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TRINITY
CAPITAL CORPORATION
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2010
· Proxy Statement
· 49
Pages
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April
17, 2010
Dear
Shareholder:
On behalf of the Board of Directors and
management of Trinity Capital Corporation, we cordially invite you to attend the
Annual Meeting of Shareholders of Trinity Capital Corporation to be held at 6:00
p.m. on May 27, 2010, at the Hilltop House Hotel located at 400 Trinity Drive,
Los Alamos, New Mexico. This Proxy Statement discusses the business to be
conducted at the meeting. At the meeting we will report on 2009 operations and
results as well as year-to-date results and the outlook for the year
ahead.
The Board of Directors has nominated
three persons to serve as Class I directors, each of whom is an incumbent
director. We recommend you vote your shares “for” the director nominees.
Trinity’s Audit Committee has selected, and we recommend that you vote “for” the
ratification of Moss Adams, LLP to serve as our independent registered public
accounting firm for the year ending December 31, 2010. The Board of Directors is
also presenting for consideration an advisory resolution approving the
compensation of Trinity’s Named Executive Officers and we recommend you vote
"for" approval of the resolution.
We have
again delivered your Annual Report and Proxy Statement via the Internet. We are
pleased to deliver documents in this manner as it embraces our values of
Innovation and Social Responsibility and will reduce waste as well as the costs
associated with printing and mailing Trinity’s Annual Report and Proxy
Statement. However, if you wish to receive a printed copy of these documents,
please contact us and we will send one within three business
days. Under the Security and Exchange Commission’s regulations, we
cannot send the Proxy Card with your Notice of Availability prior to 10 days
following mailing of that Notice.
You
may vote now on-line at http://www.lanb.com/Annual-Report.aspx or you may wait
until you receive a Proxy Card in the mail on or about April 27, 2010.
Instructions for voting are included on Page 5 of this Proxy
Statement.
We look forward to seeing and visiting
with you at the meeting.
Very
truly yours,
Bill
Enloe
President
and Chief Executive Officer
Page 1..………………………………………….……………………………… Trinity
Capital Corporation 2010 Proxy Statement
Notice
of 2010 Annual Meeting of Shareholders
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF
PROXY
MATERIALS FOR THE SHAREHOLDER MEETING
TO
BE HELD ON MAY 27, 2010
| Time: | 6:00 p.m. on Thursday, May 27, 2010 | |
| with hors d' oeuvres beginning at 5:00 p.m. | ||
| Place: | Hilltop House Hotel | |
| 400 Trinity Drive | ||
| Los Alamos, New Mexico | ||
| Items of Business: | 1. Election of three members to the Board of Directors; | |
| 2. Ratification of the appointment of Moss Adams, LLP as Trinity’s independent registered public accounting firm for the year ending December 31, 2010; | ||
| 3. To consider and approve an advisory resolution approving the compensation of Trinity’s Named Executive Officers; and | ||
| 4. The transaction of such other business as may properly be brought before the meeting and any adjournments or postponements of the meeting. | ||
| Record Date: | You can vote if you were a shareholder of record on March 15, 2010. | |
| Annual Report: | Trinity’s 2009 Annual Report is available on-line at http://www.lanb.com/Annual-Report.aspx. If you wish to receive a physical copy of the Annual Report or this Proxy Statement, please contact us: | |
|
By Telephone at: (800)
525-9634 or (505) 662-1099
By E-Mail
at: tcc@lanb.com
By U.S. Mail
at: Trinity Capital
Corporation
Stock
Representative
Post
Office Box 60
Los Alamos, New Mexico
87544
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| Proxy Voting: |
It
is important that your shares are represented and voted at the Annual
Meeting. You can vote your shares online or by completing and returning
the Proxy Card sent to you. You can revoke a proxy at any time prior to
its exercise at the Annual Meeting by following the instructions in this
Proxy Statement.
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Steve
W. Wells
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Secretary
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April
17, 2010
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Page 2.………………………………………….……………………………… Trinity
Capital Corporation 2010 Proxy Statement
Page 3.………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
2010
Proxy Statement
This Proxy Statement is being furnished to shareholders of Trinity Capital
Corporation, a New Mexico corporation (“Trinity”) with its principal executive
offices located in Los Alamos, New Mexico, in connection with the solicitation
by Trinity’s Board of Directors (“Board”) of proxies to be used at the 2010
Annual Meeting of Shareholders. The Annual Meeting will be held on May 27, 2010,
at the Hilltop House Hotel located at 400 Trinity Drive, Los Alamos, New Mexico
at 6:00 p.m., or at any adjournments or postponements of the
meeting.
Trinity is a financial holding company
which owns all of the common shares in Los Alamos National Bank, a national
banking organization (“LANB”), and Title Guaranty & Insurance Company
(“Title Guaranty”), a New Mexico corporation, and four special purpose business
trusts, created for the sole purpose of issuing an aggregate of $37.1 million in
trust preferred securities. LANB also holds interests in: TCC Advisors
Corporation, a New Mexico Corporation as the sole shareholders, Finance New
Mexico Investment Fund IV, LLC, holding 100% of the membership interests and
holds a 24% membership interest in Cottonwood Technology Group, a New Mexico
limited liability company.
Trinity’s
Annual Report, including the consolidated financial statements for the year
ended December 31, 2009, along with this Proxy Statement is first being made
available to shareholders on or about April 17, 2010, via notice and electronic
delivery. Physical copies of this Proxy Statement and Trinity’s Annual Report
are available upon request.
Annual
Meeting
Purpose of Annual
Meeting. The Annual Meeting is held to allow shareholders to act upon the
matters outlined in the Notice of Annual Meeting of Shareholders, including the
election of directors, the ratification of Trinity’s independent registered
public accounting firm and approval of an advisory (non-binding) resolution
approving the compensation of Trinity’s Named Executive Officers. In addition,
management will report on the 2009 and year-to-date performance of Trinity and
respond to questions from shareholders.
Shareholders
Entitled to Vote and Voting Rights. Shareholders of record as of the
close of business on March 15, 2010, the record date for the Annual Meeting,
will be entitled to vote their shares at the Annual Meeting. As of the record
date, there were 6,440,784 shares of common stock outstanding. Each share of
common stock is entitled to one vote on each matter properly brought before the
shareholders at the Annual Meeting. Your Proxy Card(s) will state the number of
shares held under each of your accounts. Trinity also has outstanding 35,539
shares of its Fixed Rate Cumulative Perpetual Preferred Stock, Series A and
1,777 shares of its Fixed Rate Cumulative Perpetual Preferred Stock, Series B
(all held by the United States Department of the Treasury). None of the shares
of Preferred Stock are entitled to vote at the Annual Meeting.
Page 4 .………………………………………….……………………………… Trinity
Capital Corporation 2010 Proxy Statement
How to Vote.
Your vote is very important. If you are the record holder of your shares,
you may vote either on-line, by mail or in person at the meeting. The following
are instructions on how to vote using each of the mechanisms provided by
Trinity.
Voting
On-line. Shareholders of Record on the Record Date will
receive a Notice of Availability on or about April 17, 2010. This
Notice will include an On-Line Voting Information page and the codes necessary
to vote on-line. You will receive separate login codes for each of your
accounts. The login codes will also be contained on the Proxy Card you will
receive in the mail on or about April 27, 2010. This information is
designed to authenticate the shareholder’s identity and to allow shareholders to
vote their shares and confirm that their instructions have been properly
recorded.
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Please
have this information available and go to:
http://www.lanb.com/Annual-Report.aspx.
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Click
on the words “Vote Here” and enter the Holder ID and Verification Code
found on the On-Line Voting Information page of the Notice of Availability
or on your Proxy Card.
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·
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Please
click on the radio buttons to select how you wish to vote on the
electronic Proxy Card. When you have entered your vote on each
of the three items, click once on the “Submit” button. You have then
completed voting and will be taken back to the Annual Meeting
webpage.
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You
may log on and vote at your convenience, 24 hours a day, 7 days a week.
The deadline for voting on-line is 6:00 p.m. MST on May 27,
2009.
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If you have multiple
accounts, you must repeat the process for each account in order for all
shares to be voted.
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If
you vote on-line and do not wish to change your vote, please do not
complete and return the Proxy
Card.
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Voting by Mail. You will
receive a Proxy Card in the mail on or about April 27, 2010. Complete
and sign the Proxy Card and mail it to Trinity in the accompanying pre-addressed
envelope. No
postage is required if mailed in the United States. If you do not receive a
Proxy Card in the separate mailing, please contact us.
Voting in Person. If you want
to vote in person, please come to the meeting. We
will distribute written ballots to anyone who wants to vote at the meeting.
Please note, however, that if your shares are held in the name of your broker or
fiduciary, you will need to arrange to obtain a legal proxy from your broker or
fiduciary, as described below, in order to vote in person at the
meeting. Even if
you plan to attend the Annual Meeting, you should vote on-line or complete, sign
and return your Proxy Card in advance of the Annual Meeting in case your plans
change.
If you
have multiple accounts reflected in Trinity’s stock transfer records and/or in
accounts with brokers or fiduciaries, you will receive one Instruction Page in
the Notice of Availability for on-line voting and one Proxy Card for each
account. Please
vote on-line for each account or complete, sign and return all Proxy
Cards to ensure that all of your shares are voted.
Page 5.………………………………………….……………………………… Trinity
Capital Corporation 2010 Proxy Statement
If you
indicate how you want your shares voted, they will be voted as instructed. If
you submit an on-line proxy or sign and return your Proxy Card, but do not
indicate your voting instructions, the shares represented by your Proxy Card
will be voted “for” all
three nominees named in this Proxy Statement, “for” the ratification of
Trinity’s independent registered public accounting firm and “for” approval of the advisory
resolution approving the compensation of Trinity’s Name Executive Officers and
in accordance with the judgment of the proxy holders on any other matter
properly brought before the meeting and any adjournments and postponements of
the meeting. The Board may, by resolution, provide for a lesser number of
directors or designate a substitute nominee. In the latter case, shares
represented by proxies may be voted “for” substitute nominees. Proxies cannot be
voted for more than three nominees. The Board has no reason to believe any
nominee will be unable to stand for re-election.
If your shares are held in the name of
your broker or fiduciary (or what is usually referred to as “street name”) you
should have received this Proxy Statement from your broker or fiduciary with
instructions on how to direct that person or entity to vote your shares. It will
then be your broker’s or fiduciary’s responsibility to vote your shares in the
manner you direct. Please complete, sign and return the Proxy Card in the
envelope provided by your broker or fiduciary. We encourage you to provide
directions to your broker or fiduciary as to how you want your shares voted on
all matters to be brought before the meeting. You should do this by carefully
following the instructions your broker or fiduciary gives you concerning its
procedures. This ensures that your shares will be voted at the
meeting.
Householding and
Electronic Delivery. We have adopted a procedure approved by the SEC
called “householding.” Under this procedure, shareholders of record
who have the same residential address or post office box and last name, or are
reasonably believed by us to be members of the same family, will receive only
one copy of Trinity’s Notice of Availability and Annual Meeting, unless one or
more of these shareholders notifies us that they wish to continue to receive
individual copies. We have also adopted the electronic delivery of the Annual
Report and this Proxy Statement. Shareholders may request physical copies of the
Annual Report and Proxy Statement. Trinity will mail such requested physical
copies within three (3) business days of the request. These procedures reduce
Trinity’s printing costs and postage fees from mailings.
Shareholders who participate in
householding and electronic delivery will receive separate Instruction Pages for
on-line voting and Proxy Cards for each account under which they own shares.
Additionally, householding and electronic delivery will not in any way affect
dividend check mailings and deposits.
Revocation of
Proxies. You can revoke your proxy at any time prior to the Annual
Meeting by: (i) voting on-line or by completing, signing and delivering a new
Proxy Card; (ii) providing a written notice of revocation to Trinity
prior to the Annual Meeting; or (iii) by voting in person at the Annual Meeting.
If you vote in person, revoking a prior proxy, please inform the election judges
of your revocation. If you hold your shares in the name of your broker or
fiduciary, and desire to revoke your proxy, you will need to contact that person
or entity to revoke your proxy.
Required
Vote. A
majority of the shares that are outstanding and entitled to vote as of the
record date must be present in person or by proxy at the meeting in order to
hold the meeting and conduct business. Shares are counted as present
at the meeting if the shareholder either is present in person at the meeting or
has properly submitted a signed Proxy Card or other form of proxy.
Page 6..………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
On March
15, 2010, the record date, there were 6,440,784 shares of common stock issued
and outstanding. Therefore, at least 3,220,393 shares need to be present in
person or by proxy at the Annual Meeting. Broker non-votes will not be counted
as entitled to vote, but will count for purposes of determining whether or not a
quorum is present so long as at least one routine matter, such as ratification
of Trinity's independent registered public account firm, is presented for
approval. In the event there are an insufficient number of votes for
a quorum or to approve or ratify any of the items listed below at the time of
the Annual Meeting, the meeting may be adjourned or postponed in order to permit
us to further solicit proxies. We will announce voting results at the
meeting, if possible, and we will report the results via a Form 8-K filed within
four business days of the Annual Meeting.
The
following table sets forth the votes required for each item of business for the
Annual Meeting:
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Proposal
1: Election of Three Directors (Class I)
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|
The
three nominees for election as directors who receive the highest number of
“FOR” votes will
be elected as directors. This number is called a
“plurality.” You may vote “for” or “withhold authority to vote
for” each nominee for director. If you do not vote for a particular
nominee, or you indicate “withhold authority to vote” for a particular
nominee on your Proxy Card, your non-votes or withholding of authority and
broker non-votes will not count as votes cast either for or against the
nominee, but will count for purposes of determining whether or not a
quorum is present on the matter.
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Proposal
2: To Ratify the Appointment of Moss Adams, LLP as Trinity’s independent
registered public accounting firm for the Fiscal Year Ending December 31,
2010.
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Ratification
of the appointment of Moss Adams, LLP as Trinity’s independent registered
public accounting firm for Trinity’s fiscal year ending December 31, 2010
requires a majority of the votes cast in person or by proxy at the Annual
Meeting be voted “FOR” this Proposal. You
may vote “for,” “against,” or “abstain” on the ratification of Moss Adams.
Abstentions and broker non-votes will not be counted as votes cast either
for or against the proposal, but will count for purposes of determining
whether or not a quorum is present on the matter.
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Proposal
3: To Approve an advisory resolution approving the Compensation
of Trinity’s Named Executive Officers
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Approval
of the advisory resolution approving the compensation of Trinity’s Named
Executive Officers for Trinity’s fiscal year ending December 31, 2009
requires a majority of the votes cast in person or by proxy at the Annual
Meeting to be voted “FOR” this resolution.
You may vote “for,” “against,” or “abstain” on the resolution. Abstentions
and broker non-votes will not be counted as votes cast either for or
against the resolution, but will count for purposes of determining whether
or not a quorum is present on the matter. This vote is advisory, meaning
that it will not be binding upon Trinity. However, the
Compensation Committee may take into account the outcome of the vote when
considering future executive compensation arrangements.
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How does the
Board recommend that I vote? Trinity’s Board recommends that
you vote your shares “FOR” each of the nominees to
the Board, “FOR” the
ratification of Moss Adams, LLP as Trinity’s independent registered public
accounting firm for 2010 and “FOR” the approval of the
resolution approving the compensation of Trinity’s Named Executive
Officers.
Page 7.………………………………………….……………………………… Trinity
Capital Corporation 2010 Proxy Statement
Cost of Proxy
Solicitation. Trinity will bear the cost of soliciting proxies. In
addition to solicitations by mail, Trinity’s officers, directors or employees
may solicit proxies in person or by telephone. These persons will not receive
any special or additional compensation for soliciting proxies. We may reimburse
brokerage houses and other custodians, nominees and fiduciaries for their
reasonable out-of-pocket expenses for forwarding proxy and solicitation
materials to shareholders.
List of
Shareholders. Pursuant to state law and the bylaws of Trinity, the names
of the shareholders of record entitled to vote at the Annual Meeting will be
available at the Annual Meeting and the 10 days prior to the Annual Meeting,
during regular business hours, at the Corporate Offices at: 1200 Trinity Drive,
Third Floor, Los Alamos, New Mexico 87544.
Contact
Us. You
may find copies of these documents at http://www.lanb.com/Annual-Report.aspx and
all of Trinity’s filings on the SEC’s website through Trinity’s website: http://www.lanb.com/SEC-Filings.aspx.
