Two
Liberty Place, 50 S. 16th Street, Suite 2400
Philadelphia,
Pennsylvania 19102
November
19, 2009
Dear
Shareholder:
You are
cordially invited to attend the 2009 Annual Meeting of Shareholders of Republic
First Bancorp, Inc., or the “Company,” to be held on Wednesday, December 23,
2009 at 12:00 noon at Two Liberty Place, 50 S. 16
th
Street, Suite 2400, Philadelphia, PA 19102.
At the
annual meeting, shareholders will be asked to consider and vote upon the
election of three Class II Directors to the Company’s board of directors, to
serve until the 2012 annual meeting of shareholders and until their successors
are elected and qualify, and any such other matters as may properly come before
the meeting.
It is
very important that you be represented at the annual meeting regardless of the
number of shares you own or whether you are able to attend the meeting in
person. We urge you to mark, sign and date your proxy card today and return it
in the envelope provided, even if you plan to attend the annual meeting. You may
also vote by telephone or internet with the provided
instructions. This will not prevent you from voting in person, but
will ensure that your vote is counted if you are unable to attend.
Enclosed
with your proxy materials is a copy of our 2008 Annual Report to
Shareholders.
We look
forward to seeing you at the meeting.
|
Very
truly yours,
|
|
|
|
Harry
D. Madonna
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|
Chairman
of the Board
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Chief
Executive Officer
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|
REPUBLIC
FIRST BANCORP, INC.
Two
Liberty Place, 50 S. 16th Street, Suite 2400
Philadelphia,
Pennsylvania 19102
_______________________
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
TO
BE HELD DECEMBER 23, 2009
_______________________
NOTICE IS
HEREBY GIVEN THAT the 2009 Annual Meeting of Shareholders of Republic First
Bancorp, Inc. (the “Company”) will be held on Wednesday, December 23, 2009, at
12:00 noon
at
Two Liberty Place, 50 S.
16
th
Street, Suite 2400, Philadelphia, PA
19102,
to consider and act upon:
•
|
Election
of three (3) Class II Directors of the Company, to serve until the 2012
Annual Meeting of Shareholders and until their successors are elected and
qualify; and
|
•
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Such
other business as may properly come before the annual
meeting.
|
Only
shareholders of record of the Company at the close of business on November 13,
2009, are entitled to notice of and to vote at the annual meeting and any
adjournment or postponement thereof.
All
shareholders are cordially invited to attend the annual
meeting. Whether or not you plan to attend the annual meeting, please
complete and sign the enclosed proxy card and return it promptly to the Company
in the enclosed envelope, which requires no postage if mailed in the United
States, or vote by telephone or internet.
Our proxy
statement, annual report to shareholders, and proxy card are available on the
internet at http://www.cfpproxy.com/5412. If you would like to
receive proxy materials related to this or any future shareholders meetings, or
any of the Company’s filings with the Securities and Exchange Commission or
press releases, please email your request to
llewis@rfbkonline.com
or call
us at
(215) 735-4422, ext.
5332
.
|
By
Order of the Board of Directors
|
|
|
|
Kemma
Black
|
|
Corporate
Secretary
|
November
19, 2009
IT IS
IMPORTANT THAT YOU VOTE PROMPTLY, REGARDLESS OF THE NUMBER OF SHARES YOU
OWN. PLEASE COMPLETE, SIGN AND MAIL THE ENCLOSED PROXY CARD IN THE
ACCOMPANYING ENVELOPE, OR VOTE BY TELEPHONE OR BY INTERNET, WHETHER OR NOT YOU
PLAN TO ATTEND THE ANNUAL MEETING.
REPUBLIC
FIRST BANCORP, INC.
Two
Liberty Place, 50 S. 16th Street, Suite 2400
Philadelphia,
Pennsylvania 19102
PROXY
STATEMENT FOR ANNUAL MEETING
OF
SHAREHOLDERS TO BE HELD ON DECEMBER 23, 2009
This
proxy statement is being furnished to shareholders of Republic First Bancorp,
Inc., referred to as the “Company,” in connection with the solicitation by the
board of directors of the Company of proxies to be voted at the annual meeting
of shareholders to be held at Two Liberty Place, 50 S. 16
th
Street, Suite 2400, Philadelphia, PA 19102 at 12:00 noon on Wednesday, December
23, 2009, or such later date to which the annual meeting may be adjourned or
postponed.
At the
annual meeting, you will be asked to consider and vote upon the following
matters:
•
Election
of three (3) Class II Directors of the Company, to serve until the 2012 Annual
Meeting of Shareholders and until their successors are elected and
qualify; and
•
Such
other business as may properly come before the annual
meeting.
Information
regarding the election of directors is included in this proxy
statement. Shareholders should carefully read this proxy
statement.
The first
date on which this proxy statement and the enclosed form of proxy are being sent
to the shareholders of the Company is on or about November 23,
2009.
TABLE
OF CONTENTS
Forward-Looking
Statements
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|
ii
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Information
About Voting
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1
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Election
of Directors
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3
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Board
of Directors and Committees
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6
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Security
Ownership of Certain Beneficial Owners and Management
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10
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Executive
Officers and Compensation
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11
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Certain
Relationships and Related Transactions
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22
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Code
of Ethics
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23
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Audit-Related
Information
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24
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Section
16(a) Beneficial Ownership Reporting Compliance
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25
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Equity
Compensation Plan Information
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25
|
Shareholder
Proposals
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26
|
Reports
and Other Documents
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26
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FORWARD-LOOKING
STATEMENTS
This
document contains forward-looking statements, in addition to historical
information. Forward looking statements are typically identified by
words or phrases such as “believe,” “expect,” “anticipate,” “intend,”
“estimate,” “project,” and variations of such words and similar expressions, or
future or conditional verbs such as “will,” “would,” “should,” “could,” “may,”
or similar expressions.
You
should note that many factors, some of which are discussed in this document and
in the documents we file with the Securities and Exchange Commission from time
to time, could affect the future financial results of Republic First Bancorp,
Inc. and its subsidiary, Republic First Bank (or the “Bank”), and could cause
those results to differ materially from those expressed in the forward-looking
statements contained in this document. These factors include the success of our
planned merger with Metro Bancorp Inc., credit risks of lending activities,
changes in general economic conditions, price pressures on loan and deposit
products, and other factors detailed from time to time in the Company’s filings
with the Securities and Exchange Commission, including the Company’s Annual
Report on Form 10-K for the year ended December 31, 2008, Quarterly Reports on
Form 10-Q, and any Current Reports on Form 8-K, as well as other
filings.
Republic
First Bancorp, Inc., referred to as “we” or the “Company,” cautions that any
forward-looking statements are subject to numerous assumptions, risks and
uncertainties, all of which change over time, and we assume no duty to update
forward-looking statements, except as may be required by applicable law or
regulation. We caution readers not to place undue reliance on any
forward-looking statements. These statements speak only as of the
date made, and they advise readers that various factors, including those
described above, could affect our financial performance and could cause actual
results or circumstances for future periods to differ materially from those
anticipated or projected. Except as required by applicable law or
regulation, we do not undertake, and specifically disclaim any obligation, to
publicly release any revisions to any forward-looking statements to reflect the
occurrence of anticipated or unanticipated events or circumstances after the
date of such statements.
INFORMATION
ABOUT VOTING
How are proxies being
solicited?
This
proxy solicitation is being made by and at the direction of the board of
directors of the Company, and we will pay all expenses relating to the
solicitation. In addition to the use of the mails, proxies may be
solicited personally, by telephone or by other electronic means by officers,
directors and employees of the Company and the Bank, who will not be compensated
for such solicitation activities. Arrangements may be made with
brokerage houses and other custodians, nominees and fiduciaries for forwarding
solicitation materials to the beneficial owners of shares held of record by such
persons, and the Company will reimburse those persons for their reasonable
expenses.
What is on the agenda for
the annual meeting?
The
agenda for the annual meeting includes the election of three Class II Directors
to the Company’s board of directors, to serve until the 2012 annual meeting of
shareholders and until their successors are elected and qualify and such other
matters as may properly come before the annual meeting. We are not
aware of any such other matters that may properly come before the annual meeting
at the present time.
Who can
vote?
You can
vote at the annual meeting if you are a holder of our common stock on the record
date. The record date is the close of business on November 13,
2009. Each share of common stock you own as of the record date
entitles you to one vote for each director to be elected in the election of
directors and one vote on any other matter as may properly come before the
annual meeting. As of November 13, 2009, there were 10,665,635 shares
of common stock outstanding and entitled to vote.
How do I vote if shares are
held directly in my name?
If you
hold your shares in certificate form and not through a bank, brokerage firm or
other nominee, you may vote your shares in one of the following
ways:
•
Voting By
Mail
. If you choose to vote by mail, complete the enclosed
proxy, date and sign it, and return it in the postage-paid envelope
provided.
•
Voting By Telephone.
If you choose to vote by telephone, call toll-free
(866)246-8478
•
Voting By
Internet.
If you choose to vote by internet, log onto
https://www.proxyvotenow.com/frbk
•
In
Person
. If you choose to vote in person, come to the annual
meeting and cast your vote. If you attend the meeting, you may vote
your shares in
person even if you have previously submitted a proxy.
How do I vote if shares are
held in street name or through a bank, brokerage firm or other
nominee?
If you
hold your shares in street name or through a bank, brokerage firm or other
nominee, you will need to vote your shares by providing voting instructions to
your bank, brokerage firm or other nominee, in accordance with the voting
instruction form provided to you by your bank, brokerage firm or other nominee,
or by obtaining a legal proxy from your bank, brokerage firm or other nominee
authorizing
you to vote those shares at the annual meeting. Only with a legal
proxy from your bank, brokerage firm or other nominee can you cast your vote in
person at the annual meeting.
How will my proxy be
voted?
Unless
you indicate differently on your proxy, we plan to vote signed and returned
proxies
FOR
the election
of the board’s director nominees named in this proxy statement. If
you hold your shares of the Company’s common stock in “street name” (that is,
through a broker or other nominee) and fail to instruct your broker or nominee
as to how to vote your shares of common stock, your broker or nominee may, in
its discretion, vote your shares
FOR
the election of the
nominees for director named in this proxy statement, but may not vote your
shares on any other matter to properly come before the annual
meeting. At or after the annual meeting, a judge or judges of
election will tabulate ballots cast by shareholders present and voting in person
and votes cast by proxy.
What is a broker
non-vote?
A broker
non-vote occurs when a bank or brokerage firm holding shares on behalf of a
shareholder does not receive voting instructions from the shareholder by a
specified date before the annual meeting and the bank or brokerage firm is not
permitted to vote those undirected shares on specified matters under applicable
stock exchange rules. Thus, if you do not give your broker specific
instructions, your shares may not be voted on those matters (so-called “broker
non-votes”) and will not be counted in determining the number of shares
necessary for approval. Broker non-votes are not considered to be
votes cast and, therefore, generally have no effect on the outcome of elections
of directors or other matters submitted to the shareholders. Shares
represented by “broker non-votes” will be counted, however, in determining the
number of shares of common stock represented in person or by proxy and entitled
to vote.
Can I revoke my proxy or
change my vote after submitting my proxy?
