¨
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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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¨
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Definitive Additional Materials
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¨
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Soliciting Material Pursuant to § 240.14a-12
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No fee required.
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¨
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11(Set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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¨
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Fee paid previously with preliminary materials.
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¨
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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Sincerely,
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Anthony DeChellis
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Chief Executive Officer and President
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Boston, Massachusetts
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Dated: March 16, 2020
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DATE:
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TIME:
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LOCATION:
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April 23, 2020
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10:00 a.m.
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Boston Private Headquarters
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Eastern Time
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10 Post Office Square, 2nd Floor
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Boston, MA 02109
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AGENDA
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(1)
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To elect the nine director nominees named in the Proxy Statement to serve until the 2021 annual meeting and until their successors are duly elected and qualified.
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(2)
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To approve an advisory, non-binding resolution on the compensation of the named executive officers as disclosed in the Proxy Statement.
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(3)
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To ratify the selection of KPMG LLP as the Company’s independent registered public accounting firm for fiscal year 2020.
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(4)
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To approve the Boston Private Financial Holdings, Inc. 2020 Omnibus Incentive Plan.
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(5)
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To transact any other business that may properly come before the Meeting.
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PROXY OVERVIEW
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Summary of Voting Items
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CORPORATE GOVERNANCE
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Proposal 1: Election of Directors
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CORPORATE GOVERNANCE OVERVIEW
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Policy on Hedging
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Code of Conduct and Ethics
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Dignity in the Workplace
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Related Party Transactions
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Corporate Responsibility and Sustainability
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EXECUTIVE COMPENSATION
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Proposal 2: Advisory (Non-Binding) Vote on Executive Compensation
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COMPENSATION DISCUSSION & ANALYSIS
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Executive Summary
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Summary of 2019 Compensation Actions
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Approach to Pay
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Compensation Philosophy
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Compensation Elements
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Base Salary
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Annual Executive Short-Term Incentive Plan (STI)
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Equity Based Long-term Incentives (LTI)
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Other Compensation Topics
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Equity Grant Policy
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Employment Agreements
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Executive Deferred Compensation Plan
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Say on Pay Shareholder Approval Levels for 2019
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Tax, Regulatory and Accounting Implications
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EXECUTIVE COMPENSATION TABLES
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AUDIT
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EQUITY COMPENSATION PLAN
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Proposal 4: Approval of the Boston Private Financial Holdings, Inc. 2020 Omnibus Incentive Plan
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Summary of Material Features of the Plan
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Rationale for New Plan
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Summary of the Plan
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New Plan Benefits
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Tax Aspects Under the Code
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Equity Compensation Plan Information
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PROXY OVERVIEW
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BOARD
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VOTING ITEM
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RECOMMENDATION
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PROPOSAL
1
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ELECTION OF DIRECTORS (page 4)
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Elect the nine director nominees named in this Proxy Statement to serve until the 2021 annual meeting of shareholders and until their successors are duly elected and qualified.
Each director nominee must receive the affirmative vote of a majority of votes cast as to such nominee by shareholders in order to be elected.
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FOR
Each Director Nominee
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PROPOSAL
2
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ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION (SAY ON PAY) (page 20)
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Approve an advisory, non-binding resolution on the compensation of the named executive officers of Boston Private Financial Holdings, Inc. (the "Company" or "Boston Private").
Approval requires the affirmative vote of a majority of the votes cast at the meeting.
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FOR
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PROPOSAL
3
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RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (page 46)
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Ratify the selection of KPMG LLP as the Company's independent registered public accounting firm for fiscal year 2020.
Ratification requires the affirmative vote of a majority of votes cast at the meeting.
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FOR
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PROPOSAL
4
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EQUITY COMPENSATION PLAN (page 49)
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Approve the Boston Private Financial Holdings, Inc. 2020 Omnibus Incentive Plan.
Approval requires the affirmative vote of a majority of the votes cast at the meeting.
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FOR
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MAIL
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TELEPHONE or INTERNET
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IN PERSON
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The accompanying proxy card, if properly completed, signed, dated and returned in the enclosed envelope, will be voted in accordance with your instructions. The enclosed envelope requires no additional postage if mailed in the United States.
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If you hold your shares of common stock directly and not in street name, you may vote by telephone or internet by following the instructions included on your proxy card. If you vote by telephone or internet, you do not have to mail in your proxy card. Telephone and internet voting are available 24 hours a day. For participants in the Company’s 401(k) Plan and Employee Stock Purchase Plan, telephone and internet voting are available through April 20, 2020 at 11:59 p.m., Eastern Time. For all other holders, telephone and internet voting are available through April 22, 2020 at 11:59 p.m., Eastern Time.
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If you are a registered shareholder as of the Record Date and attend the Meeting, you may deliver your completed proxy card in person. Additionally, we will have ballots available for those registered shareholders as of the Record Date who wish to vote in person at the Meeting
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CORPORATE GOVERNANCE
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The Board of Directors unanimously recommends a vote FOR each of its nine director nominees.
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Age
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Director
Since
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Independent
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BOARD NOMINEES
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Anthony DeChellis
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57
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2018
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NO
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Mark F. Furlong
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62
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2016
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YES
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Joseph C. Guyaux
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69
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2016
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YES
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Deborah F. Kuenstner
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61
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2007
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YES
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Gloria C. Larson
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69
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2015
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YES
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Kimberly S. Stevenson
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57
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2015
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YES
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Luis Antonio Ubiñas
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57
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2017
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YES
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Stephen M. Waters, Chair of the Board
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73
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2004
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YES
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Lizabeth H. Zlatkus
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61
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2015
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YES
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ANTHONY DECHELLIS
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Mr. DeChellis is the Chief Executive Officer and President of the Company and the Bank. He has over 30 years of experience in the financial services industry, holding executive level positions at OurCrowd Venture Capital, Credit Suisse, UBS and Merrill Lynch. At Credit Suisse, he oversaw a private banking and wealth management business in North and South America . At Merrill Lynch, he launched a private wealth management business in the United States. Mr. DeChellis has a deep knowledge of all aspects of the industry, including the provision of services to high net worth clients.
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Director since 2018
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CAREER EXPERIENCE
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SKILLS / QUALIFICATIONS
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Boston Private Financial Holdings, Inc.
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Risk Management and Controls
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Not Independent
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Chief Executive Officer and President (2018-present)
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Corporate Governance
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OurCrowd Venture Capital
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Financial Services
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Committees:
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President (2015 - 2016)
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Strategic Planning
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None
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Credit Suisse Private Banking - Americas
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Chief Executive Officer (2006 - 2013)
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UBS
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Head of Private Wealth Management (2003 - 2006)
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Merrill Lynch
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Head of International Private Banking for Merrill Lynch Europe (1987-2003)
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MARK F. FURLONG
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Mr. Furlong retired as President and Chief Executive Officer of BMO Harris Bank in June 2015, a role he assumed upon the close of the acquisition of Marshall & Ilsley by BMO Financial Group in 2011. Prior to its acquisition, he served in a variety of senior executive roles, including as Chairman, Chief Executive Officer, President and Chief Financial Officer of Marshall & Ilsley. His prior experience also includes service as an audit partner with Deloitte & Touche. With his significant background in the banking industry, Mr. Furlong brings unique insight to the Board concerning capital allocation strategies and banking issues, in addition to his overall management and financial expertise.
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Director since 2016
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CAREER EXPERIENCE
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PUBLIC COMPANY BOARD EXPERIENCE
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BMO Harris Bank, N.A.
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Kforce, Inc. (current)
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Independent
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President & CEO (2011-2015)
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Heska Corporation (current)
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Marshall & Ilsley
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Committees:
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Chair (2010-2011)
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SKILLS / QUALIFICATIONS
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Audit and Finance (Chair)
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Chief Executive Officer (2007-2010)
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Public Company
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Governance and Executive
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President (2004-2007)
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Finance, Accounting & Audit
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Chief Financial Officer (2001-2004)
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Financial Services
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Corporate Governance
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JOSEPH C. GUYAUX
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Mr. Guyaux retired in 2016 from PNC Financial Services Group, where he worked for 44 years and served as President, responsible for leading its bank’s consumer and business banking, wealth management and brokerage divisions. Mr. Guyaux held several other senior leadership positions at PNC Financial Services Group, including Chief Risk Officer and President and CEO of PNC Mortgage. Mr. Guyaux brings to the Board extensive experience in the financial services industry and risk management expertise.
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Director since 2016
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CAREER EXPERIENCE
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SKILLS / QUALIFICATIONS
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PNC Financial Services Group, Inc.
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Risk Management and Controls
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Independent
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President & CEO of PNC Mortgage (2015-2016)
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Financial Services
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Chief Risk Officer (2012-2015)
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Mergers & Acquisitions
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Committees:
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President (2002-2012)
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Strategic Planning
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Risk Management (Chair)
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Compensation
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DEBORAH F. KUENSTNER
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Ms. Kuenstner is the Chief Investment Officer of Wellesley College. Before joining Wellesley College, Ms. Kuenstner was Chief Investment Officer and Vice President of Investment Management at Brandeis University, a Managing Director of Research for Fidelity Management & Research Company, and the Chief Investment Officer, Global Value, at Putnam Investments, as well as an Economist at the Federal Reserve Bank of New York. Ms. Kuenstner brings to the Board valuable experience and knowledge about the financial services industry generally and, in particular, the investment management arena. In addition, her economic and risk management expertise make her an excellent nominee for the Board.
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Director since 2007
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CAREER EXPERIENCE
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SKILLS / QUALIFICATIONS
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Wellesley College
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Risk Management and Controls
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Independent
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Chief Investment Officer (2009-present)
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Corporate Governance
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Brandeis University
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Finance, Accounting & Audit
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Chief Investment Officer, Vice President of Investment Management (2007-2009)
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Executive Compensation
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Committees:
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Fidelity Management & Research Company
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Risk Management
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Managing Director (2005-2006)
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Compensation (Vice Chair)
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Putnam Investments
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Chief Investment Officer, Global Value (2000-2004)
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GLORIA C. LARSON
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Ms. Larson was the President of Bentley University from 2007 to 2018. Prior to her tenure at Bentley, she held numerous leadership positions in the legal, public policy and business fields, including serving as the Co-Chair of the Government Strategies Group at the law firm of Foley Hoag LLP and as the Secretary of Economic Affairs and the Secretary of Consumer Affairs and Business Regulation for the Commonwealth of Massachusetts. She is a board or advisory council member of several prominent professional, charitable and civic organizations. Ms. Larson's deep ties in the Massachusetts community, as well as her expertise in the regulatory oversight of banking and the financial services industry, bring great value to the Board's oversight of the Company.
