def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by
the Registrant þ
Filed by a Party other than the Registrant o
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 |
Marlin Business Services Corp.
(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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MARLIN
BUSINESS SERVICES CORP.
300 Fellowship Road
Mount Laurel, NJ 08054
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 25, 2010
To the Shareholders of Marlin Business Services Corp.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Shareholders (the Annual Meeting) of Marlin Business
Services Corp. (the Corporation), a Pennsylvania
corporation, will be held on May 25, 2010, at
9:00 a.m. at the Doubletree Hotel, 515 Fellowship Road,
Mount Laurel, New Jersey, 08054, for the following purposes:
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To elect a Board of Directors of eight (8) directors to
serve until the next annual meeting of shareholders of the
Corporation and until their successors are elected and
qualified; and
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To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
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The Board of Directors has fixed March 31, 2010, as the
record date for the determination of shareholders entitled to
notice of and to vote at the meeting or any adjournment thereof.
By order of the Board of Directors
George D. Pelose
Secretary
Your vote is important, regardless of the number of shares
you own. Even if you plan to attend the meeting, please date and
sign the enclosed proxy form, indicate your choice with respect
to the matters to be voted upon, and return it promptly in the
enclosed envelope. A proxy may be revoked before exercise by
notifying the Secretary of the Corporation in writing or in open
meeting, by submitting a proxy of a later date or attending the
meeting and voting in person.
Dated: April 20, 2010
Important Notice Regarding Availability of Proxy Materials for
the
Annual Meeting to be Held on May 25, 2010.
The Proxy
Statement and Annual Report to Shareholders are available at
www.stocktrans.com/eproxy/marlin2010
MARLIN
BUSINESS SERVICES CORP.
300 Fellowship Road
Mount Laurel, NJ 08054
Proxy
Statement
Introduction
This Proxy Statement and the enclosed proxy card are furnished
in connection with the solicitation of proxies by the Board of
Directors of Marlin Business Services Corp. (the
Corporation), a Pennsylvania corporation, to be
voted at the Annual Meeting of Shareholders (the Annual
Meeting) of the Corporation to be held on Tuesday,
May 25, 2010, at 9:00 a.m., at the Doubletree Hotel,
515 Fellowship Road, Mount Laurel, New Jersey, 08054, or at
any adjournment or postponement thereof, for the purposes set
forth below:
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To elect a Board of Directors of eight (8) directors to
serve until the next annual meeting of shareholders of the
Corporation and until their successors are elected and
qualified; and
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2.
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To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
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This Proxy Statement and related proxy card have been mailed on
or about April 20, 2010, to all holders of record of common
stock of the Corporation as of the record date. The Corporation
will bear the expense of soliciting proxies. The Board of
Directors of the Corporation has fixed the close of business on
March 31, 2010, as the record date for the determination of
shareholders entitled to notice of and to vote at the Annual
Meeting and any adjournment or postponement thereof. The
Corporation has only one class of common stock, of which there
were 12,811,578 shares outstanding as of March 31,
2010.
Proxies
and voting procedures
Each outstanding share of common stock of the Corporation will
entitle the holder thereof to one vote on each separate matter
presented for vote at the Annual Meeting. Votes cast at the
meeting and submitted by proxy are counted by the inspectors of
the meeting who are appointed by the Corporation.
You can vote your shares by properly executing and returning a
proxy in the enclosed form. The shares represented by such proxy
will be voted at the Annual Meeting and any adjournment or
postponement thereof. If you specify a choice, the proxy will be
voted as specified. If no choice is specified, the shares
represented by the proxy will be voted for the election of all
of the director nominees named in the Proxy Statement, and in
accordance with the judgment of the persons named as proxies
with respect to any other matter which may come before the
meeting. If you are the shareholder of record, you can also
choose to vote in person at the Annual Meeting.
A proxy may be revoked before exercise by notifying the
Secretary of the Corporation in writing or in open meeting, by
submitting a proxy of a later date or attending the meeting and
voting in person. You are encouraged to date and sign the
enclosed proxy form, indicate your choice with respect to the
matters to be voted upon, and promptly return it to the
Corporation.
If your shares are held in a stock brokerage account or by a
bank or other nominee, 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 nominee, who is
considered, with respect to those shares, the shareholder of
record. As the beneficial owner, you have the right to direct
how your broker votes your shares. You are also invited to
attend the meeting. However, because you are not the shareholder
of record, you may not vote your street name shares in person at
the Annual Meeting unless you obtain a proxy executed in your
favor from the holder of record. Your broker or nominee has
enclosed a voting instruction card for you to use in directing
the broker or nominee to vote your shares.
1
Quorum
and voting requirements
The presence, in person or by proxy, of shareholders entitled to
cast a majority of the votes which shareholders are entitled to
cast on each matter to be voted upon at the meeting will
constitute a quorum for the meeting. If, however, the meeting
cannot be organized because a quorum is not present, in person
or by proxy, the shareholders entitled to vote and present at
the meeting will have the power, except as otherwise provided by
statute, to adjourn the meeting to such time and place as they
may determine. Those who attend or participate at a meeting that
has been previously adjourned for lack of a quorum, although
less than a quorum, shall nevertheless constitute a quorum for
the purpose of electing directors.
At the Annual Meeting, in connection with the election of the
directors, you will be entitled to cast one vote for each share
held by you for each candidate nominated, but will not be
entitled to cumulate your votes. Votes may be cast in favor of
or withheld with respect to each candidate nominated. The eight
(8) director nominees receiving the highest number of votes
will be elected to the Board of Directors. Votes that are
withheld will be excluded entirely from the vote and will have
no effect, other than for purposes of determining the presence
of a quorum.
Brokers that are member firms of the New York Stock Exchange and
who hold shares in street name for customers have the discretion
to vote those shares with respect to certain matters if they
have not received instructions from the beneficial owners.
Brokers will have this discretionary authority with respect to
the election of directors. As a result, where brokers submit
proxies but are otherwise prohibited and thus must refrain from
exercising discretionary authority in voting shares on certain
matters for beneficial owners who have not provided instructions
with respect to such matters (commonly referred to as
broker non-votes), those shares will be included in
determining whether a quorum is present but will have no effect
in the outcome of the election of directors.
As to all other matters properly brought before the meeting, the
majority of the votes cast at the meeting, present in person or
by proxy, by shareholders entitled to vote thereon will decide
any question brought before the Annual Meeting, unless the
question is one for which, by express provision of statute or of
the Corporations Articles of Incorporation or Bylaws, a
different vote is required. Generally, abstentions and broker
non-votes on these matters will have the same effect as a
negative vote because under the Corporations Bylaws, these
matters require the affirmative vote of the holders of a
majority of the Corporations common stock, present in
person or by proxy at the Annual Meeting. Broker non-votes and
abstentions will be counted, however, for purposes of
determining whether a quorum is present.
Governance
of the Corporation
Board of
Directors
Currently, the Board of Directors of the Corporation (the
Board of Directors or the Board) has
seven (7) members. The Board has affirmatively determined
that John J. Calamari, Lawrence J. DeAngelo, Edward Grzedzinski,
Kevin J. McGinty, Matthew J. Sullivan and James W. Wert are each
independent directors. This constitutes more than a majority of
our Board of Directors. Only independent directors serve on our
Audit Committee, Compensation Committee and Nominating and
Governance Committee. The standards applied by the Board in
affirmatively determining whether a director is
independent are those objective standards set forth
in the listing standards of the Nasdaq Stock Market LLC
(Nasdaq). Mr. McGinty, a non-employee
independent director, serves as the Chairman of the Board. He
was elected to that position in March 2009, becoming the
Corporations first non-executive Chairman of the Board.
The Board is responsible for ensuring that independent directors
do not have a material relationship with us or any of our
affiliates or any of our executive officers or his or her
affiliates.
On April 6, 2010, the Board of Directors increased the
number of members to eight (8), and has selected J. Christopher
Teets to be the nominee to fill the eighth seat. Mr. Teets
is included in the slate of eight (8) members to be voted
on by the Corporations shareholders. The Board has
affirmatively determined that, if Mr. Teets is elected to
the Board by the Corporations shareholders, he would be an
independent director.
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Board
Leadership Structure
The Board believes that separating the roles of Chairman of the
Board and Chief Executive Officer strengthens the independence
of each role and enhances overall corporate governance. As a
result, in March 2009, the Board elected an independent
director, Kevin J. McGinty, to serve as the Boards first
non-executive Chairman of the Board. The Board believes that
separating the Chief Executive Officer and Chairman of the Board
positions provides the Corporation with the right foundation to
pursue the Corporations objectives.
Committees
The Corporation has three standing committees: the Audit
Committee, the Compensation Committee, and the Nominating and
Governance Committee.
Audit Committee. The Audit Committee of the
Board currently consists of three independent directors:
Messrs. Calamari (chairman), McGinty and Wert. The Board
has determined that Messrs. Calamari and Wert each qualify
as an audit committee financial expert as defined under current
rules and regulations of the Securities and Exchange Commission
(the SEC) and under Nasdaq listing standards, and
that the members of the Audit Committee satisfy the independence
and other requirements for audit committee members under such
rules, regulations and listing standards. The Audit
Committees primary purpose is to assist the Board in
overseeing and reviewing: (1) the integrity of the
Corporations financial reports and financial information
provided to the public and to governmental and regulatory
agencies; (2) the adequacy of the Corporations
internal accounting systems and financial controls; (3) the
annual independent audit of the Corporations financial
statements, including the independent registered public
accountants qualifications and independence; and
(4) the Corporations compliance with law and ethics
programs as established by management and the Board. In this
regard, the Audit Committee, among other things, (a) has
sole authority to select, evaluate, terminate and replace the
Corporations independent registered public accountants;
(b) has sole authority to approve in advance all audit and
non-audit engagement fees and terms with the Corporations
independent registered public accountants; and (c) reviews
the Corporations audited financial statements, interim
financial results, public filings and earnings press releases
prior to issuance, filing or publication. The Board has adopted
a written charter for the Audit Committee, which is accessible
on the investor relations page of the Corporations website
at www.marlincorp.com. The Corporations website is
not part of this Proxy Statement and references to the
Corporations website address are intended to be inactive
textual references only.
Compensation Committee. The Compensation
Committee of the Board currently consists of three independent
directors: Messrs. DeAngelo (chairman), Grzedzinski and
Sullivan. The functions of the Compensation Committee include:
(1) evaluating the performance of the Corporations
named executive officers and approving their compensation;
(2) preparing an annual report on executive compensation
for inclusion in the Corporations proxy statement;
(3) reviewing and approving compensation plans, policies
and programs, considering their design and competitiveness; and
(4) reviewing the Corporations non-employee
independent director compensation levels and practices and
recommending changes as appropriate. The Compensation Committee
reviews and approves corporate goals and objectives relevant to
chief executive officer compensation, evaluates the chief
executive officers performance in light of those goals and
objectives, and recommends to the Board the chief executive
officers compensation levels based on its evaluation. The
Compensation Committee also administers the Corporations
2003 Equity Compensation Plan, as amended, and the
Corporations 2003 Employee Stock Purchase Plan. The
Compensation Committee is governed by a written charter that is
accessible on the investor relations page of the
Corporations website at www.marlincorp.com.
Nominating and Governance Committee. The
Nominating and Governance Committee of the Board (the
Nominating Committee) currently consists of three
independent directors: Messrs. Grzedzinski (chairman),
DeAngelo and Wert. The Nominating Committee is responsible for
seeking, considering and recommending to the Board qualified
candidates for election as directors and proposing a slate of
nominees for election as directors at the Corporations
annual meeting of shareholders. The Nominating Committee is
responsible for reviewing and making recommendations on matters
involving general operation of the Board and its committees, and
will annually recommend to the Board nominees for each committee
of the Board. The
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Nominating Committee is governed by a written charter that is
accessible on the investor relations page of the
Corporations website at www.marlincorp.com.
The Nominating Committee has determined that no one single
criteria should be given more weight than any other criteria
when it considers the qualifications of a potential nominee to
the Board. Instead, it believes that it should consider the
total skills set of an individual. In considering
potential nominees for director, the Nominating Committee will
consider each potential nominees personal abilities and
qualifications, independence, knowledge, judgment, character,
leadership skills, education, and the diversity of their
background, expertise and experience in fields and disciplines
relevant to the Corporation, including financial literacy or
expertise. In addition, potential nominees should have
experience in positions with a high degree of responsibility, be
leaders in the companies or institutions with which they are
affiliated and be selected based upon contributions that they
can make to the Corporation. The Nominating Committee considers
all of these qualities when selecting, subject to ratification
by the Board, potential nominees for director.
The Board views both demographic and geographic diversity among
the directors as desirable and strives to take into account how
a potential nominee for director will impact the diversity that
the Board has achieved over the years.
The Nominating Committees process for identifying and
evaluating potential nominees includes soliciting
recommendations from existing directors and officers of the
Corporation and reviewing the Board and Committee Assessments
completed by the directors. The Corporation does not currently
pay any fees to third parties to assist in identifying or
evaluating potential nominees, but the Corporation may seek such
assistance in the future.
The Nominating Committee will also consider recommendations from
shareholders regarding potential director candidates provided
that such recommendations are made in compliance with the
nomination procedures set forth in the Corporations
Bylaws. The procedures in the Corporations Bylaws require
the shareholder to submit written notice of the proposed nominee
to the Secretary of the Corporation no less than 90 days
prior to the anniversary date of the immediately preceding
annual meeting of shareholders. To be in proper form, such
written notice must include, among other things, (i) the
name, age, business address and residence of the proposed
nominee, (ii) the principal occupation or employment of
such nominee, (iii) the class and number of shares of
capital stock of the Corporation owned beneficially or of record
by such nominee, and (iv) any other information relating to
the proposed nominee that would be required to be disclosed in a
proxy statement or other filings required to be made in
connection with solicitations of proxies for the election of
directors. In addition, as to the shareholder giving the notice,
the notice must also provide (a) such shareholders
name and record address, (b) the class and number of shares
of capital stock of the Corporation owned beneficially or of
record by such shareholder, (c) a description of all
arrangements or understandings between such shareholder and each
proposed nominee and any other persons (including their names)
pursuant to which the nominations are to be made by such
shareholder, (d) a representation that such shareholder (or
his or her authorized representative) intends to appear in
person or by proxy at the meeting to nominate the persons named
in the notice, and (e) any other information relating to
the shareholder that would be required to be disclosed in a
proxy statement or other filings required to be made in
connection with solicitations of proxies for the election of
directors. If the shareholder of record is not the beneficial
owner of the shares, then the notice to the Secretary of the
Corporation must include the name and address of the beneficial
owner and the information referred to in clauses (c) and
(e) above (substituting the beneficial owner for such
shareholder).