Please contact the
Trinity Capital Corporation Stock Representatives, Ada Beth Carothers or Danette
Clark to make the following requests:
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·
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If
you wish to receive physical copies of these reports for the current year
and/or permanently (please
specify);
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·
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If
you currently receive multiple copies of materials and wish to receive
only a single copy of these documents for your
household;
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·
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If
you currently receive one copy of materials and wish to receive separate
copies and do not wish to participate in householding;
or
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·
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If
you need to change or correct your name, address or other
information.
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You may
contact us at:
| By U.S. Mail: | 1200 Trinity Drive, Los Alamos, New Mexico 87544 | |
| By E-mail: | tcc@lanb.com | |
| By Telephone: | (800) 525-9634 or (505) 662-1099 or (505) 662-1036 |
Page 8.………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
Security
Ownership of Certain
Beneficial
Owners, Directors and Management
The following table sets forth certain
information with respect to the beneficial ownership of Trinity’s common stock
as of March 15, 2010, by each person known by us to be the beneficial owner of
more than 5% of Trinity’s outstanding common stock, by each Director or nominee,
by each Executive Officer named in the summary compensation table which can be
found later in this Proxy Statement and by all Directors and Executive Officers
of Trinity as a group. Beneficial ownership has been determined for this purpose
in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), under which a person is deemed to be the
beneficial owner of securities if he or she has or shares voting power or
investment power with respect to such securities or has the right to acquire
beneficial ownership of securities within 60 days of March 15, 2010. The address
for the Trinity Capital Corporation Employee Stock Ownership Plan f/k/a Los
Alamos National Bank Employee Stock Ownership Plan (“ESOP”) is 1200 Trinity
Drive, Los Alamos, New Mexico 87544.
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Beneficial Ownership
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Name
of Individual or
Individuals
in Group
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Reporting
Type
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Beneficial
Ownership
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Percent
of
Class
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Trinity
Capital Corporation ESOP (1)
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5%
Shareholder
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627,030
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9.74%
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George
A. Cowan (2)
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5%
Shareholder
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729,097
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11.32%
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William
C. Enloe (3)
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Director
and Named Executive Officer
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227,372
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3.53%
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Jeffrey
F. Howell (4)
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Director
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7,028
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*
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Deborah
U. Johnson (5)
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Director
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10,000
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*
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Jerry
Kindsfather (6)
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Director
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124,700
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1.94%
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Arthur
B. Montoya, Jr. (7)
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Director
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7,796
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*
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Lewis
A. Muir (8)
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Director
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286,288
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4.44%
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Stanley
D. Primak (9)
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Director
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8,866
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*
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Charles
A. Slocomb (10)
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Director
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3,336
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*
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Steve
W. Wells (11)
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Director
and Named Executive Officer
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116,879
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1.81%
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Robert
P. Worcester (12)
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Director
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8,888
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*
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Daniel
R. Bartholomew (13)
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Other
Named Executive Officer
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21,792
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*
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All
directors and executive officers as a group
(11
persons) (14)
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822,945
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12.78%
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*
Indicates that the individual or entity owns less than one percent of Trinity’s
common stock.
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(1)
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Of
the 627,030 shares held by Trinity’s ESOP, all are allocated or will be
allocated in 2010 to the individual participants’
accounts,
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(2)
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Dr. Cowan’s
shares are held by The Delle Foundation, a non-profit corporation
controlled by Dr. Cowan and his
spouse.
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(3)
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Includes
24,350 shares over which Mr. Enloe shares voting and investment power
with his spouse, 63,022 shares held by Mr. Enloe in Trinity’s ESOP
and 140,000 shares available to Mr. Enloe through the exercise of
options over which shares he has no voting power or investment power. All
options which Mr. Enloe may exercise within 60 days of March 15, 2010 are
included in his percentage of
ownership.
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Page 9..………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
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(4)
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This
number includes 100 shares held by Ms. Howell’s spouse to which she has
disclaimed any beneficial
ownership.
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(5)
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Ms. Johnson
shares voting and investment power in 8,200 shares with her spouse. The
remaining 1,800 shares are held by Ms. Johnson in her individual
retirement account.
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(6)
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Includes
114,292 shares, one-half of the 228,584 shares held by J&G
Investments, in which Mr. Kindsfather is a 50% partner with shared
voting and investment power.
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|
(7)
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Dr. Montoya
shares voting and investment power in 7,496 shares with his spouse. The
remaining 300 shares are held by the Arthur B. Montoya, Jr., DDS Profit
Sharing Plan over which Dr. Montoya shares voting and investment
power.
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(8)
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Includes
279,525 shares held in the Lewis and Janice Muir Revocable Trust, of which
Mr. Muir and his spouse are the trustees and share voting
and investment power, 1,105 shares over which Mr. Muir has sole
voting and investment power and 5,658 shares over which his spouse has
sole voting and investment power.
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|
(9)
|
Includes
8,452 shares over which Mr. Primak shares voting and investment power
with his spouse, 206 shares held in his individual retirement account and
208 shares held in the individual retirement account of his
spouse.
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|
(10)
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Mr. Slocomb
shares voting and investment power in such shares with his
spouse.
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(11)
|
Includes
46,850 shares Mr. Wells owns in Trinity’s ESOP, 12,705 shares held in
his individual retirement account, 14,263 shares over which Mr. Wells
has sole voting and investment power and 42,000 shares available to
Mr. Wells through the exercise of options, over which shares he has
no voting or investment power. This number includes 1,061 shares held by
Mr. Wells’ spouse, obtained prior to marriage, to which he has
disclaimed any beneficial ownership. All options which Mr. Wells may
exercise within 60 days of March 15, 2010 are included in his percentage
of ownership.
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(12)
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Mr. Worcester
shares voting and investment power over such shares with his
spouse.
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(13)
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Mr. Bartholomew
owns 14,082 shares through Trinity’s ESOP, 10 shares over which
Mr. Bartholomew shares voting and investment power with his wife and
400 shares owned by a Revocable Trust created by Mr. Bartholomew’s
father and will transfer upon death to Mr. Bartholomew. Additionally,
7,000 shares are available to Mr. Bartholomew through the exercise of
options, over which shares he has no voting or investment power. All
options which Mr. Bartholomew may exercise within 60 days of March 15,
2010 are included in his percentage of
ownership.
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(14)
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The
total of all Directors and Executive Officers does not include George A.
Cowan as he is no longer a Director but serves as a Director Emeritus and
is the beneficial owner of more than 5% of Trinity’s outstanding common
stock. The total percentage of ownership for all Directors and Executive
Officers includes all options exercisable within 60 days by Trinity’s
Named Executive Officers.
|
Section 16(a)
Beneficial Ownership Reporting Compliance. Section 16(a) of the
Securities Exchange Act of 1934 requires that the directors, executive officers
and persons who own more than 10% of Trinity’s common stock file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
These persons are also required to furnish us with copies of all section 16(a)
forms they file. Based solely on Trinity’s review of the copies of such forms
furnished to us and, if appropriate, representations made by any reporting
person concerning whether a Form 5 was required to be filed for 2009, we are not
aware of any failures to comply with the filing requirements of Section 16(a)
during 2009.
Page 10.………………………………………….……………………………… Trinity
Capital Corporation 2010 Proxy Statement
Board
of Directors and Corporate Governance
Trinity’s
Board conducts its business through meetings of the Board and through the
activities of its committees. The Board meets monthly and may schedule special
meetings as needed. During 2009, Trinity’s Board held 13 meetings. Each of
Trinity’s directors attended at least 75% of the total number of Board meetings
held and meetings of the committees on which such directors served during 2009.
It is Trinity’s policy that all directors shall attend the Annual Meetings,
except in the event of illness or other unanticipated conflicts. All of the
directors then serving attended Trinity’s 2009 Annual Meeting held on May 21,
2009.
The Board
has established a standing Audit Committee, Compensation Committee, and
Nominating and Corporate Governance Committee, among other committees. The table
below provides membership and meeting information for each of these
committees.
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Name
|
Audit
Committee
|
Compensation
Committee
|
Nominating
and Corporate Governance Committee
|
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William
C. Enloe 1
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|||
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Jeffrey
F. Howell
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X2
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X
|
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Deborah
U. Johnson
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X
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||
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Jerry
Kindsfather
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X
|
|
|
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Arthur
B. Montoya, Jr.
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X
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X2
|
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Lewis
A. Muir
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X
|
X
|
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Stanley
D. Primak
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X
|
X
|
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Charles
A. Slocomb
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X
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X
|
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Steve
W. Wells
1
|
|||
|
Robert
P. Worcester
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X
|
X2
|
X
|
|
Number
of
2009
Committee Meetings
|
4
|
5
|
1
|
|
1
|
Messrs. Enloe and Wells are
Executive Officers and as such are not members of the Board committees
listed.
|
2
Committee
Chair.
Trinity's Board
Leadership Structure and Board Oversight of Risk. Trinity has a strong,
independent Board of Directors. It is Trinity’s policy that the Board
consists of a majority of independent directors. Our key committees are chaired
by and comprised entirely of independent directors (Audit, Compensation,
Compliance and Nominating and Corporate Governance). In addition,
while Trinity's Bylaws allow for the Chief Executive Officer ("CEO") and Board
Chair to be held by the same person, the Board believes a separation of these
roles reflects good corporate governance practices. Consequently, Trinity's CEO
and Board Chair have been separate positions from the Company's
inception. The separation of these positions allows for checks and
balances with respect to the CEO role and the audit functions of the Board The
Board Chair is responsible for conducting the business at Trinity's Board of
Director Meetings and its executive sessions during which management and staff
are absent. Executive sessions of non-management directors can be requested at
any committee or Board of Directors meeting and are held several times a
year.
Page 11.………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
While the
full Board is charged with ultimate oversight responsibility for risk
management, various committees of the Board and members of management also have
specific responsibilities with respect to our risk oversight. Each
Board committee has been assigned oversight responsibility for specific areas of
risk and risk management, and each committee considers risks within its areas of
responsibility. For example, the Audit Committee is responsible for
implementing internal audit controls and maintaining the safety, soundness and
integrity of the institution by properly identifying, prioritizing, mitigating
and managing risk. The Audit Committee, along with the Nominating and
Corporate Governance Committee, is tasked with ensuring the right risk and
compliance culture exists at the organization by requiring adherence to our Code
of Business Conduct and Business Ethics and adopting best practices in corporate
governance. The Audit Committee has a prominent role in our credit
risk management as well as our operational risk, the integrity of our financial
statements, compliance, legal risk and overall policies and practices related to
risk management. The day-to-day implementation is the
responsibility of the Internal Auditor. This individual is
independent from management and reports directly to the Audit Committee, who
provides regular updates to the full Board. Trinity's Audit Committee
meets in executive session at least once annually with our external auditing
firm, the Internal Auditor, Chief Financial Officer and General
Counsel.
As previously disclosed, in January of
2010, Los Alamos National Bank became subject to an agreement with the Office of
the Comptroller of the Currency, requiring the Bank to take certain actions to
address risk management and capital matters (the "Agreement"). In
response to the Agreement, the Board established the Compliance Committee which
is tasked with ensuring compliance with the Agreement, as well as providing an
additional review of the risk management and practices of the Bank, particularly
with respect to credit risk. In addition, the Board has a Board Loan
Committee which is responsible for ensuring the implementation of policies and
procedures to ensure business is conducted within defined risk tolerances for
our lending function, including lending policies, credit trends, and
concentrations. This committee, along with the Audit Committee,
reviews our risks related to credit exposure and the adequacy of our allowance
for loan and lease losses and ensures the right risk and compliance culture
exists at the organization. The Board also has a Asset/Liability Management
Committee which oversees key aspects of risks related to capital, liquidity,
interest rates and market risks. The Board has a Compensation
Committee which oversees Trinity's compensation practices to ensure they do not
encourage unnecessary or excessive risk taking by our management or employees
and we comply with all requirements of the Treasury's Capital
Program. The Board also has a Technology Committee which oversees the
technology used and changes to such technology in order to ensure the integrity
and security of our systems and to address any potential market or reputational
risks associated with our service delivery systems. Finally, the
Board has a Strategic Planning Committee which analyzes the market and
reputational risks of, and ensures alignment between, Trinity's strategic
objectives, business processes and resources. Additionally, the Board conducts
succession planning at least annually, during which the CEO discusses the
development of talent throughout the organization.
The membership of these committees
overlaps with all directors serving on several of the committees. Each committee
reports out to the full Board on significant or risk-related matters within its
responsibilities. Such interlocking memberships and sharing of
information allows the Board insight into the management of strategic, credit,
market, liquidity, compliance, operational and reputational risks facing the
company. Management provides reports and data to the Board committees as well as
participating in discussions. The Board interacts with key members of management
within the organization on a regular basis through both Board and committee
meetings and has access to these individuals outside of formal
meetings.
Page 12..………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
Director
Independence. Trinity annually examines the relationships with each
director to determine whether that director can be considered “independent,”
“outside,” and “non-employee.” These standards are consistent with the
requirements set forth by the NASDAQ stock market ("Nasdaq") and can
be found on its website at
http://www.lanb.com/TCC-Nominating-and-Corporate-Governance-Committee-.aspx.
This analysis is reviewed by the Nominating and Corporate Governance Committee
and the full Board. All of Trinity’s non-employee directors, with the exception
of Ms. Johnson, were deemed independent in 2009. Ms. Johnson’s employer, Rick
Johnson & Company, Inc. (“RJC”), an advertising and marketing firm, received
over 5% of its gross revenue in 2009 from Trinity, resulting in Ms. Johnson not
being considered “independent” under the Nasdaq rules.
Audit Committee.
The members of the Audit Committee are Ms. Howell (Chair) and
Messrs. Montoya, Muir, Slocomb, and Worcester, each of whom served on the
Committee in 2009 and will continue in 2010 (with the exception of Mr. Muir who,
as described below, is not eligible to stand for re-election under the
provisions of Trinity's Bylaws as he is over the age of 75 at the time of the
2010 Annual Meeting when his current term expires). Each member of
the Committee is deemed to be “independent” as discussed above. The Board has
determined that Ms. Howell qualifies and has appointed her to serve as the
“audit committee financial expert” as defined in the SEC’s rules and
regulations. The Board based this decision on Ms. Howell’s extensive
professional experience, as described in her biography on page 42 of this Proxy
Statement.
The Audit
Committee is responsible for the following:
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·
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selection
and retention of Trinity’s independent registered public accounting firm,
approval of the services they will perform and review of the results, both
with management and in executive session with the accounting
firm;
|
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·
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reviewing
the performance of the independent registered public
accountants;
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·
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reviewing
with management the systems of internal controls, including the adequacy
and effectiveness of the systems of internal controls over financial
reporting and any significant changes in internal controls over financial
reporting, accounting practices and disclosure controls and
procedures;
|
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·
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reviewing
annual and quarterly financial statements and other Company filings;
and
|
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·
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reviewing
internal audit reports and associated
controls.
|
The
Committee has adopted a written charter which can be found on Trinity’s website
at http://www.lanb.com/Management.aspx setting forth the Committee’s duties and
functions.
Compensation
Committee. The
members of the Compensation Committee are Messrs. Worcester (Chair),
Kindsfather, Muir, Primak and Slocomb, and Ms. Howell, each of whom served
on the Committee in 2009 and will continue in 2010 (with the exception of Mr.
Muir, as described above). Ms. Johnson ceased being a member of the Compensation
Committee in March 2009 as a result of Ms. Johnson not being deemed to be
independent and the new requirement as a participant in the Capital Purchase
Program that all members must be independent. Each continuing member of the
Committee is deemed to be “independent” as discussed above; each member of the
Committee is deemed to be an “outside” director under Section 162(m) of the
Internal Revenue Code of 1986, and a “non-employee” director pursuant to Section
16 of the Exchange Act. The Committee has adopted a written charter, which can
be found on Trinity’s website at http://www.lanb.com/TCC-Compensation-Committee.aspx. The
charter sets forth the Committee’s duties and functions.
The
Compensation Committee is responsible for the following:
|
·
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discharging
the Board’s responsibilities relating to the compensation of the Company’s
executive officers;
|
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·
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evaluating
and making recommendations to the Board with regard to the compensation of
directors;
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Page 13..………………………………………….……………………………… Trinity
Capital Corporation 2010 Proxy Statement
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·
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ensuring
that the compensation of the Company’s executive officers and employees
complies with all requirements of the United States Department of the
Treasury's Capital Purchase Program ("CPP") and related laws and
regulations as more fully described in the Compensation Discussion and
Analysis beginning on page 17; and
|
|
·
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reviewing
the Compensation Discussion and Analysis and issuing the Compensation
Committee Report for inclusion in Trinity’s Proxy Statement in accordance
with all applicable rules and
regulations.
|
Pursuant
to its charter, the Compensation Committee may delegate authority to
subcommittees and individual members of the Committee, where appropriate.
