def14a
SCHEDULE
14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Soliciting Material Under Rule 14a-12 |
Rockville Financial, Inc.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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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
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P.O. Box 660, Rockville, CT 06066
March 23, 2011
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders of Rockville Financial,
Inc. (the Company). The meeting will be held at Maneeleys Banquet Facility, 65 Rye Street, South
Windsor, Connecticut on Tuesday, April 26, 2011 at 10:00 a.m.
At the Annual Meeting you will be asked to: (1) elect five Directors; (2) consider and approve
an advisory (non-binding) proposal on the Companys executive compensation; (3) consider and
approve an advisory (non-binding) proposal on the frequency of submission of the vote regarding the
Companys executive compensation; (4) ratify the appointment of Wolf & Company, P.C. as our
independent auditors for the current year; and (5) to transact such other business as may properly
come before the Annual Meeting or any adjournments thereof.
The Board of Directors unanimously recommends that you vote FOR the election of the Boards
nominees for election as Directors; FOR the pay package; FOR an every three year vote on the pay
package; and FOR the ratification of Wolf & Company, P.C. as our independent auditors. We
encourage you to read the accompanying Proxy Statement, which provides information regarding
Rockville Financial, Inc. and the matters to be voted on at the Annual Meeting. We have also
enclosed a copy of our 2010 Annual Report to Shareholders, which includes its Annual Report to the
SEC on Form 10-K for the year ended December 31, 2010.
It is important that your shares are represented at this meeting, whether or not you attend
the meeting in person and regardless of the number of shares you own. To make sure your shares are
represented, we urge you to complete and mail the enclosed proxy card. If you attend the meeting,
you may vote in person even if you have previously voted.
We look forward to seeing you at the meeting.
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Sincerely,
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William J. McGurk |
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President and Chief Executive Officer |
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ROCKVILLE FINANCIAL, INC.
25 Park Street, Rockville, CT 06066
860-291-3600
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 26, 2011
NOTICE IS HEREBY GIVEN that the 2011 Annual Meeting of Shareholders
(the Annual Meeting) of Rockville Financial, Inc. (the Company
or Rockville), the holding company for Rockville Bank (the
Bank) will be held on Tuesday, April 26, 2011, at 10:00 a.m., at
Maneeleys Banquet Facility, 65 Rye Street, South Windsor,
Connecticut 06074 for the following purposes:
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To elect five (5) Directors of the Company. |
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To consider and approve an advisory (non-binding) proposal on the
Companys executive compensation. |
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To consider and approve an advisory (non-binding) proposal on the
frequency of submission of the vote regarding the Companys executive
compensation. |
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To ratify the appointment of Wolf & Company, P.C. as independent
auditors of the Company for the year ending December 31, 2011. |
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To transact such other business as may properly come before the Annual
Meeting or any adjournments thereof. |
NOTE: The Board of Directors is not aware of any other business to come before the Annual Meeting.
Pursuant to the Companys bylaws, the Board of Directors of the
Company has fixed the close of business on March 11, 2011, as the
record date for the determination of shareholders entitled to vote
at the Annual Meeting. Only holders of common stock of record at
the close of business on that date will be entitled to notice of
and to vote at the Annual Meeting or any adjournments thereof.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT
YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE DATE, SIGN AND
COMPLETE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. YOU MAY REVOKE YOUR PROXY
AND VOTE IN PERSON IF YOU DO ATTEND THE ANNUAL MEETING.
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By Order of the Board of Directors
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Judy Keppner Clark |
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Secretary |
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Rockville, Connecticut
March 23, 2011
TABLE OF CONTENTS
ROCKVILLE FINANCIAL, INC.
25 Park Street, Rockville, CT 06066
860-291-3600
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Rockville
Financial, Inc. (the Company or Rockville), the holding company
for Rockville Bank (the Bank), to be used at the Annual Meeting
of Shareholders of the Company (the Annual Meeting) which will be
held at Maneeleys Banquet Facility, 65 Rye Street, South Windsor,
Connecticut on Tuesday, April 26, 2011 at 10:00 a.m., and at any
adjournment thereof. This Proxy Statement is expected to be first
mailed to shareholders on or about March 23, 2011.
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
The Annual Meeting has been called for the following purposes: (1)
to elect five Directors of the Company; (2) to consider and approve
an advisory (non-binding) proposal on the Companys executive
compensation; (3) to consider and approve an advisory (non-binding)
proposal on the frequency of submission of the vote regarding the
Companys executive compensation; (4) to ratify the appointment of
Wolf & Company, P.C. as our independent auditors for the year ended
December 31, 2011; and (5) to transact such other business as may
properly come before the Annual Meeting or any adjournments
thereof.
If you vote using the enclosed form of proxy, your shares will be
voted in accordance with the instructions indicated. Executed but
unmarked proxies will be voted FOR the election of the Boards
nominees as Directors; FOR the pay package; FOR an every three year
vote on the pay package; and FOR the ratification of the
appointment of Rockvilles independent auditors. Except for
procedural matters incident to the conduct of the Annual Meeting,
the Board of Directors does not know of any matters other than
those described in the Notice of Annual Meeting that are to come
before the Annual Meeting. If any other matters are properly
brought before the Annual Meeting, the persons named in the proxy
will vote the shares represented by such proxy on such matters as
determined by a majority of the Board of Directors. The proxies
confer discretionary authority to vote on any matter of which
Rockville did not have notice at least 30 days prior to the date of
the Annual Meeting.
SOLICITATION OF PROXIES
All costs of the solicitation of proxies will be borne by the
Company. In addition to solicitation by mail, Directors, officers
and other employees of the Company or the Bank may solicit proxies
personally, by telephone or other means without additional
compensation. The Company will reimburse brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses
incurred by them in sending proxy materials to the beneficial
owners of the common stock. The Company has also retained Morrow &
Co., LLC, a proxy soliciting firm, to assist in the solicitation of
proxies at a fee of $6,500, plus reimbursement of certain
out-of-pocket expenses.
REVOCATION OF PROXIES
Shareholders who execute proxies retain the right to revoke them. A
shareholder giving a proxy may revoke it at any time prior to its
exercise by (i) filing with the Secretary of the Company written
notice of revocation, (ii) submitting a duly-executed proxy bearing
a later date, or (iii) appearing at the Annual Meeting and voting
in person. Unless so revoked, the shares represented by the proxies
will be voted according to the shareholders instructions on the
proxy or, if no instructions are given, in favor of the Proposals
described in this Proxy Statement. In addition, shares represented
by proxies will be voted as directed by the Board of Directors with
respect to any other matters that may properly come before the
Annual Meeting or any adjournment. Proxies solicited by this Proxy
Statement may be exercised only at the Annual Meeting and any
adjournment thereof and will not be used for any other meeting.
WHO CAN VOTE
Only shareholders of record as of the close of business on March 11, 2011, are entitled to vote
at the Annual Meeting. As of March 4, 2011, there were approximately 29,504,891 shares of
common stock, no par value, (the Common Stock) issued and outstanding. The Company has no
other class of securities outstanding at this time. Each share of Common Stock is entitled to
one vote except as described below. All votes, whether voted in person or by proxy, will be
tabulated by the Companys Inspector of Elections appointed for the Annual Meeting by the Board
of Directors. Abstentions and broker non-votes are counted for purposes of establishing a
quorum. Pursuant to the Companys Certificate of Incorporation, shareholders are not entitled
to cumulate their votes for the election of Directors. The presence, in person or by proxy, of
the holders of at least a majority of the total number of outstanding shares of Common Stock
entitled to vote at the Annual Meeting (after subtracting any shares in excess of the Limit
described below) is necessary to constitute a quorum.
As provided in the Companys Certificate of Incorporation, holders of Common Stock who
beneficially own in excess of 10% of the outstanding shares of Common Stock (the Limit) are
not entitled to vote with respect to shares held in excess of the Limit. A person or entity is
deemed to beneficially own shares owned by an affiliate of, as well as by persons acting in
concert with, such person or entity. The Companys Certificate of Incorporation authorizes the
Board of Directors to (i) make all determinations necessary to implement and apply the Limit,
including determining whether persons or entities are acting in concert, and (ii) demand that
any person who is reasonably believed to beneficially own Common Stock in excess of the Limit
supply information to the Company to enable the Board of Directors to implement and apply the
Limit.
VOTING PROCEDURES
There is no cumulative voting for the election of Directors, and they are elected by a
plurality of the vote. At the Annual Meeting, five Directors will be elected (two for shorter
terms than the usual four years). Ratification of the appointment of the independent auditors
requires the affirmative vote of a majority of the votes cast at the Annual Meeting. An
abstention by a shareholder present or represented at the Annual Meeting will have the same
effect as a vote against the proposal to ratify the appointment of the independent auditors.
Broker non-votes, however, are not counted as present and entitled to vote on the proposals,
and have no effect on that vote. The election of directors is considered a non-routine
matter. Therefore, if you do not provide your broker or nominee with voting instructions with
regard to the election of directors, your broker or nominee will not be able to vote your
shares on the director vote. If you prefer, you may vote by using the telephone or Internet.
For information on submitting your proxy or voting by telephone or Internet, please refer to
the instructions on the enclosed proxy.
Approval of the Companys Executive Compensation as described in the Compensation Discussion and
Analysis and the tabular disclosure regarding named executive officer compensation (together with
the accompanying narrative disclosure) in this Proxy Statement (Proposal 2). Approval of this
non-binding advisory vote on the Companys executive compensation as described in this Proxy
Statement requires the affirmative vote of holders of a majority of our common stock present in
person or represented by proxy at the Meeting. Because this proposal is advisory, it will not be
binding upon the Board of Directors if approved. However, the Compensation Committee (formerly
known as the Human Resources Committee) and the Board of Directors will take into account the
outcome of the vote when considering future executive compensation arrangements.
Approval of the frequency of submission of a proposal on the Companys Executive Compensation
(Proposal 3). Approval of this non-binding advisory vote which allows shareholders to indicate
whether they prefer an advisory vote on named executive compensation once every one (1), two (2),
or three (3) years requires the affirmative vote of holders of a majority of our common stock
present in person or represented by proxy at the Meeting. Because this proposal is advisory, it
will not be binding upon the Board of Directors if approved. However, the Compensation Committee
and the Board of Directors will take into account the outcome of the vote when considering future
executive compensation arrangements. We are required to hold the advisory vote on the frequency of
the say-on-pay proposal at least once every six years.
Executed but unmarked proxies will be voted FOR all proposals.
Except for procedural matters incident to the conduct of the Annual Meeting, the Company does
not know of any matters other than those described in the Notice of Annual Meeting that are to
come before the Annual Meeting. If any other matters properly come before the Annual Meeting,
the persons named as proxies will vote upon such matters as determined by a majority of the
Board of Directors.
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Enclosed with this Proxy Statement is the Companys Annual Report to Shareholders for the year
ended December 31, 2010, which includes the Companys Annual Report on Form 10-K for the year
ended December 31, 2010.
CORPORATE GOVERNANCE
General
The Company was formed on September 13, 2010 as a state-chartered, stock holding company in
anticipation of the second step conversion of its predecessor mutual holding company, Rockville
Financial, MHC, Inc. Fifty-five percent of the Companys common stock was owned by Rockville
Financial MHC, Inc., a state-chartered mutual holding company and the Company held all of the
common stock of Rockville Bank (the Bank). On March 3, 2011 the Company completed a plan of
conversion and reorganization (the Conversion) whereby Rockville Financial MHC, Inc.
converted from a partially public mutual holding company structure to a fully public stock
holding company structure. At that time, Rockville Financial MHC, Inc. ceased to exist and
Rockville Bank became a wholly-owned subsidiary of Rockville Financial, Inc. References in this
proxy statement to the Company prior to the date of the Conversion refer to the old Rockville
Financial, Inc. and the financial information in the accompanying Annual Report to Shareholders
for the fiscal year ended December 31, 2010 is for the old Rockville Financial, Inc.
The business and affairs of the Company are managed by or under the direction of its Board of
Directors. Members of the Board of Directors inform themselves of the Companys business
through discussions with its President and Chief Executive Officer and with other key members
of management, by reviewing materials provided to them, and by participating in meetings of the
Board of Directors and its committees.
Risk Oversight
The Board has the primary responsibility for general risk oversight, the Audit Committee for
financial risks. The Board and Audit Committee review and Management implements a risk management
system to identify, assess, mitigate, monitor and communicate risks internally. Management is
responsible for identifying and assessing for the Board and Audit Committee major risks
potentially affecting the business and financial statements of the Company. The Board and the
Audit, Compliance and CRA Committees support and provide oversight to Management in the
performance of these tasks. The Boards oversight is also assisted by the Audit and other
committees in addressing the risks inherent in their respective areas of oversight. The Board
provides effective risk oversight through this system.
As a regulated banking institution, Rockville Bank is examined periodically by federal and state
banking authorities. The results of these examinations are presented to the full Board. Identified
issues from such examinations are tracked by Management. These examinations, in addition to the
Internal Audit reports, are reviewed by the Audit Committee and, if appropriate, the full Board,
and serve as additional risk management tools overseen by the Board. The Compensation Committee
also incorporates risk considerations into executive incentive compensation plans.
Independence of Board of Directors and Members of Its Committees
It is the policy of the Companys Board of Directors that a majority of its Directors be
independent of the Company and its subsidiaries within the meaning of applicable laws and
regulations and the listing standards of the NASDAQ Global Select Stock Market.
Since the Companys formation in 2004 and conversion in 2011 and for many years prior thereto
as a mutual savings bank, Rockvilles Board of Directors has been chaired by an independent
member of the Board. That leadership structure reflects the Boards philosophy that its
responsibility to oversee the Company is most appropriately served by having a Board Chairman
who is independent. The Chairman of the Board works with the President and Chief Executive
Officer on Board procedures so as to maintain objectivity while at the same time taking
advantage of the banking experience and insight of management in order to make effective use of
the Board for the Companys benefit. While the Board believes it important to retain the
flexibility to allocate the responsibilities of the offices of Chairman of the Board and Chief
Executive Officer in any manner that it determines from time to time to be in the best
interests of the Company, it has no plans to alter its current philosophy of separation.
The Companys Board of Directors has affirmatively determined that the Directors nominated for
election at the annual meeting and all Directors of the Company whose terms continue are
independent, with the exception of William J. McGurk, the Companys President and Chief
Executive Officer, William H. W. Crawford, IV, the Companys Senior Executive Vice President
(incoming President) and Joseph F. Jeamel, Jr., the Companys Executive
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Vice President until
his retirement effective June 30, 2010. The Companys Board of Directors has also affirmatively
determined in accordance with the Companys Audit Committee Independence Determination Policy
that the Boards Audit Committee is comprised entirely of independent Directors within the
meaning of applicable laws and regulations, the listing standards of the NASDAQ Global Select
Stock Market and the Companys corporate guidelines as set forth in the Companys Audit
Committee Charter (see the Companys proxy statement dated March 23, 2010 for a copy of the
Audit Committee Charter). In addition, the Companys Board of Directors has affirmatively
determined that the Boards Compensation Committee is comprised entirely of independent
Directors within the meaning of applicable laws and regulations, and the listing standards of
the NASDAQ Global Select Stock Market.
Independence Standards
As described above, the Companys Board of Directors examines the independence of its members
annually. In order for a Director to be considered independent, the Board must determine that
the Director has no material relationship with the Company or its affiliates, either directly
or as a partner, shareholder or officer of an organization that has such a material
relationship. At a minimum, a Director will not be considered independent if, among other
things, the Director:
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Has been employed by the Bank or its affiliates in the current year or past three years. |
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Accepts directly or indirectly any consulting, advisory or other compensatory fee from the Bank or
any affilitate thereof, other than in his or her capacity as a member of the Audit Committee, the
Board, or any other Board committee and other than fixed amounts of compensation under a retirement
plan (including deferred compensation) for prior service with the Bank, provided such compensation is
not contingent in any way on continued service. |
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Has accepted, or has an immediate family member who has accepted, any payments from the Bank or
its affiliates in excess of $120,000 during the current or any of the three previous fiscal years
(except for board services, retirement plan benefits, non-discretionary compensation or loans made by
the Bank in accordance with applicable banking regulations). |
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Has an immediate family member who is, or has been in the past three years, employed by the Bank
or its affiliates as an executive officer. |
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Has been or has an immediate family member who has been, a partner controlling shareholder or an
executive officer of any for profit business to which the Bank made or from which it received,
payments (other than those which arise solely from investments in the Companys securities) that
exceed five percent of the entitys or the Banks consolidated gross revenues for that year, or
$200,000, whichever is more, in any of the past three years. |
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Has been or has an immediate family member who has been a partner, employed as an executive of
another entity where any of the Banks executives serve on that entitys compensation committee. |
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Has been or has an immediate family member who has been a current partner of the Banks outside
auditor, or was a partner or an employee of the Banks outside auditor, who worked on the Banks
audit at any time during any of the past three years. |
Board Meetings and Committees
The business of the Companys and the Banks Boards of Directors is conducted through monthly
meetings and activities of the Boards and their committees. The Board of Directors of the Bank
consists of those persons who serve as Directors of the Company. Additionally, members of the
Companys committees serve on the identical committees of the Bank. During 2010, the Board of
Directors held twelve regular meetings and four special meetings. No current Director attended
fewer than 75% of the aggregate of the Banks and the Companys Board and committee meetings in
2010, of which he or she was a member, during the period he or she was a Director and a
committee member.
Director Attendance at Annual Meetings of Shareholders
It is the Companys policy to encourage the attendance of each member of the Board of Directors
at the Companys Annual Meeting of Shareholders. The Company expects all of its Directors to
attend the Annual Meeting. Last year, all of the Directors attended the 2010 Annual Meeting.
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Committees of the Board of Directors
The Companys Board of Directors has five committees: the Audit Committee (as described below),
the Compensation Committee (as described below), the Asset/Liability Committee, the Executive
Committee and the Lending Committee. The Company also has a Nominating Committee whose members
include both members of the Companys Board of Directors and individuals who are not Directors
of the Company. See below The Nominating Committee and Selection of Nominees for the Board.
Each of the above committees is a joint committee of the Company and the Bank. The Board of
Directors may, by resolution, designate one or more additional committees.
The Audit Committee, consisting of Directors Thomas S. Mason, Chairman, Stuart E. Magdefrau,
Vice Chairman, David A. Engelson, and Raymond H. Lefurge, Jr., meets periodically with the Companys
independent registered public accounting firm and management to review accounting, auditing, internal
audit, compliance and financial reporting matters. This committee met six times during the year ended
December 31, 2010. Each member of the Audit Committee is independent in accordance with the Companys Audit
Committee Independence Determination Policy, the listing standards of the NASDAQ Global Select Stock Market
and the Securities and Exchange Commissions (SEC) Audit Committee independence standards. The Board of
Directors has determined that Mr. Lefurge and Mr. Magdefrau are audit committee financial experts under the
rules of the SEC. The Audit Committee acts under a written charter adopted by the Board of Directors (see
the Companys proxy statement dated March 23, 2010 for a copy of the Audit Committee Charter). All of the
members of the Audit Committee have a basic understanding of finance and accounting and are able to read
and understand fundamental financial statements.
The Compensation Committee currently consists of Directors David A. Engelson, Chairman, C.
Perry Chilberg, Vice Chairman, Kristen A. Johnson, Raymond H. Lefurge, Jr. and Rosemarie
Novello Papa. This committee met ten times during the year ended December 31, 2010. Each
member of the Compensation Committee is independent in accordance with the listing standards of
the NASDAQ Global Select Stock Market. There were no Compensation Committee interlocks during
2010, which generally means that no executive officer of the Company served as a member of the
compensation committee or board of directors of another non-tax-exempt company, an executive
officer of which serves on the Companys Compensation Committee. The Compensation Committee
acts under a written charter adopted by the Board of Directors (see the Companys proxy
statement dated March 23, 2010 for a copy of the Compensation Committee Charter).
The Nominating Committee and Selection of Nominees for the Board
The Company has adopted a Director Nominations Policy (see the Companys proxy statement dated
March 23, 2010 for a copy of the Director Nominations Policy), which sets forth the procedure
for selecting (i) Director nominees for election and/or re-election to the Board of Directors
at the annual meeting of shareholders, (ii) candidates to fill vacancies on the Board in
between annual meetings of shareholders, and (iii) Board members for membership on Board
committees. The Director Nomination Policy includes a three tier selection process, beginning
with an advisory Nominating Committee, which does not have a formal charter, and whose members
consist of the Executive Committee of Rockville Banks Board of Directors and prior to the
Companys conversion in March 2011, typically two Corporators of the Mutual Holding Company,
although only one Corporator was included in 2010. The current members of the Nominating
Committee are Michael A. Bars, C. Perry Chilberg, Joseph F. Jeamel, Jr., Raymond H. Lefurge,
Jr., Stuart E. Magdefrau, William J. McGurk, members of the Banks Executive Committee, and
Keith J. Wolf, Corporator of the Mutual Holding Company prior to the conversion. A new policy
will be adopted in 2011 following the annual meeting of shareholders that will establish a
Nominating Committee structure consistent with the Companys structure as a fully public
company.
