SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the beneficial ownership of the common stock of the Company as of March 3, 2017 by (i) each director and nominee for director of the Company, (ii) named executive officers, (iii) all directors and executive officers as a group and (iv) shareholders of record who beneficially own five percent or more of the Company’s common stock. Except as indicated by footnote, the persons named in the table have sole voting and investment powers with respect to all shares shown as beneficially owned by them. All persons listed are directors of both the Company and the Bank unless noted otherwise. All directors and executive officers can receive mail in care of SBT Bancorp, Inc., 86 Hopmeadow Street, Weatogue, CT 06089. The addresses of the shareholders of record who beneficially own five percent or more of the Company’s common stock are listed below their respective names in the following table. The percent of class is based on 1,371,980 shares outstanding as of March 6, 2017.
Name of Beneficial Owner
|
|
Amount and Nature
Of Beneficial Ownership
|
|
Percent
Of Class
|
|
|
|
|
|
Directors and Executive Officers
|
|
|
|
|
|
|
|
|
|
Robert J. Bogino,
Chairman
|
|
27,841 (1)
|
|
2.0%
|
James T. Fleming,
Director
|
|
2,303 (2)
|
|
*
|
Martin J. Geitz,
President, Chief
Executive Officer and Director
|
|
42,273 (3)
|
|
3.1%
|
Gary R. Kevorkian,
Director
|
|
52,672 (4)
|
|
3.8%
|
Jerry W. Long,
Director
|
|
5,081 (5)
|
|
*
|
Nicholas B. Mason,
Director
|
|
6,420 (6)
|
|
*
|
Michael D. Nicastro,
Director
|
|
3,416 (7)
|
|
*
|
Peter C. Pabich,
Director
|
|
2,300 (8)
|
|
*
|
David W. Sessions,
Vice Chairman
|
|
20,825 (9)
|
|
1.5%
|
Ann G. Taylor,
Director
|
|
3,600 (10)
|
|
*
|
Penny R. Woodford,
Director
|
|
4,576 (11)
|
|
*
|
|
|
|
|
|
Richard J. Sudol,
Senior Vice
President and Chief Financial
Officer
|
|
5,421 (12)
|
|
*
|
Gary W. Burdick,
Senior Vice
President and Chief Commercial
Banking Officer
|
|
6,197 (13)
|
|
*
|
All directors and executive officers
as a group (15 Persons)
|
|
187,188 (14)
|
|
13.6%
|
|
|
|
|
|
|
|
|
|
|
Principal Shareholders
|
|
|
|
|
|
|
|
|
|
Banc Fund VI L.P.
Banc Fund VII L.P.
Banc Fund VIII L.P.
Banc Fund IX L.P.
20 North Wacker Drive
Suite 3300
Chicago, IL 60606
|
|
104,718 (15)
|
|
7.6%
|
|
|
|
|
|
PRB Investors, L.P.
PRB Advisors, L.L.C.
Stephen J. Paluszek
Andrew P. Bergman
245 Park Avenue
39th Floor
New York, NY 10167
|
|
78,986 (16)
|
|
5.8%
|
|
|
|
|
|
Manulife Financial Corporation
200 Bloor Street East
Toronto, Ontario, Canada, M4W 1E5
Manulife Asset Management (US) LLC
197 Clarendon Street
Boston, MA 02116
|
|
97,398 (17)
|
|
7.1%
|
____________________________
* Less than 1%
(1)
|
Includes an aggregate 300 shares of restricted stock, of which 100 will vest on October 18, 2017, 100 will vest on October 18, 2018 and 100 will vest on October 18, 2019.
Also includes
6,600 shares owned jointly with Mr. Bogino’s spouse, 861 shares held in a trust for which Mr. Bogino serves as trustee and 11,500 shares owned by his spouse. Mr. Bogino disclaims beneficial ownership of the shares beneficially owned by his spouse.
|
(2)
|
Includes an aggregate 300 shares of restricted stock, of which 100 will vest on October 18, 2017, 100 will vest on October 18, 2018 and 100 will vest on October 18, 2019.
|
(3)
|
Includes an aggregate 6,045 shares of restricted stock, of which 522 shares will vest on April 25, 2017, 1,083 shares will vest on March 19, 2017, 1,118 shares will vest on December 21, 2017, 1,084 shares will vest on March 19, 2018, 1,118 shares will vest on December 18, 2018 and 1,120 shares will vest on December 21, 2019. Also includes an aggregate 9,000 shares which Mr. Geitz may acquire beneficial ownership within 60 days through the exercise of vested stock options.
For purposes of calculating his percentage ownership of the outstanding shares of common stock, such vested stock options are added to the number of shares outstanding.
Also includes 10,903 shares owned jointly with Mr. Geitz’s spouse.
|
(4)
|
Includes an aggregate 300 shares of restricted stock, of which 100 will vest on October 18, 2017, 100 will vest on October 18, 2018 and 100 will vest on October 18, 2019.
Also includes 37,114 shares held in trusts for which Mr. Kevorkian is the trustee and 4,064 shares for which Mr. Kevorkian’s spouse is either the beneficial owner or trustee
. Mr. Kevorkian disclaims beneficial ownership of the shares beneficially owned by his spouse and by the trusts for which his spouse is the trustee.
|
(5)
|
Includes an aggregate 300 shares of restricted stock, of which 100 will vest on October 18, 2017, 100 will vest on October 18, 2018 and 100 will vest on October 18, 2019. Also includes 4,681 shares owned jointly with Mr. Long’s spouse.
|
(6)
|
Includes an aggregate 300 shares of restricted stock, of which 100 will vest on October 18, 2017, 100 will vest on October 18, 2018 and 100 will vest on October 18, 2019.
|
(7)
|
Includes an aggregate 300 shares of restricted stock, of which 100 will vest on October 18, 2017, 100 will vest on October 18, 2018 and 100 will vest on October 18, 2019. Also includes 548 shares jointly owned with Mr. Nicastro’s spouse.
|
(8)
|
Includes an aggregate of 300 shares of restricted stock, of which 100 will vest on October 18, 2017, 100 will vest on October 18, 2018 and 100 will vest on October 18, 2017. Also includes 2,000 shares owned jointly with Mr. Pabich’s spouse.
|
(9)
|
Includes an aggregate 300 shares of restricted stock, of which 100 will vest on October 18, 2017, 100 will vest on October 18, 2018 and 100 will vest on October 18, 2019. Al
so includes 1,564 shares owned jointly with Mr. Sessions’ spouse, 1,001 shares owned by his spouse, 1,357 shares owned by a private corporation owned by Mr. Sessions and his siblings and 1,252 shares owned by his children. Mr. Sessions disclaims beneficial ownership of the shares beneficially owned by his spouse and his children.
|
(10)
|
Includes an aggregate of 300 shares of restricted stock, of which 100 will vest on October 18, 2017, 100 will vest on October 18, 2018 and 100 will vest on October 18, 2019.
|
(11)
|
Includes an aggregate 300 shares of restricted stock, of which 100 will vest on October 18, 2017, 100 will vest on October 18, 2018 and 100 will vest on October 18, 2019.
|
(12)
|
Includes an aggregate 2,109 shares of restricted stock,
of which 408 shares will vest on March 19, 2017, 430 shares will vest on December 21, 2017, 409 shares will vest on March 19, 2018, 430 shares will vest on December 21, 2018 and 432 shares will vest on December 21, 2019. Also includes 1,408 shares owned jointly with Mr. Sudol’s spouse.
|
(13)
|
Includes an aggregate 1,927 shares of restricted stock,
of which 124 shares will vest on April 25, 2017, 325 shares will vest on March 19, 2017, 384 shares will vest on December 21, 2017, 325 shares will vest on March 19, 2018, 384 shares will vest on December 18, 2018 and 385 shares will vest on December 18, 2019.
|
(14)
|
Includes an aggregate 9,000
shares which an executive officer m
ay acquire beneficial ownership within 60 days through the exercise of vested stock options
. For purposes of calculating the percentage ownership of the outstanding shares of common stock, such vested stock options are added to the number of shares outstanding.
