
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W. Douglas Fisher
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David M. Guernsey
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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 (the Exchange Act), and shall not otherwise be deemed filed under such acts.
28
Executive Compensation Tables
The following table sets forth a comprehensive overview of the compensation for Mr. Converse, the Chief Executive Officer of the
Company, Mr. Beauchesne, who served as the Companys Chief Financial Officer during part of 2011, Mr. Tinley, who served as Interim Chief Financial Officer during part of 2011, and the three other most highly compensated executive
officers of the Company (including officers of the Bank) who received total compensation of $100,000 or more during the fiscal year ended December 31, 2011.
Summary Compensation Table for 2011
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Name and Principal Position
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Year
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Salary
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Bonus
(1)
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Stock
Awards
(2)
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Option
Awards
(
3
)
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Non-Equity
Incentive Plan
Compensation
(4)
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All Other
Compensation
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Total
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Peter A. Converse,
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2011
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$
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440,430
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(
5
)
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$
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|
|
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$
|
65,721
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|
$
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|
|
|
$
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140,990
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$
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35,070
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(
6
)
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$
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682,211
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President and Chief Executive Officer Company; President and Chief Executive Officer Bank
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2010
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|
$
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429,000
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(
5
)
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|
$
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|
|
|
|
|
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$
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$
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35,137
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(7)
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$
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464,137
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2009
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$
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429,000
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(
5
)
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$
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$
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18,672
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$
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23,144
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(8)
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$
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470,816
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William K. Beauchesne,
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2011
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$
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57,640
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|
$
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|
|
|
|
|
|
|
$
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46,632
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|
|
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|
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$
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3,130
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(10)
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$
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107,402
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Former Treasurer and Chief Financial Officer Company; Executive Vice President, Chief Financial Officer and Chief Operating Officer
Bank
(
9
)
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2010
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$
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212,500
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|
|
$
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35,000
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|
|
|
|
|
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$
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$
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54,959
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(11)
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$
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302,459
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2009
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|
$
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190,550
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|
$
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|
|
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$
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9,381
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$
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17,334
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(12)
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$
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217,265
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|
|
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Wilmer L. Tinley, Jr.,
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2011
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$
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128,527
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|
$
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|
|
|
|
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|
|
$
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|
|
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|
$
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(14)
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$
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128,527
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Former Interim Chief Financial Officer
(13
)
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Richard B. Anderson,
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2011
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|
$
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238,754
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|
|
$
|
|
|
|
|
|
|
|
$
|
48,081
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|
|
$
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38,439
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|
|
$
|
32,855
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(
15
)
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|
$
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358,129
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Jr., Executive Vice President and Chief Lending Officer Bank
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2010
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$
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231,750
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|
|
$
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|
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|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
30,363
|
(1
6
)
|
|
$
|
262,113
|
|
|
2009
|
|
$
|
231,750
|
|
|
$
|
|
|
|
|
|
|
|
$
|
11,410
|
|
|
|
|
|
|
$
|
22,293
|
(1
7
)
|
|
$
|
265,453
|
|
|
|
|
|
|
|
|
|
|
Patricia M. Ostrander,
|
|
2011
|
|
$
|
190,550
|
|
|
$
|
|
|
|
|
|
|
|
$
|
38,341
|
|
|
$
|
42,188
|
|
|
$
|
25,605
|
(18)
|
|
$
|
296,684
|
|
Executive Vice President, Chief Administrative Officer Bank
|
|
2010
|
|
$
|
167,500
|
|
|
$
|
25,000
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
22,828
|
(19)
|
|
$
|
215,328
|
|
|
2009
|
|
$
|
133,900
|
|
|
$
|
|
|
|
|
|
|
|
$
|
6,594
|
|
|
|
|
|
|
$
|
17,271
|
(20)
|
|
$
|
157,765
|
|
|
|
|
|
|
|
|
|
|
Steven A. Reeder,
|
|
2011
|
|
$
|
216,300
|
|
|
$
|
|
|
|
|
|
|
|
$
|
43,523
|
|
|
$
|
58,293
|
|
|
$
|
31,419
|
(21)
|
|
$
|
349,535
|
|
Executive Vice President Chief Deposit Officer Bank
|
|
2010
|
|
$
|
192,500
|
|
|
$
|
35,000
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
27,889
|
(
22
)
|
|
$
|
255,389
|
|
|
2009
|
|
$
|
164,800
|
|
|
$
|
|
|
|
|
|
|
|
$
|
8,114
|
|
|
|
|
|
|
$
|
21,215
|
(
2
3
)
|
|
$
|
194,129
|
|
(1)
|
Bonuses for 2011, which were paid on February 29, 2012, are reported in the Non-Equity Incentive Plan Compensation column. Cash bonuses for the Chief
Financial Officer, Chief Deposit Officer and Chief Administrative Officer for 2010 were paid on April 15, 2011.No annual cash bonuses were awarded to the named executive officers for 2009.
|
(2)
|
Represents the aggregate grant date fair value of restricted stock granted to the Chief Executive Officer in 2011 under the 2010 Equity Plan, calculated in accordance
with ASC Topic 718. Please refer to note 12 to the Companys Consolidated Financial Statements for the year ended December 31, 2011, for a discussion on the assumptions used in calculating the grant date fair value. No restricted stock
awards were granted to the named executive officers during 2010 or 2009.
|
(3)
|
Represents the aggregate grant date fair value of options granted to the named executive officers in 2011 under the 2010 Equity Plan and in 2009 under the 1998 Stock
Option Plan, calculated in accordance with ASC Topic 718. Please refer to note 12 to the Companys Consolidated Financial Statements for the year ended December 31, 2011, for a discussion on the assumptions used in calculating the grant
date fair value. No options were granted to the named executive officers during 2010.