However, the Committee cannot delegate its decision-making authority or its
authority to make recommendations to the Board.
Nominating and
Corporate Governance Committee. The members of the Nominating and
Corporate Governance Committee are Messrs. Montoya (Chair), Worcester,
Primak, Ms. Johnson and Ms. Howell each of whom served on the
Committee in 2009 and will continue in 2010. Each member of the Committee is
“independent” as discussed above, with the exception of Ms. Johnson. The purpose
of the Committee is to evaluate and recommend to the Board nominees for
consideration by Trinity’s shareholders to serve as directors and to review and
analyze the corporate governance policies and practices of Trinity, including
Trinity’s Code of Business Conduct and Business Ethics which may be found on
Trinity’s website at: http://www.lanb.com/TCC-BCE-Charter.aspx. The Committee has adopted a
written charter, which can be found on Trinity’s website at
http://www.lanb.com/TCC-Nominating-and-Corporate-Governance-Committee-.aspx setting
forth the Committee’s duties and functions.
Shareholder
Proposals. Under Trinity’s bylaws, no business may be brought before an
annual meeting unless it is specified in the notice of the meeting or is
otherwise brought before the meeting by or at the direction of the Board or by a
shareholder entitled to vote who has delivered written notice to Trinity’s
Corporate Secretary. Such written notice of proposal (containing
certain information specified in the bylaws about the shareholders and proposed
action) must be submitted to Trinity's Secretary not later than 120 days prior
to the first anniversary of the preceding year's annual meeting to be included
in Trinity's proxy statement. For proposals to be otherwise brought by a
shareholder and voted upon at an annual meeting, the shareholder must file
written notice of the proposal (containing certain information specified in the
bylaws about the shareholder and the proposed action) to Trinity’s Corporate
Secretary no less than 60 days prior to the first anniversary of the preceding
year’s annual meeting.
No
shareholder proposals were received by Trinity by March 23, 2010.
To be
considered for inclusion in Trinity’s proxy statement and form of proxy for
Trinity’s 2011 Annual Meeting of Shareholders, shareholder proposals must be
received by Trinity’s Corporate Secretary, at the above address, no later than
January 27, 2011, and must otherwise comply with the notice and other provisions
of Trinity’s bylaws, as well as Securities and Exchange Commission rules and
regulations. For Trinity’s 2011 Annual Meeting of Shareholders, to be
considered for a vote, such proposal must be filed with Trinity’s Corporate
Secretary not later than March 28, 2011. Additional information on
shareholder nominations is provided on page 37 of this Proxy Statement within
Item I Election of Directors.
Page 14.………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
Related Party
Transactions. Trinity’s written Related Party Transaction Policy provides
that all relationships between Trinity and any director, Named Executive Officer
(“NEO”) or an entity related to a director or NEO, will be reviewed, approved or
ratified by the Audit Committee of the Board, excluding loan transactions
falling within the ordinary course of business exception for LANB. All
transactions will be reviewed, regardless of type, when the transaction is
anticipated to or actually meets or exceeds $120,000 in compensation to the
director, NEO or an entity related to a director or NEO. The review will include
the details of the relationship, including the nature of the relationship, the
anticipated amount of compensation to be paid under the transaction, and, if
possible, a comparison of market rates for similar products or services. The
Audit Committee will consider the proposed relationship and either approve or
deny the engagement. Additionally, the relationships with directors and their
related entities will be reviewed each year as part of the determination of
independence of each director and nominee. In the event that a relationship is
entered into without prior approval of the Audit Committee, the Committee will
be provided with detailed information regarding the relationship for
ratification. If the Committee does not ratify the relationship, Trinity will
terminate the relationship. Once a relationship has been created, Trinity will
cause a request for proposals to be issued to the director, NEO or entity
related to a director or NEO not less than every five years. This request will
serve to ensure that Trinity is obtaining products and services on terms at
least as favorable as if they were from an unrelated third party.
As stated
above, Trinity engaged the services of RJC, an advertising and marketing firm,
in 2009. Deborah U. Johnson, a Trinity director, was a principal shareholder and
officer of RJC. Under the terms of Trinity’s agreement with RJC, we paid RJC
approximately $494,129 in 2009 for advertising and marketing services, which is
over 5% of RJC’s annual gross revenue, resulting in Ms. Johnson not being
considered an independent director under the Nasdaq rules. Trinity’s policy did
not require review, approval or ratification of its relationship with RJC, as
described above as this relationship was in existence prior to the adoption of
its Related Party Transaction Policy. However, Trinity has followed its policy
with regard to renewals and modifications in its relationship with RJC. Based
upon a Request for Proposals issued during 2007, we believe that the quality and
terms for the advertising and marketing services provided by RJC are similar to
those we would find with an unrelated third party.
The types
of transactions, relationships and arrangements that are considered in
determining independence but are not disclosed as a related party transaction
include, but are not limited to, borrowing relationships and business
relationships. Trinity has no indebtedness transactions with its directors or
NEOs. Trinity is a financial holding company which controls LANB, a national
bank. LANB commonly enters into customary loan, deposit and associated
relationships with its directors and executive officers, all of which are made
in the ordinary course of business, on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons and did not involve more than the normal risk of
collectability or present other unfavorable features. All loans by LANB to
Trinity’s directors and executive officers are subject to the regulations of the
Office of the Comptroller of Currency. National banks are generally prohibited
from making loans to their directors and executive officers at favorable rates
or on terms not comparable to those available to the general public or other
employees. LANB does not offer any preferential loans to Trinity’s directors or
executive officers.
Page 15.………………………………………….……………………………… Trinity
Capital Corporation 2010 Proxy Statement
Communications
with Directors. All communications to Trinity’s directors should be made
in writing to: Trinity Capital Corporation, General Counsel, 1200 Trinity Drive,
Post Office Box 60, Los Alamos, New Mexico 87544. Communications will be
forwarded to the addressee and/or the appropriate committee chair or director.
The General Counsel may summarize the contents of any communication prior to
forwarding the message to its intended recipient. Directors may review a log of
all communications received or request copies of any communications at any time.
Concerns relating to accounting, internal controls and auditing matters will be
promptly raised with Trinity’s internal auditor, if appropriate, and reported to
the Audit Committee. Trinity’s communication policy is available on Trinity’s
website at http://www.lanb.com/TCC-commpolicy.aspx. Communications regarding
concerns over the management or financial reporting of Trinity can also be
addressed directly to the Audit Committee Chair through Trinity’s website at
http://www.lanb.com/Management.aspx or by emailing auditchair@lanb.com.
Code of Business
Conduct and Business Ethics. We have a Code of Business Conduct and
Business Ethics (“Code”) in place that applies to all of Trinity’s directors,
officers and employees, including Trinity’s Chief Executive Officer and Chief
Financial Officer. Our Code requires ethical conduct at all times and conduct in
accordance with all laws and regulations. The Code is posted on Trinity’s
website at http://www.lanb.com/TCC-BCE-Charter.aspx. We intend to satisfy the
disclosure requirements under Item 5.05 of Form 8-K regarding any amendment to
or waiver of the Code by posting such information on our website. No waivers or
amendments to Trinity’s Code were granted or made in 2009.
Indemnification.
The shareholders approved an amendment to the Articles of Incorporation
at the 2003 Annual Meeting restating the indemnification provided to Trinity’s
directors. The Articles of Incorporation provide for indemnification of
directors to the fullest extent permitted by New Mexico law. This
indemnification is provided so that Trinity’s directors may undertake their
duties without undue concern regarding their personal liability.
Page 16.………………………………………….……………………………… Trinity
Capital Corporation 2010 Proxy Statement
Compensation
Discussion and Analysis
Overview. This Compensation
Discussion and Analysis describes Trinity’s compensation philosophy and polices,
as well as the compensation decisions made for 2009 as applicable to the Named
Executive Officers (“NEOs”). This section explains the structure and rationale
associated with each material element of the NEOs’ compensation, the rationale
for the compensation determinations made by the Compensation Committee in 2009
and it provides important context for the more detailed disclosure tables and
specific compensation amounts provided following the section.
The
difficult economic environment in 2009 presented significant challenges to
Trinity. Pressure on the economy and particularly on real estate
values led to increased nonperforming assets held by the Bank and significantly
increased provisions for loan losses. Because our executive
compensation programs are designed to align the compensation of our executives
with the financial performance of Trinity, the 2009 financial performance
impacted the compensation of our executive officers. The Board determined that
pay raises would not be awarded to Mr. Enloe or Mr. Wells and that no bonuses or
stock incentives would be granted to any employees, with the exception of the
Profit Sharing program shared by all eligible employees of the
Company. Mr. Bartholomew received a raise based upon his performance
and due to the significant deviation from average and median peer compensation
and internal equity.
U.S.
Treasury’s Capital Purchase Program and Federal Reserve Risk Analysis
Rules
In order
to more fully understand the Compensation Committee’s decisions with respect to
compensation during 2009 and 2010, the Committee believes it is beneficial to
understand the changing regulatory context in which these decisions were
made. In some cases, the regulatory changes clearly impacted the
Compensation Committee’s decisions with respect to compensation paid to the
NEOs, while in other cases the regulatory changes simply required the Committee
to reconfirm its existing processes and procedures for determining executive
compensation.
On March
27, 2009, Trinity became a participant in the Treasury’s Troubled Asset Relief
Program (“TARP”) by participating in the Capital Purchase Program (“CPP”)
element of TARP. As a result of its participation in the CPP, Trinity
and certain of its employees will be subject to compensation related limitations
and restrictions for the period that the company continues to participate in the
CPP (the “Participation Period”). The CPP compensation limitations
and restrictions include the following:
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·
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Except
in limited circumstances, Trinity’s five most highly compensated employees
(as determined on an annual basis) will be prohibited from receiving cash
bonus payments during the Participation Period. Messrs. Enloe
and Wells were subject to this limitation during 2009 and Messrs. Enloe,
Wells and Bartholomew will be subject to this limitation during
2010.
|
|
·
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Except
in limited circumstances, Trinity’s NEOs and its next five most highly
compensated employees (each as determined on an annual basis) will be
prohibited from receiving any severance payments upon a termination of
employment or any payments triggered by the occurrence of a change
control.
|
|
·
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Trinity’s
NEOs and next 20 most highly compensated employees will be subject to a
“clawback” of incentive compensation if that compensation is based on
materially inaccurate financial statements or performance
metrics. Further, no one in this group of employees can receive
any tax gross-up payment during the Participation
Period.
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Page 17.………………………………………….……………………………… Trinity
Capital Corporation 2010 Proxy Statement
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·
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Trinity
will be limited to an annual deduction of $500,000 with respect to the
compensation paid to each of its
NEOs.
|
In
connection with the CPP transaction, Trinity obtained waivers from its NEOs and
five most highly compensated employees waiving claims against Treasury or
Trinity for changes to the individual's compensation or benefits in order to
comply with the CPP rules. Trinity also obtained Omnibus Compensation
Amendments from its NEOs and five most highly compensated employees modifying
the terms of the Employment Agreements with Mr. Enloe and Mr. Wells and the
general terms and arrangements, policies and agreements with the remaining
employees with respect to such compensation prohibited by the CPP rules during
the Participation Period. As a consequence of such modifications of
the Employment Agreements with Mr. Enloe and Mr. Wells, the non-compete
provisions of their Employment Agreements were removed during the Participation
Period.
As a
result of its participation in the CPP, the primary means remaining available to
the Company for compensating the employees covered by the CPP rules are now
limited to cash salary, stock salary and, on a limited basis, restricted shares
compliant with the CPP rules. The Compensation Committee made significant
efforts in 2009 to determine how best to continue to meet the objectives of our
compensation program within the context of these limitations, specifically the
ability to attract and retain our key employees. It was determined
that, at this time, the Company would not increase the compensation of Mr. Enloe
or Mr. Wells.
Trinity
also implemented an Excessive or Luxury Expenses Policy effective September 13,
2009 which is posted on its website at
http://www.lanb.com/Management.aspx. This policy was required under
the CPP rules. Its implementation did not result in material changes
to Trinity's previous expense policies.
In
addition to the foregoing, the CPP rules and regulations will require the
Compensation Committee to undertake a semi-annual risk assessment with respect
to certain of the compensation plans, programs and arrangements maintained by
Trinity, regardless of whether the individual employee(s) covered by the plan,
program or arrangement is an NEO. The risk assessments are intended
to reduce the chance that any employee will be incentivized to take unacceptable
risks in order to maximize his or her compensation under such plans, programs
and arrangements. The Compensation Committee is required to certify
that it has conducted these assessments and made all reasonable
changes. Trinity's Compensation Committee has so certified within the
Compensation Committee Report on page 26 of this Proxy Statement.
As the CPP final rules were implemented
in 2009, the Committee continually discussed its compliance obligations with
respect to our executive compensation programs at each Committee
meeting. It has depended upon guidance from our legal counsel to
fully interpret the extent of the application of each of these requirements on
our executive compensation programs. As a result of Trinity's participation in
the CPP, the Compensation Committee modified its charter to require semi-annual
meetings to undertake the
required semi-annual risk assessments and to require all members be
qualified as independent directors.
Similar
to the required CPP semi-annual risk assessment, in late 2009, the Board of
Governors of the Federal Reserve issued proposed guidance that set forth a
framework for assessing the soundness of incentive compensation plans, programs
and arrangements maintained by financial institutions. Although the
guidance is designated as proposed, the Federal Reserve has indicated that it
expects current compliance with the guidance. The Federal Reserve’s
framework focuses on balanced risk-taking incentives, compatibility with
effective controls and risk management, and strong corporate
governance.
Page 18.………………………………………….……………………………… Trinity
Capital Corporation 2010 Proxy Statement
The
Compensation Committee believes that an awareness and assessment of the impact
of risk has always been, and will continue to be, a component of its analysis of
executive compensation. As such, the Committee recognizes the role of
risk assessment in the overall processes and procedures for establishing such
executive compensation. In this regard, the Committee believes that
the CPP semi-annual risk assessment and the Federal Reserve’s proposed rules
will serve as a framework for reconfirming the appropriateness of the process
and procedure the Committee has previously followed in reaching its decisions
with respect to compensation related matters.
Compensation
Philosophy and Objectives
Trinity’s compensation programs align
with the Company’s culture, philosophy and strategy to provide long-term
sustainable growth for its investors. In keeping with this strategy, Trinity’s
compensation programs are focused on the following factors:
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·
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Reflect
the qualifications, skills, experience and responsibilities of each
NEO;
|
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·
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To
attract and retain the most qualified, intelligent, honest and loyal
employees by providing competitive compensation and
benefits;
|
|
·
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To
provide each NEO with incentive and motivation to achieve superior job
performance, deliver excellent customer service, and achieve his or her
personal goals and contribute to the overall success of the organization;
and
|
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·
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To
encourage both generation of income and reduction of expenses by making
all employees owners of Trinity.
|
We
believe that Trinity’s employees are the key to our success as a company. As
Trinity’s operations are located in geographic areas with lower than national
unemployment rates and highly educated employee pools, Trinity’s compensation
programs must be very competitive in order to attract and retain the highest
quality employees. Compensation is awarded both on the basis of individual
performance and Trinity’s success. NEOs share in many of the same compensatory
programs as our other employees and many of these programs are shared in equal
proportions by NEOs and employees, including our profit sharing program and the
Employee Stock Ownership Plan (“ESOP”). These programs are employed to reward
longevity and corporate performance, thereby aligning all of our employees’
interests with those of our shareholders. Trinity’s contributions to the ESOP
and profit sharing program are based upon its profitability.
Compensation
Factors and Committee Processes
General.
Trinity’s NEOs’ base salaries are used to reflect individual performance,
while short-term and long-term incentives are used to reflect corporate
performance as well as to provide incentives for Trinity’s NEOs and other
employees to continue to work to ensure the long-term profitability of Trinity.
Trinity reviews the compensation practices for several peer groups, as discussed
below, to ensure its compensation is competitive. Trinity does not use static
performance criteria or measures, but instead looks at the complete picture of
our returns in light of the market environment, competitors, economic conditions
and other relevant factors that affect the profitability of Trinity. The
Compensation Committee has discretion to take into account all factors and
measures throughout the year, rather than certain items set at the beginning of
the year which circumstances may have made less of a priority.
