UNION BANKSHARES INC
10-Ks and 10-Qs
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ]
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
| Union Bankshares, Inc. | ||||||||
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11
(set forth the amount on which the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
Union Bankshares, Inc.
20 Lower Main Street
PO Box 667
Morrisville, VT 05661
(802) 888-6600
April 2, 2024
Dear Shareholder,
The 132nd annual meeting of Union Bankshares, Inc. (the “Company”, "we", or "our") will be held in person on Wednesday, May 15th at 3:00 p.m local time at the Stearns Center Performance Space, Vermont State University - Johnson Campus, 337 College Hill Road, Johnson, Vermont. You are cordially invited to attend. Enclosed are a notice of annual meeting, a proxy statement and a proxy card for voting your shares.
As part of our overall commitment to environmental responsibility, we have again elected to provide proxy materials to our shareholders primarily through the internet this year. We continue to seek opportunities to reduce waste and our impact on the environment whenever possible. The electronic delivery of our proxy materials provides a more efficient, cost effective, and environmentally friendly way of delivering materials to our shareholders.
This year, in addition to voting on the election of directors and ratification of the selection of our external auditors, shareholders will be asked to vote on the Company's 2024 Equity Incentive Plan, to replace our 2014 Equity Incentive Plan, which expires in May.
Our proxy materials and Annual Report on Form 10-K are posted on
www.ublocal.com
and on a special internet website, as indicated in the Important Notice of Internet Availability section of the attached Notice of Annual Meeting.
If your shares are held through a broker, please note that your broker will not have the authority to vote your shares on the election of directors or on the proposal to approve the Company's 2024 Equity Incentive Plan without your specific instructions.
Therefore, it is especially important that you submit your voting instructions to your broker promptly so your vote can be counted.
You may vote by phone or via the internet. Alternatively, you may request to receive a paper copy of the proxy materials and return the proxy card by mail. For further details, refer to the proxy card or the Information About the Meeting section of the Proxy Statement.
We hope you will join us immediately following the meeting for an informal gathering of shareholders, directors, and bank officers at the Stearns Center Performance Space, Vermont State University - Johnson Campus, 337 College Hill Road, Johnson, Vermont.
Sincerely,
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| Neil J. Van Dyke | David S. Silverman | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chairman | President & Chief Executive Officer | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Timothy W. Sargent
Secretary
Morrisville, Vermont
April 2, 2024
YOUR VOTE IS IMPORTANT
PLEASE VOTE YOUR SHARES PROMPTLY FOLLOWING THE INSTRUCTIONS ON THE PROXY TO VOTE BY TELEPHONE (TOLL FREE IN THE U.S.) OR THE INTERNET, OR BY MAIL, WHETHER OR NOT YOU INTEND TO ATTEND THE ANNUAL MEETING. SHOULD YOU ATTEND THE ANNUAL MEETING, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON BY BALLOT DURING THE MEETING IF YOU SO DESIRE.
PROXY STATEMENT - TABLE OF CONTENTS
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UNION BANKSHARES, INC.
20 Lower Main Street
Morrisville, VT 05661
(802) 888-6600
PROXY STATEMENT
Annual Meeting of Shareholders
May 15, 2024
INFORMATION ABOUT THE MEETING
Why did I receive a Notice Regarding the Internet Availability of the Proxy Materials instead of a paper copy of the proxy materials?
We have mailed a notice of availability of the proxy materials on the internet (which also constitutes a notice of meeting), rather than a full paper set of the proxy materials, to our shareholders. The notice of availability includes instructions on how to access our proxy materials on the internet, as well as instructions on how shareholders may obtain a paper copy of the proxy materials by mail or an electronic copy by email. This distribution process reduces our costs to print and distribute the proxy materials and reduces paper waste.
How can I request a paper copy of the proxy materials?
Upon request, we will without charge mail a paper copy of the proxy materials and the 20223 Annual Report on Form 10-K, or if you prefer, we will email you a copy. If you would like to request a copy of the materials for this meeting, you may (1) visit www.proxyvote.com, (2) call 1-800-579-1639 (toll free) or (3) send an email to sendmaterial@proxyvote.com. If sending an email, please include your control number located on the Important Notice Regarding Internet Availability of Proxy Materials mailed to you previously. Unless requested, you will not otherwise receive a paper or email copy.
Who is entitled to vote at the annual meeting?
Only holders of record of the Company's $2.00 par value common stock as of the close of business on March 22, 2024 (the record date for the meeting) will be entitled to vote at the annual meeting. On that date there were 4,519,388 shares of the Company's common stock outstanding, and each such share is entitled to one vote on each matter presented for vote at the annual meeting.
How do I vote my shares by proxy at the annual meeting?
If you are a shareholder of record of the Company's common stock, you may vote your shares by proxy via telephone (toll free in the United States) at 1-800-690-6903 or over the internet at
http://www.proxyvote.com
. Alternatively, you may request a paper copy of the proxy materials and mail your completed proxy in the envelope that will be provided. If you vote by telephone or the internet you will need the control number that appears on the Important Notice Regarding Internet Availability of Proxy Materials that was previously mailed to you. You are a shareholder of record if you hold your stock in your own name on the Company's shareholder records maintained by our transfer agent, Broadridge Corporate Issuer Solutions, Inc., of Brentwood, New York.
“Street name” shareholders of common stock, who wish to vote at the annual meeting will need to obtain a proxy card from the institution that holds their shares and follow the instructions on that form. Street name shareholders are shareholders who hold their common stock indirectly, through a bank, broker or other nominee.
1
Can I vote during the meeting instead of voting by proxy?
Yes, a ballot will be available at the annual meeting for shareholders of record who wish to vote in person. However, we encourage you to vote your shares by proxy via telephone or the internet, or by requesting a paper copy of the proxy materials and returning your proxy by mail, to be certain that your shares are represented and voted, even if you should be unable to attend the meeting in person. If you wish, you may revoke your previously given proxy at the annual meeting and vote in person by ballot instead.
Can I change my vote after I submit my proxy?
Yes, after you have submitted your proxy by telephone or the internet, or you have mailed your proxy card, you may change your vote at any time before the proxy is exercised at the annual meeting. A timely-submitted later dated proxy supersedes all earlier proxies. Shareholders of record may change their vote by:
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submitting a later dated proxy by telephone or the internet; or
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mailing a proxy card bearing a later date. You may request a new proxy by contacting our transfer agent, Broadridge Corporate Issuer Solutions, Inc., at the following address or toll free telephone number: write to Broadridge Corporate Issuer Solutions, Inc., Attn: Investor Relations Dept., P. O. Box 1342, Brentwood, NY 11717, or call 1-866-321-8022. You may also contact our Assistant Corporate Secretary, Kristy Adams Alfieri, for assistance at the Company's address and telephone number shown on page one of this proxy statement; or
•
withdrawing your previously given proxy in person at the annual meeting and voting your shares by ballot.
“Street name” shareholders of our common stock who wish to vote their shares will need to contact their nominee holder to obtain appropriate instructions in order to allow our transfer agent to validate their authority to vote their shares directly at the meeting. Street name shareholders are shareholders who hold their common stock indirectly, through a bank, broker or other nominee.
What does it mean if I receive more than one mailed Notice Regarding Internet Availability of Proxy Materials?
If you receive more than one mailed Notice Regarding Internet Availability of Proxy Materials, your shares are registered differently in more than one account (for example, “John Doe” and “J. Doe”). To ensure that all your shares are voted, you should vote the shares represented by each Notice of Internet Availability of Proxy Materials via the internet or by telephone. Alternatively, you can request a paper copy of the proxy materials and a proxy card for each shareholder account registration and return all of the completed proxy cards by mail. To facilitate voting at future meetings, we encourage you to register all your accounts in the same name and address. You may do so by contacting our transfer agent, Broadridge Corporate Issuer Solutions, Inc., at the following address or toll free telephone number: Broadridge Corporate Issuer Solutions, Inc., Attn: Investor Relations Dept., P. O. Box 1342, Brentwood, NY 11717, 1-866-321-8022. You may also contact our Assistant Corporate Secretary, Kristy Adams Alfieri, for assistance at the Company's address and telephone number shown on page one of this proxy statement.
What is a broker nonvote?
Under stock exchange rules governing brokerage industry practices, a broker may generally vote the shares it holds for customers on routine matters, but requires voting instructions from the customer on other, nonroutine matters. Whether a matter is considered routine or non-routine is determined under applicable stock exchange rules. A broker nonvote occurs when a broker votes less than all of the shares it holds of record for any reason, including with respect to nonroutine matters where customer instructions have not been received. The “missing” votes in such a case are broker nonvotes.
Please note that under applicable brokerage industry rules for broker voting of shares, all director elections, whether or not contested, are considered nonroutine. Therefore, a broker may not vote its customer's shares in the election of directors (Proposal 1) without specific instructions from the beneficial owner. In addition, your broker will not have the authority to vote your shares on Proposal 2 (approval of the 2024 Equity Incentive Plan) unless you provide voting instructions.
If you hold your shares through a broker, please be sure to follow your broker's instructions on how to direct the voting of your shares at the annual meeting.
2
The ratification of the appointment of the Company's independent auditors is considered to be a routine matter for purposes of a broker's discretionary voting authority under current stock exchange rules. Therefore, a broker may vote uninstructed shares on Proposal 3 under its discretionary authority.
What constitutes a quorum for purposes of the annual meeting?
The presence at the annual meeting in person or by proxy of the holders of a majority of the outstanding shares of common stock entitled to vote will constitute a quorum for the transaction of business. Proxies voted at the meeting, including those marked as “WITHHOLD” on the election of directors (Proposal 1) or "ABSTAIN" on either of the other two proposals will be treated as present at the meeting for purposes of determining a quorum.
Broker nonvotes are counted for determining a quorum to convene the meeting and for voting on routine matters (such as ratification of the appointment of the independent auditors) since the broker is entitled to vote those shares under its discretionary authority. On any matter considered to be nonroutine (such as the election of directors or Proposal 2) broker nonvotes are not considered shares entitled to be voted by the broker, and therefore would not be counted for determining whether a quorum is present to vote on such matters.
