Shareholder Communications
Our
Board of Directors provides for a process by which shareholders may communicate
with the Board of Directors, a Board of Directors’ committee, the independent
directors as a group, and individual directors. Shareholders who wish to
communicate with our Board of Directors, a Board of Directors’ committee, or
any other directors or individual directors may do so by sending written
communications addressed to the Board of Directors of 1
st
United
Bancorp, a Board of Directors’ committee, or such group of directors or
individual directors to the following address:
1
st
United Bancorp, Inc.
c/o Corporate Secretary
One North Federal Highway
Boca Raton, FL 33432
Communications
will be compiled by our Corporate Secretary and submitted to the Board of
Directors, a committee of the Board of Directors, or the appropriate group of
directors or individual directors, as appropriate, at the next regular meeting
of the Board of Directors. The Board of Directors has requested that the
Corporate Secretary submit to the Board of Directors all communications
received, excluding those items that are not related to board duties and
responsibilities, such as: mass mailings; job inquiries and resumes; and
advertisements, solicitations, and surveys.
Code of Ethics and Code of Conduct
The
Board of Directors has adopted a Code of Ethics applicable to our Chief
Executive Officer and our financial and accounting officers and a Code of
Conduct applicable to all employees, officers, and directors, which are
available, without charge, upon written request to:
1
st
United Bancorp, Inc.
c/o Corporate Secretary
One North Federal Highway
Boca Raton, FL 33432
These codes
are designed to comply with NASDAQ and U.S. Securities and Exchange Commission
requirements.
Board of Directors and Committee Evaluations
The
Corporate Governance Committee of the Board of Directors uses written
questionnaires to evaluate the Board of Directors as a whole and its
committees. The evaluation process occurs annually. Directors submit completed
questionnaires to the Chair of the Corporate Governance Committee, who
summarizes the results without attribution. The full Board of Directors
discusses the summary of the Board of Directors evaluation, and each committee
discusses the summary of its own evaluation.
Director Nominating Process
The
Corporate Governance Committee of the Board of Directors annually reviews and
makes recommendations to the full Board of Directors regarding the composition
and size of the Board of Directors so that the Board of Directors consists of
members with the proper expertise, skills, attributes, and personal and
professional backgrounds needed by the Board of Directors, consistent with
applicable regulatory requirements.
The
Corporate Governance Committee believes that all directors, including nominees,
should possess the highest personal and professional ethics, integrity, and
values, and be committed to representing the long-term interests of our
shareholders. The Corporate Governance Committee will consider criteria
including the nominee’s current or recent experience as a senior executive
officer, whether the nominee is independent, as that term is defined in Rule
5605(a)(2) of the NASDAQ listing standards, the business experience currently
desired on the Board of Directors, geography, the nominee’s banking industry
experience, and the nominee’s general ability to enhance the overall
composition of the Board of Directors. The Corporate Governance Committee does
not have a formal policy on diversity.
Our
Corporate Governance Committee will identify nominees for directors primarily
based upon suggestions from shareholders, current directors, and executives
utilizing selection criteria developed by the Corporate Governance Committee.
The Chairman of the Corporate Governance Committee and at least one other
member of the Corporate Governance Committee will interview director
candidates. The full Board of Directors will formally nominate candidates for
director to be included in the slate of directors presented for shareholder
vote based upon the recommendations of the Corporate Governance Committee
following this process.
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1st United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
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17
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Director
Attendance at Annual Meeting of Shareholders
We
encourage all incumbent directors, as well as nominees for election as
director, to attend the Annual Meeting of Shareholders. All of our incumbent
directors attended our Annual Meeting in May 2011.
Director Service on Other Boards
Directors
must be willing to devote sufficient time to carrying out their duties and
responsibilities effectively, and should be committed to serving on the Board
of Directors for an extended period of time. No director may serve on more than
three other public company boards of directors. A director must advise the
Chairman of the Board of Directors and the Chairman of the Corporate Governance
Committee of the Board of Directors before accepting an invitation to serve as
a director of another public company. The Corporate Governance Committee will
review whether such board membership may unduly impact the ability of the
director to fulfill the director’s duties to us.
Director and Officer Stock Ownership
Requirements
All
of our directors are required to hold common stock of the Company in an amount
which exceeds the lesser of $100,000 or five times their annual director fees
at the time they are elected. Newly elected directors will have 10 years to
attain this ownership threshold. Our Chief Executive Officer is required to
hold common stock of the Company in an amount which exceeds the lesser of
$100,000 or his annual base salary while serving in such capacity. A newly
appointed Chief Executive Officer will have six years to attain this ownership
threshold. The Compensation Committee has determined that as of December 31,
2011, all of our directors and our Chief Executive Officer have met our stock
ownership requirements or are on track to meet the ownership expectations
within the stated time period.
T
RANSACTIONS WITH
MANAGEMENT AND RELATED PERSONS
Some
of our directors and officers, and other persons and entities with which they
are affiliated, are customers of, and have, in the ordinary course of business
and banking, transacted with, 1
st
United Bank. These transactions
include business services provided to 1
st
United Bank, loans,
commitments, lines of credit, and letters of credit, any of which may, from
time to time, exceed $120,000. All loans included in these transactions were
made on substantially the same terms, including interest rates and collateral
requirements, as those prevailing at the time for comparable transactions with
other persons who were not affiliates of 1
st
United Bank and, in the
opinion of management, did not involve more than the normal risk of
collectability or presented other unfavorable features. Our Board of Directors
approved all of these transactions. Additional transactions with these persons
and businesses are anticipated in the future. As of December 31, 2011, the
amount of credit extended to directors, executive officers and their affiliates
in the aggregate was approximately $9.7 million.
We
recognize that transactions between us and any of our directors or executive
officers can present potential or actual conflicts of interest and create the
appearance that our decisions are based on considerations other than our and
our shareholders’ best interests. Therefore, as a general matter, it is our
preference to avoid these types of transactions. Nevertheless, we recognize
that there are situations where these types of transactions may be in, or may
not be inconsistent with, our best interests. Therefore, we have adopted formal
written procedures that require the Audit Committee of our Board of Directors
to review and, if appropriate, to approve or ratify each of these transactions.
Pursuant to the procedures, the Audit Committee will review any transaction in
which we are or will be a participant and the amount involved exceeds $120,000,
and in which any of our directors or executives had, has or will have a direct
or indirect material interest. After its review, the Audit Committee will only
approve or ratify those transactions that are in, or are not inconsistent with,
our and our shareholders’ best interests, as the Committee determines in good
faith.
For
the year ended December 31, 2011, we paid approximately $445,000 to The
Plastridge Agency, Inc., a company controlled by Thomas E. Lynch, one of our
directors, for insurance services. The approximate dollar value of Mr. Lynch’s
interest in the foregoing transaction, without regard to profits or losses, is
$445,000. The commission income to Plastridge Agency, Inc., however, amounted
to less than $50,000. The amounts paid to The Plastridge Agency include
insurance premiums remitted to our insurance carriers. Additionally, for the
year ended December 31, 2011, we made lease payments totaling $136,000 to South
County Road, Inc., a company controlled by Carlos Morrison, one of our
directors, for property used for one of 1
st
United Bank’s branches.
The approximate dollar value of Mr. Morrison’s interest in the foregoing
transaction, without regard to profits or losses, is $136,000.
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1
st
United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
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E
XECUTIVE
OFFICERS
The
names, ages, and current positions of our executive officers as of the record
date are listed in the table below. If an executive officer is also a nominee
for director, then his biography is presented in “Proposal 1 – Election of
Directors – Information Concerning the Nominees and Directors” beginning on
page 9. Executive officers are elected annually by the Board of Directors at
its meeting following the Annual Meeting of Shareholders to serve for one-year
terms and until their successors are elected and qualified. There are no
familial relationships among the executive officers nor is there any agreement
or understanding between any officer and any other person pursuant to which the
officer was elected.
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Name
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Age
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Position
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Wade E. Jacobson
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43
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Executive Vice President, Chief Lending
Officer, 1
st
United Bank
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John Marino
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48
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President
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Warren S. Orlando
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69
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Chairman of the Board of Directors
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Lawrence Ostermayer
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59
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Senior Vice President, Credit
Administration, 1
st
United Bank
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Rudy E. Schupp
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61
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Chief Executive Officer
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Wade E. Jacobson
,
43, has been the Executive Vice President, Chief Lending Officer for 1
st
United Bank since March 2007. Prior to that time, Mr. Jacobson served as Senior
Vice President, Team Leader Business Banking for 1
st
United Bank
from July 2003 (when he joined 1
st
United Bank) until his promotion
in March 2007. Mr. Jacobson began his career with Barnett Bank in the
Management Associate Training Program in 1990 and rose to the position of Vice
President Relationship Manager within that organization. He held positions of
increasing responsibility in lending production with SunTrust from 1998 until
2000, and Republic Security Bank and Wachovia from 2000 until 2003. Mr.
Jacobson is a graduate of Clemson University and holds a Bachelor’s Degree in
Finance.
Lawrence Ostermayer
,
59, joined 1
st
United Bank in
September of 2003 and currently holds the position of Senior Vice President,
Credit Administration. Mr. Ostermayer was employed by RBC Centura Bank as
Senior Credit Risk Manager – South Florida and Special Loan Group Manager
Florida & Georgia from 2002 until joining 1
st
United. From 1998
until 2002 Mr. Ostermayer worked with Republic Security/Wachovia in Business
Banking and Special Assets. Mr. Ostermayer was with Barnett Bank/Bank of
America from 1986 until 1998 managing all aspects of the credit process in the
Florida counties of Palm Beach, Martin, Okeechobee, and Highlands. Mr.
Ostermayer is a graduate of Salem College and holds a Bachelor of Science in
Business Administration.
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1st United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
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19
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EX
ECUTIVE COMPENSATION
Compensation Discussion and Analysis
Executive Overview
We
have a fundamental pay for performance orientation in our executive
compensation programs with major components revolving around the achievement of
important financial and operational initiatives and influenced by the judgment
of the Board and its Compensation Committee.
In
2003, the executive management team acquired a small (less than $100 million in
assets) troubled financial institution and has grown it to one of the 15
largest banks headquartered in Florida. In the past three years alone, our
executive management team has: 1) completed an initial public offering that
raised over $80 million in additional capital; 2) acquired the assets and
liabilities of three failed institutions from the FDIC; 3) expanded our
Southeast Florida footprint into the Gulf Coast and the Central Florida markets
of Orlando and Tampa Bay; and 4) successfully completed a secondary offering
that raised an additional $37 million.
Specifically,
in 2011, 1st United:
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Achieved one
of its highest core earnings years;
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Successfully
completed a $37.4 million public follow-on equity offering in an anemic
capital market for the banking industry and at a price per share equal to
130% of its IPO price in the fall of 2009;
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Achieved
among the highest net interest margins in comparison to its public bank
benchmark group;
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Showed among the
lowest ratios of non-performing assets to total assets in comparison to its
public bank benchmark group;
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Reflected an
above average efficiency ratio in comparison to its public bank benchmark
group;
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Grew total
assets by 12% to $1.4 billion;
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Acquired the
Gulf Coast-based Old Harbor Bank ($210 million in assets) through an
FDIC-assisted transaction;
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Announced
an agreement to acquire the Palm Harbor-based Anderen Bank ($209 million in
assets);
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Expanded its
footprint from Southeast Florida’s major markets to Florida’s coveted Central
Florida markets;
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Reported a
position of having fully 49% of its loan portfolio under loss share
indemnification agreements with the FDIC as its counterparty; and
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Enjoyed
sufficient excess capital to acquire or merge-in additional Florida banks in
the future.
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Executive
compensation is based on our Company performance in the past year and plans for
the new fiscal year. Performance exceeded many expectations in 2011, and the
Compensation Committee took the opportunity to reexamine executive
compensation. The base salary for Messrs. Orlando, Schupp, and Marino were
unchanged from 2010 and incentive pay programs revealed opportunities to be
better aligned with performance. Thus, as a result, in December 2011, the
Compensation Committee and management reviewed the executive compensation
practices, and in light of our pay for performance compensation philosophy,
altered our executive compensation programs to be more in line with 1
st
United’s performance goals as a larger community bank.
Compensation
Philosophy
The
Compensation Committee of the Board formulates and administers the compensation
program for our executive officers. Mr. Schupp recommends to the Compensation
Committee the compensation for the other named executive officers. Our
executive compensation program is designed to:
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support the
creation of long-term shareholder value;
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attract,
retain and motivate high-quality, high-performing executive leadership with
the talent and expertise to foster strong business results and enhance
shareholder value; and
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avoid
imprudent risk-taking.
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1
st
United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
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Our
principal business requires a careful balance between the interests of strict
regulators and the sometimes diverse interests of shareholders and customers.
This complex balancing is made even more difficult because our
subsidiary, 1
st
United Bank, is a high growth, commercial bank
situated in growing banking markets where it must, among other things, compete
with the operations of larger financial service providers while navigating
through the challenges of a weaker regional and national economy. In addition,
we have implemented a significant merger and acquisition strategy. Significant,
often irreversible, decisions affecting the intermediate and long-term future
of the business are a consistent part of executive officer decision-making. It
is difficult in the short-term to measure precisely the impact that good and
bad decisions in these areas will have on long-term prospects, particularly as
so many impinging factors are external to us. As a result, it is extremely
important for us to attract, develop and retain executive officers with strong
business acumen and commercial banking skills, which may not have been
necessary to run a “traditional, mature” bank in years past, but are imperative
in light of our current strategy, economic environment and circumstances.
It
is important to align the interests of our executive officers and shareholders,
therefore it is vital that we provide our executive officers with total
compensation that encourages them to make decisions that are designed to
support long-term value creation, which will often require substantial outlays
of capital, the avoidance of which would otherwise result in the attainment of
higher short-term financial results while sacrificing the achievement of
long-term shareholder value. Executive officers with proven successful track
records, bank acquisition skills, and who know the demands of Florida community
banking are extremely valuable and are a limited resource. These individuals
are sought after by our competitors. The risks and costs to identify and
recruit successor executive officers would be significant.