Risk
Management Oversight
The Corporation is subject to a variety of risks, including
credit risk, liquidity risk, operational risk and market risk.
The Board oversees risk management through a combination of
processes. The Corporations management has developed risk
management processes intended to (1) timely identify the
material risks that the Corporation faces, (2) communicate
necessary information with respect to material risks to senior
executives and, as appropriate, to the Board or relevant Board
committee, (3) implement appropriate and responsive risk
management strategies consistent with Corporations risk
profile, and (4) integrate risk management into the
Corporations decision-making. The Board regularly reviews
information regarding the Corporations credit,
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liquidity, and operations, as well as the risks associated with
each, during the Board meetings scheduled throughout the year.
The Corporation has established a Senior Credit Committee, which
is comprised of its Chief Executive Officer, Chief Operating
Officer, Chief Risk Officer, Chief Lending Officer and Vice
President of Collections. The Senior Credit Committee oversees
the Corporations comprehensive credit underwriting
process. The Board has reviewed the risk management processes
related to credit risk and members of the Senior Credit
Committee present a report on the status of the risks and
metrics used to monitor such credit risks to the Board at least
annually. In addition management provides the Board with
frequent updates which include financial results, operating
metrics, key initiatives and any internal or external issues
effecting the organization.
Among its other duties, the Audit Committee, in consultation
with the management, the independent registered public
accountants, and the internal auditors, discusses the
Corporations policies and guidelines regarding risk
assessment and risk management as well as the Corporations
significant financial risk exposures and the steps management
has taken to monitor, control and report such exposures. The
Compensation Committee considers the risks that may be presented
by the structure of the Corporations compensation programs
and the metrics used to determine individual compensation under
that program. Among its other duties, the Nominating Committee
develops corporate governance guidelines applicable to the
Corporation and recommends such guidelines or revisions of such
guidelines to the Board. The Nominating Committee reviews such
guidelines at least annually and, when necessary or appropriate,
recommends changes to the Board. The Board believes that the
present leadership structure, along with the Corporations
corporate governance policies and procedures, permits the Board
to effectively perform its role in the risk oversight of the
Corporation.
Compensation
Risk Assessment
As part of its oversight of the Corporations executive
compensation program, the Compensation Committee considers the
impact of the Corporations executive compensation program,
and the incentives created by the compensation awards that it
administers, on the Corporations risk profile. In
addition, the Corporation reviews all of its compensation
policies and procedures, including the incentives that they
create and factors that may reduce the likelihood of excessive
risk taking, to determine whether they present a significant
risk to the Corporation. Based on this review, the Corporation
has concluded that its compensation policies and procedures are
not reasonably likely to have a material adverse effect on the
Corporation.
Whistleblower
Procedures
The Corporation has established procedures that provide
employees with the ability to make anonymous submissions
directly to the Audit Committee regarding concerns about
accounting or auditing matters. The independent directors that
comprise the Audit Committee will review, investigate and, if
appropriate, respond to each submission made. Additionally, the
Corporation has reminded employees of its policy to not
retaliate or take any other detrimental action against employees
who make submissions in good faith.
Code of
Ethics and Business Conduct
All of the Corporations directors, officers and employees
(including its senior executive, financial and accounting
officers) are held accountable for adherence to the
Corporations Code of Ethics and Business Conduct (the
Code). The Code is posted on the investor relations
section of the Corporations website at
www.marlincorp.com. The purpose of the Code is to
establish standards to deter wrongdoing and to promote honest
and ethical behavior. The Code covers many areas of professional
conduct, including compliance with laws, conflicts of interest,
fair dealing, financial reporting and disclosure, confidential
information and proper use of the Corporations assets.
Employees are obligated to promptly report any known or
suspected violation of the Code through a variety of mechanisms
made available by the Corporation. Waiver of any provision of
the Code for a director or executive officer (including the
senior executive, financial and accounting officers) may only be
granted by the Board of Directors or the Audit Committee. Our
code of ethics and business conduct is available free of charge
on the investor relations page of the Corporations
website at
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www.marlincorp.com. We intend to post on our website any
amendments and waivers to the Code that are required to be
disclosed by SEC rules, or file a
Form 8-K,
Item 5.05, to the extent required by Nasdaq listing
standards.
Board and
Committee Meetings
From January 1, 2009 through December 31, 2009, there
were ten meetings of the Board of Directors, five meetings of
the Audit Committee, five meetings of the Compensation Committee
and two meetings of the Nominating Committee. All of our
Directors attended at least 75% of the aggregate number of
meetings of our Board and Board committees on which they served.
Directors are encouraged, but not required, to attend annual
meetings of the Corporations shareholders. Each director
attended the Corporations 2009 Annual Meeting of
Shareholders.
Communications
with the Board
Shareholders may communicate with the Board or any of the
directors by sending written communications addressed to the
Board or any of the directors,
c/o Corporate
Secretary, Marlin Business Services Corp., 300 Fellowship Road,
Mount Laurel, New Jersey 08054. All communications are compiled
by the Corporate Secretary and forwarded to the Board or the
individual director(s) accordingly.
Director
Ownership Requirements
Non-employee independent directors are subject to certain
ownership requirements. Each non-employee independent director
is required to own 2,500 shares of stock of the Corporation
(or 7,500 shares if serving as the Chairman of the Board).
Restricted shares do not count toward the ownership requirement.
As of March 31, 2010, all of the non-employee independent
directors were in compliance with the ownership requirement
except Mr. Grzedzinski and Mr. Sullivan.
Proposal 1:
Election
of Directors
Nominees
for Election
In general, the Corporations directors are elected at each
annual meeting of shareholders. Currently, the number of
directors of the Corporation is seven (7). At the Annual
Meeting, the Corporations shareholders are being asked to
elect eight (8) directors to serve until the next annual
meeting of shareholders and until their successors are elected
and qualified, or until their earlier death, resignation or
removal. The nominees receiving the greatest number of votes at
the Annual Meeting up to the number of authorized directors will
be elected.
All eight (8) of the nominees for election as directors at
the Annual Meeting as set forth in the following table are
incumbent directors. Except for Mr. Teets, all of the
nominees have been previously elected as directors by the
Corporations shareholders. Each of the nominees has
consented to serve as a director if elected. Except to the
extent that authority to vote for any directors is withheld in a
proxy, shares represented by proxies will be voted for such
nominees. In the event that any of the nominees for director
should, before the Annual Meeting, become unable to serve if
elected, shares represented by proxies will be voted for such
substitute nominees as may be recommended by the
Corporations existing Board, unless other directions are
given in the proxies. To the best of the Corporations
knowledge, all of the nominees will be available to serve.
For each of the eight (8) nominees for election at the
Annual Meeting, set forth below is biographical and other
information as of March 1, 2010 as to each nominees
positions and offices held with the Corporation, principal
occupations during the past five years, directorships of public
companies and other organizations held during the past five
years, and the specific experience, qualifications, attributes
or skills that, in the opinions of
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the Nominating Committee and the Board of Directors, make each
nominee qualified to serve as a director of the Corporation:
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Director
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Name
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Age
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Principal Occupation
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Since
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John J. Calamari
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55
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Former Executive Vice President and Chief Financial Officer of
J.G. Wentworth
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2003
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Lawrence J. DeAngelo
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43
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Managing Director of SunTrust Robinson Humphrey Investment Bank
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2001
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Daniel P. Dyer
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51
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CEO of Marlin Business Services Corp.
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1997
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Edward Grzedzinski
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Managing Partner of GTX Partners, LLC
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2006
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Kevin J. McGinty
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61
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Managing Director of Peppertree Capital Management Inc.
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1998
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Matthew J. Sullivan
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Partner with Peachtree Equity Partners
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2008
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J. Christopher Teets
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Partner of Red Mountain Capital Partners LLC.
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n/a
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James W. Wert
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63
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President & CEO of Clanco Management Corp.
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1998
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John J. Calamari:
Biography. Mr. Calamari has been a
Director since November 2003. Mr. Calamari served as the
Executive Vice President and Chief Financial Officer of J.G.
Wentworth from March 2007 until November 2009. Prior to that
time, Mr. Calamari was Senior Vice President, Corporate
Controller of Radian Group Inc., where he oversaw Radians
global controllership functions, a position he held after
joining Radian in September 2001. From 1999 to August 2001,
Mr. Calamari was a consultant to the financial services
industry, where he structured new products and strategic
alliances, established financial and administrative functions
and engaged in private equity financing for startup enterprises.
Mr. Calamari served as Chief Accountant of Advanta from
1988 to 1998, as Chief Financial Officer of Chase Manhattan Bank
Maryland and Controller of Chase Manhattan Bank (USA) from 1985
to 1988 and as Senior Manager at Peat, Marwick,
Mitchell & Co. (now KPMG LLP) prior to 1985. In
addition, Mr. Calamari served as a director of Advanta
National Bank, Advanta Bank USA and Credit One Bank.
Mr. Calamari received his undergraduate degree in
accounting from St. Johns University in 1976.
Qualifications. Mr. Calamari has over
33 years of banking and financial experience, including
five years serving in the role of Chief Financial Officer for a
bank and a financial services company. Mr. Calamari
achieved the level of certified public accountant, and he has
served as Chairman of the Corporations Audit Committee
since July 2004. He has seven years of past service as a
director of several non-public banks and financial services
companies. Mr. Calamari has also had leadership positions
with various community organizations. The Board has determined
that Mr. Calamari is an independent director, financially
literate and an audit committee financial expert within the
meaning of applicable SEC rules. The Board views
Mr. Calamaris independence, his banking and financial
experience, his experience as a director of other companies and
his demonstrated leadership roles in business and community
activities as important qualifications, skills and experience
for the Boards conclusion that Mr. Calamari should
serve as a director of the Corporation.
Lawrence J. DeAngelo:
Biography. Mr. DeAngelo has been a
Director since July 2001. Mr. DeAngelo is a Managing
Director with SunTrust Robinson Humphrey, an investment bank
based in Atlanta, Georgia. Mr. DeAngelo served as a
Managing Director with Roark Capital Group, a private equity
firm based in Atlanta, Georgia from 2005 until January 2010.
Prior to joining Roark in 2005, Mr. DeAngelo was a Managing
Director of Peachtree Equity Partners, a private equity firm
based in Atlanta, Georgia. Prior to co-founding Peachtree in
April 2002, Mr. DeAngelo held numerous positions at
Wachovia Capital Associates, the private equity investment group
of Wachovia Bank, from 1996 to April 2002, the most recent of
which was Managing Director. From 1995 to
7
1996, Mr. DeAngelo worked at Seneca Financial Group, and
from 1992 to 1995, Mr. DeAngelo worked in the Corporate
Finance Department at Kidder, Peabody & Co. From 1990
to 1992, Mr. DeAngelo attended business school. From 1988
to 1990, Mr. DeAngelo was a management consultant with
Peterson & Co. Consulting. Mr. DeAngelo received
his undergraduate degree in economics from Colgate University
and his MBA from the Yale School of Management.
Qualifications. Mr. DeAngelo has over
20 years of experience as an investment banker and private
equity professional, including 12 years serving in the role
of Managing Director for a variety of private equity firms. He
served as Chairman of the Corporations Nominating and
Governance Committee from November 2003 to March 2009, and has
served as Chairman of the Corporations Compensation
Committee since March 2009. He has served as a director of ten
privately held companies. The Board has determined that
Mr. DeAngelo is an independent director and is financially
literate within the meaning of applicable SEC rules. The Board
views Mr. DeAngelos independence, his investment
banking and private equity experience, his experience as a
director of other companies and his demonstrated leadership
roles in business as important qualifications, skills and
experience for the Boards conclusion that
Mr. DeAngelo should serve as a director of the Corporation.
Daniel P. Dyer:
Biography. Mr. Dyer has been Chief
Executive Officer since co-founding our Corporation in 1997. In
December of 2006, Mr. Dyer also assumed the role of
President of the Corporation. From 1986 to 1997, Mr. Dyer
served in a number of positions, most recently as Senior Vice
President and Chief Financial Officer of Advanta Business
Services, where he was responsible for financial, IT, strategic
planning and treasury functions. Mr. Dyer received his
undergraduate degree in accounting and finance from Shippensburg
University and is a licensed certified public accountant
(non-active status).
Qualifications. Mr. Dyer has over
26 years of experience in financial services, including
23 years experience in the equipment leasing industry.
Mr. Dyer is co-founder of the Corporation and has served as
Chairman of the Corporations Board of Directors from the
Corporations inception in 1997 to March 2009, and he has
served as the Corporations Chief Executive Officer since
1997. He has seven years of past service as a director of
privately held companies. Mr. Dyer has also had leadership
positions with various community organizations and industry
related organizations including the Equipment Leasing and
Finance Associations Industry Futures Council and
Foundation. The Board views Mr. Dyers leadership
ability along with his significant industry knowledge and broad
financial services expertise as important qualifications, skills
and experience for the Boards conclusion that
Mr. Dyer should serve as a director of the Corporation.
Edward Grzedzinski:
Biography. Mr. Grzedzinski has been a
Director since May 2006. Mr. Grzedzinski is a Managing
Partner of GTX Partners LLC. Mr. Grzedzinski served as the
Chairman and Chief Executive Officer of NOVA Corporation from
September 1995 to November 2004, and Vice Chairman of
US Bancorp from July 2001 to November 2004.
Mr. Grzedzinski has 25 years of experience in the
electronic payments industry and was a co-founder of the
predecessor of NOVA Corporation, NOVA Information Systems, in
1991. Mr. Grzedzinski served as a member of the Managing
Committee of US Bancorp, and was a member of the Board of
Directors of US Bank, N.A. Mr. Grzedzinski also served as
Chairman of euroConex Technologies, Limited, a European payment
processor owned by US Bancorp until November 2004 and was a
member of the Board of Directors of Indus International Inc., a
global provider of enterprise asset management products and
services until October 2004. Mr. Grzedzinski is also a
director of Neenah Paper, Inc.
Qualifications. Mr. Grzedzinski has over
25 years of experience in leadership roles with financial
services companies, including ten years serving in the role of
Chief Executive Officer for an electronic payment services
company. Mr. Grzedzinski has served as Chairman of the
Corporations Nominating and Governance Committee since
March 2009. He has seven years of service as a director of
public companies, and has also spent over five years serving on
the boards of several non-public financial services companies.
Mr. Grzedzinski has also had leadership positions with
various cultural and community organizations. The Board has
determined that Mr. Grzedzinski is an independent director,
and is financially literate within the meaning of
8
applicable SEC rules. The Board views
Mr. Grzedzinskis independence, his financial services
experience, his experience as a director of other companies and
his demonstrated leadership roles in business and community
activities as important qualifications, skills and experience
for the Boards conclusion that Mr. Grzedzinski should
serve as a director of the Corporation.
