SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. _______)
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Filed by a party other than the registrant¨ ☐
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☒ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material pursuant to § 240.14a-11(c) or § 240.14a-12 |
Emclaire Financial Corp |
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
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EMCLAIRE FINANCIAL CORP
612 MAIN STREET
EMLENTON, PENNSYLVANIA 16373
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF EMCLAIRE FINANCIAL CORP:
Notice is hereby given that the Annual Meeting of Shareholders of Emclaire Financial Corp (the “Corporation”) will be held at 9:00 a.m., local time, on Wednesday, April 25, 2018,24, 2019, at the main office of the Farmers National Bank of Emlenton, 612 Main Street, Emlenton, Pennsylvania 16373, for the following purposes:
1. To elect three (3)
1. | To elect four (4) directors to serve for three-year terms and until their successors are duly elected and qualified; |
2. | To adopt a non-binding resolution to approve the compensation of our named executive officers; |
3. To ratify the selection of Crowe Horwath LLP, Certified Public Accountants, as the Corporation’s independent registered public accounting firm for the fiscal year ending December 31, 2018;
3. | To consider an advisory vote on the frequency of the non-binding resolution to approve the compensation of our named executive officers; |
4. | To ratify the selection of Crowe LLP, Certified Public Accountants, as the Corporation’s independent registered public accounting firm for the fiscal year ending December 31, 2019; and |
5. |
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Only those shareholders of record at the close of business on March 1, 20182019 will be entitled to notice of and to vote at the Annual Meeting.
A copy of the Corporation’s Annual Report for the fiscal year ended December 31, 20172018 is being mailed with this notice.
To assure that your shares of common stock will be voted at the meeting, please indicate your voting instructions: (i) over the Internet at www.voteproxy.com, (ii) by telephone at 1-800-776-9437, or (iii) by completing and signing the enclosed proxy card and returning it promptly in the enclosed, postage prepaid, addressed envelope. No additional postage is required if mailed in the United States. The giving of a proxy will not affect your right to vote in person if you attend the meeting.
By Order of the Board of Directors, | |
William C. Marsh | |
Chairman, President and Chief Executive Officer |
March 23, 201822, 2019
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 25, 201824, 2019
The proxy materials for the Annual Meeting of Shareholders of Emclaire Financial Corp, including the Proxy Statement and the Corporation’s Annual Report for the fiscal year ended December 31, 2017,2018, are available in the Financial Information section on our website at www.emclairefinancial.com.
PROXY STATEMENT FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD APRIL 25, 201824, 2019
GENERAL
Introduction, Date, Place and Time of Meeting
This Proxy Statement is being furnished for the solicitation by the Board of Directors of Emclaire Financial Corp (the “Corporation”), a Pennsylvania business corporation and the bank holding company for the Farmers National Bank of Emlenton (the “Bank”), of proxies to be voted at the Annual Meeting of Shareholders of the Corporation to be held at the main office of the Bank, 612 Main Street, Emlenton, Pennsylvania 16373, on Wednesday, April 25, 2018,24, 2019, at 9:00 a.m. local time, or at any adjournment or postponement of the annual meeting.
The main office of the Corporation is located at 612 Main Street, Emlenton, Pennsylvania 16373. The telephone number for the Corporation is (844) 767-2311. All inquiries should be directed to William C. Marsh, Chairman, President and Chief Executive Officer. This Proxy Statement and the enclosed form of proxy are first being sent to shareholders of the Corporation on or about March 23, 2018.22, 2019. This Proxy Statement and the Annual Report for the fiscal year ended December 31, 20172018 are available in the Financial Information section on our website at www.emclairefinancial.com and www.sec.gov.
How to Vote
Shareholders may vote (i) via the Internet at www.voteproxy.com by following the instructions contained on that website, (ii) by telephone at 1-800-776-9437, (iii) by completing and signing the enclosed proxy card and returning it promptly in the enclosed, postage prepaid, addressed envelope, or (iv) appearing at the annual meeting and voting in person. Proxies properly executed and delivered by shareholders (via the Internet, telephone or by mail as described above) and timely received by us will be voted at the annual meeting in accordance with the instructions contained therein. If you authorize a proxy to vote your shares over the Internet or by telephone, you should not return a proxy by mail (unless you are revoking your previous proxy).