Benchmarking
In
making compensation decisions with respect to each executive officer’s total
compensation opportunity, the Compensation Committee considers the competitive
market for executives and compensation opportunities provided by comparable
“benchmark” companies. However, it does not target specific levels relative to
industry norms (the so-called “percentile” approach). The Compensation
Committee uses its business judgment in assessing and using the information.
We
obtain market comparison information from publicly available information for
peer and non-peer banking institutions comprised of a set of publicly-held bank
holding companies and banks in Florida and Georgia as one source of information
for consideration in setting some elements of compensation. In addition to
benchmarking, we use certain databases and market studies, such as from SNL
Financial, to gauge trends in compensation and relative allocations among the
elements of compensation. The benchmarking group includes:
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Financial
Institution
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Total Assets($)*
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Ameris
Bancorp
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2,972,168
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Capital City
Bank Group, Inc.
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2,622,053
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CenterState
Banks, Inc.
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2,062,924
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Charter
Financial Corporation
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1,063,822
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Colony
Bancorp, Inc.
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1,275,658
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Fidelity
Southern Corporation
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1,945,000
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Great
Florida Bank
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1,556,082
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Savannah
Bancorp, Inc.
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1,066,930
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Seacoast
Banking Corporation of Florida
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2,016,381
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State Bank
Financial Corporation
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2,828,579
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Southeastern
Bank Financial Corporation
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1,607,105
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*Dollars in thousands. All data
was obtained from the respective company’s 2010 Proxy Statement, the latest
data available to us when selecting a benchmark for executive compensation for
2011.
We
consider these financial institutions to share some or all of the following
characteristics with us: corporate cultures, requisite skill bases, competitive
intensity, degree of regulation, operating requirements and capital intensity.
This benchmarking group was changed for 2011 compared to 2010 because of
industry consolidation, unacceptable financial weakness of a benchmark bank
under consideration, and the need to reflect a peer group that is in a range
similar in size to the Company.
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1st United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
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21
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Compensation
Policies
We
believe that it is most appropriate to focus primarily on each executive
officer’s total compensation opportunity, ensuring that it is competitive with
other similar opportunities, taking into consideration factors such as the
character, size, scope, and performance of the Company and 1
st
United Bank, as well as the elements of compensation that are
performance-based. In addition, although executive officers have somewhat
different views about the value they attach to the various elements of
compensation, in general we believe that our executive officers must place
their highest value on future compensation to encourage long-term value
creation.
When
allocating total compensation among individual compensation components, it is
our practice to make a significant portion of each executive officer’s total
compensation opportunity performance-based, reflecting both upside potential
and downside risk. In addition, as a means of aligning the interests of our
executive officers with the interests of our shareholders and long-term value,
we believe that executive officers should have a significant and continuing
equity interest in the Company. Beyond these practices, we do not have a formal
policy for allocating between elements of compensation. The Compensation Committee
does review each compensation component offered to the executive officers to
ensure that it is competitive relative to other opportunities and that it meets
the Company’s view of fairness, consistency, retention, and motivation.
We
view compensation decisions affecting our founding executive officers (Messrs.
Orlando, Schupp, and Marino) separate from our other executive officers. An
integral element of our market strategy is to capitalize and leverage the prior
experience of our founding executive officers, including their extensive
experience with bank mergers and acquisitions, particularly buying,
turning-around, and growing troubled banks. In mid-2003, Messrs. Orlando,
Schupp, and Marino caused the change of control of a $45 million asset troubled
bank with a history of losses, recapitalized it, changed the management, the
Board of Directors and the overall business plan of the troubled bank, and
renamed the previously troubled bank as “1
st
United Bank.” We
believe these founding executive officers were and are central to our ability
to create value, and the Compensation Committee believes it is in our
shareholders’ interests that their compensation be structured in a manner which
most appropriately encourages desired behaviors to reach desired results.
The
decisions regarding any one of base pay, cash incentive compensation,
retirement savings, or equity–based compensation influence decisions regarding
the others only to the extent that total compensation opportunity must be competitive
with similar opportunities, given our character and growth strategy, and
individual performance. Decisions regarding personal benefits and perquisites
do not influence decisions regarding other compensation elements. We believe
that the perquisites and other personal benefits available to our executive
officers are customary offerings for persons in key executive positions in the
publicly-traded community banking industry and, as such, are necessary to
remain competitive with other opportunities. Further, we believe that
perquisites such as club memberships and automobile privileges are also
necessary to promote client development and client retention efforts.
We
further believe that there needs to be clarity in the underlying measures that
give rise to total compensation for executive officers while striking a balance
between strictly formula-driven measures and subjective measures, as a strict
focus on the quantitative measures can lead to unintended consequences. The
Compensation Committee therefore uses its judgment in recommending executive
officer compensation to the Board of Directors.
We
did not engage a compensation consultant in 2011.
Role of Executive
Officers in Setting Compensation
The
Compensation Committee reviews and recommends to our Board of Directors for
determination the compensation of our founding executive officers, Messrs.
Orlando, Schupp, and Marino. Each executive officer annually participates in a
performance evaluation. This evaluation is used in determining the overall
compensation level of the executive officers. In addition, Mr. Schupp
separately submits recommendations to the Compensation Committee regarding
Messrs. Jacobson and Ostermayer for use by the Compensation Committee in making
recommendations to the Board of Directors concerning their base salary,
short-term incentive compensation and long-term incentive and retirement
compensation. Mr. Schupp bases his recommendations on the detailed performance
of the executives and the data he compiles from the proxy statements of the
benchmark peer group. An executive
officer may not be present at a meeting of the Compensation Committee where
that executive officer’s compensation is being discussed.
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1
st
United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
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Effect of 2011
Say-on-Pay Vote on Compensation Decisions
At
our 2011 Annual Meeting, our shareholders approved, on a nonbinding advisory
basis, executive compensation (a “say-on-pay vote”). Out of the 22,676,157
votes cast (excluding abstentions and broker non-votes), our shareholders cast
22,405,775 shares, or 98.8%, “For” approval of our executive compensation.
While the Compensation Committee considered the high approval rate as
validation of our approach to executive compensation, as discussed below, the
Compensation Committee took certain actions in 2011 to better align
compensation with company performance. The Compensation Committee will continue
to consider the outcome of the say-on-pay votes when making future compensation
decisions for the named executive officers.
Compensation
Committee Activity in 2011
The
Compensation Committee met four times in 2011, including three executive
sessions with only the Compensation Committee members present. During these
meetings, the Compensation Committee:
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Evaluated
the performance of the executive officers.
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Reviewed
total compensation for executive officers in relation to performance and the
benchmark group.
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Approved significant
revisions to 1st United’s executive compensation arrangements with Messrs.
Orlando, Schupp, and Marino, including eliminating the automatic grants of
stock options, increasing their base salaries to be more in line with market,
capping and providing a limited clawback to the Cash Incentive Plan,
providing for annual performance-based restricted stock grant awards, and
amending the SERPs. These changes are discussed in more detail below.
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Reviewed
executive perquisites and found them to be reasonable.
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Reviewed and
discussed all incentive compensation plans to determine whether excessive
risk was created.
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Reviewed and
recommended minor changes to Director compensation for 2012.
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Reviewed and
approved the revised benchmark group for 2012.
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Compensation
Programs Design
Goals
Our
executive compensation program is designed to:
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attract,
retain and motivate senior executives and other key employees who are
vulnerable to overtures from key competitors and out-of-area banks;
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motivate
skilled executive officers through compensation plans that promote decisions
which are aligned with the long-term interests of shareholders and
non-shareholder constituencies;
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ensure that
executive officers’ efforts (i) represent an appropriate balance between
short and long-term goals, as well as between operational and financial
measurements, and (ii) focus on meeting the needs of important
non-shareholder parties, such as customers, bank regulators and employees, in
ways that build long-term value; and
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encourage
executive officers to act in ways that are consistent with our strategies,
risk appetite, interests and core values.
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Impact of Performance on Compensation
Our
executives have extensive experience in buying, integrating, turning-around and
growing troubled and healthy banks. Since 2003, we have succeeded with four
whole bank transactions (including the Anderen acquisition), one transaction
involving select branches, deposit liabilities, and loans, and three failed
banks purchased from the FDIC. Our management team also has extensive public
company experience, primarily with publicly-held banks. In 2009, the named
executive officers accomplished an initial public offering, raised more than
$80 million of additional capital, and listed the company’s stock on the NASDAQ
Global Market under the symbol “FUBC”. In
March 2011, this team raised $34 million in equity capital in a follow on
public offering. As of the closing of the Anderen transaction, the Company had
more than $1.6 billion in consolidated assets. We believe the named executive
officers were and are central to our ability to create value, and the
Compensation Committee believes it is in shareholders’ and non-shareholders’
interests that their compensation be structured in a manner which most
appropriately encourages desired behaviors in order to reach desired results.
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1st United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
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23
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We
believe that future increases in executive compensation should be tied to our
success through a combination of base salary, cash incentive compensation,
retirement plans, and the potential value of the common stock underlying the
named executive officers’ equity-based compensation.
For
details of each named executive officer’s employment agreement with the
Company, see the section of this proxy statement entitled “INFORMATION ABOUT
EXECUTIVE COMPENSATION.”
Elements of
Compensation
Total Compensation
Our
total compensation consists of four components:
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Base salary;
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Annual cash
incentive compensation;
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Equity-based
compensation; and
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§
|
Retirement
plans, other benefits and perquisites.
|
Base Pay
We
provide our named executive officers with base pay because we recognize that
cash is an important component of compensation and is highly-valued by
executive officers. Based upon factors such as market comparison data, regional
competition and business judgment, we believe that we provide our executive
officers with base pay that is competitive with their base pay opportunity at
healthy comparable companies.
Upon
their hire in mid-2003, Messrs. Orlando, Schupp, and Marino received an annual
base salary of $62,500, $125,000 and $125,000, respectively. This base pay
remained unchanged until April 1, 2005 when the Company first achieved $150
million in assets and profitability. Upon reaching these benchmarks, the annual
base pay for Messrs. Orlando, Schupp, and Marino was increased to $125,000,
$250,000 and $250,000, respectively, in accordance with the terms of their
respective employment agreements. Those base salaries were then subject to
annual adjustments. For fiscal year 2011, the annual base salaries for Messrs.
Orlando, Schupp, and Marino were increased to $134,000, $278,000, and $268,000,
respectively, based on the Compensation Committee’s subjective determination
that the executives were performing well in their roles. On December 20, 2011, we
entered into amended employment agreements with Messrs. Orlando, Schupp, and
Marino which increased their annual base salaries, effective January 1, 2012,
to $175,000, $350,000, and $315,000, respectively. The increase in 2012 is
designed to reward the executives’ successes in growing the Company and to
reflect a competitive salary based on the increased asset size and
profitability of the Company.
Mr.
Schupp recommends the base pay for each of Messrs. Jacobson and Ostermayer,
which is approved by the Compensation Committee. In 2011, Messrs. Jacobson and
Ostermayer received a base salary at the annual rate of $190,000 and $147,000,
respectively. These base salary amounts are periodically reviewed based on the
factors discussed above. Based on this review, effective January 2012, Messrs.
Jacobson and Ostermayer received a base salary at the annual rate of $200,000
and $160,000, respectively.
Cash
Incentive Compensation
We
provide our executive officers with a cash incentive opportunity as one element
of total compensation opportunity intended to be both “at risk” and
performance-based. The Compensation Committee believes that cash incentives for
our named executive officers should be tied directly to our earnings performance.
Pursuant to their employment agreements, Messrs. Orlando, Schupp, and Marino
have each been eligible for a cash incentive earning opportunity equal to one
percent, two percent and two percent, respectively, of our consolidated pre-tax
earnings, paid
quarterly, excluding certain extraordinary items and excluding restructuring
charges and other charges relating to mergers, acquisitions or transactions of
similar effect, for financial reporting purposes.
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24
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1
st
United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
|
The
Compensation Committee considered factors such as the appropriate balance of
cash compensation within the context of total compensation opportunity, the
level of incentive needed to motivate executive officers to achieve planned
corporate earnings levels, and other factors that the Compensation Committee
deemed relevant, including historical cash incentive payments, and determined
that the annualized earning opportunity through a cash incentive should range
between 75% to 125% of base compensation.
In
2011, Messrs. Orlando, Schupp, and Marino received $62,800, $125,600, and
$125,600, respectively, of total cash incentive compensation pursuant to their
employment agreements.
Mr.
Schupp recommends to the Compensation Committee the cash incentive opportunity
for Messrs. Jacobson and Ostermayer. For the fiscal year ended December 31,
2011, Mr. Jacobson earned a cash incentive payment of $32,506. Mr. Ostermayer
received a cash incentive payment of $10,000. Under the terms of Mr. Jacobson’s
employment agreement, he is eligible each quarter for cash incentive
compensation through a tailored management incentive compensation program that
includes measures of achievement of performance targets: the retention of loan
portfolios (26.25%), growth in new lending (26.25%), associated deposit growth
(11.25%), achievement of consolidated corporate earnings (10%), fee income
(11.25%) and the execution of management responsibilities (15%). Evaluation of
the degree to which Mr. Jacobson executed his management responsibilities and
achieved his goal is a subjective determination. Such incentive compensation is
capped at 50% of Mr. Jacobson’s base salary. In 2011, Mr. Jacobson’s objective
goals compared to actual results were as follows:
|
|
|
|
|
|
|
|
|
|
(Dollars
in Thousands)
|
|
Goal
|
|
Actual
|
|
|
|
|
Retention of
loan portfolios (26.25%)
|
|
$
|
840,000
|
|
$
|
774,586
|
|
|
Growth in
new lending (26.25%)
|
|
|
82,500
|
|
|
56,597
|
|
|
Associated
deposit growth (11.25%)
|
|
|
19,500
|
|
|
41,255
|
|
|
Achievement
of consolidated corporate earnings (10%)
|
|
|
8,107
|
|
|
5,954
|
|
|
Fee income
(11.25%)
|
|
|
0.330
|
|
|
0.653
|
|
Mr. Ostermayer
in his senior capacity in the areas of credit and risk management is not
eligible for cash incentives under a structured cash incentive program, but is
on occasion eligible to receive a cash incentive payment for support services
on major projects and initiatives undertaken by us. Mr. Ostermayer’s bonus was
discretionary and in consideration of his 2011 performance.