The Nominating Committee is responsible for identifying and recruiting Director candidates.
Director candidates are recommended based upon their character and track record of
accomplishments in leadership roles as well as their professional and corporate experience,
skills and expertise; and more specifically based upon their observance of the highest
standards of business and personal ethics and integrity, their active support of community
activities in our market area, and their willingness to participate in appropriate business
development efforts and Bank outreach events. The Nominating Committee seeks to align Board
composition with Rockville Banks strategic direction so that the Boards members bring skills,
experience and background that are relevant to the key strategic and operational issues that
they will review, oversee and approve. Because being the best community bank in the market is a
cornerstone of Rockville Banks strategic direction, community outreach and community
leadership are important considerations in reviewing and selecting director candidates. Because
the Company is a financial institution, familiarity with financial matters is another important
consideration. The
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Nominating Committee and the other members of the Board view the Companys
Board of Directors as a deliberative body and seek members who are willing to learn from each
other and deliberate issues as they arise.
The Company does not have a diversity policy relating to Board membership, nor has it
articulated a specific definition of diversity in this context.
The Nominating Committee makes its recommendations to the independent members of the Companys
Board of Directors. The independent members of the Board of Directors, by majority vote,
recommend Director nominees to the full Board for election and/or re-election to the Board at
the annual meeting of shareholders and, if necessary, candidates to fill vacancies on the
Board in between annual meetings of the shareholders. In making such recommendations, the
independent Directors consider the recommendations of the Nominating Committee but may
recommend Director nominees not recommended or considered by the Nominating Committee. This
was the case in May 2010 and February 2011 with the appointments of Ms. Johnson and Mr.
Crawford, respectively, to fill newly created vacancies on the Board.
The Board of Directors then recommends to the shareholders Director nominees for election and/or
re-election to the Board at the annual meeting of shareholders only from the candidates recommended by the
independent Directors and in accordance with the foregoing procedure.
The Nominating Committee also reviews and makes recommendations to the Board regarding the
re-nomination of each of the Companys current Directors based on the Directors performance and the
applicability and relevance of his or her background, skills and experience to the Companys corporate
strategy at that time.
Each nominee for election as a Director at the annual meeting described below under Election
of Directors (Proposal 1) was recommended to the independent members of the Board by the
Nominating Committee in accordance with the procedures set forth above. In determining to
recommend re-election of those Directors whose terms expire in 2011, the Nominating Committee
and the independent members of the Board reviewed the specific credentials of the five nominees
and the collective skill set and experience of the Board. Although the Nominating Committee and
Board considered all aspects of the nominees credentials and experience, the following
attributes were influential in their determinations:
Mr. Chilberg is an entrepreneur who owns a business with both a consumer retail function and a
manufacturing component. His business experience as an entrepreneur in the community is
valuable to the Boards overall capabilities.
Mr. Crawford joined the Company in January 2011 as Senior Executive Vice President of
Rockville Financial, Inc. and Rockville Bank and will hold this position until Mr. McGurks
planned retirement in April 2011, at which time Mr. Crawford will become the President and
Chief Executive Officer of both entities. Prior to joining the Bank, Mr. Crawford served as
Senior Regional Vice President, Eastern Virginia Commercial Banking, Wells Fargo Bank, N.A
based in Norfolk, Va. Prior to this, he was Executive Vice President, Commercial Banking Group,
Wachovia, a Wells Fargo Company based in Norfolk, Virginia. Mr. Crawford has been active as a
director or trustee for numerous education, arts and economic development-focused community
organizations in North Carolina, Florida and Virginia. His banking and related business and
leadership experience, as well as his community service experience, are valuable to the Boards
overall capabilities.
Mr. Jeamel had been, prior to his retirement in 2010, a senior officer of the Company since its
formation in 2004 and of Rockville Bank since 1990 and, before that had approximately 45 years
with other Connecticut banks. He has had both operational and financial responsibilities at
both institutions. He was one of two management directors on the Board. He is also active on
the board of directors of a significant social services agency in the community. His banking
and related business and leadership experience, as well as his community service experience,
are valuable to the Boards overall capabilities.
Ms. Johnson has worked for Connecticut Water Company in Connecticut since 2007 and prior to
joining Connecticut Water Company, she served as Senior Vice President, Human Resources and,
Organizational Development Officer, at Rockville Bank since 1996. Her human resources
leadership and banking and related business experience, as well as her community service
experience, are valuable to the Boards overall capabilities.
Ms. Papa has served as the Chairman and continues to serve as a member of the board of
directors of the primary voluntary healthcare institution in the community. She also serves on
the board of directors a local
6
community college. Her leadership and community service
experience are valuable to the Boards overall capabilities.
The nine remaining members of the Companys Board are currently serving terms that expire in
2012, 2013 and 2014. The Nominating Committee and the Board do not consider the qualifications
of these individuals annually. However, in reviewing the candidates for nomination or
re-nomination each year, the Nominating Committee and Board do consider the mix of talents and
experience of the entire Board. Among other things, the Nominating Committee and the Board
consider the following qualities or experience of those members whose terms expire in 2012,
2013 and 2014 to be significant:
Mr. Bars is a partner with one of the largest law firms headquartered in the community and
serves on the boards of directors of numerous community organizations. His legal and community
service experience are valuable to the Boards overall capabilities.
Ms. Guenard is an entrepreneur who built her own company in the community and then became a
senior officer of a business with significant visibility in the business community. Her
experience as an entrepreneur and participation in the business community are valuable to the
Boards overall capabilities.
Mr. Mason was for over thirty years prior to his retirement the president and treasurer of a
prominent insurance agency in the community. His long term experience as an entrepreneur in
both the business and retail residential markets in the community are valuable to the Boards
overall capabilities.
Mr. Olson is the owner of a retail furniture business in the community. His long term
experience as an entrepreneur in the retail business community is valuable to the Boards
overall capabilities.
Mr. Lefurge is a certified public accountant and the president of an accounting firm located in
the community. He also is a financial expert. His financial and leadership experience are
valuable to the Boards overall capabilities.
Mr. Magdefrau is also a certified public accountant practicing with an accounting firm located
in the community that he founded. He also is a financial expert. His financial and leadership
experience are valuable to the Boards overall capabilities.
Mr. McGurk has been the Companys President and CEO since its formation in 2004 and the
President and CEO of Rockville Bank since 1980. Mr. McGurk and Mr. Crawford are the only
management directors on the Board. He is active in numerous community non-profits. In addition
to his intimate knowledge of the Companys operations, his 45 years of banking experience and
leadership qualities are valuable to the Boards overall capabilities.
Mr. Engelson is the executive director of one of the communitys most active and visible social
service agencies and is a prior elementary school principal in the community. His long time
significant leadership and involvement in community service are valuable to the Boards overall
capabilities.
Mr. Tkacz is an entrepreneur who owns two community businesses with a significant presence in
the construction and residential homeowner markets. His experience as an entrepreneur and
participation in the business community are also valuable to the Boards overall capabilities.
Shareholder Nominations for the Board
Nominations by shareholders of record will be considered by the Nominating Committee if such
nomination is submitted in writing to the Secretary of the Company either by mail or in person
at the principal offices of the Bank located at 25 Park Street, Rockville, Connecticut 06066
not less than 100 days prior to any meeting of shareholders called for the election of
Directors; provided however, that if fewer than 100 days notice of the meeting is given to
shareholders, such nomination shall be mailed or delivered in person to the Secretary of the
Company prior to the earlier of the close of business on the 10th day following (i)
the date on which notice of such meeting was given to shareholders; or (ii) the date on which a
public announcement of such meeting was first made.
To be considered, the shareholders nomination must contain (i) the name, age, business address
and residence address of each proposed nominee; (ii) the principal occupation of each proposed
nominee; (iii) the total number of shares of common stock of the Company that will be voted for
each proposed nominee; (iv) the
7
name and address of the notifying shareholder; (v) the number
of shares of common stock of the Company that are beneficially owned by the notifying
shareholder; (vi) any other information relating to the proposed nominee as required to be
included in a proxy statement filed pursuant to the proxy rules of the SEC; and (vii) the
nominees written consent to serve as a Director if elected.
Code of Ethics
The Companys Standards of Conduct Policy is designed to promote the highest standards of
ethical and professional conduct by the Companys Directors, executive officers, including the
principal executive officer, the principal accounting officer and employees and is adopted
annually. The Standards of Conduct Policy requires that the Companys Directors, executive
officers and employees avoid conflicts of interest, comply with all laws and other legal
requirements, conduct business in an honest and ethical manner and otherwise act with integrity
and in the Companys best interest. Under the terms of the Standards of Conduct Policy,
Directors, executive officers and employees are required to report any conduct that they
believe in good faith to be an actual or apparent violation of the Standards of Conduct Policy.
The Company also has a Whistleblower Policy, which is incorporated into the Standards of
Conduct Policy, that requires Directors, executive officers and employees to comply with
appropriate accounting and internal controls and establishes procedures to report any perceived
wrongdoing, questionable accounting or auditing matters in a confidential and anonymous manner.
The Whistleblower Policy also prohibits the Company from retaliating against any Director,
executive officer or employee who reports actual or apparent violations of the Standards of
Conduct Policy. A copy of the Standards of Conduct Policy, including the Whistleblower Policy
is available, without charge, upon written request to Marliese L. Shaw, Investor Relations,
Rockville Financial, Inc., 25 Park Street, Rockville, CT 06066.
Shareholder Communications with the Board
The Company endeavors to ensure that the Board of Directors or individual Directors, if
applicable, consider the views of its shareholders, who may communicate with the Board of
Directors by sending a letter or an e-mail to the Companys Secretary, Judy Keppner Clark
(jkeppner@rockvillebank.com) or by written correspondence to the Board of Directors or an
individual Director with a copy to Ms. Keppner Clark. All communications to the Board will be
reviewed by the Companys Chairman and President, with appropriate recommendations then being
made to the Board. The Company believes that this procedure allows the Board to be responsive
to shareholder communications in a timely and appropriate manner.
8
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
General
The Audit Committee has appointed Wolf & Company, P.C. as the Companys independent registered
public accounting firm to audit the Companys financial statements for the year ending December
31, 2011, subject to ratification by the shareholders. In making its selection, the Audit
Committee considered whether Wolf & Company, P.C.s provision of services other than audit
services is compatible with maintaining the independence of Rockvilles independent
accountants. In addition, the Audit Committee reviewed the fees proposed by Wolf & Company, P.C
for audit related services and tax services for the year ended December 31, 2011, and concluded
that those fees are compatible with the independence of Wolf & Company, P.C.
Audit Fees
The Audit Committee reviewed the fees described below for audit related services and tax
services and concluded that those fees are compatible with the independence of Wolf & Company,
P.C. for the years ended December 31, 2010 and 2009. The following table sets forth the
aggregate fees billed by Rockvilles independent registered public accounting firm, Wolf &
Company, P.C. for the years ended December 31, 2010 and 2009:
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(In Thousands) |
|
Audit Fees (1) |
|
$ |
345 |
|
|
$ |
327 |
|
Tax Preparation Fees (2) |
|
|
42 |
|
|
|
38 |
|
Information Technology (3) |
|
|
42 |
|
|
|
30 |
|
S-1 Review and Consulting Fees (4) |
|
|
115 |
|
|
|
|
|
Compliance Fees (5) |
|
|
129 |
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
673 |
|
|
$ |
395 |
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Includes estimated fees for the financial statement audit of the Company, the audit of internal
control over financial reporting, quarterly reviews and the HUD compliance audits and agreed-upon
procedures for Rockville Bank and Rockville Bank Mortgage, Inc. |
|
(2) |
|
Consists of tax return preparation and tax-related compliance and services. |
|
(3) |
|
Consists of Wolfpac Information Technology, Customer Information and Financial Reporting risk
assessment modules and implementation costs. |
|
(4) |
|
Includes fees for review and consulting on the preparation of the Registration Statement on Form S-1 of
Rockville Financial New, Inc. |
|
(5) |
|
Consists of fees for review of HMDA compliance. |
Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services of Independent Auditor
Consistent with SEC requirements regarding auditor independence, the Audit Committee is required
to pre-approve all audit and permissible non-audit services provided by the independent auditor.
The Committee reviews annually and pre-approves all audit and permitted non-audit services
rendered by the Companys independent auditors in accordance with the Companys Audit Committee
Charter.
All engagements of the independent auditor to perform any audit services and non-audit services
during 2010 were pre-approved by the Audit Committee in accordance with the pre-approval policy.
The policy has not been waived in any instance.
9
REPORT OF THE AUDIT COMMITTEE
In accordance with rules adopted by the SEC, the Audit Committee of the Companys Board of
Directors submits this report for 2010.
The Audit Committee met six times during the year ended December 31, 2010. The Audit
Committees responsibilities are to:
|
|
|
oversee the external audit of managements annual financial statements; |
|
|
|
|
oversee the internal audit function and the system of internal controls; |
|
|
|
|
oversee management of the compliance function; and |
|
|
|
|
oversee regulatory reporting. |
The Audit Committee, which is appointed by the Board of Directors, is composed solely of
independent Directors in accordance with the Companys Audit Committee Independence
Determination Policy and the rules of the NASDAQ Global Select Stock Market and the SEC. The
Audit Committee recommended, and the Board of Directors has adopted, a written Audit Committee
Charter (see the Companys proxy statement dated March 23, 2010 for a copy of the Audit
Committee Charter). In addition, the Audit Committee has taken the following actions:
|
|
|
Reviewed and discussed the Companys audited financial statements for the year ended
December 31, 2010 with management of the Company. |
|
|
|
|
Discussed with the Companys independent auditors the matters required to be discussed under Statement on
Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU Section 380), as adopted
by the Public Company Accounting Oversight Board in Rule 3200T. |
|
|
|
|
Discussed and received written disclosures and the letter from the Companys independent auditors required by Independence
Standards Board Standard No. 1 (Independence Discussions With Audit Committees). |
Based upon the foregoing, the Audit Committee recommended to the Board of Directors that the
audited financial statements be included in the Companys Annual Report on Form 10-K for the
year ended December 31, 2010, which will be filed with the SEC on March 10, 2011.
March 3, 2011
The Audit Committee:
Thomas S. Mason, Chairman
Stuart E. Magdefrau, Vice Chairman
David A. Engelson
Raymond H. Lefurge, Jr.
10
ELECTION OF DIRECTORS
(Proposal 1)
The Certificate of Incorporation of the Company provides that the
number of Directors shall be as stated in the Companys Bylaws but
shall not be fewer than eight nor more than sixteen. The
Certificate of Incorporation further provides that the number of
Directors shall only be increased or decreased by the Board of
Directors. Currently, the Board of Directors has set the number of
Directors at fourteen. The Companys Bylaws provide that no person
age 70 or older is eligible for election and/or re-election as a
Director; however, the Company is making an exception to the
retirement age policy at this time and allowing for the
re-nomination of Mr. Joseph F. Jeamel, Jr. for a two-year term in
order to assist with the Companys transition to a new fully public
company through the second step conversion completed in March 2011.
Five Directors will be elected at the Annual Meeting to serve for
two-year, three-year and four-year terms, as applicable, and until
his or her successor is elected and qualified. Following the
recommendation of the Nominating Committee, the independent members
of the Board of Directors have recommended and nominated C. Perry
Chilberg, William H. W. Crawford, IV, Joseph F. Jeamel, Jr, Kristen
A. Johnson, and Rosemarie Novello Papa, all current Board members,
for re-election as Director. There are no arrangements known to
Management between C. Perry Chilberg, William H. W. Crawford, IV,
Joseph F. Jeamel, Jr, Kristen A. Johnson, and Rosemarie Novello
Papa and any other person pursuant to which such nominee was
selected, except that Mr. Crawfords employment agreement provides
that he will be nominated for a Board position during the term of
the agreement. Mr. Chilberg, Ms. Johnson and Ms. Papa are nominated
for four-year terms to expire in 2015, Mr. Crawford is nominated
for a three-year term to expire in 2014, and Mr. Jeamel is
nominated for a two-year term to expire in 2013. At each annual
meeting, nominees for the class of Directors whose terms expire at
that meeting shall be considered for election to serve two-year,
three-year and/or four-year terms and until their successors are
elected and qualified.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION
OF THE ABOVE NOMINEES FOR DIRECTOR UNDER PROPOSAL 1.
The persons named on the enclosed proxy intend to vote for the
election of Mr. Chilberg, Mr. Crawford, Mr. Jeamel, Ms. Johnson and
Ms. Papa , unless the proxy is marked by the shareholder to the
contrary. If Mr. Chilberg, Mr. Crawford, Mr. Jeamel, Ms. Johnson
or Ms. Papa is unable to serve, all valid proxies will be voted for
the election of such substitute as the Board of Directors may
recommend, or the Board of Directors may determine to reduce the
number of directorships to eliminate the resulting vacancy. The
Board knows of no reason why Mr. Chilberg, Mr. Crawford, Mr.
Jeamel, Ms. Johnson or Ms. Papa might be unavailable to serve. The
table below and on the following pages sets forth certain
information with respect to Mr. Chilberg, Mr. Crawford, Mr. Jeamel,
Ms. Johnson and Ms. Papa, and each Director continuing in office.
NOMINEE FOR DIRECTOR FOR TWO YEAR TERM TO EXPIRE IN 2013
|
|
|
|
|
|
|
|
|
|
|
Director |
|
|
Age(1) |
|
Since(2) |
|
|
|
|
|
|
|
|
|
Joseph F. Jeamel, Jr.
|
|
|
71 |
|
|
|
2007 |
|
Mr. Jeamel joined
Rockville Bank in
1990. He served as
Senior Vice
President and Chief
Financial Officer of
Rockville Bank until
2003 when he was
promoted to
Executive Vice
President. In 2005,
he was promoted to
Chief Operating
Officer of Rockville
Bank and was
appointed Executive
Vice President of
the Company. Mr.
Jeamel retired from
his positions with
Rockville Bank and
the Company on June
30, 2010, but still
consults for
Rockville Bank. |
|
|
|
|
|
|
|
|
11
NOMINEE FOR DIRECTOR FOR THREE YEAR TERM TO EXPIRE IN 2014
|
|
|
|
|
|
|
|
|
|
|
Director |
|
|
Age(1) |
|
Since(2) |
|
|
|
|
|
|
|
|
|
William H. W. Crawford, IV
|
|
|
45 |
|
|
|
2011 |
|
Mr. Crawford joined
Rockville Bank in January
2011 as the named
successor to Mr. McGurk
as President and Chief
Executive Officer. Prior
to joining the Bank, Mr.