|
(15)
|
Consists
of 0
shares owned by Banc Fund VI L.P. (“BF VI”), 45,981 shares owned by Banc Fund VII L.P. (“BF VII”), 35,454 shares owned by Banc Fund VIII L.P. (“BF VIII”) and 23,283 shares owned by Banc Fund IX L.P. (“BF IX”) and is based on information set forth in a Schedule 13G/A filed jointly on February 15, 2017 by BF VI, BF VII, BF VIII and BF IX, which are Illinois limited partnerships. The general partner of BF VI is MidBanc VI L.P. (“MidBanc VI”), whose principal business is to be a general partner of BF VI. The general partner of BF VII is MidBanc VII L.P. (“MidBanc VII”), whose principal business is to be a general partner of BF VII. The general partner of BF VIII is MidBanc VIII L.P. (“MidBanc VIII”), whose principal business is to be a general partner of BF VIII. The general partner of BF IX is MidBanc IX L.P. (“MidBanc IX”), whose principal business is to be a general partner of BF IX. MidBanc VI, MidBanc VII, MidBanc VIII and MidBanc IX are Illinois limited partnerships. The general partner of MidBanc VI, MidBanc VII, MidBanc VIII and MidBanc IX is The Banc Funds Company, L.L.C. (“TBFC”), whose principal business is to be a general partner of MidBanc VI, MidBanc VII, MidBanc VIII and MidBanc IX. TBFC is an Illinois corporation whose principal shareholder is Charles J. Moore. Mr. Moore has been the manager of BF VI, BF VII, BF VIII and BF IX since their respective inceptions. As manager, Mr. Moore has voting and dispositive power over the securities of the Company held by each of those entities. As the controlling member of TBFC, Mr. Moore controls TBFC and, therefore, each of the partnership entities are directly and indirectly controlled by TBFC.
|
(16)
|
Consists of 78,986 shares that may be deemed beneficially owned by PRB Investors, L.P., a Delaware limited partnership (“PRB Investors”), PRB Advisors, L.L.C., a Delaware limited liability company (“PRB Advisors”), Stephen J. Paluszek, a United States citizen, and Andrew P. Bergman, a United States citizen (collectively, the “PRB Reporting Persons”) and is based on information set forth in a Schedule 13G/A filed jointly on February 13, 2017 by the PRB Reporting Persons. The PRB Reporting Persons share voting and dispositive power of the 78,986 shares. PRB Advisors, Stephen J. Paluszek and Andrew P. Bergman disclaim beneficial ownership in the 78,986 shares except to the extent of their pecuniary interest therein. Stephen J. Paluszek is the principal of PRB Advisors, which is the General Partner of PRB Investors.
|
(17)
|
Consists of 0 shares owned by Manulife Financial Corporation, a Canadian corporation (“MFC”), and 97,398 shares owned by Manulife Asset Management (US) LLC, a Delaware limited liability company (“MAM (US)”), and is based on information set forth in a Schedule 13G/A filed jointly on February 14, 2017 by MFC and MAM (US). MAM (US), an indirect wholly-owned subsidiary of MFC, has beneficial ownership of 97,398 shares. Through its parent-subsidiary relationship to MAM (US), MFC may be deemed to have beneficial ownership of these same shares.
|
INFORMATION ABOUT OUR DIRECTORS AND EXECUTIVE OFFICERS
Certain information about the business experience of the remaining incumbent directors and the non-director officers of the Company, including their service as directors of other companies, is listed below. References to terms of service as a director or officer of the Company include service as a director or officer of the Bank prior to the date of the holding company reorganization on March 2, 2006.
Director Nominees, Class III
Robert J. Bogino
(74) – Mr. Bogino is the Chairman of the Company and the Bank and has been a director of the Company since 1994. Mr. Bogino served as the Company’s Vice Chairman from 2005 to 2010 and Secretary from
2002 to 2005. He currently serves as Chairman of the Corporate Governance Committee.
He was the President, Treasurer and co-owner of Bogino & DeMaria, Inc. in Avon, Connecticut, an insurance agency for which he was a founder in 1972
. The firm was sold in 2003 and he retired in 2004. As Treasurer of
Bogino & DeMaria, Inc.
, he was responsible for all financial and accounting matters, including monthly financial statement preparation and analysis, coordination with outside accounting firm for the preparation and filing of local, State and Federal tax returns and annual corporate financial statements.
Mr. Bogino received an MBA degree in Finance from Columbia University Graduate School of Business. Mr. Bogino brings his many years of business ownership, management experience and insurance expertise to the Board.
Nicholas B. Mason
(72)
–
Mr. Mason has been a director of the Company since March 2011 and a director of the Bank since 2010. He is a retired bank and insurance company executive officer. Mr. Mason had a long career as Chief Financial Officer of the Savings Bank of Manchester from 1988 to 2000, where he directed and managed the financial, treasury, accounting and audit functions of the Savings Bank of Manchester. Prior to that, he worked for eight years at the Hartford Insurance Group in property casualty, accounting, and information management. He spent four years at the Travelers Insurance Company in the Life Insurance Department and seven years at Hartford National Bank in strategic planning. Mr. Mason is active in many Farmington Valley organizations. He is the past President of the Farmington Valley Visiting Nurse Association and is Treasurer of each of Simsbury Community Television and Old Drake Hill Flower Bridge. He served as an elected member of the Town of Simsbury Board of Finance from 2002 to 2015 and as an appointed member of the Town’s Pension Committee from 2004 to 2015 and Insurance Committee from 2006 to 2015. He is a director and Treasurer of the Powder Forest Homes Association, Inc. and is a member of the Simsbury Chamber of Commerce Government Affairs Committee. In the past, he has served as Treasurer of the Simsbury Light Opera Company, the Manchester Symphony Orchestra and Chorale, the Farmington Valley Rowing Association, the Connecticut Valley Region of the Porsche Club of America, the Society of the Increase of the Ministry (Episcopal), and Christ Church, Avon, Connecticut. He was a founding director of Bankers’ Bank Northeast in Glastonbury, Connecticut. He was Treasurer of the SMB Charitable Foundation and Secretary of the Hartford Mutual Investment Fund. Mr. Mason’s experience as a former senior bank executive officer and his experience as a financial professional provide insight into the analysis of bank financial statements, regulatory reporting, budgeting, business and strategic planning, investment management and audit administration are valuable to the Board. Mr. Mason obtained a B.A. degree in Economics from Dartmouth College, an MBA degree in Finance from Columbia University Graduate School of Business, and an M.A. degree in Economics from the University of Hartford Graduate School of Business.
David W. Sessions
(66)
–
Mr. Sessions is the Vice Chairman of the Company and the Bank and has been a director of the Company since 1992. He serves as Chairman of the Executive Committee and Loan Committee. He is President and Treasurer of The CASLE Corporation, headquartered in Avon, Connecticut, which is a commercial design-build development and construction company that he co-founded in 1981. Over the past 15 years, CASLE’s main focus has been on the development and management of a portfolio of medical office buildings throughout Connecticut. He is Chairman of the Architectural Review Board of the Town of New Hartford and a member of the New Hartford Democratic Town Committee. He was formerly a member and Chairman of the New Hartford Board of Finance. Mr. Sessions is also the director/founder of Nights at the Beekley Concert Series for the benefit of the Beekley Memorial Library in New Hartford, Connecticut. He received a B.A. degree from Middlebury College and a Juris Doctorate degree from George Washington University. Mr. Sessions has many years of experience as a business owner and real estate developer and brings important managerial, operational and current real estate knowledge to the Board.
Ann G. Taylor
(62)
–
Ms. Taylor has been a director of the Company since 2013. Ms. Taylor is Executive Vice President and Chief Administrative Officer of the Connecticut Children’s Medical Center (CCMC), a position she has held since 2014. Prior to that, she was Senior Vice President and General Counsel of CCMC from 2010 to 2014 and held other senior positions at CCMC since 2000.
Prior to that, she held several counsel positions within the banking industry, including Vice President and Government Affairs Counsel for Fleet Bank, Assistant Counsel for the State of Connecticut Department of Banking and Federal Administrative Counsel for the American Bankers Association. Ms. Taylor currently serves as
a Commissioner with the State of Connecticut Criminal Justice Commission, a member of the Connecticut Legal Services Board, a member of the Connecticut Hospital Association Committee on Government, a member of the Children’s Hospital Chief Legal Officer Forum and a member of the Metro Hartford Alliance Legislative Affairs Committee. Ms. Taylor
received a B.A. degree from Catholic University of America and a Juris Doctorate degree from Western New England School of Law. Ms. Taylor’s leadership in the Greater Hartford business community, her business experience and healthcare industry knowledge as a senior executive of a hospital and her experience in legal and regulatory matters impacting the banking industry make her a valuable member of the Board.
Class I Directors, Terms Expiring at the 2018 Annual Meeting of Shareholders
James T. Fleming
(61) – Mr. Fleming has been a director of the Company since 1992. He is currently the President of the Connecticut Automotive Retailers Association, Inc. (CARA, Inc.), which position he has held since 2008.
