United States
Securities & Exchange
Commission
Washington, DC 20549
SCHEDULE 14A
(Rule 14a-101)
Proxy Statement Pursuant
to Section 14(a) of the
Securities Exchange Act
of 1934
(Amendment No. )
Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12.
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Hamilton
Bancorp, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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N/A
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(2)
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Aggregate number of securities to which transactions applies:
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N/A
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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N/A
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(4)
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Proposed maximum aggregate value of transaction:
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N/A
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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N/A
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(2)
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Form, Schedule or Registration Statement No.:
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N/A
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July 21, 2017
Dear Shareholder:
You are cordially invited to attend the annual
meeting of shareholders of Hamilton Bancorp, Inc. The meeting will be held at the executive and administrative office of Hamilton
Bank, located at 501 Fairmount Avenue, Suite 200, Towson, Maryland 21286, at 5:00 p.m., local time, on Monday, August 21, 2017.
The notice of annual meeting and proxy statement
appearing on the following pages describe the formal business to be transacted at the meeting. Officers of the Company, as well
as a representative of the Company’s independent registered public accounting firm, will be present to respond to appropriate
questions of shareholders.
It is important that your shares are represented
at this meeting, whether or not you attend the meeting in person and regardless of the number of shares you own. To make sure your
shares are represented, we urge you to complete and mail the enclosed proxy card promptly. If you attend the meeting, you may vote
in person even if you have previously mailed a proxy card.
We look forward to seeing you at the meeting.
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Sincerely,
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Robert A. DeAlmeida
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President and Chief Executive Officer
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Hamilton Bancorp, Inc.
501 Fairmount Avenue, Suite 200
Towson, Maryland 21286
(410) 823-4510
NOTICE OF 2017 ANNUAL MEETING OF SHAREHOLDERS
TIME AND DATE
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5:00 p.m. on Monday, August 21, 2017.
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PLACE
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The executive and administrative office of Hamilton Bank, located at 501 Fairmount Avenue, Suite 200, Towson, Maryland 21286.
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ITEMS OF BUSINESS
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(1) To elect three
directors to serve for a term of three years.
(2) To ratify the selection
of Dixon Hughes Goodman LLP as our independent registered public accounting firm for fiscal year ending March 31, 2018.
(3) To transact such
other business as may properly come before the meeting and any adjournment or postponement thereof.
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RECORD DATE
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To vote, you must have been a shareholder at the close of business on June 30, 2017.
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PROXY VOTING
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It is important that your shares be represented and voted at the meeting. You can vote your shares by completing and returning the proxy card or voting instruction card sent to you. Voting instructions are printed on your proxy or voting instruction card and included in the accompanying proxy statement. You can revoke a proxy at any time before its exercise at the meeting by following the instructions in the proxy statement.
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By Order of the Board of Directors
Robin L. Thiess
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Corporate Secretary
July 21, 2017
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Important Notice Regarding the Availability of Proxy Materials
for the Shareholders Meeting to be Held on August 21, 2017: The Proxy Statement, Notice and 2017 Annual Report are Available at:
http://www.edocumentview.com/HBK.
Hamilton Bancorp, Inc.
Proxy Statement
This proxy statement is furnished in connection
with the solicitation of proxies by the Board of Directors of Hamilton Bancorp, Inc. (the “Company” or “Hamilton
Bancorp”) to be used at the annual meeting of shareholders of the Company. The Company is the holding company for Hamilton
Bank (the “Bank”). The annual meeting will be held at the Bank’s executive and administrative office located
at 501 Fairmount Avenue, Suite 200, Towson, Maryland 21286 on Monday, August 21, 2017 at 5:00 p.m. local time. This proxy statement
and the enclosed proxy card are being mailed to shareholders of record on or about July 21, 2017.
Voting and
Proxy Procedure
Who Can Vote at the Meeting
You are entitled to vote your Company common
stock if the records of the Company show that you held your shares as of the close of business on June 30, 2017. If your shares
are held through a broker, bank or similar holder of record, you are considered the beneficial owner of shares held in “street
name” and these proxy materials are being forwarded to you by your broker or other holder of record. As the beneficial owner,
you have the right to direct your broker or other holder of record how to vote by filling out a voting instruction form that accompanies
these proxy materials. Your broker or other holder of record may allow you to provide voting instructions by telephone or by the
Internet. Please see the voting instruction form provided by your broker or other holder of record that accompanies this proxy
statement.
As of the close of business on June 30, 2017,
there were 3,411,075 shares of Company common stock outstanding. Each share of common stock has one vote. The Company’s articles
of incorporation provide that record owners of Company common stock beneficially owned by a person who beneficially owns in excess
of 10% of the Company’s outstanding common stock (a “10% beneficial owner”), shall not be entitled to vote, in
the aggregate, shares beneficially owned by the 10% beneficial owner in excess of 10% of the Company’s outstanding common
stock, unless a majority of unaffiliated directors (as defined in the articles of incorporation) grant such entitlement by resolution
in advance of the acquisition of the excess shares.
Attending the Meeting
If you were a shareholder as of the close of
business on June 30, 2017, you may attend the meeting. However, if your shares of Company common stock are held in street name,
you will need proof of ownership to be admitted to the meeting. A recent account statement or letter from your broker or other
holder of record are examples of proof of ownership. If you want to vote your shares of Company common stock held in street name
in person at the meeting, you will have to get a written proxy in your name from your broker or other holder of record.
Quorum and Vote Required for Proposals
Quorum.
A majority of the outstanding
shares of common stock entitled to vote is required to be represented at the meeting to constitute a quorum for the transaction
of business.
Votes Required for Proposals.
At this year’s annual meeting, shareholders will elect three directors to serve for a term of three years and until their
successors are elected and qualified. In voting on the election of directors, you may vote in favor of the nominees, withhold votes
as to all nominees, or withhold votes as to a specific nominee. There is no cumulative voting for the election of directors. Directors
must be elected by a plurality of the votes cast at the annual meeting. This means that the nominees receiving the greatest number
of votes will be elected.
In voting on the ratification of the appointment
of Dixon Hughes Goodman LLP (“DHG”) as the Company’s independent registered public accounting firm, you may vote
in favor of the proposal, vote against the proposal or abstain from voting. To ratify the selection of DHG as our independent registered
public accounting firm for the fiscal year ending March 31, 2018, the affirmative vote of a majority of the votes cast on the proposal
is required.
Broker Non-Votes.
If you do not
provide your broker or other record holder with voting instructions on certain non-routine matters, your broker will not have discretion
to vote your shares on such matters. The election of directors is a non-routine matter. In the case of routine matters, such as
the ratification of the appointment of the Company’s independent registered public accounting firm, your broker or other
holder of record is permitted to vote your shares in the record holder’s discretion if you have not provided voting instructions.
A “broker non-vote” occurs when your broker submits a proxy for the meeting with respect to routine matters, but does
not vote on non-routine matters because you did not provide voting instructions on such matters.
How Votes Are Counted.
If you
return valid proxy instructions or attend the meeting in person, we will count your shares for purposes of determining whether
there is a quorum, even if you abstain from voting. Broker non-votes also will be counted for purposes of determining the existence
of a quorum.
In counting votes for the election of directors,
votes that are withheld and broker non-votes will have no effect on the outcome of the election.
In counting votes on the proposal to ratify
the selection of the independent registered public accounting firm, abstentions will have no effect on the outcome of the vote.
Voting by Proxy
The Company’s Board of Directors is sending
you this proxy statement to request that you allow your shares of Company common stock to be represented at the annual meeting
by the persons named in the enclosed proxy card. All shares of Company common stock represented at the meeting by properly executed
and dated proxies will be voted according to the instructions indicated on the proxy card. If you sign, date and return a proxy
card without giving voting instructions, your shares will be voted as recommended by the Company’s Board of Directors.
The Board of Directors recommends that you vote:
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for
each of the nominees for director; and
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for
ratification of the appointment of DHG as the Company’s independent registered public accounting firm.
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If any matters not described in this proxy statement
are properly presented at the annual meeting, the persons named in the proxy card will use their judgment to determine how to vote
your shares. This
includes a motion to adjourn or postpone the meeting to solicit
additional proxies. If the annual meeting is postponed or adjourned for less than 30 days, your Company common stock may be voted
by the persons named in the proxy card on the new meeting date, provided you have not revoked your proxy. The Company does not
currently know of any other matters to be presented at the meeting.
You may revoke your proxy at any time before
the vote is taken at the meeting. To revoke your proxy, you must advise the Corporate Secretary of the Company in writing before
your common stock has been voted at the annual meeting, deliver a later dated proxy or attend the meeting and vote your shares
in person by ballot. Attendance at the annual meeting will not in itself constitute revocation of your proxy.
Participants in the Hamilton Bank ESOP or 401(k) Plan
If you participate in the Hamilton Bank Employee
Stock Ownership Plan (the “ESOP”), you will receive a vote authorization form for the plan that reflects all shares
you may direct the trustees to vote on your behalf under the ESOP. Under the terms of the ESOP, the ESOP trustee votes all shares
held by the ESOP, but each ESOP participant may direct the trustee how to vote the shares of common stock allocated to his or her
account. The ESOP trustee, subject to the exercise of its fiduciary responsibilities, will vote all unallocated shares of Hamilton
Bancorp common stock held by the ESOP and allocated shares for which no voting instructions are received in the same proportion
as shares for which it has received timely voting instructions. Under the terms of the Hamilton Bank 401(k) Profit Sharing Plan
(the “401(k) Plan”), a participant is entitled to vote the shares credited to his or her 401(k) Plan account. Shares
for which no voting instructions are given or for which instructions were not timely received may be voted by the 401(k) Plan trustee
as directed in the sole discretion of the Plan Administrator, subject to the determination that such a vote is for the exclusive
benefit of plan participants and beneficiaries.
The deadline for returning your ESOP and 401(k) Plan voting instructions is
August 14, 2017.
Corporate
Governance and Board Matters
General
The Company periodically reviews its corporate
governance policies and procedures to ensure that the Company meets the highest standards of ethical conduct, reports results with
accuracy and transparency and maintains full compliance with the laws, rules and regulations that govern the Company’s operations.
As part of this periodic corporate governance review, the Board of Directors reviews and adopts best corporate governance policies
and practices for the Company.
Code of Ethics and Business Conduct
The Company has adopted a Code of Ethics and
Business Conduct that is designed to promote the highest standards of ethical conduct by the Company’s directors, executive
officers and employees. The Code of Ethics and Business Conduct requires that the Company’s directors, executive officers
and employees avoid conflicts of interest, comply with all laws and other legal requirements, conduct business in an honest and
ethical manner and otherwise act with integrity and in the Company’s best interest. Under the terms of the Code of Ethics
and Business Conduct, directors, executive officers and employees are required to report any conduct that they believe in good
faith to be an actual or apparent violation of the Code of Ethics and Business Conduct. A copy of the Code of Ethics and Business
Conduct can be found in the
“Investor Relations—Corporate Overview—Corporate Governance Documents”
section of the Company’s website, www.hamilton-bank.com.
As a mechanism to encourage compliance with
the Code of Ethics and Business Conduct, the Company has established procedures for receiving, retaining and addressing complaints
regarding
accounting, internal accounting controls and auditing matters. These
procedures ensure that individuals may submit concerns regarding questionable accounting or auditing matters in a confidential
and anonymous manner. The Code of Ethics and Business Conduct also prohibits the Company from retaliating against any director,
executive officer or employee who reports actual or apparent violations of the Code of Ethics and Business Conduct.
Director Independence
Hamilton Bancorp currently has eight directors.
The Board has determined that directors William E. Ballard, Joseph J. Bouffard, Carol L. Coughlin, James R. Farnum, Jr., William
W. Furr, Bobbi Macdonald and Jenny G. Morgan are “independent” as defined in the NASDAQ Stock Market Rules (the “NASDAQ
rules”). Director Robert A. DeAlmeida is not independent because he is the Chief Executive Officer of Hamilton Bancorp. In
determining the independence of the directors listed above, the board of directors reviewed accounts that directors and their affiliates
had with the Bank, none of which are required to be reported in this proxy statement under the heading “Transactions With
Related Persons.”
Meetings of the Board of Directors
The Company conducts business through meetings
of its Board of Directors and through activities of its committees. During the fiscal year ended March 31, 2017, the Board of Directors
held 17 meetings. No director attended fewer than 90% percent of the total meetings of the Company’s Board of Directors and
the board committees on which such director served.