Crawford served as Senior
Regional Vice President,
Eastern Virginia
Commercial Banking, Wells
Fargo Bank, N.A based in
Norfolk, Virginia and its
predecessor bank,
Wachovia Bank, in various
executive positions. |
|
|
|
|
|
|
|
|
NOMINEES FOR DIRECTOR FOR FOUR YEAR TERMS TO EXPIRE IN 2015
|
|
|
|
|
|
|
|
|
|
|
Director |
|
|
Age(1) |
|
Since(2) |
|
|
|
|
|
|
|
|
|
C. Perry Chilberg
|
|
|
62 |
|
|
|
1999 |
|
Mr. Chilberg is the Vice
President and majority
owner of Bergson Tire,
Co., Inc., an automotive
tire retail business and
a manufacturer of truck
tire retreads, located
in Ellington,
Connecticut. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kristen A. Johnson
|
|
|
44 |
|
|
|
2010 |
|
Ms. Johnson has worked
for the Connecticut
Water Company in
Clinton, Connecticut
since May 2007, was
promoted to Vice
President Human
Resources in December
2007 and was appointed
Corporate Secretary of
the company in November
2010. Prior to joining
Connecticut Water
Company, she served as
Senior Vice President,
Human Resources and
Organizational
Development Officer at
Rockville Bank. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rosemarie Novello Papa
|
|
|
65 |
|
|
|
2007 |
|
Ms. Papa is Past Chair
of the Board of Trustees
for Eastern Connecticut
Health Network and a
member of the Board of
Trustees for Manchester
Community College
Foundation. |
|
|
|
|
|
|
|
|
12
CONTINUING DIRECTORS (TERMS TO EXPIRE IN 2012)
|
|
|
|
|
|
|
|
|
|
|
Director |
|
|
Age(1) |
|
Since(2) |
|
|
|
|
|
|
|
|
|
Michael A. Bars, Vice Chairman
|
|
|
55 |
|
|
|
2003 |
|
Mr. Bars is a partner with the law
firm of Kahan, Kerensky &
Capossela, LLP, a general practice
law firm with offices in Vernon
and Mansfield, Connecticut and the
President and a director of
Ellington Ridge Country Club, Inc.
and Ellington Purchasing Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pamela J. Guenard
|
|
|
48 |
|
|
|
2007 |
|
Ms. Guenard has been a Vice
President at Don Brooks &
Associates, Inc. since 2004, a
firm specializing in income tax
preparation, bookkeeping and
payroll services, located in South
Windsor, Connecticut. Ms. Guenard
is also an owner of Dovetail
Woodworks, Inc., a privately held
manufacturer of cedar outdoor
furniture, located in Ellington,
Connecticut. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas S. Mason
|
|
|
71 |
|
|
|
1989 |
|
Mr. Mason was, for over thirty
years, the owner, President and
Treasurer of L. Bissell and Son,
Inc., an insurance agency, located
in Rockville, Connecticut, until
he retired in 1995. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peter F. Olson
|
|
|
70 |
|
|
|
1980 |
|
Mr. Olson is the owner of Ladd &
Hall Co., Inc., a privately held
retail furniture company located
in Rockville, Connecticut, and the
Chairman of Vernon Housing
Authority. |
|
|
|
|
|
|
|
|
CONTINUING DIRECTORS (TERMS TO EXPIRE IN 2013)
|
|
|
|
|
|
|
|
|
|
|
Director |
|
|
Age(1) |
|
Since(2) |
|
|
|
|
|
|
|
|
|
Raymond H. Lefurge, Jr., Chairman
|
|
|
61 |
|
|
|
2003 |
|
Mr. Lefurge is a certified
public accountant. He is the
majority shareholder of the
auditing, tax and accounting
services firm of Lefurge &
Gilbert, PC, CPAs, located in
Vernon, Connecticut, where he
also holds the position of
President. |
|
|
|
|
|
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
Director |
|
|
Age(1) |
|
Since(2) |
Stuart E. Magdefrau
|
|
|
56 |
|
|
|
1995 |
|
Mr. Magdefrau is a certified
public accountant, practicing
with the firm of Magdefrau,
Renner & Ciaffaglione LLC, CPAs,
located in Vernon, Connecticut.
He was the founding partner of
the firm but no longer has an
ownership interest in it.
He is also the Treasurer of
Ellington Ridge Country Club,
Inc. and Ellington Purchasing
Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Director |
|
|
Age(1) |
|
Since(2) |
|
|
|
|
|
|
|
|
|
William J. McGurk
|
|
|
69 |
|
|
|
1981 |
|
Mr. McGurk joined Rockville Bank
in 1980, as President and Chief
Executive Officer. In 1981, Mr.
McGurk was elected to the Board
of Directors. He has over
twenty-nine years of commercial
and thrift banking experience
with Rockville Bank and
forty-four years of banking
experience. |
|
|
|
|
|
|
|
|
CONTINUING DIRECTORS (TERMS TO EXPIRE IN 2014)
|
|
|
|
|
|
|
|
|
|
|
Director |
|
|
Age(1) |
|
Since(2) |
|
|
|
|
|
|
|
|
|
David A. Engelson
|
|
|
67 |
|
|
|
1998 |
|
Mr. Engelson was, for
nineteen years, the
Supervisory Principal of
Center Road Elementary
School, located in
Vernon, Connecticut,
until he retired in
2002. He is currently
the Executive Director
of Hockanum Valley
Community Council, Inc.,
a social service agency,
located in Vernon,
Connecticut. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard M. Tkacz
|
|
|
58 |
|
|
|
2007 |
|
Mr. Tkacz is the owner
of Richs Oil Service,
Inc. and Richs
Plumbing, Heating and
Air Conditioning, Inc.,
privately held oil
distributing and HVAC
companies located in
Enfield, Connecticut. |
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Ages presented are as of December 31, 2010. |
|
(2) |
|
The reported date is the date the individual became a Director of Rockville Bank. |
INFORMATION ABOUT EXECUTIVE OFFICERS
Executive Officers of Rockville Financial, Inc.
The following individuals are the executive officers of Rockville Financial, Inc. and hold the
offices set forth below opposite their names.
14
|
|
|
|
|
|
|
Name |
|
Age(1) |
|
Position |
William J. McGurk
|
|
|
69 |
|
|
President and Chief Executive Officer |
William H.W. Crawford, IV
|
|
|
45 |
|
|
Senior Executive Vice President |
Christopher E. Buchholz
|
|
|
56 |
|
|
Executive Vice President |
Richard J. Trachimowicz
|
|
|
56 |
|
|
Executive Vice President |
John T. Lund
|
|
|
40 |
|
|
Senior Vice President, Chief Financial Officer and Treasurer |
Judy Keppner Clark
|
|
|
51 |
|
|
Secretary |
|
|
|
(1) |
|
Ages presented are as of December 31, 2010. |
The executive officers of Rockville Financial, Inc. are elected annually and hold office
until their respective successors have been elected or until death, resignation, retirement or
removal by the Board of Directors.
Executive Officers of Rockville Bank
The following individuals are the executive officers of Rockville Bank and hold the offices
set forth below opposite their names:
|
|
|
|
|
|
|
Name |
|
Age(1) |
|
Position |
William J. McGurk
|
|
|
69 |
|
|
President and Chief Executive Officer |
William H.W. Crawford, IV
|
|
|
45 |
|
|
Senior Executive Vice President |
Christopher E. Buchholz
|
|
|
56 |
|
|
Executive Vice President |
Richard J. Trachimowicz
|
|
|
56 |
|
|
Executive Vice President |
John T. Lund
|
|
|
40 |
|
|
Senior Vice President, Chief Financial Officer and Treasurer |
Richard C. DiChiara
|
|
|
60 |
|
|
Senior Vice President, Retail Banking Officer |
Mark A. Kucia
|
|
|
47 |
|
|
Senior Vice President, Commercial Banking Officer |
Laurie A. Rosner
|
|
|
46 |
|
|
Senior Vice President, Marketing and Administrative Services Officer |
Darlene S. White
|
|
|
53 |
|
|
Senior Vice President, Operations Officer |
|
|
|
(1) |
|
Ages presented are as of December 31, 2010. |
The executive officers of Rockville Bank are elected annually and hold office until their
respective successors have been elected or until death, resignation, retirement or removal by the
Board of Directors.
Biographical Information of Executive Officers of Rockville Bank Who Are Not Directors
Christopher E. Buchholz, Executive Vice President, joined Rockville Bank in June 2006 and served as
the Commercial Banking Market Executive until he was appointed to the position of Senior Vice
President, Senior Commercial Banking Officer in late 2006. He was promoted to his current position
in July 2007. Prior to joining the Bank, Mr. Buchholz served as Senior Vice President, Market
Manager, Business Banking at Bank of America.
Richard J. Trachimowicz, Executive Vice President, joined Rockville Bank in May 1996 and served as
the Senior Vice President, Retail Banking Officer until he was appointed to the position of Senior
Vice President, Human Resources and Organizational Development Officer in 2007. In April 2010 he
was promoted to his current position. Prior to 1996, Mr. Trachimowicz served as Manager of Sales
and Customer Service for Northeast Savings, located in Hartford, Connecticut.
John T. Lund, Senior Vice President, Chief Financial Officer and Treasurer, joined Rockville Bank
in December 2008. Prior to joining the Bank, Mr. Lund served as a Bank Examiner with the Federal
Deposit Insurance Corporation (FDIC), out of the Hartford, Connecticut office since 1993.
Richard C. DiChiara, Senior Vice President, Retail Banking Officer, joined Rockville Bank in
November 2007. Prior to joining the Bank, Mr. DiChiara served as Senior Vice President, Business
Banking at Bank of America. Prior to his transition to Bank of America in 2005, Mr. DiChiara served
as Senior Vice President, Business and Professional Services at Webster Bank.
15
Judy Keppner Clark, Assistant Vice President, Corporate Secretary, joined Rockville
Bank in August 1996. She has served in various positions at Rockville Bank, including Teller and
Fiscal Assistant.
Mark A. Kucia, Senior Vice President, Commercial Banking Officer, joined Rockville Bank in October
2005 and served as the Vice President, Senior Commercial Real Estate Lender until he was promoted
to his current position in August 2007. Prior to joining the Bank, Mr. Kucia served as Vice
President, Senior Commercial Real Estate Lender at Liberty Bank located in Middletown, Connecticut.
Laurie A. Rosner, Senior Vice President, Marketing and Administrative Services Officer, joined
Rockville Bank in July 1991. She has served in various positions at Rockville Bank, including
Assistant Corporate Secretary.
Darlene S. White, Senior Vice President, Operations Officer, joined Rockville Bank in April 2006.
Prior to joining the Bank, Ms. White served as Chief Operating Officer at the Polish National
Credit Union, located in Chicopee, Massachusetts.
BENEFICIAL OWNERSHIP OF COMMON STOCK BY MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The table below sets forth information as of March 4, 2011, with respect to principal
beneficial ownership of Common Stock by each Director and each of the Named Executive Officers, and
by any person (including any group as that term is used in Section 13(d)(3) of the Securities
Exchange Act of 1934) who is known to the Company to be the beneficial owner of more than 5% of the
Companys Common Stock and with respect to ownership of Common Stock by all Directors and Named
Executive Officers of the Company and the Bank as a group.
|
|
|
|
|
|
|
|
|
|
|
Number of Shares |
|
|
|
|
Beneficially |
|
Percent of |
Name and Address of Beneficial Owner |
|
Owned(1) |
|
Class (2) |
|
Independent Directors: |
|
|
|
|
|
|
|
|
Michael A. Bars |
|
|
54,870 |
(3) |
|
|
* |
|
C. Perry Chilberg |
|
|
79,308 |
(4) |
|
|
* |
|
David A. Engelson |
|
|
83,534 |
(5) |
|
|
* |
|
Pamela J. Guenard |
|
|
11,431 |
(6) |
|
|
* |
|
Joseph F. Jeamel, Jr. |
|
|
188,085 |
(7)(20) |
|
|
* |
|
Kristen A. Johnson |
|
|
36,694 |
(8)(20) |
|
|
* |
|
Raymond H. Lefurge, Jr. |
|
|
77,017 |
(9) |
|
|
* |
|
Stuart E. Magdefrau |
|
|
64,454 |
(10) |
|
|
* |
|
Thomas S. Mason |
|
|
51,010 |
(11) |
|
|
* |
|
Rosemarie Novello Papa |
|
|
16,685 |
(12) |
|
|
* |
|
Peter F. Olson |
|
|
111,730 |
(13) |
|
|
* |
|
Richard M. Tkacz |
|
|
13,060 |
(14) |
|
|
* |
|
|
Named Executive Officers: |
|
|
|
|
|
|
|
|
William J. McGurk |
|
|
346,741 |
(15)(20) |
|
|
1.18 |
% |
Christopher E. Buchholz |
|
|
70,981 |
(16)(20) |
|
|
* |
|
Richard J. Trachimowicz |
|
|
67,276 |
(17)(20) |
|
|
* |
|
John T. Lund |
|
|
7,337 |
(18)(20) |
|
|
* |
|
Mark A. Kucia |
|
|
26,624 |
(19)(20) |
|
|
* |
|
|
All Directors and Executive Officers as a
Group (21 persons) |
|
|
1,346,280 |
|
|
|
4.56 |
% |
|
|
|
* |
|
Less than 1% of the common stock outstanding. |
|
(1) |
|
Based on information provided by the respective beneficial owners and on
filings with the Securities and Exchange Commission made pursuant to the Securities
Exchange Act of 1934. |
|
(2) |
|
Based on approximately 29,504,891 shares of common stock issued
and outstanding as of March 4, 2011. |
16
|
|
|
(3) |
|
Includes 15,167 shares of restricted common stock and 13,953 exercisable
options to purchase common stock. |
|
(4) |
|
Includes 21,234 shares held by his wife, 7,720 shares held by adult
child, 15,167 shares of restricted common stock and 13,953 exercisable options to
purchase common stock. |
|
(5) |
|
Includes 7,583 shares held by his wife, 15,167 shares held jointly with
his wife, 18,919 shares of restricted common stock and 15,925 exercisable options to
purchase common stock. |
|
(6) |
|
Includes 4,303 shares held jointly with her husband and 6,370 exercisable
options to purchase common stock. |
|
(7) |
|
Includes 62,714 shares of restricted common stock and 76,743 exercisable
options to purchase common stock. |
|
(8) |
|
Includes 1,062 exercisable options to purchase common stock. |
|
(9) |
|
Includes 19,717 shares held jointly with his wife, 10,616 shares held by
his wife, 14,864 shares of restricted common stock and 13,953 exercisable options to
purchase common stock. |
|
(10) |
|
Includes 13,650 shares held jointly with his wife, 13,651 shares of
restricted common stock and 13,953 exercisable options to purchase common stock. |
|
(11) |
|
Includes 7,583 shares held in the Thomas S. Mason Trust, of which Mr.
Mason is the trustee, and 8,583 shares held in the Susan C. Mason Trust, of which
Mrs. Mason is the trustee. Also includes 18,919 shares of restricted common stock
and 15,925 exercisable options to purchase common stock. |
|
(12) |
|
Includes 6,370 exercisable options to purchase common stock. |
|
(13) |
|
Includes 52,334 shares held by his wife, 100 shares held as custodian for
minors, 14,409 shares of restricted common stock and 13,953 exercisable options to
purchase common stock. |
|
(14) |
|
Includes 1,213 shares held by his wife and 6,370 exercisable options to
purchase common stock. |
|
(15) |
|
Includes 22,750 shares held jointly with his wife, 102,976 shares of
restricted common stock and 138,808 exercisable options to purchase common stock. |
|
(16) |
|
Includes 13,452 shares of restricted common stock and 40,057 exercisable
options to purchase common stock. |
|
(17) |
|
Includes 4,701 shares held jointly with his wife, 6,280 shares of
restricted common stock and 22,409 exercisable options to purchase common stock. |
|
(18) |
|
Includes 303 shares held jointly with his wife, 907 shares of restricted
common stock and 5,187 exercisable options to purchase common stock. |
|
(19) |
|
Includes 4,258 shares of restricted common stock and 10,744 exercisable
options to purchase common stock. |
|
(20) |
|
Includes shares allocated to the account of the individuals under the
Rockville Bank Employee Stock Ownership Plan. The respective individuals have vested
shares as follows: Mr. Jeamel 2,183 shares; Ms. Johnson 5,205 shares; Mr.
McGurk 15,695 shares; Mr. Buchholz 7,318 shares; Mr. Trachimowicz 11,864
shares; Mr. Lund 681 shares and Mr. Kucia 7,419 shares. |
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely upon a review of information furnished to the Company pursuant to Rule 16a-3(e)
during the year ended December 31, 2010, all of the Companys Directors and Executive Officers
subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934 filed
all required reports on a timely basis.
COMPENSATION DISCUSSION AND ANALYSIS
Executive Summary
Rockville Financial Inc. had a successful year. Our total assets increased $106.7 million, or
6.8%, to $1.7 billion at December 31, 2010, primarily due to a $49.5 million, or 3.6%, increase in
loans and additional deposits of $90.2 million, or 8.0%. The Company earned $12.3 million in 2010
compared to earnings of $9.7 million for the year ended December 31, 2009. We accomplished this
during a year that continued to see many financial institutions incur sizable operating losses
caused by sharp write-downs of asset valuations and rising loan losses.
A significant amount of our executives compensation is intended to reflect our performance
and align our executives with shareholder interests. As a result of our 2010 performance, the Named
Executive Officers (and other officers) received annual incentive bonuses as part of our Officer
Incentive Compensation Plan. Awards were based on a combination of Company and individual
performance and resulted in payouts of 102% of target. The bonuses were based upon objective goals determined
at the beginning of the 2010 fiscal year, which were reviewed at the end of the year by the
Compensation Committee (the Committee). The Committee believes that the payouts are reflective of
the performance achieved by the Named Executive Officers during the year.
Executives also received stock option and restricted stock grants intended to be in line with
industry practice and reflective of our performance.
Throughout this year and despite the general banking environment, we maintained focus on our
core business objectives. We believe that our compensation plans were a driving force behind our
ability to remain focused and significantly increase shareholder value. The Committee is satisfied
that the compensation to the Named Executive Officers reflects the implementation of the Companys
stated compensation philosophy and our sustained performance. We believe our plans have an
appropriate pay-
17
for-performance orientation and serve to motivate the executives to act in the
Companys and shareholders best interests.
The following discussion provides detailed information on the compensation practices related
to our Named Executive Officers for fiscal year 2010. All Named Executive Officers of the Company
are also Named Executive Officers of the Bank. Equity compensation for Named Executive Officers is
paid by the Company while cash compensation and benefits are provided by the Bank. We summarize our
philosophy and guiding principles as well as our decision process and the outcomes of that process.
Objectives of the Companys Compensation Programs and Compensation Philosophy
The Companys executive compensation philosophy is designed to support the Banks business
objectives to be Connecticuts Best Community Bank by adopting a total compensation program that
is, market-based, tied to performance and aligned with shareholders interests. We believe the
Banks objective of remaining community centric, focusing on quality personal service, and
expanding its lending activities, banking networks and consumer products, will be enhanced by this
strategy.
Our compensation programs are designed to consider competitive market data, specific role
functions that may be unique to our structure, internal equity and the performance of both the
individual and the Company. We believe this approach will help us attract, retain and reward the
best employees, fulfill the Companys growth objectives and promote shareholder value.
Our executive compensation philosophy is also intended to provide a balanced approach to
rewarding performance across many different types of individual and financial performance measures
and over short and long-term horizons. We believe this approach also mitigates the risk to the
business by limiting the focus on one particular area of performance to the detriment of the health
of the Company as a whole over the long- or short-term.
Risk Assessment
Our executive compensation philosophy is meant to provide a balanced approach to rewarding
performance across many different types of individual and financial performance measures. This
approach also mitigates the risk to the business that the behaviors motivated by the compensation
plans will be focused on one particular area of performance to the detriment of the health of the
Company as a whole over the long- or short-term.
In addition, as a regulated community bank, Rockville has always adhered to a conservative and
balanced approach to risk in general. Our management and Board conduct regular reviews of our
business to ensure we remain within appropriate regulatory guidelines and appropriate practice. In
addition, we are periodically examined by the Federal Deposit Insurance Corporation and the
Connecticut Banking Department.
After a thorough review of our philosophy and evaluating the fiscal year 2009 compensation
plan results, we concluded that our compensation programs provide appropriate balance across many
performance measures, controls on the range of payouts, and ultimately allows Committee discretion
in making awards. Therefore, we do not believe that there is any material risk to the Company posed
by our compensation plans.
Role of the Compensation Committee, Management and the Compensation Consultant in the Executive
Compensation Process
Role of the Compensation Committee
The Compensation Committee (the Committee) of our Board of Directors is responsible for
discharging the Board of Directors (the Board) responsibilities in determining compensation paid
to our Named Executive Officers, as well as all other executive officers (other than payments or
benefits that are generally available to all other employees of the Company). Five members of the
Board of Directors sit on the Compensation Committee, each of whom is an independent director under
the NASDAQ Global Select Market listing requirements. To fulfill its responsibilities, the
Committee meets throughout the year (ten times in 2010) and also takes action by written consent.
The Chairman of the Committee reports on Committee actions at meetings of the Companys Board.
18
Responsibilities of the Compensation Committee include:
|
|
|
Setting the overall compensation philosophy for executive officers. |
|
|
|
|
Evaluating the performance of the Chief Executive Officer and determining all
elements of compensation. |
|
|
|
|
Ensuring corporate goals and objectives for incentives are consistent with
business and/or strategic plans approved by the Board of Directors. |
|
|
|
|
Making decisions related to base salary, short-term and long-term incentives
payable to executives officers. |
|
|
|
|
Reviewing the mix of total compensation to ensure all elements meet desired
objectives and overall compensation philosophy. |
|
|
|
|
Assessing the material risks posed by the compensation plans of the Company. |
|
|
|
|
Reviewing and approving all disclosures related to executive compensation
contained in the proxy statement. |
A committee of the Board of Directors, the Stock Awards Committee, comprised of all members of
the Board, was developed during 2007 to assist in setting the Companys equity grant strategy and
approving stock allocations. This was done to ensure the Board had proper education and information
related to stock practices at the Company. All members of the Compensation Committee participate in
the Stock Awards Committee in order to ensure that the Compensation Committee has the information
and continuity needed to review total compensation. The Stock Awards Committee met once during
2010, primarily for the purposes of setting equity grant strategy and approving stock allocation
awards.