He also serves as the Secretary and Treasurer of the Greater Hartford Automobile Dealers Association Foundation (GHADA) and is the former Executive Secretary of GHADA.
Mr. Fleming serves as a director of the Simsbury Cemetery Association, Chairman of the Simsbury Police Commission, Chairman of the Board of Managers of the Hartford Downtown YMCA, a director of the Automotive Trade Association Executives and as a Corporator of Saint Francis Hospital. Mr. Fleming is a former member of the Governor’s Cabinet of the State of Connecticut, serving from 2007 to 2008 as a Commissioner of the Department of Public Utility Control, from 2003 to 2007 as Commissioner of the Department of Public Works, and from 1999 to 2003 as Commissioner of Consumer Protection. Prior to his time in the Cabinet, he was employed by Combustion Engineering for many years. For 18 years, he served in the Connecticut General Assembly where he was the Majority Leader of the Connecticut State Senate. Mr. Fleming holds a B.A. degree from The
Eisenhower College of Rochester Institute of Technology and an M.A. degree from Trinity College.
Mr. Fleming brings important managerial, operational and organizational skills and expertise to the Board from his many years of public and private sector service.
Michael D. Nicastro
(58)
–
Mr. Nicastro has been a director of the Company since 2011. He has been the Chief Executive Officer of Continuity, a financial technology company, since 2016. He has also served as a director of Continuity since 2009. Mr. Nicastro has also been the owner and principal of Coppermine Advisors, LLC, a business advisory firm, since 2015. He is an Entrepreneur-in-Residence/Adjunct Professor at Central Connecticut State University School of Business, a position he has held since 2013, and has served on the University of Connecticut Technology Incubation Program Committee since 2014. Mr. Nicastro has 40 years of experience in banking and financial technology, including as a Product Manager for NCR Corporation from 1985 to 1994, Senior Vice President & Chief Marketing Officer of Open Solutions Inc. from 1994 to 2008 and Senior Vice President and Chief Marketing Officer of Connecticut Online Computer Center from 2013 to 2015. He also served as President and Chief Executive Officer of the Central Connecticut Chamber of Commerce from 2008 to 2013. Mr. Nicastro is a member of the Governing Board and Executive Committee of the Hartford Stage Company and is the immediate past board chairman and current board member of the Connecticut Rivers Council, Boy Scouts of America. He also serves as Treasurer of the American Clock & Watch Museum. Mr. Nicastro is a past member of the former Board of State Academic Awards, the original parent of Charter Oak State College, as well as past President of the Association for Financial Technology. Mr. Nicastro holds a Bachelor’s degree from Central Connecticut State University and a Juris Doctorate degree from Western New England School of Law. Mr. Nicastro’s extensive business background, with an emphasis in banking technology, provides important managerial, marketing and operational skills and expertise to the Board.
Penny R. Woodford
(72) – Ms. Woodford has been a director of the Company since 1992. She has been a real estate agent with Coldwell Banker Residential Brokerage since 2003. Prior to that, she was a real estate agent with DeWolf Companies from 1996 to 2003 and with Westledge Real Estate from 1983 to 1996. She is Chairperson of the Nominating Committee of the Avon Republican Town Committee. In her role as a top real estate salesperson in the Company’s market, Ms. Woodford brings valuable current real estate market insight and a large business network to the Board.
Directors Class II Directors, Terms Expiring at the 2019 Annual Meeting of Shareholders
Martin J. Geitz
(60)
–
Mr. Geitz is the President and Chief Executive Officer of the Company and the Bank and has held these positions since 2004. He has been a member of the Board since 2005. He brings over 30 years of senior management experience in banking to the Company. He is a member of the board of directors of the Federal Home Loan Bank of Boston and a member of the Federal Reserve Bank of Boston’s Community Depository Institutions Advisory Council. He is a past Chairman of the Connecticut Bankers Association and past President of the Connecticut Community Bankers Association. He is a Trustee and Treasurer of Simsbury Free Library and a Trustee of McLean Affiliates, Inc. He is also a member of the Simsbury/Granby Rotary Club. Mr. Geitz holds a B.A. degree from Johns Hopkins University and an MBA degree from Cornell University. Mr. Geitz’s extensive experience in banking and his leadership ability make him a valuable member of the Board.
Gary R. Kevorkian
(63) – Mr. Kevorkian has been Secretary of the Company since 2007 and a director of the Company since 1994. Mr. Kevorkian serves as Chairman of the Compensation and Human Resources Committee. He is an attorney-at-law and has maintained his own law practice in Granby, Connecticut since 1981. In his law practice, he specializes in real estate and trust and estates matters. As an attorney and business owner, he brings his legal and financial insight to the Board. Mr. Kevorkian is not an employee of the Company and is not compensated for his service as the Company’s Secretary.
Jerry W. Long
(65) – Mr. Long has been a director of the Company since 2010. He is the founder of PCC Technology, LLC, an information technology consulting firm (“PCC Technology”), and served as CEO of PCC
Technology from 1994 to 2016 until such entity was
sold. He currently holds the role of Senior Advisor to PCC Technology. Mr. Long is Chairman of the Board of Hebrew Healthcare, a director of the Bloomfield Chamber of Commerce; Board Emeriti of the Connecticut Business & Industry Association, former Vice Chairman of Charter Oak State College Board of Trustees, a director for Hartford Youth Scholars Foundation, Chairman of the Bloomfield Economic Development Commission, Past Chairman of the Metro Hartford Chamber of Commerce, Past President of the Bloomfield Chamber of Commerce, a director of Rideshare Company, a member of the Asylum Hill Congregational Church, Chairman of the Board of the Hebrew Home Corporation, an advisory board member of the Institute for Industrial and Engineering Technology at Central Connecticut State University, and past Treasurer of the Hartford Chapter of the Black Data Processing Associates. Mr. Long holds a Bachelor of Science degree in Business Administration from Middle Tennessee State University and an MBA degree from the University of Tennessee. Mr. Long’s many years of business ownership and managerial and technology experience are valuable assets for the Board.
Peter C. Pabich
(46) – Mr. Pabich has been a director of the Company since November 2015 and of the Bank since April 2015. Mr. Pabich serves as a partner and Certified Financial Planner
TM
with APW Wealth Advisors, LLC a position he has held since 2005. Prior to that position, he was a small business lender with Simsbury Bank. Mr. Pabich serves as Treasurer of the Simsbury Fire District. He has served on the Board of the CT Rivers Council Boy Scouts of America and is a past President of the Simsbury-Granby Rotary Club. He is a past President of the Simsbury Chamber of Commerce and past Chairman of its Government Affairs Committee. Mr. Pabich holds a Master of Science degree in Finance from Rensselaer Hartford. Mr. Pabich brings valuable experience in business exit strategies, detailed knowledge of financial products and local knowledge of our primary market area to the Board.
Non-Director Executive Officers
Richard J. Sudol
(51) – Mr. Sudol is Senior Vice President and Chief Financial Officer of the Company and the Bank, which positions he has held since 2013. Prior to joining the Company and the Bank, he served as Chief Financial Officer of Florida Shores Bank from 2009 to 2013. Prior to that, he was Senior Vice President of Financial Planning and Analysis of Riverside National Bank from 2003 to 2009. Prior to that, he held a variety of management and financial positions with Webster Financial Corporation. Mr. Sudol holds a Bachelor of Science degree in Accounting from Central Connecticut State University and earned an MBA degree from Quinnipiac University.
Gary W. Burdick
(63) – Mr. Burdick is Senior Vice President and Chief Commercial Banking Officer of the Bank, which positions he has held since 2012. Prior to joining the Bank, he served as Senior Vice President at RBS Citizens, where he was employed from 2006 to 2012. Prior to that, he was Senior Vice President and Manager, Asset Based Lending, at Webster Bank, President of the Affiliated Business Credit Corporation and Senior Vice President at Fleet Bank. Mr. Burdick is a graduate of the University of Connecticut.
Joan A. Beresford
(62) – Ms. Beresford is Senior Vice President and Chief Mortgage and Consumer Lending Operations and Servicing Officer, which positions she has held since August 2014. Prior to these positions, she was Vice President and Consumer Lending Administrator of the Bank since 2010. Prior to joining the Bank, she served as a consultant at FiServ in 2009 and Manager of the Loan Servicing Department at Webster Bank, where she was employed from 1992 to 2009. Ms. Beresford formerly served as President of the Connecticut Mortgage Bankers Association from 2001 to 2005
.