Board Leadership Structure
At the Company, the positions of Chairwoman
of the Board and Chief Executive Officer are held by different individuals. Chairwoman Carol L. Coughlin provides guidance to our
Chief Executive Officer, Robert DeAlmeida, and is active in setting the agenda for Board meetings and presides over meetings of
the full Board. The Chief Executive Officer is responsible for setting the strategic direction for the Company and the day to day
leadership and performance of the Company. We believe that this separation of roles enhances the Chairwoman’s leadership
of the Board, which in turn oversees management, and enhances the Chief Executive Officer’s focus on managing Company operations.
The Board is also involved in the strategic planning of the Company through formal discussions and approval of the Strategic Plan,
which is updated annually.
Board’s Role in Risk Oversight
The Risk Committee of the Board of Directors
is responsible for overseeing the Company’s risk management policy and its implementation. The committee approves the Company’s
Risk Appetite Statements and Risk Tolerance levels, which in turn are presented to and approved by the Board. Quarterly, management
develops a risk summary dashboard that shows actual risk ratings compared to established risk tolerance levels. Management reports
action plans for those risk categories outside of acceptable tolerances. Risk categories include credit, interest rate, liquidity,
price, operational, information technology, compliance, capital, earnings, strategic and reputation risks. The Compliance and Risk
Officer coordinates and oversees the risk and compliance programs with management and has an auxiliary reporting relationship to
the Chair of the Risk Committee.
Committees of the Board of Directors
The following table identifies our standing
Board committees and their members as of June 30, 2017. All members of each committee are independent as defined by NASDAQ rules.
Each committee
operates under a written charter or charters available in the
“Investor
Relations—Corporate Overview—Corporate Governance Documents”
section of the Company’s website,
www.hamilton-bank.com
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Governance and
Nominating
Committee
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Compensation
Committee
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Risk
Committee
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Audit
Committee
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William E. Ballard
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X
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X
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Joseph J. Bouffard
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X *
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Carol L. Coughlin
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X
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X
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X
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James R. Farnum, Jr.
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X
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X *
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William W. Furr
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X
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X *
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Bobbi R. Macdonald
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X *
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X
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Jenny G. Morgan
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X
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X
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Number of Meetings in Fiscal 2017:
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4
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5
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5
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5
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* Denotes Chairperson.
Audit Committee.
The Audit Committee
assists the Board of Directors in its oversight of the Company’s accounting and reporting practices, the quality and integrity
of the Company’s financial reports and the Company’s compliance with applicable laws and regulations. The Audit Committee
is also responsible for engaging the Company’s independent registered public accounting firm and monitoring its conduct and
independence. The board of directors of Hamilton Bancorp has designated Carol L. Coughlin, William E. Ballard, and James R. Farnum,
Jr. as “audit committee financial experts,” as that term is defined by the rules and regulations of the Securities
and Exchange Commission. The report of the Audit Committee required by the rules of the Securities and Exchange Commission is included
in this proxy statement under the heading
“Audit Committee Report.”
Risk Committee.
The Risk
Committee of the Board of Directors is responsible for overseeing the Company’s risk management policy and its implementation.
See
“Board’s Role in Risk Oversight”
above.
Compensation Committee.
The Compensation
Committee is responsible for the annual evaluation of the Chief Executive Officer as well as recommending to the full Board the
compensation of the Chief Executive Officer and other executive officers and directors, and administering the overall compensation
policy of the Company. The Compensation Committee’s duties include:
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establishing, reviewing, modifying and approving the executive compensation philosophy of the Company;
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reviewing at least annually the performance of the Chief Executive Officer and reviewing all compensation components for the
Chief Executive Officer and other executive officers, including base salary, annual incentive, long-term incentives and perquisites;
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determining, in consultation with the Governance and Nominating Committee, the compensation to be paid to directors of the
Company and of affiliates of the Company for their service as directors;
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administering and having discretionary authority over the Company’s incentive compensation plans and programs;
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approving grants of equity awards to executive officers and directors;
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regularly evaluating the relationship between the Company’s overall compensation policies and practices and risk;
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in consultation with the Governance and Nominating Committee, reviewing the Bank’s management succession plan for the
Chief Executive Officer and other executive officers; and
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reviewing the Company’s employee benefits plans and other personnel, compensation, and related policies.
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These duties and responsibilities are set forth
in a written Charter reviewed by the Compensation Committee and approved by the Board of Directors annually.
The Compensation Committee considers the relationship
between the Company’s compensation policies and practices for all employees and risk, including whether such policies and
practices encourage imprudent risk taking and/or would be reasonably likely to have a material adverse effect on the Company. In
performing its responsibilities, the Compensation Committee receives regular reports on compensation matters and trends from the
Committee’s independent compensation consultant and the Company’s Compliance and Risk Officer. The Compensation Committee
annually reviews the risk profile of our executive and broad-based compensation programs to determine if any practices might encourage
excessive risk taking on the part of senior executives. For 2017, the committee noted features of the Company’s incentive
plans (executive and broad-based) that mitigate risk, including the satisfaction of a pre-determined performance gate or trigger
in order for cash bonuses to be paid under the Annual Incentive Plan, significant stock ownership guidelines, and our clawback
policy. In light of this analysis, the Compensation Committee believes that the Company’s compensation programs (executive
and broad-based) provide multiple and effective safeguards to protect against undue risk. The performance of the Chief Executive
Officer and other executive officers is reviewed at least semi-annually by the Compensation Committee. While strict numerical formulas
are not used to evaluate their overall performance, the Compensation Committee considers the performance of the Company and the
Bank based on common performance metrics such as earnings, return on equity, return on assets and asset quality, and each executive
officer’s contribution to the Company’s successful operation. Decisions by the Compensation Committee with respect
to the compensation of executive officers are reported to the full Board for ratification.
The Compensation Committee makes decisions about
the Chief Executive Officer and executive officer compensation as part of the annual review of the performance of the Chief Executive
Officer and the other executive officers. The Compensation Committee considers the Chief Executive Officer’s perspective
on each executive officer’s individual performance (other than the Chief Executive Officer’s performance) and the performance
of the Company. The Chief Executive Officer is not in the executive sessions or any meetings where his compensation and/or performance
are being discussed. In addition, the Compensation Committee may delegate to management certain of its duties and responsibilities,
including with respect to the adoption, amendment, modification or termination of the Company’s tax-qualified retirement
plans and health and welfare plans.
During the year ended March 31, 2017, the Compensation
Committee worked with Broder & Associates (“Broder”) with respect to reviewing the Company’s broad-based
employee compensation and
benefit plans. Broder also provided the Compensation Committee with
compensation survey data used for compensation benchmarking. Broder provides human resource advice and guidance to the Compensation
Committee and the Bank’s human resource department as well as broad based compensation data relating to all its employees.
Moreover, the Compensation Committee has determined that pursuant to applicable Securities and Exchange Commission Rules and the
NASDAQ corporate governance listing standards, Broder has not engaged in any work that would cause a conflict of interest in their
role of determining or recommending the amount or form of the Company’s executive and director compensation.
The Compensation Committee, along with the Governance
Committee, has established stock ownership guidelines for senior management and the Board of Directors that should be met at the
end of five years. These guidelines were approved by the Board.
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CEO
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65,000 shares
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Other Officers:
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EVP
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20,000 shares
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SVP
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10,000 shares
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VP
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7,500 shares
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Non-employee directors
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6,800 shares
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Governance and Nominating Committee.
The Company’s Governance and Nominating Committee assists the Board of Directors in identifying qualified individuals to
serve as Board members. The Governance and Nominating Committee also considers and recommends the nominees for director to stand
for election at the Company’s annual meeting of shareholders, including considering recommendations for nominees submitted
by shareholders. The procedures of the Governance and Nominating Committee, which are required to be disclosed by the rules of
the Securities and Exchange Commission, are included in this proxy statement under the heading
“Governance and Nominating
Committee Procedures.”
The Governance and Nominating Committee also
develops and recommends corporate governance guidelines to the Board for its approval, makes recommendations to the Board regarding
the size and composition of the Board and develops and recommends to the Board criteria for the selection of individuals to be
considered for election or re-election to the Board. The Governance and Nominating Committee reviews the Board’s committee
structure and recommends to the Board, for its approval, directors to serve as members of each committee. In addition, the Governance
and Nominating Committee reviews and approves all related person transactions in accordance with the Company’s Policy and
Procedures for Approval of Related Person Transactions, and reviews and monitors director relationships with the Company and the
Company’s independent accounting firm to ensure the Board’s compliance with the NASDAQ rules regarding director independence.
In 2017, the Governance and Nominating Committee did the following:
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Evaluated the Board as a whole, and had individual directors evaluated by all directors (360-degree style evaluations), to
assess a number of attributes, including engagement, continuing education, attendance and contributions (financial and intellectual).
The Chairwoman and/or the Governance and Nominating Committee Chair met individually with each director to discuss performance.
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Evaluated the size, composition, diversity and skill set of the Board. Evaluated the committee structure and functions, management
and financial reports and communications. Monitored the minimum expectation of sixteen hours of continuing education per year.
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Monitored Company stock ownership and retention guidelines.
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Director Attendance at the Annual Meeting
The Board of Directors encourages each director
to attend annual meetings of shareholders. All of our then-current directors attended the 2016 annual meeting of shareholders.
Governance
and Nominating Committee Procedures
General
It is the policy of the Governance and Nominating
Committee of the Board of Directors to consider director candidates recommended by shareholders who appear to be qualified to serve
on the Company’s Board of Directors. The Governance and Nominating Committee may choose not to consider an unsolicited recommendation
if no vacancy exists on the Board of Directors and the Governance and Nominating Committee does not perceive a need to increase
the size of the Board of Directors. To avoid the unnecessary use of the Governance and Nominating Committee’s resources,
the Governance and Nominating Committee will consider only those director candidates recommended in accordance with the procedures
set forth below.
Procedures to be Followed by Shareholders
To submit a recommendation of a director candidate
to the Governance and Nominating Committee, a shareholder should submit the following information in writing, addressed to the
Chairwoman of the Governance and Nominating Committee, care of the Corporate Secretary, at the main office of the Company located
at 501 Fairmount Avenue, Suite 200, Towson, Maryland 21286:
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A statement that the writer is a shareholder and is proposing a candidate for consideration by the Governance and Nominating
Committee;
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The name and address of the shareholder as they appear on the Company’s books, and the number of shares of the Company’s
common stock that are owned beneficially by the shareholder (if the shareholder is not a holder of record, appropriate evidence
of the shareholder’s ownership will be required);
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The name, address and contact information for the candidate, and the number of shares of common stock of the Company that are
owned by the candidate (if the candidate is not a holder of record, appropriate evidence of the candidate’s share ownership,
if any, should be provided);
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A statement of the candidate’s business and educational experience;
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Such other information regarding the candidate as would be required to be included in the proxy statement pursuant to Securities
and Exchange Commission Regulation 14A;
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A statement detailing any relationship between the candidate and any customer, supplier or competitor of the Company;
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Detailed information about any relationship or understanding between the proposing shareholder and the candidate; and
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A statement that the candidate is willing to be considered and willing to serve as a director if nominated and elected.
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In order for a director candidate to be considered
for nomination at the Company’s annual meeting of shareholders, the recommendation must be received by the Governance and
Nominating Committee at least 180 calendar days before the date the Company’s proxy statement was released to shareholders
in connection with the previous year’s annual meeting, advanced by one year.
Process for Identifying and Evaluating Nominees
The process that the Governance and Nominating
Committee follows to identify and evaluate individuals to be nominated for election to the Board of Directors is as follows:
Identification.
For purposes of
identifying nominees for the Board of Directors, the Governance and Nominating Committee first develops an analysis of board skill
needs. The Committee then identifies possible candidates meeting the requirements and relies on personal contacts of the committee
members and other members of the Board of Directors as well as knowledge of the members of the communities served by the Bank who
fit the criteria. Candidates are vetted and brought in for formal interviews with the Governance and Nominating Committee. The
Governance and Nominating Committee makes recommendations to the Board for additional interviews and vetting. After the candidate
is fully vetted by the Committee and the Board of Directors, the Board of Directors vote on whether to nominate the candidate for
election as a director. The Governance and Nominating Committee will also consider director candidates recommended by shareholders
in accordance with the policy and procedures set forth above. The Governance and Nominating Committee has not previously used an
independent search firm to identify nominees.
Evaluation.
