DEF 14A of Hanover Bancorp, Inc. /MD
Filed Feb 9, 2024 · FY20230001104659-24-012954
PROPOSAL 1 - ELECTION OF DIRECTORS
PROPOSAL 1 - ELECTION OF DIRECTORS The Certificate of Incorporation and Bylaws of the Company provide that the number of Directors shall not be less than one (1) and permit the exact number to be determined from time to time by the Board of Directors. There are currently nine (9) members of our Board of Directors. Our Bylaws provide for a Board of Directors divided into three (3) classes. For 2024, there are three (3) nominees for Director. There are no arrangements or understanding between any director, or nominee for directorship, pursuant to which such director or nominee was selected as a director or nominee. The Board of Directors of the Company has nominated for election to the Board of Directors the persons named below, each of whom currently serves as a member of the Board. If elected, each will serve a term of three years, and until his or her replacement has been duly elected and qualified. The Board of Directors has no reason to believe that any of the nominees will be unavailable to serve if elected. The following table sets forth the names, ages, principal occupations, and business experience for all directors, including the nominees, as well as their prior service on the Board, if any. Unless otherwise indicated, principal occupations shown for each Director have extended for five or more years.
NOMINEES FOR ELECTION
NOMINEES FOR ELECTION
NOMINEES FOR ELECTION
| Name and Position with the Company | Age | Principal Occupation for Past Five Years | Term of Office Since – Expires (1) | | Varkey Abraham, Director | 70 | Owner of Shoe Wholesale/Retail Company and Real Estate Investor | 2008 – 2024 | | Ahron H. Haspel, Director | 80 | Attorney and Certified Public Accountant, Retired Partner of the law firm of Jones Day and KPMG, LLP | 2012 – 2024 | | Robert Golden, Director | 60 | Founder and CEO of TREO Brands and President of Golden Properties Group LLC | 2014 – 2024 |
DIRECTORS WHOSE TERMS CONTINUE BEYOND THE 2023 ANNUAL MEETING
DIRECTORS WHOSE TERMS CONTINUE BEYOND THE 2023 ANNUAL MEETING
DIRECTORS WHOSE TERMS CONTINUE BEYOND THE 2023 ANNUAL MEETING
| Name and Position with the Company | Age | Principal Occupation for Past Five Years | Term of Office Since – Expires (1) | | Michael P. Puorro, Chairman and CEO | 64 | Chairman and CEO of the Company and the Bank | 2012 – 2025 | | Metin Negrin, Director | 57 | Founder, Owner and President of Lexin Capital, a real estate investment, redevelopment and management company, Former Chairman of Savoy Bank | 2021 – 2025 | | Elena Sisti, Director | 68 | Managing Partner of Durel Associates, AGEM LLC, and Riviera Development Corporation, real estate investment and management companies in New Jersey, Founder and Former Director of Savoy Bank | 2021 – 2025 | | Michael Katz, Director | 85 | Physician, Former President of Ear Nose and Throat Associates of New York, P.C. | 2012 – 2026 | | John R. Sorrenti, Director | 73 | Architect, Founder and President of JRS Architect, P.C. | 2012 – 2026 | | Philip Okun, Director | 69 | Former President of Polimeni International and President of Skyline Management; Founding Partner of Realty Connect USA, LLC | 2008 – 2026 |
DIRECTORS WHOSE TERMS CONTINUE BEYOND THE 2023 ANNUAL MEETING
| (1) Includes service on the Bank’s Board of Directors |
DIRECTORS WHOSE TERMS CONTINUE BEYOND THE 2023 ANNUAL MEETING
There are no arrangements between any of our directors and any other individuals pursuant to which any director was selected as a director. No director is related to any other director or executive officer by blood, marriage, or adoption. No director is also a director of a company having a class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended, or subject to the requirements of Section 15(d) of such Act or any company registered as an investment company under the Investment Company Act of 1940, except for Ahron H. Haspel, who serves as a Trustee of the North European Oil Royalty Trust. The Company encourages all directors to participate in the Company’s Annual Meeting. Each then current member of the Company’s Board of Directors participated in the Company’s 2023 virtual Annual Meeting of Shareholders with the exception of Messrs. Abraham, Golden, Katz, and Negrin. IN ORDER TO BE ELECTED TO A TERM ON THE BOARD OF DIRECTORS, DIRECTORS MUST RECEIVE THE AFFIRMATIVE VOTE OF A PLURALITY OF THE VOTES CAST AT THE ANNUAL MEETING. SEE “WHAT VOTE IS REQUIRED TO ADOPT THE PROPOSALS AT THE ANNUAL MEETING?” ABOVE. THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” THE NOMINEES SET FORTH ABOVE.