Jocelyn A. Mitchell
(50) – Ms. Mitchell is Senior Vice President and Chief Retail Banking Officer of the Bank, which positions she has held since May 2014. Prior to these positions, she was Vice President and Senior Market Manager of the Bank’s Granby branch since 2008. She has over 25 years of experience in retail banking and related financial services. Ms. Mitchell was a board member of the Granby Chamber of Commerce from 2008 to 2012. She also served as a member of board of managers of the Farmington Valley YMCA from 2008 to 2015 and as its Board President from 2012 to 2015. Ms. Mitchell holds a Bachelor of Science degree in Economics and Mathematics and an MBA degree from the University of Connecticut.
Audit and Compliance Committee Financial Expert
The Board has determined that the Company currently has at least one audit committee financial expert serving on its Audit and Compliance Committee. For the year ended December 31, 2016, that person was Nicholas B. Mason, who is “independent” as that term is defined in NASDAQ Listing Rule 5605.
Independence of Directors and Director Nominees
The following directors and director nominees are independent in accordance with Rule 5605 of the NASDAQ listing standards: Robert J. Bogino, James T. Fleming, Gary R. Kevorkian, Jerry W. Long, Nicholas B. Mason, Michael D. Nicastro, Peter C. Pabich, David W. Sessions, Ann G. Taylor and Penny R. Woodford.
Board Leadership Structure and the Board’s Role in Risk Oversight
The Company has an independent Chairman 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 Company’s Chairman provides independent leadership of the Board. Having an independent Chairman enables non-management directors to raise issues and concerns for Board consideration without immediately involving management. The Chairman also serves as a liaison between the Board and senior management. The Board has determined that having an independent Chairman separate from the Chief Executive Officer is the most appropriate structure for risk oversight of the Company.
Risk management at the Company is the process of identifying, measuring, controlling and monitoring risk across the enterprise. Risk management crosses all functions and employees and is embedded in all aspects of planning and performance measurement. Systems, information and timely reporting enable the Company to identify, measure, control and monitor risk throughout the enterprise.
The Board is responsible for oversight of the Company’s enterprise risk framework. The Board has delegated primary responsibility to the Executive Committee for overseeing financial, investment and operational risk exposures, to the Audit and Compliance Committee for overseeing regulatory and legal risk, to the Loan Committee of the Bank for overseeing credit risk, and to the Compensation and Human Resources Committee for oversight of risk related to management and staff. These committees report to the full Board to ensure the Company’s overall risk exposures are understood, including risk interrelationships. Risk reports are provided at committee and Board meetings and the Board regularly engages in discussions of these risk reports and risk management. The Board also oversees reputational risk.
Board Committees
The Board of Directors presently has four standing committees – the
Audit and Compliance
Committee
,
the Corporate Governance
Committee
,
the
Executive Committee
a
nd the Compensation and Human Resources Committee.
Audit and Compliance Committee
of the Company.
The Audit and Compliance Committee has oversight responsibility for and reviews all financial and other reports provided by the Company’s independent registered public accounting firm and the Company’s internal audit firm. The Audit and Compliance Committee evaluates and selects the independent auditor subject to shareholder ratification. The Audit and Compliance Committee, in its meetings with the Company’s auditors, discusses and approves the audit and compliance scope and reviews all audit findings. The members of the Audit and Compliance Committee are currently Messrs. Mason (Chair), Fleming, Nicastro and Pabich
and
Ms. Woodford, who all served as members of such committee for the entirety of 2016. All current members of the Audit and Compliance Committee are independent in accordance with NASDAQ Listing Rule 5605. The Audit and Compliance Committee operates pursuant to a written charter adopted by the Board. The Audit and Compliance Committ
ee met four t
imes during 2016.
Compensation and Human Resources Committee of the Company.
The Compensation and Human Resources Committee determines the compensation of the employees of the Company and the Bank, including executive officers other than the President and CEO.
In determining the compensation of the Company’s and the Bank’s employees, including executive officers other than the President and CEO, the Compensation and Human Resources Committee considers the recommendations of Martin J. Geitz, President and CEO of the Company and the Bank. The Compensation and Human Resources Committee also reviews, but does not determine, the compensation of (i) the President and CEO of the Company and the Bank and (ii) the directors. Recommendations regarding the President and CEO’s compensation are made by the Compensation and Human Resources Committee to the full Board, which then approves the President and CEO’s compensation. With respect to director compensation, the Compensation and Human Resources Committee will make recommendations to the Corporate Governance Committee, which then recommends the amount of director compensation to the full Board for approval. The members of the Compensation and Human Resources Committee for 2016 were Messrs. Kevorkian (Chair), Bogino, Long and Sessions and Ms. Taylor, each of whom is still currently a member of such committee.
All members of the Compensation and Human Resources Committee are independent in accordance with NASDAQ Listing Rule 5605
. The Compensation and Human Resources Committee operates pursuant to a written charter adopted by the Board. The Compensation and Human Resources Committee met seven times in 2016.
Corporate Governance Committee
of the Company.
The Corporate Governance Committee functions as the nominating committee for director candidates, identifies qualified individuals to become members of the Company’s Board of Directors, determines the composition of the Board of Directors and its committees, monitors and assesses the effectiveness of the Board of Directors, develops and implements the Company’s corporate governance guidelines and reviews and recommends director compensation. The current members of the Corporate Governance Committee are Messrs. Bogino (Chair),
Fleming and Pabich
and Mses. Taylor and Woodford, who all served as members of such committee for the entirety of 2016. All current members of the Corporate Governance Committee are independent as that term is defined in NASDAQ Listing Rule 5605.
The
Corporate Governance Committee operates pursuant to a written charter adopted by the Board.
The Corporate Governance Committee met four times during 2016.
The Corporate Governance Committee has a formal policy regarding the consideration of director candidates recommended by shareholders which sets forth the minimum qualifications of suitable nominees for director as well as approved processes for identifying and evaluating director nominees. The Corporate Governance Committee will consider any director candidate recommended by shareholders in accordance with the standards set forth in the Company’s Certificate of Incorporation, as amended. Such suggestions, together with appropriate biographical information, should be submitted to: SBT Bancorp, Inc., Attn: Gary R. Kevorkian, Secretary, 86 Hopmeadow Street, Weatogue, Connecticut 06089. Possible director candidates who have been suggested by shareholders are evaluated by the Corporate Governance Committee in the same manner as are other possible director candidates.
The general criteria used to establish the traits, abilities and experience that the Corporate Governance Committee looks for in determining candidates for election to the Board include highest ethical character, independence from management, ability to represent all shareholders of the
Company, ability to exercise sound business judgment, relevant expertise and experience that would benefit the
Company
and the ability to offer advice and guidance to the Chief Executive Officer and the Board. Key among the criteria is a director’s existing ties to the Company’s markets and adherence to the Company’s Code of Ethics and Conflicts of Interest Policy. All directors are subject to mandatory retirement from service on the Company’s Board of Directors upon reaching seventy-six years of age. The Corporate Governance Committee has not adopted a formal diversity policy with regard to the selection of director nominees. However, the Corporate Governance Committee considers diversity as a factor in identifying director nominees and believes the Board, as a whole, should be a diverse body, with diversity reflecting age, gender, background and professional experience.
Executive Committee
of the Company.
The Executive Committee is responsible for the general supervision of the
Company’s
affairs between meetings of the full Board. The Executive Committee oversees the
Company’s
investments, asset/liability management and budget and capital planning and reviews the
Company’s
interest rate sensitivity and deposit and loan pricing. The Executive Committee is also responsible for overseeing the
Company’s
information technology planning, security and development. In addition, the Executive Committee’s responsibilities include reviewing the financial and market performance of the subsidiary offering non-deposit products (including review and approval of the selection of and contracts with third party broker/dealers, review of all product types sold, appointment of Bank management to fill needed roles, recommendation of prudent policies and procedures, setting of commission structures and oversight of compliance with applicable regulations) and evaluating opportunities in the marketplace for enhancing the Company’s offering of non-deposit products and services. The current members of the Executive Committee are Messrs. Sessions (Chair), Bogino, Geitz, Kevorkian and Mason, each of whom served as a member of such committee for the entirety of 2016. The Executive Committee met 12 times during
2016.
Bank Committee
The Bank’s Board of Directors has a Loan Committee, all of whose members are directors of both the Bank and the Company. The Loan Committee is responsible for the review and approval of consumer, mortgage and commercial loan requests above the respective individual or collective lending authorities of Bank loan officers as established in the Bank’s Loan Policy. The Loan Committee is also responsible for ensuring compliance with the Bank’s credit policies as annually approved by the Bank’s Board of Directors, including the review and monitoring of the diversification of the loan portfolio and oversight of the Bank’s compliance with the Community Reinvestment Act, as amended (“CRA”). The Loan Committee also reviews and monitors the growth and credit quality of the loan portfolio, including loan originations, delinquencies, risk rating changes, loan loss reserves and loan collection activities. The current members of the Loan Committee are Messrs. Sessions (Chair), Bogino, Geitz, Kevorkian, Long and Nicastro,
each of whom served as a member of such committee for the entirety of 2016
.