Both the Compensation and Stock Awards Committees have the authority and resources to obtain
advice and assistance from appropriate advisors in carrying out their responsibilities. Both
Committees meet in executive session where each Committee deliberates independent of management.
Role of the Compensation Consultant
For 2010, the Committee retained Pearl Meyer & Partners (Consultant), an independent
consulting firm to provide advice related to executive compensation and equity compensation. The
Committee has direct access to the consultant and periodically requests analyses, education and
advice related to best practices and trends in the market related to executive compensation and
benefits. The Consultant does not provide any other services to the Company or the Bank.
In 2010, the Committee requested that the Consultant attend two meetings in person. In
addition, the Consultant attended one meeting telephonically to brief the Committee on trends and
legislation in compensation that may affect the Company or the Bank. The Committee engaged the
Consultant to conduct an executive compensation review during the year 2010.
Role of the Companys Management
The Companys management provides information and input, as requested by the Compensation
Committee to facilitate decisions related to executive compensation. At the start of each year, the
Chief Executive Officer develops proposed Company goals and objectives that are reviewed and
approved by the Board of Directors. Performance measures for the incentive plan are based on the
Board approved goals.
Members of management may be asked to provide input relating to potential changes in
compensation programs for review by the Compensation Committee. The Chief Executive Officer and the
Executive Vice President Human Resources provide the Committee and other advisors with Company
information related to the Committees needs.
The Compensation Committee occasionally requests members of senior management to be present at
Committee meetings where executive compensation and Company or individual performance are discussed
and evaluated. Executives are free to provide insight, suggestions or recommendations regarding
executive compensation. However, only independent Committee members are allowed to vote on
decisions regarding executive compensation.
Typically, following the Annual Meeting of Shareholders, the Chief Executive Officer reviews
executive performance with the Committee and makes recommendations relating to executive
19
compensation decisions. The Committee meets with the Chief Executive Officer to discuss his own
performance and compensation package, but ultimately decisions regarding his package are made
solely based upon the Committees deliberations. Decisions regarding other executives are made by
the Committee considering recommendations from the Chief Executive Officer. The Committee also
relies on data and advice provided by its Consultant and legal advisor.
Inputs to Committee Decisions
Competitive Benchmarking
Understanding the competitive landscape is a key element the Committee considers in setting
program targets and making compensation decisions. The Committee relies on data and advice of Pearl
Meyer & Partners, an independent consulting firm which provides benchmarking data, best practices
information and general education to members of the Committee as needed throughout the year. Pearl
Meyer & Partners completed a comprehensive market assessment in June 2010 which the Committee used
to assess the competitiveness and appropriateness of its programs and to provide guidance for
setting pay levels and making decision related to the executive officers. The purpose of the review
was to provide an independent and objective analysis of all elements of compensation (by element
and in aggregate).
A primary data source used in setting a competitive market for the Named Executive Officers is
the information publicly disclosed by a custom peer group of twenty publicly traded banks of
similar asset size and region. This peer group is recommended by Pearl Meyer & Partners and
approved by the Committee. The comparable companies are reviewed regularly and may change slightly
depending on changes in the market place, acquisitions, divestures and business focus of the
Company. The following banks were included in the competitive assessment conducted by Pearl Meyer &
Partners.
Alliance Financial Corporation
Arrow Financial Corporation
Bancorp Rhode Island, Inc.
Beacon Federal Bancorp, Inc
Cape Bancorp, Inc
Center Bancorp, Inc
Danvers Bancorp, Inc.
Enterprise Bancorp, Inc.
Financial Institutions, Inc.
First of Long Island Corporation
Kearny Financial Corp. (MHC)
Northfield Bancorp, Inc. (MHC)
OceanFirst Financial Corp.
Oritani Financial Corp. (MHC)
Peapack-Gladstone Financial Corporation
Roma Financial Corporation
State Bancorp, Inc.
Suffolk Bancorp
United Financial Bancorp (MHC)
Westfield Financial, Inc.
In addition to the peer group, the Consultant includes data from other industry surveys such
as the Watson Wyatt Financial Institutions Benchmark Survey and the Pearl Meyer & Partners
Northeast Banking Compensation Survey. Both surveys are broad-based compensation surveys with more
than 100 financial institutions. The information from these competitive data sources were used to
make 2010 base salary adjustments and to confirm our incentive plan award targets and ranges.
2010 Executive Compensation Program Components and Decisions
Compensation paid to the Companys executive officers in 2010 consisted of the following
components: base salary, short-term incentive paid pursuant to the Officer Incentive Compensation
Plan, long-term equity awards paid pursuant to the Companys 2006 Stock Incentive Award Plan, and
participation in our employee and executive benefit plans.
Base Salaries. Base salaries provide compensation to our executives that reflect their role
at the Company. Base salaries are reviewed annually and adjusted as appropriate to reflect each
executives performance, contribution, experience and pay relative to the market. We also consider
internal responsibilities and relationships which may be unique to our Company.
We aim to set base salaries at a conservatively competitive level. This is in recognition of
our philosophy to place more emphasis on incentive, or performance-based pay. In making salary
decisions, the Committee considers each individuals particular responsibilities, experience and
contributions at the Company. The following summarizes the 2009 and 2010 salaries for the Companys
Named Executive Officers:
20
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer |
|
2009 Base Salary |
|
2010 Base Salary |
|
% of Increase |
Mr. William J. McGurk |
|
$ |
432,772 |
|
|
$ |
432,772 |
|
|
|
|
|
Mr. Christopher E. Buchholz |
|
$ |
203,840 |
|
|
$ |
211,994 |
|
|
|
4 |
% |
Mr. Richard J. Trachimowicz(1) |
|
$ |
146,640 |
|
|
$ |
188,000 |
|
|
|
28 |
% |
Mr. John T. Lund(2) |
|
$ |
150,800 |
|
|
$ |
180,000 |
|
|
|
19 |
% |
Mr. Mark A. Kucia(3) |
|
|
n/a |
|
|
$ |
180,000 |
|
|
|
|
|
|
|
|
(1) |
|
Mr. Trachimowicz was promoted to Executive Vice President in 2010. |
|
(2) |
|
Mr. Lunds compensation was increased to $159,848 in May 2010 and adjusted in
November 2010 to reflect increased responsibilities and peer analysis. |
|
(3) |
|
Mr. Kucia became a Named Executive Officer in 2010. |
Incentive Compensation. All executives and officers participate in the Companys
Officer Incentive Compensation Plan (OICP) which is administered by the Compensation Committee of
the Board of Directors. The OICP is a short-term compensation plan specifically designed to
encourage participants to focus on key performance goals during the fiscal year. The OICP provides
participants with an opportunity to earn variable rewards that are contingent on a combination of
Company and Individual performance. A significant portion of the overall annual cash compensation
of the executives is provided from the OICP.
For 2010, the Committee (with input from the CEO) established plan goals and award
opportunities for the Plan. In the past, the Plan measured Company performance solely through net
income. During 2010, the Committee expanded the number of Company goals to incorporate multiple
measures. The objective was to create a more balanced view of performance that the Committee also
felt represented sound risk management features.
Specifically, the goals included Net Income (50%), Interest Expense (15%), Asset Quality (10%)
and Individual Performance (25%). Performance for each measure is defined at threshold, target and
stretch levels which are designed to result in corresponding payouts (50%, 100% and 125%
respectively). Awards are interpolated in between these levels to provide for incremental rewards.
In order for the OICP to activate the Company must attain 80% of the target net income goal.
If this level of net income is not met, the OICP will not pay out any awards regardless of
performance on other goals. Target net income is exclusive of security gains and losses. Once 80%
of the net income goal is achieved, the incentive plan will turn on and payouts will be based on
Company and individual performance as defined below.
As soon as practical, following the end of the fiscal year, performance is assessed against
the Company goals to determine payouts related to each performance measure. Individual performance
is assessed for each executive to determine the award related to individual goals. The final payout
is then calculated for each executive. With respect to executive officers, the President and Chief
Executive Officer and Executive Vice President Human Resources present the incentive award payments
as determined by the incentive formula to the Compensation Committee for review and approval. The
Committee meets in executive session to assess the Chief Executive Officers performance and
determine his incentive award.
For fiscal year 2010, the Companys target net income after tax was $10.8 million and actual
performance was $12.3 million. Below is a summary of goal attainment and incentive payment for
Named Executive Officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Measure |
|
Weighting |
|
Threshold |
|
Target |
|
Stretch |
|
Actual |
|
Payout |
Net Income (in millions $) |
|
|
50 |
% |
|
$ |
8.6 |
|
|
$ |
10.8 |
|
|
$ |
11.9 |
|
|
$ |
12.3 |
|
|
|
125 |
% |
Interest Expense (UBPR %) |
|
|
15 |
% |
|
|
50 |
% |
|
|
40 |
% |
|
|
30 |
% |
|
|
54 |
% |
|
|
0 |
% |
Asset Quality (NPA
Adjusted for Charge-offs
basis points) |
|
|
10 |
% |
|
|
1.0 |
|
|
|
.90 |
|
|
|
.80 |
|
|
|
.91 |
|
|
|
.975 |
|
Individual Performance |
|
|
25 |
% |
|
|
80 |
% |
|
|
100 |
% |
|
|
125 |
% |
|
|
100 |
% |
|
|
100 |
% |
The individual performance component of the OICP is based on the Chief Executive Officers
recommendation to the Compensation Committee of each individuals performance. Many team wide and
Company wide factors are considered in this analysis. Individual performance is evaluated based on a
21
payout scale of 80% to 125%. For 2010, all Named Executive Officers met their performance goals
and received 100% (target) payout for the individual component. Some of the individual items that
were considered include:
|
|
|
Mr. Buchholz managed the successful acquisition of Family Choice Mortgage, managed the
process for selection of a new mortgage origination platform as well as oversight for all
commercial and consumer lending activities for the Bank. |
|
|
|
|
Mr. Trachimowicz designed and implemented plans, programs, procedures, budgets,
operational activities, products and services in response to regulatory changes, business
strategies and objectives, customer service and employee development and engagement. |
|
|
|
|
Mr. Lund successfully managed interest rate risk and liquidity position in the context
of the robust management of the Companys Asset/Liability management process in addition
to his key role in the second-step conversion to a fully public company. |
|
|
|
|
Mr. Kucia met all lending related production goals (loans, deposits, and fees) in
accordance with the Companys overall strategic goals and objectives. |
Each participant in 2010 had a defined incentive opportunity expressed as a percentage of base
salary. The incentive opportunity defines the target award that will be paid based on achieving
earnings goals and individual performance. The target incentive opportunity is 60% of base salary
for the Chief Executive Officer; 50% for the Executive Vice Presidents; and 40% for other Named
Executive Officers.
Except as otherwise provided, with respect to participants in the OICP who are Named Executive
Officers, the earned incentive award will be paid between January 1, 2011 and March 15, 2011. A
participant who has retired, died or become disabled during the 2010 plan year in accordance with
the provisions of the Eligibility section of the plan will be eligible for a pro-rated payment of
the entire earned incentive award based on goals actually achieved in 2010, but prorated as of the
date of termination based on the number of days of employment in 2010 divided by 365, and such
pro-rated award shall be paid between January 1, 2011 and March 15, 2011. Payment of earned
incentive awards will be made in cash except that the Bank may, at its sole discretion, make
payment of earned incentive awards to Named Executive Officers in the form of shares of Company
stock, the value of which shall equal the amount to be paid, as determined by the Compensation
Committee of the Board.
As a result, the following incentive awards were allocated to the Named Executive Officers
based on the actual performance of the Company and the individuals during fiscal year 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer |
|
2010 Incentive Target |
|
2010 Incentive Actual |
|
% of Target Incentive |
Mr. William J. McGurk |
|
$ |
259,663 |
|
|
$ |
265,181 |
|
|
|
102 |
% |
Mr. Christopher E.
Buchholz |
|
$ |
105,997 |
|
|
$ |
108,249 |
|
|
|
102 |
% |
Mr. Richard J.
Trachimowicz |
|
$ |
94,000 |
|
|
$ |
95,998 |
|
|
|
102 |
% |
Mr. John T. Lund |
|
$ |
65,267 |
|
|
$ |
66,654 |
|
|
|
102 |
% |
Mr. Mark A. Kucia |
|
$ |
65,267 |
|
|
$ |
66,654 |
|
|
|
102 |
% |
Stock Awards. We provide long-term incentive compensation to our executive officers in the
form of stock and restricted stock awards. Our stock plan is designed to align the financial
interests of our officers with our shareholders, create significant ownership among our management
team and enable us to attract and retain executive officers.
During 2010, executives received stock options and shares of restricted stock that were
designed to reflect each executives current and anticipated contributions to the Company. The
value that may be realized upon exercise of options depends upon the exercise price of the option
and the price of the Companys common stock at the time of exercise, while the value of restricted
stock awards depends primarily on the price of our common stock at each vesting date.
Following the Companys minority stock issuance in 2005, the Company began issuing stock
awards in 2006. At that time the Committee decided to hold back a large pool of shares for future
grants rather than allocate all the shares in the first year which is typical practice among
converting banks. The intent was to divide the grants over multiple years in a
22
manner more consistent with practices of established public banks. During 2007, the newly created Stock Awards
Committee of the Board of Directors was convened to discuss the Companys stock award strategy and
define the process for allocating the awards going forward.
The Stock Awards Committee considered the goals for the plan, expense to the Company, size of
the share pool and current stock holdings of the executives. As a result of lengthy discussion
regarding the propriety of making grants in the face of a hard economic environment and weighing
the philosophy of providing much of the executives compensation as incentive compensation (which
we consider equity compensation to be), and in keeping with the original strategy from 2006, the
Stock Awards Committee decided to grant stock options and restricted stock to key officers of the
Company in 2010. Had the Committee not approved such grants, executives total compensation
opportunity would have decreased significantly which the Committee felt would not serve the
interests of the Company or its shareholders. The amount of the grants was determined based on
market data and recommendations provided by the Consultant.
Stock option and restricted stock grants were made on November 15, 2010 with an exercise price
equivalent to the fair market value ($11.25) per share of common stock on the date of Stock Awards
Committee approval. Stock options and restricted stock vest 20% immediately and 20% annually over
the next four years. Stock options and restricted shares vest upon retirement in accordance with
the Companys Retirement Plan.
The Stock Awards Committee continues to retain a substantial number of shares (primarily stock
options) in the equity incentive plan that it intends to use in subsequent years pursuant to its
original strategy.
Stock Retention Policy: In conjunction with the granting of stock awards in 2006 the Company
adopted a Stock Retention Policy which requires, absent an extraordinary circumstance, that
directors and officers who receive stock awards retain at least 25% of the vested shares they
receive as restricted stock and that they realize from the exercise of stock options, for as long
as they are employed by or in service as a director or officer of the Company. The Committee
remains committed to this policy and monitors compliance by the executives.
Chief Executive Officer Compensation Review
The Compensation Committee, in determining the compensation for the Companys Chief Executive
Officer, Mr. McGurk, considered the Companys financial performance and growth, as well as its
financial and regulatory condition. The Company performed between the Peer Group 50th
and 75th percentiles for Revenue, Net Income, ROAA, ROAE, and Efficiency Ratio; metrics
historically consistent with the overall financial health of a bank.
As stated above, Mr. McGurks 2010 base salary of $432,772 was unchanged from the prior year.
The Compensation Committee, at Mr. McGurks recommendation, did not grant a salary increase for Mr.
McGurk in 2010. This recommendation was made by Mr. McGurk in recognition of uncertain economic
conditions facing the banking industry.
In early 2011 the Companys Compensation Committee considered Mr. McGurks long tenure,
reputation in the industry and long track-record of sustained performance and determined a salary
increase was warranted. On January 20, 2011, the Committee approved an 11% salary increase bringing his
salary to $281,000 for 2011.
Mr. McGurks 2010 bonus, determined under the OICP, was $265,181 or approximately 102% of his
target incentive. In addition to the OICP award, on January 20, 2011, the Companys Compensation
Committee approved a special discretionary award of $140,000, in recognition of his long term
leadership and sustained strong financial performance and condition of the Company despite the
unprecedented financial crisis of recent years.
Mr. McGurk was granted stock options to purchase an aggregate of 35,400 shares of our common
stock at an exercise price of $11.25 per share, the fair market value of the stock on the date of
grant, November 15, 2010. Vesting restrictions and other terms of the options are the same as those
to other executives as outlined above. Similar to the other executives, the amount of the grant was
based on market data and a recommendation provided by the Consultant.
23
The Committee considered the CEOs pay in light of Company performance and his pay relative to
peers and believes the total compensation package to be appropriate and aligned with market
practices and the best interest of shareholders.
Benefits and Supplemental Executive Retirement Plans
In addition to the compensation paid to executive officers as described above, executive
officers received, along with and on the same terms as other employees, certain benefits pursuant
to the 401(k) Plan, the Employee Stock Ownership Plan, the Retirement Plan and life insurance. All
of the executive officers are also eligible to participate in the Supplemental Savings and
Retirement Plan. This Plan provides restorative payments to select highly compensated executives
designated by the Compensation Committee who are prevented from receiving the full benefits
contemplated by the Retirement Plan, 401(k) Plan and Employee Stock Ownership Plan.
Mr. McGurk and Mr. Trachimowicz receive certain benefits under Rockville Banks nonqualified
supplemental retirement plans that are otherwise limited by Internal Revenue Code caps on qualified
plans. Mr. Buchholz, Mr. Kucia and Mr. Lund participate in individual Supplemental Executive
Retirement Plans designed to provide them with retirement benefits outside of the Retirement Plan
of Rockville Bank which was closed to new entrants as of January 1, 2005. The Compensation
Committee believes this nonqualified supplemental retirement benefit is both appropriate and common
for executives based on information reviewed by the Committee at the time the plans were
established.
In addition, Mr. McGurk, Mr. Buchholz and Mr. Trachimowicz receive automobile allowances, the
value of which is outlined in the notes to the Summary Compensation Table below.
Death Benefits for Certain Officers
The Bank maintains an unfunded plan for a select group of officers whose lives have been
insured by Bank Owned Life Insurance pursuant to which $25,000 is payable to a beneficiary
designated by the officer upon the death of the officer while actively employed by the Bank or
after the officers retirement in accordance with the terms of the Banks defined benefit
Retirement Plan. The benefits of the plan are provided solely from Rockville Banks general assets.
Executive Employment/Severance Agreements
The Company has entered into employment agreements with change of control provisions with all
of its Named Executive Officers and certain non-executive officers. All of these contracts reflect
a term of one year. The Company believes these agreements are necessary and appropriate to provide
a level of financial security to officers important to the success of the Company in the event a
change of control affecting the Company occurs. All of the contracts providing change of control
protection contain double trigger provisions. This means that the officer is entitled to change
of control compensation only if there is both a change of control at the Company and the officer
either has his or her employment terminated or he or she terminates with good reason.
Tax, Accounting and Other Considerations
The Compensation Committee considers the effects of tax and accounting treatments when it
determines executive compensation. For example, in 1993, the Internal Revenue Code was amended to
disallow publicly traded companies from receiving a tax deduction on compensation paid to executive
officers in excess of $1 million (section 162(m) of the Code), unless, among other things, the
compensation meets the requirements for performance-based compensation. In structuring Rockvilles
compensation programs and in determining executive compensation, the Committee takes into
consideration the deductibility limit for compensation. The Committee reserves the right, however,
in the exercise of its business judgment, to establish appropriate compensation levels for
executive officers that may exceed the limits on tax deductibility established under Section 162(m) of the Code. The employment contracts
for the Named Executive Officers other than Mr. McGurk were recommended in 2011 and contain change
of control limitation provisions such that if the change of control payment to any of the executive
officers exceeds the limit on such payments pursuant to Internal Revenue Code Section 280G, the
payment will be reduced so it does not exceed that limit. Mr. McGurks employment contract
traditionally contained a 280G tax gross up provision and no change was made to his contract in
2011 given his pending retirement and the unlikely event that the Company would experience a change
of control before his retirement. The Committee believes the change in control features are
unlikely to be triggered given the Companys desire
24
to remain an independent, community-oriented
institution, and that the gross up features of the contracts are consistent with that belief and
strategy. The Compensation Committee takes into consideration the accounting effects of Financial
Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 in determining
vesting periods for stock options and restricted stock awards under the Rockville Financial, Inc.
2006 Stock Incentive Award Plan.
25
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee has reviewed and discussed with management the Compensation
Discussion and Analysis disclosure appearing above in this Proxy Statement. Based on this review
and discussion, the Compensation Committee recommended to the Board of Directors of the Company
that the Compensation Discussion and Analysis be included in the Companys Annual Report on Form
10-K for the year ended December 31, 2010, which incorporates by reference the disclosure contained
in this Proxy Statement.
