DEF 14A of Riverview Bancorp Inc
Filed Jul 19, 2024 · FY20240000939057-24-000175
Vote Required to Approve Proposal 1: Election of Directors
Vote Required to Approve Proposal 1: Election of Directors Directors are elected by a plurality of the votes cast at the annual meeting by holders of Riverview common stock. Accordingly, the two nominees for election as directors who receive the highest number of votes actually cast will be elected. Pursuant to our Articles of Incorporation, stockholders are not permitted to cumulate their votes for the election of directors. Votes may be cast for or withheld from each nominee. Votes that are withheld and broker non-votes will have no effect on the outcome of the election because the nominees receiving the greatest number of votes will be elected. Our Board of Directors unanimously recommends that you vote FOR the election of each of its director nominees.
PROPOSAL 1 – ELECTION OF DIRECTORS
PROPOSAL 1 – ELECTION OF DIRECTORS Our Board of Directors consists of eight members and is divided into three classes. Approximately one-third of the directors are elected annually to serve for a three-year period or until their respective successors are elected and qualified. The table below sets forth information regarding each director of Riverview and each nominee for director. The Nominating and Governance Committee of the Board of Directors selects nominees for election as directors. Each of our nominees currently serves as a Riverview director. B. Nicole Sherman was appointed to the Board effective July 1, 2024 in connection with her hiring as the President and Chief Executive Officer of Riverview and Riverview Bank. Ms. Sherman was recommended by a third-party search firm retained by Riverview and Riverview Bank. Each nominee has consented to being named in this Proxy Statement and has agreed to serve if elected. If a nominee is unable to stand for election, the Board of Directors may either reduce the number of directors to be elected or select a substitute nominee. If a substitute nominee is selected, the proxy holders will vote your shares for the substitute nominee, unless you have withheld authority. At this time, we are not aware of any reason why a nominee might be unable to serve if elected. The Board of Directors recommends a vote FOR the election of Ms. Graham and Ms. Sherman, each for a three-year term.
PROPOSAL 1 – ELECTION OF DIRECTORS
| | Age as of | Year First Elected or | Term to | | Name | March 31, 2024 | Appointed Director | Expire | | | BOARD NOMINEE | | | | Stacey A. Graham | 72 | 2020 | 2027 (1) | | B. Nicole Sherman | 53 | 2024 | 2027 (1) | | | DIRECTORS CONTINUING IN OFFICE | | | | Patricia W. Eby | 72 | 2019 | 2025 | | Gerald L. Nies | 75 | 2009 | 2025 | | Valerie Moreno | 56 | 2021 | 2025 | | Bradley J. Carlson | 71 | 2014 | 2026 | | Bess R. Wills | 70 | 2010 | 2026 | | Larry A. Hoff | 72 | 2022 | 2026 |
PROPOSAL 1 – ELECTION OF DIRECTORS
___________
PROPOSAL 1 – ELECTION OF DIRECTORS
| (1) Assuming election or reelection. |
PROPOSAL 1 – ELECTION OF DIRECTORS
Set forth below is the principal occupation of each nominee for director and each director continuing in office, as well as a brief description of the qualifications, attributes, skills and areas of expertise of each nominee or director that led to the conclusion that the person should serve as a director of Riverview. All nominees and directors have held their present positions for at least five years unless otherwise indicated. Stacey A. Graham is retired. She is the owner of What’s Next? Strategies, a consulting firm she founded in January 2020 that provides strategic, business, marketing and fund-raising counsel to nonprofit companies. From March 2021 until January 2022, she served as the interim President and Chief Executive Officer of The Historic Trust. Ms. Graham served as the President of the Humane Society for Southwest Washington from 2013 to 2020. Prior to that, she was the Executive Vice President and Chief Strategy Officer of First Independent Bank from 2005 until 2012, when the Bank was acquired by Sterling Savings Bank. After the acquisition, Ms. Graham served as Sterling’s Senior Vice President and Merger Integration Officer through the end of 2012. She was a member of the Board of Directors of LightHouse Community Credit Union from June 2017 until November 2020. She is an active volunteer and is involved in many regional and local organizations. In addition, Ms. Graham has served on the boards of YWCA of Clark County, Nonprofit Network of Southwest Washington, Northwest Pilot Project, Friends of the Family, Marion County Red Cross and Children First for Oregon. In 2019, she received the Iris Award given to women in leadership in Southwest Washington. Ms. Graham’s expertise in community banking and marketing, as well as her extensive civic and community involvement, make her a valuable resource to the Board. B. Nicole Sherman was appointed as President and Chief Executive Officer of Riverview and Riverview Bank, effective July 1, 2024. Ms. Sherman has over 25 years of experience growing community banking organizations, having served as Chief Operating Officer for Utah First Credit Union, Salt Lake