The Loan Committee met 24 times during 2016.
Availability of Committee Charters
The Audit and Compliance Committee, the Compensation and Human Resources Committee Charter and the Corporate Governance Committee each operates pursuant to a separate written charter adopted by the Board. Each committee reviews its charter at least annually. The three committee charters can be viewed at http://investors.simsburybank.com/govdocs.aspx?iid=4100578. Each charter is also available in print to any shareholder who requests it. The information contained on the website is not incorporated by reference or otherwise considered a part of this document.
Board Meetings
The Board held 14 meetings during 2016. All of the Company’s incumbent directors attended at least 75% of the aggregate of (i) the total number of meetings of the Board of Directors and (ii) the total number of meetings held by the committees of the Board of Directors on which such directors served during 2016.
Board members are expected to attend the Company’s annual meeting of shareholders. Ten of the eleven directors of the Company at the time of the Company’s 2016 annual meeting of shareholders attended such meeting.
Shareholder Communications
The Board of Directors has a formal process in place for shareholder communication to the Board of Directors or any individual director. Shareholders wishing to communicate with the Board of Directors or any individual director may write to SBT Bancorp, Inc., Attn: Gary R. Kevorkian, Secretary, 86 Hopmeadow Street, Weatogue, Connecticut 06089. All communications received of a relevant nature will be forwarded to the full Board or appropriate individual director as directed. The Board of Directors believes this approach is reasonable in light of the relatively small number of shareholders of the Company and the relatively small number of communications the Board expects to receive in the foreseeable future.
Code of Ethics and Conflicts of Interest Policy
The Company has adopted a Code of Ethics and Conflicts of Interest Policy that applies to all employees, officers and directors.
The
Code of Ethics and Conflicts of Interest Policy
can be viewed at http://investors.simsburybank.com/govdocs.aspx?iid=4100578.
The Code of Ethics and Conflicts of Interest Policy
is also available in print to any shareholder who requests it. The information contained on the website is not incorporated by reference or otherwise considered a part of this document.
COMPENSATION AND OTHER MATTERS
Executive Compensation
The following table presents information relating to the compensation of the Company’s CEO and the next two most highly compensated executive officers (collectively, the “Named Executive Officers”) for the fiscal years ended December 31, 2016, 2015 and 2014.
Summary Compensation Table
Name and principal position
|
Year
|
|
Salary
|
|
|
Bonus
|
|
|
Stock awards
|
|
|
Option awards
|
|
|
Non-equity incentive plan compensation
|
|
|
Non-qualified
deferred
earnings
|
|
|
All other Compensation
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Martin J. Geitz
|
2016
|
|
$
|
294,518
|
(1)
|
|
$
|
30,000
|
(2)
|
|
$
|
73,746
|
(5)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
95,885
|
(8)
|
|
$
|
494,149
|
|
President & Chief
|
2015
|
|
$
|
285,992
|
(1)
|
|
$
|
33,000
|
(3)
|
|
$
|
69,938
|
(6)
|
|
$
|
44,000
|
(7)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
96,369
|
(8)
|
|
$
|
529,299
|
|
Executive Officer
|
2014
|
|
$
|
280,000
|
(1)
|
|
$
|
23,000
|
(4)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
87,163
|
(8)
|
|
$
|
390,163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard J. Sudol
|
2016
|
|
$
|
189,055
|
|
|
$
|
28,000
|
(9)
|
|
$
|
28,391
|
(12)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
11,114
|
(14)
|
|
$
|
256,560
|
|
Senior Vice President &
|
2015
|
|
$
|
182,308
|
|
|
$
|
30,000
|
(10)
|
|
$
|
26,361
|
(13)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
7,811
|
(14)
|
|
$
|
246,480
|
|
Chief Financial Officer
|
2014
|
|
$
|
175,000
|
|
|
$
|
28,500
|
(11)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
7,226
|
(14)
|
|
$
|
210,726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary W. Burdick
|
2016
|
|
$
|
164,730
|
|
|
$
|
27,200
|
(15)
|
|
$
|
25,336
|
(18)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
24,053
|
(20)
|
|
$
|
241,319
|
|
Senior Vice President &
|
2015
|
|
$
|
150,932
|
|
|
$
|
24,000
|
(16)
|
|
$
|
20,982
|
(19)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
23,696
|
(20)
|
|
$
|
219,610
|
|
Chief Commercial
|
2014
|
|
$
|
140,000
|
|
|
$
|
21,000
|
(17)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
23,050
|
(20)
|
|
$
|
184,050
|
|
Banking Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Mr. Geitz also serves as a director but does not receive any compensation for those services.
|
(2)
|
2016 performance bonus scheduled to be paid in cash in 2017.
|
(3)
|
2015 performance bonus paid in cash in 2016.
|
(4)
|
2014 performance bonus paid in cash in 2015.
|
(5)
|
On December 21, 2016, Mr. Geitz received a grant from the Company of 3,356 shares of restricted stock with a fair market value of $73,746 on the date of grant. Such shares of restricted stock will vest over three years as follows: 1,118 on December 21, 2017, 1,118 on December 21, 2018 and 1,120 shares on December 21, 2019.
|
(6)
|
On March 19, 2015, Mr. Geitz received a grant from the Company of 3,250 shares of restricted stock with a fair market value of $69,938 on the date of grant. Such shares of restricted stock will vest over three years as follows: 1,083 on March 19, 2016, 1,083 on March 19, 2017 and 1,084 on March 19, 2018.
|
(7)
|
On December 22, 2015, Martin J. Geitz received a grant from the Company of stock options to purchase 20,000 shares of stock. Such stock options had a fair market value of $44,000 on the date of grant. Vesting of such stock options is over five years as follows: 4,500 shares on December 22, 2015, 4,500 shares on December 22, 2016, 4,500 shares on December 22, 2017, 4,500 shares on December 22, 2018 and 2,000 shares on December 22, 2019.
|
(8)
|
Includes Mr. Geitz’s personal use of a Bank-leased automobile, annual dues for country club membership, employer match of 401(k) Plan contributions, employer-paid premiums for group term life insurance in excess of $50,000, employer-paid portion of health insurance normally paid by an employee, employer-paid amounts for a Supplemental Executive Retirement Plan (SERP) and the economic benefit under an endorsement split-dollar life insurance agreement. The imputed income related to the SERP was $65,183 for 2016, $65,183 for 2015, and $65,183 for 2014.
|
(9)
|
2016 performance bonus scheduled to be paid in cash in 2017.
|
(10)
|
2015 performance bonus paid in cash in 2016.
|
(11)
|
2014 performance bonus paid in cash in 2015.
|
(12)
|
On December 21, 2016, Richard J. Sudol received a grant from the Company of 1,292 shares of restricted stock with a fair market value of $28,391 on the date of grant. Such shares of restricted stock will vest over three years as follows: 430 on December 21, 2017, 430 on December 21, 2018 and 432 shares on December 21, 2019.
|
(13)
|
On March 19, 2015, Richard J. Sudol received a grant from the Company of 1,225 shares of restricted stock with a fair market value of $26,361 on the date of grant. Such shares of restricted stock will vest over three years as follows: 408 shares on March 19, 2016, 408 shares on March 19, 2017 and 409 shares on March 19, 2018.
|
(14)
|
Includes Mr. Sudol’s employer match of 401(k) Plan contributions, employer-paid premiums for group term life insurance in excess of $50,000, the economic value of the split dollar life agreement and employer-paid amounts for a Supplemental Executive Retirement Plan (SERP).
|
(15)
|
2016 performance bonus scheduled to be paid in cash in 2017.
|
(16)
|
2015 performance bonus paid in cash in 2016.
|
(17)
|
2014 performance bonus paid in cash in 2015.
|
(18)
|
On December 21, 2016, Gary W. Burdick received a grant from the Company of 1,153 shares of restricted stock with a fair market value of $25,336 on the date of grant. Such shares of restricted stock will vest over three years as follows: 384 on December 21, 2017, 384 on December 21, 2018 and 385 shares on December 21, 2019.
|
(19)
|
On March 19, 2015, Gary W. Burdick received a grant from the Company of 975 shares of restricted stock with a fair market value of $20,982 on the date of grant. Such shares of restricted stock will vest over three years as follows: 325 shares on March 19, 2016, 325 shares on March 19, 2017 and 325 shares on March 19, 2017.
|
(20)
|
Includes Mr. Burdick’s employer match of 401(k) Plan contributions, employer-paid premiums for group term life insurance in excess of $50,000, the economic value of the split dollar life agreement and employer-paid amounts for a Supplemental Executive Retirement Plan (SERP).
|
The Compensation and Human Resources Committee is responsible for reviewing the performance and establishing the compensation of the Bank’s officers and key employees, including the Bank’s executive officers other than the President and CEO. The committee also reviews, but does not determine, the compensation of the President and CEO and makes a recommendation of his compensation to the full Board, which then approves the President and CEO’s compensation. The committee relies upon industry information, including surveys of similarly sized and located institutions and targets the Bank’s compensation to be generally at the level of its peer group institutions.