What vote is required to approve matters at the annual meeting?
The election of directors (Proposal 1) will require the affirmative vote of a plurality of the votes cast. That means that the nominees who receive the highest number of vote totals for the number of vacancies to be filled will be elected as directors. Therefore, a vote to WITHHOLD authority from voting on any nominee will not affect the outcome of the election unless there are more nominees than there are vacancies to be filled.
Approval of the 2024 Equity Incentive Plan (Proposal 2) will require that more votes be cast FOR the proposal than AGAINST. Therefore, abstentions will not affect the outcome of the vote on Proposal 2.
Ratification of the appointment of the Company's independent auditors (Proposal 3) will require that more votes be cast FOR the proposal than AGAINST. Therefore, abstentions will not affect the outcome of the vote on Proposal 3.
If any other matter should be presented at the meeting, approval of such matter would generally require that more votes be cast in favor than opposed; abstentions and broker nonvotes would not affect the outcome.
Management of the Company is not aware at this time of any matter that may be submitted to vote of the shareholders at the annual meeting other than the election of directors and ratification of the appointment of the independent auditors.
Do broker nonvotes affect the outcome of the shareholder votes on Proposals 1, 2 or 3?
Because the election of directors (Proposal 1) is not the subject of an election contest and is by plurality vote, broker nonvotes at the annual meeting will not affect the outcome of the election of directors.
Broker nonvotes are not considered to be “votes cast” and therefore will not affect the outcome of the votes on the approval of the 2024 Equity Incentive Plan (Proposal 2), or of ratification of the appointment of independent auditors (Proposal 3).
How does the Board recommend that I vote my shares?
The Board of Directors recommends that you vote
FOR
Proposal 1 to set the number of directors for the ensuing year at nine and to elect each of the nine nominees listed in this proxy statement;
FOR
the approval of the 2024 Equity Incentive Plan (Proposal 2); and
FOR
ratification of the appointment of the independent accounting firm of Berry Dunn McNeil & Parker, LLC as the Company's external auditors for 2024 (Proposal 3).
If you request a paper copy of the proxy materials and return your proxy card by mail, your shares will be voted in the manner you indicate on the proxy card. If you sign and return your proxy card but do not specify how you want your shares to be voted, the persons named as proxy holders on the proxy card will vote your shares
FOR
each of the nominees for director,
FOR
Proposal 2, and
FOR
Proposal 3, and in accordance with the recommendations of the Board of Directors on any other matters that may be presented for vote of shareholders at the meeting.
3
How are proxies solicited?
Proxies are being solicited by internet posting of our proxy materials and by mail. Proxies may also be solicited by directors, officers or employees of the Company or our wholly-owned subsidiary, Union Bank (“Union” or the “Bank”), in person or by telephone, facsimile, or email. Those individuals will not receive any additional compensation for such solicitation.
Who pays the expenses for soliciting proxies?
The Company pays the expenses for soliciting proxies for the annual meeting. These expenses include costs relating to preparation, mailing and returning of proxies. In addition, we may reimburse banks, brokers or other nominee holders for their expenses in sending proxy materials to the beneficial owners of our common stock.
SHARE OWNERSHIP INFORMATION
Share Ownership of Management and Principal Holders
The following table shows the number and percentage of outstanding shares of the Company's common stock owned beneficially as of March 22, 2024 by:
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each incumbent director of the Company;
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each executive officer named in the 2023 Summary Compensation Table included elsewhere in this proxy statement;
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all of the Company's directors and executive officers as a group; and
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each person (including any “group,” as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934), known to the management of the Company to own beneficially more than 5% of the Company's outstanding common stock.
4
Except as otherwise indicated in the footnotes to the table, the named individuals possess sole voting and investment power over the shares listed.
| Shareholder or Group |
Shares
Beneficially Owned |
Percent
of Class |
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| Directors, Nominees and Executive Officers | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Joel S. Bourassa | 899 | * | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dawn D. Bugbee | 3,990 | * | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Karyn J. Hale | 4,655 | (1) | * | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mary K. Parent | 100 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nancy C. Putnam | 3,256 | (2) | * | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gregory D. Sargent | 849 | (3) | * | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Timothy W. Sargent | 2,661 | * | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| David S. Silverman | 28,870 | (4) | * | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Janet P. Spitler | 289 | (5) | * | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cornelius J. Van Dyke | 3,546 | (6) | * | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All Directors, Nominees and Executive Officers as a Group | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (10 in number) | 49,115 | 1.09 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5% or more Shareholders | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Richard C. Sargent | 460,840 | (7) | 10.20 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Susan Hovey Mercia | 388,976 | (8) | 8.61 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Walter M. Sargent Revocable Trust | 240,119 | (9) | 5.31 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Name and Age |
Served as
Director Since (1) | Principal Occupation for Past Five Years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Joel S. Bourassa, 66 | 2019 |
General Manager, Eagle Mountain House; 2022-present
Jackson, NH Chief Operating Officer, Attitash Mountain Service Company; 2020-2022 North Conway, NH General Manager, Attitash Mountain Village; 2019-2020 Bartlett, NH Previously, Regional Director of Resorts, Vacation Resorts International Lincoln, NH
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Dawn D. Bugbee, 67
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2016
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Retired
| Previously, Vice President and Chief Financial Officer, Green Mountain Power Corporation Colchester, VT
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Mary K. Parent, 48
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2023
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Attorney at Law, Downs, Rachlin & Martin
| 2005 - present St. Johnsbury, VT
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Nancy C. Putnam, 68
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2018
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Retired
| Previously, CPA, Marckres Norder & Company, Inc. (accounting firm) Morrisville, VT
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Gregory D. Sargent, 64
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2021
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Principal and CPA, Kittell Branagan and Sargent (accounting firm)
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St. Albans, VT
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Timothy W. Sargent, 48
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2011
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Attorney at Law, Sargent Law Office, PLLC
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Morrisville, VT
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David S. Silverman, 63
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2011
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President and Chief Executive Officer Union Bankshares, Inc. and Union Bank
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Morrisville, VT
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Janet P. Spitler, 64
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2022
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Chief Financial Officer, Evernorth, f//k/a Housing Vermont; 2015-present
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Burlington, VT
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Cornelius J. Van Dyke, 70
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2010
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Retired
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Previously, Search and Rescue Coordinator, Vermont Department of Public Safety; 2013 - 2022 Previously, President and General Manager, Golden Eagle Resort Stowe, VT
____________________
(1)
Each incumbent director is also a director of Union Bank; years of service do not include any prior years of service on the Board of Union Bank.
Director and Nominee Qualifications
Community banking is about being a good member of the communities we serve and providing quality customer service and products, while ensuring that the interests of our shareholders and employees are satisfied and our regulatory requirements are met. The Company's Board meets at least quarterly, and Union Bank's Board meets
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monthly, to strategize, guide and monitor the activities of the Bank to achieve these goals. We rely on our directors for their strategic vision, business acumen and knowledge of local markets and opportunities. All of our directors live or work in the communities we serve and bring a unique set of talents, perspectives and backgrounds to our Board. They have been active members in organizations of their choice and interest over their lifetimes, usually in a leadership position, which has added to their reputations as respected individuals. Our directors include long-standing members of the Board who have served through many economic cycles, technological advancements, regulatory changes and periods of Company growth.
The information below summarizes the specific experience, qualifications, attributes and skills that led our Board to conclude that the individual should serve on the Company's Board. We believe that in their professional and personal lives and through their Board service, each has demonstrated sound judgment, leadership capabilities, high ethical standards and a strong commitment for service to the Company.
Joel Bourassa
joined the Company's Board in 2019 and has served on Union Bank's Board since June 2018. During 2022 Joel became the General Manager for Eagle Mountain House, a hotel located in Jackson, New Hampshire. Prior to this role, Joel served as the Chief Operating Officer for Attitash Mountain Service Company from 2020 through 2022 and was the General Manager at Attitash Mountain Village in Bartlett, New Hampshire. Joel was previously the Regional Director of Resorts for Vacation Resorts International, with responsibilities that included the management oversight of resort properties in Lake Placid, New York, Stowe, Vermont and two entities in Lincoln, New Hampshire. In 2023, Joel was elected to the Mount Washington Valley Chamber of Commerce and the Jackson Ski Touring Foundation. He also formerly served as the International Director for the Ski New Hampshire Association. He received his undergraduate degree in business administration/marketing from Southern New Hampshire and Plymouth State Universities. Joel previously served as Chair of both the Board of Selectman for the Town of Woodstock, New Hampshire and the Board of Trustees for Lincoln-Woodstock Ambulance Service. He also served as President of the Lincoln-Woodstock Rotary Club, was a founding member and Director of The Bridge Project, a community service organization in the Lincoln-Woodstock area, and is a past President of the Lincoln-Woodstock Chamber of Commerce. Joel previously served on Union's Northern New Hampshire Advisory Board and Union's Asset Management Group Committee. His years of experience in the tourism business in New Hampshire and years of community service in Lincoln and Woodstock, New Hampshire provide valuable knowledge and insight to the Board. Joel serves on the Compensation Committee.
Dawn Bugbee
joined the Company's Board in 2016 and has served on Union Bank's Board since 2015. She retired in December 2019 as a Vice President and Chief Financial Officer for Green Mountain Power Corporation, which prior to its acquisition in 2007 by Gaz Metro, L. P. was a publicly-traded, SEC reporting company. Prior to March 2006 she was the Chief Financial officer at Northwestern Medical Center (NMC) in St. Albans, Vermont, and returned on an interim basis to serve as NMC's Chief Administrative Officer from March 2020 through December 2020. She is a certified public accountant (CPA) (inactive license) and holds a Bachelor of Science degree from Castleton University. She is an active member in the local community serving NMC's Board of Directors and as Chair of its finance committee. Dawn is a past Trustee of Champlain College in Burlington, a gubernatorial appointee to the Vermont Education and Health Building Financing Agency (VEHBFA), a member of the Boards of United Way of Chittenden County and Goodwill of Northern New England and is a Rotarian in the St. Albans and Colchester Rotary clubs. Dawn's years of experience as Chief Financial Officer and knowledge of SEC reporting requirements add valuable strength to the Board. Dawn previously served on the Company's Audit Committee and is currently the Chair of Compensation Committee.