|
(4)
|
The amounts in this column reflect the annual cash bonus awards earned for 2011 under the Executive Incentive Plan. Pursuant to the TARP Standards, the bonus award
reported for Mr. Converse was paid in shares of TARP-compliant restricted stock, based on the closing market price of the Companys common stock on February 22, 2012.
|
(5)
|
Includes $48,000 of director fees paid by the Company/Bank.
|
(6)
|
Represents $7,350 of 401(k) matching contribution, $14,168 in club memberships, $10,979 in medical and dental insurance premiums, $233 in premiums paid on long-term
care policy and $2,340 for personal use of a Company-owned car. The aggregate incremental cost of Mr. Converses personal use of a Company-owned car is calculated based on the fair market value of the car and mileage attributable to
personal use.
|
(7)
|
Represents $7,350 of 401(k) matching contribution, $15,135 in club memberships, $9,779 in medical and dental insurance premiums, $233 in premiums paid on long-term care
policy and $2,640 for personal use of a company-owned car.
|
(8)
|
Represents $10,647 in club memberships, $9,324 in medical and dental insurance premiums, $233 in premiums paid on long-term care policy and $2,940 for personal use of a
company-owned car.
|
(9)
|
Mr. Beauchesne passed away on February 22, 2011.
|
(10)
|
Represents $1,000 car allowance, $2,103 in medical and dental insurance premiums and $27 in premiums paid on long-term care policy.
|
(11)
|
Represents $6,000 car allowance, $11,892 in medical and dental insurance premiums and $166 in premiums paid on long-term care policy.
|
(12)
|
Represents $6,000 car allowance, $11,168 in medical and dental insurance premiums and $166 in premiums paid on long-term care policy.
|
29
(13)
|
Mr. Tinley served as Interim Chief Financial Officer from March 4, 2011 until February 20, 2012; he currently serves as Temporary Finance Support
Officer.
|
(14)
|
Mr. Tinley received no perks in 2011.
|
(15)
|
Represents $7,343 of 401(k) matching contribution, $6,000 car allowance, $19,330 in medical and dental insurance premiums and $182 in premiums paid on long-term care
policy.
|
(16)
|
Represents $7,133 of 401(k) matching contribution, $6,000 car allowance and $17,048 in medical and dental insurance premiums and $182 in premiums paid on long-term care
policy.
|
(17)
|
Represents $6,000 car allowance, $16,111in medical and dental insurance premiums and $182 in premiums paid on long-term care policy.
|
(18)
|
Represents $6,646 of 401(k) matching contribution, $6,000 car allowance, $12,856 in medical and dental insurance premiums and $103 in premiums paid on long-term care
policy.
|
(19)
|
Represents $5,205 of 401(k) matching contribution, $6,000 car allowance, $11,520 in medical and dental insurance premiums and $103 in premiums paid on long-term care
policy.
|
(20)
|
Represents $6,000 car allowance, $11,168 in medical and dental insurance premiums and $103 in premiums paid on long-term care policy.
|
(21)
|
Represents $7,350 of 401(k) matching contribution, $6,000 car allowance, $17,961 in medical and dental insurance premiums and $108 in premiums paid on long-term care
policy.
|
(22)
|
Represents $5,955 of 401(k) matching contribution, $6,000 car allowance, $15,826 in medical and dental insurance premiums and $108 in premiums paid on long-term care
policy.
|
(23)
|
Represents $6,000 car allowance, $15,107 in medical and dental insurance premiums and $108 in premiums paid on long-term care policy.
|
The Company does not maintain (i) any equity-based incentive plans or (ii) any defined benefit retirement plans. No named
executive officer has deferred any amounts under the deferred compensation plan.
The following table provides information
with respect to stock options and restricted stock awards granted to the named executive officers during 2011, as well as possible payouts for the named executive officers under the Companys Executive Incentive Plan, reflecting the amounts
that could have been paid under the plan based on performance during 2011.
Grants of Plan-Based Awards for 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Grant
Date
|
|
|
Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards
(1)
|
|
|
All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(2)
|
|
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(3
)
|
|
|
Exercise or
Base Price
of Option
Awards
($/Share)
|
|
|
Grant Date
Fair Value
of Stock
and Option
Awards
(4)
|
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
|
|
|
Peter A. Converse
|
|
|
|
|
|
$
|
76,281
|
|
|
$
|
176,594
|
|
|
$
|
392,430
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/28/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,845
|
|
|
|
|
|
|
|
|
|
|
$
|
65,721
|
|
William K. Beauchesne
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wilmer L. Tinley, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard B. Anderson, Jr.
|
|
|
1/28/11
|
|
|
$
|
15,815
|
|
|
$
|
54,913
|
|
|
$
|
238,754
|
|
|
|
|
|
|
|
19,810
|
|
|
$
|
6.06
|
|
|
$
|
48,081
|
|
Patricia M. Ostrander
|
|
|
1/28/11
|
|
|
$
|
14,817
|
|
|
$
|
51,449
|
|
|
$
|
190,550
|
|
|
|
|
|
|
|
15,797
|
|
|
$
|
6.06
|
|
|
$
|
38,341
|
|
Steven A. Reeder
|
|
|
|
|
|
$
|
21,803
|
|
|
$
|
75,705
|
|
|
$
|
216,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/28/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,932
|
|
|
$
|
6.06
|
|
|
$
|
43,523
|
|
(1)
|
The amounts shown in the threshold column reflect the minimum cash bonus award payable under the Executive Incentive Plan for 2011 performance. The target amount for
each named executive officer represents 45%, 23%, 27% and 35% of 2011 base salary, respectively. The amounts shown in the maximum column are 100% of the named executive officers 2011 base salary. If threshold goals are not met, no annual cash
bonus award is paid under the plan. Mr. Beauchesne and Mr. Tinley did not participate in the Executive Incentive Plan during 2011. Please refer to the Non-Equity Incentive Plan Compensation column of the Summary Compensation
Table to see the amount of the annual cash bonus award each named executive officer actually earned for 2011 under the Executive Incentive Plan.
