(6 | ) | Blondel Pinnock was initially designated as a Named Executive Officer Chief Financial Officer, Chief Risk Officer and Chief Lending Officer who served in such capacities at fiscal year end March 31, 2010 (collectively, the“Named Executive Officers”). | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Change in | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pension Value | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | and | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nonqualified | | | | | | | | | | Year | | | | | | | | | | | | | | | | | | | Non-Equity | | | Deferred | | | | | | | | Name and Principal | | Ended | | | | | | | | | | | Stock | | | Option | | | Incentive Plan | | | Compensation | | | All Other | | | | | Position | | 3/31 | | | Salary | | | Bonus | | | Awards(5) | | | Awards(5) | | | Compensation | | | Earnings(6) | | | Compensation(7) | | | Total | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Deborah C. Wright(1) | | | 2010 | | | $ | 385,420 | | | | — | | | | — | | | | — | | | | — | | | $ | 11,967 | | | $ | 88,673 | | | $ | 486,060 | | Chairman and Chief | | | 2009 | | | $ | 376,698 | | | | — | | | $ | 40,860 | | | | — | | | | — | | | $ | 1,519 | | | $ | 39,938 | | | $ | 458,699 | | Executive Officer | | | 2008 | | | $ | 350,006 | | | $ | 25,000 | | | $ | 104,121 | | | $ | 57,466 | | | $ | 308,690 | | | $ | 1,378 | | | $ | 12,402 | | | $ | 859,062 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Mark A. Ricca(2) | | | 2010 | | | $ | 200,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 8,028 | | | $ | 208,028 | | Executive Vice President, Chief Risk Officer and General Counsel | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Chris M. McFadden(3) | | | 2009 | | | $ | 69,231 | | | | — | | | | — | | | | — | | | | | | | | — | | | | — | | | $ | 69,231 | | Executive Vice President | | | 2010 | | | $ | 141,731 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 141,731 | | and Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | James H. Bason, Jr.(4) | | | 2010 | | | $ | 177,327 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 20,895 | | | $ | 198,222 | | Senior Vice President | | | 2009 | | | $ | 176,854 | | | | — | | | $ | 9,597 | | | | — | | | | — | | | | — | | | $ | 8,143 | | | $ | 194,594 | | and Chief Lending Officer | | | 2008 | | | $ | 170,000 | | | $ | 12,300 | | | $ | 13,206 | | | | — | | | $ | 69,300 | | | | — | | | $ | 3,591 | | | $ | 268,397 | |
| | | (1) | | Ms. Wright: Other compensation includes $9,800 401k plan match; 9,014 ESOP shares valued at $8.75 per share on March 31, 2010. | | (2) | | Mr. Ricca joined the Company on November 20, 2008. Other compensation for Mr. Ricca includes $8,028 401k plan match. | | (3) | | Ms. McFadden joined the Company on September 14, 2009 | | (4) | | Mr. Bason: Other compensation includes 2,388 ESOP shares valued at $8.75 per shares on 3/31/2010. | | (5) | | The amounts in columns (e) and (f) reflect the value of the awards on the date granted in the respective fiscal year ended March 31. Stock awards are based on the closing price on the grant date Option values are based on their Black-Scholes value, based on the assumptions set forth in Note 13 to the Financial Statements set forth in the Company’s Form 10-K for the fiscal year ended March 31, 2010. Values reported previously were based on the dollar amount recognized for financial statement purposes and included amounts from awards granted in and prior to the respective fiscal year. | | (6) | | The significant change in the present value of the pension plan benefit is due to using a different rate to calculate the value. In the past an 8% rate was used which coincided with what was used for FAS 35 measurement. This year, the FASB 87 disclosure rate of 5.645% was used to comply with the SEC requirement that a plan sponsor must use the assumptions it uses for generally accepted accounting principles. But for the change in rates, the change in value would have been $1,305. | | (7) | | The Company does not currently offer additional perquisites, which in the aggregate exceed $10,000 per year for any Named Executive Officer.2015. |
During fiscal year 2010,
Nonqualified Deferred Compensation Plans
Carver does not offer any non-qualified deferred compensation plans.
Benefit Plans
Performance Compensation Plan. Carver maintains a Performance Compensation Plan which is a cash-based incentive plan that provided certain officers and employees of Carver an incentive cash award that is credited to a memorandum account maintained by Carver for the benefit of such persons. The awards granted vest over a five-year period on the specified vesting dates, and under the terms of the Performance Compensation Plan are subject to accelerated vesting in connection with a change in control, or by reason of the death or disability of the participant. Upon the vesting of an award or a percentage of an award, the vested amount is distributed to the participant as soon as practicable, but in no plan-based awards were grantedevent later than the 15th day of the third month following the end of the plan year. In the event of the participant’s termination due to anydeath, disability or a change in control, the Performance Compensation Plan provides that the participant’s vested account balance will be paid within 30 days following the termination of our named executive officers. 21
The following table sets forth information regarding stock awards, stock options and similar equity compensation outstanding at March 31, 2010, whether granted during fiscal year 2010 or earlier.the employee’s employment. No awards have been transferred.