Yes. Any
shareholder giving a proxy has the right to attend the annual meeting and vote
in person. A proxy may be revoked prior to the annual meeting if a
later-dated proxy or a written revocation is sent to the Company at Two Liberty
Place, 50 S. 16th Street, Suite 2400, Philadelphia, PA 19102,
Attention: Kemma Black, Corporate Secretary, and received prior to the annual
meeting. In addition, a proxy may be revoked at the annual meeting by
filing a later-dated proxy or by filing a written notice of such revocation with
the Secretary of the Company at the annual meeting prior to the voting of such
proxy.
What constitutes a quorum at
the annual meeting and how are votes counted?
We need a
quorum of shareholders to hold a valid annual meeting. A quorum will
be present if at least a majority of the outstanding shares of common stock are
represented in person or by proxy at the annual meeting. Abstentions
and broker non-votes are counted as present for the purpose of establishing a
quorum.
How many votes are required
for the election of directors?
Directors
are elected by a plurality vote of shares of common stock cast in person or by
proxy at the annual meeting. A “plurality” means that the individuals
who receive the largest number of affirmative votes cast are elected as
directors up to the maximum number of directors to be chosen at the annual
meeting. Because the election of directors is based on a plurality of
the votes cast, abstentions and broker non-votes have no effect on the outcome
of the vote. Votes that are withheld from a director
nominee
will be excluded entirely from the vote for such nominee and will have no effect
on the result. Shareholders are not entitled to cumulative voting in
the election of directors.
How many votes are required
for any other proposals that may properly come before the annual
meeting?
Any other
proposals that may properly come before the annual meeting will be approved if a
majority of the votes cast are voted in favor of the action, unless the question
is one upon which a larger or different vote is required by express provision of
law or by our articles of incorporation or our bylaws. Abstentions
and broker non-votes on such other proposals are not considered votes cast on
the proposals and, as such, have no effect on the approval of the
proposals. We are not aware of any such other proposals that may
properly come before the annual meeting at the present time.
ELECTION
OF DIRECTORS
The
Company’s by-laws provide that the board may consist of not less than five
directors and not more than 25 directors, classified into three classes, as
nearly equal in number as possible, with the specific number of directors fixed
from time to time by resolution of the board. The members of one
class of directors is elected at each annual meeting and each class of directors
serves for approximately three years. The classes of directors have
been designated as “Class I,” “Class II” and “Class III.”
The board
has fixed the number of directors at eight, after increasing the number from
eight to nine in June 2008, at which time Theodore J. Flocco, Jr. was appointed,
and then reducing the number in July 2008 following the resignation of Louis J.
DeCesare. Currently, the Class I Directors are Harry D. Madonna and
William W. Batoff; the Class II Directors are Robert J. Coleman, Lyle W. Hall,
Jr. and Harris Wildstein, Esq.; and the Class III Directors are Neal I. Rodin,
Barry L. Spevak and Theodore J. Flocco, Jr. Mr. DeCesare had been a
Class I Director.
The
incumbent Class I Directors will continue in office until the Company’s 2011
Annual Meeting of Shareholders and the incumbent Class III Directors will
continue in office until the Company’s 2010 Annual Meeting of
Shareholders. All directors will hold office until the annual meeting
of shareholders at which their terms expire and until the elections and
qualifications of their successors.
Upon the
recommendation of the nominating committee of our board of directors, our board
has nominated Robert J. Coleman, Lyle W. Hall, Jr. and Harris Wildstein, Esq.
for reelection as Class II Directors, to serve until the Company’s 2012 annual
meeting of shareholders and thereafter until their successors are elected and
qualify. All of the director nominees have agreed to stand for
election. In the event, however, that one or more director nominees,
for any reason, become unavailable for election or service as directors, the
board may designate a substitute nominee or nominees to replace him or them and
the persons designated in the enclosed proxy will vote for the election of such
other person or persons as the board may recommend.
Director
Nominees
The
following individuals have been nominated for election to the board as Class II
Directors, each of them to serve until the 2012 Annual Meeting of Shareholders
and until his successor is elected and qualifies.
Robert J. Coleman
, age 72,
has been a director of the Company and the Bank since April 2003. He
has also been the Chairman and Chief Executive Officer of Marshall, Dennehey,
Warner, Coleman & Goggin, a defense litigation law firm, since
1974.
Lyle W. Hall, Jr.
, age 65,
has been a director of the Company and the Bank since April 2004. He
has been a director of First Bank of Delaware since November
2007. Mr. Hall has been the President of Deilwydd Partners, a real
estate and financial consulting company, since 1987 and also serves as President
of Montalcino, LLC, a company engaged in the management of nursing homes and
assisted living facilities since September 2009. Prior to that, Mr. Hall was the
Executive Vice President and Director of Butcher & Company, a New York Stock
Exchange Investment Banking Company. Mr. Hall is a Certified Public
Accountant and a member of the American Institute of Certified Public
Accountants.
Harris Wildstein, Esq.
, age
63, has been a director of the Company and the Bank since 1988. Since
1999, Mr. Wildstein has been a director of the First Bank of
Delaware. Since September 2004, Mr. Wildstein has been an owner and
officer of Lifeline Funding, LLC. He has been the Vice President of
R&S Imports, Ltd., an automobile dealership, since 1977, and President of
HVW, Inc., an automobile dealership, since 1982.
Continuing
Directors
Each of
the following individuals is an incumbent director who will continue to serve as
a director of the Company until the end of his respective term or until his
successor is elected and qualifies.
Class I
Directors
Harry D. Madonna
, age 67, has
been Chairman and Chief Executive Officer of the Company and Chairman of the
Bank since 1988. Mr. Madonna was Chief Executive Officer of the Bank
from 1988 until December 2006 and resumed the title of Chief Executive Officer
of the Bank in June 2009. Mr. Madonna has been Chairman of the Board
of Directors of First Bank of Delaware since 1999 and was its Chief Executive
Officer from 1999 until July 2008. Mr. Madonna was counsel to Spector
Gadon & Rosen, PC, a general practice law firm located in Philadelphia,
Pennsylvania from January 1, 2002 until June 30, 2005 and prior to that, was a
partner of Blank Rome Comisky & McCauley LLP, a general practice law firm
located in Philadelphia, Pennsylvania from 1980 until December
2001.
William W. Batoff
, age 74,
has been a director of the Company and the Bank since 1988 and a director of
First Bank of Delaware since 1999. Since 1996, he has been the
Managing Director of William W. Batoff Associates, a government relations
consulting firm. Prior to that, Mr. Batoff was a senior consultant of
Cassidy & Associates, a government relations consulting firm, since 1992,
and has been a Presidential Appointee to the Advisory Board of the Pension
Benefit Guarantee Corporation (PBGC) a United States Government
Agency.
Class III
Directors
Theodore J. Flocco, Jr.,
C.P.A.
, age 65, has been a director of the Company and the Bank since
June 2008. Before his retirement from Ernst & Young LLP, Mr.
Flocco was Senior Audit Partner and advised many of the largest SEC regulated
clients of the Philadelphia office for more than 35 years, including several
regional and local banks. Mr. Flocco’s appointment to the board of
directors resulted from investments by Vernon W. Hill, II, founder and chairman
(retired) of Commerce Bancorp, and a group of three other investors, including
Mr. Flocco, in a private placement of $10.8 million of convertible trust
preferred securities sponsored by the Company. In connection with the
investments, Mr. Hill entered into a consulting agreement with the Company
which, among other things, provides Mr. Hill the right to designate one
individual to the board of directors, and Mr. Flocco is Mr. Hill’s designee for
that position. Mr. Flocco has experience in the banking, mutual fund,
real estate and manufacturing and distribution industries. His responsibilities
at Ernst & Young LLP included consulting with senior executives and
directors of companies on accounting and strategic business issues, mergers and
acquisitions,
public offerings and SEC registrations. He has extensive experience in the
public offering market, having spearheaded more than 100 public equity and debt
offerings.
Neal I. Rodin
, age 64, has
been a director of the Company and the Bank since 1988. Mr. Rodin has
been the Managing Director of the Rodin Group, an international real estate
investment company, since 1988, and has been the President of IFC, an
international financing and investing company, since 1975.
Barry L. Spevak
, age 49, has
been a director of the Company and the Bank since April 2004. He has
also been a partner with Miller Downey Spevak Kaffenberger, Limited, a certified
public accounting firm, since 1991 and serves on the board of directors of the
Recording for the Blind and Dyslectic.
As noted
above, Messrs. Madonna, Batoff, Hall and Wildstein are members of First Bank of
Delaware’s board of directors. First Bank of Delaware’s class of
common stock is registered with the Federal Deposit Insurance Corporation, or
“FDIC,” pursuant to section 12 of the Securities Exchange Act of 1934, as
amended. Mr. Rodin and Mr. Batoff are brothers-in-law.
Recommendation
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
FOR
THE ELECTION OF
EACH OF ITS NOMINEES TO THE BOARD OF DIRECTORS OF THE COMPANY TO SERVE UNTIL THE
2012 ANNUAL MEETING OF SHAREHOLDERS AND UNTIL HIS SUCCESSOR IS ELECTED AND
QUALIFIES.
BOARD
OF DIRECTORS AND COMMITTEES
Director
Independence
The
Company’s common stock is listed on the Nasdaq Global Market and the Company’s
board of directors has determined the independence of the members of its board
and committees under the Nasdaq listing standards. The Company’s
board of directors determined that under Nasdaq independence standards Messrs.
Batoff, Coleman, Flocco, Hall, Rodin and Spevak, constituting a majority of the
members of the the Company’s board of directors, are independent, and that all
of the members of the audit, nominating and compensation committees are
independent. The Company’s directors who were determined to not be
independent were Messrs. Madonna and Wildstein. In determining
the independence of Mr. Flocco, the board considered a consulting arrangement
pursuant to which Mr. Flocco earned $32,500 during 2008.
Meetings of the Board and
Attendance
During
2008, the directors held eleven board meetings. All of the directors
attended at least 75% of all of the meetings of the board and the meetings of
all committees of the board on which such director served.
We
encourage all incumbent directors and nominees for election as directors to
attend our annual meetings. All then-serving directors attended the
Company’s 2008 Annual Meeting of Shareholders.
Board
Committees
The
Company’s board of directors conducts much of its business through committees,
including a standing audit committee, nominating committee and compensation
committee.
Audit
Committee
The board
of directors of the Company has designated a standing audit
committee. Messrs. Hall (chair), Batoff and Spevak serve as members
of the audit committee. The board of directors has determined that
Mr. Hall is an “audit committee financial expert” as that term is defined in
Item 407(d)(5) of Regulation S-K, and is “financially sophisticated,” as that
term is defined under Nasdaq rules. All members of the audit
committee are independent under Nasdaq listing standards, including the
independence criteria applicable to audit committee members. The
audit committee held five meetings during 2008, and it operates under a written
charter approved by the board. A copy of the audit committee’s
charter is available on the Company’s website at
www.rfbkonline.com. The purposes of the audit committee are
to:
•
|
assist
the board in its oversight of the integrity of the Company’s financial
statements, the Company’s compliance with legal and regulatory
requirements, the independent auditors’ qualifications and independence,
the performance of the Company’s internal audit function and independent
auditors, and the Company’s management of market, credit, liquidity and
other financial and operational
risks;
|
•
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decide
whether to appoint, retain or terminate the Company’s independent auditors
and to pre-approve all audit, audit-related and other services, if any, to
be provided by the independent auditors;
and
|
•
|
prepare
the report required to be prepared by the audit committee pursuant to the
rules of the Securities and Exchange Commission, or “SEC,” for inclusion
in the Company’s annual proxy
statement.
|
Audit Committee
Report
The audit
committee of the Company’s board of directors is responsible for providing
independent, objective oversight of the Company’s accounting functions and
internal controls.
