Q: | Who will bear the costs of soliciting proxies?
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A: | The Company will bear the entire cost of this solicitation. Officers and regular employees of Lakeland may also, but without additional compensation, solicit proxies by further mailings, personal conversations, telephone, facsimile ore-mail. Lakeland will make arrangements with brokerage houses, custodians, nominees and fiduciaries for the forwarding of proxy solicitation materials to beneficial owners of shares held of record by these brokerage houses, custodians, nominees and fiduciaries and Lakeland will reimburse these brokerage houses, custodians, nominees and fiduciaries for their reasonable expenses incurred in connection with the solicitation.
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Q: What if I return my signed proxy card but do not provide instructions on how to vote?
A: Unless you give other instructions on your signed proxy card, the persons named as proxies on a properly executed proxy card will vote in accordance with the recommendations of the Board of Directors.
Q: Who will bear the costs of soliciting proxies?
A: The Company will bear the entire cost of this solicitation. Officers and regular employees of Lakeland may also, but without additional compensation, solicit proxies by further mailings, personal conversations, telephone, facsimile or e-mail. Lakeland will make arrangements with brokerage houses, custodians, nominees and fiduciaries for the forwarding of proxy solicitation materials to beneficial owners of shares held of record by these brokerage houses, custodians, nominees and fiduciaries and Lakeland will reimburse these brokerage houses, custodians, nominees and fiduciaries for their reasonable expenses incurred in connection with the solicitation.
The Company’s Board of Directors currently consists of twelve members. The Board is divided into three equal classes, as nearly equal in number as possible. Each year one class of directors is elected to serve for a three-year term and until their respective successors have been elected and qualified.
The Board of Directors has nominated Lawrence R. Inserra, Jr., Robert E. McCracken and Thomas J. Shara for election as directors at the Annual Meeting, each for a term of office expiring in 2025 and Robert F. Mangano for election as director for a term of office expiring in 2023.
The Board of Directors recommends a vote “FOR” each of the nominees for director.
Board Composition and Qualifications
The Board’s Nominating and Corporate Governance Committee is charged with reviewing the composition of the Board and refreshing it as appropriate. The Board believes that the Company benefits by fostering a mix of experienced directors with a deep understanding of the banking industry and the communities served by Lakeland Bank.
Diversity
The Company’s
Board does not have a formal policyDiversity
At the direction of considering diversityand in identifying potential director candidates. However, sincecoordination with the Board of Directors, the Company has made, and continues to make, significant progress expanding the diversity of its workforce, vendors and suppliers to align more closely with the communities that we serve, as well as establishing diversity goals among our management and associates.
The Board believes that the best decisions are reached after consideration and input is provided from members having a broad array of backgrounds, perspectives, talent and experiences. The Board further believes that its membership should broadly reflect the banking communitycommunities, businesses and consumers served by Lakeland, itLakeland.
While our Board’s commitment to diversity has an informal practice of considering a nominee’s age, race, ethnicity, national origin, gender, and geographic location in additionbeen demonstrated through these actions, the Board recognized the need to such nominee’s qualificationsformalize its approach for Board service.diversity. Last year, the Board directed its Nominating and Corporate Governance Committee to establish a diversity definition, goals and timeframe for increased Board member diversity, which would be informed by and aligned with an updated skills assessment, as well as the practices of peers, the rules being promulgated by the stock exchanges, as well as evolving guidance and stakeholder expectations on Environmental, Social and Governance (“ESG”) practices. To comprehensively assess and address actual or perceived ESG disclosure gaps and ESG expectations of all of its stakeholders, Lakeland engaged Nasdaq's ESG consulting team. As part of this process, Lakeland has adopted the diversity
definition within Nasdaq Listing Rule 5605(f) which, in relevant part, defines diverse board members as individuals who self-identify either as female or as either an underrepresented minority or LGBTQ+. An underrepresented minority is further defined as an individual who self-identifies in one or more of the following groups: Black or African American, Hispanic or Latinx, Asian, Native American or Alaska Native, Native Hawaiian or Pacific Islander or two or more races of ethnicities.
As Lakeland already has had a gender diverse Board for over two decades, Lakeland anticipates achieving its remaining diversity goals in 2023, well in advance of the Nasdaq Listing Rule 5605(f)'s August 2025 compliance date. See “Nominating and Corporate Governance Committee
Matters—Matters - Qualifications.”