Kevin J. McGinty:
Biography. Mr. McGinty has been a
Director since February 1998 and has served as non-executive
Chairman of the Board of Directors of the Corporation since
March 2009. Mr. McGinty is Managing Director of Peppertree
Capital Management, Inc. Prior to founding Peppertree in January
2000, Mr. McGinty served as a Managing Director of Primus
Venture Partners during the period from 1990 to December 1999.
In both organizations Mr. McGinty was involved in private
equity investing, both as a principal and as a limited partner.
From 1970 to 1990, Mr. McGinty was employed by Society
National Bank, now KeyBank, N.A., where in his final position he
was an Executive Vice President. Mr. McGinty received his
undergraduate degree in economics from Ohio Wesleyan University
and his MBA in finance from Cleveland State University.
Qualifications. Mr. McGinty has over
39 years of experience in the banking and private equity
industries, including 20 years as an officer of a bank, and
19 years serving in the role of Managing Director for a
variety of private equity firms. He served as Chairman of the
Corporations Compensation Committee from November 2003 to
March 2009, and has served as Chairman of the Corporations
Board of Directors since March 2009. He has 25 years of
past service as a director of privately held companies.
Mr. McGinty has also had leadership positions with various
cultural and community organizations. The Board has determined
that Mr. McGinty is an independent director and is
financially literate within the meaning of applicable SEC rules.
The Board views Mr. McGintys independence, his
banking experience, his experience as a director of other
companies and his demonstrated leadership roles in business and
community activities as important qualifications, skills and
experience for the Boards conclusion that Mr. McGinty
should serve as a director of the Corporation.
Matthew J. Sullivan:
Biography. Mr. Sullivan has been a
Director since April 2008. Mr. Sullivan is a Partner with
Peachtree Equity Partners (Peachtree).
Mr. Sullivan co-founded Peachtree in 2002. From 1994 to
2002, Mr. Sullivan held numerous positions at Wachovia
Capital Associates, the private equity investment group of
Wachovia Bank, the most recent of which was Managing Director.
From 1983 to 1994, Mr. Sullivan worked in the Corporate
Finance Department at Kidder, Peabody & Co. and
previously with Arthur Andersen & Company where he
earned his certified public accountant license (currently
non-active status). Mr. Sullivan received his undergraduate
degree in finance from the University of Pennsylvania and his
MBA from Harvard Business School.
Qualifications. Mr. Sullivan has over
20 years of experience as an investment banker and private
equity professional, including over ten years serving in the
role of Managing Director for a variety of private equity firms.
He has over ten years of past service as a director of privately
held companies. Mr. Sullivan has also had leadership
positions with various cultural and community organizations. The
Board has determined that Mr. Sullivan is an independent
director and is financially literate within the meaning of
applicable SEC rules. The Board views Mr. Sullivans
independence, his investment banking and private equity
experience, his experience as a director of other companies, and
his demonstrated leadership roles in business and community
activities as important qualifications, skills and experience
for the Boards conclusion that Mr. Sullivan should
serve as a director of the Corporation.
J. Christopher Teets:
Biography. Mr. Teets has not previously
served as a member of Corporations Board. Mr. Teets
has served as a Partner of Red Mountain Capital Partners LLC
(Red Mountain), an investment firm, since February
2005. Before joining Red Mountain in 2005, Mr. Teets was an
investment banker at Goldman Sachs & Co. Prior joining
Goldman Sachs in 2000, Mr. Teets worked in the investment
banking division of Citigroup. Mr. Teets currently serves
on the boards of Air Transport Services Group, Inc., Affirmative
Insurance Holdings, Inc. and Encore Capital Group, Inc.
Mr. Teets holds a bachelors degree from Occidental
College and an MSc degree from the London School of Economics.
9
Qualifications. Mr. Teets has over
12 years of experience as an investment banker and
investment professional, which includes advising and investing
in financial institutions. Mr. Teets experience also
includes five years serving as a Partner for an investment firm.
He has three years of service as a director of public companies
and currently sits on the boards of three such companies. The
Board has determined that Mr. Teets is an independent
director and is financially literate within the meaning of
applicable SEC rules. The Board views Mr. Teets
independence, his investment banking and public and private
investing experience, his experience with financial
institutions, his experience as a director of other public
companies and his demonstrated leadership roles in business as
important qualifications, skills and experience for the
Boards conclusion that Mr. Teets should serve as a
director of the Corporation.
James W. Wert:
Biography. Mr. Wert has been a Director
since February 1998. Mr. Wert is President and CEO of
Clanco Management Corp., which is headquartered in Cleveland,
Ohio. Prior to joining Clanco in May 2000, Mr. Wert served
as Chief Financial Officer and then Chief Investment Officer of
KeyCorp, a financial services company based in Cleveland, Ohio,
and its predecessor, Society Corporation, until 1996, after
holding a variety of capital markets and corporate banking
leadership positions spanning his 25 year banking career.
Mr. Wert received his undergraduate degree in finance from
Michigan State University in 1971 and completed the Stanford
University Executive Program in 1982. Mr. Wert also serves
as Vice Chairman and Director of
Park-Ohio
Holdings Corp.
Qualifications. Mr. Wert has over
25 years of experience in the banking and financial
services industries, including 20 years as a senior officer
of a bank. He served as Chairman of the Corporations Audit
Committee from November 2003 to July 2004. He has 18 years
of service as a director of public companies, and has also spent
15 years serving on the boards of several non-public
entities. Mr. Wert has also had leadership positions with
various cultural and community organizations. The Board has
determined that Mr. Wert is an independent director,
financially literate and an audit committee financial expert
within the meaning of applicable SEC rules. The Board views
Mr. Werts independence, his banking and financial
services experience, his experience as a director of other
companies and his demonstrated leadership roles in business and
community activities as important qualifications, skills and
experience for the Boards conclusion that Mr. Wert
should serve as a director of the Corporation.
Recommendation
of the Board
The Board recommends that the shareholders vote
FOR the eight (8) nominees listed above.
Proxies received will be so voted unless shareholders specify
otherwise in the proxy.
10
Security
Ownership of Certain Beneficial Owners and Management
The following table sets forth information with respect to the
beneficial ownership of our common stock as of March 1,
2010, by:
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each person or entity known by us to beneficially own more than
5% of our common stock;
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each of our named executive officers in the Summary Compensation
Table below;
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each of our directors and nominees; and
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all of our executive officers, directors and nominees as a group.
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Under the rules of the SEC, a person is deemed to be a
beneficial owner of a security if that person has or shares
voting power, which includes the power to vote or to direct the
voting of such security, or investment power, which includes the
power to dispose of or to direct the disposition of such
security. A person is also deemed to be a beneficial owner of
any securities for which that person has a right to acquire
beneficial ownership within 60 days. Under these rules,
more than one person may be deemed a beneficial owner of the
same securities and a person may be deemed to be the beneficial
owner of securities as to which such person has no economic
interest.
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Number of Shares
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Percent
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Name of Beneficial Owner
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Beneficially Owned
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of Class
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Executive Officers, Directors and Nominees
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Daniel P.
Dyer1,2
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561,616
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4.36
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%
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George D.
Pelose1,2
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383,477
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|
|
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2.99
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Lynne C.
Wilson1,2
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92,249
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*
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John J.
Calamari1,3
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28,096
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|
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|
*
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Lawrence J.
DeAngelo1,3
|
|
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35,083
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|
|
|
*
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Edward
Grzedzinski1,3
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20,820
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|
|
|
*
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Kevin J.
McGinty1,3
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|
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82,246
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|
|
|
*
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James W.
Wert1,3
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|
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76,287
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|
|
|
*
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Matthew J.
Sullivan1,3,4
|
|
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2,325,429
|
|
|
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18.26
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J. Christopher
Teets5,10
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|
|
|
|
|
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All executive officers, directors and nominees as a group
(10 persons)1,6
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3,605,303
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|
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27.44
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Beneficial Owners of More Than 5% of Common Stock
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Peachtree Equity Investment Management,
Inc.7
1170 Peachtree St., Ste. 1610
Atlanta, GA 30309
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2,309,934
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19.6
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Columbia Wanger Asset Management,
L.P.8
227 West Monroe Street, Suite 3000
Chicago, IL 60606
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|
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1,214,550
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|
|
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9.6
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William Blair & Company,
LLC9
222 W. Adams Street
Chicago, IL 60606
|
|
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1,179,538
|
|
|
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9.33
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Red Mountain Capital Partners LLC
10
10100 Santa Monica Blvd, Ste. 925
Los Angeles, CA 90067
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|
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1,040,374
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|
|
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8.2
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Dimensional Fund Advisors
LP.11
Palisades West, Building One
6300 Bee Cave Road
Austin, TX 78746
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721,891
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5.71
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* Represents less than 1%.
1 Does
not include options vesting more than 60 days after
March 1, 2010, held by Mr. Dyer (69,629),
Mr. Pelose (50,090), Ms. Wilson (26,841),
Mr. Calamari (2,041), Mr. DeAngelo (2,041),
Mr. Grzedzinski
11
(3,291), Mr. McGinty (2,324), and Mr. Sullivan
(4,541), and Mr. Wert (2,041). Includes, where applicable,
shares held in the 2003 Employee Stock Purchase Plan and
restricted shares awarded under the 2003 Equity Compensation
Plan, as amended.
2 Includes
options for Mr. Dyer (164,008), Mr. Pelose (145,506)
and Ms. Wilson (8,969) to purchase shares that are
currently exercisable or will become exercisable within
60 days following March 1, 2010.
3 Includes
options for Mr. Calamari (13,857), Mr. DeAngelo
(13,857), Mr. Grzedzinski (9,946), Mr. McGinty
(23,657), Mr. Sullivan (6,204), and Mr. Wert (23,657)
to purchase shares that are currently exercisable or will become
exercisable within 60 days following March 1, 2010.
4 Includes
2,309,934 shares that are reported as beneficially owned by
Peachtree Equity Investment Management, Inc., based solely on a
Schedule 13G filed jointly by such entity, WCI (Private
Equity) LLC (WCI) and Matthew J. Sullivan with the
SEC on February 17, 2004. The shares are reported as
directly owned by WCI, whose sole manager is Peachtree Equity
Investment Management, Inc. (the Manager). The
Manager could be deemed to be an indirect beneficial owner of
the reported shares, and could be deemed to share such
beneficial ownership with WCI. Matthew J. Sullivan is a director
of the Manager, and could be deemed to be an indirect beneficial
owner of the reported shares, and could be deemed to share such
indirect beneficial ownership with the Manager and WCI.
Mr. Sullivan disclaims beneficial ownership of the reported
shares except to the extent of his pecuniary interest therein.
5 The
information for Mr. Teets does not include shares
beneficially owned by Red Mountain Capital Partners LLC
(Red Mountain), as described in footnote 10 below.
Mr. Teets, a Partner of Red Mountain, disclaims beneficial
ownership of the shares of the Corporation beneficially owned by
Red Mountain.
6 Includes
options to purchase 409,661 shares that are currently
exercisable or will become exercisable within 60 days
following March 1, 2010.
7 The
shares reported as beneficially owned by Peachtree Equity
Investment Management, Inc. are based solely on a
Schedule 13G filed jointly by such entity, WCI (Private
Equity) LLC (WCI) and Matthew J. Sullivan with the
SEC on February 17, 2004. The shares are reported as
directly owned by WCI, whose sole manager is Peachtree Equity
Investment Management, Inc. (the Manager). The
Manager could be deemed to be an indirect beneficial owner of
the reported shares, and could be deemed to share such
beneficial ownership with WCI. Matthew J. Sullivan is a director
of the Manager, and could be deemed to be an indirect beneficial
owner of the reported shares, and could be deemed to share such
indirect beneficial ownership with the Manager and WCI.
Mr. Sullivan disclaims beneficial ownership of the reported
shares except to the extent of his pecuniary interest therein.
8 The
shares reported as beneficially owned by Columbia Wanger Asset
Management, L.P. (Columbia) are reported as of
December 31, 2009, based solely on a Schedule 13G/A
filed by Columbia on February 10, 2010. Columbia is the
beneficial owner of 1,214,550 shares and these shares
include shares held by Columbia Acorn Trust (CAT), a
Massachusetts business trust that is advised by the reporting
person. CAT holds 9.42% of the shares of issuer.
9 The
shares reported as beneficially owned by William
Blair & Company, L.L.C (Blair) are
reported as of December 31, 2009, based solely on a
Schedule 13G/A filed by Blair on February 5, 2010.
10 The
shares reported as beneficially owned by Red Mountain are
reported as of January 4, 2010, based solely on a
Schedule 13D/A (Amendment No. 2 to Schedule 13D)
jointly filed on January 5, 2010 by Red Mountain and
certain of its related persons. Mr. Teets, a Partner of Red
Mountain, disclaims beneficial ownership of all shares of the
Corporation beneficially owned by Red Mountain.
11 The
shares reported as beneficially owned by Dimensional
Fund Advisors LP (Dimensional) are reported as
of December 31, 2009, based solely on a Schedule 13G
filed by Dimensional on February 8, 2010. Dimensional
reported that it does not possess any sole or shared voting or
investment power over any shares beneficially owned. Dimensional
disclaims beneficial ownership of the shares reported.
12
Compensation
Discussion and Analysis
Compensation
Overview
The Compensation Committee of the Board of Directors sets and
administers the policies that govern our executive compensation,
including:
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establishing and reviewing executive base salaries;
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overseeing the Corporations annual incentive compensation
plans;
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overseeing the Corporations long-term equity-based
compensation plan;
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approving all bonuses and awards under those plans; and
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annually approving and recommending to the Board all
compensation decisions for executive officers, including those
for the Chief Executive Officer (the CEO) and the
other officers named in the Summary Compensation Table (together
with the CEO, the Executive Officers).
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The current Executive Officers of the Corporation are Daniel P.
Dyer, George D. Pelose and Lynne C. Wilson. All of them were
Executive Officers during 2009.
The Compensation Committee operates under a written charter
(accessible on the investor relations page of the
Corporations website at www.marlincorp.com) and
only independent directors serve on the Compensation Committee.
