UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X] Filed by a Party other than the Registrant [ ]
Check the appropriate box:
|
|
|
[ ] Preliminary
Proxy Statement
|
|
[ ]
Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
|
[X] Definitive Proxy
Statement
|
[ ] Definitive Additional
Materials
|
[ ] Soliciting Material
under Rule 14a-12
|
NEW
PEOPLES BANKSHARES, INC.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of
Filing Fee (Check the appropriate box):
[X]
|
No
fee required.
|
[
]
|
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
|
|
|
(1)
|
Title
of each class of securities to which transaction applies:
|
|
|
|
|
|
(2)
|
Aggregate
number of securities to which transaction applies:
|
|
|
(3)
|
Per
unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was determined):
|
|
|
(4)
|
Proposed maximum aggregate value of transaction:
|
|
|
[]
|
Fee paid previously with preliminary materials:
|
|
|
[]
|
Check box if any part of the fee is offset
as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
|
|
|
(1)
|
Amount Previously Paid:
|
|
|
(2)
|
Form, Schedule or Registration Statement No.:
|
NEW PEOPLES BANKSHARES, INC.
67 Commerce Drive
Honaker, Virginia 24260
Dear Shareholder:
You are cordially invited
to attend the 2017 Annual Meeting of Shareholders of New Peoples Bankshares, Inc. (the “Company”) to be held on Tuesday,
May 16, 2017, at 6:00 p.m. at the Abingdon office of New Peoples Bank, 350 West Main Street, Abingdon, Virginia 24210. At the
Annual Meeting, you will be asked to vote on three proposals. Enclosed with this letter are a formal notice of the Annual Meeting,
a Proxy Statement and a proxy.
Whether or not you plan
to attend the Annual Meeting,
it is important that your shares be represented and voted
. Please read this
Proxy Statement and submit your Proxy via the Internet, or by using the toll-free telephone number or by completing, signing,
dating and returning your Proxy promptly using the enclosed postage-paid envelope. Your Proxy may be revoked at any time before
it has been voted.
We hope you will participate
in the Annual Meeting, either in person or by proxy.
Sincerely,
/s/ C. Todd
Asbury
C. Todd Asbury
President and Chief Executive
Officer
Honaker, Virginia
April 3, 2017
NEW PEOPLES BANKSHARES, INC.
67 Commerce Drive
Honaker, Virginia 24260
___________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
___________________
The Annual Meeting of
Shareholders (the “Annual Meeting”) of New Peoples Bankshares, Inc. (the “Company”) will be held on Tuesday,
May 16, 2017 at 6:00 p.m. at the Abingdon office of New Peoples Bank, 350 West Main Street, Abingdon, Virginia 24210, for the
following purposes:
|
1.
|
To
elect three directors to serve for terms of three years each expiring at the 2020 annual
meeting of shareholders; and
|
|
2.
|
To
approve a non-binding resolution on the compensation of the named executive officers
disclosed in this proxy statement.
|
|
3.
|
To
ratify the Audit Committee’s appointment of Elliott Davis Decosimo, LLC as the
Company’s independent registered public accounting firm for the year ending December
31, 2017.
|
|
4.
|
Act
upon such other matters as may properly come before the Annual Meeting.
|
Only holders of shares
of Common Stock of record at the close of business on March 22, 2017, the record date set by our Board of Directors, are entitled
to notice of, and to vote at, the Annual Meeting.
It is important that
as many shares as possible be represented at the Annual Meeting. Please read this Proxy Statement and submit your Proxy via the
Internet, or by using the toll-free telephone number or by completing, signing, dating and returning your Proxy promptly using
the enclosed postage-paid envelope. You may revoke your proxy at any time before it has been voted.
By Order of the Board of Directors
/s/ Joseph D. Pennington
Joseph D. Pennington
Secretary
April 3, 2017
Important
Notice Regarding the Availability of Proxy Materials
for
the Shareholder Meeting to be Held on May 16, 2017.
The Proxy Statement, proxy card and the 2016
Annual Report to stockholders on Form 10-K are available at
http://www.edocumentview.com/NWPP
.
NEW PEOPLES BANKSHARES, INC.
67 Commerce Drive
Honaker, Virginia 24260
________________________________________________
PROXY STATEMENT
2017 ANNUAL MEETING OF
SHAREHOLDERS
________________________________________________
This Proxy Statement is furnished to holders
of the common stock, par value $2.00 per share (“Common Stock”), of New Peoples Bankshares, Inc., in connection with
the solicitation of proxies by our Board of Directors on behalf of the Company to be used at the 2017 Annual Meeting of Shareholders
(the “Annual Meeting”) to be held on Tuesday, May 16, 2017 at 6:00 p.m. at the Abingdon office of New Peoples Bank,
350 West Main Street, Abingdon, Virginia 24210, and any duly reconvened meeting after adjournment thereof.
Your vote is very important,
regardless of the number of shares you own. You are urged to submit your vote as soon as possible. You will have the option to
vote by telephone, via the Internet or by completing, dating and signing a proxy and returning it to the Company. Any shareholder
who executes a proxy has the power to revoke it at any time by written notice to our Secretary, by executing a proxy dated as
of a later date, or by voting in person at the Annual Meeting. It is expected that this Proxy Statement and the enclosed proxy
card will be mailed on or about April 3, 2017 to all shareholders entitled to vote at the Annual Meeting.
The cost of soliciting
proxies for the Annual Meeting will be borne by us. We do not intend to solicit proxies other than by use of mail, however certain
officers and our regular employees or our subsidiaries, without additional compensation, may use their personal efforts, by telephone
or otherwise, to obtain proxies. We may also reimburse banks, brokerage firms and other custodians, nominees and fiduciaries for
their reasonable out-of-pocket expenses in forwarding proxy materials to the beneficial owners of shares of Common Stock.
To reduce the expenses
of delivering duplicate proxy materials to shareholders, we are relying upon SEC rules that permit us to deliver only one proxy
statement and annual report to multiple shareholders who share an address unless we received contrary instructions from any shareholder
at that address. All shareholders sharing an address will continue to receive separate proxy cards based on their registered ownership
of Common Stock. Any shareholder sharing an address who does not receive an individual proxy statement and annual report may write
or call Computershare Investor Services (“Computershare”) as specified below and Computershare will promptly send
the materials to the shareholder at no cost. For future meetings, a shareholder may request separate copies of our proxy statement
and annual report, or request that we only send one set of these materials if the shareholder is receiving multiple copies, by
contacting Computershare at Attn.: Shareholder Services, 211 Quality Circle, Suite 210, College Station, TX 77845 or by telephoning
Computershare toll free at 1-800-368-5948.
On March 22, 2017, the
record date for determining those shareholders entitled to notice of and to vote at the Annual Meeting, there were 23,355,457
shares of Common Stock issued and outstanding. Each outstanding share of Common Stock is entitled to one vote on all matters to
be acted upon at the Annual Meeting. A majority of the shares of Common Stock entitled to vote, represented in person or by proxy,
constitutes a quorum for the transaction of business at the Annual Meeting.
A shareholder may abstain
or (only with respect to the election of directors) withhold his or her vote (collectively, “Abstentions”) with respect
to each item submitted for shareholder approval. Abstentions will be counted for purposes of determining the existence of a quorum.
Abstentions will not be counted as voting in favor of the relevant item, and generally will have no effect on whether or not the
item is approved.
A broker who holds shares
in “street name” is prohibited from voting on certain items when he or she has not received instructions on how to
vote from the beneficial owner, but on other items the broker is entitled to vote without instructions from the beneficial owner.
Brokers are not permitted to vote for the election of directors nor the advisory resolution on named executive compensation without
specific instruction from the beneficial owner of the shares in street name. “Broker shares” for which at least one
matter a vote has been casted will be counted for purposes of determining the existence of a quorum for the transaction of business
at the Annual Meeting. Where brokers do not have or do not exercise such discretion, the inability or failure to vote is referred
to as a “broker nonvote.” Broker nonvotes will not be counted as voting in favor of any particular matter. “Broker
shares” that are not voted on any matter at the Annual Meeting will not be counted for purposes of determining the existence
of a quorum.