Compliance with
regulatory requirementsRegulatory Requirements
The Nominating and Corporate Governance Committee considers regulatory requirements affecting directors, including potential competitive restrictions, as well as the other positions the director has held, including other board memberships. No member of the Company’s Board may serve on the board of another financial institution,
or bank or savings and loan holding company in the Company’s market area.
The charter of the Nominating and Corporate Governance Committee provides that there will be no differences in the manner in which the Nominating and Corporate Governance Committee evaluates nominees recommended by shareholders and nominees recommended by the Committee or by management, except that no specific process shall be mandated with respect to the nomination of any individuals who have previously served on the Board.
The Company maintains a mandatory retirement age for its
directors. Anydirectors, which requires that any director who turns 72 during
his or hertheir term must retire at the next Annual Meeting of
shareholders.-4-
Shareholders. To provide for continuity with shareholders, customers and associates and, in order to further ensure the success with respect to all aspects of the January 6, 2022, 1st Constitution merger and integration, the Board approved a specific exception to its mandatory retirement age policy so as to allow Mr. Mangano, who is 76, to join the Boards of Lakeland and Lakeland Bank at legal close and to continue thereafter for an additional one-year term from the 2022 Annual Meeting of Shareholders, subject to shareholder approval.other local organizations, led the Board to conclude that this individual should serve as a director of Lakeland and Lakeland Bank.
Mr.
Thomas J. Shara’s over 30 years of experience in the banking industry, his stature and reputation in the banking and local community, and his service as President and CEO of Lakeland and Lakeland Bank since April 2008 led the Board to conclude that this individual should serve as a director of Lakeland and Lakeland Bank. His knowledge and understanding of all facets of the business of banking, the leadership he has demonstrated at Lakeland and at prior institutions and his involvement in charitable and trade organizations make him extremely valuable as a Board member. Mr. Shara serves as a member of the New Jersey Bankers Association Board of Directors, on the Board of Directors of the Commerce and Industry Association of New Jersey, the Board of Trustees of the Boys and Girls Club of Paterson and Passaic, New Jersey and the Board of Trustees of the Chilton Hospital Foundation. He also serves on the Board of Governors of the Ramapo College Foundation. Mr. Shara earned a Master’s Degree in Business Administration
as well asand a Bachelor of Science Degree from Fairleigh Dickinson University.
Mr. Shara is the Immediate Past Chairman of New Jersey Bankers Association.
With respect to our continuing directors:
Mr. Bohuny currently is President at Brooks Builders. Mr. Bohuny’s over 20 years of experience in the residential and commercial construction and real estate development fields, and his prior work experience in the equity and fixed income markets and service on various educational and philanthropic boards including the StonyBrook School, Eastern Christian School, Christian Healthcare Center, New Canaan Society and NextGen Board Meetings—Leaders Advisory Council, led the Board to conclude that this individual should serve as a director of Lakeland and Lakeland Bank.
Ms. Deacon is the current Board Chair of Lakeland Bancorp, Inc. and Lakeland Bank, as well as Secretary/Treasurer of Deacon Homes, Inc. Ms. Deacon’s over 40 years of extensive experience in the real estate development process, building contracting, property management and sales, her service to a number of community associations, her reputation in the broader business community as well as in the local real estate markets and her dedication to Lakeland and Lakeland Bank led the Board to conclude that this individual should serve as a director of Lakeland. Ms. Deacon is responsible for the planning and administration of numerous operating companies and four condominium associations. Her past participation in the state and local real estate associations includes leadership positions and committee experience in ethics, professional standards, strategic planning and governance. Ms. Deacon is committed to enhancing her professional participation as a director of Lakeland and frequently attends continuing education seminars and institutes applicable to directors of banks and bank holding companies. During her 27-year tenure at Lakeland, she has served on every committee of the Board. In January 2010, she was elected Vice Chair of the Board of Lakeland and Lakeland Bank and, in May 2011, she was elected Board Chair of Lakeland and Lakeland Bank.
Mr. Flynn is a Partner at PKF O’Connor Davies, LLP, one of the largest regional accounting firms in the tri-state area. He received his Bachelor of Science Degree, cum laude, from Monmouth College. With over 30 years of experience as a practicing CPA, Mr. Flynn brings in-depth knowledge of generally accepted accounting principles and auditing standards to our Board. He has worked with audit committees and boards of directors in the past, including previously serving on the Boards of TD Banknorth, Inc. and Hudson United Bancorp, and provides Lakeland’s Board of Directors and its Audit Committee with extensive experience in auditing and preparing financial statements. For these reasons, the Board has concluded that this individual should serve as a director of Lakeland and Lakeland Bank.
