UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.___)
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ]
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to §240.14a-12
Calvin B. Taylor Bankshares, Inc.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) 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):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] 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.
1) Amount previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date filed:
CALVIN B. TAYLOR BANKSHARES, INC.
P. O. Box 5, 24 North Main Street, Berlin, Maryland 21811
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of Calvin B. Taylor Bankshares, Inc.:
The Annual Meeting of Stockholders of Calvin B. Taylor Bankshares, Inc. (the
"Company") will be held at 24 North Main Street, Berlin, Maryland 21811, on
Wednesday, May 9, 2012, at 2:00 p.m., local time, for the following purposes:
1. To elect the Directors of the Company, who shall serve for a one-year
term, and until their respective successors are elected and have
qualified;
2. To ratify the appointment of Rowles & Company, LLP as the independent
auditors for Calvin B. Taylor Bankshares, Inc., and Calvin B. Taylor
Banking Company of Berlin, Maryland for the fiscal year ending December
31, 2012;
3. To have an advisory vote on executive compensation; and
4. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
This Notice is accompanied by a copy of the Company’s Annual Report and a
Proxy Statement providing a detailed description of the items to be voted on at
the Meeting.
The Board of Directors has carefully reviewed and considered the proposals
for election, and recommends the Stockholders of the Company TO APPROVE, RATIFY
AND CONFIRM the items contained in the Proxy Statement.
Only Stockholders of record at the close of business on March 1, 2012, are
entitled to notice of and to vote at the annual meeting or any adjournment
thereof. Your vote on these matters is very important. We urge you to carefully
review the enclosed materials and return your Proxy promptly.
You are cordially invited to attend this meeting in person.
Whether or not
you plan to attend the meeting, please sign and promptly return the Proxy in the
enclosed postage paid envelope
. If you attend the meeting, you may vote in
person if you so desire, even though you have previously returned your Proxy.
Sincerely,
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/s/ Reese F. Cropper, Jr.
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/s/ Raymond M. Thompson
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Reese F. Cropper, Jr.
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Raymond M. Thompson
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Chairman of the Board of Directors
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President and Chief Executive Officer
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Berlin, Maryland
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March 7, 2012
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CALVIN B. TAYLOR BANKSHARES, INC.
P. O. Box 5, 24 North Main Street, Berlin, Maryland 21811
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder(s) hereby appoints Reese F. Cropper, Jr., Raymond
M. Thompson, and William H. Mitchell, and each of them, proxies, with the powers
that the undersigned would possess if personally present, and with the full
power of substitution ___________________________ (substitution name, if any),
to vote all shares of the undersigned in Calvin B. Taylor Bankshares, Inc. at
the annual meeting of stockholders to be held on Wednesday, May 9, 2012, at
2:00 p.m., and at any and all adjournments and postponements thereof, upon all
subjects that may properly come before the meeting, including matters described
in the proxy statement furnished herewith, subject to any directions indicated
below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES,
FOR THE RATIFICATION OF AUDITORS, AND FOR APPROVAL OF THE COMPENSATION OF
EXECUTIVE OFFICERS AS NAMED IN THE ACCOMPANYING PROXY STATEMENT.
1. Election of the following nominees as Directors:
James R. Bergey, Jr.
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Charlotte K. Cathell
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Hale Harrison
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Joseph E. Moore
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John H. Burbage, Jr
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Reese F. Cropper, Jr.
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Gerald T. Mason
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Louis H. Taylor
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Todd E. Burbage
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Reese F. Cropper, III
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William H. Mitchell
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Raymond M. Thompson
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To vote your shares for all nominees, mark the "For" space with an "X". To
vote against all nominees, mark the "Against" space with an "X". If you do not
wish your shares voted "For" a particular nominee, mark the "For All Except"
space with an "X", and strike the name(s) above by drawing a line through the
name(s) of each nominee you do not wish to vote for.
________FOR
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________AGAINST
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________FOR ALL EXCEPT
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2. Ratification of Rowles & Company, LLP, as independent
auditors:
More information about this question can be found in the Proxy Statement in
the section titled "Ratification of Appointment of Independent Auditors." Please
mark your vote with an "X" in the appropriate space below.
________FOR
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________AGAINST
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________ABSTAIN
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3. Advisory vote on executive compensation:
More information about this question can be found in the Proxy Statement in
the section titled "Compensation Policies and Practices." Please mark your vote
with an "X" in the appropriate space below.
________FOR
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________AGAINST
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________ABSTAIN
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4. At their discretion, to vote upon such matters as may
properly come before the Annual Meeting.
IMPORTANT NOTICE:
This
PROXY should be signed
by all owners of this
stock.
Stockholder sign above
line and date Date
Co-stockholder sign above line and date Date
CALVIN B. TAYLOR BANKSHARES, INC.