OUTSTANDING EQUITY AWARDS at FISCAL YEAR-END 2010
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | | Stock Awards | | | | | | | | | | | | | | | | | | | | | | | | Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | incentive plan | | | Equity | | | | | | | | | | | | | | | | | | | | | | | | awards: | | | incentive plan | | | | | | | | | | | | | | | | | | | | | | | | number of | | | awards: market | | | | | | | | Number of | | | Number of | | | | | | | | | | | unearned | | | or payout value | | | | | | | | securities | | | securities | | | | | | | | | | | shares, units or | | | of unearned | | | | | | | | underlying | | | underlying | | | | | | | | | | | other rights | | | shares, units or | | | | | | | | unexercised | | | unexercised | | | | | | | | | | | that have not | | | other rights | | | | | | | | options (#) | | | options (#) | | | Option exercise | | | Option | | | vested | | | that have not | | Name | | Date of Grant | | | exercisable | | | unexercisable | | | price($) | | | expiration date | | | (#) | | | vested ($)(1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Deborah C. Wright | | | 6/01/2000 | | | | 30,000 | | | | | | | | 8.210 | | | | 5/30/2010 | | | | 13,007 | | | $ | 113,811 | | | | | 8/22/2001 | | | | 30,000 | | | | | | | | 9.930 | | | | 8/20/2011 | | | | | | | | | | | | | 6/12/2002 | | | | 30,000 | | | | | | | | 12.060 | | | | 6/09/2012 | | | | | | | | | | | | | 6/24/2003 | | | | 20,000 | | | | | | | | 16.410 | | | | 6/21/2013 | | | | | | | | | | | | | 6/24/2004 | | | | 15,000 | | | | | | | | 19.630 | | | | 6/22/2014 | | | | | | | | | | | | | 6/09/2005 | | | | 4,074 | | | | 9,507 | | | | 17.130 | | | | 6/07/2015 | | | | | | | | | | | | | 11/20/2006 | | | | 4,696 | | | | 7,046 | | | | 16.500 | | | | 11/17/2016 | | | | | | | | | | | | | 5/11/2007 | | | | 2,624 | | | | 10,496 | | | | 16.900 | | | | 5/11/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | James H. Bason, Jr. | | | 2/5/2003 | | | | 2,700 | | | | | | | | 12.410 | | | | 2/02/2013 | | | | 2,302 | | | $ | 20,143 | | | | | 6/24/2004 | | | | 1,250 | | | | | | | | 19.630 | | | | 6/22/2014 | | | | | | | | | | | | | 6/09/2005 | | | | 273 | | | | 640 | | | | 17.130 | | | | 6/07/2015 | | | | | | | | | | | | | 5/04/2007 | | | | — | | | | | | | | | | | | | | | | | | | | | |
| | | (1) | | Unvested shares value is based on Carver’s stock price at close of business on March 31, 2010 of $8.75. |
Grant dates and vesting schedules for unvested shares are shown below for each Named Executive Officer.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Shares | | | | | | | | | | | | Grant Date | | | Granted | | | Unvested | | | Vesting Dates of Unvested Shares | | | Vested Schedule | Deborah Wright | | | 6/09/2005 | | | | 5,432 | | | | 3,260 | | | | 6/09/2010 | | | | | | | | | | | | | | | 10% yrs 1-4; 60% year 5 | | | | 11/20/2006 | | | | 5,513 | | | | 2,206 | | | | 6/14/2010 | | | | 6/14/2011 | | | | | | | | | | | 20% per year | | | | 5/11/2007 | | | | 6,160 | | | | 3,696 | | | | 5/11/2010 | | | | 5/11/2011 | | | | 5/11/2012 | | | | | | | 20% per year | | | | 6/11/2008 | | | | 4,807 | | | | 3,845 | | | | 6/11/2010 | | | | 6/11/2011 | | | | 6/11/2012 | | | | 6/11/2013 | | | 20% per year | | | | | | | Total Unvested | | | 13,007 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | James Bason | | | 6/09/2005 | | | | 1,096 | | | | 658 | | | | 6/09/2010 | | | | | | | | | | | | | | | | | | | 11/20/2006 | | | | 690 | | | | 276 | | | | 6/14/2010 | | | | 6/14/2011 | | | | | | | | | | | | | | | 5/04/2007 | | | | 775 | | | | 465 | | | | 5/04/2010 | | | | 5/04/2011 | | | | 5/04/2012 | | | | | | | | | | | 6/11/2008 | | | | 1,129 | | | | 903 | | | | 6/11/2010 | | | | 6/11/2011 | | | | 6/11/2012 | | | | 6/11/2013 | | | | | | | | | | Total Unvested | | | 2,302 | | | | | | | | | | | | | | | | | | | |
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Nonqualified Deferredmade under the Performance Compensation Plans
The Company did not have any non-qualified deferred compensation plans in fiscal year 2010.
Benefits Plans
Pension Plan.The subsequent to the date that Carver Federal Savings Bank Retirement Income Plan is a noncontributory, tax-qualified defined benefit plan (the “Pension Plan”). The Pension Plan was amended such that future benefit accruals ceased as of December 31, 2000. Since that date, no new participants were eligible to enterentered into the Pension Plan and participants as of such date have not been creditedTARP CPP with additional years of service or increased compensation. Active employees with at least one year of service on December 31, 2000 are eligible to receive a benefit under the Plan should the Plan be terminated. The amount of the benefit will be calculated based on age, credited years of service and pay at the time the plan was frozen. Employees with more than five years of service on December 31, 2000 who reach retirement age before the Plan is terminated are eligible for a benefit calculated based on the Plan’s definitions of earnings and eligibility. Ms. Wright is the only Named Executive Officer in the plan. The present value of Ms. Wright’s accumulated benefit in the plan is $27,886.U.S. Treasury.
401(k)401(k) Savings Plan.The CompanyCarver maintains a 401(k) Savings Plan (“(“401(k) Plan”) with a profit sharing feature for all eligible employees of the Company. The Company matchesCarver. Carver matched contributions to the 401(k) Plan equal to 100% of pre-tax contributions made by each employee up to a maximum of 4%3% of their pay, subject to IRS limitations. All such matching contributions are fully vested and non-forfeitable at all times regardless of the years of service with the Bank. To be eligible for the matching contribution, the employee must be 21 years of age and have completed at least three months of service. Under the profit-sharing feature of the Company has the discretion to make a contribution. Ifplan, if the Bank achieves a minimum of 70% of its fiscal year performance goal, the Compensation Committee may authorize an a non-elective contribution to the 401(k) Plan on behalf of each eligible employee of up to 2% of the employee’s annual pay, subject to IRS limitations. This non-elective contribution, if made, is awarded regardless of whether the employee makes voluntary contributions to the 401(k) Plan. Non-elective Company contributions vest 20% each year for the first five years of employment and are fully vested thereafter. To be eligible for the non-elective company contribution, the employee must be 21 years of age, have completed at least one year of service and be employed on the last day of the plan year, currently December 31, or have terminated employment for death, disability or retirement. The CompanyCarver did not award a non-elective contribution for the 401(k) Plan year that ended December 31, 2009.2015.
Employee Stock Ownership Plan.Effective upon conversion to a publicly traded company, an Employee Stock Ownership Plan (“ESOP”) was established for all eligible employees. The ESOP used proceeds from a term loan obtained from a third-party institution to purchase shares of Carver’s common stock in the initial public offering to pledge as collateral for the loan. In June 2004, the loan was paid off and the Bank continued to make discretionary contributions to the ESOP by purchasing shares in the open market. This was in accordance with Carver’s common stock repurchase program where shares are held in a suspense account for future allocation among the participants based on compensation, as described by the Plan, in the year of allocation. In May 2006, the Compensation Committee approved management’s recommendation and voted to freeze the ESOP. Discretionary contributions ceased and no new participants were eligible to enter the ESOP after December 31, 2006.
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Employment and Other Agreements with Executive Officers
Notwithstanding their employment and letter agreements as summarized below, Carver’s Named Executive Officers have agreed in writing to accept the ARRA standards discussed earlier in this document and to not accept any severance during the period in which the U.S. Treasury holds an equity position in Carver. Additionally, under the Orders issued by the regulators on February 7, 2011, Carver is prohibited from fulfilling severance payment commitments, resulting from termination for any reason (except for payments performed or benefits accrued), that are outside the scope of a non-discriminatory, all-employee severance program.