Page 19.………………………………………….……………………………… Trinity
Capital Corporation 2010 Proxy Statement
Corporate
Performance. In establishing compensation for Trinity’s NEOs for 2009,
the Compensation Committee weighed the financial and other performance
indicators and levels of success desired and expected in assessing the
performance of its NEOs. The financial indicators were based upon the budget
created by management and approved by the Board and focus primarily on the
returns for LANB, including return on average equity, asset quality, efficiency,
net income, return on average assets and regulatory compliance. Trinity’s
Compensation Committee sets the expectations of meeting or exceeding these
goals, but takes into account other internal and external factors that influence
the levels of success that can be achieved in the given year. Additionally,
Trinity provides equal consideration to LANB’s customer satisfaction levels and
employee satisfaction levels. Trinity’s goals are set as “stretch” goals which
are not easily attainable. As a result, Trinity retains the flexibility and full
discretion to determine whether to reward its NEOs and to determine at what
level based on corporate performance even if the measures contained in the
budget are or are not fully met.
Individual
Performance. Included in the consideration of individual performance is
the expertise, skill set and workload requirements for each position as well as
the responsibilities resultant from being a public company. All employees of
Trinity and its subsidiaries set individual goals each year that are in
alignment with departmental goals which, in turn, align with corporate goals and
strategies. The goals are set by the employees and are discussed with and
approved by each employee’s supervisor. The focus in developing annual and
long-term goals remains on the interests of Trinity’s three key stakeholders:
excellence in customer service, employee satisfaction and investor returns.
Goals for Trinity’s NEOs typically include reaching budget for financial
measures, progress toward or achievement of Trinity’s strategic goals, meeting
opportunities and challenges as they arise, personnel management and
development, and community support and involvement.
Peer Comparison.
Trinity’s Compensation Committee believes that the compensation paid to
similarly situated executives at other financial institutions should be a point
of reference for measurement, but not the determinative factor in setting the
compensation for Trinity’s NEOs. Recognizing the inherent difficulty in
assessing and comparing compensation programs and awards, the Compensation
Committee retains the discretion to determine the nature and extent of use of
comparative compensation data.
In its
2009 compensation review, the Committee compared Trinity's
compensation program to certain peer financial institutions. Data was provided
by SNL Financial, Inc. regarding the 2008 reported compensation of NEOs for
several peer sets of financial institutions, including: financial institutions
by asset size, by geographic region, and by 2008 peer group (based on asset size
and geography). The primary peer group used for 2009 included thirty-five (35)
banking organizations with total assets ranging from slightly under $1 billion
to $9.7 billion in assets primarily located within our region (the Southwestern
and Western United States). The peer group was chosen because of the relative
size in total assets and the geographic location. The institutions
included within the Compensation Committee's peer group analyses
were:
| Alliance Financial Corporation | First Financial Bankshares, Inc. |
| BancFirst Corporation | First Guaranty Bankshares, Inc. |
| Bancorp Rhode Island, Inc. | First State Bancorporation |
| Beverly Hills Bancorp, Inc. | Firstbank Corporation |
| Canandaigua National Corporation | Guaranty Bancorp |
| Centrue Financial Corporation | Horizon Financial Corp. |
| City Bank | IBERIABANK Corporation |
| CoBiz Financial, Inc. | Merchants Bancshares, Inc. |
| Eagle Bancorp, Inc. | MetroCorp Bancshares, Inc. |
| Encore Bancshares, Inc. | MidSouth Bancorp, Inc. |
| F & M Bancorporation | Palmetto Bancshares, Inc. |
| First Bancorp, Inc. | Peapack-Gladstone Financial Corporation |
Page 20.………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
| Preferred Bank | Southwest Bancorp, Inc. |
| PremierWest Bancorp | Texas Capital Bancshares, Inc. |
| Reliance Bancshares, Inc. | West Bancorporation, Inc. |
| Sierra Bancorp | Wilson Bank Holding Company |
| Southeastern Bank Financial Corp. | Yadkin Valley Financial Corporation |
| Southside Bancshares, Inc. |
The
Compensation Committee believes that the peer group is representative of the
sector in which Trinity operates. From that analysis, the Committee concluded that its NEOs’
total compensation is generally below the median and average levels for its
peers and its 2009 performance was generally above median and average
levels. The Committee does not target a certain benchmark within its
peer group, but rather, uses the peer evaluation to validate that Trinity's
compensation is competitive with our peers.
Role of
Management and Compensation Consultants. William C. Enloe, Trinity’s
Chief Executive Officer (CEO), sets the salary and bonus for Mr. Wells and Mr.
Bartholomew. Mr. Enloe receives input and recommendations from the Committee
with regard to the salary and bonus for Mr. Wells. Mr. Enloe provides
recommendations regarding the stock incentives awarded and on the amount of
Trinity’s contributions to the ESOP, profit sharing and other bonus programs.
Mr. Enloe plays no role in determining the form or amount of his own
compensation and does not make recommendations with regard to director
compensation. Mr. Bartholomew does not participate in discussions regarding the
other NEOs’ compensation.
The
Committee has the authority to, pursuant to its charter, and has engaged
compensation consultants from time to time, as deemed appropriate. When such
consultants are retained, they are contracted for, and the scope of the
engagement, is established by the Committee. The Committee did not engage
consultants with respect to 2009 compensation of NEOs or directors.
Elements
of Compensation
General.
Trinity uses short- and long-term compensation, as well as, cash and
non-cash compensation, to ensure that Trinity's compensation program is
competitive with the market and to motivate employees to contribute to the
profitability and sustainability of the company. Trinity’s compensation program
includes the following elements which are available to all eligible employees:
base salary, profit sharing, ESOP, discretionary performance bonuses, and
benefits which include health insurance, life and disability insurance, flexible
spending accounts, leave (vacation, sick and sabbatical), leave incentives,
401(k) Plan, health club memberships, education assistance, and products and
service discounts. Trinity pays commissions in limited circumstances. Trinity’s
managers may award performance bonuses to select employees for extraordinary
efforts; however, certain employees are ineligible for bonuses under the CPP
rules. Trinity also pays a portion of the premiums for certain insurance plans
and makes available other plans at the employees' expense. In addition, Trinity
has Stock Incentive and Deferred Income Plans for employees designated by the
Board. Trinity recognizes and celebrates each employee’s anniversary with the
grant of additional vacation hours at each anniversary, pins at 1, 3, 5, 10, 20,
25 and 30 years of service, four-week paid sabbaticals for every ten years of
employment and special awards at 20, 25 and 30 years.
NEO
compensation historically consisted of base salary, benefits, profit sharing,
ESOP contributions, ESOP top-heavy cash payments for salaries in excess of plan
caps, discretionary performance bonuses and discretionary stock incentives. NEOs
are eligible to participate in all benefits on an equal basis with all other
employees; however, during the CPP Participation Period, the top five highest
compensated employees are not eligible to receive profit sharing, ESOP top-heavy
cash payments, discretionary performance bonuses or discretionary stock
incentives except as permitted by the CPP rules. Mr. Enloe is also provided
with a vehicle allowance for one-half of his car lease, insurance, maintenance,
gas and expenses for this vehicle.
Page 21.………………………………………….……………………………… Trinity
Capital Corporation 2010 Proxy Statement
Base Salary.
Salaries are established from year to year based primarily on individual
performance as well as evaluation of peer and market rates. Mr. Enloe’s
salary is set annually by the Board, based on the recommendations of the
Committee. Mr. Enloe sets, with the approval of the Committee
and the Board, the salaries for Mr. Wells and
Mr. Bartholomew.
At its
March 23, 2010 meeting, the Committee determined that Mr. Enloe and Mr. Wells
would not receive any salary increases. In making the determination,
the Committee recognized that Trinity’s financial performance in 2009, while
better than many peer and direct competitors, did not meet budgeted levels. In
addition, due to the economic environment and the continuing economic
challenges, the Committee determined that it would continue a conservative
approach to compensation. The Compensation Committee and management determined
that such a short-term course was prudent and that the best interests of the
shareholders was to continue holding executive compensation expense static. Mr.
Enloe granted Mr. Bartholomew an 8.5% salary increase on February 20,
2010. Mr. Bartholomew’s salary increase was based upon his
individual performance in 2009 in the management of the Cashiers’ Department,
financial reporting and controls, accomplishment of departmental goals and
service to the community and, in part, to make Mr. Bartholomew's compensation
more competitive with Trinity's peers. The Board determined at its
January 27, 2009 meeting not to grant any salary increases to Messrs. Enloe,
Wells or Bartholomew for 2009. The Board reevaluated the compensation
of its NEOs at its meeting of August 27, 2009 and determined not to make any
changes based upon Trinity's performance during the first two quarters of
2009.
The NEOs’ base salaries constitute the
majority of total compensation for each. In 2009, the base salary accounted for
approximately: 93% of Mr. Enloe’s total compensation; 90% of
Mr. Wells’ total compensation; and 92% of Mr. Bartholomew’s total
compensation. The NEOs’ total compensation is based upon the total amount shown
in the Summary Compensation Table on page 29. The makeup of total compensation
with the salary constituting the largest portion allows Trinity’s NEOs to strive
to reach individual, department and corporate goals to grow Trinity’s profits,
assets and returns on a consistent basis, without having conflicting incentives
for year-to-year performance returns that may adversely affect long-term
sustainable returns.
Short-Term
Incentives.
Discretionary Performance Bonus.
The Committee and the Board have the discretion to award Mr. Enloe a
performance bonus, and Mr. Enloe has the discretion to award Mr. Wells
and Mr. Bartholomew a performance bonus, based upon their individual and
Trinity’s annual performance. The Board has traditionally retained bonuses as a
smaller portion of total compensation as it believes management’s focus should
be on long-term sustainability goals. In addition, as described below, the
majority of Trinity’s NEOs receive short-term incentives through Trinity’s
profit sharing and ESOP programs on the same basis as all other employees.
Messrs. Enloe, Wells and Bartholomew did not receive a performance bonus in
2009.
The Board
did not use predetermined performance criteria in 2009 to determine the amount
of performance bonus a NEO may be eligible for, but rather, uses a wholly
discretionary approach. The Board reviewed Trinity’s performance as a
guide, including a review of the key financial measures and adaptation to
events, whether anticipated or unanticipated. The Compensation Committee
believes this approach allows for an effective compensation program for
Trinity’s NEOs that is also in alignment with Trinity’s compensation philosophy,
corporate strategy and corporate culture.
Page 22.………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
Profit Sharing and Employee Stock
Ownership Plan. Short-term incentives are granted based upon Trinity’s
performance. Trinity contributes to the profit sharing program based on its
belief that sharing corporate profits is an effective motivating technique for
employees. Trinity believes that sharing profits leads to employees who are more
conscientious in reducing costs and increasing income and efficiency, thereby
aligning their interests with those of our shareholders. Trinity
firmly believes that employee/owners act differently than employees who do not
have a personal stake in their company. Trinity pays into the ESOP in accordance
with its culture of ownership and as a method for providing some retirement
funds for its employees.
All
eligible hourly and salaried employees participate, on a proportional basis, in
Trinity’s ESOP and Trinity’s profit sharing program. All eligible employees
receive the same percentage of their eligible compensation, consisting primarily
of their base salaries, through these programs. Sixty percent of each eligible
employee’s award is in the form of a cash bonus through the profit sharing
program and forty percent is contributed to the employee's ESOP account.
Full-time employees become eligible for ESOP participation the year following
the completion of 1,000 hours of service. An employee’s ownership of his or her
ESOP account currently vests incrementally over a period of six years. Full-time
employees become eligible for profit sharing participation the year following
the completion of 18 months of service. Trinity’s contribution to these programs
is recommended by the Compensation Committee and determined by the full Board
based on the profitability of Trinity and is entirely
discretionary.
To the extent permitted under the CPP
rules during the Participation Period, Trinity’s NEOs participate in Trinity’s
profit sharing and ESOP program on the same basis as all eligible employees. The
Board determines, based on the Committee’s
recommendation, the contribution amount, if any, each year based on Trinity’s
performance. Trinity has granted approximately 7% of its pre-tax net income to
these plans for each of the last nine years. Trinity’s ESOP program has
top-heavy provisions that exclude an employee’s base salary in excess of
$220,000. In 2008, the Board approved a top-heavy make-up cash payment to
Trinity’s NEOs whose salaries are in excess of this amount so that they
participate in the same percentage, although those funds are granted as a cash
award in 2009. In January 2009, Mr. Enloe received top-heavy make-up
payment (based upon the 2008 ESOP contributions of 7% of pre-tax net income for
that year) of $8,240 and Mr. Wells received a top-heavy make-up payment of
$2,361. In 2009, the profit sharing and ESOP portion of Trinity’s NEOs’
compensation, including any top-heavy make-up payments paid in 2009 for 2008
contributions to the ESOP, constituted 6.8% of Mr. Enloe’s total
compensation; 9.4% of Mr. Wells’ total compensation; and 7.5% of
Mr. Bartholomew’s total compensation. The NEOs’ total compensation is based
upon the total amount shown in the Summary Compensation Table on page
29.
In its
December 22, 2009 meeting, the Board determined the Company would contribute to
Trinity’s profit sharing and ESOP in the amount of approximately 7% of pre-tax
net income, with ineligible employee's payments retained by the
Company. These programs reward all employees for their efforts
contributing to the profitability of Trinity. Additionally, the ESOP is the
second-largest shareholder of Trinity, tying the financial interest of our
employees to the interests of the shareholder in enhancing the value of
Trinity’s stock.
Page 23.………………………………………….……………………………… Trinity
Capital Corporation 2010 Proxy Statement
Long-Term
Incentives.
General. Trinity has granted
stock incentives to key employees, including its NEOs, as motivation to enhance
the appreciation of Trinity’s stock price and returns and to reward their
efforts through the long-term appreciation of Trinity’s stock price. While such
grants have a minimal dilutive effect on the interests of existing shareholders,
the Committee and the Board believe that aligning the senior leaders’ personal
long-term interests with those of the shareholders outweighs this effect. The
full benefit of the stock incentives are only realized upon the appreciation of
Trinity’s stock price, providing an incentive for participants to create value
for Trinity’s shareholders by delivering consistent and sustainable returns and
equity in the Company.
Trinity Capital Corporation 2005
Stock Incentive Plan. The following is a brief description of the
material terms of the 2005 Plan. The following summary is qualified in its
entirety by reference to the full Plan which may be found as Appendix A to
Trinity’s 2005 Proxy Statement.
|
·
|
A
maximum of 500,000 shares of Trinity’s common stock are reserved for
issuance. A maximum of 100,000 shares may be granted to an individual
during any calendar year. Shares delivered will be authorized but unissued
shares of Trinity common stock, treasury shares or shares purchased in the
open market or otherwise.
|
|
·
|
In
the event of recapitalizations, reclassifications or other specified
events affecting Trinity or shares of Trinity’s common stock, appropriate
and equitable adjustments may be made to the number and kind of shares of
Trinity’s common stock available for grant, as well as to other maximum
limitations under the 2005 Plan, and the number and kind of shares of
Trinity common stock or other rights and prices under outstanding
awards.
|
|
·
|
The
2005 Plan is an “omnibus” stock plan that permits the Compensation
Committee to utilize various types of equity-based
awards.
|
|
·
|
The
price of any stock option granted may not be less than the fair market
value of Trinity’s common stock on the date the option is granted. The
option price is payable in cash, shares of Trinity’s common stock, through a
broker-assisted cashless exercise or as otherwise permitted by the
Compensation Committee.
|
|
·
|
The
2005 Plan does not permit the repricing of options or stock appreciation
rights (“SARs”) without the approval of shareholders or permit the
granting of discounted options.
|
|
·
|
The
2005 Plan will have a term of ten years expiring on April 7, 2015, unless
terminated earlier by the Board. The Board may at any time and from time
to time and in any respect amend or modify the 2005 Plan. The Board may
seek the approval of any amendment or modification by Trinity’s
shareholders to the extent it deems necessary or advisable in its sole
discretion for purposes of compliance with Section 162(m) or Section 422
of the Internal Revenue Code, or another exchange or securities market or
for any other purpose.
|
1998 Stock Option Plan.
Awards granted prior to January 1, 2005 were issued under the 1998 Stock
Option Plan. This Plan can be found as Exhibit 10.4 to Trinity’s Form 10 filed
on April 30, 2003. Trinity no longer grants awards under the 1998 Plan although
17,000 shares are still authorized for issuance under this Plan. Stock Options
to purchase 229,000 shares of Trinity common stock issued under the 1998 Plan
were outstanding as of December 31, 2009.
