PROXY STATEMENT
2021 ANNUAL MEETING OF SHAREHOLDERS
This summary highlights certain information contained elsewhere in this proxy statement. This summary does not contain all of the information you should consider. You should
read the entire proxy statement carefully before voting.
ANNUAL MEETING OF SHAREHOLDERS
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Time and date:
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9:00 a.m., Eastern Time, on Tuesday, May 18, 2021
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Record date:
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Close of business on March 16, 2021
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Attendance:
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Shareholders as of the record date may participate in the Annual Meeting:
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By Webcast: On the Internet, access www.virtualshareholdermeeting.com/BHB2021 and enter the 16-digit control number included on your proxy card
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In Person:
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Bar Harbor Bank & Trust
82 Main Street
Bar Harbor, Maine
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How to vote:
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Over the Internet at www.proxyvote.com, by telephone at 1-800-690-6903, by webcast or in person at the Annual Meeting, by email at bhb@allianceadvisors.com,
or by mail addressed to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. The deadline for transmitting Internet, telephone, and email voting is up until 11:59 p.m. Eastern Time on May 17, 2021 for shares held directly and by
11:59 p.m. Eastern Time on May 13, 2021 for shares held in a Plan. Please have your proxy card in hand when utilizing these other forms of voting.
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Votes
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Shareholders as of the record date will be entitled to one vote at the Annual Meeting for each outstanding share of common stock
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Common stock
outstanding as
of record date:
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14,945,097 shares
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VOTING MATTERS
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2021
PROXY
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Page 1
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Table of Contents
PROXY SUMMARY
The
Notice of Annual Meeting, proxy statement and proxy card were first mailed to our shareholders on or about April 1, 2021.
Shares
represented by properly executed proxies, including unmarked proxies, will be voted "FOR" each of the director nominees identified in Proposal 1
and "FOR" Proposals 2 and 3. Our Board knows of no business other than the matters described in this proxy statement that will be presented at the Annual
Meeting. To the extent that matters not known at this time may properly come before the Annual Meeting, absent instructions thereon to the contrary, the enclosed proxy will confer discretionary
authority with respect to such other matters. It is the intention of the persons named in the proxy to vote in accordance with the recommendations of the Board.
VOTING PROCEDURES AND METHOD OF COUNTING VOTES
Quorum Requirements
The presence at the Annual Meeting, either in person, by webcast or by proxy, of the holders of not less than a majority of the shares entitled to vote at the
Annual Meeting will constitute a quorum. Shareholders who attend the annual meeting may revoke their proxy and vote at the meeting if they choose to do so. If there is no quorum, the holders of a
majority of shares present at the Annual Meeting in person, by webcast or represented by proxy may adjourn the Annual Meeting to another date.
Voting Rights
Each share is entitled to cast one vote for each matter to be voted on at the meeting. Cumulative voting is not permitted.
Broker Non-Votes
A broker non-vote occurs when a broker or other nominee holder, such as a bank, submits a proxy representing shares that another person owns. Specifically,
that person has not provided voting instructions to the broker or other nominee holder. Brokers who hold their customers' shares in "street name," under the applicable rules of the NYSE American and
other self-regulatory organizations of which the brokers are members, may sign and submit proxies for these shares and may vote these shares on routine matters, which typically include the
ratification of the appointment of our independent registered public accounting firm.
Votes Required for Election or Approval
Each director will be elected by a plurality of the votes cast at the Annual Meeting by shareholders present by webcast, in person or represented by proxy and
entitled to vote. This means that individuals who receive the largest number of "FOR" votes will be elected as directors. A "withhold" vote will have no
effect on the vote. Brokers do not have discretionary authority to vote shares on this proposal and broker non-votes will have no effect on the vote.
The advisory vote to approve our 2020 named executive officers' compensation must be approved by a majority of the votes cast at the Annual Meeting by the
shareholders present by webcast, in person or represented by proxy and entitled to vote. Abstentions will have no effect on the outcome of the vote because they do not count as "votes cast". Brokers
do not have discretionary authority to vote shares on this proposal and broker non-votes will have no effect on the vote.
The ratification of RSM US LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021 must be approved
by a majority of the votes cast at the Annual Meeting by the shareholders present by webcast, in person or represented by proxy and entitled to vote. Abstentions will have no effect on the outcome of
the vote because they do not count as "votes cast". Because this proposal is considered a routine matter, discretionary votes by brokers will be counted.
Participation in Virtual Webcast of Annual Meeting:
In accordance with Maine law which does not allow virtual only shareholder meetings, the Annual Meeting will be held in-person at Bar Harbor Bank &
Trust, 82 Main Street, Bar Harbor, Maine. In view of the continuing public health impact of the COVID-19 pandemic and in keeping with the recommendations of the U.S. Centers for Disease Control and
Prevention, we strongly encourage shareholders to participate remotely through the virtual webcast and discourage anyone from participating in
person due to the potential public health risks involved. Voting without attending the meeting in person has never been easier, with the options to vote via the Internet, email, and telephone being
widely available, in addition to mailing in completed and signed proxy cards. If shareholders attend in person in a number that we determine may present a public health risk to the attendees, we
reserve the right to adjourn the meeting to a later date. Any shareholder who attends the annual meeting in person will be required to follow social distancing guidelines and wear a mask or cloth face
covering in accordance with the requirements of applicable laws, orders and the meeting venue, and may be subject to additional health screening requirements. No masks, face coverings or other
personal protective equipment will be provided at the meeting. While we are implementing measures to reduce the risks of COVID-19 transmission at the Annual Meeting, we cannot guarantee your safety
due to the nature of the virus.
The
live audio webcast of the Annual Meeting will be available for listening by the general public, but participation in the Annual Meeting, including voting shares and submitting questions, will be
limited to shareholders. To ensure they can participate, shareholders and proxyholders should visit www.virtualshareholdermeeting.com/BHB2021 and enter the 16-digit control number included on their
Notice of Internet Availability of Proxy Materials or proxy card. If you wish to participate in the meeting and your shares are held in street name, you must obtain, from the broker, bank or other
organization that holds your shares, the information required, including a 16-digit control number, in order for you to be able to participate in, and vote at, the Annual Meeting.
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Page 2
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2021
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Table of Contents
PROXY SUMMARY
Shareholders
can vote their shares and submit questions via the Internet during the Annual Meeting by accessing the annual meeting website at www.virtualshareholdermeeting.com/BHB2021. We will answer
any timely submitted questions on a matter to be voted on at the Annual Meeting before voting is closed on the matter. Following adjournment of the formal business of the Annual Meeting, we will
address appropriate general questions from shareholders regarding Bar Harbor Bankshares in the order in which the questions are received. Questions relating to shareholder proposals or Bar Harbor
Bankshares may be submitted in the field provided in the web portal at or before the time the questions are to be discussed. All questions received during the Annual Meeting will be presented as
submitted, uncensored and unedited, except that we may omit certain personal details for data protection issues and we may edit profanity or other inappropriate language. If we receive substantially
similar questions, we will group those questions together and provide a single response to avoid repetition.
Online
check-in to the Annual Meeting webcast will begin at 8:45 a.m., Eastern time, and you should allow ample time to log in to the meeting webcast and test your computer audio system.
During
online check-in and continuing through the length of the Annual Meeting, we will have technicians standing by to assist you with any technical difficulties you may have accessing the virtual
meeting. If you encounter any difficulties accessing the Annual Meeting during the check-in or at meeting time, you should call the technical support number available at
www.virtualshareholdermeeting.com/BHB2021.
We
have designed our virtual format to enhance, rather than constrain, shareholder access, participation and communication. For example, shareholder will be able to communicate with us during the
Annual Meeting so they can ask questions. An audio replay of the Annual Meeting will be made publicly available at https://www.barharbor.bank/shareholder-relations until our 2022 annual meeting of
shareholders.
This
audio replay will include each shareholder question addressed during the Annual Meeting. The virtual webcast platform is expected to accommodate most, if not all, shareholders. We will test the
platform technology before going "live" for the Annual Meeting webcast.
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2021
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Page 3
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Table of Contents
ENVIRONMENTAL AND SOCIAL GOVERNANCE
Environmental and Social Governance
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Our
Environmental, Social and Governance (ESG) practices embody our commitment to the people and places we serve. Through these principled business practices, we remain committed and connected to our
recognized corporate culture of positively impacting society.
In
early 2021, we published our initial Environmental, Social, and Governance Report which highlights our progress on a variety of ESG topics and is aligned with GRI and SASB frameworks. This Report
will guide our strategies and reporting as we move forward on our ESG journey. Following the core values that drive our culture, actions, and behaviors, actions both in and outside of the workplace
are fundamental in everything we do. This sets us apart and allows us to achieve our goals to generate a consistent value for our customers, employees, communities and shareholders. Our 2021
Environmental, Social and Governance Report can be found at www.barharbor.bank/esgreport2021.
Our Employees
We strive to create and maintain an employment environment that attracts and rewards the best talent available, encouraging diversity in hiring practices in
the communities in which we do business. We provide competitive compensation and benefits to our employees and we offer opportunities through training and development. We are committed to maintaining
a workplace where all employees feel valued for their contributions and fully engaged with our business. We believe that a workforce bringing together diverse perspectives, ideas and experiences based
on competencies leads to stronger financial performance and retention of the best talent.
Our Communities
Our strong commitment to our communities is underscored in our brand promise:
Bar
Harbor Bank & Trust is a true community Bank. We recognize, appreciate, and support the unique people and culture in the places we call home.
We
share these commitments during the onboarding experience for our new employees and through volunteer opportunities in the communities we serve. In addition to many volunteer hours dedicated, we
proudly promote a higher quality of life in the communities we serve and encourage our employees to participate in a charitable fund distributed throughout our region. We also support our employees
volunteering their time and talents in the communities where they live and work. We provide paid time off to specifically serve in the community. This community involvement is part of our required
brand behaviors and as such is incorporated into our annual performance reviews.
Environmental Sustainability
We are committed to pursuing initiatives that are smart for our business and good for the environment. We have continually focused on meaningful initiatives
that are aligned with our business goals to help reduce our environmental impact, drive operational cost reductions and demonstrate our ongoing commitment to environmental sustainability. Some of our
key initiatives include increasing energy efficiency, reducing carbon waste, recycling, and reduction in paper usage and storage.
Governance
We are committed to assuring and maintaining transparent governance through best board governance practices, which are subject to continuous review as such
practices evolve. We maintain strong risk oversight in management and at the Board level. We have ongoing dialogue with our shareholders, regulators, customers and employees. Our Board embodies
diversity, inclusion and mutual respect with a wide variety of business expertise.
We
believe operating our business responsibly and ethically puts us in a position to address the interests of our stakeholders while also creating long-term value for our shareholders. We remain
focused on continuing to advance these programs and making a positive, sustainable impact on the communities in which we live and conduct our business.
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Page 4
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2021
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Table of Contents
CORPORATE GOVERNANCE
Board Committees
We are committed to objective, independent leadership for our Board and each of its committees. Our Board believes active, objective and independent oversight of
management is central to:
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effective Board governance,
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serving the best interests of our company and our shareholders
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executing our strategic objectives
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creating long-term shareholder value
Our
Board has adopted rigorous governance practices and procedures focused on our corporate growth in accordance with the Investor Stewardship Group's Corporate Governance Principles for U.S. Listed
Companies. In addition, to maintain and enhance its independent oversight, our Board has implemented measures to further enrich Board composition, leadership and effectiveness. These measures align
our corporate governance structure with achieving our strategic objectives and enable our Board to effectively communicate and oversee our culture of compliance and in-depth risk management. Our Board
frequently discusses business and other matters with the senior management team, as well as principal advisors such as our legal counsel, auditors, consultants and financial advisors.
Board Leadership Structure
The position of Chairman of the Board is held by David Woodside. Curtis Simard serves as President and Chief Executive Officer. This leadership structure
allows Mr. Simard to focus on our operations and business strategy, while Mr. Woodside provides independent leadership for the Board together with an appropriate level of management
oversight, sets the agenda for meetings, and enables other directors to raise issues and concerns for Board consideration.
The
Board leadership structure is guided by our Governance Committee which nominates individuals to serve as members of the Board, including management directors. The Governance Committee is keenly
focused on the character, integrity, diversity and qualifications of the Board's members, as well as the Board's leadership structure and composition. The Board has concluded that our current
leadership structure is appropriate at this time but will continue to periodically review its leadership structure and may make such changes in the future as it deems appropriate.
All
director-nominees are considered "independent directors" under the corporate governance standards set forth in the NYSE American Company Guide or the NYSE American Rules, except for
Mr. Simard, our President and Chief Executive Officer. The Chairman of the Board is considered an "independent director." Mr. Simard does not serve as a Chair of any Board committee, nor
is
he a member of the Audit, Compensation and Human Resources, or Governance Committee. Our Governance Committee nominates an independent director to serve in the Chairman's role for election by the
entire Board. The independent directors meet regularly, as they deem appropriate, in executive session immediately after Board meetings to help ensure Board independence and oversight of
organizational activities.