Compensation Philosophy. The Compensation
Committee believes that the most effective executive
compensation program is one that is designed to reward the
achievement of specific annual, long-term and strategic goals by
the Corporation, and which aligns executives interests
with those of the shareholders by rewarding performance against
established goals, with the ultimate objective of improving
shareholder value. The Compensation Committee evaluates both
performance and compensation to ensure that the Corporation
maintains its ability to attract and retain superior employees
in key positions and that compensation provided to key employees
remains competitive in the marketplace. To that end, the
Compensation Committee believes executive compensation packages
provided by the Corporation to its executives, including the
Executive Officers, should include both cash and equity-based
compensation that reward performance as measured against
established goals.
Managements Role in the Compensation-Setting
Process. The Compensation Committee makes all
compensation decisions relating to the Executive Officers;
however, the Corporations management plays a significant
role in the compensation-setting process, including:
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evaluating employee performance;
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establishing performance targets and objectives; and
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recommending salary and bonus levels and equity awards.
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The CEO works with the Compensation Committee Chairman in
establishing the agenda for Compensation Committee meetings.
Management also prepares meeting information for each
Compensation Committee meeting. The CEO also participates in
Compensation Committee meetings at the Compensation Committee
Chairmans request to provide:
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background information regarding the Corporations
strategic objectives;
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a tally sheet for each Executive Officer, setting forth total
compensation and aggregate equity awards for each Executive
Officer;
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an evaluation of the performance of the Corporations
officers, including the Executive Officers; and
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compensation and equity award recommendations as to the
Corporations officers, including the Executive Officers.
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13
The Compensation Committee can exercise its discretion in
modifying any recommended awards to the Corporations
officers, including the Executive Officers. At a Compensation
Committee meeting held on January 19, 2010, the Committee
approved the 2009 bonus recommendations put forth by the CEO.
External Consultants and Benchmarking. The
Compensation Committee has utilized the services of an
independent consulting firm, Watson Wyatt. In 2004, the
Compensation Committee first engaged Watson Wyatt to conduct a
study of the Corporations Executive Officer compensation
programs and strategies (the 2004 Watson Study). The
2004 Watson Study compared the Corporations executive
compensation levels with that of (i) a peer group comprised
of companies with a business services and financing focus that
are similar in size to the Corporation (the peer
group), (ii) compensation details from various market
surveys across several industries (together with the peer group,
the comparison group), and (iii) broader
financial services industry practices. The 2004 Watson Study
selected a compensation peer group of companies consisting of
eight publicly-traded companies in a similar industry and size
with executive positions with responsibilities similar in
breadth and scope as the Corporation. The peer group used in the
initial benchmark analysis contained in the 2004 Watson Study
consisted of: California First National Bank (CFNB); Credit
Acceptance Corp. (CACC); Financial Federal Corp. (FIF); First
Marblehead Corp. (FMD); Medallion Financial Corp. (TAXI);
Portfolio Recovery Associates Inc. (PRAA); First Investors
Financial Services Group Inc. (FIFS); and World Acceptance Corp.
(WRLD).
The 2004 Watson Study concluded that the Corporations
Executive Officers are paid conservatively relative to the
comparison group. The study noted that the Executive
Officers base salaries at the time of the report were
generally below the 50th percentile of the comparison group, but
the competitiveness of the Executive Officers total annual
cash compensation improved with above market bonus
opportunities. The 2004 Watson Study further noted that the
value of the existing long-term incentives granted to the
executives (primarily in the form of stock options) was below
market levels.
In response to the findings of the 2004 Watson Study and in
keeping with our philosophy of providing strong incentives for
superior performance, the Compensation Committee modified the
structure of the Corporations Executive Officer equity
compensation program. Based on recommendations contained in the
2004 Watson Study, effective in 2005, the Compensation Committee
modified the stock-based incentive award program for the
Executive Officers to include the three separate components set
forth below (i.e., stock option grants, restricted stock grants,
and the management stock ownership program (the
MSOP)). The 2004 Watson Study suggested that this
mix of stock-based awards will improve the competitiveness of
the Corporations long-term incentive plan for its
Executive Officers and will better serve to align the overall
interests of the Executive Officers with the Corporations
shareholders.
In October 2008, the Compensation Committee engaged Watson Wyatt
to update the 2004 Watson Study regarding the Corporations
Executive Officer compensation programs and strategies (the
2008 Watson Study). In response to the findings of
the 2008 Watson Study, the Compensation Committee further
modified the structure of the Corporations Executive
Officer compensation programs. Based on recommendations
contained in the 2008 Watson Study, effective in 2009, the three
components of the stock-based incentive award program for the
Executive Officers consisted of performance accelerated
restricted stock awards, time vesting restricted stock, and the
MSOP. Based on the 2008 Watson Study, stock options were
eliminated from future grants and replaced with restricted stock.
The equity grants made to the Executive Officers in 2009 were
done under the program structure recommended in the 2008 Watson
Study.
Compensation
Components
As part of their studies, Watson Wyatt reviewed the
Corporations existing executive compensation structure and
assisted in the development of executive compensation programs
that (a) are competitive among companies in similar growth
and development stages to attract and retain talented
management, (b) provide incentives that focus on the
critical needs of the business on an annual and continuing
basis, and (c) reward management commensurate with the
creation of shareholder and market value.
14
The 2004 Watson Study included an initial benchmark analysis of
the Corporations executive compensation program, comparing
it to (i) the peer group, (ii) the comparison group,
and (iii) broader financial services industry practices.
The peer group used in the initial benchmark analysis in the
2004 Watson Study consisted of: California First National Bank
(CFNB); Credit Acceptance Corp. (CACC); Financial Federal Corp.
(FIF); First Marblehead Corp. (FMD); Medallion Financial Corp.
(TAXI); Portfolio Recovery Associates Inc. (PRAA); First
Investors Financial Services Group Inc. (FIFS); and World
Acceptance Corp. (WRLD). The Compensation Committee used this
benchmark data to set the Executive Officers compensation
levels in 2004. On an ongoing basis, the Compensation Committee
reviews a variety of factors in assessing and setting overall
executive compensation levels, including references to this peer
group and the market surveys, broader financial services
industry practices, tally sheets, executive performance, and the
2008 Watson Study.
The components of compensation paid to the Executive Officers in
2009 were as follows:
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|
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|
Base Salary. The Compensation Committee
establishes base salaries that it believes to be sufficient to
attract and retain quality Executive Officers who can contribute
to the long-term success of the Corporation. The Committee
determines each Executive Officers base salary through a
thorough evaluation of a variety of factors, including the
executives responsibilities, tenure, job performance and
prevailing levels of market compensation. The Compensation
Committee reviews these salaries at least annually for
consideration of increase based on merit and competitive market
factors. The 2008 Watson Study provided the Compensation
Committee with an updated competitive analysis regarding the
base salaries of the Corporations Executive Officers.
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|
|
|
Bonus. The annual incentive bonus awards are
designed to reward the Executive Officer for the achievement of
certain corporate and individual performance goals. The
Compensation Committee sets threshold, target and maximum bonus
levels for each goal. As part of the 2004 Watson Study, the
Corporation sought to set the Executive Officers total
target compensation levels at levels that were near the median
of the data from the peer group and the broader industry
practices. This resulted in the setting of threshold, target and
maximum bonus levels (as a percentage of base salaries) as
follows: Daniel P. Dyer: 42.5% threshold, 85% target and 148.75%
maximum; George D. Pelose: 37.5% threshold, 75% target and
108.75% maximum; and Lynne C. Wilson: 22.5% threshold, 45%
target and 63% maximum.
|
Prior to the beginning of each year, the Corporation sets target
levels for the items of corporate performance that are to be
measured that year for assessing the bonus opportunity for the
Executive Officers. Some of the target levels are standard for
each Executive Officer (such as corporate pre-tax income), and
some are specific to that Executive Officers primary area
of responsibility (such as unit performance and individual
development). The full matrix of performance measurements varies
by Executive Officer and by year, as do the weightings of each
item, which can range from 15% to 75% of the total bonus
opportunity. To achieve the target bonus payout associated with
a performance measurement, the Executive Officer must achieve
100% of the plan for that performance measurement. If the
Executive Officer does not achieve 100% of the planned
performance measurements for that year, such Executive Officer
can still achieve the threshold bonus payout if the performance
level exceeds certain minimum requirements. Maximum bonus payout
can be achieved if the Executive Officer exceeds the planned
levels for the performance measurements. Each Executive Officer
has a portion of his or her bonus opportunity measured against
individual goals (MBOs) and performance. The weighting of the
individual performance component varies by Executive Officer and
by year, and may range from 15% to 75% of the Executive
Officers total bonus opportunity. Individual performance
goals typically include performance on specific projects or
initiatives assigned to the Executive Officer as well as overall
professional development.
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|
|
|
Equity-Based Incentive Awards. The
Compensation Committee believes that share ownership provided by
equity-based compensation emphasizes and reinforces the
mutuality of interest among the Executive Officers and
shareholders. After each fiscal year, the Compensation Committee
|
15
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|
|
reviews and approves stock-based awards for the Executive
Officers based primarily on the Corporations results for
the year and the executives individual contribution to
those results. As part of the 2008 Watson Study, the Corporation
set the Executive Officers annual equity-based
compensation target levels (as a percentage of base salaries) as
follows: Daniel P. Dyer: 120% target; George D. Pelose: 90%
target; and Lynne C. Wilson: 45% target. The stock-based
incentive awards adopted pursuant to the 2008 Watson Study
include three separate formulaic components:
(1) performance accelerated restricted stock grants (60% of
the annual target grant amount), (2) time vesting
restricted stock grants (20% of the annual target grant amount),
and (3) the MSOP (20% of the annual target grant amount).
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Other Benefits. The Executive Officers
participate in employee benefits plans generally available to
all of the Corporations employees, including medical and
health plans and 401(k) and ESPP programs. In addition,
Messrs. Dyer and Pelose received reimbursement of life and
disability insurance premiums pursuant to their employment
agreements, and each of the Executive Officers receive
reimbursement for physical examinations.
|
Components
of Equity-Based Incentive Awards
As mentioned above, the formulaic equity-based incentive awards
adopted pursuant to the 2008 Watson Study include three separate
components: (1) performance accelerated restricted stock
grants, (2) time vesting restricted stock grants, and
(3) the MSOP.
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|
Performance Accelerated Restricted Stock
Grants. Performance accelerated restricted stock
grants represent 60% of the value of the annual equity grants
made to the Executive Officers and the other equity-based
incentive program participants. These grants are made
bi-ennially (i.e., double grants made every other year) as
recommended in the 2008 Watson Study as a way to make meaningful
grants that will help immediately align the interests of the
grant recipients with the shareholders. The restrictions on the
performance accelerated restricted stock grants lapse after
seven years, but are subject to accelerated performance vesting.
Vesting shall accelerate and the restrictions shall lapse on all
or a portion of the restricted shares if the grant recipient
achieves all or a portion of
his/her
annual vesting goals during the first three years after the
grant date (up to one-third of the total grant amount can vest
on an accelerated basis each of the first three years after the
grant date), as approved by the Compensation Committee.
Overachievement against the goals may result in the Compensation
Committee granting of additional restricted shares.
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Time Vesting Restricted Stock Grants. Time
vesting restricted stock grants represent 20% of the value of
the annual equity grants made to the Executive Officers and the
other equity-based incentive program participants. The
restrictions on these shares shall lapse pro-rata over four
years after the grant date (25% per year).
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|
Management Stock Ownership Program. The MSOP
represents 20% of the value of the annual equity grants made to
the Executive Officers and the other equity-based incentive
program participants. The MSOP provides for a matching grant of
restricted stock to a participant who owns common stock of the
Corporation. The restrictions on the matching MSOP restricted
shares lapse after ten years, but are subject to accelerated
vesting. Vesting of the matching MSOP restricted shares shall
immediately accelerate (and all restrictions shall lapse) after
three years if the grantee maintained continuous outright
ownership of a matching number of unrestricted shares of the
Corporation for the entire three-year period.
|
Ownership
Guidelines
In an effort to ensure that the Executive Officers and other
officers and managers of the Corporation maintain sufficient
equity ownership so that their thinking and actions are aligned
with the interests of our shareholders, the Corporation first
adopted management ownership guidelines in 2006, which apply to
all participants in the equity-based incentive award program.
The ownership guidelines were revised in 2009 and currently
consist of
16
minimum share ownership levels for the Executive Officers and
the other officers participating in the equity-based incentive
award program. The minimum share ownership guidelines are
summarized below:
|
|
|
Name/Position
|
|
Minimum Ownership Guideline
|
|
Daniel P. Dyer
|
|
50,000 shares
|
George D. Pelose
|
|
35,000 shares
|
Lynne C. Wilson
|
|
20,000 shares
|
Other Officers
|
|
2,000 to 20,000 shares (depending on position and tenure)
|
Restricted shares do not count toward the ownership guideline.
Compliance will be reviewed at least annually.
If an equity incentive program participant sells shares of the
Corporation while such participant is not in compliance with the
ownership guidelines, the Compensation Committee will take this
into account prior to making additional equity awards to such
participant.
As of March 1, 2010, Messrs. Dyer and Pelose were in
compliance with their respective ownership guidelines, and
Ms. Wilson was not in compliance with her ownership
guideline.
Employment
Agreements
In November 2003, the Corporation entered into employment
agreements with Messrs. Dyer and Pelose, amended in
December 2008, the terms of which are substantially similar to
each other. The employment agreements establish minimum salary
and target bonus levels for the executives. The agreements
require the executives to devote substantially all of their
business time to their employment duties. Each agreement had an
initial two-year term that automatically extends on each
anniversary of the effective date of the agreement for
successive one-year terms unless either party to the agreement
provides 90 days notice to the other party that he does not
wish to renew the agreement. The agreements currently run
through November 2011.
The Corporation may terminate the employment agreements for or
without cause, and the executive may terminate his employment
agreement with or without good reason. The employment agreements
terminate automatically upon a change in control. The employment
agreements provide for severance in the case of termination
without cause, resignation for good reason, termination upon
non-renewal of agreement, and termination on account of change
in control. The employment agreements are intended to comply
with the requirements of Section 409A of the Internal
Revenue Code, to the extent applicable, and the agreements shall
be interpreted to avoid any penalty sanctions under the Code.
Upon termination of the employment agreement, the executive will
be subject to certain protective non-competition and
non-solicitation covenants. In addition, for a
24-month
period after termination of employment, the executive is
prohibited from hiring the Corporations employees.
Compensation
for Executive Officers in 2009
Base Salary. The Executive Officers are
currently entitled to the following base salaries:
Mr. Dyer, $390,000, Mr. Pelose, $325,000, and
Ms. Wilson, $252,937; however, effective February 9,
2009, Messrs. Dyer and Pelose voluntarily agreed to reduce
their salaries by 5% for a period of time in light of the
difficult economic environment. Mr. Peloses voluntary
salary reduction ended on December 1, 2009.