The Board of Directors
is not aware of any matters other than those described in this Proxy Statement that may be presented for action at the Annual
Meeting. However, if other matters do properly come before the Annual Meeting, the persons named in the enclosed proxy possess
discretionary authority to vote in accordance with their best judgment with respect to such other matters.
PROPOSAL ONE: ELECTION OF DIRECTORS
The Board of Directors consists of nine current
members, three of whom are nominated for election as directors at the Annual Meeting to serve for terms of three years each expiring
on the date of the annual meeting of shareholders in 2020. Six other directors are serving terms that end in either 2018 or 2019,
as indicated below.
The election of each nominee for director requires
the affirmative vote of the holders of a plurality of the shares of Common Stock cast in the election of directors. If the proxy
is executed in such manner as not to withhold authority for the election of any or all of the nominees for directors, then the
persons named in the proxy will vote the shares represented by the proxy for the election of the three nominees named below. If
the proxy indicates that the shareholder wishes to withhold a vote from one or more nominees for director, such instructions will
be followed by the persons named in the proxy.
Each nominee has consented to being named in
this Proxy Statement and has agreed to serve if elected. The Board of Directors has no reason to believe that any of the nominees
will be unable or unwilling to serve. If, at the time of the Annual Meeting, any nominee is unable or unwilling to serve as a
director, votes will be cast, pursuant to the enclosed proxy, for such substitute nominee as may be nominated by the Board of
Directors. There are no current arrangements between any nominee and any other person pursuant to which a nominee was selected.
No family relationships exist among any of the directors or between any of the directors and executive officers of the Company.
The following biographical information discloses
each nominee’s age and business experience for the past five years, unless otherwise noted, and the year that each individual
was first elected to our Board of Directors or earlier to the Board of Directors of New Peoples Bank, Inc. (the “Bank”),
the predecessor to and now a wholly owned subsidiary of the Company.
Nominees for Election for Terms Expiring in 2020
John D. Cox
, 60, is the owner of Cox
Tractor Company, a farm equipment business that he has owned and operated since 1978 located in Kingsport, Tennessee. Mr. Cox
is also a local farmer and entrepreneur. He graduated with high honors from the University of Tennessee in 1978, where he obtained
a Bachelor of Science Degree in Business Administration. Mr. Cox has served as a director of the Company since 1998 and served
as Chairman of the Board of Directors for the Company and the Bank for two years 2012 through 2014. He currently sits as the Chairman
of the Compensation Committee, a member of the Executive Committee, Audit Committee, Risk and Compliance Committee, Asset Liability
Management Committee, and Nominating Committee. Mr. Cox’s experience in agriculture and agriculturally-related small businesses
support the Company’s significant customer base in these markets.
Charles H. Gent, Jr.
, 57, is self-employed
in the logging and farming industry in Honaker, Virginia and has served as Vice Chairman of the Board of Directors of the Company
and the Bank since December 2012. He has been President of C & R Gent Logging from 1992 to present. Mr. Gent is also involved
in farming and various real estate ventures with his family. He was vice president and owner of Genwal Coal Company in Utah from
the years 1981 to 1989. He is actively involved in several community activities. He has been a director since 1998 and serves
on the Audit Committee, Compensation Committee, Risk and Compliance Committee and Executive Committee. Mr. Gent’s experience
in logging and mining, as well as real estate and farming, provides experience to the Board relevant to understanding these businesses
in the Company’s rural markets.
Eugene S. Hearl,
85, is a retired banker
that has over 44 years of banking experience serving in capacities as President and CEO for two community banks, TruPoint Bank
and the former Cumberland Bank, and as the Regional President for the former Dominion Bank in the Southwest Virginia market. Mr.
Hearl was appointed as a director of the Company on November 29, 2010 and serves on the Audit Committee, Compensation Committee,
Director Loan Committee, Asset Liability Management Committee, and the Risk and Compliance Committee. Mr. Hearl’s vast wealth
of knowledge in community banking and the various industries in our local markets provide additional financial institution management
skills and perspective to the Board.
THE BOARD OF DIRECTORS RECOMMENDS THE SHAREHOLDERS
VOTE “FOR” THE NOMINEES SET FORTH ABOVE.
PROPOSAL TWO: ADVISORY VOTE
ON THE APPROVAL OF COMPENSATION
OF THE NAMED EXECUTIVE OFFICERS
The Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (the Dodd-Frank Act) enables our shareholders to approve, on an advisory or nonbinding basis, the compensation
of the Company’s named executive officers, as described in the disclosures and discussion regarding executive compensation
in this proxy statement. Our performance-related compensation philosophy is the basis for all of our compensation decisions. Please
refer to “Executive Compensation” for an overview of the compensation of the Company’s named executive officers,
as required by Securities and Exchange Commission rules. At the 2011 Annual Meeting of Shareholders, the shareholders approved
a proposal on how frequently to hold this advisory nonbinding vote on compensation for named executive officers, which was to
hold such vote annually.
We are asking for stockholder approval of our
named executive officers’ compensation as described in this proxy. The vote is not intended to address any specific
item of compensation, but rather the overall compensation of our named executive officers and the compensation policies and practices
discussed in this proxy. Because the vote is advisory, it will not be binding on the Company or its Board of Directors. However,
the Compensation Committee will take into account the outcome of the vote when considering future executive compensation arrangements.
The compensation of our Chief Executive Officer, C. Todd Asbury, is included in the overall executive officer compensation which
is the subject of this Proposal. Mr. Asbury attends the Board’s Compensation Committee although he does not participate
in any discussion or approval of his own compensation. A majority vote of the shares present in person or by proxy is required
to approve this resolution.
THE BOARD OF DIRECTORS RECOMMENDS THE SHAREHOLDERS
VOTE “FOR” APPROVAL OF THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS.
PROPOSAL THREE: RATIFICATION OF
APPOINTMENTOF INDEPENDENT AUDITORS
For the year ending December 31, 2017, the
Audit Committee of the Board of Directors has selected Elliott Davis Decosimo, LLC, an independent registered public accounting
firm, to perform the audit of the Company’s financial statements.
The selection of Elliott Davis Decosimo, LLC
as the Company’s independent auditors is not required to be submitted to a vote of the shareholders for ratification. The
Company is doing so because it believes that it is a matter of good corporate practice. If the shareholders fail to vote on an
advisory basis in favor of the selection of Elliott Davis Decosimo, LLC, the Audit Committee will reconsider whether to retain
Elliott Davis Decosimo, LLC, and may retain that firm or another firm without re-submitting the matter to the shareholders. Even
if the shareholders ratify the appointment, the Audit Committee may, in its discretion, direct the appointment of a different
independent registered public accounting firm at any time during the year if it determines that a change would be in the Company’s
best interests. Approval of this Proposal requires the affirmative vote of a majority of the shares voted on the Proposal.
A representative of Elliott Davis Decosimo,
LLC is expected to be at the Annual Meeting of Shareholders. That representative will have the opportunity to make a statement
at the meeting and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THE SHAREHOLDERS
VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF ELLIOTT DAVIS DECOSIMO, LLC AS THE INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2017.