The Compensation and Human Resources Committee has retained the services of Arthur Warren Associates on an ongoing basis to advise such committee on executive compensation matters and non-executive employee compensation matters. On an every other year basis, Arthur Warren Associates is engaged to perform a full review of the Company’s total compensation programs (including with respect to the three named executive officers) and to make recommendations (i) toward maintaining the Company’s competiveness with its peers with regard to the Company’s compensation philosophy, its Compensation and Human Resources Committee Charter and its short term bonus plans for non-executive employees and (ii) toward ensuring an appropriate peer group of banks. During 2015, Arthur Warren Associates was engaged to perform a full review and the determination of an appropriate peer group of banks. During 2016, Arthur Warren Associates was engaged to determine an appropriate peer group of banks. The Compensation and Human Resources Committee Charter considered the independence of Arthur Warren Associates and determined that in 2016, Arthur Warren Associates satisfied the criteria for being independent.
In 2016,
the Compensation and Human Resources Committee instructed Arthur Warren Associates to update the Bank’s peer group for purposes of using comparable institutions for industry benchmarking. The peer group consists of 13 publicly traded banks within the region having assets ranging between $250 million and $1.56 billion. The banks included in the public bank peer group for 2016 were: Bankwell Financial Group, Community Bancorp, Elmira Savings Bank, Empire Bancorp, Greene County Bancorp, Ledyard Financial Group, Melrose Bancorp, Pathfinder Bancorp, Pilgrim Bancshares, PSB Holdings, Salisbury Bancorp, Union Bankshares and Wellesley Bancorp. Based on the analysis prepared by Arthur Warren Associates, the Compensation and Human Resources Committee determined that the Bank’s compensation programs and levels were generally competitive with the compensation programs and levels maintained by the Bank’s peers
.
The members of the Compensation and Human Resources Committee are Messrs. Kevorkian (chair), Bogino, Long and Sessions and Ms. Taylor.
Employment, Change in Control and Other Related Agreements
The Bank maintains employment or change in control agreements with the following named executive officers: Messrs.
Geitz, Sudol and Burdick. The continued
success of the Company and the Bank depends to a significant degree on the skills and competence of these officers. These agreements are with the Bank and not with the Company.
Martin J. Geitz, President and Chief Executive Officer
– The Bank and Martin J. Geitz are parties to an Employment Agreement, dated as of September 1, 2004, which was subsequently amended effective as of December 31, 2008 (the “Geitz Employment Agreement”). The term of the Geitz Employment Agreement is from October 4, 2004 to the earlier to occur of (i) Mr. Geitz attaining the age of sixty-five, (ii) Mr. Geitz’s voluntary termination of employment or (iii) the termination of Mr. Geitz’s employment by the Bank (for Cause (as defined in the Geitz Employment Agreement) or otherwise). Mr. Geitz is to be paid an annual salary of $170,000, subject to adjustment by the Board. In addition, Mr. Geitz is entitled to an annual bonus in an amount and form set by the Board. His salary, bonus and other compensation for 2014 through 2016 is set forth in the Summary Compensation Table. Option grants and restricted stock awards are discussed in the footnotes of the Summary Compensation Table and the Outstanding Equity Awards Table. Mr. Geitz is also entitled to: (1) participate in the Bank’s comprehensive health insurance plan; (2) participate in any long-term disability insurance plan (monthly cap of $25,000 compared to $8,000 for employees who are not executive officers) and 401(k) plan maintained by the Bank; (3) paid time off of 28 days per year; (4) the use of an automobile for business purposes; (5) membership in a private “country” or similar golf club; and (6) attendance at two banking trade association conventions per year, including the cost of attendance and travel for Mr. Geitz and his spouse.
The Bank may terminate Mr. Geitz’s employment at any time without notice. The Bank may also give up to sixty days’ prior notice of the termination and require Mr. Geitz to remain in the employ of the Bank for such sixty days. If the Bank terminates Mr. Geitz’s employment other than for Cause or due to a Change in Control or Potential Change in Control (as such terms are defined in the Geitz Employment Agreement), Mr. Geitz shall be entitled to receive a lump sum payment equal to the aggregate of: (1) twelve months of Mr. Geitz’s then current salary; (2) an amount equal to bonus to which he would have been entitled under the Geitz Employment Agreement had a Change of Control occurred; (3) payment for any accrued but unused vacation time; and (4) payment of Mr. Geitz’s medical insurance for twelve months following his termination. This lump sum amount shall not be reduced by any compensation that Mr. Geitz receives for any other employment after the termination of his employment with the Bank. If Mr. Geitz’s employment is terminated for Cause, he shall have no right to receive any compensation or other benefits from the bank for any period following such termination for Cause.
Mr. Geitz may voluntarily terminate his employment upon ninety days’ prior notice to the Bank unless such termination is approved by the Board of Directors or there is a material breach of the Bank’s obligations under the Geitz Employment Agreement. If Mr. Geitz violates the terms concerning his voluntary termination set forth in the Geitz Employment Agreement, the Bank will be entitled to enjoin Mr. Geitz’s employment with any significant competitor of the Bank for a period of twelve months.
In the event of a Change in Control or Potential Change in Control of the Bank, Mr. Geitz would be entitled to receive (1) credit for his years of service to the Bank plus five additional years for purposes of vesting and calculation of benefits under any benefit plan of the Bank or a successor thereto; (2) twelve months’ notice of termination during which time he shall receive payment at his then current salary and the highest bonus received by Mr. Geitz during the preceding thirty-six months; (3) a lump sum cash payment in an amount equal to the sum of Mr. Geitz’s then current salary plus the highest bonus he received during the preceding 36 months; and (4) outplacement services in an amount not to exceed $10,000. Notwithstanding anything to the contrary set forth in the Geitz Employment Agreement, any payments due to Mr. Geitz as a result of his termination of employment may be delayed for up to six months after his termination of employment if the Bank determines that the delay is necessary to comply with Section 409A of the Internal Revenue Code. In the event that payments are delayed, the Bank will pay 5% simple interest on such delayed payments to Mr. Geitz.
The Bank and Martin J. Geitz are parties to a Supplemental Executive Retirement Agreement, dated October 20, 2010. The agreement is an unfunded, non-qualified supplemental retirement program for Mr. Geitz and provides for supplemental retirement benefits payable in installments over 15 years upon his attainment of normal retirement age of 65 years old. Under the agreement, the projected retirement benefits for Mr. Geitz, assuming he remains employed by the Bank until normal retirement age of 65, are $82,800 per year payable monthly for 15 years, with such monthly payments beginning on the first day of the month after he turns 65 years old. Mr. Geitz or his designated beneficiary will also be entitled to the aforementioned retirement benefits in the event of Mr. Geitz’s disability, death or termination of employment within twenty four months of a change in control of the Bank. The benefits are capped at $82,800 per year for 15 years and are subject to being substantially less should Mr. Geitz not remain employed with the Bank until the normal retirement age of 65. The agreement also contains restrictive covenants that may result in Mr. Geitz forfeiting all accrued benefits should he be terminated for cause, be removed by regulatory order, or violate non-competition, non-solicitation or confidentiality provisions set forth in the agreement during the term of the agreement and within 12 months following his termination of employment with the Bank.