Management
is responsible for the Company’s internal controls and financial reporting
process. The independent accountants are responsible for performing
an independent audit of the Company’s consolidated financial statements in
accordance with generally accepted auditing standards and to issue a report
thereon. The audit committee’s responsibility is to monitor and
oversee these processes.
In
connection with these responsibilities, the audit committee has reviewed and
discussed the audited consolidated financial statements of the Company at and
for the year ended December 31, 2008, with management. The audit
committee discussed with Beard Miller Company LLP, or “BMC,” the Company’s
independent registered public accounting firm, the matters required to be
discussed by Statement on Auditing Standards No. 61, “Communication with Audit
Committees,” as amended. The audit committee received the written
disclosures and letter from BMC required by Independence Standards Board
Standard No. 1, “Independence Discussions with Audit Committees,” as in
effect, and discussed with BMC its independence. Since then, BMC
merged with Parente Randolph, LLC and became ParenteBeard, LLC.
Based
upon the audit committee’s review and discussions with management and the
independent accountants referred to above, the audit committee recommended to
the board that the Company’s audited consolidated financial statements be
included in the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2008, for filing with the Securities and Exchange
Commission.
|
Respectfully
submitted,
|
|
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Lyle
W. Hall, Jr. Chair
|
|
William
W. Batoff
|
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Barry
L. Spevak
|
|
|
March
12, 2009
|
Notwithstanding
anything to the contrary set forth in any of the Company’s previous filings
under the Securities Act or the Exchange Act that might incorporate future
filings, including this Proxy Statement, in whole or in part, the preceding
Audit Committee Report shall not be incorporated by reference into any such
filings nor shall they be deemed to be soliciting material or deemed to be filed
with the SEC under the Securities Act of 1933, as amended, or the Exchange Act
of 1934, as amended.
Compensation
Committee
Messrs.
Batoff (chair), Hall, and Rodin serve as members of the compensation
committee. All members of the compensation committee have been
determined by the board to be independent under Nasdaq listing standards,
“non-employee directors,” as defined in SEC Rule 16b-3, and “outside directors,”
as defined for purposes of Internal Revenue Code Section 162(m). The
compensation committee held five meetings in 2008. The compensation
committee operates under a written charter
approved
by the board. A copy of the compensation committee’s charter is
available on the Company’s website at www.rfbkonline.com. The
compensation committee’s responsibilities include the following.
•
|
Review
and approve on an annual basis the corporate goals and objectives with
respect to compensation for the chief executive
officer.
|
•
|
Evaluate
at least annually the chief executive officer’s performance in light of
established goals and objectives and, based on such evaluation, have sole
authority to determine the chief executive officer’s annual
compensation.
|
•
|
Review
and make recommendations to the board of directors with respect to
compensation for other executive officers, incentive-compensation plans
and equity-based compensation
plans.
|
•
|
Review
and make recommendations to the board of directors with respect to the
compensation of directors.
|
•
|
Administer,
interpret and determine awards pursuant to the Company’s stock-based
incentive compensation plans.
|
•
|
Have
the sole authority, in its discretion, to retain and terminate any
consulting firm to assist in the evaluation of director, chief executive
officer or senior executive compensation, including sole authority to
approve the firm’s fees and other retention
terms.
|
Compensation Processes and
Procedures
The
compensation committee meets at such times as it determines to be necessary or
appropriate, but not less than once a year. The compensation
committee has the sole authority to establish the compensation of the chief
executive officer of the Company and the Bank and may not delegate such
authority, except to a subcommittee. The chief executive officer has
the primary responsibility for determining the amount and form of compensation
of the other executive officers of the Company and consults with the
compensation committee on such matters. The compensation committee is
empowered to engage independent compensation consultants, but did not do so
during 2008. In 2006, however, the compensation committee did engage
Strategic Compensation Planning, Inc., of Malvern, Pennsylvania, to assist the
compensation committee in structuring the employment agreements for the chief
executive officer of the Company and the Bank. See “Executive
Compensation” on page 17 for more information regarding this employment
agreement.
The
compensation committee is also responsible for periodically reviewing the amount
and form of director compensation paid to non-employee directors. The
compensation committee recommends proposed changes in director compensation to
the board as appropriate, from time to time, and any changes in director
compensation are approved by the board.
Compensation Committee
Interlocks and Insider Participation
During
2008, Messrs. Batoff, Hall, and Rodin served as members of the compensation
committee of the Company’s board of directors. No member of the
compensation committee during 2008 ever served as an officer or employee of the
Company or the Bank. There are no compensation committee interlocks
between the Company or the Bank and any other entity, involving the Company’s or
the Bank’s, or such entity’s, executive officers or board members.
Nominations and Shareholder
Communications
Nominating
Committee
Messrs.
Rodin (chair), Hall, and Batoff serve as members of our nominating
committee. All members of the nominating committee have been
determined by the board to be independent under Nasdaq listing
standards. The nominating committee held one meeting in
2008. The nominating committee operates under a written charter
approved by the board. A copy of the nominating committee’s charter
is available on the Company’s website at www.rfbkonline.com.
The
nominating committee oversees the composition and operation of the Company’s
board, including identifying individuals qualified to become board members,
recommending to the board director nominees for the annual meetings of
shareholders, and filling vacancies occurring between annual shareholder
meetings. It identifies director candidates by considering the
recommendations of the Company’s directors, executive officers and shareholders,
as well as those of experts and consultants of the Company. The
nominating committee evaluates candidates it has identified or who have been
recommended to it based on the selection criteria provided in the nominating
committee charter and other criteria deemed relevant by the nominating
committee, including each candidate’s background and experience, as well as the
candidate’s ability to act in the best interest of the Company’s shareholders,
honesty and integrity.
The
nominating committee evaluates director candidates recommended by shareholders
in the same manner that it evaluates other director candidates. The
procedures for shareholders to recommend director candidates are described under
the heading “Shareholder Proposals and Nominations for the 2010 Annual Meeting”
on page 26.
Shareholder
Communications
Any
shareholder may communicate with our board of directors, or any individual
member or members of the board, by directing his, her or its communication to
Kemma Black, Corporate Secretary, Republic First Bancorp, Inc., Two Liberty
Place, 50 S. 16th Street, Suite 2400, Philadelphia, PA 19102, together with a
request to forward the communication to the intended recipient or
recipients. In general, all shareholder communications delivered to
the corporate secretary for forwarding to the board or specified board members
will be forwarded in accordance with the shareholder’s
instructions. The corporate secretary, however, may not forward any
abusive, threatening or otherwise inappropriate materials.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth, as of November 13, 2009, information with respect to
the holdings of Company securities of all persons which the Company, pursuant to
filings with the SEC and the Company’s stock transfer records, has reason to
believe may be beneficial owners of more than five percent (5%) of the Company’s
outstanding common stock, each current director, each named executive officer,
and all of the Company’s directors and executive officers as a
group.
Name (1)
|
Number of Shares
Beneficially Owned (2)
|
Percentage of Ownership (2)
|
Harry
D. Madonna (4)
|
1,095,856
|
9.9%
|
William
W. Batoff (5)
|
173,658
|
1.6%
|
Robert
J. Coleman (6)
|
161,368
|
1.5%
|
Theodore
J. Flocco, Jr. (7)
|
36,923
|
*
|
Lyle
W. Hall, Jr. (8)
|
54,106
|
*
|
Neal
I. Rodin (9)
|
207,182
|
1.9%
|
Barry
L. Spevak (10)
|
28,164
|
*
|
Harris
Wildstein (11)
|
838,893
|
7.8%
|
Vernon
W. Hill, II (3)
|
960,000
|
8.3%
|
Carol
L. Hunter
|
-
|
*
|
Edward
J. Ryan
|
-
|
*
|
Louis
J. DeCesare (12)
|
58,040
|
*
|
Paul
Frenkiel (13)
|
15,127
|
*
|
Frank
A. Cavallaro
|
-
|
*
|
|
|
|
All
directors and executive
officers
as a group (11 persons).
|
2,596,150
|
23.2%
|
(1)
|
Unless
otherwise indicated, the address of each beneficial owner is c/o Republic
First Bancorp, Inc., Two Liberty Place, 50 S. 16th Street, Suite 2400,
Philadelphia, PA 19102. The group of directors and
executive officers was determined as of November 13, 2009 and does not
reflect any changes in management since that date.
|
(2)
|
The
securities “beneficially owned” by an individual are determined in
accordance with the definition of “beneficial ownership” set forth in Rule
13d-3 under the Securities Exchange Act of 1934, as
amended. Any person who, directly or indirectly, through any
contract, arrangement, understanding, relationship, or otherwise has or
shares: voting power, which includes the power to vote, or to direct the
voting of, common stock; and/or, investment power, which includes the
power to dispose, or to direct the disposition of, common stock, is
determined to be a beneficial owner of the common stock. All
shares are subject to the named person’s sole voting and investment power
unless otherwise indicated. Shares beneficially owned include
shares issuable upon exercise of options which are currently exercisable
or which will be exercisable within 60 days of November 13, 2009, and upon
conversion of convertible securities which are currently convertible or
which will be convertible within 60 days of November 13,
2009. Percentage calculations presume that the identified
individual or group exercise and convert all of his or their respective
options and convertible securities, and that
|
|
no
other holders of options or convertible securities exercise their options
or convert their convertible securities. As of November 13,
2009 there were 10,665,635 shares of the Company’s common stock
outstanding.
|
(3)
|
Information
with respect to beneficial ownership is based on a Schedule 13D filed with
the SEC on June 20, 2008 by Vernon W. Hill, II and Theodore J. Flocco,
Jr. Includes 6,000 capital securities of Republic First Bancorp
Capital Trust IV held by Mr. Hill, which are currently convertible into
923,077 shares of common stock, and 240 capital securities of Republic
First Bancorp Capital Trust IV held by Mr. Flocco, which are currently
convertible into 36,923 shares of common stock. The address of
Mr. Hill is 17000 Horizon Way, Suite 100, Mt. Laurel,
NJ 08054.
|
(4)
|
Includes
52,446 shares of common stock issuable subject to options which are
currently exercisable and 2,288 capital securities of Republic First
Bancorp Capital Trust IV held by a family trust, which are currently
convertible into 352,000 shares of common stock.
|
(5)
|
Includes
7,696 shares of common stock issuable subject to options which are
currently exercisable.
|
(6)
|
Includes
7,696 shares of common stock issuable subject to options which are
currently exercisable.
|
(7)
|
Includes
240 capital securities of Republic First Bancorp Capital Trust IV which
are currently convertible into 36,923 shares of common
stock.
|
(8)
|
Includes
7,696 shares of common stock issuable subject to options which are
currently exercisable.
|
(9)
|
Includes
7,696 shares of common stock issuable subject to options which are
currently exercisable.
|
(10)
|
Includes
7,696 shares of common stock issuable subject to options which are
currently exercisable.
|
(11)
|
Includes
64,614 shares of common stock subject to options which are currently
exercisable. Also includes 15,828 shares in trust for his daughter, 12,235
shares with power of attorney for his mother, 21,092 shares owned by his
son, and 2,032 shares held by his wife.
|
(12)
|
Mr.
DeCesare terminated his employment as an executive officer and resigned
his position as a director on June 21, 2008. The reported
beneficial ownership includes 15,479 shares held by Mr. DeCesare as of
February 20, 2008 and 42,561 shares insued to Mr. DeCesare on August 29,
2008 upon his exercise of options.
|
(13)
|
Mr.