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KIMBERLY S. STEVENSON
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Ms. Stevenson is the Senior Vice President and General Manager of Foundational Data Services at NetApp. Prior to joining NetApp in January 2020, Ms. Stevenson was a venture partner at RIDGE-LANE Limited Partners, a strategic advisory and venture development firm that advises companies seeking to accelerate growth through the use of technology. Formerly, she held senior positions at Lenovo, Intel and HP Enterprise Services. With the financial services industry increasingly reliant on technology, Ms. Stevenson’s deep operational and technology experience serves to enhance the Board’s overall composition.
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Director since 2015
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CAREER EXPERIENCE
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PUBLIC COMPANY BOARD EXPERIENCE
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NetApp
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Skyworks Solutions, Inc. (current)
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Independent
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Senior Vice President and General Manager (2020-present)
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Cloudera, Inc. (past five years)
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RIDGE-LANE Limited Partners
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Venture Partner (2018 to 2019)
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SKILLS / QUALIFICATIONS
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Lenovo
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Risk Management and Controls
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Committees:
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Senior Vice President (2017-2018)
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Technology/Cybersecurity
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Risk Management (Vice Chair)
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Intel Corporation
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Public Company
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Governance and Executive
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Executive Officer, Corporate Vice President (2009-2017)
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Finance, Accounting & Audit
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LUIS A. UBIÑAS
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Mr. Ubiñas served as President of the Ford Foundation from 2008 to 2013 where he oversaw more than $12 billion in assets and over $500 million in annual giving. Prior to joining the Ford Foundation, he spent 18 years with McKinsey & Company, where he held various positions, including Senior Partner of the firm’s West Coast media practice working with technology, telecommunications and media companies. Along with his expertise in governance-related matters, Mr. Ubiñas has extensive private company investment and board experience as well as a deep knowledge in the marketing and media arenas.
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STEPHEN M. WATERS
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Mr. Waters is the Chair of the Company and the Bank, and the managing partner of Compass Partners Capital LLC and its investment subsidiaries. Previously, he held numerous executive positions at Morgan Stanley, including as Co-Chief Executive Officer of Morgan Stanley, Europe, member of Morgan Stanley’s worldwide 12-person Operating Committee and Co-Director of the firm’s Mergers and Acquisitions Department. He also previously served as a director of Duty Free International. Mr. Waters brings over 40 years of specific and relevant financial services experience to the Board, along with a deep understanding and practical knowledge of the investment management business.
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LIZABETH H. ZLATKUS
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Ms. Zlatkus held many senior leadership positions at The Hartford Financial Services Group, including Chief Financial Officer, Chief Risk Officer and Co-President of Hartford Life Insurance Companies. Since her retirement from The Hartford in 2011, she has served as a director on several public company, private company and non-profit boards. Ms. Zlatkus’ extensive experience in the financial services arena, where she has deep expertise in risk and finance, regulation, governance, and operations, makes her an excellent nominee for the Board.
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Director since 2015
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CAREER EXPERIENCE
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PUBLIC COMPANY BOARD EXPERIENCE
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The Hartford Financial Services Group
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Axis Capital Holdings Limited (current)
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Independent
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Chief Risk Officer (2010-2011)
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Computer Sciences Corporation (past five years)
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Chief Financial Officer (2008-2010)
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Co-President of Hartford Life (2007-2008)
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SKILLS / QUALIFICATIONS
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Risk Management and Controls
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Committees:
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Public Company
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Audit and Finance (Vice Chair)
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Finance, Accounting & Audit
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Compensation (Chair)
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Strategic Planning
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Majority Voting for Directors in Uncontested Elections
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Yes
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Annual Election of All Directors
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Yes
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Diverse Board (as to Gender, Composition, Skills, Experience, etc.)*
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Yes
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Annual Board and Committee Self-Evaluation
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Yes
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Separate Chair of the Board and CEO
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Yes
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Independent Directors Meet Without Management at Regularly Scheduled Board Meetings
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Yes
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Annual Independent Director Evaluation of CEO
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Yes
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Focus on Environmental, Social, and Governance (ESG)
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Yes
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Code of Conduct and Ethics for Directors
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Yes
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Board Level Risk Management Committee
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Yes
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Size of Board*
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9
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Number of Independent Directors*
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8
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Average Director Age*
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63
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Average Director Tenure (in Years)*
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6.3
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Annual Equity Grant to Directors
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Yes
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Disclosure Committee for Financial Reporting
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Yes
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Director Stock Ownership Policy
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Yes
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Term and Age Limit Guidance for Directors
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Yes
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*Based on the nine director nominees named in this Proxy Statement.
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•
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setting agendas for Board meetings in consultation with the CEO;
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•
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chairing Board meetings and ensuring that Board functions are effectively carried out;
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•
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chairing executive sessions of independent directors and providing feedback to the CEO, as appropriate;
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•
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serving as liaison for chairs of subsidiary company boards, as needed;
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•
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facilitating the Board’s efforts to create and maintain practices that respond to feedback from shareholders and other stakeholders;
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•
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representing the Board at meetings with major shareholders and other stakeholder groups on governance-related matters, as may be requested from time to time;
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•
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facilitating effective communication between directors and management, both inside and outside of meetings of the Board;
|
•
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providing advice to the CEO on major issues, including strategic initiatives; and
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•
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working with the CEO to ensure management strategies, plans and performance are appropriately risk assessed and represented to the Board.
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•
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the review and discussion of periodic reports to the Board of Directors and its committees on topics relating to risks that the Company faces, including, among others, credit risk, interest rate risk, operational risks (including cybersecurity and technology-related risks), and compliance and regulatory risk;
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•
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monitoring the level and trend of such risks relative to pre-approved levels and the ability to manage and mitigate such risks;
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•
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the required approval by the Board of Directors (or a committee thereof) of significant transactions and other decisions, including final budgets, material uses of capital, strategic direction, and executive management hiring and promotions;
|
•
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the direct oversight of specific areas of the Company’s business by the Risk Management Committee, the Audit and Finance Committee, the Compensation Committee and the Governance and Executive Committee; and
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•
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regular periodic reports from the Company’s internal and external auditors and other third party consultants regarding areas of potential risk, including, among others, those relating to the Company’s internal controls and financial reporting.
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•
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the compensation plans of the persons identified as named executive officers to ensure that such plans do not encourage the named executive officers to take unnecessary or excessive risks that threaten the value of the Company;
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•
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employee compensation plans in light of the risks posed to the Company by such plans and how to limit these risks; and
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•
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employee compensation plans to ensure these plans do not encourage the manipulation of reported earnings to enhance compensation.
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Name
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Audit
and
Finance
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Compensation (1)
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Risk
Management
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Governance and Executive (1)
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Mark F. Furlong (2), (3)
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Chair (8)
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X
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Joseph C. Guyaux (2)
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X
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Chair (8)
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Deborah F. Kuenstner (2), (3), (4)
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X
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|
X
|
|
|
Gloria C. Larson (2)
|
|
|
|
|
|
X
|
|
Chair (8)
|
Kimberly S. Stevenson (2), (3), (5)
|
|
|
|
|
|
X
|
|
X
|
Luis Antonio Ubiñas (2), (3), (6)
|
|
X
|
|
|
|
|
|
X
|
Stephen M. Waters (2), (3)
|
|
|
|
X
|
|
|
|
X
|
Lizabeth H. Zlatkus (2), (3), (7)
|
|
X
|
|
Chair (8)
|
|
|
|
|
Number of Committee Meetings Held in 2019
|
|
8
|
|
8
|
|
9
|
|
3
|
(1)
|
In January 2019, the Board of Directors split the Compensation, Governance and Executive Committee into two separate committees, the Compensation Committee and the Governance and Executive Committee.
|
(2)
|
The Board of Directors has determined that this member is an "independent" director under Nasdaq listing standards.
|
(3)
|
The Board of Directors has determined that this member is an “audit committee financial expert” under SEC regulations.
|
(4)
|
Deborah F. Kuenstner joined the Risk Management Committee in January 2019.
|
(5)
|
Kimberly S. Stevenson joined the Governance and Executive Committee in January 2019.
|
(6)
|
Luis Antonio Ubiñas joined the Governance and Executive Committee in January 2019.
|
(7)
|
Lizabeth H. Zlatkus joined the Compensation Committee in January 2019.
|
(8)
|
Indicates Chair as of December 31, 2019.
|
•
|
the process of reporting the Company’s financial statements;
|
•
|
the system of internal controls as it relates to financial reporting;
|
•
|
the audit process;
|
•
|
the Company's internal audit function;
|
|
|
|
•
|
the Company’s process for monitoring compliance with laws and regulations and the Code of Conduct and Ethics;
|
•
|
the review and approval of the Company’s declaration of dividends; and
|
•
|
the qualifications, independence and performance of the Company’s independent registered public accounting firm in accordance with SEC regulations.
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Current Position
|
Maura S. Almy
|
|
64
|
|
Executive Vice President and Chief Operating and Platform Officer
|
James C. Brown
|
|
54
|
|
Executive Vice President and President of Commercial Banking
|
Anthony DeChellis
|
|
57
|
|
Chief Executive Officer and President
|
Steven M. Gaven
|
|
40
|
|
Executive Vice President and Chief Financial Officer
|
Colleen A. Graham
|
|
54
|
|
Executive Vice President and General Counsel
|
John T. Longley
|
|
57
|
|
Executive Vice President and Head of West Coast
|
W. Timothy MacDonald
|
|
61
|
|
Executive Vice President and Chief Risk Officer
|
Joy C. McCune
|
|
52
|
|
Executive Vice President and Chief Human Resources Officer
|
Paul M. Simons
|
|
54
|
|
Executive Vice President and President of Private Banking, Wealth & Trust
|
William I. Woodson
|
|
54
|
|
Executive Vice President and Head of Wealth Advisory and Family Office Services
|
|
|
|
MAURA S. ALMY
|
||
|
|
Ms. Almy joined the Company in February 2019 as Executive Vice President and Chief Operating and Platform Officer. Prior to joining the Company, from January 2014 to July 2018, Ms. Almy was a Senior Vice President and Chief Operating Officer of Santander Securities LLC USA, where she led the operations, information technology, project management, vendor management and business continuity planning functions. In addition, as a member of Santander's executive team, she was directly responsible for the income statement for its Private Banking Wealth business. Ms. Almy has over 35 years of experience in roles spanning retail trading, client relationship management, sales, operations and technology, with positions held at Credit Suisse, Fidelity Investments, Barber & Bronson, Bear Stearns & Co. Inc., and Dean Whitter/Morgan Stanley, among others.