The
amounts set forth above include the cash incentive compensation that the
executive officers earned in 2011, which incentive awards are set forth in the
“Non-Equity Incentive Plan Compensation” column of the Summary Compensation
Table.
Beginning
in 2012, the total bonus payable to Messrs. Orlando, Schupp, and Marino under
the Cash Incentive Plan will be limited to the highest base salary paid to any
of our named executive officers in the case of Messrs. Schupp and Marino, and
50% of the highest base salary paid to any of our named executive officers in
the case of Mr. Orlando. By decreasing the maximum target opportunity for the
Cash Incentive Plan from 125% of base compensation to 100%, less relative
expense is incurred by us. In addition, each quarter, only 75% of the quarterly
cash bonus earned will be paid to the executives. The remaining 25% of the
quarterly cash bonus earned will now be withheld by us and will be subject to a
clawback as follows: each year, after we have filed our Annual Report on Form
10-K with the Securities and Exchange Commission, we will calculate what
Messrs. Orlando, Schupp, and Marino would have earned under the Cash Incentive
Plan if the Cash Incentive Plan was based on an annual calculation rather than
a quarterly calculation. If we calculate a lower cash bonus payment under the
annualized method, then we will reduce the 25% held back under the Cash
Incentive Plan accordingly.
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1st United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
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25
|
Equity-Based
Compensation
The
portion of the executive officers’ total compensation comprised of equity-based
compensation is intended to reward longer-term performance, retain the
executive officers, allow visibility to the longer-term outcomes of
current period decisions, and more closely align the interests of our executive
officers with the interests of our shareholders, all of which are intended to
support the creation of long-term shareholder value.
Since
2003, Messrs. Orlando, Schupp, and Marino each received periodic equity awards
in the form of non-qualified stock options awarded at fair market value in an
amount equal to 3.33% of newly-issued shares of stock issued by us at any point
in time, excluding shares of common stock issued as a result of exercised stock
options. Any options granted under the employment agreements prior to January
1, 2007 vest immediately and are immediately exercisable. Options granted on or
after January 1, 2007 vest 20% on each of the first five anniversaries of the
grant date or 10% on each of the first ten anniversaries of the grant date. All
outstanding options immediately vest and become exercisable upon (i)
termination not for cause, (ii) change of control, or (iii) death or disability.
As discussed below, effective January 1, 2012, Messrs. Orlando, Marino, and
Schupp no longer receive options upon the issuance of additional shares of our
common stock in accordance with their amended employment agreements.
Messrs.
Jacobson and Ostermayer each are eligible to receive periodic equity awards in
the form of non-qualified stock options, as recommended by Mr. Schupp and
approved by the Compensation Committee and the Board of Directors. Options
granted to Messrs. Jacobson and Ostermayer are granted pursuant to the 1
st
United Bancorp, Inc. 2008 Incentive Plan and vest ratably over seven years on
anniversaries of the date of grant. If Messrs. Jacobson’s and Ostermayer’s
employment is terminated due to death, disability, or normal or early
retirement after age 65, then the executive officer will have 180 days to
exercise the options that were exercisable at the date of termination. Upon a
change of control, all unvested options immediately vest. If Messrs. Jacobson
and Ostermayer are terminated for any other reason, including for “cause,” no
unexercised options may be exercised on or after the effective date of
termination or, if for cause, once we deliver the termination notice.
For
details of the option grants, see the footnotes to the Summary Compensation
Table in the section of this proxy statement entitled “INFORMATION ABOUT
EXECUTIVE COMPENSATION.”
Beginning
in 2011, assuming certain annual specified performance goals are met, we will
annually grant restricted stock to each of Messrs. Orlando, Schupp, and Marino.
Each year, Messrs. Orlando, Schupp, and Marino have the opportunity to earn an
award with a value equal to 50% of the highest base salary paid to any of our
named executive officers, with the number of shares to be granted being based
on the fair market value of our common stock as of the last business day in
February after the year in which the award is earned. The award will vest in
ten (10) equal annual installments, except that the award will immediately vest
if the executive’s employment is terminated not for “cause” (as that term is
defined in their employment agreement), there is a “Change of Control” (as that
term is defined in their employment agreement), the executive dies or becomes
subject to a “Disability” (as that term is defined in their employment
agreement). The awards will be determined based on the following metrics:
Financial
Performance (75%)
|
|
|
|
|
|
§
|
Pre-tax net income budget achievement (50%
weight of the 75%)
|
|
|
|
|
|
|
§
|
Non-performing
asset/asset ratio to benchmark group mean (uncovered assets) (20% weight of
the 75%)
|
|
|
|
|
|
|
§
|
Net interest
margin compared to benchmark group mean (20% weight of the 75%)
|
|
|
|
|
|
|
§
|
Efficiency
ratio to benchmark group mean (10% weight of the 75%)
|
Operational
Performance (25%)
|
|
|
|
|
|
§
|
Annual bank
safety and soundness examination rating for calendar year (75% weight of the
25%)
|
|
|
|
|
|
|
§
|
Specialty
area examination results FDIC loss share, BSA, CRA, IT (25% weight of the
25%)
|
Any
restricted stock award would be accompanied by a supplemental cash award in the
amount of the federal income tax liability of the executive resulting from the
restricted stock award. Because the tax liability arises as the shares vest,
the supplemental cash award is paid over a ten year period. The supplemental
cash award allows the executive to retain all of the shares he receives, rather
than having to sell a portion of the shares to satisfy any tax obligation. This
supports our philosophy of ownership expectations and aligns the interests of
our executives with those of the shareholders.
|
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26
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1
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United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
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The
equity-based compensation was revised in 2011 because the Compensation
Committee and the founding executive officers agreed that improvements could be
made to better align compensation with Company performance. The previous stock
option equity program revolved around capitalization events, whether an equity
offering or the issuance of common stock as consideration in an acquisition.
Success in such initiatives was the performance indicator. The new stock grant
program contains a series of strict, recognized, industry and
shareholder-centric financial and operational performance standards. The new
program is capped to a fraction of a base salary limitation in recognition that
common stock issues will grow significantly given the new size and growth
appetite of the institution. The base salary limitation of 50% was tested
through scenario development and selected to retain a balance between deferred,
long-term equity compensation and other elements of total compensation.
For
the fiscal year ended December 31, 2011, we granted 27,945 shares of restricted
stock to each of Messrs. Orlando, Schupp, and Marino. In 2011, Messrs. Orlando,
Schupp, and Marino objective goals compared to actual results were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Goal
|
|
Actual
|
|
|
Financial Performance (75%)
|
|
|
|
|
|
|
|
|
Pre-tax net income (37.5%)
|
|
$
|
7,390,000
|
|
$
|
5,954,000
|
|
|
Non-performing asset/asset ratio to
benchmark (15%)
|
|
|
5.94
|
%
|
|
4.01
|
%
|
|
Net interest margin compared to benchmark
(15%)
|
|
|
3.82
|
%
|
|
4.76
|
%
|
|
Efficiency ratio compared to benchmark
(7.5%)
|
|
|
75.1
|
%
|
|
76.8
|
%
|
Operational Performance (25%)
–
(Not disclosed)*
*Under federal
law, we are prohibited from disclosing examination results to the public.
Therefore, our operational performance goals, which include confidential
examination results, cannot be disclosed. In 2011, Messrs. Orlando, Schupp, and
Marino achieved a total payout of 25% of the total 25% available for
operational performance. The operational performance goals are designed to
balance risk taking with safety and soundness. There is a risk that payments
will not be made at all and a substantial risk that the payments will be made
at less than 100% of the target amount. The achievement of the goals may be
affected by several factors not entirely controlled by the named executive
officers.
Retirement
Plans, Other Benefits and Perquisites
General.
We provide our executive officers with a
comprehensive benefits program, which includes health, major medical, life
insurance, post-employment compensation, and other personal benefits
(perquisites) provided in the employment agreements for Messrs. Orlando,
Schupp, and Marino, or as recommended by Mr. Schupp in the case of Messrs.
Jacobson and Ostermayer. These benefits are an integral part of the total
compensation package for the executive officers, and the aggregate value is
included in the information reviewed by the Compensation Committee. In
addition, we believe that the intrinsic value placed on personal benefits by
the executives is generally greater than the incremental cost of these
benefits.
Benefits Generally Available to Active Employees.
Executives are eligible for all health and major
medical programs offered to exempt employees, including medical, dental and
vision coverage, use of our employee assistance program, short- and long-term
disability, and paid time off.
We
maintain one retirement plan, which qualifies for favorable tax treatment under
the Internal Revenue Code: a defined contribution 401(k) plan. This plan is
available to all Company and 1
st
United Bank employees. Each of the
named executive officers participates in the 401(k) plan.
Additional
Personal Benefits.
The Company provides its named executive officers with certain
perquisites not generally available to other employees, including:
|
|
|
|
|
|
§
|
Supplemental
Executive Retirement Plan (See “INFORMATION ABOUT EXECUTIVE COMPENSATION —
Pension Benefits” for additional information on this plan) (provided to
Messrs. Orlando, Schupp, and Marino only);
|
|
|
|
|
|
|
§
|
club
memberships (provided to Messrs. Orlando, Schupp, and Marino only);
|
|
|
|
|
|
|
§
|
automobile privileges; and
|
|
|
|
|
1st United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
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27
|
|
|
|
|
|
|
§
|
family health and dental benefits
(provided to Messrs. Orlando, Schupp and Marino only).
|
The
personal benefits are considered part of the overall executive compensation
program and are presented in this light: (i) as part of the total compensation
package recommended by the Compensation Committee and approved by the Board of
Directors, (ii) as part of the Compensation Committee’s review of each
executive officer’s annual total compensation, and (iii) in compensation
discussions with executive officers. The Compensation Committee believes the
benefits the Company and the individual derive from these perquisites more than
offset their costs.
Elements of Post-Employment Compensation.
We
have entered into employment agreements and maintain supplemental executive
retirement plans, or “SERPs,” that will require the Company and 1
st
United Bank to provide compensation to our founding executive officers, Messrs.
Orlando, Schupp, and Marino, in the event of a termination of employment or a
change in control of the Company or 1
st
United Bank. We have entered
into an employment agreement with Mr. Jacobson, but not Mr. Ostermayer.
We
believe that in a change-in-control situation, it is extremely important to
secure the dedicated attention of our executive officers whose personal
positions are at stake and to whom other opportunities are readily available.
We further believe that change in control arrangements defining specific
compensation and benefits payable under such circumstances enable executive
officers to put aside personal financial and career objectives and focus on
maximizing shareholder value. We also believes that our change in control
arrangements improve the likelihood that we will retain Messrs. Orlando,
Schupp, Marino, and Jacobson in times of uncertainty.
We
also provide Messrs. Orlando, Schupp, Marino, and Jacobson with termination
payments and other benefits upon separation, death or disability. We believe
these payments and benefits are fundamental to attracting and retaining
qualified executive officers because they enable them to focus on achieving our
performance goals without being distracted by career objectives and personal
financial goals. For a discussion of these benefits upon termination of
employment, see “INFORMATION ABOUT EXECUTIVE COMPENSATION – Payments Upon
Termination of Employment.”
The
Compensation Committee regards the change in control and termination payments
and benefits payable under the employment agreements and the SERPs as part of
the total compensation opportunity available to our executive officers, and
these payments and benefits impact decisions made recognizing the retirement
benefits available to the executive officers’ other market opportunities.
The
Compensation Committee used its business judgment when considering the
appropriateness of the change in control and termination payments available
under the employment agreements, taking into account factors such as the
opportunities available in the marketplace for executive officers with proven
track records, the risks and costs associated with losing key executives in
times of uncertainty, the intrinsic value of these payments and benefits to the
key executives relative to the expertise and industry experience those
executives bring to us, and what the Compensation Committee believes to be the
standard practice for banking executives.
When
considering the appropriateness of the payments and benefits available to
Messrs. Orlando, Schupp, and Marino under the SERPs, the Compensation Committee
used its business judgment to define what it views as a fair benefit ratio for
a retirement surrogate plan, based on disability policies, defined contribution
retirement plans, and other programs it deemed appropriate. The Compensation
Committee also consulted with Equias Alliance, LLC, which gave comfort that the
benefit ratio under the SERPs in a change in control scenario is competitive.
For a discussion of the benefits payable under the SERPs, see “INFORMATION
ABOUT EXECUTIVE COMPENSATION – Pension Benefits.”
The
Compensation Committee has reviewed the achievements of the executive team
since 2003 and has assessed the Company’s success in navigating through, what
is believed to be, a severe economic recession, in one of the hardest hit
states for banking. In doing so, it believes that the Board of Directors has
had the opportunity to assess the actual outcomes of the balance of risk and reward
that its compensation philosophy, processes and practices, as expressed through
the executive officer compensation program established in 2003, have produced.
The Compensation Committee is satisfied that the executive officer compensation
program reflects a mix of compensation elements that have produced an
appropriate balance of risk and reward for the company and its named executive
officers.
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28
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1
st
United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
|
Impact of Regulatory Requirements
Tax Deductibility of
Compensation
Section
162(m) of the Internal Revenue Code imposes a $1.0 million limit on the amount
that a publicly traded company may deduct for compensation paid to an executive
officer who is employed on the last day of the fiscal year. “Performance-based
compensation” is excluded from this $1.0 million limitation. A compensation
arrangement will not qualify as “performance-based compensation” if the payment
to the executive is triggered by termination, whether that be by the company
without cause or by the executive due to good reason or retirement. In general,
our policy is to provide compensation that we may fully deduct for income tax
purposes. However, in order to maintain ongoing flexibility of our compensation
programs, our Compensation Committee may from time to time approve annual
compensation that exceeds the $1.0 million limitation. We recognize that the
loss of the tax deduction may be unavoidable under these circumstances.