CERTAIN INFORMATION ABOUT THE BOARD OF DIRECTORS
CERTAIN INFORMATION ABOUT THE BOARD OF DIRECTORS The following is a brief discussion of the business and banking background and experience of our directors for at least the past five years. With respect to directors, the biographies also contain information regarding the person’s experience, qualifications, attributes or skills that led to the conclusion that the person should serve as a director. Unless otherwise indicated, senior officers have held their positions for the past five years. Michael P. Puorro, Chairman and Chief Executive Officer — Mr. Puorro has over thirty-five years of banking experience, with over thirty years as a senior executive. Prior to joining Hanover, Mr. Puorro was the Co-Chairman and President of Madison National Bancorp, Inc. and Madison National Bank where he was a leading member of Madison’s entrepreneurial founding group and executive management team. Prior to this, Mr. Puorro served as Executive Vice President and Chief Financial Officer of New York Community Bancorp, Inc. and as Executive Vice President and Chief Financial Officer of Roslyn Bancorp, Inc. Mr. Puorro is a former Board member of the New York Bankers Association. Mr. Puorro earned a Bachelor of Business Administration degree in Accounting from Dowling College’s School of Professional Accountancy, and in addition to being a Certified Public Accountant, is a member of the American Institute of Certified Public Accountants and the New York State Society of Certified Public Accountants. In May 2012, Mr. Puorro received an Honorary Doctorate Degree in Human Letters from Dowling College. Through his business contacts in our market, Mr. Puorro has been able to attract customers and investors, and his financial expertise is of great value to the Board. In addition, as our senior executive officer, his insight on our operations is invaluable to the Board. Robert Golden, Lead Independent Director — Mr. Golden is the Founder and CEO of TREO Brands, an innovative beverage company focused on plant-based hydration. Mr. Golden is also President of Golden Properties Group LLC which is an active investor in commercial office buildings and retail and residential properties in New York City and the surrounding areas, as well as throughout the Midwest. Prior to forming Golden Properties Group LLC, Mr. Golden was the owner of one of the largest cleaning and security companies in New York (Golden Mark). His company serviced mainly large office buildings and financial institutions. Mr. Golden is on the Board of Directors for Volunteers of America in New York, he is currently on the Nassau County Police Department Foundation Advisory Board, and is also a contributor to many charitable organizations. Mr. Golden attended the University of Bridgeport. Through his business activities, Mr. Golden has a strong sense of business conditions in our market that is invaluable to the Board Varkey Abraham, Director — Mr. Abraham is a founding director of Hanover Community Bank. Mr. Abraham is the principal owner and Chief Executive Officer of the Eric’s Shoe Stores chain in the United States, Abraham and Sons Leather Company and VA Smith Shoe Company International. Further, Mr. Abraham is a real estate investor, serves as Chairman of the Pravasi television channel. Mr. Abraham is the former two-term President of the Indo-American Malayalee Chamber of Commerce and also served as a Sabha Council Member for Saint Thomas Mar Thoma Church. Mr. Abraham brings to the Board significant management expertise and leadership skills, as well as insight into the experience of locally owned businesses. Ahron H. Haspel, Director — Mr. Haspel is an active investor and an attorney and CPA specializing in the tax area. He retired from Jones Day in January 2011 where he served as a partner specializing in the corporate tax and mergers and acquisitions area. Prior to joining Jones Day in February 2005, Mr. Haspel was a partner at KPMG and served on its Board of Directors and in a number of leadership positions. While on the Board of KPMG, Mr. Haspel served on the firm’s Audit, Compensation and Strategic Planning Committees. Mr. Haspel serves as a member of the Board and Trustee of North European Oil Royalty Trust (NRT) a New York Stock Exchange listed company and serves as Chairman of NRT’s Audit and Compensation Committees. Mr. Haspel is a qualified audit committee financial expert for SEC purposes. He earned a Bachelor of Science degree in Accounting from Long Island University, his Juris Doctor from Brooklyn Law School and his LLM degree in Taxation from New York University School of Law. He is a Certified Public Accountant and a member of the New York Bar. He is also a member of the Board of a number of philanthropic organizations. Mr. Haspel’s extensive legal and accounting background and understanding of finance, and experience with public companies, proves invaluable to the Board. Michael Katz, Director — Dr. Katz is an active financial institution investor and highly experienced and accomplished board-certified otolaryngologist. Dr. Katz has been in practice with Ear, Nose, and Throat Associates of New York, P.C. since 1969. For over 35 years, he served as President of the group practice which is one of the largest multi-specialty practices of its kind with offices located throughout Queens, Nassau, Suffolk, and the Bronx. While serving as President, Dr. Katz oversaw a growing practice of over 200 employees in multiple locations including over 30 physicians and physician assistants/nurse practitioners, specializing in otolaryngology, allergy & immunology, facial plastic and