P. O. Box 5, 24 North Main Street, Berlin, Maryland 21811
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 9, 2012
This proxy statement is furnished to the stockholders of Calvin B. Taylor
Bankshares, Inc. (the "Company") in connection with the solicitation of proxies
by the Board of Directors of the Company, to be voted at the Annual Meeting of
Stockholders. The Annual Meeting of Stockholders will be held on Wednesday, May
9, 2012 at 2:00 p.m. local time and at any adjournment or postponement thereof,
for the purposes set forth in this Proxy Statement. The meeting will be held at
the principal Executive Office of the Company at 24 North Main Street, Berlin,
Maryland 21811. This Proxy Statement and the accompanying Proxy were first
mailed to the stockholders on or about April 2, 2012.
VOTING AND REVOCABILITY OF PROXY APPOINTMENTS
The Company has fixed March 1, 2012, as the record date (the "Record Date")
for determining the stockholders entitled to receive notice of and to vote at
the Annual Meeting. The Company’s only stock is its Common Stock, par value
$1.00 per share. At the close of business on the Record Date, there were
outstanding and entitled to vote 2,995,723 shares of Common Stock of the
Company, with each share being entitled to one vote. There are no cumulative
voting rights. A majority of the outstanding shares of Common Stock represented
at the Meeting, in person or by proxy, will constitute a quorum.
All proxies will be voted in accordance with the instructions contained in
the proxies. If no choice is specified, proxies will be voted "FOR" the election
to the Board of Directors of all nominees listed below under "ELECTION OF
DIRECTORS," "FOR" the ratification of the appointment of Rowles and Company,
LLP, as independent auditors for the Company for the fiscal year ending December
31, 2012, and at the proxy holder’s discretion, on any other matter that may
properly come before the Meeting. Any stockholder may revoke a proxy given
pursuant to this solicitation prior to the Meeting by delivering an instrument
revoking it, or by delivering a duly executed proxy bearing a later date, to
William H. Mitchell, Vice President of the Company. A stockholder may elect to
attend the meeting and vote in person even if he or she has a proxy outstanding.
Stockholders whose shares are held in brokerage accounts will have the option
to submit their proxies or voting instructions electronically through the
Internet or by telephone. Stockholders should check the voting form or
instructions provided by their brokerage to see which options are available.
Stockholders submitting proxies or voting instructions electronically should
understand that there may be costs associated with electronic access that would
be borne by the stockholder, such as usage fees from Internet access providers
and telephone companies. To revoke a proxy previously submitted electronically,
a stockholder may submit a new proxy at a later date before the vote is taken at
the Annual Meeting. In this case, the earlier proxy will be revoked and the
proxy submitted later will be recorded.
Brokers generally may not vote shares held by them in street name for
customers. A broker that holds shares in street name for customers has authority
to vote on "routine" items if it has transmitted proxy-soliciting materials to
the beneficial owner but has not received instructions from that owner. The
proposal to ratify the selection of the Company’s independent auditors is a
"routine" item. Brokers that do not receive instructions may not, however, vote
on the election of Directors. Thus, it is important that you cast your vote for
the election of Directors.
Management of the Company is not aware of any other matter to be presented
for action at the meeting other than those mentioned in the Notice of Annual
Meeting of Stockholders and referred to in this Proxy Statement. If any other
matters come before the meeting, it is the intention of the persons named in the
enclosed Proxy to vote on such matters in accordance with their judgment.
SOLICITATION
This solicitation is made by the Company. The costs associated with
preparing, printing, assembling, and mailing the proxy materials are borne by
the Company. Out-of-pocket and clerical expenses incurred by brokerage houses
and other custodians who transmit copies of the proxy materials to the
beneficial owners of shares held as of the Record Date are reimbursable by the
Company.
- 1 -
ELECTION OF DIRECTORS
Article II of the Company’s Articles of Incorporation, and Section 2.03 of
the Company’s Bylaws, as amended, provide that each member of the Company’s
Board of Directors shall serve a one-year term. The entire Board of Directors is
elected annually by vote of the Stockholders.
It is the intention of the persons named as proxies in the accompanying Proxy
to vote FOR the election of the nominees identified below to serve for a
one-year term, expiring at the 2013 Annual Meeting of Stockholders. If any
nominee is unable or fails to accept nomination or election, the persons named
as proxies in the Proxy will vote for the election of remaining nominees and any
substitute nominee(s) recommended by the Company’s Board of Directors.
Directors are elected by a plurality of the votes cast at the meeting.
Abstentions will not be considered to be either affirmative or negative votes.
The table below provides information about the nominees and officers,
including age, position with the Company, and position with Calvin B. Taylor
Banking Company (the "Bank"). All of the nominees who are incumbent Directors of
the Company and the Bank have current terms that expire in May 2012 upon
election of their successors.
Name
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Age
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Title or Position with the Company
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Title or Position with the Bank
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James R. Bergey, Jr.
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57
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Director, first elected 10/31/95
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Director, first elected 02/02/94
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John H. Burbage, Jr.