March 9, 2011
The Compensation Committee:
David A. Engelson, Chairman
C. Perry Chilberg, Vice Chairman
Kristen A. Johnson
Raymond H. Lefurge, Jr.
Rosemarie Novello Papa
26
COMPENSATION OF EXECUTIVE OFFICERS AND TRANSACTIONS WITH MANAGEMENT
Summary Compensation Table
The following table sets forth certain information with respect to the compensation of our
principal executive officer, principal financial officer and three most highly compensated
executive officers during 2010. Each individual listed in the table below may be referred to as a
Named Executive Officer or NEO or Executive Officer. The material terms of each officers
employment agreements are described above on page 24. No options or other equity-based awards were
repriced or otherwise modified during 2010 for the Named Executive Officers. A portion of 2010
compensation as reflected in the following table is represented by the value attributable to
restricted stock and stock options granted in the fourth quarter.
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Pension |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified |
|
|
|
|
Name and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity |
|
Deferred |
|
|
|
|
Principal |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock(4) |
|
Option(5) |
|
Incentive Plan |
|
Compensation |
|
All Other |
|
|
Position |
|
Year |
|
Salary(3) |
|
Bonus |
|
Awards |
|
Awards |
|
Compensation(6) |
|
Earnings(7) |
|
Compensation(8) |
|
Total |
(a) |
|
(b) |
|
(c)$ |
|
(d)$ |
|
(e)$ |
|
(f)$ |
|
(g)$ |
|
(h)$ |
|
(i)$ |
|
(j)$ |
William J. McGurk |
|
|
2010 |
|
|
|
432,772 |
|
|
|
0 |
|
|
|
0 |
|
|
|
161,070 |
|
|
|
265,181 |
|
|
|
221,082 |
|
|
|
84,922 |
|
|
|
1,165,027 |
|
President and Chief |
|
|
2009 |
|
|
|
432,772 |
|
|
|
0 |
|
|
|
32,109 |
|
|
|
94,855 |
|
|
|
247,600 |
|
|
|
505,387 |
|
|
|
74,546 |
|
|
|
1,387,269 |
|
Executive Officer |
|
|
2008 |
|
|
|
426,954 |
|
|
|
0 |
|
|
|
503,160 |
|
|
|
81,600 |
|
|
|
124,638 |
|
|
|
579,973 |
|
|
|
101,199 |
|
|
|
1,817,524 |
|
Christopher E. Buchholz
Executive Vice President |
|
|
2010 |
|
|
|
208,858 |
|
|
|
0 |
|
|
|
28,125 |
|
|
|
32,100 |
|
|
|
108,249 |
|
|
|
39,625 |
|
|
|
46,165 |
|
|
|
463,122 |
|
|
|
2009 |
|
|
|
197,809 |
|
|
|
0 |
|
|
|
23,100 |
|
|
|
34,313 |
|
|
|
99,148 |
|
|
|
173,984 |
|
|
|
39,091 |
|
|
|
567,445 |
|
|
|
2008 |
|
|
|
192,662 |
|
|
|
0 |
|
|
|
119,800 |
|
|
|
27,200 |
|
|
|
44,100 |
|
|
|
50,042 |
|
|
|
47,678 |
|
|
|
481,482 |
|
Richard J. Trachimowicz
Executive
Vice President |
|
|
2010 |
|
|
|
172,092 |
|
|
|
0 |
|
|
|
25,313 |
|
|
|
28,119 |
|
|
|
95,998 |
|
|
|
370,758 |
|
|
|
32,561 |
|
|
|
724,841 |
|
|
|
2009 |
|
|
|
142,302 |
|
|
|
0 |
|
|
|
20,790 |
|
|
|
18,605 |
|
|
|
57,061 |
|
|
|
66,554 |
|
|
|
25,600 |
|
|
|
330,912 |
|
|
|
2008 |
|
|
|
138,531 |
|
|
|
8,058 |
|
|
|
59,900 |
|
|
|
17,680 |
|
|
|
30,456 |
|
|
|
75,797 |
|
|
|
25,613 |
|
|
|
356,035 |
|
John T Lund(1)
Senior Vice President,
Chief Financial Officer and Treasurer |
|
|
2010 |
|
|
|
158,693 |
|
|
|
0 |
|
|
|
16,875 |
|
|
|
20,930 |
|
|
|
66,654 |
|
|
|
56,112 |
|
|
|
29,314 |
|
|
|
348,578 |
|
|
|
2009 |
|
|
|
146,531 |
|
|
|
0 |
|
|
|
13,860 |
|
|
|
19,063 |
|
|
|
58,679 |
|
|
|
0 |
|
|
|
18,219 |
|
|
|
256,352 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark A. Kucia(2)
Senior Vice President, Commercial Banking Officer |
|
|
2010 |
|
|
|
158,807 |
|
|
|
0 |
|
|
|
22,500 |
|
|
|
15,561 |
|
|
|
66,654 |
|
|
|
181,504 |
|
|
|
28,277 |
|
|
|
473,303 |
|
27
|
|
|
(1) |
|
Mr. Lund was hired on December 8, 2008 and became a Named Executive Officer in 2009. |
|
(2) |
|
Mr. Kucia became a Named Executive Officer in 2010. |
|
(3) |
|
Reflects actual base salary amounts paid for fiscal years 2008-2010. Annualized base salaries
as of December 31, 2010 were as follows: Mr. McGurk: $432,772, Mr. Buchholz: $211,994; Mr.
Trachimowicz: $188,000; Mr. Lund: $180,000; and Mr. Kucia: $180,000. |
|
(4) |
|
These amounts represent the aggregate grant date fair value of restricted stock awards made
pursuant to Rockvilles 2006 Stock Incentive Award Plan determined in accordance with FASB
Topic 718. Prior years were restated in order to comply with the new reporting requirement.
For the restricted stock awarded in December 2006, 20% vested on December 22, 2006, and 20%
vest on each December 13, 2007-2010; for the restricted stock awarded in February 2008, 20%
vested on February 20, 2008 and 20% vest on each February 20, 2009-2012; for the restricted
stock awarded in March 2009, 20% vested on March 16, 2009 and 20% vest on each March 16,
2010-2013; for the restricted stock awarded in November 2010, 20% vested on November 15, 2010
and 20% vest on each November 15, 2011-2014. Assumptions made in valuing these awards are
disclosed in footnote 14, Share-Based Compensation to Rockvilles Consolidated Financial
Statements for the year ended December 31, 2010 as contained in Rockvilles Annual Report on
Form 10-K incorporated herein by reference. |
|
(5) |
|
These amounts represent the aggregate grant date fair value of stock option awards made
pursuant to Rockvilles 2006 Stock Incentive Award Plan determined in accordance with FASB
Topic 718. Prior years were restated in order to comply with the new reporting requirement.
The stock options awarded in December 2006 vested on December 13, 2008. The stock options
awarded in August 2007 vested 20% on August 14, 2007 and vest 20% on each August 14,
2008-2011; for the stock options awarded in February 2008, 20% vested on February 20, 2008 and
20% vest on each February 20, 2009-2012; for the stock options awarded in March 2009, 20%
vested on March 16, 2009 and 20% vest on each March 16, 2010-2013; for the stock options
awarded in November 2010, 20% vested on November 15, 2010 and 20% vest on each November 15,
2011-2014. Mr. McGurk reached retirement age and unvested shares will be accelerated upon
retirement; therefore, the awards were fully expensed at grant. Assumptions made in valuing
these awards are disclosed in footnote 14, Share-Based Compensation to Rockvilles
Consolidated Financial Statements for the year ended December 31, 2010 as contained in
Rockvilles Annual Report on Form 10-K incorporated herein by reference. |
|
(6) |
|
Reflects the annual bonus award earned for fiscal year 2010 under the Rockville Bank Officer
Incentive Compensation (OICP) Plan. |
|
(7) |
|
Reflects the change in the present value of the life annuity from fiscal year end 2009 to
2010 for both the qualified and non-qualified defined benefit retirement plans (The Retirement
Plan of Rockville Bank, SERP, Supplemental Savings and Retirement Plan, and Supplemental
Executive Retirement Agreement). Change in Pension Value as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental |
|
Supplemental |
|
Supplemental |
|
|
|
|
|
|
|
|
Executive |
|
Savings & |
|
Executive Ret. |
|
|
|
|
Retirement Plan |
|
Retirement Plan |
|
Retirement |
|
Agreement |
|
|
Name |
|
(Pension) |
|
(SERP) |
|
Plan |
|
(Flat $ Benefit) |
|
Total |
William J. McGurk |
|
$ |
511,862 |
|
|
|
($570,459 |
) |
|
$ |
279,679 |
|
|
|
|
|
|
$ |
221,082 |
|
Christopher E. Buchholz |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39,625 |
(a) |
|
|
39,625 |
|
Richard J. Trachimowicz |
|
|
114,919 |
|
|
|
|
|
|
|
|
|
|
|
255,839 |
(b) |
|
|
370,758 |
|
John T. Lund |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56,112 |
(b) |
|
|
56,112 |
|
Mark A. Kucia |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
181,504 |
(b) |
|
|
181,504 |
|
|
|
|
(a) |
|
Participant is vested in the benefit under this plan based on a plan change
effective April 15, 2009. |
|
(b) |
|
Mr. Trachimowicz, Mr. Lund and Mr. Kucia are new participants to this plan in
2010. |
|
(8) |
|
All Other compensation includes 401(k) matching contributions, car allowance, ESOP
contributions, Company Contribution to Supplemental Savings and Retirement Plan, Group term
life insurance premium and dividends. |
The following table shows individual amounts for fiscal year 2010 included in the All
Other Compensation column.
All Other Compensation Break Out
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee |
|
Bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental |
|
|
|
|
Name and |
|
|
|
|
|
Stock |
|
Owned |
|
Group Term |
|
|
|
|
|
|
|
|
|
Savings and |
|
|
|
|
Principal |
|
|
|
|
|
Ownership |
|
Life |
|
Life |
|
Dividend |
|
Car |
|
Retirement |
|
|
|
|
Position |
|
401(k)(a) |
|
Plan(b) |
|
Insurance(c) |
|
Insurance(d) |
|
Paid(e) |
|
Allowance(f) |
|
Plan |
|
Other |
|
Total |
William J. McGurk |
|
$ |
7,350 |
|
|
$ |
17,596 |
|
|
$ |
120 |
|
|
$ |
6,858 |
|
|
$ |
7,231 |
|
|
$ |
2,591 |
|
|
$ |
43,176 |
|
|
$ |
0 |
|
|
$ |
84,922 |
|
Christopher E.
Buchholz |
|
|
14,700 |
|
|
|
17,596 |
|
|
|
0 |
|
|
|
1,876 |
|
|
|
1,824 |
|
|
|
5,769 |
|
|
|
4,248 |
|
|
|
152 |
(g) |
|
|
46,165 |
|
Richard J.
Trachimowicz |
|
|
7,093 |
|
|
|
16,982 |
|
|
|
120 |
|
|
|
1,523 |
|
|
|
1,074 |
|
|
|
5,769 |
|
|
|
0 |
|
|
|
0 |
|
|
|
32,561 |
|
John T. Lund |
|
|
13,060 |
|
|
|
15,634 |
|
|
|
0 |
|
|
|
303 |
|
|
|
317 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
29,314 |
|
Mark A. Kucia |
|
|
11,304 |
|
|
|
15,656 |
|
|
|
0 |
|
|
|
455 |
|
|
|
862 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
28,277 |
|
|
|
|
(a) |
|
Rockvilles matching contributions to the qualified defined contribution 401(k) retirement
plan. |
|
(b) |
|
Rockvilles contributions allocated under the Employee Stock Ownership Plan during 2010. As
of December 31, 2010 the executives were vested in the following portions of their total
shares: 100% for Mr. McGurk and Mr. Trachimowicz; 80% for Mr. Buchholz and Mr. Kucia; and 20%
for Mr. Lund. |
|
(c) |
|
The cost of a $25,000 death benefit through Bank Owned Life Insurance. |
|
(d) |
|
Group term life insurance premiums for coverage in excess of $50,000. |
|
(e) |
|
Dividend paid for unvested restricted stock. |
|
(f) |
|
Mr. McGurks car allowance reflects his personal use of a company car. |
|
(g) |
|
Mr. Buchholzs other compensation includes flex credit to offset the cost of health/dental insurance. |
28
Grants of Plan-Based Awards
The following table presents information on plan-based compensation in 2010 for the Named
Executive Officers. The restricted stock and stock option awards were granted in 2010 under
Rockvilles 2006 Stock Incentive Award Plan, described below. These restricted stock and stock
option awards vest over a five-year period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other |
|
All Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock |
|
Stock |
|
|
|
|
|
Grant |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards: |
|
Awards: |
|
Exercise |
|
Date Fair |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number |
|
Number of |
|
or Base |
|
Value of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of Shares |
|
Securities |
|
Price of |
|
Stock and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of Stock |
|
Under-lying |
|
Option |
|
Option |
|
|
Grant |
|
Estimated Possible Payouts Under |
|
or Units |
|
Options |
|
Awards(3) |
|
Awards(4) |
Name |
|
Date(1) |
|
Non-Equity Incentive Plan Awards(2) |
|
(#) |
|
(#) |
|
($/Sh) |
|
($/Sh) |
(a) |
|
(b) |
|
(c) |
|
(d) |
|
(e) |
|
(i) |
|
(j) |
|
(k) |
|
(l) |
|
|
|
|
|
|
Threshold |
|
Target |
|
Maximum |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($) |
|
($) |
|
($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William J. McGurk |
|
|
11/15/10 |
|
|
$ |
129,832 |
|
|
$ |
259,663 |
|
|
$ |
324,579 |
|
|
|
0 |
|
|
|
35,400 |
|
|
|
11.25 |
|
|
|
161,070 |
|
Christopher E.
Buchholz |
|
|
11/15/10 |
|
|
|
52,998 |
|
|
|
105,997 |
|
|
|
132,496 |
|
|
|
2,500 |
|
|
|
7,055 |
|
|
|
11.25 |
|
|
|
60,225 |
|
Richard J.
Trachimowicz |
|
|
11/15/10 |
|
|
|
47,000 |
|
|
|
94,000 |
|
|
|
117,500 |
|
|
|
2,250 |
|
|
|
6,180 |
|
|
|
11.25 |
|
|
|
53,432 |
|
John T. Lund |
|
|
11/15/10 |
|
|
|
32,634 |
|
|
|
65,267 |
|
|
|
81,584 |
|
|
|
1,500 |
|
|
|
4,600 |
|
|
|
11.25 |
|
|
|
37,805 |
|
Mark A. Kucia |
|
|
11/15/10 |
|
|
|
32,634 |
|
|
|
65,267 |
|
|
|
81,584 |
|
|
|
2,000 |
|
|
|
3,420 |
|
|
|
11.25 |
|
|
|
38,061 |
|
|
|
|
(1) |
|
This column shows the date of the grant for all awards granted in 2010. |
|
(2) |
|
For Mr. McGurk, the Annual Incentive Compensation Plan target represents 60% of base salary.
All other executives Annual Incentive Compensation Plan target as a percentage of base salary
is as follows: Mr. Buchholz 50%, Mr. Trachimowicz 50%, Mr. Lund 40% and Mr. Kucia
40%. Incentive opportunity ranges from 50% to 125% of the target. |
|
(3) |
|
Exercise price represents the closing price on the grant date. |
|
(4) |
|
For stock option awards column (l) reflects the grant date FASB Topic 718 fair value for
awards disclosed in column (j); the Black-Scholes value is $4.55 per share. Assumptions made
in valuing these awards are disclosed in footnote 14, Share-Based Compensation to
Rockvilles Consolidated Financial Statements for the year ended December 31, 2010 as
contained in Rockvilles Annual Report on Form 10-K incorporated herein by reference. |
2006 Stock Incentive Award Plan
The Board of Directors and shareholders of the Company approved the Rockville Financial, Inc.
2006 Stock Incentive Award Plan in 2006. The Board of Directors believes that the ability to grant
stock options, stock awards, stock appreciation rights and/or performance awards is an important
component of the Companys overall compensation philosophy. In order to attract, retain and
motivate qualified employees and Board members, the Board believes the Company must offer market
competitive, long-term compensation opportunities. The Board believes that the availability of
stock-based benefits is a key component in this strategy and that this strategy also furthers the
objective of aligning the interests of management and Company shareholders.
The following table sets forth certain information with respect to the value of all
unexercised options and unvested stock awards previously awarded to each Named Executive Officer as
of December 31, 2010.
29
Outstanding Equity Awards at Fiscal Year-End
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
Stock Awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
Plan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive |
|
Market |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan |
|
or Payout |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
Number |
|
Market |
|
Awards: |
|
Value of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive |
|
|
|
|
|
|
|
|
|
of |
|
Value of |
|
Number of |
|
Unearned |
|
|
|
|
|
|
Number of |
|
|
|
|
|
Plan |
|
|
|
|
|
|
|
|
|
Shares |
|
Shares |
|
Unearned |
|
Shares, |
|
|
|
|
|
|
Securities |
|
Number of |
|
Awards |
|
|
|
|
|
|
|
|
|
or Units |
|
or Units |
|
Shares, |
|
Units or |
|
|
|
|
|
|
Underlying |
|
Securities |
|
Number of |
|
|
|
|
|
|
|
|
|
of Stock |
|
of Stock |
|
Units or |
|
Other |
|
|
|
|
|
|
Unexercised |
|
Underlying |
|
Securities |
|
|
|
|
|
|
|
|
|
That |
|
That |
|
Other |
|
Rights |
|
|
|
|
|
|
Options |
|
Unexercised |
|
Underlying |
|
|
|
|
|
|
|
|
|
Have |
|
Have |
|
Rights |
|
That |
|
|
|
|
|
|
Exercisable |
|
Options(1) |
|
Unearned |
|
Option Exercise |
|
Option |
|
Not |
|
Not |
|
That Have |
|
Have Not |
|
|
Grant |
|
Options |
|
Unexercisable |
|
Options |
|
Price |
|
Expiration |
|
Vested(2) |
|
Vested(3) |
|
Not Vested |
|
Vested |
Name |
|
Date |
|
(#) |
|
(#) |
|
(#) |
|
($) |
|
Date |
|
(#) |
|
($) |
|
(#) |
|
($) |
William J. |
|
|
11/15/10 |
|
|
|
7,080 |
|
|
|
28,320 |
|
|
|
|
|
|
|
11.25 |
|
|
|
11/15/20 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
McGurk |
|
|
3/16/09 |
|
|
|
12,440 |
|
|
|
18,660 |
|
|
|
|
|
|
|
9.24 |
|
|
|
3/16/19 |
|
|
|
2,085 |
|
|
|
25,479 |
|
|
|
|
|
|
|
|
|
|
|
|
2/20/08 |
|
|
|
18,000 |
|
|
|
12,000 |
|
|
|
|
|
|
|
11.98 |
|
|
|
2/20/18 |
|
|
|
16,800 |
|
|
|
205,296 |
|
|
|
|
|
|
|
|
|
|
|
|
8/14/07 |
|
|
|
24,000 |
|
|
|
6,000 |
|
|
|
|
|
|
|
14.35 |
|
|
|
8/14/17 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
12/13/06 |
|
|
|
30,000 |
|
|
|
0 |
|
|
|
|
|
|
|
17.77 |
|
|
|
12/13/16 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
Christopher E. Buchholz |
|
|
11/15/10 |
|
|
|
1,411 |
|
|
|
5,644 |
|
|
|
|
|
|
|
11.25 |
|
|
|
11/15/20 |
|
|
|
2,000 |
|
|
|
24,440 |
|
|
|
|
|
|
|
|
|
|
|
3/16/09 |
|
|
|
4,500 |
|
|
|
6,750 |
|
|
|
|
|
|
|
9.24 |
|
|
|
3/16/19 |
|
|
|
1,500 |
|
|
|
18,330 |
|
|
|
|
|
|
|
|
|
|
|
|
2/20/08 |
|
|
|
6,000 |
|
|
|
4,000 |
|
|
|
|
|
|
|
11.98 |
|
|
|
2/20/18 |
|
|
|
4,000 |
|
|
|
48,880 |
|
|
|
|
|
|
|
|
|
|
|
|
8/14/07 |
|
|
|
8,000 |
|
|
|
2,000 |
|
|
|
|
|
|
|
14.35 |
|
|
|
8/14/17 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
12/13/06 |
|
|
|
6,500 |
|
|
|
0 |
|
|
|
|
|
|
|
17.77 |
|
|
|
12/13/16 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
Richard J. |
|
|
11/15/10 |
|
|
|
1,236 |
|
|
|
4,944 |
|
|
|
|
|
|
|
11.25 |
|
|
|
11/15/20 |
|
|
|
1,800 |
|
|
|
21,996 |
|
|
|
|
|
|
|
|
|
Trachimowicz |
|
|
3/16/09 |
|
|
|
2,440 |
|
|
|
3,660 |
|
|
|
|
|
|
|
9.24 |
|
|
|
3/16/19 |
|
|
|
1,350 |
|
|
|
16,497 |
|
|
|
|
|
|
|
|
|
|
|
|
2/20/08 |
|
|
|
3,900 |
|
|
|
2,600 |
|
|
|
|
|
|
|
11.98 |
|
|
|
2/20/18 |
|
|
|
2,000 |
|
|
|
24,440 |
|
|
|
|
|
|
|
|
|
|
|
|
8/14/07 |
|
|
|
5,200 |
|
|
|
1,300 |
|
|
|
|
|
|
|
14.35 |
|
|
|
8/14/17 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
12/13/06 |
|
|
|
2,000 |
|
|
|
0 |
|
|
|
|
|
|
|
17.77 |
|
|
|
12/13/16 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
John T. Lund |
|
|
11/15/10 |
|
|
|
920 |
|
|
|
3,680 |
|
|
|
|
|
|
|
11.25 |
|
|
|
11/15/20 |
|
|
|
1,200 |
|
|
|
14,664 |
|
|
|
|
|
|
|
|
|
|
|
|
3/16/09 |
|
|
|
2,500 |
|
|
|
3,750 |
|
|
|
|
|
|
|
9.24 |
|
|
|
3/16/19 |
|
|
|
900 |
|
|
|
10,998 |
|
|
|
|
|
|
|
|
|
Mark A. |
|
|
11/15/10 |
|
|
|
684 |
|
|
|
2,736 |
|
|
|
|
|
|
|
11.25 |
|
|
|
11/15/20 |
|
|
|
1,600 |
|
|
|
19,552 |
|
|
|
|
|
|
|
|
|
Kucia |
|
|
3/16/09 |
|
|
|
2,500 |
|
|
|
3,750 |
|
|
|
|
|
|
|
9.24 |
|
|
|
3/16/19 |
|
|
|
1,200 |
|
|
|
14,664 |
|
|
|
|
|
|
|
|
|
|
|
|
2/20/08 |
|
|
|
3,900 |
|
|
|
2,600 |
|
|
|
|
|
|
|
11.98 |
|
|
|
2/20/18 |
|
|
|
1,600 |
|
|
|
19,552 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The options granted on December 13, 2006 vested on December 13, 2008, the options granted on
August 14, 2007 vest 20% on each August 14, 2007-2011, the options granted on each February
20, 2008 vest 20% on each February 20, 2008-2012, the options granted on March 16, 2009 vest
20% on each March 16, 2009-2013, and the options granted on November 15, 2010 vest 20% on each
November 15, 2010-2014. |
|
(2) |
|
Vesting dates for the stock awards are as follows: The restricted stock awarded on February
20, 2008, 20% on each February 20, 2008-2012, the restricted stock awarded on March 16, 2009,
20% on each March 16, 2009-2013, and the restricted stock on November 15, 2010, 20% on each
November 15, 2010-2014. Vesting is accelerated upon retirement. Mr. McGurk reached retirement
age; therefore, unvested shares vesting will be accelerated upon retirement. |
|
(3) |
|
Market values are based on the closing market price of the Companys stock of $12.22 on
December 31, 2010. |
The following information sets forth the stock awards vested and stock options exercised
by the Named Executive Officers during the fiscal year ended December 31, 2010.