reconstructive surgery, audiology, sleep disorders and speech and swallowing disorders. Dr. Katz earned his undergraduate degree from Columbia University and his medical degree from the State University of New York, Downstate. He went on to complete general surgery training at Kings County Hospital in New York and then did his residency in otolaryngology at Manhattan Eye, Ear and Throat Hospital. He is board certified by the American Board of Otolaryngology. Dr. Katz was Chief of Ear, Nose and Throat (“ENT”) at Flushing Hospital and was previously Chief of ENT at New York Hospital Medical Center of Queens. Apart from the medical field, Dr. Katz serves as Co-Chairman of the Fisher Island Condo Board #2, is highly active in environmental issues and is a large contributor to the UJA-Federation of NY. Dr. Katz’s business development capabilities in the Long Island marketplace led the Board to conclude that Dr. Katz should serve as a director. Metin Negrin, Director — Mr. Negrin is the Founder and President of Lexin Capital, a private investment, development and management company that manages its own capital along with that of a global client base and makes direct investments in real estate. The firm has real estate investments in New York City as well as Florida, Maryland, Arizona and Mexico. Mr. Negrin was also the Chairman of Savoy Bank prior to its acquisition by Hanover. In addition, Mr. Negrin is the President of the Board of the Allen-Stevenson School, a boys Kindergarten-8 day school of 400 students on the Upper East Side of Manhattan, as well as Treasurer and Executive Committee Board Member of the American Turkish Society. A graduate of Deutsche Schule High School in Istanbul, Mr. Negrin holds a BS in Economics and an MBA in Finance from NYU Stern School of Business. Mr. Negrin’s management and business experience led the Board to conclude that Mr. Negrin should serve as a director.
CERTAIN INFORMATION ABOUT THE BOARD OF DIRECTORS
Philip Okun, Director — Mr. Okun is a founding director of Hanover Community Bank. Additionally, he has been Chairman of the Loan Committee since the Bank’s inception. Mr. Okun has worked in the commercial real estate industry for more than 30 years. As President of Polimeni International, Mr. Okun was responsible for the Company’s development program in Poland, having completed numerous shopping centers throughout the country. As President of its affiliate company, Skyline Management Corp., he was responsible for the management of a three-million square foot portfolio of office buildings and shopping centers on Long Island and the east coast. Further, his experience includes redevelopment, leasing, financing, and brokerage. Mr. Okun is a founding partner of Realty Connect USA, LLC. Realty Connect currently has over 800 sales agents in 14 offices on Long Island and Queens. Mr. Okun is a licensed real estate broker in New York and Florida. He is author of the book “Make Money on Main Street” and a licensed sea captain. Mr. Okun earned a Bachelor of Arts degree in education from Fairleigh Dickinson University. Mr. Okun’s experience in the commercial real estate market led the Board to conclude that Mr. Okun should serve as a director. Elena Sisti, Director — Ms. Sisti was the founder and Chairperson Emeritus of Savoy Bank, only the second New York bank established by a woman. Ms. Sisti founded Savoy Bank following a 25-year career at Citibank, and she remained as a Board member of Savoy until its acquisition by Hanover. Ms. Sisti is the Managing Partner of a New Jersey based real estate investment and management firm started by her family. She received a B.A. in Economics from Barnard College, Columbia University. Ms. Sisti immigrated to the United States in 1963 from Caracas, Venezuela. Ms. Sisti’s experience in banking and financial services, along with her knowledge of our local community will assist us as we continue to grow. John R. Sorrenti, Director — Mr. Sorrenti, FAIA, is Founder and President of JRS Architect, P.C., a full service architectural, interior design and preservation firm serving the greater New York City region. Mr. Sorrenti has served on many committees both for the American Institute of Architects (AIA) and the National Council of Architectural Registration Board (NCARB). In 1989, Mr. Sorrenti served as President of the AIA Long Island Chapter, served as the New York State President in 1994 and in 1997, he served as the National Vice President. He also served as Regional Director for NCARB’s National Board. Mr. Sorrenti chaired the AIA/College of Fellows’ Regional Representative Program nationally for six years and in 2016 was the Chancellor for the College of Fellows. He remains on the New York State Education Board of Architecture as an Extended Member, previously serving as Chair. He is currently the Chair of North Hempstead’s Landmarks Commission. In 1996, Mr. Sorrenti received his Fellowship from the American Institute of Architects which only 3% of the AIA membership have achieved. In 1991, Mr. Sorrenti helped to form the guidelines for the Americans with Disabilities Act (ADA) and in 1993 assisted with the New York City ADA Code. In 2008, Mr. Sorrenti was presented with the Lifetime Achievement Award from the AIA Long Island Chapter and in 2017 received their Community Service Honor Award. Mr. Sorrenti earned a Bachelor of Architecture degree from New York Institute of Technology (NYIT), a Masters in Architecture from Ohio University, and an MBA from NYIT. Mr. Sorrenti provides the Board with significant leadership and managerial experience, particularly from the perspective of a locally based business enterprise.