Mr. Fredericks’ experience in business, banking and real estate, as well as his extensive knowledge of the communities in which Lakeland operates, has led the Board to conclude that this individual should serve as a director of Lakeland and Lakeland Bank. Mr. Fredericks’ knowledge of banking comes from his 28-year tenure as a director of Lakeland, during which he has served on several committees. Mr. Fredericks owns and operates three businesses in Lakeland’s markets: he is the president and CEO of Fredericks Fuel and Heating Services, as well as president of Keil Oil Inc. and F&B Trucking Inc. He also is the managing partner of several real estate partnerships in the area. Mr. Fredericks is a lifetime resident and active participant in the communities served by Lakeland, and has been a member of numerous charitable, civic and business organizations over the years. These
include his prior service as Trustee of Chilton Memorial Hospital; member and past president of the West Milford Education Foundation and member and past president of the West Milford Rotary Club.
Mr. Gragnolati has served as the President and CEO of Atlantic Health System since 2015. Atlantic Health System is a not-for-profit private healthcare company that operates hospitals and health care facilities throughout New Jersey. He also serves as a Past Chairman of the Board of the American Hospital Association, a nationwide organization that represents and advocates on behalf of hospitals, health care systems, networks, other providers of care and individual members. He also previously served on the board of Paper Mill Playhouse and is a proponent of their work in arts accessibility, which makes theater available to audience members with cognitive and developmental disabilities.Prior to joining Atlantic Health System, Mr. Gragnolati served as Senior Vice President, Community Division of Johns Hopkins Medicine, and President and CEO of Suburban Hospital and, before that, held executive positions at WellSpan Health, the Medical Center Hospital of Vermont, and Baystate Medical Center in Springfield, Massachusetts. Mr. Gragnolati holds a bachelor’s degree in Health Systems Analysis from the University of Connecticut, an MBA from Western New England College, and an Executive Leadership Certificate from the JFK School at Harvard University. Mr. Gragnolati’s experience in business, executive management and finance, as well as his familiarity with and leadership of not-for-profit organizations, has led the Board to conclude that this individual should serve as a director of Lakeland and Lakeland Bank.
Mr. Hanson has served as President and CEO of The Hampshire Companies, a full service, private real estate investment firm with assets valued at more than $2.3 billion, based in Morristown, New Jersey, since 2005. Mr. Hanson also serves as a non-executive director of United-Hampshire US REIT Management PTE LTD., a Singapore company REIT Manager (50% of which is owned by The Hampshire Companies) that operates as a real estate investment trust that owns and operates U.S.-based shopping, storage, grocery and necessity-based retail properties and which is listed on the Singapore Exchange. He holds a number of leadership positions, both professionally and philanthropically. He presently serves as Co-Chairman of the Board of Advisors and Executive-in-Residence at Rutgers University School of Business, Center for Real Estate Studies. Mr. Hanson also serves as a Member of the New Jersey State Investment Council since 2010. Mr. Hanson has served as a Commissioner of the Palisades Interstate Park Commission since 1995. Mr. Hanson presently serves as President of the Commission, a position that he previously held between 2000 and 2005 and to which he was re-appointed in September 2021. Mr. Hanson holds a law degree from Vermont Law School, graduating Magna Cum Laude, and a Bachelor of Arts from Hope College, and subsequently served in a variety of leadership roles at each institution, including as Trustee. Mr. Hanson’s extensive knowledge of the commercial real estate markets, his proven business experience and philanthropic leadership led the Board to believe that this individual should serve as a director of Lakeland and Lakeland Bank.
Ms. Hendershot has had significant experience in the leadership and management of various corporate entities and operations. She also has experience in managing and controlling risk-taking operations within the insurance industry, and in IT strategy and developments. This experience, as well as her educational background including a degree in economics from Cornell University, led the Board to conclude that this individual should serve as a director of Lakeland and Lakeland Bank.
Mr. Nicholson’s business experience with Eastern Propane Corporation, including having served as president and CEO of that entity for 28 years, his educational background in finance and business management, his experience in buying and selling companies and commercial real estate properties and his reputation in the business and local community led the Board to conclude that this individual should serve as a director of Lakeland and Lakeland Bank. In 2009, Mr. Nicholson was honored with the Outstanding Citizen of the Year award from Sparta Township and as a Distinguished Citizen by the Boy Scouts of America, Patriots Path Council. In March 2010, Mr. Nicholson received the Distinguished Alumni Award from Florida Southern College for outstanding service to his professions and community. Mr. Nicholson is the Past Chairman of the board of trustees for the Sussex County New Jersey Chamber of Commerce.
