UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


SCHEDULE 14A


Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934

(Amendment No.   )

 

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NEW PEOPLES BANKSHARES, INC.


(Name of Registrant as Specified In Its Charter)


(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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 NEW PEOPLES BANKSHARES, INC.

67 Commerce Drive
Honaker, Virginia 24260

 

Dear Shareholder:

 

You are cordially invited to attend the 20162022 Annual Meeting of Shareholders of New Peoples Bankshares, Inc. (the “Company”) to be held on Tuesday, May 17, 2016,2022, at 6:00 p.m. atby virtual audio meeting. In support of the Abingdon officehealth of New Peoples Bank, 350 West Main Street, Abingdon, Virginia 24210. our shareholders, directors and employees, the Board of Directors has determined that the Annual Meeting will be conducted exclusively as a “virtual audio meeting” of shareholders via online live webcast. There will be no physical location for the meeting. You will be able to attend and listen to the meeting live, submit questions and vote online during the meeting by visiting meetnow.global/MUWP9Q9. For information on how to participate in the virtual Annual Meeting, please see the first paragraph on page 1 of the accompanying proxy statement.

At the Annual Meeting, you will be asked to vote on threetwo proposals. Enclosed with this letterWe are furnishing proxy materials to our shareholders primarily over the Internet. You may read, print and download these materials, including a formal notice of the Annual Meeting, a Proxy Statement, the proxy card, and the 2021 Annual Report on Form 10-K at http://www.edocumentview.com/NWPP. On or about April 4, 2022, we mailed our shareholders a proxy.notice with instructions on how to access these materials and how to vote their shares online. The notice also provides instructions on how you can request a paper copy of these materials if you would prefer.

 

Whether or not you plan to attend the Annual Meeting online, it is important that your shares be represented and voted. Please read thisthe accompanying Proxy Statement and submit your Proxyproxy via the Internet, or by using the toll-free telephone number or, if you request a paper copy, by completing, signing, dating and returning your Proxyproxy card promptly using the enclosed postage-paid envelope. This will not prevent you from voting your shares electronically during the meeting, but it will ensure that your vote is counted if you are unable to attend the meeting. Your Proxy may be revoked at any time before it has been voted. If your broker, bank or other nominee holds your shares, you also should contact your nominee for additional information.

 

We hope you will participate in the Annual Meeting online, either in person or by proxy.

 

Sincerely,

/s/ C. Todd Asbury

C. Todd Asbury

President and Chief Executive Officer

 

Honaker, Virginia

April 4, 20162022

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NEW PEOPLES BANKSHARES, INC.

67 Commerce Drive

Honaker, Virginia 24260

___________________

 

___________________

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

___________________

 

The Annual Meeting of Shareholders (the “Annual Meeting”) of New Peoples Bankshares, Inc. (the “Company”) will be held on Tuesday, May 17, 20162022 at 6:00 p.m. atThe Annual Meeting will be conducted exclusively as a “virtual audio meeting” of shareholders via online live webcast. You will be able to attend and participate in the Abingdon office of New Peoples Bank, 350 West Main Street, Abingdon, Virginia 24210, forAnnual Meeting online, vote your shares electronically and submit your questions prior to and during the meeting by visiting meetnow.global/MUWP9Q9.

At the meeting, you will be asked to vote on the following purposes:proposals:

 

1.1.To elect threefour directors to serve for terms of three years each expiring at the 20192025 annual meeting of shareholders; and

2.To approve a non-binding resolution on the compensation of the named executive officers disclosed in this proxy statement.
3.2.To ratify the Audit Committee’s appointment of Elliott Davis Decosimo, LLCYount, Hyde & Barbour, PC (“YHB”) as the Company’s independent registered public accounting firm for the year ending December 31, 2016.2022.

4.3.Act upon such other matters as may properly come before the Annual Meeting.

 

Only holders of shares of Common Stock of record at the close of business on March 23, 2016,2022, the record date set by our Board of Directors, are entitled to notice of, and to vote at, the Annual Meeting.

 

It is important that as many shares as possible be represented at the Annual Meeting. Please read this Proxy Statement and submit your Proxyproxy via the Internet, or by using the toll-free telephone number or, if you request a paper copy, by completing, signing, dating and returning your Proxyproxy card promptly using the enclosed postage-paid envelope. You may revoke your proxy at any time before it has been voted.

 

By Order of the Board of Directors

 

/s/ Joseph D. Pennington

Joseph D. Pennington

SecretaryJohn J. Boczar

 

John J. Boczar

Secretary       

April 4, 20162022

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Important Notice Regarding the Availability of Proxy Materials

for the Shareholder Meeting to be Held on May 17, 2016.2022.

 

The Proxy Statement, proxy card and the 20152021 Annual Report to stockholders on Form 10-K are available athttp://www.edocumentview.com/NWPP.NWPP.

If your shares of the Company’s common stock are held by a broker or other custodian, then that organization is considered the shareholder of record and the shares are considered held in “street name”. The Company provided its proxy materials to the shareholder of record for distribution to you along with your voting instruction form. As the beneficial owner of the shares, you have the right to direct the shareholder of record how to vote your shares. Check the information forwarded to you by the shareholder of record to see which voting methods are available to you. As a beneficial owner, you must register in advance to attend the Annual Meeting virtually on the Internet. Additional instructions are included in the Proxy Statement.

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NEW PEOPLES BANKSHARES, INC.

67 Commerce Drive

Honaker, Virginia 24260

 

PROXY STATEMENT

20162022 ANNUAL MEETING OF SHAREHOLDERS

 

This Proxy Statement is furnished to holders of the common stock, par value $2.00 per share (“Common Stock”), of New Peoples Bankshares, Inc., in connection with the solicitation of proxies by our Board of Directors on behalf of the Company to be used at the 20162022 Annual Meeting of Shareholders (the “Annual Meeting”) to be held on Tuesday, May 17, 20162022 at 6:00 p.m. atThe Annual Meeting will be conducted exclusively as a “virtual audio meeting” of shareholders via online live webcast. You will be able to attend and participate in the Abingdon officeAnnual Meeting online, vote your shares electronically and submit your questions prior to and during the meeting by visiting meetnow.global/MUWP9Q9.

We are furnishing our proxy materials primarily over the Internet rather than mailing paper copies of New Peoples Bank, 350 West Main Street, Abingdon, Virginia 24210,those materials to each shareholder. On or about April 4, 2022, we first mailed an Important Notice Regarding the Availability of Proxy Materials on the Internet (the “Notice”) to shareholders and any duly reconvened meeting after adjournment thereof.posted our proxy materials on the Internet site referenced therein. These proxy materials include the accompanying notice of Annual Meeting, this Proxy Statement, the proxy card and our Annual Report on Form 10-K for the year ended December 31, 2021. The Notice provides information regarding how to access these proxy materials on the Internet, vote your shares or request a paper copy of these materials.

 

Your vote is very important, regardless of the number of shares you own. You are urged to submit your vote as soon as possible. YouAs described in the Notice, you will have the option to vote by telephone, via the Internet or, if you request a paper copy, by completing, dating and signing a proxy card and returning it to the Company. Execution or submission of a proxy will not affect a registered shareholder’s right to attend the Annual Meeting via the Internet and vote during the meeting. Any registered shareholder who has executed or submitted a proxy may revoke it by attending the Annual Meeting via the Internet and voting during the meeting. Any shareholder who executes a proxy also has the power to revoke it at any time by written notice to our Secretary, by executing a proxy dated as of a later date, or by submitting a subsequent vote using any of the methods described above. If your shares are held in “street name,” and you want to change or revoke voting in person atinstructions you have given to the Annual Meeting. It is expectedrecord holder of your shares, please follow the directions given by the institution that this Proxy Statement and the enclosed proxy card will be mailed on or about April 4, 2016 to all shareholders entitled to vote at the Annual Meeting.holds your shares.

 

The cost of soliciting proxies for the Annual Meeting will be borne by us. We do not intend to solicit proxies other than by use of mail and electronic notice and access to the Internet; however, certain officers and our regular employees of the Company or ourits subsidiaries, without additional compensation, may use their personal efforts, by telephone or otherwise, to obtain proxies. We may also reimburse banks, brokerage firms and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses in forwarding proxy materials to the beneficial owners of shares of Common Stock.

 

To reduce the expenses of delivering duplicate proxy materials to shareholders, we are relying upon SEC rules of the Securities and Exchange Commission (“SEC”) that permit us to deliver only one proxy statementNotice and annual report to multiple shareholders who share an address unless we received contrary instructions from any shareholder at that address. All shareholders sharing an address will continue to receive separate proxy cards based on their registered ownership of Common Stock. Any shareholder sharing an address who does not receive an individual proxy statement and annual report may write or call Computershare Investor Services (“Computershare”) as specified below and Computershare will promptly send the materials to the shareholder at no cost. For future meetings, a shareholder may request separate copies of our proxy statement and annual report,materials, or request that we only send one set of these materials if the shareholder is receiving multiple copies, by contacting Computershare at Attn.: ShareholderProxy Services, 211 Quality Circle, Suite 210, College Station, TX 77845P.O. Box 505008, Louisville, Kentucky 40233-9814 or by telephoning Computershare toll free at 1-800-368-5948.

 

On March 23, 2016,2022, the record date for determining those shareholders entitled to notice of and to vote at the Annual Meeting, there were 23,354,08223,922,086 shares of Common Stock issued and outstanding. Each outstanding share of Common Stock is entitled to one vote on all matters to be acted upon at the Annual Meeting. A majority of the shares of Common Stock entitled to vote, represented in person or by proxy, constitutes a quorum for the transaction of business at the Annual Meeting.

 

A shareholder may abstain or (only with respect to the election of directors) withhold his or her vote (collectively, “Abstentions”) with respect to each item submitted for shareholder approval. Abstentions will be counted for purposes of determining the existence of a quorum. Abstentions will not be counted as voting in favor of the relevant item, and generally will have no effect on whether or not the item is approved.

 

If your shares are held in an account with a broker or other custodian, then your shares are held in “street name.” As a beneficial owner, you must register in advance to attend the Annual Meeting virtually on the Internet. To register to attend the Annual Meeting, you must submit proof of your proxy power (legal proxy) reflecting your holdings along with your name and email address to the Company’s transfer agent, Computershare, Inc. Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on May 10, 2022. You will receive confirmation of your registration by email after we receive your registration materials. Requests for registration should be directed to us at the following: By email: Forward the email from your broker, or attach an image of your legal proxy, to legalproxy@computershare.com; By mail: Computershare, New Peoples Bankshares, Inc. Legal Proxy, P.O. Box 43001, Providence, Rhode Island 02940-3001.