Our
Audit Committee meets quarterly and receives reports from our independent registered public accounting firm, the independent loan review consultants, and the internal audit function of Bar Harbor
Bankshares. Our internal auditor conducts an annual risk-based audit program and provides audit findings quarterly to the Audit Committee.
Role of the Chairman
Mr. Woodside, as the Chairman of the Board, presides over the meetings of the Board and performs duties as may be assigned to him
including:
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Presiding at all meetings of the Board, including all executive sessions of the independent directors
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Serving as principal liaison between the President and Chief Executive Officer and the independent directors
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Approving agendas for board meetings
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Approving information to be presented to the Board
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Approving the schedule of meetings of the Board to ensure there is sufficient time for discussion of agenda items
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Calling meetings of the entire Board or the independent directors as needed
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Participating in consultations and direct communications with major shareholders and their representatives
Risk Oversight
Our Board recognizes the importance of maintaining the trust and confidence of our customers, clients and employees. Specifically independent of oversight of
key risks facing our company, including the impact of the COVID-19 pandemic, the Board devotes significant time and attention to data and systems protection, including cybersecurity and information
security risks. Our Board monitors and manages risks through the activities of select Board committees and in conjunction with our management, internal audit, our independent registered public
accounting firm, and other specialized independent advisors. Specialized audits include Information Technology and Security, Bank Secrecy Act, Loan Review, and Trust Operations. The Board regularly
discusses risk management with senior management.
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2021
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Page 5
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Table of Contents
CORPORATE GOVERNANCE
Board Risk Committee
The Board Risk Committee is composed of the following directors: Matthew Caras, Lauri Fernald, Brendan O'Halloran, Curtis Simard, Kenneth Smith, Stephen
Theroux, Scott Toothaker, and David Woodside. Mr. Caras serves as Chair. Committee members are appointed by the Board and oversees the risk governance structure.
Key
responsibilities include, but is not limited to, internal controls over financial reporting, credit risk, interest rate risk, liquidity risk, operational risk, data and cybersecurity risk,
compensation risk, reputational risk, and compliance risk.
The
Board Risk Committee meets at least monthly and receives regular presentations and reports throughout the year on data, cybersecurity and information security risk from management. These
presentations and reports address a broad range of topics including updates on technology trends, regulatory developments, legal issues, policies and practices, the threat of environment and
vulnerability assessments, and specific and ongoing efforts to prevent, detect, and respond to internal and external critical threats.
In
addition, the Board Risk Committee reviews and discusses on a quarterly basis Bar Harbor Bank and Trust's bank-wide risk assessment. The resulting risk assessment is aggregated, shared and
discussed with the Board at least annually. In addition to monthly Board reports, our Board receives real-time reports from our Chief Risk Officer on key developments across the industry, as well as
specific information about peers, vendors, and other significant incidents. In 2020, the Committee held a
total
of 12 meetings. Our information security programs enable us to monitor and promptly respond to threats and incidents, and innovate and adopt new technologies, as appropriate. The Board Risk
Committee shares the Company's goal that each employee be responsible for information security, data security, and proven cybersecurity practices.
The
Board Risk Committee also sets loan policy, establishes credit authorities, and approves or ratifies all extensions of credit to borrowers with loan relationships over $5 million, and
regularly reviews credit trends, delinquencies, non-performing loans, charged-off loans, and management's quarterly assessment of the adequacy of the Loan Loss reserve. The Board Risk Committee, in
conjunction with the Audit Committee, reviews reports prepared by an independent loan review firm, as well as those issued by our Internal Audit to assist in their on-going assessment of credit risk.
Compensation and Human Resources Committee
Our Compensation and Human Resources Committee manages executive officer and director compensation, including incentive compensation risk. This Committee has
engaged Pearl Meyer & Partners, LLC or "Pearl Meyer," an independent compensation consultant, to provide competitive market data and research into compensation best practices to guide
the decisions of the Committee. The Committee reviews compensation matters with the assistance of our Board Risk Committee. These results are reviewed by the Board to ensure incentive plans for
executive management and other officers discourage excessive risk-taking.
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Page 6
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2021
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Table of Contents
Board Committees
Our
Board has five standing committeesExecutive, Audit, Compensation and Human Resources, Governance, and Board Risk. Charters describing the responsibilities of the Audit, Compensation
and Human Resources, and Governance Committees can be found on our website at www.barharbor.bank under the Shareholder Relations page. The Board Risk
Committee is discussed on page 6.
Our
Board committees regularly make recommendations and report on their activities to the full Board. Each committee may obtain advice from internal or external financial, legal, accounting, or other
advisors at their discretion. Our Board, considering the recommendations of our Governance Committee, reviews our committee charters and committee membership at least annually. The duties of our Board
committees are summarized below.
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Executive
Key Responsibilities
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Audit
Key Responsibilities
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Exercises all the powers of the Board relating to the ordinary operations of business when the Board is not in session, subject to any specific vote of the Board
Appointed by the Board after
the Annual Meeting of Shareholders
Members: Matthew Caras, Martha Dudman, Lauri Fernald, Curtis Simard, Kenneth Smith,
Scott Toothaker and David Woodside (Chair)
2020 Meetings: 2
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Oversees qualifications, appointment, performance, compensation, and independence of our independent registered public accounting firm
Assists the Board in
fulfilling its oversight responsibilities with respect to 1) the financial information to be provided to shareholders and the Securities and Exchange Commission or SEC; 2) the review of quarterly financial statements; 3) the system of
financial reporting controls management as established; and 4) the internal audit, external audit, and loan review processes
Oversees compliance with legal and regulatory requirements
Makes inquiries of management
to assess the scope and resources necessary for the corporate audit function to execute its responsibilities
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Independence/Qualifications
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All committee members are independent under the NYSE American listing requirements and Rule 10A-3(b)(1) under the Securities Exchange Act of 1934 or Exchange Act
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All committee members are financially literate in accordance with the NYSE American listing standards
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All committee members are qualified as Audit Committee financial experts under SEC rules
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Members: Daina Belair, David Colter, Steven Dimick, Brendan O'Halloran and Scott Toothaker (Chair)
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2020 Meetings: 4
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See Appendix A for the Report of the Audit Committee.
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2021
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Page 7
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Table of Contents
CORPORATE GOVERNANCE
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Compensation and Human Resources
Key Responsibilities
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Governance
Key Responsibilities
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Oversees establishing, maintaining, and administering all compensation programs and employee benefit plans
Approves and recommends the CEO's compensation to the Board for further approval by all
independent directors, and reviews and approves all other executive officer compensation
Recommends director compensation for Board approval
Reviews and approves the
terms of any employment agreements, severance agreements, change in control protections and any other compensatory arrangements for the CEO, officers and other senior management
Reviews human capital
management practices
Prepares and reviews its report on executive compensation to be included in our proxy statement or annual report
Independence/Qualifications
All committee members are independent under the NYSE American listing standards
Heightened
independence requirements (same as those applicable to Audit Committee members under SEC rules)
Members: Matthew Caras,
David Colter, Martha Dudman, Lauri Fernald, Kenneth Smith (Chair) and David Woodside
2020 Meetings: 6
Further information regarding the Compensation and Human Resources Committee can be found in this proxy statement beginning under the caption "Role of the
Compensation and Human Resources Committee" on page 31.
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Oversees the Board's governance processes
Screens director candidates, recommending nominees to the full Board (including the slate of returning directors) to be elected each year
Identifies and reviews the qualifications of potential Board members; recommends nominees for election to the Board
Recommends the size and composition of the Board
Recommends committee
structure and membership
Sponsors new director orientation and education
Reviews and assesses shareholder input and our shareholder engagement process
Independence/Qualifications
All committee members are independent under the NYSE American listing standards
Members: Daina Belair, Matthew
Caras, Steven Dimick, Lauri Fernald (Chair) and David Woodside
2020 Meetings: 4
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Board Risk
Key Responsibilities
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Oversees risk governance structure
Reviews risk management, risk assessment guidelines, policies regarding market, credit, operational, liquidity, funding, reputational, compliance
Reviews enterprise risk, as well as other risks as necessary to fulfill the Committee's oversight duties and responsibilities
Independence/Qualifications
All committee members are independent under the NYSE American listing standards
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Reviews risk appetite and tolerance
Oversees capital, liquidity, and funding in coordination with the Asset/Liability Management Committee of our subsidiary, Bar Harbor Bank & Trust which
we refer to as the Bank or BHBT
Members: Matthew Caras (Chair), Lauri Fernald, Brendan O'Halloran, Curtis Simard, Kenneth
Smith, Stephen Theroux, Scott Toothaker, and David Woodside
2020 Meetings: 12
Further information regarding the Board Risk Committee can be found in this proxy statement beginning under the caption "Board Risk Committee" on
page 6
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Page 8
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2021
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Table of Contents
CORPORATE GOVERNANCE
Compensation and Human Resources Committee Interlocks and Insider Participation
None of our Named Executive Officers or NEOs (see listing on Page 30) serves as a member of a Compensation and Human Resources Committee of any other
company that has an executive officer serving as a member of our Board. No NEO serves as a member of the board of directors of any other company that has an executive officer serving as a member of
our Compensation and Human Resources Committee.
Board Risk Committee
Risk assessment and risk management are the responsibility of our company's senior management team. The Board Risk Committee is responsible for oversight and
review. Oversight is, in part, conducted through the established Enterprise Risk Management Program and is administered by the Bank's Chief Risk Officer, Richard B. Maltz. As part of the Enterprise
Risk Management Program, information from the BHBT's business lines is regularly collected and analyzed to identify, monitor, track, and report various risks within the company.
Other Risk Oversight Committees
To assist our Board in fulfilling its risk management responsibilities, a network of management oversight committees has been established. These oversight
committees have the delegated authority and specific duties to execute our risk management policy. Specifically, the committees listed below are responsible for the ongoing identification,
measurement, monitoring, and management of risk.
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Enterprise Risk Management Committee is responsible for reviewing and recommending for approval risk mitigation strategies,
risk acceptance, as well as ongoing assessment
of
the adequacy and effectiveness of internal controls, and oversight of any risk mitigation plans. This committee ensures our company has an appropriate balance between business development
objectives, risk tolerances, cost of internal control, operational efficiency, regulatory requirements and customer experiences.
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Management Loan Committee oversees the management of credit risk related to the lending portfolio of the Bank and associated
activities, including credit quality, loan production, credit delivery activities, credit policies, problem loan management, and the collection processes. This committee meets regularly and can
approve aggregate loan exposure for borrowers up to $5 million.
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Information Technology & Operations Steering Committee is responsible for developing and implementing our technology
and operations strategies. This committee manages the implementation of operational risk management practices, including the development of internal policies, procedures and risk tolerance guidelines,
assures the quality and performance of the Bank's project management practices, and ensures the organization's operational objectives are achieved in a safe and sound manner.
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Asset Liability Management Committee is responsible for the management of interest rate risk, liquidity risk, market risk, and
capital adequacy levels, as well as developing strategies governing the effective management of our balance sheet and income statement.
We
believe our risk management activities and detailed reports provide clear and concise information to our senior management team, as well as the Board to adequately evaluate compliance with our risk
management programs and policies.
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Page 9
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Table of Contents
GOVERNANCE PROCEDURES AND RELATED MATTERS
Governance Procedures and Related Matters
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Code of Conduct and Business Ethics
Our Code of Conduct and Business Ethics or the Code of Conduct applies to all our directors, executive officers, employees, contractors and consultants, and
articulates our philosophy regarding ethical conduct in the workplace. The Code of Conduct establishes standards for behavior, including standards with respect to compliance with laws and regulations,
actual or potential conflicts of interest, fairness, insider trading, use of our customers' information, and public and financial disclosure.
Our
Code of Conduct also provides clear guidance on reporting concerns or offenses. Also, we have adopted a Code of Ethics for Senior Financial Officers that supplements the more general Code of
Conduct and conforms to the requirements of the Sarbanes-Oxley Act of 2002 and NYSE American listing standards.
Any
substantive changes in or waivers of the Code of Conduct granted to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing
similar functions, must be disclosed within four business days by a posting on our website. In the case of a waiver of our Code of Conduct for any executive officer or director, the required
disclosure also will be made available on our website within four business days of the date of such waiver. The Company's corporate governance guidelines including Code of Conduct and Code of Ethics
are available on our website at https://www.barharbor.bank/codes-and-charters.
Securities and Insider Trading Policy
We maintain a Securities and Insider Trading Policy that applies to all our directors, executive officers, employees, contractors and consultants. The policy
is designed to prevent insider trading, or even the appearance of insider trading, and to protect our reputation, integrity and ethical conduct. A copy of policy is available on our website at https://www.barharbor.bank/codes-and-charters.
Prohibition on Hedging
Our Securities and Insider Trading Policy prohibits directors, executive officers, employees, contractors and consultants from engaging in any hedging activity
involving our securities.
Board Independence and Qualifications
Under NYSE American corporate governance standards, a majority of the Board must be "independent directors" as defined in Section 803A of the NYSE
American Rules. According to Section 803A, "independent director" means a person other than an executive officer or employee of our company. In addition, for a director to qualify as
"independent," the Board must affirmatively determine that the director does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities
of a director. The Board has determined that all the director-nominees listed in this
proxy
statement meet the applicable independence standards except for Curtis Simard, our President and Chief Executive Officer. Mr. Simard is not a member of the Audit, Compensation and Human
Resources, or Governance Committee.
