Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. MIDDLEBURG FINANCIAL CORP (914138) 10-K/A published on Mar 31, 2017 at 12:17 pm
Reporting Period: Dec 30, 2016
Mr. Meurlin retired as Vice President and Airport Manager of Washington Dulles International Airport in 2005 after 28 years of service. Mr. Meurlin is also a retired Major General in the United States Air Force Reserve and was called back to active duty in 2005. His final assignment was to establish for the Secretary of Defense the office to manage the care and benefits for wounded warriors from all services. Mr. Meurlin has been actively involved in our communities by serving on the Board of Directors for both the Reston Chamber of Commerce as well as the Loudoun Chamber of Commerce, past Regional Chairman of the United Way of the National Capital Area, past Chairman of the Heart Association of Northern Virginia and recently was a member of the Loudoun Economic Development Commission, serving as Chairman of the Transportation and Infrastructure Committee. He currently is the President of the Washington Airports Task Force, a public/private enterprise supporting the growth of aviation services and economic development for the Washington, D.C. region. Mr. Meurlin also serves as a Board Member of the Dulles South Alliance, an organization focused on the long term planning and development of the Dulles south region and President of the Dulles Foreign Trade Zone. Mr. Meurlin holds a bachelor of arts degree in political science from the University of Vermont and a master of science in systems management from the University of Southern California.
Mr. Shook has served as Chief Executive Officer and President of MFC since May 2010, and as President and Chief Executive Officer of Middleburg Bank since August 2008. From 2007 to 2008, he served as President of MFC and Middleburg Bank. From 2005 to 2007, Mr. Shook served as Executive Vice President, Investment Services and Fauquier Community Executive with Middleburg Bank. Mr. Shook serves as a Director and Chairman of the Board of Middleburg Investment Group and Middleburg Trust Company. From 1995 to 2005, he was Senior Vice President, Fauquier Bankshares, Inc. Mr. Shook has served as a Director of the Loudoun County Chamber of Commerce, Vice Chairman of the Fauquier Chamber of Commerce; Chairman of the Bluemont Concert Series; President of the Rotary Club of Warrenton; and Senior Warden and Vestryman of St. James’ Episcopal Church. He has served as a Director and is a past Chairman of the Virginia Bankers Association. He is a member of the Government Relations Administrative Committee of the American Bankers Association. He is a Trustee and member of the Executive Committee of the Virginia Foundation for Independent Colleges and a Director of Shrine Mont, The Cathedral Shrine of the Transfiguration and Conference Center. He is also a Member of the CEO Cabinet of Loudoun County and a Member of the Loudoun Laurels Committee. Mr. Shook holds a bachelor of arts degree from the University of Virginia. Mr. Shook’s experience as Chief Executive Officer of Middleburg Financial Corporation and his extensive understanding of the financial services industry, risk management and governance of a public company provide the Board with an invaluable resource for assessing and managing risks and planning for corporate strategy.
of annual cash compensation (base salaries and annual cash bonus and incentives), and long-term incentives (typically in the form of stock-based awards). We strive to maintain competitive compensation levels reflective of performance and provided in a mix of compensation that effectively balances cash and equity, and balances short and long-term rewards for operating and strategic results. We target executive salaries at the 50th percentile of comparable organizations and set individual salaries to reflect job performance and track record. We establish annual target incentive levels in-line with prevailing practice among comparable organizations, with the intent that annual cash compensation for targeted performance is competitive with the 50th percentile of comparable organizations. Job and operating performance that falls short of performance targets is designed to earn conservative cash compensation; and similarly, job and operating performance that exceeds performance targets is designed to pay above the market average. We manage the long-term incentive element of executive compensation so as to provide competitive equity awards. When making equity grants, we evaluate our run rate (total grants as a percent of common shares outstanding) in light of peer and competitive market practices so that the dilutive impact on our shareholders is in line with prevailing market practice.
As shown above, the financial and operating targets approved by the Compensation Committee for the 2016 Management Incentive Plan were net income, return on average assets (ROAA), return on average equity (ROAE), efficiency ratio, net interest margin and individual operating goals for each named executive. An additional objective related to asset quality was also included for all participants. For 2016, we defined asset quality as nonperforming assets as a percent of total assets, where nonperforming assets equals the sum of other real estate owned, nonaccrual loans, accruing trouble debt restructurings and loans in excess of 90 days past due and still accruing. This asset quality performance measure can increase, keep intact or decrease the total amount of the incentive award achieved. More specifically, the asset quality performance measure is structured such that incentive earnings from other objectives are reduced if nonperforming assets are greater than the preset level or range. Because increases to loan loss reserves also reduce earnings on Net Income, ROAA and ROAE objectives, asset quality has the potential to further reduce incentives through these metrics as well, and thus reinforce its importance to the Company. The Asset Quality performance range was as follows:
In addition, severance payments may be paid to Mr. Shook, Mr. Mehra, Mr. Culver, and Mr. Hartley related to a Change of Control. If any executive’s employment is terminated without “cause” or if the executive resigns for “good reason” within one year after a Change of Control, the Company will pay Mr. Shook 300% of his highest cash compensation earned after 2009 and pay Mr. Culver 200% of his highest compensation after 2008. Mr. Mehra, and Mr. Hartley will be paid 200% of their highest cash compensation earned after 2009. Payment of these amounts are subject to the provision of Section 409A of the Internal Revenue Code which may require that disbursement of benefits be postponed for six months from date of termination. In addition, each officer’s compensation related to the change of control and employment termination will be reduced as necessary to avoid any “excess parachute payment” as defined by Section 280G of the Internal Revenue Code. This adjustment is intended to preserve the tax deductibility of these payments by the Company and avoid any related excise taxes under Section 4999 of the Internal Revenue Code.