Employment Agreements.As of JuneAgreements
On January 1, 1999, both Carver and2015, Carver Federal entered into an employment agreements to secure the services of Deborah C. Wright asagreement (the “Employment Agreement”) with Michael T. Pugh, President and Chief Executive Officer. The employment agreements are intended to set forth the aggregate compensation and benefits payable to Ms. Wright for all services rendered to them and any of their subsidiaries. Both employment agreements provided for an initial term of the Employment Agreement is three years beginning June 1, 1999years. The Employment Agreement and pursuant toMr. Pugh’s performance will be reviewed by the termsBoard of Directors of the employment agreements,Bank six months before the third anniversary and six months before each yearanniversary thereafter, have been extended an additional year following a review of Ms. Wright’s performance by the Compensation Committee and the Board of Directors.Directors may approve a one-year extension of the Employment Agreement after each such review.
Under the Employment Agreement, Mr. Pugh is entitled to a base salary of $360,000, subject to increase at the discretion of the Board of Directors of the Bank in connection with its annual review. The Employment Agreement provides that Mr. Pugh was eligible for a restricted stock award to be granted on or about April 15, 2016, 2017 and 2018, with the amount of each award to be at the discretion of the Board of Directors of the Bank, but not fewer than
7,250 restricted shares of the Company’s common stock. The Employment Agreement also provides for participation in the Bank’s retirement, pension, savings, profit-sharing, stock bonus, health and welfare and any other employee benefit and compensation plans covering employees of the Bank. In addition, the employment agreementsEmployment Agreement provides that the Bank shall provide for an annual incentive payment based on the achievement of certain performance goals, future grant of stock awards,to Mr. Pugh a supplemental retirement benefit, additionalterm life insurance protection and participationpolicy in the variousamount of $1,000,000 payable to his beneficiaries. The Employment Agreement further provides that, in the event that the amount of benefits or contributions Mr. Pugh would have received or accrued under the tax-qualified plans of the Bank is limited by applicable sections of the Internal Revenue Code of 1986, as amended (the “Code”), the Bank will provide Mr. Pugh with supplemental benefits equal to the benefits attributable to employer contributions that he would have received if the limitations did not apply, with such benefits payable in 12 equal monthly installments beginning at least six months after his separation from service with the Bank. Finally, the Bank will pay or reimburse Mr. Pugh $2,500 per month in transportation and accommodation expenses during the period January 1, 2015 to August 31, 2015 until the location of his primary residence is completed, for customary relocation expenses, and up to $11,795 for legal expenses incurred by him in connection with the Employment Agreement.
Mr. Pugh may terminate his employment for “good reason,” which includes (i) a material diminution of his title, duties, responsibilities, authority or reporting lines, (ii) a material diminution in base salary, (iii) relocation of his principal office by more than 50 miles, and (iv) a material breach of the Employment Agreement by the Bank.
In the event that Mr. Pugh resigns for good reason or in the event the Company or the Bank terminates the employment of Mr. Pugh for any reason other than “cause” (as defined in the Employment Agreement) or “disability” (as defined in the Employment Agreement), he will be entitled to receive a cash lump sum payment equal to the present value of the salary that he would have earned if he had continued working for the Bank through the then-current expiration date of the Employment Agreement (the “Remaining Unexpired Employment Period”). If such resignation or termination occurs in connection with or within one year following a “change in control” (as defined in the Employment Agreement), then Mr. Pugh will be entitled to receive a cash lump sum payment equal to the lesser of (i) the present value of salary he would have earned during the Remaining Unexpired Employment Period plus one additional year, or (ii) the present value of two-times his then-current salary had it been paid out over the following two years. Any payments are required to be paid within 30 days after termination of employment, unless a six month delay in the payments is required to comply with Section 409A of the Internal Revenue Code of 1986, as amended (“Code”). Mr. Pugh will also be entitled to receive a cash lump sum payment equal to (i) the excess of the present value of the aggregate benefits to which he would be entitled under any defined benefit pension plans over the present value of the benefits to which he is actually entitled under such defined benefit pension plans as of the date of his termination, (ii) the present value of the additional employer contributions to which he would have been entitled under any defined contribution plans, (iii) the fair market value of any stock that would have been allocated or awarded to him under any stock-based employee benefit plans, maintained(iv) the payments that would have been made to him under any cash bonus or long-term or short-term cash incentive compensation plan and (v) the present value of any supplemental retirement benefits to which he would have been entitled, in each case if he were 100% vested under the applicable plan and had continued working for the Bank during the Remaining Unexpired Employment Period. In addition, Mr. Pugh will be entitled to receive, at his election, a cash lump sum payment equal to (i) the excess of fair market value of a share of the Company’s common stock over the exercise price of any option or stock appreciation right held by Carverhim, and Carver Federal from time(ii) the fair market value of any restricted shares awarded to time.him, in each case upon surrender of such stock, option or appreciation right. The agreements alsoBank will continue to provide customary corporate indemnificationhealth and errorswelfare benefits, as well as the term life insurance policy, to which Mr. Pugh and omissions insurance coverage throughouthis eligible dependents would have been entitled for the Remaining Unexpired Employment Period and for any such additional period to which they are entitled under COBRA.
In the event of Mr. Pugh’s termination for “disability” (as defined in the Employment Agreement), he will be entitled to receive ¾ of his base salary, and the Bank shall continue to provide health and welfare benefits substantially identical to those received prior to his disability, through the earliest to occur of (i) his return to full-time employment in the same capacity as he was employed prior to disability, (ii) his full-time employment by another employer, (iii) his reaching age 65, (iv) his death, or (v) the expiration of the term of the agreementsEmployment Agreement.
All payments are subject to Section 409A and for six years thereafter. Carver may terminate Ms. Wright’s employment at any time for cause as definedSection 280G of the Code, and restrictions resulting from the Bank’s participation in the employment agreements. In the event that Carver terminates Ms. Wright’s employment for reasons other than for cause, she would be entitled to a severance benefit equal in value to the cash compensation, retirementTroubled Asset Relief Program and other fringe benefits she would have earned had she remained employedregulatory restrictions.