Qualifications of our Executive Officers
In addition to Mr. Shara, whose qualifications are listed above, the Company's Executive Officers are:
Thomas F. Splaine, 56, a Certified Public Accountant, has been Executive Vice President and Chief Financial Officer of the Company and the Bank since March 2017. He joined Lakeland in 2016 as First Senior Vice President and Chief Accounting Officer of the Company and the Bank. Prior to joining Lakeland, Mr. Splaine was employed at Investors Bancorp, Inc. since 2004 and served in roles as Senior Vice President - Chief Financial Officer, Financial Planning and Analysis and Investor Relations of Investors Bancorp, Inc.
Ronald E. Schwarz, 67, has served as Senior Executive Vice President and Chief Operating Officer of the Company and the Bank since 2017. Since joining the Company in 2009, Mr. Schwarz has served as Senior Executive Vice President and Chief Revenue Officer of the Company and the Bank and Executive Vice President and Chief Retail Officer of the Company and the Bank.
Timothy J. Matteson, Esq., 52, has served as Executive Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary of the Company since 2017. In 2012, Mr. Matteson was named Executive Vice President, General Counsel and Corporate Secretary of the Company. He joined the Company in 2008 as Senior Vice President and General Counsel.
James M. Nigro, 54, joined Lakeland in 2016 and serves as Executive Vice President, Chief Risk Officer of the Company. Previously, Mr. Nigro was Senior Vice President and Credit Risk Manager of The Provident Bank from 2013 to 2016.
Paul Ho Sing Loy, 61, is Executive Vice President and Chief Information Officer of the Company since 2019 and, of the Bank, since 2017. Previously Mr. Ho Sing Loy served as Senior Vice President and Director of Business Solutions of Associated Bank since 2012.
Ellen Lalwani, 58, has served as Executive Vice President and Chief Banking Officer of the Company and the Bank in 2020. Employed by the Bank since 2008, Ms. Lalwani has served as Executive Vice President and Chief Retail Officer of the Company and the Bank and Senior Vice President and Director of Retail Sales of the Bank.
John F. Rath, III, 63, has served as Executive Vice President and Chief Lending Officer of the Company and the Bank since 2018. Mr. Rath has been with the Bank since 2015, having served as First Senior Vice President, Commercial and Industrial Lending Group Manager and Senior Vice President, Commercial and Industrial Lending, Hudson Valley, New York.
Board Meetings - Independence
Meetings: 10 meetings held in 20192021
The full Board holds 10 regular meetings each year, supplemented by calls and special meetings as needed. The Board also holds an annual strategy session and conducts annual self-evaluations.
Independence: The Board has determined that the following current members of the Board satisfy the NASDAQ definition of independence: Bruce D. Bohuny, Mary Ann Deacon, Brian Flynn, Mark J. Fredericks, Brian A. Gragnolati, James E. Hanson II, Janeth C. Hendershot, Lawrence R. Inserra, Jr., Robert F. Mangano, Robert E. McCracken and Robert B. Nicholson, III. The Board has determined that Thomas J. Shara, as an executive and employee of the Company, is not independent.
In addition, the Board has determined that all of the members of the Audit Committee named below meet the definition of independence imposed by the
Sarbanes Oxley ActNasdaq Marketplace Rules and SEC Rule 10A-3 with respect to members of the Audit Committee.
Board Leadership Structure and Role in Risk Oversight
The Company currently has, and historically has had, a Board Chair separate from the Chief Executive Officer. The Board believes it is important to have an independent director in a Board leadership position at all times. The Board Chair provides leadership for the Board. Having an independent Board Chair enables non-management directors to raise issues and concerns for Board consideration without immediately involving management. The Board Chair also serves as a liaison between the Board and senior management. The Company’s Board has determined that the current structure, an independent Board Chair, separate from the Chief Executive Officer, is the most appropriate structure at this time, as it ensures that, at all times, there will be an independent director in a Board leadership position.
The full Board of Directors is responsible for and regularly engages in discussions about risk management and receives reports on this topic from executive management and other officers of the Company. In June 2018, the Board established a separate standing Risk Committee to assist and facilitate its risk oversight responsibilities, including overseeing the Company’s enterprise-wide risk management framework and monitoring certain risk management activities designed to ensure the Company operates within risk parameters established by the Board.