Page 24.………………………………………….……………………………… Trinity
Capital Corporation 2010 Proxy Statement
Equity Awards. Mr. Enloe
makes recommendations to the Board with regard to the amount and type of stock
awards for all other employees. These recommendations are considered by the
Committee which, in turn, provides its own recommendations for approval by the
full Board. The Committee delegates administration of the awards to management.
Trinity does not have a program, plan or practice to time equity awards to its
executives in coordination with the release of material nonpublic information
nor does Trinity time the release of material non-public information for the
purpose of affecting the values of executive compensation. Trinity has not
repriced any compensation awards, including stock incentive grants nor has it
made any material modifications to these Plans or awards. Trinity typically
determines grants of stock incentives near the end of each fiscal year and
announces those awards as soon as practicable following the grant.
Trinity’s
stock incentive awards have been priced at or above the market value of the
stock based on the last reported sale price as of the date of grant which is
also the date of approval, with the exception of the July 1998 stock option
grant which was granted at $0.25 below the last reported sale price and the
January 1, 2006 stock appreciation right grant which was approved on December
15, 2005 and granted at the closing market price as of December 31, 2005.
Trinity set the SARs grant date on a date other than the approval date as the
result of an accounting rule change benefiting Trinity that took effect on
January 1, 2006. Trinity has awarded all stock option and SARs based on the last
reported market price of Trinity’s stock on the option grant date, with the
exception of the July 1998 and January 2006 grants as described above. Trinity
will in the future price all options and other equity awards at or above market
price as of the actual grant date.
Trinity
has shifted from the grant of Non-Qualified Stock Options (NQSOs) to the grant
of SARs beginning in 2006 due to several considerations. The Committee and the
Board determined that the dilutive effect of such awards were reduced by the
grant of SARs rather than NQSOs as fewer shares will be issued upon maturity,
thereby benefitting Trinity’s shareholders. Additionally, the Committee and the
Board considered the expense to exercise and pay taxes associated with NQSOs,
thereby limiting the motivational effect on grantees. The Committee and the
Board concluded that the grant of SARs, rather than NQSOs, better served the
interests of both grantees and shareholders.
As
discussed above, Trinity did not award any stock incentives to the NEOs in 2008
or 2009.
Page 25.………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
Compensation
Committee Report
The
report of the Compensation Committee below shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent Trinity specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
The
Compensation Committee reviewed and discussed Trinity’s Compensation Discussion
and Analysis with management. The Compensation Committee also reviewed its
composition and concluded that a majority of Directors serving on the
Compensation Committee are independent pursuant to the standards promulgated by
Nasdaq. The Compensation Committee has met and held discussions with management
regarding the fair and complete presentation of Trinity’s compensation
practices, policies and plans.
In
addition, the Compensation Committee certifies that:
|
·
|
In
May 2009 and again in December 2009, it reviewed with Trinity’s Internal
Auditor and General Counsel, the Company’s NEO incentive compensation
arrangements and made all reasonable efforts to ensure that such
arrangements do not encourage NEOs to take unnecessary and excessive risks
that threaten the value of the
Company;
|
|
·
|
During
the six month period beginning September 14, 2009, it reviewed with
Trinity’s Internal Auditor and General Counsel the employee compensation
plans, including NEO incentive compensation plans, and made all reasonable
efforts to limit any unnecessary risks these plans pose to the Company;
and
|
|
·
|
During
the six month period beginning September 14, 2009, it reviewed with
Trinity’s Internal Auditor and General Counsel the employee compensation
plans to eliminate any features of these plans that would encourage the
manipulation of reported earnings of Trinity to enhance the compensation
of any employee.
|
The
certification above is being provided in accordance with the requirement of the
Interim Final Rule issued June 15, 2009 by the U.S. Department of the
Treasury.
In the
course of conducting its Risk Assessment, the Compensation Committee considered
the overall business and risk environment confronting Trinity and how the NEO
compensation plans and employee compensation plans serve to motivate employee
behavior when operating within that environment. In particular, the
Compensation Committee’s Risk Assessment focused on the following compensation
plans (* denotes plans in which NEOs participate):
| Base Salary* | Employee Stock Ownership Plan* |
| Performance Bonuses* | Equity Incentive Plan* |
| Annual Bonuses | Change in Control Agreements* |
| Profit Sharing* |
401(k)
Plan
|
With the
exception of Change in Control Agreements, Trinity does not maintain any
compensation plans in which only NEOs participate. For purposes of
this discussion, references to “NEO compensation plans” mean the portion of an
employee plan in which the NEOs participate.
Page 26.………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
With
respect to the NEO compensation plans, the Compensation Committee believes that
such plans do not encourage Trinity's NEOs to take unnecessary or excessive
risks that could harm the value of the company. The Compensation
Committee believes this to be true because, as is more fully described in the
Compensation Discussion and Analysis, the Compensation Committee strives to
provide a balanced aggregate compensation package to our NEOs that serves to
incentivize our NEOs to manage the business of Trinity in a way that will result
in company-wide financial success and value growth for our
shareholders.
We
believe it is appropriate for our executives to focus certain of their efforts
on near-term goals that have importance to the company; however, we also
acknowledge that near-term focus should not be to the detriment of a focus on
the long-term health and success of Trinity. In practice, providing
base salary to any employee provides the most immediate reward for job
performance. The Compensation Committee engages in an annual process,
as is described in the Compensation Discussion and Analysis, to set base
salary. We believe our process for establishing base salary is
relatively free from risk to the company, as we do not typically make
significant adjustments to base salary based on a single year’s
performance. The Committee believes it is appropriate to reward our
executives' focus on near-term goals, when such goals correspond to the overall
company goals and direction set by our Board of Directors. To reward
the executives for such focus, the Compensation Committee may award, at its full
discretion, cash bonuses to our executives. In awarding cash bonuses
through our profit sharing program, we try to provide an adequate level of
reward and future incentive for the achievement of company goals, while also
ensuring that the amounts awarded are not such a substantial portion of the
total compensation that they could promote behavior that would encourage
unreasonable or excessive risks. In this way, we believe the awards
under our profit sharing program do not encourage our executives to take
unnecessary or excessive risks that could harm the value of
Trinity.
The other
incentive compensation elements offered to our NEOs, with the exception of
perquisites, are intended to reward performance over the long-term or are
intended to focus our executives’ attention on the long-term performance of the
company. We feel there is little, if any, risk associated with our
Employee Stock Ownership Plan (ESOP) and 401(k) Plan as both
are tax-qualified retirement plans that are subject to and maintained in
accordance with the mandates of the Internal Revenue Code and the Employee
Retirement Income Security Act. We believe our Equity Incentive Plans
help to tie our executives’ interest more closely to those of our shareholders
by giving them an equity interest in the company. We feel this equity
interest in Trinity promotes a long-term focus among our executives on the
financial success of the company. Finally, while Trinity has adopted
a deferred compensation plan, it has not yet granted its use by any employee or
NEO.
With
respect to the employee compensation plans, the Risk Assessment has not resulted
in a determination by the Compensation Committee that changes were necessary to
bring such plans into compliance with the CPP rules. We believe the
company has adequate policies and procedures in place to balance and control any
risk-taking that may be incentivized by the employee compensation
plans. The Committee further believes that such policies and
procedures will work to limit the risk that any employee would manipulate
reporting earnings in an effort to enhance his or her compensation.
The
Committee intends to continue, in accordance with its obligations under CPP, to
periodically review and assess the NEO compensation plans and employee
compensation plans to ensure that the risk-taking behavior incentivized by such
plans is kept to an appropriate level. The Committee will, as
necessary, amend or discontinue any plan or revise any company policy or
procedure to meet its obligations under CPP.
Page 27 .………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
Based on
the review and discussions, the Compensation Committee determined that the risk
management oversight and the internal controls embedded within the organization,
the discretionary nature of most compensation plans or a combination of these
features, are key features that serve to ensure that the compensation plans do
not encourage undesirable risk-taking activities or the manipulation of
earnings. The Compensation Committee has recommended to the Board,
and the Board has approved, that the Compensation Discussion and Analysis
contained herein be included in Trinity’s Annual Report on Form 10-K for the
year ended December 31, 2009 and Proxy Statement, for filing with the Securities
and Exchange Commission.
The
Compensation Committee:
Robert P.
Worcester (Chair)
Jerry
Kindsfather
Lewis A.
Muir
Stanley
D. Primak
Charles
A. Slocomb
Page 28 .………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
Executive
Compensation
Named Executive
Officers (“NEOs”). Trinity currently has three NEOs. These officers are:
William C. Enloe, Chief Executive Officer and President of Trinity, Chief
Executive Officer and Chairman of LANB and Chief Executive Officer and Chairman
of Title Guaranty; Steve W. Wells, Secretary of Trinity and President and Chief
Administrative Officer of LANB; and Daniel R. Bartholomew, Chief Financial
Officer of Trinity and LANB. The following table contains the summary of
compensation to Trinity’s NEOs from 2007 to 2009.
|
2009
Summary Compensation Table
|
||||||
|
Name
and
Principal
Position
|
Year
|
Salary
|
Total
|
|||
|
($)
|
($)
|
($)
|
($)
|
($)
|
||
|
(a)
|
(b)
|
(c)
|
(d)
|
(f)
|
(i)
|
(j)
|
|
William
C. Enloe, Chief Executive Officer of Trinity
|
2009
2008
|
372,339
372,339
|
0
250
|
0
0
|
29,054
57,542
|
401,393
430,131
|
|
2007
|
347,975
|
45,275
|
128,355
|
68,240
|
589,845
|
|
|
Steve
W. Wells, President of LANB
|
2009
2008
|
255,549
255,549
|
0
250
|
0
0
|
27,187
44,590
|
282,736
300,389
|
|
2007
|
240,822
|
20,250
|
64,178
|
33,690
|
358,940
|
|
|
Daniel
R. Bartholomew, Chief Financial Officer of Trinity
|
2009
2008
|
149,248
149,248
|
0
0
|
0
0
|
12,218
20,532
|
161,466
169,780
|
|
2007
|
132,475
|
7,000
|
29,928
|
17,074
|
186,477
|
|
|
(1)
|
Bonus
consists of discretionary performance and other
bonuses.
|
|
(2)
|
Amounts
reported under this column reflect the grant date fair value of during the
years ended December 31, 2009, 2008 and 2007, in accordance with FASB ASC
Topic 718. The assumptions used in calculating these
amounts are set forth in Note 13 to our consolidated financial
statements for the year ended December 31, 2009, which is located on pages
96 and 97 of our Annual Report on Form 10-K. Option awards were
awarded to Mr. Enloe and Mr. Wells in both January 2007 and December
2007. The awards in January were based upon 2006
performance.
|
Included
in the above Summary Compensation Table is Other Compensation (Column i). The
following table provides more detail on the compensation paid to Trinity’s NEOs
in 2009 included in that column.
|
All
Other Compensation Table
|
||||||
|
Name
|
Year
|
Perquisites
and Other Personal Benefits
|
Profit
Sharing
|
Insurance
Premiums
($)
|
Company
Contributions
Related
to ESOP
|
Total
($)
|
|
($)
|
($)
|
($)
|
||||
|
William
C. Enloe
|
2009
|
-
|
21,225
|
1,958
|
5,871
|
29,054
|
|
Steve
W. Wells
|
2009
|
-
|
20,748
|
568
|
5,871
|
27,187
|
|
Daniel
R. Bartholomew
|
2009
|
-
|
8,306
|
120
|
3,792
|
12,218
|
Page 29 .………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
Profit
Sharing paid to our NEOs was paid in January 2009, prior to our entry into CPP,
and was based upon the financial performance of Trinity in
2008. Included in “Insurance Premiums” are health, life and
disability insurance for our NEOs which are provided on the same terms to all
employees. “Company Contributions Related to ESOP” is constituted of
contributions to the ESOP and ESOP top heavy contributions received by the NEOs
in cash. ESOP top heavy payments were paid in January 2009, prior to our entry
into CPP, and based upon the financial performance of Trinity in
2008.
Grants
of Plan-Based Awards
One
element of the compensation for Trinity’s NEOs is the granting of long-term
stock incentives. All stock incentives are granted based on incentive plans
approved by the shareholders. These include the 1998 Stock Option Plan and the
Trinity Capital Corporation 2005 Stock Incentive Plan. Trinity did not grant any
stock incentives to its NEOs in 2009.
Outstanding
Equity Awards at Fiscal-Year End
The table below depicts all equity
awards outstanding as of the 2009 year-end.
|
2009
Outstanding Equity Awards at Fiscal Year-End Table
|
||||
|
Number
of Securities Underlying Unexercised Options (#)
|
||||
|
Name
|
Exercisable
|
Unexercisable
|
Option
Exercise Price
($)
|
Option
Expiration Date
|
|
William
C. Enloe
|
0
|
16,000
|
$ 25.00
|
12/18/2012
|
|
0
|
18,000
|
$ 28.75
|
1/16/2012
|
|
|
0
|
28,000
|
$ 28.00
|
1/1/2011
|
|
|
28,000
|
0
|
$ 30.50
|
8/16/2015
|
|
|
28,000
|
0
|
$ 32.00
|
12/18/2013
|
|
|
28,000
|
0
|
$ 22.00
|
12/19/2012
|
|
|
28,000
|
0
|
$ 20.00
|
12/20/2011
|
|
|
28,000
|
0
|
$ 20.00
|
12/14/2010
|
|
|
Steve
W. Wells
|
0
|
8,000
|
$ 25.00
|
12/18/2012
|
|
0
|
9,000
|
$ 28.74
|
1/16/2012
|
|
|
0
|
14,000
|
$ 28.00
|
1/1/2011
|
|
|
14,000
|
0
|
$ 30.50
|
8/16/2015
|
|
|
14,000
|
0
|
$ 32.00
|
12/18/2013
|
|
|
14,000
|
0
|
$ 22.00
|
12/19/2012
|
|
|
Daniel
R.
|
0
|
4,000
|
$
25.00
|
12/18/2012
|
|
Bartholomew
|
0
|
4,000
|
$ 28.75
|
1/16/2012
|
|
0
|
7,000
|
$ 28.00
|
1/1/2011
|
|
|
7,000
|
0
|
$ 30.50
|
12/16/2014
|
|
(1) SARs vest
on the fifth anniversary of the date of grant.
|
(2)
|
NQSOs
vest in equal amounts over the first three years following grant and
expire on the tenth anniversary of
grant.
|
Page 30.………………………………………….……………………………… Trinity
Capital Corporation 2010 Proxy Statement
Option
Exercises and Stock Vested in 2009
The
following table shows the number of shares of stock acquired through the
exercise of options in 2009 and the value realized on exercise. The value
realized on exercise is calculated by the difference of the option exercise
price and the reported trade price as of the date of exercise multiplied by the
number of shares exercised. The options exercised in 2009 were all Non-Qualified
Stock Options issued under the 1998 Stock Option Plan and as such the value
realized on exercise listed below is taxable as ordinary income to the
grantee.
|
2009
Option Exercises and Stock Vested Table
|
||
|
Name
|
Option Awards
|
|
|
Number
of Shares Acquired on Exercise
|
Value
Realized on Exercise
|
|
|
(#)
|
($)
|
|
|
William
C. Enloe
|
-
|
-
|
|
Steve
W. Wells
|
14,000
|
24,500
|
|
Daniel
R. Bartholomew
|
-
|
-
|
Employment
Agreements
Trinity has entered into Employment
Agreements with Mr. Enloe and Mr. Wells. Trinity entered into these
agreements to provide certainty in the relationship between Trinity and these
two key employees in relation to their positions, non-compete and
non-solicitation agreements and change of control provisions. The key provisions
to these agreements are discussed below in the Post-Employment Compensation
section and are qualified in their entirety by reference to the full Employment
Agreements, as modified, which may be found as Exhibits 10.11 and 10.12 to
Trinity’s Form 10-K filed on March 16, 2007 and Amended on March 13, 2008, which
Amendments may be found as Exhibits 10.11 and 10.12 to Trinity’s Form 10-K filed
on March 17, 2008 and Amended by an Omnibus Compensation Amendment executed on
March 24, 2009, the form of which Amendments may be found as Exhibit 10.3 to
Trinity’s Form 8-K filed on March 27, 2009. In addition, Mr. Enloe
and Mr. Wells have entered into a Waiver, the form of which may be found as
Exhibit 10.2 to Trinity’s Form 8-K filed on March 27, 2009, waiving certain
rights under the Employment Agreements and other benefit and compensation plans
pursuant to the requirements for participation in the CPP.