Option Exercises and Stock Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
Stock Awards |
|
|
Number of |
|
|
|
|
|
Number of |
|
|
|
|
Shares |
|
|
|
|
|
Shares |
|
|
|
|
Acquired on |
|
Value Realized |
|
Acquired on |
|
Value Realized on |
Name |
|
Exercise |
|
Upon Exercise ($) |
|
Vesting |
|
Vesting ($)(2) |
William J. McGurk(1) |
|
|
0 |
|
|
|
0 |
|
|
|
17,495 |
|
|
|
181,724 |
|
Christopher E. Buchholz |
|
|
0 |
|
|
|
0 |
|
|
|
3,800 |
|
|
|
40,002 |
|
Richard J. Trachimowicz |
|
|
0 |
|
|
|
0 |
|
|
|
2,100 |
|
|
|
22,467 |
|
John T. Lund |
|
|
0 |
|
|
|
0 |
|
|
|
600 |
|
|
|
6,906 |
|
Mark A. Kucia |
|
|
0 |
|
|
|
0 |
|
|
|
1,600 |
|
|
|
17,184 |
|
|
|
|
(1) |
|
Vesting is accelerated upon retirement. Mr. McGurk reached retirement age; therefore,
unvested shares vesting will be accelerated upon retirement. |
|
(2) |
|
Value reflects the vested shares at the vesting price on February 20, 2010 of $9.97, March
16, 2010 of $11.77, November 15, 2010 of $11.25 and December 13, 2010 of $10.69. |
30
Supplemental Executive Retirement Plan
The Bank has adopted the Supplemental Executive Retirement Plan (the SERP) for the purpose
of providing designated executives of Rockville Bank with supplemental retirement benefits. Mr.
McGurk has been designated by the Compensation Committee for participation in the SERP which
provides him with a retirement benefit equal to 70% of his average annual earnings over the
12-month period during the last 120 months of employment producing the highest average or, if
higher, his current annual earnings, which include base salary plus annual incentive compensation.
The SERP benefit is offset by the executives benefits under the tax-qualified Retirement Plan and
the Supplemental Savings and Retirement Plan.
Participants in the SERP are entitled to their benefit upon the later of termination of
employment or attainment of age 60, subject to the completion of five years of service with the
Bank. Benefits under the SERP are payable in monthly installments in the form of a straight life
annuity unless the participant has made a lump sum election in accordance with the terms of the
SERP. A participant may elect to receive all, none or a specified portion of his or her retirement
benefit as a lump sum determined on the basis of the interest rate and mortality assumptions used
to calculate benefits under the tax-qualified Retirement Plan. Any such lump sum election must be
made prior to the date of the participants commencement of participation in the SERP; otherwise,
such an election becomes effective only if the participant remains in the employment of the Bank
for the full 12 calendar months immediately following the date of the election (except in the case
of death or disability) and payment of such lump sum pursuant to such election is not made until
the fifth anniversary of the date on which payment would otherwise have been made.
In the event that a participant who has made an election dies or becomes disabled during the
12-calendar month period following the election date, the requirement to remain employed during
such
12-month period will be deemed to have been satisfied. Benefits under the SERP are not payable if
barred by any action of the Connecticut Banking Commissioner or the Federal Deposit Insurance
Corporation. Moreover, benefits are not payable if the participant is in breach of any
non-competition or other restrictive covenant agreement in such participants employment or change
in control agreement or if the participant has been discharged from employment for cause. In the
event of a participants death, the participants spouse will receive a benefit equal to 100% of
the benefit that would have been provided from the SERP had the participant retired on the date of
death and commenced benefits on the later of the date the participant would have attained age 60 or
the date of the participants death; provided, however, that in calculating the participants
benefit, the offset attributable to the participants tax-qualified Retirement Plan shall be
determined on the basis of the 50% survivor annuity payable to the spouse under the tax-qualified
Retirement Plan.
Upon the death of a participant after benefits commence under the SERP, 100% of the benefit
that the participant was receiving at the time of death will be continued to his or her spouse;
provided, however, that if a participant previously received a lump sum payment of all or a portion
of the participants retirement benefit, such death benefit to the participants surviving spouse
shall be proportionately reduced. In the event of the death of a participant who has one or more
children who are dependents for federal income tax purposes and whose spouse dies while such child
is a dependent, 100% of the benefit payable to the participant or the spouse, as the case may be,
shall be continued to such dependent(s) for so long as any child remains a dependent. In 2008, the
Compensation Committee amended the SERP to comply with new Section 409A of the Internal Revenue
Code and its regulations.
Supplemental Executive Retirement Agreement
Rockville Bank established Supplemental Executive Retirement Agreements (the Agreements) for
Mr. Buchholz, Mr. Kucia, Mr. Lund and Mr. Trachimowicz to supplement their retirement benefits from
other sources. Under the Agreements, Mr. Buchholz may receive an annual benefit of $40,000, each
for twenty years, payable in 240 monthly installments; Mr. Kucia may receive an annual benefit of
$35,000, each for twenty years, payable in 240 monthly installment; Mr. Lund may receive an annual
benefit of $35,000, each for twenty years, payable in 240 monthly installments; and Mr.
Trachimowicz may receive an annual benefit of $30,000, each for twenty years, payable in 240
monthly installments. Benefits payable under the Agreements will be forfeited in the event Mr.
Buchholz, Mr. Kucia, Mr. Lund or Mr. Trachimowicz are terminated for cause before a change in
control.
31
Pension Benefits
The following table provides information regarding the retirement benefits for the NEOs under
the Companys tax-qualified defined benefit and supplemental executive retirement plans, namely the
Retirement Plan of Rockville Bank, Supplemental Executive Retirement Plan, Supplemental Executive
Retirement Agreement, and Supplemental Savings and Retirement Plan, described below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Present Value of |
|
Payments During |
|
|
Number of Years |
|
Accumulated |
|
Last Fiscal |
Name |
|
Credited Service |
|
Benefit($) |
|
Year($) |
William J. McGurk
Retirement Plan of Rockville Bank |
|
|
30.00 |
|
|
|
2,296,152 |
|
|
|
0 |
|
Supplemental Executive Retirement
Plan of Rockville Bank (70% SERP) |
|
|
30.83 |
|
|
|
2,374,502 |
|
|
|
0 |
|
Supplemental Savings & Retirement
Plan of Rockville Bank (Article V
Supplemental Pension Benefit) |
|
|
30.00 |
|
|
|
1,197,172 |
|
|
|
0 |
|
Christopher E. Buchholz(1)
Supplemental Executive Retirement
Agreement (Flat $ Benefit) |
|
|
4.58 |
|
|
|
341,118 |
|
|
|
0 |
|
Richard J. Trachimowicz
Retirement Plan of Rockville Bank |
|
|
15.00 |
|
|
|
496,677 |
|
|
|
0 |
|
Supplemental Executive Retirement
Agreement (Flat $ Benefit) |
|
|
14.58 |
|
|
|
255,839 |
|
|
|
0 |
|
John T. Lund(2)
Supplemental Executive Retirement
Agreement (Flat $ Benefit) |
|
|
2.08 |
|
|
|
56,112 |
|
|
|
0 |
|
Mark A. Kucia
Supplemental Executive Retirement
Agreement (Flat $ Benefit) |
|
|
5.17 |
|
|
|
181,504 |
|
|
|
0 |
|
|
|
|
(1) |
|
Participant is vested in the benefit under this plan based on a plan change effective
April 15, 2009. |
|
(2) |
|
Participant is not yet vested in the benefit under this plan. |
Non-Qualified Deferred Compensation
Rockville maintains one defined contribution plan, the Supplemental Savings and Retirement
Plan, that provides for the deferral of compensation for executives on a basis that is not tax
qualified.
The Bank adopted the Supplemental Savings and Retirement Plan, which was implemented in
connection with the reorganization and offering that took place in 2005. This plan provides
restorative payments to executives designated by the Compensation Committee who are prevented from
receiving the full benefits contemplated by the tax-qualified Retirement Plan, 401(k) Plan and
Employee Stock Ownership Plan. The NEOs participate in the plan. The restorative payments under the
plan consist of payments in lieu of shares that cannot be allocated to the participants account
under the Employee Stock Ownership Plan, deferrals and payments for employer safe harbor or
matching contributions that cannot be made under the 401(k) Plan due to the legal limitations
imposed on the 401(k) Plan and payments for benefits that cannot be paid under the Retirement Plan
due to legal limitations imposed on benefits payable from the Retirement Plan.
The following table provides information in respect to each defined contribution or other plan
that provides for the deferral of compensation on a basis that is not tax qualified.
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive |
|
Registrant |
|
Aggregate |
|
Aggregate |
|
Aggregate |
|
|
Contributions |
|
Contributions |
|
Earnings in |
|
Withdrawals / |
|
Balance at |
Name |
|
in Last FY($) |
|
in Last FY($)(1) |
|
Last FY($)(2) |
|
Distributions($) |
|
Last FYE($) |
William J. McGurk |
|
43,277 |
|
43,176 |
|
67,993 |
|
0 |
|
528,093 |
Christopher E. Buchholz |
|
0 |
|
8,365 |
|
655 |
|
0 |
|
12,979 |
Richard J. Trachimowicz |
|
0 |
|
0 |
|
0 |
|
0 |
|
0 |
John T. Lund |
|
0 |
|
0 |
|
0 |
|
0 |
|
0 |
Mark A. Kucia |
|
0 |
|
0 |
|
0 |
|
0 |
|
0 |
|
|
|
(1) |
|
2010 deferred compensation match on current year deferrals. |
|
(2) |
|
2010 deferred compensation interest accrued on all deferrals. |
32
Retiree Medical/Drug, Dental and Life Insurance Plans
Rockville Bank established the Retiree Medical/Drug Insurance Plan, the Retiree Dental
Insurance Plan and the Retiree Life Insurance Plan to provide retiree welfare benefits to employees
hired before March 1, 1993 who had at least five years of service at retirement and are age 62 or
older. Participants in the Retiree Medical/Drug Insurance Plan and the Retiree Dental Insurance
Plan may have to pay a percentage of the premiums payable under the plans, depending on their
accumulated years of service and whether they retire before or after January 1, 1994.
Participants hired before March 1, 1993 who had at least five years of service at retirement
and are age 62 or older are eligible for life insurance coverage equal to the lesser of their final
salary at retirement rounded to the next thousand or $100,000. At age 70, the life insurance
coverage in effect as of a participants retirement date shall be reduced by 50%. Rockville Bank
pays 100% of all premiums under the Retiree Life Insurance Plan.
Employment and Change in Control Agreements
In 2006, the Bank and the Company amended its existing employment agreement with the Banks
President and Chief Executive Officer to provide for a one year, renewable term. The current term
ends on December 31, 2010 and may be extended upon written notice from the Compensation Committee.
Similarly, the employment agreements with the Banks remaining Executive Officers (each, including
the President and Chief Executive Officer, an Executive Officer), will also end on December 31,
2010 and may be extended on an annual basis upon written notice provided by the Compensation
Committee. All of these contracts reflect a term of one year. The employment agreements generally
provide for a base salary and the continuation of certain benefits currently received and are
reviewed annually by the Compensation Committee.
Under specified circumstances, the employment agreements require certain payments to be made
upon the Executive Officers termination of employment for reasons including a change in control
as defined in the agreement. However, the Executive Officers employment may be terminated for
cause without incurring any continuing obligations. If the Bank chooses to terminate these
employment agreements for reasons other than cause, or if the Executive Officer resigns from the
Bank under specified circumstances that constitute good reason, a severance benefit is payable in
the amount of three times the sum of his or her base salary and his or her potential annual
incentive compensation for the year of termination or, if higher, his or her actual annual
incentive compensation for the year prior to the year of termination. The severance benefit is
payable in monthly installments over the 36 months following termination unless the termination
occurs within two years after a change in control, in which case it is payable in an immediate lump
sum.
In addition, the Executive Officer is entitled to a pro-rata portion of the annual incentive
compensation potentially payable to him or her for the year of termination; accelerated vesting of
any outstanding stock options, restricted stock or other stock awards; immediate exercisability of
any outstanding options; and deemed satisfaction of any performance-based objectives under any
stock or other long-term incentive award. If the Executive Officer elects to continue his or her
health plan coverage under COBRA, the Bank will pay the Executive Officer on a monthly basis the
after-tax cost of such COBRA coverage. If the COBRA continuation period is less than three years,
the Bank will make a good faith effort to obtain other comparable insured coverage for the
Executive Officer for the balance of such three-year period; otherwise, the Bank will pay the
Executive Officer a lump sum amount equal on an after-tax basis to the present value of the cost of
the coverage that would have been incurred for the balance of such three-year period if the
Executive Officer had participated in the Banks retiree medical plan. In addition, the Bank will
pay the Executive Officer a lump sum amount equal on an after-tax basis to the cost of continuing
coverage under the Banks group long-term disability and group life insurance policies for such
three-year period.
In the event that an Executive Officer becomes entitled to benefits in connection with a
change in control that are subject to the tax on excess parachute payments under Section 4999 of
the Internal Revenue Code, the Bank will reduce payments to the Executive Officer to the max amount
that will not result in an excess parachute payment. This reduction provision was added to all
Executive Officer employment contracts in 2011 other than Mr. McGurks. His contract continues to
include a tax gross up feature in the event a change of control would result in his receipt of
excess parachute payments. It is considered unlikely such provision will be triggered prior to his
April 2011 planned retirement. In the event of a potential
33
change in control, the Bank will fund a rabbi trust to provide for payment of benefits due to
the Executive Officers under their employment agreements. In consideration for the compensation and
benefits provided under their employment agreements, the Executive Officers are prohibited from
competing with the Bank and the Company during the term of their employment agreements and for a
period of two years following their termination of employment; provided, however, that such
prohibition does not apply in the event of the Executive Officers termination by the Company
without cause within two years following a change in control or the Executive Officers resignation
for good reason within two years following a change in control or the Executive Officers voluntary
resignation without entitlement to severance benefits.
Potential Payments Upon Termination or Change in Control
In considering the change in control provisions for the employment agreements, the
Compensation Committee was mindful of the Banks intent to remain independent. Accordingly, the
Committee believes a change in control situation triggering these provisions, and therefore the
payment of the change in control amounts, is unlikely. Conversely, the change in control provisions
may also serve as a defensive deterrent to an unwanted change in control overture.
The tables below reflect the compensation and benefits due to each of the Named Executive
Officers, following or in connection with any termination of employment. The amounts shown assume
that each termination of employment was effective as of December 31, 2010, and the fair market
value of the Companys common stock was $10.50, the closing price of common stock on the NASDAQ
Global Select Stock Market on that date. The amounts shown in the table are estimates of the
amounts which would be paid upon termination of employment. Actual amounts to be paid can only be
determined at the time of the termination of employment.
Payments and Benefits upon any Termination
Executive officers are entitled to receive earned and unpaid compensation upon any termination
of employment. In addition, all unvested stock awards and all unvested stock options held by the
Executive Officers will be forfeited upon termination of employment, except death, disability,
retirement and change-in-control.
Mr. McGurk, has reached the retirement age defined in his employment agreement. Therefore, his
termination except involuntary termination for cause would be considered Retirement per the
terms of his employment agreement. This Executive Officer is entitled to a lump sum payment equal
to the pro-rata portion of Executives annual target incentive compensation potentially payable in
cash to Executive for the year of termination.
Voluntary Termination
Mr. McGurk has reached the retirement age defined in his employment agreement. Therefore, his
voluntary termination would be considered Retirement per the terms of his employment agreement
and entitled benefits per the terms of Retirements. Mr. McGurk is eligible to post retirement
health care and post retirement life insurance.
An Executive Officer who voluntarily terminates employment is not entitled to any benefits.
Involuntary Termination for Cause
An Executive Officer whose employment is terminated for cause is not entitled to any benefits.
Mr. McGurk is eligible for post retirement health care and post retirement life insurance.
Involuntary Termination Without Cause
Upon an involuntary termination other than for cause, the Executive Officer is entitled to
|
|
|
At December 31, 2010, three times the sum of the Executive Officers Base Salary
immediately prior to termination plus an amount equal to the greater of the portion of the
Executives annual target incentive compensation potentially payable in cash to the
Executive for the year of termination or the portion of the Executives annual incentive
compensation that became payable in cash to the Executive |
34
|
|
|
for the latest year preceding the year of termination. As of January 1, 2011, this benefit was
changed to 11/2 times the sum of the Executive Officers compensation. |
|
|
|
|
A lump sum payment equal to the pro-rata portion of the Executives annual target
incentive compensation potentially payable in cash to the Executive for the year of
termination. |
|
|
|
|
The continuation of benefits, which includes health care, group term life insurance and
long-term disability benefits. |
|
|
|
|
Mr. McGurk is eligible for post-retirement health care and post retirement life
insurance. |
Involuntary Termination or Voluntary Termination for Good Reason after Change-in-Control
Upon an involuntary termination after Change-in-Control, the Executive Officer is entitled to
|
|
|
Three times the sum of the Executive Officers Base Salary immediately prior to
termination plus an amount equal to the greater of the portion of the Executives annual
target incentive compensation potentially payable in cash to the Executive for the year of
termination or the portion of the Executives annual incentive compensation that became
payable in cash to the Executive for the latest year preceding the year of termination. |
|
|
|
|
A lump sum payment equal to the pro-rata portion of the Executives annual target
incentive compensation potentially payable in cash to the Executive for the year of
termination. |
|
|
|
|
The continuation of benefits, which includes health care, group term life insurance and
long-term disability benefits. |
|
|
|
|
A lump-sum tax gross-up payment if the executive becomes subject to the 20% excise tax on
parachute payments. |
|
|
|
|
Mr. McGurk is eligible for post-retirement health care and post-retirement life
insurance. |
Death
The Executive Officers survivor is entitled to receive earned and unpaid compensation upon
the death of the Executive Officer and all unvested stock awards and all unvested stock options
held by the Executive Officer will be accelerated and the beneficiary can exercise the options at
any time within five years from the termination. In addition, the health care benefit will be
continued up to three years.
|
|
|
Mr. McGurks survivors are eligible for post-retirement health care. |
Disability
The Executive Officer is entitled to receive earned and unpaid compensation upon the
separation from service due to disability of the Executive Officer and all unvested stock awards
and all unvested stock options held by the Executive Officer will be accelerated and the Executive
Officer can exercise the options at any time within five years from the termination. In addition,
the health care benefit will be continued until the Executive Officer is eligible for Medicare.