The Bank and Martin J. Geitz are parties to an Endorsement Split Dollar Insurance Agreement, dated October 20, 2010. This agreement provides for the sharing of death proceeds under certain life insurance policies owned by the Bank on the life of Mr. Geitz with Mr. Geitz’s designated beneficiary. The Bank has the right to exercise all incidents of ownership of the life insurance policies and may terminate such policies without the consent of Mr. Geitz. Under the agreement, if Mr. Geitz passes away prior to termination of his employment with the Bank, Mr. Geitz’s designated beneficiary will be entitled to a benefit of $750,000, which will increase four percent (4%) on each anniversary of the effective date of the agreement; provided, however, that such benefit shall not exceed the total death proceeds of the life insurance policies minus the greater of (i) such policies’ cash surrender value or (ii) the aggregate premiums paid by the Bank for such policies. If Mr. Geitz passes away after termination of his employment with the Bank (for reasons other than death or disability), Mr. Geitz’s designated beneficiary will not be entitled to any benefits. Mr. Geitz’s rights under this agreement will terminate if he is subject to a final removal or prohibition order issued by an appropriate federal banking agency. In addition, no benefits will be paid to Mr. Geitz’s designated
beneficiary
if the insurance company denies coverage (i) for material misstatements of fact made by Mr. Geitz on any application for life insurance or (ii) for any reason; provided, however, that the Bank will evaluate the reasons for denial and, upon advice of legal counsel and in its sole discretion, consider judicially challenging such denial.
Richard J. Sudol, Senior Vice President and Chief Financial Officer
– Richard J. Sudol
is an at-will employee of the Bank. His salary, bonus and other compensation for 2014 through 2016 is set forth in the Summary Compensation Table. Option grants and restricted stock awards are discussed in the footnotes of the Summary Compensation Table and the Outstanding Equity Awards Table. He is entitled to receive paid time off of 28 days per year and to participate in the Bank’s benefit plans, including its medical plan, dental plan
, group term life insurance plan with enhanced benefits not available to employees who are not executive officers, long-term disability insurance plan with enhanced benefits not available to employees who are not executive officers
and 401(k) plan
.
The Bank entered into a Change in Control Severance Agreement, dated March 11, 2014, with Richard J. Sudol (the “Sudol CIC Severance Agreement”). Pursuant to the Sudol CIC Severance Agreement, in the event Mr. Sudol is terminated by the Bank without Cause (as defined in the Sudol
CIC Severance
Agreement) or he resigns for Good Reason (as defined in the Sudol CIC Severance Agreement) (i) upon a Change in Control (as defined in the Sudol CIC Severance Agreement) or (ii) during the remainder of the month in which a Change in Control occurs and 12 months thereafter, Mr. Sudol will be entitled to, among other benefits, the following: (1) a lump sum payment equal to two times the sum of (a) the greater of his annual base salary in effect immediately prior to the Change in Control or his annual base salary in effect at the time a notice of termination is given and (b) the greater of his annual target bonus for the year in which the Change in Control occurs or, if such target bonus has not yet been determined, his annual bonus for the year immediately preceding the year in which the Change in Control occurs; (2) accelerated vesting of his stock options, restricted stock and any other performance related incentive compensation awards; (3) 24 months of health insurance benefits on the same terms as were provided prior to termination of employment; (4) an amount in cash equal to his pro-rated annual target bonus for the year in which his termination occurs; (5) the aggregate amount that the Bank would have contributed under the 401(k) Plan on behalf of Mr. Sudol for a period of 24 months (plus a fixed earnings rate of 7% thereon); and (6) outplacement and job search services with a value not to exceed $10,000. The Sudol CIC Severance Agreement
is
in effect through December 31, 2014 and commencing on Janu
ary 1, 2015
and for each January 1 thereafter, the CIC Severance Agreement is automatically extended for one additional year unless the Bank or Mr. Sudol gives notice to the other party no later than September 30th of the preceding year that the Sudol CIC Severance Agreement will not be extended.
The Bank entered into two Supplemental Executive Retirement Agreements with Mr. Sudol, one of which was dated March 11,
2014 and one of which was dated January 18, 2017. Both agreements are unfunded, non-qualified supplemental retirement programs for
Mr. Sudol and provide for supplemental retirement benefits payable in installments over 15 years upon his attainment of normal retirement age of 65 years old. The projected retirement benefits for Mr. Sudol, assuming he has been employed by the Bank for at least ten years and remains employed by the Bank until normal retirement age of 65, are $
20,000 per year payable monthly for 15 years under the March 11, 2014 agreement and $30,000 per year payable monthly for 15 years under the January 18, 2017 agreement,
with such monthly payments beginning on the first day of the month after he turns 65 years old. The retirement benefits vest in 10% increments for each of the ten calendar years commencing with (i) 2014 for the March 11, 2014 agreement and (ii) 2017 for the January 18, 2017 agreement. The benefits are capped at the aforementioned $20,000 and $30,000 per year. Mr. Sudol or his designated beneficiary will also be entitled to the aforementioned retirement benefits in the event of Mr. Sudol’s disability, death or termination of employment within twenty four months of a change in control of the Bank. The agreements also contain restrictive covenants that may result in Mr. Sudol forfeiting all accrued benefits should he be terminated for cause, be removed by regulatory order, or violate non-competition, non-solicitation or confidentiality provisions set forth in the agreements during the terms of the agreements and within 12 months following his termination of employment with the Bank.
The Bank entered into a Split Dollar Life Insurance Agreement,
dated April 29, 2014, with Mr. Sudol. The agreement provides for the sharing of death proceeds under certain life insurance policies owned by the Bank on the life of Mr. Sudol with Mr. Sudol’s designated beneficiary. The Bank has the right to exercise all incidents of ownership of the life insurance policies and may terminate such policies without the consent of Mr. Sudol. Under the agreement, if Mr. Sudol passes away prior to termination of his employment with the Bank, Mr. Sudol’s designated beneficiary will be entitled to a benefit of $100,000; provided, however, that such benefit shall not exceed the total death proceeds of the life insurance policies minus the greater of (i) such policies’ cash surrender value or (ii) the aggregate premiums paid by the Bank for such policies.
If Mr. Sudol passes away after termination of his employment with the Bank (for reasons other than death or disability), Mr. Sudol’s designated beneficiary will be entitled to any vested benefit under the agreement. For purposes of the agreement, Mr. Sudol will achieve vested status if he is terminated following a change in control. Mr. Sudol’s designated beneficiary will not be entitled to any unvested benefit under the agreement.
Mr. Sudol’s rights under this agreement will terminate if he is subject to a final removal or prohibition order issued by an appropriate federal banking agency. In addition, no benefits will be paid if the insurance company denies coverage (i) for material misstatements of fact made by Mr. Sudol on any application for life insurance or (ii) for any reason; provided, however, that the Bank will evaluate the reasons for denial and, upon advice of legal counsel and in its sole discretion, consider judicially challenging such denial.
Gary W. Burdick, Senior Vice President and Chief Commercial Banking Officer
– Gary W. Burdick
is an at-will employee of the Bank. His salary, bonus and other compensation for 2014 through 2016 is set forth in the Summary Compensation Table. Option grants and restricted stock awards are discussed in the footnotes of the Summary Compensation Table and the Outstanding Equity Awards Table. He is entitled to receive paid time off of 28 days per year and to participate in the Bank’s benefit plans, including its medical plan, dental plan
, group term life insurance plan with enhanced benefits not available to employees who are not executive officers, long-term disability insurance plan with enhanced benefits not available to employees who are not executive officers
and 401(k) plan
.
The Bank entered into a Change in Control Severance Agreement, dated October 24, 2012, with Gary W. Burdick (the “Burdick CIC Severance Agreement”). Pursuant to the Burdick CIC Severance Agreement, in the event Mr. Burdick is terminated by the Bank without Cause (as defined in the Burdick
CIC Severance
Agreement) or he resigns for Good Reason (as defined in the Burdick CIC Severance Agreement) (i) upon a Change in Control (as defined in the Burdick CIC Severance Agreement) or (ii) during the remainder of the month in which a Change in Control occurs and 12 months thereafter, Mr. Burdick will be entitled to, among other benefits, the following: (1) a lump sum payment equal to two times the sum of (a) the greater of his annual base salary in effect immediately prior to the Change in Control or his annual base salary in effect at the time a notice of termination is given and (b) the greater of his annual target bonus for the year in which the Change in Control occurs or, if such target bonus has not yet been determined, his annual bonus for the year immediately preceding the year in which the Change in Control occurs; (2) accelerated vesting of his stock options, restricted stock and any other performance related incentive compensation awards; (3) 24 months of health insurance benefits on the same terms as were provided prior to termination of employment; (4) an amount in cash equal to his pro-rated annual target bonus for the year in which his termination occurs; (5) the aggregate amount that the Bank would have contributed under the 401(k) Plan on behalf of Mr. Burdick for a period of 24 months (plus a fixed earnings rate of 7% thereon); and (6) outplacement and job search services with a value not to exceed $10,000. The Burdick CIC Severance Agreement
is
in effect through December 31, 2012, and commencing on January 1, 2013 and for each January 1 thereafter, the Burdick CIC Severance Agreement is automatically extended for one additional year unless the Bank or Mr. Burdick gives notice to the other party no later than September 30th of the preceding year that the Burdick CIC Severance Agreement will not be extended.