Page 31.………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
Trinity’s
Employment Agreements contain non-compete, non-solicitation, non-disparagement
and confidentiality provisions, equitable enforcement provisions, and dispute
resolution provisions. These provisions were consideration to induce Trinity to
enter into the agreements and thus, any benefit conferred by the Employment
Agreements is conditioned on the honoring of these terms by the employee.
Trinity’s Employment Agreements further precondition the receipt of any
severance pay or other benefits upon the employee remaining available for
consultation for a twelve month period following termination, not to exceed 100
hours and the release of any employment related claims. Trinity modified these
Employment Agreements on March 24, 2009, through an Omnibus Amendment and Waiver
in order to comply with the CPP rules, as discussed in more detail in the
Compensation Discussion and Analysis beginning on page 17 above. The Omnibus
Amendments and Waivers, among other provisions, required Mr. Enloe and Mr. Wells
to relinquish all rights to severance payments during the CPP Participation
Period. Trinity determined that it was appropriate to eliminate the non-compete
provisions of those Employment Agreements in the limited circumstance that the
employment of Mr. Enloe or Mr. Wells is terminated and said employee(s) are
prohibited by law from receiving the severance provided in consideration for
such non-competition provisions. The non-solicitation and non-disparagement
provisions remain in full effect regardless of the receipt of severance or other
benefits. Upon repayment in full of CPP funds, Mr. Enloe and Mr.
Wells will again be entitled to severance payments in accordance with the terms
of the Employment Agreements and will be subject to their non-compete
provisions.
Trinity’s
amendments to the Employment Agreements with Mr. Enloe and Mr. Wells on March
24, 2009, also included the imposition of a provision that requires the
adjustment or recovery of awards or payments upon restatement or other
adjustment of relevant company financial statements or performance metrics.
Thus, to the extent that such adjustment or recovery is required under
applicable securities law, the CPP rules or other law, Trinity’s Employment
Agreements with Mr. Enloe and Mr. Wells provide that they will make
restitution. Awards or payments made to Mr. Bartholomew and the top
twenty highest compensated employees will likewise be subject to recovery upon
restatement or other adjustment of relevant company financial statements or
performance metrics.
Post-Employment
Compensation
The CPP
rules will prohibit the Company from making any payment to the NEOs for
departure from Trinity for any reason, except for payments "for services
performed or benefits accrued." Except in the case of an NEO's death
or disability, the CPP rules generally will prohibit the payment of any
severance amounts and will also serve to restrict the ability of Trinity to
accelerate the vesting of any compensation and/or benefits upon a termination of
employment or a change in control.
The
Compensation Committee believes that, even though the CPP rules will prohibit
such payments if a change in control or other termination of employment occurs
during the Participation Period, it is beneficial to understand the terms of the
arrangements that would apply except for such CPP rules.
Trinity
has various agreements which require payments be made to its NEOs upon
termination or constructive termination. The following is a description of the
applicable post-employment plans and benefits provided by Trinity through its
employment plans and agreements to its NEOs. As noted above and in the
Compensation Discussion and Analysis section of this Proxy Statement, because of
the application of the CPP rules, if a termination of either Mr. Enloe or Mr.
Wells had occurred as of December 31, 2009, neither would have been eligible to
receive any severance. Mr. Bartholomew is not a party to an agreement
that provides for any severance payments upon a termination of
employment.
Trinity
does not have a Pension Benefits Plan nor have its employees used the Trinity
Capital Corporation 2005 Deferred Income Plan. Trinity’s NEOs participate in
Trinity’s ESOP, which is a qualified retirement plan, in the same manner as all
other Trinity employees. All of Trinity’s NEOs are fully vested in the ESOP and
would be entitled to distribution of their account balances upon termination for
any reason. The values of the NEOs’ ESOP accounts are not included in the
Post-Termination Payments below and would not be subject to the CPP's
prohibition on severance payments.
Upon the
conclusion of the CPP Participation Period, when the CPP rules are no long
applicable to Trinity and its employees, Mr. Enloe and Mr. Wells will again be
eligible to receive certain severance payments under their Employment Agreements
as described below.
Page 32.………………………………………….……………………………… Trinity
Capital Corporation 2010 Proxy Statement
Payments upon
Voluntary Termination. New Mexico is an “at will” employment state, and
does not require severance payments upon voluntary termination in the absence of
an agreement to the contrary. None of Trinity’s NEOs are entitled to
payment of severance upon voluntary termination. Mr. Enloe and Mr.
Wells are required to provide 60 days prior notice of their intent to terminate
employment voluntarily under their Employment Agreements. The NQSOs
granted under the 1998 Plan exercisable as of the date of an NEO or other
recipient’s voluntary termination must be exercised by the earlier of the
specified expiration date or two years following the date of
termination. All non-vested NQSOs are forfeited on the date of
voluntary termination. Under the 2005 Plan, NEOs or other recipient
employees who voluntarily terminate must exercise all vested NQSOs within 90
days following termination. NQSOs granted under the 2005 Plan that
are not vested on the date of voluntary termination are
forfeited. Under the 2005 Plan, all SARs immediately vest and are
settled as of the date of voluntary termination
Payments upon
Termination Without Cause (without Change in Control). New
Mexico is an “at will” employment state, and does not require severance payments
for termination without cause in the absence of an agreement to the contrary.
Pursuant to their Employment Agreements, Mr. Enloe and Mr. Wells are entitled to
payment of severance in the amount of 12 months’ base salary upon termination
without cause during the term of their Employment Agreements. Mr. Bartholomew is
not entitled to any severance payments following termination without cause.
However, under the CPP rules, these severance payments are impermissible and the
Omnibus Agreements executed by Mr. Enloe and Mr. Wells eliminated these payments
during the Participation Period.
NQSOs
granted under the 1998 Plan exercisable as of the date of termination without
cause must be exercised by the earliest of the specified expiration date or two
years following the date of termination. All non-vested NQSOs issued under the
1998 Plan are forfeited on the date of termination without
cause. Under the 2005 Plan, employees who are terminated without
cause must exercise all vested NQSOs within 90 days following termination. NQSOs
granted under the 2005 Plan that are not yet vested are forfeited. Under the
2005 Plan, all SARs immediately vest and are settled as of the date of
termination without cause. This acceleration of SAR vesting would not
be permitted under the CPP rules with respect to a termination occurring during
the Participation Period.
Payments upon
Termination for Cause (without Change in Control). New Mexico
is an “at will” employment state, and does not require severance payments upon
termination for cause in the absence of an agreement to the contrary. None of
Trinity’s NEOs are entitled to payment of severance upon termination for
cause. NQSOs granted under the 1998 Plan exercisable as of the date
of termination for cause must be exercised by the earliest of the specified
expiration date or two years following the date of termination. All non-vested
NQSOs granted under the 1998 Plan are forfeited on the date of termination for
cause. Under the 2005 Plan, all NQSOs expire the day prior to
termination when termination is for cause. SARs granted under the 2005 Plan are
forfeited if termination is for cause.
Payments upon
Termination Following a Change in Control. In the event that
Messrs. Enloe or Wells are terminated within 12 months of a change of
control, either with or without cause, each shall be entitled to a lump sum
payment of 12 months salary (based upon his then-current rate). Should
Messrs. Enloe or Wells be terminated for non-renewal of his employment
Agreement within 6 months of a change of control, each shall be entitled to the
change of control payments specified above. Should Messrs. Enloe or Wells
terminate his employment due to a detrimental change within 24 months of a
change of control, each shall be entitled to the change of control payments
specified above. All change of control payments are limited in amount in order
to comply with the Internal Revenue Code section 280G. However, under the CPP
rules, these severance payments are impermissible and the Omnibus Agreements
executed by Mr. Enloe and Mr. Wells eliminated these payments during the
Participation Period. Mr. Bartholomew is not entitled to any severance upon
termination following a change in control.
Page 33.………………………………………….……………………………… Trinity
Capital Corporation 2010 Proxy Statement
The 1998
Plan provides that upon a change in control, all existing NQSOs immediately vest
and are exercisable. The 1998 Plan also provides that the grantee must exercise
all vested NQSOs by the earlier of the specified expiration date or the second
anniversary of termination due to change in control. NQSOs granted under the
2005 Plan immediately vest and are exercisable upon a change in control, unless
vesting is conditioned upon performance in which case certain percentages of the
awards are vested and exercisable in accordance with the percentages of
performance attained as more specifically provided in the 2005 Plan. Under the
2005 Plan, all SARs immediately vest and are settled as of the date of
termination due to a change in control. The acceleration of equity
award vesting would not be permitted under the CPP rules with respect to a
termination occurring during the Participation Period.
Payments upon
Termination due to Disability or Death. New Mexico is an “at will”
employment state, and does not require severance payments upon termination due
to disability or death in the absence of an agreement to the contrary. None of
Trinity’s NEOs are entitled to payment of severance upon termination due to
disability or death. NQSOs granted under the 1998 Plan
exercisable as of the date of termination due to disability must be exercised by
the earliest of the specified expiration date or two years following the date of
termination. All non-vested options are forfeited on the date of termination due
to disability. NQSOs issued under the 1998 Plan exercisable as of the date of
death must be exercised by the earlier of the specified expiration date or the
first anniversary of the date of death. All non-vested options are forfeited on
the date of death. Under the 2005 Plan, all stock options exercisable as of the
date of termination due to disability or the date of death must be exercised by
the earlier of the specified expiration date or the first anniversary of the
date of termination due to disability or the date of death. All non-vested
options are forfeited. Under the 2005 Plan, all SARs immediately vest and are
settled as of the date of termination due to disability or the date of
death.
Compensation
Committee Interlocks and Insider Participation
During 2009, no NEO of Trinity served
as (1) a member of a compensation committee (or other board committee performing
equivalent functions, or in the absence of any such committee, the entire board
of directors) of another entity, one of whose executive officers served on
Trinity’s Compensation Committee, (2) a director of another entity, one of whose
executive officers served on Trinity’s Compensation Committee or (3) a member of
the Compensation Committee (or other board committee performing equivalent
functions or, in the absence of any such committee, the entire board of
directors) of another entity, one of whose executive officers served as director
of Trinity. In addition, none of the members of the Compensation
Committee (a) was an officer or employee of Trinity or any of its subsidiaries
in 2009, (b) was formerly an officer or employee of Trinity or any of its
subsidiaries, or (c) had any relationship requiring disclosure under “Certain
Relationships and Related Transactions” found on page 15 of this Proxy
Statement, with the exception of Ms. Johnson who ceased being a member of the
Compensation Committee in March 2009.
Page 34.………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
Director
Compensation
In 2009,
Trinity’s Board was composed of ten directors, eight of whom are non-employee
directors. We also had one Director Emeritus. Trinity provides compensation to
Trinity’s outside directors based on the service they provide to the Company.
Trinity’s inside directors, William C. Enloe and Steve W. Wells, and Trinity’s
Director Emeritus, George A. Cowan, are provided no compensation for their
services as directors, but Trinity’s employed directors are compensated for
their positions within Trinity as described above.
|
2009
Director Compensation
|
|||
|
Name
|
Fees
Earned or Paid in Cash
($)
|
All
Other Compensation ($)
|
Total ($)
|
|
Jeffrey
F. Howell
|
18,000
|
1,283
|
19,283
|
|
Deborah
U. Johnson
|
18,000
|
1,283
|
19,283
|
|
Jerry
Kindsfather
|
18,000
|
1,283
|
19,283
|
|
Arthur
B. Montoya, Jr.
|
18,000
|
1,283
|
19,283
|
|
Lewis
A. Muir
|
18,000
|
1,283
|
19,283
|
|
Stanley
D. Primak
|
21,600
|
1,539
|
23,139
|
|
Charles
A. Slocomb
|
18,000
|
1,283
|
19,283
|
|
Robert
P. Worcester
|
24,000
|
1,710
|
25,710
|
|
George
A. Cowan
|
-
|
-
|
-
|
|
(1)
|
All
Other Compensation consists of tax gross-ups. Trinity does not provide for
the payment of any tax gross-ups to its
NEOs.
|
All of Trinity’s directors are paid a
retainer on a monthly basis for their service to Trinity and LANB. No
compensation was paid to the directors of Title Guaranty. The monthly fee paid
for service as a director of Trinity is $500 and the monthly fee paid for
service as a director of LANB is $1,000. Trinity’s Chair and
Vice-Chair are paid an additional fee per month of service. The Chair receives
an additional $500 per month and the Vice-Chair receives an additional $300 per
month. Committee Chairs are not paid additional fees. Beginning in
March 2010, Trinity's three members of the Board Compliance Committee, Messrs.
Kindsfather, Slocomb and Worcester, will be paid an additional $500 per month
for service on this Committee.
Trinity does not have any stock
ownership guidelines; however, each of its directors is required to comply with
12 U.S.C. Section 72 which requires its directors to own a minimum of $1,000 in
Trinity’s stock. Each of Trinity’s directors owns in excess of $1,000 worth of
Trinity’s stock. See “Security
Ownership of Certain Beneficial Owners, Directors and Management” table
on page 8 for further information.
Page 35.………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
Audit
Committee Report
The
report of the Audit Committee below shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under
the Securities Exchange Act of 1934, except to the extent Trinity specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
The
Committee obtained from Moss Adams a formal written statement describing all
relationships between Moss Adams, LLP (“Moss Adams”) and Trinity that might bear
on the independent registered public accounting firm’s independence consistent
the applicable requirements of the Public Company Accounting Oversight Board
regarding the independent accountant’s communications with the audit committee
discussed with the independent registered accounting firm any relationships that
may impact its objectivity and independence, and satisfied itself as to the
firm’s independence. The Committee also reviewed its composition and
concluded that all directors serving on the Committee are independent pursuant
to the standards promulgated by Nasdaq.
The
Committee met and held discussions with management and Moss Adams regarding the
fair and complete presentation of Trinity’s results and the assessment of the
quality and adequacy of Trinity’s internal control over financial
reporting. The Committee reviewed and discussed Trinity’s policies
with respect to risk assessment and risk management. The Committee discussed
with Trinity’s internal auditor and Moss Adams the overall identification of
audit risks, scope and plans for their respective audits. The Audit Committee
has reviewed and discussed Trinity’s audited financial statements for the year
ended December 31, 2009 with Trinity’s management, Trinity’s internal auditors
and Moss Adams.
The
Committee met with the internal auditor and Moss Adams, with and without
management present, to discuss the results of their examinations, the
evaluations of Trinity’s internal controls, and the overall quality of Trinity’s
financial reporting. The Audit Committee discussed and reviewed with the
independent registered public accounting firm all communications required by
generally accepted accounting standards, including those described in Statement
on Auditing Standards No. 114, “The Auditor’s Communication with
those Charged with Governance,” as amended. Management has the
responsibility for the preparation of Trinity’s financial statements and the
independent registered public accounting firm has the responsibility for the
audit of those statements in accordance with the standards of the Public Company
Accounting Oversight Board.
Based on
the review and discussions with management and Moss Adams, the Committee has
recommended to the Board, and the Board has approved, that the audited financial
statements be included in Trinity’s Annual Report on Form 10-K for the year
ended December 31, 2009, for filing with the Securities and Exchange Commission.
The Audit Committee also reappointed the independent registered public
accounting firm, Moss Adams, LLP, and the Board of Directors concurred in such
reappointment.
The
Audit Committee:
Jeffrey
F. Howell, Chair
Lewis A.
Muir
Arthur B.
Montoya, Jr.
Charles
A. Slocomb
Robert P.
Worcester
Page 36.………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
Item
I
Election
of Directors
Trinity
has a staggered Board of Directors, divided into three classes. One class is
elected annually to serve for a three-year term or until his or her successor is
elected. Mr. Muir is not eligible to stand for re-election under the provisions
of Trinity’s Bylaws as he is over the age of 75 at the time of the 2010 Annual
Meeting when his current term expires. The Board has determined to continue with
a Board consisting of nine directors. Three Class I directors will be elected at
the 2010 Annual Meeting to serve for a three-year term expiring in 2013. Each of
the nominees for election as Class I directors are incumbent
directors.
Director
Nominations and Qualifications. The Nominating and Corporate Governance
Committee follows the procedures contained in Trinity’s bylaws and the
nominating policies and procedures to identify, evaluate and select nominees for
the Board of Directors. The Nominating and Corporate Governance Committee
considers candidates suggested by the Board, management and shareholders.
Existing directors whose terms will expire at the next Annual Meeting will
automatically be evaluated unless that director expresses his or her intent not
to stand for re-election.