City, Utah, from January 2024 to June 2024, and as Chief Operating Officer for Numerica Credit Union, Spokane, Washington, from 2020 to 2023. Prior to that, Ms. Sherman worked at Columbia Bank, Tacoma, Washington, from 2011 to 2020, serving in positions of increasing responsibility, with her most recent position as Executive Vice President, Head of Retail Banking, Digital Integration, Small Business Lending. Ms. Sherman has a wide range of banking expertise, including retail and digital banking, commercial and business banking, and wealth management including private banking and financial services, as well as corporate marketing and communications, diversity, equity, inclusivity, belonging and accessibility (DEIBA) and community impact and philanthropy, all of which make her a valuable addition to the Board. Ms. Sherman also has experience with mergers and acquisitions and since 2003 has been a top-rated faculty member at Pacific Coast Banking School at the University of Washington Foster School of Business. Patricia W. Eby is Chair of the Board of Riverview Trust Company, a position she has held since 2022. Ms. Eby is a retired Certified Public Accountant. She retired on April 30, 2019 from Peterson & Associates P.S., a certified public accounting firm in Vancouver, Washington, having been affiliated with the firm for 41 years, including the past 19 years as President and sole owner. Ms. Eby has a B.S. in Accounting from Walla Walla College and a J.D. from Lewis & Clark Law School. She is active in Rotary, PeaceHealth Foundation and the Free Clinic. Ms. Eby’s extensive financial background, tax and accounting expertise, and business and personal contracts in the local market make her a valuable resource to the Board. Ms. Eby has been designated as the audit committee financial expert. Gerald L. Nies is Chairman of the Board of the Bank and of Riverview, positions he has held since August 2020. Mr. Nies is retired after 42 years in the insurance business. He was President and Chief Executive Officer of Nies Insurance Agency from 1985-2011 and then was Executive Vice President after selling the business to Brown & Brown, Inc. Currently, he is the owner of a small investment property management company. He attended Western Washington University and became a Chartered Property Casualty Underwriter. Mr. Nies is a past Board member of the Washington Independent Agents Association and past President of the National Agent Advisory Council for Safeco Insurance. He also served as one of the five Clark County Emergency Medical Services Administrative Board members, elected Council Member for the City of Battle Ground and Fire Chief for the City of Battle Ground. Mr. Nies’ diverse career has afforded him expertise in managing financial and operational aspects of business, as well as customer relations. Valerie Moreno has been the Chief Information Officer (“CIO”) and Chief Information Security Officer (“CISO”) at Reed College since February 2022. In this role, she is responsible for delivering information technology services, strategic planning and developing and maintaining security policies and standards. Prior to that, Ms. Moreno served as the CIO/CISO for Clark College, a position she held from January 2018 to February 2022. In that capacity, she served as the CIO/CISO liaison between Clark College and the Washington State Community and Technical College system. She also served as CISO lead for the IT Security Council for all 34 community and technical colleges. From May 2015 to January 2018, Ms. Moreno was the Director of IT Services for Portland Community College, and previously worked at Northwestern University, AT&T and Qwest. She holds a Bachelor of Science degree from DeVry University in Network and Communication Management. Ms. Moreno previously served on the boards of Centro Cultural, a nonprofit serving the Latino community of Portland, as well as the Chicago Women in Trades and Girls in the Game organizations. She also has prior connections to the PCC Foundation, Youth Job Center and the Hispanic Bell Management Association. Her expertise in technology and information security make her an important addition to the Board. Bradley J. Carlson is President and General Manager of Evergreen Memorial Gardens Cemetery, Funeral Chapel and Crematory, a position he has held since 1995. A graduate of Washington State University with a Bachelor of Arts in Communications and Advertising, Mr. Carlson spent over 10 years in the computer industry as a sales person and sales manager before joining the family business in 1987. He is a past Chair of the Board for the Association of Washington Business, which is a statewide business lobbying group with over 8,000 members. He is also past President of the Washington Cemetery, Cremation and Funeral Association, and served for 11 years on the Washington State Funeral Directors, Embalmers and Cemetery Board, as appointed by the Governor. Currently he is on the Board of Directors of the Fairmount Memorial Group in Spokane, Washington. His expertise in community banking and finance, as well as his knowledge of, and business and personal contacts in the local market, make him a valuable resource to the Board.