As
noted, the Governance Committee identifies nominees to serve as directors primarily by accepting and considering the suggestions and nominee recommendations made by directors, management and
shareholders. To date, the Governance Committee has not engaged any third parties to assist in identifying candidates for the Board. The Governance Committee considers a potential candidate's
background, business and professional experience, demonstrated business acumen (including any requisite financial expertise or other special qualifications), ethical character, current employment, the
ability to exercise sound business judgment, and a commitment to understand our company, our business and the industry in which we operate.
In
addition, the Governance Committee considers a candidate's experience at a regulated financial institution and whether a candidate has sufficient time to devote to the responsibilities of being a
director, their community service or other board service, as well as the racial, ethnic, and gender diversity of the Board. Candidates are subject to a background check and must be clear of any
judgments or sanctions. The Governance Committee generally considers a candidate's qualifications with respect to these broad criteria and assesses whether the candidate can make decisions on behalf
of or while representing us in a manner consistent with our stated business goals and objectives.
The
Governance Committee will also consider the candidate's "independent" status in accordance with applicable regulations and listing standards. The Governance Committee will consider nominees
recommended by shareholders. Any shareholder wishing to
nominate a candidate for director must follow the procedures for submission of proposals set forth in the section of this proxy statement entitled "Nominations by Shareholders and Other Shareholder
Proposals."
Director Tenure
Each elected director serves until the next succeeding annual meeting and until his or her successor is elected or qualified or until his or her earlier
resignation or removal from office. The Board has not established limits on the number of terms that may be served by a director. However, our Bylaws provide that directors will not be nominated for
election or re-election after their seventy-second birthday except that the full Board may nominate candidates over 72 years of age for election or re-election for a single annual term for
special circumstances as determined by the Board to be for the benefit of shareholders. We believe our best interests are served when the Board is represented by individuals who have developed, over
time, valuable insight into our operations, businesses, as well as a profound understanding of our core values and goals toward community growth and prosperity.
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Page 10
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2021
PROXY
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Table of Contents
GOVERNANCE PROCEDURES AND RELATED MATTERS
Bar Harbor Trust Services and Charter Trust Company Committees
Our company, indirectly through BHBT, has two additional wholly-owned subsidiariesBar Harbor Trust Services, or BHTS, and Charter Trust Company,
or CTC. BHTS and CTC have separate committees. These committees have identical memberships and are composed of: Daina Belair, Martha Dudman, Curtis Simard, Kenneth Smith and Stephen Theroux. These
directors oversee both subsidiaries. Ms. Dudman serves as the Chair for both Committees. The BHTS and CTC committees provide oversight for these two entities that offer trust and wealth
management services to clients.
CEO and Senior Management Succession Planning
Our Board oversees CEO and senior executive management succession planning which is formally reviewed at least annually. Our CEO and our Human Resources
Officer provide our Board with recommendations and evaluations of potential CEO successors and review their development progress. Our Board reviews potential internal senior executive management
candidates with our President and CEO and our Human Resources Officer, including the qualifications, experience, and development priorities for these individuals. Directors engage with potential
candidates at Board and committee meetings and in less formal settings to allow directors to personally assess their qualifications.
Further,
our Board periodically reviews the overall composition of our senior management's qualifications, tenure, and experience. Our Board also establishes steps to address emergency succession
planning in extraordinary circumstances. Our emergency succession planning is intended to enable us to respond to unexpected position vacancies, including those resulting from a major catastrophe, by
continuing our safe and sound operation and minimizing potential disruption or loss of continuity to our organization's business and operations.
Board Meetings, Committee Membership, and Attendance
In 2020 our Board held ten regular meetings, one strategic planning meeting, our quarterly measurement against strategic objectives meetings, and one annual
meeting. Directors are expected to attend our Annual Meetings of shareholders, our Board meetings and the meetings of committees of which they are members. Each of our directors attended at least
99.7% of the total number of meetings of our Board and each of the committees on which they served during 2020. In addition, all the directors serving on our Board at the time of our 2020 Annual
Meeting attended the meeting.
Identifying and Evaluating Director Candidates
Board Composition
Our Board oversees the business and affairs of our organization. Our Board provides active and independent oversight of management. To carry out Board
responsibilities, we seek candidates with:
-
-
Strong business judgment
-
-
High personal integrity
-
-
Demonstrated achievement in public or private companies
-
-
Proven leadership and management ability
-
-
Dedicatedable to devote necessary time to oversight
-
-
Free of potential conflicts of interests
-
-
Collegial manner
Our
Board seeks directors whose complementary knowledge, experience, and skills provide a broad range of perspectives and leadership expertise in financial services and other highly complex and
regulated industries, strategic planning and business development, business operations, marketing and distribution, technology/cybersecurity, risk management and financial controls, human capital
management, corporate governance, public policy, and other areas important to our business strategy and oversight. Our Board also assesses directors' age and tenure, and Board continuity; it strives
to achieve a balance between the perspectives of new directors and those of longer-serving directors with industry and institutional insights.
Board Diversity
Although we do not maintain a formal diversity policy our Board views diversity as a priority and seeks representation across a range of attributes, including
gender, race, ethnicity, and professional experience. It regularly assesses our Board's diversity when identifying and evaluating director candidates. In addition, our Board seeks to include members
who are independent, possess financial literacy and expertise, and an understanding of risk management principles, policies, and practices, and have experience in identifying, assessing, and managing
risk exposures. Our current Board, composed of the 12 director nominees, reflects the Board's commitment to identifying, evaluating, and nominating candidates who possess personal qualities,
qualifications, skills, and diversity of backgrounds, and provide a mix of tenures that, when taken together, best serve our company and our shareholders.
Shareholder Engagement
Our Board and management regularly engage with our shareholders to solicit their views and input on company performance, corporate governance, environmental,
social and governance and other topics of interest to shareholders, such as human capital management, and executive compensation matters. These meetings may include participation by our Chairman,
President and Chief Executive Officer, Chief Financial Officer, or other senior management members, and they generally focus on our performance, strategy, and business development. The combination of
information received in investor meetings and shareholder engagement meetings regularly provides the Board and management with insights into the comprehensive scope of topics important to our
shareholders.
Additional Corporate Governance Information
More information about our corporate governance can be found on our website at www.barharbor.bank. Shareholders
may also obtain copies of this proxy statement, free of charge, as well as our other corporate filings at our website.
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2021
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Page 11
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Table of Contents
BENEFICIAL OWNERSHIP OF COMMON STOCK
Beneficial Ownership of Common Stock
|
The
following table sets forth information regarding the beneficial ownership of our common stock as of March 16, 2021 by: 1) each person or entity known by us to own beneficially more
than 5% of the outstanding common stock calculated on the number of shares outstanding on March 16, 2021; 2) each current director and nominee for election to the Board; 3) each
NEO; and 4) all executive officers and directors as a group. We had 14,945,097 shares of common stock, net of treasury shares, outstanding as of March 16, 2021. Unless otherwise
indicated, the address of all individuals listed below is 82 Main Street, PO Box 400, Bar Harbor, Maine, 04609.
The
information provided is based on our records and information furnished by the persons listed. We are not
aware
of any arrangement that could at a subsequent date result in a change in control of our company.
The
number of shares beneficially owned by the persons set forth below is determined under the rules of Section 13 of the Exchange Act, and the information is not necessarily indicative of
beneficial ownership for any other purpose. Under such rules, an individual is considered to beneficially own any shares of common stock if he or she directly or indirectly has or shares, or has the
right within 60 days to directly or indirectly have or share 1) voting power, which includes the power to vote or to direct the voting of the shares; or 2) investment power, which
includes the power to dispose or direct the disposition of shares.
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NAME OF BENEFICIAL OWNERS
|
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TITLE OF CLASS
|
|
AMOUNT OF
BENEFICIAL
OWNERSHIP
|
|
FOOTNOTES
|
|
PERCENT
OF
CLASS1
|
|
5% or more beneficial owners
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BlackRock, Inc.
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1,156,712
|
|
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|
2
|
|
|
|
7.74
|
%
|
|
|
|
|
|
|
|
|
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The Vanguard Group
|
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|
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778,159
|
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|
3
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|
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5.21
|
%
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DIRECTORS
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Belair, Daina H.
|
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Common
|
|
|
5,458
|
|
|
|
|
|
|
|
*
|
|
|
|
|
|
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Caras, Matthew L.
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Common
|
|
|
13,447
|
|
|
|
|
|
|
|
*
|
|
|
|
|
|
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Colter, David M.
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Common
|
|
|
5,656
|
|
|
|
4
|
|
|
|
*
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|
|
|
|
|
|
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|
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Dimick, Steven H.
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Common
|
|
|
8,158
|
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
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|
Dudman, Martha T.
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Common
|
|
|
16,666
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|
|
|
|
|
|
|
*
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|
|
|
|
|
|
|
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Fernald, Lauri E.
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Common
|
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12,300
|
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
|
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|
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O'Halloran, Brendan J.
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Common
|
|
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6,457
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|
|
|
|
|
|
|
*
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|
|
|
|
|
|
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Simard, Curtis C.
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Common
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|
|
56,397
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|
|
|
9
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|
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|
*
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|
|
|
|
|
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Smith, Kenneth E.
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Common
|
|
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17,157
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|
|
|
5
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|
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*
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|
|
|
|
|
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Theroux, Stephen R.
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Common
|
|
|
63,115
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|
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|
6
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|
|
|
*
|
|
|
|
|
|
|
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|
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Toothaker, Scott G.
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Common
|
|
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36,677
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|
|
|
7
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|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
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Woodside, David B.
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Common
|
|
|
16,567
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|
|
|
8
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|
|
|
*
|
|
|
|
|
|
|
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|
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NAMED EXECUTIVE OFFICERS
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|
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|
|
|
|
|
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|
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|
Iannelli, Josephine
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Common
|
|
|
15,039
|
|
|
|
9
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
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Maltz, Richard B.
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Common
|
|
|
22,024
|
|
|
|
9
|
|
|
|
*
|
|
|
|
|
|
|
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|
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Colombo, Marion
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Common
|
|
|
7,283
|
|
|
|
9
|
|
|
|
*
|
|
|
|
|
|
|
|
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|
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Mercier, John M.
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Common
|
|
|
6,586
|
|
|
|
9
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
All directors and executive officers as a group (16 persons)
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308,987
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|
|
|
10
|
|
|
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2.07
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%
|
|
|
|
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|
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Page 12
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2021
PROXY
STATEMENT
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Table of Contents
BENEFICIAL OWNERSHIP OF COMMON STOCK
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1.
|
|
Unless otherwise indicated, an individual has sole voting power and sole investment power with respect to the indicated shares. All individual holdings amounting to less than 1% of issued and outstanding common stock are marked with an
(*).
|
2.
|
|
BlackRock, Inc, holdings are disclosed based on their ownership as of December 31, 2020 as filed on Form Schedule 13G on January 29, 2021. The address of BlackRock, Inc. is 55 East 52nd Street, New York, NY
10055.
|
3.
|
|
The Vanguard Group holding are disclosures based on their ownership as of December 31, 2020 as filed on Form Schedule 13G on February 10, 2021. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355.
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4.
|
|
Includes 30 shares owned by Mr. Colter's children registered in a custodial account.
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5.
|
|
Includes 3,861 shares over which voting and dispositive powers are shared jointly with Mr. Smith's spouse.
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6.
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|
Includes 24,844 shares over which voting and dispositive powers are shared jointly with Mr. Theroux's spouse. This number does not include 24,000 shares held within a Supplemental Executive Retirement Plan for which Mr. Theroux does not
have voting or dispositive powers.
|
7.
|
|
Includes 4,500 shares over which voting and dispositive powers are shared with Mr. Toothaker's spouse.
|
8.
|
|
Includes 3,443 shares over which voting and dispositive powers are shared jointly with Mr. Woodside's spouse. This also includes 1,500 shares owned by Mr. Woodside's spouse over which he does not have voting or dispositive
powers.
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9.
|
|
The table below includes (a) shares the NEOs own directly, (b) shares over which NEOs have voting power of fully vested shares under our 401(k) Plan, (c) time-vested and performance shares (disclosed at Target) scheduled to be issued
to the executives within 60 days of the March 16, 2021 record date under the long-term incentive plans. These ownership positions are set forth in the table below:
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NAME
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DIRECT
(a)
|
|
401(k) PLAN
(b)
|
|
LONG TERM
INCENTIVE
EQUITY
(c)
|
|
Curtis C. Simard
|
|
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49,333
|
|
|
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1,090
|
|
|
|
5,975
|
|
|
|
|
|
|
|
|
|
|
Josephine Iannelli
|
|
|
12,151
|
|
|
|
|
|
|
|
2,888
|
|
|
|
|
|
|
|
|
|
|
Richard B. Maltz
|
|
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19,136
|
|
|
|
|
|
|
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2,888
|
|
|
|
|
|
|
|
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Marion Colombo
|
|
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4,879
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|
|
|
|
|
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1,707
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|
|
|
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|
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John M. Mercier
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5,494
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|
|
|
|
|
|
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1,789
|
|
|
|
|
|
|
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10.