Mr. Pugh has agreed, for a period of one year following the remaining termdate of his termination (or, if less, the Remaining Unexpired Employment Period), not to become an officer, employee, consultant, director or trustee of any bank with less than two billion dollars in assets or any minority depository institution, or any direct or indirect subsidiary or affiliate of any such entity, that competes with the business of the agreements. The same severance benefits would be available if Ms. Wright resigns duringBank in any city, town or county in which the term of the employment agreements following a loss of title,Bank has an office or membership on the Board; a material reduction in her duties, functions or responsibilities; involuntary relocation of her principal place of employment by over 30 miles from its location as of June 1, 1999, other material breaches of contract by Carver that are not cured within 30 days; or, in certain circumstances, a change in control. In the event of a change in control, the remaining term of Ms. Wright’s agreement with Carver at any point in time will be three years unless written notice of non-renewal is given by the Board or Ms. Wright.has filed an application for approval to establish an office. A portion of the severance benefits payable to Ms. Wright under her employment agreements in the event of a change in control might constitute “excess parachute payments” under current federal tax laws. Federal tax laws impose a 20% excise tax, payable by the executive, on excess parachute payments. In the event that any amounts paid to Ms. Wright following a change of control would constitute “excess parachute payments”,Ms. Wright’s employment agreement with Carver provides that she will be indemnified for any excise taxes imposed due to such excess parachute payments, and any additional income and employment taxes imposed as a result of such indemnification of excise taxes. Any excess parachute payments and indemnification amounts paid will not be deductible compensation expenses for the Company.
Letter Agreements. The CompanyAgreements
Carver entered into letter employment agreements with Messrs. Spencer and Raborn and Ms. McFadden and Messrs Bason and Ricca.Maier. Generally, each letter employment agreement provides for “at-will” employment and compensation in the form of base salary and benefits continuation based on length of service and in certain instances, a one-time payment.benefits. Change in Control Arrangements. In the event of a change in control, pursuant to her employment agreement, Ms. Wright is eligible for three years of base salary and benefits continuation. Pursuant to their letter agreements, as of March 31, 2010, Ms. McFadden and Messrs Ricca and Bason are eligible for 39 weeks of base salary and benefits continuation. Notwithstanding their change in control arrangements, the Company’s senior executive officers have agreed in writing to accept the ARRA standards discussed earlier in this document. Under ARRA, during the period in which the Treasury holds an equity position in the Company, the Company is prohibited from paying severance resulting from termination for any reason, except for payments for services performed or benefits accrued.
24
Recent Legislation and Its Impact On Executive Compensation24
On January 16, 2009, the Company completed a financing transaction with the United States Treasury under the TARP. The Company is therefore subject to these restrictions, and would be unable to make any of the payments described above under the caption “Potential Payments Upon Termination or Change in Control.” To comply with these restrictions, Ms. Wright, Ms. McFadden, Mr. Ricca and Mr. Bason have signed agreements waiving their respective rights to severance payments for so long as the Company is legally prohibited from making such payments.
Under ARRA, all institutions that have received government investments under the TARP are required to comply with new executive compensation restrictions. Among other things, these restrictions prohibit the payment of severance to the Company’s senior executive officers upon their departure from the institution for any reason. In addition, for institutions like the Company that have received less than $25 million under the TARP, the institution’s highest paid executive officer may not receive a cash bonus, but may receive a bonus in the form of restricted stock provided that (i) the restricted stock does not vest until the Treasury’s investment is redeemed, and (ii) the value of the restricted stock does not exceed one-third of the officer’s annual compensation. These restrictions remain in place for so long as the government’s investment in the institution is outstanding.
In February 2010, the U.S. Treasury announced the creation of the TARP Community Development Capital Initiative (“CDCI”), in recognition of the unique role of Community Development Financial Institutions (“CDFI’s”) as lenders in disadvantaged communities. Carver, as a CDFI, applied to participate in the CDCI program. On August 27, 2010, Carver completed an exchange of TARP CCP capital for CDCI capital. All restrictions on executive compensation that applied under TARP CPP remain in force under the CDCI program.
Director Compensation The Chairman of the Board of Directors is currently the Chief Executive Officer and does not receive any additional compensation for serving as the Board Chairman. The Company’s outside
Carver’s directors are paid an annual cash retainer of $10,000 to serve as a Director of both Carver and Carver Federal and receive a meeting fee of $600 for Board Meetings attended and $700 per Executive Committee meeting attended. The chairs of the Asset Liability and Interest Rate Risk Committee (“(“ALCO”) and Audit committees receive an annual retainer of $7,500 and $5,000, respectively, and a meeting fee of $650.The chairs of the remaining committees receive an annual retainer of $1,500 and all committee members including the chairs thereof receive $475 per committee meeting attended. The Non-Executive Chairman is paid a quarterly cash retainer of $10,000 ($40,000 per year) to serve as Chairman of both Carver and Carver Federal, and receives a meeting fee of $1,500 for Board Meetings attended. Upon shareholder approval of new directors, the Compensation Committee may approve a grant of 1,000 shares of restricted stock and 1,000 stock options, which vest pursuant to the Company’sCarver’s incentive plan in effect at the time of the grant. In 2010, after a competitive study of Non-Employee Director Compensation conducted by PM&P,Pearl Meyer, the Compensation Committee decidedvoted to grant annual restricted stock awards in the amount of $5,000 to each non-employee director. Such grants are effective as of the date of eachNon-Employee director at subsequent annual meeting of stockholders.meetings. All other compensation elements would remain unchanged. The Non-Employee Directors have not received annual restricted stock awards given the constraints on Carver’s Equity Plan. 25
The following table sets forth information regarding compensation earned by the non-employee directors of the CompanyCarver during the last fiscal year.year ended March 31, 2016.