In evaluating potential
nominees, the Governance and Nominating Committee determines whether the candidate is eligible and qualified for service on the
Board of Directors by evaluating the candidate under certain criteria, which are described below. If such individual fulfills these
criteria, the Governance and Nominating Committee will conduct a background check of the individual and interview the candidate
to further assess the qualities of the prospective nominee and the contributions he or she would make to the Board of Directors.
Qualifications
The Governance and Nominating Committee has
recommended, and the Board of Directors has adopted, a set of criteria for the Governance and Nominating Committee to consider
when it selects individuals to be nominated for election to the Board of Directors. A candidate must meet the eligibility requirements
set forth in the Company’s bylaws, which include an age restriction, a residency requirement and a requirement that the candidate
not have been subject to certain criminal or regulatory actions. A candidate also must meet any qualification requirements set
forth in any Board or Committee governing documents.
If the candidate is deemed eligible for election
to the Board of Directors, the Governance and Nominating Committee will then evaluate the potential nominee based on the following
criteria:
|
·
|
financial, regulatory and business experience;
|
|
·
|
familiarity with and participation in the local community;
|
|
·
|
integrity, honesty and reputation in connection with upholding a position of trust with respect to customers;
|
|
·
|
ability to fully participate in the Company’s monthly meetings and on designated committees;
|
|
·
|
dedication to the Company and its shareholders; and
|
The Committee
will also consider any other factors it deems relevant, including skills, background, age, diversity, size of the Board of Directors
and regulatory disclosure obligations. We do not maintain a specific diversity policy, but we believe diversity is important and
it is considered in our review of candidates. Diversity includes not only gender and ethnicity, but the various perspectives that
come from having differing viewpoints, geographic and cultural backgrounds, and life experiences.
With respect to nominating an existing director
for re-election to the Board of Directors, the Governance and Nominating Committee will consider and review an existing director’s
board and committee attendance and performance; results of their annual 360 degree board evaluation; length of board service; experience,
skills and contributions that the existing director brings to the Board; and independence.
Submission of Business Proposals and Shareholder Nominations
The Company must receive proposals that shareholders
seek to include in the proxy statement for the Company’s next annual meeting no later than March 18, 2018. However, if next
year’s annual meeting is held on a date more than 30 calendar days from August 21, 2018, a shareholder proposal must be received
by a reasonable time before the Company begins to print and mail its proxy solicitation for such annual meeting. Any shareholder
proposals that are intended to be included in the proxy statement for the Company’s next annual meeting will be subject to
the requirements of the proxy rules adopted by the Securities and Exchange Commission.
In addition, the Company’s bylaws provide
that, in order for a shareholder to make nominations for the election of directors or proposals for business to be brought before
the annual meeting, a shareholder must deliver notice of such nominations and/or proposals to the Secretary not less than 80 days
nor more than 90 days before the date of the annual meeting. However, if less than 90 days’ notice or prior public disclosure
of the date of the annual meeting is given to shareholders, such notice must be received not later than the close of business of
the tenth day following the day on which notice of the date of the annual meeting was mailed to shareholders or prior public disclosure
of the meeting date was made. A copy of the bylaws may be obtained from the Company.
Proposal 1
— Election of Directors
Hamilton Bancorp currently has eight directors,
each of whom also serves as a director of Hamilton Bank. Directors serve in three classes with three-year staggered terms so that
approximately one-third of the directors are elected at each annual meeting. Directors of Hamilton Bank are elected by Hamilton
Bancorp as its sole shareholder.
The following table states our directors’
names, their ages as of March 31, 2017, and the years when they began serving as directors and when their current terms expire.
Name (1)
|
|
Position(s) Held With
Hamilton Bank
|
|
Age
|
|
Director
Since (2)
|
|
Current Term
Expires
|
Carol L. Coughlin
|
|
Chairwoman of the Board
|
|
58
|
|
2010
|
|
2017
|
Robert A. DeAlmeida
|
|
President, Chief Executive Officer and Director
|
|
62
|
|
2005
|
|
2018
|
William E. Ballard
|
|
Director
|
|
68
|
|
2010
|
|
2017
|
Joseph J. Bouffard
|
|
Director
|
|
67
|
|
2015
|
|
2017
|
James R. Farnum, Jr.
|
|
Director
|
|
57
|
|
2013
|
|
2018
|
William W. Furr
|
|
Director
|
|
68
|
|
1977
|
|
2019
|
Bobbi R. Macdonald
|
|
Director
|
|
51
|
|
2008
|
|
2018
|
Jenny G. Morgan
|
|
Director
|
|
57
|
|
2016
|
|
2019
|
|
(1)
|
The mailing address for each person listed is 501 Fairmount Avenue, Suite 200, Towson, Maryland 21286.
|
|
(2)
|
Includes service as a director of Hamilton Bank prior
to its conversion in fiscal 2013.
|
Nominees for Election as Directors
The nominees for election as directors at the
2017 annual meeting of shareholders are William E. Ballard, Carol L. Coughlin and Joseph J. Bouffard, each of whom is a current
director of the Company and the Bank.
It is intended that the proxies solicited
by the Board of Directors will be voted for the election of the nominees named above unless other instructions are provided.
If any nominee is unable to serve, the proxy committee will vote your shares to approve the election of any substitute proposed
by the Board of Directors. Alternatively, the Board of Directors may adopt a resolution to reduce the size of the Board. At this
time, the Board of Directors knows of no reason why any nominee might be unable to serve.
The
Board of Directors recommends a vote “FOR” the election of all nominees.
The Business Background of Nominees and Continuing Directors
The business experience for the past five years
of each of our directors is set forth below. The biographies also contain information regarding the person’s experience,
qualifications, attributes or skills that caused the Governance and Nominating Committee and the Board of Directors to determine
that the person should serve as a director. Unless otherwise indicated, directors have held their positions for the past five years.
Nominees
William E. Ballard.
William E.
Ballard is a Partner and Project Manager of EFI Group, LLC, which provides a wide range of engineering and manufacturing consulting
services to address industry profitability challenges. Services include strategic planning and expansion implementation. He is
responsible for maintaining EFI Group’s Project Management and Lean Manufacturing standards, assigning the right resources
to projects and ensuring EFI Group’s clients have an exceptional experience overall. Prior to joining EFI Group in 2001,
Mr. Ballard led capital project evaluation, capital expansion and manufacturing improvement-planning activities for a major chemical
company and also held line positions in both manufacturing and maintenance. He is a Mechanical Engineering professional and earned
his MBA in Finance from the University of Baltimore. Mr. Ballard is a Member of the Regional Manufacturing Institute, a group that
promotes the growth of manufacturing throughout Maryland. Mr. Ballard serves as a member of the Audit Committee and the Corporate
Governance and Nominating Committee of the Board of Hamilton Bank. He also served as the Board liaison to the Compliance Committee.
Mr. Ballard’s management experience and knowledge of the local business community provides the board valuable insights regarding
business development in our market area.
Carol L. Coughlin.
Ms. Coughlin
was appointed to the Board of Hamilton Bank in 2010 and to the position of Chairwoman of the Board in January 2015. She is an accomplished
C-suite executive with a proven track record helping high-growth companies improve profits, overcome obstacles, and implement change.
Ms. Coughlin is known for her skills in financial strategy, turnaround and profitability improvements, scaling for growth, risk
assessment, M&A, managing change and cultivating highly motivated teams in high growth environments. She has partnered with
CEOs to lead turnarounds, recapitalizations, high growth and profitability improvement, and prepared for and participated in the
sale of three companies. In 2006, Carol launched BottomLine Growth Strategies, Inc., a growth advisory service firm which works
with CEOs of privately held companies to transform their enterprise value through implementation of proven best practice financial
and operations strategies and to assist them in the development of board governance best practices. She and her company have received
numerous awards for her leadership and community impact. Coughlin has served on a number of boards including public, private, government,
non-profits and advisory. In addition to her service on the Hamilton Bancorp board, she serves on the board and is the Finance
Affairs Chair of University of Maryland Medical Center, an academic medical center with over $1B in revenues, and the Maryland
529 Board which governs over $5BB in assets of Maryland’s prepaid college and college savings plans. She also participates
on the Finance and Strategy Committee and the Audit Committee of the University of Maryland Medical System. Coughlin is a magna
cum laude graduate from Loyola University Maryland with a Master’s in Business Administration, and also holds a BS in Business/Accounting
from Towson University. She is a Certified Public Accountant (active status, Maryland). Ms. Coughlin meets the SEC
requirements of “audit committee financial expert” and serves as a member of the Risk, Governance/Nominating and Audit
Committees. Ms. Coughlin’s extensive financial management and board governance experience along with her knowledge of the
local business community and active civic involvement makes her an invaluable member of the Company’s board of directors.
Joseph J. Bouffard.
Mr. Bouffard
was appointed to the Board of Directors on January 20, 2015. A seasoned financial executive, he has more than 25 years of experience
working for Baltimore-based financial institutions and more than 15 years serving as president and CEO for area community banks.
Mr. Bouffard possesses real-world knowledge and expertise working with community banks, public companies, and both performing and
troubled banking institutions. Mr. Bouffard has extensive ties to the Baltimore banking community and has served on several banking-related
boards and committees. Before retiring in December 2014, he served eight years as president and CEO of Baltimore County Savings
Bank, a $630,000,000 community bank/bank holding company with 16 branch offices. During his tenure with Baltimore County Savings
Bank, Mr. Bouffard improved the poorly performing institution that was
previously victimized by a multimillion dollar check fraud. He converted
it from a mutual holding company to a Federal Reserve Member Bank and took the company from three years of losses to 16 consecutive
quarters of profitability. Prior to that, Mr. Bouffard served as president and CEO of The Patapsco Bank, and during his tenure
converted the bank from a mutual organization to a publicly traded company and grew assets from $77 million to $228 million. He
also served as senior vice president of The Bank of Baltimore, president and chief operating officer of Municipal Savings Bank,
a subsidiary of Baltimore Bancorp, and vice president of The Bank of Baltimore. An accomplished CEO, Mr. Bouffard spent much of
his career advancing the banking community by serving on industry association and community foundation boards. Mr. Bouffard serves
as Chairman of the Compensation Committee. In 2016 Mr. Bouffard retired as a board member and chairman of the compensation committee
of Maryland Financial Bank and as an active member of the membership committee for the American Bankers Association. He previously
served on the American Bankers Association Community Bankers Council, as a board member of the Dundalk Community College Foundation,
and board member of the Maryland Bankers Association. Mr. Bouffard holds a bachelor’s degree in business administration from
University of Baltimore and MBA from Loyola University Maryland, formerly Loyola College. He resides in Bel Air, Maryland with
his wife. Mr. Bouffard’s extensive experience with publicly traded community banking organizations in the Mid Atlantic market
area makes him an invaluable asset to the Board.
Directors Continuing in Office
The following directors
have terms ending in 2018:
Robert A. DeAlmeida.
Hamilton
Bank has transformed and thrived under the leadership of president and CEO Robert (Bob) DeAlmeida. His vision for expansion began
as far back as 1990 when he was hired as the bank’s chief financial officer. At the time, the bank had two locations and
less than 25 employees. Today, Hamilton Bank operates eight Maryland locations from its headquarters in Towson, and its staff has
more than tripled. DeAlmeida and his team have expanded the bank’s services to meet the complete banking needs of small businesses,
retailers, consumers, and homeowners across Greater Baltimore. During his prior post as CFO of Hamilton Bank, DeAlmeida managed
the accounting operations and investments for the bank, yet he quickly found himself entrenched in other aspects of the business.
DeAlmeida handled negotiations and all related acquisition dealings, fueling growth for Hamilton Bank at a time when other banks
were struggling. He became vice president and treasurer in 1990, and earned the position of bank president in July 2005. During
DeAlmeida’s tenure, Hamilton Bank has proven its stability, its reputation, and its dedication to the customer. Mr. DeAlmeida
serves on prominent industry boards and in a variety of special advisory roles. He currently serves on, and was past chair of,
the board of directors of the Maryland Bankers Association - the only professional association representing the banking industry
in Maryland. He serves as chairman of The Federal Reserve Bank of Richmond’s Community Depository Institutions Advisory Council
(CDIAC), and also represents the district by serving on the National Community Depository Institution Advisory Council in Washington
D.C. . Mr. DeAlmeida serves on the Board of Directors of the Maryland Chamber of Commerce and is the incoming chair of the University
of Baltimore, Merrick School of Business Dean’s Advisory Council – this council provides business perspective for the
strategic direction of the School. Mr. DeAlmeida is chairman of the board of directors of Healthy Neighborhoods, a supporting organization
of the Baltimore Community Foundation which finances housing and home improvements for home buyers and homeowners in Baltimore
City. Mr. DeAlmeida also serves on the Neighborhood Housing Services (NHS) of Baltimore loan committee; the audit and finance committee
of the Girl Scouts of Central Maryland; and on the investment committee of the Maryland Historical Society. He is a past director
of both NHS of Baltimore and past chair of HARBEL Housing Services. DeAlmeida earned his bachelor’s degree in accounting
from Loyola College of Maryland and his master’s degree in economics from the University of Baltimore.