Incumbent Directors Whose Terms Expire in
2018
Joe M. Carter
, 79, is a retired general
manager of Daugherty Chevrolet in Gate City, Virginia. He served 43 years in this role from 1965 to April 2008. Mr. Carter is
a 1958 graduate of the Whitney Business School formerly located in Kingsport, Tennessee. He served as an advisory Board member
of the former Peoples Bank, Inc. and its successors, Premier Bank – Central, N.A. and First Virginia Bank Southwest, until
his resignation in 1998. Mr. Carter has served as a Trustee of Thomas Village Baptist Church for 26 years and it’s Treasurer
for the past 23 years. He also has served on the Scott County Economic Development Board of Directors from 1998 to 2000. He has
been a director of the Company since 1998 and served on the Audit Committee from 1998 until 2004. He currently serves on the Director
Loan Committee, Executive Committee, Audit Committee and Asset Liability Management Committee of the Bank. Mr. Carter’s
experience in the automotive industry and consumer finance assists the Board of Directors in understanding these businesses which
are important in the Company’s markets.
Harold Lynn Keene
, 62, has been President
of Keene Carpet, Inc. since 1976 and was President of Harold Keene Coal Co., Inc. beginning in 1984 until its sale in January
2011. Mr. Keene received his Bachelor of Science Degree in accounting from East Tennessee State University in 1976. He served
as a bank director for Peoples Bank, Inc. and its successor bank Premier Bank-Central, N.A. from 1987 until 1997 for which he
was an Audit Committee member during his entire tenure and Chairman of the Board for two years. He also served as an advisory
board member with First Virginia Bank Southwest from 1997 to 1998. He has been a director of the Company and has sat as the Audit
Committee Chairman since 1998. He also has been the Chairman of the Board of Directors of the Company and the Bank since May 2014.
Mr. Keene also serves on the Executive Committee, Director Loan Committee, Asset Liability Management Committee, and the Risk
and Compliance Committee. Mr. Keene’s experience in banking provides an important resource to the Board of Directors in
dealing with bank and finance-related matters. His experience in the coal industry provides for a resource in the coal industry
which is an important market for the Company.
Fred W. Meade
, 83, has been President
and Owner of Big M Stores, Inc., a retail department store and flooring business, since 1973 and has also been involved in real
estate development and rental properties since 1980. He served as a Board member of Southwest Bank of Virginia from 1971 until
it sold in 1980. He subsequently served as an advisory board member for the former Bank of Virginia and Signet Bank from 1980
until 1997. Mr. Meade has served as a member of the Russell County Economic Development board for the past twenty-five years.
In addition, he has served as a member of the Board of Directors of the Russell County Chamber of Commerce. He is a life-long
resident of Russell County. He has been a director of the Company since 1998 and served as Chairman of the Board of Directors
for the Company and the Bank for two years. He currently is a member of the Director Loan Committee, Nominating Committee and
the Compensation Committee. Mr. Meade’s experience in the retail business, real estate, economic development, and bank board
experience are very important to the Board of Directors.
Incumbent Directors Whose Terms Expire in
2019
Tim W. Ball
, 57, has been President,
Owner and Operator of Ball Coal Company and owner of Tim Ball Trucking Company since 1985, and President of Tim Ball Farming Corporation
since 1987. Mr. Ball is a 1982 graduate of Emory and Henry College. He is active in various community services. He has been a
director of the Company since 1999. He currently is a member of the Compensation and Nominating Committees. Mr. Ball’s experience
in the coal industry and farming serve well for the Board of Directors because many of the Company’s customers are involved
in these lines of business.
Michael G. McGlothlin
, 65, is President
of the Appalachian College of Pharmacy (2005 to 2006 and 2008 to present). He also serves as President of Watkins Branch
Development, LTD and The Inn on Garden Creek, LTD (2006 to present), as Secretary and Director of MGM Methane Corporation (2009
to present), as Trustee and Treasurer of the Appalachian School of Law (Trustee 2002 to present and Treasurer 2005 to present), and
as a Trustee and as Secretary of the McGlothlin Foundation (1998 to present). He has been the owner of Michael G. McGlothlin,
Attorney-at-Law in Grundy, Virginia since 2002. Prior to that, he was a partner in the Law Firm of McGlothlin and
Wife from 1984 to 2002. He served as Commonwealth Attorney for Buchanan County, Virginia from 1980 to 1983 and as County
Attorney for Buchanan County, Virginia from 1984 to 1989 and then from 1992 to February 2011. He was a partner in the Law
Firm of McGlothlin, McGlothlin and McGlothlin from 1977 to 1979. Mr. McGlothlin is past President of the Buchanan County
Bar Association. Mr. McGlothlin is a 1974 graduate of the University of Virginia and a 1977 graduate of the Marshall Wythe
School of Law of the College of William and Mary.
He served as a member of the College Board
of the University of Virginia’s College at Wise, formerly known as Clinch Valley College Advisory Board, from 1985 to 2010.
He is a past President of the Grundy Kiwanis Club and a past Chairman of the Breaks District of the Sequoyah Council of the Boy
Scouts of America. He was a member of the Virginia Board of Forestry from 2002 to 2006 and the Great Southwest Group Home
Commission from 1983 to 1992.
Mr. McGlothlin has been a Director of the Company
and the Bank since 1998 and served 2 years as Chairman of the Board of the Company and the Bank until December 2012. He currently
sits on the Risk and Compliance, Nominating, and Asset Liability Management Committees of the Board. Mr. McGlothlin’s
experience as an attorney, administrator, and organizational and community leader provide the Board with a broad range of professional
experience and his community involvement assists the Board in understanding the communities it serves and developing relationships
within those communities.
B. Scott White
, 71, is a retired cattle
rancher in Castlewood, Virginia, as well as a private investor. He was the President and CEO of a multi-state rock quarry, White
Stone Company and White’s Pelletizing Company, from 1970 until the company was sold in 1997. Mr. White also served
as General Manager of Sky Blue Tower Company, LLC, a cell phone tower rental company in southwest Virginia, from 2004 to 2008. Currently,
he serves on the Board of Rockydale Quarries in Roanoke, Virginia. He served two years as Chairman of the Board of the Company,
and currently serves as Chairman of the Risk and Compliance Committee. Mr. White also serves as a member of the Audit Committee,
the Compensation Committee, the Nominating Committee, Asset Liability Management Committee, and Director Loan Committee of the
Company. He has been a director since 1998. Mr. White’s experience as a small business owner and rancher provides
experience to the Board relevant to its small business and agricultural customer base.
Executive Officers Who Are Not Directors
The following biographical information discloses
the age and business experience in the past five years for each of our executive officers who are not directors.
C. Todd Asbury
, age 46, has served as
the Company and Bank’s President and Chief Executive Officer since December 17, 2014. He had previously served as Executive
Vice President, Chief Financial Officer, and Treasurer of both the Company and the Bank from May 2009 to December 2014. Mr. Asbury
had served as Secretary of the Company and the Bank from May 2010 to December 2014. He served as Senior Vice President, Chief
Financial Officer, and Treasurer of the Company and the Bank starting in December 2003.
John W. Beard, Jr.
, age 64, has served
as Executive Vice President and Chief Credit Officer of the Bank since January 25, 2016. He had served as Senior Vice President
and Senior Credit Officer of Hometrust Bank, from June 2014 to January 2016. Prior to that, he served as the Chief Credit
Officer and Executive Vice President of Jefferson Federal Bank from March 2012 to May 2014. Prior to that, he served as
the President and CEO of Citizens Bank from September 2008 to January 2011. Prior to that, he served as the Senior Credit
Officer for Northeast Tennessee for First Tennessee Bank from October 1992 to September 2008.
Joseph D. Pennington
, age 43, has served
as the Company and Bank’s Senior Vice President, Chief Financial Officer, Treasurer and Secretary since April 27, 2015.
He had previously served as Senior Vice President and Financial Officer of both the Company and Bank from February 2015 to April
26, 2015. Mr. Pennington, who is a certified public accountant, served as a Senior Manager for Elliott Davis, LLC, a larger regional
accounting firm, from October of 2012 to February of 2015. Prior to that, he served as the Chief Financial Officer of Bank of
Virginia from March 2011 until October 2012. Mr. Pennington has over 15 years of community banking experience.
Frank Sexton, Jr.