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A broker who holds shares in “street name” is prohibited from voting on certain items when ithe or she has not received instructions on how to vote from the beneficial owner. Except for certainowner, but on other items, for which brokers are prohibited from exercising their discretion, athe broker is entitled to vote on matters presented to shareholders without instructions from the beneficial owner. Where brokers do not have or do not exercise such discretion, the inability or failure to vote is referred to as a “broker non-vote.” Brokers are not permitted to vote foron the election of directors and the advisory resolution on named executive compensation without specific instruction from the beneficial owner of the shares in street name. We expect that brokers will be allowed to exercise discretionary authority for beneficial owners who have not provided voting instructions with respect to the ratification of Yount, Hyde & Barbour, PC (“YHB”) as our independent registered public accounting firm; therefore, no broker non-votes are expected to exist in connection with this proposal. “Broker shares” that are votedfor which a vote has been cast on at least one matter will be counted for purposes of determining the existence of a quorum for the transaction of business at the Annual Meeting. Where brokers do not have or do not exercise such discretion, the inability or failure to vote is referred to as a “broker nonvote.” Broker nonvotes will not be counted as voting in favor of any particular matter. “Broker shares” that are not voted on any matter at the Annual Meeting will not be counted for purposes of determining the existence of a quorum. Broker non-votes will not be counted as voting in favor of any particular matter, and generally will have no effect on whether or not the item is approved.

 

The Board of Directors is not aware of any matters other than those described in this Proxy Statement that may be presented for action at the Annual Meeting. However, if other matters do properly come before the Annual Meeting, the persons named in the enclosed proxy possess discretionary authority to vote in accordance with their best judgment with respect to such other matters.

 

PROPOSAL ONE: ELECTION OF DIRECTORS

 

The Board of Directors currently consists of nine currenteleven members, threefour of whom are nominated for election as directors at the Annual Meeting to serve for terms of three years each expiring on the date of the annual meeting of shareholders in 2019. Six2025. Seven other directors are serving terms that end in either 20172023 or 2018,2024, as indicated below.

 

The election of each nominee for director requires the affirmative vote of the holders of a plurality of the shares of Common Stock cast in the election of directors. If the proxy is executed in such manner as not to withhold authority for the election of any or all of the nominees for directors, then the persons named in the proxy will vote the shares represented by the proxy for the election of the threefour nominees named below. If the proxy indicates that the shareholder wishes to withhold a vote from one or more nominees for director, such instructions will be followed by the persons named in the proxy.

 

Each nominee has consented to being named in this Proxy Statement and has agreed to serve if elected. The Board of Directors has no reason to believe that any of the nominees will be unable or unwilling to serve. If, at the time of the Annual Meeting, any nominee is unable or unwilling to serve as a director, votes will be cast, pursuant to the enclosed proxy, for such substitute nominee as may be nominated by the Board of Directors. There are no current arrangements between any nominee and any other person pursuant to which a nominee was selected. No family relationships exist among any of the directors or between any of the directors and executive officers of the Company.

 

The following biographical information discloses each nominee’s age and business experience for the past five years, unless otherwise noted, and the year that each individual was first elected to our Board of Directors or earlier to the Board of Directors of New Peoples Bank, Inc. (the “Bank”), the predecessor to and now a wholly owned subsidiary of the Company.

 

Nominees for Election for Terms Expiring in 20192025

 

Tim W. Ball, 56,age 62, has been President, Owner and Operator of Ball Coal Company and owner of Tim Ball Trucking Company since 1985, and President of Tim Ball Farming Corporation since 1987. Mr. Ball is a 1982 graduate of Emory and Henry College. He is active in various community services. He has been a director of the Company since 1999. He currently is a member of the Compensation and Nominating Committees. Mr. Ball’s experience in the coal industry and farming serve well for the Board of Directors because many of the Company’s customers are involved in these lines of business.

 

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Michael G. McGlothlin, 64,age 70, is an attorney and President of the Appalachian College of Pharmacy (2005 to 2006 and 2008 to present). He also serves as President of Watkins Branch Development, LTD and The Inn on Garden Creek, LTD, (2006 to present), as Secretary and Director of MGM Methane Corporation, (2009 to present), as Trustee and Treasurer of the Appalachian School of Law, (Trustee 2002 to present and Treasurer 2005 to present), and as a Trustee and as Secretary of the McGlothlin Foundation (1998 to present).Foundation. He has been the owner of Michael G. McGlothlin, Attorney-at-Law in Grundy, Virginia since 2002. Prior to that, he was a partner in the Law Firm of McGlothlin and Wife from 1984 to 2002.  He previously served as Commonwealth Attorney for Buchanan County, Virginia from 1980 to 1983 and as County Attorney for Buchanan County, Virginia from 1984 to 1989 and then from 1992 to February 2011.  He was a partner in the Law Firm of McGlothlin, McGlothlin and McGlothlin from 1977 to 1979.Virginia. Mr. McGlothlin is past President of the Buchanan County Bar Association. Mr. McGlothlin is a 1974 graduate of the University of Virginia and a 1977 graduate of the Marshall Wythe School of Law of the College of William and Mary.

He served as a member of the College Board of the University of Virginia’s College at Wise, formerly known as Clinch Valley College Advisory Board, from 1985 to 2010.  He is a past President of the Grundy Kiwanis Club and a past Chairman of the Breaks District of the Sequoyah Council of the Boy Scouts of America.  He was a member of the Virginia Board of Forestry from 2002 to 2006 and the Great Southwest Group Home Commission from 1983 to 1992.

Mr. McGlothlin has been a Director of the Company and the Bank since 1998 and served 2 years as Chairman of the Board of the Company and the Bank until December 2012. He currently sits on the Risk and Compliance, Nominating, and Asset Liability Management Committees of the Board.1998. Mr. McGlothlin’s experience as an attorney, administrator, and organizationalorganization and community leader provide the Board with a broad range of professional experience and his community involvement assists the Board in understanding the communities it serves and developing relationships within those communities.

 

B. Scott White, 70,age 76, is a retired cattle rancher in Castlewood, Virginia, as well as a private investor.investor and has served as Vice Chairman of the Board of Directors of the Company and the Bank since 2019. He was the President and CEO of a multi-state rock quarry, White Stone Company in Castlewood, Virginia and White’s Pelletizing Company from 1970in Paradise, Pennsylvania until the company wascompanies were sold in 1997. Mr. White also previously served as General Manager of Sky Blue Tower Company, LLC, a cell phone tower rental company in southwest Virginia, from 2004 to 2008.Virginia. Currently, he serves on the Board of Rockydale Quarries in Roanoke, Virginia. He served two years as Chairman of the Board of the Company, and currently serves as Chairman of the Risk and Compliance Committee.  Mr. White also serves as a member of the Audit Committee, the Compensation Committee, the Nominating Committee, Asset Liability Management Committee, and Director Loan Committee of the Company. He has been a director since 1998. Mr. White’s experience as a small business owner and rancher provides experience to the Board relevant to its small business and agricultural customer base.

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C. Todd Asbury, age 51, has served as the Company’s and the Bank’s President and Chief Executive Officer since December 17, 2014, and was elected to the Board in 2018.  He previously served as Executive Vice President, Chief Financial Officer, and Treasurer of both the Company and the Bank from May 2009 to December 2014.  Mr. Asbury served as Secretary of the Company and the Bank from May 2010 to December 2014.  He served as Senior Vice President, Chief Financial Officer, and Treasurer of the Company and the Bank starting in December 2003. Prior to joining the Company, he worked for several community financial institutions and in public accounting. He is a certified public accountant.  Mr. Asbury serves as Chairman of the Board of Trustees of Bluefield University; as a member of the Board of Trustees of the Virginia Bankers’ Association School of Bank Management, as a member of Board of Directors of the United Way of Southwest Virginia, a member of the Board of Directors of the Virginia Early Childhood Development Foundation, and as a member of the Southwest Virginia Workforce Development Board of Directors.  Based on his background and extensive understanding of the operations of the Company, Mr. Asbury is well qualified to serve as a director.

THE BOARD OF DIRECTORS RECOMMENDS THE SHAREHOLDERS VOTE “FOR” THE NOMINEES SET FORTH ABOVE.

PROPOSAL TWO: ADVISORY VOTE

ON THE APPROVAL OF COMPENSATION

OF THE NAMED EXECUTIVE OFFICERS

 

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act) enables our shareholders to approve, on an advisory or nonbinding basis, the compensation of the Company’s named executive officers, as described in the disclosures and discussion regarding executive compensation in this proxy statement. Our performance-related compensation philosophy is the basis for all of our compensation decisions.  Please refer to “Executive Compensation” for an overview of the compensation of the Company’s named executive officers, as required by Securities and Exchange Commission rules. At the 2011 Annual Meeting of Shareholders, the shareholders approved a proposal on how frequently to hold this advisory nonbinding vote on compensation for named executive officers, which was to hold such vote annually.

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We are asking for stockholder approval of our named executive officers’ compensation as described in this proxy.  The vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the compensation policies and practices discussed in this proxy. Because the vote is advisory, it will not be binding on the Company or its Board of Directors. However, the Compensation Committee will take into account the outcome of the vote when considering future executive compensation arrangements. The compensation of our Chief Executive Officer, C. Todd Asbury, is included in the overall executive officer compensation which is the subject of this Proposal. Mr. Asbury attends the Board’s Compensation Committee although he does not participate in any discussion or approval of his own compensation. A majority vote of the shares present in person or by proxy is required to approve this resolution.

THE BOARD OF DIRECTORS RECOMMENDS THE SHAREHOLDERS VOTE “FOR” APPROVAL OF THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS.

PROPOSAL THREE:TWO: RATIFICATION OF

APPOINTMENTOF INDEPENDENT AUDITORS

  

For the year ending December 31, 2016,2022, the Audit Committee of the Board of Directors has selected Elliott Davis Decosimo, LLC,YHB, an independent registered public accounting firm, to perform the audit of the Company’s financial statements.