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|
Total beneficial ownership excludes 5,500 (.0004%) shares of common stock as of the March 16, 2021 record date held by two trusts, which, for the purpose of voting, are allocated equally among the directors present at the Annual Meeting under
the terms of the respective trust instruments. No director has any other beneficial interest in these shares. These trusts are denominated for purposes of this proxy statement as the "Parker Trust "and the "The Fred & Hattie Lynam Private
Foundation" formerly known as the Lynam Trust. The Parker Trust was established in 1955 in perpetuity. BHTS, our second tier non-depository trust services company located in Ellsworth, Maine, is the sole Trustee, with full powers, of this trust
benefiting the Mt. Heights Cemetery in Southwest Harbor, Maine. The Fred & Hattie Lynam Private Foundation, was established in 1942 in perpetuity to benefit Mount Desert Island charities and later expanded to provide scholarships to
graduates of Mount Desert Island High School. BHTS is the sole Trustee, with full powers, and administers the trust with the assistance of an established Grant and Scholarship Committee made up of members of the Board and community
representatives.
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2021
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Page 13
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Table of Contents
COMPENSATION OF EXECUTIVE OFFICERS
Compensation of Executive Officers
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Compensation Discussion and Analysis
This section discusses an overview and analysis of our compensation program and policies, as they relate to our named executive officers, or NEOs, listed below,
the material compensation decisions made under those programs and policies, and the material factors considered in making those decisions. Later in this proxy statement under the heading "Executive
Compensation Tables" is a series of tables containing specific information about the compensation earned or paid to the NEOs.
The
discussion below is intended to aid in the understanding of the detailed information disclosed in those tables and provide context within the overall compensation program.
Named Executive Officers
For 2020, our NEOs were:
-
-
Curtis C. Simard, President and CEO
-
-
Josephine Iannelli, Executive Vice President, CFO and Treasurer
-
-
Richard B. Maltz, Executive Vice President, Chief Operating and Chief Risk Officer
-
-
Marion Colombo, Executive Vice President and Director of Retail Delivery
-
-
John M. Mercier, Executive Vice President and Chief Lending Officer
Summary of 2020 Compensation Decisions
The Compensation and Human Resources Committee made the following compensation decisions for 2020, which are further described below in this Compensation
Discussion and Analysis:
-
-
Awarded base salary increases to NEOs averaging 3.0%
-
-
Paid annual cash incentives at 147% of target which represents 53.9% of NEO base salaries based on corporate and individual
achievements
-
-
Authorized the vesting of restricted stock for the 2018-2020 Long-Term Incentive Plan performance period,
-
-
Granted annual equity awards pursuant to our Long-Term Incentive Plan
Our Compensation Program Philosophy and Objectives
Our compensation philosophy is to pay for performance. Our performance considerations include both financial and non-financial measuresincluding
the way results are achievedfor our company, the line of business, and the individual. These considerations reinforce and promote responsible growth and maintain alignment with our risk
framework. Our executive compensation program provides a mix of salary, incentives, and benefits paid over time to align executive officer and shareholder
interests.
The
objectives of our program are to:
-
-
provide NEOs with total compensation opportunities at levels that are competitive for comparable positions at other companies
and banks
-
-
directly link a significant portion of total compensation to our achievement of performance goals in a way that proportionally
rewards higher performance levels
-
-
provide upside opportunities for exceptional individual performance, which can result in differentiated compensation among
NEOs based on performance
-
-
closely align the NEOs' interests with those of our shareholders by making stock-based incentives an important element of the
executive's compensation
Role of the Compensation and Human Resources Committee
The Compensation and Human Resources Committee oversees regulatory compliance for all our compensation and benefit plans and administers our executive
compensation programs. This Committee recommends these programs to the Board for approval through its independent board members at least annually and more frequently, if circumstances warrant. These
programs are intended to provide a variety of competitive compensation components including base salaries, annual cash incentives, severance arrangements, retirement programs, traditional benefits and
limited perquisites. In addition, we have sought to align the long-term interests of our executives, including the NEOs, with those of our shareholders by providing share-based incentives in the form
of equity awards. The composition of the components may vary from year-to-year based on individual performance, our business plan, market conditions or other factors.
The
Compensation and Human Resources Committee believes that our compensation policies and procedures are designed to provide a strong link between each NEO's compensation and our short- and long-term
performance. The objective of our
compensation program is to provide compensation, which is competitive, variable based on our performance, and aligned with the long-term interests of shareholders.
Executive Compensation Governance
Our executive compensation program includes the following practices and policies which we believe promote sound compensation governance and are in the best
interests of our shareholders.
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Page 31
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Table of Contents
COMPENSATION OF EXECUTIVE OFFICERS
What We Do:
-
-
Design programs that place a substantial portion of compensation at-risk
-
-
Align compensation programs with our annual business objectives and long-term strategies
-
-
Use multiple performance measures and caps on potential incentive payments
-
-
Grant 50% of annual equity awards based on the total dollar value under accounting rules to NEOs with performance-based
conditions
-
-
Vest equity awards over a multi-year period
-
-
Include clawback provisions in our annual and long-term incentive plans for executive officers
-
-
Engage with and consider shareholder input in designing our executive pay programs
-
-
Conduct an annual risk assessment of annual incentive programs
What We Don't Do:
-
-
Allow hedging of our securities
-
-
Provide excessive perquisites or supplemental executives retirement plans
-
-
Provide for multi-year guaranteed salary increases or non-performance-based cash incentive awards for executive officers
-
-
Include "golden parachute" excise tax gross ups in severance arrangements
Shareholder "Say on Pay" Advisory Votes
Shareholders are entitled to annually vote on an advisory, non-binding resolution on our compensation policies and procedures as they relate to our NEOs. Past
shareholder votes have been overwhelmingly in favor of our programs and practices.
The
approval percentages of the "Say on Pay" voting results for the last four years were as follows:
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2017
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2018
|
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2019
|
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2020
|
97.0%
|
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95.6%
|
|
96.4%
|
|
93.81%
|
|
|
|
|
|
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The
Compensation and Human Resources Committee has and will continue to consider the outcome of future advisory, non-binding "Say on Pay" votes when reviewing and planning future executive
compensation arrangements.
The Role of Compensation Consultants
The Compensation and Human Resources Committee has utilized, and expects to utilize in the future, various outside consultants, actuaries and attorneys to
assist in developing and implementing the essential components of our compensation program, including its equity program and incentive compensation arrangements.
The
Compensation and Human Resources Committee, under the authority granted by its charter, engages Pearl Meyer to assist in reviewing our executive officer and director compensation packages. Their
2020 engagement included:
-
-
providing current market-based total compensation guidelines to assist in establishing appropriate and ongoing base
compensation and incentive compensation levels for our NEOs
-
-
providing guidance and market comparisons for the long-term incentive program using equity grants to NEOs under our approved
equity plan
-
-
providing a comprehensive review of our compensation program for our directors
The
Compensation and Human Resources Committee has assessed the relationships among Pearl Meyer, our company, the
Committee,
and its executive officers for independence and conflicts of interest. In this assessment, the Committee reviewed the criteria set forth in the SEC Reg. 240.10C-1(b)(4) (i)-(vi) and
such other criteria as it deemed appropriate
The
Compensation and Human Resources Committee did not identify any conflicts of interest with the engagement of Pearl Meyer. Additionally, Pearl Meyer provided documented assurances that their
relationship meets the independence standards, and no conflicts of interest were identified.
Role of Management
On an annual basis, management provides the Compensation and Human Resources Committee with general information on executive officer compensation, including
the NEOs. The Committee then reviews, discusses and considers this information and any recommendations. Mr. Simard and our Human Resources experts assist in the administration of all executive
compensation programs, prepare Compensation and Human Resources Committee and Board meeting materials, and perform work as requested by this Committee. Mr. Simard, as our CEO, attends portions
of the Committee's meetings and makes recommendations on base salary, annual incentives and equity compensation for only the executive officers who report to the CEO. The Committee has the discretion
to accept, reject or modify the CEO's recommendations.
The
CEO is not a member of the Compensation and Human Resources Committee and is not present for the executive sessions or for any discussion regarding his own compensation.
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Page 32
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2021
PROXY
STATEMENT
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Table of Contents
COMPENSATION OF EXECUTIVE OFFICERS
The
Compensation and Human Resources Committee reviews and recommends to the Board's independent members compensation programs for approval. The Committee also provides an analysis of the
recommendations it believes meet our ongoing needs to attract, motivate, and retain talented and qualified executives who can make major contributions to our leadership and success. The Committee
regularly reviews market information provided by Pearl Meyer. Primary data sources used in the benchmarking for the NEOs represent information publicly disclosed by a peer group of publicly traded
banks and published surveys. The Committee reviews comparative compensation and benefit information contained in the public filings of this peer group which has been established for compensation
comparison (the Compensation Peer Group) using objective selection criteria. The Compensation Peer Group is reviewed annually by the Committee.
Market Benchmarking and Performance Comparisons
The Compensation and Human Resources Committee considers companies primarily in the banking industry that are comparable to us based on market capitalization,
geographic area and number of employees. The 2020 Compensation Peer Group includes financial institutions that fall within a range of $1.8 billion in assets to $8.7 billion in assets.
All peer banks are in the Northeast region and New York excluding New York City. The Committee believes this group provides an appropriate selection of publicly traded financial institutions
representing the geographical area most probable to be considered for recruitment purposes. Further, the Committee believes the Compensation Peer Group information discloses compensation programs of
similarly situated executives in comparable institutions, and the analysis is a useful comparative tool for the Committee in establishing executive compensation programs and individual criteria for
our executives.
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Institution Name
|
|
Ticker
|
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City
|
|
State
|
|
Industry
|
|
Exchange
|
|
Prior
Peer
|
|
ISS
Peer
|
|
Total
Assets
(Reported)
2020Q1
|
|
Total
Assets
(Reported)
2019Y
|
|
Total
Revenue
(Reported)
2019Y
|
|
FTE
Employees
(actual)
2019Y
|
|
Number of
Offices
(actual)
2019Y
|
|
Boston Private Financial Holdings
|
|
BPFH
|
|
Boston
|
|
MA
|
|
Bank
|
|
NASDAQ
|
|
Y
|
|
Y
|
|
|
8,746,326
|
|
|
|
8,830,501
|
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329,532
|
|
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779
|
|
|
|
22
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Brookline Bancorp, Inc.
|
|
BRKL
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|
Boston
|
|
MA
|
|
Bank
|
|
NASDAQ
|
|
Y
|
|
Y
|
|
|
8,461,591
|
|
|
|
7,856,853
|
|
|
|
283,093
|
|
|
|
787
|
|
|
|
51
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|
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Tompkins Financial Corporation
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TMP
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Ithaca
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NY
|
|
Bank
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AMEX
|
|
Y
|
|
Y
|
|
|
6,743,114
|
|
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|
6,725,623
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|
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286,061
|
|
|
|
1,047
|
|
|
|
64
|
|
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Meridian Bancorp, Inc.
|
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EBSB
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Peabody
|
|
MA
|
|
SB/T/M
|
|
NASDAQ
|
|
Y
|
|
|
|
|
6,348,554
|
|
|
|
6,343,694
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186,251
|
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514
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|
39
|
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Washington Trust Bancorp, Inc.
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WASH
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Westerly
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RI
|
|
Bank
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|
NASDAQ
|
|
Y
|
|
Y
|
|
|
5,620,979
|
|
|
|
5,292,659
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|
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|
200,494
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|
|
|
609
|
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|
|
23
|
|
|
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Century Bancorp, Inc.
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|
CNBK.A
|
|
Medford
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MA
|
|
Bank
|
|
NASDAQ
|
|
Y
|
|
Y
|
|
|
5,562,286
|
|
|
|
5,492,424
|
|
|
|
114,267
|
|
|
|
432
|
|
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|
27
|
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TrustCo Bank Corp NY
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TRST
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Glenville
|
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NY
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|
SB/T/M
|
|
NASDAQ
|
|
Y
|
|
|
|
|
5,256,647
|
|
|
|
5,221,322
|
|
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|
174,398
|
|
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|
814
|
|
|
|
148
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|
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Bridge Bancorp, Inc.
|
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BDGE
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Bridgehampton
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NY
|
|
Bank
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|
NASDAQ
|
|
Y
|
|
Y
|
|
|
5,060,872
|
|
|
|
4,921,520
|
|
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|
167,468
|
|
|
|
496
|
|
|
|
40
|
|
|
|
|
|
|
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Camden National Corporation
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CAC
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Camden
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|
ME
|
|
Bank
|
|
NASDAQ
|
|
Y
|
|
Y
|
|
|
4,594,539
|
|
|
|
4,429,521
|
|
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|
169,743
|
|
|
|
639
|
|
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|
60
|
|
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Financial Institution Inc.