, age 67, has served
as Executive Vice President and Chief Operating Officer of both the Company and the Bank since December 2003. He had previously
served as Interim Chief Financial Officer, Secretary, and Treasurer of the Company and Bank from December 17, 2014 to April 26,
2015. He had previously served as the Company’s Executive Vice President, Chief Financial Officer and Secretary since 2001
and the Bank’s Executive Vice President and Cashier since 1998.
Karen D. Wimmer
, age 53, has served
as Executive Vice President and Director of Special Assets of the Bank since January 25, 2016. Ms. Wimmer served as Executive
Vice President and Chief Credit Officer of the Bank from March 1, 2014 to January 24, 2016. She also served as Senior Vice President
and Senior Credit Officer of the Bank from November 1, 2012 to February 28, 2014 and from June 2011 to July 2012. From mid-2010
to June 2011 she was Vice President of the Commercial Loan Division. From August 2001 to mid-2010, she served as a Loan Officer
and Assistant Manager of the Princeton, West Virginia branch focusing on business development and commercial lending. In 2007,
she was promoted to Vice President. Ms. Wimmer initially joined the Bank in August 2001 as Assistant Vice President, Assistant
Manager and Loan Officer. Prior to joining the Bank, Ms. Wimmer worked for BB and T via its acquisition of the former One Valley
Bank with experience in commercial lending and banking from 1988 to 2001. Ms. Wimmer has a total of 28 years of banking experience.
Security Ownership of Management
The following table sets forth, as of March
22, 2017, certain information with respect to beneficial ownership of shares of Common Stock by each of the members of the Board
of Directors, by each of the executive officers named in the “Summary Compensation Table” below and by all directors
and executive officers as a group. Beneficial ownership includes shares, if any, held in the name of the individual’s spouse,
minor children or other relatives of the individual living in such person’s home, as well as shares, if any, held in the
name of another person under an arrangement whereby the director or executive officer can vest title in himself at once or at
some future time.
Name
of Beneficial Owner
|
Common
Stock
Beneficially Owned
(1)
|
Exercisable
Common
Stock
Warrants
(2)
|
Total
Shares Beneficially
Owned
|
Percent
of
Class
(3)
|
|
|
|
|
|
C.
Todd Asbury
|
1,000
|
200
|
1,200
|
*
|
Tim
W. Ball
|
3,432
|
-
|
3,432
|
*
|
John
W. Beard, Jr.
|
-
|
-
|
-
|
*
|
Joe
M. Carter**
|
29,955
(4)
|
-
|
29,955
|
*
|
John
D. Cox**
|
361,461
(5)
|
18,127
|
379,588
|
1.62%
|
Charles
H. Gent, Jr.**
|
31,970
(6)
|
-
|
31,970
|
*
|
Eugene
Hearl
|
3,297
|
-
|
3,297
|
*
|
Harold
Lynn Keene**
|
4,391,116
(7)
|
-
|
4,391,116
|
18.80%
|
Michael
G. McGlothlin
|
458,267
|
-
|
458,267
|
1.96%
|
Fred
W. Meade
|
44,609
(8)
|
-
|
44,609
|
*
|
Joseph
D. Pennington
|
-
|
-
|
-
|
*
|
Frank
Sexton, Jr.
|
54,035
(9)
|
-
|
54,035
|
*
|
B.
Scott White
|
4,889,567
(10)
|
11,646
|
4,901,213
|
20.97%
|
Karen
D. Wimmer
|
3,334
|
666
|
4,000
|
*
|
All
Directors and Executive Officers as a group (14 persons)
|
10,272,043
|
30,639
|
10,302,682
|
44.05%
|
* Percentage
of ownership is less than one percent of the outstanding shares of Common Stock.
** Members of the Executive Committee.
(1) Except as otherwise indicated, each director, director nominee or executive officer has sole voting power and investment power with respect to the shares shown.
(2) Common stock warrants
are exercisable immediately at $1.75 per share for five years from the date of issuance.
(3) Based on 23,355,457 shares of Common Stock issued and outstanding
on March 22, 2017.
(4) Includes 8,201 shares held by Mr. Carter's wife.
(5) Includes 51,193 shares
held by Mr. Cox's wife.
(6) Includes 2,860 shares
held by Mr. Gent's wife, 2,860 shares Mr. Gent holds as custodian for his child, and 4,800 held jointly with his wife.
(7) Includes 975,000 shares held by H.L. Keene, L.L.C. in which Mr. Keene is the sole manager and 500 shares held by The Harold Lynn Keene Trust.
(8) Includes 36,036 shares
Mr. Meade holds jointly with his wife.
(9) Includes 440 shares Mr. Sexton holds jointly
with his child.
(10) Includes 2,061,666 shares held by SBTB, L.P. in which Mr. White is a general
partner, 874,842 shares held by Sky Investments, LLC in which Mr. White is the manager, 172,160 shares held by Mr. White's
wife and 9,056 shares Mr. White holds as trustee.
Security Ownership of Certain Beneficial
Owners
As of March 22, 2017, the
following persons are known to us that beneficially own five percent or more of the Company’s stock. Other than as disclosed
below, the Company is not aware of any person or group, as those terms are defined in the Securities Exchange Act of 1934, who
beneficially owned more than 5% of the outstanding Common Stock as of March 22, 2017.
Name
and Address of Beneficial Owner
|
|
Amount
and Nature of
Beneficial
Ownership
|
|
Percent
of Class
|
Harold
Lynn Keene
Post
Office Box 1320
Lebanon,
Virginia 24260
|
|
4,391,116
|
|
18.80%
|
Richard
G. Preservati, Sr.
Post
Office Box 1003
Princeton,
West Virginia 24740
Blaine
Scott White
Post
Office Box 520
Castlewood,
Virginia 24224
|
|
3,039,999
4,901,213
|
|
12.74%
20.97%
|
Section 16(a) Beneficial Ownership Reporting
Compliance
Section 16(a) of the Securities Exchange Act
of 1934 requires our directors and certain officers to file reports with the Securities and Exchange Commission (“SEC”)
indicating their holdings of, or transactions in, our equity securities. Based on a review of these reports and written
representations furnished to us, we believe that our directors and officers complied with all Section 16(a) filing requirements
with respect to 2016.
Director Compensation
The following table sets forth, as of December
31, 2016, certain information with respect to director compensation for each of the members of the Board of Directors. The directors
did not receive any other compensation during 2016 for their services as directors on the Board.
Director
Compensation for 2016
|
Name
|
Fees
Earned or
Paid
in Cash ($)
|
Total
($)
|
Tim
W. Ball
|
8,800
|
8,800
|
Joe
M. Carter
|
14,400
|
14,400
|
John
D. Cox
|
13,200
|
13,200
|
Charles
H. Gent, Jr.
|
11,200
|
11,200
|
Eugene
Hearl
|
15,400
|
15,400
|
Harold
Lynn Keene, Jr.
|
16,400
|
16,400
|
Michael
G. McGlothlin
|
9,400
|
9,400
|
Fred
W. Meade
|
13,800
|
13,800
|
B.
Scott White
|
16,400
|
16,400
|
In 2016, each director was paid $700 per month
for service on the Board of Directors and $200 per committee meeting for each committee of which a director is a member. For 2017,
the fees remain the same.
CORPORATE GOVERNANCE
General
Our business and affairs are managed under
the direction of the Board of Directors in accordance with the Virginia Stock Corporation Act and our Articles of Incorporation
and Bylaws. Members of the Board are kept informed of our business through discussions with our executive officers and other officers,
by reviewing materials provided to them and by participating in meetings of the Board and its committees.
The Board of Directors has determined that
all nine members are independent as defined by the listing standards of the NASDAQ Stock Market (“NASDAQ”). In
reaching this conclusion, the Board of Directors considered that the Company and its subsidiary bank may conduct business with
companies of which certain members of the Board of Directors or members of their immediate families are or were directors or officers;
however, in 2016, no transactions occurred with such companies.