PROPOSAL 1 – ELECTION OF DIRECTORS
Bess R. Wills is General Manager/Co-Owner of Gresham Ford in Gresham, Oregon and is responsible for all matters of the day-to-day operation. She has over 30 years of experience in fiscal and corporate administration and management of businesses, including having managed a group of auto dealerships in Southern California. She is active with many business and community organizations and has received statewide recognition for her work with local charities. She has been recognized as Woman Executive of the Year by the Portland Business Journal, as well as received numerous other awards in the Automotive Industry. She is currently Chairperson of the Adventist Medical Foundation in Portland and has served on many other regional non-profit boards, as well as on the Audit Committee for Mt. Hood Community College. Ms. Wills’ career has given her strong leadership experience and knowledge of owning and operating a long-established business. In 2022, she was recognized as one of the six Ford dealers globally with the “Salute to Dealers Award” from Ford Motor Company and the Ford family. This recognition honors dealers who have relentless dedication to the betterment of their communities. In 2023, she was recognized as the Gresham Area Chamber of Commerce “Honoree of the Year” for her leadership in the greater Gresham area business community. Her business community involvement, as well as her competitive success in her industry, brings a broad set of skills to the Board. Larry A. Hoff is retired. He served as a State Representative for Washington’s 18th Legislative District from January 2019 until December 2022. Prior to that, Mr. Hoff served as Chief Executive Officer for Fibre Federal Credit Union from May 2001 to January 2017. Mr. Hoff served as the assistant ranking member of the House Consumer Protection and Business Committee. The committee considers an array of consumer protection issues, as well as the safety and soundness of the states banks and credit unions, the regulation of consumer credit and lending, and the regulation of securities and investments. He also served on the House Appropriations Committee and the House Labor and Workplace Standards Committee. Mr. Hoff previously served on the Board of Directors of the Doernbecher Children’s Hospital Foundation, St. Paul Lutheran Church, Vancouver Dawn Lions, Clark County Department of Community Services Advisory Board and the Longview Noon Rotary. He received his Bachelor of Science in Accounting from the University of North Dakota. Mr. Hoff’s expertise in community banking and finance, as well as his knowledge of consumer compliance and banking regulations, make him a valuable addition to the Board.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
AND CORPORATE GOVERNANCE MATTERS
AND CORPORATE GOVERNANCE MATTERS
Board of Directors
Board of Directors The Boards of Directors of Riverview and Riverview Bank conduct their business through Board and committee meetings. During the fiscal year ended March 31, 2024, the Riverview Board of Directors held 13 regular meetings and the Bank Board of Directors held 13 regular meetings. No director attended fewer than 75% of the total meetings of the Boards and committees on which he or she served during this period. The Board of Directors regularly meet in executive session, outside of the presence of the Chief Executive Officer and management.
DIRECTORS’ COMPENSATION
| Name | Fees Earned or Paid in Cash ($) | All Other Compensation ($) | Total ($) | | Gerald L. Nies | 76,900 | -- | 76,900 | | Bess R. Wills | 61,400 | -- | 61,400 | | Bradley Carlson | 48,400 | -- | 48,400 | | Patricia W. Eby | 53,700 | -- | 53,700 | | Stacey A. Graham | 56,700 | -- | 56,700 | | Valerie Moreno | 50,100 | -- | 50,100 | | Larry A. Hoff | 54,600 | -- | 54,600 | | Patrick Sheaffer (1) | 15,500 | -- | 15,500 | | ____________ | | | |
Summary Compensation Table
Summary Compensation Table The following table shows information regarding compensation earned by our named executive officers.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Stock Awards ($)(1) | Non-Equity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings ($)(2) | All Other Compensation ($)(3) | Total ($) | | Daniel D. Cox | 2024 | 292,431 | 49,438 | 39,449 | -- | 22,631 | 403,949 | | Acting President and Chief | 2023 | 240,536 | 47,082 | 99,353 | -- | 21,841 | 408,812 | | Executive Officer and Chief Credit Officer | | | | | | | | | David Lam | 2024 | 252,514 | 49,636 | 17,030 | -- | 22,009 | 341,189 | | Executive Vice President | 2023 | 245,540 | 48,658 | 87,623 | -- | 21,772 | 403,593 | | and Chief Financial Officer | | | | | | | | | C. Evan Sowers (4) | 2024 | 305,220 | 59,998 | 41,175 | -- | 13,197 | 419,590 | | President and Chief Executive | | | | | | | | | Officer of Riverview Trust | | | | | | | | | Company | | | | | | | | | Kevin J. Lycklama | 2024 | 248,225 | -- | -- | -- | 16,550 | 264,775 | | Former President and Chief | 2023 | 401,670 | 217,360 | 246,167 | 61 | 57,208 | 922,466 | | Executive Officer | | | | | | | |
Summary Compensation Table