Environmental, Social and Governance (ESG) Matters and Board Oversight
Summary
With deep roots in our communities, Lakeland Bank has shared and advanced the societal goals and aspirations of our customers, shareholders and associates for over half a century. We are proud to have formalized our Environmental, Social and Governance (ESG) strategy in 2022 on our continuing journey to serve and support our communities and stakeholders.
Our commitment to advancing these ESG principles is not new. What is new is our commitment to enhanced disclosure in a wide range of areas, such as business ethics; diversity, equity and inclusion; employee well-being; climate change; access to financial services; data protection and cyber security; among many others. We understand that ESG related policies and actions not only affect the well-being of people, communities and society, but also have implications for risk mitigation and long-term financial performance and value. Some of these initiatives can be viewed under the "Corporate Social Responsibility" section of our website, which we plan to update and share our progress on these topics.
In early 2021, recognizing the growing ESG disclosure expectations, our senior management team, with the support of our Board of Directors and assisted by Nasdaq’s ESG consultancy group, began a year long process to optimize our ESG disclosures to meet stakeholders’ expectations.
As part of this process, we reviewed the principles and disclosures of the Sustainability Accounting Standards Board (SASB), the recommendations and supporting disclosures of other leading ESG frameworks, and examined how we could adopt strategies to expand our disclosures and metrics to follow these frameworks. We next benchmarked Lakeland to our current and aspirational ESG peers to better understand stakeholder expectations within our competitive markets, while mining investor insights on their strategic priorities. Having compiled this information, we developed our short, medium and long term ESG disclosure plan to increase transparency around our efforts, which we plan to update and release on an annual basis.
The Board of Directors has delegated oversight of our ESG program and strategy to the Nominating and Corporate Governance Committee. Execution of our ESG plan will be overseen and coordinated through our recently established ESG Committee, a management committee with interdisciplinary representation advised by members of Nasdaq’s ESG consultancy group.
Human Capital Management
The success of our business is highly dependent on our associates, who are dedicated to our mission to inspire and enable the communities we serve to achieve financial stability and success. We seek to hire well-qualified associates to sustain and build on our culture of service and performance. Our selection and promotion processes are without bias and include the active recruitment of minorities and women. None of our associates are covered by a collective bargaining agreement.
We encourage the growth and development of our associates and, whenever possible, seek to fill positions by promotion and transfer from within the Company. Continual learning and career development are advanced through annual performance and development conversations between associates and their managers, internally developed training programs, customized corporate training engagements and educational reimbursement programs. Our Leader Engagement and Development (LEAD) Program was launched in 2018 to foster leadership abilities and cultivate effective management approaches. To date, 51 associates have completed the program. Reimbursement is available to associates enrolled in pre-approved degree or certification programs at accredited institutions that teach skills or knowledge relevant to our business, and for seminars, conferences and other training events associates attend in connection with their job duties or professional certification requirements.
The safety, health and wellness of our associates is a top priority. As with many organizations, the COVID-19 pandemic presented unique challenges with regard to maintaining associate safety while continuing successful operations. We instituted remote working plans at the start of the pandemic and were able to transition, over a short period of time, many of our eligible associates to effectively working from remote locations. We ensured a safely-distanced working environment for associates performing customer-facing activities at branches and operations centers, closing branch lobbies as necessary. On an ongoing basis, we further promote the health and wellness of our associates by strongly encouraging work-life balance, offering flexible work schedules, keeping the associate portion of health care premiums to a minimum and sponsoring various wellness programs, through which associates are encouraged to incorporate healthy habits into their daily routines.
Associate retention helps us operate efficiently and achieve our business objectives. We provide competitive wages, annual bonuses, stock awards, a 401(k) Plan with an employer matching contribution, healthcare and insurance benefits, health savings, flexible spending accounts, paid time off, family leave and an employee assistance program. At December 31, 2021, approximately 29% of our team had been with us for 10 years or more.
Diversity, Equity and Inclusion
We know that Lakeland’s continued success is dependent on having a workforce that reflects and represents our communities’ diverse backgrounds, experiences and perspectives.
In 2020, we appointed our first Chief Diversity Officer, with a mandate to focus on and expand workforce, vendor/supplier and leadership diversity, among other vital issues. We sponsor Share Your Voice “listening” roundtables for associates, with the assistance of outside experts, and launched a Cultural Connections newsletter. A Diversity Task Force was created to provide associates further opportunities for input into relevant issues, access to information and assistance on topics ranging from diversity to wellness, parenting and other personal issues and concerns.