Code of Ethics
The Board of Directors has adopted a Code of
Ethics for our directors, executive officers, and senior officers who have financial responsibilities. The Code of Ethics is designed
to promote, among other things, honest and ethical conduct, proper disclosure of financial information in our periodic reports,
and compliance with applicable laws, rules and regulations by our senior officers who have financial responsibilities.
A copy of the Code of Ethics may be obtained
on our website at
www.npbankshares.com/code-of-ethics.aspx
.
Whistleblower Procedures
The Audit Committee and the Board of Directors
have approved procedures for the receipt, retention and treatment of reports or complaints to the Audit Committee regarding accounting,
internal accounting controls, auditing matters and legal or regulatory matters. There are also procedures for the submission
by Company or Bank employees of confidential, anonymous reports to the Audit Committee of concerns regarding questionable accounting
or auditing matters.
Communications with Directors
Any director may be contacted by writing to
him c/o Post Office Box 1810, Honaker, Virginia 24260. Communications to the directors as a group may be sent to the same address,
c/o the Secretary of the Company. We promptly forward, without screening, all such correspondence to the indicated directors.
Board Leadership
The Company’s and the Bank’s Board
of Directors are composed of non-management members.
The Chairman of the Board is occupied by a
non-management member and typically rotates every two years. The Board believes that the principal role of the President and Chief
Executive Officer is to manage the business of the company in a safe, sound, and profitable manner. The role of the
Board, including its Chairman, is to provide independent oversight of the President and Chief Executive Officer, to oversee the
business and affairs of the organization for the benefit of its shareholders, to adopt or approve major policies and procedures,
to oversee financial reporting and compliance, and to balance the interests of the Company’s constituencies including shareholders,
customers, employees, and communities. Executive sessions of the Board are held periodically with the absence of the Chief Executive
Officer.
The Company’s leadership structure consists
of varying levels of authority, responsibility and risk exposure that increase through each incremental level of management hierarchy.
The senior management team reports directly to the CEO and meets collectively on a regular basis, and dialogs daily regarding
the Bank’s activities. The senior management team manages every aspect of the Bank’s activities and acts as a primary
communications medium across all functional areas of the organization. This structure enables information and management
guidance to flow easily up, down and horizontally.
Board’s Role in Risk Oversight
The Board is intimately engaged in overseeing
the risk management of the Company, including credit risk, liquidity risk, interest rate risk, price risk, operational risk, compliance
risk, strategic risk, and reputational risk. This is accomplished through a strong committee system consisting of the Asset Liability
(“ALCO”) Committee, the Director’s Loan Committee, the Compensation Committee, the Risk and Compliance Committee
and the Audit Committee; each of which meets with scheduled frequency with its senior staff counterparts. In addition, the leadership
structure of the Board of Directors (independent chair) supports the Board’s independent risk oversight role. Each of these
committees is composed of directors who are familiar with their areas of responsibility. Senior management is responsible for
day-to-day risk management in each functional area and report at each full Board meeting on the risk-related matters within their
area of responsibility. In addition, the Board receives and reviews minutes from each committee and additional commentary
from each respective committee chair is provided as deemed appropriate. Data reviewed are both historical and forward-looking
to enable the Board to look at both recent outcomes and to the likelihood of various future outcomes. The entire executive management
team attends all Board meetings and remains for the duration of the meeting except when the Board goes into Executive Session.
Board Committees & Committee Meeting Attendance
The Boards of the Company and the Bank are
identical in membership. The Boards have standing executive, nominating, audit and compensation committees (or committees
performing similar functions) as listed below. The Board of Directors has adopted charters for its Audit Committee, Compensation
Committee, ALCO Committee, and Nominating Committee to define the duties and responsibilities of those committees. These charters
are available on our website at
www.npbankshares.com
. The Board had established a Risk and Compliance Committee in conjunction
with its formal written agreement with the Federal Reserve Bank of Richmond and the Virginia State Corporation Commission Bureau
of Financial Institutions (“Written Agreement”.) The Written Agreement was terminated effective January 20, 2016;
however, the Risk and Compliance Committee still continues as a committee of the Company and Bank. The Board may, from time to
time, establish committees for specific, designated purposes.
There were twelve meetings of the Board of
Directors in 2016. Each
of our directors attended at least 75% of the aggregate of the total number
of meetings of the Board of Directors and the total number of meetings of committees on which the director served. We encourage,
but do not require, members of the Board of Directors to attend the annual meeting of shareholders. All of the directors attended
the 2016 annual meeting of shareholders.
Executive Committee
- The Company
and the Bank also have an Executive Committee which is chaired by the Board Chair. Its members include Messrs. Keene (Chairman),
Gent, Carter, and Cox. The members are elected annually by the full Board, as are the members of every standing Committee. The
Executive Committee, when necessary, is empowered to act on behalf of the full Board between scheduled Board meetings. The Executive
Committee did not meet in 2016.
Nominating Committee
-
The
Nominating Committee was created in May 2006 to propose prospective members for nomination to the Board of Directors. All decisions
by the Nominating Committee relating to the nominations of prospective Board members are reported to the full Board of Directors.
The members of the Nominating Committee include Messrs. McGlothlin (Chairman), Cox, Ball, Meade and White. All of the members
of the Committee are independent as defined in the NASDAQ Stock Market Listing Rules. The Committee met once in 2016 at which
time the recommendations for nominees in the 2016 proxy were discussed for the Board of Directors’ approval.
Shareholders entitled to vote for the election
of directors may submit candidates for consideration by the Nominating Committee if the Committee receives timely written notice,
in proper form, for each such recommended director candidate. If the notice is not timely and in proper form, the nominee will
not be considered. Any candidates recommended by a shareholder will be reviewed and considered in the same manner as all other
director candidates considered by the Board.
In accordance with our Bylaws,
any shareholder entitled to vote in the election of directors may directly nominate one or more persons for election as director(s)
at an annual meeting if the nomination is made in writing. Any such shareholder nominations must be received by our Secretary
within the timeframe set forth in “Proposals for 2018 Annual Meeting of Shareholders” below. To be in proper form,
the notice must include (a) the name and address of the shareholder who intends to make the nomination of the person(s) and of
the person(s) to be nominated; (b) a representation that the shareholder is the owner of our stock entitled to vote at such meeting
and intends to appear in person or by proxy at the meeting to nominate the person(s) specified in the notice; (c) a description
of all arrangements or understandings between the shareholder and each nominee for director and any other person(s) (naming such
person(s)) pursuant to which the nomination(s) are to be made by the shareholder; (d) such other information regarding such nominee
proposed by such shareholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission, had the nominee been nominated, or intended to be nominated, by the Board of Directors, including,
but not limited to, the amount and nature of his beneficial ownership of our securities and his principal occupation for the past
five years; and (e) the written consent of each nominee to serve as a director if so elected.
The Nominating Committee considers, at a minimum,
the following factors in recommending to the Board potential new directors, including candidates submitted by shareholders, or
the continued service of existing directors:
|
·
|
the
ability of the prospective nominee to represent the interests of our shareholders;
|
|
·
|
the
prospective nominee’s standards of integrity, commitment and independence of thought
and judgment;
|
|
·
|
the
prospective nominee’s ability to dedicate sufficient time, energy and attention
to the diligent performance of his or her duties, including the prospective nominee’s
service on other public company boards; and
|
|
·
|
the
extent to which the prospective nominee contributes to the range of talent, skill and
expertise appropriate for the Board of Directors.
|
The Board’s priorities in evaluating
Board candidates and the relative weight it gives to any given characteristic will vary from time to time based on the particular
needs of the Board and us at the time and based on the expertise of the incumbent members of the Board of Directors. Diversity
was not considered as a factor in selecting the current directors for nomination for an additional term.