Compensation Design Principles and Governance Best Practices
| o | Pay for Performance — We provide a significant portion of pay based on performance (short- and long-term) |
Compensation Design Principles and Governance Best Practices
| o | Sound Risk Management — We discourage excessive risk taking and have designed our incentive plans with appropriate risk-mitigating features |
Compensation Design Principles and Governance Best Practices
| o | Competitive Benchmarking — We benchmark our compensation practices to ensure executive compensation is consistent with the current market |
Compensation Design Principles and Governance Best Practices
| o | Tax Gross-Ups — We do not provide excise tax gross-ups on benefits or in change-in-control agreements |
Compensation Design Principles and Governance Best Practices
| o | Stock Option Repricing — Our equity plans do not permit repricing of stock options that are out-of-the-money |
Executive Compensation Objectives and Policies
| Compensation Component | Purpose/Objective | | Base Salary | ● Provides a competitive level of fixed income based on role, experience and individual performance; target market median | | Annual Incentive Plan | ● Motivates and rewards executives for performance on key financial, operational and individual objectives in support of our annual business plan and broader corporate strategies ● Rewards vary based on performance (higher performance will result in above market median pay; lower performance will result in below market median pay) | | Long-Term Incentive Plan | ● Aligns executives’ interests with those of shareholders through equity-based compensation ● Encourages retention through multiple year vesting ● Provides that a component of the equity-based compensation is performance based, contingent upon the Company attaining certain performance metrics | | Other Benefits | ● Provides a base level of competitive benefits for executive talent | | Employment Agreements/Severance & CIC Agreements | ● Provides employment security to key executives ● Focuses executives on Company performance and transactions that are in the best interests of shareholders, regardless of the impact such transactions may have on the executive’s employment |
Peer Group & Competitive Benchmarking
Peer Group & Competitive Benchmarking The Compensation Committee typically conducts benchmark reviews in connection with setting base salary levels and total compensation. The Committee engaged its independent consultant to update the peer group and competitive benchmarking for consideration in setting compensation and in structuring executive incentive programs going forward. The updated and revised peer group consists of 18 publicly traded financial institutions with a median asset size of $2.3 billion as of March 2023 and which are headquartered in the Mid-Atlantic and Northeast regions. 2023 Executive Compensation Program and Pay Decisions:
Annual Incentive
Annual Incentive An important element of our performance-based pay program is our Executive Annual Incentive Plan, which provides cash incentives based on attaining pre-established goals including Hanover’s pre-tax, pre-provision net revenue, pre-tax, pre-provision return on average assets, net loan growth and net charge-off ratio, based on Hanover originated loans (i.e., excluding loans acquired in the Chinatown or Savoy transactions). As discussed above, these goals are measured on a calendar year basis. Each participant has a target incentive opportunity expressed as a percentage of base salary, although actual payouts can range from a 50% payout at threshold performance on each performance metric to 150% of target for stretch performance on each performance metric, with no payout if a performance metric is below threshold. Hanover’s financial performance in 2023 resulted in performance at 45% of target for all performance metrics in the aggregate. In addition, in setting the bonus payments, the Committee took into account the attainment of corporate goals by Hanover, including:
Annual Incentive
| • | Successfully completed existing initiatives, including launch of online consumer account opening and opening of Hauppauge branch and office facility; |
Annual Incentive
| • | Continued national expansion of SBA Loan Program; |
Annual Incentive
| • | Progress on core deposit generation despite industry-wide disruption tied to large bank failures; |
Annual Incentive
| • | Growth of C & I loans with corresponding deposit generation; |
Annual Incentive
| • | Finalization and implementation of the Bank’s Project Management Office; |
Annual Incentive
| • | Expanded the Bank’s “brand” through the use of an enhanced website, social media presence and community and business outreach; and |
Annual Incentive
| • | Maintained regulatory standing |
Annual Incentive
In determining the performance of each NEO, the Committee considered its assessment of the Chief Executive Officer’s performance and the Chief Executive Officer’s evaluation of each NEO’s performance. The Committee also took into account the economic uncertainties discussed above in the discussion of base salaries, including inflation, rising interest rates and the risk of recession, and so the Committee approved payouts for 2023 at 45% of the target level for all NEO’s. Set forth below are some of the accomplishments considered by the Committee in determining the individual component:
Annual Incentive