|
JAMES C. BROWN
|
||
|
|
Mr. Brown joined the Bank in December of 1999 and has held numerous positions throughout his tenure. In March 2019, he was named Executive Vice President and President of Commercial Banking of the Company. Prior to his current role, he served as Executive Vice President and President - Commercial Banking of the Bank from 2010 to 2019, and Executive Vice President and Chief Lending Officer of the Bank from 2003 to 2010, after several other roles at the Bank. Mr. Brown has over 32 years of banking experience, beginning his career at Shawmut Bank and State Street Corporation. Mr. Brown serves on the board of directors of the Bank.
|
STEVEN M. GAVEN
|
||
|
|
Mr. Gaven joined the Company in November 2011 as Vice President, Corporate Finance and Director of Investor Relations of the Company. In February 2016, he was named Chief Financial Officer of Boston Private Wealth LLC ("BPW"), a wholly-owned subsidiary of the Bank. He became Executive Vice President and Chief Financial Officer of the Company in January 2018 while also continuing in his role as Chief Financial Officer of BPW. Prior to joining the Company, Mr. Gaven was a member of the U.S. Industrials equity research team at Susquehanna International Group after holding several corporate finance roles at Investor Financial Services Corp. Mr. Gaven serves on the board of directors of the Bank.
|
COLLEEN A. GRAHAM
|
||
|
|
Ms. Graham joined the Company in April 2019 as Executive Vice President and General Counsel, with responsibility for Legal, Compliance and administrative oversight of Internal Audit. From August 2018 to April 2019, Ms. Graham served as Chief Executive Officer and founder of NextGen Compliance LLC, where she assisted in compliance investigations and designed proactive and preventative compliance solutions. Prior to that time, Ms. Graham worked for 21 years in senior leadership positions at Credit Suisse and its affiliates. From February 2016 to July 2017, she was a co-founder, board member, and the Chief Supervisory Officer of Signac, a Fintech joint venture between Credit Suisse and Palantir Technologies. Among other roles, Ms. Graham served as Managing Director and Credit Suisse’s Head of Compliance Americas, Head of Business Risk Management for the Private Bank Americas and Global Chief Control and Operational Risk Officer for the investment bank. Ms. Graham also co-chaired the Credit Suisse Investment Bank’s Operational Risk Committee.
|
|
|
|
JOHN T. LONGLEY
|
||
|
|
John Longley joined the Company in August 2019 as Executive Vice President and Head of West Coast. Previously, he served as the co-founder and Chief Executive Officer of Dobot, Inc., a Fintech company, from May 2014 to May 2018. Prior to launching Dobot, Inc., Mr. Longley served as Managing Director and Head of Private Wealth with BlackRock/iShares for three years. His additional Wall Street experience includes a cumulative 17 years with Smith Barney and subsequently Citigroup (via acquisition), where he held several executive roles.
|
W. TIMOTHY MACDONALD
|
||
|
|
Mr. MacDonald is Executive Vice President and Chief Risk Officer, responsible for overseeing the Company’s enterprise risk management program and relationships with key regulators. Mr. MacDonald joined the Company in 2009. First serving as Senior Vice President, Deputy Chief Risk Officer, he was named Executive Vice President and Chief Risk Officer of the Bank in 2011 and was elected Executive Vice President and Chief Risk Officer of the Company in 2013. Prior to joining the Company, he held key positions at GE Capital and worked at KPMG LLP, the Federal Reserve System and Shawmut Bank.
|
JOY MCCUNE
|
||
|
|
Ms. McCune joined the Company in August 2018 as Executive Vice President and Chief Human Resources Officer. Previously, Ms. McCune was the Chief Human Resources Officer at Boston Financial Data Services from 2015 to 2017. From 1997 to 2015, she served as a Senior Vice President at State Street Corporation, where she was responsible for providing strategic support to the State Street management committee and their global lines of business and led efforts in support of succession planning, new business line launches, and human resources matters in mergers and acquisitions. Her early experience also includes various human resources roles at other financial services and technology companies. Ms. McCune serves on the board of directors of the Bank.
|
PAUL M. SIMONS
|
||
|
|
Mr. Simons joined the Company in December 2018 as Executive Vice President and Chief of Corporate Strategy and Development. In March 2019, he became President of Private Banking, Wealth & Trust, while continuing to serve in his role as Executive Vice President. From May 2017 to November 2018, Mr. Simons was a Managing Director of Seaport Global Holdings, an institutional securities firm, where he developed and launched Seaport Global Asset Management. Prior to joining Seaport, from December 2014 to October 2016, he served as provisional CEO for a start-up financial information and technology company. With over 30 years of experience in the financial services sector, including senior level positions at Credit Suisse and Merrill Lynch, he has demonstrated expertise and leadership in many aspects of financial services, including asset management, wealth management, financial technology, private banking, investment banking, family office and client relationship management. Mr. Simons serves on the boards of directors of the Bank and Dalton, Greiner, Hartman, Maher & Co., LLC, an affiliate of the Company.
|
|
|
|
WILLIAM I. WOODSON
|
||
|
|
Mr. Woodson joined the Company in May 2019 as Executive Vice President and Head of Wealth Advisory and Family Office Services. He has more than 25 years of experience within the financial services industry and joined the Company from Citigroup where he was a Managing Director and head of the Family Office Group for Citi Private Bank in North America from May 2014 to May 2019. Prior to joining Citi Private Bank, Mr. Woodson held senior private banking and family office positions at Credit Suisse and Merrill Lynch, where, among other responsibilities, he ran a multi-family office business and managed ultra high net worth and family office clients. Mr. Woodson began his career in a Big Four public accounting firm as a tax professional, where he spent almost a decade providing domestic and international tax advice to ultra high net worth individuals, families and closely-held businesses.
|
For biographical information regarding Anthony DeChellis see “Information Regarding Director Nominees.”
|
|
|
|
ENVIRONMENTAL
|
◦
|
Environmental Sustainability Team
|
◦
|
The Company recently formed an Environmental Sustainability Team that will oversee and direct improvements in sustainability initiatives. Projects may include using environmentally friendly office products, going paperless, encouraging green commuting and participating in environmental clean-up days.
|
◦
|
The Company has installed filtered water refill stations where employees can dispense clean, filtered water into reusable water bottles and glasses as an environmentally friendly alternative to single-use plastic water bottles.
|
◦
|
The Company has removed plastic straws from circulation in its kitchens and will examine options to reduce use of plastic utensils, plates and cups.
|
◦
|
In order to decrease the Company’s carbon footprint, the Environmental Sustainability Team will assess areas where energy consumption can be reduced and consider purchasing cleaner renewable energy where feasible.
|
◦
|
Employee and Community Engagement
|
◦
|
The Company supports organizations, such as the American Lung Association, that focus on eliminating tobacco use and related lung disease and improving overall air quality.
|
SOCIAL
|
◦
|
Community Investment
|
◦
|
The Bank has an ‘Outstanding’ Community Reinvestment Act rating from federal and state regulators, and has invested approximately $1.5 billion in its Community Investment initiatives in the last five years.
|
◦
|
Staff volunteer for services and participate on boards and committees of nonprofit organizations that are engaged in improving the lives of low- and moderate-income people and neighborhoods in local communities. Special focus is on affordable housing, financial education, first-time homebuyer counseling, economic development, youth programs, domestic violence, homelessness, health, education, substance abuse treatment and crime prevention.
|
◦
|
The Company regularly offers nonprofit organizations free training programs through its Community Investment seminars. These seminars are designed to build the capacity of nonprofit organizations to thrive in their communities and to further their missions. Topics range from corporate governance best practices to fraud prevention and updates on federal and state laws affecting nonprofits.
|
◦
|
Philanthropic Initiatives
|
|
|
|
◦
|
The Company maintains a philanthropic giving program that assists nonprofit organizations, primarily serving low- and moderate-income people and places with flexible funds for operating, program and capital investment purposes.
|
◦
|
In 2019, the Company made contributions to a local children’s hospital, a foundation dedicated to improving the lives of homeless children and their families, and a national breast cancer research organization. The Company donates more than $1,000,000 to charitable organizations annually.
|
◦
|
The Company was recognized in 2019 by the Boston Business Journal and Silicon Valley Business Journal as one of the regions’ largest corporate charitable contributors.
|
◦
|
The Company supports its employees as they give back to the communities in which they live and work, including encouragement of employee volunteerism. Each employee is granted eight hours of time for volunteering and community service. On average, Company employees volunteer 5,000 hours annually.
|
◦
|
Employee Engagement
|
◦
|
The Company actively monitors employee engagement through annual and pulse surveys and recently commenced an Engagement Council focused on maintaining ongoing employee satisfaction.
|
◦
|
Diversity & Inclusion
|
◦
|
The Company is an equal opportunity employer and maintains hiring practices and policies that foster and promote an inclusive and diverse workforce.
|
◦
|
The Company is committed to gender diversity at all levels of the organization:
|
▪
|
Four directors on the Board are female, representing 50% of the non-executive members of the Board.
|
▪
|
As of December 31, 2019, women constituted 30% of the Company's executive officers and 57% of the Company's employee base.
|
▪
|
As of December 31, 2019, 50% of millennials (employees between the ages of 26 and 40) in the Company's workforce were female.
|
◦
|
Client Engagement
|
◦
|
The Company is committed to meeting the evolving needs and expectations of its clients. The Company surveys clients annually to measure satisfaction and ensure a consistently high level of service. In 2019, the Company achieved a 91% customer satisfaction score.
|
◦
|
ESG Investment Strategies
|
◦
|
The Company offers clients access to investment screening strategies that:
|
▪
|
exclude companies and industries associated with tobacco, alcohol, weapons or fossil fuels; or
|
▪
|
focus on investing in companies that support renewable energy, or partake in sustainable business practices or other ESG causes.
|
GOVERNANCE
|
◦
|
Culture
|
◦
|
The Company believes in treating clients with exceptional care through understanding their lives, not just their financial needs. To inspire employees to accomplish this purpose, we have created a corporate culture built on trust, respect, listening and an overreaching desire to do the right thing. With an uncompromising commitment to this culture, the Company adds value for its customers, shareholders,
|
|
|
|
|
|
|
EXECUTIVE COMPENSATION
|
|
|
|
The Board of Directors unanimously recommends that shareholders vote FOR the following resolution to approve the compensation of the Company's named executive officers:
|
|
|
|
|
Named Executive Officer
|
Title
|
Start Date
|
Anthony DeChellis
|
Chief Executive Officer and President
|
11/26/2018
|
Steven M. Gaven
|
Executive Vice President and Chief Financial Officer
|
1/1/20181
|
John T. Longley
|
Executive Vice President and Head of West Coast
|
8/31/2019
|
Paul M. Simons
|
Executive Vice President and President of Private Banking, Wealth & Trust
|
3/15/20191
|
William I. Woodson
|
Executive Vice President and Head of Wealth Advisory & Family Office Services
|
5/28/2019
|
Corey A. Griffin
|
Former Executive Vice President and CEO, Private Clients Group
|
1/1/20182
|
(1) Represents effective date of current title.