 

The selection of Elliott Davis Decosimo, LLCYHB as the Company’s independent auditors is not required to be submitted to a vote of the shareholders for ratification. The Company is doing so because it believes that it is a matter of good corporate practice. If the shareholders fail to vote on an advisory basis in favor of the selection of Elliott Davis Decosimo, LLC,YHB, the Audit Committee will reconsider whether to retain Elliott Davis Decosimo, LLC,YHB, and may retain that firm or another firm without re-submitting the matter to the shareholders. Even if the shareholders ratify the appointment, the Audit Committee may, in its discretion, direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that a change would be in the Company’s best interests. Approval of this Proposal requires the affirmative vote of a majority of the shares voted on the Proposal.

 

A representativeElliott Davis, PLLC (“Elliott Davis”) served as the Company’s independent registered public accounting firm during the fiscal years ended December 31, 2021 and 2020. On March 25, 2022, the Company notified Elliott Davis that it was being dismissed as the Company's independent registered public accounting firm, effective with the completion of the audit for the year ending December 31, 2021. The dismissal of Elliott Davis Decosimo, LLC iswas made upon the recommendation of the Audit Committee of the Company’s Board of Directors.

The audit reports of Elliott Davis on the Company’s consolidated financial statements for each of the two fiscal years ended December 31, 2021 and 2020 did not contain any adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles. During the Company's two most recent fiscal years ended December 31, 2021 and 2020, and the subsequent interim period from January 1, 2022 through the date of Elliott Davis’s dismissal, there were (i) no disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) between the Company and Elliott Davis on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the satisfaction of Elliott Davis, would have caused Elliott Davis to make reference to the subject matter of the disagreement in connection with Elliott Davis’s reports on the Company’s consolidated financial statements for 2021 and 2020, and (ii) no “reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K and the related instructions).

During the Company’s two most recent fiscal years ended December 31, 2021 and 2020, and the subsequent interim period from January 1, 2021 through the date of Elliott Davis’s dismissal, neither the Company nor anyone acting on its behalf consulted with YHB regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company's consolidated financial statements, and neither a written report nor oral advice was provided to the Company that YHB concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue, or (ii) any matter that was either the subject of a “disagreement” or a “reportable event” (as defined in Item 304(a)(1)(iv) and Item 304(a)(1)(v) of Regulation S-K and the related instructions, respectively).

Representatives of YHB and Elliott Davis are expected to be atparticipate in the Annual Meeting of Shareholders. That representativeThose representatives will have the opportunity to make a statement at the meeting and will be available to respond to appropriate questions.

 

THE BOARD OF DIRECTORS RECOMMENDS THE SHAREHOLDERS VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF ELLIOTT DAVIS DECOSIMO, LLCYHB AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2016.2022.

 

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Incumbent Directors

Incumbent Directors Whose Terms Expire in 20172023

 

Gina D. Boggess, age 51, is the Coordinator of Religious Education for Sacred Heart Catholic Church in Princeton, West Virginia, a position she has held since 2018. Previously, she was involved in Met Resources, a family owned coal mining business, for ten years. Prior to that, she worked for a community bank for seven years in various positions, including branch management and as a financial services representative and marketing director. She is active in her community serving on various boards including the Princeton Rescue Squad, Community Foundation of the Virginias and as a state and local board member for Catholic Charities. Ms. Boggess’ experience in both the banking and coal industries as well as her community involvement in the Princeton, West Virginia market provides experience that is relevant to serving customers in this market.

John D. Cox, 59,age 65, is the owner of Cox Tractor Company, a farm equipment business, located in Kingsport, Tennessee, that he has owned and operated since 1978 located in Kingsport, Tennessee.1978. Mr. Cox is also a local farmer and entrepreneur. He graduated with high honors from the University of Tennessee in 1978, where he obtained a Bachelor of Science Degree in Business Administration. Mr. Cox has served as a director of the Company since 1998 and served as Chairman of the Board of Directors for the Company and the Bank for two years from 2012 through 2014. He currently sits as the Chairman of the Compensation Committee, a member of the Executive Committee, Audit Committee, Risk and Compliance Committee, Asset Liability Management Committee, and Nominating Committee. Mr. Cox’s experience in agriculture and agriculturally-relatedagricultural-related small businesses support the Company’s significant customer base in these markets.

 

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Charles H. Gent, Jr., 56,age 62, is self-employed in the logging and farming industryindustries in Honaker, Virginia and has served as Vice Chairman of the Board of Directors of the Company and the Bank since December 2012.from 2012 to 2019. He has beenis President of C & R Gent Logging from 1992 to present.Logging. Mr. Gent is also involved in farming and various real estate ventures with his family. HePreviously, he was vice president and owner of Genwal Coal Company in Utah from the years 1981 to 1989.Utah. He is actively involved in several community activities. He has been a director since 1998 and serves on the Audit Committee, Compensation Committee, Risk and Compliance

Committee and Executive Committee.1998. Mr. Gent’s experience in logging and mining, as well as real estate and farming, provides experience to the Board relevant to understanding these businesses in the Company’s rural markets.

 

Eugene S. Hearl, 84,age 90, is a retired banker thatwho has over 44 years65years of banking experience serving in capacities as President and CEO for two community banks, TruPoint Bank and the former Cumberland Bank, and as the Regional President for the former Dominion Bank in the Southwest Virginia market. Mr. Hearl was appointed as a director of the Company on November 29, 2010 and serves on the Audit Committee, Compensation Committee, Director Loan Committee, Asset Liability Management Committee, and the Risk and Compliance Committee.2010. Mr. Hearl’s vast wealth of knowledge in community banking and the various industries in our local markets provide additional financial institution management skills and perspective to the Board.

 

Incumbent Directors Whose Terms Expire in 20182024

 

Joe M. Carter, 78,84, is a retired general manager of Daugherty Chevrolet in Gate City, Virginia. HeVirginia, where he served 43 years in this role from 1965 to Apriluntil 2008. Mr. Carter is a 1958 graduate of the Whitney Business School formerly located in Kingsport, Tennessee. He served as an advisory Board member of the former Peoples Bank, Inc. and its successors, Premier Bank – Central, N.A. and First Virginia Bank Southwest, until his resignation in 1998. Mr. Carter has served as a Trustee of Thomas Village Baptist Church for the past 26 years and it’s Treasurer for the past 13 years. He also has served on the Scott County Economic Development Board of Directors from 1998 to 2000.Southwest. He has been a director of the Company since 1998 and served on the Audit Committee from 1998 until 2004. He currently serves on the Director Loan Committee, Executive Committee and Asset Liability Management Committee of the Bank.1998. Mr. Carter’s experience in the automotive industry and consumer finance assists the Board of Directors in understanding these businesses, which are important in the Company’s markets.

 

Harold Lynn Keene, 61,age 67, has been President of Keene Carpet, Inc. since 1976 and was President of Harold Keene Coal Co., Inc. beginning in 1984 until its sale in January 2011. Mr. Keene received his Bachelor of Science Degree in accounting from East Tennessee State University in 1976. He served as a bank director for Peoples Bank, Inc. and its successor bank Premier Bank-Central, N.A. from 1987 until 1997 for which he was an Audit Committee member during his entire tenure and Chairman of the Board for two years. He also served as an advisory board member with First Virginia Bank Southwest from 1997 to 1998.Southwest. He has been a director of the Company and has sat as the Audit Committee Chairman since 1998. He also has been the Chairman of the Board of Directors of the Company and the Bank since May 2014. Mr. Keene also serves on the Executive Committee, Director Loan Committee, Asset Liability Management Committee, and the Risk and Compliance Committee. Mr. Keene’s experience in banking provides an important resource to the Board of Directors in dealing with bank and finance-related matters. His experience in the coal industry provides for a resource in the coal industry which is anthis important market for the Company.

 

Fred W. MeadeJ. Robert Buchanan, 82, has been President and Ownerage 70 is a retired veteran Virginia banker with more than 40 years of Big M Stores, Inc., a retail department store and flooring business, since 1973 and has also been involved in real estate development and rental properties since 1980.industry experience. He served most recently as President, Chief Executive Officer and Director of First Region Bancshares and First Sentinel Bank from 2008 through 2015. He also held positions as Chief Financial Officer with National Bankshares, Inc., National Bank of Blacksburg, and Premier Bankshares Corporation; as Controller and Internal Auditor with Dominion Bank of Middle Tennessee; and internal auditor with Virginia Polytechnic Institute. He began his career as an assistant bank examiner in the Fifth National Bank Region of the OCC. Based on his extensive banking background, Mr. Buchanan was appointed to boards of the Bank and the Company January 22, 2018, and is well qualified to serve as a Board member of Southwest Bank of Virginia from 1971 until it sold in 1980. He subsequently served as an advisory board member for the former Bank of Virginia and Signet Bank from 1980 until 1997. Mr. Meade has served as a member of the Russell County Economic Development board for the past twenty-five years. In addition, he has served as a member of the Board of Directors of the Russell County Chamber of Commerce. He is a life-long resident of Russell County. He has been a director of the Company since 1998 and served as Chairman of the Board of Directors for the Company and the Bank for two years. He currently is a member of the Director Loan Committee, Nominating Committee and the Compensation Committee. Mr. Meade’s experience in the retail business, real estate, economic development, and bank board experience are very important to the Board of Directors.director.

 

7

 

Executive Officers Who Are Not Directors

 

The following biographical information discloses the age and business experience in the past five years for each of our executive officers who are not directors.

 

C. Todd AsburyBryan T. Booher, age 45,51, has served as Executive Vice President and Chief Risk Officer of the Company and Bank’sBank since January 27, 2020.  He was previously employed by Highlands Union Bank from January 2004 until January 2020 in multiple roles, including Interim President and Chief Executive Officer, Chief Risk Officer, Executive Vice President of Operations and Information Technology, and Senior Lending Officer.  Prior to that, he was employed by BB&T from 1992 to 2004.