Retirement
The Executive Officer is entitled to receive earned and unpaid compensation upon the
retirement of the Executive Officer and all unvested stock awards and all unvested stock options
held by the Executive Officer will be accelerated and the Executive Officer can exercise the
options at any time within five years from the termination. In addition, the health care benefit
will be continued until the Executive Officer is eligible for Medicare. Mr. McGurk is eligible for
post-retirement health care and post-retirement life insurance.
35
The following table describes the potential payments based upon a hypothetical
termination or a change in control of the Company on December 31, 2010 for William J. McGurk.
Column (d) assumes an involuntary termination of the executive in mid year as opposed to the mere
expiration of the term of his one year employment agreement, for which termination payments would
be substantially less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
or Good |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reason |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary |
|
|
|
|
|
Termination |
|
|
|
|
Executive |
|
|
|
|
|
|
|
|
|
Not For |
|
|
|
|
|
within 2 |
|
|
|
|
benefits and |
|
Voluntary |
|
Normal |
|
Cause |
|
For Cause |
|
Years of a |
|
|
|
|
Payments Upon |
|
Termination |
|
Retirement |
|
Termination |
|
Termination |
|
CIC |
|
Death |
|
Disability |
Termination (a) |
|
$ (b) |
|
$ (c) |
|
$ (d) |
|
$ (e) |
|
$ (f) |
|
$ (g) |
|
$ (h) |
|
Compensation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary |
|
|
0 |
|
|
|
0 |
|
|
|
2,077,305 |
|
|
|
0 |
|
|
|
2,077,305 |
|
|
|
0 |
|
|
|
0 |
|
Short-Term Incentive |
|
|
259,663 |
|
|
|
259,663 |
|
|
|
259,663 |
|
|
|
0 |
|
|
|
259,663 |
|
|
|
259,663 |
|
|
|
259,663 |
|
Stock Option
Unvested and
Accelerated
(1) |
|
|
85,957 |
|
|
|
85,957 |
|
|
|
85,957 |
|
|
|
0 |
|
|
|
85,957 |
|
|
|
85,957 |
|
|
|
85,957 |
|
Restricted Stock
Unvested and
Accelerated |
|
|
230,775 |
|
|
|
230,775 |
|
|
|
230,775 |
|
|
|
0 |
|
|
|
230,775 |
|
|
|
230,775 |
|
|
|
230,775 |
|
Benefits and
Perquisites: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health and Welfare
Benefit
Continuation
(2) |
|
|
244,936 |
|
|
|
244,936 |
|
|
|
282,069 |
|
|
|
244,936 |
|
|
|
282,069 |
|
|
|
160,116 |
|
|
|
265,343 |
|
280G Tax & Gross Up |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
Total: |
|
|
821,331 |
|
|
|
821,331 |
|
|
|
2,935,769 |
|
|
|
244,936 |
|
|
|
2,935,769 |
|
|
|
736,511 |
|
|
|
841,738 |
|
|
|
|
|
(1) |
|
The stock options granted on 12/13/2006 and 8/14/2007 had exercise prices higher than the
stocks closing price as of 12/31/2010. |
|
(2) |
|
Includes postretirement health care, postretirement life insurance, health care continuation
for eligible non-spouse dependent only, group term life benefit and long-term disability
benefit. |
The following table describes the potential payments based upon a hypothetical
termination or a change in control of the Company on December 31, 2010 for Christopher E. Buchholz.
Column (d) assumes an involuntary termination of the executive in mid year as opposed to the mere
expiration of the term of his one year employment agreement, for which termination payments would
be substantially less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
or Good |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reason |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary |
|
|
|
|
|
Termination |
|
|
|
|
Executive |
|
|
|
|
|
|
|
|
|
Not For |
|
|
|
|
|
within 2 |
|
|
|
|
benefits and |
|
Voluntary |
|
Normal |
|
Cause |
|
For Cause |
|
Years of a |
|
|
|
|
Payments Upon |
|
Termination |
|
Retirement |
|
Termination |
|
Termination |
|
CIC |
|
Death |
|
Disability |
Termination (a) |
|
$ (b) |
|
$ (c) |
|
$ (d) |
|
$ (e) |
|
$ (f) |
|
$ (g) |
|
$ (h) |
|
Compensation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary |
|
|
0 |
|
|
|
0 |
|
|
|
953,971 |
|
|
|
0 |
|
|
|
953,971 |
|
|
|
0 |
|
|
|
0 |
|
Short-Term Incentive |
|
|
0 |
|
|
|
0 |
|
|
|
105,997 |
|
|
|
0 |
|
|
|
105,997 |
|
|
|
0 |
|
|
|
0 |
|
Stock Option
Unvested and
Accelerated
(1) |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
26,550 |
|
|
|
26,550 |
|
|
|
26,550 |
|
Restricted Stock
Unvested and
Accelerated |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
91,650 |
|
|
|
91,650 |
|
|
|
91,650 |
|
Benefits and
Perquisites: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health and Welfare
Benefit
Continuation
(2) |
|
|
0 |
|
|
|
0 |
|
|
|
5,485 |
|
|
|
0 |
|
|
|
5,485 |
|
|
|
0 |
|
|
|
15,163 |
|
280G Tax & Gross Up |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
395,065 |
|
|
|
0 |
|
|
|
0 |
|
|
Total: |
|
|
0 |
|
|
|
0 |
|
|
|
1,065,453 |
|
|
|
0 |
|
|
|
1,578,718 |
|
|
|
118,200 |
|
|
|
133,363 |
|
|
|
|
|
(1) |
|
The stock options granted on 12/13/2006 and 8/14/2007 had exercise prices higher than the
stocks closing price as of 12/31/2010. |
|
(2) |
|
Includes postretirement health care, postretirement life insurance, group term life benefit
and long-term disability benefit. |
|
(3) |
|
Mr. Buchholz is vested in the benefit under the Supplemental Executive Retirement Agreement
(Flat $ Benefit) on a plan change effective April 15, 2009. Therefore, there is no additional
benefit upon CIC under this plan any longer. |
36
The following table describes the potential payments based upon a hypothetical
termination or a change in control of the Company on December 31, 2010 for Richard J. Trachimowicz.
Column (d) assumes an involuntary termination of the executive in mid year as opposed to the mere
expiration of the term of his one year employment agreement, for which termination payments would
be substantially less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
or Good |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reason |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary |
|
|
|
|
|
Termination |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not For |
|
|
|
|
|
within 2 |
|
|
|
|
Executive benefits and |
|
Voluntary |
|
Normal |
|
Cause |
|
For Cause |
|
Years of a |
|
|
|
|
Payments Upon |
|
Termination |
|
Retirement |
|
Termination |
|
Termination |
|
CIC |
|
Death |
|
Disability |
Termination (a) |
|
$ (b) |
|
$ (c) |
|
$ (d) |
|
$ (e) |
|
$ (f) |
|
$ (g) |
|
$ (h) |
|
Compensation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary |
|
|
0 |
|
|
|
0 |
|
|
|
846,000 |
|
|
|
0 |
|
|
|
846,000 |
|
|
|
0 |
|
|
|
0 |
|
Short-Term Incentive |
|
|
0 |
|
|
|
0 |
|
|
|
94,000 |
|
|
|
0 |
|
|
|
94,000 |
|
|
|
0 |
|
|
|
0 |
|
Stock Option Unvested and
Accelerated
(1) |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
16,326 |
|
|
|
16,326 |
|
|
|
16,326 |
|
Restricted Stock
Unvested and Accelerated |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
62,933 |
|
|
|
62,933 |
|
|
|
62,933 |
|
Benefits and Perquisites: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health and Welfare
Benefit Continuation
(2) |
|
|
0 |
|
|
|
0 |
|
|
|
74,277 |
|
|
|
0 |
|
|
|
74,277 |
|
|
|
31,217 |
|
|
|
227,127 |
|
Supplemental Executive
Retirement Agreement
Acceleration
(3) |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
280G Tax & Gross Up |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
375,260 |
|
|
|
0 |
|
|
|
0 |
|
|
Total: |
|
|
0 |
|
|
|
0 |
|
|
|
1,014,277 |
|
|
|
0 |
|
|
|
1,468,796 |
|
|
|
110,476 |
|
|
|
306,386 |
|
|
|
|
|
(1) |
|
The stock options granted on 12/13/2006 and 8/14/2007 had exercise prices higher than
the stocks closing price as of 12/31/2010. |
|
(2) |
|
Includes health care continuation, group term life benefit and long-term disability
benefit. The value represents three years continuation of benefits grossed up for tax. For
disability, benefit is assumed to continue until the participant is eligible for Medicare. |
The following table describes the potential payments based upon a hypothetical
termination or a change in control of the Company on December 31, 2010 for John T. Lund. Column (d)
assumes an involuntary termination of the executive in mid year as opposed to the mere expiration
of the term of his one year employment agreement, for which termination payments would be
substantially less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
or Good |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reason |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary |
|
|
|
|
|
Termination |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not For |
|
|
|
|
|
within 2 |
|
|
|
|
Executive benefits and |
|
Voluntary |
|
Normal |
|
Cause |
|
For Cause |
|
Years of a |
|
|
|
|
Payments Upon |
|
Termination |
|
Retirement |
|
Termination |
|
Termination |
|
CIC |
|
Death |
|
Disability |
Termination (a) |
|
$ (b) |
|
$ (c) |
|
$ (d) |
|
$ (e) |
|
$ (f) |
|
$ (g) |
|
$ (h) |
|
Compensation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary |
|
|
0 |
|
|
|
0 |
|
|
|
735,801 |
|
|
|
0 |
|
|
|
735,801 |
|
|
|
0 |
|
|
|
0 |
|
Short-Term Incentive |
|
|
0 |
|
|
|
0 |
|
|
|
65,267 |
|
|
|
0 |
|
|
|
65,267 |
|
|
|
0 |
|
|
|
0 |
|
Stock Option Unvested and
Accelerated
(1) |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
14,745 |
|
|
|
14,745 |
|
|
|
14,745 |
|
Restricted Stock
Unvested and Accelerated |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
25,662 |
|
|
|
25,662 |
|
|
|
25,662 |
|
Benefits and
Perquisites: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health and Welfare
Benefit Continuation
(2) |
|
|
0 |
|
|
|
0 |
|
|
|
99,476 |
|
|
|
0 |
|
|
|
99,476 |
|
|
|
95,250 |
|
|
|
850,403 |
|
280G Tax & Gross Up |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
370,761 |
|
|
|
0 |
|
|
|
0 |
|
|
Total: |
|
|
0 |
|
|
|
0 |
|
|
|
900,544 |
|
|
|
0 |
|
|
|
1,311,712 |
|
|
|
135,657 |
|
|
|
890,810 |
|
|
|
|
|
(1) |
|
The stock options granted on 12/13/2006 and 8/14/2007 had exercise prices higher than the
stocks closing price as of 12/31/2010. |
|
(2) |
|
Includes health care continuation, group term life benefit and long-term disability benefit.
The value represents three years continuation of benefits grossed up for tax. For disability,
benefit is assumed to continue until the participant is eligible for Medicare. |
37
The following table describes the potential payments based upon a hypothetical
termination or a change in control of the Company on December 31, 2010 for Mark A. Kucia.
Column (d) assumes an involuntary termination of the executive in mid year as opposed to
the mere expiration of the term of his one year employment agreement, for which termination
payments would be substantially less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
or Good |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reason |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary |
|
|
|
|
|
Termination |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not For |
|
|
|
|
|
within 2 |
|
|
|
|
Executive benefits and |
|
Voluntary |
|
Normal |
|
Cause |
|
For Cause |
|
Years of a |
|
|
|
|
Payments Upon |
|
Termination |
|
Retirement |
|
Termination |
|
Termination |
|
CIC |
|
Death |
|
Disability |
Termination (a) |
|
$ (b) |
|
$ (c) |
|
$ (d) |
|
$ (e) |
|
$ (f) |
|
$ (g) |
|
$ (h) |
|
Compensation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary |
|
|
0 |
|
|
|
0 |
|
|
|
735,801 |
|
|
|
0 |
|
|
|
735,801 |
|
|
|
0 |
|
|
|
0 |
|
Short-Term Incentive |
|
|
0 |
|
|
|
0 |
|
|
|
65,267 |
|
|
|
0 |
|
|
|
65,267 |
|
|
|
0 |
|
|
|
0 |
|
Stock Option Unvested and
Accelerated
(1) |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
14,453 |
|
|
|
14,453 |
|
|
|
14,453 |
|
Restricted Stock
Unvested and Accelerated |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
53,768 |
|
|
|
53,768 |
|
|
|
53,768 |
|
Benefits and
Perquisites: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health and Welfare
Benefit Continuation
(2) |
|
|
0 |
|
|
|
0 |
|
|
|
4,226 |
|
|
|
0 |
|
|
|
4,226 |
|
|
|
0 |
|
|
|
21,683 |
|
280G Tax & Gross Up |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
313,371 |
|
|
|
0 |
|
|
|
0 |
|
|
Total: |
|
|
0 |
|
|
|
0 |
|
|
|
805,294 |
|
|
|
0 |
|
|
|
1,186,886 |
|
|
|
68,221 |
|
|
|
89,904 |
|
|
|
|
|
(1) |
|
The stock options granted on 12/13/2006 and 8/14/2007 had exercise prices higher than the
stocks closing price as of 12/31/2010. |
|
(2) |
|
Includes health care continuation, group term life benefit and long-term disability benefit.
The value represents three years continuation of benefits grossed up for tax. For voluntary
termination or disability, benefit is assumed to continue until the participant is eligible
for Medicare and for his spouse until the expiration of her COBRA continuation period. |
Director Compensation
Director Fees
After the Compensation Committee reviewed the results of the analysis on Board of Directors
Compensation completed by Pearl Meyer & Partners in 2010, and in recognition of the economic
climate, the Compensation Committee recommended not increasing Board of Directors meeting fees from
$900 per meeting. Other Board of Directors Compensation also remained the same.
Each non-employee Director receives an annual retainer of $10,200, $900 for each Board meeting
and $850 for each Committee meeting that he or she attends. In addition to the above fees, the
Chairman of the Board also receives an annual retainer of $21,000, and the Vice Chairman of the
Board, the Audit Committee Chairman, and the Compensation Committee Chairman receive annual
retainers of $11,400. The Company paid fees totaling $469,275 to non-employee Directors during the
fiscal year ended December 31, 2010. Directors are not paid separately for their services on the
Board of both the Company and the Bank.
On November 15, 2010, each non-employee Director received 3,500 shares of stock options except
for Mr. Jeamel who received 4,500 shares of stock options. The exercise price of these options is
$11.25, the grant date closing price. The grant date fair value for each stock option award is
$15,925, except for Mr. Jeamel whose grant date fair value is $20,475. These options vested 20%
immediately and the remaining 20% will vest annually on each anniversary of the grant date over the
next four years.
38
The following table details the compensation paid to each of our non-management Directors in
2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value |
|
|
|
|
|
|
Fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
and |
|
|
|
|
|
|
Earned |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified |
|
|
|
|
|
|
or Paid |
|
Stock |
|
|
|
|
|
Non-Equity |
|
Deferred |
|
|
|
|
|
|
in |
|
Awards |
|
Option Awards |
|
Incentive Plan |
|
Compensation |
|
All Other |
|
|
|
|
Cash |
|
(2) |
|
(3) |
|
Compensation |
|
Earnings |
|
Compensation(4) |
|
Total |
Name |
|
($) |
|
($) |
|
($) |
|
($) |
|
($) |
|
($) |
|
($) |
Michael A. Bars |
|
|
57,425 |
|
|
|
0 |
|
|
|
15,925 |
|
|
|
0 |
|
|
|
0 |
|
|
|
490 |
|
|
|
73,840 |
|
C. Perry Chilberg |
|
|
39,650 |
|
|
|
0 |
|
|
|
15,925 |
|
|
|
0 |
|
|
|
0 |
|
|
|
490 |
|
|
|
56,065 |
|
David A. Engelson |
|
|
56,150 |
|
|
|
0 |
|
|
|
15,925 |
|
|
|
0 |
|
|
|
0 |
|
|
|
611 |
|
|
|
72,686 |
|
Pamela J.Guenard |
|
|
30,400 |
|
|
|
0 |
|
|
|
15,925 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
46,325 |
|
Joseph F. Jeamel |
|
|
19,475 |
|
|
|
0 |
|
|
|
20,475 |
|
|
|
0 |
|
|
|
0 |
|
|
|
3,570 |
(5) |
|
|
43,520 |
|
Raymond H. Lefurge,
Jr. |
|
|
67,450 |
|
|
|
0 |
|
|
|
15,925 |
|
|
|
0 |
|
|
|
0 |
|
|
|
490 |
|
|
|
83,865 |
|
Kristen A. Johnson |
|
|
21,025 |
|
|
|
0 |
|
|
|
15,925 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
36,950 |
|
Stuart E. Magdefrau |
|
|
43,050 |
|
|
|
0 |
|
|
|
15,925 |
|
|
|
0 |
|
|
|
0 |
|
|
|
490 |
|
|
|
59,465 |
|
Thomas S. Mason |
|
|
44,250 |
(1) |
|
|
0 |
|
|
|
15,925 |
|
|
|
0 |
|
|
|
0 |
|
|
|
611 |
|
|
|
60,786 |
|
Rosemarie Novello
Papa |
|
|
34,550 |
|
|
|
0 |
|
|
|
15,925 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
50,475 |
|
Peter F. Olson |
|
|
41,300 |
|
|
|
0 |
|
|
|
15,925 |
|
|
|
0 |
|
|
|
0 |
|
|
|
490 |
|
|
|
57,715 |
|
Richard M.Tkacz |
|
|
36,675 |
|
|
|
0 |
|
|
|
15,925 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
52,600 |
|
|
|
|
(1) |
|
Mr. Mason elected to defer 50% of his annual fees, $22,125. |
|
(2) |
|
These amounts represent the aggregate grant date fair value of restricted stock awards in
accordance with FASB Topic 718. Assumptions made in valuing these awards are disclosed in
footnote 14, Share-Based Compensation to the Companys Consolidated Financial Statements for
the year ended December 31, 2010 as contained in the Companys Annual Report on Form 10-K
incorporated herein by reference. Directors do not have any unvested shares as of December 31,
2010. |
|
(3) |
|
These amounts represent the aggregate grant date fair value of restricted stock awards in
accordance with FASB Topic 718. Assumptions made in valuing these awards are disclosed in
footnote 14, Share-Based Compensation to the Companys Consolidated Financial Statements for
the year ended December 31, 2010 as contained in the Companys Annual Report on Form 10-K
incorporated herein by reference. As of December 31, 2010, Directors have the following
unvested shares; Bars 6,300 shares; Chilberg 6,300 shares; Engelson 6,300 shares;
Guenard 6,300 shares; Jeamel 3,600 shares; Johnson 2,800 shares; Lefurge 6,300
shares; Magdefrau 6,300 shares; Mason 6,300 shares; Papa 6,300 shares; Olson 6,300
shares; and Tkacz 6,300 shares. |
|
(4) |
|
Reflects dividends paid for unvested restricted stock owned by each Director in 2010. |
|
(5) |
|
Mr. Jeamel was paid a pro-rated bonus of $60,872, for his service as an executive officer
during 2010. In addition, he also received the following benefits during 2010: Flat $ SERP -
Benefits paid during 2010 of $27,636 (Note no benefits accrued during 2010), and a Qualified
Pension Benefits paid during 2010 of $71,654 (Change in Pension value during 2010 of
$110,083). |
39
Deferred Compensation Plan
The Bank maintains the Rockville Bank Non-Qualified Deferred Compensation Plan for Directors,
a non-qualified plan that permits Directors to defer all or part of their total fees for a plan
year in 25% increments. The participants in the Non-Qualified Deferred Compensation Plan direct the
investment of their deferred amounts among several investment funds. Participants elect the method
of payment of their deferral accounts either on a date certain or upon termination of their service
as a Director. Participants may elect to receive the deferral amounts in a lump sum payment or in
consecutive annual installments over a period not to exceed five years. The Bank accrued expenses
totaling $9,300 to Directors in connection with this plan during the fiscal year ended December 31,
2010.