Annual Bonuses. In 2009, the Executive
Officers were eligible for annual bonuses at the following
threshold, target and maximum bonus levels (as a percentage of
base salaries): Daniel P. Dyer: 42.5% threshold, 85% target and
148.75% maximum; George D. Pelose: 37.5% threshold, 75% target
and 108.75% maximum; and Lynne C. Wilson: 22.5% threshold, 45%
target and 63% maximum. The annual incentive bonus awards are
designed to reward the Executive Officer for the achievement of
certain corporate and individual performance goals. Each year,
the Compensation Committee reviews and approves goals for each
Executive Officer, which typically consist of a corporate goal
and specific individual goals.
Given the difficult and uncertain economic environment in 2009
for financial services companies, the Board established a
maximum aggregate potential bonus pool of $600,000 for 2009 that
would be eligible for bonus
17
payouts to thirteen officer-level employees if the Corporation
achieved pre-tax adjusted income (excluding the impact of
derivatives) of $1.7 million for 2009. The Corporation
posted pre-tax adjusted income (excluding the impact of
derivatives) of $3.3 million for 2009, which exceeded the
$1.7 million threshold by 94%. As a result, the entire
$600,000 aggregate bonus pool was made available for payouts to
the eligible officer-level employees of the Corporation.
Given the reduced aggregate bonus pool of $600,000 for 2009,
Mr. Dyer (as CEO) recommended adjusted target bonus levels
for the Executive Officers for 2009 as follows:
Mr. Dyer adjusted from 85% of base salary to
29.64%; Mr. Pelose adjusted from 75% of base
salary to 28.93%; and Ms. Wilson adjusted from
45% of base salary to 20.47%. Mr. Dyer also recommended
that since the Corporation exceeded the 2009 pre-tax adjusted
income threshold for the reduced bonus pool, the bonus payouts
to the Executive Officers in 2009 be made at their adjusted
target bonus percentages. The Compensation Committee accepted
Mr. Dyers recommendation and, as a result, the target
bonus levels for the Executive Officers for 2009 were reduced as
recommended and 2009 bonus payouts to the Executive Officers
were made at their 2009 adjusted target bonus percentages.
The calculation of the bonus payable to each executive in 2009
is as follows: Mr. Dyer $390,000 base salary
multiplied by the 2009 adjusted target bonus percentage of
29.64% equals $115,600; Mr. Pelose $325,000
base salary multiplied by the 2009 adjusted target bonus
percentage of 28.93% equals $94,031; and
Ms. Wilson $252,937 base salary multiplied by
the 2009 adjusted target bonus percentage of 20.47% equals
$51,781. The table below shows the aggregate 2009 bonus
opportunity at the threshold, target and maximum levels and the
actual 2009 bonus achieved:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009 Annual Bonus Opportunity
|
|
Actual Bonus
|
|
|
Threshold
|
|
Target1
|
|
Maximum
|
|
Achieved for 2009
|
|
Daniel P. Dyer
|
|
$
|
165,750
|
|
|
$
|
331,500
|
|
|
$
|
580,125
|
|
|
$
|
115,600
|
|
George D. Pelose
|
|
$
|
121,875
|
|
|
$
|
243,750
|
|
|
$
|
353,437
|
|
|
$
|
94,031
|
|
Lynne C. Wilson
|
|
$
|
56,911
|
|
|
$
|
113,822
|
|
|
$
|
159,350
|
|
|
$
|
51,781
|
|
1 Represents
normal target levels. As described above, targets bonus levels
were adjusted in 2009 due to the difficult and uncertain
economic environment to the following levels:
Mr. Dyer $115,600; Mr. Pelose
$94,031; and Ms. Wilson $51,781.
Annual Equity-Based Incentives. In connection
with the Corporations annual equity-based incentive
program adopted based on the recommendations in the 2008 Watson
Study, on February 13, 2009, the Compensation Committee
reviewed and approved stock-based awards for the Executive
Officers based on the Corporations results for the year
and the executives individual contribution to those
results. Grants made under the annual equity-based incentive
plan to the Executive Officers in 2009 consisted of the
following:
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|
|
|
|
Performance Accelerated Restricted Stock
Grant: Pursuant to the recommendations in the
2008 Watson Study, the Compensation Committee made a bi-ennial
grant of restricted performance based stock in 2009 (which
represented a double grant encompassing 2009 and 2010 grant
amounts). On February 18, 2009, the Compensation Committee
granted the following amount of performance accelerated
restricted stock to the Executive Officers:
Mr. Dyer 38,400; Mr. Pelose
74,000; and Ms. Wilson 30,352. On
October 28, 2009, the Corporations shareholders
approved an amendment to the Corporations 2003 Equity
Compensation Plan that increased the annual grant limit to a
participant under the plan from 100,000 shares to
200,000 shares. As a result of that change, on
October 28, 2009, the Corporation made additional grants of
performance accelerated restricted stock of 86,400 and
4,000 shares, respectively, to Messrs. Dyer and
Pelose, which completed the amount of the bi-ennial grant owing
to these individuals based on their equity participation levels.
These restrictions on the performance accelerated restricted
stock lapse in seven years from the grant date, but lapsing may
be accelerated to the first three years after the grant date (up
to one-third each year) if certain performance conditions are
met. The performance goals for the Executive Officers for the
first years potential one-third accelerated vesting were
as follows: Mr. Dyer debt and liquidity
management, pursue alternative funding, satisfactory risk
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18
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management, enhance service value proposition, improve corporate
level efficiency and productivity, retain key personnel, and
strategic positioning of the organization;
Mr. Pelose debt and liquidity management,
pursue alternative funding, satisfactory risk management,
enhance service value proposition, improve corporate level
efficiency and productivity, overall asset quality (emphasis on
2009 vintage), integrate the bank and Marlin where applicable,
and develop the management team; and Ms. Wilson
enhance service value proposition, improve corporate level
efficiency and productivity, compliance for regulatory exams,
implement certain financial systems, and continued development
of tax department.
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|
|
|
|
Time Vesting Restricted Stock Awards: The
annual time vesting restricted stock grant to the Executive
Officers was made by the Compensation Committee on
February 18, 2009. The restrictions on the time vesting
restricted stock grants will lapse over the four year period
following the grant date on a pro-rate basis (25% per year). In
2009, the Corporation made the following time vesting restricted
stock awards to the Executive Officers:
Mr. Dyer 20,800; Mr. Pelose
13,000; and Ms. Wilson 5,059.
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|
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|
Matching Grant of MSOP Restricted
Stock: Pursuant to the Corporations MSOP
plan, the Compensation Committee made matching grants of
restricted stock to the Executive Officers. The restrictions on
the MSOP restricted stock will lapse ten years from the date of
grant; however, if the Executive Officer continuously maintains
ownership of an equal number of common shares for three years,
the vesting on the matching shares shall accelerate and fully
vest at the end of such three year period. In 2009, the
Corporation granted the following matching shares of restricted
stock to the Executive Officers: Mr. Dyer
20,800; Mr. Pelose 13,000; and
Ms. Wilson 5,059.
|
Other Restricted Stock Grants. On
January 2, 2009, the Compensation Committee awarded
20,000 shares of restricted stock to Mr. Dyer. This
special grant of restricted shares was made by the Compensation
Committee to further align the interests of the Executive
Officer with those of the shareholders. These restricted shares
shall cliff vest three years from the grant date.
Compensation
Committee Report
The Compensation Committee has reviewed and discussed the
Compensation Discussion and Analysis set forth above with
management and, based on such review and discussions, the
Compensation Committee recommended to the Board that the
Compensation Discussion and Analysis be included in the Proxy
Statement for the Corporations 2010 Annual Meeting of
Shareholders and included in the Corporations Annual
Report on
Form 10-K
for the year ended December 31, 2009.
This report is submitted by the members of the Compensation
Committee of the Board of Directors:
Lawrence J. DeAngelo (Chairman)
Edward Grzedzinski
Matthew J. Sullivan
Compensation
Committee Interlocks and Insider Participation
The members of the Corporations Compensation Committee are
named above. None of these individuals has ever been an officer
or employee of the Corporation or any of its subsidiaries and no
compensation committee interlocks existed during
2009.
19
Compensation
and Plan Information
Summary
Compensation Table
The following table sets forth the compensation awarded or paid,
or earned or accrued for services rendered to the Corporation in
all capacities during fiscal years 2009, 2008 and 2007 by the
Corporations Chief Executive Officer, Chief Financial
Officer and the other individual who was an executive officer
during fiscal year 2009. In accordance with SEC rules, the
compensation described in the table does not include medical,
group life insurance or other benefits which are available
generally to all our salaried employees.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
Incentive Plan
|
|
All Other
|
|
|
Name & Principal
|
|
|
|
Salary
|
|
Bonus
|
|
Awards
|
|
Awards
|
|
Compensation
|
|
Compensation
|
|
Total
|
Position
|
|
Year
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)1
|
|
($)2
|
|
($)
|
|
Daniel Dyer
|
|
|
2009
|
|
|
$
|
387,600
|
|
|
|
|
|
|
$
|
233,835
|
|
|
$
|
80,678
|
|
|
$
|
115,600
|
|
|
$
|
12,732
|
|
|
$
|
830,445
|
|
Chief Executive Officer
|
|
|
2008
|
|
|
$
|
334,808
|
|
|
|
|
|
|
$
|
142,770
|
|
|
$
|
111,562
|
|
|
$
|
115,600
|
|
|
$
|
11,441
|
|
|
$
|
716,181
|
|
|
|
|
2007
|
|
|
$
|
320,000
|
|
|
|
|
|
|
$
|
111,318
|
|
|
$
|
71,752
|
|
|
$
|
47,600
|
|
|
$
|
13,591
|
|
|
$
|
564,261
|
|
George D. Pelose
|
|
|
2009
|
|
|
$
|
324,313
|
|
|
|
|
|
|
$
|
302,318
|
|
|
$
|
53,103
|
|
|
$
|
94,031
|
|
|
$
|
9,616
|
|
|
$
|
783,381
|
|
Chief Operating Officer and
|
|
|
2008
|
|
|
$
|
301,346
|
|
|
|
|
|
|
$
|
346,107
|
|
|
$
|
65,482
|
|
|
$
|
94,031
|
|
|
$
|
11,187
|
|
|
$
|
818,153
|
|
General Counsel
|
|
|
2007
|
|
|
$
|
290,154
|
|
|
|
|
|
|
$
|
190,373
|
|
|
$
|
55,381
|
|
|
$
|
44,250
|
|
|
$
|
6,636
|
|
|
$
|
586,794
|
|
Lynne C. Wilson
|
|
|
2009
|
|
|
$
|
262,665
|
|
|
|
|
|
|
$
|
139,643
|
|
|
$
|
19,634
|
|
|
$
|
51,781
|
|
|
$
|
2,919
|
|
|
$
|
476,642
|
|
Senior Vice President and
|
|
|
2008
|
|
|
$
|
252,937
|
|
|
|
|
|
|
$
|
85,389
|
|
|
$
|
16,970
|
|
|
$
|
39,832
|
|
|
$
|
6,485
|
|
|
$
|
401,613
|
|
Chief Financial Officer
|
|
|
2007
|
|
|
$
|
245,812
|
|
|
|
|
|
|
$
|
52,672
|
|
|
$
|
5,691
|
|
|
$
|
24,147
|
|
|
$
|
2,451
|
|
|
$
|
330,773
|
|
|
|
1
|
Figures represent the cash portion of the bonuses earned for
that year (but paid in first quarter of the following year). For
fiscal 2007, the Compensation Committee approved the bonuses for
the Executive Officers that were recommended by the CEO, with
one exception: rather than paying the entire bonus amounts in
cash, the Compensation Committee decided to pay approximately
one-half in cash (which is reflected in the Non-Equity Incentive
Plan Compensation column for 2007) and the remainder in
restricted stock awards (Mr. Dyer
5,000 shares; Mr. Pelose
4,648 shares; and Ms. Wilson
2,245 shares) at a per share price equal to $9.52, which
was the closing price of the Corporations common stock on
that date.
|
|
2
|
Includes contributions made by the Corporation to the 401(k)
plan on behalf of the Executive Officers, and, except with
respect to Ms. Wilson, reimbursement of life and disability
insurance premiums pursuant to their employment agreements. The
2008 figures for Mr. Pelose and Ms. Wilson and the
2007 figure for Mr. Dyer include reimbursement of the cost
of a physical examination. Contributions made by the Corporation
to the 401(k) plan in 2009 were $4,741 for Mr. Dyer, $5,229
for Mr. Pelose and $2,919 for Ms. Wilson.