Mary Parent
joined the Company''s Board in 2023 has been a Union Bank director since her appointment to the Board in April 2022. Mary is currently serving as a Director and Chair of the Business Law Group for Downs Rachlin Martin PLLC in St. Johnsbury, Vermont. Mary holds a law degree from Boston College Law School (Boston, MA) and a Bachelor of Arts in biological sciences from Smith College (Northampton, MA). She is an active member in the local community. She serves as a Corporator of the Northeastern Vermont Regional Hospital (NVRH) and as a community volunteer on NVRH's Philanthropy Committee. She recently completed her terms as both a Trustee and Chair of the Board of Trustees of NVRH. She also serves as a Corporator of the St. Johnsbury Development Fund. She previously served as the President of the Board of Directors of the St. Johnsbury Chamber of Commerce and Vice-
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Chair of the Fairbanks Museum Board of Trustees, as well as on several other non-profit boards. She is a member of both the Vermont and New Hampshire Bar Associations. Mary serves on Union Bank’s Wealth Management Group Committee and its Executive Loan Committee.
Nancy Putnam
joined the Company's Board in 2018 and has served on Union Bank's board since 2017. Nancy retired from Marckres Norder and Company, an accounting firm in Morrisville, in 2017, where she practiced as a CPA for 21 years. Prior to this, Nancy was Vice President and Trust Officer for the former Franklin Lamoille Bank in Morrisville, Vermont. Nancy is active in the community, having served on the executive, compensation, and finance committees of the Board of Trustees of Copley Hospital, where she also served as Board chair for two years. Nancy is a past member of the finance committee for the Town of Cambridge and volunteered with the Smuggler's Notch Adaptive Ski Program and serves as Treasurer of both the Bryan Memorial Gallery and the Cambridge Food Shelf. Nancy's considerable experience as a CPA and previous community bank experience add valuable insight to our Board. Nancy currently serves as Chair of the Audit Committee and serves on Union's Wealth Management Committee. Nancy is the designated "audit committee financial expert" and as such is the Audit Committee representative on the Company's Disclosure Control Committee.
Gregory (Greg) Sargent
joined the Company's Board in 2021 and has been a Union Bank director since May 2020. Greg is the former managing director of Kittell Branagan and Sargent, a public accounting and consulting firm in St. Albans, Vermont where he has practiced as a CPA since starting the firm in 1986. Before being appointed managing director, Greg was in charge of the firm’s quality control system. Greg currently serves as the treasurer for the Vermont Arts Council and has previously been a member of several nonprofit boards in northwestern Vermont, holding positions of treasurer and president. Greg is a graduate of Southern New Hampshire University and earned a Bachelor of Science degree in accounting. He is a member of the Vermont Society of CPAs and the American Institute of Public Accountants. Greg’s considerable experience as a CPA and knowledge of our important local markets adds valuable insight to the Board. Greg serves on the Company's Audit Committee and Union’s Wealth Management Committee.
Timothy Sargent
joined the Company's Board in 2011 and has served as the Board's Vice Chairman since 2019. He has served on Union Bank's Board since 2010. Tim holds a law degree from Vermont Law School (South Royalton, Vermont) and a Bachelor of Science from Bates College (Lewiston, Maine). Tim is the principal attorney at Sargent Law Office, PLLC, located in Morrisville, VT and has been with the firm for twenty years . He is an active member in the local community and cares very deeply about the economic health and vitality of the region. Tim served more than eight years as Trustee on the Morrisville Water & Light Department, was a Rotarian for a number of years with the Morrisville Rotary Club (in which he was president) and on the Board of Directors for the "start-up" Morrisville Food Cooperative here in Morrisville, Vermont. Tim currently sits on the Ron Terrill Scholarship Fund, which awards annual college scholarships to local graduating high school students in the immediate region. The Company values Tim's legal insights, knowledge of local businesses and perspectives. Tim serves on the Company's Audit Committee and Executive Loan Committee.
David Silverman
became President of the Company and the Bank on April 1, 2011 and CEO of both in May 2012. He was appointed to the Bank's Board of Directors in November 2010 and elected to the Company's Board at the 2011 annual meeting. David has been with the Bank for 37 years and before becoming President, served in many capacities, including as Vice President of the Company and Senior Vice President and Senior Loan Officer of the Bank. David has been active in the community having served on the Boards of the Stowe Area Association, Lamoille County Mental Health Services, the Morristown Development Review Board and the Lamoille Economic Development Corporation. He also served as Chair of the Board of Lamoille Health Partners f/k/a Community Health Services of the Lamoille Valley for eight years and on the Executive Committee of the Vermont Bankers Association. He recently concluded a ten year term on the Copley Hospital Board of Trustees where he previously served as Chair and continues to serve as Trustee of the Vermont State College system. David's many years of service to the Company in various positions, and his day to day leadership since becoming CEO in 2012 provide the Board with the benefit of his thorough knowledge of the Company's business operations, markets and strategic challenges and opportunities. David
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serves on the Bank's Wealth Management Committee, its Executive Loan Committee, the Company's Disclosure Control Committee, and all three of Union's local Advisory Boards.
Janet Spitler
joined the Company's Board in 2022 and has been a Union Bank director since April 2021. Janet is currently the Chief Financial Officer for Evernorth, a nonprofit organization that develops and finances housing and other community investment projects for low and moderate income people across northern New England. Janet is also the President of the Board of the Vermont Community Loan Fund. Janet has 24 years of banking experience and was previously CFO and Executive Vice President for publicly traded Merchants Bancshares, Inc., and its subsidiary Bank, Merchants Bank, for 17 years. She has also served as past Board member and Board chair of Housing Vermont (a predecessor to Evernorth) and previously served on the boards of VSECU and the Humane Society of Chittenden County. Janet is also a past member of the United Way’s Women’s Council and the Vermont Tax Advisory Board. Janet is a graduate of William Smith College and Syracuse University. Janet’s considerable experience in banking and finance adds valuable insight to our Board. Janet serves on the Company's Audit and Compensation Committees.
Neil Van Dyke
from Stowe, Vermont joined the Board in 2010 and was elected Chair of the Board in May 2019. He had previously served as Vice Chair since 2016 and has served on Union Bank's Board since 2009. Neil adds a unique perspective to the Company's complement of Board members as a previous long-time owner of a large resort property in Stowe. He joined the staff of the Golden Eagle Resort in 1979 and served as its President and was a co-owner until its sale in September of 2014. In 2022, Neil retired as the Search and Rescue Coordinator for the Vermont Department of Public Safety, a position he held since 2013. He holds a Bachelor of Arts degree from Dartmouth College and a Master of Science with a concentration in recreation management from SUNY College of Environmental Science and Forestry. Neil was actively involved on the board of the Stowe Area Association 1982 through 2014, and is the founder of Stowe Mountain Rescue, where he was a team leader from 1980 through 2020. He has also served as a member of the Stowe Select Board from 2010 to 2020. Neil served as a director of the Franklin Lamoille Bank and on the Vermont advisory board of Banknorth from 1998 until 2006. Neil's extensive education and experience in the travel and tourism business, which is an important business segment in our markets, as well as his prior bank board involvement, add further depth to our Board. In addition to serving as Board Chair, he also serves on the Company's Compensation Committee.
Board Diversity Matrix
The Company's Board of Directors views its diversity as an important strength and a driver of the Company's success. The following matrix illustrates the diversity of the Board as of the date of this proxy statement, based on the directors' self-identification under the categories prescribed in the NASDAQ rules for listed companies:
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Director’s Compensation
Directors’ fees, committee fees and advisory board member fees for service on the Boards of the Company and Union Bank are determined annually by the Company’s Board of Directors, upon recommendation of the Compensation Committee ("Committee"). The appropriateness of the fees paid and the fee structure are reviewed on a periodic basis by the Committee or the Company’s Board based on published surveys, consultant recommendations and available information on the director compensation practices of other financial institutions.
In setting director compensation, the Compensation Committee and Board are guided by the framework outlined in the Company’s Director and Advisory Board Compensation Policy (the “Director Compensation Policy”). As described below, for 2023 compensation for the nonemployee directors consisted of cash payments and an equity award. President and CEO David Silverman, who serves as a director of the Company and the Bank, does not receive compensation for such service, other than the annual cash retainer for Company Board service.
Director fees paid in cash for 2023 services consisted of retainers for Board and committee service. Directors also received a grant of RSUs with an approximate value of $10,000. The schedule of fees in effect during 2023 for our nonemployee directors was as follows:
____________________
(1)
Actual equity grant is based on grant date closing price of the Company's common stock, as reported on the NASDAQ Stock Market, rounded up to the next whole share.
In accordance with the Company’s Director Compensation Policy and as permitted under the terms of the 2014 Equity Incentive Plan, as amended and approved by the shareholders at the 2022 Annual Shareholder meeting (“Plan”), equity compensation was awarded to the Company’s nonemployee directors in 2023 in the form of Restricted Stock Units (RSUs). Each RSU awarded represents the right to receive one share of the Company’s common stock subject to continued Board service through the vesting period, which expires on May 14 2024. The number of RSU’s awarded was calculated using a dollar amount of $10,000, divided by the closing price of the Company stock on the May 17, 2023 grant date ($20.69 per share), rounded up to the next whole share. This resulted in an equity award of 484 RSUs to each nonemployee director of the Company. On the May 14, 2024 vesting date, the RSUs will be settled in Company common stock on a one to one basis. Unvested RSUs will be forfeited in the event the nonemployee director terminates service as a Company director prior to the vesting date, other than in the event of his or her disability or death, as provided under the terms of the award. No separate equity award was made for service on the Board of Union Bank.