DIRECTOR COMPENSATION AT FISCAL YEAR-END 2010MARCH 31, 2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Change In | | | | | | | | | | Fees | | | | | | | | | | | | | | | Pension | | | | | | | | | | Earned | | | | | | | | | | | | | | | Value And | | | | | | | | | | or | | | | | | | | | | | Non-Equity | | | Nonqualified | | | | | | | | | | Paid In | | | Stock | | | Option | | | Incentive Plan | | | Deferred | | | All Other | | | | | | | Cash | | | Awards | | | Awards | | | Compensation | | | Compensation | | | Compensation | | | Total | | Name | | ($) | | | ($) | | | ($) | | | ($) | | | Earnings | | | ($) | | | ($) | | Carol Baldwin Moody | | $ | 28,525 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 28,525 | | Dr. Samuel Daniel | | $ | 28,325 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 28,325 | | David L. Hinds | | $ | 38,650 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 38,650 | | Robert Holland, Jr. | | $ | 32,200 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 32,200 | | Pazel G. Jackson Jr. | | $ | 41,200 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 41,200 | | Edward B. Ruggiero | | $ | 25,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 25,000 | | Robert Tarter | | $ | 29,525 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 29,525 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fees earned or paid in cash | | Stock awards | | Option awards | | Non-equity incentive plan compensation | | Change in pension value and nonqualified deferred compensation earnings | | All other compensation | | Total | Name | | ($) | | ($) | | (S) | | ($) | | | | ($) | | ($) | (a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | Dr. Samuel Daniel (1) | | $10,900 | | — |
| | — |
| | — |
| | — |
| | — |
| |
| $10,900 |
| Deborah C. Wright | | $70,000 | | — |
| | — |
| | — |
| | — |
| | — |
| |
| $70,000 |
| Robert Holland, Jr. | | $22,875 | | — |
| | — |
| | — |
| | — |
| | — |
| |
| $22,875 |
| Pazel G. Jackson, Jr. | | $39,425 | | — |
| | — |
| | — |
| | — |
| | — |
| |
| $39,425 |
| Robert Tarter | | $34,425 | | — |
| | — |
| | — |
| | — |
| | — |
| |
| $34,425 |
| Susan Tohbe | | $29,825 | | — |
| | — |
| | — |
| | — |
| | — |
| |
| $29,825 |
| Janet Rollé | | $20,425 | | — |
| | — |
| | — |
| | — |
| | — |
| |
| $20,425 |
| Lewis P. Jones III | | $26,950 | | — |
| | — |
| | — |
| | — |
| | — |
| |
| $26,950 |
| Colvin W. Grannum | | $24,475 | | — |
| | — |
| | — |
| | — |
| | — |
| |
| $24,475 |
| Kenneth Knuckles | | $26,650 | | — |
| | — |
| | — |
| | — |
| | — |
| |
| $26,650 |
| Ingrid LaMae deJongh | | $24,400 | | — |
| | — |
| | — |
| | — |
| | — |
| |
| $24,400 |
|
(1) Dr. Daniel retired from the Board of Directors effective as of the 2015 Annual Meeting of Stockholders, which was held on September 24, 2015.
Impact of Accounting and Tax on the Form of Compensation
The Compensation Committee and the CompanyCarver consider the accounting and tax (individual and corporate) consequences of the compensation plans prior to making changes to the plans. The Compensation Committee has considered the impact of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)(ASC) Topic 718 (formerly “SFASSFAS No. 123R”)123(R), on the Company’sCarver’s use of equity incentives as a key retention tool.
As part of its role, the Compensation Committee also reviews and considers sections of the Internal Revenue Code (“IRC”), including but not limited to, Golden Parachutes Under IRC Section 280(g)280G and the deductibility of executive compensation under Section 162(m) which limits deduction of compensation paid to Named Executive Officers to $1,000,000 unless the compensation is“performance-based”. This applies to base salary, all cash incentive plans and equity grants other than stock options. During fiscal year 2010,2015, no employee received taxable compensation in excess of $1,000,000 and therefore, deductibility of compensation was not limited by these sections of the IRC.
Option Granting Practices
The timing of the Company’sCarver’s option grants has historically been and continues to be determined upon appointment to the Board, upon hire, or in conjunction with incentive grants after the Company’sCarver’s fiscal year end and approved by the Compensation Committee. In fiscal year 2010,2016, no options were granted to Named Executive Officers. When granted, however, grants vest pursuant to the Company’sCarver’s incentive plan in effect at the time of the grant.
Ownership Guidelines The Company
Carver regularly reviews the ownership levels of its directors and officers and has not established minimum stock ownership guidelines as the Company’sfor Carver’s directors and the Named Executive Officers collectively own a significant amount of Company Stock.Officers. 26
Conclusion26
The Compensation Committee retains the discretion to decrease all forms of incentive payouts based on significant individual or Company performance shortfalls. Likewise, the Committee retains the discretion to increase payouts and/or consider special awards for significant achievements, including but not limited to superior asset management, investment or strategic accomplishment and/or consummation of beneficial acquisitions.
Overall, the level and mix of compensation that is finally decided upon is considered within the context of both the objective data from Carver’s competitive assessment of compensation and performance, as well as discussion of the subjective factors as outlined above. The Compensation Committee believes that each executive’s compensation is within the competitive range of practices when compared to the objective comparative data and reasonable given Company and individual performance.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table sets forth information about the shares of Voting Stock authorized by Carver for issuance under equity compensation plans as of March 31, 2010.
| | | | | | | | | | | | | | | | | | | | | | | Number of | | | | | | | | | | | | securities | | | | Number of | | | | | | | remaining | | | | securities to be | | | Weighted- | | | available for future | | | | issued upon | | | average | | | issuance under | | | | exercise of | | | exercise price | | | equity | | | | outstanding | | | of outstanding | | | compensation | | | | options, | | | options, | | | plans (excluding | | | | warrants and | | | warrants and | | | securities reflected | | Plan Category | | rights | | | rights | | | in column (a)) | | | | | | | | | | | | | | | Equity compensation plans approved by security holders | | | 208,514 | | | $ | 12.03 | | | | 249,046 | | | | | | | | | | | | | | | Equity compensation plans not approved by security holders | | | — | | | | — | | | | — | | | | | | | | | | | | | | | Total | | | 208,514 | | | $ | 12.03 | | | | 249,046 | |
The Company’s Stock Incentive Plans do not provide for re-pricing of stock options, which is the cancellation of shares in consideration of the exchange for other stock options to be issued at a lower price, and the Company has not acted to re-price stock options.