Tax and Accounting
Considerations
The
Compensation Committee carefully considers the tax impact of our compensation
programs on us as well as on our executive officers. The Compensation Committee
believes that decisions regarding executive compensation should be primarily
based on whether they result in positive long-term value for our shareholders,
customers, employees and other important stakeholders. However, in light of the
competitive nature of the market for executive talent, the Compensation
Committee believes that it is more important to ensure that our executive
officers remain focused on building shareholder value than to use a particular
compensation practice or structure solely to ensure tax deductibility.
Federal Reserve and
FDIC Guidance
In
2010, the Federal Reserve issued final comprehensive guidance regarding the
manner in which banks and bank holding companies pay incentive compensation. In
accordance with the final guidance, all banking organizations supervised by the
Federal Reserve are required to review the incentive compensation arrangements
of: senior executive officers and others responsible for oversight of
company-wide activities or material business lines; individual employees,
including nonexecutive employees, whose activities may expose the bank to
material amounts of risk; and groups of employees who are subject to the same
or similar incentive compensation arrangements and who, in the aggregate, may
expose the bank to material amounts of risk. Our Compensation Committee has
conducted a review to ensure that compensation is structured in a manner so as
not to encourage excessive risk-taking.
Report of the Compensation Committee
We,
as a Compensation Committee, have reviewed and discussed with management the
Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K
included in this Proxy Statement. Based on that review and discussion, we have
recommended to the Board of Directors of the Company that the Compensation
Discussion and Analysis be included in this Proxy Statement.
2011 Compensation Committee
Paula Berliner (Chair)
Jeffery L. Carrier
Arthur S. Loring
Thomas E. Lynch
Joseph W. Veccia, Jr.
This report shall not be deemed to be
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act of 1933, or the
Securities Exchange Act of 1934, and shall not otherwise be deemed filed under
these acts.
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1st United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
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29
|
Compensation Committee Interlocks and Insider
Participation
The
following non-employee directors were the members of the Compensation Committee
of our Board of Directors during 2011: Paula Berliner, Jeffery L. Carrier,
Arthur S. Loring, Thomas E. Lynch, and Joseph W. Veccia, Jr. None of the
members of the Compensation Committee is a current or former officer or
employee of the Company or any of its subsidiaries. In addition, there were no
“compensation committee interlocks” during 2011.
|
|
|
|
30
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1
st
United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
|
INFORMATION ABOUT EXECUTIVE COMPENSATION
Summary
Compensation Table
The
following summary compensation table shows compensation information for our
principal executive officer, principal financial officer, and our three most
highly compensated executive officers as of December 31, 2011, 2010 and 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal
Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Stock
Awards($)
(1)
|
|
Option
Awards
($)
(1)
|
|
Nonequity
Incentive Plan
Compensation
(2)
|
|
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
|
|
All Other
Compensation
($)
(3)
|
|
Total
($)
|
|
Warren S. Orlando
Chairman of the Board
|
|
2011
|
|
134,000
|
|
—
|
|
164,876
|
|
373,832
|
|
62,800
|
|
—
|
|
57,803
|
|
793,311
|
|
|
2010
|
|
134,000
|
|
15,000
|
|
|
|
—
|
|
38,760
|
|
—
|
|
49,331
|
|
237,091
|
|
|
2009
|
|
130,000
|
|
—
|
|
|
|
988,016
|
|
105,750
|
|
—
|
|
46,200
|
|
1,269,966
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rudy E. Schupp
|
|
2011
|
|
278,000
|
|
—
|
|
164,876
|
|
373,832
|
|
125,600
|
|
—
|
|
44,440
|
|
986,748
|
|
Chief Executive
|
|
2010
|
|
278,000
|
|
30,000
|
|
|
|
—
|
|
77,520
|
|
—
|
|
44,336
|
|
429,856
|
|
Officer
|
|
2009
|
|
270,000
|
|
—
|
|
|
|
988,016
|
|
211,500
|
|
—
|
|
34,999
|
|
1,504,515
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Marino
President
|
|
2011
|
|
268,000
|
|
—
|
|
164,876
|
|
373,832
|
|
125,600
|
|
—
|
|
27,763
|
|
960,071
|
|
|
2010
|
|
268,000
|
|
30,000
|
|
|
|
—
|
|
77,520
|
|
—
|
|
28,141
|
|
403,661
|
|
|
2009
|
|
260,000
|
|
—
|
|
|
|
988,016
|
|
211,500
|
|
—
|
|
18,433
|
|
1,477,949
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wade A. Jacobson
|
|
2011
|
|
190,000
|
|
15,000
|
|
|
|
52,000
|
|
32,506
|
|
—
|
|
4,288
|
|
293,794
|
|
Executive Vice
|
|
2010
|
|
178,500
|
|
—
|
|
|
|
46,575
|
|
55,080
|
|
—
|
|
10,909
|
|
291,064
|
|
President
|
|
2009
|
|
170,000
|
|
—
|
|
|
|
—
|
|
48,743
|
|
—
|
|
18,515
|
|
237,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lawrence Ostermayer
Senior Vice President
|
|
2011
|
|
147,000
|
|
10,000
|
|
|
|
23,400
|
|
—
|
|
—
|
|
11,702
|
|
193,102
|
|
|
2010
|
|
140,000
|
|
10,000
|
|
|
|
21,320
|
|
—
|
|
—
|
|
15,920
|
|
187,240
|
|
|
2009
|
|
131,000
|
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
15,800
|
|
146,800
|
|
|
|
|
(1)
|
The values
for stock option and stock awards in this column represent the grant date
fair value of awards computed in accordance with FASB ASC Topic 718. A
discussion of the assumptions used in calculating the award may be found in
Note 12 and Note 15 to our audited consolidated financial statements for the
fiscal year ended December 31, 2011 included in our Annual Report on Form
10-K filed with the Securities and Exchange Commission. In the case of
performance-based restricted stock awards, the value in this column represents
the probable outcome of the applicable performance condition. The actual
number of stock awards granted on February 29, 2012 based on 2011 results was
27,945 restricted shares to Messrs. Orlando, Schupp and Marino which vest
ratably after 10 years beginning with the first anniversary after their
grant. The actual number of stock option equity awards granted in 2011
is shown in the “Grants of Plan-Based Awards” table beginning on page 35. Pursuant to
applicable SEC Rules, the amounts shown exclude the impact of estimated
forfeitures related to service-based vesting conditions. These amounts do not
necessarily reflect the actual value received or to be received by the named
executive officers.
|
|
|
|
|
(2)
|
The amounts
in this column represent quarterly cash bonuses paid to our named executive
officers equal to two percent (for Messrs. Schupp and Marino) and one percent
(for Mr. Orlando) of our consolidated pre-tax net income as required by their
respective employment agreements. We discuss these agreements in further
detail below. For Mr. Jacobson, the amounts in the column relate to the
Management Incentive Compensation Program described on page 24.
|
|
|
|
|
|
|
|
1st United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
|
31
|
|
|
|
|
(3)
|
The amounts
reported in 2011 reflect, for each named executive officer, the sum of (i)
the incremental cost to us of all perquisites and other personal benefits;
and (ii) amounts contributed by us to the 401(k) plan. The following table
outlines (i) those perquisites and other personal benefits and (ii)
additional all other compensation required by the Securities and Exchange
Commission rules to be separately quantified:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
401(k) Match
|
|
Club Dues
|
|
Automobile*
|
|
Healthcare
Premiums
|
|
Warren S. Orlando
|
|
$
|
2,010
|
|
$
|
36,398
|
|
$
|
2,259
|
|
$
|
17,136
|
|
Rudy E. Schupp
|
|
|
3,790
|
|
|
17,326
|
|
|
2,875
|
|
|
20,449
|
|
John Marino
|
|
|
3,675
|
|
|
925
|
|
|
2,714
|
|
|
20,449
|
|
Wade A. Jacobson
|
|
|
2,828
|
|
|
—
|
|
|
1,463
|
|
|
—
|
|
Lawrence Ostermayer
|
|
|
2,082
|
|
|
—
|
|
|
9,600
|
|
|
—
|
*Personal use
of automobile taxable benefit for Messrs. Schupp, Orlando, Marino and Jacobson;
automobile allowance for Mr. Ostermayer.
Grants
of Plan-Based Awards
The
following table provides information concerning grants of awards made to our
named executive officers for the year ended December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
Stock
Awarded:
Number of
Shares of
Stock or
Units (#)
|
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options (#)
|
|
Exercise
or Base
Price of
Stock or
Option
Awards
($/sh)
|
|
Grant Date
Fair Value
of Stock
and Option
Awards ($)
|
|
|
|
|
|
Estimated Future Payouts
Under Nonequity Incentive
Plan Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under
Equity Incentive Plan Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Threshold
(#)
|
|
Target
(#)
|
|
Maximum (#)
|
|
|
|
|
|
Name
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12-20-11
|
|
|
|
|
|
|
|
|
|
$
|
175,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3-22-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
166,667
|
|
6.50
|
|
324,634
|
|
Rudy E. Schupp
|
|
4-12-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
25,000
|
|
6.50
|
|
49,198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12-20-11
|
|
|
|
|
|
|
|
|
|
$
|
175,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3-22-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
166,667
|
|
6.50
|
|
324,634
|
|
Warren S. Orlando
|
|
4-12-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
25,000
|
|
6.50
|
|
49,198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12-20-11
|
|
|
|
|
|
|
|
|
|
$
|
175,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3-22-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
166,667
|
|
6.50
|
|
324,634
|
|
John Marino
|
|
4-12-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
25,000
|
|
6.50
|
|
49,198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wade A. Jacobson
|
|
1-3-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
6.91
|
|
52,000
|
|
Lawrence
Ostermayer
|
|
1-3-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,000
|
|
6.91
|
|
23,400
|
We
have entered into written employment agreements with each of our named
executive officers except Mr. Ostermayer. Below is a description of the material terms of these
employment agreements.
Warren S. Orlando
On
March 4, 2004, we and 1
st
United Bank entered into an Employment
Agreement with Mr. Orlando. That agreement was amended on November 16, 2007,
December 18, 2008, December 20, 2011, and January 24, 2012. Mr. Orlando
serves as our and 1
st
United Bank’s Chairman. His agreement is
for a continuously renewing three-year period and, effective January 1, 2012,
provides for a minimum annual base salary of $175,000, and his salary must always
be equal to 50% of the highest annual rate paid to any named executive officer.
In addition, Mr. Orlando is entitled to one percent of our consolidated pre-tax
net income as discussed above under “EXECUTIVE COMPENSATION - Compensation
Discussion and Analysis-Elements of Compensation - Cash Incentive
Compensation.”
Mr.
Orlando is entitled to participate in all of the employee benefit programs and
certain retirement perquisites generally available to our executive officers,
including benefits under our SERP.
|
|
|
|
32
|
1
st
United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
|
Prior
to December 31, 2011, Mr. Orlando was entitled to grants of stock options in an
amount equal to three and one-third percent (3.33%) of the shares of Common
Stock issued by us from time to time, excluding any shares of Common Stock
issued as a result of Mr. Orlando’s exercise of options. Any options granted to
Mr. Orlando prior to January 1, 2007 pursuant to this provision of his
employment vested immediately and are exercisable on the grant date. Any
options granted on or after January 1, 2007 vest in equal installments over a
5-year period, or 20% each year, from the date of grant or over 10 years, or
10% each year from the date of grant. All unvested options become immediately
vested and exercisable upon (i) Mr. Orlando’s termination not for cause, (ii) a
change of control, or (iii) Mr. Orlando’s death or disability.
Beginning
in 2011, Mr. Orlando is eligible to receive annual performance-based grants of
restricted stock in a maximum amount equal to 50% of the highest base salary
paid to any of our named executive officers. The total number of restricted
shares granted will be based on the fair market value of our common stock as of
the last business day in February after the year in which the award is earned.
The restricted stock will vest in 10 equal annual installments, except that the
award will immediately vest if Mr. Orlando’s employment is terminated “without
cause”, in the event of a “change of control”, death, and Disability (as those
terms are defined in his employment agreement). The award will be determined
based on the certain metrics and weightings as discussed in more detail above
under “EXECUTIVE COMPENSATION - Compensation Discussion and Analysis-Elements
of Compensation - Equity-Based Compensation.”
All
decisions concerning Mr. Orlando’s employment and/or termination require the
prior written consent of at least eighty percent of the entire Board of
Directors (not including Mr. Orlando). Mr. Orlando is entitled to certain
severance benefits if his employment is terminated upon a change of control or
if he resigns within 90 days of any of the following (“without cause”): (a)
failure of our or 1
st
United’s Board to re-elect him as Chairman;
(b) failure to be re-elected to our or 1
st
United’s Board; (c)
material failure (after proper notice and failure to cure) by us or 1
st
United Bank with respect to Mr. Orlando’s duties; (d) material breach by us or
1
st
United Bank of the terms of his employment agreement (including
salary and benefits having a material adverse effect on Mr. Orlando’s
compensation); (e) relocation of principal place of employment outside of Palm
Beach County, Florida; (f) acceptance by the Board of Mr. Orlando’s resignation
from the Board tendered pursuant to our Bylaws as a result of Mr. Orlando
receiving more “withhold” votes than “for” votes in an uncontested election of
directors; or (g) any other reason that is not a “for cause” termination.
Rudy E. Schupp
On
March 4, 2004, we and 1
st
United Bank entered into an Employment
Agreement with Mr. Schupp. That agreement was amended on November 16, 2007,
December 18, 2008, and December 20, 2011. Mr. Schupp serves as our Chief
Executive Officer and as Chief Executive Officer and President of 1
st
United Bank. His agreement is for a continuously renewing three-year period
and, effective January 1, 2012, provides for a minimum annual base salary of
$350,000. In addition, Mr. Schupp is entitled to two percent of our
consolidated pre-tax net income as discussed above under “EXECUTIVE
COMPENSATION - Compensation Discussion and Analysis - Elements of Compensation
- Cash Incentive Compensation.”