Company and Union directors are eligible to participate in the Company’s 2020 Amended and Restated Executive Nonqualified Excess Plan, a nonqualified defined contribution plan which permits participants to elect to defer receipt of current cash compensation from the Company or Union in order to provide retirement or other benefits as selected in the individual adoption agreements. Additional information about the plan is contained elsewhere in this proxy
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statement under the caption “EXECUTIVE COMPENSATION - Deferred Compensation Plans.” Fees deferred during 2023 are reflected as Fees Earned or Paid in Cash in the 2023 Director Compensation Table below.
The following table lists the annual compensation paid or awarded during 2023 to the Company’s incumbent nonemployee directors for service on the Boards of the Company and Union:
2023 Director Compensation Table
Additional information about the business background, experience and qualifications of Ms. Hale is set forth below, and such information pertaining to Mr. Silverman is contained elsewhere in this proxy statement under the caption “PROPOSAL 1: TO ELECT DIRECTORS - Director and Nominee Qualifications.”
Karyn Hale joined Union Bank in 2005 as a project specialist and moved into the role of Finance Officer in 2008 until she assumed the role as Chief Financial Officer (CFO) and Treasurer of the Company and Union on April 1, 2014. She became a Senior Vice President of Union on May 21, 2014 and was promoted to Executive Vice President on December 31, 2019. Ms. Hale's responsibilities include oversight of accounting, internal controls, treasury, taxation, regulatory reporting, asset/liability management, audit/exam processes, shareholder relations, human resources and serving on the senior management team. Ms. Hale is the Chair of the Company's Disclosure Control Committee and Union's Asset Liability Committee. Prior to joining the Company and Union, Ms. Hale worked in public accounting with A. M. Peisch & Company for twelve years. She graduated from St. Michael's College with a Bachelors of Science degree in Accounting and is a Certified Public Accountant. Her membership affiliations include the American Institute of Certified Public Accountants, the Vermont Society of CPAs, the Financial Managers Society. Ms. Hale is currently serving on the Board of Directors of Evernorth, (f/k/a Housing Vermont) is the Chair of its Finance Committee, and a member of its Executive Committee. She also serves on the Board of Directors for the Vermont Economic Development Authority (VEDA) and is a member of its Audit and Executive Committees. Ms. Hale is a past member of the St. Johnsbury Development Fund and of the Members Advisory Panel of the Federal Home Loan Bank of Boston.
COMPENSATION COMMITTEE REPORT
The Compensation Committee (the “Committee”) of the Board of Directors of Union Bankshares, Inc. (the “Company”) is made up of four nonemployee directors, Dawn D. Bugbee (Chair), Cornelius (Neil) J. Van Dyke, Joel S. Bourassa and Janet P. Spitler, all of whom served on the Committee throughout 2023. Each of the members of the Committee was determined by the Board to be independent within the meaning of applicable listing standards of the
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NASDAQ Stock Market, taking into consideration all relevant factors under applicable NASDAQ rules, including compensation earned by Committee members in fulfilling their duties, any other fees paid by the Company to the Committee members, any other affiliation with the Company or Union Bank (“Union”), and all other factors specifically relevant to determining whether a Committee member has a relationship to the Company which is material to his or her ability to discharge his or her duties as a member of the Committee in a manner independent from management.
This Compensation Committee Report discusses the compensation awarded to, earned by or paid to the Company’s named executive officers (the “NEOs”) listed in the 2023 Summary Compensation Table elsewhere in this proxy statement under the caption “EXECUTIVE COMPENSATION.” This report also describes the objectives of our executive compensation program for 2023, our risk management goals and practices, and how the most recent shareholder advisory “say-on-pay” vote in 2022 affected our executive compensation decision-making. For 2023, the Company’s NEOs were: David S. Silverman, President and CEO; and Karyn J. Hale, Vice President, Treasurer and Chief Financial Officer. Each of our NEOs also served as an executive officer of Union throughout 2023.
Executive Summary
The objectives of our compensation program are to develop a total executive compensation package with the purpose of attracting, retaining and motivating talented members of senior management to help us achieve the Company’s business goals and objectives. To achieve these objectives, the Compensation Committee regularly reviews and modifies our compensation and incentive programs to ensure they advance these core objectives. We assess our program from the perspective of our shareholders and regulators, considering best practices and making changes as appropriate.
Our Executive Compensation Program
Our compensation program and philosophy for executive officers was developed by the Compensation Committee and is subject to annual review and approval by our Board of Directors, most recently in March 2024. The objectives of our executive compensation program are to: (1) attract, retain and motivate talented members of senior management; (2) provide a competitive total compensation and benefits package; (3) reward superior performance while appropriately balancing short and long-term performance and incentives consistent with prudent risk management goals and practices; and (4) align management interests with those of the Company’s shareholders, with the ultimate goal of enhancing overall shareholder value.
To meet our executive compensation objectives, our program is designed to provide: (1) base salary; (2) short-term cash incentives; (3) long-term incentives (equity grants); and (4) executive benefits. The Compensation Committee may from time to time retain the services of compensation consultants to assist the Committee in its duties. Input may also be sought from the CEO, CFO, Human Resources Officer and others as needed to ensure the Committee has the information and perspectives it needs to carry out its duties.
As part of a bi-annual process, in 2022 the Compensation Committee retained the services of McLagan, part of the Rewards Solutions practice at AON, an independent consulting firm specializing in executive and Board compensation. McLagan benchmarked the salary, short-term cash incentive and long-term equity plans for fifteen distinct senior officer positions of the Bank, including the two NEOs. Recommendations were then provided with regard to salary levels, short-term incentive plan design and target payouts, and long-term equity plan design and target awards. Current salary survey data specific to banking continues to be utilized for benchmarking compensation.
The Compensation Committee will continue to review, evaluate, and revise our compensation program as appropriate to meet the Company’s desired objectives and adhere to changing regulations and emerging corporate best practices.
No changes were made with regard to our compensation practices in 2023, with the exception of a discretionary adjustment to our short-term incentive compensation plan for 2023. The Compensation Committee and Board of Directors agreed to waive the incentive plan trigger of attaining 90% of budgeted net income for 2023. The interest rate environment changed dramatically in 2023 compared to assumptions utilized in setting the short term incentive plan trigger. The Committee and Board of Directors agreed that these changes were outside of the control of management. There were no other discretionary adjustments made to the 2023 short term incentive plan and for 2024
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no design changes have been made with this plan other than normal and customary plan metric changes designed to reflect our annual business goals for 2024. There were no discretionary adjustments made for the long term incentive compensation plan for 2023, and for 2024 no design changes have been made with this incentive compensation plan other than normal and customary plan metric changes designed to reflect our annual business goals for 2024.
Risk Oversight of Compensation Programs
The Compensation Committee strives to ensure our executive compensation program is designed to appropriately balance risk by utilizing short and long-term performance goals and incentives, consistent with prudent risk management goals and practices.
In establishing the overall compensation program for employees, including the executive officers, the Compensation Committee and the Board are mindful of the potential implications for enterprise risk management. The Committee and Board believe that the Company’s compensation practices, which for executives are heavily weighted to fixed salary, do not create material adverse risks to the Company because they do not encourage excessive risk-taking. In addition, the short-term incentive program is focused solely on Bank-wide performance, which encourages overall achievement of annual goals rather than individual or business line performance, and includes a recoupment provision which discourages inappropriate risk-taking that might lead to improper financial reporting.
Effect of 2022 Advisory Vote on NEO Compensation
At our 2022 annual meeting, our shareholders cast a non-binding advisory vote on our executive compensation (a “say-on-pay proposal”), with 97.5% of the shares represented and entitled to vote at the meeting cast in support of the compensation paid to our NEOs. The Compensation Committee believes this affirms our shareholders’ support of the Company’s executive compensation program, and as such we have not significantly changed our approach to executive compensation. A "say-on-frequency" advisory vote is held every six years, regarding the shareholders' preference on whether to hold say-on-pay advisory votes every one, two or three years. Our most recent say-on-frequency vote was held at the 2019 Annual Meeting of Shareholders, at which 81.3% of the shares represented and entitled to vote were cast in a non-binding advisory vote to approve a frequency of three years for future nonbinding say-on-pay votes. Accordingly, our next say-on-pay and say-on-frequency advisory votes will occur no later than at the Company’s 2025 annual shareholder meeting. The Compensation Committee and Board will continue to consider the outcome of our say-on-pay votes, regulatory changes and emerging best practices when making future recommendations regarding compensation for the Company’s NEOs.
Impact of Accounting and Tax Consequences on the Form of Compensation
The Compensation Committee and management consider the accounting and tax (individual and corporate) consequences of the compensation plans prior to making changes to the Company’s compensation plans or programs.
Submitted by the Compensation Committee
Dawn D. Bugbee, Chair
Joel S. Bourassa
Janet P. Spitler
Cornelius (Neil) J. Van Dyke
20
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table summarizes the total compensation that was paid or accrued for each of our named executive officers (NEOs) during each of the two most recent fiscal years:
2023 Summary Compensation Table
____________________
(1)
Represents outstanding awards of RSUs at December 31, 2023. All unvested RSUs are to be settled in common stock on a one-to-one basis upon expiration of the applicable vesting period. For Mr. Silverman, includes 2,745 RSUs that will vest on December 15, 2024; and 677 RSUs that will vest on December 13, 2025. For Ms. Hale, includes 1,156 RSUs that will vest on December 15, 2024; and 285 RSUs that will vest on December 13, 2025.
(2)
Represents the closing price of $30.65 for the Company's common stock on December 31, 2023, as reported on the NASDAQ Stock Market, multiplied by the number of unvested shares underlying the outstanding unvested RSUs.