|
(2)
|
Reflects the number of shares of TARP-compliant restricted stock granted to Mr. Converse under the 2010 Equity Plan.
|
(3)
|
Reflects the number of shares subject to stock options granted to the named executive officer under the 2010 Equity Plan.
|
30
(4)
|
Reflects the grant date fair value of the restricted stock or stock options award granted to the named executive officer on January 28, 2011 (computed in
accordance with FASB ASC Topic 718).
|
For more information regarding the Companys equity plans, see
Equity Compensation Plans below. The Companys general practice is that other than equity awards made to new hires, all equity awards to employees are made by the Board, upon recommendation of the Personnel and Compensation
Committee, at its regularly scheduled meeting in January or February each year. As a public company, 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 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. Under the
Companys 1998 Stock Option Plan and 2010 Equity Plan, the exercise price of any option granted may not be less than 100% of the fair market value of the common stock on the date of grant. For purposes of the 1998 Stock Option Plan, fair market
value was determined by reference to the average of the highest and lowest selling price on any exchange (including NASDAQ) on which the common stock was traded on such date, or if there were no sales on such date, then the exercise price would be
not less than the mean between the bid and asked price on such date. As a result of this provision of the plan, the exercise price of an option granted under the 1998 Stock Option Plan may be higher or lower than the closing price on the date of
grant. Under the 2010 Equity Plan, fair market value is determined by reference to the closing price on any exchange (including NASDAQ) on which the common stock was traded on such date.
Outstanding Equity Awards at 2011 Fiscal Year-End
The following table sets forth information concerning all outstanding option awards and unvested restricted stock awards held by named executive officers at December 31, 2011. All options were
granted at 100% of fair market value as determined in accordance with the applicable option plan. The number of shares subject to each award and the exercise price have been adjusted to reflect all stock dividends, stock splits and capital
restructurings effected after the date of such award, but have not otherwise been modified, except for the acceleration of vesting discussed below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
Peter A. Converse
|
|
|
53,171
|
|
|
|
|
|
|
$
|
3.01
|
|
|
|
01/09/2012
|
|
|
|
10,845
|
(1)
|
|
$
|
83,832
|
(2)
|
|
|
|
28,358
|
|
|
|
|
|
|
$
|
4.32
|
|
|
|
01/11/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
17,014
|
|
|
|
|
|
|
$
|
11.09
|
|
|
|
01/10/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
14,745
|
|
|
|
|
|
|
$
|
12.78
|
|
|
|
01/18/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
11,797
|
|
|
|
|
|
|
$
|
16.76
|
|
|
|
01/11/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
11,132
|
|
|
|
2,783
|
|
|
$
|
15.99
|
|
|
|
01/16/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
16,170
|
|
|
|
10,780
|
|
|
$
|
10.67
|
|
|
|
01/30/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
4,900
|
|
|
|
7,350
|
|
|
$
|
4.31
|
|
|
|
01/28/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William K. Beauchesne
|
|
|
26,581
|
|
|
|
|
|
|
$
|
3.01
|
|
|
|
01/09/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
22,687
|
|
|
|
|
|
|
$
|
4.32
|
|
|
|
01/11/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
12,760
|
|
|
|
|
|
|
$
|
11.09
|
|
|
|
01/10/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
11,343
|
|
|
|
|
|
|
$
|
12.78
|
|
|
|
01/18/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
9,075
|
|
|
|
|
|
|
$
|
16.76
|
|
|
|
01/11/2016
|
|
|
|
|
|
|
|
|
|
31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
7,260
|
|
|
|
|
|
|
$
|
15.99
|
|
|
|
01/16/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
13,475
|
|
|
|
|
|
|
$
|
10.67
|
|
|
|
01/30/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
6,125
|
|
|
|
|
|
|
$
|
4.31
|
|
|
|
01/28/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
19,213
|
|
|
|
|
|
|
$
|
6.06
|
|
|
|
01/28/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wilmer L. Tinley, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard B. Anderson, Jr.