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69
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Director, first elected 10/31/95
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Director, first elected 02/04/87
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Todd E. Burbage
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39
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Director, first elected 05/17/06
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Director, first elected 05/17/06
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Charlotte K. Cathell
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61
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Director, first elected 05/17/06
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Director, first elected 05/17/06
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Reese F. Cropper, Jr.
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70
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Director, first elected 10/31/95
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Director, first elected 03/06/74
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Chairman of the Board
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Chairman of the Board
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Reese F. Cropper, III
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51
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Director, first elected 05/03/00
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Director, first elected 05/03/00
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Hale Harrison
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64
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Director, first elected 10/31/95
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Director, first elected 01/08/75
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Gerald T. Mason
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64
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Director, first elected 10/31/95
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Director, first elected 02/02/94
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William H. Mitchell
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62
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Director, first elected 05/05/99
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Director, first elected 05/05/99
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Vice President
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Executive Vice President, Cashier,
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Chief Financial Officer
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Joseph E. Moore
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69
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Director, first elected 10/31/95
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Director, first elected 11/03/76
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Louis H. Taylor
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51
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Director, first elected 05/11/11
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Director, first elected 05/11/11
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Raymond M. Thompson
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49
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Director, first elected 05/08/02
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Director, first elected 05/08/02
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President, Chief Executive Officer
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President, Chief Executive Officer
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Mr. James R. Bergey, Jr. is a Certified Public Accountant and President of
Bergey & Company, P.A., in Berlin, Maryland. He is a member of the Board of
Directors of Atlantic General Hospital Corporation, the Waterman’s Trust and the
Community Foundation of the Eastern Shore. Mr. Bergey serves as Treasurer of
Atlantic General Hospital Corporation and Chairman of the Finance Committee of
the Hospital Board.
Mr. Bergey’s director qualifications include his tenure as a director of the
Company and the Bank, lifelong residency in the Company’s service area,
experience as owner of a locally based business, and professional expertise as a
certified public accountant.
Mr. John H. Burbage, Jr. is an owner of Mystic Harbour Development Co.,
Mystic Harbour Utility Co., and Bethany Land Co., and a partner in Bayside
Realty, Burbage Properties, Blue Water Development Company, Sunset Bay, LLC, and
Holiday House, LLC, Bethany Beach, Delaware. Mr. Burbage currently serves on the
Board of Directors of Atlantic General Hospital.
Mr. Burbage’s director qualifications include his tenure as a director of the
Company and the Bank, lifelong residency in the Company’s service area,
experience as owner of a locally based business, experience in real estate
development, and knowledge of the local real estate market.
- 2 -
Mr. Todd E. Burbage is a builder, developer and owner of both commercial and
residential projects in Maryland, Delaware, and Virginia, as well as Washington
DC. He currently serves on the Board of Directors for The Community Foundation
of the Eastern Shore, Peninsula Regional Medical Center Foundation, and Maryland
Coastal Bays Program.
Mr. Burbage’s director qualifications include his tenure as a director of
the Company and the Bank, lifelong residency in the Company’s service area,
experience as owner of a locally based business, professional experience in real
estate development, and knowledge of the local real estate market.
Ms. Charlotte K. Cathell was first elected the Register of Wills for
Worcester County in 1998. She recently served as President of the Maryland
Register of Wills Association for three years. She is a member of the Ocean
Pines/Ocean City Kiwanis Club and the Worcester County Commission for Women. Ms.
Cathell was a founder of Worcester County G.O.L.D. (Giving Other Lives Dignity),
served as President for ten years from 1997 to 2007, and continues to serve on
the Board of Directors.
Ms. Cathell’s director qualifications include her tenure as a director of the
Company and the Bank, lifelong residency in the Company’s service area,
professional experience in state government, and participation and leadership in
community-based organizations.
Mr. Reese F. Cropper, Jr. was employed by the Bank from May 1962 through
November 2011, serving as its President from January 1974 to May 2002. He became
President and Chief Executive Officer of the Company on October 31, 1995,
serving in those capacities until May 2002, and December 31, 2005, respectively.
Mr. Cropper continues to serve as Chairman of the Board of Directors of the Bank
and the Company since his election in May 2002, and is a member of the Executive
Committee of the Bank. He is a past President of the Maryland Bankers
Association and he served a six-year term as a member of the Banking Board of
the State of Maryland from 1983 to 1989. He is also a Director of Ocean City
Golf and Yacht Club, partner in the Atlantic Hotel, Berlin, Maryland, and
Holiday House, LLC, Bethany Beach, Delaware, and owns several rental properties
in the Berlin-Ocean City area.
Mr. Cropper is uniquely qualified for his position as Chairman of the Board
of Directors of the Bank and the Company. He is a lifelong resident of the
Company’s service area and was an employee of the Bank for almost 50 years. Mr.
Cropper’s long tenure as senior officer of the Bank, coupled with his knowledge
of the political environment in which the Company operates, bring great value
and perspective to the Board.