| • | Enhanced our C&I Lending Platform – successfully opened our Hauppauge Business Banking Center, which serves as the nexus of the Bank’s commercial banking activities, and generated $36.1 million in deposits and originated $88.7 million in C&I loans through September 30, 2023. |
Annual Incentive
| • | Continued to Expand our government guaranteed lending – continued the nationwide expansion of our SBA lending program with the hiring of business development and support personnel based in Florida, Georgia, Kansas, Pennsylvania and Texas. |
Annual Incentive
| • | Maintain Liquidity and the Deposit Portfolio Despite Industry-wide Disruption – maintaining Hanover’s liquidity and stabilizing the deposit portfolio during the disruption earlier this year caused by the failures of Silicon Valley Bank, Signature Bank and First Republic Bank, even though the liquidity negatively impacted our net interest margin. |
Annual Incentive
As a result, the Committee approved the following incentive awards:
Annual Incentive
| Executive | 2023 Target Annual Incentive Award | 2023 Actual Annual Incentive Award | | Michael P. Puorro | $294,075 | $132,334 | | McClelland Wilcox | $161,250 | $72,563 | | Kevin Corbett | $81,250 | $36,563 |
Annual Incentive
However, in reviewing the performance of the management team, the Committee did not believe that the payouts discussed above under the terms of the Executive Annual Incentive Plan fully reflected the contributions made by management. The performance targets for 2023 under the Executive Annual Incentive Plan were set in early 2023, and did not fully reflect the impact of the Federal Reserve’s aggressive rate increases and the related impact on the Bank’s net interest margin and borrower loan demand, or the industry-wide impact of the failures of Silicon Valley Bank, Signature Bank and First Republic Bank, and the particular impact on smaller institutions such as the Bank, and the related need to sacrifice yield and margin for liquidity. In light of the forgoing, the Committee approved the following supplemental cash bonuses for our NEO’s:
Annual Incentive
| Executive | Supplemental 2023 Cash Bonus | | Michael P. Puorro | $73,519 | | McClelland Wilcox | $40,313 | | Kevin Corbett | $20,313 |
Long-Term Incentives – Equity-Based Awards
Long-Term Incentives – Equity-Based Awards The Company’s equity incentive program is designed to be performance-based, align executives with shareholder interests and promote the long-term success of the Company. Grants are based upon the Committee’s view of the individual achievements of the NEO’s and are made in the form of shares of Hanover common stock, subject to time vesting requirements. Since 2022 all shares granted have been subject to a five -year vesting requirement. For 2023, grants were approved by the Committee as follows:
Long-Term Incentives – Equity-Based Awards
| Executive | Shares Granted | | Michael P. Puorro | 11,300 | | McClelland Wilcox | 7,745 | | Kevin Corbett | 2,810 |
Long-Term Incentives – Equity-Based Awards
Grants under the long-term incentive program are made under the Company’s 2018 Equity Compensation Plan or the 2021 Equity Compensation Plan.
Employment Agreements
Employment Agreements The Company is party to employment agreements with several executives. Those agreements are described elsewhere in this Proxy Statement under “Executive Compensation.”
Summary Compensation Table
Summary Compensation Table The table below sets forth information concerning the compensation of our Chief Executive Officer and our next two most highly compensated executive officers (the “NEO’s”) for the fiscal year ended September 30, 2023: Summary Compensation Table
Summary Compensation Table
| | | Salary | Bonus | Stock Awards (1) | Option Awards | Non-equity incentive plan com- pensation | Change in pension value and non- qualified deferred compen- sation earnings | All other compen- sation (2) | Total | | Name and Principal Position | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | | Michael P. Puorro, Chairman and Chief Executive Officer | 2023 | 625,000 | - | 187,483 | - | 281,250 | - | 46,712 | 1,140,445 | | | 2022 | 625,000 | - | 736,462 | - | 391,500 | - | 39,292 | 1,792,254 | | | 2021 | 570,769 | - | 82,500 | - | 247,500 | - | 36,662 | 937,431 | | McClelland Wilcox, President (3) | 2023 | 525,000 | - | 131,248 | - | 157,500 | - | 25,004 | 838,752 | | | 2022 | 525,000 | - | 517,498 | - | 222,750 | - | 21,716 | 1,286,964 | | | 2021 | 156,115 | - | - | - | - | - | 5,600 | 161,715 | | Kevin Corbett, Executive Vice President and Chief Credit Officer | 2023 | 315,000 | - | 47,243 | - | 78,750 | - | 9,208 | 450,201 | | | 2022 | 315,000 | - | 186,764 | - | 112,500 | - | 15,047 | 629,311 | | | 2021 | 295,385 | - | 21,384 | - | 66,500 | - | 14,892 | 398,161 |
Summary Compensation Table
| (1) Stock awards reported reflect the grant date fair value of restricted stock awards and performance awards under Accounting Standards Codification Topic No. 718, Compensation-Stock Compensation (“ASC Topic 718”). | | (2) All other compensation consists of 401(k) matching contributions, automobile allowance, and life insurance premiums. | | (3) Mr. Wilcox commenced employment on May 26, 2021, upon the consummation of the acquisition of Savoy Bank. |
Summary Compensation Table