To further expand diversity in our workforce, we partnered on recruitment efforts with organizations such as the African American, Hispanic and New Jersey LGBT chambers of commerce, which have led to an increase in hiring diverse talent. The third class of our LEAD Program graduated in 2021; the program continues to be an important tool for fostering the leadership abilities and management potential of diverse members of our team.
A survey of Lakeland associates in 2021 found that 94% believe we are committed to diversity and 90% agree we are making progress with our initiatives. We are encouraged by these findings and committed to moving our efforts forward.
A leader in gender diversity, Lakeland’s Board of Directors has had female representation for over two decades and female Board leadership, through our current Board Chair, Mary Ann Deacon, for over a decade. At December 31, 2021, the Company employed 717 associates, including 36 part-time associates, of which approximately 68% are women.
Lakeland’s Board of Directors believes that the best decisions are reached after consideration and input is provided from members having a broad array of backgrounds, perspectives, talent and experience. With this guidance, Lakeland’s Board directed its Nominating and Corporate Governance Committee to establish a diversity definition, goals and timeframe for increased Board member diversity, which would be informed by and aligned with an updated skills assessment, and stakeholder expectations. Having now adopted the diversity definition within Nasdaq Listing Rule 5605(f), Lakeland’s Board anticipates achieving its next diversity goal in 2023, well in advance of the Rule’s August 2025 compliance date.
Community Reinvestment Act Rating
Lakeland is extremely proud of our “Outstanding” Community Reinvestment Act rating received from the Federal Deposit Insurance Corporation ("FDIC") in October 2020, a rating that we have maintained since 2005.
The Community Reinvestment Act is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound banking operations. The rating is based upon an assessment of three categories: lending, investment, and services. Included in the assessment are bank practices such as mortgage lending, small business lending, community development lending, investments and services to communities, along with associate community involvement. This rating is considered when regulators review institutions’ applications for deposit facilities and mergers and acquisitions.
Community Engagement
A key element of our mission is to encourage the stability and success of our communities. In 2021 – as the strains of COVID-19 were felt across our society – Lakeland supported organizations that provide healthcare, economic assistance, education and other vital resources. Some of our more significant community-oriented efforts included contributions for inner-city pediatric dentistry services; support for a community college technical training program; and our annual Scholarship Golf Outing, which aids local students who are pursuing higher education. In addition, through the efforts of our Healthcare Banking team, Lakeland provided millions of dollars in credit, as well as other financial services, to enable the work of assisted living and memory care facilities, ambulatory surgical centers, medical practices, behavioral health and substance abuse centers, and other healthcare providers across our market area.
Further information related to Lakeland’s support of its communities through volunteerism and philanthropic activities can be found on the "Corporate Social Responsibility" section of our website.
Data Privacy and Cyber Security
Maintaining the security, availability and integrity of our customers' private information is of paramount importance to our entire Lakeland team. We have integrated corporate policies and operating procedures that govern how we collect, use, retain and protect private and personal data of our customers and other stakeholders; manage and monitor third-party risk; and ensure operational continuity and recovery through resiliency planning and testing.
With oversight from our Board, directly and through its Risk Committee chaired by an independent director, Lakeland’s cybersecurity program utilizes multiple levels of preventive and detective tools, rigorous systems testing, vulnerability and software patch management, and a dedicated information security team led by our Chief Information Security Officer, who reports to our Chief Risk Officer.
Activities within our information security program include engaging third parties to conduct internal and external system penetration testing and internal security risk assessments; updating our incident response program to ensure a coordinated response by internal and external team members to mitigate the impact of, and recover from, any cyber-attacks, including communications to internal and external customers and other stakeholders; mandatory annual training in information security for our associates; and periodically conducting exercises to raise data security awareness.
Related Party Transactions
Lakeland Bank has made, and expects to make in the future,
in the ordinary course of business, loans to directors, officers, principal shareholders and their
associates.associates in the ordinary course of business. All loans to such persons were made, and will be made, on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the Company or Lakeland Bank.
Policies and Procedures Concerning Related Party Transactions
The Audit Committee of the Board of Directors has adopted written procedures governing related party transactions. By “related party transaction,” we mean a transaction between the Company or any of its subsidiaries, on the one hand, and an executive officer, director or immediate family member of an executive officer or a director, on the other hand. The procedures provide that:
•related party transactions that have been previously approved by the full Board of Directors will not be included in the transactions that are approved by the Audit Committee;
•any single related party transaction up to $5,000 is automatically deemed to bepre-approved by the Audit Committee, which transactions are reviewed and approved at the next Audit Committee meeting;
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