To identify candidates
for nomination, the Nominating Committee does the following:
|
·
|
Establish
criteria and qualifications for the selection of new directors to serve on the board.
|
|
·
|
Identify
individuals believed to be qualified as candidates to serve on the Board (including from
among those individuals recommended by shareholders) and recommend the candidates for
any directorships to be filled by the Board or by the shareholders at an annual or special
meeting. In addition, the Committee reviews and makes recommendations to the Board with
respect to whether members of the Board should stand for re-election.
|
|
·
|
Conduct
all necessary and appropriate inquiries into the backgrounds and qualifications of possible
candidates as directors. In that connection, the Committee has sole authority to retain
and to terminate any search firm used to assist it in identifying candidates to serve
as directors of the Company, including sole authority to approve the fees payable to
such search firm and any other terms of retention.
|
|
·
|
Review
and make recommendations to the Board, as the Committee deems appropriate regarding the
composition and size of the Board in order to ensure the Board has the requisite expertise
and its membership consists of persons with sufficient expertise and independent backgrounds
and always consists of a majority of independent directors in accordance with NASDAQ
listing standards.
|
Compensation
Committee
-
The Compensation Committee of the Company and the Bank reviews management’s performance and compensation, and reviews
and sets guidelines for compensation of all employees, including the Company’s executive officers. Currently, the individuals
serving as Chief Executive Officer and as executive officers of the Company also serve in the same capacities, respectively, for
the Bank, except for Ms. Wimmer and Mr. Beard, who only serve as executive officers of the Bank and not the Company. These executive
officers are presently compensated for services rendered by them to the Bank, but not for services rendered by them to the Company.
All decisions by the Compensation Committee relating to the compensation of our executive officers are reported to the full Board
of Directors. Except for his own compensation, Mr. Asbury provides information and advice to the Compensation Committee regarding
the form and amount of compensation of executive officers. No other executive officer participates in this process with the Committee.
The Compensation Committee may not delegate its authority and has not utilized a consultant.
The Chief Executive Officer does not set his
own salary or bonus. The CEO sets the salary and bonuses of the other named executive officers’, and provides input to the
Committee regarding his own but does not participate in the Compensation Committee discussions or approval of his own compensation.
Recommendations are made by the Committee and the final decision resides with the Board of Directors.
The Compensation Committee and Board attempt
to align performance and compensation based upon strategic goals that are incorporated in the Company’s budget as approved
by the Board of Directors. We believe that our conservative but competitive compensation policies and practices are unlikely to
create risks that are reasonably likely to have a materially adverse effect on New Peoples. As discussed in this Proxy Statement,
most of the compensation that we pay consists of annually-determined salaries and bonuses. This permits the Board of Directors
to review annually the budget versus actual performance, internal policy limits for various key performance ratios, asset quality
ratios, interest rate sensitivity shocks, liquidity management, and capital levels before compensation is set. All of these components
together with continuation of employment are assessed each year. It is at the discretion of the Board of Directors to pay cash
bonuses or any other incentives if goals are met or exceeded. So, for example, in 2016 and 2015 the Board did not pay bonuses
or any other incentives based compensation to any employee except for a $500 Christmas bonus to all employees. We believe that
this substantially contemporaneous approach to determining compensation is not likely to encourage excessive risk taking and in
fact allows the Board to align compensation with business factors such as acceptable versus unacceptable risk taking.
The members of the Compensation Committee are
Messrs. Cox (Chairman), Ball, Gent, Hearl, Meade, and White all of whom the Board in its business judgment has determined are
independent as defined by the NASDAQ Stock Market Listing Rules. The Compensation Committee held two meetings in 2016. For additional
information regarding executive compensation and the Compensation Committee, see “Executive Compensation and Related Party
Transactions” below.
Audit Committee
-
The
Audit Committee assists the Board of Directors in fulfilling the Board’s oversight responsibility to the shareholders relating
to the integrity of our financial statements, our compliance with legal and regulatory requirements for our accounting and reporting
practices, the qualifications, independence and performance of our independent public accountants and the performance of the internal
audit function. The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the
work of the our independent public accountants engaged for the purpose of preparing or issuing an audit report or performing other
audit, review or attestation services for us. The Board of Directors and the Audit Committee have adopted a written charter for
the Audit Committee.
The members of the Audit Committee are Messrs. Carter,
Cox, Gent, Hearl, Keene (Chairman) and White. The Board in its business judgment has determined that all of the members
of the Audit Committee are independent as defined by NASDAQ Stock Market Listing Rules for audit committee members and applicable
SEC regulations. The Board of Directors also has determined that all of the members of the Audit Committee have sufficient
knowledge in financial and auditing matters to serve on the Audit Committee and that Mr. Keene qualifies as an audit committee
financial expert as defined by SEC regulations who is independent as defined in the NASDAQ Stock Market Rules for audit committee
members.
The Audit Committee held ten meetings in 2016.
For additional information regarding the Audit Committee, see “Audit Information – Audit Committee Report” below.
Risk and Compliance Committee
– The Risk and Compliance Committee of the Company and the Bank provided oversight of the Company’s and Bank’s
compliance with the Written Agreement entered into on July 29, 2010 with the banking regulators. Though the Written Agreement
was terminated effective January 20, 2016, the Risk and Compliance Committee continues as a committee to provide risk and regulatory
oversight for the Company and Bank. This committee oversees the Bank’s risk management’s practices to ensure that
management has a process in place to identify, monitor, and manage key risks. Other areas the committee will assist the board
in complying with are as follows:
|
·
|
Set
strategy and identify key risk related to Strategic Imperatives;
|
|
·
|
Monitor
and oversee management’s executions of the Strategic Plan;
|
|
·
|
Set
the Risk Appetite for the Holding Company and Subsidiaries;
|
|
·
|
Understand
the Bank’s System of Risk Management and Control;
|
|
·
|
Oversee
and approve the Enterprise Risk Management Policy; and
|
|
·
|
Have
direct oversight responsibility of Strategic Risk, Reputational Risk, Operational Risk
and Compliance Risk.
|
This Committee met five times in 2016 and reviewed
the Company’s and Bank’s risk management progress, processes, and practices. The Committee consists of Chairman B.
Scott White, John D. Cox, Charles H. Gent Jr., Eugene S. Hearl, Harold Lynn Keene, and Michael G. McGlothlin.
EXECUTIVE COMPENSATION AND RELATED PARTY
TRANSACTIONS
The following table is a summary of compensation
that we paid for the fiscal years ended December 31, 2016 and 2015 to the named executive officers in all capacities in which
they served:
Summary
Compensation Table
Fiscal
Years 2016 and 2015
Name
and
Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
(1)
|
Change
in Pension Value and Nonqualified
Deferred
Compensation
Earnings
($)
(2)
|
All
Other
Compensation
($)
(3)
|
Total
($)
|
C.
Todd Asbury
President
and Chief Executive
Officer
|
2016
2015
|
255,000
250,000
|
500
500
|
-
-
|
14,512
13,737
|
270,012
264,237
|
Frank
Sexton, Jr.
(4)
Executive
Vice President and
Chief
Operating Officer
|
2016
2015
|
179,604
176,348
|
500
500
|
-
-
|
11,897
11,615
|
192,001
188,463
|
Karen
D. Wimmer
(5)
Executive
Vice President and
Director
of Special Assets
|
2016
2015
|
164,800
164,654
|
500
500
|
-
-
|
8,512
7,573
|
173,812
172,727
|
|
|
|
|
|
|
|
(1)
All
employees received a Christmas bonus at the discretion of the Board of Directors.
(2)
These amounts represent the change in the actuarial present value of the accumulated benefit under the salary continuation
agreement for Mr. Sexton.
(3)
All benefits that might
be considered of a personal nature did not exceed $10,000.