James W. Kiser, age 41 has served as Executive Vice President and Chief Banking Officer of the Bank since December 17,May 29, 2020. He previously served as First Senior Vice President and Chief Commercial Banking Officer from March 2018 to May 2020; and First Senior Vice President and Senior Commercial Banking officer from August 2015 to March 2018. Prior to joining the Bank in August 2015, Mr. Kiser served as Chief Lending Officer at First Sentinel Bank from June 2014 to July 2015 and in various positions with First Bank of Virginia from November 2007 to June 2014. He had previously

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Christopher G. Speaks, age 56, has served as Executive Vice President, Chief Financial Officer and Treasurer of both the Company and the Bank from May 2009 to December 2014. Mr. Asbury had served as Secretary ofsince August 16, 2021. He joined the Company and the Bank from May 2010 to December 2014. He served as Senior Vice President, Chief Financial Officer, and Treasurer of the Company and the Bank startingFNB Bancshares, Inc. in December 2003.

John W. Beard, Jr., age 63, has served as Executive Vice President and Chief Credit Officer of the Bank since January 25, 2016. He had served as Senior Vice President and Senior Credit Officer of Hometrust Bank, from June 2014 to January 2016.  Prior to that, he served as the Chief Credit Officer and Executive Vice President of Jefferson Federal Bank from March 2012 to May 2014.  Prior to that, he served as the President and CEO of Citizens Bank from September 2008 to January 2011.  Prior to that, he served as the Senior Credit Officer for Northeast Tennessee for First Tennessee Bank from October 1992 to September 2008.

Joseph D. Pennington, age 42, has served as the Company and Bank’s Senior Vice President, Chief Financial Officer, Treasurer and Secretary since April 27, 2015. He had previously served as Senior Vice President and Financial Officer of both the Company and Bank from February 2015 to April 26, 2015. Mr. Pennington, who is a certified public accountant, served as a Senior Manager for Elliott Davis, LLC, a larger regional accounting firm, from October of 2012 to February of 2015. Prior to that,Scottsboro, Alabama where he served as the Chief Financial Officer of Bank of Virginia from March 2011January 2021 until October 2012. From March of 2009it was acquired in April 2021. Prior to February of 2011,that, he was the Controller for HomeTown Bank located in Roanoke, Virginia. Mr. Pennington has over 15 years of community banking experience.

Frank Sexton, Jr., age 66, has served as Chief Financial Officer and in senior level accounting and finance roles at several financial institutions, including Executive Vice President and Chief Operating Officer of both the Company and the Bank since December 2003. He had previously served as Interim Chief Financial Officer Secretary, and Treasurer of the Company and Bankfor Tyndall Federal Credit Union from December 17, 2014May 2016 to April 26, 2015. He had previously served as the Company’s Executive Vice President, Chief Financial Officer and Secretary since 2001 and the Bank’s Executive Vice President and Cashier since 1998.

Karen D. Wimmer, age 52, has served as Executive Vice PresidentJanuary 2020, and Director of Special Assets of the Bank since January 25, 2016. Ms. Wimmer served as Executive Vice PresidentFinance and Chief Credit Officer of theother senior level positions at CertusBank from November 2011 through October 2015. He worked in senior accounting level roles at The South Financial Group and TD Bank from March 1, 2014 to January 24, 2016. She also served as Senior Vice President and Senior Credit Officer of the Bank from November 1, 2012 to February 28, 2014 and from June 2011 to July 2012. From mid-2010 to June 2011 she was Vice President of the Commercial Loan Division. From August 2001 to mid-2010, she served as a Loan Officer and Assistant Manager of the Princeton, West Virginia branch focusing on business development and commercial lending. In 2007, she was promoted to Vice President. Ms. Wimmer initially joined the Bank in August 2001 as Assistant Vice President, Assistant Manager and Loan Officer. Prior to joining the Bank, Ms. Wimmer worked for BB and T via its acquisition of the former One Valley Bank with experience in commercial lending and banking from 1988 to 2001. Ms. Wimmer has a total of 28 years of banking experience.1998 through 2011.

 

Security Ownership of Management

 

The following table sets forth, as of March 23, 20162022, certain information with respect to beneficial ownership of shares of Common Stock by each of the members of the Board of Directors, by each of the executive officers named in the “Summary Compensation Table” below and by all directors and executive officers as a group. Beneficial ownership includes shares, if any, held in the name of the individual’s spouse, minor children or other relatives of the individual living in such person’s home, as well as shares, if any, held in the name of another person under an arrangement whereby the director or executive officer can vest title in himself at once or at some future time.

8

 

 

 

 

Name of Beneficial Owner

 

 

 

Common Stock Beneficially Owned (1)

 

 

Exercisable

Common Stock
Warrants (2)

 

 

Total Shares Beneficially
Owned

 

 

 

Percent

of Class(3)

C. Todd Asbury  1,000   200   1,200   * 
Tim W. Ball  3,432   —     3,432   * 
John W. Beard, Jr.  —     —     —     * 
Joe M. Carter**  29,955(4)  —     29,955   * 
John D. Cox**  361,461(5)  18,127   379,588   1.62%
Charles H. Gent, Jr.**  31,970(6)  —     31,970   * 
Eugene Hearl  3,297   —     3,297   * 
Harold Lynn Keene**  4,391,116(7)  —     4,391,116   18.80%
Michael G. McGlothlin  458,267   —     458,267   1.96%
Fred W. Meade  44,609(8)  —     44,609   * 
Joseph D. Pennington  —     —     —     * 
Frank Sexton, Jr.  54,035(9)  —     54,035   * 
B. Scott White  4,889,567(10)  11,646   4,901,213   20.98%
Karen D. Wimmer  3,334   666   4,000   * 
All Directors and Executive Officers as a group (14 persons)  10,272,043   30,639   10,302,682   44.06%

 

Name of Beneficial Owner

 

Common Stock

Beneficially Owned (1)

 

Percent

of Class (2)

     
C. Todd Asbury 10,208 *
Tim W. Ball 3,432 *
Gina D. Boggess 2,476 *
J. Robert Buchanan 4,100 *
Joe M. Carter 29,955(3)*
John D. Cox 614,489(4)2.57%
Charles H. Gent, Jr. 31,970(5)*
Eugene Hearl 3,297 *
Harold Lynn Keene 4,508,487(6)18.85%
Michael G. McGlothlin 458,267 1.92%
B. Scott White 5,132,752(7)21.46%
Named Executive Officers:    
James W. Kiser 10,360(8)*

All Directors and Executive

Officers as a Group (14 persons)

 

 

 

10,809,793

 

 

45.19%

  

*       Percentage of ownership is less than one percent of the outstanding shares of Common Stock.

** Members of the Executive Committee.

(1)(1)Except as otherwise indicated, each director, director nominee or executive officer has sole voting power and investment power with respect to the shares shown.
(2)Common stock warrants are exercisable immediately at $1.75 per share for five years from the date of issuance.
(3)(2)Based on 23,354,08223,922,086 shares of Common Stock issued and outstanding on March 23, 2016.2022.
(4)(3)Includes 8,201 shares held by Mr. Carter's wife.
(5)(4)Includes 51,193526,411 shares held by Mr. Cox's wife.in a revocable personal trust.

(6)(5)Includes 2,860 shares held by Mr. Gent's wife, 2,860 shares Mr. Gent holds as custodian for his child, and 4,800 shares held jointly with his wife.
(7)(6)Includes 975,0001,076,779 shares held by H.L. Keene, L.L.C. in which Mr. Keene is the sole manager, and 500 shares held by The Harold Lynn Keene Trust.
(8)Includes 36,036 shares Mr. Meade holds jointly with his wife.
(9)Includes 440 shares Mr. Sexton holds jointly with his child.
(10)(7)Includes 2,061,666 shares held by SBTB, L.P. in which Mr. White is a general partner, 874,842986,862 shares held by Sky Investments, LLC in which Mr. White is the manager, and 172,160 shares held by Mr. White's wife and 9,056 shareswife. Mr. White holds shares as trustee.trustee under various trust agreements – 108,010 shares in revocable personal trust, 156,637 shares in a self-directed IRA, 9,056 shares under irrevocable trust for an offspring, and 412,186 shares allocated to three irrevocable trusts for grandchildren.
(8)Held jointly with spouse.

 

9

Security Ownership of Certain Beneficial Owners

 

As of March 23, 2016,2022, the following persons are known to us that beneficially own five percent or more of the Company’s stock. Other than as disclosed below, the Company is not aware of any person or group, as those terms are defined in the Securities Exchange Act of 1934, who beneficially owned more than 5% of the outstanding Common Stock as of March 23, 2016.2022.

 

Name and Address of Beneficial Owner Amount and Nature of
Beneficial Ownership
 Percent of Class
Harold Lynn Keene
Post Office Box 1320
Lebanon, Virginia 24260
  4,391,116   18.80%
 
Richard G. Preservati, Sr.
Post Office Box 1003
Princeton, West Virginia 24740
 
Blaine Scott White
Post Office Box 520
Castlewood, Virginia 24224
  

 

3,039,999

 

 

 

4,901,213

   

 

12.74%

 

 

 

20.98%

 
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Name and Address of Beneficial OwnerAmount and Nature of Beneficial OwnershipPercent of Class

B. Scott White

Post Office Box 520

Castlewood, Virginia 24224

5,132,752(1)

21.46%

Harold Lynn Keene

Post Office Box 1320

Lebanon, Virginia 24260

4,508,487(2)18.85%

Richard G. Preservati, Sr.

Post Office Box 1003

Princeton, West Virginia 24740

3,039,999(3)

12.71%

(1)Includes 2,061,666 shares held by SBTB, L.P. in which Mr. White is a general partner, 986,862 shares held by Sky Investments, LLC in which Mr. White is the manager, and 172,160 shares held by Mr. White's wife. Mr. White holds shares as trustee under various trust agreements – 108,010 shares in revocable personal trust, 156,637 shares in a self-directed IRA, 9,056 shares under irrevocable trust for an offspring, and 412,186 shares allocated to three irrevocable trusts for grandchildren.
(2)Includes 1,076,779 shares held by H.L. Keene, L.L.C. in which Mr. Keene is the sole manager, and 500 shares held by The Harold Lynn Keene Trust.
(3)Includes 2,533,333 held by Family’s Future IV Limited Partnership in which Mr. Preservati is a general partner.

 

Delinquent Section 16(a) Beneficial Ownership Reporting ComplianceReports

 

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and certain of our officers to file reports with the Securities and Exchange Commission (“SEC”)SEC indicating their holdings of, or transactions in, our equity securities. Based on a review of these reports and written representations furnished to us, we believe that our directors and officers timely complied with all Section 16(a) filing requirements with respect to 2015.2021, other than Mr. White with three reports listing three late transactions; Mr. Keene with one report listing one late transaction, Mr. Cox with one report listing one late transactions and Mr. Kiser with one report listing one late transaction.