(2) Mr. Griffin's employment with the Company terminated as of April 30, 2019 and Mr. Griffin served as a consultant to the Company from May 1, 2019 until May 31, 2019.
|
|
•
|
Improving client value proposition for high net worth and ultra high net worth clients by attracting and retaining high caliber talent with deep subject matter expertise to advise clients;
|
•
|
Building upon the Company's capabilities for serving the unique financial objectives of wealthy families, family offices, and their advisors;
|
•
|
Increasing Boston Private's market share in the existing markets of Boston, California, Florida, and New York; and
|
•
|
Delivering progress against key strategic initiatives critical to better position the Company to achieve these strategic priorities (additional details found beginning on page 28).
|
|
|
|
Named Executive Officer
|
|
Previous Firm
|
|
Role
|
John T. Longley
|
|
BlackRock iShares
|
|
Head of Private Wealth
|
|
|
Citi Private Bank North America
|
|
Chief Executive Officer
|
Paul M. Simons
|
|
Credit Suisse
|
|
Co-Head of Private Banking USA
|
|
|
Merrill Lynch
|
|
Managing Director
|
William I. Woodson
|
|
Citi Private Bank
|
|
Head of Family Office Group
|
|
|
Credit Suisse
|
|
Managing Director
|
DILUTED EARNINGS PER SHARE
|
|
RETURN ON AVERAGE COMMON EQUITY
|
|
TOTAL
ASSETS UNDER MANAGEMENT / ADVISORY |
|
OPERATING EARNINGS RETURNED TO SHAREHOLDERS
|
$0.97
|
|
10.0%
|
|
$16.8 billion
(as of December 31, 2019)
|
|
59%
|
|
|
|
|
5% increase year-over-year
|
|
|
•
|
Nonperforming assets as a percentage of total assets were 0.26% at December 31, 2019, compared to the KRX median of 0.45%. The Company ranked in the 86th percentile relative to the KRX.
|
•
|
Total loans recovered exceeded total loans charged-off during 2019. Total net loans recovered as a percentage of loans was 0.02%, while the industry experienced net charge-offs (KRX median of 0.12%). The Company ranked in the 94th percentile relative to the KRX.
|
|
|
|
BASE SALARY:
|
|
SHORT-TERM INCENTIVE
(% of target):
|
|
LONG-TERM INCENTIVE
PSUs (% of target):
|
0%
|
|
Initial Funding = 83%
Final Funding = 70%
|
|
81%
|
No base salary increases for any named executive officer since 2016
(other than one increase made in connection with a promotion)
|
|
The Committee exercised negative discretion to reduce funding by 13 percentage points.
|
|
3-year average PSU payout:
Payouts for the last three PSU cycles have averaged 87% of target
|
|
|
|
•
|
Attract, retain and motivate exceptional leaders dedicated to the success of the organization;
|
•
|
Maximize individual and Company performance; and
|
•
|
Align compensation with performance.
|
|
|
|
|
|
|
CHARACTERISTIC
|
|
RANGE
|
|
CRITERIA
|
|
|
|
|
|
|
|
SIZE
|
|
Companies approximately 1/3 to 3 times the size of Boston Private
|
|
Total Assets of $4 billion to $28 billion
|
|
|
Market Capitalization of $700 million to $4 billion
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
BUSINESS MIX
|
|
Companies with a similar business mix to Boston Private
|
|
Fees as a percent of total revenue of at least 20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER RELEVANT CHARACTERSITCS
|
|
|
|
Companies headquartered in major metropolitan areas
|
|
|
Companies with which Boston Private competes for executive talent
|
||||
|
|
|
|
|
|
|
|
Named Executive Officer
|
Start Date
|
January 1, 2019
Salary ($)
|
December 31, 2019
Salary ($)
|
Change ($)
|
||
Anthony DeChellis
|
11/26/2018
|
700,000
|
700,000
|
—
|
|
|
Steven M. Gaven
|
1/1/20181
|
300,000
|
300,000
|
—
|
|
|
John T. Longley
|
8/31/2019
|
NA
|
|
350,000
|
NA
|
|
Paul M. Simons
|
3/15/20191
|
350,000
|
350,000
|
—
|
|
|
Williams I. Woodson
|
5/28/2019
|
NA
|
|
350,000
|
NA
|
|
Corey A. Griffin
|
1/1/20182
|
400,000
|
|
NA
|
NA
|
|
(1) Represents effective date of current title.
(2) Mr. Griffin's employment with the Company terminated as of April 30, 2019 and Mr. Griffin served as a consultant to the Company from May 1, 2019 until May 31, 2019.
|
|
|
|
|
|
Weighting
|
|
Metric
|
Type
|
2018
|
2019
|
ROACE
|
Quantitative
|
50.0%
|
37.5%
|
PTPP Income Growth
|
Quantitative
|
50.0%
|
37.5%
|
PASI
|
Qualitative
|
—%
|
25.0%
|
|
|
100.0%
|
100.0%
|
•
|
Introduction of a new relationship management model that includes identification and hiring of talent;
|
•
|
Establishment and retention of an experienced executive leadership team;
|
•
|
Execution of a digital technology roadmap ensuring a premier client experience; and
|
•
|
Continued enhancements in the Company's infrastructure.
|
•
|
Relative Credit Quality,
|
•
|
Average Deposit Growth,
|
•
|
TSR as measured against the KRX, and
|
•
|
Assets under Management - Net New Assets.
|
|
|
|
($ in millions)
|
2019 Targeted
Performance Levels
|
|
2019 Actual Performance
Levels and Weighted Funding
|
||
|
Target
|
|
Result (1)
|
|
Weighted
Funding
|
ROACE
|
10.75%
|
|
10.10%
|
|
33%
|
PTPP Income Growth (2)
|
$106
|
|
$100.1
|
|
23%
|
PASI
|
Described above
|
|
Exceeded - 110%
|
|
27%
|
Final funding level
|
|
|
|
|
83%
|
(1) Presented on an operating basis.
|
|||||
(2) $ in millions.
|
Metric
|
Performance Level
|
Relative credit quality
|
Top quartile of the KRX
|
Year-over-year average deposit growth
|
Below target
|
Net new assets
|
Below target
|
TSR (versus KRX)
|
Below 50th percentile
|
|
|
|
Executive
|
|
Annual Base
Salary ($)
|
|
Target
Bonus ($)
|
|
Actual
Bonus ($)
|
|
|||
A. DeChellis
|
|
700,000
|
|
|
700,000
|
|
|
390,000
|
|
|
S. Gaven
|
|
300,000
|
|
|
225,000
|
|
|
175,000
|
|
|
J. Longley1
|
|
350,000
|
|
|
475,000
|
|
|
158,334
|
|
|
P. Simons
|
|
350,000
|
|
|
425,000
|
|
|
300,000
|
|
|
W. Woodson1
|
|
350,000
|
|
|
425,000
|
|
|
400,000
|
|
|
C. Griffin2
|
|
400,000
|
|
|
400,000
|
|
|
116,667
|
|
|
(1) Mr. Longley's and Mr. Woodson's employment with the Company commenced on August 31, 2019 and May 28, 2019, respectively. Their 2019 STI bonus amounts were based on negotiations at the time of their respective hires.
|
|
|||||||||
(2) Mr. Griffin's employment with the Company terminated as of April 30, 2019 and Mr. Griffin served as a consultant to the Company from May 1, 2019 until May 31, 2019. He received a pro-rated portion of his 2019 STI bonus through May 31, 2019.
|
|
|
|
|
Award Type
|
|
2018
|
|
2019
|
||
|
|
%
of Total
|
Summary
|
|
%
of Total |
Summary
|
PSU
|
|
60%
|
3-year vesting (absolute ROACE target and relative ROACE percentile ranking against KRX)
|
|
60%
|
3-year vesting (absolute ROACE target and relative ROACE percentile ranking against KRX)
|
RSU
|
|
40%
|
3-year cliff vesting
|
|
20%
|
3 equal annual installments
|
NQSO
|
|
NA
|
|
|
20%
|
4 equal annual installments
|
|
|
|
|
|
2019 Awards
|
|
|||||||||
|
|
|
|
Non-Qualified Stock Options
|
|
Time-Based
Restricted Stock Units (RSUs)
|
|
Performance-Based Restricted Stock Units (PSUs)
|
|
|||
Name
|
|
Grant Date
|
|
Number of Shares Underlying Options Granted (#)
|
|
Number
of Stock
Units (#)
|
|
Target Number of Units Granted (#)
|
|
|||
A. DeChellis
|
|
5/15/2019
|
|
71,429
|
|
|
19,856
|
|
|
59,567
|
|
|
S. Gaven
|
|
5/15/2019
|
|
19,481
|
|
|
5,415
|
|
|
16,245
|
|
|
P. Simons
|
|
5/15/2019
|
|
16,234
|
|
|
4,513
|
|
|
13,538
|
|
|
Threshold
|
Low Target
|
Target
|
Maximum
|
8.0%
|
11.0%
|
12.0%
|
13.5%
|
Threshold
|
Target
|
Outperform
|
25th percentile
|
50th percentile
|
75th percentile
|
|
|
|
|
|
|
|
Time-Based
Restricted Stock Units (RSUs)
|
|
Non-Qualified Stock Options (NQSOs)
|
||||
Executive
|
|
Grant Date
|
|
Number of Stock Units (#)
|
|
Number of Shares Underlying Options Granted (#)
|
||||
J. Longley
|
|
11/15/2019
|
|
43,290
|
|
(1)
|
|
100,000
|
|
(1)
|
P. Simons
|
|
2/15/2019
|
|
29,215
|
|
(2)
|
|
N/A
|
|
(2)
|
W. Woodson
|
|
8/15/2019
|
|
96,525
|
|
(3)
|
|
100,000
|
|
(3)
|
(1)
|
Awards granted on November 15, 2019 utilized a closing share price of $11.55 and a binomial lattice option value of $3.08 per share to convert the approved value to a fixed number of shares underlying the NQSO.
|
(2)
|
Awards granted on February 15, 2019 utilized a closing share price of $11.98.
|
(3)
|
Awards granted on August 15, 2019 utilized a closing share price of $10.36 and a binomial lattice option value of $2.73 per share to convert the approved value to a fixed number of shares underlying the NQSO.
|
Name
|
Level (multiple of salary)
|
Mr. DeChellis
|
6 x Base Salary
|
Mr. Gaven
|
3 x Base Salary
|
Mr. Longley
|
3 x Base Salary
|
Mr. Simons
|
3 x Base Salary
|
Mr. Woodson
|
3 x Base Salary
|
|
|
|
|
|
|
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors has reviewed and discussed the Compensation Discussion & Analysis required by Item 402(b) of Regulation S-K promulgated under the Securities Act of 1933, as amended, with management and, based on this review and these discussions, the Compensation Committee recommended to the Board that the Compensation Discussion & Analysis be included in the Company’s Proxy Statement.