Equity Compensation - Long-Term Equity Incentive Plan
The Company's long-term equity incentive compensation plan is the Union Bankshares, Inc. 2014 Equity Incentive Plan, as amended by the shareholders in 2022 (the “LTIP”), which is administered by the Compensation Committee. The primary purpose of the LTIP is to link senior management compensation more closely to corporate performance and increases in shareholder value, and to assist the Company in attracting, retaining and motivating executive management. Eligible participants consist of only nonemployee directors, executive vice presidents and senior vice presidents of the Company or Union who are in a position to contribute significantly to profitability and who are recommended by the Compensation Committee and approved by the Company’s Board.
In February, 2023, the Compensation Committee recommended and the Board approved the terms of the annual plan design for contingent equity compensation awards under the LTIP to fourteen Union Bank senior officers including the two NEOs. Those terms included a threshold regulatory rating condition for Union as well as individual and Union performance metrics and time-based vesting conditions, which are described in a 2023 Equity Award Summary (the “Summary”) summarized below. During 2023, Union met the threshold trigger for 2023 awards of achieving satisfactory results from its most recent safety and soundness regulatory examination. Additionally, each of the participants, including the two NEOs, achieved the required performance evaluation rating during 2023 of “fully meets expectations.”
Awards of time-based RSUs subject to time-based vesting conditions (“TBRSUs”) and performance-based RSUs subject to both time-based and performance-based vesting conditions (PBRSUs”) were approved on February 7, 2024
23
by the Compensation Committee and Board for all eligible participants. The narrative below recognizes the nature of the equity awards for the eligible participants, including Mr. Silverman and Ms. Hale.
The number of common shares underlying the TBRSUs awarded for 2023 services was determined by dividing the dollar value of the participant’s award at the target level by the closing price of the Company’s common stock on February 7, 2024, as reported on the NASDAQ Stock Market, with fractional shares rounded up to the next whole share. The actual number of common shares underlying the PBRSUs awarded for 2023 services was determined by the Compensation Committee during the first quarter of 2024, based on Union’s actual performance in 2023 compared to the specified 2023 performance measures (described below) and on the closing price of the Company’s common stock on February 7, 2024, as reported on the NASDAQ Stock Market, with fractional shares rounded up to the next whole share. Prior to vesting, TBRSUs and PBRSUs do not earn dividends or dividend equivalents, nor do they bear any voting rights. The Compensation Committee and the Board chose to award stock-settled RSUs since this type of equity grant helps to create a long-term ownership focus and alignment with shareholders while also serving as a powerful retention feature for our top executives.
Notwithstanding anything to the contrary in the Summary, individual award certificates, or the LTIP, the RSU awards are intended to be exempt from, or to comply with, Code Section 409A, and to be administered and interpreted accordingly, in a manner consistent with the requirements for avoiding additional taxes or penalties under Code Section 409A.
Incentive Opportunity:
The CEO’s aggregate TBRSU and PBRSU target award opportunity for 2023 was 25% of base salary, for Union Bank’s five executive officers the target opportunity was 20% of base salary, and for the Bank’s eight senior officers the target opportunity was 10% of base salary, with 50% allocated to TBRSUs and 50% to PBRSUs. So long as Union attained the plan trigger and individual performance ratings were met, TBRSU awards of 12.5% of base salary for the CEO, and 10.0% for the other NEO would be earned, with vesting of one-third of the TBRSU award on December 15, 2024, December 13, 2025 and December 15, 2026. Additionally, the target awards for PBRSUs of 12.5% of base salary for the CEO and 10.0% for the other NEO would be granted only if the specified 2023 performance measure at the target level were satisfied. The actual PBRSU award for 2023 services could have ranged from 0% for not achieving the threshold performance goal, to 18.75% of the base salary for the CEO and 15% for the other NEO for meeting or exceeding the stretch performance goal, with vesting over two years, approximately one-half per year, on December 15, 2024 and December 13, 2025.
2023 Performance Measure and Actual Results:
The performance measure for the 2023 PBRSU provisional award compared the Company’s three-year average ROAE on a bank-only basis to that of a peer group of New England banks and thrifts with assets from $750 million to $2.0 billion, as compiled and published by S&P Global, Inc. (f/k/a SNL Financial LLC). Union and peer group data used for calculating 2023 PBRSU provisional awards were as of December 31, 2023, 2022 and 2021.
In order for eligible senior officers to be awarded PBRSUs, Union had to attain a minimum ROAE of the 85
th
percentile for the three year measurement period. The target goal would be attained if Union’s three-year ROAE was at the 90
th
percentile of all banks and thrifts in the designated peer group. The stretch goal would be attained if Union’s three-year ROAE was at or above the 95
th
percentile of the peer group.
24
The 2023 PBRSU threshold, target and stretch performance measures for Mr. Silverman and Ms. Hale, and Union’s actual results versus the peer group were as follows:
Calculation of the number of PBRSUs in the above table reflects Union attaining the maximum performance goal of 150% of the target award (or better) by achieving the 100
th
percentile of three-year ROAE relative to a peer group of New England banks and thrifts.
25
The vesting of RSU awards for the NEOs during 2023 are summarized in the following table:
____________________
(1)
Represents the number of shares acquired on vesting of RSU awards under the LTIP pursuant to the 2020, 2021 and 2022 Equity Award Summaries. Value based on the closing price of $30.10 for the Company’s common stock on the December 15, 2023 vesting date, as reported on the NASDAQ Stock Market.
Stock Retention Requirement:
The Compensation Committee believes that Union’s executive officers should maintain a material personal financial stake in the Company to promote a long-term perspective in managing the Company and to better align shareholder and executive interests. Therefore, the terms of the outstanding awards under the LTIP require executive officers to retain ownership of 25% of their after tax vested share awards until termination of employment or retirement from Union. If an executive experiences personal economic hardship, the Compensation Committee has the authority to decide whether the holding period requirements will be waived in whole or in part for that particular award or if the executive will be allowed to sell more shares than the holding period requirements would otherwise permit.
Deferred Compensation Plans and Supplemental Executive Retirement Plan
Union Bankshares, Inc. and Union Bank sponsor two nonqualified deferred compensation plans for Directors and certain key officers. One of these plans, the 2008 Amended and Restated Nonqualified Deferred Compensation Plan was frozen in 1998 to new participants and in 2004 to additional deferrals. Additional information about that plan is contained elsewhere in this proxy statement under the caption “PROPOSAL 1: TO ELECT DIRECTORS - Directors’ Compensation.”
The Company's Executive Nonqualified Excess Plan, as amended and restated in 2020 (the “2020 Excess Plan”) is a defined contribution plan that permits participating officers and Directors to elect to defer receipt of current compensation from the Company or the Bank in order to provide retirement or other benefits as selected in the individual adoption agreements. Participants may select among designated reference investments consisting of investment funds, with the performance of the participant's account mirroring the selected reference investment. Distributions are made only upon a qualifying distribution event, which may include a separation from service, death, disability or unforeseeable emergency or (in the case of distributions from an in-service withdrawal account or education funding account) upon a date specified in the participant's deferral election form. The plan does not provide for above market or preferential earnings on deferrals. Promised benefits under the plan are general unsecured obligations of the Company and/or the Bank, as no assets of the Company or the Bank have been segregated to meet the payment obligations under the plan. However, the Company and the Bank have jointly purchased life insurance and mutual funds to fund substantially all of the anticipated benefit payments.
In addition to voluntary deferrals made by Mr. Silverman, under the provisions of the 2020 Excess Plan and a related Supplemental Executive Retirement Plan (SERP) Agreement entered into between the Bank and Mr. Silverman on March 1, 2020, a Company contribution in the amount of $27,537 was made in March 2024 to Mr. Silverman’s plan account. The SERP is intended to replace some of the benefits lost by Mr. Silverman under federally mandated restrictions on retirement income benefits to highly compensated employees under qualified retirement income plans like 401(k) plans. Benefits lost include not receiving the full amount of a Company match, safe harbor contribution or profit sharing contribution on total salary plus cash bonus earned due to maximum compensation restrictions for benefit calculation purposes. Ms. Hale was not covered under a SERP in 2023.
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The following table summarizes voluntary deferrals under the 2020 Excess Plan during 2023, earnings/(losses) during 2023 on accumulated deferrals and the aggregate balance of the accrued benefit as of December 31, 2023, for Mr. Silverman and Ms. Hale, and for Mr. Silverman, also discloses the amount of the Company's contribution under his SERP for 2023 services.
____________________
(1)
The amount reported as deferred in this table is included in the NEO’s salary reported in the 2023 Summary Compensation Table.
(2)
Contributed pursuant to Mr. Silverman's SERP in March 2024 with respect to the 2023 plan year and included in "All Other Compensation" in the 2023 Summary Compensation Table. Ms. Hale does not participate in the SERP.
Defined Contribution Retirement Savings (401(k)) Plan
Union maintains a contributory, tax qualified Employee Savings 401(k) and Profit-Sharing Plan covering all employees who meet certain eligibility requirements. Participants may elect to contribute up to the IRS maximum dollar amount limitations of their eligible compensation to their 401(k) plan account on a tax deferred basis. The plan also provides for matching contributions by Union, in the sole discretion of Union's Board of Directors. During 2023 and 2022, Union made a discretionary 401(k) matching contribution of fifty cents for every dollar of compensation deferred by the participant, up to 6% of each participant's eligible compensation. The plan also provided during 2023 and 2022 for a non-discretionary 3% safe harbor contribution for the account of each participant. Union made a 3% discretionary profit-sharing contribution for the account of each eligible employee with respect to each of the 2023 and 2022 plan years, with funds actually contributed in February of the following year. Nondiscretionary safe harbor contributions, discretionary matching contributions and discretionary profit-sharing contributions made for the account of the two executive officers named in the 2023 Summary Compensation Table are included in the table under “All Other Compensation.”
Perquisites and Other Personal Benefits
The Company does not generally provide its executive officers with perquisites or other personal benefits such as club memberships, financial planning assistance, tax preparation, living allowances, commuting expenses, or similar benefits not described in this proxy statement. However, the Company does provide a Company-owned vehicle to Mr. Silverman and pays related energy and maintenance charges. The Company also pays the expenses of the executive officers and their spouses in connection with attendance at certain banking-related functions, such as bankers’ association conferences.