 

Director Compensation

 

The following table sets forth, as of December 31, 2015,2021, certain information with respect to director compensation for each of the members of the Board of Directors. The directors did not receive any other compensation during 20152021 for their services as directors on the Board.

 

Director Compensation for 2015
Director Compensation for 2021Director Compensation for 2021
Name 

Fees Earned or

Paid in Cash ($)

 Total ($)

Fees Earned or

Paid in Cash ($)

Total ($)
C. Todd Asbury-- 
Tim W. Ball  9,400   9,400   9,0009,000 
Gina D. Boggess9,2009,200 
J. Robert Buchanan10,00010,000 
Joe M. Carter  16,800   16,800 13,00013,000 
John D. Cox  17,000   17,000 14,80014,800 
Charles H. Gent, Jr.  13,600   13,600   9,0009,000 
Eugene Hearl  22,000   22,000 13,60013,600 
Harold Lynn Keene, Jr.  19,600   19,600 
Harold Lynn Keene18,40018,400 
Fred W. Meade3,5003,500 
Michael G. McGlothlin  10,200   10,200   8,6008,600 
Fred W. Meade  16,200   16,200 
B. Scott White  20,400   20,400 15,60015,600 
    

 

In 2015,2021, each director was paid $700 per month, except for Mr. Keene, Chairman, who received $1,000 per month, for service on the Board of Directors and $200 per committee meeting for each committee of which a director isattended as a member. For 2016, the fees remain the same.

10

CORPORATE GOVERNANCE

 

CORPORATE GOVERNANCE

General

 

Our business and affairs are managed under the direction of the Board of Directors in accordance with the Virginia Stock Corporation Act and our Articles of Incorporation and Bylaws. Members of the Board are kept informed of our business through discussions with our executive officers and other officers, by reviewing materials provided to them and by participating in meetings of the Board and its committees.

 

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The

Except for Mr. Asbury, the Board of Directors has determined that all nine members are independent as defined by the listing standards of the NASDAQNasdaq Stock Market (“NASDAQ”Nasdaq”).  In reaching this conclusion, the Board of Directors considered that the Company and its subsidiary bank may conduct business with companies of which certain members of the Board of Directors or members of their immediate families are or were directors or officers; however, in 2015,2021, no transactions occurred with such companies.companies other than those described under “Certain Relationships and Related Transactions.”

Code of Ethics

 

The Board of Directors has adopted a Code of Ethics for our directors, executive officers, and senior officers who have financial responsibilities. The Code of Ethics is designed to promote, among other things, honest and ethical conduct, proper disclosure of financial information in our periodic reports, and compliance with applicable laws, rules and regulations by our senior officers who have financial responsibilities.

 

A copy of the Code of Ethics may be obtained on our website atwww.npbankshares.com/code-of-ethics.aspxhttps://newpeoples.bank/Code-of-Ethics.

 

Whistleblower Procedures

 

The Audit Committee and the Board of Directors have approved procedures for the receipt, retention and treatment of reports or complaints to the Audit Committee regarding accounting, internal accounting controls, auditing matters and legal or regulatory matters.  There are also procedures for the submission by Company or Bank employees of confidential, anonymous reports to the Audit Committee of concerns regarding questionable accounting or auditing matters.Committee.

 

Anti-Hedging Policy

The Company currently does not have any policies with respect to financial instruments or transactions in derivative securities or otherwise that hedge or offset any decrease in the market value of the Company’s common stock.

Communications with Directors

 

Any director may be contacted by writing to him or her c/o Post Office Box 1810, Honaker, Virginia 24260. Communications to the directors as a group may be sent to the same address, c/o the Secretary of the Company. We promptly forward, without screening, all such correspondence to the indicated directors.

 

Board Leadership

 

TheExcept for Mr. Asbury, the Company’s and the Bank’s BoardBoards of Directors are currently composed of non-management members. For the years 2013 and 2014 until his resignation on December 17, 2014, Jonathan H. Mullins our former Chief Executive Officer, served as a member of the Board of Directors for the Company and the Bank.

 

The Chairman of the Board is occupied by a non-management member and typically rotates every two years.member. The Board believes that the principal role of the President and Chief Executive Officer is to manage the business of the company in a safe, sound, and profitable manner.  The role of the Board, including its Chairman, is to provide independent oversight of the President and Chief Executive Officer, to oversee the business and affairs of the organization forin the benefitbest interests of its shareholders, to adopt or approve major policies and procedures, to oversee financial reporting and compliance, and to balance the interests ofserve the Company’s constituencies including shareholders, customers, employees, and communities. The Board believes that the inclusion of the President and Chief Executive Officer on the Boards of the Company and the Bank enhances the effectiveness of the Boards’ activities due to the operational expertise and institutional knowledge possessed by the President and Chief Executive Officer. Executive sessions of the Board are held periodically with the absence of the Chief Executive Officer.

 

11

The Company’s leadership structure consists of varying levels of authority, responsibility and risk exposure that increase through each incremental level of management hierarchy. The senior management team reports directly to the CEO and meets collectively on a regular basis, and dialogs daily regarding the Bank’s activities. The senior management team manages every aspect of the Bank’s activities and acts as a primary communications medium across all functional areas of the organization.  This structure enables information and management guidance to flow easily up, down and horizontally.

 

Board’s Role in Risk Oversight

 

The Board is intimately engaged in overseeing the risk management of the Company, including credit risk, liquidity risk, interest rate risk, price risk, operational risk, cyber security risk, compliance risk, strategic risk, and reputational risk. This is accomplished through a strong committee system consisting of the Asset Liability (“ALCO”) Committee, the Director’s Loan Committee, the Compensation Committee, the Risk and ComplianceNominating Committee, and the Audit, Risk and Compliance Committee; each of which meets with scheduled frequency with its senior staff counterparts. In addition, the leadership structure of the Board of Directors (independent chair) supports the Board’s independent risk oversight role. Each of these committees is composed of directors who are familiar with their areas of responsibility. Senior management is responsible for day-to-day risk management in each functional area and report at each full Board meeting on the risk-related matters within their area of responsibility.  In addition, the Board receives and reviews minutes from each committee and additional commentary from each respective committee chair is provided as deemed appropriate. Data reviewed are both historical and forward-looking to enable the Board to look at both recent outcomes and to the likelihood of various future outcomes. The entire executive management team attends all Board meetings and remains for the duration of the meeting except when the Board goes into Executive Session. The schedule below lists all Board committees and their members:

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ALCO (2)

Audit Risk and Compliance(1)

Compensation(1)

Executive(3)

Loan(2)

Nominating(1)

C. Todd AsburyXXX
Tim W. BallXX
Gina D. BoggessXX
J. Robert BuchananX*XX
Joe M. CarterX
John D. CoxXX*XXX
Charles H. Gent, Jr.XA
Eugene HearlXXX*
Harold Lynn KeeneXX*X*X
Michael G. McGlothlinX*
B. Scott WhiteXXXXXX

(1)Company Committee
(2)Bank Committee
(3)Committee of both Company and Bank

*        Committee Chair

A        Alternate Member

 

Board Committees & Committee Meeting Attendance

The Boards of the Company and the Bank are identical in membership. TheAmong other committees described above the Boards have standing executive, nominating, audit and compensation committees (or committees performing similar functions) as listeddiscussed further below. The Board of Directors has adopted charters for its Audit Committee, Compensation Committee, ALCO Committee, and Nominating Committee to define the duties and responsibilities of those committees. These charters are available on our website atwww.npbankshares.com. The Board had established a Risk and Compliance Committee in conjunction with its formal written agreement with the Federal Reserve Bank of Richmond and the Virginia State Corporation Commission Bureau of Financial Institutions (“Written Agreement”.) The Written Agreement was terminated effective January 20, 2016; however, the Risk and Compliance Committee will still continue as a committee of the Company and Bank. The Board may, from time to time, establish committees for specific, designated purposes. https://newpeoples.bank/Bankshares-About-Us.

 

There were fifteentwelve meetings of the Company’s Board of Directors in 2015. Eachof our directors2021. Each incumbent director attended at leastgreater than 75% of the aggregate of the total number of meetings of the Board of Directors and the total number of meetings of committees onof which the director served.

was a member in 2021. We encourage, but do not require, members of the Board of Directors to attend the annual meeting of shareholders. All of the directors attended the 20152021 annual meeting of shareholders.shareholders except for Joe Carter.

 

Executive Committee - The Company and the Bank each also have an Executive Committee which is chaired by the Board Chair. Its members include Messrs. Keene (Chairman), Gent, Carter, and Cox. The members are elected annually by the full Board, as are the members of every standing Committee. The Executive Committee,that, when necessary, is empowered to act on behalf of the full Board, on routine matters, between scheduled Board meetings. The Executive Committee met one timethree times in 2015.2021.

 

12

Nominating Committee -The Nominating Committee was created in May 2006 to propose prospective members for nomination to the Board of Directors. All decisions by the Nominating Committee relating to the nominations of prospective Board members are reported to the full Board of Directors. The members of the Nominating Committee include Messrs. McGlothlin (Chairman), Cox, Ball, Meade and White. All of the members of the Committee are independent as defined in the NASDAQ Stock Market Listing Rules.Nasdaq listing standards. The Nominating Committee met onceone time in 20152021 at which time the recommendations for nominees in the 20152021 proxy were discussed for the Board of Directors’ approval.

 

Shareholders entitled to vote for the election of directors may submit candidates for consideration by the Nominating Committee if the Committee receives timely written notice, in proper form, for each such recommended director candidate. If the notice is not timely and in proper form, the nominee will not be considered. Any candidates recommended by a shareholder will be reviewed and considered in the same manner as all other director candidates considered by the Board.

 

In accordance with our Bylaws, any shareholder entitled to vote in the election of directors may directly nominate one or more persons for election as director(s) at an annual meeting if the nomination is made in writing. Any such shareholder nominations must be received by our Secretary within the timeframe set forth in “Proposals for 20172023 Annual Meeting of Shareholders” below. To be in proper form, the notice must include (a) the name and address of the shareholder who intends to make the nomination of the person(s) and of the person(s) to be nominated; (b) a representation that the shareholder is the owner of our stock entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person(s) specified in the notice; (c) a description of all arrangements or understandings between the shareholder and each nominee for director and any other person(s) (naming such person(s)) pursuant to which the nomination(s) are to be made by the shareholder; (d) such other information regarding such nominee proposed by such shareholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission,SEC, had the nominee been nominated, or intended to be nominated, by the Board of Directors, including, but not limited to, the amount and nature of his beneficial ownership of our securities and his principal occupation for the past five years; and (e) the written consent of each nominee to serve as a director if so elected.