Solicitation of Proxies
The proxy solicited hereby, if properly voted via the Internet or telephone or signed and returned to us and not revoked prior to its use, will be voted in accordance with your instructions contained in the proxy. If no contrary instructions are given, each proxy signed and received will be voted in the manner recommended by the Board of Directors as follows: (i) FOR the nominees for director described herein; (ii) FOR the amendmentnon-binding resolution to approve the compensation of our named executive officers; (iii) FOR a frequency of every three years for future non-binding resolutions to approve the Corporation’s Amended and Restated Articlescompensation of Incorporation (the “Articles”) to eliminate the current supermajority voting provision for a merger or similar transaction in certain circumstances; (iii)our named executive officers; (iv) FOR the ratification of Crowe Horwath LLP, as the Corporation’s independent registered public accounting firm for the year ending December 31, 2018;2019; and (iv)(v) upon the transaction of such other business as may properly come before the meeting, in accordance with the best judgment of the persons appointed as proxies. Proxies solicited hereby may be exercised only at the annual meeting and any adjournment of the annual meeting and will not be used for any other meeting. Execution and return of the enclosed proxy will not affect a shareholder’s right to attend the annual meeting and vote in person.
The cost of preparing, assembling, mailing and soliciting proxies will be borne by the Corporation. The Corporation has retained Laurel Hill Advisory Group, LLC, Jericho, New York, a professional proxy solicitation firm, to assist in the solicitation of proxies. Such firm will receive a fee of $6,000 plus reimbursement for out-of-pocket expenses. In addition to solicitations by mail, directors, officers and employees of the Corporation may solicit proxies personally or by telephone without additional compensation. In addition to the use of the mail, certain directors, officers and employees of the Corporation intend to solicit proxies personally, by telephone and by facsimile. Arrangements will be made with brokerage houses and other custodians, nominees and fiduciaries to forward proxy solicitation material to the beneficial owners of stock held of record by these persons, and, upon request, the Corporation will reimburse them for their reasonable forwarding expenses.
Quorum
The presence of shareholders, in person or by proxy, entitled to cast at least a majority of the votes which all shareholders are entitled to cast shall constitute a quorum at the annual meeting. Abstentions, broker non-votes, which are discussed below, and votes withheld from director nominees count as “shares present” at the meeting for purposes of determining a quorum.
Voting
At the close of business on March 1, 2018,2019, the voting record date, the Corporation had outstanding 2,271,1392,698,712 shares of common stock, $1.25 par value per share. Only shareholders of record, at the close of business on the voting record date, will be entitled to notice of and to vote at the annual meeting. Each issued and outstanding share of common stock owned on the record date will be entitled to one vote on each matter to be voted on at the annual meeting, in person or by proxy.
Directors are elected by a plurality of the votes cast with a quorum present. The threefour nominees for director receiving the most votes of the common stock represented in person or by proxy at the annual meeting will be elected as directors. The affirmative vote of 80% of the outstanding shares of common stock is required to amend our Articles to eliminate the current supermajority voting provision for a merger or similar transaction in certain circumstances. The affirmative vote of a majority of the total votes present in person or by proxy is required for approval of the proposals to approve the non-binding resolution approving the compensation of our named executive officers and to ratify the appointment of the independent registered public accounting firm. The frequency of the advisory vote on the non-binding resolution approving the compensation of our named executive officers receiving the greatest number of votes (either every three years, every two years or every year) will be the frequency that shareholders approve.
With regard to the election of directors, you may vote in favor of or withhold authority to vote for one or more nominees for director. Votes that are withheld in connection with the election of one or more nominees for director will not be counted as votes cast for such individuals and accordingly will have no effect. An abstention may be specified on the proposals to amendapprove the non-binding resolution approving the compensation of our Articles ornamed executive officers and to ratify the appointment of Crowe Horwath LLP as our independent registered public accounting firm for 2018.2019. Abstentions will have the same effect as a vote against these proposals. An abstention on the frequency of the advisory vote on the non-binding resolution approving the compensation of our named executive officers will have no effect on that proposal.