Mr. Reese F. Cropper, III is the owner of Insurance Management Group, Inc.,
an insurance agency. He is one of less than 100 agents nationally that holds the
insurance designation of "Community Insurance Risk Management Specialist"
(CIRMS) and he serves on the Maryland Chapter of Community Association’s
Institute’s Legislative Action Committee. Mr. Cropper also serves on the Board
of Trustees of Worcester Preparatory School, Berlin, Maryland, is the Chairman
of the Employee Pension Plan Committee for the Town of Ocean City, Maryland, and
is the President of the Decatur Business Center Condominium Association in West
Ocean City.
Mr. Cropper’s director qualifications include his tenure as a director of the
Company and the Bank, lifelong residency in the Company’s service area,
experience as owner of a locally based business, and knowledge of insurance
issues, coverage and products available to the Company and the Bank.
Mr. Hale Harrison owns and operates Harrison Group Resort Hotels in Ocean
City, Maryland. Mr. Harrison is a former councilman and secretary for the Town
of Ocean City and former Chairman of the Ocean City Planning and Zoning
Commission. He is past Chairman of the Board of Directors and a member of the
Finance Committee of Atlantic General Hospital.
Mr. Harrison’s director qualifications include his tenure as a director of
the Company and the Bank, lifelong residency in the Company’s service area,
experience as owner of a locally based business, and knowledge of the
hospitality industry on which the economy of the Company’s service area relies
for employment and revenue generation.
Mr. Gerald T. Mason is the Chief Administrative Officer for Worcester County
Government and a member of the Tri-County Council for the Lower Eastern Shore.
He serves on the Maryland Association of Counties Legislative Committee.
Mr. Mason’s director qualifications include his tenure as a director of the
Company and the Bank, lifelong residency in the Company’s service area, and
experience in local and regional government.
Mr. William H. Mitchell has been employed by the Bank since June 1970 and was
named as its Cashier in February 1986. He became Senior Vice President and Chief
Financial Officer of the Bank in January 1999, and Vice President of the Company
in February 1999. In 2006, Mr. Mitchell was named Executive Vice President of
the Bank. Mr. Mitchell is a member of the Berlin Lions Club and serves as a
Trustee and the Treasurer of the Humphreys Foundation, Inc.
Mr. Mitchell’s director qualifications include his tenure as a director of
the Company and the Bank, lifelong residency in the Company’s service area, and
his 40 years of service to the Bank. Mr. Mitchell’s expertise in bank operations
and stockholder relations are of particular value.
- 3 -
Joseph E. Moore, Esq. is a partner in the law firm of Williams, Moore,
Shockley & Harrison, LLP, with offices in Ocean City and Ocean Pines. Mr. Moore
is a member of the Board of Trustees of the Worcester Preparatory School, in
Berlin. He is the Chairman of the Board of Zoning Appeals for the Town of
Berlin. Mr. Moore also serves on the Board of Directors of Chesapeake Utilities
Corporation of Dover, Delaware, and is a member of its Compensation Committee
and Governance Committee. Mr. Moore is a former member of the Board of Directors
of the Nabb Center for Delmarva History & Culture at Salisbury University and a
member of the Board of Directors of the Ocean City Lifesaving Museum. He is a
member of the Board of Trustees of the Maryland Historical Society. Mr. Moore
presently serves as co-Chair of the First Appellate Circuit Character Committee
of the Maryland State Board of Law Examiners, having been appointed to that
position by the Maryland Court of Appeals. Mr. Moore is a fellow of the American
College of Trial Lawyers.
Mr. Moore’s director qualifications include his tenure as a director of the
Company and the Bank, lifelong residency in the Company’s service area,
experience as a partner in a locally based business, and knowledge of applicable
law.
Mr. Louis H. Taylor is the Principal of Stephen Decatur
High School, a Maryland Blue Ribbon School. During Mr. Taylor's 28 years of
employment in Worcester County Public Schools, he has served as teacher, coach,
assistant principal and, since 1995, principal. He was Principal of the Year for
the State of Maryland for the 1998-1999 school year.
Mr. Taylor serves as Vice-Chairman of the Board of Directors at Atlantic
General Hospital and Chairman of the Board of Hudson Health Services. He is a
director of the Community Foundation of the Eastern Shore and the Salisbury
University Varsity Club. Mr. Taylor previously served on the Worcester County
Local Management Board, 2003-2006, and the Worcester County Board of Zoning
Appeals, 2006-2009. He is co-owner of Bali Hi R.V. Park, Inc.
Mr. Taylor’s qualifications for a seat on the boards of the Company and the
Bank include lifelong residency in the Company’s service area, and participation
and leadership in numerous community-based organizations.
Mr. Raymond M. Thompson has been employed by the Bank since October 1997. Mr.
Thompson served as Vice President of the Bank from January 1999 to his election
as President in May 2002, and as Treasurer of the Company from February 2000 to
his election as President in May 2002. He was appointed Chief Executive Officer
of the Company and the Bank as of January 1, 2006. Mr. Thompson serves on the
boards of the Maryland Bankers Association, Southern Eastern Shore Revolving
Loan Fund, and the Maryland Financial Bank. He is a "Corporation Member" of
Atlantic General Hospital. Mr. Thompson is a member and past Treasurer of the
Berlin Lions Club.