|
|
|
28,358
|
|
|
|
|
|
|
$
|
3.01
|
|
|
|
01/09/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
22,687
|
|
|
|
|
|
|
$
|
4.32
|
|
|
|
01/11/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
12,760
|
|
|
|
|
|
|
$
|
11.09
|
|
|
|
01/10/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
11,343
|
|
|
|
|
|
|
$
|
12.78
|
|
|
|
01/18/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
9,075
|
|
|
|
|
|
|
$
|
16.76
|
|
|
|
01/11/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
7,018
|
|
|
|
1,754
|
|
|
$
|
15.99
|
|
|
|
01/16/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
9,834
|
|
|
|
6,556
|
|
|
$
|
10.67
|
|
|
|
01/30/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
2,980
|
|
|
|
4,470
|
|
|
$
|
4.31
|
|
|
|
01/28/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,810
|
|
|
$
|
6.06
|
|
|
|
01/28/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Patricia M. Ostrander
|
|
|
7,088
|
|
|
|
|
|
|
$
|
3.01
|
|
|
|
01/09/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
8,506
|
|
|
|
|
|
|
$
|
4.32
|
|
|
|
01/11/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
5,670
|
|
|
|
|
|
|
$
|
11.09
|
|
|
|
01/10/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
6,805
|
|
|
|
|
|
|
$
|
12.78
|
|
|
|
01/18/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
5,445
|
|
|
|
|
|
|
$
|
16.76
|
|
|
|
01/11/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
4,114
|
|
|
|
1,028
|
|
|
$
|
15.99
|
|
|
|
01/16/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
5,682
|
|
|
|
3,789
|
|
|
$
|
10.67
|
|
|
|
01/30/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
1,722
|
|
|
|
2,583
|
|
|
$
|
4.31
|
|
|
|
01/28/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,797
|
|
|
$
|
6.06
|
|
|
|
01/28/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven A. Reeder
|
|
|
11,797
|
|
|
|
|
|
|
$
|
13.77
|
|
|
|
06/16/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
6,352
|
|
|
|
|
|
|
$
|
16.76
|
|
|
|
01/11/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
4,840
|
|
|
|
1,210
|
|
|
$
|
15.99
|
|
|
|
01/16/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
6,992
|
|
|
|
4,662
|
|
|
$
|
10.67
|
|
|
|
01/30/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
2,119
|
|
|
|
3,179
|
|
|
$
|
4.31
|
|
|
|
01/28/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,932
|
|
|
$
|
6.06
|
|
|
|
01/28/2021
|
|
|
|
|
|
|
|
|
|
(1)
|
Reflects the number of shares of restricted stock granted on January 28, 2011 pursuant to the 2010 Equity Plan. The shares vest in equal installments on the first
five anniversaries of the grant date, subject to certain restrictions under the TARP Standards.
|
(2)
|
The market value is the number of reported shares multiplied by the closing market price of the Companys common stock on December 30, 2011, the last business
day of 2011, which was $7.73 per share.
|
32
(3)
|
Mr. Beauchesne passed away on February 22, 2011. These options, granted under the 1998 Stock Option Plan, vested at the time of his death and may be exercised
by his decedent(s) or estate by the earlier of two years from the date of his death or the expiration of the options.
|
Prior to 2010, all stock options were granted under the 1998 Stock Option Plan. All stock options issued after April 28, 2010, were granted under the 2010 Equity Plan. None of the awards are subject
to performance conditions or other vesting requirements other than continued employment. Awards granted in 2002 (i.e., those awards expiring in 2012) vest in three equal annual installments commencing on the first anniversary the date of grant.
Awards made after 2002 (i.e., those awards expiring in 2013 and after) vest in five equal annual installments commencing on the first anniversary of the date of grant. In December 2005, in connection with the implementation of a new accounting
standard regarding the recognition of compensation expense with respect to option awards, the Board of Directors accelerated the vesting of all options that were unvested as of December 15, 2005, resulting in the avoidance of future option
expense with respect to such awards.
Option Exercises and Stock Vested in 2011
The following table sets forth information regarding options exercised by the named executive officers during 2011, and the amount
realized upon such exercises, based on the difference between the market value on the exercise date and the exercise price.
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Name
|
|
Number of Shares
Acquired
on
Exercise
|
|
|
Value Realized
on Exercise
|
|
|
|
|
Peter A. Converse
|
|
|
44,306
|
|
|
$
|
191,938
|
|
|
|
|
William K. Beauchesne
|
|
|
|
|
|
|
|
|
|
|
|
Wilmer L. Tinley
|
|
|
|
|
|
|
|
|
|
|
|
Richard B. Anderson, Jr.
|
|
|
31,012
|
|
|
$
|
136,518
|
|
|
|
|
Patricia M. Ostrander
|
|
|
4,428
|
|
|
$
|
19,493
|
|
|
|
|
Steven A. Reeder
|
|
|
|
|
|
|
|
|
None of the named executive officers held restricted stock that vested during 2011.
The Company does not have any pension or defined benefit plan.
Potential Payments Upon Termination or Change of Control
As noted above,
as of December 31, 2011, no named executive officer had any employment or severance agreement or any agreement providing for payments or benefits upon a change of control of the Company, other than the oral agreement to provide
Mr. Converse with a change of control benefit of one year of base salary in the event of his termination or certain other events, following a change of control of the Company. The Companys ability to pay or accrue this amount to
Mr. Converse during the TARP Period is significantly limited by the TARP Standards restrictions on golden parachute payments. The TARP Standards generally prohibit the Company from making any payments to the named executive
officers and the Companys next five most highly compensated employees for departure from the Company or upon most change of control events, other than compensation earned for services rendered or accrued benefits.
Under the terms of the Companys outstanding options and restricted stock, all unvested options and restricted stock fully vests
upon a change of control and upon certain terminations of employment. However, during the TARP Period, the TARP Standards prohibit the acceleration of vesting of equity awards held by the named executive officers and the Companys next five
most highly compensated employees due to a departure or most change of control events.
33
Employee Benefit Plans
The Company provides all officers and full-time employees with group life and medical and dental insurance coverage. With the exception of all of the executive officers, all employees pay a portion of the
premium costs of medical and dental insurance.
401(k) Plan.
The Bank maintains a 401(k) defined contribution plan (the
Plan). Employees who are at least 21 years of age, have completed at least ninety days of continuous service with the Bank and have completed at least 1,000 hours of work during any Plan year are eligible to participate in the Plan.