Under rules applicable to broker-dealers, the proposalproposals for the election of directors, to approve the non-binding resolution approving the compensation of our named executive officers and to amend our Articlesthe frequency of the advisory vote on the non-binding resolution are considered to be non-routine matters. Brokerage firms may not vote on non-routine matters in their discretion on behalf of their clients if such clients have not furnished voting instructions. A “broker non-vote” occurs when a broker’s customer does not provide the broker with voting instructions on non-routine matters for shares owned by the customer but held in the name of the broker. For such non-routine matters, the broker cannot vote on the proposal and reports the number of such shares as “non-votes.” Because the election of directors, the proposals to approve the non-binding resolution approving the compensation of our named executive officers and the proposal to amend our Articlesfrequency of the advisory vote on the non-binding resolution are not considered routine matters, there potentially can be “broker non-votes” at the annual meeting. Any “broker non-votes” submitted by brokers or nominees in connection with the annual meeting will have no effect on the vote for the election of directors. However, a broker non-vote ondirectors or the proposal to amend our Articles will have the same effect as a vote against the proposal.
Accordingly, because of the required vote, abstentions, broker-non-votes and unvoted shares on the proposal to amend our Articles of Incorporation will have the same effect as a vote against the proposal. Please vote your proxy by mail, via the Internet or by telephone as soon as practicable so your vote can be counted.other proposals.
Revocation of Proxies and Changing a Vote
A shareholder who votes via the Internet (as described above) or telephone (as described above) or returns a proxy via mail may revoke it at any time before it is voted by: (i) delivering written notice of revocation to Matthew J. Lucco,Jennifer A. Roxbury, Secretary, Emclaire Financial Corp, 612 Main Street, Post Office Box D, Emlenton, Pennsylvania 16373, telephone: (844) 767-2311; or (ii) voting in person at the annual meeting after giving written notice to the Secretary of the Corporation. Executing and returning a later-dated proxy, and giving written notice thereofof revocation to the Secretary of the Corporation or voting again via the Internet or telephone will revoke thean earlier voted proxy. Only the latest dated proxy, ballot or Internet or telephone proxy submitted by a shareholder prior to the annual meeting will be counted.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 25, 201824, 2019
The proxy materials for the Annual Meeting of Shareholders of Emclaire Financial Corp, including the Proxy Statement and the Corporation’s Annual Report for the fiscal year ended December 31, 2017,2018, are available in the Financial Information section on our website at www.emclairefinancial.com or www.sec.gov.
PRINCIPAL BENEFICIAL OWNERS OF THE CORPORATION’S COMMON STOCK
Persons and groups owning in excess of 5% of the common stock are required to file certain reports regarding such ownership pursuant to the Securities Exchange Act of 1934, as amended (the “1934 Act”). The following table sets forth, as of the voting record date, certain information as to the common stock beneficially owned by (i) persons or groups who own more than 5% of the common stock, (ii) the directors of the Corporation, (iii) certain executive officers of the Corporation included in the Summary Compensation Table (which we refer to as “named executive officers”), and (iv) all directors and executive officers of the Corporation as a group. Other than as noted below, managementManagement knows of no person or group that ownsowned more than 5% of the outstanding shares of common stock at the voting record date.
Name and Address | Amount and Nature of Beneficial Ownership(1) | Percent of Outstanding Common Stock Beneficially Owned | Amount and Nature of Beneficial Ownership(1) | Percent of Outstanding Common Stock Beneficially Owned | |||||||||
The Banc Funds Company, L.L.C. | 117,207 | (2) | 5.16 | % | |||||||||
20 North Wacker Drive, Suite 3300 | |||||||||||||
Chicago, IL 60606 | |||||||||||||
Directors: | |||||||||||||
Robert L. Hunter | 89,792 | (3) | 3.95 | % | 90,292 | (2) | 3.35% | ||||||
Henry H. Deible | 74,121 | (3) | 2.75% | ||||||||||
Robert W. Freeman | 43,661 | (4) | 1.92 | % | 45,243 | (4) | 1.68% | ||||||
William C. Marsh | 40,646 | 1.79 | % | 43,924 | 1.63% | ||||||||
John B. Mason | 39,042 | 1.72 | % | 39,542 | 1.47% | ||||||||
Nicholas D. Varischetti | 34,143 | 1.50 | % | 34,643 | 1.28% | ||||||||
Milissa S. Bauer | 32,453 | (5) | 1.20% | ||||||||||
James M. Crooks | 27,832 | (5) | 1.23 | % | 28,335 | (6) | 1.05% | ||||||
Milissa S. Bauer | 25,375 | (6) | 1.12 | % | |||||||||
David L. Cox | 18,830 | (7) | * | 19,330 | (7) | * | |||||||
Mark A. Freemer | 17,100 | * | 17,600 | * | |||||||||
Deanna K. McCarrier | 16,544 | * | 17,097 | * | |||||||||
Henry H. Deible II | 384 | * | |||||||||||