Mr.
Schupp is entitled to participate in all of the employee benefit programs and
perquisites generally available to our executive officers, including benefits
under our SERP.
Prior
to December 31, 2011, Mr. Schupp was entitled to grants of stock options in an
amount equal to three and one-third percent (3.33%) of the issued and
outstanding shares of our Common Stock from time to time, excluding any shares
of Common Stock outstanding as a result of Mr. Schupp’s exercise of options.
Any options granted to Mr. Schupp prior to January 1, 2007 pursuant to this
provision of his employment vested immediately and are exercisable on the grant
date. Any options granted on or after January 1, 2007 vest in equal
installments over a 5-year period, or 20% each year, from the date of grant or
over 10 years, or 10% each year from the date of grant. All unvested options
become immediately vested and exercisable upon (i) Mr. Schupp’s termination not
for cause, (ii) a change of control, or (iii) Mr. Schupp’s death or disability.
|
|
|
|
1st United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
|
33
|
Beginning
in 2011, Mr. Schupp is eligible to receive annual performance-based grants of
restricted stock in an amount equal to a maximum 50% of the highest base salary
paid to any of our named executive officers. The total number of restricted
shares granted will be based on the fair market value of our common stock as of
the last business day in February after the year in which the award is earned.
The restricted stock will vest in 10 equal annual installments, except that the award
will immediately vest if Mr. Schupp’s employment is terminated “without cause”,
in the event of a “change of control”, death, and Disability (as those terms
are defined in his employment agreement). The award will be determined based on
the certain metrics and weightings as discussed in more detail above under
“EXECUTIVE COMPENSATION - Compensation Discussion and Analysis - Elements of
Compensation - Equity-Based Compensation.”
All
decisions concerning Mr. Schupp’s employment and/or termination require the
prior written consent of at least eighty percent of the entire Board of
Directors (not including Mr. Schupp). Mr. Schupp is entitled to certain
severance benefits if his employment is terminated upon a change of control or
if he resigns within 90 days of any of the following (“without cause”): (a)
failure of either our Board to re-elect him as Chief Executive Officer or 1
st
United Bank’s Board to re-elect him as Chief Executive Officer and President;
(b) failure to be re-elected to either our or 1
st
United Bank’s
Board; (c) material failure (after proper notice and failure to cure) by us or
1
st
United Bank with respect to Mr. Schupp’s duties; (d) material
breach by us or 1
st
United Bank of the terms of his employment
agreement (including salary and benefits having a material adverse effect on
Mr. Schupp’s compensation); (e) relocation of principal place of employment
outside of Palm Beach County, Florida; ; (f) acceptance by the Board of Mr.
Schupp’s resignation from the Board tendered pursuant to our Bylaws as a result
of Mr. Schupp receiving more “withhold” votes than “for” votes in an
uncontested election of directors; or (g) any other reason that is not a “for
cause” termination.
John Marino
On
March 4, 2004, we and 1
st
United Bank entered into an Employment
Agreement with John Marino. That agreement was amended on November 16, 2007,
December 18, 2008, and December 20, 2011. Mr. Marino serves as our President
and Chief Operating Officer and as Chief Operating Officer and Chief Financial
Officer of 1
st
United Bank. His agreement is for a continuously
renewing three-year period and provides for a minimum annual base salary of
$315,000, and his salary must always be equal to 90% of the highest annual rate
paid to any named executive officer. In addition, Mr. Marino is entitled to two
percent of our consolidated pre-tax net income as discussed above under
“EXECUTIVE COMPENSATION - Compensation Discussion and Analysis - Elements of
Compensation - Cash Incentive Compensation.”
Mr.
Marino is entitled to participate in all of the employee benefit programs and
perquisites generally available to our executive officers, including benefits
under our SERP.
Prior
to December 31, 2011, Mr. Marino was entitled to grants of stock options in an
amount equal to three and one-third percent (3.33%) of the issued and
outstanding shares of our Common Stock from time to time, excluding any shares
of Common Stock outstanding as a result of Mr. Marino’s exercise of options.
Any options granted to Mr. Marino prior to January 1, 2007 pursuant to this
provision of his employment vested immediately and are exercisable on the grant
date. Any options granted on or after January 1, 2007 vest in equal installments
over a 5-year period, or 20% each year, from the date of grant or over 10
years, or 10% each year from the date of grant. All unvested options become
immediately vested and exercisable upon (i) Mr. Marino’s termination not for
cause, (ii) a change of control, or (iii) Mr. Marino’s death or disability.
Beginning
in 2011, Mr. Marino is eligible to receive annual performance-based grants of
restricted stock in an amount equal to a maximum 50% of the highest base salary
paid to any of our named executive officers. The total number of restricted
shares granted will be based on the fair market value of our common stock as of
the last business day in February after the year in which the award is earned.
The restricted stock will vest in 10 equal annual installments, except that the
award will immediately vest if Mr. Marino’s employment is terminated “without
cause”, in the event of a “change of control”, death, and Disability (as those
terms are defined in his employment agreement). The award will be determined
based on the certain metrics and weightings as discussed in more detail above
under “EXECUTIVE COMPENSATION - Compensation Discussion and Analysis - Elements
of Compensation - Equity-Based Compensation.”
All
decisions concerning Mr. Marino’s employment and/or termination require the
prior written consent of at least eighty percent of the entire Board of
Directors (not including Mr. Marino). Mr. Marino is entitled to certain
severance benefits if his employment is terminated upon a change of control or
if he resigns within 90 days of any of the following (“without cause”): (a)
failure of either our Board to re-elect him as President or 1
st
United Bank’s Board to re-elect him as Chief Operating Officer and Chief
Financial Officer; (b) failure to be re-elected to our or 1
st
|
|
|
|
34
|
1
st
United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
|
United Bank’s Board; (c) material failure
(after proper notice and failure to cure) by us or 1
st
United Bank
with respect to Mr. Marino’s duties; (d) material breach by us or 1
st
United Bank of the terms of his employment agreement (including salary and
benefits having a material adverse effect on Mr. Marino’s compensation); (e)
relocation of principal place of employment outside of Palm Beach County,
Florida; (f) acceptance by the Board of Mr. Marino’s resignation from the Board
tendered pursuant to our Bylaws as a result of Mr. Marino receiving more
“withhold” votes than “for” votes in an uncontested election of directors; or
(g) any other reason that is not a “for cause” termination.
Wade A. Jacobson
On
December 22, 2009, 1
st
United Bank entered into an employment
agreement with Mr. Jacobson, which was amended on February 8, 2012. Mr.
Jacobson’s employment agreement was effective as of January 1, 2010 and had an
initial term of one year. Thereafter, the employment agreement automatically
renews for successive one-year terms. Mr. Jacobson must receive a minimum
annual base salary of $170,000. In addition, he is entitled to cash incentive
compensation at the end of each calendar quarter of 1
st
United Bank,
in an amount as determined pursuant to a Management Incentive Compensation
Plan. Mr. Jacobson can earn a maximum of 50% of his base compensation as an
annual bonus based on quarterly targets for new loan and deposit production,
management responsibilities and overall bank earnings. Mr. Jacobson is entitled to the following
severance benefits if his employment is terminated upon a change of control or
for other than cause: (a) an amount equal to 12 months base salary; (b) an
amount equal to the average annual cash incentive compensation with respect to
the average for the two immediately preceding years; and (c) reimbursement
of up to $1,000 per month for continuation of health coverage under COBRA for
up to 12 months after the date of termination.
Lawrence Ostermayer
We
have not entered into an employment agreement with Mr. Ostermayer.
|
|
|
|
1st United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
|
35
|
Outstanding Equity Awards at Fiscal Year-End
2011
The
following table provides information, for our named executive officers, on
stock option holdings at December 31, 2011.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities
Underlying Unexercised
Options
(#)
|
|
Equity
Incentive Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
|
Option
Exercise Price
($)
|
|
Option
Expiration Date
|
|
|
Name
|
|
Exercisable
|
|
Unexercisable
|
|
|
|
|
|
Warren S.
Orlando
|
|
|
|
34,448
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
$
|
10.60
|
|
|
|
|
7/1/2013
|
|
|
|
|
|
|
53,333
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
12.50
|
|
|
|
|
4/30/2014
|
|
|
|
|
|
|
69,335
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
13.50
|
|
|
|
|
12/19/2015
|
|
|
|
|
|
|
25,722
|
|
|
|
|
38,583
|
(1)
|
|
|
|
—
|
|
|
|
|
14.50
|
|
|
|
|
3/1/2018
|
|
|
|
|
|
|
36,000
|
|
|
|
|
24,000
|
(2)
|
|
|
|
—
|
|
|
|
|
7.00
|
|
|
|
|
9/30/2018
|
|
|
|
|
|
|
93,333
|
|
|
|
|
373,333
|
(1)
|
|
|
|
—
|
|
|
|
|
5.40
|
|
|
|
|
9/17/2019
|
|
|
|
|
|
|
14,000
|
|
|
|
|
56,000
|
(1)
|
|
|
|
—
|
|
|
|
|
5.40
|
|
|
|
|
10/6/2019
|
|
|
|
|
|
|
33,333
|
|
|
|
|
133,334
|
(2)
|
|
|
|
—
|
|
|
|
|
6.50
|
|
|
|
|
3/22/2021
|
|
|
|
|
|
|
2,500
|
|
|
|
|
22,500
|
(1)
|
|
|
|
—
|
|
|
|
|
6.50
|
|
|
|
|
4/12/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rudy E.
Schupp
|
|
|
|
34,448
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
10.60
|
|
|
|
|
7/01/2013
|
|
|
|
|
|
|
53,333
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
12.50
|
|
|
|
|
4/30/2014
|
|
|
|
|
|
|
69,335
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
13.50
|
|
|
|
|
12/19/2015
|
|
|
|
|
|
|
25,722
|
|
|
|
|
38,583
|
(1)
|
|
|
|
—
|
|
|
|
|
14.50
|
|
|
|
|
3/01/2018
|
|
|
|
|
|
|
36,000
|
|
|
|
|
24,000
|
(2)
|
|
|
|
—
|
|
|
|
|
7.00
|
|
|
|
|
9/30/2018
|
|
|
|
|
|
|
93,333
|
|
|
|
|
373,333
|
(1)
|
|
|
|
—
|
|
|
|
|
5.40
|
|
|
|
|
9/17/2019
|
|
|
|
|
|
|
14,000
|
|
|
|
|
56,000
|
(1)
|
|
|
|
—
|
|
|
|
|
5.40
|
|
|
|
|
10/06/2019
|
|
|
|
|
|
|
33,333
|
|
|
|
|
133,334
|
(2)
|
|
|
|
—
|
|
|
|
|
6.50
|
|
|
|
|
3/22/2021
|
|
|
|
|
|
|
2,500
|
|
|
|
|
22,500
|
(1)
|
|
|
|
—
|
|
|
|
|
6.50
|
|
|
|
|
5/22/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John
Marino
|
|
|
|
34,448
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
10.60
|
|
|
|
|
7/01/2013
|
|
|
|
|
|
|
53,333
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
12.50
|
|
|
|
|
4/30/2014
|
|
|
|
|
|
|
69,335
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
13.50
|
|
|
|
|
12/19/2015
|
|
|
|
|
|
|
25,722
|
|
|
|
|
38,583
|
(1)
|
|
|
|
—
|
|
|
|
|
14.50
|
|
|
|
|
3/01/2018
|
|
|
|
|
|
|
36,000
|
|
|
|
|
24,000
|
(2)
|
|
|
|
—
|
|
|
|
|
7.00
|
|
|
|
|
9/30/2018
|
|
|
|
|
|
|
93,333
|
|
|
|
|
373,333
|
(1)
|
|
|
|
—
|
|
|
|
|
5.40
|
|
|
|
|
9/17/2019
|
|
|
|
|
|
|
14,000
|
|
|
|
|
56,000
|
(1)
|
|
|
|
—
|
|
|
|
|
5.40
|
|
|
|
|
10/6/2019
|
|
|
|
|
|
|
33,333
|
|
|
|
|
133,334
|
(2)
|
|
|
|
—
|
|
|
|
|
6.50
|
|
|
|
|
3/22/2021
|
|
|
|
|
|
|
2,500
|
|
|
|
|
22,500
|
(1)
|
|
|
|
—
|
|
|
|
|
6.50
|
|
|
|
|
3/22/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wade A.
Jacobson
|
|
|
|
1,000
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
12.50
|
|
|
|
|
3/01/2014
|
|
|
|
|
|
|
1,000
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
10.60
|
|
|
|
|
7/23/2014
|
|
|
|
|
|
|
3,500
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
13.50
|
|
|
|
|
12/13/2015
|
|
|
|
|
|
|
999
|
|
|
|
|
2,501
|
(3)
|
|
|
|
—
|
|
|
|
|
7.20
|
|
|
|
|
5/01/2019
|
|
|
|
|
|
|
2,857
|
|
|
|
|
7,143
|
(3)
|
|
|
|
—
|
|
|
|
|
5.65
|
|
|
|
|
10/29/2019
|
|
|
|
|
|
|
2,857
|
|
|
|
|
17,143
|
(3)
|
|
|
|
—
|
|
|
|
|
6.91
|
|
|
|
|
1/03/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lawrence Ostermayer
|
|
|
|
1,000
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
10.60
|
|
|
|
|
9/22/2013
|
|
|
|
|
|
|
1,000
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
12.50
|
|
|
|
|
7/01/2014
|
|
|
|
|
|
|
2,000
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
13.50
|
|
|
|
|
12/13/2015
|
|
|
|
|
|
|
571
|
|
|
|
|
1,429
|
(3)
|
|
|
|
—
|
|
|
|
|
7.20
|
|
|
|
|
5/01/2019
|
|
|
|
|
|
|
1,999
|
|
|
|
|
5,001
|
(3)
|
|
|
|
—
|
|
|
|
|
5.65
|
|
|
|
|
10/29/2019
|
|
|
|
|
|
|
1,285
|
|
|
|
|
7,715
|
(3)
|
|
|
|
—
|
|
|
|
|
6.91
|
|
|
|
|
1/03/2021
|
|
|
|
|
|
|
36
|
1
st
United
Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
|
|
|
|
|
(1)
|
Vest ratably over 10 years
(10% per year).
|
|
|
|
|
(2)
|
Vest ratably over 5 years
(20% per year).
|
|
|
|
|
(3)
|
Vest ratably over 7 years
(14.29% per year).
|
Option Exercises and Stock Vested
None
Pension Benefits
We
provide to Messrs. Orlando, Schupp, and Marino retirement benefits under our
SERPs, a non-qualified plan. The key provisions of the SERPs are summarized
below.