Under the Plan, a participant may contribute up to 15% of his or her compensation for the year, subject to certain limitations. The Bank may also make, but is not required to make, a discretionary contribution for each participant. The amount of
such contribution, if any, is determined on an annual basis by the Board of Directors. Contributions by the Bank totaled $330,852 for the fiscal year ended December 31, 2010 and $410,676 for the fiscal year ended December 31, 2011.
Nonqualified Deferred Compensation Plan
. On November 22, 2006, the Board of Directors of the Bank approved the
adoption of the Nonqualified Deferred Compensation Plan for directors and key management employees of the Company, the Bank and their affiliates. Participation in the plan is available to members of the Board of Directors and a select group of
management or highly compensated employees of the Company, the Bank and their affiliates, including each named executive officer disclosed in this proxy statement. Under the plan, participants who are directors may defer on a pre-tax basis up to
100% of their director fees, and participants who are employees may defer on a pre-tax basis up to 80% of their base compensation and 80% of bonus or commissions. Under the plan, the Bank has no obligation to make contributions for the benefit of
participants, although it has discretion to make contributions for the benefit of one or more participants. No named executive officers have deferred any amounts under the plan.
The deferred compensation accounts are fully vested to the extent they consist of amounts attributable to deferrals by the participants,
but may be subject to a vesting schedule to the extent that they consist of amounts, if any, attributable to discretionary contributions by the Bank. The deferred compensation accounts are credited with earnings or losses based upon investment
elections that the participants make from among various measurement funds designated by the Bank. The plan is unfunded and the deferred compensation account balances are general obligations of the Bank.
At the time deferral elections are made, participants may choose when the amounts they defer will be paid to them. Distributions of
amounts deferred under the plan upon a participants retirement are payable in installments or in a lump sum, at the participants option; distributions for reasons other than retirement are generally payable in a lump sum. Elections may
be changed, subject to the provisions of the plan, and, in limited circumstances such as unforeseeable financial emergency, distributions may be made early.
Equity Compensation Plans.
The 2010 Equity Plan was approved by the Board
of Directors and the stockholders, and became effective March 2, 2010. The purposes of the 2010 Equity Plan are to (a) promote the long-term success of the Company and to increase stockholder value by providing employees and directors with
incentives to contribute to the long-term growth and profitability of the Company and (b) assist the Company in attracting, retaining and motivating highly qualified employees.
Prior to adoption of the 2010 Equity Plan, the Company maintained the 1998 Stock Option Plan, which was originally approved by
stockholders of the Bank in 1998, was assumed by the Company in connection with the reorganization into the holding company structure in 1999 and amended in 2007. In connection with stockholder approval of the 2010 Equity Plan, no new awards will be
granted under the 1998 Stock Option Plan after March 2, 2010. Awards previously granted under the 1998 Stock Option Plan remain outstanding in accordance with their terms, but none of the remaining shares of common stock authorized under the
1998 Stock Option Plan were transferred to the 2010 Equity Plan. In addition, awards under the 1998 Stock Option Plan that are forfeited or expire without being exercised will not be available for awards under the 2010 Equity Plan.
As of March 9, 2012, there were options to purchase an aggregate of 1,300,302 (as adjusted for stock dividends) shares of common
stock outstanding under the 1998 Stock Option Plan, at exercise prices ranging from $3.07 to $18.33 per share, expiring no later than January 2020. As of March 9, 2012, there were options to purchase an aggregate of 274,577 shares of common
stock outstanding under the 2010 Equity Plan, at exercise prices ranging from $5.12 to $8.62 per share, expiring no later than January 2022. There were also 121,421 shares of restricted stock outstanding under the 2010 Equity Plan.
34
In January 2012, options to purchase 78,250 shares of common stock, at an exercise price of
$8.62 per share, were granted to fifty-nine officers and 6,317 shares of restricted stock were granted to four officers under the 2010 Equity Plan. In February 2012, 65,106 shares of restricted stock were granted to nine officers and the eight
outside directors.
1998 Stock Option Plan
Options under the 1998 Stock Option Plan could be either incentive stock options (ISOs) as defined in Section 422 of the Code or options that are not ISOs (Non-ISOs). Awards
to non-employee directors could consist only of Non-ISOs. The 1998 Stock Option Plan is administered by the Personnel and Compensation Committee.
Prior to March 2, 2010, the Personnel and Compensation Committee had the authority to select the recipients of stock options and to establish the terms of option awards, subject to the provisions of
the 1998 Stock Option Plan. Generally the term of an option granted under the plan would not exceed ten years from the date of grant and the exercise price would be no lower than the fair market value of a share of the Companys common stock on
the date of grant. Options granted under the 1998 Stock Option Plan may be exercised in whole or in part and generally are not transferable except upon the death of a participant or in connection with a qualified domestic relations order
within the meaning of Section 414(p) of the Code. Outstanding and unexercised options held by a participant at his death are immediately exercisable by the participants transferee under the terms of such options up to the earlier of 24
months after death or the expiration of the option. In the event of any merger, consolidation, recapitalization, reorganization, reclassification, stock dividend, stock split, combination or subdivision 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 Personnel and Compensation Committee will adjust both the number and kind of shares of stock as to which options may be awarded under the 1998 Stock
Option Plan, the affected terms (including exercise price) of all outstanding options and the aggregate number of shares of common stock remaining available for grant under the 1998 Stock Option Plan.