Reimbursement of life and disability insurance premiums in 2009
was $7,991 for Mr. Dyer and $4,387 for Mr. Pelose.
|
20
Current
Compensation Grants of Plan-Based Awards
Table
The following Grants of Plan-Based Awards table provides
additional information about restricted stock and option awards
and equity incentive plan awards granted to our Executive
Officers during the year ended December 31, 2009. The
Corporation does not have any non-equity incentive award plans
and has therefore omitted the corresponding columns. The
compensation plans under which the grants in the following table
were made are described in the Compensation for Executive
Officers in 2009 Equity-Based Incentives.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All other
|
|
Option
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Awards:
|
|
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Number
|
|
|
|
Date Fair
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
of
|
|
Exercise
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
of
|
|
Securities
|
|
or Base
|
|
Stock
|
|
|
|
|
Estimated Future Payouts Under
|
|
Shares
|
|
Under-
|
|
Price of
|
|
and
|
|
|
|
|
Equity Incentive Plan Awards
|
|
of Stock
|
|
lying
|
|
Option
|
|
Option
|
|
|
Grant
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
or Units
|
|
Options
|
|
Awards
|
|
Awards
|
Name
|
|
Date
|
|
(#)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
($/sh)
|
|
($)
|
|
Daniel P. Dyer
|
|
|
01/02/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
$
|
51,000
|
|
|
|
|
02/18/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,800
|
|
|
|
|
|
|
|
|
|
|
$
|
93,600
|
|
|
|
|
02/18/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,800
|
|
|
|
|
|
|
|
|
|
|
$
|
93,600
|
|
|
|
|
02/18/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,400
|
|
|
|
|
|
|
|
|
|
|
$
|
265,344
|
|
|
|
|
10/28/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
86,400
|
|
|
|
|
|
|
|
|
|
|
$
|
619,488
|
|
George D. Pelose
|
|
|
02/18/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,000
|
|
|
|
|
|
|
|
|
|
|
$
|
58,500
|
|
|
|
|
02/18/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,000
|
|
|
|
|
|
|
|
|
|
|
$
|
58,500
|
|
|
|
|
02/18/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
74,000
|
|
|
|
|
|
|
|
|
|
|
$
|
511,340
|
|
|
|
|
10/28/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
|
|
$
|
28,680
|
|
Lynne C. Wilson
|
|
|
02/18/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,059
|
|
|
|
|
|
|
|
|
|
|
$
|
22,766
|
|
|
|
|
02/18/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,352
|
|
|
|
|
|
|
|
|
|
|
$
|
209,732
|
|
|
|
|
09/10/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,059
|
|
|
|
|
|
|
|
|
|
|
$
|
37,588
|
|
21
Outstanding
Equity Awards at Fiscal Year-End 2009
The following table summarizes the equity awards we have made to
our Executive Officers which are outstanding as of
December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
Plan
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
Awards:
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
Market or
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
Number of
|
|
Payout
|
|
|
|
|
|
|
Awards;
|
|
|
|
|
|
|
|
Market
|
|
Unearned
|
|
Value of
|
|
|
Number of
|
|
Number of
|
|
Number of
|
|
|
|
|
|
Number of
|
|
Value of
|
|
Shares,
|
|
Unearned
|
|
|
Securities
|
|
Securities
|
|
Securities
|
|
|
|
|
|
Shares or
|
|
Shares or
|
|
Units or
|
|
Shares, Units
|
|
|
Underlying
|
|
Underlying
|
|
Underlying
|
|
Option
|
|
|
|
Units of
|
|
Units of
|
|
Other
|
|
or Other
|
|
|
Unexercised
|
|
Unexercised
|
|
Unexercised
|
|
Exercise
|
|
Option
|
|
Stock that
|
|
Stock that
|
|
Rights that
|
|
Rights that
|
|
|
Options (#)
|
|
Options (#)
|
|
Unearned
|
|
Price
|
|
Expiration
|
|
Have Not
|
|
Have Not
|
|
Have Not
|
|
Have Not
|
Name
|
|
Exercisable
|
|
Unexercisable
|
|
Options (#)
|
|
($)
|
|
Date
|
|
Vested(#)
|
|
Vested (#)
|
|
Vested (#)
|
|
Vested ($)
|
|
Daniel P. Dyer
|
|
|
20,294
|
|
|
|
|
|
|
|
|
|
|
$
|
4.23
|
|
|
|
04/01/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51,240
|
|
|
|
|
|
|
|
|
|
|
$
|
10.18
|
|
|
|
10/02/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,000
|
|
|
|
|
|
|
|
|
|
|
$
|
3.39
|
|
|
|
01/15/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,000
|
|
|
|
|
|
|
|
|
|
|
$
|
3.39
|
|
|
|
01/10/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,650
|
|
|
|
|
|
|
|
|
|
|
$
|
10.18
|
|
|
|
01/10/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,000
|
|
|
|
4,000
|
1
|
|
|
|
|
|
$
|
18.80
|
|
|
|
01/28/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,429
|
|
|
|
|
|
|
|
|
|
|
$
|
17.52
|
|
|
|
01/10/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,012
|
|
|
|
2,004
|
2
|
|
|
|
|
|
$
|
21.60
|
|
|
|
03/21/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,026
|
3
|
|
$
|
21.60
|
|
|
|
03/28/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,657
|
|
|
|
4,657
|
4
|
|
|
|
|
|
$
|
20.77
|
|
|
|
03/16/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,919
|
5
|
|
$
|
20.77
|
|
|
|
03/16/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,660
|
|
|
|
16,982
|
6
|
|
|
|
|
|
$
|
9.52
|
|
|
|
03/01/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,034
|
7
|
|
$
|
9.52
|
|
|
|
03/01/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,760
|
8
|
|
$
|
21,887
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,000
|
9
|
|
$
|
71,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,320
|
10
|
|
$
|
65,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,773
|
11
|
|
$
|
21,990
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,050
|
12
|
|
$
|
47,977
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
13
|
|
$
|
317,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
14
|
|
$
|
158,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,800
|
15
|
|
$
|
164,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,800
|
16
|
|
$
|
164,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,400
|
17
|
|
$
|
304,512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
86,400
|
18
|
|
$
|
685,152
|
|
|
|
|
|
|
|
|
|
George D. Pelose
|
|
|
5,050
|
|
|
|
|
|
|
|
|
|
|
$
|
5.01
|
|
|
|
07/25/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,000
|
|
|
|
|
|
|
|
|
|
|
$
|
3.39
|
|
|
|
08/20/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,700
|
|
|
|
|
|
|
|
|
|
|
$
|
10.18
|
|
|
|
10/02/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,000
|
|
|
|
|
|
|
|
|
|
|
$
|
3.39
|
|
|
|
01/15/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,000
|
|
|
|
|
|
|
|
|
|
|
$
|
3.39
|
|
|
|
01/10/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,055
|
|
|
|
|
|
|
|
|
|
|
$
|
10.18
|
|
|
|
01/10/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
$
|
14.00
|
|
|
|
11/10/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
2,500
|
1
|
|
|
|
|
|
$
|
18.80
|
|
|
|
01/28/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,246
|
|
|
|
|
|
|
|
|
|
|
$
|
17.52
|
|
|
|
01/10/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,918
|
|
|
|
973
|
2
|
|
|
|
|
|
$
|
21.60
|
|
|
|
03/28/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,838
|
19
|
|
$
|
21.60
|
|
|
|
03/28/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,578
|
|
|
|
3,578
|
4
|
|
|
|
|
|
$
|
20.77
|
|
|
|
03/16/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,924
|
20
|
|
$
|
20.77
|
|
|
|
03/16/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,348
|
|
|
|
13,046
|
6
|
|
|
|
|
|
$
|
9.52
|
|
|
|
03/01/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,842
|
28
|
|
$
|
9.52
|
|
|
|
03/01/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
712
|
8
|
|
$
|
5,646
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,883
|
9
|
|
$
|
30,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,500
|
21
|
|
$
|
202,215
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,391
|
10
|
|
$
|
50,681
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,130
|
11
|
|
$
|
16,891
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,648
|
12
|
|
$
|
36,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
13
|
|
$
|
396,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,000
|
15
|
|
$
|
103,090
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,000
|
16
|
|
$
|
103,090
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
74,000
|
17
|
|
$
|
586,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
18
|
|
$
|
31,720
|
|
|
|
|
|
|
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
Plan
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
Awards:
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
Market or
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
Number of
|
|
Payout
|
|
|
|
|
|
|
Awards;
|
|
|
|
|
|
|
|
Market
|
|
Unearned
|
|
Value of
|
|
|
Number of
|
|
Number of
|
|
Number of
|
|
|
|
|
|
Number of
|
|
Value of
|
|
Shares,
|
|
Unearned
|
|
|
Securities
|
|
Securities
|
|
Securities
|
|
|
|
|
|
Shares or
|
|
Shares or
|
|
Units or
|
|
Shares, Units
|
|
|
Underlying
|
|
Underlying
|
|
Underlying
|
|
Option
|
|
|
|
Units of
|
|
Units of
|
|
Other
|
|
or Other
|
|
|
Unexercised
|
|
Unexercised
|
|
Unexercised
|
|
Exercise
|
|
Option
|
|
Stock that
|
|
Stock that
|
|
Rights that
|
|
Rights that
|
|
|
Options (#)
|
|
Options (#)
|
|
Unearned
|
|
Price
|
|
Expiration
|
|
Have Not
|
|
Have Not
|
|
Have Not
|
|
Have Not
|
Name
|
|
Exercisable
|
|
Unexercisable
|
|
Options (#)
|
|
($)
|
|
Date
|
|
Vested(#)
|
|
Vested (#)
|
|
Vested (#)
|
|
Vested ($)
|
|
Lynne C. Wilson
|
|
|
1,903
|
|
|
|
635
|
22
|
|
|
|
|
|
$
|
21.32
|
|
|
|
06/05/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,808
|
23
|
|
$
|
21.32
|
|
|
|
06/05/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,728
|
|
|
|
1,729
|
4
|
|
|
|
|
|
$
|
20.77
|
|
|
|
03/16/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,794
|
24
|
|
$
|
20.77
|
|
|
|
03/16/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,237
|
|
|
|
6,711
|
6
|
|
|
|
|
|
$
|
9.52
|
|
|
|
03/01/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,265
|
29
|
|
$
|
9.52
|
|
|
|
03/01/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,100
|
25
|
|
$
|
72,163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,932
|
26
|
|
$
|
15,321
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,825
|
27
|
|
$
|
54,122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,087
|
10
|
|
$
|
24,480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,029
|
11
|
|
$
|
8,160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,391
|
12
|
|
$
|
18,961
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
30
|
|
$
|
99,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,059
|
15
|
|
$
|
40,118
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,352
|
17
|
|
$
|
240,691
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,059
|
31
|
|
$
|
40,118
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
The expiration date of the options is ten years after the grant
date. The options granted will vest and become exercisable over
an eight year period at the following annual increments: 2.5% in
first year; 5.0% in second year; 7.5% in third year; 10.0% in
fourth year; 15.0% in fifth year; and 20.0% in each of the
sixth, seventh and eighth years. On March 9, 2007, the
Corporation reported GAAP net income greater than
$17.0 million for a fiscal year, accelerating vesting of
the options so that the remaining amount of unexercised shares
from the seventh and eighth years of the vesting schedule became
immediately exercisable.
|
|
2.
|
Stock options vest at the rate of 25% per year, with vesting
dates for the remaining 25% at 3/28/2010.
|
|
3.
|
The Performance Based non-qualified stock options were granted
on March 28, 2006 at a strike price equal to $21.60 (the
closing price of the Corporations common stock on that
date). These options have a term of seven years and vest four
years from the grant date. The number of option shares that vest
on such date will be determined by the Corporations EPS
compounded average growth rate over the four fiscal years
following the grant date, as follows: EPS compounded average
growth rate over the four fiscal years at less than 13.5%, 0; at
13.5%-14.99%, 4,008; at 15.0%-16.49%, 8,017; at 16.5% or
greater, 12,026.
|
|
4.
|
Stock options vest at the rate of 25% per year, with vesting
dates for the remaining 50% at 3/16/2010; and 3/16/2011.
|
|
5.
|
The Performance Based non-qualified stock options were granted
on March 16, 2007 at a strike price equal to $20.77 (the
closing price of the Corporations common stock on that
date). These options have a term of seven years and vest four
years from the grant date. The number of option shares that vest
on such date will be determined by the Corporations EPS
compounded average growth rate over the four fiscal years
following the grant date, as follows: EPS compounded average
growth rate over the four fiscal years at less than 13.5%, 0; at
13.5%-14.99%, 4,306; at 15.0%-16.49%, 8,612; at 16.5% or
greater, 12,919.
|
|
6.
|
Stock options vest at the rate of 25% per year, with vesting
dates for the remaining 75% at 2/28/2010;
2/28/2011;
and 2/28/2012.
|
|
7.
|
The Performance Based non-qualified stock options were granted
on February 29, 2008 at a strike price equal to $9.52 (the
closing price of the Corporations common stock on that
date). These options have a term of seven years and vest four
years from the grant date. The number of option shares that vest
on such date will be determined by the Corporations EPS
compounded average growth rate over the four fiscal
|
23
|
|
|
years following the grant date, as follows: EPS compounded
average growth rate over the four fiscal years at less than
13.5%, 0; at 13.5%-14.99%, 10,345; at 15.0%-16.49%, 20,689; at
16.5% or greater, 31,034.
|
|
|
8.
|
The shares were granted on March 9, 2004, and vest ten
years from the grant date.
|
|
9.
|
Represents grant of restricted shares made on January 11,
2005 (the grant date stock price was $17.52). The restrictions
on these shares shall lapse on January 11, 2012.
|
|
|
10.
|
Represents grant of restricted shares made on March 16,
2007 (the grant date stock price was $20.77). The restrictions
on these shares shall lapse on March 16, 2014. Vesting
shall immediately accelerate (and all restrictions shall lapse)
upon the Corporation reporting certain minimum compounded
average net income growth for a period of four consecutive
fiscal years after the date of grant (using reported net income
for 2006 as the initial measurement point).
|
|
11.
|
Represents matching grant of restricted stock under the MSOP
made on March 16, 2007 (the grant date stock price was
$20.77). The restrictions on these matching restricted shares
shall lapse on March 16, 2017. Vesting shall immediately
accelerate (and all restrictions shall lapse) after three years
(on March 16, 2010) if the grantee maintained
continuous outright ownership of a matching number of
unrestricted shares of the Corporation for the entire three year
period.
|
|
12.
|
Represents matching grant of restricted stock under the MSOP
made on February 29, 2008 (the grant date stock price was
$9.52). The restrictions on these matching restricted shares
shall lapse on February 28, 2018. Vesting shall immediately
accelerate (and all restrictions shall lapse) after three years
(on February 28, 2011) if the grantee maintained
continuous outright ownership of a matching number of
unrestricted shares of the Corporation for the entire three year
period.
|
|
13.
|
Represents grant of restricted shares made on December 15,
2008 (the grant date stock price was $2.98). The restrictions on
these shares shall lapse on December 15, 2011.
|
|
14.
|
Represents grant of restricted shares made on January 2,
2009 (the grant date stock price was $2.55). The restrictions on
these shares shall lapse on January 2, 2012.
|
|
15.
|
Time vesting restricted stock grants (the grant date stock price
was $4.50) that vest at the rate of 25% per year, with vesting
date of 2/18/2010; 2/18/2011; 2/18/2012; and 2/18/2013.
|
|
16.
|
Represents matching grant of restricted stock under MSOP made on
February 18, 2009 (the grant date stock price was $4.50).