____________
Summary Compensation Table
| (1) Represents the aggregate grant date value of awards, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, “Compensation–Stock Compensation.” For a discussion of valuation assumptions, see Note 11 of the Notes to Consolidated Financial Statements in Riverview’s Annual Report on Form 10-K for the year ended March 31, 2024. | | (2) Consists of above-market earnings on balances in the nonqualified deferred compensation plan; calculated based on the earnings adjustment in excess of 120 percent of the applicable federal long-term rate in effect on January 1st of each year. | | (3) The following table reflects the other compensation paid to our named executive officers in the year ended March 31, 2024. |
Summary Compensation Table
| Name | ESOP Contribution ($) | 401(k) Plan Contribution ($) | Life Insurance Premium ($) | Company Car Allowance ($) | Board Fees ($) | | Daniel D. Cox | 2,900 | 12,921 | 810 | 6,000 | -- | | David Lam | 2,900 | 12,299 | 810 | 6,000 | -- | | C. Evan Sowers | 51 | 6,336 | 810 | 6,000 | -- | | Kevin J. Lycklama | -- | 8,713 | 337 | 3,500 | 4,000 |
Summary Compensation Table
___________
Summary Compensation Table
| (4) Not a named executive officer in 2023. |
Summary Compensation Table
Employment and Change in Control Agreements. We have entered into employment and change in control agreements with each of the named executive officers other than Mr. Lycklama. The employment and change in control agreements expire on December 31, 2024 and are subject to annual renewal provisions. For the year ended March 31, 2024, the annual salaries of Messrs. Cox, Lam and Sowers were $319,299, $258,084 and $311,999, respectively. The salaries, which are paid by Riverview Bank, must be reviewed annually and may be increased at the discretion of the Board. The employment agreements also provide that the executives will participate in our annual incentive plan and receive all benefits that we provide to our employees generally. The employment agreements provide that compensation must be paid in the event of disability, termination without cause or termination by the executive for specified reasons. The change in control agreements provide that compensation must be paid in connection with a termination in the event of a change in control. These termination payments are described below under “Potential Payments Upon Termination.” Effective October 3, 2023, Riverview and Riverview Bank entered into a separation agreement and release with Kevin Lycklama, our former President and Chief Executive Officer, whose employment ended effective September 6, 2023. Pursuant to the agreement, Mr. Lycklama will continue to receive his monthly base salary for 12 months which will total $410,200 at the end of the 12 month period (less appliable taxes and other required deductions and withholdings) and certain other benefits; and Mr. Lycklama has agreed to, among other things, a customary, general waiver and release of claims, as well as post-employment covenants with respect to confidential information and non-solicitation of certain customers and employees. Compensation Program Elements. The Personnel/Compensation Committee focuses primarily on the following four components in forming the total compensation program for our executive officers: base salary; incentive compensation; deferred compensation; and long-term incentive compensation. The current compensation plans involve a combination of salary and incentive compensation to reward short-term performance, and deferred compensation and equity awards to reward long-term performance. Base Salary. The purpose of base salary is to create a secure base of cash compensation for our employees. Salary levels are designed to be competitive within the banking and financial services industries. In setting competitive salary levels, the Personnel/Compensation Committee regularly evaluates current salary levels by surveying similar institutions in Washington, Oregon and the Western Region of the United States. The survey analysis focuses primarily on asset size, nature of ownership, type of operation and other common factors. Specifically, the Committee reviews a peer group comprised of 23 similarly-sized regional banks ranging in asset size from $1 billion to $4.1 billion. In addition, the Committee reviews the Northwest Financial Industry Salary Survey prepared by Milliman, Inc. (“Milliman”) in association with the Washington Bankers Association and the Oregon Bankers Association, covering 73 Northwest financial organizations, and the Portland Area Cross-Industry Survey prepared by Milliman, which covers 75 major local employers. We analyze the results of the surveys by position, and the midpoint of each position/grade, as it compares to Riverview Bank. Midpoints of each grade for Riverview are compared to midpoints of survey data to determine if grade adjustments are necessary to remain competitive. The Personnel/Compensation Committee also considers the relevant position’s scope of responsibility, the executive’s experience and tenure, and Riverview’s overall financial