Frenkiel terminated his employment as an executive officer on November 7,
2008. The reported beneficial ownership includes shares held by
Mr. Frenkiel as of March 6,
2009.
|
EXECUTIVE
OFFICERS AND COMPENSATION
Executive
Officers
The
following sets forth certain information regarding executive officers of the
Company. Information pertaining to Harry D. Madonna, who is both a director and
the chief executive officer of the Company and the Bank, may be found in the
section entitled “Continuing Directors—Class I Directors” on page
4.
Edward J. Ryan
, 53, has been
the Controller of the Company and the Bank since October 2005 and served as the
acting Chief Financial Officer of the Company and the Bank from November 2008
until August 2009. From 1999 to October 2005, Mr. Ryan served as the
Accounting Manager for American Business Financial Services Inc.
Carol L. Hunter
, 60, has been
a Senior Credit Officer of the Bank since March 2007 and served as the Chief
Credit Officer from January 2008 until December 2008. From 1984 to February
2007, Ms. Hunter served in various functions at PNC Bank, most recently as a
Senior Business Advisor for Commercial Banking.
Frank A. Cavallaro
, 40, has
been Senior Vice President and Chief Financial Officer of the Company since
August 31, 2009. Prior to joining the Company, Mr. Cavallaro, served
as Vice President/Finance Department for Commerce Bank, N.A. and its successor
TD Bank, N.A. from May 2003 to August 2009. Mr. Cavallaro, a
certified public accountant, has twelve years of experience in the financial
services industry and, prior to that, three years experience in public
accounting with Ernst & Young LLP.
Executive
Compensation
Compensation Discussion and
Analysis
Overview of the Executive
Compensation Program
. The Company’s executive compensation program
includes a number of fixed and variable compensation and benefit components,
typical of programs among comparable community banking and financial services
companies in our local and regional marketplace.
The
program seeks to provide participating executives with an industry-competitive
level of total compensation when their collective and individual performances
meet or exceed the goals approved by the board of directors, the compensation
committee or the chief executive officer.
Compensation Philosophy and Program
Objectives
. We believe that the compensation program for executives
should directly support the achievement of annual, longer-term and strategic
goals of the business, and, thereby, align the interests of executives with the
interests of the Company’s shareholders.
We
believe the current program provides sufficient levels of fixed income, in the
forms of base salary and health and welfare benefits, to attract high caliber
executive talent to the organization. It also provides competitive
annual bonus and longer-term incentive opportunities to encourage specific
performance and to reward the successful efforts of executives.
The
incentive opportunities are based on competitive industry practice, an
executive’s role in the organization, and performance.
Our
current program contains certain deferred post-employment compensation features,
provided on a selective basis, to encourage retention through long-term wealth
accumulation opportunities and to assure transition support in the event of
substantial organization or ownership change. These provisions are
designed to support retention of good performers by the
organization.
We
believe that the features and composition of the current program are consistent
with practices of other comparable community banking and financial services
organizations in our marketplace and that the program balances the need for
competitive pay opportunities at the executive level with shareholders’
expectations for reasonable return on their investment.
Program Management
. The
compensation committee of the board of directors has primary responsibility for
the design and administration of the compensation of the chief executive officer
of the Company and the Bank, and makes recommendations with respect to the
compensation program for other executive officers. The compensation
committee will consider the make-up and administration of the executive
compensation program in light of changing organization needs and operating
conditions and changing trends in industry practice. The compensation
committee has the power and authority to retain consultants and, in 2006,
retained Strategic Compensation Planning, Inc., of Malvern, PA, to assist the
compensation committee in structuring the employment agreements for the chief
executive officer of the Company and the Bank. See “Executive
Compensation” on page 17 for more information regarding this employment
agreement.
Role of Executive Management in the
Pay Decision Process
. The compensation committee is
responsible for approving compensation of the chief executive officer of the
Company and the Bank. It will also make recommendations with respect
to the compensation of other executive officers. In formulating its
decisions, the compensation committee may seek information about the performance
of the business, organization staffing requirements and the performance levels
of incumbent executives from
the chief
executive officer. It will also utilize the services of the Company’s
chief financial officer and other officers of the Company to the extent the
compensation committee deems appropriate.
Program Review and Pay Decision
Process
. Annually, the compensation committee reviews
information on executive compensation levels in the industry and industry
program practices, reviews the Company’s compensation program, and considers
adjustments to the program, salary adjustments and incentive
awards. The compensation committee will examine the current
compensation and benefit levels of incumbent executives in light of their
continuing or changing roles in the business and the assessments of their
individual performances by the compensation committee or the chief executive
officer. It will also determine annual bonus compensation, after
consideration of Company and individual performance, but which is ultimately
discretionary.
The
compensation committee may also be called upon to consider pay related decisions
throughout the calendar year as executives are reassigned or promoted and new
executives join the organization. In these instances, the
compensation committee will review all aspects of the executive’s compensation
including base salary level, annual incentive opportunities, longer-term
incentive awards, participation in special benefit plans, and employment
contract provisions, if applicable.
Pay Decision Factors and
Considerations
. The following factors typically influence
compensation committee decisions on pay and benefits for Company
executives:
•
|
Salary
: executive’s
overall performance during the year ending, changes in organization role
and scope of responsibility, current salary in relation to the position’s
market value, any significant changes in the industry’s pay practices for
comparable positions.
|
•
|
Annual Bonus
Compensation
: competitive industry practice with respect to size of
awards, actual performance (achievement) against goals and
objectives.
|
•
|
Longer-term Incentive
Awards
: competitive industry practice with respect to size of
awards, recent performance of the Company and the individual executive,
applicable accounting rules for expensing equity awards, and shareholder
concerns about dilution and
overhang.
|
•
|
Nonqualified Compensation and
Benefits
: tax rules on qualified benefit plans, likely replacement
income benefits for executives compared to other categories of employees
within the organization, competitive industry practice for comparable type
and level of executive positions.
|
•
|
Perquisites
: the needs
of the executive’s position, frequency of travel to other Company
locations, or to meet with Company clients and prospective clients, and
competitive industry practices for comparable executive
roles.
|
•
|
Employment Agreements
:
where they serve Company needs for confidentiality about business
practices and plans and preservation of the customer base (noncompetition
and nonsolicitation provisions) and competitive industry
practices.
|
Basis for Defining Competitive
Compensation Levels and Practices
. The types and levels of
compensation included in the Company’s executive compensation program are
generally consistent with current features and programming trends among similar
size and type organizations in the Company’s local and regional
marketplace.
The
compensation committee reviews survey reports on national and regional
compensation practice within Company’s industry group, focusing on pay levels
and practices among community banking and diversified financial services
institutions based in the Mid-Atlantic Region and specifically the Greater
Philadelphia metropolitan marketplace having assets of $800 million to $1.5
billion. This range of institutions represents banking companies that
are somewhat smaller and somewhat larger than Company. The asset
range will be modified from time to time as Company’s operating circumstances
change.
For the
2008 program planning cycle, the compensation committee reviewed executive
compensation information from the following institutions in Pennsylvania,
Delaware, and New Jersey:
|
Abington
Community Bancorp, Inc.
|
Greater
Community Bancorp
|
|
Bancorp,
Inc.
|
Leesport
Financial Corp.
|
|
Bryn
Mawr Bank Corp.
|
Royal
Bancshares of Pennsylvania
|
|
First
Chester County Corp.
|
|
Program
Components
. There are six (6) elements in the current
executive compensation program:
Base Salary
. Base
salary opportunities are targeted at the median level of industry practice for
comparable jobs in like size and type community banking and financial service
organizations. Within the defined competitive range, an executive’s
salary level is based initially on his qualifications for the assignment and
experience in similar level and type roles. Ongoing, salary
adjustments reflect the individual’s overall performance of the job against
organization expectations and may also reflect changes in industry
practices.
Health & Welfare
Benefits
. Executives participate in Company’s qualified health
and welfare benefits program on the same terms and conditions as all other
employees of the Company.
Annual Performance
Incentives
. The Company pays bonus compensation which provides
executives with opportunities to earn additional cash compensation in a given
year. Bonus compensation is discretionary, but Company and business
unit operating results and individual performance contributions are
considered. Typical annual performance metrics for Company executives
include net income, loan and deposit growth and net interest
margin. The determination of actual bonus amounts is not formulaic,
but, rather, the result of a review of achievements by the chief executive
officer and the compensation committee and the application of prevailing
industry practices on annual incentive awards.
Longer-term Performance
Incentives
. Executives are eligible to participate in
longer-term incentive award plans established to focus executive efforts on the
strategic directions and goals of the business and to reward them for their
successes in increasing enterprise value. Awards can result in
additional cash compensation or equity grants in the form of stock options or
restricted stock. While the size of such awards may increase or
decrease based on current business performance, it is the intention of the
compensation committee to recommend some combination of the available awards at
least annually as an incentive to focus executives future efforts on longer-term
needs and objectives of the business.
•
|
Equity Grant
Plans
. Our Amended and Restated Stock Option and
Restricted Stock Plan authorizes us to grant options to purchase shares of
common stock to our employees, directors and consultants. We
can also grant restricted stock to these same audiences. Our
compensation committee is the administrator of all stock grant
plans. Stock option or restricted stock grants may be made at
the commencement of employment and from time to time to meet other
specific retention or performance objectives, or for other
reasons.
|
Periodic grants of stock options or restricted stock are made at
the discretion of the compensation committee to eligible employees and, in
appropriate circumstances, the compensation committee considers the
recommendations of the chief executive officer.
•
|
Deferred
Compensation
. At the end of the calendar year, named
executive officers may receive, at the compensation committee’s
discretion, a contribution equal to some percentage of their base salary
or base salary and bonus, usually 10%-25%, into our deferred compensation
plan. Contributions vest over three (3) years. The
value and any earnings on participant accounts are determined by the
changes in value of the Company’s common stock. Receipt of the
deferred compensation and earnings is deferred to normal
retirement.
|
Nonqualified Benefits and
Perquisites
. We currently do not offer a nonqualified
supplemental retirement income plan (SERP) to any of our executives, but our
chief executive officer, as a former non-employee director, has an account
balance in a now frozen retirement income plan for directors.
Perquisites
for Company executives are generally limited automobile allowance or use of a
Company-provided automobile, and, in a very few instances, a club
membership. Typically, these perquisites are provided in instances
where such benefits can facilitate the conduct of business with corporate and
high net worth clients.
Employment Agreements and Change in
Control
. Our chief executive officer has an employment
agreement with the Company and the Bank. The agreement includes a
change in control severance provision. See “Executive Compensation”
on page 17 for additional information regarding this agreement.
•
|
Post Retirement Income
Benefits
. When retired, former Company executives are
only eligible to receive replacement income benefits from our qualified
retirement income plans, the same plans covering other employees of the
Company. We do not currently sponsor any type of supplemental
retirement income plan for highly compensated employees, although we may
consider instituting such a plan in the
future.
|
•
|
Severance in the Event of
Termination Not for Cause or Change in Control
. Our
chief executive officer has specific severance arrangements in place with
the Company in the event of a termination of their employment not related
to a change in control of the Company and in the event of such a change in
control. Under this arrangement, our chief executive officer
would receive three times the sum of his then-current base salary plus the
average of his bonuses for the prior three years. All
outstanding equity grants and other benefit provisions would fully
vest. We also maintain a change in control policy which would
provide a severance benefit to executive officers upon certain changes of
control of the Company. See “Severance and Change in Control
Benefits” at page 21.
|
•
|
Tax Gross-up
Provision
. The employment agreement for our chief
executive officer provides for an excise tax liability gross-up payment
following a change in control (as defined in the agreement) if his
severance benefits exceed the then-current standards under Internal
Revenue Code Section 4999.
|
Status of the Program and Likely
Practices Going Forward
. The general structure of the Company executive
compensation program was established several years ago and it has been
continuously refined to meet the changing needs of the business and to maintain
a competitive posture in the marketplace for executive talent.