| | | Item 12. | | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersMatters. |
The following table sets forth, as of February 16, 2011,July 25, 2016, certain information as to shares of Voting Stock beneficially owned by persons owning in excess of 5% of any class of Carver’s outstanding Voting Stock. Carver knows of no person, except as listed below, who beneficially owned more than 5% of any class of the outstanding shares of Carver’s Voting Stock as of February 16, 2011.July 25, 2016. Except as otherwise indicated, the information provided in the following table was obtained from filings with the Securities and Exchange Commission (“SEC”) and with Carver pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Addresses provided are those listed in the filings as the address of the person authorized to receive notices and communications. For 27
purposes of the table below and the table set forth under “Security Ownership of Management,” in accordance with Rule 13d-3 under the Exchange Act, a person is deemed to be the beneficial owner, for purposes of these tables, of any shares of stock (1) over which he or she has or shares, directly or indirectly, voting or investment power, or (2) of which he or she has the right to acquire beneficial ownership at any time within 60 days after February 16, 2011.July 25, 2016. As used in this proxy statement, “voting power” is the power to vote or direct the voting of shares, and “investment power” includes the power to dispose or direct the disposition of shares. | | | | | | | | | | | Amount and Nature of | | | Percent of | | Name and Address | | Beneficial | | | Common Stock | | of Beneficial Owner | | Ownership | | | Outstanding(1) | | Wellington Management Company, LLP 75 State Street Boston, MA 02109 | | | 244,500 | (2) | | | 9.68 | % | Donald Leigh Koch c/o Koch Asset Management, L.L.C. 1293 Mason Road Thown & Country, MO 63131 | | | 238,016 | (3) | | | 9.43 | % | Third Avenue Management LLC 622 Third Avenue, 32nd Floor New York, NY 10017 | | | 218,500 | (4) | | | 8.65 | % | Deborah C. Wright c/o Carver Federal Savings Bank 75 West 125th Street New York, NY 1027 | | | 161,946 | (5) | | | 6.41 | % | Bay Pond Partners, L.P. c/o Wellington Management Company, LLP 280 Congress Street Boston, MA 02210 | | | 154,700 | (6) | | | 6.13 | % | Keefe, Bruyette & Woods, Inc. 787 Seventh Avenue New York, NY 10019 | | | 143,600 | (7) | | | 5.69 | % |
| | | | Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Common Stock Outstanding(1) | U.S. Department of the Treasury c/o The Bank of New York Mellon 2 Hanson Place Brooklyn, NY 11217 | 2,321,286 (2) | 62.8% |
| | | (1) | | On February 16, 2011,July 26, 2015, there were 2,524,6913,696,087 outstanding shares of Common Stock. On October 27, 2011, Carver completed a 1-for-15 reverse stock split, which reduced the number of outstanding shares of common stock from 2,492,415 to 166,161. |
| | (2) | | Based on a Schedule 13G/A filed withOn October 28, 2011, the SEC on February 14, 2007 by Wellington Management Company, LLP. | | (3) | | Based on a Schedule 13G filed withU.S. Department of the Securities and Exchange Commission jointly by Koch Asset Management, L.L.C. (“KAM”Treasury (the “U.S. Treasury”) and Donald Leigh Koch on February 11, 2011. In its roleexchanged the Series B preferred stock it owned as an investment manager having trading authority over securities held in accounts on behalfpart of its clients (“Managed Portfolios”the TARP Community Development Capital Initiative (the “TARP-CDCI”), KAM has sole dispositive power over 238,016 for 2,321,286 shares of Common Stock and as a result, may be deemed the beneficial owner of the same. Donald Leigh Koch owns 100% of KAM and serves as its managing member, from which Mr. Koch may be deemed to have the power to exercise any dispositive power that KAM may have with respect to Carver Common Stock. Additionally, Mr. Koch, individually, and Mr. Koch and his spouse, jointly, own and hold voting power with respect to Managed Portfolios containing approximately 70,500Series C Preferred stock converted into 1,208,039 shares of Common Stock (the “Koch Shares”). Other than with respect to the Koch Shares, Mr. Koch specifically disclaims beneficial ownership over anyand 45,118 shares of Series D preferred stock. Series C stock was previously reported as Mezzanine equity, and upon conversion to Common Stock that he or KAM may be deemed to beneficially own. | | (4) | | Based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 14, 2006 by Third Avenue Management LLC. | | (5) | | Includes 132,399 vested options to purchase shares of Common Stock. | | (6) | | Based on a Schedule 13G filed with the Securities and Exchange Commission on February 14, 2011 jointly by Bay Pond Partners, L.P. and Wellington Hedge Management, LLC. | | (7) | | Based on a Schedule 13G filed with the Securities and Exchange Commission on February 11, 2011 by Keefe, Bruyette & Woods, Inc.Series D is now reportable as stockholders’ equity. |
28
Security Ownership of Management The following table sets forth information about the shares of Voting Stock beneficially owned by each nominee, each Continuing Director (as defined herein),current director of Carver, each Named Executive Officer identified in the Summary Compensation Table included in this proxy statement, and all directors and executive officers of Carver or Carver Federal, as a group, as of February 16, 2011.July 25, 2016. Except as otherwise indicated, each person and each group shown in the table has sole voting and investment power with respect to the shares of Voting Stock indicated and none of the shares are pledged as security. | | | | | | | | | | | | | | | Amount and Nature | | | | | | | | | of Beneficial | | | | | | | | | Ownership of | | | Percent of | | | | | | Common Stock | | | Common Stock | | Name | | Title | | (1) (2) | | | Outstanding (3) | | | | | | | | | | | | | Deborah C. Wright | | Chairman and Chief Executive Officer | | | 161,946 | | | | 6.41 | % | Samuel J. Daniel | | Director | | | 2,527 | | | | * | | Robert Holland, Jr. | | Director | | | 19,347 | | | | * | | Pazel G. Jackson, Jr. | | Director | | | 1,326 | | | | * | | Janet L. Rollé | | Director | | | 2,000 | | | | | | Robert R. Tarter | | Director | | | 2,000 | | | | * | | Susan M. Tohbe | | Director | | | 2,000 | | | | | | Mark A. Ricca | | Executive Vice President and Chief Risk Officer | | | 7,500 | | | | * | | Chris McFadden | | Executive Vice President and Chief Financial Officer | | | 7,500 | | | | * | | James H. Bason | | Senior Vice President and Chief Lending Officer | | | 10,033 | | | | * | | | | | | | | | | | | | All directors and other executive officers as a group persons (10 persons) | | | | | | | 8.56 | % |
| | | | | | Name | Title | Amount and Nature of Beneficial Ownership of Common Stock (1) | Percent of Common Stock Outstanding (2) | | | | | Deborah C. Wright | Chairman of the Board | 1,656 |
| * | Robert Holland, Jr. | Director | 1,024 |
| * | Pazel G. Jackson, Jr. | Director | 88 |
| * | Janet L. Rollé | Director | 133 |
| * | Robert R. Tarter | Director | 133 |
| * | Susan M. Tohbe | Director | 133 |
| * | Lewis P. Jones III | Director | 1,000 |
| * | Colvin W. Grannum | Director | 1,000 |
| * | Kenneth J. Knuckles | Director | 1,000 |
| * | Ingrid LaMae deJongh | Director | 1,000 |
| * | Michael T. Pugh | President, Chief Executive Officer and Director | — |
| * | Christina L. Maier | First Senior Vice President and Chief Financial Officer | — |
| * | David L. Toner | Former First Senior Vice President and Chief Financial Officer (3) | 610 |
| * | John Spencer | Senior Vice President, Chief Operations and Information Technology Officer | 333 |
| * | James Raborn | Former First Senior Vice President, General Counsel, and Loan Workout Officer (4) | — |
| * | Blondel Pinnock | Senior Vice President and Chief Lending Officer | 481 |
| | Less than 1% of outstanding Common Stock. | All directors and other executive officers as a group persons (16 persons) | 8,591 |
| * |
* Less than 1% of outstanding Common Stock. | | (1) | | Amounts of equity securities showninclude shares of common stock subject to options exercisable within 60 days as follows: Ms. Wright — 132,399; Dr. Daniel — 800; Mr. Holland — 2,986;- 1,656; Mr. Tarter — 800; Mr. Bason — 4,863;- 66; Ms. Rollé - 66; Ms. Tohbe - 66; all officers and directors as a group — 141,848.- 1,854. |
Amounts of equity securities shownalsoinclude shares of common stock subject to options that are not exercisable within 60 days as follows: Mr. Jones - 600; Mr. Grannum - 600; Mr. Knuckles - 600; Ms. deJongh - 600; all officers and directors as a group - 2,400. Amounts of equity securities showninclude unvested shares of restricted stock awarded to the executive officers and directors under the 2006 Stock Incentive Plan, which such executive officers and directors have neither voting nor dispositive power, as follows: Ms. Rollé - 13; Ms. Tohbe - 13; Mr. Spencer - 67; Ms. Pinnock - 67; Mr. Jones - 1,000; Mr. Grannum - 1,000; Mr. Knuckles - 1,000; Ms. deJongh - 1,000; all officers and directors as a group - 4,160.