| Outstanding Equity Awards at Fiscal Year-End | | | | | | | | | | | | Option Awards | | | | | Stock Awards | | | | | | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options(#) un-exercisable | Equity incentive plan awards: Number of securities underlying unexercised unearned options | Option exercise price | Option expiration date | Number of shares or units of stock that have not vested | Market value of shares or units of stock that have not vested | Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested | | Name | (#) | (#) | (#) | ($) | (#) | (#) | ($) | (#) | (#) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | | Michael P. Puorro | 71,840 | — | — | 10.00 | 10/1/2024 | 14,257 | 257,909 | 39,382 | 712,240 | | McClelland Wilcox | 29,900 | — | — | 4.46 | 2/18/2024 | 9,978 | 180,502 | 26,760 | 484,088 | | McClelland Wilcox | 42,000 | — | — | 6.25 | 7/1/2025 | — | — | — | — | | Kevin Corbett | — | — | — | — | — | 3,592 | 64,979 | 9,973 | 180,412 |
Summary Compensation Table
We are party to employment agreements with each of Messrs. Puorro, Chairman and Chief Executive Officer, and McClelland Wilcox, President. Mr. Puorro’s agreement has a term of three years and renews for an additional twelve-month period each year. Mr. Puorro is to receive a base salary of at least $364,375, subject to annual adjustment. During the fiscal year ended September 30, 2023, he received a base salary of $625,000, although it was retroactively increased to $653,500 as of July 1, 2023. He is also eligible to participate in our incentive plans and other benefit plans for executive officers. Mr. Puorro is to receive an $800 per month car allowance, and we will reimburse Mr. Puorro for his premiums on a life insurance policy he owns. In the event that Mr. Puorro’s employment is terminated without cause, he is entitled to receive a lump sum payment equal to the sum of two times (i) his then current base salary, (ii) the highest cash bonus paid to him over the prior three years, (iii) the highest grant date value of any equity award granted to Mr. Puorro over the prior three years, and (iv) his annual automobile allowance. In addition, we will maintain Mr. Puorro’s then current health, hospital, medical and life insurance benefits in effect for two years after his termination or pay Mr. Puorro the value of the premiums for such coverage. In the event of a merger, acquisition or change-in-control transaction, Mr. Puorro will be entitled to a lump sum payment equal to the sum of 2.99 times (i) his then current base salary, (ii) the highest cash bonus paid to him over the prior three years, (iii) the highest grant date value of any equity award granted to Mr. Puorro over the prior three years, and (iv) his annual automobile allowance. In addition, Mr. Puorro’s then current health, hospital, medical and life insurance benefits are to be maintained in effect for three years after the change in control transaction, or Mr. Puorro is to be paid the value of the premiums for such coverage. The benefits upon a change in control are subject to reduction to avoid the imposition of excise taxes under Section 4999 of the Code, provided that such reduction would result in a better after-tax result for Mr. Puorro. Had a change in control occurred as of September 30, 2023, at an assumed price equal to 120% of our then tangible book value (a price of $27.28), Mr. Puorro would have been entitled to receive a net payment, after the reduction required to ensure that the payments would not constitute an excess parachute payment, of approximately $2.9 million under his employment agreement. Mr. Wilcox’s agreement provides for a minimum base of $525,000, subject to annual adjustment. During the fiscal year ended September 30, 2023, he received a base salary of $525,000, although it was retroactively increased to $537,500 as of July 1, 2023. He is also eligible to participate in our incentive plans and other benefit plans for executive officers. Mr. Wilcox’s agreement has a term of three years and renews for an additional twelve-month period each year. In the event that Mr. Wilcox’s employment is terminated without cause he is entitled to a lump sum payment equal to two times the sum of (i) his then current annual base salary, (ii) the highest cash bonus paid to him in the prior three years, and (iii) the highest full grant date value of any equity award granted over the prior three years, if any. In addition, in the event of a change in control, the employment agreement provides for payment to Mr. Wilcox of 2.99 times the sum of (i) his then current annual Base Salary, (ii) the highest cash bonus payment paid to Employee over the past three years, and (iii) the highest full grant date value of any equity award granted over the past three years. In addition, we will maintain Mr. Wilcox’s then current health, hospital, medical and life insurance benefits in effect for three years after his termination or pay Mr. Wilcox the value of the premiums for such coverage. The benefits upon a change in control are subject to reduction to avoid the imposition of excise taxes under Sections 280G and 4999 of the Code, provided that such reduction would result in a better after-tax result for Mr. Wilcox. Had a change in control occurred as of September 30, 2023, at an assumed price equal to 120% of our then tangible book value (a price of $27.28), Mr. Wilcox would have been entitled to receive a net payment, after the reduction required to ensure that the payments would not constitute an excess parachute payment, of approximately $1.1 million under his employment agreement. The employment agreement subjects Mr. Wilcox to a