Due to
the Company’s recent financial and operating results, the compensation committee
determined not to award any bonus compensation to our chief executive officer
for 2007 or 2008, and only modest bonus compensation to certain other executive
officers. The compensation committee will evaluate award
opportunities for executives, consistent with performance results.
Both
stock option grants and deferred compensation contributions are likely to
continue with the size of awards tracking with the performance results of the
business.
It is
possible that some of these future grants may include performance vesting in
lieu of the traditional time vesting requirements attached to past
grants.
Nonqualified
Benefits
. The compensation committee may evaluate the need and
effectiveness of a supplemental retirement income plan for certain highly
compensated employees in the future.
Perquisites
. We
believe the Company’s perquisites have always been modest, offering use of a
Company vehicle primarily to those executives who travel among Company’s branch
offices and operations centers and those who frequently meet with clients and
prospects offsite. Similarly, club memberships are only provided for
those executives who can utilize them in conducting the Company’s
business.
Employment
Agreements
. The compensation committee has responsibility for
review of current and proposed employment agreements and will specifically
authorize contract renewals.
Compliance with Sections 162(m) and
409A of the Internal Revenue Code
. Section 162(m) of the
Internal Revenue Code provides that publicly held corporations may not deduct
compensation paid to certain executive officers in excess of $1,000,000
annually, with certain exemptions for qualified “performance-based”
compensation. The Company has obtained shareholder approval of its
stock option plan, and compensation earned pursuant to such plans is exempt from
the Section 162(m) limit. Since we retain discretion over bonuses and certain
amounts contributed to the deferred compensation plan, such amounts will not
qualify for the exemption for performance-based compensation. Such
amounts have not been at levels that, together with other compensation,
approached the $1,000,000 limit. Due to the relatively conservative
amount of annual compensation, the Company believes its compensation policies
reflect due consideration of Section 162(m). We reserve the right,
however, to use our judgment to authorize compensation payments that do not
comply with the exemptions in Section 162(m) when we believe that such payments
are appropriate and in the best interests of our shareholders, after taking into
consideration changing business conditions or the executive officer’s
performance.
It is
also our intention to maintain our executive compensation arrangements in
conformity with the requirements of Section 409A of the Internal Revenue Code,
which imposes certain restrictions on deferred compensation arrangements. We
have been engaged in a process of reviewing and modifying our deferred
compensation arrangements since the enactment of Section 409A in 2004 in order
to maintain compliance under Section 409A.
Executive
Compensation
The
following table shows the annual compensation of the Company’s chief executive
officer, chief financial officer and the three most highly compensated executive
officers of the company other than the chief executive officer and chief
financial officer for the fiscal year ended December 31,
2008. Collectively, these officers are referred to as our “named
executive officers.” Messrs. DeCesare and Frenkiel were no longer
serving as executive officers of the Company at December 31, 2008.
2008
Summary Compensation Table
The
following table shows the annual compensation of the Company’s named executive
officers for the fiscal years ended December 31, 2008, 2007 and
2006.
Name
and Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Option
Awards
(1) ($)
|
Change
in
Pension
Value
($)
|
All
Other
Compensation
($)
|
Total
($)
|
Harry
D. Madonna,
President
and Chief
Executive
Officer (2)
|
2008
|
390,225
|
-
|
21,330
|
-
|
150,427
|
561,982
|
|
2007
|
356,384
|
-
|
16,731
|
8,110
|
174,290
|
555,515
|
|
2006
|
330,000
|
250,000
|
-
|
7,799
|
128,843
|
716,642
|
Louis
J.
DeCesare
Former
President and
Chief
Operating Officer (3)
|
2008
|
461,751
|
-
|
21,330
|
-
|
14,265
|
497,346
|
|
2007
|
250,000
|
-
|
16,731
|
-
|
110,739
|
377,470
|
|
2006
|
200,000
|
125,000
|
-
|
-
|
66,952
|
391,952
|
Paul
Frenkiel
Former
Chief Financial
Officer
(4)
|
2008
|
121,537
|
-
|
6,338
|
-
|
33,820
|
161,695
|
|
2007
|
113,750
|
-
|
6,971
|
-
|
32,237
|
152,958
|
|
2006
|
104,000
|
13,000
|
-
|
-
|
31,516
|
148,516
|
Carol
L.
Hunter
Chief
Credit Officer (5)
|
2008
|
116,427
|
4,250
|
3,617
|
-
|
16,295
|
140,589
|
|
2007
|
66,937
|
-
|
-
|
-
|
961
|
67,898
|
|
2006
|
-
|
-
|
-
|
-
|
-
|
-
|
Edward
J.
Ryan
Chief
Financial Officer (6)
|
2008
|
96,161
|
4,000
|
-
|
-
|
4,006
|
104,167
|
|
2007
|
93,173
|
8,000
|
-
|
-
|
4,047
|
105,220
|
|
2006
|
82,000
|
500
|
-
|
-
|
2,158
|
84,658
|
(1)
|
The
amount shown is the dollar amount recognized for financial statement
reporting purposes with respect to the referenced fiscal year in
accordance with ASC 718-10. The Black-Scholes option pricing
model is utilized to determine the fair value of stock
options. Assumptions made in the valuation of option awards for
financial statement reporting purposes are as follows: In 2008
the following assumptions were utilized: a dividend yield of 0%; expected
volatility of 24.98% to 34.52%; risk-free interest rate of 2.49% to 3.37%
and an expected life of 7.0 years. In 2007 the following
assumptions were utilized: a dividend yield of 0%; expected
volatility of 25.24%; risk-free interest rate of 4.70% and an
expected life of 7.0 years. In 2006 the following assumptions
were utilized: a dividend yield of 0%; expected volatility of
29.03%; risk-free interest rate of 4.83% and an expected life of 7.0
years. A dividend yield of 0% is utilized, because cash
dividends have never been paid. The expected life reflects a 3 to 4 year
“all or nothing” vesting period, the maximum ten year term and review of
historical behavior. The volatility was based on Bloomberg’s seven year
volatility calculation for “FRBK” stock. The risk-free interest rate is
based on the seven year Treasury bond.
|
(2)
|
In
2008, 2007 and 2006, respectively, all other compensation for Harry D.
Madonna includes $15,778, $12,192 and $13,510 of automobile and
transportation allowance, $26,405, $12,380 and $27,485 of business
development expense including a club membership which is sometimes used
for personal purposes, $3,727, $3,736 and $4,145 for a supplemental
long-term disability policy, $4,692, $3,732 and $4,200 matching
contributions by Republic First to Republic First’s 401(k) plan, and
$99,825, $142,250 and $79,503 contributions by Republic First to the
deferred compensation plan maintained for the benefit of its officers and
directors.
|
(3)
|
In
2008, 2007 and 2006, respectively, other compensation for Louis J.
DeCesare includes $10,568, $18,905 and $11,230 of automobile and
transportation allowance, $2,466, $7,834 and $12,540 of business
development
|
expense including a club membership which was sometimes used for personal
purposes, $1,231, $9,000 and $0 for a 401k match, and $0, $75,000 and $43,182
contributions by the Company to the deferred compensation plan maintained for
the benefit of its officers and directors.
(4)
|
In
2008, 2007 and 2006, respectively, other compensation for Paul Frenkiel
includes $5,265, $5,070 and $4,550 of automobile and transportation
allowance, $5,122, $4,417 and $4,819 for a 401k match, and $23,433,
$22,750 and $22,147 contributions by the Company to the deferred
compensation plan maintained for the benefit of its officers and
directors.
|
(5)
|
In
2008, 2007 and 2006, respectively, other compensation for Carol L. Hunter
includes $4,820, $961 and $0 for a 401k match, and $11,475, $0 and $0
contributions by the Company to the deferred compensation plan maintained
for the benefit of its officers and directors.
|
(6)
|
In
2008, 2007 and 2006, respectively, other compensation for Edward J. Ryan
includes $4,006, $4,047 and $2,158 for a 401k
match.
|
2008
Grants of Plan-Based Awards Table
Name
|
Grant
Date
|
All
Other Option
Awards:
Number
of
Securities
Underlying
Options
(#)
|
Exercise
or Base
Price
of Option
Awards
($ / Sh)
|
Closing
Price on
Grant
Date ($ /
Sh)
|
Grant
Date Fair
Value
of Stock
and
Option
Awards
(1) ($)
|
Harry
D. Madonna
|
January
23, 2008
|
12,000
|
5.99
|
6.30
|
24,480
|
Louis
J. DeCesare
|
January
23, 2008
|
12,000
|
5.99
|
6.30
|
24,480
|
Carol
L. Hunter
|
January
23, 2008
|
5,000
|
6.35
|
6.30
|
10,850
|
(1)
|
The
grant date fair value was determined in accordance with ASC 718-10, by the
Black-Scholes option pricing model. The following assumptions
were utilized: a dividend yield of 0%; expected volatility of 24.98%; a
risk-free interest rate of 3.08% and an expected life of 7.0
years. Options vest after four years from the date of grant,
and are subject to acceleration upon completion of a change in control, as
defined in the plan.
|
The
Company’s compensation committee met on January 22, 2008 to authorize the
granting of the options in the table shown above, and the grant date was January
23, 2008. Options issued to Mr. Madonna and Mr. DeCesare represented the annual
grant of options as per their employment contracts. The grant date exercise
price was the price as of the most recent close on January 22, 2008, of
$5.99.
Summary Compensation and Grants of
Plan-Based Awards
. Our named executive officers receive from
the Company a combination of base salary, health and welfare benefits, bonus
compensation, long-tern incentive compensation in the form of stock option
awards, qualified and nonqualified deferred compensation and
perquisites. Bonus compensation is paid at the discretion of the
compensation committee of the Company’s board of directors after consideration
of numerous factors, which may include net income, core deposits, loan growth,
income from loan programs, and other factors set by the compensation
committee.
Effective
January 1, 2007, the Company and the Bank entered into an employment agreement
with Mr. Madonna. The compensation paid to Mr. Madonna is determined,
in large part, by the terms of his employment agreement, which is described
below.
Mr.
Madonna currently serves as chairman of the board, president and chief executive
officer of the Company and the Bank under the terms of an agreement with an
initial term of three years beginning January 1, 2007 at an annual base salary
of $330,000. Pursuant to the terms of the agreement, Mr. Madonna’s
annual base salary increased to $363,000 on April 1, 2007, increased an
additional 10% on April 1, 2008, and is scheduled to increase an additional 10%
on April 1, 2009. The Company and the Bank may terminate Mr.