Submitted by the Compensation Committee of the Board:
Lizabeth H. Zlatkus, Chair
Deborah F. Kuenstner, Vice Chair
Joseph C. Guyaux
Stephen M. Waters
|
|
|
|
|
Name and
Principal Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Stock Awards
($)
|
|
Option Awards ($)
|
|
Non-Equity
Incentive Plan
Compensation
($)(7)
|
|
All Other
Compensation
($)(8)
|
|
Total ($)
|
|||||||||||||||
Anthony DeChellis
|
|
2019
|
|
700,000
|
|
|
|
—
|
|
|
|
880,007
|
|
(4) (5)
|
|
220,001
|
|
(6
|
)
|
|
390,000
|
|
|
|
28,400
|
|
|
|
2,218,408
|
|
|
CEO and President
|
|
2018
|
|
51,154
|
|
(4)
|
|
—
|
|
|
|
750,000
|
|
(4)
|
|
1,750,000
|
|
(7
|
)
|
|
—
|
|
|
|
25,799
|
|
(8)
|
|
2,576,953
|
|
|
Steven M. Gaven
|
|
2019
|
|
300,000
|
|
|
|
—
|
|
|
|
239,993
|
|
(4) (5)
|
|
60,001
|
|
(6
|
)
|
|
175,000
|
|
|
|
28,400
|
|
|
|
803,394
|
|
|
Executive Vice President and Chief Financial Officer
|
|
2018
|
|
297,346
|
|
(3)
|
|
—
|
|
|
|
202,503
|
|
(5)(6)
|
|
—
|
|
|
|
186,000
|
|
|
|
12,836
|
|
(8)
|
|
698,685
|
|
||
John T. Longley
Executive Vice President and Head of West Coast
|
|
2019
|
|
106,346
|
|
(1
|
)
|
|
—
|
|
|
|
500,000
|
|
(4)
|
|
308,000
|
|
(6
|
)
|
|
158,334
|
|
|
|
21,212
|
|
|
|
1,093,892
|
|
Paul M. Simons
Executive Vice President and President of Private Banking, Wealth & Trust
|
|
2019
|
|
350,000
|
|
|
|
—
|
|
|
|
550,001
|
|
(4) (5)
|
|
50,001
|
|
(6
|
)
|
|
300,000
|
|
|
|
28,400
|
|
|
|
1,278,402
|
|
|
William I. Woodson
Executive Vice President and Head of Wealth Advisory & Family Office Services
|
|
2019
|
|
199,231
|
|
(2
|
)
|
|
—
|
|
|
|
999,999
|
|
(4)
|
|
273,000
|
|
(6
|
)
|
|
400,000
|
|
|
|
19,846
|
|
|
|
1,892,076
|
|
Corey A. Griffin
|
|
2019
|
|
138,462
|
|
(3
|
)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
116,667
|
|
|
|
895,101
|
|
|
|
1,150,230
|
|
|
Former Executive Vice President and CEO Private Client Group
|
|
2018
|
|
400,000
|
|
|
|
—
|
|
|
|
360,004
|
|
|
|
—
|
|
|
|
240,000
|
|
|
|
70,942
|
|
|
|
1,070,946
|
|
||
|
2017
|
|
400,000
|
|
|
|
—
|
|
|
|
381,186
|
|
|
|
—
|
|
|
|
500,000
|
|
|
|
42,092
|
|
|
|
1,323,278
|
|
|
|
|
(6)
|
This amount reflects the grant date fair value of stock options granted under the 2009 Plan calculated in accordance with ASC 718, disregarding any estimates of service-based forfeitures. Information about the assumptions used to value these awards can be found in Part II. Item 8 "Financial Statements and Supplementary Date - Note 18: "Employee Benefits" of the Company's 2019 Annual Report on Form 10-K.
|
|
||||||||||||||||||
(7)
|
The amounts in this column reflect the annual STI awards to the named individuals under the 2017, 2018, and 2019 STI.
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
(8)
|
All Other Compensation for 2019 is composed of the following amounts:
|
|||||||||||||||||||
Compensation item
|
|
Anthony DeChellis ($)
|
|
Steven M. Gaven ($)
|
|
John Longley ($)
|
|
Paul M. Simons ($)
|
|
William I. Woodson ($)
|
|
Corey A. Griffin ($)
|
|
|||||||
Matching Contribution to 401(k) Plan
|
|
8,400
|
|
|
8,400
|
|
|
1,212
|
|
|
8,400
|
|
|
4,846
|
|
|
8,400
|
|
|
|
Dividends Paid on Vested Stock Grants
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,939
|
|
|
|
Flexible Perquisite Allowance
|
|
20,000
|
|
|
20,000
|
|
|
20,000
|
|
|
20,000
|
|
|
15,000
|
|
|
20,000
|
|
|
|
Consulting Fees1
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40,000
|
|
|
|
Payments Related to Severance2:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Cash Severance
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
400,000
|
|
|
|
Accelerated Vesting of Equity
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
280,461
|
|
|
|
Dividends Paid on Vested Stock Grants (due to acceleration of vesting)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43,078
|
|
|
|
Benefits Continuation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,223
|
|
|
|
Fringe Benefits (maximum annual cap)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,000
|
|
|
|
Total All Other Compensation
|
|
28,400
|
|
|
28,400
|
|
|
21,212
|
|
|
28,400
|
|
|
19,846
|
|
|
895,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
(1) Mr. Griffin served as a consultant to the Company from May 1, 2019 to May 31, 2019 and continued to receive his base salary and benefits during that time as payment for his consulting services.
|
|
|||||||||||||||||||
|
|
|
||||||||||||||||||
(2) The amount reported for Mr. Griffin represents his severance pay package pursuant to the Company's Executive Vice President Severance Pay Plan, including the treatment of outstanding equity upon termination "without cause" per standard equity award agreements as previously disclosed in prior proxy statements. This is described under the heading "Potential Payments upon a Termination or Change in Control".
|
|
|||||||||||||||||||
|
|
|
|
|
|
|
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1)
|
|
Estimated Future Payouts
Under Equity Incentive
Plan Awards(2)
|
|
All
Other
Stock
Awards:
Number
of
Shares
of
Stock or
Units
#
|
|
All
Other
Option
Awards
Number of
Securities
Underlying
Options #
|
|
Exercise
or Base
Price of
Option
Awards
($/unit)
|
|
Grant
Date
Fair
Value of
Stock
and
Option
Awards
($)(3)
|
||||||||||||
Name
|
|
Grant
Date
|
|
Target
$
|
|
Maximum
$
|
|
Target
#
|
|
Maximum
#
|
|
|
|
|
||||||||||||
Anthony DeChellis
|
|
5/15/2019
|
|
—
|
|
|
—
|
|
|
59,567
|
|
|
119,134
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
660,002
|
|
|
5/15/2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,856
|
|
|
—
|
|
|
—
|
|
|
220,004
|
|
|
|
5/15/2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
71,429
|
|
|
11.08
|
|
|
220,001
|
|
|
|
|
|
700,000
|
|
|
1,400,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Steven M. Gaven
|
|
5/15/2019
|
|
—
|
|
|
—
|
|
|
16,245
|
|
|
32,490
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
179,995
|
|
|
5/15/2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,415
|
|
|
—
|
|
|
—
|
|
|
59,998
|
|
|
|
5/15/2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,481
|
|
|
11.08
|
|
|
60,001
|
|
|
|
|
|
225,000
|
|
|
450,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
John T. Longley
|
|
11/15/2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43,290
|
|
|
—
|
|
|
—
|
|
|
500,000
|
|
|
11/15/2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100,000
|
|
|
11.55
|
|
|
308,000
|
|
|
|
|
|
475,000
|
|
|
950,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Paul M. Simons
|
|
5/15/2019
|
|
—
|
|
|
—
|
|
|
13,538
|
|
|
27,076
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
150,001
|
|
|
5/15/2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,513
|
|
|
—
|
|
|
—
|
|
|
50,004
|
|
|
|
5/15/2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,234
|
|
|
11.08
|
|
|
50,001
|
|
|
|
2/15/2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,215
|
|
|
—
|
|
|
11.98
|
|
|
349,996
|
|
|
|
|
|
425,000
|
|
|
850,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
William I. Woodson
|
|
8/15/2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96,525
|
|
|
—
|
|
|
—
|
|
|
999,999
|
|
|
8/15/2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100,000
|
|
|
10.36
|
|
|
273,000
|
|
|
|
|
|
425,000
|
|
|
850,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Corey A. Griffin (4)
|
|
|
|
400,000
|
|
|
800,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
The amount shown in the Maximum column is 200% of the target amount shown in the Target column, and is the maximum that may be awarded under the STI. There is no threshold for amounts that may be awarded under the STI.
|
|
|
|
(2)
|
The number of units shown in the Maximum column is 200% of the target amount shown in the Target column, which is the maximum number of units that may be earned under PSU awards. For a description of these awards see "Equity-Based Long-Term Incentives." No payout is possible if actual performance fails to exceed pre-established threshold performance goals over the three-year performance.
|
(3)
|
This column shows the grant date fair value of equity awards in accordance with ASC 718. Information about the assumptions used to value these awards can be found in Part II. Item 8. "Financial Statements and Supplementary Data - Note 18: "Employee Benefits" of the Company's 2019 Annual Report on Form 10-K.
|
(4)
|
The amount reported for Mr. Griffin represents his full target and maximum bonus payouts under the STI. Mr. Griffin's employment with the Company terminated on April 30, 2019 and Mr. Griffin served as a consultant to the Company from May 1, 2019 until May 31, 2019. He received a pro-rated portion of his 2019 STI bonus through May 31, 2019, the amount of which is reported in the "Non-Equity Incentive Plan Compensation" column of the Summary Compensation Table above.