performance. Incentive Compensation Program. We believe it is appropriate to provide individuals who are responsible for managing existing business and/or generating new business with competitive incentive compensation opportunities. Our incentive compensation plan is designed to provide for incentive compensation with established targets of up to 40% of salary for the Chief Executive Officer, 30% of salary for executive vice presidents and 10% to 30% of salary for senior management. Certain other officers may participate in the plan at a level of 10% to 30% of salary. By rewarding the attainment of goals, we truly utilize incentive for actual individual and corporate performance, and are competitive in the marketplace. We may utilize the services of compensation consultants, as needed, to remain fair and competitive in the future. The Personnel/Compensation Committee reviews and approves goals and incentive participation each year. Individual participant goals and performance modifier targets are communicated to participants in writing in the first quarter of the fiscal year to which the goals apply. Goals are measured against performance after the end of the fiscal year. Results are communicated the month following year-end for each participant. The performance modifier ranges from zero to a maximum of two times the salary at risk percentage. In making awards under the incentive compensation plan, the Personnel/Compensation Committee and Chief Executive Officer or executive officers, as appropriate, review quantifiable data versus a plan approved by the Board. The plan also provides for subjective evaluation of performance by the Committee and Chief Executive Officer or executive officers, as appropriate. Currently, performance measures include financial objectives such as profitability, asset quality, deposit growth and efficiency; and a non-financial objective based on individual personal goals. Participant salaries are recorded, with specific goals tied to Riverview’s goals for the year, and a percentage of compensation is noted as a target award opportunity. For example, if a named executive officer’s salary is $235,937 per year with a 30% target award opportunity, the opportunity for incentive compensation is $70,781 if goals are met at 100%. The target award opportunity is divided into several goals based on Riverview’s annual goals. A performance modifier is used to determine the percentage of the goal met. A goal partially met at 88% with a weight factor of 25% would look like this: $235,937 x 30% target award opportunity = $70,781
Summary Compensation Table
| Goal Weight | Performance Modifier | Result | | 0.25 | 0.88 | 0.22 |
Summary Compensation Table
$70,781 x 0.22 = $15,572 Performance goals are assessed annually and paid following the fiscal year end. For the fiscal year ended March 31, 2024 the performance goals for the named executive officers were as follows:
Summary Compensation Table
| Goal | Weighting | Total ($) | | Profitability | 30% | Pre-tax pre-provision net income of $13 million | | Asset quality | 15% | Classified asset ratio of 10% | | Deposit growth | 15% | Deposit growth of 15% | | Efficiency | 15% | Efficiency ratio of 65% | | Personal goals | 25% | Individual business plan goals |
Summary Compensation Table
Incentive compensation is awarded when Riverview achieves performance goals, subject to the discretion of the Personnel/Compensation Committee. Maximum incentive compensation is limited to no more than 20% of net income. For 2024, the minimum level of achievement for Riverview was net income of at least $10 million. Riverview did not achieve this goal, however, the Personnel/Compensation Committee exercised its discretion to award incentive compensation for several reasons. The Committee recognized that 2024 had been a challenging environment for financial services organizations and as a result of changes in Riverview’s senior executive management team, it was necessary to award incentive compensation to retain and attract the talented executive officers who are vital to Riverview’s success. In addition, the executive officers contributed to Riverview’s achievement of the asset quality goal. This goal was exceeded, resulting in full payout in this category. The Personnel/Compensation Committee also took into consideration the fact that incentive compensation is paid to senior managers other than the executive team and felt it was important to reward those employees for reaching their goals. Deferred Compensation. Officers at the level of senior vice president and above may elect to defer up to 50% of salary, with no income tax payable by the officer until benefits are received. This alternative is available through the non-qualified deferred compensation plan described below under “Potential Payments Upon Termination.” Long Term Incentive Compensation. We believe that performance-based pay opportunities and equity awards motivate high levels of performance, align the interests of the directors and officers with those of our stockholders and effectively recognize director and officer contributions