Madonna’s agreement with notice at least six months prior to the scheduled
expiration/renewal date or any time for good reason. Mr. Madonna may
terminate the agreement upon six
months
notice. Mr. Madonna is also eligible to receive an annual bonus in an
amount set by the sole discretion and determination of the compensation
committee of the Company’s board of directors upon achieving mutually agreed
upon budget criteria. He will also receive 25% of base salary and
most recent bonus as deferred compensation. Annually, for each of the
three years of the agreement, Mr. Madonna will receive 12,000 stock options at
an exercise price equal to the stock’s market price on the date of grant, which
will vest four years after the grant. Mr. Madonna will be provided an
automobile and will be reimbursed for its operation, maintenance and insurance
expenses. Additionally, he will receive health and disability
insurance available to all employees, term life insurance for three times his
salary, business related travel and entertainment expenses and club dues and
expenses. The agreement with Mr. Madonna provides for severance and
change in control payments, which are discussed below under the caption,
“Severance and Change in Control Benefits” on page 21. It also
provides for the non-disclosure by Mr. Madonna of confidential information
acquired by him in the context of his employment with the Company and the
Bank.
2008
Outstanding Equity Awards At Fiscal Year-End Table
Option
Awards
Name
|
Number
of Securities
Underlying
Unexercised
Options
(#)
Exercisable (1)
|
Number
of Securities
Underlying
Unexercised
Options
(#)
Unexercisable
(1)(2)
|
Option
Exercise Price
($)
(1)
|
Option
Expiration
Date
|
Harry
D. Madonna
|
|
12,000
|
5.99
|
January
23, 2018
|
|
|
13,200
|
11.77
|
January
2, 2017
|
|
27,104
|
|
10.05
|
April
20, 2015
|
|
25,342
|
|
6.16
|
January
1, 2014
|
Paul
Frenkiel
|
|
5,500
|
11.77
|
January
2, 2017
|
Carol
L. Hunter
|
|
5,000
|
6.35
|
January
23, 2018
|
(1)
|
The
number of shares of common stock underlying options and the option
exercise prices have been adjusted in accordance with their terms as a
result of the Company’s 10% stock dividend in April,
2007.
|
(2)
|
All
unexercisable options will vest on the earlier of the fourth anniversary
of the date of grant, or upon completion of a change in control, as
defined in the plan.
|
2008
Option Exercises And Stock Vested
Option
Awards
Name
|
Number
of Shares
Acquired
on Exercise (#)
|
Value
Realized on Exercise ($)
|
Harry
D. Madonna (1)
|
77,516
|
166,779
|
Louis
J. DeCesare (2)
|
42,561
|
161,983
|
(1)
|
Options
to purchase 23,851, 23,851 and 29,814 shares at per share exercise prices
of $3.12, $2.77 and $1.81, respectively, were exercised on May 30,
2008. The value realized on exercise has been determined based
on the closing price of the Company common stock on May 30, 2008, which
was $4.66.
|
(2)
|
Options
to purchase 12,000, 3,727, 17,888, 4,473 and 4,473 shares at per share
exercise prices of $5.99, $3.76, $6.16, $2.77 and $2.72, respectively,
were exercised on August 29, 2008. The value realized on exercise has been
determined based on the closing price of the Company common stock on
August 29, 2008, which was $8.99.
|
2008
Pension Benefits Table
Name
|
Plan
Name
|
Number
of Years Credited
Service
( 1) (#)
|
Present
Value of
Accumulated
Benefit ($)
|
Harry
D. Madonna
|
Supplemental
retirement benefits
|
16
|
210,883
|
(1)
|
Mr.
Madonna’s years of credited service and the present value of his
accumulated benefit were determined as of December 31, 2008, which is the
same pension plan measurement date that the Company used for financial
statement reporting purposes with respect to its audited financial
statements for the fiscal year ended December 31,
2008.
|
In 1992,
the Company adopted a supplemental retirement plan for non-employee
directors. The plan was frozen to new participants in 1992, but the
Company continues to maintain the plan for participants who served as
non-employee directors in 1992. At that time, Mr. Madonna was a
non-employee director and he continues to be a participant in the
plan. The present value of accumulated benefit was calculated based
upon the actuarial present value of accumulated benefits, calculated as of
December 31, 2008, as follows. The plan provides for a retirement benefit of
$25,000 per year for ten years, which payments may begin at the later
of actual retirement date or 65 years of age. As Mr. Madonna has
reached 65 years of age, the amount shown as the present value of the
accumulated benefit is the amount necessary to fund $25,000 annual payments over
a ten year period commencing as December 31, 2008, the end of the Company’s most
recently completed fiscal year, determined using a 4% discount
rate. Upon completion of a change in control, in satisfaction of all
his rights under this arrangement, Mr. Madonna will be entitled to receive
approximately $250,000.
2008
Nonqualified Deferred Compensation Table
Name
|
Executive
Contributions
in Last
Fiscal Year ($)
|
Registrant
Contributions
in Last
Fiscal
Year (1) ($)
|
Aggregate
Earnings
in
Last Fiscal Year
($)
(2)
|
Aggregate
Balance at
Last
Fiscal Year-End
(3)
($)
|
Harry
D. Madonna
|
-
|
99,825
|
(59,216)
|
331,343
|
Louis
J. DeCesare (4)
|
-
|
-
|
-
|
-
|
Paul
Frenkiel
|
-
|
23,433
|
2,386
|
89,604
|
Carol
L. Hunter
|
-
|
11,475
|
904
|
12,379
|
(1)
|
Company
contributions are also included as other compensation in the Summary
Compensation Table.
|
(2)
|
Participant
accounts are credited with gains, losses and expenses as if they had been
invested in the common stock of the Company. The amount
reported is not included in the Summary Compensation
Table.
|
(3)
|
The
aggregate balances include company contributions of $99,825, $142,250 and
$79,503 for Mr. Madonna, $23,433, $22,750 and $22,147 for Mr. Frenkiel and
$11,475, $0 and $0 for Ms. Hunter, all included as other compensation in
the Summary Compensation Table for 2008, 2007 and 2006,
respectively. Company contributions to the deferred
compensation plan vest over a three year period or completion of a change
in control, as defined in the plan. At December 31, 2008, the
vested balances for Mr. Madonna, Mr. Frenkiel and Ms. Hunter were $80,060,
$17,001, and $0, respectively.
|
(4)
|
Mr.
DeCesare had no contributions or aggregate earnings in 2008, because when
his employment ceased, he was entitled only to a distribution of the
vested portion of his account applicable to prior years. The amount of
that distribution was $21,434.
|
The
Company has caused a deferred compensation plan to be maintained for the benefit
of its officers and directors. The plan, which permits participants
to make contributions up to the amount of his or her salary subject to
applicable limitations under the Internal Revenue Code. In addition,
the Company may make discretionary contributions to the plan, typically a
percentage of the participant’s base salary or annual cash
compensation. The Company’s contributions to the plan for the benefit
of Mr. Madonna are limited by the amounts specified in his January 2007
employment agreement. The value and any earnings on participant
accounts are determined by the changes in value of the Company’s common
stock. The plan provides for distributions upon retirement and,
subject to applicable limitations under the Internal Revenue Code, limited
hardship withdrawals.
Severance and Change in Control
Benefits
. Mr. Madonna’s employment agreement with the Company
and the Bank provides for certain severance and change in control
benefits. Upon the occurrence of a change in control (as defined in
the agreements), or termination for any reason other than death, resignation by
the executive without cause (as defined in the agreements) and termination by
the Company or the Bank with good reason (as defined in the agreements), Mr.
Madonna would receive a severance payment equal to three times his annual base
salary plus three times his average bonus over the prior three
years. Mr. Madonna would receive three years of health and life
insurance or cash in an amount equal to the cost of such
insurance. Mr. Madonna would receive an automobile. Mr.
Madonna would also receive a “gross-up” payment as reimbursement for any
additional excise taxes if triggered under section 4999 of the Internal Revenue
Code. If a change in control occurred December 31, 2008, or Mr.
Madonna’s employment was terminated December 31, 2008 for any reason other than
death, resignation by Mr. Madonna without cause or termination by the Company or
the Bank with good reason, Mr. Madonna would have received cash severance, life
and health insurance benefits, automobile allowances and tax gross ups
aggregating approximately $2.0 million. Payments following a change
in control are to be made in a lump sum. In all other instances,
payments are to be made over 36 months.
Director
Compensation
The
following table sets forth information regarding compensation paid by the
Company to its current non-employee directors during 2008.
2008
Director Compensation Table
Name
|
Fees
Earned or
Paid
in Cash ($)
|
Option
Awards (1)
(2)
($)
|
Change
in
Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
(3) ($)
|
All
Other
Compensation
(4)
($)
|
Total
($)
|
William
W. Batoff
|
30,000
|
7,240
|
2,775
|
11,000
|
51,015
|
Robert
J. Coleman
|
27,250
|
7,240
|
-
|
11,000
|
45,490
|
Theodore
J. Flocco, Jr. (5)
|
8,000
|
-
|
-
|
6,000
|
14,000
|
Lyle
W. Hall, Jr.
|
38,500
|
7,240
|
-
|
11,000
|
56,740
|
Neal
I. Rodin
|
33,500
|
7,240
|
7,799
|
11,000
|
59,539
|
Barry
L. Spevak
|
34,625
|
7,240
|
-
|
11,000
|
52,865
|
Harris
Wildstein Esq.
|
31,500
|
7,240
|
7,499
|
11,000
|
57,239
|
(1)
|
The
amount shown is the dollar amount recognized for financial statement
reporting purposes with respect to the referenced fiscal year in
accordance with ASC 718-10. See footnote (1) to the 2008
Summary Compensation Table on page 17 for assumptions made in the
valuation of option awards for financial statement reporting
purposes.
|
(2)
|
Each
director, other than Mr. Flocco, received a grant of 3,300 options (as
adjusted as a result of the Company’s 10% stock dividend in April, 2007)
on January 2, 2007. Each such option vests three years after
the date of grant, subject to acceleration upon completion of a change in
control, as defined in the plan. The fair value as of the date
of grant for each director was $15,210. Each director, other
than Mr. Flocco, received a grant of 3,000 options on January 23,
2008. Each such option vests three years after the date of
grant, subject to acceleration upon completion of a change in
control. The fair value as of the date of grant for each
director was $6,510. As of December 31, 2008, the following directors had
the following outstanding options: Mr. Batoff, 13,996; Mr. Coleman,
13,996; Mr. Hall, 13,996; Mr. Rodin 13,996; Mr. Spevak, 13,996; and Mr.
Wildstein, 70,914.
|
(3)
|
Amounts
shown represent the 2008 expense for supplemental retirement benefits for
directors who served as such in 1992, the year in which the benefit
originated. The benefit is not provided to directors who joined the board
of directors since 1992.
|
(4)
|
Amounts
shown represent payments to directors for business development and other
expenses incurred in their capacity as directors.
|
(5)
|
Mr.
Flocco was appointed to the board of directors in June
2008
|
Employee
directors receive no additional compensation for their service on the
board. During 2008, non-employee directors received a $6,000
quarterly retainer. The audit committee chair received $1,500 for
each audit committee meeting attended and each other member of the audit
committee received $1,000 for each audit committee meeting
attended. The chair of all other board committees received $750 for
each committee meeting attended and each other member of those committees
received $500 for each committee meeting attended. During 2008,
non-employee directors also received an additional retainer of $1,000 per month
from February through December for business development and other expenses
incurred in connection with their service as directors. Messrs. Hall
and Rodin each received $4,000 for service on the special committee of the board
designated in connection with the planned merger of the Company with Metro
Bancorp, Inc., formerly Pennsylvania Commerce Bancorp, Inc.