|
|
Option Awards
|
|
Stock Awards
|
|||||||||||||||||||||||||||
Name
|
Number of Securities Underlying
Unexercised Options Exercisable (#)(1) |
|
Number of Securities Underlying
Unexercised Options Unexercisable (#)(2) |
|
Equity
Incentive
Plan
Awards Number of Securities Underlying Unexercised Unearned Options (#)
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number of Shares or Units of Stock that Have Not Vested (#)
|
|
Market Value of Shares or Units of Stock that Have Not Vested ($)
|
|
|
Equity Incentive Plan
Awards: Number of Unearned
Shares, Units or
Other Rights That
Have Not Vested (#)
|
|
|
Equity Incentive Plan
Awards: Market or Payout Value of Unearned
Shares, Units or
Other Rights That
Have Not Vested ($)(2)
|
|||||||||||
Anthony DeChellis
|
—
|
|
|
71,429
|
|
|
—
|
|
|
11.08
|
|
|
5/15/2029
|
|
19,856
|
|
|
238,868
|
|
|
|
59,567
|
|
(9)
|
|
716,591
|
|
|||
|
31,407
|
|
|
94,221
|
|
|
391,850
|
|
(13
|
)
|
12.70
|
|
|
11/26/2028
|
|
44,292
|
|
|
532,833
|
|
(12)
|
|
—
|
|
|
|
—
|
|
||
Steven M. Gaven
|
—
|
|
|
19,481
|
|
|
—
|
|
|
11.08
|
|
|
5/15/2029
|
|
5,415
|
|
|
65,142
|
|
(3)
|
|
16,245
|
|
(9)
|
|
195,427
|
|
|||
|
5
|
|
|
—
|
|
|
—
|
|
|
9.05
|
|
|
5/15/2022
|
|
4,880
|
|
|
58,706
|
|
(4)
|
|
7,319
|
|
(10)
|
|
88,048
|
|
|||
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,680
|
|
|
20,210
|
|
(5)
|
|
1,361
|
|
(11)
|
|
16,370
|
|
||
John T. Longley
|
—
|
|
|
100,000
|
|
|
—
|
|
|
11.55
|
|
|
11/15/2029
|
|
43,290
|
|
|
520,779
|
|
(6)
|
|
—
|
|
|
|
—
|
|
|||
Paul M. Simons
|
—
|
|
|
16,234
|
|
|
—
|
|
|
11.08
|
|
|
5/15/2029
|
|
33,728
|
|
|
405,748
|
|
(3)
|
|
13,538
|
|
(9)
|
|
162,862
|
|
|||
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,215
|
|
|
351,456
|
|
(7)
|
|
—
|
|
|
|
—
|
|
||
William I. Woodson
|
—
|
|
|
100,000
|
|
|
—
|
|
|
10.36
|
|
|
8/15/2029
|
|
96,525
|
|
|
1,161,196
|
|
(8)
|
|
—
|
|
|
|
—
|
|
|||
Corey A. Griffin
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
||
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
4,527
|
|
(10)
|
|
54,460
|
|
||
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
8,090
|
|
(11)
|
|
97,326
|
|
(1)
|
All securities issued under the 2009 Plan, other than the awards made to Mr. DeChellis in 2018, which were granted under the Company's 2010 Inducement Stock Plan.
|
|
|
(2)
|
The market value is based on the closing price of the Company's common stock on December 31, 2019 of $12.03.
|
|
|
(3)
|
This award vests in three equal installments beginning on May 15, 2020.
|
|
|
(4)
|
This award vests on May 14, 2021.
|
|
|
(5)
|
This award vests on May 15, 2020.
|
|
|
(6)
|
This award vests in three equal installments beginning on November 13, 2020.
|
|
|
(7)
|
This award vests on February 15, 2022.
|
|
|
(8)
|
This award vests in three equal installments beginning on August 15, 2020.
|
|
|
|
(9)
|
2019 stock awards include PSUs which could, based on performance for the 2019-2021 performance period, result in the earn-out of additional units for above target outperformance as set forth below.
|
||||||
Named Executive Officer
|
|
Target PSUs Granted
|
|
Maximum PSUs Potentially Earned
|
|||
Anthony DeChellis
|
|
59,567
|
|
|
119,134
|
|
|
Steven M. Gaven
|
|
16,245
|
|
|
32,490
|
|
|
John T. Longley
|
|
—
|
|
|
—
|
|
|
Paul M. Simons
|
|
13,538
|
|
|
27,076
|
|
|
William I. Woodson
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
||||||||
Name
|
|
Number of Shares Acquired on Exercise
# (1)
|
|
Value Realized on Exercise
$
|
|
Number of Shares Acquired on Vesting
#
|
|
Value Realized on Vesting
$ (3)
|
||||
Anthony DeChellis (1)
|
|
—
|
|
|
—
|
|
|
14,763
|
|
|
172,579
|
|
Steven M. Gaven (2)
|
|
—
|
|
|
—
|
|
|
2,208
|
|
|
24,089
|
|
John T. Longley
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Paul M. Simons
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
William I. Woodson
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Corey A. Griffin (2)
|
|
—
|
|
|
—
|
|
|
41,496
|
|
|
434,662
|
|
(1) Securities issued under the Company's 2010 Inducement Stock Plan.
|
||||||||||||
|
||||||||||||
(2) Securities issued under the 2009 Plan.
|
||||||||||||
|
||||||||||||
(3) The number and value realized of shares acquired on vesting in 2019 includes the following RSUs with value at the vest date, based on the closing price on such date, as listed below:
|
Name
|
|
Total Shares Vested
|
|
Weighted Average Vest
Date Fair
Value per
Share
|
|
Value Realized
on Vesting
|
||
Anthony DeChellis
|
|
14,763
|
|
|
11.69
|
|
172,579
|
|
Steven M. Gaven
|
|
2,208
|
|
|
10.91
|
|
24,089
|
|
John T. Longley
|
|
—
|
|
|
—
|
|
—
|
|
Paul M. Simons
|
|
—
|
|
|
—
|
|
—
|
|
William I. Woodson
|
|
—
|
|
|
—
|
|
—
|
|
Corey A. Griffin
|
|
41,496
|
|
|
10.47
|
|
434,662
|
|
|
|
|
|
|
|
|
•
|
subject to his execution and effectiveness of a separation agreement, including a release of claims in favor of the Company, an amount equal to two times the sum of his then current base salary and target annual bonus (or, if such target annual bonus has not been established, an amount equal to the target annual bonus for the immediately preceding year), paid out in substantially equal installments in accordance with the Company’s payroll practice over 18 months;
|
•
|
subject to his co-payment of premium amounts at the active employees’ rate, continued group health, dental and vision coverage under the Company’s benefit plans for a period of up to 18 months; and
|
•
|
acceleration of any equity awards that will vest in accordance with the terms of their respective award agreements.
|
|
|
|
•
|
subject to his execution and effectiveness of a separation agreement, including a release of claims in favor of the Company within 60 days of his termination, a lump sum payment equal to two times the sum of his then current base salary (or his base salary in effect immediately prior to the change in control, if higher) plus his then current target annual bonus (or his target annual bonus in effect immediately prior to the change in control, if higher);
|
•
|
acceleration of any equity awards that will vest in accordance with the terms of their respective award agreements; and
|
•
|
if Mr. DeChellis was participating in the Company’s group health plan immediately prior to the date of termination and elects group health plan coverage, a monthly cash payment for 18 months, or his COBRA health continuation period, whichever ends earlier, in an amount equal to the monthly employer contribution that the Company would have made to provide health insurance to Mr. DeChellis if he had remained employed by the Company.
|
|
|
|
|
|
|
Name
|
|
Payment/Benefit
|
|
Termination without Cause/for Good Reason ($) (1)
|
|
Termination due to Death or Disability ($) (5)
|
|
Change in Control (no termination) ($)
|
|
Termination without Cause/for Good Reason in connection with a Change in Control ($)
|
||||
Anthony DeChellis
|
|
Cash Severance
|
|
2,800,000
|
|
|
—
|
|
|
—
|
|
|
2,800,000
|
|
|
Pro-Rated Bonus
|
|
—
|
|
|
390,000
|
|
|
—
|
|
|
—
|
|
|
|
Continued/ Accelerated Vesting of Equity (2), (4)
|
|
733,529
|
|
|
922,220
|
|
|
—
|
|
|
922,220
|
|
|
|
Benefits (3)
|
|
21,111
|
|
|
—
|
|
|
—
|
|
|
21,111
|
|
|
|
Fringe Benefits (maximum annual cap)
|
|
20,000
|
|
|
—
|
|
|
—
|
|
|
20,000
|
|
|
|
Total
|
|
3,574,640
|
|
|
1,312,220
|
|
|
—
|
|
|
3,763,331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Steven M. Gaven
|
|
Cash Severance
|
|
300,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Pro-Rated Bonus
|
|
175,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Continued/Accelerated Vesting of Equity (2) (4)
|
|
169,912
|
|
|
250,669
|
|
|
—
|
|
|
250,669
|
|
|
|
Benefits (3)
|
|
22,088
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Fringe Benefits (maximum annual cap)
|
|
20,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Total
|
|
687,000
|
|
|
250,669
|
|
|
—
|
|
|
250,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
John T. Longley
|
|
Cash Severance
|
|
350,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Pro-Rated Bonus
|
|
158,334
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Continued/ Accelerated Vesting of Equity (2), (4)
|
|
21,883
|
|
|
520,779
|
|
|
—
|
|
|
520,779
|
|
|
|
Benefits (3)
|
|
22,223
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Fringe Benefits (maximum annual cap)
|
|
20,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Total
|
|
572,440
|
|
|
520,779
|
|
|
—
|
|
|
520,779
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Paul M. Simons
|
|
Cash Severance
|
|
350,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Pro-Rated Bonus
|
|
300,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Continued/Accelerated Vesting of Equity (2) (4)
|
|
148,005
|
|
|
439,961
|
|
|
—
|
|
|
439,961
|
|
|
|
Benefits (3)
|
|
22,223
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Fringe Benefits (maximum annual cap)
|
|
20,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Total
|
|
840,228
|
|
|
439,961
|
|
|
—
|
|
|
439,961
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
William I. Woodson
|
|
Cash Severance
|
|
350,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Pro-Rated Bonus
|
|
400,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Continued/ Accelerated Vesting of Equity (2), (4)
|
|
146,345
|
|
|
1,161,196
|
|
|
—
|
|
|
1,161,196
|
|
|
|
Benefits (3)
|
|
22,304
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Fringe Benefits (maximum annual cap)
|
|
20,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Total
|
|
938,649
|
|
|
1,161,196
|
|
|
—
|
|
|
1,161,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(1) Amounts in this column reflect payments due Mr. DeChellis per his Employment Agreement and the payments due all other named executive officers as per the Company's Executive Vice President Severance Pay Plan, and accelerated or continued vesting of equity awards pursuant to the terms of each award agreement.