In the absence of Personnel and Compensation Committee action to the contrary: (A) an otherwise unexpired ISO, or a Non-ISO granted
to an employee, shall cease to be exercisable upon (i) an employees termination of employment for just cause (as defined in the 1998 Stock Option Plan), (ii) the date three months after an employee terminates service for
a reason other than just cause, death, or disability, or (iii) the date one year after an employee terminates service due to disability, or two years after termination of such service due to his death; (B) an unexpired Non-ISO granted to a
non-employee director shall be exercisable at any time (but not later than the date on which the Non-ISO would otherwise expire). Notwithstanding the provisions of any option which provide for its exercise in installments as designated by the
Personnel and Compensation Committee, such option shall become immediately exercisable upon the optionees death or permanent and total disability. Notwithstanding the provisions of any award which provides for its exercise or vesting in
installments, but subject to the TARP Standards restriction on accelerated vesting applicable to the named executive officers and the next five most highly compensated employees, on the date of a change in control, all options issued under the
1998 Stock Option Plan shall be immediately exercisable and fully vested. At the time of a change in control, the optionee shall, at the discretion of the Personnel and Compensation Committee, be entitled to receive cash in an amount equal to the
excess of the fair market value of the common stock subject to such option over the exercise price of such shares, in exchange for the cancellation of such options by the optionee.
For purposes of the 1998 Stock Option Plan, change in control means any one of the following events: (1) the acquisition
of ownership of, holding or power to vote more than 51% of the Companys voting stock; (2) the acquisition of the power to control the election of a majority of the Companys directors; (3) the exercise of a controlling influence
over the management or policies of the Company by any person or by persons acting as a group within the meaning of Section 13(d) of the Exchange Act; or (4) the failure during any period of two consecutive years, of individuals who at the
beginning of such period constitute the Board of Directors of the Company (the Continuing Directors) for any reason to constitute at least two-thirds thereof, provided that any individual whose election or nomination for election as a
member of the Board was approved by a vote of at least two-thirds of the Continuing Directors then in office shall be considered a Continuing Director. For purposes of defining change in control, the term person refers to an
individual or a corporation, partnership, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated organization or any other form of entity not specifically listed. The decision of the Personnel and Compensation
Committee as to whether a change in control has occurred shall be conclusive and binding.
35
2010 Equity Plan
The 2010 Equity Plan provides for the grant of awards in the form of stock options (ISOs or Non-ISOs), stock appreciation rights, restricted and unrestricted stock, performance units and other awards to
directors and employees, except that ISOs may only be granted to employees. The Companys Personnel and Compensation Committee administers the 2010 Equity Plan and has the authority to determine the terms and conditions of each award thereunder
, but as a matter of practice recommends all awards to the Board of Directors for approval.
Generally the term of an option
granted under the plan will not exceed ten years from the date of grant and the exercise price will be no lower than the fair market value of a share of the Companys common stock on the date of grant. To date, options granted under the 2010
Equity Plan vest over five years and expire ten years from the grant date, and restricted stock granted under the 2010 Equity Plan vests over five years, subject to certain limitations required under the TARP Standards.
Unless the Personnel and Compensation Committee or the Board determines otherwise, no award granted under the 2010 Equity Plan will be
transferable for any reason other than by will or by the laws of descent and distribution. During the lifetime of the participant, a stock option, stock appreciation right or similar-type of award will be exercisable only by the participant or by a
permitted transferee to whom such stock option, stock appreciation right or other award has been transferred by will or by the laws of descent and distribution.
The 2010 Equity Plan provides that if a participants employment is terminated for cause (as defined in the plan), all vested but unexercised and earned but unpaid awards will terminate, be forfeited
and revert to the 2010 Equity Plan. If a participant ceases to be an employee of the Company for reasons other than cause, the participants award may be exercised to the extent the award is vested within the period of time specified in the
award document or, if no time is specified, within three months following the termination. If a participant ceases to be an employee because of disability or death, the participants award becomes fully vested, may be exercised within the
period of time specified in the award document or, if no time is specified, within twelve months. If the participant does not exercise the vested portion of the award within the required period of time, the vested shares will be forfeited and revert
to the 2010 Equity Plan. If on the date of termination, any portion of an award is not earned or not vested, that portion of the award will be forfeited and revert to the 2010 Equity Plan.
The 2010 Equity Plan provides that upon a change in control of the Company (as defined in the plan), a participant will fully vest in and
have the right to exercise any stock option and stock appreciation right as to all of the common stock under the award, including shares as to which the participant would not otherwise be vested or exercisable, and all restrictions and conditions,
including any vesting requirements, of any stock award and restricted stock held by a participant will lapse. Except as otherwise specified in the applicable award document, in the event of a change in control, the Personnel and Compensation
Committee or the Board may, in its discretion, provide for (i) all performance units and any other awards held by a participant to be deemed fully earned, (ii) the settlement of any award by the Company for an amount of cash equal to the
amount which could have been obtained upon the exercise of the award or realization of a participants rights had the award been currently exercisable or payable, (iii) cause any award then outstanding to be assumed, or substituted, by the
acquiring or surviving corporation in such change in control, or (iv) make such adjustment to any award then outstanding as the Personnel and Compensation Committee or the Board deems appropriate. Where an award being changed is an ISO or is
subject to Section 409A of the Code, no changes will be made that would negatively impact the tax status of the award.
To date, options granted under the 2010 Equity Plan provide for accelerated vesting of the unvested portion of the option upon a change
in control of the Company or upon cessation of employment because of death or disability. Restricted stock granted under the 2010 Equity Plan, other than restricted stock that is limited to comply with the TARP Standards, provides for accelerated
vesting of the unvested shares upon a change in control of the Company, upon the cessation of employment or Board service because of death or disability, upon retirement with the consent of the Board at or after age 65 and five years of service,
upon termination of employment by the Company, not for cause, after five years of employment or termination of Board service with the consent of the Board after five years of service.