Monthly
Benefit
For
Messrs. Orlando, Schupp and Marino, upon separation from service, for reasons
other than death, constructive early termination, disability, change in
control, or termination for cause, on or after their normal retirement age,
which for Mr. Orlando means his 75
th
birthday, for Mr. Schupp means
his 65
th
birthday and for Mr. Marino his 55
th
birthday,
each will receive 30% of the average of the two (2) highest annual rates of
base salary paid by us and/or 1
st
United Bank to any of our named
executive officers during the five (5) calendar years preceding such separation
from service. For purposes of the description of the SERP, these calculations
will be referred to as the “Final Base Salary.” Additionally, beginning in
2013, the amount of the annual normal retirement benefit payable will increase
from 30% of Final Base Salary to a maximum of 60% of Final Base Salary for
separations occurring in 2018 or thereafter, in 5% annual increments.
Early
Retirement Benefit
If
the founding named executive officer elects to retire or is terminated prior to
normal retirement age and change-in-control, for any reason other than death,
constructive early termination, termination for cause, or disability, the
executive officer shall receive 30% of Final Base Salary subject to the following
vesting schedule:
|
|
|
|
|
|
|
|
|
Full Calendar Years Subsequent to the
Vesting Commencement Date
(July 1, 2006)
|
|
Vested Portion of Benefit
|
|
|
1
|
|
|
|
20.0
|
%
|
|
|
2
|
|
|
|
40.0
|
%
|
|
|
3
|
|
|
|
47.5
|
%
|
|
|
4
|
|
|
|
55.0
|
%
|
|
|
5
|
|
|
|
62.5
|
%
|
|
|
6
|
|
|
|
70.0
|
%
|
|
|
7
|
|
|
|
77.5
|
%
|
|
|
8
|
|
|
|
85.0
|
%
|
|
|
9
|
|
|
|
92.5
|
%
|
|
|
10
or more
|
|
|
|
100.0
|
%
|
|
|
|
|
|
1st United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
|
37
|
Additionally,
beginning in 2013, the amount of the annual normal retirement benefit payable
will increase from 30% of Final Base Salary to a maximum of 60% of Final Base
Salary for separations occurring in 2018 or thereafter, in 5% annual increments.
Vesting
Vesting
commenced on July 1, 2006, which was the first day of the calendar month
following the calendar quarter in which we first had consolidated total assets
of at least $250 million.
Change
in Control Benefit
Upon
a change in control, the founding named executive officers will receive 70% of
the average of the two (2) highest annual amounts of Total Cash Compensation
paid by us and/or 1
st
United Bank to any of our named executive
officers during the five (5) full calendar years preceding the change in
control (“Final Total Cash Compensation”), payable each year for a period of 20
years.
Death
and Disability Benefit
If
the founding named executive officer dies or incurs a Disability while in our
or 1
st
United Bank’s active service, the executive officer or his
estate will receive 70% of his Final Base Salary for a period of 20 years.
Pension Benefits
Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Plan
Name
|
|
Number of Years
Credited Service
|
|
Present Value of
Accumulated Benefit
|
|
Payments During
Last Fiscal Year
|
|
|
Rudy E.
Schupp
|
|
|
SERP
|
|
|
5
|
|
$
|
473,783
|
|
|
—
|
|
|
Warren S.
Orlando
|
|
|
SERP
|
|
|
5
|
|
$
|
403,868
|
|
|
—
|
|
|
John Marino
|
|
|
SERP
|
|
|
5
|
|
$
|
398,035
|
|
|
—
|
|
|
Wade A.
Jacobson
|
|
|
N/A
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Lawrence
Ostermayer
|
|
|
N/A
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Payments Upon Termination of Employment
The
compensation payable to each named executive officer in the event of a
termination of employment or a change in control of the Company or 1
st
United Bank is listed in the tables below. In the table below, it is assumed
that the applicable event occurred on December 31, 2011.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination and Change of Control
Payments for Warren Orlando
|
|
|
Executive Benefits
and Payments Upon
Termination
|
|
Voluntary
Resignation
|
|
Early
Retirement
Prior to Age 75
|
|
Normal
Retirement at
Age 75
(2)
|
|
Without
Cause or
Good Reason
Termination
|
|
Change
of
Control
(6)
|
|
For
Cause
Termination
|
|
Death
|
|
Disability
|
|
|
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Compensation
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,328,250
|
(5)
|
$
|
1,328,250
|
(5)
|
$
|
—
|
|
$
|
43,750
|
(8)
|
$
|
1,835,253
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Executive
Retirement Plan
|
|
|
403,868
|
(1)
|
|
403,868
|
(1)
|
|
2,440,745
|
(3)
|
|
2,973,092
|
(7)
|
|
3,994,112
|
(7)
|
|
—
|
|
|
3,994,112
|
(7)
|
|
2,973,092
|
(7)
|
|
Life Insurance and
Disability
|
|
|
—
|
|
|
—
|
|
|
9,000
|
(4)
|
|
9,000
|
(4)
|
|
9,000
|
(4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Health and Dental
Care
|
|
|
—
|
|
|
—
|
|
|
179,000
|
(4)
|
|
179,000
|
(4)
|
|
179,000
|
(4)
|
|
—
|
|
|
179,000
|
(4)
|
|
—
|
|
|
280G Tax Gross-Up
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
$
|
403,868
|
|
$
|
403,868
|
|
$
|
2,628,745
|
|
$
|
4,489,342
|
|
$
|
5,510,362
|
|
$
|
—
|
|
$
|
4,216,862
|
|
$
|
4,808,345
|
|
|
|
|
|
38
|
1
st
United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination and Change of Control
Payments for Rudy Schupp
|
|
Executive Benefits
and Payments Upon
Termination
|
|
Voluntary
Resignation
|
|
Early
Retirement
Prior to Age
65
|
|
Normal
Retirement at
Age 65
(2)
|
|
Without
Cause
or Good Reason
Termination
|
|
Change
of
Control
(6)
|
|
For
Cause
Termination
|
|
Death
|
|
Disability
|
|
|
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Compensation
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,328,250
|
(5)
|
$
|
1,328,250
|
(5)
|
$
|
—
|
|
$
|
119,000
|
(8)
|
$
|
3,748,354
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits
and Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Executive
Retirement Plan
|
|
|
473,783
|
(1)
|
|
473,783
|
(1)
|
|
1,847,181
|
(3)
|
|
3,285,092
|
(7)
|
|
3,994,112
|
(7
)
|
|
—
|
|
|
3,994,112
|
(7)
|
|
3,285,092
|
(7)
|
|
Life Insurance and
Disability
|
|
|
—
|
|
|
—
|
|
|
9,000
|
(4)
|
|
9,000
|
(4)
|
|
9,000
|
(4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Health and
DentalCare
|
|
|
—
|
|
|
—
|
|
|
213,000
|
(4)
|
|
213,000
|
(4)
|
|
213,000
|
(4)
|
|
—
|
|
|
213,000
|
(4)
|
|
—
|
|
|
280G Tax Gross-
Up
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
$
|
473,783
|
|
$
|
473,783
|
|
$
|
2,069,181
|
|
$
|
4,835,342
|
|
$
|
5,544,362
|
|
$
|
—
|
|
$
|
4,326,112
|
|
$
|
7,033,446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination and Change of Control
Payments for John Marino
|
|
Executive
Benefits
and Payments Upon
Termination
|
|
Voluntary
Resignation
|
|
Early
Retirement
Prior to Age
55
|
|
Normal
Retirement
at Age 55
(2)
|
|
Without
Cause
or Good
Reason
Termination
|
|
Change
of
Control
(6)
|
|
For
Cause
Termination
|
|
Death
|
|
Disability
|
|
|
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Compensation
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,328,250
|
(5)
|
$
|
1,328,250
|
(5)
|
$
|
—
|
|
$
|
110,150
|
(8)
|
$
|
3,670,505
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits
and Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Executive
Retirement Plan
|
|
|
398,035
|
(1)
|
|
398,035
|
(1)
|
|
2,662,741
|
(3)
|
|
2,863,888
|
(7)
|
|
3,994,112
|
(7)
|
|
—
|
|
|
3,994,112
|
(7)
|
|
2,863,888
|
(7)
|
|
Life Insurance and
Disability
|
|
|
—
|
|
|
—
|
|
|
9,000
|
(4)
|
|
9,000
|
(4)
|
|
9,000
|
(4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Health and Dental
Care
|
|
|
—
|
|
|
—
|
|
|
213,000
|
(4)
|
|
213,000
|
(4)
|
|
213,000
|
(4)
|
|
—
|
|
|
213,000
|
(4)
|
|
—
|
|
|
280G Tax Gross-Up
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
$
|
398,035
|
|
$
|
398,035
|
|
$
|
2,884,741
|
|
$
|
4,414,138
|
|
$
|
5,544,362
|
|
$
|
—
|
|
$
|
4,317,262
|
|
$
|
6,534,393
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination and Change of Control
Payments for Wade Jacobson
|
|
Executive Benefits
and Payments Upon
Termination
|
|
Voluntary
Resignation
|
|
Without
Cause
Termination
|
|
Change
of
Control
(11)
|
|
For
Cause
Termination
|
|
Death
|
|
|
Disability
|
|
|
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary
($190,000)
|
|
$
|
—
|
|
$
|
190,000
|
|
$
|
190,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
Management
Incentive Plan
|
|
|
—
|
|
|
51,293
|
|
|
51,293
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Benefits and
Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life Insurance and
Disability
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Health Care
|
|
|
—
|
|
|
12,000
|
|
|
12,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Dental Care
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
280G Tax Gross-Up
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
$
|
—
|
|
$
|
253,293
|
|
$
|
253,293
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
(1)
|
The estimated present value
amount relating to the Supplemental Executive Retirement Plan (“SERP”) in the
above tables is based on (i) 62.5% vesting of the benefits, (ii) an annual
benefit equal to the average of the two highest annual rates of base salary
paid by the Company or 1
st
United Bank to any of the Company’s
named executive officers during the five fiscal years preceding the
triggering event, (iii) an assumed discount rate of 5.0%, and (iv) payments
continuing for 20 years.
|
|
|
|
|
1st United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
|
39
|
|
|
|
|
(2)
|
Assumes the executives were
the age indicated in the column heading on December 31, 2011. In addition,
under Mr. Marino’s employment agreement, 55 is considered early retirement
age but normal retirement age under the SERP. However, under Mr. Marino’s
employment agreement, the Board of Directors can decide that retirement at 55
will be considered normal retirement age. Mr. Marino’s normal retirement
column assumes the Board of Directors has made this determination.
|
|
|
|
|
(3)
|
The estimated present value
amount relating to the SERP in the above table is based on (i) an annual
benefit equal to the average of the two highest annual rates of base salary
paid by the Company or 1
st
United Bank to any of the Company’s
named executive officers during the five fiscal years preceding the
triggering event, (ii) an assumed discount rate of 5.0%, and (iii) payments
continuing for 20 years.
|
|
|
|
|
(4)
|
Assumes (i) insurance will
be continued for the executive for a period of 15 years, (ii) the current
cost for such insurance, and (iii) an assumed discount rate of 5.0%.
|
|
|
|
|
(5)
|
In the event of a without
cause termination, a good reason termination by the executive officer or a
change of control, the underlying employment agreements provide for severance
payments for each of the three executive officers equivalent to the amount
shown.
|
|
|
|
|
(6)
|
Even though the term
“change of control” is defined differently in the executive’s employment
agreement and the SERP, this table assumes the change of control event meets
the requirements of both definitions.
|
|
|
|
|
(7)
|
The estimated present value
amount relating to the SERP in the above table is based on (i) an annual
benefit equal to 70% of the average if the two highest Total Cash Compensation
(as defined in the executive’s employment agreement) paid by the Company or 1
st
United Bank to any of our named executive officers with respect to the five
full fiscal years of the Company immediately preceding the year in which the
triggering event occurs, (ii) an assumed discount rate of 5.0%, and (iii)
payments continuing for 20 years.
|
|
|
|
|
(8)
|
The executive will receive
pay equal to three months of his base salary and three months of his cash
incentive compensation.
|
|
|
|
|
(9)
|
The executive will receive,
if disabled, 75% of his highest cash compensation of the last three years.
For purposes of this schedule, 15 years of payout was assumed with a discount
rate of 5%.
|
Below
is a description of the assumptions that were used in creating the tables
above. Unless otherwise noted, the descriptions of the payments below are
applicable to all of the above tables relating to potential payments upon
termination or change in control.
Involuntary Not For Cause Termination or Termination for
Good Reason.