(2) In the event of a change in control with no termination, if the acquiring company elected not to assume or replace the outstanding grants, all outstanding unvested grants of time-based restricted stock and RSUs would vest and all performance shares/PSUs would vest pro-rata based on the number of days from the grant date to the date of the change in control.
(3) Health and dental contribution using premium rates at January 1, 2020.
(4) Performance shares/PSUs pro-rated based on grant date for each performance/vesting cycle. Time-based restricted stock/RSUs are pro-rated (not fully accelerated) upon termination without cause/for good reason and are fully accelerated in a change-in-control termination assuming grants not assumed or replaced.
(5) In the event of termination due to death or disability for all named executive officers, all time-based equity awards will fully accelerate and all performance equity awards will vest on a pro-rated basis based on the duration of the named executive officer's employment in the performance period.
|
|
|
|
•
|
the annual total compensation of the "median employee" of the Company (other than Mr. DeChellis) was $105,844; and
|
•
|
the annual total compensation of Mr. DeChellis, as reported in the Summary Compensation Table included elsewhere in this Proxy Statement, was $2,218,408.
|
•
|
We combined all of the elements of the "median employee’s" compensation for 2019 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $105,844. The difference between such employee’s salary, wages, tips and overtime pay and the employee’s annual total compensation represented the estimated value of the following benefits: company matching contributions to participants in the Company's Section 401(k) employee savings plan, company-provided gift cards, payment for accrued and unused vacation time and wellness benefits.
|
•
|
With respect to the annual total compensation of Mr. DeChellis, we used the amount reported in the "Total" column of the 2019 Summary Compensation Table included in this Proxy Statement.
|
|
|
|
•
|
An annual retainer fee of $120,000, of which 50% ($60,000) is payable in cash as a cash retainer and 50% ($60,000) is payable in Company stock as a stock retainer.
|
•
|
The non-executive Chair’s supplemental annual retainer fee is $50,000, of which 50% ($25,000) is paid in cash, for a total cash retainer of $85,000, and 50% ($25,000) is paid in stock, for a total stock retainer of $85,000. As a result, the total Chair retainer is $170,000.
|
•
|
Each director can elect to receive up to 100% of the annual cash retainer fee in stock.
|
|
|
|
Name and Principal Position
|
|
Fees
Earned
or Paid in Cash
($)
|
|
Stock
Awards
($) (6)
|
|
Option
Awards
($)
|
|
Non-Equity
Incentive
Plan
Compensation
($)
|
|
Change in
Pension
Value and
NQ Deferred
Compensation
Earnings ($)
|
|
All Other
Compensation
($)
|
|
Total ($)(7)
|
||||||||
Board of Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Mark F. Furlong
|
|
67,500
|
|
|
60,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
127,500
|
|
|
Joseph C. Guyaux
|
|
67,500
|
|
|
60,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
127,500
|
|
|
Deborah F. Kuenstner
|
|
62,500
|
|
|
60,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
122,500
|
|
|
Gloria C. Larson
|
|
67,500
|
|
|
60,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
127,500
|
|
|
Daniel P. Nolan (1)
|
|
17,360
|
|
(2
|
)
|
17,360
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34,720
|
|
Kimberly S. Stevenson
|
|
62,500
|
|
(3
|
)
|
60,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
122,500
|
|
Luis Antonio Ubiñas
|
|
62,500
|
|
|
60,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
122,500
|
|
|
Stephen M. Waters (4)
|
|
85,000
|
|
|
85,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
170,000
|
|
|
Lizabeth H. Zlatkus
|
|
70,000
|
|
(5
|
)
|
60,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
130,000
|
|
(1)
|
On February 14, 2019, Mr. Nolan resigned from the Board of Directors of the Company.
|
(2)
|
Mr. Nolan elected to receive $17,360 of his cash compensation in the form of Company stock.
|
(3)
|
Ms. Stevenson elected to receive $32,500 of her cash compensation in the form of Company stock.
|
(4)
|
Non-Executive Chair of the Board
|
(5)
|
Ms. Zlatkus elected to receive $42,500 of her cash compensation in the form of Company stock.
|
(6)
|
Represents the aggregate grant date fair value, computed in accordance with ASC 718, of awards that were granted to directors in 2019.
|
(7)
|
The compensation numbers in the above table may not correspond to the Board and Committee retainers described under "Compensation of Directors" due to the timing of the rotation of committee chair assignments in 2019.
|
|
|
|
AUDIT
|
|
|
|
2019
|
|
2018
|
|||||
Audit fees (1)
|
|
$
|
1,130,000
|
|
|
$
|
1,074,355
|
|
|
Audit-related fees
|
|
18,000
|
|
|
8,750
|
|
|||
Tax fees
|
|
—
|
|
—
|
|
—
|
|
||
All other fees
|
|
—
|
|
|
—
|
|
|||
Total fees
|
|
$
|
1,148,000
|
|
|
$
|
1,083,105
|
|
(1)
|
Audit fees for 2019 and 2018 include fees billed, or expected to be billed, for the annual audit and quarterly reviews.
|
|
|
|
|
|
The Board of Directors unanimously recommends that shareholders vote FOR the ratification of the selection of KPMG as the Company's independent registered public accounting firm for fiscal year 2020.
|
|
|
|
|
|
|
|
EQUITY COMPENSATION PLAN
|
|
|
|
The Board of Directors unanimously recommends that shareholders vote FOR approval of the Boston Private Financial Holdings, Inc. 2020 Omnibus Incentive Plan.
|
|
|
|
•
|
The maximum number of shares of common stock to be issued under the Plan is 3,700,000, less one share of common stock for every share subject to an award granted after December 31, 2019 under the 2009 Plan;
|
•
|
The award of stock options (both incentive and non-qualified options), stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, cash-based awards, and dividend equivalent rights is permitted;
|
•
|
Shares tendered or held back to cover the exercise price of options or taxes on option exercise will not be added back to the reserved pool under the Plan. Upon the exercise of a stock appreciation right that is settled in shares of common stock, the full number of shares underlying the award will be charged to the reserved pool. Additionally, shares the Company reacquires on the open market will not be added to the reserved pool under the Plan;
|
•
|
Stock options and stock appreciation rights will not be repriced in any manner without shareholder approval;
|
•
|
The value of all awards awarded under the Plan and all other cash compensation paid by the Company to any non-employee director in any calendar year may not exceed $400,000; provided, however, the independent members of the Board of Directors may make exceptions to this limit for the non-executive Chair but the non-employee director receiving additional compensation may not participate in any decision regarding such exception;
|
•
|
A minimum vesting period of one year is required for all equity awards, other than a limited number of excepted awards under the Plan;
|
•
|
Any dividends and dividend equivalent rights payable with respect to any equity award are subject to the same vesting provisions as the underlying award;
|
•
|
Any material amendment to the Plan is subject to approval by the Company's shareholders; and
|
•
|
Awards under the Plan will be subject to the Company’s clawback policy, as in effect from time to time. In the absence of such a policy, the Plan provides for recoveries or clawbacks of awards and any shares of common stock issued pursuant to awards if (a) the vesting of the awards was determined or calculated based on materially inaccurate financial statements or any other material inaccurate performance metric criteria; or (b) if the Company terminates a grantee’s employment due to their gross negligence or willful misconduct, which conduct, directly or indirectly, results in the Company preparing an accounting restatement.
|
•
|
The term of the Plan will expire on April 23, 2030.
|
|
|
|
Share Element
|
|
2017
|
|
2018
|
|
2019
|
Stock Options Granted
|
|
—
|
|
517,478
|
|
437,016
|
Full-Value Awards Granted
|
|
485,263
|
|
479,194
|
|
844,691
|
Total Awards Granted (1)
|
|
485,263
|
|
996,672
|
|
1,281,707
|
Weighted average common shares outstanding during the fiscal year
|
|
82,430,633
|
|
83,596,685
|
|
83,430,740
|
Annual Burn Rate
|
|
0.59%
|
|
1.19%
|
|
1.54%
|
|
|
|
|
|
|
|
Three-Year Average Burn Rate (2)
|
|
|
|
|
|
1.11%
|
(1)
|
Total Awards Granted represents the sum of Stock Options Granted and Full-Value Awards Granted.
|
(2)
|
As illustrated in the table above, the three-year average burn rate for the 2017-2019 period was 1.11%, which is below the ISS industry category burn rate threshold of 2.90%.
|
|
|
|
•
|
awards under the Plan and any shares of common stock issued pursuant to awards will be subject to recovery or clawback by the Company if and to the extent that the vesting of the awards was determined or calculated based on materially inaccurate financial statements or any other material inaccurate performance metric criteria; or
|
•
|
if the Company terminates a grantee’s employment due to their gross negligence or willful misconduct, which conduct, directly or indirectly, results in the Company preparing an accounting restatement, any awards under the Plan and any shares of common stock issued pursuant to awards will be subject to recovery or clawback.