All other compensation includes amounts
for Mr. Asbury representing matching contributions under the Bank’s defined contribution plan of $7,855 and $7,699 in 2016
and 2015, respectively; flexible spending amounts contributions for cafeteria plan employee benefits of $5,074 and $5,049 in 2016
and 2015, respectively; group term life insurance premiums of $858 and $480 in 2016 and 2015, respectively; and long term disability
insurance premiums of $725 and $509 in 2016 and 2015, respectively.
All other compensation includes amounts
for Mr. Sexton representing matching contributions under the Bank’s defined contribution plan of $5,706 and $5,592 in 2016
and 2015, respectively; contributions for cafeteria plan employee benefits of $5,074 and $5,049 in 2016 and 2015, respectively;
group term life insurance premiums of $606 and $473 for 2016 and 2015, respectively; and long term disability insurance premiums
of $511 and $501 in 2016 and 2015, respectively.
All other compensation includes amounts
for Ms. Wimmer representing matching contributions under the Bank’s defined contribution plan of $5,068 and $4,271 in 2016
and 2015, respectively; contributions for cafeteria plan employee benefits of $2,400 for 2016 and 2015, respectively; group term
life insurance premiums of $566 and $438 in 2016 and 2015, respectively; and long term disability insurance premiums of $478 and
$464 in 2016 and 2015, respectively.
(4)
Mr. Sexton was appointed Interim Chief Financial Officer, Secretary and Treasurer of the Company and Bank on December 17, 2014 and served in this capacity until April 26, 2015.
(5)
Ms. Wimmer became Executive Vice President and Director of Special Assets on January 25, 2016. Ms. Wimmer served as Executive Vice President and Chief Credit Officer of the Bank effective February 28, 2014 and her compensation reflects her pay for 2015 in that capacity.
Narrative Disclosure to Summary Compensation
Table
Base Salary and Bonus
Our performance, in general, is considered
in determining the amount of annual salary increases. The Compensation Committee sets base salaries at levels competitive with
senior executives with comparable qualifications, experience and responsibilities, of similarly sized banks. The Virginia Bankers
Association Salary Survey was used for comparison of salaries paid for similar positions and responsibilities. The Compensation
Committee also takes into consideration our strategic plans and Company performance, including but not limited to, branch performance,
asset quality, capital management, core deposit growth, efficiency, regulatory compliance, and earnings.
The named executive officers’
annual salary is based on the above criteria as well as an assessment of their past performance and expected future contributions.
In addition to the internal measures above, the Board of Directors also reviews our financial performance in relation to peer
group averages in the Virginia Bankers’ Association Salary Survey. A subjective approach is used in its evaluation of these
factors, and therefore the Compensation Committee does not rely on a formula or weights of specific factors.
The annual base salary for
Ms. Wimmer was increased to $164,800 in May of 2015. Mr. Sexton’s salary was increased to an annual base amount of $179,875
in February of 2016. Mr. Asbury’s salary was increased to an annual base of $255,000 in December of 2015.
Christmas bonuses were paid
in the years 2016 and 2015 to all employees of the Company. No incentive bonuses have been paid to named executives paid for the
years 2009 through 2016.
Other Elements of Compensation
Each named executive officer, with the exception
of Mr. Pennington, is provided with the use of a company vehicle.
The Bank has established a qualified defined
contribution plan that covers all full time employees including the named executive officers. Matching contributions paid by the
Bank to the named executive officers is detailed in the Summary Compensation Table above.
On December 18, 2002, the Bank entered into
a salary continuation agreement with Frank Sexton, Jr. If Mr. Sexton were to terminate his employment after his 65th birthday,
his benefit would be $40,500 annually to be paid in 180 monthly installments for 15 years; total value is $366,348 (as of November
1, 2016).
Employment Agreements
On December 1, 2016, the Company and the Bank
entered into an Employment Agreement (the “Agreement”) with Mr. Asbury. The Agreement is effective as of December
1, 2016. The term of the Agreement ends on December 1, 2019, unless earlier terminated, and the Agreement automatically renews
for successive two year terms (unless terminated prior to the commencement of the renewal term).
Under Mr. Asbury’s Agreement, he is entitled
to an annual base salary of $255,000 and an annual performance bonus, if any, in an amount approved by New Peoples’ Board
of Directors. Mr. Asbury is also eligible to participate in any equity and/or other long-term compensation programs established
by the Company as well as employee benefits, executive benefits, or perquisites approved by the Board and reimbursement of expenses
and vacation as set forth in his Agreement.
The Agreement provides Mr. Asbury with severance
benefits in the event of termination of his employment under certain circumstances and contains certain confidentiality and noncompetition
provisions.
The Agreement provides that the executive’s
employment may be terminated by the Company “With Cause” (as defined in the Agreement) or without Cause, or by the
executive for “Good Reason” (as defined in the Agreement) or without Good Reason. The executive’s employment
may be terminated upon a determination that the executive is disabled or automatically upon the executive’s death. If an
executive’s employment is terminated by the Company for Cause or by the executive for Other than Good Reason, then under
his Agreement, the executive will be entitled to receive any accrued but unpaid salary, bonus or other benefits or awards, and
expense reimbursement. The foregoing amounts are referred to collectively as the “Accrued Obligations.” If an executive’s
employment is terminated by the Company without Cause or by the executive for Good Reason, then, in addition to the Accrued Obligations,
the executive will be entitled under his Agreement to receive the following: (i) if not connected to a Change in Control (as defined
in the Agreement), a severance payment equal to two times the executive’s base salary and bonus; or (ii) if within 24 months
after a Change in Control, a severance payment equal to three times the executive’s base salary and bonus unless the Change
in Control is a Sale of the Company (as defined in the Agreement) in which case the severance payment is based on certain percentages
of the Company’s book value received by the Company’s shareholders in the transaction.
Neither the Company nor the Bank has entered into an employment
agreement with any of the other named executive officers, except as discussed above.
Employee Incentive Plans
In December of 2015, the Board of Directors
approved two employee incentive plans that were in effect for 2016; a Short-Term Bonus Plan and Company-Wide Profit Sharing Plan.
The Short-Term Bonus Plan is designed to reward
and recognize individual employees “on-the-spot” for extraordinary performance/accomplishments. These bonuses
are to individual employees in amounts ranging from $100 to $1,000 (with an aggregate annual amount for all short term bonuses
not to exceed $25,000) and are awarded on recommendation of senior officers with the approval of the President and Chief
Executive Officer. During 2016 total bonuses of $11,300 were paid out under the Short-Term Bonus Plan.
The second plan is a Company-Wide Profit Sharing
Plan which allows all employees of New Peoples Bank to share in the profits of the Bank when strategic goals are met. For
2016 the Board of Directors budgeted a total of $225,000 for this plan. The Plan is designed to reward employees a percentage
of his or her annual salary, or a flat dollar amount for commissioned or lower-wage employees, when the Bank meets the budgeted
net income for the year. If the Bank’s net income exceeds the budgeted net income, the profit-sharing pool is increased
by 10% of the excess (but in no event will the total bonus pool exceed 10% of reportable net income in any year). Similarly, if
the Bank does not make its budgeted net income for the year, the bonus pool is reduced by the shortfall which is added back into
net income until it equals the budgeted amount or the bonus pool is exhausted. The Board of Directors has established an award
schedule that allocates the bonus pool by percentage based on the employee’s position with the Bank. No bonuses were
awarded under this plan for 2016 that would have been paid out in 2017.
For 2017, both the Short-Term Bonus Plan and
the Company-Wide Profit Sharing Plan are still in effect. Under the Short-Term Bonus Plan the aggregate annual amount for all
short term bonuses will not exceed $25,000 in 2017. For 2017 the Board of Directors budgeted a total amount of $225,000
for the Company-Wide Profit Sharing Plan.