Health and Welfare Benefits
The Company offers the same health and welfare benefits to all salaried and non-salaried employees, although benefits may vary depending on whether the employee is employed full-time or part-time. These benefits include health insurance, group life insurance, short-term disability insurance, long-term disability insurance, education benefits and paid time off.
Split Dollar Life Insurance
Union’s group life insurance plan has a stated benefit of three times annual salary, subject to a maximum benefit limit of $300,000. Due to this benefit cap, those employees (including the two NEOs) whose salary exceeds $100,000 do not receive a group life insurance benefit equal to three times their annual salary. Accordingly, Union entered into split-dollar life insurance agreements with certain officers, including the two NEOs, which provide that a portion of the
27
death benefit on a life insurance policy owned by Union will be paid to the executive’s beneficiary if the NEO dies while employed with Union. The agreements expire upon termination of employment. The amount of the additional death benefit under the split-dollar life insurance arrangement is $800,000 for Mr. Silverman and $400,000 for Ms. Hale. The split-dollar life insurance benefit is in addition to the group life insurance coverage generally available to Union’s employees.
Change in Control Agreements
In August, 2021, each of our NEOs entered into amended and restated change in control agreements with the Company. These agreements contain terms and conditions customarily found in change in control agreements for executives holding comparable positions, including automatic annual one-year extensions of these agreements unless written notification of non-continuance is provided in accordance with the terms of the agreements. No severance is payable unless there is an involuntary termination within 12 months (24 months in the case of our CEO) after a change in control (as defined in such agreements), or in some circumstances, within six months before a change in control. If the executive officer is terminated without “cause” (as defined in such agreements) or the executive officer resigns for “good reason” (as defined in such agreements) within the designated period the executive will be entitled to receive a lump sum payment of 100% of the executive’s annual base salary (200% of base salary in the case of our CEO) plus 100% of the executive’s bonus (short-term incentive) amount (200% in the case of our CEO), plus an amount equal to the employer contributions made by the Bank or its Affiliates under the Bank’s 401(k) and profit sharing plan for the account of the executive with respect to the last completed plan year immediately prior to the change in control, including any employer matching contributions, “safe harbor” contributions and profit sharing contributions and under any SERP for the benefit of the executive. The Bank is also required to continue to provide to the executive (and the executive's dependents, if applicable), at the Bank’s sole expense, the same level of medical, dental, vision and prescription drug insurance benefits upon substantially the same terms and conditions (including contributions required by the NEO, if any, for such benefits) as existed immediately prior to the executive's date of termination for a period of 12 months following the date of separation (24 months in the case of our CEO). In addition, the Bank is required to provide outplacement services to the terminated NEO. Any equity-based awards (whether to be settled in cash or stock) held by the NEOs under any equity-based plan of the Company, including any outstanding awards under the Company’s LTIP, or any successor equity-based plans, will be governed by the provisions of the respective plan.
Payment of benefits under the Agreements is subject to execution by the NEO of a waiver and release of claims. The Agreements also contain non-disparagement, confidentiality, non-competition and non-solicitation covenants binding on the NEO following termination of employment and payment of the contractual change in control benefits. There are no tax “gross up” provisions in the agreements.
28
Potential Payments upon Change in Control:
The following table summarizes payments and benefits that would have been payable to each of our two NEOs under their Change in Control Agreements, assuming that their employment had terminated on December 31, 2023, and that such termination occurred within the applicable period following a change in control of the Company or Union (24 months for the CEO and 12 months for the other NEO, or in some circumstances within 6 months prior to a change in control, as defined). For purposes of this table, the effective date of termination is assumed to be December 31, 2023. The closing market price of our common stock on December 31, 2023 was $30.65, as reported on the NASDAQ Stock Market.
____________________
(1)
The amounts shown in the table are for illustrative purposes only, and are equal to two times the eligible compensation for the CEO and one times the eligible compensation for the other NEO paid in 2023.
(2)
Assumes that RSU awards under the LTIP become fully vested upon a change in control pursuant to the Board’s exercise of discretion under the LTIP. Value of awards in this chart assumes termination of employment during the second half of the performance period and achieving the performance level as actually achieved at December 31, 2023. Includes unvested RSUs awarded in 2021, 2022 and 2023.
(3)
“Good reason” is defined in the Agreements to mean, among other things, a material diminution of responsibility or salary; a change in location of more than 50 miles from the executive’s current location; or the inability of Union to perform its obligations under the agreement. “Cause” means, among other things, illegal acts, gross misconduct or the executive’s failure to perform in any material respect their obligations under the Agreement.
29
PAY VERSUS PERFORMANCE DISCLOSURE
In accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive compensation for our principal executive officer (“PEO”) and Non-PEO named executive officers (“NEOs”) and Company performance for the fiscal years listed below.
____________________
(1)
David S. Silverman served as our PEO throughout each year presented. The individuals comprising the Non-PEO NEOs for purposes of the calculations in the table for each year presented are listed below.
(2)
The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of SEC Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table Total with certain adjustments pertaining to equity compensation, as described in footnote 3 below.
(3)
Compensation Actually Paid reflects the exclusions and inclusions of certain amounts pertaining to equity compensation for the PEO and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards column are the totals from the Stock Awards column set forth in the Summary Compensation Table.
The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables:
30
(4)
The Company TSR assumes $100 was invested in the Company’s common stock for the period starting December 31, 2020 through the end of the listed year and assumes reinvestment of dividends. Historical stock performance is not necessarily indicative of future stock performance.
Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Company Total Shareholder Return ("TSR")
The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and the Company's cumulative TSR over the three most recently completed fiscal years.
31
Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income
The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and our net income during the three most recently completed fiscal years.
PROPOSAL 2
APPROVAL OF THE UNION BANKSHARES, INC.
2024 EQUITY INCENTIVE PLAN
On March 20, 2024, upon recommendation of the Compensation Committee, our Board of directors adopted the Union Bankshares, Inc. 2024 Equity Incentive Plan (the “2024 Equity Plan” or the “Plan”), subject to shareholder approval at the annual meeting. If approved, the 2024 Equity Plan will replace the Union Bankshares, Inc. 2014 Equity Incentive Plan (the "2014 Equity Plan"), which expires in May, and would apply to awards granted on or after the date of the Annual Meeting.
Among the factors the Compensation Committee and Board considered in assessing the advisability of adopting the Plan were the importance of maintaining equity as a component of our overall compensation program and the continued appropriateness of equity compensation within the context of our overall compensation philosophy, as well as the advice of our independent compensation consultants, Aon, PLC, on matters of compensation practices and plan design.
A summary of the material features of the 2024 Equity Plan is set forth below. The summary is qualified in its entirety by reference to the full text of the 2024 Equity Plan, which is attached to this proxy statement as Appendix A.
Summary of the 2024 Equity Plan
Purpose
. The primary purpose of the 2024 Equity Plan is to promote our Company’s success by linking the personal interests of our officers and nonemployee directors to those of our shareholders, and by providing participants with an incentive for outstanding performance. The Compensation Committee and Board believe that the 2024 Equity Plan will help the Company attract, retain and motivate officers, nonemployee directors and prospective officer-employees by providing a means for them to share in the long-term growth and profitability of the Company and encouraging them to acquire a proprietary stake in the Company.
Administration
. The 2024 Equity Plan will be administered by the Compensation Committee (the “Committee”) of the Board of Directors. The Committee will have the authority to designate participants; determine the type or types of awards to be granted to each participant and the number, terms and conditions of awards; establish, adopt or revise any rules and regulations
32
as it may deem advisable to administer the 2024 Equity Plan; and make all other decisions, interpretations, and determinations that may be necessary or appropriate under the Plan. In its discretion, the full Board of Directors may at any time administer the Plan in lieu of the Committee. If it does so, it will have all the powers of the Committee described in the Plan and in this summary description of the Plan.
Eligibility
. As with the 2014 Equity Incentive Plan, the 2024 Equity Plan permits the grant of awards to officers of the Company and its affiliates, as selected by the Committee from time to time in its discretion, as well as awards to nonemployee directors of the Company and its affiliates, subject in each case to limitations on individual awards. As of March 20, 2024, the number of eligible persons was approximately 55, including 8 nonemployee directors of the Company and/or Union Bank. The number of eligible persons may increase over time based upon future growth of the Company and Union Bank. Not all persons eligible for participation in the Plan will receive awards, as the selection of grantees from time to time is within the discretion of the Committee.
The Plan also permits the Committee to grant awards to prospective officer-employees. The Board believes that this authority will provide desirable flexibility in recruiting top executive talent.
Types of Awards
. The 2024 Equity Plan authorizes the granting of awards in any of the following forms:
•
Options
- options to purchase shares of the Company's common stock, which may be options designed to qualify as incentive stock options ("ISOs") under Section 422 of the U.S. tax code (the "Code") or may be options not so qualified ("Non-Qualified Options"). ISOs may not be awarded to nonemployee directors.
•
Restricted Stock
- shares of the Company’s common stock that are subject to such vesting conditions as are determined by the Committee and specified in the award certificate, which may include, for example, time-based or performance based vesting conditions. Generally, a participant will have full voting and dividend rights as to unvested shares during the restriction period. Restricted stock will be forfeited and canceled to the extent the specified vesting conditions are not met.
•
Restricted Stock Units ("RSUs")
- the right to receive shares of the Company’s common stock (or an equivalent value in cash or other property, as determined by the Committee and specified in the award certificate) in the future, subject to such vesting conditions as are determined by the Committee and as specified in the award certificate which may include, for example, time-based or performance based vesting conditions. Unlike shares of restricted stock, RSUs do not represent issued shares. Accordingly, the participant does not have voting or dividend rights with respect to an award of RSUs. However, in the Committee’s discretion, an award of RSUs may include an award of dividend equivalents, which entitle the participant to payments (or an equivalent value payable in stock or other property as the Committee may determine) equal to any dividends paid on the number of shares of stock underlying the award.