After a
new candidate for director is identified by the Board or nominated by a
Shareholder, the Committee will compile the information required in Trinity’s
bylaws and will make an initial determination whether to entertain the candidate
based on information provided to the Committee, the directors’ own knowledge and
any other inquiries made by the Committee. This preliminary determination is
also based on Trinity’s Director Criteria, the current composition of the Board,
the balance of management and independent directors, and the need for Audit
Committee members or other expertise and any other factor deemed relevant by the
Committee. While we do not have a separate diversity policy, the Committee also
considers diversity in reviewing its current directors and any potential
nominees. The Committee places value in a board composed of
characteristics reflective of our communities in terms of gender and race, as
well as differing perspectives in terms of professional fields, education,
skills, and community service. The Committee has broad discretion to
consider any additional factors it deems relevant to an assessment of a proposed
nominee’s suitability for the Board. If a candidate satisfies the initial
review, the Committee will conduct an interview of the candidate. The Committee
will also conduct interviews with all incumbent directors standing for
re-election and review their independence, qualifications, conduct, background
and areas of expertise. After conducting all interviews and evaluations, the
Committee meets in closed-sessions to discuss each nominee and makes its
recommendations to the Board. The Board will review the recommendations and make
the final determination of which nominees will be presented for
election.
In
considering potential nominees to the Board, and when evaluating incumbent
directors, the Nominating and Corporate Governance Committee shall seek to,
among other things, promote collegiality among members of the Board, encourage
directors to be active participants in the communities served by the Company and
contribute to organizations located in such communities. The Board
has adopted the following criteria for nominees to serve on Trinity’s
Board:
|
|
i.
|
Each
nominee should meet the minimum requirements for service on the Board
contained in Trinity’s bylaws.
|
Page
37.………………………………………….……………………………… Trinity Capital Corporation 2010
Proxy Statement
|
|
ii.
|
No
nominee can be eligible for election or re-election as a director if at
the time of election such person is 75 or more years of age, unless the
nominee was over the age of 75 when the bylaws were amended on February
18, 2003.
|
|
|
iii.
|
Each
nominee should possess the highest personal and professional ethics,
integrity and values.
|
|
|
iv.
|
Each
nominee should have, in the Nominating and Corporate Governance
Committee’s opinion, a sufficient educational and professional background
and have relevant past and current employment affiliations, board
affiliations and experience for service on the
Board.
|
|
|
v.
|
Each
nominee should have demonstrated effective leadership and sound judgment
in his or her professional life.
|
|
|
vi.
|
Each
nominee should have a strong sense of service to the communities which
Trinity and its subsidiaries serve.
|
|
|
vii.
|
Each
nominee should have exemplary management and communication
skills.
|
|
|
viii.
|
Each
nominee should be free of conflicts of interest that would prevent him or
her from serving on the Board. For the purposes of this item, individuals
who (a) have a borrowing relationship or (b) conduct business in the
ordinary course with Trinity or any of its subsidiaries should not, solely
because of such relationships, be deemed to have a “conflict of
interest.”
|
|
|
ix.
|
Each
nominee should be expected to ensure that other existing and future
commitments do not materially interfere with his or her service as a
director of Trinity.
|
|
|
x.
|
Each
nominee should review and agree to meet the standards and duties set forth
in Trinity’s Code of Business Conduct and Business
Ethics.
|
|
|
xi.
|
Each
nominee should be willing to devote sufficient time to carrying out their
duties and responsibilities effectively, and should be committed to serve
on the Board for an extended period of
time.
|
The
“independence” of non-management nominees will also be taken into account so
that at least a majority of the Board will be made up of directors who satisfy
the independence standards set forth by Nasdaq and the rules and regulations of
the SEC. Information regarding the nominating policies and
procedures, the director criteria and Trinity’s bylaws can be found on Trinity’s
website at http://www.lanb.com/TCC-Corporate-Governance.aspx.
There are no arrangements or
understandings between any of the nominees, directors or executive officers and
any other person pursuant to which any of Trinity’s nominees, directors or
executive officers have been
selected for their respective positions. No nominee, member of the Board or
executive officer is related to any other nominee, member of the Board or
executive officer. No nominee or director is a director of another “public
corporation” (i.e. subject to the reporting requirements of the Exchange Act) or
of any investment company. We have no knowledge that any nominee will refuse or
be unable to serve, but if any of the nominees are unavailable for election the
holders of the proxies reserve the right to vote for substitute nominees
proposed by the Board.
Page 38.………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
Shareholder
Nomination Procedure. Shareholders may nominate candidates for the Board
by following the procedure detailed in Trinity’s bylaws. The following is a
summary of the process for shareholder nominations:
|
·
|
The
shareholder must provide a written statement suggesting an individual as a
candidate that includes the information required by Trinity’s
bylaws.
|
|
·
|
The
statement must be received by the Corporate Secretary, in the case of an
annual meeting, not less than 60 days and not more than 90 days prior to
the first anniversary (day and month) of the previous year’s annual
meeting and, in the case of a special meeting, not less than 60 days and
not more than 90 days prior to the special
meeting.
|
Nominations
that are not received at least 120 days prior to the anniversary of the previous
year’s annual meeting will not be included in Trinity’s proxy statement but will
be presented for a vote at the Annual Meeting.
Shareholder
nominations for the 2011 Annual Meeting must be received by Trinity’s Secretary
not later than January 27, 2011 for inclusion in the Proxy Statement and no
earlier than February 28, 2011 and no later than March 28, 2011 to be voted upon
at the 2011 Annual Meeting.
Each
shareholder written statement must set forth: (a) as to each person whom the
shareholder proposes to nominate for election as director: (i) the name, age,
business address and residential address of such person; (ii) the principal
occupation or employment and business experience for the previous five years of
such person; (iii) The class and number of shares of Trinity’s stock which are
beneficially owned by such person on the date of the written statement; and (iv)
any other information relating to such person that would be required to be
disclosed pursuant to rules and regulations promulgated under the Securities
Exchange Act; and (b) as to the nominating shareholder giving the written
statement: (i) the name and address, as they appear on Trinity’s books, of the
nominating shareholder and the name and principal business address of any other
beneficial shareholder known by the nominating shareholder to support such
nominee; and (ii) the class and number of shares of stock which are beneficially
owned by the nominating shareholder on the date of such written statement and
the number of shares owned beneficially by any other record or beneficial
shareholders known by the nominating shareholder to be supporting such nominee
on the date of such written statement. All submissions must be accompanied by
the written consent of the proposed nominee to be named as a nominee and to
serve as a director if elected. The Nominating and Corporate Governance
Committee may request additional information in order to make a determination as
to whether to nominate the person for director.
Any
deficiencies in a notice of shareholder nomination will be noted by the
Corporate Secretary and the nominating shareholder will be informed and provided
an opportunity to cure the defect, if possible. The presiding officer will
determine whether a nomination was timely made and will make that determination
at the shareholders meeting.
No
shareholder nominations were received by the Corporate Secretary by March 23,
2010. The Nominating and Corporate Governance Committee has not retained or paid
any third parties to assist in the identification of nominees. All of the
nominees approved by the Nominating and Corporate Governance Committee for
inclusion in this Proxy Statement and listed on the Proxy Card are incumbent
directors standing for re-election.
Page 39.………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
2010
DIRECTOR NOMINEES
The
following descriptions provide the background and qualifications for each person
who has been nominated for election as a director, including the year each
became a director of Trinity and his or her positions with us.
|
Nominee
|
Principal
Occupation, Directorships,
Qualifications,
Attributes and Skills
|
||
 WILLIAM
C. ENLOE
Age
61
Director
Since 1979
Term
will expire 2013
|
Mr. Enloe
has served as President and Chief Executive Officer of Trinity since 1979.
He is a member of the Board’s Loan, Funds Management, Technology, Trust
and Strategic Planning Committees. Mr. Enloe has also served as the
Chairman and Chief Executive Officer of Los Alamos National Bank since
1994. Mr. Enloe has been employed by Los Alamos National Bank since
1971 and served as the President and Chief Executive Officer from
1978-1994; Vice President from 1975-1978; Cashier from 1973-1975; and as a
Loan Officer from 1971-1973. Additionally, he has served as Chief
Executive Officer and Chairman of the Board of Title Guaranty since May
2000 and TCC Advisors since its creation in February 2006. In addition to
his service to Trinity, Mr. Enloe is committed to New Mexico
charities and economic development efforts. Mr. Enloe is the Chair of
the Los Alamos Economic Development Land Use Committee, and serves as a
member on the Board of the LANS Venture Acceleration Fund Review Panel
(RAB), and the Los Alamos Economic Development Corporation. Additionally,
he serves as a member of the Boards of Directors of the Santa Fe
Institute, the Delle Foundation, Los Alamos Technical Associates, Inc. and
is also a managing member of KKSE, LLC. Mr. Enloe served as a director for
the Federal Reserve Board in Denver from 2008 to 2009.
Mr.
Enloe’s qualifications include extensive banking career beginning in
1971. Mr. Enloe also has executive experience in all areas of
banking. Mr. Enloe has extensive knowledge of the local, state
and national economy, has served on countless boards and organizations
serving the communities in which Trinity operates.
|
||
Page 40.………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
 DEBORAH
U. JOHNSON
Age
58
Director
Since 2001
Term
will expire 2013
|
Ms. Johnson
has served as a member of the Boards of Directors of Trinity and Los
Alamos National Bank since 2001. She has also served as Strategic Planning
Committee Chair since 2002 and is a member of the Nominating and Corporate
Governance, Compensation and Trust Committees. Ms. Johnson is the
Chairman and Director of Rick Johnson & Company, Inc., an advertising
and marketing firm headquartered in Albuquerque, New Mexico.
Ms. Johnson is the New Mexico member on the Federal Reserve Bank of
Kansas City’s Tenth District Economic Advisory Council. Very active in the
business community in Albuquerque, Ms. Johnson serves as Director for
the Albuquerque Economic Development Committee (Chairman 2002 and 2003),
and has served on the University of New Mexico Anderson Schools of
Management (Chairman 1999), the New Mexico Better Business Bureau
(Chairman 1999), and the Central New Mexico Susan G. Komen Foundation
(Chairman 2001), and the United Way Women’s Leadership Council.
Ms. Johnson has a long history of commitment to the business
community as well as charitable organizations in New Mexico and has served
as, among other positions, a Director of the New Mexico Association of
Commerce and Industry, Quality New Mexico and the Governor’s Business
Executives for Education. Ms. Johnson is past chairman of Affiliated
Advertising Agencies International, and has received numerous professional
awards including “Female Executive of the Year” by the New Mexico Chapter,
National Association of Female Executives; “Top 100 Power Broker” by New
Mexico Business Weekly; “Woman on the Move,” 1996 and “New Mexico of
Vision,” 2004, by the YWCA; “Top 25 Women Business Owners” by New Mexico
Woman Magazine; “Maxie Anderson Small Business Award” by the Greater
Albuquerque Chamber of Commerce, 1999; and The “ZIA” Achievement Award
from the University of New Mexico. The New Mexico Business Weekly named
her one of the state’s ten “Most Influential Women.”
Ms.
Johnson’s qualifications include extensive executive, public relations and
strategic planning experience. Ms. Johnson’s skills and
experience as an advertising executive aid in communications to
shareholders and customers. Ms. Johnson’s clear commitment to
the business and economic development in New Mexico make her knowledgeable
about the Albuquerque market and the state as a whole.
|
||
 CHARLES
A. SLOCOMB
Age
63
Director
Since 1999
Term
will expire 2013
|
Mr. Slocomb
has been a member of the Boards of Directors of Trinity and Los Alamos
National Bank since 1999. Mr. Slocomb is a member of the Board’s
Technology, Trust and Audit Committees. He retired from the Los Alamos
National Laboratory in August of 2004 and accepted a job with SAIC as a
consulting employee in November 2004. He held various management positions
at the Laboratory, including Project Director, Division Director and Group
Leader. He also serves as a member of the Board of Directors of Laguna
Vista Land Owners Association and as a volunteer firefighter for the
Laguna Vista Volunteer Fire Department. He and his wife, Connie, live in
Santa Fe, New Mexico.
Mr.
Slocomb’s qualifications include his expertise in technology and
computing, including data security. Mr. Slocomb has been a
long-time resident of Los Alamos and has knowledge about our communities
and the Laboratory which constitutes a major employer and business in our
markets.
|
The
Board of Directors unanimously recommends that you vote “FOR” all
nominees.
Page 41.………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
CONTINUING
DIRECTORS
Set forth below is
information concerning the business experience and qualifications for
each of the continuing directors.
|
Director
|
Principal
Occupation, Directorships,
Qualifications,
Attributes and Skills
|
 JEFFREY
F. HOWELL
Age
56
Director
Since 2002
Current
Term expires 2012
|
Ms. Howell
has served as a member of the Boards of Directors of Trinity and Los
Alamos National Bank since 2002 and was Chairman of the Board of Trinity
from 2004 to 2008. She is the Chair of the Audit Committee and serves as
the audit committee financial expert. Ms. Howell is also a member of
the Board’s Loan and Funds Management Committees. She is President and
Chief Executive Officer of Howell Fuel and Lumber Company, Inc.,
headquartered in Wallkill, New York. She was the founder and managing
Director of Howell Meyers Associates from 1997 to 2001, was employed in
various capacities at Harvard University from 1985 to 1991, including as
Associate Director for Administration at Harvard College Observatory and
Assistant Dean for Financial Operations in the Faculty of Arts and
Sciences. She was an accountant in the Emerging Business Systems Group at
Coopers & Lybrand from 1982 to1984 after having received her Masters
of Business Administration from Yale University. She is also a member of
the Board of Directors of The Delle Foundation, and the J. R. Oppenheimer
Memorial Committee. Ms. Howell was elected to the Lady Bird Johnson
Wildflower Center Advisory Council in 2009. Ms. Howell is a
former member of the Board of Directors and President of the Los Alamos
National Laboratory Foundation, membership chair of the League of Women
Voters of Los Alamos, a member of Rotary International and a past Dog
Handler and Search and Rescue volunteer for the K-9 Unit of the Pajarito
Ski Patrol.
Ms.
Howell’s qualifications include her business experience and financial
expertise. Ms. Howell has extensive experience in business
operations and has served as the Chair of Trinity's Audit Committee since
2003.
|
 JERRY
KINDSFATHER
Age
60
Director
Since 1984
Current
Term expires 2011
|
Mr. Kindsfather
served as the Chairman of the Board of Directors of Trinity from 2000 to
2004. Mr. Kindsfather has served as a member of the Boards of
Directors of Trinity and Los Alamos National Bank since 1984 and as a
member of the Board of Directors of Title Guaranty & Insurance Company
since May 2000. He is also a member of the Audit, Compensation, Trust,
Strategic Planning, Loan and Funds Management Committees.
Mr. Kindsfather retired in November 2003 after serving as the
President of AKC, Inc. since 1970 and as co-owner of Ed’s Foods, a retail
grocery store located in Los Alamos, New Mexico, since 1970. Mr.
Kindsfather is a partner in J&G Investments and is a managing member
of KKSE, LLC.
Mr.
Kindsfather has business management experience and experience as a small
business owner. Mr. Kindsfather has extensive accounting and
financial expertise. Mr. Kindsfather has significant experience
serving as a director for Trinity for over 25
years.
|
Page 42.………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
 ARTHUR
B. MONTOYA, JR.
Age
45
Director
Since 2001
Current
Term expires 2012
|
Dr. Montoya
has served as a member of the Board of Directors of Trinity and Los Alamos
National Bank since 2001. He is Chair of the Board’s Nominating and
Corporate Governance Committee and is a member of the Board’s Audit and
Loan Committees. Dr. Montoya runs a successful dental practice in Los
Alamos, New Mexico. He also serves as a member of the Board of Directors
of the Los Alamos Girls Basketball League, and is a director and Secretary
for the Los Alamos Historical Society. Dr.
Montoya has been on the Pajarito Home Owners Association Board
of Directors and is a past Chairman, taught religious education at
Immaculate Heart of Mary Catholic Church, is a past Chairman and member of
the Board of Directors of the Los Alamos Chamber of Commerce, a past
Chairman and member of the Board of Directors for the Los Alamos Medical
Center, is active in the Northern New Mexico Interdisciplinary Study Club,
is a girls basketball coach at Los Alamos Middle School, is a volunteer
for the Los Alamos Fusion Volleyball Club and is involved in the Special
Olympics of New Mexico.
Dr.
Montoya provides insight from his experience as a small business owner as
well as from the dental and general medical community. Dr.