Mr. Thompson’s director qualifications include his tenure as a director of
the Company and the Bank, coupled with his banking experience as described in
the preceding paragraph. He is a lifelong resident of the Company’s service area
and has a broad base of professional and personal associations in the community.
The following Directors have family relationships: Reese F. Cropper, Jr. is
the father of Reese F. Cropper, III and Joseph E. Moore is a cousin to the
Croppers. John H. Burbage, Jr. is the father of Todd E. Burbage.
None of the directors or officers of the Company or the Bank have been
involved in any administrative proceedings or convicted of any crime.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTIONS OF THE NOMINEES
NAMED ABOVE.
- 4 -
COMPENSATION POLICIES AND PRACTICES
Director Compensation
During 2011, non-employee directors of the Bank received a fee of $850 for
each board meeting attended and $850 for each of the Bank’s Executive Committee
meetings attended. No fees are paid for attendance at meetings of audit,
compensation, nominating or strategic planning committees. Directors are not
compensated for attendance at meetings of the Company’s board. Total directors’
fees paid by the Bank were $175,900 during 2011. Directors are not paid any form
of compensation other than the fees described above.
Executive Compensation
The table below presents a summary of the compensation for the last three
fiscal years of the principal executive officer, principal financial officer,
and other executive officers of the Company who received an annual salary and
bonus that exceeded $100,000 during that period.
Annually, the Board Compensation Committee determines compensation for Mr.
Cropper, Mr. Thompson and Mr. Mitchell. Consideration is given to the
contribution of each individual to the operation of the Company. Bonuses, if
any, are discretionary and determined in a manner consistent with bonuses paid
to other employees. Mrs. Hawkins’ compensation is established by senior
management.
The Company does not provide any form of compensation other than that which
is disclosed in the following table.
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Other
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401(k) Plan
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Total
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Name and Principal Position
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Year
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Salary
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Bonus
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Compensation
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Contributions
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Compensation
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(3)
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Reese F. Cropper, Jr.
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2011
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$ 123,750
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$ 5,400
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$ 21,084
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(1)(2)
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$ 7,605
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$ 157,839
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Chairman of the Board
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2010
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$ 135,000
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$ 5,400
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$ 15,472
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(1)(2)
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$ 8,539
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$ 164,411
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2009
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$ 135,000
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$ 5,400
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$ 14,874
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(1)(2)
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$ 10,524
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$ 165,798
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Raymond M. Thompson
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2011
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$ 243,000
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$ 9,720
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$ 13,910
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(1)(2)
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$ 14,682
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$ 281,312
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President and CEO
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2010
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$ 243,000
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$ 9,720
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$ 14,403
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(1)(2)
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$ 14,321
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$ 281,444
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(Principal Executive Officer)
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2009
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$ 243,000
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$ 9,720
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$ 16,615
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(1)(2)
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$ 18,259
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$ 287,594
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William H. Mitchell
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2011
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$ 138,640
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$ 4,345
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$ 6,488
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(2)
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$ 8,671
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$ 158,144
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Vice President
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2010
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$ 143,640
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$ 5,746
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$ 6,488
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(2)
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$ 9,185
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$ 165,059
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2009
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$ 151,200
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$ 6,048
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$ 6,488
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(2)
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$ 11,566
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$ 175,302
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Jennifer G. Hawkins
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2011
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$ 76,390
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$ 3,056
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$ 5,450
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$ 84,896
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Treasurer
|
2010
|
|
$ 75,633
|
|
$ 3,025
|
|
|
|
|
|
$ 5,245
|
|
|
$ 83,903
|
|
(Principal Financial Officer)
|
2009
|
|
$ 75,633
|
|
$ 3,025
|
|
|
|
|
|
$ 5,865
|
|
|
$ 84,523
|
|
(1) Benefits paid by the Bank in connection with the use of an automobile.
(2) Benefits paid by the Bank in connection with the payment of insurance
premiums.
(3) The Company contributes to the 401(k) Plan for all participating
employees including executive officers. Annually, the Board of Directors
approves a discretionary contribution in addition to matching 50% of
employee contributions to a maximum of 6% of qualifying wages.
- 5 -
Advisory Vote on Executive Compensation
The "Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010"
(Dodd-Frank) entitles our stockholders to vote to approve the compensation of
the above-named officers. This is an advisory vote, which means that it is non
–binding. This provision of Dodd-Frank is commonly known as say-on-pay.
The Company’s practices for establishing executive compensation are described
above under "Executive Compensation." The Company does not enter into employment
contracts with officers or other employees, and has no incentive compensation
plans under which compensation is calculated based on individual or corporate
performance.
Although the say-on-pay vote is non-binding, the Board of Directors will take
seriously any significant vote against the executive officer compensation as
disclosed in this proxy statement, including evaluating whether any action is
appropriate in response to that vote.