The Plan does not provide for cash-based awards, other than RSUs to be settled in cash, dividends on restricted stock and dividend equivalents on restricted stock units. The Company’s Short Term Incentive Performance Plan, which provides for performance-based cash incentive awards, is described elsewhere in this proxy statement under the caption “EXECUTIVE COMPENSATION - Short Term Incentive Performance Plan.”
Shares Available for Awards
. Subject to adjustment as provided in the 2024 Equity Plan (see “
Adjustments
” below), the aggregate number of shares of our common stock that would be reserved and available for issuance pursuant to awards granted under the Plan is 250,000. There are currently 69,135 shares remaining available for issuance under the 2014 Equity Plan. However, no further grants will be made under that plan, which expires in May of this year. Under the 2024 Equity Plan, shares covered by an award will be counted against the maximum number of remaining shares authorized at the time the award is granted. The Plan provides that the following shares will not be counted against the maximum number of shares authorized: (i) shares covered by an award that is terminated by expiration, forfeiture or cancellation; (ii) shares tendered by participants as full or partial payment of the exercise price of stock options, (iii) shares underlying a restricted stock unit grant settled in cash; and (iv) shares withheld by reason of net-settlement upon exercise of an option; and (v) shares withheld by or remitted to the Company to satisfy a participant’s tax withholding obligations relating to an award. In addition, substitute awards issued to the optionees of an entity acquired by the Company would not be counted against the Plan’s share authorization. The total number of shares that may be issued under the Plan upon exercise of ISOs may not exceed 50,000. Except for the foregoing aggregate limitation with respect to ISOs, the Committee has discretion to utilize all 250,000 authorized shares for grants of any single type of award, but the aggregate of all awards may not exceed 250,000 shares, subject to the foregoing rules on share availability.
Dilution not Material.
Potential stockholder dilution from the 2024 Equity Plan would not be material. Assuming all 250,000 shares were to be issued, based on our common stock outstanding as of the record date for the annual meeting (4,519,388 shares), the resulting dilution would be 5.53%.
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Limitations on Individual Awards
. The maximum number of shares of common stock subject to awards that may be granted under the 2024 Equity Plan in any calendar year to any one person (including any nonemployee director) is as follows:
Vesting Conditions; Performance Goals
. In its discretion, the Committee may condition vesting of an award on such criteria as it deems appropriate, including continued service requirements and attainment of specified performance goals. Performance goals may be based on the performance of the Company as a whole or on any one or more Subsidiaries or business units of the Company or a Subsidiary and may be measured relative to a peer group, an index or a business plan. In establishing any performance measures, the Committee may provide for the exclusion of the effects of the following items, to the extent identified in the audited financial statements of the Company, including footnotes, or in the Management’s Discussion and Analysis section of the Company’s annual report: (i) extraordinary, unusual, and/or nonrecurring items of gain or loss; (ii) gains or losses on the disposition of a business; (iii) changes in tax or accounting principles, regulations or laws; or (iv) mergers or acquisitions.
Term of Awards.
The exercise period of stock options will be as determined at the discretion of the Compensation Committee at the date of grant but may not exceed ten (10) years. The expiration (vesting) terms of awards of restricted stock and RSUs will be determined at the discretion of the Committee at the time of the grant.
Limitations on Transfer; Beneficiaries
. No unvested or unexercised award will be assignable or transferable by a participant other than by will or the laws of descent and distribution or (except in the case of an ISO) pursuant to a qualified domestic relations order;
provided
,
however
, that the Compensation Committee may permit other transfers (other than transfers for value) where it concludes that such transferability does not result in accelerated taxation, does not cause any option intended to be an incentive stock option to fail to qualify as such, as is otherwise appropriate and desirable, taking into account any factors deemed relevant, including without limitation, any state or federal tax or securities laws or regulations applicable to transferable awards. A participant may, in the manner determined by the Committee, designate a beneficiary to exercise the rights of the participant and to receive any distribution with respect to any award upon the participant’s death.
Treatment of Awards upon a Death or Disability:
Unless otherwise provided in an award certificate under limitations relating to incentive stock options, if a participant’s service terminates by reason of death or disability:
•
all of such participant’s outstanding stock options will become fully vested and remain exercisable until (i) in the case of death, until the expiration date of the option, and (ii) in the case of disability, the earlier of the expiration date of the original term of the option or twelve months;
•
all time-based vesting restrictions on outstanding awards will lapse; and
•
the payout opportunities attainable under all of that participant’s outstanding performance-based awards will vest based on target or actual performance (depending on the time during the performance period in which the date of termination occurs) and the awards will payout on a prorata basis, based on the time elapsed prior to the date of termination.
Treatment of Awards upon a Change in Control
. Unless otherwise provided in an award certificate or in a separate agreement with a participant:
•
upon the occurrence of a change in control of the Company (as defined in the Plan) in which awards are not assumed by the surviving entity or otherwise equitably converted or substituted in connection with the change in control in a manner approved by the Committee or the Board of Directors:
◦
all outstanding stock options will become exercisable;
◦
all time-based vesting restrictions on outstanding awards will lapse; and
◦
all outstanding performance-based awards will vest based on target level or actual performance and the awards will payout on a pro-rata basis, based on the time elapsed during the performance period prior to the change in control; and
•
with respect to awards assumed by the surviving entity or otherwise equitably converted or substituted in connection with a change in control, the terms of such assumption, conversion or substitution shall be as determined by the Committee in its discretion, and without the consent of the Participant.
•
if a payment under an award agreement is subject to Code Section 409A and if the Change in Control definition contained in this Plan or in an award agreement or other agreement with the participant does not comply with the definition of “change of control” for purposes of a distribution under Code Section 409A, then any payment of an
34
amount that is otherwise accelerated under this Section shall be delayed until the earliest time that such payment would be permissible under Code Section 409A without triggering any penalties applicable under Code Section 409A.
Acceleration upon Certain Other Events
. The Committee may in its sole discretion at any time determine that, upon the termination of service of a participant, or the occurrence of a Change in Control, all or a portion of such participant’s stock options shall become fully or partially exercisable, that all or a part of the restrictions on all or a portion of the participant’s outstanding awards of restricted stock or RSUs shall lapse, and/or that any performance-based criteria with respect to any awards held by that participant shall be deemed to be wholly or partially satisfied, in each case, as of such date as the Committee may, in its sole discretion, declare. The Committee need not treat all participants uniformly in exercising such discretion.
Adjustments
. If the Company effects an internal reorganization, recapitalization or similar corporate transaction that causes the value of a share or the Company’s common stock to change, such as a stock dividend, stock split, reverse stock split, spin-off, rights offering, or large nonrecurring cash dividend, the total share authorization and annual grant limitations under the Plan, as well as the number of shares and exercise price (if any) under outstanding awards, will be adjusted proportionately up or down, and the Committee will have the discretion to make such other adjustments to the Plan and outstanding awards as it deems necessary to preserve the benefits or potential benefits of the awards.
No Discounted Options.
Stock options may not be granted with an exercise price lower than the fair market value of the underlying shares on the date of grant.
No Repricing or “Evergreen” Provisions, or Tax “Gross Ups.”.
Outstanding stock options cannot be repriced, directly or indirectly, without the prior consent of the Company's stockholders. The exchange of an “underwater” option (i.e., an option having an exercise price in excess of the current market value of the underlying stock) for another award would be considered an indirect repricing and would, therefore, require the prior consent of the stockholders.
There are no “evergreen” features under which shares authorized for issuance pursuant to the Plan would be automatically replenished.
The Plan does not provide for any tax “gross-ups” or similar payments or reimbursements to defray a participant's tax liability associated with the issuance of awards.
Termination and Amendment
.
Plan.
Our Board of Directors or the Committee may, at any time and from time to time, terminate or amend the 2024 Equity Plan, but if an amendment would constitute a material amendment requiring stockholder approval under applicable listing requirements, laws, policies or regulations, then such amendment will be subject to stockholder approval. In addition, the Board of Directors or the Committee may condition any Plan amendment on the approval of the stockholders for any other reason. No termination or amendment of the 2024 Equity Plan may, without the written consent of the participant, reduce or diminish the value of an award determined as if the award had been exercised, vested, cashed in or otherwise settled on the date of such amendment or termination.
Outstanding Awards.
In its discretion, the Committee may provide in an award agreement that an award will be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of specified events, including termination of employment, violation of material Company policies or other conduct detrimental to the business or reputation of the Company. The Committee may amend or terminate outstanding awards. However, such amendments may require the consent of the participant and, unless approved by the stockholders, the exercise price of an outstanding stock option may not be reduced, directly or indirectly, and the original term of a stock option may not be extended.
Plan Term.
Unless extended by amendment approved by the stockholders, the Plan will expire ten (10) years from its effective date. The Plan will become effective on the date it is approved by the stockholders.
Certain Federal Income Tax Consequences
Non-Qualified Stock Options.
Generally, no taxable income is recognized by the optionee upon the grant of a Non-Qualified Option under the 2024 Equity Plan, nor will the Company be entitled to a deduction at that time. When the optionee exercises a Non-Qualified Option, he or she will recognize ordinary income in an amount equal to the excess of the fair market value of the common stock received upon exercise of the option at the time of exercise over the exercise price, and the Company will be allowed a corresponding federal income tax deduction. Any gain that the optionee realizes when he or she later sells or disposes of the shares will be short-term or long-term capital gain, depending on how long the shares were held.
Incentive Stock Options.