| | | Amounts of equity securities shown also include shares of common stock subject to options that are not exercisable within 60 days as follows: Ms. Wright — 7,596; Dr. Daniel — 200; Ms, Rollé — 1,000; Mr. Tarter — 200; Ms. Tohbe — 1,000; all officers and directors as a group — 9,996. | | | | Amounts of equity securities shown include unvested shares of restricted stock awarded to the executive officers and directors under the 2006 Stock Incentive Plan, which such executive officers and directors have neither voting nor dispositive power, as follows: Dr. Daniel — 200; Ms, Rollé — 1,000; Mr. Tarter — 200; Ms. Tohbe — 1,000; Mr. Ricca — 7,500; Ms. McFadden — 7,500; all officers and directors as a group — 17,400. | | (2) | | Includes 71,499 shares in the aggregate held by the ESOP Trust that have been allocated as of December 31, 2009 to the individual accounts of executive officers under the ESOP and as to which an executive officer has sole voting power for the shares allocated to such person’s account, but no dispositive power, except in limited circumstances. Ms Wright has 9,014 shares and Mr. Bason has 2,388 shares. | | (3) | | Percentages with respect to each person or group of persons have been calculated on the basis of 2,524,691 shares of Common Stock, exclusive of shares held by Carver the total number of3,696,087 shares of Common Stock outstanding as of February 16, 2011July 25, 2016, plus the number of shares of Common Stock which such person or group has the right to acquire within 60 days after February 16, 2011July 25, 2016 by the exercise of stock options. |
29
Securities Authorized for Issuance Under Equity Compensation Plans The following table sets forth information about the shares of Voting Stock authorized by Carver for issuance under equity compensation plans as of March 31, 2016.
| | | | | Plan Category | Number of securities to be issued upon exercise of Outstanding options, warrants and Rights. | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) | | | | | Equity compensation plans approved by security holders (1) | 5,924 | $81.65 | 264,075 | | | | | Equity compensation plans not approved by security holders | — | — | — | | | | | Total | 5,924 | $81.65 | 264,075 |
(1)Note: Shares have been adjusted to reflect Carver’s 1-for-15 reverse stock split, effective October 27, 2011.
Carver’s Stock Incentive Plans do not provide for re-pricing of stock options, which is the cancellation of shares in consideration of the exchange for other stock options to be issued at a lower price, and Carver has not acted to re-price stock options.
| | | Item 13. | | Certain Relationships and Related Transactions, and Director Independence.
|
Item 13.Certain Relationships and Related Transactions, and Director Independence. Board Independence and Leadership Structure
Independence. The Board of Directors has determined that each of its continuing non-management directors, other than Deborah C. Wright, is independent according to the Board’s independence standards as set out in its Bylaws, Corporate Governance Principles, applicable rules of the SEC and the rules of the NASDAQ Stock Market. They are Robert Holland, Jr., Janet L. Rollé, Lewis P. Jones III, Colvin W. Grannum, Robert R. Tarter, Kenneth Knuckles, Ingrid LaMae deJongh, Pazel G. Jackson, Jr., and Susan M. Tohbe. The Board of Directors determined that Deborah C. Wright was not independent because she served as an executive officer of Carver until December 31, 2014. Board Leadership Structure. The Board of Directors has separated the position of Chairman of the Board from the position of Chief Executive Officer, effective January 1, 2015. The Board of Directors believes this provides an efficient and effective leadership model for Carver. Lead Independent Director. The Board of Directors has created the position of lead independent director, whose primary responsibility is to preside over periodic executive sessions of the independent members of the Board of Directors. The lead independent director also prepares the agenda for meetings of the independent directors, serves as a liaison between the independent directors and management and outside advisors, and makes periodic reports to the Board of Directors regarding the actions and recommendations of the independent directors. The independent members of the Board of Directors have designated Robert Holland, Jr. to serve in this position for fiscal year 2017. Transactions with Certain Related Persons Applicable law requires that all loans or extensions of credit to executive officers and directors must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with the general public and must not involve more than the normal risk of repayment or present other unfavorable features. Carver Federal offers loans to its directors, officers and employees, which loans are made in the ordinary course of business and are not made with more favorable terms nor do they involve more than the normal risk of collectability or present unfavorable features. Furthermore, loans above the greater of $25,000, or 5% of Carver Federal’s capital and surplus (up to $500,000), to Carver Federal’s directors and executive officers must be approved in advance by a majority of the disinterested members of Carver Federal’s Board of Directors. As of the date of this proxy statement, neither Carver nor Carver Federal had made any outstanding loans or extensions of credit to any of its executive officers or directors.
| | | Item 14. | | Principal Accounting Fees and Services.
|
General
The Finance
Item 14.Principal Accounting Fees and Services. Audit Committee of the Board of Directors of Fees Carver has appointed the firm ofpreviously retained KPMG, LLP as independent auditors for Carverits auditor for the fiscal year endingyears ended March 31, 20122016 and the Board of Directors has determined that it would be desirable to request that stockholders ratify such appointment. Representatives of KPMG LLP are expected to be present at the Annual Meeting. They will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions. Stockholder ratification of the appointment of KPMG LLP is not required by Carver’s Bylaws or otherwise. However, the Board of Directors is submitting the appointment of the independent registered public accounting firm to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the appointment of KPMG LLP, the Finance and Audit Committee will reconsider whether it should select another independent registered public accounting firm. Even if the selection is ratified, the Finance and Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change is in the best interests of Carver Bancorp, Inc. and its stockholders.