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FISI
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Warsaw
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NY
|
|
Bank
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|
NASDAQ
|
|
Y
|
|
Y
|
|
|
4,471,768
|
|
|
|
4,384,178
|
|
|
|
170,293
|
|
|
|
703
|
|
|
|
53
|
|
|
|
|
|
|
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|
|
|
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Enterprise Bancorp, Inc.
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|
EBTC
|
|
Lowell
|
|
MA
|
|
Bank
|
|
NASDAQ
|
|
Y
|
|
Y
|
|
|
3,367,153
|
|
|
|
3,235,049
|
|
|
|
132,142
|
|
|
|
538
|
|
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
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|
|
Arrow Financial Corporation
|
|
AROW
|
|
Glens Falls
|
|
NY
|
|
Bank
|
|
NASDAQ
|
|
Y
|
|
Y
|
|
|
3,291,332
|
|
|
|
3,184,275
|
|
|
|
116,846
|
|
|
|
520
|
|
|
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cambridge Bancorp
|
|
CATC
|
|
Cambridge
|
|
MA
|
|
Bank
|
|
NASDAQ
|
|
Y
|
|
Y
|
|
|
2,852,629
|
|
|
|
2,855,563
|
|
|
|
115,097
|
|
|
|
303
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hingham Institution for Savings
|
|
HIFS
|
|
Hingham
|
|
MA
|
|
SB/T/M
|
|
NASDAQ
|
|
Y
|
|
|
|
|
2,654,571
|
|
|
|
2,590,346
|
|
|
|
75,730
|
|
|
|
88
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Western New England Bancorp
|
|
WNEB
|
|
Westfield
|
|
MA
|
|
SB/T/M
|
|
NASDAQ
|
|
Y
|
|
|
|
|
2,190,328
|
|
|
|
2,181,476
|
|
|
|
67,684
|
|
|
|
307
|
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Bancorp, Inc.
|
|
FNLC
|
|
Damariscotta
|
|
ME
|
|
Bank
|
|
NASDAQ
|
|
Y
|
|
Y
|
|
|
2,136,396
|
|
|
|
2,068,796
|
|
|
|
66,682
|
|
|
|
240
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bankwell Financial Group, Inc.
|
|
BWFG
|
|
New Canaan
|
|
CT
|
|
Bank
|
|
NASDAQ
|
|
Y
|
|
Y
|
|
|
2,053,625
|
|
|
|
1,882,182
|
|
|
|
59,107
|
|
|
|
157
|
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemung Financial Corporation
|
|
CHMG
|
|
Elmira
|
|
NY
|
|
Bank
|
|
NASDAQ
|
|
Y
|
|
Y
|
|
|
1,841,329
|
|
|
|
1,787,827
|
|
|
|
80,783
|
|
|
|
362
|
|
|
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
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|
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2021
PROXY
STATEMENT
|
|
Page 33
|
Table of Contents
COMPENSATION OF EXECUTIVE OFFICERS
The Compensation Peer Group information is used as a guide in establishing the competitiveness and reasonableness in our compensation program and practices. The
committee does not target the elements of our compensation program at any specific level or percentile within the Compensation Peer Group. Rather than rely on a specific formula-based model, the
committee believes that retaining discretion to assess the overall performance of NEOs gives the committee the ability to more accurately reflect individual contributions that cannot be absolutely
quantified. The Compensation and Human Resources Committee also believes that an emphasis on incentive compensation for our NEOs is an important component of our overall compensation program. In
addition, the Committee generally does not affirmatively set out in any given year, or with respect to any given executive, to apportion compensation in any specific ratio among the various categories
of compensation described below. Rather, the Compensation Committee uses the principles described above, and the factors described for each category in the discussion that follows as a guide in
assessing the proper allocation among those categories.
Compensation and Human Resources Committee Report
The Compensation and Human Resources Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of the
Securities and Exchange Commission Regulation S-K with management.
The
Compensation and Human Resources Committee believes our financial results and total shareholder return (disclosed in our Form 10-K for the year ended December 31, 2020) compare
favorably with our Compensation Peer Group indicating a solid pay-for-performance alignment. The Committee further believes the compensation established for our CEO and other NEOs provide an
appropriate balance between market compensation and shareholder return. The Committee referenced market data including peer group and survey information along with guidance provided by Pearl Meyer in
its process to establish and validate the appropriateness of our executive compensation compared to market and performance.
Based
upon this review and discussion, the Compensation and Human Resources Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this proxy
statement.
|
|
|
Compensation and Human Resources Committee Members
|
Kenneth E. Smith, Chair
|
|
David M. Colter
|
Matthew L. Caras
|
|
Martha T. Dudman
|
Lauri E. Fernald
|
|
David B. Woodside
|
|
|
|
The
following table provides information concerning the compensation paid for 2020 to our Named Executive Officers who consist of our Chief Executive Officer and President and our other four most
highly compensated executive officers during 2020.
|
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|
|
|
|
|
|
|
|
|
NAME
|
|
BHB 2020
BASE
SALARY1
|
|
BHB 2020
TOTAL CASH
COMPENSATION2
|
|
Curtis C. Simard
|
|
|
$
|
655,000
|
|
|
|
$
|
1,088,738
|
|
|
|
|
|
|
|
|
Josephine Iannelli
|
|
|
420,000
|
|
|
|
636,317
|
|
|
|
|
|
|
|
|
Richard B. Maltz
|
|
|
420,000
|
|
|
|
636,317
|
|
|
|
|
|
|
|
|
Marion Colombo
|
|
|
310,000
|
|
|
|
446,854
|
|
|
|
|
|
|
|
|
John M. Mercier
|
|
|
310,000
|
|
|
|
446,854
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Approved base salary figures as of year-end 2020 have been used for comparison purposes in this table.
|
2
|
|
Approved base salary figures at the end of 2020 plus the cash amount paid to each NEO under the 2020 Annual Cash Incentive Program.
|
The
Compensation and Human Resources Committee also considers the relative scarcity of senior banking executive candidates in its immediate market area with skills and experience necessary to achieve
future strategic goals, as well as the challenge in a very competitive market to recruit out-of-market candidates to work in rural Maine. The Committee does not use any formal, fixed or indexed
criteria for establishing compensation levels for any of our NEOs within market identified ranges. The Committee believes the growth in total compensation provided to our executive officers should be
weighted towards variable compensation including cash and equity incentives which tie directly to corporate performance with less emphasis upon growth in base salaries.
Compensation Plan Components
Our executive compensation program applicable to the NEOs is composed of the following primary components: (1) base salaries; (2) annual cash
incentive compensation programs; (3) long-term incentives in the form of equity grants; and (4) retirement benefits including our 401(k) plan, severance arrangements and perquisites
(membership dues and auto allowances).
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Page 34
|
|
2021
PROXY
STATEMENT
|
|
|
Table of Contents
COMPENSATION OF EXECUTIVE OFFICERS
|
|
|
PERFORMANCE YEAR 2020 COMPENSATION COMPONENTS1
|
|
|
|
DESCRIPTION
|
|
HOW IT PAYS
|
Base Salary
|
|
Salary/wages are paid on a standard, company-wide schedule of 26 pay periods throughout the year
|
|
|
|
Annual Cash Incentive
|
|
Awarded annually, subject to Board-approved formulas for company-wide, group-specific performance measures, and individual performance measures.
|
|
|
|
Equity Incentives
|
|
Comprised of three-year performance- and time-based Restricted Stock Units, or Restricted Stock Awards with immediate vesting on grant date, all with three-year restriction periods after vesting
|
|
|
|
|
|
|
1
|
|
Benefits and perquisites are described later in the proxy statement are excluded.
|
The
charts below summarize the 2020 targeted pay mix for each NEO.
|
|
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|
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|
2021
PROXY
STATEMENT
|
|
Page 35
|
Table of Contents
Base Salary
Our executive compensation program provides base salaries to compensate executive officers for the performance of core duties and responsibilities associated
with their positions. The Compensation and Human Resources Committee reviews base salaries annually in the context of comparative industry information, as described above. The Committee also considers
the specific contributions of the individual executive officer's leadership skills, contributions to our strategic initiatives, the officer's opportunity for professional growth, as well as market
factors when it sets and adjusts base salaries. In addition, the Committee considers the prevailing economic climate, our overall performance, and our most
current business plan.
Upon
performance evaluations, and the advice and market salary data supplied by Pearl Meyer, in 2020 the Compensation and Human Resources Committee made performance and market adjustments resulting in
the approved base salaries for 2021 as set forth below:
|
|
|
|
|
|
|
|
|
|
|
|
NAME
|
|
2020
BASE SALARY
|
|
2021
BASE SALARY
|
|
Curtis C. Simard
|
|
|
$
|
655,000
|
|
|
|
$
|
674,700
|
|
|
|
|
|
|
|
|
Josephine Iannelli
|
|
|
420,000
|
|
|
|
432,600
|
|
|
|
|
|
|
|
|
Richard B. Maltz
|
|
|
420,000
|
|
|
|
432,600
|
|
|
|
|
|
|
|
|
Marion Colombo
|
|
|
310,000
|
|
|
|
319,300
|
|
|
|
|
|
|
|
|
John M. Mercier
|
|
|
310,000
|
|
|
|
319,300
|
|
|
|
|
|
|
|
|
Annual Cash Incentive Program
During 2020, the NEOs participated in the Annual Cash Incentive Program which was designed to provide meaningful incentives tied to our annual metrics to
optimize profitability, growth, excellence in individual performance, and to promote teamwork among its participants. Consistent with best practices, the Board and its compensation consultant continue
to review and increase the percentage of at risk pay for each executive annually. This program was approved by the Board for 2020.
Annual Cash Incentive Performance Measures. The senior management team has predefined performance goals to determine their annual short-term incentive awards. Bar
Harbor Bankshares common team goals for 2020 were Net Income, a credit asset quality measure of Non-Performing Loans as a Percentage of Total Loans, a well-managed Efficiency Ratio, and the successful
completion of strategic initiatives. The specific allocations of goals were weighted to reflect the focus and contribution of each position.
The
following table shows the 2020 target compensation for the annual cash incentive in dollars:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAME
|
|
BASE SALARY
|
|
Target
(AS A
PERCENTAGE OF
BASE SALARY)
|
|
TARGET
|
|
Curtis C. Simard
|
|
|
$
|
655,000
|
|
|
|
45.00
|
%
|
|
$
|
294,750
|
|
|
|
|
|
|
|
|
|
Josephine Iannelli
|
|
|
420,000
|
|
|
|
35.00
|
%
|
|
147,000
|
|
|
|
|
|
|
|
|
|
Richard B. Maltz
|
|
|
420,000
|
|
|
|
35.00
|
%
|
|
147,000
|
|
|
|
|
|
|
|
|
|
Marion Colombo
|
|
|
310,000
|
|
|
|
30.00
|
%
|
|
93,000
|
|
|
|
|
|
|
|
|
|
John M. Mercier
|
|
|
310,000
|
|
|
|
30.00
|
%
|
|
93,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 36
|
|
2021
PROXY
STATEMENT
|
|
|
Table of Contents
The
following table shows the specific performance goals of the 2020 annual cash incentive plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE GOALS
|
|
|
|
|
|
|
|
|
|
INCENTIVE MEASURES
|
|
THRESHOLD
|
|
TARGET
|
|
STRETCH
|
|
Adjusted Net Income ($thousands)1
|
|
|
$
|
29,805
|
|
|
|
$
|
32,048
|
|
|
|
$
|
35,253
|
|
|
|
|
|
|
|
|
|
|
NPL/Tloans2
|
|
|
1.02
|
%
|
|
|
0.90
|
%
|
|
|
0.75
|
%
|
|
|
|
|
|
|
|
|
|
Efficiency Ratio3
|
|
|
64.40
|
%
|
|
|
63.14
|
%
|
|
|
61.88
|
%
|
|
|
|
|
|
|
|
|
|
Strategic Initiatives4
|
|
|
90.00
|
%
|
|
|
100.00
|
%
|
|
|
110.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Adjusted net income is reflected in the Non-GAAP table located in the Management Discussion and Analysis section of our annual 10-K filing. Additional adjustments may be made based on approval by the board compensation and human resource committee.
Adjusted net income includes, but is not limited to gain or losses on sales of securities, extinguishment of debt, sales of premises and equipment, and other real estate owned. Non-recurring charges reflected in acquisition, conversion, and other
expenses are also included.
|
2
|
|
Non-Performing Loans (NPL's) include all loans on non-accrual status as of December 31, 2020 as measured against total loans
|
3
|
|
Efficiency ratio is a Non-GAAP measure computed by using adjusted non-interest expense net of franchise taxes and intangible amortization divided by adjusted revenue tax effected for tax advantaged assets using marginal tax rate. See 10-K
Reconciliation of Non-GAAP measures for further details.
|
4
|
|
Strategic initiatives include, but are not limited to, M&A activity, balance sheet strategies and restructuring initiatives.
|
Below
is a summary of the annual incentive awards paid for 2020 performance:
|
|
|
|
|
|
|
|
|
|
|
NAMED EXECUTIVE OFFICER
|
|
ACTUAL
|
|
TARGET
|
|
% OF TARGET
|
|
Curtis C. Simard
|
|
$
|
433,738
|
|
$
|
294,750
|
|
147%
|
|
|
|
|
|
|
|
|
|
Josephine Iannelli
|
|
216,317
|
|
147,000
|
|
147
|
|
|
|
|
|
|
|
|
|
Richard B. Maltz
|
|
216,317
|
|
147,000
|
|
147
|
|
|
|
|
|
|
|
|
|
Marion Colombo
|
|
136,854
|
|
93,000
|
|
147
|
|
|
|
|
|
|
|
|
|
John M. Mercier
|
|
136,854
|
|
93,000
|
|
147
|
|
|
|
|
|
|
|
|
|
Details
of the above are disclosed in Threshold, Target and Stretch categories in the "Grants of Plan-Based Awards" table under the heading "Executive Compensation Tables" found elsewhere in this
proxy statement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
PROXY
STATEMENT
|
|
Page 37
|
Table of Contents
COMPENSATION OF EXECUTIVE OFFICERS
Long-Term Equity Incentives
Our Board utilizes a Long-Term Incentive Program for senior management members as part of their total compensation.