Non-employee
directors are eligible to receive grants of stock options under the Company’s
stock option plan and restricted stock plan and grants are made from time to
time, typically on an annual basis. Non-employee directors are also
eligible to participate in a deferred compensation plan.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with related
persons
On June
10, 2008, a family trust of Harry D. Madonna, chairman, chief executive officer
and president of the Company and the Bank, and Theodore J. Flocco, Jr., a
director of the Company and the Bank, along with Vernon W. Hill, II and other
investors, purchased capital securities of Trust IV. Mr. Madonna’s
family trust purchased 3,000 capital securities and Mr. Flocco purchased 240
capital securities, and Mr. Hill purchased 6,000 capital securities, each for
$1,000 per capital security. Mr. Hill, at the time of his investment,
entered into a consulting agreement with the Company, pursuant to which he
provides advisory and consulting services to the Company with respect to
strategic matters and opportunities, as well as the Company’s business and
operations. Among other things, the consulting agreement provides Mr.
Hill the right to designate one individual to the board of directors, and Mr.
Flocco is Mr. Hill’s designee for that position.
The Bank
has made, and expects to continue to make, loans in the future to directors and
executive officers of the Company and the Bank, and to their family members, and
to firms, corporations, and other entities in which they and their family
members maintain interests. None of such loans are, as of the date of this
Annual Report on Form 10-K, or were at December 31, 2008, nonaccrual, past due,
restructured or potential problems, and all of such loans were made in the
ordinary course of business, on
substantially
the same terms, including interest rates and collateral, as those prevailing at
the time for comparable loans with persons not related to the Company or the
Bank and did not involve more than the normal risk of collectibility or present
other unfavorable features.
Prior to
January 31, 2005, First Bank of Delaware was a wholly owned subsidiary of the
Company. Four of the Company’s eight directors, Messrs. Batoff, Hall,
Madonna and Wildstein, are members of First Bank of Delaware’s five person
board. At the time First Bank of Delaware was spun off from the
Company, the Bank and BSC Services Corporation, a wholly-owned subsidiary of
First Bank of Delaware, entered into a number of agreements pursuant to which
BSC Services Corporation provided services to the Bank, including a financial
accounting and reporting service agreement, compliance services agreement,
operation and data processing services agreement; and human resources and
payroll services agreement. These agreements provided for shared data
processing, accounting, employee leasing, human resources, credit and compliance
services. During 2008, the Company and First Bank of Delaware began
to transition away from this relationship. In July 2008, the Bank and
First Bank of Delaware entered into a number of agreements, similar to those
between BSC Services Corporation and the Bank, but pursuant to which the Bank
would provide services to First Bank of Delaware. These agreements
include a financial accounting and reporting service agreement, compliance and
audit services agreement, operations, data processing and administrative
services agreement, human resources and payroll services agreement, and credit
and loan administration services agreement. In August 2008, BSC
Services Corporation discontinued its operations and all of its employees were
transferred to the direct employ of either the Bank of First Bank of
Delaware. The Bank paid BSC Services Corporation $8.2 million in 2008
for services provided. For services provided in 2008, after changes
in the relationship between the Bank and First Bank of Delaware, First Bank of
Delaware paid the Bank $215,000.
Review, approval or
ratification of transactions with related persons
All
transactions with related persons are approved by the board of directors of the
Company.
CODE
OF ETHICS
The
Company has adopted a code of ethics that applies to the Company’s principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions. The text of the
Company’s code of ethics is available on the Company’s website at
www.rfbkonline.com.
AUDIT-RELATED
INFORMATION
Registered Public Accounting
Firm
The audit
committee selected BMC as the independent registered public accounting firm for
the Company for the fiscal years ending December 31, 2007 and
2008. On October 1, 2009, the Company was notified that BMC merged
with Parente Randolph, LLC and became ParenteBeard, LLC
(“ParenteBeard”). The audit committee has approved ParenteBeard as
the independent registered public accounting firm for the Company for the fiscal
year ending December 31, 2009. ParenteBeard has advised the Company
that one or more of its representatives will be present at the 2009 annual
meeting to make a statement if they so desire and to respond to appropriate
questions.
The
following table presents the aggregate fees billed by BMC, the Company’s
principal accountant, for the fiscal years ended December 31, 2008 and
2007.
Fee Category
|
|
2008 Fees ($)
|
|
|
2007 Fees ($)
|
|
Audit
Fees (1)
|
|
$
|
180,900
|
|
|
$
|
167,662
|
|
Audit-Related
Fees (2)
|
|
|
34,235
|
|
|
|
—
|
|
Tax
Fees (3)
|
|
|
20,000
|
|
|
|
20,639
|
|
All
Other Fees (4)
|
|
|
—
|
|
|
|
—
|
|
Total
Fees
|
|
$
|
235,135
|
|
|
$
|
188,301
|
|
(1)
Audit
Fees consist of fees billed for professional services rendered for the audit of
the Company’s consolidated financial statements, internal control over financial
reporting and review of the interim consolidated financial statements included
in quarterly reports and services that are normally provided by Beard Miller
Company LLP in connection with statutory and regulatory filings or
engagements.
(2)
Audit-Related
Fees consist of fees billed for assurance and related services that are
reasonably related to the performance of the audit or review of the Company’s
consolidated financial statements and are not reported under “Audit
Fees.”
(3)
Tax Fees
consist of fees billed for professional services for tax compliance, tax advice
and tax planning. These services include assistance regarding federal
and state tax compliance, tax audit defense, customs and duties, and mergers and
acquisitions.
(4)
All Other
Fees consist of fees billed for products and services provided by the
independent registered public accounting firm, other than those services
described above.
The audit
committee meets with our independent auditors to approve the annual scope of
accounting services to be performed and the related fee
estimates. The audit committee also meets with the Company’s
independent auditors, on a quarterly basis, following completion of their
quarterly reviews and annual audit and prior to the Company’s earnings
announcements, to review the results of their auditors’ work. During
the course of the year, the chairman of the audit committee has the authority to
pre-approve requests for services that were not approved in the annual
pre-approval process. The chairman reports any interim pre-approvals
at the following quarterly meeting. At each of the meetings,
management and the Company’s independent auditors update the audit committee
with material changes to any service engagement and related fee estimates as
compared to amounts previously approved. During fiscal 2008 all audit
and non-audit services performed by BMC for the Company were pre-approved by the
audit committee in accordance with the foregoing procedures.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Exchange Act requires the Company’s officers and directors and
persons who own more than 10% of a registered class of the Company’s equity
securities (collectively, the “Reporting Persons”) to file reports of ownership
and changes in ownership with the SEC and to furnish the Company with copies of
these reports. Based on the Company’s review of the copies of the
reports filed by such persons and written representations, the Company believes
that all filings required to be made by Reporting Persons for the period from
January 1, 2008 through December 31, 2008 were made on a timely basis except for
three untimely Form 4s reporting ten transactions filed by William W. Batoff,
one untimely Form 4 reporting one transaction and one Form 5 reporting a
transaction that should have been reported on Form 4 filed by Robert J. Coleman,
one untimely Form 4 reporting one transaction filed by Louis J. DeCesare, Jr.,
two untimely Form 4s reporting two transactions filed by Lyle W. Hall, Jr., one
untimely Form 3 filed by Carol Hunter, four untimely Form 4s reporting six
transactions filed by Harry D. Madonna, two untimely Form 4s reporting six
transactions filed by Neal Rodin, two untimely Form 4s reporting three
transactions filed by Barry Spevak, and two untimely Form 4s reporting five
transactions filed by Harris Wildstein.
EQUITY
COMPENSATION PLAN INFORMATION
The
following table sets forth information as of December 31, 2008, with respect to
the shares of common stock that may be issued under the Company’s existing
equity compensation plans.
Plan Category
|
Number
of Shares to Be
Issued
upon Exercise of
Outstanding
Options,
Warrants and Rights
|
Weighted-average
Exercise
Price of
Outstanding
Options,
Warrants and Rights
|
Number
of Shares
Remaining
Available
for
Future Issuance
Under
Equity
Compensation
Plans
(Excluding
Securities
Reflected
in
First Column)
|
Equity
Compensation Plans
approved
by security holders
|
467,988
|
$8.33
|
(1)
|
Equity
compensation plans
not
approved by security holders
|
—
|
—
|
—
|
Total
|
467,988
|
$8.33
|
(1)
|
(1)
|
The
amended plan includes an “evergreen formula” which provides that the
maximum number of shares which may be issued is 1,540,000 shares plus an
annual increase equal to the number of shares required to restore the
maximum number of shares available for grant to 1,540,000
shares.
|
SHAREHOLDER
PROPOSALS
Any
shareholder who intends to present a proposal for consideration at the Company’s
2010 Annual Meeting of Shareholders must submit her or his proposal to the
Company no later than January 1, 2010, which is expected to be a reasonable
time before the Company begins to print and send its proxy materials to
shareholders for such annual meeting, in order to have the Company consider the
inclusion of such proposal in the Company’s 2010 Proxy Statement relating to the
2010 Annual Meeting. Reference is made to SEC Rule 14a-8 for
information concerning the content and form of such proposal and the manner in
which such proposal must be made.
Any
shareholder who intends to present a proposal for consideration at the Company’s
2010 Annual Meeting of Shareholders outside of the process of SEC Rule 14a-8
must deliver written notice of any proposed director nomination or other
proposal for consideration at the Company’s 2010 Annual Meeting of Stockholders
to the Corporate Secretary no later than January 1, 2010, pursuant to the
Company’s advance notice by-law. This requirement is separate from
and in addition to the SEC requirements that a shareholder must meet in order to
have a shareholder proposal included in the Bank’s proxy statement.
Nominations
for election to the board of directors at the 2010 Annual Meeting may be made
only in writing by a shareholder entitled to vote at the 2010 Annual Meeting of
Shareholders. Such nominations must be addressed as
follows: Kemma Black, Corporate Secretary, Republic First Bancorp,
Inc., Two Liberty Place, 50 S. 16th Street, Suite 2400, Philadelphia, PA
19102. Nominations for the 2010 Annual Meeting must be received by
the Corporate Secretary no later than February 1, 2010, and must be accompanied
by the following information: (i) the name and address of the shareholder who
intends to make the nomination; (ii) a representation that the shareholder is a
holder of record of stock entitled to vote at the meeting and intends to appear
in person or by proxy at the meeting to nominate the person or persons specified
in the notice; (iii) a description of all arrangements or understandings between
the shareholder and each nominee and any other person or persons (naming such
person or persons) pursuant to which the nomination or nominations are to be
made by the shareholder; (iv) such other information regarding each nominee
proposed by such shareholder as would have been required to be included in a
Proxy Statement filed pursuant to the proxy rules of the SEC had each nominee
been nominated or intended to be nominated by the board; and (v) the consent of
each nominee to serve as a director of the Company if so elected. The
Chairman of any meeting of shareholders held to elect directors and the board of
directors may refuse to recognize the nomination of any person not made in
compliance with such provisions. There have been no material changes
in these procedures since the date of the Proxy Statement for the 2008 Annual
Meeting of Shareholders.
REPORTS
AND OTHER DOCUMENTS
Annual
Report
A copy of
the Company’s 2008 Annual Report to Shareholders accompanies this proxy
statement.