 

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The Nominating Committee considers, at a minimum, the following factors in recommending to the Board potential new directors, including candidates submitted by shareholders, or the continued service of existing directors:

 

the ability of the prospective nominee to represent the interests of our shareholders;
the prospective nominee’s standards of integrity, commitment and independence of thought and judgment;
the prospective nominee’s ability to dedicate sufficient time, energy and attention to the diligent performance of his or her duties, including the prospective nominee’s service on other public company boards; and
the extent to which the prospective nominee contributes to the range of talent, skill and expertise appropriate for the Board of Directors.
·the ability of the prospective nominee to represent the interests of our shareholders;
·the prospective nominee’s standards of integrity, commitment and independence of thought and judgment;
·the prospective nominee’s ability to dedicate sufficient time, energy and attention to the diligent performance of his or her duties, including the prospective nominee’s service on other public company boards; and
·the extent to which the prospective nominee contributes to the range of talent, skill and expertise appropriate for the Board of Directors.

 

The Board’s priorities in evaluating Board candidates and the relative weight it gives to any given characteristic will vary from time to time based on the particular needs of the Board and us at the time and based on the expertise of the incumbent members of the Board of Directors. Diversity was not considered as a factor in selecting the current directors for nomination for an additional term.

 

To identify candidates for nomination, the Nominating Committee does the following:

 

Establish criteria and qualifications for the selection of new directors to serve on the board.
Identify individuals believed to be qualified as candidates to serve on the Board (including from among those individuals recommended by shareholders) and recommend the candidates for any directorships to be filled by the Board or by the shareholders at an annual or special meeting. In addition, the Committee reviews and makes recommendations to the Board with respect to whether members of the Board should stand for re-election.
13·Establish criteria and qualifications for the selection of new directors to serve on the Board.
·Identify individuals believed to be qualified as candidates to serve on the Board (including from among those individuals recommended by shareholders) and recommend the candidates for any directorships to be filled by the Board or by the shareholders at an annual or special meeting. In addition, the Committee reviews and makes recommendations to the Board with respect to whether members of the Board should stand for re-election.
·Conduct all necessary and appropriate inquiries into the backgrounds and qualifications of possible candidates as directors. In that connection, the Committee has sole authority to retain and to terminate any search firm used to assist it in identifying candidates to serve as directors of the Company, including sole authority to approve the fees payable to such search firm and any other terms of retention.
·Review and make recommendations to the Board, as the Committee deems appropriate regarding the composition and size of the Board in order to ensure the Board has the requisite expertise and its membership consists of persons with sufficient expertise and independent backgrounds and always consists of a majority of independent directors in accordance with Nasdaq listing standards.

 

Conduct all necessary and appropriate inquiries into the backgrounds and qualifications of possible candidates as directors. In that connection, the Committee has sole authority to retain and to terminate any search firm used to assist it in identifying candidates to serve as directors of the Company, including sole authority to approve the fees payable to such search firm and any other terms of retention.
Review and make recommendations to the Board, as the Committee deems appropriate regarding the composition and size of the Board in order to ensure the Board has the requisite expertise and its membership consists of persons with sufficient expertise and independent backgrounds and always consists of a majority of independent directors in accordance with NASDAQ listing standards.

CompensationCommittee -The Compensation Committee of the Company and the Bank reviews management’s performance and compensation, and reviews and sets guidelines for compensation of all employees, including the Company’s executive officers. This includes recommendations to the Board of Directors with respect to the executive officers’ bonuses and long-term incentive awards. Currently, the individuals serving as Chief Executive Officer and as executive officers of the Company also serve in the same capacities, respectively, for the Bank, except for Ms. WimmerMessrs. Booher and Mr. Beard,Kiser, who only serve as executive officers of the Bank and not the Company. These executive officers are presently compensated for services rendered by them to the Bank, but not for services rendered by them to the Company. All decisions by the Compensation CommitteeCommittees relating to the compensation of our executive officers are reported to the full Board of Directors. Except for his own compensation, Mr. Asbury provides information and advice to the Compensation Committee regarding the form and amount of compensation of executive officers. No other executive officer participates in this process with the Committee. The Compensation Committee may not delegate its authority and has not utilized a consultant.

 

The Chief Executive Officer does not set his own salary or bonus orbonus. The Chief Executive Officer recommends the salaries orsalary and bonuses of the other named executive officers. The CEO participates in the discussion and approval of the other named executive officers’ compensation,officers and provides input to the Committee regarding his own, but he does not participate in the Compensation CommitteeCommittees discussions or approval of his own compensation. Recommendations are made by the Committee and the final decision residesdecisions reside with the Board of Directors.

 

The Compensation Committee and Board attempt to align performance and compensation based upon strategic goals that are incorporated in the Company’s budget as approved by the Board of Directors. We believe that our conservative but competitive compensation policies and practices are unlikely to create risks that are reasonably likely to have a materially adverse effect on New Peoples.the Company. As discussed in this Proxy Statement, most of the compensation that we pay consists of annually-determinedannually determined salaries and bonuses. This permits the Board of Directors to review annually the budget versus actual performance, internal policy limits for various key performance ratios, asset quality ratios, interest rate sensitivity shocks, liquidity management, and capital levels before compensation is set. All of these components together with continuation of employment are assessed each year. It is at the discretion of the Board of Directors to pay cash bonuses or any other incentives if goals are met or exceeded. So, for example, in 2015 the Board did not pay bonuses or any other incentives based compensation to any employee except for a $500 Christmas bonus to all employees. We believe that this substantially contemporaneous approach to determining compensation is not likely to encourage excessive risk taking and in fact allows the Board to align compensation with business factors such as acceptable versus unacceptable risk taking.

 

The members of the Compensation Committee are Messrs. Cox (Chairman), Ball, Gent, Hearl, Meade, and White all of whom the Board in its business judgment has determined that all members of the Compensation Committee are independent as defined by the NASDAQNasdaq Stock Market Listing Rules. The Compensation Committee held four meetings in 2015.2021. For additional information regarding executive compensation and the Compensation Committee, see “Executive Compensation and Related Party Transactions” below.

Audit, Risk and Compliance Committee -The Audit Risk and Compliance Committee (Audit Committee) assists the Board of Directors in fulfilling the Board’s oversight responsibility to the shareholders relating to the integrity of our financial statements, our compliance with legal and regulatory requirements for our accounting and reporting practices, the qualifications, independence and performance of our independent public accountants and the performance of the internal audit function. The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the work of the our independent public accountants engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attestation services for us. The Board of Directors and the Audit Committee have adopted a written charter for the Audit Committee.

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The members of the Audit Committee are Messrs. Cox, Gent, Hearl, Keene (Chairman)also oversees the internal audit and White.   regulatory compliance and review functions.

The Board in its business judgment has determined that all of the members of the Audit Committee are independent as defined by NASDAQNasdaq Stock Market Listing Rules for audit committee members and applicable SEC regulations.  The Board of Directors also has determined that all of the members of the Audit Committee have sufficient knowledge in financial and auditing matters to serve on the Audit Committee and that Mr. KeeneBuchanan qualifies as an audit committee financial expert as defined by SEC regulations who is independent as defined in the NASDAQ Stock Market Rules for audit committee members.regulations.

 

The Audit Committee held elevenfive meetings in 2015.2021. For additional information regarding the Audit Committee, see “Audit Information – Audit Committee Report” below.

 

Risk and Compliance Committee – The Risk and Compliance Committee of the Company and the Bank provided oversight of the Company’s and Bank’s compliance with the Written Agreement entered into on July 29, 2010 with the banking regulators. Though the Written Agreement was terminated effective January 20, 2016, the Risk and Compliance Committee will continue as a committee to provide risk and regulatory oversight for the Company and Bank. This committee oversees the Bank’s risk management’s practices to ensure that management has a process in place to identify, monitor, and manage key risks. Other areas the committee will assist the board in complying with are as follows:

Set strategy and identify key risk related to Strategic Imperatives;
Monitor and oversee management’s executions of the Strategic Plan;

• Set the Risk Appetite for the Holding Company and Subsidiaries;

Understand the Bank’s System of Risk Management and Control;
Oversee and approve the Enterprise Risk Management Policy; and
Have direct oversight responsibility of Strategic Risk, Reputational Risk, Operational Risk and Compliance Risk.

This Committee met twelve times in 2015 and reviewed management’s progress in meeting the requirements of the Written Agreement and also reviewed risk management progress and practices. The Committee consists of Chairman B. Scott White, John D. Cox, Charles H. Gent Jr., Eugene S. Hearl, Harold Lynn Keene, and Michael G. McGlothlin.