to Riverview’s success. On July 26, 2017, our stockholders approved the 2017 Equity Incentive Plan. This plan provides for the award of stock options, restricted stock and restricted stock units. The 2017 Equity Incentive Plan is intended to provide us flexibility in our ability to motivate, recruit and retain the highly qualified officers and other key personnel who help Riverview meet its goals, as well as reward and encourage current directors and employees. The awards also serve to promote an executive’s continued service to Riverview by vesting over a period of several years. Awards are allocated based upon regulatory practices and policies, and the practices of other publicly-traded financial institutions as verified by external surveys. Awards are based upon the executive officers’ level of responsibility and expected contributions to Riverview and Riverview Bank. These factors differ from year to year, but are fundamentally driven by the Committee’s view on what is necessary to most effectively support Riverview’s business and leadership strategies. In connection with the 2017 Equity Incentive Plan, on April 18, 2018 the Committee established the 2018 Long-Term Incentive Plan, under which the Committee determined to grant both time-based and performance-based awards to each of the named executive officers. The time-based awards vest ratably over a three-year period. Awards of performance-based restricted stock (“performance shares”) are contingent on attaining pre-established performance goals. The Committee reviews and approves goals in consultation with management. The Committee established threshold, target and stretch performance levels and associated payouts. At the end of the performance period, resulting payouts are determined based on Riverview’s performance relative to the performance goals. The performance shares vest ratably over a two-year period after the end of the performance period. For fiscal year 2024, the performance goal was based on Riverview’s earnings per share. No changes were made to the Long-Term Incentive Plan. Stock ownership is also enhanced through participation in our ESOP, under which eligible employees receive an allocation of Riverview stock based on a percentage of eligible wages. The Board of Directors has appointed an administrative committee of Riverview officers to administer the ESOP and the 401(k) Plan, and the named executive officers are eligible to participate in both of these plans. On an annual basis, Riverview allocates shares to the ESOP, which applies to all eligible participants including the named executive officers. In fiscal year 2024, Riverview contributed 25,000 shares into the ESOP on behalf of eligible participants, and matched 100% of the first three percent and 50% of the next two percent of participants’ contributions into the 401(k) Plan each payroll period.
Outstanding Equity Awards
Outstanding Equity Awards The following information with respect to unvested stock awards as of March 31, 2024 is presented for the named executive officers. The named executive officers did not have any stock options outstanding at March 31, 2024.
Outstanding Equity Awards
| Name | Number of Shares or Units That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | | Daniel D. Cox | 19,321 (2) | 91,195 | | David Lam | 19,690 (3) | 92,937 | | C. Evan Sowers | 11,516 (4) | 54,356 | | Kevin J. Lycklama | -- | -- | | _____________ | | |
Outstanding Equity Awards
| (1) Amounts shown are calculated using the closing price of Riverview common stock of $4.72 on March 28, 2024, the last trading day of the 2024 fiscal year. | | (2) Reflects 1,626 shares granted on July 9, 2021, which vest ratably over 3 years from the date of grant; 4,878 shares which vest 50% on July 9, 2023 and 50% on July 9, 2024; 1,868 shares granted on July 8, 2022, which vest ratably over 3 years from the date of grant; 5,605 shares which vest 50% on July 8, 2024 and 50% on July 8, 2025; 2,372 shares granted on July 7, 2023, which vest ratably over 3 years from the date of grant; and 7,117 shares which vest 50% on July 7, 2025 and 50% on July 2026. | | (3) Reflects 1,681 shares granted on July 9, 2021, which vest ratably over 3 years from the date of grant; 5,042 shares which vest 50% on July 9, 2023 and 50% on July 9, 2024; 1,931 shares granted on July 8, 2022, which vest ratably over 3 years from the date of grant; 5,793 shares which vest 50% on July 8, 2024 and 50% on July 8, 2025; 2,382 shares granted on July 7, 2023, which vest ratably over 3 years from the date of grant; and 7,145 shares which vest 50% on July 7, 2025 and 50% on July 7, 2026. | | (4) Reflects 2,879 shares granted on July 7, 2023, which vest ratably over 3 years from the date of grant; 8,637 shares which vest 50% on July 7, 2025 and 50% on July 2026. |
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation The following information is presented with respect to plans that provide for the deferral of base salary compensation on a basis that is not tax-qualified in which the named executive officers participated in the year ended March 31, 2024.