Bobbi R. Macdonald.
Bobbi R. Macdonald
is Executive Director and founder of The City Neighbors Foundation. Ms. Macdonald co-founded three public schools: City Neighbors
Charter School (2005), City Neighbors Hamilton (2009) and City Neighbors High School (2010). City Neighbors schools, students,
teachers and parents learn through Project Based Learning, Arts Integration, and a unique governance model that engages families
in creating the school culture. Serving over 850 students City Neighbors is a premier organization and scores in the
top 10 for statewide assessments in Baltimore. The City Neighbors Foundation seeks to disseminate best practices, provide
professional development for teachers, and provide forums to transform public education. A lifelong advocate for grassroots organizing
for building strong communities, Ms. Macdonald was recently selected by the Annie E. Casey Foundation as one of 16 leaders from
across the country for the Children and Family Fellowship. She received her Bachelor's Degree from the University of Illinois in
Human Development and Family Ecology, and holds a Master’s Degree from the University of Maryland, College Park, in Curriculum
and Instruction. Ms. Macdonald serves as Chairwoman of the Corporate Governance and Nominating Committee and as a member of the
Compensation Committee of the Board of Hamilton Bank. Ms. Macdonald is on the Board of the National Coalition of Diverse
Charter Schools, and the Advisory Board of Reimagining Education, a National project of Convergence. She also serves as a
founding member and past Chair of the Maryland Alliance for Public Schools and the Baltimore Education Coalition. Ms. Macdonald’s
extensive community involvement and leadership experience in building high performing organizations makes her an invaluable asset
to the Board.
James R. Farnum.
James
R. Farnum, Jr. is the Chief Executive Officer and Owner of Alliance Advisory Group, LLC, an organizational advisory practice he
formed in 2003 to provide strategic advisory services to a variety of organizations in both the for profit and not-for-profit sectors.
Mr. Farnum also serves as the Vice President of Sales and Operations for the S.W. Betz Company, an 84 year old weighing and materials
handling distributor. Mr. Farnum has thirty-six years of experience in commercial and retail banking and financial services as
well as owning and operating several businesses. He is a graduate of Loyola University Maryland with an Executive MBA (Fellows
Program) and also earned a Bachelor’s of Science in Finance from the University of Maryland, College Park. Current and past
affiliations include Adjunct Professor at the Loyola University Maryland Sellinger School of Business and the Johns Hopkins University
Carey Business School; Board of Directors for L.E. Goldsborough & Sons, Inc.; and the Board of Advisors and Finance Committee
Chair of St. Frances Academy. Mr. Farnum serves as Chairman of the Audit Committee, Chairman of the Loan Committee and as a member
of the Risk Committee of the Board of Hamilton Bank. Mr. Farnum’s strategic and risk management experiences, banking and
financial services experience, and knowledge of the local business community make him a valuable asset to the board of directors.
The following directors have terms ending in 2019:
William W. Furr.
William W. Furr
has over 40 years’ experience in the highly regulated insurance business and severed on Hamilton’s Board since 1977.
He is presently President and Board member of The Paramount Insurance Company, a local non-standard automobile insurer. Prior to
being named President of Paramount in 2015, Mr. Furr worked as a consultant, assisting with insurance regulatory compliance, customer
service and marketing for insurance operations and small businesses. In 2004 he facilitated for the Maryland Insurance Administration
the rehabilitation and of Carroll County Mutual Insurance Company, now Westminster American Insurance. Previously, Mr. Furr spent
28 years as manager of the Baltimore regional office of Amica Mutual Insurance Company. Mr. Furr serves as a member of the Compensation
Committee and chairs the Risk Committee of the Board of Hamilton Bank. In addition to his Hamilton board position, Mr. Furr is
on the board of Westminster American Insurance Company and chairs their Audit Committee. Mr. Furr previously served on the District
of Columbia Property Insurance Facility Board, and was Chairman of the Maryland Joint Insurance Association Board. Mr. Furr’s
other past affiliations include the Joseph Richey Hospice board and the All Saints Sisters of
Poor convent in Catonsville. Mr. Furr is a Chartered Property Casualty
Underwriter and received a bachelor’s degree from University of Richmond. Mr. Furr’s extensive experience in regulated
environments, his commitment to excellence, management and operations experience, and knowledge of the local business community
offers Hamilton’s board valuable insights regarding regulators, internal processes, external customer service and marketing
matters.
Jenny G. Morgan.
Ms. Morgan
was appointed to the Board of Directors on January 19, 2016. Jenny G. Morgan is currently President and Chief Executive Officer
of basys, inc., a growing technology company that for 40 years has provided benefits administration systems for third-party administrators
and self-administered fund offices in the multiemployer market throughout the United States and Canada. Prior to joining basys,
inc. in 2009, Ms. Morgan served as an Investment Principal at Sterling Partners, a top middle-market private equity firm, where
her responsibilities included identifying, evaluating and executing prospective investments and working with portfolio companies
to leverage opportunities for growth and operational efficiencies. Before joining Sterling Partners in 2006, Ms. Morgan was Chief
Executive Officer of ViPS, Inc. (now a subsidiary of General Dynamics Information Technology), which grew into one of the Baltimore
area’s largest information technology companies during her 20-year leadership. Ms. Morgan holds a Master of Administrative
Sciences degree from Johns Hopkins University and a Bachelor of Arts degree in economics from Brandeis University. She was selected
as a finalist for the Ernst & Young Entrepreneur of The Year® Award in 2000 and named an Ernst & Young Entrepreneur
of The Year® Award winner for the state of Maryland in 2005. From 2001 to 2003, she received the Deloitte & Touche Technology
Fast 50 award as CEO of one of Maryland’s 50 fastest-growing technology companies. Ms. Morgan serves as a member of the Risk
Committee and the Audit Committee of the Board of Hamilton Bank. Ms. Morgan serves on a number of local, privately held company
boards and the Advisory Council for the Johns Hopkins Carey Business School. She also served on the Board of Federal Reserve Bank
of Richmond, Baltimore Branch from 2009-2014. Ms. Morgan’s extensive leadership experience with high growth companies along
with her expertise in mergers and acquisitions and cyber security makes her a strong asset to the Board.
Proposal 2
— Ratification of Independent Registered Public Accounting Firm
On March 17, 2015, the Company engaged Stegman
& Company (“Stegman”) as the Company’s independent registered public accounting firm to audit the Company’s
financial statements for the fiscal year ending March 31, 2016. Prior to engaging Stegman, the Company did not consult with Stegman
regarding any of the matters listed under Regulation S-K Item 304(a)(2)(i) or (ii). Stegman has not audited the consolidated financial
statements of the Company as of and for any year or issued any reports on any audits of the consolidated financial statements of
the Company. During the Company’s fiscal years ended March 31, 2016 and 2015, there were (1) no disagreements (as such term
is used in Regulation S-K Item 304(a)(1)(iv)) between the Company and Stegman on any matters of accounting principles or practices,
financial statement disclosure, or auditing scope or procedures, which disagreement(s), if not resolved to the satisfaction of
Stegman, would have caused Stegman to make reference to the subject matter of the disagreement(s) in connection with its report
on the Company's financial statements and (2i) no reportable events within the meaning set forth in Item 304(a)(1)(v) of Regulation
S-K.
Following the Company’s engagement of
Stegman, Stegman announced that effective June 1, 2016 substantially all directors and employees of Stegman would join Dixon Hughes
Goodman LLP (“DHG”). As a result, effective June 1, 2016, Stegman resigned as the Company’s independent registered
public accounting firm. The Audit Committee approved the engagement of DHG to serve as the Company’s independent registered
public accounting firm and the Company engaged DHG to serve as the Company’s independent registered public accounting effective
June 1, 2016. Prior to engaging DHG, the
Company did not consult with DHG regarding any of the matters listed
under Regulation S-K Item 304(a)(2)(i) or (ii).
The Audit Committee of the Board of Directors
has appointed DHG to be the Company’s independent registered public accounting firm for the year ending March 31, 2018, subject
to ratification by shareholders. A representative of DHG is expected to be present at the annual meeting to respond to appropriate
questions from shareholders and will have the opportunity to make a statement should he or she desire to do so.
If the ratification of the appointment of DHG
is not approved by a majority of the votes cast by shareholders at the annual meeting, other independent registered public accounting
firms may be considered by the Audit Committee of the Board of Directors.
Even if the selection of DHG is ratified, the
Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at
any time during the year if it determines that such change is in the best interest of the Company and its shareholders.
The Board of Directors recommends a vote
“FOR” the ratification of Dixon Hughes Goodman LLP as independent registered public accounting firm for the year ending
March 31, 2018.
Set forth below is certain information concerning
aggregate fees billed for professional services rendered by DHG and Stegman & Company during the fiscal years ended March 31,
2017 and 2016, respectively.
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
Audit Fees
|
|
$
|
90,018
|
|
|
$
|
65,135
|
|
Audit-Related Fees
|
|
$
|
—
|
|
|
$
|
—
|
|
Tax Fees
|
|
$
|
7,500
|
|
|
$
|
7,500
|
|
All Other Fees
|
|
$
|
—
|
|
|
$
|
—
|
|
Audit Fees.
The aggregate fees
billed to us for professional services rendered for the audit of our annual consolidated financial statements, review of the consolidated
financial statements included in our Quarterly Report on Form 10-Q and services that are normally provided in connection with
statutory and regulatory filings and engagements were $90,018 and $65,135 during the years ended March 31, 2017 and 2016, respectively.
Audit Related Fees.
During the
year ended March 31, 2017 and 2016, respectively, audit-related fees billed to the Company by DHG and Stegman & Company were
$0 and $0, respectively.
Tax Fees.
The aggregate fees billed
to us for professional services rendered for tax preparation, tax consultation and tax compliance were $7,500 and $7,500 by DHG
and Stegman & Company during the years ended March 31, 2017 and 2016, respectively.
All Other Fees.
The aggregate
fees billed to us by DHG and Stegman & Company for professional services rendered for other fees were $0 and $0 during the
years ended March 31, 2017 and 2016, respectively. There were no fees billed to us by DHG and Stegman & Company during the
years ended March 31, 2017 and 2016 that are not described above.
The Audit Committee is responsible for appointing,
setting compensation and overseeing the work of the independent registered public accounting firm. In accordance with its charter,
the Audit Committee approves, in advance, all audit and permissible non-audit services to be performed by the independent registered
public accounting firm. Such approval process ensures that the external auditor does not provide any non-audit services to the
Company that are prohibited by law or regulation.
In addition, the Audit Committee has established
a policy regarding pre-approval of all audit and permissible non-audit services provided by the independent registered public accounting
firm. Requests for services by the independent registered public accounting firm for compliance with the auditor services policy
must be specific as to the particular services to be provided. The request may be made with respect to either specific services
or a type of service for predictable or recurring services. During the year ended March 31, 2017, all services were approved, in
advance, by the Audit Committee in compliance with these procedures.
REPORT OF THE AUDIT COMMITTEE
The Company’s management is responsible
for the Company’s internal controls and financial reporting process. The Company’s independent registered public accounting
firm is responsible for performing an independent audit of the Company’s consolidated financial statements and issuing an
opinion on the conformity of those financial statements with U.S. generally accepted accounting principles. The Audit Committee
oversees the Company’s internal controls and financial reporting process on behalf of the Board of Directors.
In this context, the Audit Committee has met
and held discussions with management and the independent registered public accounting firm. Management represented to the Audit
Committee that the Company’s consolidated financial statements were prepared in accordance with U.S. generally accepted accounting
principles and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent
registered public accounting firm. The Audit Committee discussed with the independent registered public accounting firm matters
required to be discussed pursuant to the Public Company Accounting Oversight Board’s Auditing Standard No. 16,
Communications
with Audit Committees
, including the quality, and not just the acceptability, of the accounting principles, the reasonableness
of significant judgments and the clarity of the disclosures in the financial statements.