36
For purposes of the 2010 Equity Plan, unless otherwise defined in the award document,
cause is defined as the termination of the participants employment as a result of: (i) an act dishonesty undertaken and intended to result in gain or personal enrichment, (ii) persistent failure to perform duties and
obligations that is not remedied in a reasonable period of time after receipt of written notice, (iii) violation of confidentiality or proprietary information obligations to or agreements, (iv) use, sale or distribution of illegal drugs on
the employers premises, (v) threatening, intimidating or coercing or harassing fellow employees, or (vi) the conviction of a felony.
For purpose of the 2010 Equity Plan, change in control is defined as a (i) business combination, (ii) the acquisition by a beneficial owner, directly or indirectly, of 50% or more of
the combined voting power of the outstanding shares of capital stock of the Companys then outstanding securities with respect to the election of the directors, or (iii) during any period of three consecutive years, individuals who, at the
beginning of such period, constitute the Board of Directors (the Incumbent Board) cease to constitute at least a majority of the Board of Directors, provided that any person becoming a director subsequent to March 2, 2010 whose
election, or a nomination for election by the Companys stockholders, was approved by the vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of any individual whose initial
assumption of office is in connection with an actual or threatened election contest relating to the election of the directors) shall be, for these purposes, considered as though such person were a member of the Incumbent Board.
If the outstanding shares of common stock are increased or decreased or changed into or exchanged for a different number or kind of
shares or other securities of the Company by reason of any stock split, stock dividend, recapitalization, reorganization, merger, consolidation, extraordinary dividend, split-up, spin-off, combination, exchange of shares, or similar event, an
appropriate and proportionate adjustment will be made by the Personnel and Compensation Committee to the number and kind of shares authorized for issuance under the 2010 Equity Plan, including the maximum number of shares available under the special
limits provided for in the 2010 Equity Plan, as well as to the number and class of shares of common stock subject to each outstanding award, and the exercise price of any outstanding award, in order to retain the economic value or opportunity of
such award. Where an award being adjusted is an ISO or is subject to Section 409A of the Code, no changes will be made that would negatively impact the tax status of the award.
PROPOSAL 2 NON-BINDING ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
The EESA, as amended by the ARRA, includes a provision requiring TARP participants to permit a separate stockholder vote at each annual
meeting held during the TARP Period to approve the compensation of executives, as disclosed pursuant to the compensation disclosure rules of the SEC. As a result, the Company is providing stockholders 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 stockholders the opportunity to endorse or not endorse our executive pay program
through the following resolution:
RESOLVED
, that the stockholders 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 2012 Annual Meeting.
Because this vote is advisory, it will not be binding upon the Board of Directors.
However, the Personnel and Compensation Committee will take into account the outcome of the vote when considering future executive compensation arrangements. Under the EESA, as amended by ARRA, the vote may not be construed as overruling a decision
by the Board of Directors, or to create or imply any additional fiduciary duty by the Board.
Stockholders are encouraged
to read the section of this proxy statement entitled Compensation Discussion and Analysis as well as the tabular disclosure regarding named executive officer compensation, together with the accompanying narrative disclosure.
37
Vote Required
The affirmative vote of a majority of the votes cast on the proposal is required to approve this proposal. Proxies received by the Company and not revoked prior to or at the meeting will be voted in favor
of this non-binding proposal unless otherwise instructed by the stockholder.
We believe our compensation policies are
strongly aligned with the long term interests of the Company and its stockholders.
As such, the Board of Directors recommends that stockholders vote FOR approval of this non-binding advisory resolution.
38
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act 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 SEC, 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 and executive officers, the Company is not aware of any failure of any such person to comply with the requirements of Section 16(a) for 2011 that has not previously been disclosed, except that a Form 4 reporting one
transaction for Mr. Coombe during 2011 was not filed in a timely manner, a Form 4 reporting one transaction for Mr. Burdette during 2011 was not filed in a timely manner, and a Form 4 reporting one transaction for Mr. Lehman during
2011 was not filed in a timely manner.
PROPOSAL 3 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTANT
The Audit Committee has appointed the independent registered public accounting firm of Yount, Hyde &
Barbour to audit the accounts of the Company for the fiscal year ending December 31, 2012. Yount, Hyde & Barbour also audited the Companys financial statements for the year ended December 31, 2011. Representatives of Yount,
Hyde & Barbour 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. In the event that the appointment
of Yount, Hyde & Barbour is not ratified by stockholders, the Audit Committee will consider making a change in the independent registered public accountant for 2013.
Vote Required
The affirmative vote of a majority of the votes cast on the
proposal is required to approve this proposal. Proxies received by the Company and not revoked prior to or at the meeting will be voted in favor of this proposal unless otherwise instructed by the stockholder.
The Board of Directors recommends that stockholders vote FOR ratification of the appointment of Yount, Hyde & Barbour as the
Companys independent registered public accountant for the fiscal year ending December 31, 2011.
PRINCIPAL
ACCOUNTANT FEES
Audit Fees.
The aggregate amount of fees billed to the Company by Yount, Hyde & Barbour
for 2011 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-K and 10-Q, and for services normally provided in connection with
statutory and regulatory filings, was $171,900. Yount, Hyde & Barbour billed $222,750 for such services for 2010. This category includes fees for services necessary to perform the audit in accordance with the standards of the Public Company
Accounting Oversight Board, and things such as consents and assistance with and review of documents filed with the SEC, and the audit of the Companys internal control over financial reporting.