Pearl
Meyer assisted the Compensation and Human Resources Committee with the initial plan design and periodically evaluates appropriate reward levels. The program is designed to be made up of
three-year rolling plans. Grants may be given in time-vested restricted stock, performance-vested restricted stock units, or a combination of both. The purpose of the program is to align executives'
interests with shareholder interests, increase executive stock ownership, and ensure sound risk management by providing a balanced view of performance and reward over a longer time horizon. The
program also positions our total compensation offerings to be competitive with the market to attract and retain strong talent which is needed to drive our success.
Our
Board has approved Long-Term Incentive Programs for senior management members as part of their total compensation. This compensation component is used to align the interests of our participating
officers and managers, particularly executive officers, with those of shareholders over a long-term horizon, and to support our leadership retention objectives. As further described below grants are
made under the 2019 Equity Plan ("the 2019 Plan") which was approved by shareholders at the 2019 Annual Meeting of Shareholders.
The
following table shows the performance goals for the long-term incentive awards granted in 2020 at Threshold, Target and Stretch for role of the participants within the 2020-2022 Plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020-2022 Long Term Incentive Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time Vested
|
|
Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
% of
Salary
|
|
Amount $
|
|
Threshold
% of
Salary
|
|
Threshold $
|
|
Target
% of
Salary
|
|
Target $
|
|
Stretch
% of
Salary
|
|
Stretch $
|
|
Curtis C. Simard
|
|
|
25.00
|
%
|
|
$
|
163,750
|
|
|
20.00
|
%
|
|
|
$
|
131,000
|
|
|
|
40.00
|
%
|
|
$
|
262,000
|
|
|
60.00
|
%
|
|
|
$
|
393,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Josephine Iannelli
|
|
|
20.00
|
|
|
84,000
|
|
|
10.00
|
|
|
|
42,000
|
|
|
|
20.00
|
|
|
84,000
|
|
|
30.00
|
|
|
|
126,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard B. Maltz
|
|
|
20.00
|
|
|
84,000
|
|
|
10.00
|
|
|
|
42,000
|
|
|
|
20.00
|
|
|
84,000
|
|
|
30.00
|
|
|
|
126,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marion Colombo
|
|
|
17.50
|
|
|
54,250
|
|
|
8.75
|
|
|
|
27,125
|
|
|
|
17.50
|
|
|
54,250
|
|
|
26.25
|
|
|
|
81,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John M. Mercier
|
|
|
17.50
|
|
|
54,250
|
|
|
8.75
|
|
|
|
27,125
|
|
|
|
17.50
|
|
|
54,250
|
|
|
26.25
|
|
|
|
81,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Information
pertaining to outstanding equity awards are disclosed in the "Outstanding Equity Awards at Fiscal Year-end" table found on page 42 in this proxy statement.
The
2020 Plan provides our NEOs with the opportunity to earn equity-based awards. Under the 2020 program, grants may be delivered in performance-vested restricted stock units, time-vested restricted
stock, or a combination of both. The purpose of the program is to align executives' interests with shareholder interests, increase executive stock ownership, and ensure sound risk management by
providing a balanced view of performance and reward over a longer time horizon. The program also positions our total compensation offerings to be competitive with the market to attract and retain
strong talent which is needed to drive our success.
Target
award opportunities are based on role. Equity awards are calculated as a percentage of base salary to determine the number of shares available for awards. See the table "Grants of Plan Based
Awards (columns g-k) on page 41 to reference the actual shares that may be earned under the 2020-2022 plan year to each NEO.
LONG-TERM EQUITY INCENTIVE MEASURES
The Long-Term Incentive Programs consist of both performance-based and time-vested stock units converted to restricted
shares.
Time-vested shares that are granted vest annually with a third of the shares vesting in each of the years covered. Grants are contingent upon continued employment with a pro-rated portion
vesting in the event of a participant retirement, death, or disability. The time-vested shares also have a post-vesting holding period of three years. At the time of vesting, sufficient shares may be
withheld to cover the executive's tax liabilities.
The
remaining shares are performance-vested shares to be awarded at the end of the three-year measurement period and upon attainment of the performance goals. Relative Return on Assets ("ROA")
measured against the SNL $1.5 billion to $6 billion Bank Index peer group will determine the performance award for 2020-2022 Plan. The average of the twelve quarters within the plan
measurement year is calculated and measured against peer results for the same period. A result below the 35th percentile of the peer group would fall below Threshold and no
payment would be due or paid. Target is calculated at the 50th percentile when measured against the peer group, and the plan Stretch is capped at the
75th percentile. In addition to relative ROA, there is a Total Shareholder Return ("TSR") modifier to further align shareholder interest. If our TSR calculation for the same
performance measurement period is negative, a payout cannot exceed Threshold regardless of the relative ROA performance results.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 38
|
|
2021
PROXY
STATEMENT
|
|
|
Table of Contents
COMPENSATION OF EXECUTIVE OFFICERS
Benefits, Retirement and Post-Termination Compensation Elements
We provide a 401(k) plan for all employees meeting minimum age and service requirements which includes employer matching contributions of up to 5%. We match
100% on the first 3% deferred by employees and 50% on the next 2% deferred by employees.
We
also maintain employment agreements with NEOs Simard and Iannelli which provide severance benefits in the event of a termination by the employer without cause and/or by the employee with good
reason, as well as change in control with subsequent termination (or constructive termination).
We
also have change in control agreements for NEOs Maltz, Colombo and Mercier. These agreements provide for, among other things, the payment of their salary and subsidized medical COBRA reimbursement
for a period of 24 to 36 months in the event of both a change in control and subsequent termination (or constructive termination) within set timeframes after a change in control, unless such
termination was for cause. These specific payments and timeframes were established under the advice of a compensation consultant and employment attorney as representative of similar type agreements in
the industry, and which we believe are necessary to attract and retain senior executives.
Our
equity award agreements and the related long term incentive plan program documents address treatment of equity awards upon termination of employment or change in control. Under these provisions,
the awards vest on a prorated basis in case of termination of employment due to death, disability, or retirement (defined as attainment of age 65 or attainment of age 60 with at least 10 years
of service), based on actual performance for performance-based awards. The award agreements and program documents also provide for full vesting of outstanding equity awards upon the occurrence of a
change in control (i.e., without requirement of a subsequent termination of employment), based on target performance in case of performance-based awards.
The
Compensation and Human Resources Committee feels these agreements are necessary to provide a competitive total compensation plan to attract and retain the employment of our current and future
NEOs.
Other Compensation and Benefits
All executive officers can participate in certain group health, dental, disability and term life insurance benefits. In accordance with our policy, all such
benefits are generally available to our employees including employees of our subsidiaries. In addition, we provide our NEOs paid time off awards.
Clawback Provision
We have provisions in our incentive programs guidance requiring each current and former executive officer to forfeit any
erroneously
awarded incentive-based compensation. This incentive-based compensation would have been received by any such officer during the three completed years preceding the date on which we are
required to prepare an accounting restatement due to our material non-compliance with any financial reporting requirement under the federal securities laws. None of our directors or executives were
required to forfeit any such erroneously awarded incentive-based compensation in 2020.
Our
provisions further state that the altering, inflating and/or inappropriate manipulation of performance/financial results or any other infraction of recognized ethical business standards will
subject any participant to disciplinary action up to and including termination of employment. In addition, any incentive compensation as provided by the plan to which the participant would otherwise
be entitled will be revoked or subject to "clawback."
All
cash and equity awards proposed under the 2019 Equity Plan will be subject to clawback, cancellation, recoupment, rescission, payback, reduction, or similar action in accordance with the terms of
any clawback or similar policy or any applicable law related to such actions, as may be in effect from time-to-time.
Stock Ownership Guidelines
While all our executive officers hold equity interests in our company and may be granted shares in the future under our equity programs, we do not have
specific guidelines regarding stock ownership for our NEOs at this time. Our Board has implemented a three-year retention requirement for shares acquired under equity awards issued under our Long-Term
Incentive Program for NEOs for retention purposes. We encourage NEO stock ownership and review overall ownership levels on a periodic basis.
Policy on Code Section 162(m)
Section 162(m) of the U.S. Internal Revenue Code, or the Code, generally prohibits any publicly held corporation from taking a federal income tax
deduction for compensation paid in excess of $1 million in any taxable year to the CEO and the other "covered employees" as defined in the rule. Under the tax laws in effect before 2018,
compensation that qualified as "performance-based compensation" under Section 162(m) of the Code was deductible without regard to this limitation. Effective for tax years beginning after
December 31, 2017, the Tax Cuts and Job Acts of 2017 generally eliminated the performance-based exemption, subject to a special rule that grandfathers certain awards and agreements that were in
effect on November 2, 2017. While considering tax deductibility as only one of several considerations in determining compensation, the Compensation and Human Resources Committee believes the
tax deduction limitation should not compromise its ability to structure
compensation programs that provide benefits to us that outweigh the potential benefit of a tax deduction, and therefore, may approve compensation that is not deductible for tax purposes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
PROXY
STATEMENT
|
|
Page 39
|
Table of Contents
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation Table
The following table discloses compensation for the years ended December 31, 2020, 2019 and 2018 received by the NEOs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAME AND PRINCIPAL POSITION
|
|
YEAR
|
|
BASE
SALARY
RECEIVED1
|
|
SIGN ON
BONUS
|
|
STOCK
AWARDS2
|
|
NON-EQUITY
INCENTIVE PLAN
COMPENSATION
|
|
ALL
OTHER COMPENSATION3
|
|
TOTAL ($)
|
|
Curtis C. Simard
|
|
|
2020
|
|
|
|
$
|
655,000
|
|
|
$
|
|
|
$
|
556,767
|
|
|
$
|
433,738
|
|
|
|
$
|
62,965
|
|
|
$
|
1,708,470
|
|
President & CEO
|
|
|
2019
|
|
|
|
635,000
|
|
|
|
|
417,498
|
|
|
253,388
|
|
|
|
30,287
|
|
|
1,336,173
|
|
|
|
|
2018
|
|
|
|
605,000
|
|
|
|
|
302,481
|
|
|
303,500
|
|
|
|
30,235
|
|
|
1,241,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Josephine Iannelli
|
|
|
2020
|
|
|
|
420,000
|
|
|
|
|
210,024
|
|
|
216,317
|
|
|
|
12,660
|
|
|
859,001
|
|
EVP, CFO and Treasurer
|
|
|
2019
|
|
|
|
405,000
|
|
|
|
|
226,856
|
|
|
121,780
|
|
|
|
24,585
|
|
|
778,221
|
|
|
|
|
2018
|
|
|
|
390,000
|
|
|
|
|
144,261
|
|
|
160,000
|
|
|
|
28,204
|
|
|
722,465
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard B. Maltz
|
|
|
2020
|
|
|
|
420,000
|
|
|
|
|
210,024
|
|
|
216,317
|
|
|
|
24,126
|
|
|
870,467
|
|
EVP, Chief Operating Officer and
|
|
|
2019
|
|
|
|
405,000
|
|
|
|
|
226,856
|
|
|
121,780
|
|
|
|
26,744
|
|
|
780,380
|
|
Chief Risk Officer
|
|
|
2018
|
|
|
|
390,000
|
|
|
|
|
144,261
|
|
|
160,000
|
|
|
|
23,838
|
|
|
718,099
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marion Colombo
|
|
|
2020
|
|
|
|
310,000
|
|
|
|
|
135,629
|
|
|
136,854
|
|
|
|
25,204
|
|
|
607,687
|
|
EVP, Director of Retail Delivery
|
|
|
2019
|
|
|
|
300,000
|
|
|
|
|
143,738
|
|
|
78,931
|
|
|
|
32,663
|
|
|
555,332
|
|
|
|
|
2018
|
|
|
|
245,385
|
4
|
|
30,000
|
5
|
160,296
|
6
|
|
115,000
|
|
|
|
28,631
|
|
|
579,312
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John M. Mercier
|
|
|
2020
|
|
|
|
310,000
|
|
|
|
|
135,629
|
|
|
136,854
|
|
|
|
34,820
|
|
|
617,303
|
|
EVP, Chief Lending Officer
|
|
|
2019
|
|
|
|
300,000
|
|
|
|
|
123,743
|
|
|
78,931
|
|
|
|
33,354
|
|
|
536,028
|
|
|
|
|
2018
|
|
|
|
290,000
|
|
|
|
|
90,585
|
|
|
100,000
|
|
|
|
29,269
|
|
|
509,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Included in salary amounts for each NEO are monies they deferred pursuant to our 401(k) Plan, which allows our employees and employees of our wholly owned subsidiaries to defer monies from their compensation, subject to applicable limitations in
Code Section 401(k), and amounts deferred pursuant to our Section 125 Cafeteria Plan providing health, life, and disability insurance benefits. Employees, including NEOs, are paid on a bi-weekly basis.
|
2
|
|
Amounts in this column represent grants issued to NEOs under the Long-Term Incentive Plans computed in accordance with FASB ASC Topic 718. See Note 14 Stock Based Compensation Plans to our financial statements included in our Annual Report
Form 10-K filed for the year ending December 31, 2020. For performance-based awards, amounts in this column are computed at the probable level of Stretch performance.
|
3
|
|
Other Annual Compensation includes match and contribution amounts into our 401(k) plan in the same formula and schedule as available to all other employees and such other items as imputed life insurance amounts on group term insurance in excess of
the allowable $50,000, non-taxable IRS limit. Please see the table following these footnotes for further detail.
|
4
|
|
Base salary for Ms. Colombo represents pro-rated amounts of her approved annualized base salary representing the time worked during the identified year.
|
5
|
|
Ms. Colombo received a sign on bonus of $30,000 upon joining in February 2018.
|
6
|
|
Ms. Colombo was granted a pro rata share of long-term performance stock awards for 2016-2018, 2017-2019, and 2018-2021 upon joining in February 2018.