In addition, the Audit Committee has received
the written disclosures and the letter from the independent registered public accounting firm required by the applicable requirements
of the Public Company Accounting Oversight Board and has discussed with the independent registered public accounting firm the firm’s
independence from the Company and its management. In concluding that the registered public accounting firm is independent, the
Audit Committee considered, among other factors, whether the non-audit services provided by the firm were compatible with its independence.
The Audit Committee discussed with the Company’s
independent registered public accounting firm the overall scope and plans for their audit. The Audit Committee meets with the independent
registered public accounting firm, with and without management present, to discuss the results of their examination, their consideration
of the Company’s internal controls, and the overall quality of the Company’s financial reporting.
In performing all of these functions, the Audit
Committee acts only in an oversight capacity. In its oversight role, the Audit Committee relies on the work and assurances of the
Company’s management, which has the primary responsibility for financial statements and reports, and of the independent registered
public accounting firm who, in its report, express an opinion on the conformity of the
Company’s consolidated financial statements to U.S. generally
accepted accounting principles. The Audit Committee’s oversight does not provide it with an independent basis to determine
that management has maintained appropriate accounting and financial reporting principles or policies, or appropriate internal controls
and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit
Committee’s considerations and discussions with management and the independent registered public accounting firm do not assure
that the Company’s consolidated financial statements are presented in accordance with U.S. generally accepted accounting
principles, that the audit of the Company’s consolidated financial statements has been carried out in accordance with generally
accepted auditing standards or that the Company’s independent registered public accounting firm is “independent.”
In reliance on the reviews and discussions referred
to above, the Audit Committee has recommended to the Board of Directors, and the Board has approved, that the audited consolidated
financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal years ended March 31, 2017 and
2016 for filing with the Securities and Exchange Commission. The Audit Committee also has approved, subject to shareholder ratification,
the selection of Dixon Hughes Goodman LLP as the Company’s independent registered public accounting firm for the fiscal year
ending March 31, 2018.
Audit Committee of the Board of Directors
of
Hamilton Bancorp, Inc.
James R. Farnum, Jr. (Chairman)
William E. Ballard
Carol L. Coughlin
Jenny G. Morgan
Executive
Officers
The following table sets forth information
regarding the executive officers of the Company and Hamilton Bank. Age information is as of March 31, 2017. The executive officers
of the Company and Hamilton Bank are elected annually.
Name
|
|
Age
|
|
Position
|
Robert A. DeAlmeida
|
|
62
|
|
President and Chief Executive Officer
|
John P. Marzullo
|
|
46
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
Ellen R. Fish
|
|
55
|
|
Executive Vice President
|
Below is the business experience for the
past five years of our executive officers who are not also directors.
John P. Marzullo.
John P.
Marzullo joined Hamilton Bank in 2010, filling the position of treasurer that was left vacant when Bob DeAlmeida took on his current
role as president in 2006. Marzullo's primary responsibilities include overseeing the accounting department, handling the monthly
and quarterly financial reporting, and working with DeAlmeida to manage the bank’s investment portfolio. Marzullo brings
nearly 20 years of experience in accounting, both as a certified public accountant (currently inactive) and as an assistant controller
in the banking industry. While at Stegman & Company, he worked with a number of small businesses but was primarily the go-to
CPA for financial institutions. He later moved to RSM McGladrey for a brief time before seizing an opportunity to move into the
banking industry with a position as assistant controller at K Bank. He remained at K Bank for six years, until it was taken over
by federal regulators and then M&T Bank at the end of 2010. The lessons learned at K Bank prepared Marzullo well for the conservative
approach long held by Hamilton. Marzullo graduated with honors from Towson University, receiving a bachelor’s degree in finance
in 1994 and a bachelor’s degree in accounting in 1996. He is a member of the Maryland Association of CPAs and the American
Institute of CPAs, allowing him to stay on top of trends in banking and giving him additional research tools. He’s a married
father of three children, and a life-long soccer player.
Ellen R. Fish.
Ellen Fish
joined Hamilton Bank in 2014 and has over 30 years of banking experience and an impressive background in lending, cash management,
retail banking and operations. Fish is responsible for the oversight of the lending, cash management, retail banking, IT, operations
and loan servicing in addition to; the development and delivery of products and services to customers throughout the bank. Prior
to her time at Hamilton Bank, she served as Executive Vice President at CFG Community Bank and Senior Vice President for Provident
Bank of Maryland. Ms. Fish was a founder of the Baltimore County Small Business Resource Center. She is a recognized female executive
having been a three-time recipient of The Daily Record’s “Maryland’s Top 100 Women” award and inducted
into the “Circle of Excellence.” Fish was appointed to the University System of Maryland Board of Regents by Governor
Hogan in 2016. She has previously served on the boards for the Maryland Chamber of Commerce, Towson University Foundation, Baltimore
County Chamber of Commerce, The Women’s Housing Coalition, Leadership Baltimore County and Roland Park Country School. Fish
is a past president of Executive Alliance and a two-time recipient of SmartCEO’s “Top Banker” award. She has
also received the Volunteer of the Year award from the Baltimore County Chamber of Commerce and was a recipient of the 2016 Maryland
Bankers Association Achievement Honors. Fish earned her Bachelor of Science degree in management from Virginia Tech.
Executive Compensation
Summary Compensation Table
The table below summarizes the total compensation
paid to, or earned by, Mr. DeAlmeida, who serves as our President and Chief Executive Officer, Mr. Marzullo, who serves as our
Senior Vice President, Chief Financial Officer and Treasurer, and Ellen R. Fish, who serves as our Executive Vice President for
the year ended March 31, 2017. We refer to these individuals as “Named Executive Officers.”
Summary Compensation Table for the Year Ended March 31, 2017
|
Name and Principal
Position
|
|
Year
|
|
|
Salary
(1)($)
|
|
|
Bonus
(2) ($)
|
|
|
Stock
Awards
($)
|
|
|
Option
Awards
($)
|
|
|
All Other
Compensation
(3)($)
|
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert A. DeAlmeida
|
|
2017
|
|
|
264,083
|
|
|
4,400
|
|
|
—
|
|
|
—
|
|
|
24,224
|
|
|
292,707
|
|
President and Chief
|
|
2016
|
|
|
|
264,083
|
|
|
|
5,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
26,828
|
|
|
|
295,911
|
|
Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John P. Marzullo
|
|
2017
|
|
|
|
106,294
|
|
|
|
3,850
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9,983
|
|
|
|
120,037
|
|
Senior Vice President, Chief
|
|
2016
|
|
|
|
103,227
|
|
|
|
4,375
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10,649
|
|
|
|
118,250
|
|
Financial Officer
and
Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ellen R. Fish
|
|
2017
|
|
|
|
205,429
|
|
|
|
4,356
|
|
|
|
—
|
|
|
|
—
|
|
|
|
18,390
|
|
|
|
228,175
|
|
Executive Vice President
|
|
2016
|
|
|
|
203,846
|
|
|
|
4,950
|
|
|
|
—
|
|
|
|
—
|
|
|
|
15,357
|
|
|
|
224,153
|
|
|
(1)
|
Includes salary that was earned in accordance with the Bank’s paid time off policy applicable to all employees.
|
|
(2)
|
The Compensation Committee approved a bonus of $10,000 for Mr. DeAlmeida and a retention bonus pool of $50,000 to be allocated
by the Chief Executive Officer for employee performance related to the merger with Fairmount Bancorp. As a result of the foregoing,
Mr. Marzullo and Ms. Fish were awarded bonuses of $8,750 and $9,900, respectively. Half of each bonus was paid in September 2015,
and half was paid on June 30, 2016, based on the Company’s performance after the merger.
|
|
(3)
|
The amounts reflect what we have paid to, or reimbursed, the applicable Named Executive Officer for various benefits which
we provide. A break-down of the various elements of compensation in this column for fiscal 2017 is set forth in the table immediately
below. For the year ended March 31, 2017, no Named Executive Officer received perquisites or personal benefits that, in the aggregate,
were greater than or equal to $10,000.
|
Name
|
|
Safe Harbor
Contribution to
401(k) Plan (a)
($)
|
|
|
Split Dollar
Life
Insurance (b)
($)
|
|
|
ESOP and
Supplemental
ESOP (c)
($)
|
|
|
Total
($)
|
|
Robert A. DeAlmeida
|
|
|
7,950
|
|
|
|
823
|
|
|
|
15,451
|
|
|
|
24,224
|
|
John P. Marzullo
|
|
|
3,280
|
|
|
|
239
|
|
|
|
6,374
|
|
|
|
9,893
|
|
Ellen R. Fish
|
|
|
6,249
|
|
|
|
—
|
|
|
|
12,141
|
|
|
|
18,390
|
|
|
(a)
|
Represents the safe harbor employer contribution made to the Named Executive Officer’s 401(k) Plan account for the plan
year ended December 31, 2016.
|
|
(b)
|
Represents the Named Executive Officer’s imputed income related to split dollar life insurance that is provided by Hamilton
Bank for the year ended March 31, 2017. Such split dollar life insurance coverage is provided in accordance with the Named Executive
Officer’s Executive Split Dollar Agreement with Hamilton Bank as described below under “Benefit Plans-
Executive
Split Dollar Agreements
.”
|
|
(c)
|
Represents the aggregate number of: (1) shares allocated to the Named Executive Officer’s ESOP account with respect to
the plan year ended December 31, 2016, the value of which was determined based on the $15.35 closing price of the Company's common
stock as reported by NASDAQ on March 31, 2017, and (2) phantom shares allocated to the Named Executive Officer’s Supplemental
ESOP account with respect to the plan year ended December 31, 2016, the value of which was determined based on the $15.35 closing
price of the Company's common stock as reported by NASDAQ on March 31, 2017.
|
Short Term Incentive Plan
The Bank adopted the Annual Incentive Plan,
effective as of April 1, 2015, to motivate and reward senior management for their contributions to the performance and success
of the Company and Hamilton Bank. The Plan focuses on financial measures that are critical to the Company’s and Hamilton
Bank’s growth and profitability, and is utilized to align the interests of our senior management team with shareholders of
the Company by paying cash bonus awards that are directly linked to the performance of the Company and Hamilton Bank. If the performance
objectives are accomplished, the participant would receive a cash award equal to a pre-established percentage of his or her base
salary, as determined by the Compensation Committee. Each Named Executive Officer was a participant in the Annual Incentive Plan.
For the annual performance period ending
March 31, 2017, the Compensation Committee established objective performance objectives related to: (1) net income; (2) loan production;
and (3) asset quality. Because the Bank did not satisfy its pre-established net income performance metric, no bonuses were awarded
under the Annual Incentive Plan.
Employment and Change in
Control Agreements
Employment Agreement with Mr. DeAlmeida
.
On October 10, 2012, Hamilton Bank and the Company entered into separate employment agreements with Mr. DeAlmeida. The employment
agreements have essentially identical provisions, except that the employment agreement with the Company: (i) provides for daily,
rather than annual, renewal of the term; (ii) obligates the Company to make payments not made by Hamilton Bank under its agreement
with Mr. DeAlmeida (provided that no duplicate payments are made); and (iii) will not require an automatic cut-back of severance
benefits payable on termination of employment in connection with a change in control in order to avoid an excess parachute payment
under Section 280G of the Internal Revenue Code.
The employment agreement with the Company
has a three-year term that automatically renews daily so that the remaining term is always three years. The employment agreement
with Hamilton Bank had an initial term of three years. At least 60 days prior to the anniversary date of the agreement, the disinterested
members of the Board of Directors of Hamilton Bank must conduct a comprehensive performance evaluation and affirmatively approve
any extension of the Hamilton Bank employment agreement for an additional year or determine not to extend the term of the Hamilton
Bank employment agreement. If the Board of Directors determines not to extend the term, it must notify Mr. DeAlmeida at least 30
days, but not more than 60 days, prior to the anniversary date.
The employment agreements provide Mr. DeAlmeida
with an annual base salary, which was $259,100 for the year ended March 31, 2017. The base salary may be increased, but not decreased
(other than a decrease which is applicable to all senior officers). In addition to base salary, Mr. DeAlmeida is entitled to participate
in any bonus program and benefit plan that are made available to management employees, and will be reimbursed for all reasonable
business expenses incurred.
In the event of Mr. DeAlmeida’s involuntary
termination of employment for reasons other than cause, disability or death, or in the event of his resignation for “good
reason,” he will receive a severance payment equal to the base salary that he would have earned had he remained employed
with the Hamilton Bank and the Company from his date of termination until, and including, the last day of the remaining term of
his employment agreements. Such payment is payable in a lump sum within 30 days following Mr. DeAlmeida’s date of termination.