The restrictions on these matching restricted shares shall lapse
on February 18, 2019. Vesting shall immediately accelerate
(and all restrictions shall lapse) after three years (on
February 18, 2012) if the grantee maintained
continuous outright ownership of a matching number of
unrestricted shares of the Corporation for the entire three year
period.
|
|
17.
|
Represents bi-ennial grant of performance accelerated restricted
shares made on February 18, 2009 (the grant date stock
price was $4.50). The restrictions on these shares shall lapse
on February 18, 2016. Vesting may accelerate (and all
restrictions shall lapse) up to one-third of the grant amount
for each of the three years immediately following the grant date
if the grantee achieves certain performance goals established
annually for each of the first three years. Additional grants
may be made if the grantee exceeds his/her performance goals.
|
|
18.
|
Represents remainder of bi-ennial grant of performance
accelerated restricted shares made on October 28, 2009 (the
grant date stock price was $7.17). The restrictions on these
shares shall lapse on October 28, 2016. Vesting may
accelerate (and all restrictions shall lapse) up to one-third of
the grant amount for each of the three years immediately
following the grant date if the grantee achieves certain
performance goals established annually for each of the first
three years. Additional grants may be made if the grantee
exceeds his performance goals.
|
|
19.
|
The Performance Based non-qualified stock options were granted
on March 28, 2006 at a strike price equal to $21.60 (the
closing price of the Corporations common stock on that
date). These options have a term of seven years and vest four
years from the grant date. The number of option shares that vest
on such date will be determined by the Corporations EPS
compounded average growth rate over the four fiscal years
following the grant date, as follows: EPS compounded average
growth rate over the four fiscal years at less than 13.5%, 0; at
13.5%-14.99%, 1,946; at 15.0%-16.49%, 3,892; at 16.5% or
greater, 5,838.
|
24
|
|
20.
|
The Performance Based non-qualified stock options were granted
on March 16, 2007 at a strike price equal to $20.77 (the
closing price of the Corporations common stock on that
date). These options have a term of seven years and vest four
years from the grant date. The number of option shares that vest
on such date will be determined by the Corporations EPS
compounded average growth rate over the four fiscal years
following the grant date, as follows: EPS compounded average
growth rate over the four fiscal years at less than 13.5%, 0; at
13.5%-14.99%, 3,308; at 15.0%-16.49%, 6,616; at 16.5% or
greater, 9,924.
|
|
21.
|
Shares of performance based restricted stock granted on
May 19, 2006. The restrictions on these shares shall lapse
on May 19, 2011.
|
|
22.
|
Stock options vest at the rate of 25% per year, with vesting
dates for the remaining 25% at 6/5/2010.
|
|
23.
|
The Performance Based non-qualified stock options were granted
on June 5, 2006 at a strike price equal to $21.32 (the
closing price of the Corporations common stock on that
date). These options have a term of seven years and vest four
years from the grant date. The number of option shares that vest
on such date will be determined by the Corporations EPS
compounded average growth rate over the four fiscal years
following the grant date, as follows: EPS compounded average
growth rate over the four fiscal years at less than 13.5%, 0; at
13.5%-14.99%, 1,269; at 15.0%-16.49%, at 2,539; at 16.5% or
greater, 3,808.
|
|
24.
|
The Performance Based non-qualified stock options were granted
on March 16, 2007 at a strike price equal to $20.77 (the
closing price of the Corporations common stock on that
date). These options have a term of seven years and vest four
years from the grant date. The number of option shares that vest
on such date will be determined by the Corporations EPS
compounded average growth rate over the four fiscal years
following the grant date, as follows: EPS compounded average
growth rate over the four fiscal years at less than 13.5%, 0; at
13.5%-14.99%, 1,598; at 15.0%-16.49%, 3,196; at 16.5% or
greater, 4,794.
|
|
25.
|
Represents grant of restricted shares made on June 5, 2006
(the grant date stock price was $21.32). The restrictions on
these shares shall lapse on June 5, 2010.
|
|
26.
|
Represents grant of restricted shares made on June 5, 2006
(the grant date stock price was $21.32). The restrictions on
these shares shall lapse on June 5, 2013. Vesting shall
immediately accelerate (and all restrictions shall lapse) upon
the Corporation reporting certain minimum compounded average net
income growth for a period of four consecutive fiscal years
after the date of grant (using reported net income for 2005 as
the initial measurement point).
|
|
27.
|
Shares of restricted stock granted on June 5, 2006, whereby
all or a portion of these shares may vest four years after the
issuance date depending on the diluted EPS compound average
growth rate over such four year period (i.e., the number of
shares that vest could be 0; 2,275; 4,550; or 6,825).
|
|
28.
|
The Performance Based non-qualified stock options were granted
on February 29, 2008 at a strike price equal to $9.52 (the
closing price of the Corporations common stock on that
date). These options have a term of seven years and vest four
years from the grant date. The number of option shares that vest
on such date will be determined by the Corporations EPS
compounded average growth rate over the four fiscal years
following the grant date, as follows: EPS compounded average
growth rate over the four fiscal years at less than 13.5%, 0; at
13.5%-14.99%, 7,947; at 15.0%-16.49%, 15,895; at 16.5% or
greater, 23,842.
|
|
29.
|
The Performance Based non-qualified stock options were granted
on February 29, 2008 at a strike price equal to $9.52 (the
closing price of the Corporations common stock on that
date). These options have a term of seven years and vest four
years from the grant date. The number of option shares that vest
on such date will be determined by the Corporations EPS
compounded average growth rate over the four fiscal years
following the grant date, as follows: EPS compounded average
growth rate over the four fiscal years at less than 13.5%, 0; at
13.5%-14.99%, 4,088; at 15.0%-16.49%, 8,177; at 16.5% or
greater, 12,265.
|
|
30.
|
Represents grant of restricted shares made on June 30, 2008
(the grant date stock price was $6.93). The restrictions on
these shares shall lapse on June 30, 2011.
|
|
31.
|
Represents matching grant of restricted stock under MSOP made on
September 10, 2009 (the grant date stock price was $7.43).
The restrictions on these matching restricted shares shall lapse
on September 10, 2019. Vesting shall immediately accelerate
(and all restrictions shall lapse) after three years (on
September 10, 2012) if the grantee maintained
continuous outright ownership of a matching number of
unrestricted shares of the Corporation for the entire three year
period.
|
25
Option
Exercises and Stock Vested Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
Number of Shares
|
|
|
|
Number of Shares
|
|
|
|
|
Acquired on
|
|
Value Realized on
|
|
Acquired on Vesting
|
|
Value Realized on
|
Name
|
|
Exercise (#)
|
|
Exercise ($)
|
|
(#)
|
|
Vesting ($)
|
|
Daniel P. Dyer
|
|
|
7,706
|
|
|
$
|
26,464
|
|
|
|
7,495
|
|
|
$
|
29,753
|
|
George D. Pelose
|
|
|
|
|
|
|
|
|
|
|
28,959
|
|
|
$
|
112,168
|
|
Lynne C. Wilson
|
|
|
|
|
|
|
|
|
|
|
2,245
|
|
|
$
|
8,419
|
|
Securities
Authorized for Issuance under Equity Compensation
Plans
The following table discloses, as of December 31, 2009, the
number of outstanding options and other rights granted by the
Corporation to participants in equity compensation plans, as
well as the number of securities remaining available for future
issuance under these plans. The table provides this information
separately for equity compensation plans that have and have not
been approved by shareholders.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities
|
|
|
|
|
|
|
|
|
|
Remaining Available for
|
|
|
|
Number of Securities
|
|
|
|
|
|
Future Issuance Under
|
|
|
|
to be Issued Upon
|
|
|
Weighted Average
|
|
|
Equity Compensation
|
|
|
|
Exercise of
|
|
|
Exercise Price of
|
|
|
Plans Excluding
|
|
|
|
Outstanding Options
|
|
|
Outstanding Options
|
|
|
Securities Reflected in
|
|
Plan Category
|
|
and Other Rights
|
|
|
and Other Rights
|
|
|
Column (a)
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
Equity Compensation Plans Approved by Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
2003 Equity Compensation Plan, as amended
|
|
|
778,161
|
|
|
$
|
12.20
|
|
|
|
489,354
|
|
2003 Employee Stock Purchase Plan
|
|
|
None
|
|
|
|
n/a
|
|
|
|
35,995
|
|
Equity Compensation Plans Not Approved by Shareholders
|
|
|
None
|
|
|
|
n/a
|
|
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals
|
|
|
778,161
|
|
|
$
|
12.20
|
|
|
|
525,349
|
|
Potential
Payments Upon Termination of Employment or Change in
Control
The following tables show potential payments to
Messrs. Dyer and Pelose upon termination of employment,
including without limitation a change in control, assuming a
December 31, 2009 termination date. Stock option benefit
amounts are computed for each option as to which vesting will be
accelerated upon the occurrence of the termination event by
multiplying the number of shares underlying the option by the
difference between the $7.93 closing price per share of our
common stock on December 31, 2009, and the exercise price
per share of the option. Restricted stock benefit amounts are
computed by multiplying the number of restricted shares as to
which vesting will be accelerated by the $7.93 per share closing
price of our common stock on December 31, 2009.
A description of the applicable provisions of the employment
agreements for Messrs. Dyer and Pelose follows the tables.
Daniel P.
Dyer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Control,
|
|
|
|
|
|
|
Non-Renewal by
|
|
|
|
|
|
|
Corporation,
|
|
|
|
|
|
|
Termination without
|
|
For Cause or
|
|
|
|
|
Cause or for Good
|
|
Voluntary
|
|
Death or
|
Benefit Type
|
|
Reason
|
|
Termination
|
|
Disability
|
|
Lump Sum Payments
|
|
$
|
1,100,034
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
$
|
2,024,553
|
|
|
|
|
|
|
$
|
2,024,553
|
|
Excise Tax
Gross-Ups
|
|
$
|
911,204
|
|
|
|
|
|
|
|
|
|
26
George D.
Pelose
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Control,
|
|
|
|
|
|
|
Non-Renewal by
|
|
|
|
|
|
|
Corporation,
|
|
|
|
|
|
|
Termination without
|
|
For Cause or
|
|
|
|
|
Cause or for Good
|
|
Voluntary
|
|
Death or
|
Benefit Type
|
|
Reason
|
|
Termination
|
|
Disability
|
|
Lump Sum Payment
|
|
$
|
928,903
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
$
|
1,564,304
|
|
|
|
|
|
|
$
|
1,564,304
|
|
Excise Tax
Gross-Ups
|
|
|
|
|
|
|
|
|
|
|
|
|
The Corporation has employment agreements with Messrs. Dyer
and Pelose (each, an executive), which run through
November 2011.
The Corporation may terminate the employment agreements for or
without cause. A termination for cause requires a vote of
two-thirds of our directors and prior written notice to the
executive providing an opportunity to remedy the cause. Cause
generally means: 1) willful fraud or material dishonesty by
the executive in connection with the performance of his
employment duties; 2) grossly negligent or intentional
failure by the executive to substantially perform his employment
duties; 3) material breach by the executive of certain
protective covenants (as described below); or 4) the
conviction of, or plea of nolo contendere to, a charge of
commission of a felony by the executive.
The Corporation may terminate the executives employment
upon non-renewal of the employment agreement. Upon non-renewal
of the employment agreement, the executives employment
with the Corporation will terminate as of the last day of the
agreement term, provided that the executive was willing and able
to execute a new contract providing terms and conditions
substantially similar to those in the employment agreement and
to continue providing services under the employment agreement.
The executive may terminate his employment agreement with or
without good reason. A termination by the executive for good
reason requires prior written notice providing the Corporation
with the opportunity to remedy the good reason. Good reason
means the occurrence of any one or more of the following,
without the consent of the executive: (a) a material
diminution in the executives authority, duties or
responsibilities; (b) the Corporation requires that the
executive report to an officer or employee of the Corporation
instead of reporting directly to the Corporations Chief
Executive Officer, in the case of Mr. Pelose, and Board of
Directors, in the case of Mr. Dyer; (c) a material
diminution in the executives base compensation, which, for
purposes of the employment agreement, means the executives
base salary and target incentive bonus percentage in effect
immediately prior to the action taken to diminish the
executives base salary or target incentive bonus
percentage; (d) a material change in the geographic
location at which the executive must perform services, which
shall include a change to a location that is more than
twenty-five (25) miles from the location at which the
executive performs services under the employment agreement as of
December 31, 2009; or (e) any other action or inaction
that constitutes a material breach by the Corporation under the
employment agreement.
If a change in control (as defined in the employment agreements)
occurs during the term of the employment agreements, then the
executives employment with the Corporation shall
automatically terminate without cause as of the date of the
change of control.
Pursuant to the terms of their employment agreements, if the
employment of Messrs. Dyer or Pelose ends for any reason,
the Corporation will pay accrued salary, bonuses and incentive
payments already determined and other existing obligations. In
addition, in the event of a termination of employment due to
either termination by the Corporation without cause, the
resignation by the executive for good reason, non-renewal by the
Corporation or a change in control, the executive will receive a
lump sum payment equal to: (i) two times current base
salary; (ii) two times the average incentive bonus earned
for the preceding two fiscal years; (iii) two years of
medical and dental benefits for the executive and his family,
based on the current monthly COBRA premium plus an increase to
cover taxes; (iv) two years of life and long-term
disability insurance coverage, based on the current annual
premiums, plus an increase to cover taxes; and (v) any
incentive bonus
27
earned but not yet paid. The lump sum amount is payable within
thirty (30) days following the termination date (provided
the executive executes and does not revoke a standard release of
employment claims). In the event that the executives
employment is terminated on account of the executives
death or disability, termination by the Corporation without
cause, the resignation by the executive for good reason,
non-renewal by the Corporation or a change in control, then all
of the options, restricted stock and other stock incentives
granted to the executive will become fully vested, and the
executive will have up to two years in which to exercise all
vested options. If any payments due to the executive under the
employment agreement would be subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code, then the
Corporation will be required to gross up the executives
payments for the amount of the excise tax plus the amount of
income and other taxes due as a result of the gross up payment.
Notwithstanding the provisions described above, the employment
agreements are intended to comply with the requirements of
Section 409A of the Internal Revenue Code, to the extent
applicable, and the agreements shall be interpreted to avoid any
penalty sanctions under the Code, and therefore may require a
payment delay of severance benefits or reimbursements to be paid
to the executive.
Upon termination of the employment agreement, the executive will
be subject to certain protective covenants. If the Corporation
terminates the executives employment without cause or if
the executive terminates his employment with good reason, the
executive will be prohibited from competing with the Corporation
and from soliciting its customers for an
18-month
period; provided that such period shall be 12 months for
all other terminations. In addition, for a
24-month
period after termination of employment, the executive is
prohibited from hiring the Corporations employees.
Ms. Wilson does not have an employment agreement, but
pursuant to the terms of the Corporations 2003 Equity
Compensation Plan, as amended (the Equity Plan),
upon a change of control (as defined in the Equity Plan), all
outstanding options shall immediately vest and become
exercisable, and the restrictions and conditions on all
outstanding restricted stock awards shall immediately lapse.
Based on this, in the event of a change of control (as defined
in the Equity Plan), assuming a December 31, 2009 change of
control date, the benefit to Ms. Wilson would be $613,259
in restricted stock and $0 in options. Stock option benefit
amounts are computed for each option as to which vesting will be
accelerated upon the occurrence of the termination event by
multiplying the number of shares underlying the option by the
difference between the $7.93 closing price per share of our
common stock on December 31, 2009 and the exercise price
per share of the option. Restricted stock benefit amounts are
computed by multiplying the number of restricted shares as to
which vesting will be accelerated by the $7.93 per share closing
price of our common stock on December 31, 2009.