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Page 40
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2021
PROXY
STATEMENT
|
|
|
Table of Contents
COMPENSATION OF EXECUTIVE OFFICERS
The NEOs also participate in certain group life, health and disability insurances and medical reimbursement plans not disclosed in the Summary Compensation Table
that are generally available to all employees and do not discriminate in scope, terms and operation. The table below provides detail on the amounts comprising the column entitled "All Other
Compensation" contained in the Summary Compensation Table for 2020.
|
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NAME
|
|
EMPLOYER
401(K)
CONTRIBUTION
MATCH
|
|
MEMBERSHIP
DUES
|
|
HOUSING
ALLOWANCE
|
|
AUTOMOBILE
ALLOWANCE
|
|
IMPUTED LIFE
INSURANCE
|
|
TOTAL
|
|
Curtis C. Simard
|
|
|
$
|
11,400
|
|
|
|
$
|
43,680
|
|
|
|
$
|
|
|
|
|
$
|
5,979
|
|
|
|
$
|
1,906
|
|
|
$
|
62,965
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Josephine Iannelli
|
|
|
11,400
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
1,260
|
|
|
12,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard B. Maltz
|
|
|
11,400
|
|
|
|
|
|
|
|
|
|
|
|
7,182
|
|
|
|
5,544
|
|
|
24,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marion Colombo
|
|
|
11,400
|
|
|
|
10,920
|
|
|
|
|
|
|
|
0
|
|
|
|
2,884
|
|
|
25,204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John M. Mercier
|
|
|
11,400
|
|
|
|
11,560
|
|
|
|
|
|
|
|
8,927
|
|
|
|
2,933
|
|
|
34,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Membership Dues include payment of membership or participation fees to fitness, country club, or similar organizations.
|
We
may provide non-cash perquisites that are not disclosed in the table above with a de minimis value such as incidental service fee waivers on deposit
accounts or safe deposit rental fees.
Grants of Plan-Based Awards
The following table sets forth information regarding the 2020-2022 long-term plan-based awards granted to the NEOs during the last fiscal year under the 2020
Annual Incentive Plan. Amounts disclosed are based on 2020 eligible salaries received by the participants. The time-vested grants under the 2020-2022 Long Term Incentive Plan are shown under Target,
and the range of the possible performance awards pursuant to the 2020-2022 Long Term Incentive Plan is also disclosed for each participant.
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|
|
|
|
|
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards1
|
|
Estimated future payouts
under equity incentive
plan awards2
|
|
All other
stock awards:
Number of
|
|
Grant date
fair value of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
|
|
Name
(a)
|
|
Grant Type
(b)
|
|
Grant Date
(c)
|
|
Threshold ($)
(d)
|
|
Target ($)
(e)
|
|
Stretch ($)
(f)
|
|
Threshold (#)
(g)
|
|
Target (#)
(h)
|
|
Stretch (#)
(i)
|
|
stock units3(#)
(j)
|
|
stock awards4
(#) (k)
|
|
Curtis C. Simard
|
|
Short-term
|
|
|
|
|
|
|
$
|
147,375
|
|
|
|
$
|
294,750
|
|
|
|
$
|
442,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time-vested
|
|
|
Jan 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,532
|
|
|
|
$
|
163,757
|
|
|
|
|
Performance
|
|
|
Jan 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,226
|
|
|
|
10,451
|
|
|
|
15,677
|
|
|
|
|
|
|
|
393,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Josephine Iannelli
|
|
Short-term
|
|
|
|
|
|
|
73,500
|
|
|
|
147,000
|
|
|
|
220,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time-vested
|
|
|
Jan 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,351
|
|
|
|
84,010
|
|
|
|
|
Performance
|
|
|
Jan 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,676
|
|
|
|
3,351
|
|
|
|
5,027
|
|
|
|
|
|
|
|
126,014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard B. Maltz
|
|
Short-term
|
|
|
|
|
|
|
73,500
|
|
|
|
147,000
|
|
|
|
220,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time-vested
|
|
|
Jan 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,351
|
|
|
|
84,010
|
|
|
|
|
Performance
|
|
|
Jan 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,676
|
|
|
|
3,351
|
|
|
|
5,027
|
|
|
|
|
|
|
|
126,014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marion Colombo
|
|
Short-term
|
|
|
|
|
|
|
46,500
|
|
|
|
93,000
|
|
|
|
139,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time-vested
|
|
|
Jan 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,164
|
|
|
|
54,251
|
|
|
|
|
Performance
|
|
|
Jan 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,082
|
|
|
|
2,164
|
|
|
|
3,246
|
|
|
|
|
|
|
|
81,377
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John M. Mercier
|
|
Short-term
|
|
|
|
|
|
|
46,500
|
|
|
|
93,000
|
|
|
|
139,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time-vested
|
|
|
Jan 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,164
|
|
|
|
54,251
|
|
|
|
|
Performance
|
|
|
Jan 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,082
|
|
|
|
2,164
|
|
|
|
3,246
|
|
|
|
|
|
|
|
81,377
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
The Annual Incentive Program detail in columns (d), (e), and (f) represents the possible payouts ranges based on the relevant performance level for the calendar year ended December 31, 2020. More information regarding the terms of the
Annual Incentive Program can be found in the Compensation Discussion and Analysis.
|
2
|
|
Amounts in columns (g), (h), and (i) represent the number of performance shares granted under the Long-Term Incentive Plan in 2020 based on the relevant performance level. The performance shares were granted under the 2019 Equity Plan. More
information regarding the terms of the performance shares can be found in the Compensation Discussion and Analysis.
|
3
|
|
Represents the number of time-vested shares granted to NEOs in 2020 under the Long-Term Incentive Plans. The performance shares were granted under the 2019 Equity Plan. More information regarding the terms of the time-vested can be found in the
Compensation Discussion and Analysis
|
4
|
|
Fair values of performance awards in column (k) are determined based on Stretch performance level.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
PROXY
STATEMENT
|
|
Page 41
|
Table of Contents
COMPENSATION OF EXECUTIVE OFFICERS
Outstanding Equity Awards at Fiscal Year-End-2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCK AWARDS
|
|
|
|
|
|
|
|
|
|
|
|
NAME
(a)
|
|
NUMBER OF SHARES
OR UNITS OF STOCK
THAT HAVE NOT
VESTED1
(b)
|
|
MARKET VALUE OF
SHARES OR UNITS OF
STOCK THAT HAVE
NOT VESTED1
(c)
|
|
EQUITY INCENTIVE PLAN
AWARDS; NUMBER OF
UNEARNED SHARES,
UNITS OR OTHER RIGHTS
THAT HAVE NOT VESTED2
(d)
|
|
EQUITY INCENTIVE PLAN
AWARDS; MARKET OR
PAYOUT VALUE OF
UNEARNED SHARES,
UNITS OR OTHER RIGHTS
THAT HAVE NOT VESTED2
(e)
|
|
Curtis C. Simard
|
|
|
6,194
|
|
|
|
$
|
139,933
|
|
|
|
23,956
|
|
|
|
$
|
541,155
|
|
|
|
|
|
|
|
|
|
|
|
|
Josephine Iannelli
|
|
|
3,114
|
|
|
|
70,346
|
|
|
|
8,987
|
|
|
|
203,010
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard B. Maltz
|
|
|
3,114
|
|
|
|
70,346
|
|
|
|
8,987
|
|
|
|
203,010
|
|
|
|
|
|
|
|
|
|
|
|
|
Marion Colombo
|
|
|
1,986
|
|
|
|
44,862
|
|
|
|
5,691
|
|
|
|
128,551
|
|
|
|
|
|
|
|
|
|
|
|
|
John M. Mercier
|
|
|
1,986
|
|
|
|
44,862
|
|
|
|
5,691
|
|
|
|
128,551
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Amounts in column (b) represent time-vested shares payable in 2021, 2022 and 2023. The amount in column (c) represents the total value of those shares at December 31, 2020 at the closing price of $22.59 per share.
|
2
|
|
Amounts in column (d) represent the performance shares payable in 2021, 2022, and 2023 if paid at Stretch level. The amounts in column (e) represent the total value of those shares at December 31, 2020 at the closing price of $22.59
per share. More information regarding the terms of the performance shares can be found in the Compensation and Discussion Analysis.
|
Stock Vested in 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCK AWARDS1
|
|
|
|
|
|
|
|
|
NAME
|
|
NUMBER OF SHARES ACQUIRED ON VESTING
|
|
VALUE REALIZED ON VESTING1
|
|
Curtis C. Simard
|
|
|
10,264
|
|
|
|
$
|
187,036
|
|
|
|
|
|
|
|
|
Josephine Iannelli
|
|
|
7,739
|
|
|
|
153,954
|
|
|
|
|
|
|
|
|
Richard B. Maltz
|
|
|
8,049
|
|
|
|
160,291
|
|
|
|
|
|
|
|
|
Marion Colombo
|
|
|
4,257
|
|
|
|
85,238
|
|
|
|
|
|
|
|
|
John M. Mercier
|
|
|
6,405
|
|
|
|
135,198
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
This represents the number and dollar value, respectively, of restricted time-vested shares issued in 2020 to NEOs under the 2016-2018, 2017-2019 and 2018-2020 Long Term Incentive Programs and the performance shares issued under the 2017-2019 plan.
Depending on the plan period, the time-vested shares must be held for a period of one to three years after issue and performance shares are required to be held for a three-year period.
|
No
NEO held stock options at December 31, 2020.
No
NEOs have Pension Benefits or activity in any Nonqualified Deferred Compensation plan or SERP.
Potential Payments Upon Termination of Employment or Change in Control
Executive Employment Agreements. We have entered into executive employment agreements with Mr. Simard and
Ms. Iannelli. Mr. Simard and Ms. Iannelli are the only named executive officers with employment agreements. The agreements provide severance benefits to the executive in
connection with termination of employment either by us without "cause" or by the executive for "good reason" (as those terms are defined in the employment agreements). The amount of severance depends,
in part, on whether the termination of employment occurs prior to a change in control ("non-CIC severance"), or in anticipation of, or within 12 months after, a change in control ("CIC
severance"). In each case, severance payments are conditioned on the executive providing us with a release of claims. The following briefly summarizes the severance benefits payable to each executive
under the agreements:
Non-CIC severance
-
-
For Mr. Simard, his employment agreement provides for (i) cash severance equal to his base salary for the
remainder of the term of his employment agreement (currently scheduled to remain in effect through December 31, 2021), payable in a lump sum; (ii) pro-rata annual incentive award for the
year of termination; (iii) group health benefits (including medical, vision and dental benefits) for the remainder of the employment term (currently, through December 31, 2021) or
18 months (if longer); and (iv) full vesting of all outstanding equity awards, with assumed target performance for performance-based awards.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 42
|
|
2021
PROXY
STATEMENT
|
|
|
Table of Contents
COMPENSATION OF EXECUTIVE OFFICERS
-
-
For Ms. Iannelli, her employment agreement provides for (i) cash severance equal to three years' of base salary,
payable in a lump sum; and (ii) a payment equal to 18 months of our share of premium contributions for group health benefits (including medical, vision and dental benefits).
CIC severance
-
-
For Mr. Simard, his employment agreement provides for (i) cash severance equal to three times the sum of
Mr. Simard's base salary and target annual bonus, payable in a lump sum; (ii) pro-rata annual incentive award for the year of termination; (iii) group health benefits (including
medical, vision and dental benefits) for 36 months; and (iv) full vesting of all outstanding equity awards, with assumed target performance for performance-based awards.