In addition, Mr. DeAlmeida will be entitled to receive from Hamilton Bank or the Company continued life insurance and non-taxable
medical and dental insurance coverage under the same cost-sharing arrangements that apply for active employees of Hamilton Bank
and Hamilton Bancorp. Such coverage will cease upon the earlier
of: (i) the completion of the remaining term of the employment agreements or (ii) the date on which Mr. DeAlmeida receives substantially
similar benefits from another employer. For purposes of the employment agreements, “good reason” is defined as: (i)
a material reduction in base salary or benefits (other than reduction by Hamilton Bank or the Company that is part of a good faith,
overall reduction of such benefits applicable to all employees); (ii) a material reduction in Mr. DeAlmeida’s duties or responsibilities;
(iii) a relocation of Mr. DeAlmeida’s principal place of employment by more than 25 miles from Hamilton Bank’s or the
Company’s main office location; or (iv) a material breach of the employment agreements by Hamilton Bank or the Company.
If Mr. DeAlmeida’s involuntary termination
of employment other than for cause, disability or death or voluntary resignation for “good reason” occurs on or after
the effective date of a change in control of the Company or Hamilton Bank, he would be entitled to (in lieu of the payments and
benefits described in the previous paragraph) a severance payment equal to three times the sum of his highest rate of base salary
and annual bonus paid to, or earned by, him during the current calendar year of his date of termination or either of the three
calendar years immediately preceding his date of termination. Such payment will be payable in a lump sum within 30 days following
Mr. DeAlmeida’s date of termination. In addition, Mr. DeAlmeida would be entitled, at no expense, to the continuation of
substantially comparable life insurance and non-taxable medical and dental insurance coverage until the earlier of: (i) the date
which is three years after his date of termination; or (ii) the date on which he receives substantially similar benefits from another
employer. Notwithstanding the foregoing, the payments required under the Hamilton Bank employment agreement but not under the Company
employment agreement in connection with a change in control will be reduced to the extent necessary to avoid penalties under Section
280G of the Internal Revenue Code.
Furthermore, should Mr. DeAlmeida become
disabled, he will be entitled to disability benefits, if any, provided under a long-term disability plan sponsored by Hamilton
Bank or the Company. In the event of Mr. DeAlmeida’s death while employed, his beneficiaries will be paid his base salary
for one year following death, and his family will continue to receive non-taxable medical and dental coverage for one year thereafter.
Upon any termination
of employment that would entitle Mr. DeAlmeida to a severance payment (other than a termination in connection with a change in
control), Mr. DeAlmeida will be required to adhere to one-year non-competition and non-solicitation covenants.
Change in Control Agreement with Mr.
Marzullo
.
On October 10, 2012, Hamilton Bank entered into a change in control agreement with Mr. Marzullo. The
agreement had an initial
term of two years. At least 60 days prior to the anniversary date of the agreement, the disinterested members of the Board of Directors
of Hamilton Bank must conduct a comprehensive performance evaluation and affirmatively approve any extension of the agreement for
an additional year or determine not to extend the term of the agreement. If the Board of Directors determines not to extend the
term, it must notify the executive at least 30 days, but not more than 60 days, prior to the anniversary date of the agreement.
Under the agreement, in the event of
Mr.
Marzullo
’s involuntary termination of employment other than for cause, disability or death, or voluntary resignation
for “good reason” occurs on or after the effective date of a change in control of the Company or Hamilton Bank,
Mr.
Marzullo
would be entitled to a severance payment equal to two times the sum of his highest rate of base salary and annual
bonus paid to, or earned by, him during the current calendar year of his date of termination or either of the two calendar years
immediately preceding his date of termination. Such payment will be payable in a lump sum within 30 days following
Mr.
Marzullo
’s date of termination. In addition,
Mr. Marzullo
would be entitled to the continuation of substantially comparable life insurance and non-taxable medical and dental
insurance coverage until the earlier of: (i) the date which
is two years after his date of termination or (ii) the date on which he receives substantially similar benefits from another employer.
Notwithstanding the foregoing, the payments required under the agreement will be reduced to the extent necessary to avoid penalties
under Section 280G of the Internal Revenue Code. For purposes of the change in control agreement, “good reason” is
defined as: (i) a material reduction in
Mr. Marzullo
’s base
salary or benefits (other than reduction by Hamilton Bank that is part of a good faith, overall reduction of such benefits applicable
to all employees); (ii) a material reduction in his duties or responsibilities; (iii) a relocation of his principal place of employment
by more than 25 miles from Hamilton Bank’s main office location; or (iv) a material breach of the change in control agreement
by Hamilton Bank.
Change in Control Agreement with Ms.
Fish.
On February 27, 2015, Hamilton Bank entered into a change in control agreement with Ms. Fish. The anniversary date
of the agreement has since been changed to October 10 of each year so that the agreement term aligns with the aforementioned agreements
for Messrs. DeAlmeida and Marzullo. The agreement has an initial term of two years. At least 60 days prior to the anniversary date
of the agreement, the disinterested members of the Board of Directors of Hamilton Bank must conduct a comprehensive performance
evaluation and affirmatively approve any extension of the agreement for an additional year or determine not to extend the term
of the agreement. If the board of directors determines not to extend the term, it must notify the executive at least 30 days, but
not more than 60 days, prior to the anniversary date of the agreement.
Under the agreement, in the event of
Ms.
Fish
’s involuntary termination of employment other than for cause, disability or death, or voluntary resignation for
“good reason,” occurs on or after the effective date of a change in control of the Company or Hamilton Bank,
Ms.
Fish
would be entitled to a severance payment equal to two times the sum of her highest rate of base salary and annual bonus
paid to, or earned by, her during the current calendar year of her date of termination or either of the two calendar years immediately
preceding her date of termination. Such payment will be payable in a lump sum within 30 days following
Ms.
Fish
’s date of termination. In addition,
Ms. Fish
would be entitled to the continuation of substantially comparable life insurance and non-taxable medical and dental insurance coverage
until the earlier of: (i) the date which is two years after her date of termination or (ii) the date on which she receives substantially
similar benefits from another employer. Notwithstanding the foregoing, the payments required under the agreement will be reduced
to the extent necessary to avoid penalties under Section 280G of the Internal Revenue Code. For purposes of the change in control
agreement, “good reason” is defined as: (i) a material reduction in
Ms.
Fish
’s base salary or benefits (other than reduction by Hamilton Bank that is part of a good faith, overall reduction
of such benefits applicable to all employees); (ii) a material reduction in her duties or responsibilities; (iii) a relocation
of her principal place of employment by more than 25 miles from Hamilton Bank’s main office location; or (iv) a material
breach of the change in control agreement by Hamilton Bank.
Stock Based Compensation
Set forth below is certain information regarding
outstanding equity awards granted to the Named Executive officers at March 31, 2017:
Outstanding Equity Awards at Fiscal Year-End
|
|
Option awards
|
|
Stock awards
|
|
Name
|
|
Number of
securities
underlying
unexercised
options (#)
exercisable
|
|
|
Number of
securities
underlying
unexercised
options (#)
unexercisable (1)
|
|
|
Option
exercise price
($)
|
|
|
Option
expiration
date
|
|
Number of
shares or
units of stock
that have not
vested (#)(1)
|
|
|
Market value
of shares or
units of stock
that have not
vested (2)
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert A. DeAlmeida
|
|
|
44,400
|
|
|
|
29,600
|
|
|
|
13.85
|
|
|
2/3/2024
|
|
|
10,000
|
|
|
|
153,500
|
|
John P. Marzullo
|
|
|
11,100
|
|
|
|
7,400
|
|
|
|
13.85
|
|
|
2/3/2024
|
|
|
2,400
|
|
|
|
36,840
|
|
Ellen R. Fish
|
|
|
11,100
|
|
|
|
7,400
|
|
|
|
13.85
|
|
|
2/18/2024
|
|
|
3,300
|
|
|
|
50,655
|
|
|
(1)
|
Stock awards and option awards listed for Messrs. DeAlmeida and Marzullo represent grants under our 2013 Equity Incentive Plan
and vest at a rate of 20% per year beginning on February 3, 2015. For Ms. Fish, her stock awards and option awards listed represent
grants under our 2013 Equity Incentive Plan and vest at a rate of 20% per year beginning on February 18, 2015.
|
|
(2)
|
The amounts in this column are based on the fair market value of our common stock on March 31, 2017 of $15.35 per share.
|
2013 Equity Incentive Plan
.
On November 18, 2013, our shareholders approved the 2013 Equity Incentive Plan to provide employees and directors of the Company
and Hamilton Bank with additional incentives to promote the growth and performance of the Company and to further align the interests
of our directors and management with the interests of our shareholders by increasing the ownership interests of directors and management
in the common stock of the Company. The 2013 Equity Incentive Plan is administered by the Compensation Committee. The 2013 Equity
Incentive Plan initially authorized the issuance of up to 518,420 shares of common stock, of which up to 370,300 shares of common
stock may be delivered pursuant to the exercise of stock options and 148,120 shares of common stock may be issued pursuant to grants
of restricted stock awards and/or restricted stock units.
The Compensation Committee may determine
the type and terms and conditions of the awards under the 2013 Equity Incentive Plan, and these determinations will be set forth
in an award agreement delivered to each recipient. Factors used to determine awards under the plan include recipient’s executive
position, job performance and contributions to the company. Awards may be granted in a combination of incentive and non-qualified
stock options or restricted stock or restricted stock units, as follows:
|
(i)
|
Stock Options
. A stock option gives the recipient the right to purchase shares of Company common stock at a specified
price for a specified period of time. The exercise price may not be less than the fair market value on the date the stock option
is grant. Stock options are either “incentive” stock options or “non-qualified” stock options. Incentive
stock options have certain tax advantages and must comply with the requirements of Section 422 of the Internal Revenue Code. Only
employees are eligible to receive incentive stock options.
|
|
(ii)
|
Restricted Stock
. A restricted stock award is a grant of common stock of the Company, subject to vesting requirements,
to a recipient for no consideration or minimum consideration as may be required by applicable law. Restricted stock awards are
granted in whole shares of common stock and are subject to vesting conditions and other
|
|
|
restrictions established by the Compensation Committee as set forth in the 2013 Equity
Incentive Plan or the award agreement. Unless otherwise determined by the Compensation Committee, the recipient of a
restricted stock award may exercise any voting rights with respect to common stock subject to an award and receive
dividends and distributions with respect to the common stock.
|
|
(iii)
|
Restricted Stock Units
. Restricted stock units are similar to restricted stock awards in that the value of a restricted
stock unit is denominated in shares of stock, however, unlike a restricted stock award, no shares of stock are transferred to the
recipient until certain requirements or conditions associated with the award are satisfied.
|
With respect to restricted stock and restricted
stock units, performance measures may be applied to the awards so that they are conditioned on the achievement of one or more performance
measures set forth in the 2013 Equity Incentive Plan and specified in the recipient’s underlying award agreement. Such shares
are referred to as “performance shares.” The performance shares will vest only on the achievement of one or more performance
measures in whole or in part, which are predetermined and specified in the recipient’s award agreement. Notwithstanding the
foregoing, unless otherwise specified in the recipient’s award agreement, all awards will vest upon death, disability or
involuntary termination of employment or termination of service as a director following a change in control.
As of March 31, 2017, the Compensation Committee
awarded 83,900 restricted stock awards and 242,350 stock options to employees and directors, in the aggregate, under the 2013 Equity
Incentive Plan.
Benefit Plans
Hamilton Bank Agreement for Deferred
Compensation of Salaries
.
Hamilton Bank adopted the Agreement for Deferred Compensation of Salaries on January 1, 1984.
Mr. DeAlmeida is a participant in this plan. The plan allows for executive participant to defer payment of a specified percentage
or fixed amount of his base salary to be paid during the next calendar year. The participant’s deferred salary is held by
Hamilton Bank through a grantor trust. Legg Mason Trust, FSB serves as trustee of the grantor trust and is directed by Hamilton
Bank as to the investment of the assets held by the grantor trust. If the participant elects to defer payment of his salary, the
participant is required to elect the time and manner in which his deferred salary will be paid. Specifically, the participant must
elect that his deferred salary will (i) either be paid on either a specified date or upon his separation from service and (ii)
be paid in the form of either a lump sum distribution or equal installments over a specified period of time.
Executive Split Dollar Agreements
.