The Bank entered into a Supplemental Executive Retirement Agreement, dated October 24, 2012, with Mr. Burdick.
The agreement is an unfunded, non-qualified supplemental retirement program for Mr. Burdick and provides for supplemental retirement benefits payable in installments over 15 years upon his attainment of normal retirement age of 65 years old. Under the agreement, the projected retirement benefits for Mr. Burdick, assuming he remains employed by the Bank until normal retirement age of 65, are $10,000 per year payable monthly for 15 years, with such monthly payments beginning on the first day of the month after he turns 65 years old. Mr. Burdick or his designated beneficiary will also be entitled to the aforementioned retirement benefits in the event of Mr. Burdick’s disability, death or termination of employment within twenty four months of a change in control of the Bank. The benefits are capped at $10,000 per year for 15 years and are subject to being substantially less should Mr. Burdick not remain employed by the Bank until the normal retirement age of 65. The agreement also contains restrictive covenants that may result in Mr. Burdick forfeiting all accrued benefits should he be terminated for cause, be removed by regulatory order, or violate non-competition, non-solicitation or confidentiality provisions set forth in the agreement during the term of the agreement and within 12 months following his termination of employment with the Bank.
The Bank entered into a Split Dollar Life Insurance Agreement,
dated January 22, 2013, with Mr. Burdick. The agreement provides for the sharing of death proceeds under certain life insurance policies owned by the Bank on the life of Mr. Burdick with Mr. Burdick’s designated beneficiary. The Bank has the right to exercise all incidents of ownership of the life insurance policies and may terminate such policies without the consent of Mr. Burdick. Under the agreement, if Mr. Burdick passes away prior to termination of his employment with the Bank, Mr. Burdick’s designated beneficiary will be entitled to a benefit of $100,000; provided, however, that such benefit shall not exceed the total death proceeds of the life insurance policies minus the greater of (i) such policies’ cash surrender value or (ii) the aggregate premiums paid by the Bank for such policies. If Mr. Burdick passes away after termination of his employment with the Bank (for reasons other than death or disability), Mr. Burdick’s designated beneficiary will be entitled to any vested benefit under the agreement. For purposes of the agreement, Mr. Burdick will achieve vested status if he is terminated following a change in control. Mr. Burdick’s designated beneficiary will not be entitled to any unvested benefit under the agreement. Mr. Burdick’s rights under the agreement will terminate if he is subject to a final removal or prohibition order issued by an appropriate federal banking agency. In addition, no benefits will be paid if the insurance company denies coverage (i) for material misstatements of fact made by Mr. Burdick on any application for life insurance or (ii) for any reason; provided, however, that the Bank will evaluate the reasons for denial and, upon advice of legal counsel and in its sole discretion, consider judicially challenging such denial.
Equity Awards
On December 21, 2016, Martin J. Geitz received a grant from the Company of 3,356 shares of restricted stock with a fair market value of $73,746 on the date of grant. Such shares of restricted stock will vest over three years as follows: 1,118 shares on December 21, 2017, 1,118 shares on December 21, 2018 and 1,120 shares on December 21, 2019.
On December 22, 2015, Martin J. Geitz received a grant from the Company of stock options to acquire 20,000 shares of stock. Such stock options had a fair market value of $44,000 on the date of grant. Vesting of such stock options is over five years as follows: 4,500 shares on December 22, 2015, 4,500 shares on December 22, 2016, 4,500 shares on December 22, 2017, 4,500 shares on December 22, 2018 and 2,000 shares on December 22, 2019.
On March 19, 2015, Martin J. Geitz received a grant from the Company of 3,250 shares of restricted stock with a fair market value of $69,938 on the date of grant. Such shares of restricted stock will vest over three years as follows: 1,083 shares on March 19, 2016, 1,083 shares on March 19, 2017 and 1,084 shares on March 19, 2018.
On April 25, 2014, Martin J. Geitz received a grant from the Company of 1,562 shares of restricted stock with a fair market value of $33,588 on the date of grant that constituted his performance bonus for 2013. Accordingly, such grant of restricted stock was not included under “Stock awards” in the Summary Compensation Table for the year 2014. Such shares of restricted stock will vest over three years as follows: 520 shares on April 25, 2015, 520 shares on April 25, 2016 and 522 shares on April 25, 2017.
On December 21, 2016, Gary W. Burdick received a grant from the Company of 1,153 shares of restricted stock with a fair market value of $25,336 on the date of grant. Such shares of restricted stock will vest over three years as follows: 384 shares on December 21, 2017, 384 shares on December 21, 2018 and 385 shares on December 21, 2019.
On March 19, 2015, Gary W. Burdick received a grant from the Company of 975 shares of restricted stock with a fair market value of $20,982 on the date of grant. Such shares of restricted stock will vest over three years as follows: 325 shares on March 19, 2016, 325 shares on March 19, 2017 and 325 shares on March 19, 2018.
On April 25, 2014, Gary W. Burdick received a grant from the Company of 372 shares of restricted stock with a fair market value of $7,999 on the date of grant that constituted a portion of his performance bonus for 2013. Accordingly, such grant of restricted stock was not included under “Stock awards” in the Summary Compensation Table for the year 2014. Such shares of restricted stock will vest over three years as follows: 124 shares on April 25, 2015, 124 shares on April 25, 2016 and 124 shares on April 25, 2017.
On December 21, 2016, Richard J. Sudol received a grant from the Company of 1,292 shares of restricted stock with a fair market value of $28,391 on the date of grant. Such shares of restricted stock will vest over three years as follows: 430 shares on December 21, 2017, 430 shares on December 21, 2018 and 432 shares on December 21, 2019.
On March 19, 2015, Richard J. Sudol received a grant from the Company of 1,225 shares of restricted stock with a fair market value of $26,361 on the date of grant. Such shares of restricted stock will vest over three years as follows: 408 shares on March 19, 2016, 408 shares on March 19, 2017 and 409 shares on March 19, 2018.
The outstanding equity awards held by the Named Executive Officers as of December 31, 2016 were as follows:
Outstanding Equity Awards at Fiscal Year-End
|
|
Option Awards
|
|
|
Stock Awards
|
|
Name
|
|
Number of Securities Underlying Unexercised Options
(#)
Exercisable
|
|
Number of Securities Underlying Unexercised Options
(#) Unexer-
cisable
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number of Shares or Units of Stock That Have Not Vested
(#)
|
|
Market Value of Shares or Units of Stock That Have Not Vested
($)
|
Martin J. Geitz
President & Chief
Executive Officer
|
|
|
9,000
|
(1)
|
|
|
11,000
|
(1)
|
|
$
|
30.00
|
|
|
12/22/2025
|
|
|
|
6,045
|
(2)
|
|
$
|
144,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard J. Sudol
Senior Vice President
& Chief Financial Officer
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
2,109
|
(3)
|
|
$
|
50,363
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary W. Burdick
Senior Vice President &
Chief Commercial
Banking Officer
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
1,927
|
(4)
|
|
$
|
46,017
|
|
(1)
|
Stock options vest pursuant to the following schedule: 4,500 shares on 12/22/2015, 4,500 shares on 12/22/2016, 4,500 shares on 12/22/2017, 4,500 shares on 12/22/2018 and 2,000 shares on 12/22/2019. Vesting is conditioned on the named individual remaining an employee until the end of each vesting period.
|
(2)
|
The number of shares of unvested stock will vest as follows: 1,083 shares on 3/19/2017, 522 shares on 4/25/2017, 1,118 shares on 12/21/2017, 1,084 shares on 3/19/2018, 1,118 shares on 12/21/2018 and 1,120 shares on 12/21/2019. Vesting is conditioned on the named individual remaining an employee until the end of each vesting period.
|
(3)
|
The number of shares of unvested stock will vest as follows: 408 shares on 3/19/2017, 430 shares on 12/21/2017, 409 shares on 3/19/2018, 430 shares on 12/21/2018 and 432 shares on 12/21/2019. Vesting is conditioned on the named individual remaining an employee until the end of each vesting period.
|
(4)
|
The number of shares of unvested stock will vest as follows: 325 shares on 3/19/2017, 124 shares on 4/25/2017, 384 shares on 12/21/2017, 325 shares on 3/19/2018, 384 shares on 12/21/2018 and 385 shares on 12/21/2019. Vesting is conditioned on the named individual remaining an employee until the end of each vesting period.
|