covenant not to compete during the period of his employment and for one year following a termination of his employment except in cases where employment is terminated without cause. We are also a party to a Change in Control Agreement with Mr. Kevin Corbett, our Executive Vice President and Chief Credit Officer. Mr. Corbett’s agreement provides that in the event of a change of control (as therein defined) Mr. Corbett shall be entitled to receive a lump sum payment equal to one (1) times the sum of (i) his then current annual base salary, and (ii) the highest cash bonus payment paid to him over the past three years. The agreement contains customary non-solicitation and confidentiality covenants. Mr. Corbett’s benefits under the agreement are subject to reduction in the event the benefits would constitute an “excess parachute payment” under Section 280G of the Internal Revenue Code of 1986, as amended. The agreement is further subject to compliance with Section 409A of the Internal Revenue Code. Had a change in control occurred as of September 30, 2023, at an assumed price equal to 120% of our then tangible book value (a price of $27.28), Mr. Corbett would have been entitled to receive a net payment, after the reduction required to ensure that the payments would not constitute an excess parachute payment, of approximately $448 thousand under his agreement.
Director Compensation
Director Compensation We pay our non-employee members of the Board a retainer of $25,000 annually and a fee of $1,000 per Board meeting attended. Our Lead Independent Director also receives an additional retainer of $3,750 per quarter, and our committee chairs receive an additional fee of between $2,500 and $13,400 per year. We also pay committee fees to those Board members who serve on Board committees. Our Directors also participate in our equity compensation plans. The table below shows the compensation paid to our non-employee directors for the fiscal year ended September 30, 2023.
Director Compensation
| Director Compensation |
Director Compensation
| | Fees earned or paid in cash | Stock Awards | Options awards | Non-equity incentive plan compensation | Nonqualified deferred compensation earnings | All other compensation | Total | | Name | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | | Varkey Abraham | 36,413 | 31,998 | — | — | — | — | 68,411 | | Robert Golden | 49,663 | 31,998 | — | — | — | — | 81,661 | | Ahron H. Haspel | 48,463 | 31,998 | — | — | — | — | 80,461 | | Michael Katz | 37,038 | 31,998 | — | — | — | — | 69,036 | | Metin Negrin | 42,788 | 31,998 | — | — | — | — | 74,786 | | Philip Okun | 45,038 | 31,998 | — | — | — | — | 77,036 | | Elena Sisti | 42,288 | 31,998 | — | — | — | — | 74,286 | | John R. Sorrenti | 38,413 | 31,998 | — | — | — | — | 70,411 |
BOARD OF DIRECTORS
BOARD OF DIRECTORS Section 2.01 Number. The number of directors which shall constitute the entire Board of Directors shall be at least one (1), with such precise number as determined by the Board of Directors from time to time. Election and Term of Directors. Directors shall be elected at the annual meeting of shareholders. The Directors shall be divided into three (3) classes, as nearly equal in number as possible, known as Class 1, Class 2 and Class 3. The initial Directors of Class 1 shall serve until the Third Annual Meeting of Shareholders (three (3) years). At the Third Annual Meeting of Shareholders, the Directors shall be elected for a term of three (3) years, and after the expiration of such term, shall thereafter be elected every three (3) years for three-year terms. The initial directors of Class 2 shall serve until the Second (2nd) Annual Meeting of Shareholders (two (2) years). At the Second (2nd) Annual Meeting of the Shareholders, the Directors of Class 2 shall be elected for a term of three (3) years, and after the expiration of such term, shall thereafter be elected every three (3) years for three (3) year terms. The initial Directors of Class 3 shall serve until the First Annual Meeting of the Shareholders (One (1) year). At the Second Annual Meeting of the Shareholders, the Directors of Class 3 shall be elected for a term of three (3) years, and after the expiration of such term, shall thereafter be elected every three (3) years for three (3) year terms. Each Director shall serve until his/her successor shall have been elected and shall qualify even though his/her term of office, as herein provided, has otherwise expired, except in the event of his/her earlier resignation, removal or disqualification. Section 2.02 Meetings of the Board. An annual meeting of the Board of Directors shall be held in each year directly after adjournment of the annual meeting of shareholders. Other regular meetings of the Board shall be held at such times as may from time to time be fixed by resolution of the Board. Special meetings of the Board may be held at any time upon the call of the Chief Executive Officer, President or a majority of the Board of Directors. Meetings of the Board of Directors shall be held at such place as from time to time may be fixed by resolution of the Board or by order of the President. If no place is so fixed, meetings of the Board shall be held at the principal office of the Corporation. Section 2.03 Notice of Meetings. Notice of regular meetings of the Board of Directors need not be given. Notice of each special meeting shall be (i) mailed to each director, addressed to the address last given by