Nonqualified Deferred Compensation
| Name | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY ($) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at FYE ($) | | Daniel D. Cox | -- | -- | -- | -- | -- | | David Lam | -- | -- | -- | -- | -- | | C. Evan Sowers | -- | -- | -- | -- | -- | | Kevin J. Lycklama | 30,000 | -- | 2,012 | 175,028 | -- |
Nonqualified Deferred Compensation
We currently offer a deferred compensation plan. Under the plan, officers at the level of senior vice president and above may elect to defer up to 50% of salary until the time specified by the officer (or upon separation from service or a change in control, if elected by the officer), with no income tax payable by the officer until benefits are received under the deferred compensation plan adopted by Riverview Bank. Once a deferral election is made for a year, it cannot be changed during that year except under limited circumstances, such as hardship or disability. We credit an earnings adjustment on assets under the plan based on the rate of the Bank’s average yield on assets for the prior year, less 100 basis points. For the calendar year ended December 31, 2023, this crediting rate was 2.98%. Under the plan, upon the time specified by the officer, or upon an earlier separation from service or a change in control, if elected by the officer when he commences participation in the plan, we will pay the officer or his designated beneficiaries his plan benefit in a lump sum or in annual installments over ten years, as elected by the officer. The payment election was made at the same time the officer makes his compensation deferral election. The payment election may be changed only if the change election is made sufficiently in advance, generally at least 12 months, and payments are delayed for at least five years. The payment will be based on an amount equal to the balance in the officer’s account immediately before the date on which benefits commence, plus interest, as measured above, on the unpaid balance if the payment is made in installments. At March 31, 2024, no named executive officer participated in the plan.
Potential Payments Upon Termination
Potential Payments Upon Termination We have entered into agreements with the named executive officers that provide for potential payments upon disability, termination and retirement. In addition, our equity plans also provide for potential payments upon termination. The following table shows, as of March 31, 2024, the value of potential payments and benefits following a termination of employment under a variety of scenarios.
Potential Payments Upon Termination
| | Disability ($) | Termination Without Cause by Employer or Termination for Good Reason by Employee ($) | Qualifying Termination Following Change in Control ($) | Normal Retirement ($) | Death ($) | | Daniel D. Cox | | | | | | | Employment Agreement | 115,879 | 334,789 | -- | -- | -- | | Change in Control Agreement | -- | -- | 1,095.795 | -- | -- | | Equity Plans | 91,195 | 91,195 | 91,195 | -- | 91,195 | | David Lam | | | | | | | Employment Agreement | 95,474 | 267,350 | -- | -- | -- | | Change in Control Agreement | -- | -- | 852,942 | -- | -- | | Equity Plans | 92,937 | 92,937 | 92,937 | -- | 92,937 | | C. Evan Sowers | | | | | | | Employment Agreement | 113,446 | 321,445 | -- | -- | -- | | Change in Control Agreement | -- | -- | 1,028,167 | -- | -- | | Equity Plans | 54,356 | 54,356 | 54,356 | -- | 54,356 | | Kevin J. Lycklama | | | | | | | Separation Agreement | -- | 410,950 | -- | -- | -- | | Equity Plans | -- | -- | -- | -- | -- |
Potential Payments Upon Termination
Employment Agreements. We have entered into employment agreements with certain of the named executive officers other than Mr. Lycklama. Each agreement provides for payments to the executive upon his disability or termination. If the executive becomes disabled during the term of his employment agreement, his employment will terminate. Riverview Bank must then pay the executive a lump sum payment equal to four months of base salary on the effective date of the termination. In addition, the Bank must provide continued coverage or pay a cash amount equal to the premiums that the Bank would have paid on the executive’s behalf for life, medical, dental and disability coverage. The disability payments will end on the earlier of: (1) the date of the executive’s full-time employment by another employer; (2) the executive’s death; or (3) 12 months. The employment agreements also provide for benefits in the event of the executive’s termination. If the executive’s employment is terminated for any reason other than a change in control or cause, or the executive terminates his employment for good reason (as defined in the agreement), the Bank must pay the executive a severance benefit in an aggregate amount equal to the sum of the following: (1) 12 months of executive’s base salary; (2) cash amount equal to the premiums that the Bank would have paid on the executive’s behalf for life, medical and disability coverage for 12 months; and (3) any bonus earned for a prior performance period but not yet paid. The employment agreements restrict each executive’s right to compete against Riverview or Riverview Bank for a one-year period following termination of employment. Change in Control Agreements. We have entered into change in control agreements with each of the named executive officers (other than Mr. Lycklama) that provide for severance payments and other benefits in the event of certain terminations of employment in connection