Advisory Vote on the Frequency of Holding an Advisory Vote on Executive
Compensation
Dodd-Frank also entitles our stockholders to indicate a preferred frequency
for inclusion of the advisory vote on executive compensation in the Proxy.
Stockholders are given the option of indicating a preference for the advisory
vote on executive compensation to be presented in the Proxy at intervals of one,
two, or three years. This too is an advisory vote, which means that it is non
–binding. This provision of Dodd-Frank is commonly known as say-on-frequency.
In May 2011, stockholders’ votes indicated a preference for the advisory vote
on executive compensation to be presented in the Proxy annually. Accordingly,
the Company’s Board of Directors has approved inclusion of an advisory vote on
say-on-pay in this Proxy.
Overall Compensation Policies
The Company has no employees. Compensation for various positions in the Bank
is established with consideration to the competitive employment environment in
the area for similar job positions. Individual employee qualifications including
relevant experience and education are considered in determining compensation.
Employees qualify for annual pay increases and bonuses based on their
performance. All bonuses are discretionary and are approved by the Board of
Directors.
Relations with employees are considered to be good. Compensation policies and
practices are designed in such a manner as to have a low likelihood of
increasing the risk of causing a material adverse effect on the Bank or the
Company.
BOARD LEADERSHIP STRUCTURE AND RISK OVERSIGHT
The Boards of Directors of the Bank and of the Company (the Boards) have
parallel leadership structures. Reese F. Cropper, Jr., Chairman, served as
president of the Bank for twenty-eight years and Chief Executive Officer (CEO)
for ten years before resigning from those positions in May 2002, and December
31, 2005, respectively. Raymond M. Thompson succeeded Mr. Cropper as President
and CEO. Mr. Cropper has served as Chairman of the Board since May 2002. The
positions of Chairman and CEO, as well as other officer positions, are filled by
the Boards annually during their organizational meeting. Separation or
combination of the positions of Chairman and CEO is considered at that time.
While these positions are currently separated, the Boards do not consider that
the assignment of both positions to the same individual, properly vetted,
presents higher risk.
The Boards have not designated a senior or leading independent director. Each
independent director brings unique perspective and is on equal footing with each
other director. The Audit Committee which is comprised of only independent
directors meets quarterly. At this time, any concerns of a non-employee director
can be voiced in the absence of inside directors and discussed within this
independent body.
To fulfill its role in risk oversight, the Board relies primarily on
information provided by senior management and auditors. Financial and accounting
officers analyze and report results of operations, evaluation of capital
adequacy of correspondent banks, and activity in the investment portfolio. Loan
department managers provide updated information on credit issues including
delinquencies and other troubled loans. Management informs the Board of
non-financial events that may become public knowledge with either positive or
negative effect on the Bank’s reputation in the community. Internal and outside
auditors and federal and state banking examiners report the results of their
tests, highlighting matters that require Board attention. Board members attend
seminars to stay abreast of issues in the banking industry and to network with
peers.
- 6 -
BOARD & COMMITTEE MEETINGS
The Boards of Directors of the Bank and of the Company are scheduled to meet
monthly and each held twelve meetings in 2011. Members are compensated for
attendance.
The Executive Committee of the Bank’s board meets weekly and is comprised of
four standing members and one rotating member. In 2011, the standing members
included two inside directors, one outside director, and one emeritus director.
The rotating member is an outside director. In addition to discussion and
approval or denial of loan applications, the Committee engages in discussions of
general interest including regulatory updates, bank polices and procedures,
customer service, and product development. Non-employee directors serving on
this Committee are compensated for attendance.
The Audit Committee is a standing committee of the Company’s Board comprised
of independent directors. Members serving in 2011 were James R. Bergey, Jr.,
John H. Burbage, Jr., Todd E. Burbage, Charlotte K. Cathell, Hale Harrison,
Gerald T. Mason, and Michael L. Quillin, Sr. Chairman James R. Bergey, Jr.
serves as the financial expert. The Audit Committee meets no less than quarterly
and held four meetings in 2011. The Board of Directors has adopted a written
Audit Policy which serves as a charter for the Audit Committee (see Exhibit I).
The Committee reviews the reports and findings of the internal auditor
quarterly. At least once each year, the Committee meets with the outside audit
firm to review and discuss annual financial reports and required year-end
communications from the audit firm. Members are not compensated for attendance.
The Compensation Committee is a standing committee of the Bank’s board
comprised of three independent directors. Committee members in 2011 were Hale
Harrison, Gerald T. Mason, and Michael L. Quillin. The Compensation Committee
meets annually or as needed to establish executive compensation. No officer of
the Bank serves in a capacity that influences Compensation Committee members in
their professional activities outside of the Bank and the Company. The
Compensation Committee held one meeting in 2011. Members are not compensated for
attendance.
The full Board of Directors performs the function of a Nominating Committee
on an ad hoc basis. Directors serve for one-year terms subject to annual
re-election until they either reach mandatory retirement at 72 years of age or
voluntarily resign from the Board. When seeking nominees, the Board, acting as
the Nominating Committee, considers the reputation of a candidate in the
community, their professional qualifications, and other characteristics that
would best compliment and strengthen the composition of the current directorate.