Compensation in the form of perquisites and other personal benefits provided by us has been
omitted for all individual Directors as the total amount of those perquisites and personal benefits
constituted less than $10,000 for 2010 for each.
Certain Relationships and Related Transactions
Federal regulations require that all loans or extensions of credit to executive officers and
directors of insured institutions must be made on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable transactions with other
persons, and must not involve more than the normal risk of repayment or present other unfavorable
features. Notwithstanding this rule, federal regulations permit banks like Rockville Bank to make
loans to executive officers and directors at reduced interest rates if the loan is made under a
benefit program generally available to all Bank employees and does not give preference to any
executive officer or director over any other employee. Rockville Bank maintains certain loan
programs whereby employees with one year of service or more, including executive officers and
directors, may obtain loans with an interest rate discount. From time to time, Rockville Bank also
makes loans and extensions of credit, directly and indirectly, to its executive officers and
directors that are not part of an employee discount loan program. These loans are made in the
ordinary course of business, are made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable loans with persons not related to
Rockville Bank, and do not involve more than the normal risk of collectibility or present other
unfavorable features.
The following information is furnished for outstanding loans made by Rockville Bank to
executive officers and directors under the discounted loan programs:
40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Largest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal |
|
Principal |
|
|
|
|
Original |
|
|
|
|
|
Original |
|
|
|
|
|
Outstanding |
|
Balance as of |
|
Interest Paid |
Name |
|
Loan Date |
|
Loan Type |
|
Note Rate |
|
Current Rate |
|
During 2010 |
|
12/31/10 |
|
During 2010 |
Michael A. Bars* |
|
|
3/3/2006 |
|
|
Fixed |
|
|
6.375 |
% |
|
|
4.75 |
% |
|
$ |
229,952.96 |
|
|
$ |
221,222.43 |
|
|
$ |
10,734.31 |
|
|
|
|
|
|
|
Residential |
|
|
|
|
|
Rate Modified |
|
|
|
|
|
|
|
|
|
|
|
|
Judy Keppner Clark |
|
|
7/21/2008 |
|
|
Fixed |
|
|
5.125 |
% |
|
|
4.625 |
% |
|
$ |
78,454.96 |
|
|
$ |
72,867.41 |
|
|
$ |
3,512.45 |
|
|
|
|
|
|
|
Residential |
|
|
|
|
|
Rate Modified |
|
|
|
|
|
|
|
|
|
|
|
|
David A. Engelson* |
|
|
10/22/2004 |
|
|
Fixed |
|
|
5.375 |
% |
|
|
4.500 |
% |
|
$ |
53,395.33 |
|
|
$ |
31,347.05 |
|
|
$ |
1,951.72 |
|
|
|
|
|
|
|
Residential |
|
|
|
|
|
Rate Modified |
|
|
|
|
|
|
|
|
|
|
|
|
Pamela J. Guenard |
|
|
8/13/2003 |
|
|
Fixed |
|
|
5.375 |
% |
|
|
5.375 |
% |
|
$ |
90,671.41 |
|
|
$ |
87,898.67 |
|
|
$ |
4,813.12 |
|
|
|
|
|
|
|
Residential |
|
|
|
|
|
No employee rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
reduction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
requested. |
|
|
|
|
|
|
|
|
|
|
|
|
Kristen A. Johnson |
|
|
8/26/2008 |
|
|
ARM Loan |
|
|
5.50 |
% |
|
|
5.50 |
% |
|
$ |
97,228.39 |
|
|
$ |
94,162.19 |
|
|
$ |
5,271.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
No employee rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
reduction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
requested. |
|
|
|
|
|
|
|
|
|
|
|
|
John T. Lund |
|
|
6/10/2009 |
|
|
Fixed |
|
|
4.875 |
% |
|
|
4.375 |
% |
|
$ |
286,391.89 |
|
|
$ |
276,935.41 |
|
|
$ |
12,341.52 |
|
|
|
|
|
|
|
Residential |
|
|
|
|
|
Rate Modified |
|
|
|
|
|
|
|
|
|
|
|
|
William J. McGurk |
|
|
5/5/2003 |
|
|
ARM Loan- |
|
|
4.250 |
% |
|
|
2.75 |
% |
|
$ |
37,402.98 |
|
|
$ |
27,717.03 |
|
|
$ |
851.03 |
|
|
|
|
|
|
|
.50% off Rate |
|
|
|
|
|
Rate Modified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Margin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peter F. Olson |
|
|
6/21/2004 |
|
|
Fixed |
|
|
5.000 |
% |
|
|
4.500 |
% |
|
$ |
89,193.05 |
|
|
$ |
81,576.01 |
|
|
$ |
3,857.84 |
|
|
|
|
|
|
|
Residential |
|
|
|
|
|
Rate Modified |
|
|
|
|
|
|
|
|
|
|
|
|
Rosemarie N. Papa |
|
|
6/29/2009 |
|
|
Fixed |
|
|
4.750 |
% |
|
|
4.750 |
% |
|
$ |
294,224.46 |
|
|
$ |
279,888.68 |
|
|
$ |
13,666.22 |
|
|
|
|
|
|
|
Residential |
|
|
|
|
|
No employee rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
reduction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
requested |
|
|
|
|
|
|
|
|
|
|
|
|
Richard M. Tkacz |
|
|
7/21/2007 |
|
|
Fixed Rate |
|
|
6.500 |
% |
|
|
6.500 |
% |
|
$ |
116,589.47 |
|
|
$ |
111,456.00 |
|
|
$ |
6,707.10 |
|
|
|
|
|
|
|
Home Equity |
|
|
|
|
|
No employee rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
reduction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
requested. |
|
|
|
|
|
|
|
|
|
|
|
|
Richard J. Trachimowicz |
|
|
9/29/2008 |
|
|
ARM Loan- |
|
|
5.375 |
% |
|
|
4.875 |
% |
|
$ |
291,750.14 |
|
|
$ |
286,919.54 |
|
|
$ |
14,117.77 |
|
|
|
|
|
|
|
.50% off Rate |
|
|
|
|
|
Rate Modified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Margin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Rate modified for $500 fee when we offered a modification program. This has since been
discontinued. |
ELECTION OF DIRECTORS
(Proposal 1)
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
ELECTION OF JOSEPH F. JEAMEL, JR. TO SERVE AS DIRECTOR OF THE COMPANY FOR A
TERM OF TWO YEARS, THE ELECTION OF WILLIAM H. W. CRAWFORD, IV TO SERVE AS
DIRECTOR OF THE COMPANY FOR A TERM OF THREE YEARS AND THE ELECTION OF
C. PERRY CHILBERG, KRISTEN A. JOHNSON AND ROSEMARIE NOVELLO PAPA TO SERVE AS
DIRECTORS OF THE COMPANY FOR A TERM OF FOUR YEARS, AND UNTIL THEIR
RESPECTIVE SUCCESSORS ARE QUALIFIED AND ELECTED.
41
ADVISORY (NON-BINDING) VOTE ON EXECUTIVE COMPENSATION
(Proposal 2)
As part of our commitment to corporate governance best practices, and as required by the
Section 14A(a)(2) of the Exchange Act, the Companys Board of Directors is providing shareholders
with the opportunity to cast an advisory vote on its compensation program at the Meeting through
the following resolution:
RESOLVED, that the shareholders approve the Companys executive compensation, as described in
the Compensation Discussion and Analysis and the tabular disclosure regarding named executive
officer compensation (together with the accompanying narrative disclosure) in this Proxy
Statement.
We believe that our compensation policies and procedures, which are described more fully in
the Compensation Discussion and Analysis section of this Proxy Statement and in the tables and
narrative in the Executive Compensation section, are strongly aligned with the long-term
interests of shareholders. Rockvilles executive compensation philosophy is designed to support the
Banks business objectives to be Connecticuts Best Community Bank by adopting a total
compensation program that is attractive, market-based, tied to performance and aligned with
shareholders interests. We believe the Banks objective of remaining community centric, focusing
on quality personal service, and expanding its lending activities, banking networks and consumer
products, will be enhanced by this strategy. Our compensation programs are designed to consider
competitive market data, specific role functions that may be unique to our structure, internal
equity and the performance of both the individual and the Company. We believe this approach will
help us attract, retain and reward the best employees, fulfill the Companys growth objectives and
promote shareholder value.
Approval of this proposal will require the affirmative vote of a majority of our common stock
represented in person or by proxy at the Meeting. This vote will not be binding on or overrule any
decisions by the Board of Directors or the Compensation Committee, will not create or imply any
additional fiduciary duty on the part of the Board of Directors or the Compensation Committee, and
will not restrict or limit the ability of our shareholders to make proposals in the future for
inclusion in proxy materials related to executive compensation. The Compensation Committee and the
Board of Directors will, however, take into account the outcome of the vote when considering future
executive compensation arrangements.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE COMPANYS EXECUTIVE
COMPENSATION, AS DESCRIBED IN COMPENSATION DISCUSSION AND ANALYSIS, AND THE TABULAR DISCLOSURE
REGARDING NAMED EXECUTIVE OFFICER COMPENSATION (TOGETHER WITH ACCOMPANYING NARRATIVE DISCLOSURE) IN
THIS PROXY STATEMENT.
ADVISORY VOTE ON THE FREQUENCY OF ADVISORY VOTES ON
EXECUTIVE COMPENSATION
(Proposal 3)
As an additional part of our commitment corporate governance best practices, and as
required by the Section 14A(a)(2) of the Exchange Act, the Companys Board of Directors is
providing shareholders with the opportunity to provide an advisory vote to assist the Board in
determining whether the shareholder advisory vote on executive compensation should occur every one,
two or three years.
Consistent with the Companys compensation philosophy, the Companys executive compensation
program promotes a total compensation program designed to support our belief that all executives
should have a significant portion of their compensation tied to performance. We define performance
to reflect a balance of Company and individual performance on both a short- and long-term basis. In
setting our total compensation guidelines, we target a significant portion of our compensation in
the form of annual cash incentives and equity/long-term incentive awards that focus on
performance-based, at-risk compensation. Stock options and restricted stock granted in 2010 vest
20% immediately and 20% annually over the next four years, consistent with a long-term view of the
creation and maintenance of shareholder value. In addition, the Company generally maintains one
year employment contracts for its executives (except for the initial contract term for Mr. Crawford
who is scheduled to succeed Mr. McGurk upon the latters retirement as President and Chief
Executive Officer effective at the Annual Meeting of Shareholders.
42
The Company believes holding an advisory vote on executive compensation every three years
would allow the Company to conduct a meaningful and detailed review of its pay practices in
response to such shareholder advisory vote on executive compensation and that a more frequent vote
is not necessary given the long-term nature of the Companys business plan and the Companys
compliance with best practices related to compensation.
For the reasons discussed above, the Board of Directors recommends that shareholders vote to
hold the advisory vote on executive compensation every three years. Shareholders are not voting,
however, to approve or disapprove of this particular recommendation. The proxy card provides for
four choices and shareholders are entitled to vote on whether the advisory vote on executive
compensation should be held every one, two, or three years, or to abstain from voting.
While the result of this advisory vote on the frequency of the vote on executive compensation
is non-binding, the Board of Directors values the opinions that shareholders express in their
votes. It will consider the outcome of the vote and those opinions when deciding how frequently to
conduct the vote on executive compensation.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
TO HOLD THE ADVISORY VOTE ON EXECUTIVE COMPENSATION EVERY THREE YEARS.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(Proposal 4)
The Audit Committee has appointed the firm of Wolf & Company, P.C.
to be independent auditors for Rockville for the year ending
December 31, 2011, subject to ratification of the appointment by
Rockvilles shareholders. Unless otherwise indicated, properly
executed proxies will be voted in favor of ratifying the
appointment of Wolf & Company, P.C., independent certified public
accountants, to audit the books and accounts of Rockville for the
year ending December 31, 2011. If Rockvilles shareholders do not
ratify the appointment, the Audit Committee will consider a change
in auditors for the next year.
Wolf & Company, P.C. has advised Rockville that they are
independent accountants with respect to Rockville, within the
meaning of standards established by the Independence Standards
Board and federal securities laws administered by the SEC.
Assuming the presence of a quorum at the Annual Meeting, the
affirmative vote of the majority of the votes cast is required to
ratify the appointment of Wolf & Company, P.C. as Rockvilles
independent auditors for the year ending December 31, 2011.
Representatives of Wolf & Company, P.C., the Companys independent
registered public accounting firm for the year ended December 31,
2010, are expected to be present at the Annual Meeting. They will
be given an opportunity to make a statement if they desire to do so
and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR RATIFICATION
OF THE APPOINTMENT OF WOLF & COMPANY, P.C. AS ROCKVILLES INDEPENDENT AUDITORS
FOR THE YEAR ENDING DECEMBER 31, 2011.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors
knows of no matters to be brought before the Annual Meeting other
than procedural matters incident to the conduct of the Annual
Meeting. If further business is properly presented, the proxy
holders will vote proxies, as determined by a majority of the Board
of Directors.
43
SHAREHOLDER PROPOSALS FOR 2012 ANNUAL MEETING
Pursuant to the proxy solicitation regulations of the SEC, any
shareholder proposal intended for inclusion in the Companys proxy
statement and form of proxy relating to the Companys 2012 Annual
Meeting of Shareholders must be received by the Company by November
30, 2011. The Companys 2012 Annual Meeting of Shareholders is
currently scheduled to take place on April 24, 2012. Nothing in
this paragraph shall be deemed to require Rockville to include in
its proxy statement and form of proxy any shareholder proposal
which does not meet the requirements of the SEC in effect at the
time.
ANNUAL REPORTS
Copies of the Companys 2010 Annual Report to Shareholders, which
includes its Annual Report to the SEC on Form 10-K for the year
ended December 31, 2010, accompanying this proxy statement are not
a part of the proxy solicitation materials. The Annual Report to
the SEC accompanying this proxy statement does not include the Form
10-Ks exhibits filed with the SEC. These exhibits are listed in
the Form 10-K and can be viewed on the SECs website (www.sec.gov)
or, upon written request, we will provide any recipient of this
proxy statement, free of charge, all exhibits filed at the SEC with
the Form 10-K. Requests should be directed to Marliese L. Shaw,
Investor Relations, Rockville Financial, Inc.,
25 Park Street, Rockville, CT 06066.
PROXY STATEMENT
Important Notice Regarding the Availability of Proxy Materials for
the Shareholder Meeting to be held on April 26, 2011. The proxy
statement, the 2010 Annual Report to Shareholders and the form of
proxy are available at http://www.cfpproxy.com/5820.
The Board of Directors urges each shareholder, whether or not he or
she intends to be present at the Annual Meeting, to complete, sign
and return the enclosed proxy as promptly as possible.
|
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By Order of the Board of Directors
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Judy Keppner Clark |
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Secretary |
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REVOCABLE PROXY
ROCKVILLE FINANCIAL, INC.
ANNUAL MEETING OF SHAREHOLDERS
APRIL 26, 2011
10:00 a.m.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned being a shareholder of Rockville Financial, Inc. hereby appoints Raymond
H. Lefurge, Jr., Michael A. Bars and Peter F. Olson or each of them, with full power of
subsitution in each, as proxies to cast all votes which the undersigned shareholder in entitled
to cast at the 2011 Annual Meeting of shareholders to be held at 10:00 a.m., local time, on
April 26, 2011, at Maneeleys Banquet Facility, 65 Rye Street, South Windsor, Connecticut 06074,
and it any adjournment thereof. The undersigned Shareholder hereby revokes any proxy or proxies
heretofore given.
This proxy will be voted as directed or, if no direction is given, will be voted FOR the
nominees under proposal 1, FOR the approval of the Companys executive compensation in
Proposal 2, FOR a three year frequency in Proposal 3, FOR the ratification of Rockville
Financial, Inc.s appointment of Independent auditors in Proposal 4; and in accordance with the
determination of a majority of the Board of Directors as to any other matters. If the proxy is
not marked to withhold authority to vote the nominees, it will be voted FOR the nominees.
If you receive more than one proxy card, please sign and return all cards in the accompanying
envelope. Please check your mailing address as it appears on the Revocable Proxy. If it
is inaccurate, please include your correct address below.
PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY CARD PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE OR PROVIDE YOUR INSTRUCTIONS TO VOTE VIA
THE INTERNET OR BY TELEPHONE.
(Continued, and to be marked, dated and signed, on the other side)
FOLD AND DETACH HERE
ROCKVILLE FINANCIAL, INC. ANNUAL MEETING, APRIL 26, 2011
YOUR VOTE IS IMPORTANT!
Annual Meeting Materials are available on-line at:
http://www.cfpproxy.com/6979
You can vote in one of three ways:
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Call toll free 1-866-598-8804 on a Touch-Tone Phone. There is NO CHARGE to you for
this call. |
or
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Via the Internet at https://www.proxyvotenow.com/rckb and follow the
instructions. |
or
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Mark, sign and date your proxy card and return it promptly in the enclosed envelope. |
PLEASE SEE REVERSE SIDE FOR VOTING INSTRUCTIONS
6979
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PLEASE MARK VOTES AS IN THIS EXAMPLE
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REVOCABLE PROXY
ROCKVILLE FINANCIAL, INC.
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Annual Meeting of Shareholders
APRIL 26, 2011 |
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With- |
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For All |
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For |
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hold |
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Except |
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1. Election of three Directors for a four
year term: |
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(01) C. Perry Chilberg |
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(02) Kristen A. Johnson |
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(03) Rosemarie Novello Papa |
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Election of one Director for a three year term: |
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(04) William H.W. Crawford, IV |
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Election of one Director for a two year term: |
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(05) Joseph F. Jeamel, Jr. |
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INSTRUCTION: To withhold authority to vote for any nominee(s), mark For All Except
and write that nominee(s) name(s) or number(s) in the space provided below.
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Please be sure to date and sign
this proxy card in the box below.
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Date |
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Sign above |
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Co-holder (if any) sign above |
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For
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Against
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Abstain |
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Approval of the Companys executive compensation as
described in the Compensation Discussion and Analysis and
the tabular disclosure regarding named
executive officer compensation (together with the accompanying narrative disclosure) in the Proxy Statement.
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One
Year
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Two
Years
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Three
Years
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Abstain |
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3.
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Approval to hold the advisory vote on executive
compensation every three years.
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For
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Against
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Abstain |
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Ratification of the appointment of Wolf & Company P.C. as
independent auditors for the current year. |
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The Board of Directors recommends a vote FOR Proposals 1, 2 and 4, and for a
three year frequncy on Proposal 3.
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Mark here if you plan to attend the meeting
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Mark here for address change and note change |
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Please date this Revocable Proxy and sign,
exactly as your name(s) appears on your stock certificate.
When shares are held jointly, each holder should sign. When
signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is
a corporation, please sign full corporate name by duly
authorized officer, giving full title as such. If signer is
a partnership, please sign in partnership name by
authorized person.
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IF YOU WISH TO PROVIDE YOUR INSTRUCTIONS TO VOTE BY TELEPHONE OR INTERNET,
PLEASE READ THE INSTRUCTIONS BELOW
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FOLD AND DETACH HERE IF YOU ARE VOTING BY MAIL
PROXY VOTING INSTRUCTIONS
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![()](y90198y9019806.gif) |
Shareholders of record have three ways to vote:
1. By Mail; or
2. By Telephone (using a Touch-Tone Phone); or
3. By Internet.
A telephone or Internet vote authorizes the named proxies to vote your shares in the same manner as
if you marked, signed, dated and returned this proxy. Please note telephone and Internet votes must
be cast prior to 3 a.m., April 26, 2011. It is not necessary to
return this proxy if you vote by telephone or Internet.
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Vote by Telephone
Call Toll-Free on a Touch-Tone Phone anytime prior to
3 a.m., April 26, 2011:
1-866-598-8804
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Vote by Internet
anytime prior to
3 a.m., April 26, 2011 go to
https://www.proxyvotenow.com/rckb
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Please note that the last vote received, whether by telephone, Internet or by mail, will be the vote counted.
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ON-LINE ANNUAL MEETING MATERIALS:
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http://www.cfpproxy.com/6979 |