with a change in control of Riverview. If within 24 months after a change in control, the executive’s employment is terminated other than for cause, or the executive terminates his employment for good reason, Riverview must pay a lump sum severance payment of the following: (1) 30 months of executive’s base salary and target annual incentive compensation (36 months for Mr. Lycklama); (2) prorated incentive compensation for the fiscal year in which the termination occurs based on the executive’s target annual incentive compensation through the month ended before the date of termination; (3) any bonus earned for a prior performance period but not yet paid; and (4) accelerated vesting to 100% on all stock options or restricted stock issued to the executive. The change in control agreements also require continued coverage under life, medical and disability insurance for 18 months, or a lump sum equal to the premiums that would have been paid if continued coverage is not possible. The change in control agreements contain provisions requiring reduction of any payments that would be deemed to constitute an excess parachute payment under Section 280G of the Internal Revenue Code. Separation Agreement. In 2023, we entered into a separation agreement and release with Kevin Lycklama, our former President and Chief Executive Officer. Pursuant to the agreement, Mr. Lycklama will continue to receive his monthly base salary for 12 months which will total $410,200 at the end of the 12-month period (less appliable taxes and other required deductions and withholdings) and certain other benefits. Payments are made monthly and began in October 2023. Equity Plans. Our 2003 Stock Option Plan provides for accelerated vesting of awards in the event of a change in control. Specifically, if a tender offer or exchange offer for Riverview’s shares is commenced, or if a change in control occurs, unless the committee administering the plan has provided otherwise in the award agreement, all options granted and not fully exercisable shall become exercisable in full upon the happening of that event. The named executive officers do not currently have any options that are not fully exercisable under the 2003 Stock Option Plan. The 2017 Equity Incentive Plan provides that unvested awards will become exercisable or vest in connection with a change in control only if the participant experiences an involuntary termination other than for cause within 365 days following the change in control event or the acquiring company does not either assume the outstanding award or replace the outstanding award with an equivalently-valued award.
Pay Versus Performance
Pay Versus Performance In August 2022 pursuant to a mandate of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), the SEC adopted Item 402(v) of Regulation S-K, requiring information about the relationship between executive compensation actually paid (“CAP”) to our named executive officers and Riverview’s financial performance.
Pay Versus Performance
| Year | Summary Compensa- tion Table Total for PEO (Cox) ($)(1) | Compensa- tion Actually Paid to PEO (Cox) ($)(2) | Summary Compensa- tion Table Total for PEO (Lycklama) ($)(1) | Compensa- tion Actually Paid to PEO (Lycklama) ($)(1) | Average Summary Compensa- tion Table Total for Non-PEO NEOs ($)(1) | Average Compensa- tion Actually Paid to Non-PEO NEOs ($)(2) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return ($)(3) | Net Income ($) | | 2024 | 403,949 | 382,111 | 264,775 | 264,775 | 380,390 | 362,957 | (22.0) | 3,799,000 | | 2023 | -- | -- | 922,466 | 620,593 | 406,203 | 340,870 | (17.7) | 18,069,000 | | 2022 | -- | -- | 949,914 | 1,097,401 | 459,969 | 471,779 | 12.2 | 21,820,000 |
Pay Versus Performance
| (1) During the year ended March 31, 2024, Daniel D. Cox and Kevin J. Lycklama each served as our principal executive officer (“PEO”). For 2023 and 2022, Kevin J. Lycklama served as our PEO. The non-PEO named executive officers (non-PEO NEOs) for 2024 are C. Evan Sowers and David Lam, for 2023 are Daniel D. Cox and David Lam, and for 2022 are Christopher P. Cline, David Lam and Kim J. Capeloto. |
Pay Versus Performance
| (2) The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by Riverview’s NEOs. These amounts reflect the Summary Compensation Table totals with certain adjustments. Adjustments for 2024 are as follows: |
Pay Versus Performance
| Name | PEO (Cox) ($) | PEO (Lycklama) ($) | Average of Non-PEO NEOs ($) | | Summary Compensation Table total | 403,949 | 264,775 | 380,390 | | Deduction for amounts reported under the Stock Awards column in the Summary Compensation Table | 49,438 | -- | 54,817 | | Year end value of equity awards granted during year that remain unvested as of year-end | 44,788 | -- | 49,662 | | Year over year change in fair value of outstanding and unvested equity awards | (12,016) | -- | (9,674) | | Year over year change in fair value of equity awards granted in prior years and vested in the year | (5,172) | -- | (2,604) | | Compensation Actually Paid | 382,111 | 264,775 | 362,957 |
Pay Versus Performance
| (3) Total Shareholder Return assumes $100 invested on March 31, 2021, with all dividends reinvested. |
Pay Versus Performance
The following chart illustrates the relationship between the compensation actually paid to our named executive offers, calculated in accordance with Item 402(v) of Regulation S-K, and Riverview’s total shareholder returns on a cumulative basis, assuming an investment of $100 on March 31, 2021 and all dividends reinvested. and net income.