Named Executive Officers: | |||||||||||||
Matthew J. Lucco | 6,627 | * | |||||||||||
Jennifer A. Roxbury | 1,805 | * | 2,531 | * | |||||||||
All directors and executive officers as a group (13 persons) | 362,922 | 15.98 | % | ||||||||||
Robert A. Vernick | 1,402 | * | |||||||||||
All directors and executive officers as a group (15 persons) | 448,882 | 16.63% |
* | Represents less than 1% of the outstanding common stock. |
(1) | Based upon information provided by the respective beneficial owners and filings with the Securities and Exchange Commission (“SEC”) made pursuant to the 1934 Act. For purposes of this table, pursuant to rules promulgated under the 1934 Act, a person or entity is considered to beneficially own shares of common stock if they directly or indirectly have or share (1) voting power, which includes the power to vote or to direct the voting of the shares, or (2) investment power, which includes the power to dispose or direct the disposition of the shares. Unless otherwise indicated, a person or entity has sole voting power and sole investment power with respect to the indicated shares. |
(2) |
Of the |
Of the | ||
(4) | Of the 45,243 shares beneficially owned by Mr. Freeman, |
(5) |
Of the |
(6) | Of the 28,335 shares beneficially owned by Mr. Crooks, 3,273 shares are owned jointly with his spouse and 635 shares are owned individually by his spouse. |
(7) | Of the |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Corporation’s common stock is registered pursuant to Section 12(b) of the 1934 Act. The officers and directors of the Corporation and beneficial owners of greater than 10% of the common stock are required to file reports on Forms 3, 4, and 5 with the SEC disclosing changes in beneficial ownership of the common stock. Based on the Corporation’s review of such ownership reports, to the Corporation’s knowledge, no executive officer, director, or 10% beneficial owner of the Corporation failed to file such ownership reports on a timely basis for the fiscal year ended December 31, 2017, 2018, except that Milissa S. Bauer,Henry H. Deible, a director, filed late one Form 4 with respect to the salepurchase of 201,104 shares of common stock in December 2017.2018.
INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR,
CONTINUING DIRECTORS AND EXECUTIVE OFFICERS
Election of Directors
The Corporation has a classified Board of Directors with staggered three-year terms of office. In a classified board, the directors are generally divided into separate classes of equal number. The terms of the separate classes expire in successive years. Thus, at each annual meeting of shareholders, successors to the class of directors whose term then expires are to be elected to hold office for a term of three years, so that the office of one class will expire each year.
A majority of the members of our Board of Directors are independent based on an assessment of each member’s qualifications by the Board, taking into consideration the NASDAQ Stock Market’s requirements for independence. The Board of Directors has concluded that Directors Bauer, Cox, Crooks, H. Deible, H. Deible II, Freeman, Freemer, Hunter, Mason, McCarrier and Varischetti do not have any material relationships with the Corporation that would impair their independence. In connection with the acquisition of Community First Bancorp, Inc. on October 1, 2018, the Corporation agreed to appoint two former directors of Community First, Henry H. Deible and Henry H. Deible II to the Boards of Directors of the Corporation and the Bank in the class of directors whose terms expire at the respective 2021 and 2019 annual meetings of shareholders. Each of such directors will be re-nominated for an additional term, subject to the fiduciary duties of the Board of Directors and any applicable eligibility requirements set forth in the Corporation’s or the Bank’s, as the case may be, articles of incorporation, bylaws, or nominating and corporate governance committee guidelines, or any applicable law, rule, regulation or listing standard. There are no other arrangements or understandings between the Corporation and any other person pursuant to which such person has been elected a director. Shareholders of the Corporation are not permitted to cumulate their votes for the election of directors.
Unless otherwise directed, each proxy executed and returned by a shareholder will be voted for the election of the nominees for director listed below. If the person named as nominee should be unable or unwilling to stand for election at the time of the annual meeting, the proxies will nominate and vote for one or more replacement nominees recommended by the Board of Directors. At this time, the Board of Directors knows of no reason why the nominees listed below may not be able to serve as a director if elected. Any vacancy occurring on the Board of Directors of the Corporation for any reason may be filled by a majority of the directors then in office until the expiration of the term of office of the class of directors to which he or she was appointed. Ages are reflected as of December 31, 2017.2018.