Hamilton Bank has entered into Executive Split Dollar Agreements with each of Messrs. DeAlmeida and Marzullo. Under the agreements,
each executive’s designated beneficiary is entitled to share in the proceeds under a life insurance policy owned by Hamilton
Bank in the event of the executive’s death while employed with Hamilton Bank. The death benefit payable to each executive’s
designated beneficiary is $350,000.
401(k) Plan
.
Hamilton
Bank maintains the 401(k) Plan, a tax-qualified defined contribution retirement plan, for all employees who have satisfied the
401(k) Plan’s eligibility requirements. Each eligible employee can begin participating in the 401(k) Plan on the first day
of the month following the date on which the employee attains age 18 and has completed 90 days of service.
A participant may contribute up to 100%
of his or her compensation to the 401(k) Plan on a pre-tax basis, subject to the limitations imposed by the Internal Revenue Code.
For 2017, the salary deferral contribution limit is $18,000 provided, however, that a participant over age 50 may contribute an
additional $6,000 to the 401(k) Plan. In addition to salary deferral contributions, the 401(k) Plan provides
that Hamilton Bank will make a safe harbor employer contribution
to each participant’s account equal to at least 3% of the participant’s compensation earned during the plan year (referred
to as a “non-elective contribution”). A participant is always 100% vested in his or her salary deferral and non-elective
contributions.
In addition, Hamilton Bank is permitted
to make a discretionary profit sharing contribution to the 401(k) Plan that is allocated to each participant based on his or her
group category. Each participant will be categorized into one of the following groups: (i) Group A will consist of the President
and Chief Executive Officer; (ii) Group B will consist of the Executive Vice President; (iii) Group C will consist of Senior Officers;
(iv) Group D will consist of Junior Officers; (v) Group E will consist of Managers; (vi) Group F will consist of Staff; (vii) Group
G will consist of Terminated Highly Compensated Employees; and (viii) Group H will consist of Terminated Non-Highly Compensated
Employees. Hamilton Bank may contribute a different percentage of the profit sharing contribution to each group, with the amount
contributed to be allocated to each participant in the group proportionately based on his or her compensation compared to the total
compensation paid to all participants in the group during the plan year. Each participant vests in his or her profit sharing contribution
at a rate 20% per year such that the participant will become 100% vested upon the completion of five years of credited service.
However a participant will immediately become 100% vested in any employer contributions upon the participant’s death, disability
or attainment of age 65 (or the fifth anniversary of joining the 401(k) Plan, if later) while employed with Hamilton Bank.
Generally, a participant (or participant’s
beneficiary) may receive a distribution from his or her vested account at retirement, age 59½ (while employed with Hamilton
Bank), death, disability or termination of employment, and elect for the distribution to be paid in the form of either a lump sum
or installment payments of at least $1,000 over a specified period.
Each participant has an individual account
under the 401(k) Plan and may direct the investment of his or her account among a variety of investment options available, including
the Hamilton Bancorp Stock Fund, which allows participants to invest in the common stock of the Company.
ESOP
.
Effective January
1, 2012, Hamilton Bank adopted the ESOP, a tax-qualified retirement plan, for eligible employees. Eligible employees who have attained
age 21 will begin participation in the ESOP on the later of the effective date of the ESOP or upon the first entry date commencing
on or after the eligible employee’s completion of 1,000 hours of service during a continuous 12-month period. Employees who
had attained age 21 and completed 1,000 hours of service during a continuous 12-month period as of October 10, 2012 (the effective
date of the conversion of Hamilton Bank from the mutual to stock form of organization) were eligible to immediately participate
in the ESOP.
The ESOP trustee purchased, on behalf of
the ESOP, 296,240 shares of Company common stock issued in connection with the conversion and related stock offering. The ESOP
funded its stock purchase with a loan of $2,962,400 from the Company, which represented the aggregate purchase price of the common
stock. The loan is repaid principally through Hamilton Bank’s contribution to the ESOP and dividends payable on unallocated
common stock held by the ESOP over a 20-year term of the loan. The interest rate for the ESOP loan is an adjustable-rate equal
to the prime rate, as published in
The Wall Street Journal
. The interest rate adjusts annually and is the prime rate on
the first business day of the calendar year, retroactive to January 1 of such year.
The trustee holds the shares purchased by
the ESOP in an unallocated suspense account. Shares are released from the suspense account on a pro-rata basis as the loan is repaid
by the ESOP. The trustee allocates the shares released among the participants’ accounts on the basis of each participant’s
proportional share of compensation relative to all participants. Participants vest in their benefit at a rate
of 20% per year, such that the participants
will be 100% vested upon completion of five years of credited service. Participants who were employed by Hamilton Bank immediately
prior to the conversion received credit for vesting purposes for years of service prior to adoption of the ESOP. Participants also
will become fully vested upon normal retirement, death or disability, a change in control, or termination of the ESOP. Generally,
participants will receive distributions from the ESOP upon severance from employment. The ESOP reallocates any unvested shares
forfeited upon termination of employment among the remaining participants.
The ESOP permits participants to direct
the trustee as to how to vote the shares of common stock allocated to their accounts. The trustee votes unallocated shares and
allocated shares for which participants do not provide instructions on any matter in the same ratio as those shares for which participants
provide instructions, subject to fulfillment of the trustee’s fiduciary responsibilities.
Under applicable accounting requirements,
Hamilton Bank will record a compensation expense for the ESOP at the fair market value of the shares as they are committed to be
released from the unallocated suspense account to participants’ accounts. The compensation expense resulting from the release
of Company common stock from the suspense account and allocation to plan participants will result in a corresponding reduction
in the Company’s earnings.
Supplemental ESOP
.
Hamilton
Bank adopted the Hamilton Bank Non-Qualified Supplemental Employee Stock Ownership Plan (the “Supplemental ESOP”),
effective January 1, 2012. The Supplemental ESOP is a non-tax qualified benefit restoration plan that provides additional cash
benefits, equal to the participant’s account balance, at retirement or other termination of employment (or upon a change
in control) to participants who are key employees selected by the Compensation Committee to participate in the plan and whose benefits
under the tax-qualified ESOP described above are limited by tax limitation laws applicable to tax-qualified plans. Mr. DeAlmeida
is the only participant in the Supplemental ESOP.
Each plan year, the Supplemental ESOP credits
each participant who also participates in the tax-qualified ESOP with an annual amount equal to the sum of the difference (denominated
in shares of phantom stock) between: (i) the number of shares of common stock of the Company that would have been allocated to
the participant’s account in the ESOP, but for the tax law limitations imposed by the Internal Revenue Code, plus earnings
thereon; and (ii) the actual number of shares allocated to the participant’s account in the ESOP plus earnings thereon. Hamilton
Bank, at its discretion, may establish a rabbi trust to hold assets attributable to the Supplemental ESOP to fund its benefit obligation
or may account for the assets of the Supplemental ESOP solely as bookkeeping entries. One share of phantom stock will have a value
equal to the fair market value of one share of Company common stock. Dividends deemed paid on shares of phantom stock held in the
participant’s account will immediately be deemed to be reinvested in shares of phantom stock.
The participant’s accumulated benefit
under the Supplemental ESOP will be payable in a lump sum payment within 30 days following the first to occur of: (i) the participant’s
separation from service; (ii) the participant’s death; (iii) the participant’s disability; or (iv) a change in control
of Hamilton Bank or the Company. The accumulated benefit will be paid to the participant in cash equal to the fair market value
of the participant’s phantom shares, plus earnings thereon, as of the date of distribution.
Director
Compensation
Director Fees.
All non-employee
directors received fees per board and committee meetings attended for the fiscal year ended March 31, 2017. Each non-employee director
was paid a retainer of $2,000 per month, with the exception of the Board Chairwoman who was paid $3,000 per month. In addition,
Directors Farnum, Bouffard and Macdonald each received a monthly retainer for their service as Chairperson of the Audit Committee
($300), Compensation Committee ($200) and Governance and Nominating Committee ($100), respectively. Each non-employee director
was also paid $500 for each special board meeting and committee meeting attended. A special board meeting is a board meeting other
than our regularly scheduled monthly meeting.
Set forth below is a summary of the compensation
for each of our non-employee directors for the year ended March 31, 2017. Director compensation paid to directors who are also
Named Executive Officers is reflected above in
“—Executive Compensation—Summary Compensation Table.”
Name
|
|
Fees Earned or
Paid in Cash
($)
|
|
|
Stock
Awards (1)
(2)(3)($)
|
|
|
Option
Awards (1)
(2)(4)($)
|
|
|
All Other
Compensation (5)
($)
|
|
|
Total
($)
|
|
Carol L. Coughlin
|
|
|
46,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
46,000
|
|
William E. Ballard
|
|
|
32,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
32,000
|
|
Joseph J. Bouffard
|
|
|
36,000
|
|
|
$
|
10,125
|
|
|
$
|
128,250
|
|
|
|
—
|
|
|
|
174,375
|
|
James R. Farnum, Jr.
|
|
|
40,600
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
40,600
|
|
William W. Furr
|
|
|
30,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
30,000
|
|
Bobbi R. Macdonald
|
|
|
30,700
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
30,700
|
|
Jenny G. Morgan
|
|
|
30,500
|
|
|
$
|
10,125
|
|
|
$
|
128,250
|
|
|
|
—
|
|
|
|
168,875
|
|
|
(1)
|
Each director’s outstanding stock options and restricted stock awards are as follows:
Coughlin — stock options: 9,500; restricted stock: 4,900. Ballard — stock options: 9,500; restricted
stock: 4,500. Bouffard: —stock options: 9,500; restricted stock: 750. Farnum — stock options: 9,500; restricted
stock: 750. Furr — stock options: 9,500; restricted stock: 4,500. Macdonald — stock options: 9,500;
restricted stock: 4,500. Morgan—stock options: 9,500; restricted stock: 750.
|
|
(2)
|
Amounts included in the “Stock Awards” and “Option Awards” columns for
the year ended March 31, 2017, represent grants under our 2013 Equity Incentive Plan that were made on November 1, 2016 to
directors Bouffard and Morgan. Amounts related to stock awards and option awards are reported in the table above pursuant to applicable
Securities and Exchange Commission regulations that require that we report the full grant-date fair value of grants in the year
in which such grants are made. Because grants vest (are earned) at a rate of 20% per year beginning November 1, 2017, neither
of the directors actually recognized any income from the awards during the year ended March 31, 2017.
|
|
(3)
|
Reflects the aggregate grant date fair value of restricted stock awards granted to each director
on November 1, 2016 with a grant date market value of $13.50 per share. Directors Bouffard and Morgan were each granted 750 shares
of restricted stock. These awards vest equally over a five-year period beginning on November 1, 2017. The assumptions used in the
valuation of these awards are included in Note 18 to our audited financial statements included in our Annual Report on Form 10-K
for the year ended March 31, 2017 as filed with the Securities and Exchange Commission.
|
|
(4)
|
Reflects the aggregate grant date fair value of awards of stock options granted to each director
on November 1, 2016 with a grant date fair value of $13.50 per stock option and an exercise price of $13.50 per option. These awards
vests equally over a five-year period beginning on November 1, 2017. Directors Bouffard and Morgan were each granted 9,500 options.
The assumptions used in the valuation of these awards are included in Note 18 to our audited financial statements included in our
Annual Report on Form 10-K for the year ended March 31, 2017 as filed with the Securities and Exchange Commission.
|
|
(5)
|
No director received any perquisites or benefits that, in the aggregate, were equal to or greater
than $10,000.
|
Director Plans
2013 Equity Incentive Plan
.
Directors
are eligible to participate in the 2013 Equity Incentive Plan. Please see the description of the plan set forth under
“Executive
Compensation-Benefit Plans”
for further details.
Stock
Ownership
Stock Ownership of Certain Beneficial Owners
The following table provides information
as of June 30, 2017, with respect to persons known by the Company to be the beneficial owners of more than 5% of the Company’s
outstanding common stock. A person may be considered to own any shares of common stock over which he or she has, directly or indirectly,
sole or shared voting or investing power. Percentages are based on 3,411,075 shares of Company common stock issued and outstanding
as of June 30, 2017.