Director nominees are proposed to stockholders by consensus of the Board of
Directors. The Nominating Committee did not meet in 2011.
The Strategic Planning Committee consists of up to five members including the
Bank’s President. The purpose of this committee is to periodically review
the Bank’s current strategic mission, and make planning recommendations or
suggestions for the full Board’s consideration. During 2011, the
committee consisted of independent directors James Bergey, Jr., Todd Burbage,
Charlotte Cathell and Hale Harrison, and President Raymond M. Thompson.
The Committee met once in 2011. Members are not compensated for attendance.
There are no Board committees other than those described above.
COMPLIANCE WITH BENEFICIAL OWNERSHIP RULES
Section 16(a) of the Securities Exchange Act of 1934 requires (i) the
Company's directors and executive officers and (ii) persons who own more than
10% of a registered class of the Company's equity securities to file with the
Securities Exchange Commission (the "SEC"), within certain specified time
periods, reports of ownership and changes in ownership. Such directors,
officers, and stockholders are required by the SEC regulations to furnish the
Company with copies of all such reports that they file.
To the Company's knowledge, based solely upon a review of such copies of such
reports furnished to the Company and representations that no other reports were
required with respect to the year ended December 31, 2011, all persons subject
to the reporting requirements of Section 16(a) filed the required reports on a
timely basis with respect to 2011.
- 7 -
CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH RELATED PARTIES
Some Directors and officers of the Company and their families or close
associates, are current and/or past customers of the Bank. During the year ended
December 31, 2011, transactions, including loans from the Bank to these persons,
have occurred. All loans to related parties have been made in the ordinary
course of business at the same terms, including interest rates and collateral,
as those prevailing at the time for comparable loans made to persons not related
to the Bank or the Company. Loans to Directors and executive officers are
approved by the Board of Directors and reviewed every six months. Related party
loans do not involve more than the normal risk of collectability, nor do they
contain other terms or features that are unfavorable to the Bank and the
Company. Related parties may also have funds on deposit at the Bank. These
deposits are accepted in the ordinary course of business and are subject to the
same terms as those that apply to persons not related to the Bank or the
Company. It is likely that additional related party transactions will occur in
the future.
The Bank is legally represented by and engages Williams, Moore, Shockley, and
Harrison, LLP, in which Director Joseph E. Moore is a partner. The total amount
of legal fees for both the Company and Bank in 2011, paid to Mr. Moore and/or
his legal firm was $46,344. Management believes that the terms of these
transactions with are comparable to those that would have been obtained in
negotiating transactions with independent third parties.
PRINCIPAL BENEFICIAL OWNERS OF THE COMPANY’S COMMON STOCK
The following table sets forth the number and percentage of outstanding
shares of the Company's Common Stock beneficially owned by (a) each executive
officer of the Company, (b) each director of the Company, (c) all directors and
executive officers of the Company as a group, and (d) each person or entity
known to the Company to own more than five percent of the outstanding Common
Stock.
The percentage of outstanding shares owned is based on 2,995,723 shares of
Common Stock outstanding as of the Record Date, March 1, 2012.
|
|
Shares of Common Stock
|
Beneficially Owned
|
Name
|
Relationship to Company
|
Number
|
Percent
|
James R. Bergey, Jr.
|
Director
|
19,855
|
0.66%
|
John H. Burbage, Jr.
|
Director
|
225,531
|
7.53%
|
Todd E. Burbage
|
Director
|
12,187
|
0.41%
|
Charlotte K. Cathell
|
Director
|
700
|
0.02%
|
Reese F. Cropper, Jr.
|
Director, Chairman
|
174,743
|
5.83%
|
Reese F. Cropper, III
|
Director
|
9,492
|
0.32%
|
Hale Harrison
|
Director
|
44,368
|
1.48%
|
Gerald T. Mason
|
Director
|
400
|
0.01%
|
William H. Mitchell
|
Director, Vice President
|
2,180
|
0.07%
|
Joseph E. Moore
|
Director
|
3,751
|
0.13%
|
Michael L. Quillin, Sr.
|
Director, Retiring in May 2012
|
32,320
|
1.08%
|
Louis H. Taylor
|
Director
|
1,100
|
0.04%
|
Raymond M. Thompson
|
Director, President and
|
8,480
|
0.28%
|
|
Chief Executive Officer
|
|
|
D. Kenneth Bates
|
Secretary
|
77
|
0.00%
|
Jennifer G. Hawkins
|
Treasurer
|
400
|
0.01%
|
|
|
|
|
All Directors and Officers as a Group
|
535,584
|
17.88%
|
|
|
|
|
Humphreys Foundation
|
> 5% stockholder
|
196,344
|
6.55%
|
|
|
|
|
Total
|
|
731,928
|
24.43%
|
- 8 -
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS AND OTHER AUDIT
DISCLOSURES
Subject to ratification by the stockholders, the Board of Directors has
appointed Rowles & Company, LLP (Rowles) as independent registered public
accounting firm to audit the financial statements of the Company for the 2012
fiscal year. Rowles has served as independent auditor for the Company since its
formation in 1995. Fees paid to Rowles during the last three fiscal years for
annual audits and other services are detailed in the table below. Audit Fees
include services rendered for the audit of the Company’s annual financial
statements, review of financial statements included in the Company’s quarterly
public filings, and the attestation of management’s report on internal control
over financial reporting. Tax Fees include charges related to the preparation
and filing of income tax returns.