Nominees for Director for Three-Year Terms Expiring in 2021
Nominees for Director | ||||||||||||
for | ||||||||||||
Principal Occupation | Director Since | |||||||||||
Name | Age | for Past Five Years | Bank/Corporation | |||||||||
David L. Cox | 68 | |||||||||||
The Board of Directors recommends that you vote “FOR” for each of the nominees for director.
Members of the Board of Directors Continuing in Office
Directors Whose Terms Expire in 2019
Retired, former Chairman, President and Chief Executive Officer of the Bank and the Corporation. Mr. Cox's prior service as Chairman, President and Chief Executive Officer as well as his subsequent years of service as a director provide the Board with valuable knowledge and experience. | 1991/1991 | |||||
Henry H. Deible II | 36 | Owner and President of Forestland Investments, LLC and owner and Forester for Sustainable Forestry Consultants. As a business executive in the Corporation's market area as well as previous experience as a director of a community banking institution, Mr. Deible is well qualified to serve as a director. | 2018/2018 | |||
Mark A. Freemer | 59 | Chief Financial Officer for Varischetti Holdings, LP. Formerly a Partner with Clyde, Ferraro & Co., LLP, Certified Public Accountants. Mr. Freemer is a certified public accountant. As a business executive in the Corporation's market area as well as his many years of service as a director of the Corporation and his public accounting experience, Mr. Freemer is well qualified to serve as a director. | 2004/2004 | |||
William C. Marsh | 52 | Chairman, President and Chief Executive Officer of the Bank and the Corporation. Mr. Marsh is a certified public accountant. Mr. Marsh's positions as Chairman, President and Chief Executive Officer, his extensive involvement with and background in the banking industry and involvement in business and civic organizations in the communities that the Corporation operates, as well as his prior accounting background provide the Board valuable insight regarding the business and operations of the Corporation. | 2006/2006 |
The Board of Directors recommends that you vote “FOR” for each of the nominees for director.
Members of the Board of Directors Continuing in Office
Directors Whose Terms Expire in 2020
Board Leadership Structure and Risk Oversight Board Leadership Structure. Since the Corporation was founded in 1989, the Corporation has employed a traditional board leadership model, with our Chief Executive Officer also serving as Chairman of our Board of Directors. We believe this traditional leadership structure benefits the Corporation. A combined Chairman and Chief Executive Officer role helps provide strong, unified leadership for our management team and Board of Directors. William C. Marsh has served as our Chairman and Chief Executive Officer since January 1, 2009. Prior to becoming Chairman and Chief Executive Officer, Mr. Marsh served as Executive Vice President and Chief Financial Officer of the Corporation beginning in 2006. Our Board of Directors is currently comprised of
The Board acts efficiently and effectively under its current structure, where the Chief Executive Officer also acts as Chairman. A combined Chairman and Chief Executive Officer is in the best position to be aware of major issues facing the Corporation on a day-to-day and long-term basis, and is in the best position to identify key risks and developments facing the Corporation to be brought to the Board’s attention. A combined Chairman and Chief Executive Officer position eliminates the potential for confusion and duplication of efforts, including among employees. A combined Chairman and Chief Executive Officer position eliminates the potential for confusion as to who leads the Corporation, providing the Corporation with a single public “face” in dealing with shareholders, employees, regulators, analysts and other constituencies. Risk Oversight. The Board’s role in the Corporation’s risk oversight process includes receiving regular reports from members of senior management on areas of material risk to the Corporation, including operational, financial, legal and regulatory, and strategic and reputational risks. The full Board (or the appropriate committee in the case of risks that are under the purview of a particular committee) receives these reports from the appropriate “risk owner” within the organization to enable it to understand our risk identification, risk management and risk mitigation strategies. When a committee receives the report, the Chairman of the relevant committee reports on the discussion to the full Board during the next Board meeting. This enables the Board and its committees to coordinate the risk oversight role, particularly with respect to risk interrelationships.
Directors Attendance at Annual Meetings
Although we do not have a formal policy regarding attendance by members of the Board of Directors at annual meetings of shareholders, all directors are expected to attend the Corporation’s annual meeting of shareholders.