Messrs. Orlando, Schupp, and
Marino will each be entitled to certain benefits as described in the table
above if his employment is terminated by us for reasons other than cause or by
the executive for good reason. A termination is for cause if it is for any of
the following reasons:
|
|
|
|
|
|
§
|
the executive intentionally engages in
dishonest conduct in connection with his performance of services for the
Company or 1
st
United Bank resulting in his conviction of a
felony;
|
|
|
|
|
|
|
§
|
the executive is convicted of, or pleads
guilty or nolo contendere to, a felony or any crime involving moral
turpitude;
|
|
|
|
|
|
|
§
|
the
executive willfully fails or refuses to perform his duties under his
employment agreement;
|
|
|
|
|
|
|
§
|
the executive breaches his fiduciary duties
to the Company or 1
st
United Bank for personal profit; or
|
|
|
|
|
|
|
§
|
the
executive willfully breaches or violates any law, rule or regulation (other
than traffic or boating violations or similar offenses), or a final cease and
desist order in connection with his performance of services for the Company
or 1
st
United Bank.
|
A termination
by Messrs. Orlando, Schupp, and Marino is for good reason if it is for any of
the following reasons:
|
|
|
|
|
|
§
|
the failure
of the Board of Directors of either the Company or 1
st
United Bank
to appoint or re-appoint or elect or re-elect the executive to the offices he
currently holds (or a more senior office, if any);
|
|
|
|
|
|
|
§
|
the failure
of the shareholders of the Company or 1
st
United Bank to elect or
re-elect the executive to the Board of Directors of the Company or 1
st
United Bank;
|
|
|
|
|
|
|
§
|
the failure
of the Board of Directors or the governance committee of the Company or 1
st
United Bank to nominate the executive for such election or re-election;
|
|
|
|
|
|
|
§
|
a material diminution in the executive’s
duties, functions and responsibilities;
|
|
|
|
|
|
|
§
|
a material
breach of the executive’s employment agreement or as to any other
compensation or benefit program in which the executive participates;
|
|
|
|
|
|
|
§
|
the relocation of the executive’s principal
place of employment, without his written consent, to a location outside of
Palm Beach County, Florida; or
|
|
|
|
|
40
|
1
st
United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
|
|
|
|
|
|
|
§
|
Acceptance
by the Board of Directors of the executive’s resignation from the Board of
Directors tendered by the executive solely as a result of the executive
receiving more “withhold” votes than “for” votes in an uncontested election
of directors.
|
Mr.
Jacobson is entitled to certain benefits as described in the table above if his
employment is terminated by us for reasons other than death, disability, or for
cause. Termination for cause under Mr. Jacobson’s employment agreement means
termination due to personal dishonesty, willful misconduct, breach of fiduciary
duty, intentional failure to perform stated duties, willful violation of any
law, rule, or regulation (other than traffic violations or similar offenses) or
final removal and prohibition order, final cease-and-desist order, or material
breach of any provision of his employment agreement or any event that would
make Mr. Jacobson ineligible for employment by an insured depository
institution under Section 19 of the Federal Deposit Insurance Act, as amended.
Payments upon a Termination in Connection with a
Change of Control.
The executive will be
entitled to certain benefits as described in the tables above if the
executive’s employment is terminated by us after a change of control. The
definition of change of control is different under the executive employment agreements
and the supplemental executive retirement program agreements.
Under
each of Messrs. Orlando’s, Schupp’s, and Marino’s employment agreement, a
change of control means:
|
|
|
|
|
|
1.
|
approval by
our shareholders of a transaction that would result in the reorganization,
merger or consolidation of the Company with one or more other persons, other
than a transaction:
|
|
|
|
|
|
|
(a)
following which at least 50.1% of the common stock, equity ownership
interests, or combined voting power of the surviving entity are beneficially
owned in substantially the same relative proportions by persons who,
immediately prior to such transaction, beneficially owned at least 50.1% of
the outstanding common stock, equity ownership interests or combined voting power
in the Company as appropriate;
|
|
|
|
|
|
|
(b)
in which no person, or persons acting in concert, beneficially own 20% or
more of the outstanding common stock or equity ownership interests in, or 20%
or more of the combined voting power of the securities entitled to vote
generally in the election of directors of, the surviving entity; and
|
|
|
|
|
|
|
(c)
in which at least a majority of the members of the Board of Directors of the
entity resulting from such transaction were members of the Board of Directors
of the Company;
|
|
|
|
|
|
|
2.
|
the
acquisition of all or substantially all of the assets of the Company or
beneficial ownership of 20% or more of the outstanding securities or of the
combined voting power of the outstanding securities of the Company entitled
to vote generally in the election of directors or approval by the
shareholders of the Company of any transaction which would result in such an
acquisition;
|
|
|
|
|
|
|
3.
|
a complete
liquidation or dissolution of the Company or approval by our shareholders of
such a liquidation or dissolution;
|
|
|
|
|
|
|
4.
|
the
occurrence of any event if, immediately following such event, at least 50% of
the members of our Board of Directors (or our successor) were not members
prior to the transaction; or
|
|
|
|
|
|
|
5.
|
the occurrence
of any of the prior listed events involving 1
st
United Bank.
|
Under
Mr. Jacobson employment agreement, a change in control means the acquisition by
any person (other than 1
st
United Bank or and 1
st
United
Bank employee benefit plan, including its trustee) of beneficial ownership of
50% or more of the combined voting power of the then outstanding securities of
1st United Bancorp, Inc. entitled to vote generally in the election of
directors.
|
|
|
|
|
|
A change in
control under the SERP agreement occurs when:
|
|
|
|
|
|
|
§
|
one person
or a group acquires stock that, combined with stock previously owned,
controls more than 50% of the value or voting power of the stock of the
Company;
|
|
|
|
|
1st United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
|
41
|
|
|
|
|
|
|
§
|
during any
12-month period, either (x) any person or group acquires stock possessing 35%
of the voting power of the Company or 1
st
United Bank, or (y) the
majority of the Board of Directors of the Company or 1
st
United
Bank is replaced by persons whose appointment or election is not endorsed by
a majority of the Board of Directors; or
|
|
|
|
|
|
|
§
|
a person or
a group acquires, during any 12-month period, assets of the Company or 1
st
United Bank having a total gross fair market value equal to 40% or more of
the total gross fair market value of all of the respective corporation’s
assets.
|
The
compensation payable to Messrs. Jacobson and Ostermayer in the event of a
termination of employment or a change of control of the Company or 1
st
United Bank is listed in the table below.
Under
the terms of each of our stock option plans, all outstanding stock options
automatically accelerate and become immediately exercisable upon a change of
control. Additionally, all options granted to each of Messrs. Orlando, Schupp,
and Marino prior to December 31, 2011 under their previous employment
agreements automatically accelerate and become immediately exercisable upon (a)
termination of their employment for reasons other than for cause, (b) a change
of control, (c) death, or (d) disability. Assuming any of the foregoing
triggering events had occurred on December 31, 2011 and that the executive
exercised the full amount of his awards, the cash value of the accelerated
awards (based on the stipulated value of a share of the Company common stock of
$5.55 at December 31, 2011) would have been as follows:
|
|
|
|
|
|
|
Name
|
|
Value of Accelerated
Equity Awards
|
|
|
Warren S.
Orlando
|
|
$
|
80,500
|
|
|
Rudy E.
Schupp
|
|
|
80,500
|
|
|
John Marino
|
|
|
80,500
|
|
|
Wade E.
Jacobson
|
|
|
—
|
|
|
Lawrence
Ostermayer
|
|
|
—
|
|
280G Tax Gross-up
Upon
a change in control of the Company or 1
st
United Bank, the executive
may be subject to certain excise taxes pursuant to Section 280G of the Internal
Revenue Code. We have agreed to reimburse the executive for all excise taxes
that are imposed on the executive under Section 280G and any income and excise
taxes that are payable by the executive as a result of any reimbursements for
Section 280G excise taxes.
|
|
|
|
42
|
1
st
United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
|
P
ROPOSAL 2
NONBINDING ADVISORY APPROVAL OF EXECUTIVE
COMPENSATION
We
believe that our executive compensation program is designed to retain and
motivate high-quality executive leadership with the talent to support the
creation of long-term shareholder value. As we detail above in the Compensation
Discussion and Analysis, we have structured these plans such that significant
elements of the total executive compensation package (cash and equity pay
elements) are “at risk” elements which provide both upside potential and
downside risk ensuring that management’s interests are aligned with those of
shareholders.
The
Board of Directors asks that shareholders consider the following:
|
|
|
|
|
|
§
|
1
st
United concluded 2011 in the
face of a difficult economic downturn with more than $66 million of capital
in excess of what is defined as “well capitalized” levels by our regulators;
|
|
|
|
|
|
|
§
|
1
st
United integrated one
significant acquisition and completed another acquisition in 2011 expanding
its banking system to 19 banking centers (although these acquisitions
resulted in expected seven figure one-time charges and costs);
|
|
|
|
|
|
|
§
|
1
st
United, despite the difficult economy, grew total assets $154 million, or
12%, in 2011; and
|
|
|
|
|
|
|
§
|
1
st
United had net income of
$3.7 million for the year ended December 31, 2011.
|
Shareholders
are encouraged to carefully review the “Executive Compensation” section of this
Proxy Statement for a detailed discussion of our executive compensation
program.
In
accordance with Section 14A of the Exchange Act and as a matter of good
corporate practice, we are asking for our shareholders to approve the following
resolution:
|
|
|
|
|
|
|
“RESOLVED, that the compensation paid to 1st United Bancorp, Inc.’s
Named Executive Officers as disclosed pursuant to Item 402 of Regulation S-K
including the Compensation Discussion and Analysis, compensation tables, and
narrative discussion is hereby APPROVED.”
|
Your
vote on this proposal is advisory and will not be binding upon our Board of
Directors. The Compensation Committee of our Board of Directors, however, will
take into account the outcome of the vote when considering future executive
compensation arrangements.
|
|
|
The Board of Directors unanimously recommends that the shareholders vote “FOR” the approval of the
compensation of the Named Executive Officers as disclosed pursuant to Item 402 of Regulation S-K, including
the Compensation Discussion and Analysis, executive compensation tables, and narrative discussion of executive
compensation in this Proxy Statement.
|
S
ECTION 16(A)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Exchange Act requires directors and executive officers and any
persons who own more than 10% of a class of stock registered under Section 12
of the Exchange Act to file reports with the Securities and Exchange Commission
with respect to their ownership of the class of stock. Directors, executive
officers, and persons owning more than 10% of a registered class of stock are
required to furnish the Company with copies of all Section 16(a) reports they
file.
Based
solely upon on a review of these reports received by us for 2011 and any
written representations from reporting persons, we believe that during 2011
each required Section 16(a) report for 2011 was filed on time.
|
|
|
|
1st United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
|
43
|
R
EPORT OF THE
AUDIT COMMITTEE
The
Audit Committee of 1
st
United Bancorp, Inc. (the “Company”) operates
under a written charter adopted by the Board of Directors and is published on
the Investor Relations section of the Company’s Web site at
www.1stunitedbankfl.com
. This report
reviews the actions taken by the Audit Committee with regard to the Company’s
financial reporting process during 2011 and particularly with regard to the
Company’s audited consolidated financial statements as of December 31, 2011 and
2010 and for the three years ended December 31, 2011.
The
Audit Committee selects the Company’s independent registered public accounting
firm and meets with the Company’s independent registered public accounting firm
to discuss the scope and review the results of the annual audit. The Audit Committee
has implemented procedures to ensure that during the course of each fiscal year
it devotes the attention that it deems necessary or appropriate to each of the
matters assigned to it under the Audit Committee’s Charter.
All
of the directors who serve on the Audit Committee are “independent” for
purposes of the NASDAQ Stock Market independence standards. That is, the Board
of Directors has determined that none of the members of the Committee has any
relationship to the Company that may interfere with his independence from the
Company and its management.
The
Audit Committee reviewed the Company’s 2011 audited financial statements and
met with both management and Crowe Horwath LLP, the Company’s independent
registered public accounting firm for 2011, to discuss those financial
statements. Management represented to us that the financial statements were
prepared in conformity with accounting principles generally accepted in the
United States of America. The Committee discussed with Crowe Horwath LLP the
matters required to be discussed under professional Standards, AU Section 380,
“Communication with Audit Committees” as amended by the Public Company
Accounting Oversight Board. The Committee also received from and discussed the
written disclosures and the letter from Crowe Horwath LLP required by the
Public Company Accounting Oversight Board regarding Crowe Horwath LLP’s
communications with the Audit Committee concerning independence.
On
the basis of these reviews and discussions, the Audit Committee recommended to
the Board of Directors that the Board of Directors approve the inclusion of the
Company’s audited financial statements in the Company’s Annual Report on Form
10-K for the fiscal year ended December 31, 2011, for filing with the
Securities and Exchange Commission.
THE AUDIT COMMITTEE
Jeffery L. Carrier, Chairman
Ronald A. David
Thomas E. Lynch
This
report shall not be deemed to be incorporated by reference by any general
statement incorporating by reference the Proxy Statement into any filing under
the Securities Act of 1933 or Exchange Act, and shall not otherwise be deemed
filed under these Acts.
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44
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1
st
United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
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P
ROPOSAL 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The
Audit Committee of the Board of Directors has appointed the accounting firm of
Crowe Horwath LLP to serve as the Company’s independent registered public
accounting firm for the fiscal year ending December 31, 2012. A proposal to
ratify that appointment will be presented at the Annual Meeting.
Representatives of Crowe Horwath LLP are expected to be present at the meeting.
They will have the opportunity to make a statement if they desire to do so and
will be available to respond to appropriate questions from shareholders.
Shareholder
ratification of the appointment of Crowe Horwath LLP as our independent
registered public accounting firm is not required by our Bylaws or other applicable
legal requirement. However, the Board of Directors is submitting the
appointment of Crowe Horwath LLP to the shareholders for ratification as a
matter of good corporate practice. If the shareholders fail to ratify the
appointment, the Audit Committee will reconsider whether or not to retain that
firm. Even if the appointment is ratified, the Audit Committee at its
discretion may direct the appointment of a different independent accounting
firm at any time during the year if it determines that such a change would be
in our best interests and our shareholders’ best interests.
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The Board of
Directors unanimously recommends a vote “FOR” the ratification of our
appointment of
Crowe Horwath LLP
as our independent registered
public accounting firm for the current fiscal year.