Name and Address
|
|
Number of Shares
Owned
|
|
|
Percent of
Common Stock
Owned
|
|
|
|
|
|
|
|
|
Stilwell Value Partners VII, L.P. (1)
|
|
|
315,101
|
|
|
|
9.24
|
%
|
Stilwell Activist Fund, L.P.
|
|
|
|
|
|
|
|
|
Stilwell Activist Investments, L.P.
|
|
|
|
|
|
|
|
|
Stilwell Partners, L.P.
|
|
|
|
|
|
|
|
|
Stilwell Value LLC
|
|
|
|
|
|
|
|
|
Joseph Stilwell
|
|
|
|
|
|
|
|
|
111 Broadway,12th Floor
|
|
|
|
|
|
|
|
|
New York, New York 10006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hamilton Bank Employee Stock Ownership Plan Trust (2)
|
|
|
291,054
|
|
|
|
8.53
|
%
|
First Bankers Trust Services, Inc.
|
|
|
|
|
|
|
|
|
2321 Kochs Lane, P.O. Box 4005
|
|
|
|
|
|
|
|
|
Quincy, Illinois 62305
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EJF Capital LLC (3)
|
|
|
325,000
|
|
|
|
9.53
|
%
|
EJF Sidecar Fund, Series LLC – Series E
|
|
|
|
|
|
|
|
|
Emanuel J. Friedman
|
|
|
|
|
|
|
|
|
2107 Wilson Boulevard, Ste 410
|
|
|
|
|
|
|
|
|
Arlington, Virginia 22201
|
|
|
|
|
|
|
|
|
|
(1)
|
On a Schedule 13D/A filed on June 8, 2015, Stilwell Value Partners VII, L.P., Stilwell Activist
Fund, L.P., Stilwell Activist Investments, L.P., Stilwell Partners, L.P., Stilwell Value LLC, and Joseph Stilwell each reported
shared dispositive power and shared voting power with respect to 315,101, of the Company’s common stock.
|
|
(2)
|
Under the terms of the ESOP, the ESOP trustee will vote shares allocated to participants’ accounts in the manner directed
by the participants. The ESOP trustee, subject to its fiduciary duties, will vote unallocated shares and allocated shares for which
no timely voting instructions are received in the same proportion as shares for which the trustee has received proper voting instructions
from participants.
|
|
(3)
|
On a Schedule 13G filed on February 11, 2016, EJF Capital LLC, EJF Sidecar Fund, Series LLC – Series E and Emanuel J.
Friedman reported shared voting and dispositive power with respect to 325,000 shares of the Company’s common stock.
|
Stock Ownership of Management
The following table provides information
as of June 30, 2017 about the shares of Company common stock that may be considered to be beneficially owned by each director,
named executive officer listed in the Summary Compensation Table and all directors and executive officers of the Company as a group.
A person may be considered to beneficially own any shares of common stock over which he or she has, directly or indirectly, sole
or shared voting or investment power. Unless otherwise indicated, none of the shares listed are pledged as security, and each of
the named individuals has sole voting power and sole investment power with respect to the number of shares shown. Percentages are
based on 3,411,075 shares of Company common stock issued and outstanding as of June 30, 2017.
Name
|
|
Number
of Shares
Owned
|
|
|
Number
of Shares
That May Be
Acquired Within
60 Days By
Exercising
Options
|
|
|
Total
|
|
|
Percent
of
Common Stock
Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carol L. Coughlin
|
|
|
19,291
|
(1)
|
|
|
5,700
|
|
|
|
24,991
|
|
|
|
*
|
|
William E. Ballard
|
|
|
10,700
|
(2)
|
|
|
5,700
|
|
|
|
15,700
|
|
|
|
*
|
|
Joseph J. Bouffard
|
|
|
1,417
|
(3)
|
|
|
—
|
|
|
|
1,417
|
|
|
|
*
|
|
Robert A. DeAlmeida
|
|
|
82,575
|
(4)
|
|
|
44,400
|
|
|
|
126,975
|
|
|
|
3.72
|
%
|
James R. Farnum, Jr.
|
|
|
1,750
|
(5)
|
|
|
5,700
|
|
|
|
7,450
|
|
|
|
*
|
|
William W. Furr
|
|
|
14,500
|
(6)
|
|
|
5,700
|
|
|
|
20,200
|
|
|
|
*
|
|
Bobbi R. Macdonald
|
|
|
6,750
|
(7)
|
|
|
5,700
|
|
|
|
12,450
|
|
|
|
*
|
|
Jenny G. Morgan
|
|
|
2,750
|
(8)
|
|
|
—
|
|
|
|
2,750
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named
Executive Officers Who Are Not Also Directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John P. Marzullo
|
|
|
8,728
|
(9)
|
|
|
11,100
|
|
|
|
19,828
|
|
|
|
*
|
|
Ellen R. Fish
|
|
|
7,137
|
(10)
|
|
|
11,100
|
|
|
|
18,237
|
|
|
|
*
|
|
All
Directors and Executive Officers as a Group (10) persons
|
|
|
155,598
|
|
|
|
95,100
|
|
|
|
250,698
|
|
|
|
7.35
|
%
|
|
(1)
|
Includes 2,120 shares of unvested restricted stock, 9,021 shares held in an IRA, 5,370 shares held in a trust and 2,780 shares
directly owned.
|
|
(2)
|
Includes 1,800 shares of unvested restricted stock, 6,200
shares held in an IRA and 2,700 shares directly owned.
|
|
(3)
|
Includes 750 shares of unvested restricted stock and 667 shares directly owned.
|
|
(4)
|
Includes 12,501 shares held in the Bank’s 401(k) Plan, 17,800 shares held in a trust, 6,774 shares held through the ESOP,
10,000 shares of unvested restricted stock, 15,000 shares held in an IRA, 500 shares held by Mr. DeAlmeida’s daughter, and
20,000 shares directly owned.
|
|
(5)
|
Includes 300 shares of unvested restricted stock, 1,000 shares held in an IRA and 450 shares directly owned.
|
|
(6)
|
Includes 1,800 shares of unvested restricted stock, 10,000 shares held in an IRA and 2,700 shares directly owned.
|
|
(7)
|
Includes 250 shares held in a limited liability company, 1,800 shares of unvested restricted stock and 4,700 shares directly
owned.
|
|
(8)
|
Includes 750 shares of unvested restricted stock and 2,000 shares directly owned.
|
|
(9)
|
Includes 2,728 shares held through the ESOP, 2,400 shares of unvested restricted stock and 3,600 shares directly owned.
|
|
(10)
|
Includes 1,387 shares held through the ESOP, 3,300 shares of unvested restricted stock and 2,450 shares directly owned.
|
Section
16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange
Act of 1934 requires the Company’s executive officers and directors, and persons who own more than 10% of any registered
class of the Company’s equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange
Commission. Executive officers, directors and greater than 10% shareholders are required by regulation to furnish the Company with
copies of all Section 16(a) reports they file.
Based solely on the
Company’s review of copies of the reports it has received and written representations provided to it from the individuals
required to file the reports, the Company believes that each of its executive officers and directors has complied with applicable
reporting requirements for transactions in Hamilton Bancorp common stock during the year ended March 31, 2017.
Transactions
with Related Persons
The Sarbanes-Oxley Act of 2002 generally
prohibits us from making loans to our executive officers and directors, but it contains a specific exemption from such prohibition
for loans made by Hamilton Bank to our executive officers and directors in compliance with federal banking regulations. At March
31, 2017, all of our loans to directors and executive officers were made in the ordinary course of business, were made on substantially
the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not
related to Hamilton Bank, and did not involve more than the normal risk of collectability or present other unfavorable features.
These loans were performing according to their original terms at March 31, 2017, and were made in compliance with federal banking
regulations.
Shareholder
Communications
The Company encourages shareholder communications
to the Board of Directors and/or individual directors. All communications from shareholders should be addressed to Hamilton Bancorp,
Inc., 501 Fairmount Avenue, Suite 200, Towson, Maryland 21286. Communications to the Board of Directors should be in the care of
Robin L. Thiess, Corporate Secretary. Communications to individual directors should be sent to such director at the Company’s
address. Shareholders who wish to communicate with a Committee of the Board should send their communications to the care of the
Chair of the particular committee, with a copy to Bobbi R. Macdonald, the Chair of the Governance and Nominating Committee of the
Board of Directors. It is in the discretion of the Governance and Nominating Committee whether any communication sent to the full
Board should be brought before the full Board.
Miscellaneous
The Company will pay the cost of this proxy
solicitation. The Company will reimburse brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses
incurred by them in sending proxy materials to the beneficial owners of the Company. Additionally, directors, officers and other
employees of the Company may solicit proxies personally or by telephone without receiving additional compensation.
The Company’s Annual Report to Shareholders
has been included with this proxy statement. Any shareholder who has not received a copy of the Annual Report may obtain a copy
by writing to the
Corporate Secretary of the Company. The Annual Report is not
to be treated as part of the proxy solicitation material or as having been incorporated by reference into this proxy statement.
If you and others who share your address
own your shares in “street name,” your broker or other holder of record may be sending only one annual report and proxy
statement to your address. This practice, known as “householding,” is designed to reduce our printing and postage costs.
However, if a shareholder residing at such an address wishes to receive a separate annual report or proxy statement in the future,
he or she should contact the broker or other holder of record. If you own your shares in “street name” and are receiving
multiple copies of our annual report and proxy statement, you can request householding by contacting your broker or other holder
of record.
Whether or not you plan to attend the annual
meeting, please vote by marking, signing, dating and promptly returning the enclosed proxy card in the enclosed envelope.
|
BY ORDER OF THE BOARD OF DIRECTORS
|
|
|
|
|
|
|
|
Robin L. Thiess
|
|
Corporate Secretary
|
|
|
Towson, Maryland
|
|
July 21, 2017
|
|
Dear ESOP Participant:
I am forwarding you the
attached
green
Vote Authorization Form to convey your voting instructions to First Bankers Trust Services (the
“ESOP Trustee”) on the proposals to be presented at the Annual Meeting of Stockholders of Hamilton Bancorp, Inc.
(the “Company”) to be held on August 21, 2017. Also enclosed is a Notice and Proxy Statement for the Annual
Meeting of Stockholders and a copy of the Company’s Annual Report to Stockholders.
As a participant in the Hamilton
Bank Employee Stock Ownership Plan (the “ESOP”), you are entitled to direct the ESOP Trustee how to vote the shares
of Company common stock allocated to your account. To direct the ESOP Trustee how to vote your shares of Company common stock,
please complete and sign the attached green Vote Authorization Form and return it in the enclosed postage-paid envelope so that
it is received (not post marked) no later than
August 14, 2017
. Vote Authorization Forms received after August 14,
2017 will not be counted. Your voting instructions will not be revealed, directly or indirectly, to any employee or director of
the Company or Hamilton Bank.
The ESOP Trustee will vote the
unallocated shares of Company common stock held in the ESOP Trust in a manner calculated to most accurately reflect the voting
instructions received from ESOP participants, subject to its fiduciary duties under the Employee Retirement Income Security Act
of 1974, as amended. If you do not direct the ESOP Trustee how to vote your shares of Company common stock, the ESOP Trustee will
vote your shares in a manner calculated to most accurately reflect the instructions it receives from other participants, subject
to its fiduciary duties.
|
Sincerely,
|
|
|
|
|
|
The
Plan Administrator of
the
Hamilton Bank Employee
Stock
Ownership Plan
|
Dear 401(k) Plan Participant:
I
am forwarding you the attached
blue
Vote Authorization Form to convey your voting Stockholders and a copy of the
Company’s Annual Report to Stockholders.
As
a holder of Company common stock in the Hamilton Bancorp Stock Fund (the “Employer Stock Fund”) through the Hamilton
Bank 401(k) Profit Sharing Plan, you are entitled to direct the Employer Stock Fund Trustee how to vote the shares of Company
common stock credited to your account as of June 30, 2017, the record date for stockholders entitled to vote at the Annual Meeting.
To direct the Employer Stock Fund Trustee how to vote your shares held in the Employer Stock Fund, please complete and sign the
attached
blue
Vote Authorization Form and return it in the enclosed postage-paid envelope so that it is received
(not post marked) no later than
August 14, 2017
. Vote Authorization Forms received after August 14, 2017 will not
be counted. Your voting instructions will not be revealed, directly or indirectly, to any employee or director of the Company
or Hamilton Bank.
Shares
of Company common stock held in the Employer Stock Fund for which no directions are given or for which timely instructions were
not received will be voted by the Trustee as directed in the sole discretion of the Plan Administrator, subject to the determination
that such a vote is for the exclusive benefit of plan participants and beneficiaries. Abstentions will be similarly treated, but
solely with respect to the proposal for which an abstention is marked.
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Sincerely,
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The
Plan Administrator of
the
Hamilton Bank 401(k) Profit Sharing Plan
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Hamilton Bancorp, Inc. (NASDAQ:HBK)
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