Montoya has served the community through his participation in various
boards and organizations.
|
 STANLEY
D. PRIMAK
Age
58
Director
Since 2001
Current
Term expires 2012
|
Mr. Primak
has served as a member of the Boards of Directors of Trinity and Los
Alamos National Bank since 2001 and Vice Chairman of the Board of
Directors since 2008. He is also a member of the Board’s Loan,
Compensation and Nominating and Corporate Governance Committees.
Mr. Primak is Vice President of Primak Builders, Inc., a residential
construction company in Los Alamos, New Mexico, a position he has held
since 1996, and is Vice-President of Tranquillo Partners, a residential
construction and real estate management company. He is also a member of
the Board of Directors and Chairman for of the Los Alamos Commerce and
Development Corporation, a member of the Los Alamos County Personnel
Board, a member of the League of Women Voters and is President of the Los
Alamos Chamber of Commerce. Mr. Primak is also a member of the Green
Builders Association, the Santa Fe Area Homebuilders Association and the
New Mexico Homebuilders Association. Mr. Primak also
serves on the Design and Build Committee for the Habitat for Humanity for
Los Alamos and Rio Arriba Counties. Mr. Primak took the lead and served as
the Project Manager for LANB’s Habitat for Humanity House in Espanola, New
Mexico in 2008.
Mr.
Primak's professional knowledge of the construction and building industry
in our markets makes him a valuable resource for the Company's credit
activities. As a small business owner, Mr. Primak also provides
insight into the challenges and needs of this significant customer
segment.
|
Page 43.………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
 STEVE
W. WELLS
Age
54
Director
Since 1985
Current
Term expires 2011
|
Mr. Wells
has served as President and Chief Administrative Officer of Los Alamos
National Bank since 1994. He has served on the Boards of Directors of Los
Alamos National Bank and Trinity since 1986, as Trinity’s Secretary since
1986 and as a member of the Board of Directors of Title Guaranty since May
2000. He is also a member of the Board’s Loan, Funds
Management, Technology, Trust and Strategic Planning Committees.
Mr. Wells has been employed by Los Alamos National Bank since 1985
and previously held the position of Executive Vice President from 1985 to
1994. He is currently a member of the Boards of Directors and President of
Los Alamos Public Schools Foundation, and a member of the Boards of
Directors of Los Alamos Family YMCA, and the Los Alamos Medical Center for
which he is also Chair of the Board of Trustees.
Mr.
Wells’ qualifications include extensive banking career beginning in 1978,
including executive experience as Executive Vice President. Mr.
Wells has served on countless boards and organizations serving the
communities in which Trinity operates.
|
 ROBERT
P. WORCESTER
Age
63
Director
Since 1995
Current
Term expires 2011
|
Mr. Worcester
has been a member of the Boards of Directors of Trinity and Los Alamos
National Bank since 1995 and has served as the Chairman of the Board of
Directors since 2008. Mr. Worcester served as the Vice Chairman of the
Board from 2004 to 2008. Mr. Worcester is also the Chair
of the Compensation Committee. He is a member of the Audit, Trust and
Strategic Planning Committees. He has been the President and a 50%
shareholder of Worcester & McKay, P.C. since 1993, where he is a
practicing attorney, and is a member of Worcester & McKay, LLC.
Mr. Worcester has been recognized by “The Best Lawyers in America”
for the last 16 years and has been recently recognized by “Outstanding
Lawyers in America” and in “Super Lawyers of the Southwest.” He
is also a Fellow of the American College of Trust and Estate Counsel. He
serves as the President of the Georgia O’Keefe Foundation. In addition,
Mr. Worcester serves as a member of the Board of Directors and
President of the Santa Fe Art Foundation, as a member of the Board of
Directors and as President of the John Bourne Foundation, as a member of
the Board of Directors and Secretary of the Allan Houser Foundation, as a
member of the Board of Directors and Secretary of the Veritas Foundation
and as a member of the Council of Benefactors of the Santa Fe Community
Foundation, as a member of the Endowment Committee of St. Michael’s High
School, Director and President of the First Tee of Santa Fe and as a
member of the Council on International Relations.
Mr.
Worcester’s qualifications include his knowledge and expertise as a trust
and estate attorney. Mr. Worcester has knowledge of a broad
range legal and business issues. Mr. Worcester has also served
the communities through professional, educational and community service
organizations.
|
Page 44.………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
DIRECTOR
WHOSE TERM EXPIRES AT 2010 MEETING
Lewis A.
Muir, who has been a Director of Trinity and Los Alamos National Bank since 1990
and currently serves as Secretary of the Bank is not eligible for reelection at
the conclusion of his current term, which expires at the 2010 Annual
Meeting. Trinity’s Bylaws provide that any director who has attained
the age of 75 prior to the Annual Meeting at which he or she would stand for
election or reelection is not eligible to serve. Mr. Muir is
currently 77 years of age and as such is not eligible to stand for reelection
under Trinity’s bylaws.
 LEWIS
A. MUIR
Age
77
Director
Since 1990
Current
Term expires 2010
|
Mr. Muir
has been a member of the Boards of Directors of Trinity and Los Alamos
National Bank since 1990 and was the Audit Committee Chair from 1999 to
2003. He is a member of the Board’s Loan, Funds Management, Compensation,
Audit, and Strategic Planning Committees. Mr. Muir also serves as
President and a member of the Board of Directors of Universal Properties,
and is a member of the Los Alamos Chamber of Commerce where he was a past
ex officio member
of the Board of Directors. He was also a member of the Board of Directors
of the Maternal Child Health Council. Mr. Muir has been extensively
involved in Los Alamos County government for many years, serving as a
member of the Council of the Incorporated County of Los Alamos from 1993
to 2003, as a member of the Board of Directors and as Treasurer of the New
Mexico Association of Counties from 1993 to 2003. Mr. Muir is a
current member and past President of the Los Alamos Rotary Club. He is a
former member of the Board of Directors and past President of the Los
Alamos Retirement Center. Mr. Muir serves as a Consultant Pharmacist
for the Los Alamos County Detention Center, the Los Alamos Endoscopy
Center and works part-time at the Los Alamos Medical Center
Pharmacy.
Mr.
Muir provides insight from his experience as a small business owner as
well as a member of the medical community. Mr. Muir has served
the community through his participation in various boards and
organizations, most notably his long service to the County of Los
Alamos.
|
Page 45.………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
DIRECTOR
EMERITUS
 GEORGE
A. COWAN
Age
90
Director
Emeritus Since 2006
|
Dr. Cowan
served as a member of the Board of Directors of Trinity since its
formation in 1975 to 2006 and was been a director of Los Alamos National
Bank from 1963 to 2006. Dr. Cowan resigned at the end of his term in
May 2006. Dr. Cowan was Chairman of the Board of Trinity from 1977 to
1995 and of Los Alamos National Bank from 1965 to 1994. In 1988, he
retired from Los Alamos National Laboratory after 40 years of service,
over which period he was employed as a staff member, Associate Director
for Research and Senior Fellow. Dr. Cowan continues to serve as a
Senior Fellow Emeritus to the Laboratory and was awarded the Los Alamos
National Laboratory Medal in 2002. He served as a member of the White
House Science Council under President Reagan from 1982 to 1985.
Dr. Cowan is the founding member of the Santa Fe Institute, serving
as its President from 1984 to 1991. He continues to serve on the Board of
Directors as a Lifetime Director Emeritus and is a Distinguished Fellow of
the Institute. He also served as a member of the Board of Directors of Los
Alamos National Laboratory Foundation and serves as a member of the
Advisory Board for the Center for Neural Basis of Cognition.
Dr. Cowan was awarded a Presidential Citation from the Department of
Energy in 1990, the New Mexico Academy of Science Distinguished Scientist
Award in 1975, the Robert H. Goddard Award in 1984, the E.O. Lawrence
Award in 1965 and the Enrico Fermi Prize in 1991 for contributions during
his career as a nuclear scientist. He was awarded the Los Alamos Living
Treasures Award in 2003. He is a fellow and/or member of several
societies, including the American Academy of Arts and Sciences, the
American Chemical Society, the American Physical Society and Sigma Xi and
has received honorary degrees from several universities.
Dr.
Cowan's long knowledge of the community, his connections within the
scientific community and institutional knowledge from Trinity's inception
make him a valuable resource.
|
In
addition, the following individual serves as an executive officer of Trinity and
Los Alamos National Bank:
Daniel
Bartholomew. Mr. Bartholomew, age 44, has served as Chief
Financial Officer of Trinity and Vice President and Chief Financial Officer of
Los Alamos National Bank since February 2003. Mr. Bartholomew has been with
Los Alamos National Bank since 1987, serving in a variety of positions,
including Teller Supervisor, Assistant Cashier, Cashier and Vice
President/Cashier. He is also the Chairman of the Board’s Asset/Liability
Management Committee and a member of the ESOP Advisory Board of Trinity Capital
Corporation. Mr. Bartholomew serves as Chairman of the Board of
Directors for Casa Mesita, Inc. d/b/a Casa Mesita Group Home.
Page 46.………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
Item
II
Approval
of Independent Registered Public Accountant
Shareholders
will be asked to ratify the appointment of Moss Adams, LLP as Trinity’s
independent registered public accounting firm for the year ending December 31,
2010. If the appointment of Moss Adams is not ratified, the matter of the
appointment of independent registered public accounting firm will be considered
by the Audit Committee and Board. A representative of Moss Adams is expected to
be present at the Annual Meeting, will be given the opportunity to make a
statement if the representative desires to do so and will be available to
respond to appropriate questions.
Accountant Fees.
The
following are the audit fees, audit related fees, tax fees and other fees billed
by Moss Adams for the 2009 and 2008 audits of Trinity’s financial
statements.
|
Services
Provided
|
2009
|
2008
|
|
Audit
Fees
|
$ 213,600
|
$169,391
|
|
Audit
Related Fees
|
$
45,000
|
$ 22,500
|
|
Tax
Fees
|
$ 19,800
|
$ 16,500
|
|
All
Other Fees
|
$
-
|
$
-
|
|
TOTAL
|
$ 278,400
|
$ 208,391
|
Audit Fees.
The audit services included the review of the consolidated financial
statements and internal control over financial reporting, and other services
normally performed by independent auditors in connection with statutory and
regulatory filings.
Audit Related
Fees. The majority of these services related to the audit of Trinity’s
ESOP and 401(K) plan and evaluation of compliance with the Sarbanes-Oxley Act of
2002.
Tax Fees.
The tax fees billed were for the preparation of Trinity’s federal and
state tax returns.
All Other Fees.
Moss Adams did not bill for any other services in 2009 or
2008.
Pre-Approval. All audit services, audit
related services, tax services and other services performed in 2008 and 2009
were pre-approved by the Audit Committee. The Committee concluded that the
provision of such services by Moss Adams was compatible with the maintenance of
that firm’s independence in the conduct of its auditing functions. The Audit
Committee will, going forward, consider annually and, if appropriate, approve
the provision of audit and non-audit services by Moss Adams. The Audit Committee
will, as necessary, consider and, if appropriate, approve the provision of audit
and non-audit services which are not encompassed by the Audit Committee’s annual
pre-approval and are not prohibited by law.
The Audit
Committee discussed with Moss Adams the firm’s independence from Trinity and its
management, including the matters in the written disclosures required by
applicable requirements of the Public Accounting Oversight Board regarding the
independent accountant’s communications with the Audit Committee. The Committee
concluded that Moss Adams is independent from Trinity and its
management.
The Board unanimously, and with the
recommendation of the Audit Committee, recommends a vote “for” the approval of
Moss Adams, LLP as Trinity’s independent registered public accounting firm for
the year ending 2010.
Page 47.………………………………………….……………………………… Trinity
Capital Corporation 2010 Proxy Statement
Item
III
Approval
of an Advisory Resolution
Approving
the Compensation of
Trinity’s
Named Executive Officers
During
the Participation Period in which Trinity participates in the CPP, Trinity is
required to provide shareholders with the right to cast an advisory vote on
Trinity’s compensation program for its Named Executive Officers (a so-called
“Say-on-Pay”) at each annual meeting of shareholders. As a result, Trinity is
presenting this proposal, which gives the shareholders, the opportunity to
endorse or not endorse Trinity’s executive pay program by voting for or against
the following resolution:
“RESOLVED,
that the shareholders approve the compensation of Trinity’s Named Executive
Officers, as disclosed in the Compensation Discussion and Analysis, the
compensation tables, and the accompanying narrative disclosures contained in
this proxy statement.”
The Board
of Directors urges shareholders to endorse the compensation program for
Trinity’s Named Executive Officers by voting “FOR” the above resolution. As
discussed in the Compensation Discussion and Analysis contained in this Proxy
Statement, the Compensation Committee believes that the executive compensation
for 2009 is reasonable and appropriate, is justified by the performance of
Trinity in an extremely difficult environment and is consistent with Trinity’s
compensation philosophy.
This vote
is advisory meaning that it will not be binding upon the Board of Directors and
will not overrule any decision by the Board or Compensation Committee or imply
any additional fiduciary duty owed by the Directors. However, the Compensation
Committee may take into account the outcome of the vote when considering future
executive compensation arrangements.
The
Board unanimously, and with the recommendation of the Compensation Committee,
recommends a vote “for” the approval the advisory Resolution on the compensation
of Trinity’s Named Executive Officers for 2009.
Page 48.………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy Statement
Proxy
for Common Shares Solicited on Behalf of the Board
of
Directors for the Annual Meeting of Shareholders of
Trinity
Capital Corporation to be held on May 27, 2010
The undersigned hereby appoints Jill Cook and Tim Doyle, or
either one of them acting in the absence of the other, with power of
substitution, attorneys and proxies, for and in the name and place of the
undersigned, to vote the number of common shares that the undersigned would be
entitled to vote if then personally present at the Annual Meeting of
shareholders, to be held at the Hilltop House Hotel located at 400
Trinity Drive, Los Alamos, New Mexico, on the 27th day of May 2010 at 6:00 p.m.,
or any adjournments or postponements of the meeting, upon the matters set forth
in the Notice of Annual Meeting and Proxy Statement, receipt of which is hereby
acknowledged, as follows:
ITEM
I. Election of
Directors:
|
FOR all
nominees
¨
|
FOR only nominees as
marked below
¨ William
C. Enloe
¨ Deborah
U. Johnson
¨ Charles
A. Slocomb
|
WITHHOLD AUTHORITY to
vote for all nominees
¨
|
|
ITEM
II.
|
Ratification
of the Appointment of Moss Adams, LLP as Trinity's independent
public accountants for the year ending December 31, 2010:
|
|
FOR ¨
|
AGAINST ¨
|
ABSTAIN ¨
|
|
ITEM III.
|
To
Approve the Advisory Resolution on the compensation of Trinity’s
Named Executive Officers:
|
|
FOR ¨
|
AGAINST ¨
|
ABSTAIN ¨
|
Other
Items: In
accordance with their discretion, upon all other matters that may properly come
before said meeting and any adjournments or postponements of the
meeting.
This
Proxy, when properly executed, will be voted in the manner directed herein by
the undersigned shareholder. If no direction is made, this Proxy will
be voted “FOR” all Nominees listed under Item I, “FOR” Item II and “FOR” Item
III.
|
|
Dated:____________________________,
2010
|
Signature(s)
____________________________________________________________________
Note: Please
date Proxy and sign it exactly as name or names appear on the label
above. All joint owners of shares must sign. State full
title when signing as executor, Administrator, Trustee, Guardian,
Etc. Please return signed Proxy Card
Page 49.………………………………………….………………………………
Trinity Capital Corporation 2010 Proxy
Statement
TABLE OF CONTENTS
NOTICE OF 2010 ANNUAL MEETING OF SHAREHOLDERSANNUAL MEETINGSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENTBOARD OF DIRECTORS AND CORPORATE GOVERNANCECOMPENSATION DISCUSSION AND ANALYSISU.S. Treasurys Capital Purchase Program and Federal Reserve Risk Analysis RulesCompensation Philosophy and ObjectivesCompensation Factors and Committee ProcessesElements of CompensationCOMPENSATION COMMITTEE REPORTEXECUTIVE COMPENSATIONCompensation Committee Interlocks and Insider ParticipationDIRECTOR COMPENSATIONAUDIT COMMITTEE REPORTITEM I ELECTION OF DIRECTORS2010 DIRECTOR NOMINEESCONTINUING DIRECTORSDIRECTOR WHOSE TERM EXPIRES AT 2010 MEETINGDIRECTOR EMERITUSITEM II APPROVAL OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTSITEM III APPROVAL OF AN ADVISORY RESOLUTION APPROVING THE COMPENSATION OF TRINITYS NAMED EXECUTIVE OFFICERS