Directors
Compensation
The non-employee independent members of the Board of Directors
receive a $30,000 annual retainer (payable in quarterly
installments) for their service on the Board of Directors.
Non-employee independent members of the Board of Directors are
granted an Option to purchase 5,000 shares of the
Corporations common stock upon their initial appointment
or election to the Board. These Options vest in four equal
annual installments. In addition, non-employee independent
members of the Board of Directors receive annual grants under
the Corporations 2003 Equity Compensation Plan, as
amended, of (i) restricted stock yielding a present value
of $27,000 at the Stock Award grant date and (ii) Options
yielding a present value of $9,000 at the grant date (using an
option pricing model). The annual restricted Stock Awards vest
at the earlier of (a) seven years from the grant date and
(b) six months following the non-employee independent
directors termination of Board service. The annual Option
grants cliff vest one year from the grant date. The per share
exercise price of all Options granted to non-employee
independent members of the Board of Directors is equal to the
fair market value per share on the date the Option is granted.
The chairman of the Audit Committee receives additional
compensation of $10,000 per year, the chairman of the
Compensation Committee receives additional compensation of
$4,000 per year, and the chairman of the Nominating Committee
receives additional compensation of $2,000 per year. These fees
are paid in quarterly installments.
28
On March 31, 2009, the Board of Directors elected
Mr. McGinty to the role of Chairman of the Board and
eliminated the position of Lead Independent Director. In
connection therewith, the Board of Directors also approved the
following total compensation to be paid to the non-employee
Chairman of the Board of the Corporation: (i) $100,000
total annual retainer (payable in quarterly installments),
(ii) an annual option grant yielding a present value of
$10,250 and (iii) an annual restricted stock grant yielding
a present value of $30,750. The annual option grant will have a
seven year term and will cliff vest one year from the grant
date, and the annual restricted stock grant will vest at the
earlier of (a) seven years from the grant gate and
(b) six months following the non-employee Chairmans
termination of Board service. Effective April 13, 2009,
Mr. McGinty voluntarily agreed to reduce his annual
retainer by 20% for an unspecified period of time in light of
the difficult economic environment. This voluntary reduction
ended on January 1, 2010, at which time
Mr. McGintys annual retainer as non-employee Chairman
of the Board returned to $100,000.
The following table sets forth compensation from the Corporation
for the non-employee independent members of the Board of
Directors in 2009. The table does not include reimbursement of
travel expenses related to attending Board, Committee and
Corporation business meetings.
Director
Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned or
|
|
Stock
|
|
Option
|
|
|
Name
|
|
Paid In Cash ($)
|
|
Awards ($)
|
|
Awards ($)
|
|
Total ($)
|
|
Kevin J. McGinty
|
|
$
|
74,750
|
|
|
$
|
12,335
|
|
|
$
|
5,558
|
|
|
$
|
92,643
|
|
John J. Calamari
|
|
$
|
40,000
|
|
|
$
|
12,241
|
|
|
$
|
5,340
|
|
|
$
|
57,581
|
|
James W. Wert
|
|
$
|
30,000
|
|
|
$
|
12,241
|
|
|
$
|
5,340
|
|
|
$
|
47,581
|
|
Lawrence J. DeAngelo
|
|
$
|
33,500
|
|
|
$
|
12,241
|
|
|
$
|
5,340
|
|
|
$
|
51,081
|
|
Edward Grzedzinski
|
|
$
|
31,500
|
|
|
$
|
12,241
|
|
|
$
|
15,556
|
|
|
$
|
59,297
|
|
Matthew J. Sullivan
|
|
$
|
30,000
|
|
|
$
|
4,532
|
|
|
$
|
8,590
|
|
|
$
|
43,122
|
|
On April 12, 2010, the Board of Directors approved a change
in the equity component of the annual director compensation
plan, eliminating the annual option grants and replacing them
with additional restricted stock grants (equal to the value of
the option grants being eliminated). This change was made to
better align the equity portion of the Board of Directors
compensation program with director compensation programs of the
Corporations peer group, and this change will be effective
with the 2010 grants made to the Corporations directors.
Report of
the Audit Committee
Management is responsible for the Corporations internal
financial controls and the financial reporting process. The
Corporations outside independent registered public
accountants, Deloitte & Touche LLP, are responsible
for performing an independent audit of the Corporations
consolidated financial statements and to express an opinion as
to whether those financial statements fairly present in all
material respects the financial position, results of operations
and cash flows of the Corporation, in conformity with generally
accepted accounting principles in the United States
(GAAP). The Audit Committees responsibility is
to monitor and oversee these processes. In addition, the Audit
Committee meets at least quarterly with our management and
outside independent registered public accountants to discuss our
financial statements and earnings press releases prior to any
public release or filing of the information.
The Audit Committee has reviewed and discussed the audited
financial statements of the Corporation for the year ended
December 31, 2009, with the Corporations management.
The Audit Committee has discussed with the outside independent
registered public accountants the matters required to be
discussed by SAS 61 (Codification of Statements of Auditing
Standards, AU § 380).
The outside independent registered public accountants provided
to the Audit Committee the written disclosure required by
Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees). The Audit Committee
discussed with the outside independent registered public
accountants their
29
independence and considered whether the non-audit services
provided by the outside independent registered public
accountants are compatible with maintaining their independence.
Based on the Audit Committees review and discussions noted
above, the Audit Committee recommended to the Board that the
Corporations audited financial statements be included in
the Corporations Annual Report on
Form 10-K
for the year ended December 31, 2009, for filing with the
SEC.
This report is submitted by the members of the Audit Committee
of the Board of Directors:
John J. Calamari (Chairman)
James W. Wert
Kevin J. McGinty
Independent
Registered Public Accountants
A representative of Deloitte & Touche LLP, the
Corporations independent registered public accountants,
will be present at the Annual Meeting and will be given the
opportunity to make a statement if desired. The representative
will also be available to respond to appropriate questions.
The following sets forth the fees paid to the Corporations
independent registered public accountants for the last two
fiscal years:
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
Audit Fees
|
|
$
|
910,739
|
|
|
$
|
1,009,707
|
|
Audit-Related Fees
|
|
$
|
0
|
|
|
$
|
35,000
|
|
Tax Fees
|
|
$
|
8,000
|
|
|
$
|
7,578
|
|
All Other Fees
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
918,739
|
|
|
$
|
1,052,285
|
|
Audit Fees. Consists of fees related to the
performance of the audit or review of the Corporations
financial statements and internal control over financial
reporting, including services in connection with assisting the
Corporation in its compliance with its obligations under
Section 404 of the Sarbanes-Oxley Act and related
regulations. This category also includes annual agreed upon
procedures relating to servicer reviews and the issuance of term
asset-backed securitizations.
Audit-Related Fees. Consists of fees related
to the audit of the Corporations 401(k) Plan by
Deloitte & Touche LLP in 2008.
Tax Fees. Consists of assistance rendered in
preparation of proxy disclosures.
The Audit Committee has the sole authority to consider and
approve in advance any audit, audit-related and tax work to be
performed for the Corporation by its independent registered
public accountants.
Certain
Relationships and Related Transactions
Under the Corporations Code of Ethics and Business
Conduct, the Audit Committee must review and approve
transactions with related persons (directors,
director nominees and executive officers or their immediate
family members, or stockholders owning 5% or greater of the
Corporations outstanding common stock) in which the amount
exceeds $120,000 and in which the related person has a direct or
indirect material interest. Under this policy, full written
disclosure must be submitted in writing to the
Corporations General Counsel, who will submit it to the
Audit Committee for review. The transaction must receive Audit
Committee approval prior to the consummation of the transaction.
The Corporation obtains all of its commercial, healthcare and
other insurance coverage through The Selzer Company, an
insurance broker located in Warrington, Pennsylvania. Richard
Dyer, the brother of Daniel P. Dyer, the Chairman of our Board
of Directors and Chief Executive Officer, is the President of
The Selzer
30
Company. We do not have any contractual arrangement with The
Selzer Company or Richard Dyer, nor do we pay either of them any
direct fees. Insurance premiums paid to The Selzer Company
totaled $495,000 in 2009.
Joseph Dyer, the brother of Daniel P. Dyer, the Chairman of our
Board of Directors and Chief Executive Officer, is a vice
president in our treasury group and was paid compensation in
excess of $120,000 for such services in 2009.
On March 11, 2008, the Corporation received approval from
the Federal Deposit Insurance Corporation (FDIC) for
federal deposit insurance for its wholly-owned subsidiary,
Marlin Business Bank, an industrial bank chartered by the State
of Utah (the Bank), and approved the Bank to
commence operations effective March 12, 2008. As a result
of the approval, the Corporation became subject to the terms,
conditions and obligations of a Letter Agreement, dated as of
June 18, 2007 (the Letter Agreement), by and
among the Corporation, Peachtree Equity Investment Management,
Inc. (Peachtree) and WCI (Private Equity) LLC
(WCI). On March 26, 2007, the Corporation
announced that it had received correspondence from the FDIC
approving the application for federal deposit insurance for the
Bank, subject to certain conditions set forth in the order
issued by the FDIC, dated as of March 20, 2007 (the
Order). The Order provided that the approval of the
Corporations Bank application was conditioned on Peachtree
and WCI, whose sole manager is Peachtree, executing a passivity
agreement with the FDIC to eliminate Peachtree and WCIs
ability to control the Bank. Therefore, Peachtree, WCI and the
FDIC entered into a Passivity Agreement, dated as of
June 18, 2007 (the Passivity Agreement), which
would be deemed effective on the date of issuance from the FDIC
of the federal deposit insurance for the Bank. In connection
with the execution of the Passivity Agreement, the Corporation
entered into the Letter Agreement, which is also deemed
effective on the date of issuance from the FDIC of the federal
deposit insurance for the Bank. Therefore, the effective date
for both the Passivity Agreement and the Letter Agreement is
March 11, 2008. Under the terms of the Letter Agreement,
the Corporation agreed to create one vacancy on the
Corporations Board of Directors by increasing the size of
the Board from six to seven directors. The Corporation also
agreed to take all necessary action to appoint one individual
proposed by Peachtree and WCI as a member of the Board who will
serve as a director until the expiration of the term at the
Annual Meeting. In addition, the Corporation agreed to include
an individual proposed by Peachtree and WCI on the Boards
slate of nominees for election as a director of the Corporation
and to use its best efforts to cause the election of such
individual so long as Peachtree and WCI are subject to the terms
and conditions of the Passivity Agreement.
Section 16(a)
Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires the Corporations directors, executive officers
and shareholders who beneficially own more than 10% of the
Corporations outstanding equity stock to file initial
reports of ownership and reports of changes in ownership of
common stock and other equity securities of the Corporation with
the SEC. Based on a review of copies of the reports we received
and on the statements of the reporting persons, to the best of
the Corporations knowledge, all required reports in 2009
were filed on time except that the Corporation, on behalf of
Kevin J. McGinty, failed to timely file a Form 4 to report
a change in ownership of common stock. The Corporation, on the
behalf of Kevin J. McGinty, failed to timely file a Form 4
to report the purchase of common stock on December 8, 2009.
The Corporation filed the Form 4 for such grant on
December 11, 2009 on behalf of Kevin J. McGinty.
Shareholder
Proposals
In order to be considered for inclusion in the
Corporations proxy statement for the annual meeting of
shareholders to be held in 2011, all shareholder proposals must
be submitted to the Corporate Secretary at the
Corporations office, 300 Fellowship Road, Mount Laurel,
New Jersey, 08054 on or before December 21, 2010.
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Additional
Information
Any shareholder may obtain a copy of the Corporations
Annual Report on
Form 10-K
for the year ended December 31, 2009, including the
financial statements and related schedules and exhibits,
required to be filed with the SEC, without charge, by submitting
a written request to the Corporate Secretary, Marlin Business
Service Corp., 300 Fellowship Road, Mount Laurel, New Jersey,
08054. You may also view these documents on the investor
relations page of the Corporations website at
www.marlincorp.com.
Other
Matters
The Board of Directors knows of no matters other than those
discussed in this Proxy Statement that will be presented at the
Annual Meeting. However, if any other matters are properly
brought before the meeting, any proxy given pursuant to this
solicitation will be voted in accordance with the
recommendations of Board of Directors.
BY ORDER OF THE BOARD OF DIRECTORS
George D. Pelose
Secretary
Mount Laurel, New Jersey
April 20, 2010
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PROXY
MARLIN BUSINESS SERVICES CORP.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
MARLIN BUSINESS SERVICES CORP.
I/We hereby appoint George D. Pelose and Lynne C. Wilson, or any one of them with power of
substitution in each, as proxyholders for me/us, and hereby authorize them to represent me/us at
the 2010 Annual Meeting of Shareholders of Marlin Business Services Corp. to be held at the
Doubletree Hotel, 515 Fellowship Road, Mount Laurel, New Jersey, on May 25, 2010 at 9:00 a.m., and
at any adjournment thereof, and at this meeting and any adjournment, to vote, as designated below,
the same number of shares as I/we would be entitled to vote if then personally present.
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I. Election of Directors
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o FOR all nominees listed (except as written to the contrary below) |
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o WITHHOLD all nominees listed |
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NOMINEES:
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01- John J. Calamari, 02- Lawrence J. DeAngelo, 03-Daniel P. Dyer, 04-Edward Grzedzinski, |
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05-Kevin J. McGinty, 06-Matthew J. Sullivan, 07- J. Christopher Teets, and 08- James W. Wert |
(INSTRUCTION: To withhold authority to vote for one or more individual nominees, write
their name(s) on the line below)
THIS PROXY, WHEN PROPERLY SIGNED BY YOU, WILL BE VOTED IN THE MANNER YOU DIRECT ON THIS CARD. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE LISTED NOMINEES IN THE ELECTION OF DIRECTORS,
AND IN THE DISCRETION OF THE PROXYHOLDERS NAMED IN THIS PROXY UPON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT.
THIS PROXY MAY BE REVOKED BY YOU AT ANY TIME BEFORE IT IS VOTED AT THE ANNUAL MEETING.
I/we hereby acknowledge the receipt, prior to the signing of this Proxy, of a Notice of Annual
Meeting of Shareholders and an attached Proxy Statement for the 2010 Annual Meeting, and the Annual
Report of Marlin Business Services Corp. for the year ended December 31, 2009.
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DATE: , 2010 |
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Please sign exactly as your name appears above and print
the date on which you sign the proxy in the spaces provided
above. |
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If signed on behalf of a corporation, please sign in corporate
name by an authorized officer. If signing as a
representative, please give full title as such. For joint accounts, only
one owner is required to sign. |
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