AuditRelated Fees.
During 2011, the aggregate amount of fees billed to the Company by Yount, Hyde & Barbour for
assurance and related services reasonably related to the performance of the audit services rendered by it, and for consultation, was $26,555. In 2010, Yount, Hyde & Barbour billed $12,770 for such services. For both 2011 and 2010 this
category included an employee benefit plan audit.
Tax Fees.
During 2011, the aggregate amount of fees billed to the
Company by Yount, Hyde & Barbour for tax advice, compliance and planning services was $10,050. In 2010, Yount, Hyde & Barbour billed $9,750 for such services. For both years fees were limited to the preparation of federal and state
tax returns for the Company and its subsidiary trusts.
39
All Other Fees.
During 2011 and 2010, there were no other fees billed to the Company
by Yount, Hyde & Barbour.
The engagements of Yount, Hyde & Barbour to provide services other than audit
services were not made pursuant to the
de minimis
exception to the pre-approval requirement contained in the rules of the SEC and the Companys Audit Committee charter, and the Audit Committee concluded that such engagements were
compatible with the maintenance of Yount, Hyde & Barbours independence in the conduct of its auditing functions.
FORM 10-K ANNUAL REPORT
The Company will provide to any stockholder solicited hereby, without charge, a copy of its Annual Report on Form 10-K for the year ended December 31, 2011 filed with the SEC, upon written
request. Requests should be directed to Krista DiVenere, Assistant Controller, Virginia Commerce Bank, 14201 Sullyfield Circle, Suite 500, Chantilly, Virginia 20151.
OTHER MATTERS
Management is not aware of any matters to be presented for
action by stockholders at the meeting other than Proposals 1, 2 and 3 referred to above. 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 best judgment on such matters.
STOCKHOLDER PROPOSALS
All proposals of stockholders to be presented for consideration at the next annual meeting and included in the Companys proxy
materials must be received by the Company no later than November 21, 2012. Any such proposals must meet the requirements of Rule 14a-8 under the Securities Exchange Act of 1934. The Company must receive written notice of any other matter (other
than a director nomination) to be acted upon at the next annual meeting, for which inclusion in the Companys proxy materials is not sought, by February 4, 2013. The Company must receive written notice of any director nomination to be
acted upon at the next annual meeting by January 25, 2013, and such notice must also comply with the Companys bylaws.
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By Order of the Board of Directors
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VIRGINIA COMMERCE BANCORP, INC.
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Kenneth R. Lehman, Secretary
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March 14, 2012
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40
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x
PLEASE MARK VOTES AS
IN
THIS EXAMPLE
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REVOCABLE PROXY
VIRGINIA COMMERCE BANCORP, INC.
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This proxy is solicited on behalf of the Board of Directors.
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The undersigned hereby makes, constitutes and appoints W. Douglas Fisher and David M. Guernsey, 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 Virginia Commerce Bancorp, Inc. (the Company) which the undersigned would be entitled to vote if personally
present at the Companys Annual Meeting of Stockholders to be held on April 25, 2012 and at any adjournment or postponement thereof.
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1.
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Election of Directors.
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¨
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FOR
all nominees listed below (except as noted
to the contrary below)
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¨
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WITHHOLD AUTHORITY
to vote for all nominees
listed below
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Nominees:
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Leonard Adler; Michael G.
Anzilotti; Thomas E. Burdette; Peter A. Converse; W. Douglas Fisher; David M. Guernsey; Kenneth R. Lehman; Norris E. Mitchell; and Todd A. Stottlemyer
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(Instructions: To withhold
authority to vote for any individual nominee, write that nominees name in the space provided below.)
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2.
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The non-binding, advisory proposal to approve the Companys executive compensation.
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¨
FOR
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AGAINST
¨
ABSTAIN
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3.
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The ratification of the appointment of Yount, Hyde & Barbour, P.C. as the Companys independent registered public accountant for the fiscal year ending December
31, 2012.
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¨
FOR
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AGAINST
¨
ABSTAIN
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This proxy, when properly executed, will be voted in
the manner directed herein by the undersigned stockholder. If no direction is made, this proxy will be voted
FOR
all of the nominees listed above,
FOR
the proposal to approve the Companys executive compensation and
FOR
the
proposal to ratify the appointment of Yount, Hyde & Barbour, P.C. as the Companys independent registered public accountant.
In addition, this proxy will be voted at the discretion of the proxy holder(s) in accordance with their best
judgment upon any other matter which may properly come before the meeting or any adjournment or postponement of the meeting.
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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 stockholder is a corporation, the proxy should be signed in the full corporate name
by a duly authorized officer whose title is stated.
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Please check box if you plan to attend the Annual
Meeting.
¨
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Please be sure to sign and date
this proxy in the box below.
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Date
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Stockholder sign above
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(Co-holder, if any, sign above)
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Detach above card, sign, date and mail in postage paid envelope provided.
VIRGINIA COMMERCE BANCORP, INC.
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PLEASE COMPLETE, DATE, SIGN AND
MAIL THIS PROXY PROMPTLY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
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IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED BELOW AND RETURN THIS
PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.
Virginia Commerce Bancorp (MM) (NASDAQ:VCBI)
過去 株価チャート
から 9 2024 まで 10 2024
Virginia Commerce Bancorp (MM) (NASDAQ:VCBI)
過去 株価チャート
から 10 2023 まで 10 2024