Auditor Fee Information
2015. KPMG’s fees billed for the fiscal years ended March 31, 20102016 and 20092015 were as follows: | | | | | | | | | | | 2010 | | | 2009 | | Audit fees | | $ | 494,600 | | | $ | 400,000 | | | | | | | | | Audit-Related Fees | | | — | | | | — | | | | | | | | | Tax Fees | | | | | | | | | Other fees* | | $ | — | | | $ | 69,442 | | | | | | | | | Total | | $ | 494,600 | | | $ | 469,442 | |
| | | * | | Includes audit and tax work for Carver Community Development Corporation and the maintenance | | | | | | | 2016 | | 2015 | | Audit fees | 660,000 | | $500,000 | | Audit-related fees | 8,000 | | 8,000 | | Tax fees | — | | — | | | | | | | Total | 668,000 | | $508,000 | |
Pre-Approval of Carver as a community development entity. |
30
Pre-Approval Policy for Services by the Independent AuditorsRegistered Public Accounting Firm
During fiscal year 2010,2016, the Finance and Audit Committee of Carver’s Board of Directors pre-approved the engagement of KPMG LLP to provide non-audit services and considered whether, and determined that, the provision of such other services by KPMG LLP is compatible with maintaining KPMG LLP’s independence. In June 2004, the Finance and Audit Committee established a policy to pre-approve all audit and permissible non-audit services provided by KPMG LLP consistent with applicable SEC rules. Under the policy, prior to the engagement of the independent auditors for the next year’s audit, management submits an aggregate of services expected to be rendered during that year for each of the four categories of services described above to the Finance and Audit Committee for approval. Prior to engagement, the Finance and Audit Committee pre-approves these services by category of service. The fees are budgeted and the Finance and Audit Committee will receive periodic reports from management on actual fees versus the budget by category of service. During the year, circumstances may arise when it may become necessary to engage the independent auditors for additional services not contemplated in the pre-approval. In those instances, the Finance and Audit Committee requires specific pre-approval before engaging the independent auditor. The Finance and Audit Committee has delegated pre-approval authority, subject to certain limits, to the chairman of the committee. The chairman is required to report, for informational purposes, any pre-approval decisions to the Finance and Audit Committee at its next regularly scheduled meeting. Report of the Finance and Audit Committee of the Board of Directors This report is furnished by the Carver Finance and Audit Committee of the Board of Directors as required by the rules of the SEC under the Exchange Act. The report of the Finance and Audit Committee 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 (“Securities Act”), or the Exchange Act, except to the extent that Carver specifically incorporates this information by reference, and shall not otherwise be deemed to be filed under the Securities Act or the Exchange Act.
The Board of Directors has adopted a written charter that sets forth the Finance and Audit Committee’s duties and responsibilities and reflects applicable rules of the NASDAQ Stock Market and SEC regulations. All members of the Finance and Audit Committee have been determined to be independent as defined in the listing requirements of the NASDAQ Stock Market. The Board of Directors has determined that Robert R. Tarter, Pazel G. Jackson, Jr. and Susan M. Tohbe each qualify as an “audit committee financial expert.” The Finance and Audit Committee received the required written disclosures and letter from KPMG LLP, Carver’s independent accountants for fiscal year ended March 31, 2016, required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning the independent registered public accounting firm’s independence. The Finance and Audit Committee reviewed and discussed with the Company’sCarver’s management and KPMG LLP the audited financial statements of the CompanyCarver contained in the Company’sCarver’s fiscal year 20102016 annual report on Form 10-K. The Finance and Audit Committee has also discussed with KPMG LLP the matters required to be discussed pursuant to the Codified Statements on Auditing Standards No. 61, as amended or supplemented.
Throughout the year, the Finance and Audit Committee had full access to management and the independent and internal auditors for the Company.Carver. The Finance and Audit Committee consulted with advisors regarding the Sarbanes-Oxley Act of 2002, the NASDAQ Stock Market’s corporate governance listing standards and the corporate governance environment in general and considered any additional requirements of the Finance and Audit Committee as well as additional procedures or matters the Finance and Audit Committee should consider. DuringFollowing the end of fiscal year 2010,2016, the Finance and Audit Committee approved the retention of the Company’sBDO USA, LLP as Carver’s independent accounting firm KPMG LLP, and received the Board’s ratification of this decision. The Finance and Audit Committee acts only in an oversight capacity and necessarily relies on the assurances and work of the Company’sCarver’s management and independent auditors who expressed an opinion on the Company’sCarver’s annual financial statements. The Company’sCarver's management has the primary responsibility for the financial statements and the reporting process, including the systems of internal control. Based on its review and discussions described in the immediately preceding paragraphs, the Finance and Audit Committee recommended to the Board of Directors that the audited financial statements included in the Company’sCarver’s fiscal year 20102016 Annual Report on Form 10-K be included in that report. Finance and Audit Committee of Carver Bancorp, Inc.
Robert R. Tarter (Chairman)
Pazel G. Jackson, Jr.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. | | | | | | | | | | | | | CARVER BANCORP, INC. | | | | | | | | | | February 24, 2011 | August 18, 2016 | By | | /s/ Deborah Wright | Michael T. Pugh | | | | | | Deborah C. Wright | Michael T. Pugh | | | | | | ChairmanPresident and Chief Executive Officer | | |
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below on August 12, 2016 by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. | | | | | /s/ Deborah WrightDeborah C. Wright Michael T. Pugh | | ChairmanPresident and Chief Executive Officer
| Michael T. Pugh | (Principal Executive Officer) | | | | /s/ Chris McFaddenChris McFadden Christina L. Maier | | First Senior Vice President and Chief Financial Officer
| Christina L. Maier | (Principal FinancialAccounting Officer and AccountingPrincipal Financial Officer) | | | /s/ Deborah C. Wright | Chairman | /s/ Samuel J. DanielSamuel J. Daniel Deborah C. Wright | | Director | | | /s/ Ingrid LaMae deJongh | Director | /s/ Robert Holland, Jr.Robert Holland, Jr. Ingrid LaMae deJongh | | Lead Director | | | /s/ Colvin W. Grannum | Director | Colvin W. Grannum | | | | /s/ Robert Holland, Jr. | Lead Director | Robert Holland, Jr. | | | | /s/ Pazel G. Jackson, Jr. | Director | Pazel G. Jackson, Jr. | | Director | | | /s/ Lewis P. Jones III | Director | /s/ Janet L. RolléJanet L. Rollé Lewis P. Jones III | | Director | | | /s/ Kenneth J. Knuckles | Director | /s/ Robert R. TarterRobert R. Tarter Kenneth J. Knuckles | | Director | | | /s/ Michael T. Pugh | Director | Michael T. Pugh | | | | /s/ Janet L. Rollé | Director | Janet L. Rollé | | | | /s/ Robert R. Tarter | Director | Robert R. Tarter | | | | /s/ Susan M. Tohbe | Director | Susan M. Tohbe | | Director |
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