Certain Relationships and Related Transactions
Certain of our directors,
executive officers, and shareholders know to us who own beneficially 5% or more of our stock (and their immediate family members)
have had, and expect to have in the future, lending transactions with us. Any extensions of credit to our directors, executive
officers, and such shareholders are made in the ordinary course of business, were required to be on substantially the same terms,
including interest rates and collateral, as comparable transactions to non-related parties at the time of the extension of credit,
and did not involve more than the normal risk of collectability or present other unfavorable features, pursuant to Regulation
O – Loans to Executive Officers, Directors and Principal Shareholders of Member Banks.
We have not adopted a formal policy that covers
the review and approval of related person transactions by our Board of Directors. The Board, however, does review all related
party transactions that are proposed to it for approval. During such a review, the Board will consider, among other things, the
related person’s relationship to us, the facts and the circumstances of the proposed transaction, the aggregate dollar amount
of the transaction, the related person’s relationship to the transaction and any other material information. Our Audit Committee
has the responsibility to review significant conflicts of interest involving directors or executive officers.
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
Elliott Davis Decosimo, LLC (“Elliott
Davis Decosimo”) served as our independent registered public accountants with respect to the audit of our consolidated financial
statements for the fiscal year ended December 31, 2016.
Elliott Davis Decosimo’s report on the
Company’s consolidated financial statements for the fiscal years ended December 31, 2016 and 2015 does not contain any adverse
opinion or disclaimer of opinion, nor are they qualified or modified as to uncertainty, audit scope, or accounting principles.
The Audit Committee is recommending shareholder approval of the appointment of Elliott Davis Decosimo as the Company’s independent
registered public accounting firm for 2017.
AUDIT INFORMATION
The Audit Committee operates under a written
charter adopted by the Board of Directors. A copy of the Audit Committee charter can be found on our website
www.npbankshares.com
.
2016 and 2015 Fees of Independent Registered Public Accountants
– Elliott Davis Decosimo
Audit Fees
- The aggregate fees billed
by Elliott Davis Decosimo for professional services rendered for the audit of our annual financial statements for the fiscal years
ended December 31, 2016 and 2015, and for the review of the financial statements included in the Company’s Quarterly Reports
on Form 10-Q, and services that are normally provided in connection with statutory and regulatory filings and engagements, for
fiscal years ending December 31, 2016 and 2015 were $105,786 and $105,327, respectively.
Audit Related Fees
- The aggregate fees
billed by Elliott Davis Decosimo for professional services for assurance and related services that are reasonably related to the
performance of the audit or review of our financial statements and not reported under the heading “Audit Fees” above
for the fiscal years ended December 31, 2016 and 2015 were $11,350 and $9,500, respectively. For both years 2016 and 2015, the
fees were incurred related to audits of the 401-k benefit plan.
Tax Fees
- The aggregate fees billed
by Elliott Davis Decosimo for professional services for tax compliance, tax advice and tax planning for the fiscal years ended
December 31, 2016 and 2015 were $12,150 and $20,130, respectively. During 2016 and 2015, these services included preparation of
tax returns as necessary and for NPB Capital Trusts I & 2, assistance provided for an IRS tax audit, as well as tax compliance
services.
All Other Fees
- None.
Pre-Approved Services
- All audit related
services, tax services and other services were pre-approved by the Audit Committee, which concluded that the provision of such
services by Elliott Davis Decosimo was compatible with the maintenance of that firm’s independence in the conduct of their
auditing functions. The Audit Committee has a policy that provides for the pre-approval of all services to be provided by its
independent registered public accounting firm. The Audit Committee does not delegate to management its responsibility to pre-approve
services performed by the independent registered public accounting firm. All of the services mentioned above were pre-approved
by the Audit Committee.
Audit Committee Report
The Audit Committee has furnished the following
report:
Management is responsible for our internal
controls, financial reporting process and compliance with laws and regulations and ethical business standards. Our independent
public accountants are responsible for performing an independent audit of our consolidated financial statements in accordance
with generally accepted auditing standards and issuing a report thereon. The Audit Committee’s responsibility is to monitor
and oversee these processes on behalf of the Board of Directors.
In this context, the Audit Committee has reviewed
and discussed with management and Elliott Davis Decosimo, our independent public accountants for 2016, the audited financial statements.
Management represented to the Audit Committee that our consolidated financial statements were prepared in accordance with accounting
principles generally accepted in the United States.
The Audit Committee has discussed with the
independent public accountants the matters required to be discussed by Statement on Auditing Standards No. 61 (Professional Standards),
as amended, including its judgments about the quality, not just the acceptability, of our accounting principles and underlying
estimates in our consolidated financial statements; all critical accounting policies and practices to be used; all alternative
treatments within generally accepted accounting principles for policies and practices related to material items that have been
discussed with our management; and other material written communication between the independent public accountants and our management,
such as any management letter or schedule of unadjusted differences.
In addition, the Audit Committee has received
from the independent public accountants the written disclosures and the letter required by applicable requirements of the Public
Company Accounting Oversight Board regarding the independent accountant’s communications with the audit committee concerning
independence, and discussed with them their independence from us and our management. Moreover, the Audit Committee has considered
whether the independent public accountants’ provision of other non-audit services to us is compatible with maintaining their
independence from us.
In reliance on the reviews and discussions
referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included
in our Annual Report on the Form 10-K for the fiscal year ended December 31, 2016, for filing with the Securities and Exchange
Commission. By recommending to the Board of Directors that the audited financial statements be so included, the Audit Committee
is not opining on the accuracy, completeness or presentation of the information contained in the audited financial statements.
Members of the Audit Committee
Joe M. Carter
John D. Cox
Charles H. Gent, Jr.
Eugene S. Hearl
Harold Lynn Keene (Chairman)
B. Scott White
PROPOSALS FOR 2018 ANNUAL MEETING OF SHAREHOLDERS
As discussed above under “Director Nomination
Process,” our Bylaws prescribe the procedures that a shareholder must follow to nominate a director. For a shareholder to
nominate a candidate for director at the 2018 Annual Meeting of Shareholders, notice of the nomination must be received by our
Secretary no later than March 2, 2018. The notice must describe various matters regarding the nominee and the shareholder giving
the notice. Any shareholder may obtain a copy of our Bylaws, without charge, upon written request to our Secretary.
In accordance with SEC regulations,
if any shareholder intends to present a proposal to be considered for inclusion in our proxy materials for our 2017 Annual Meeting,
the proposal must be in proper form and must be received at our principal executive offices at 67 Commerce Drive, Honaker, Virginia
24260, no later than January 15, 2018.
In accordance with our Bylaws,
if any shareholder intends to present a proposal (other than a director nomination) at the 2018 Annual Meeting of Shareholders
outside of the proxy statement process, notice of the shareholder’s intention to present the proposal must be received by
our Secretary no later than March 2, 2018. The notice must include a description of the proposed business, the reasons therefor,
and other specified matters. The proxy solicited by the Board of Directors for the 2018 Annual Meeting will confer discretionary
authority to vote on any shareholder proposal presented at the meeting if we have not received notice of such proposal by March
2, 2018, in writing delivered to our Secretary.
OTHER MATTERS
THE ANNUAL REPORT ON FORM 10-K FOR THE FISCAL
YEAR ENDED DECEMBER 31, 2016 (THE “FORM 10-K”), AS FILED WITH THE SEC IS BEING MAILED TO SHAREHOLDERS WITH THIS PROXY
STATEMENT. A COPY OF OUR ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2016 (EXCLUDING EXHIBITS)
IS ALSO BEING MAILED WITH THIS PROXY STATEMENT AS FILED WITH THE SEC. A COPY OF THE FORM 10-K MAY ALSO BE OBTAINED WITHOUT CHARGE
BY WRITING TO OUR SECRETARY, WHOSE ADDRESS IS POST OFFICE BOX 1810, HONAKER, VIRGINIA 24260.
New Peoples Bankshares (PK) (USOTC:NWPP)
Historical Stock Chart
From Mar 2024 to Apr 2024
New Peoples Bankshares (PK) (USOTC:NWPP)
Historical Stock Chart
From Apr 2023 to Apr 2024