EXECUTIVE COMPENSATION AND RELATED PARTY TRANSACTIONS

 

The following table is a summary of compensation that we paid for the fiscal years ended December 31, 20152021 and 20142020 to the named executive officers in all capacities in which they served:

 

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Summary Compensation Table

Fiscal Years 20152021 and 20142020

 

Name and

Principal Position


 

 

 

 

 

Year


 

 

 

 

 

Salary ($)


 

 

 

 

 

Bonus ($)(1)


 

 

Change in Pension Value and Nonqualified

Deferred Compensation

Earnings ($)(2)


 

 

 

 

All Other

Compensation ($)(3)


 

 

 

 

 

Total ($)


 

C. Todd Asbury(4)

  2015   250,000   500   —     13,737   264,237 
President andd Cheif Executive Officer  2014   175,440   500   —     11,250   187,190 
                         

Jonathan H. Mullins(5)

  2015   —     —     —     —     —   
President and Chief Executive Officer  2014   248,675   500   —     13,204   262,379 
                         
Frank Sexton Jr.(6)  2015   176,348   500   —     11,615   188,463 
Executive Vice President and Chief Operating Officer  2014   172,890   500   20,783   11,257   205,430 
                         

Karen D. Wimmer(7)

  2015   164,654   500   —     7,573   172,727 
Executive Vice President and Director of Special Assets  2014   160,000   500   —     7,631   168,131 
Name and Principal Position Year Salary ($) Bonus ($)(1) Non-Equity Plan Compensation ($) Nonqualified Deferred Compensation Earnings ($) All Other Compensation ($)(2) Total ($)
C. Todd Asbury 2021 288,061 38,721 - - 24,462 351,844
President and Chief 2020 277,970 6,000 -   19,610 303,580
Executive Officer              
               
James W. Kiser 2021 213,595 23,160 -                        - 21,739 258,494
Executive Vice President and 2020 185,807 6,000     13,570 205,377
Chief Banking Officer              
               
Bryan Booher 2021 175,577 19,750 - - 13,725 209,052
Executive Vice President and              
Chief Risk and Credit Officer              


(1)Includes awards for 2021, paid in 2022, under the Profit Sharing and Senior Performance Bonus plans to Messrs. Asbury, Kiser, and Booher of $38,721, $23,160 and $19,750, respectively. All employees received a Christmas bonus at the discretion of the Board of Directors.Directors of $500 for 2021 and 2020, with the exception of Mr. Speaks who received $250 for 2021 All employees received an additional pandemic service bonus of $500 in 2020. In 2020, Messrs. Asbury and Kiser received discretionary bonuses in 2020, paid in 2021, of $5,000,each.
(2)These amounts represent the change in the actuarial present value of the accumulated benefit under the salary continuation agreement for Mr. Sexton.
(3)All benefits that might be considered of a personal nature did not exceed $10,000.
All other compensation includes amounts for Mr. Asbury representing matching contributions under the Bank’s defined contribution plan of $7,699 and $5,480 in 2015 and 2014, respectively;401(k) Plan, flexible spending amounts contributions for cafeteria plan employee benefits, of $5,049 and $4,800 in 2015 and 2014, respectively; group term life insurance premiums of $480 and $471 in 2015 and 2014, respectively; and long termlong-term disability insurance premiums for all persons listed; allocated personal use of $509 and $499 in 2015 and 2014, respectively.
All other compensation includes amountsa company vehicle for Mr. Mullins representing matching contributions under the Bank’s defined contribution plan of $7,800 in 2014; contributionsAsbury and an auto allowance for cafeteria plan employee benefits of $2,400 in 2014; supplemental life insurance premiums of $1,602 in 2014; group term life insurance premiums of $681 in 2014; and long term disability insurance premiums of $721 in 2014.
All other compensation includes amounts for Mr. Sexton representing matching contributions under the Bank’s defined contribution plan of $5,592 and $5,501 in 2015 and 2014, respectively; contributions for cafeteria plan employee benefits of $5,049 and $4,800 in 2015 and 2014, respectively; group term life insurance premiums of $473 and $464 for 2015 and 2014, respectively; and long term disability insurance premiums of $501 and $492 in 2015 and 2014, respectively.
All other compensation includes amounts for Ms. Wimmer representing matching contributions under the Bank’s defined contribution plan of $4,271 and $4,512 in 2015 and 2014, respectively; contributions for cafeteria plan employee benefits of $2,400 for 2015 and 2014, respectively; group term life insurance premiums of $438 and $349 in 2015 and 2014, respectively; and long term disability insurance premiums of $464 and $370 in 2015 and 2014, respectively.
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(4)Mr. Asbury was appointed President and Chief Executive Officer of the Company and Bank on December 17, 2014 with a base salary of $250,000. His 2014 compensation includes his compensation as Chief Financial Officer prior to his appointment as Chief Executive Officer. Prior to his appointment, he served as Executive Vice President, Chief Financial Officer, Secretary and Treasurer of the Company and Bank during 2014.
(5)Mr. Mullins resigned as President, Chief Executive Officer and Director of the Company and Bank on December 17, 2014.
(6)Mr. Sexton was appointed Interim Chief Financial Officer, Secretary and Treasurer of the Company and Bank on December 17, 2014 and served in this capacity until April 26, 2015.
(7)Ms. Wimmer became Executive Vice President and Director of Special Assets on January 25, 2016. Ms. Wimmer served as Executive Vice President and Chief Credit Officer of the Bank effective February 28, 2014 and her compensation reflects her pay for 2015 and 2014 including her compensation as a non-named executive officer and also as a named executive officer during 2014.Mr.. Kiser

Narrative Disclosure to Summary Compensation Table

 

Base Salary and Bonus

 

Our performance, in general, is considered in determining the amount of annual salary increases. The Compensation Committee sets base salaries at levels competitive towith senior executives with comparable qualifications, experience and responsibilities, of similarly sized banks. The Virginia Bankers Association Salary Survey was used for comparison of salaries paid for similar positions and responsibilities. The Compensation Committee also takes into consideration our strategic plans and Company performance, including but not limited to, branch performance, asset quality, capital management, core deposit growth, efficiency, regulatory compliance, and earnings.

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The Compensation Committee approves the named executive officers’ annual salary is based on the above criteria and itsas well as an assessment of their past performance and expected future contributions. In addition to the internal measures above, the Board of Directors also reviews our financial performance in relation to peer group averages in the Virginia Bankers’ Association Salary Survey. A subjective approach is used in its evaluation of these factors, and therefore the Compensation Committee does not rely on a formula or weights of specific factors.

 

The annual base salary for Ms. Wimmer was increased to $164,800 in May 2015. Mr. Asbury’s salary was increased to an annual base of $250,000 on December 17, 2014 upon his appointment as President and Chief Executive Officer of the Company and Bank. Mr. Sexton’s salary was increased to an annual base amount of $176,348 in November of 2014.

Christmas bonuses were paid in the years 2015 and 2014 to all employees of the Company. No incentive bonuses have been paid to named executives paid for the years 2009 through 2015.

Stock Options

The stock option plan expired on May 31, 2011. The remaining outstanding options which were granted to the named executive officers, directors and other key employees were intended to provide a means for this group to increase their personal financial interest in the Company, thereby stimulating the efforts of these employees and strengthening their desire to remain with us. The stock option plan permitted the award of incentive stock options and non-qualified stock options to directors and eligible officers and key employees. The Board of Directors made grants under the stock option plan on a discretionary basis, taking into consideration the respective scope of accountability and contributions of each director and employee, including the Chief Executive Officer, to the Company. In 2011, the Compensation Committee did not award any stock options to any of the executive officers or other employees. Since the change in accounting regulations in 2005 regarding expensing stock options, no stock options have been awarded to any individuals.

There were no outstanding equity awards to the named executive officers during 2015.

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We have no established policy regarding the recapturing of awards if they were granted based on financial results that are determined to have been misstated.

Other Elements of Compensation

 

Each named executive officer, with the exception of Mr. Pennington,Booher, is provided with the use of a company vehicle.vehicle or a monthly allowance.

 

The Bank has established a qualified defined contribution401(k) plan that covers all full timefull-time employees including the named executive officers. Matching contributions paid by the Bank to the named executive officers is detailed in the Summary Compensation Table above.

 

Employment Agreements

On December 18, 2002,1, 2016, the Company and the Bank entered into a salary continuation agreementan Employment Agreement (the “Agreement”) with Frank Sexton, Jr. If Mr. Sexton wereAsbury. The Agreement is effective as of December 1, 2016. The initial term of the Agreement ended on December 1, 2019, after which the Agreement automatically renews for successive two-year terms (unless terminated prior to terminate his employment after his 65th birthday, his benefit would be $40,500 annually to be paid in 180 monthly installments for 15 years; total value is $366,348 (asthe commencement of November 1, 2015)the renewal term).

 

Employment AgreementsUnder Mr. Asbury’s Agreement, he is entitled to an annual base salary of $277,970 and an annual performance bonus, if any, in an amount approved by New Peoples’ Board of Directors. Mr. Asbury is also eligible to participate in any equity and/or other long-term compensation programs established by the Company as well as employee benefits, executive benefits, or perquisites approved by the Board and reimbursement of expenses and vacation as set forth in his Agreement.

The Agreement provides Mr. Asbury with severance benefits in the event of termination of his employment under certain circumstances and contains certain confidentiality and noncompetition provisions.

The Agreement provides that the executive’s employment may be terminated by the Company “With Cause” (as defined in the Agreement) or without Cause, or by the executive for “Good Reason” (as defined in the Agreement) or without Good Reason. The executive’s employment may be terminated upon a determination that the executive is disabled or automatically upon the executive’s death. If an executive’s employment is terminated by the Company for Cause or by the executive for Other than Good Reason, then under his Agreement, the executive will be entitled to receive any accrued but unpaid salary, bonus or other benefits or awards, and expense reimbursement. The foregoing amounts are referred to collectively as the “Accrued Obligations.” If an executive’s employment is terminated by the Company without Cause or by the executive for Good Reason, then, in addition to the Accrued Obligations, the executive will be entitled under his Agreement to receive the following: (i) if not connected to a Change in Control (as defined in the Agreement), a severance payment equal to two times the executive’s base salary and bonus; or (ii) if within 24 months after a Change in Control, a severance payment equal to three times the executive’s base salary and bonus unless the Change in Control is a Sale of the Company (as defined in the Agreement) in which case the severance payment is based on certain percentages of the Company’s book value received by the Company’s shareholders in the transaction.

 

Neither the Company nor the Bank has entered into an employment agreement with any of the other named executive officers.officers, except as discussed above.

 

Employee Incentive Plans

 

In December of 2015, the Board of Directors approved two employee incentive plans that will be in effect for 2016;plans: a Short-Term Bonus Plan and Company-Wide Profit Sharing Plan. 

The Short-Term Bonus Plan is designed to reward and recognize individual employees “on-the-spot” for extraordinary performance/accomplishments.  These bonuses will be paidare to individual employees in amounts ranging from $100 to $1,000 (with an aggregate annual amount for all short termshort-term bonuses not to exceed $25,000) and will beare awarded on recommendation of senior officers with the approval of the President and Chief Executive Officer. Payments under the Short-term Bonus Plan were made for 2021 and 2020. For 2021 total bonuses of $23,100 were paid, of which $13,950 was paid in 2022. For 2020 total bonuses were paid of $24,900, of which $18,750 was paid in 2021.