Committees and Meetings of the Corporation and the Bank
During
Membership on Certain Board Committees. The Board of Directors of the Corporation has established an audit committee, executive committee, human resources committee and a nominating and corporate governance committee. The human resources committee functions as the Corporation’s compensation committee.
The following table sets forth the membership of such committees as of the date of this proxy statement.
Audit Committee.The audit committee of the Board is composed of six members and operates under a written charter adopted by the Board of Directors. During
The audit committee charter adopted by the Board sets
To monitor the preparation of quarterly and annual financial reports; To review the adequacy of internal control systems and financial reporting procedures with management and independent auditors; and To review the general scope of the annual audit and the fees charged by the independent auditors.
Human Resources Committee.The human resources committee of the Board functions as the compensation committee and has the responsibility to evaluate the performance of and determine the compensation for the Chairman of the Board, President and Chief Executive Officer of the Corporation, to approve the compensation structure for senior management and the members of the Board of Directors, to review the Corporation’s salary administration program and to review and administer the Corporation’s bonus plans, including the management incentive program.
The human resources committee, which is currently composed entirely of independent directors, administers the Corporation’s executive compensation program. In
The human resources committee is committed to high standards of corporate governance. The human resources committee’s charter reflects the foregoing responsibilities and commitment, and the human resources committee and the Board will periodically review and revise the charter, as appropriate. The full text of the human resources committee charter is available on our website at www.emclairefinancial.com. The human resources committee’s membership is determined by the Board. There were
The human resources committee has exercised exclusive authority over the compensation paid to the Corporation’s Chairman of the Board, President and Chief Executive Officer and reviews and approves salary increases and bonuses for the Corporation’s other executive officers as prepared and submitted to the human resources committee by the Chairman of the Board, President and Chief Executive Officer. Although the human resources committee does not delegate any of its authority for determining executive compensation, the human resources committee has the authority under its charter to engage the services of outside advisors, experts and others to assist the human resources committee. Nominating and Corporate Governance Committee.The Corporation has established a nominating and corporate governance committee to identify and recommend to the full Board of Directors the selection of qualified individuals to serve as Board members, recommend to the full Board director nominees for each annual meeting of shareholders, review existing corporate governance documents, establish corporate governance principles applicable to the Corporation and to govern the conduct of the Board and its members, and review nominations for director submitted by shareholders. During
The nominating and corporate governance committee considers candidates for director suggested by its members and other directors, as well as management and shareholders. The nominating and corporate governance committee also may solicit prospective nominees. The committee will also consider whether to nominate any person nominated pursuant to the provision of our bylaws relating to shareholder nominations. The nominating and corporate governance committee has the authority and ability to retain a search firm to identify or evaluate potential nominees if it so desires.
The charter of the nominating and corporate governance committee sets forth certain criteria the committee may consider when recommending individuals for nomination as director including: (a) ensuring that the Board of Directors, as a whole, is diverse and consists of individuals with various and relevant career experience, relevant technical skills, industry knowledge and experience, financial expertise (including expertise that could qualify a director as a “financial expert,” as that term is defined by the rules of the SEC), local or community ties and (b) minimum individual qualifications, including strength of character, mature judgment, familiarity with our business and industry, independence of thought and an ability to work collegially. The committee also may consider the extent to which the candidate would fill a present need on the Board of Directors.
Once the nominating and corporate governance committee has identified a prospective nominee, the committee makes an initial determination as to whether to conduct a full evaluation of the candidate. This initial determination is based on whatever information is provided to the committee with the recommendation of the prospective candidate, as well as the committee’s own knowledge of the prospective candidate, which may be supplemented by inquiries to the person making the recommendation or others.
Section 10.1 of our bylaws governs shareholder nominations for election to the Board of Directors and requires all nominations for election to the Board of Directors by a shareholder to be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a shareholders’ notice must be received by the Corporation
Executive Officers Who are Not Directors
Set forth below is information with respect to the principal occupations during at least the last five years for the current executive officers of the Corporation who do not serve as directors. All executive officers of the Corporation are elected annually by the Board of Directors and serve at the discretion of the Board. There are no arrangements or understandings between the executive officers and the Corporation and any person pursuant to which such persons have been selected officers. Ages are reflected as of December 31,
Jennifer A. Roxbury, age
Amanda L. Engles,
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth a summary of certain information concerning the compensation awarded to or paid by the Corporation or its subsidiaries for services rendered in all capacities during the past two years to our principal executive officer as well as our two other highest compensated executive officers in
Outside Compensation Consultants
Periodically, the Corporation retains a compensation consulting firm to review its compensation structure.