|
|
|
|
|
|
|
|
|
|
|
|
Options
|
|
Stock Awards
|
||||||||||||||||||||
Name and Position
|
|
Average Exercise Price
($)
|
|
Number of Awards
(#)
|
|
Dollar Value
($)(1)
|
|
Number of Awards
(#)
|
||||||||||||||||
Anthony DeChellis, Chief Executive Officer and President
|
|
|
11.08
|
|
|
|
|
71,429
|
|
|
|
880,006
|
|
|
|
|
79,423
|
|
|
|
||||
Steven M. Gaven, Executive Vice President and Chief Financial Officer
|
|
|
11.08
|
|
|
|
|
19,481
|
|
|
|
239,993
|
|
|
|
|
21,660
|
|
|
|
||||
John T. Longley, Executive Vice President and Head of West Coast
|
|
|
11.55
|
|
|
|
|
100,000
|
|
|
|
500,000
|
|
|
|
|
43,290
|
|
|
|
||||
Paul M. Simons, Executive Vice President and President of Private Banking, Wealth and Trust
|
|
|
11.08
|
|
|
|
|
16,234
|
|
|
|
550,001
|
|
|
|
|
47,266
|
|
|
|
||||
William I. Woodson, Executive Vice President and Head of Wealth Advisory & Family Office
|
|
|
10.36
|
|
|
|
|
100,000
|
|
|
|
999,999
|
|
|
|
|
96,525
|
|
|
|
||||
Corey A. Griffin, Former Executive Vice President and CEO Private Client Group
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
||||
All current executive officers, as a group
|
|
|
11.02
|
|
(2)
|
|
|
401,300
|
|
|
|
4,650,018
|
|
(3)
|
|
|
421,740
|
|
|
|
||||
All current directors who are not executive officers, as a group
|
|
|
—
|
|
|
|
|
—
|
|
|
|
614,719
|
|
(3)
|
|
|
54,615
|
|
|
|
||||
All current employees who are not executive officers, as a group
|
|
|
11.08
|
|
(2)
|
|
|
19,482
|
|
|
|
4,213,117
|
|
(3)
|
|
|
380,499
|
|
|
|
(1)
|
The valuation of stock awards is based on the grant date fair value computed in accordance with ASC Topic 718. Information about the assumptions used to value these awards can be found in Part II. Item 8 "Financial Statements and Supplementary Date - Note 18: "Employee Benefits" of the Company's 2019 Annual Report on Form 10-K.
|
(2)
|
Represents the weighted-average exercise price for the group.
|
(3)
|
Represents the aggregate grant date fair value for the group.
|
|
|
|
|
|
|
|
|
Equity Compensation Plan Information
|
|||||||||
Plan category
|
|
Number of Securities
to be Issued Upon
Exercise of Outstanding
Options, Warrants
and Rights
|
|
Weighted
Average
Exercise
Price of
Outstanding
Options,
Warrants
and Rights
|
|
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (Excluding
Securities Referenced
the First Column)
|
|||||
|
|
|
|
|
|
|
|||||
Equity compensation plans approved by security holders (1)
|
|
1,699,466
|
|
(3), (4)
|
|
12.54
|
|
(5)
|
1,579,928
|
|
(6)
|
Equity compensation plans not approved by security holders (2)
|
|
566,579
|
|
|
|
11.76
|
|
|
167,468
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total
|
|
2,266,045
|
|
|
|
12.34
|
|
|
1,747,396
|
|
|
(1)
|
The 2009 Plan and the ESPP.
|
(2)
|
The Inducement Plan. The Company’s Board of Directors approved the Inducement Plan, which has not been approved by the Company’s shareholders. The purpose of the Inducement Plan is to grant equity awards (stock options, restricted stock, restricted stock units, stock appreciation rights and other stock awards) to new employees as an inducement to join the Company. No shares have been issued (or will be issued) from the Inducement Plan since December 31, 2019.
|
(3)
|
Does not include purchase rights accruing under the ESPP because the purchase price (and therefore the number of shares to be purchased) will not be determined until the end of the purchase period.
|
(4)
|
Includes 589,124 shares of restricted stock that could be issued if certain performance metrics are met.
|
(5)
|
The weighted average exercise price does not include outstanding RSUs or performance awards, for which there is no exercise price.
|
(6)
|
Includes 1,283,362 shares available for future issuances under the 2009 Plan and 296,566 shares available under the ESPP.
|
|
|
|
SHARE OWNERSHIP
|
Name*
|
|
Common
Stock (1)
|
|
Exercisable
Options
|
|
Percentage
of
Outstanding
Stock (2)
|
|||
Current Directors
|
|
|
|
|
|
|
|||
Mark F. Furlong
|
|
27,851
|
|
|
—
|
|
|
**
|
|
Joseph C. Guyaux
|
|
13,840
|
|
|
—
|
|
|
**
|
|
Deborah F. Kuenstner
|
|
139,166
|
|
|
—
|
|
|
**
|
|
Gloria C. Larson
|
|
30,500
|
|
|
—
|
|
|
**
|
|
Kimberly S. Stevenson
|
|
37,470
|
|
|
—
|
|
|
**
|
|
Luis Antonio Ubiñas
|
|
10,112
|
|
|
—
|
|
|
**
|
|
Stephen M. Waters
|
|
31,838
|
|
|
—
|
|
|
**
|
|
Lizabeth H. Zlatkus
|
|
27,570
|
|
|
—
|
|
|
**
|
|
Named Executive Officers (3)
|
|
|
|
|
|
|
|||
Anthony DeChellis***
|
|
162,746
|
|
|
31,407
|
|
|
**
|
|
Steven M. Gaven
|
|
11,412
|
|
|
5
|
|
|
**
|
|
John T. Longley
|
|
—
|
|
|
—
|
|
|
**
|
|
Paul M. Simons
|
|
12,881
|
|
|
—
|
|
|
**
|
|
William I. Woodson
|
|
—
|
|
|
—
|
|
|
**
|
|
All Current Directors, Nominees and Executive Officers as a Group (18 Persons) (4)
|
|
655,280
|
|
|
31,412
|
|
|
0.82
|
%
|
*
|
Unless otherwise indicated, the address is c/o Boston Private Financial Holdings, Inc., 10 Post Office Square, Boston, MA 02109.
|
**
|
Represents less than 1%
|
***
|
Mr. DeChellis is also a director of the Company.
|
(1)
|
Beneficial share ownership is determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended. Accordingly, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares the power to vote such security or the power to dispose of such security. The amounts set forth above as beneficially owned include shares owned, if any, by spouses and relatives living in the same home as to which beneficial ownership may be disclaimed.
|
(2)
|
Percentages held by executive officers and directors individually and as a group are calculated on the basis of 83,265,674 shares of common stock outstanding as of January 30, 2020.
|
(3)
|
Performance shares, restricted stock units and performance stock units that are not eligible to vest within 60 days of January 30, 2020 are not included as executive officers have no beneficial interest in such equity awards until either established performance criteria are met or a vesting time period has lapsed. Please see “Compensation Discussion & Analysis.”
|
(4)
|
Includes 149,894,809 shares of common stock and no exercisable options held by the Company’s current executive officers not identified on this table.
|
|
|
|
Name and Business Address of Beneficial Owner
|
|
Amount and
Nature of
Beneficial
Ownership
|
|
Percentage of
Outstanding
Stock
|
BlackRock, Inc., 55 East 52nd Street, New York, NY 10055
|
|
12.306,826(1)
|
|
14.80%
|
FMR LLC, 245 Summer Street, Boston, MA 02210
|
|
6,974,324(2)
|
|
8.38%
|
The Vanguard Group, 100 Vanguard Blvd., Malvern, PA 19355
|
|
8,961,208(3)
|
|
10.76%
|
Dimensional Fund Advisors LP, Building One, 6300 Bee Cave Road, Austin, Texas, 78746
|
|
5,764,049(4)
|
|
6.92%
|
(1)
|
This information is based solely on a Schedule 13G/A filed with the SEC on February 4, 2020 by BlackRock, Inc., in which it reported sole voting power of 12,141,589 shares and sole dispositive power of 12,306,826 shares. In this same Schedule 13G/A filing, BlackRock identified iShares Core S&P Small-Cap ETF as having the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, more than 5% of the Company's shares.
|
(2)
|
This information is based solely on a Schedule 13G/A filed with the SEC on February 7, 2020 by FMR LLC, in which it reported sole voting power of 2,989,804 shares and sole dispositive power of 6,974,324 shares. In this same Schedule 13G/A filing, FMR LLC identified FIAM LLC, Fidelity Institutional Asset Management Trust Company, FMR Co., Inc. and Strategic Advisers LLC as being those subsidiaries that beneficially own the Company’s shares being reported by FMR LLC.
|
(3)
|
This information is based solely on a Schedule 13G/A filed with the SEC on February 12, 2020 by The Vanguard Group, in which it reported sole voting power of 82,107 shares, shared voting power of 25,763 shares, sole dispositive power of 8,866,221 shares and shared dispositive power of 94,987 shares.
|
(4)
|
This information is based solely on a Schedule 13G/A filed with the SEC on February 12, 2020 by Dimensional Fund Advisors LP, in which it reported sole voting power of 5,486,813 shares and sole dispositive power of 5,764,049 shares. Dimensional Fund Advisors LP, an investment adviser registered under Section 203 of the Investment Advisors Act of 1940, furnishes investment advice to four investment companies registered under the Investment Company Act of 1940, and serves as investment manager or sub-adviser to certain other commingled funds, group trusts and separate accounts (such investment companies, trusts and accounts, collectively referred to as the “Funds”). In certain cases, subsidiaries of Dimensional Fund Advisors LP may act as an adviser or sub-adviser to certain Funds. In its role as investment advisor, sub-adviser and/or manager, Dimensional Fund Advisors LP or its subsidiaries (collectively, “Dimensional”) may possess voting and/or investment power over the securities of the Company that are owned by the Funds, and may be deemed to be the beneficial owner of the shares of the Company held by the Funds. However, all securities reported are owned by the Funds. Dimensional disclaims beneficial ownership of such securities.
|
|
|
|
SHAREHOLDER MATTERS
|
|
|
|
SECTION 1.
|
GENERAL PURPOSE OF THE PLAN; DEFINITIONS
|
|
|
|
|
|
|
SECTION 2.
|
ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES AND DETERMINE AWARDS
|
|
|
|
SECTION 3.
|
STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
|
|
|
|
|
|
|
SECTION 4.
|
ELIGIBILITY
|
SECTION 5.
|
STOCK OPTIONS
|
|
|
|
SECTION 6.
|
STOCK APPRECIATION RIGHTS
|
|
|
|
SECTION 7.
|
RESTRICTED STOCK AWARDS
|
SECTION 8.
|
RESTRICTED STOCK UNITS
|
|
|
|
SECTION 9.
|
UNRESTRICTED STOCK AWARDS
|
SECTION 10.
|
CASH-BASED AWARDS
|
SECTION 11.
|
DIVIDEND EQUIVALENT RIGHTS
|
SECTION 12.
|
TRANSFERABILITY OF AWARDS
|
|
|
|
SECTION 13.
|
TAX WITHHOLDING
|
SECTION 14.
|
SECTION 409A AWARDS
|
|
|
|
SECTION 15.
|
TERMINATION OF SERVICE RELATIONSHIP, TRANSFER, LEAVE OF ABSENCE, ETC.
|
SECTION 16.
|
AMENDMENTS AND TERMINATION
|
SECTION 17.
|
STATUS OF PLAN
|
SECTION 18.
|
GENERAL PROVISIONS
|
|
|
|
SECTION 19.
|
EFFECTIVE DATE OF PLAN
|
SECTION 20.
|
GOVERNING LAW
|
|
|
|