-
-
For Ms. Iannelli, her employment agreement provides for (i) cash severance equal to three times the sum of
Ms. Iannelli's base salary and target annual bonus, payable in a lump sum; and (ii) a payment equal to 36 months of our share of premium contributions for group health benefits
(including medical, vision and dental benefits).
Executive Change in Control Severance Plan. The named executive officers, other than Mr. Simard and Ms. Iannelli,
do not have employment agreements and do not participate in any arrangements entitling them to non-CIC severance. The named executives, other than Mr. Simard and Ms. Iannelli, do,
however, participate in our Executive Change in Control Severance Plan. The plan provides participating executives with severance benefits in the event that (i) a change in control occurs; and
(ii) within 12 months after the change in control, the executive's employment is terminated by us without cause or by the executive for good reason (as those terms are defined in the
plan). If a qualifying termination occurs, the executive is eligible for severance benefits equal to a specified number of months of base salary and a specified number of months of COBRA premiums for
group health coverage (to the extent the COBRA
premiums exceed active employee premium rates). Mr. Maltz is eligible for 36 months of salary and 18 months of COBRA premiums, and the other
named executive officers are eligible for 24 months of salary and 12 months of COBRA premiums.
Equity Awards. Our equity award agreements and the related long-term incentive plan program documents address treatment of
equity awards upon termination of employment or change in control. Under these provisions, the awards vest on a prorated basis in case of termination of employment due to death, disability, or
retirement (defined as attainment of age 65 or attainment of age 60 with at least 10 years of service), based on actual performance for performance-based awards. None of the named executive
officers were eligible for retirement as of the end of the last fiscal year. Except as set forth in the preceding paragraphs, for any other termination of employment before vesting, the awards
forfeit. The award agreements and program documents also provide for full vesting of outstanding equity awards upon the occurrence of a change in control (i.e., without requirement of a
subsequent termination of employment), based on target performance in case of performance-based awards.
No Change in Control Excise Taxes. None of these arrangements include payments of excise taxes in case of a change in control.
The employment agreements and Executive Change in Control Severance Plan instead provide for a cutback in any change in control payments to the extent a cutback would result in a greater after-tax
payment to the executive.
The
following table estimates the amount that would have been payable to each named executive officer under the arrangements described above assuming the applicable employment termination event or
change in control had occurred as of the end of the last fiscal year. The value of equity awards that vest is based on the closing price of our common stock at the end of the last fiscal year and
assumes target performance in case of performance-based awards.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
PROXY
STATEMENT
|
|
Page 43
|
Table of Contents
COMPENSATION OF EXECUTIVE OFFICERS
Termination and Change in Control Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Event
|
|
Curtis C. Simard
|
|
Josephine Iannelli
|
|
Richard B. Maltz
|
|
Marion Colombo
|
|
John M. Mercier
|
|
Termination Without Cause or With Good ReasonNot in Connection with Change in Control
|
|
|
|
|
|
|
|
|
|
|
|
Cash severance
|
|
$
|
1,965,000
|
|
$
|
1,260,000
|
|
|
|
|
|
|
|
Pro rata bonus
|
|
294,750
|
|
147,000
|
|
|
|
|
|
|
|
Benefits
|
|
59,119
|
|
59,119
|
|
|
|
|
|
|
|
Equity vesting
|
|
726,424
|
|
316,043
|
|
|
|
|
|
|
|
Total
|
|
$
|
3,045,293
|
|
$
|
1,782,162
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without Cause or With Good ReasonIn Connection with Change in Control1
|
|
|
|
|
|
|
|
|
|
|
|
Cash severance
|
|
$
|
2,849,250
|
|
$
|
1,701,000
|
|
$
|
1,260,000
|
|
$
|
620,000
|
|
$
|
620,000
|
|
Pro rata bonus
|
|
294,750
|
|
147,000
|
|
|
|
|
|
|
|
Benefits
|
|
59,119
|
|
59,119
|
|
29,560
|
|
19,706
|
|
19,706
|
|
Equity vesting
|
|
726,424
|
|
316,043
|
|
316,043
|
|
197,684
|
|
199,552
|
|
Total
|
|
$
|
3,929,543
|
|
$
|
2,223,162
|
|
$
|
1,605,603
|
|
$
|
837,390
|
|
$
|
839,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death, Disability or Retirement 2
|
|
|
|
|
|
|
|
|
|
|
|
Cash severance
|
|
$
|
655,000
|
|
$
|
420,000
|
|
|
|
|
|
|
|
Pro rata bonus
|
|
|
|
|
|
|
|
|
|
|
|
Benefits
|
|
29,560
|
|
29,560
|
|
|
|
|
|
|
|
Equity vesting
|
|
225,739
|
|
110,366
|
|
110,366
|
|
67,128
|
|
68,996
|
|
Total
|
|
$
|
910,299
|
|
$
|
599,926
|
|
$
|
110,366
|
|
$
|
67,128
|
|
$
|
68,996
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Any Other Termination of Employment
|
|
|
|
|
|
|
|
|
|
|
|
Cash severance
|
|
|
|
|
|
|
|
|
|
|
|
Pro rata bonus
|
|
|
|
|
|
|
|
|
|
|
|
Benefits
|
|
|
|
|
|
|
|
|
|
|
|
Equity vesting
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing of Change in Control
|
|
|
|
|
|
|
|
|
|
|
|
Cash severance
|
|
|
|
|
|
|
|
|
|
|
|
Pro rata bonus
|
|
|
|
|
|
|
|
|
|
|
|
Benefits
|
|
|
|
|
|
|
|
|
|
|
|
Equity vesting
|
|
726,424
|
|
316,043
|
|
316,043
|
|
197,684
|
|
199,552
|
|
Total
|
|
$
|
726,424
|
|
$
|
316,043
|
|
$
|
316,043
|
|
$
|
197,684
|
|
$
|
199,552
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
The termination of employment is in connection with a change in control if (i) for Mr. Simard and Ms. Iannelli, it occurs in anticipation of, or within 12 months after, a change in control, and (ii) for the other named
executive officers, it occurs within 12 months after a change in control.
|
2
|
|
None of the named executive officers were eligible for retirement for purposes of the equity award agreements as of the end of December 31, 2020.
|
|
|
|
|
|
|
|
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|
|
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Page 44
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2021
PROXY
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Table of Contents
CEO Pay Ratio
As
required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about
the relationship of the annual total compensation of our
employees and the annual total compensation of Curtis C. Simard, our Chief Executive Officer and President ("CEO") as of the end of 2020, our last completed
fiscal year:
|
|
|
|
|
CEO PAY RATIO
|
|
CEO Annual Total Compensation
|
|
$
|
953,945
|
|
|
|
|
|
Median Employee Annual Total Compensation
|
|
$
|
53,704
|
|
|
|
|
|
CEO to Median Employee Pay Ratio
|
|
17.76
|
|
|
|
|
|
Based
on this information, we reasonably estimate that for 2020 our CEO's annual total compensation was approximately 18 times that of the median of the annual total compensation of all our employees.
To
identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of our median employee and our CEO for this purpose, we took the
following steps:
-
-
We selected, November 16, 2020 which is within the last three months of 2020, as the date upon which we would identify
the "median employee" because it enabled us to make such identification in a reasonably efficient and economical manner.
-
-
We identified the "median employee" from our employee population excluding the CEO by including the annualized base salary
calculated on their November 16, 2020 compensation rate, overtime, incentives, commissions, matching contributions to participants in our Section 401(k) plan, and the employer subsidy
contributions for our health programs.
-
-
We annualized the compensation of the employees who were hired in 2020 but did not work for us for the entire fiscal year.
Since
we do not widely distribute annual equity awards to our employees, such awards were excluded from our compensation measure for identifying our median employee.
We
identified our median employee using compensation measures identified in Section 953(b) consistently applied to all our employees included in the calculation.
CEO Employment Agreement
In February 2018 we executed a new CEO Employment Agreement with Mr. Simard in order to retain Mr. Simard.
The
term of the Employment Agreement is three years from January 1, 2018, with automatic one-year renewals each January 1st thereafter unless we elect not to extend the term of
the
Employment Agreement by providing Mr. Simard with 90 days' written notice. The Employment Agreement includes certain restrictive covenants with respect to competition and
non-solicitation of customers and employees that apply during the term of the Employment Agreement and for a period of one-year following Mr. Simard's termination of employment, the geographic
scope of which has been expanded to cover a fifty-mile radius of any location where the employer maintains an office as of the date of the termination of employment.
Under
the terms of the Employment Agreement, Mr. Simard is entitled to receive an annual base salary of $655,000, which amount is not subject to automatic increase, but will be reviewed
annually, and further provides that his base compensation will not be reduced downward during the term of the Employment Agreement. Mr. Simard will be eligible to continue to participate in our
annual incentive and long-term incentive plans approved by the Board and in our medical, dental, disability, retirement, life insurance, and other employee benefit plans.
If
Mr. Simard's employment is terminated by the employer without "cause" or he resigns for "good reason" (each as defined in the Employment Agreement), Mr. Simard is entitled to receive,
in addition to accrued benefits, 1) a lump sum payment equal to the base compensation that would have been paid during the remaining unexpired term of the Employment Agreement;
2) insurance continuation for the greater of the remaining unexpired term of the Employment Agreement or the duration of COBRA coverage; 3) payment of a pro-rated amount of any incentive
compensation earned for the calendar year of termination; and 4) immediate vesting of all time-based equity awards and vesting at target of all performance-based equity awards.
In
addition, if Mr. Simard's employment is terminated by the employer without cause or he resigns for good reason within six months prior to or within twelve months following a change in
control (as defined in the Employment Agreement), then, in addition to accrued benefits, he is entitled to receive 1) a lump sum payment equal to three times his base compensation and target
bonus in effect during the year of termination; 2) insurance continuation for three years; 3) payment of a pro-rated amount of
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Table of Contents
CEO Pay Ratio
any incentive compensation earned for the calendar year of termination; and 4) immediate vesting of all time-based equity awards and vesting at target of
all performance-based equity awards. If the payment of the severance benefits upon a change in control is determined to constitute an "excess parachute payment" under Code Section 280G, then
the payments will be reduced so that no portion of the severance benefits will be non-deductible to us or will be subject to excise taxes.
Compensation of the CEO.
On an annual basis, the Compensation and Human Resources Committee reviews the existing compensation plan for our CEO. This Committee reviews his compensation
plan specific to our overall performance, the achievement of certain financial and non-financial goals and the judgment of the entire Board as to the quality of his leadership. In addition, the
Committee will compare his compensation to CEOs of our Compensation Peer Group and salary survey information for comparable positions. In making these comparisons, the Committee will consider
appropriate differences in the size, business model, and financial performance of the other banking institutions.
In
accordance with the CEO Employment Agreement, the Committee reviews his base salary no less often than annually and may recommend an increase in his base salary to the Board at the Committee's sole
discretion.
As
further discussed below, Mr. Simard participated in the structured annual incentive cash compensation plan provided to all executive officers. During 2020, Mr. Simard earned an award
amounting to $433,738.
During
2020, the Compensation and Human Resources Committee granted Mr. Simard restricted time-vested shares and the potential for an issue of restricted performance shares under the 2019-2021
Long Term Incentive Program. He is required to hold the time-vested and any performance shares issued for a minimum of three years from the issue date. Mr. Simard is a member of the Board and
does not receive any director fees for participating in the activities of the Board.
Other Employment Agreements, Change in Control, Confidentiality and Non-Competition
Agreements.
We entered into an Employment Agreement with Ms. Iannelli which includes change in control, confidentiality and non-competition provisions. This
agreement provides Ms. Iannelli severance of salary for 36 months and benefits for a period of 36 months in the event of both a change of control of our company and subsequent
termination (or constructive termination) within 12 months after a change of control, unless such termination was for cause. In addition, Ms. Iannelli's equity grants will vest in
accordance with the terms of the plans under which they were granted and vest fully upon a change in control.
We
have also entered into an Executive Change in Control Severance Plan with BHBT's Executive Vice Presidents, Richard B. Maltz, Marion Colombo, and John M. Mercier along with eight other
management employees. Their agreements provide for severance of salary for a period of 12 to 24 months in the event of both a change of control of our company and subsequent termination (or
constructive termination) within 12 months of a change of control, unless such termination was for cause.
All
these agreements were entered into as part of a total compensation program to attract and/or retain qualified executives and not entered into in response to any effort known to the Board by any
party or entity to acquire control of our company.
Incentive Cash Compensation.
During 2020, Messrs. Simard, Maltz and Mercier and Mss. Iannelli and Colombo participated in an annual cash incentive compensation program with
team goals representing opportunities for incentive payments. We paid out a total of $1,140,080 in March 2021 to the five NEOs based on the 2020 measurement period.
The
plan is based on a balance of multiple measures, layered oversight, and reasonable ceilings for exceptional performance. These two basic plan features structure the plan to discourage excessive
risk but rewards strong performance. The Compensation and Human Resources Committee and the Board Risk Committee both reviewed the plan design to insure it is in line with best practices for risk.
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Page 46
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2021
PROXY
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Table of Contents