Pension Plan
The Bank
401(k) Plan
The Corporation maintains a defined contribution 401(k) plan. Employees are eligible to participate by providing tax-deferred contributions up to 20% of qualified compensation. Employee contributions are vested at all times. The Corporation provides a matching contribution of up to 4% of the participant’s salary. The Corporation may also make, at the sole discretion of its Board of Directors, a profit sharing contribution.
Supplemental Retirement Agreements
The
Each of the
The
Employment and Change in Control Agreements
The change in control agreements for
Outstanding Equity Awards at Fiscal Year-End
The following tables set forth, with respect to the executive officers named in the Summary Compensation Table, information with respect to the number of awards held as of December 31,
(1) Based upon the fair market value of a share of common stock of the Corporation as of December 31,
Certain Transactions
Other than as set forth below, there have been no material transactions, proposed or consummated, between the Corporation and the Bank with any director or executive officer of the Corporation or the Bank, or any associate of the foregoing persons.
The Bank, like many financial institutions, has followed a written policy of granting various types of loans to officers, directors, and employees and under such policy grants a discount of 100 basis points on loans extended to all employees, including executive officers. With the exception of such policy, all loans to executive officers and directors of the Corporation and the Bank have been made in the ordinary course of business and on substantially the same terms and conditions, including interest rates and collateral, as those prevailing at the time for comparable transactions with persons not related to the Bank, and do not involve more than the normal risk of collectibility nor present other unfavorable features. All such loans are approved by the Board of Directors.
The following table presents a summary of loans in excess of $120,000 with preferential pricing (100 basis point discount) extended by the Bank to any of the Corporation’s directors, executive officers or immediate family members of such individuals. In addition, the Corporation had
Director Compensation
During
The following table sets forth information concerning compensation paid or accrued by the Corporation and the Bank to each member of the Board of Directors with the exception of named executive officers reported within the Summary Compensation Table during the year ended December 31,
PROPOSAL TO ADOPT A NON-BINDING RESOLUTION TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS Pursuant to Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), the proxy rules of the SEC were amended to require that not less frequently than once every three years, a proxy statement for an annual meeting of shareholders for which the proxy solicitation rules of the SEC require compensation disclosure must also include a separate resolution subject to a shareholder vote to approve the compensation of the company's named executive officers disclosed in the proxy statement. The executive officers of the Corporation named in the summary compensation table and deemed to be "named executive officers" are William C. Marsh, Jennifer A. Roxbury and Robert A. Vernick. Reference is made to the summary compensation table and disclosures set forth under "Executive Compensation" in this proxy statement. The proposal gives shareholders the ability to vote on the compensation of our named executive officers through the following resolution: "Resolved, that the shareholders approved the compensation of the named executive officers as disclosed in this proxy statement." The shareholder vote on this proposal is not binding on the Corporation or the Board of Directors and cannot be construed as overruling any decision made by the Board of Directors. However, the Board of Directors of the Corporation will review the voting results on the non-binding resolution and take them into consideration when making future decisions regarding executive compensation. The Board of Directors recommends that you vote "FOR" the non-binding resolution to approve the compensation of our named executive officers. ADVISORY VOTE ON THE FREQUENCY OF THE NON-BINDING RESOLUTION TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS Section 951 of the Dodd-Frank Act also amended the proxy rules of the SEC to require that not less frequently than once every six years, a proxy statement for an annual meeting of shareholders for which the proxy solicitation rules of the SEC require compensation disclosure must also include a separate proposal subject to a shareholder vote to determine whether the shareholder vote to approve the compensation of the named executive officers will occur every one, two or three years. Accordingly, we are seeking a shareholder vote regarding whether the non-binding resolution to approve he compensation of our named executive officers should occur every three years, every two years or every year. The Board of Directors asks that you support a frequency of every three years for future non-binding resolutions on the compensation of our named executive officers. Setting an advisory vote every three years will be the most effective timeframe for the Corporation to respond to shareholder feedback and provide us with sufficient time to engage with shareholders to understand and respond to the vote results. The advisory vote on this proposal is not binding on the Corporation or the Board of Directors and cannot be construed as overruling any decision made by the Board of Directors. However, the Board of Directors of the Corporation will review the results of the advisory vote and take them into consideration when making future decisions regarding the frequency of submitting to shareholders the non-binding resolution to approve the compensation of our named executive officers. The Board of Directors recommends an advisory vote for a frequency of "EVERY THREE YEARS" for future non-binding resolutions to approve the compensation of our named executive officers.