On
written request, we will provide, without charge, a copy of our Annual Report on
Form 10-K for the year ended December 31, 2008, as filed with the SEC (including
a list briefly describing the exhibits thereto), to any record holder or
beneficial owner of common stock on November 13, 2009, the record date for the
annual meeting, or to any person who subsequently becomes such a record holder
or beneficial owner. Additionally, our proxy statement, annual report
to shareholders, and proxy card are available on the internet at
http://www.cfpproxy.com/5412.
Requests for copies should be
directed to Kemma Black, Corporate Secretary, Republic First Bancorp, Inc., Two
Liberty Place, 50 S. 16th Street, Suite 2400, Philadelphia, PA 19102,
(215) 735-4422, extension 5251.
Security Holders Sharing an
Address
Only one
copy of this Proxy Statement and the accompanying Annual Report and Form 10-K
are being delivered to multiple shareholders sharing an address unless the
Company has previously received contrary instructions from one or more of such
shareholders. On written or oral request to Kemma Black, Corporate
Secretary, Two Liberty Place, 50 S. 16th Street, Suite 2400, Philadelphia,
PA 19102, (215) 735-4422, extension 5251, the Company will deliver
promptly a separate copy of this Proxy Statement and the accompanying Annual
Report and Form 10-K to a shareholder at a shared address to which a single copy
of the documents was delivered. Shareholders sharing an address who
wish, in the future, to receive separate copies or a single copy of our Proxy
Statements and annual reports should provide written or oral notice to the
Corporate Secretary at the address and telephone number set forth
above.
IT IS
IMPORTANT THAT YOU VOTE PROMPTLY, REGARDLESS OF THE NUMBER OF SHARES YOU
OWN. PLEASE COMPLETE, SIGN AND MAIL THE ENCLOSED PROXY CARD IN THE
ACCOMPANYING ENVELOPE, OR VOTE BY TELEPHONE OR BY INTERNET, WHETHER OR NOT YOU
PLAN TO ATTEND THE ANNUAL MEETING.
REVOCABLE
PROXY
REPUBLIC
FIRST BANCORP, INC.
ANNUAL
MEETING OF SHAREHOLDERS
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF
REPUBLIC FIRST BANCORP, INC.
The
undersigned hereby appoints Rhonda S. Costello and Andrew J. Logue, with full
power of substitution, and authorizes them to represent and vote, as designated
below and in accordance with their judgment upon any other matters properly
presented at the annual meeting, including any motion to adjourn or postpone the
meeting, for the purpose of soliciting additional proxies or for any other
reason, or other matters incidental to the conduct of the annual meeting or
otherwise, all the shares of Republic First Bancorp, Inc. common stock held of
record by the undersigned at the close of business on November 13, 2009, at
the annual meeting of shareholders, to be held December 23, 2009, and at any and
all adjournments or postponements thereof. The board of directors recommends a
vote "
FOR
" each of the listed
proposal.
This
proxy, when properly executed, will be voted in the manner directed herein by
the undersigned shareholders(s). If no direction is made, this proxy will be
voted FOR the proposal set forth herein. If any other business is presented at
such meeting, including any motion to adjourn or postpone the meeting, for the
purpose of soliciting additional proxies or for any other reason, or other
matters incidental to the conduct of the meeting or otherwise, this proxy will
be voted by those named in this proxy in their best judgment. At the present
time, the board of directors knows of no other business to be presented at the
meeting.
The
undersigned acknowledges receipt from Republic First Bancorp, Inc. prior to the
execution of this proxy, of the Notice of Annual Meeting scheduled to be held on
December 23, 2009, the Proxy Statement dated on
or
about November
19
, 2009, and Republic First Bancorp,
Inc.'s 2008 Annual Report.
PLEASE
COMPLETE, DATE, SIGN, AND MAIL THIS PROXY CARD PROMPTLY IN THE
ENCLOSED
POSTAGE-PAID
ENVELOPE OR PROVIDE YOUR INSTRUCTIONS TO VOTE VIA
THE
INTERNET OR BY TELEPHONE.
(Continued,
and to be marked, dated and signed,
on the other
side)
*
FOLD AND DETACH HERE
*
REPUBLIC
FIRST BANCORP, INC. - ANNUAL MEETING, DECEMBER 23, 2009:
YOUR
VOTE
IS
IMPORTANT!
Annual
Meeting Materials are available on-line at:
http://www.cfpproxy.com/5412
You
can vote in one of three ways:
1. Call
toll free 1-866-246-8478
on a Touch-Tone Phone.
There is
NO CHARGE
to
you
for this
call.
or
2. Via
the Internet at
https://wwwproxyvotenowcom/frbk
and follow the
instructions.
or
3. Mark,
sign and date your proxy card and return it promptly in the enclosed
envelope.
PLEASE
SEE REVERSE SIDE FOR VOTING INSTRUCTIONS
[ X ]
|
PLEASE
MARK VOTES
AS
IN THIS EXAMPLE
|
REVOCABLE
PROXY
REPUBLIC
FIRST BANCORP, INC.
|
ANNUAL
MEETING OF SHAREHOLDERS
Wednesday,
December 23, 2009
|
1.
Election of three Class II Directors of Republic First
Bancorp,
Inc., each to hold ofice until the 2012
annual
meeting of shareholders and until their
successors
are elected and qualify.
|
For
[
]
|
Withold
All
[ ]
|
For
All
Except
[ ]
|
Should
a director nominee be unable to serve as a director, an event the Republic
First
Bancorp,
Inc. does not currently anticipate, the persons named in this proxy
reserve the
right,
in their discretion to vote for a substitute nominee designated by the
board of
directors.
|
(
01) Robert J.
Coleman
|
(02)
Lyle W. Hall, Jr.
|
(03)
Harris Wildstein
|
This
proxy may be revoked at any time before it is voted on by delivering to
the
secretary of Republic
First Bancorp, Inc. on or before the taking of the vote at the annual
meeting, a written notice of revocation bearing a later date than
the proxy or a later dated proxy relating to the same shares of Republic
First Bancorp, Inc. common stock, or by
attending
the annual meeting and voting in person. Attendance at the annual meeting
will not in itself constitute the revocation of a proxy. If this proxy is
properly revoked as
described
above, then the power of the persons named in this proxy shall be deemed
terminated and of no further force and efect.
|
|
|
|
|
INSTRUCTION:
To withhold authority to vote for any nominee(s), mark For All Except" and
write that nominee(s') name(s) or number(s) in the space provided
below.
|
|
|
Mark here if you plan to attend the
meeting
Mark here for address change and note change
Please
sign exactly
as
your
name
appears above on this card. When signing
as
attorney,
executor, administrator trustee or guardian, please give your full
title
as
such. If
shares
are
held jointly,
each
holder should sign.
|
|
Please be sure to date and
sign
this
proxy card in the box below.
|
Date
|
|
|
sign above
|
|
|
|
IF
YOU WISH TO PROVIDE YOUR INSTRUCTIONS TO VOTE BY TELEPHONE OR INTERNET, PLEASE
READ THE INSTRUCTIONS BELOW
*
FOLD AND DETACH HERE IF YOU ARE VOTING BY
MAIL
*
PROXY
VOTING INSTRUCTIONS
Shareholders
of record have three ways to vote:
1. By
Mail; or
2. By
Telephone (using a Touch-Tone Phone); or
3. By
Internet.
A
telephone or Internet vote authorizes the named proxies to vote your shares in
the same manner as if you marked, signed, dated and returned this
proxy.
Please note telephone and Internet votes must be cast prior to 3:00 a.m.,
December 23, 2009. It is not necessary to return this proxy if you vote
by
telephone or Internet.
|
|
|
Vote
by Telephone
|
|
Vote
by Internet
|
|
|
|
Call
Toll-Free on a Touch-Tone Phone anytime prior
to
|
|
|
3:00
a.m., December 23, 2009:
|
|
3:00
a.m., December 23, 2009 go to
|
|
|
|
1-866-246-8478
|
|
https://www.proxyvotenow.com/frbk
|
Please note that the last vote
received, whether by telephone, Internet or by mail, will be the vote counted.
ION-
|
|
LINE
ANNUAL MEETING MATERIALS:
|
http://www.cfpproxy.com/5412
|
[ X ]
|
PLEASE
MARK VOTES
AS
IN THIS EXAMPLE
|
REVOCABLE
PROXY
REPUBLIC
FIRST BANCORP, INC. COMMON STOCK
|
|
|
|
|
|
|
|
|
|
|
THIS
PROXY IS SOLICITED ON BEHALF OF
THE
BOARD OF DIRECTORS
|
|
(1)
Election of Directors:
|
For
[ ]
|
With-hold
[ ]
|
For
All Except
[ ]
|
The
undersigned shareholder of Republic First Bancorp, Inc. (the "Company")
hereby constitutes and appoints Rhonda S. Costello and Andrew J. Logue, or
either of them the lawful attorneys and proxies of the undersigned both
with full power of substitution, for and on behalf of the undersigned, to
vote as specified on the reverse side, all of the shares of the
Corporation's common stock held of record by the undersigned on
November 13, 2009 at the Annual Meeting of Shareholders of the
Corporation to be held on Wednesday, December 23, 2009, at 12 pm, at Two
Liberty Place, 50 S. 16th Street, Suite 2400, Philadelphia, PA 19102 and
at any adjournments or postponements thereof.
THIS
PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED "FOR" PROPOSAL (1). IF ANY
OTHER MATTERS ARE VOTED ON AT THE ANNUAL MEETING, THIS PROXY WILL BE VOTED
BY THE PROXYHOLDERS ON SUCH MATTER IN THEIR SOLE DISCRETION. THIS PROXY IS
REVOCABLE AT ANY TIME BEFORE IT IS EXERCISED.
|
|
Robert
J. Coleman
Lyle
W. Hall, Jr.
Harris
Wildstein
INSTRUCTION: To
withhold authority to vote for any individual nominee, mark “For All
Except” and write that nominee’s name in the space provided
below.
Should
a director nominee be unable to serve as a director, an event the Republic
First Bancorp, Inc. does not currently anticipate, the persons named in
this proxy reserve the right, in their discretion to vote for a substitute
nominee designated by the board of directors.
This
proxy may be revoked at any time before it is voted on by delivering to
the secretary of Republic First Bancorp, Inc. on or before the taking of
the vote at the annual meeting, a written notice of revocation bearing a
later date than the proxy or a later dated proxy relating to the same
shares of Republic First Bancorp, Inc. common stock, or by attending the
annual meeting and voting in person. Attendance at the annual meeting will
not in itself constitute the revocation of a proxy. If this proxy is
properly revoked as described above, then the power of the persons named
in this proxy shall be deemed terminated and of no further force and
effect.
The
undersigned acknowledges receipt from Republic First Bancorp, Inc. prior
to the execution of this proxy, of the Notice of Annual Meeting scheduled
to held on December 23, 2009, the Proxy Statement dated on or about
November IL 2009, and Republic First Bancorp, Inc.'s 2008 Annual
Report.
|
Please
be sure to date and sign
this
proxy card in the box below.
|
Date
|
|
Sign
above
|
|
|
|
|
|
* Detach
above card, sign, date and mail in postage paid envelope provided.
*
REPUBLIC
FIRST BANCORP, INC.
PLEASE
ACT PROMPTLY
PLEASE
COMPLETE, DATE, SIGN, AND MAIL THIS PROXY CARD PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
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.
|
IF YOUR
ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED BELOW AND
RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.
|
|
|
|
|
PROXY
MATERIALS ARE
AVAILABLE
ON-LINE AT:
|
|
|
http://www.cfpproxy.com/5412
|