The second plan is a Company-WideBank-Wide Profit Sharing Plan, which allows all eligible employees of New Peoples Bank to share in the profits of the CompanyBank when strategic goals are met.  For 2016 the Board of Directors has budgeted a total of $225,000 for this plan.   The Plan is designed to reward employees a percentage of his or her annual salary, or a flat dollar amount for commissioned or lower-wage employees, for Company performance when the Company exceeds a budgeted net income for the year. Adjustments toBank meets the budgeted amount are made depending on the Company’s net income for the year. If the Company’s net income exceeds the budgeted net income the profit sharing pool is increased by 25% of the overage (but in no event will the total bonus pool exceed 10% of reportable net income in any year. Similarly if the CompanyBank does not make its budgeted net income for the year, the bonus pool is reduced by the shortfall, which is added back into net income until it equals the budgeted amount or the bonus pool is exhausted as the case may be.exhausted. The Board of Directors of the Bank has established an award schedule that allocates the bonus pool by percentage based on the employee’s position with the Company.Bank. For 2021 bonuses awarded under the Profit Sharing Plan totaled $187,414 and were paid in 2022. No bonuses were awarded under this plan for 2020.

 

For 2022, both the Short-Term Bonus Plan and the Company-Wide Profit Sharing Plan are still in effect. Under the Short-Term Bonus Plan, the aggregate annual amount for all short-term bonuses will not exceed $25,000 in 2022. For 2022, the Board of Directors budgeted a total amount of $200,000 for the Company-Wide Profit Sharing Plan.

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In July 2021, the Board of Directors approved a Senior Performance Bonus Plan, for certain senior officers of the Company and Bank. Participants have the ability to earn an annual incentive award up to a predetermined percentage of total compensation based on achievement of the Bank’s operating or consolidated performance goals. In addition to promoting the achievement of Bank performance goals, the incentive awards are designed to align the interests of senior management into a common objective. Any bonuses earned under the Senior Plan are paid in cash. For 2021, $79,961 was accrued for this plan, and paid in 2022. For 2022, the Board of Directors budgeted $101,712

Certain Relationships and Related Transactions

 

Certain of our directors, andexecutive officers, and persons with whom they are associatedshareholders known to us who own beneficially 5% or more of our stock (and their immediate family members) have had, and expect to have in the future, bankinglending transactions with us. Any extensions of credit to our directors, executive officers, and officerssuch shareholders are made in the ordinary course of business, were required to be on substantially the same terms, including interest rates and collateral, as comparable transactions to non-related parties at the time of the extension of credit, and did not involve more than the normal risk of collectability or present other unfavorable features, pursuant to Regulation O – Loans to Executive Officers, Directors and Principal Shareholders of Member Banks.features.

 

We have not adopted a formal policy that covers the review and approval of related person transactions by our Board of Directors. The Board, however, does review all related party transactions that are proposed to it for approval. During such a review, the Board will consider, among other things, the related person’s relationship to us, the facts and the circumstances of the proposed transaction, the aggregate dollar amount of the transaction, the related person’s relationship to the transaction and any other material information. Our Audit Committee has the responsibility to review significant conflicts of interest involving directors or executive officers.

 

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INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS

Elliott Davis Decosimo, LLC (“Elliott Davis Decosimo”) served as our independent registered public accountants with respectIn August 2021, the Bank sold a parcel of land adjacent to the audit of our consolidated financial statementsGrundy, Virginia office to Director McGlothlin for $150 thousand, which approximated the fiscal year ended December 31, 2015.

Elliott Davis Decosimo’s report on the Company’s consolidated financial statements for the fiscal years ended December 31, 2015 and 2014 does not contain any adverse opinion or disclaimer of opinion, nor are they qualified or modified as to uncertainty, audit scope, or accounting principles. The Audit Committee is recommending shareholder approvalfair value of the appointment of Elliott Davis Decosimo as the Company’s independent registered public accounting firm for 2016.property.

 

AUDIT INFORMATION

 

The Audit Committee operates under a written charter adopted by the Board of Directors. A copy of the Audit Committee charter can be found on our websitewww.npbankshares.com.

 

20152021 and 20142020 Fees of Independent Registered Public Accountants – Elliott Davis Decosimo

 

Audit Fees - The following table sets forth the aggregate fees billed bypaid to Elliott Davis Decosimo for professional services rendered forin connection with the audit of our annualthe Company’s consolidated financial statements for the fiscal years ended December 31, 20152021 and 2014, and for the review of the financial statements included in the Company’s Quarterly Reports on Form 10-Q, and services that are normally provided in connection with statutory and regulatory filings and engagements, for fiscal years ending December 31, 2015 and 2014 were $105,327 and $110,766, respectively.

Audit Related Fees - The aggregate fees billed by Elliott Davis Decosimo for professional services for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and not reported under the heading “Audit Fees” above for the fiscal years ended December 31, 2015 and 2014 were $9,500 annually. For both years 2015 and 2014, the fees were incurred related to audits of the 401-k benefit plan.

Tax Fees - The aggregate fees billed by Elliott Davis Decosimo for professional services for tax compliance, tax advice and tax planning for the fiscal years ended December 31, 2015 and 2014 were $20,130 and $14,255, respectively. During 2015 and 2014, these services included preparation of tax returns as necessary and for NPB Capital Trusts I & 2, assistance provided for an IRS tax audit,2020, as well as fees paid for audit-related services, tax compliance services.services and all other services in 2021 and 2020.

 

  2021 2020
 Audit fees (1) $105,902  $110,858 
 Audit-related fees (2)  10,400   10,475 
 Tax fees  14,205   12,150 
 Total $130,507  $133,483 

All Other Fees - None.

(1)Audit fees include aggregate fees incurred for professional services rendered for the audit of our annual financial statements and for the review of the financial statements included in the Company’s Quarterly Reports on Forms 10-Q for the fiscal years 2021 and 2020.

(2)The audit-related fees include audits of employee benefit plans for both years. These audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under the heading of “Audit fees”.

 

Pre-Approved Services - All audit related services, tax services and other services were pre-approved by the Audit Committee, which concluded that the provision of such services by Elliott Davis Decosimo was compatible with the maintenance of that firm’s independence in the conduct of their auditing functions. The Audit Committee has a policy that provides for the pre-approval of all services to be provided by its independent registered public accounting firm. The Audit Committee does not delegate to management its responsibility to pre-approve services performed by the independent registered public accounting firm. All of the services mentioned above were pre-approved by the Audit Committee.

 

Audit Committee Report

 

The Audit Committee has furnished the following report:

 

Management is responsible for our internal controls, financial reporting process and compliance with laws and regulations and ethical business standards. Our independent public accountants are responsible for performing an independent audit of our consolidated financial statements in accordance with generally accepted auditing standards and issuing a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes on behalf of the Board of Directors.

 

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In this context, the Audit Committee has reviewed and discussed with management and Elliott Davis, Decosimo, our independent public accountants for 2015,2020, the audited financial statements. Management represented to the Audit Committee that our consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States.

 

The Audit Committee has discussed with the independent public accountants the matters required to be discussed by Statement on Auditing Standards No. 61 (Professional Standards), as amended,the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC, including its judgments about the quality, not just the acceptability, of our accounting principles and underlying estimates in our consolidated financial statements; all critical accounting policies and practices to be used; all alternative treatments within generally accepted accounting principles for policies and practices related to material items that have been discussed with our management; and other material written communication between the independent public accountants and our management, such as any management letter or schedule of unadjusted differences.

 

In addition, the Audit Committee has received from the independent public accountants the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight BoardPCAOB regarding the independent accountant’s communications with the audit committeeAudit Committee concerning independence, and discussed with them their independence from us and our management. Moreover, the Audit Committee has considered whether the independent public accountants’ provision of other non-audit services to us is compatible with maintaining their independence from us.

 

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in our Annual Report on the Form 10-K for the fiscal year ended December 31, 2015,2021, for filing with the Securities and Exchange Commission.SEC. By recommending to the Board of Directors that the audited financial statements be so included, the Audit Committee is not opining on the accuracy, completeness or presentation of the information contained in the audited financial statements.

 

Members of the Audit Committee

J. Robert Buchanan

John D. Cox

Charles H. Gent, Jr.

Eugene S. Hearl

Harold Lynn Keene (Chairman)

B. Scott White

 

PROPOSALS FOR 20172023 ANNUAL MEETING OF SHAREHOLDERS

 

The Company anticipates holding the 2023 Annual Meeting of Shareholders on May 16, 2023. As discussed above under “Director Nomination Process,” our Bylaws prescribe the procedures that a shareholder must follow to nominate a director. For a shareholder to nominate a candidate for director at the 20172023 Annual Meeting of Shareholders, notice of the nomination must be received by our Secretary no later than March 2, 2017.5, 2023. The notice must describe various matters regarding the nominee and the shareholder giving the notice. Any shareholder may obtain a copy of our Bylaws, without charge, upon written request to our Secretary.

 

In accordance with SEC regulations, if any shareholder intends to present a proposal to be considered for inclusion in our proxy materials for our 20172023 Annual Meeting, the proposal must be in proper form and must be received at our principal executive offices at 67 Commerce Drive, Honaker, Virginia 24260, no later than January 15, 2017.December 5, 2022.

 

In accordance with our Bylaws, if any shareholder intends to present a proposal (other than a director nomination) at the 20172023 Annual Meeting of Shareholders outside of the proxy statement process, notice of the shareholder’s intention to present the proposal must be received by our Secretary no later than March 2, 2017.5, 2023. The notice must include a description of the proposed business, the reasons therefor, and other specified matters. The proxy solicited by the Board of Directors for the 20172023 Annual Meeting will confer discretionary authority to vote on any shareholder proposal presented at the meeting if we have not received notice of such proposal by March 2, 2017,5, 2023, in writing delivered to our Secretary.

 

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OTHER MATTERS

 

THE ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 20152021 (THE “FORM 10-K”), AS FILED WITH THE SEC, IS BEING MAILED TO SHAREHOLDERS WITHACCOMPANIES THIS PROXY STATEMENT. A COPY OF OUR ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 20152021 (EXCLUDING EXHIBITS) IS ALSO BEING MAILED WITH THIS PROXY STATEMENT AS FILED WITH THE SEC. A COPY OF THE FORM 10-K MAY ALSO BE OBTAINED WITHOUT CHARGE BY WRITING TO OUR SECRETARY, WHOSE ADDRESS IS POST OFFICE BOX 1810, HONAKER, VIRGINIA 24260.

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