REPORT OF THE AUDIT COMMITTEE
In discharging its oversight responsibility, the audit committee has met and held discussions with management and Crowe
In addition, the audit committee has discussed with the independent auditors the auditors’ independence from management and the Corporation, and has received and discussed with the independent auditors the matters in the written disclosures required by the Independence Standards Board and as required under the Sarbanes-Oxley Act of 2002, including considering the permissibility of non-audit services with the auditors’ independence.
The audit committee also obtained from the independent auditors a formal written statement describing all relationships between the Corporation and Crowe
Based on these discussions and reviews, the audit committee recommended that the Board of Directors approve the inclusion of the Corporation’s audited consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31,
Respectfully submitted by the members of the audit committee of the Board of Directors:
Mark A. Freemer, Chairman Milissa S. Bauer James M. Crooks Robert L. Hunter Deanna K. McCarrier Nicholas D. Varischetti
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The audit committee of the Board of Directors of the Corporation has appointed Crowe
Vote Required; Effect
Unless instructed to the contrary, it is intended that proxies will be voted for the ratification of the selection of Crowe,
Recommendation of the Board of Directors
The Board of Directors recommends that shareholders vote
It is understood that even if the selection of Crowe
RELATIONSHIP WITH INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
General
The audit committee of the Board of Directors has appointed Crowe
In addition to performing customary audit services related to the audit of the Corporation’s financial statements, Crowe
The audit committee selects the Corporation’s independent registered public accounting firm and separately pre-approves all audit services to be provided by it to the Corporation. The audit committee also reviews and separately pre-approves all audit-related, tax and all other services rendered by our independent registered public accounting firm in accordance with the audit committee’s charter and policy on pre-approval of audit-related, tax and other services. In its review of these services and related fees and terms, the audit committee considers, among other things, the possible effect of the performance of such services on the independence of our independent registered public accounting firm.
During
Auditor Fees
The following table sets forth the aggregate fees paid by us to Crowe
ANNUAL REPORT
A copy of the Corporation’s Annual Report for its fiscal year ended December 31,
SHAREHOLDER PROPOSALS
Any shareholder who, in accordance with and subject to the provisions of the proxy rules of the SEC, wishes to submit a proposal for inclusion in the Corporation’s proxy statement for its
Under the Corporation’s current bylaws, business proposal nominations for directors other than those to be included in the Corporation’s proxy materials following the procedures described in Rule 14a-8 under the 1934 Act, may be made by shareholders entitled to vote at the meeting if notice is timely given and if the notice contains the information required by the bylaws. Nominations must be received no less than sixty (60) days prior to the annual meeting.
In the event the Corporation receives notice of a shareholder proposal to take action at next year’s annual meeting of shareholders that is not submitted for inclusion in the Corporation’s proxy material, or is submitted for inclusion but is properly excluded from the proxy material, the persons named in the proxy sent by the Corporation to its shareholders intend to exercise their discretion to vote on the shareholder proposal in accordance with their best judgment.
SHAREHOLDER COMMUNICATION WITH THE BOARD
The Corporation does not have a formal procedure for shareholder communication with its Board of Directors. In general, officers are easily accessible by telephone or mail. Any matter intended for the Board, or for any individual member or members of the Board, should be directed to the President with a request to forward the same to the intended recipient. In the alternative, shareholders can send correspondence to the Board to the attention of the Board Chairman, William C. Marsh, or to the attention of the Chairman of the Audit Committee, Mark A. Freemer, in care of the Corporation at the Corporation’s address. All such communications will be forwarded unopened.
OTHER MATTERS
The Board of Directors does not know of any matters to be presented for consideration other than the matters described in the Notice of Meeting, but if any matters are properly presented, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their judgment.
ADDITIONAL INFORMATION
Upon written request, a copy of the Corporation’s Annual Report on Form 10-K for the year ended December 31,
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