|
2011
|
2010
|
2009
|
Audit Fees
|
$ 59,439
|
$ 32,290
|
$ 51,840
|
Tax Fees
|
4,760
|
3,350
|
3,550
|
Other
|
-
|
-
|
-
|
Total
|
$ 64,199
|
$ 35,640
|
$ 55,390
|
The Audit Committee has discussed with Rowles the compatibility of non-audit
services with the auditors’ independence and has received related disclosures
from Rowles. All services provided by Rowles are pre-approved by the Committee.
The Committee has reviewed and discussed the audited financial statements
with the Company’s management. The Committee has discussed with Rowles the scope
and results of the audit. Based on these discussions, the Committee recommends
that the audited financial statements be included in the Company’s Annual Report
and Form 10-K, which is filed with the Securities and Exchange Commission.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF ROWLES &
COMPANY, LLP, AS INDEPENDENT AUDITORS.
STOCKHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING OF STOCKHOLDERS
Stockholders' proposals, intended to be presented at the 2013 Meeting of
Stockholders, must be received by the Company no later than December 7, 2012, to
be presented at the 2013 Annual Meeting of Stockholders or considered for
inclusion in the Company's Proxy statement for that meeting.
ANNUAL REPORTS
A copy of the Company's Annual Report is being mailed together with this
Proxy Statement. The Company’s Annual Report on Form 10-K for the year-ended
December 31, 2011, as filed with the Securities and Exchange Commission, is
accessible without charge through the Bank’s website at
www.taylorbank.com
, or to any stockholder of record as of
March 1, 2012, upon written request directed to Jennifer G. Hawkins, Treasurer,
Calvin B. Taylor Bankshares, Inc., P.O. Box 5, Berlin, Maryland 21811-0005.
ANNUAL REPORT - INTERNET AVAILABILITY
A copy of the Company’s Annual Report for the fiscal year ended December 31,
2011 is enclosed with this proxy statement. Additionally, this Proxy Statement
and our Annual Report for the fiscal year ended December 31, 2011 are available
on our web site at
https://materials.proxyvote.com/876838
.
- 9 -
Exhibit I
Calvin B. Taylor Bankshares, Inc. and Subsidiaries
Audit Policy
Purpose
The Board of Directors (Board) adopts this policy which is designed to
provide sufficient audit coverage to prevent unnecessary losses that may result
from inadequate controls or inappropriate procedures and to assure that
disclosure and reporting controls are adequate to assure that the financial
reports of the Company are fairly stated. Further, it is the purpose of this
policy to provide authority and direction to the Audit Committee (Committee) of
the Board.
Audit Committee
The Board authorizes the Audit Committee to oversee the audit functions of
the Company and its subsidiaries. The Committee is responsible for selecting
qualified external and internal auditors to provide sufficient audit coverage in
all major risk areas, to assess the adequacy of internal controls, to test
compliance with policies, procedures, generally accepted accounting principles
and applicable laws and regulations. The Committee may, at its discretion,
retain counsel or other advisors as necessary to fulfill their duties.
The Committee is comprised of all independent Board members and meets no less
than quarterly. During each meeting, the Committee will meet absent Directors
who are employees of the Company or subsidiaries.
External audit
The Committee will select an external audit firm to perform an audit in
accordance with generally accepted auditing standards. At least once in every
three years, the Committee will obtain, review and sign a letter from the
external audit firm stating a mutual understanding of the engagement.
Annually, the external auditor will meet with the Board to review their
findings and recommendations, and to discuss the independence of the auditor.
This meeting will generally occur within the first quarter of the year.
Internal audit
The Committee will select a qualified internal auditor who will remain
independent of operational functions when performing audits and who will report
directly to the Committee. Internal Audit will assess the adequacy of the Bank’s
policies, procedures and internal control structure and test compliance with
those policies and procedures, as well as applicable laws and regulations and
generally accepted accounting principles.
A risk-based Internal Audit Program, approved by the Committee, will be
maintained by the internal auditor. The schedule will be flexible allowing the
auditor to use judgment in applying additional or reduced procedures as deemed
necessary.
Internal Audit will maintain documentation of audit procedures supporting all
conclusions in working papers which will be available to auditors and examiners
on request. It is the intent of the Bank that this cooperation should facilitate
the work of auditors and examiners to minimize duplication of effort and cost to
the Bank.
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