each director to the Secretary or, if none has been given, to the director’s residence or usual place of business, at least three (3) days before the day on which the meeting is to be held, or (ii) shall be sent to the director by facsimile or e-mail or shall be delivered personally or by telephone, at least twenty-four (24) hours before the time the meeting is to be held. Each notice shall state the time and place of the meeting but need not state the purposes thereof except as otherwise expressly provided by applicable law. Notice of any meeting of the Board of Directors may be waived either before, at, or after such meeting in writing signed by each director. Attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except when the director attends a meeting for the express purposes of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Section 2.04 Quorum and Manner of Acting. At each meeting of the Board of Directors, the presence of a majority of the entire Board shall constitute a quorum for the transaction of business, and the vote of a majority of the directors present at the time of the vote, if a quorum is present at that time, shall be the act of the Board. Section 2.05 Action without a Meeting. Any action required or permitted to be taken by the Board or any committee thereof may be taken without a meeting if all members of the Board or such committee consent in writing to the adoption of a resolution authorizing the action. The resolution and the written consents thereto by the members of the Board or committee shall be filed with the minutes of the proceedings of the Board or committee. Section 2.06 Participation in Board Meetings by Video Conference and Other Means. Any one or more members of the Board of Directors or any committee thereof may participate in a meeting of the Board or such committee by means of a video conference or similar communications equipment allowing all persons participating in the meeting to see and hear each other at the same time. Participation by such means shall constitute presence in person at a meeting. At the discretion of the Chairman of the Board of Directors or any committee thereof, members may participate in such meetings by means of a conference telephone allowing all persons participating in the meeting to hear (but not see) each other at the same time. Section 2.07 Resignation and Removal. Resignation and Removal of a director shall be in accordance with the Corporation’s Articles of Incorporation and the Maryland General Corporation Law. Section 2.08 Vacancies. Newly created directorships resulting from an increase in the number of directors and vacancies occurring in the Board of Directors for any reason may be filled in accordance with the Corporation’s Articles of Incorporation and the Maryland General Corporation Law. . Section 2.09 Committees of the Board. The Board of Directors by resolution adopted by a majority of the entire Board of Directors, may designate an executive committee and other committees, each consisting of one (1) or more directors. Each committee (including the members thereof) shall serve at the pleasure of the Board of Directors and shall keep minutes of its meetings and report the same to the Board of Directors. The Board may designate one or more directors as alternate members of any committee. Alternate members may replace any absent or disqualified member or members at any meeting of the committee. In addition, in the absence or disqualification of a member of a committee, if no alternate member has been designated by the Board of Directors, the members present at any meeting and not disqualified from voting, whether or not they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of the absent or disqualified member. Section 2.10 Operation of Committees. A majority of all the members of a committee shall constitute a quorum for the transaction of business, and the vote of a majority of all the members of a committee present at a meeting at which a quorum is present shall be the act of the committee. Each committee shall adopt whatever other rules of procedure it determines for the conduct of its activities. Section 2.11 Compensation of Directors. Each director shall be entitled to receive as compensation for his services as director or for attendance at meetings of the Board of Directors, such amounts (if any) as shall be fixed from time to time by the Board of Directors or shareholders. Each director shall be entitled to reimbursement for reasonable traveling expenses incurred by him in attending any such meeting. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.
BOARD OF DIRECTORS
Section 2.12 Presumption of Assent. A director of the Corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to such action unless such director announces his or her dissent at the meeting and (a) such director’s dissent is entered in the minutes of the meeting, (b) such director files his or her written dissent to such action with the secretary of the meeting before the adjournment thereof, or (c) such director forwards his or her written dissent within 24 hours after the meeting is adjourned, by certified mail, return receipt requested, bearing a postmark from the United States Postal Service, to the secretary of the meeting or the Secretary of the Corporation. Such right to dissent shall not apply to a director who voted in favor of such action or failed to make his or her dissent known at the meeting. Article III.