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1st United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
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45
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A
UDIT FEES AND
RELATED MATTERS
Audit and Non-Audit Fees
The
following table presents fees for professional audit services rendered by Crowe
Horwath LLP for the audit of our annual financial statements and other
professional services provided for the years ended December 31, 2011 and 2010.
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Type of
Fees
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2011
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2010
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Audit Fees
(1)
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$
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220,000
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$
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185,000
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Audit-Related Fees
(2)
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130,144
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44,750
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Tax Fees
(3)
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25,190
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20,250
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All Other Fees
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—
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28,030
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Total
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$
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375,334
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$
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278,030
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(1)
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Audit fees
for 2011 and 2010 consist of professional services rendered for the annual
audit of our financial statements and review of financial statements included
in our quarterly reports, and accounting consultation.
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(2)
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Audit-related
fees for 2011 and 2010 consist of fees paid to Crowe Horwath LLP related to
our acquisitions and registration statements.
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(3)
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Tax fees for
2011 and 2010 consist solely of fees related to preparing the 2011 and 2010
federal corporate income and state income and franchise tax returns.
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(4)
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All other
fees include fees for tax consulting services.
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Policy on Audit Committee Preapproval of
Audit and Nonaudit Services of Independent Auditor
The
Audit Committee of the Board of Directors has implemented procedures under our
Audit Committee Preapproval Policy for Audit and Nonaudit Services to ensure
that all audit and permitted non-audit services provided to us are preapproved
by the Audit Committee. Specifically, the Audit Committee preapproves the use
of an independent accountant for specific audit and non-audit services, within
approved monetary limits. If a proposed service has not been preapproved
pursuant to the Preapproval Policy, then it must be specifically preapproved by
the Audit Committee before it may be provided by our independent accountant.
Any preapproved services exceeding the pre-approved monetary limits require
specific approval by the Audit Committee. The Audit Committee may delegate
pre-approval authority to one or more of its members when expedition of
services is necessary.
All
of the audit-related, tax and all other services provided by Crowe Horwath LLP
to us in 2011 were approved by the Audit Committee by means of specific
preapprovals or pursuant to the procedures contained in the Preapproval Policy.
The Audit Committee has determined that all nonaudit services provided by Crowe
Horwath LLP in 2011 were compatible with maintaining its independence in the
conduct of its auditing functions.
S
HAREHOLDER
PROPOSALS
Shareholder
proposals that are to be included in the Proxy Statement for the 2013 meeting
must be received by December 13, 2012. Shareholder proposals for the 2013
meeting that are not intended to be included in the Proxy Statement for that
meeting must be received by February 26, 2013, or the Board of Directors can
vote the proxies in its discretion on the proposal. Proposals must comply with
the proxy rules and be submitted in writing to our Corporate Secretary at our
principal offices.
D
IRECTOR
NOMINATIONS
Any
shareholder entitled to vote generally in the election of directors may
recommend a candidate for nomination as a director. A shareholder may recommend
a director nominee by submitting the name and qualifications of the candidate
the shareholder wishes to recommend, pursuant to Article I, Section 14 of our
Bylaws, to:
1
st
United Bancorp, Inc.
One North Federal Highway
Boca Raton, FL 33432
Attention: Corporate Secretary
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46
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1
st
United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
|
To
be considered, recommendations with respect to an election of directors to be
held at an annual meeting must be received no earlier than 180 days and no
later than 120 days prior to April 12, 2013, the first anniversary of this
year’s Notice of Annual Meeting date. In other words, director nominations must
be received no earlier than October 14, 2012, and no later than December 13,
2012, to be nominated for consideration at the 2013 Annual Meeting.
Recommendations with respect to an election of directors to be held at a
special meeting called for that purpose must be received by the 10th day
following the date on which notice of the special meeting was first mailed to
shareholders. Recommendations meeting these requirements will be brought to the
attention of the Corporate Governance Committee. Candidates for director
recommended by shareholders are afforded the same consideration as candidates
for director identified by our directors, executive officers, or search firms,
if any, employed by us.
ANNUAL REPORT
We
filed an annual report for the fiscal year ended December 31, 2011, on Form
10-K with the U.S. Securities and Exchange Commission.
Shareholders may obtain, free of charge, a copy of our
annual report on Form 10-K by writing to our Corporate Secretary at our
principal offices.
H
OUSEHOLDING
We
have adopted a procedure approved by the Securities and Exchange Commission
known as “householding.” Under this procedure, shareholders of record who have
the same address and last name will receive only one copy of our Notice of
Annual Meeting, Proxy Statement, and Annual Report, unless one or more of these
shareholders notifies our transfer agent that they wish to continue receiving
individual copies. This procedure will reduce our printing costs and postage
fees. If you wish to receive your own copy of these materials, you may contact
our transfer agent, American Stock Transfer & Trust Company, in writing, by
telephone, or on the Internet:
American Stock Transfer & Trust Company
59 Maiden Lane, Plaza Level
New York, NY 10038
(800) 937-5449 (U.S. and Canada)
(718) 921-8124 (International)
www.amstock.com
Shareholders
who participate in householding will continue to receive separate proxy cards.
If you are eligible for householding, but you and other shareholders of record
with whom you share an address currently receive multiple copies of our Notice
of Annual Meeting, Proxy Statement, and Annual Report, or if you hold stock in
more than one account, and in either case you wish to receive only a single
copy of each document for your household, please contact our transfer agent as
indicated above. Beneficial owners can request information about householding
from their banks, brokers, or other nominees.
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1st United Bancorp, Inc. Notice of Annual Meeting and Proxy Statement
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47
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Dear Shareholder,
Your vote is
important. Please read both sides of the attached Proxy Card. You can vote your
shares through the Internet, by telephone or by marking, signing, and dating and
returning your card. If you vote through the Internet or by telephone, there is
no need to mail your card.
You are invited to
attend the Annual Meeting of Shareholders on Tuesday, May 22, 2012, at 3:00 p.m.
at the Boca Raton Historical Society located at 71 North Federal Highway, Boca
Raton, Florida. If you plan to attend the Annual Meeting, you should either mark
the box provided on the Proxy Card or signify your attendance when you access
the Internet or telephone voting system.
We urge you to vote your shares.
Warren S. Orlando
Chairman of the Board
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1ST UNITED BANCORP, INC.
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One North Federal Highway
Boca Raton, FL 33432
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
1ST UNITED BANCORP, INC. FOR THE ANNUAL MEETING OF SHAREHOLDERS
MAY 22, 2012
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KNOW ALL MEN BY THESE PRESENTS that I,
the undersigned shareholder of 1st United Bancorp, Inc. (the “Company”), Boca
Raton, Florida, do hereby nominate, constitute and appoint John Marino, Warren
S. Orlando and Rudy E. Schupp (collectively, the “Proxies”), or any one of them
(with full power to act alone), my true and lawful attorneys and proxies with
full power of substitution, for me and in my name, place and stead to vote all
the shares of Common Stock of the Company that the shareholder signing this
Proxy Card is entitled to vote at the annual meeting of its shareholders to be
held at 71 North Federal Highway, Boca Raton, Florida, on Tuesday, May 22, 2012, at 3:00 P.M.,
and at any adjournments or postponements thereof, as instructed on
the reverse side of this Proxy Card and in the Proxies’ discretion on other
matters.
All proxies previously given or executed by the shareholder signing
this Proxy Card are hereby revoked.
(Continued and to be signed on the reverse side.)
ANNUAL MEETING OF SHAREHOLDERS OF
1ST UNITED BANCORP, INC.
May 22, 2012
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL
:
The Notice of Meeting,
proxy statement and proxy card
are available at
www.1stunitedbankfl.com/proxy/
Please sign, date and mail
your proxy card in the
envelope provided as soon
as possible.
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â
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Please detach along perforated line and mail in the envelope provided.
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â
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21230300000000001000 1
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052212
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PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE
x
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1.
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To elect a Board of Directors to serve for a one-year term that will expire at the annual shareholders’ meeting in 2013, or until
their successors are duly elected and qualified.
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NOMINEES:
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o
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FOR ALL NOMINEES
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¡
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Paula Berliner
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¡
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Derek C. Burke
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o
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WITHHOLD
AUTHORITY
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¡
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Jeffery L. Carrier
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FOR ALL NOMINEES
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¡
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Ronald A. David
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¡
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James Evans
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o
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FOR ALL EXCEPT
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¡
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Arthur S. Loring
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(See
instructions below)
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¡
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Thomas E. Lynch
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¡
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John Marino
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¡
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Carlos Morrison
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¡
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Warren S. Orlando
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¡
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Rudy E. Schupp
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¡
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Joseph W. Veccia, Jr.
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INSTRUCTIONS:
To withhold
authority to vote for any individual nominee(s), mark
“FOR ALL
EXCEPT”
and fill in the circle next to each nominee you wish to
withhold, as shown here:
l
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To change the address on your account, please check the box at right and indicate your new address in the address space above.
Please note that changes to the registered name(s) on the account may not be submitted via this method.
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o
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FOR
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AGAINST
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ABSTAIN
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2.
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Nonbinding advisory vote to approve executive compensation.
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o
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o
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o
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3.
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To ratify the appointment of Crowe Horwath LLP as the Company’s
principal independent registered public accounting firm for the
Company’s fiscal year ending December 31, 2012.
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o
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o
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o
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THE BOARD RECOMMENDS “FOR” ITEMS 1, 2, AND 3.
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The undersigned shareholder(s) hereby acknowledges receipt of the Notice of Annual Meeting
and Proxy Statement.
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ELECTRONIC ACCESS TO FUTURE DOCUMENTS
|
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If you would like to receive future shareholder communications over the Internet
exclusively and no longer receive any material by mail, please visit
http://www.amstock.com. Click on Shareholder Account Access to enroll. Please
enter your account number and tax identification number to log in, then select
Receive Company Mailings via E-Mail and provide your e-mail address.
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Please mark here if you intend to attend the 2012 Annual Meeting of Shareholders.
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o
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Signature of Shareholder
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Date:
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Signature of Shareholder
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Date:
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Note:
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Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing
as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please
sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.
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ANNUAL MEETING OF SHAREHOLDERS OF
1ST UNITED BANCORP, INC.
May 22, 2012
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PROXY VOTING INSTRUCTIONS
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INTERNET
- Access
“www.voteproxy.com”
and follow the on-screen instructions. Have your proxy card
available when you access the web page, and use the Company Number and Account
Number shown on your proxy card.
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TELEPHONE
- Call toll-free
1-800-PROXIES
(1-800-776-9437) in the United States or
1-718-921-8500
from
foreign countries from any touch-tone telephone and follow the instructions.
Have your proxy card available when you call and use the Company Number and
Account Number shown on your proxy card.
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Vote online or by phone until 11:59 PM EST the day before the meeting.
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MAIL
- Sign, date and
mail your proxy card in the envelope provided as soon as
possible.
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IN PERSON
- You may vote your shares in person by attending the Annual Meeting.
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COMPANY NUMBER
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ACCOUNT NUMBER
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NOTICE OF INTERNET AVAILABILITY
OF PROXY MATERIAL
:
The Notice of meeting, proxy statement and proxy card are available at
www.1stunitedbankfl.com/proxy/
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â
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Please detach along perforated line and mail in the envelope provided
IF
you are not voting via telephone or the Internet.
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â
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21230300000000001000 1
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052212
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PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE
x
|
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|
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|
|
|
|
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|
|
1.
|
To elect a Board of Directors to serve for a one-year term that will expire at the annual shareholders’ meeting in 2013, or until
their successors are duly elected and qualified.
|
|
|
|
|
|
|
|
|
|
NOMINEES:
|
|
|
o
|
FOR ALL NOMINEES
|
¡
|
Paula Berliner
|
|
|
|
|
¡
|
Derek C. Burke
|
|
|
o
|
WITHHOLD
AUTHORITY
|
¡
|
Jeffery L. Carrier
|
|
|
|
FOR ALL NOMINEES
|
¡
|
Ronald A. David
|
|
|
|
|
¡
|
James Evans
|
|
|
o
|
FOR ALL EXCEPT
|
¡
|
Arthur S. Loring
|
|
|
|
(See
instructions below)
|
¡
|
Thomas E. Lynch
|
|
|
|
|
¡
|
John Marino
|
|
|
|
|
¡
|
Carlos Morrison
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¡
|
Warren S. Orlando
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¡
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Rudy E. Schupp
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¡
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Joseph W. Veccia, Jr.
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INSTRUCTIONS:
To withhold
authority to vote for any individual nominee(s), mark
“FOR ALL
EXCEPT”
and fill in the circle next to each nominee you wish to
withhold, as shown here:
l
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To change the address on your account, please check the box at right and indicate your new address in the address space above.
Please note that changes to the registered name(s) on the account may not be submitted via this method.
|
o
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FOR
|
AGAINST
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ABSTAIN
|
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2.
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Nonbinding advisory vote to approve executive compensation.
|
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o
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o
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o
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FOR
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AGAINST
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ABSTAIN
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3.
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To ratify the appointment of Crowe Horwath LLP as the Company’s
principal independent registered public accounting firm for the
Company’s fiscal year ending December 31, 2012.
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o
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o
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o
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THE BOARD RECOMMENDS “FOR” ITEMS 1, 2, AND 3.
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The undersigned shareholder(s) hereby acknowledges receipt of the Notice of Annual Meeting
and Proxy Statement.
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|
ELECTRONIC ACCESS TO FUTURE DOCUMENTS
|
|
If you would like to receive future shareholder communications over the Internet
exclusively and no longer receive any material by mail, please visit
http://www.amstock.com. Click on Shareholder Account Access to enroll. Please
enter your account number and tax identification number to log in, then select
Receive Company Mailings via E-Mail and provide your e-mail address.
|
|
|
|
|
Please mark here if you intend to attend the 2012 Annual Meeting of Shareholders.
|
o
|
|
|
|
|
|
|
|
|
|
|
Signature of Shareholder
|
|
Date:
|
|
Signature of Shareholder
|
|
Date:
|
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|
Note:
|
Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing
as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please
sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.
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