A participant will not recognize income, and the Company will not be allowed a tax deduction, if upon the grant of an incentive stock option is granted. If the optionee holds the option shares for the required holding period of at least two years after the date the option was granted and one year after exercise, the difference between the exercise price and the amount realized upon sale or disposition of the option shares will be long-term capital gain or loss, and the Company will
35
not be entitled to a federal income tax deduction at that time. If the optionee disposes of the option shares in a sale, exchange, or other disqualifying disposition before the required holding period ends, he or she will recognize taxable ordinary income in an amount equal to the excess of the fair market value of the option shares at the time of exercise over the exercise price, and the Company will be allowed a federal income tax deduction equal to such amount. While the exercise of an incentive stock option does not result in current taxable income, the excess of the fair market value of the option shares at the time of exercise over the exercise price will be an item of adjustment for purposes of determining the optionee’s alternative minimum taxable income.
Restricted Stock.
Unless a participant makes an election under Code Section 83(b) to accelerate recognition of the income to the date of grant as described below, a participant will not recognize income, and the Company will not be allowed a tax deduction, at the time a restricted stock award is granted, provided that the award is nontransferable and is subject to a substantial risk of forfeiture. When the restrictions lapse, the participant will recognize ordinary income equal to the fair market value of the common stock as of that date (less the amount he or she paid for the stock, if any), and the Company will be allowed a corresponding federal income tax deduction at that time. If the participant files an election under Code Section 83(b) within 30 days after the date of grant of the restricted stock, he or she will recognize ordinary income as of the date of grant equal to the fair market value of the stock as of that date (less the amount paid for the stock, if any) and the Company will be allowed a corresponding federal income tax deduction at that time. However, if the stock fails to vest for any reason and is later forfeited, the participant will not be able to recover the tax previously paid pursuant to the Code Section 83(b) election. If a Section 83(b) election is made, dividends paid on the restricted stock will be taxed at dividend rates rather than as ordinary income.
Restricted Stock Units.
A participant will not recognize income, and the Company will not be allowed a tax deduction, at the time a restricted stock unit award is granted. Upon receipt of shares of common stock (or the equivalent value in cash or other property) in settlement of a restricted stock unit award, a participant will recognize ordinary income equal to the fair market value of the common stock or other property as of that date (less the amount he or she paid for the stock or property, if any) and the Company will be allowed a corresponding federal income tax deduction at that time. Dividend equivalents paid to a participant with respect to restricted stock units will be taxed to the participant as ordinary income.
Code Section 409A.
Awards under the 2024 Equity Plan are intended to be exempt from, or to comply with, Internal Revenue Code Section 409A, and the terms of the Plan and awards are to be interpreted accordingly. Nevertheless, the Company does not provide a guaranty to any participant that an award will be exempt from, or comply with, Section 409A.
Tax Withholding.
The Company or any affiliate has the right to deduct or withhold, or require a participant to remit to the Company, an amount sufficient to satisfy federal, state, and local taxes (including employment taxes) required by law to be withheld with respect to any exercise, lapse of restriction, or other taxable event arising as a result of the 2024 Equity Plan.
New Plan Benefits to Named Executive Officers and Others
.
If the stockholders approve the 2024 Equity Plan, awards will be made at the discretion of the Committee. Therefore, except as disclosed below with respect to estimated potential grants under consideration for 2025, to be based on 2024 performance, it is not possible at this time to determine the benefits or amounts that may be received by the Company’s executive officers and other participants under the Plan in the future.
Although no final decision has yet been made, should the 2024 Equity Plan be approved by the stockholders at the annual meeting, the Committee is considering potential equity grants (i) to nonemployee directors during 2024 (subject to vesting) for services during the one year term that will expire at the 2025 annual meeting and (ii) to employee participants in 2025 with respect to 2024 services, in the form of RSUs pertaining to a total of approximately 18,207 shares of common stock. Certain additional information regarding these potential grants is provided in the table below.
____________________
(1)Number of potential RSUs is estimated solely for purposes of this table. Dollar value is based on the estimated number of potential RSUs, multiplied by the closing price of the Company’s common stock on March 22 2024, as reported on the NASDAQ Stock Market. RSUs do not have an exercise price and are settled without payment of consideration.
36
Additional information
The table below presents information on the 2014 Equity Plan (currently the Company's only equity compensation plan) at December 31, 2023 as required under SEC disclosure rules:
(1)
Represents shares issuable under the 2014 Equity Plan upon vesting of outstanding restricted stock units (“RSUs”) granted under the 2014 Equity Plan, as amended, and includes RSUs for which performance conditions have been satisfied but which are also subject to time-based vesting conditions.
(2)
There were no outstanding stock options; RSUs not included as they do not include an exercise price.
(3)
All of such shares are available for issuance pursuant to future awards under the 2014 Equity Plan, as amended, prior to the Plan's termination date of May 19, 2024.
Vote Required to Approve Proposal 2
Approval of the 2024 Equity Plan will require that more votes be cast "FOR" then "AGAINST" the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
PROPOSAL 2.
PROPOSAL 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Upon recommendation of the Audit Committee and ratification by the shareholders, the independent registered public accounting firm of BerryDunn was engaged to serve as the Company's independent accountants to audit the Company's consolidated financial statements for the year ended December 31, 2023.
BerryDunn has advised the Audit Committee that they are independent accountants with respect to the Company within the meaning of standards established by the American Institute of Certified Public Accountants, the Public Company Accounting Oversight Board, the Independence Standards Board and federal securities laws administered by the SEC. A representative of BerryDunn is expected to be present at the annual meeting. He will have the opportunity to make a statement if he so desires, and he is expected to be available to respond to appropriate questions.
The Audit Committee has appointed BerryDunn to serve as the Company's independent registered public accounting firm to audit the Company's consolidated financial statements for the year ending December 31, 2024, and to perform such other appropriate accounting services as may be required. Although not required by law, consistent with evolving corporate practices the Board has determined that it is desirable to request shareholder ratification of the appointment. The Audit Committee has not determined what action it will take if the shareholders do not ratify the appointment of BerryDunn. In such event, the Committee could decide to continue to retain the services of BerryDunn for 2024 and consider a change in auditors for 2025. Moreover, even if the appointment is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time if it determines that such a change would be in the best interests of the Company and its shareholders.
BerryDunn has audited the Company's consolidated financial statements for the last 15 calendar years and has audited the controls over financial reporting for the years ended December 31, 2014 through 2019 and the years ended December 31, 2022 and 2023.
37
Audit Fees
Aggregate fees billed for professional services rendered to the Company by BerryDunn for the years ended December 31, 2023 and 2022, are detailed in the table below.
Audit fees
in both years were for the audits of the annual consolidated financial statements of the Company included in the Company's annual report on Form 10-K, audits of internal controls over financial reporting, and review of quarterly financial statements included in the Company's quarterly reports on Form 10-Q filed with the SEC.
Tax fees
in both years were for services related to tax compliance, including the preparation of tax returns, review of estimates, and tax advice.
Audit and tax consulting fees
in both years related to consulting and planning services including the implementation of the accounting pronouncement regarding accounting for current credit losses (CECL) which became effective for the Company in 2023 and implementation of tax law changes. 2023 fees included internal control consulting related to moving to an outsourced IT environment.
Audit Committee Preapproval Guidelines
All audit and nonaudit services provided by the registered independent accounting firm during the preceding two fiscal years were approved in advance by the Audit Committee. The Audit Committee has adopted Preapproval Guidelines relating to the provision of audit and nonaudit services by the Company's external auditors. Under these Guidelines, the Audit Committee preapproves both the type of services to be provided by the external auditor and the estimated fees related to these services. During the approval process, the Audit Committee considers the impact of the types of services and the related fees on the independence of the auditor. The services and fees must be compatible with the maintenance of the auditor's independence, including compliance with SEC rules and regulations.
In order to ensure timely review and approval, the Audit Committee has delegated to the Chair of the Committee the authority to amend or modify the list of preapproved services and fees, subject to prompt reporting to the full Committee of action taken pursuant to such delegated authority.
Vote Required to Approve Proposal 3
Ratification of the appointment of BerryDunn as the Company's independent auditors for 2024 will require that more votes be cast “FOR” than “AGAINST” the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
PROPOSAL 3.
SHAREHOLDER NOMINATIONS AND OTHER PROPOSALS
Bylaw Requirements for Shareholder Nominations and Other Proposals
A shareholder of record may nominate an individual for election as a director or present other matters for action from the floor at the annual meeting, subject to compliance with the procedures specified in Section 2.4 of the Company’s Amended and Restated Bylaws, which require the shareholder to provide timely advance written notice and specified information to the Company. In order for a shareholder to make a nomination or propose other business from the floor at the 2025 annual meeting, which is expected to be held on May 21, 2025, the shareholder must provide to the Company advance written notice of the proposed nomination or other business, containing all of the information specified in Section 2.4 of the Bylaws, no earlier than January 16, 2025 and no later than February 17, 2025.
The required notice and information should be sent within the specified deadlines to the attention of the Corporate Secretary, Union Bankshares, Inc., 20 Lower Main Street, Morrisville, VT 05661. The notice must include the following information about the shareholder and any beneficial owner on whose behalf the shareholder is acting: (i) name and address, (ii) number of shares of the Company’s capital stock beneficially owned, directly or indirectly, and (iii) any material pecuniary or other interest in the business or nomination to be proposed, as well as any material pecuniary or other interest of any of the respective affiliates or associates of the shareholder or of any beneficial owner on whose behalf the shareholder is acting.
38
In addition, with respect to any director nomination, the shareholder must provide all of the same information that would be required under SEC Regulation 14A for the solicitation of proxies for the election of such nominee, including without limitation (i) name and age, (ii) description of the individual’s business background for the past five years, (iii) any arrangement between the nominee and any other person pursuant to which the individual is to be nominated for election to the Board, and (iv) a written consent of the nominee to serve as a director if properly nominated and elected. With respect to other proposals, the shareholder must submit a detailed description of the business to be brought before the meeting and the reasons for conducting such business at the meeting.
The above description is merely a brief summary of the applicable provisions which does not purport to be complete, and is qualified in its entirety by reference to the full text of Section 2.4 of the Bylaws. The Company’s Amended and Restated Bylaws are contained in Exhibit 99.1 to the Company’s current report on Form 8-K, filed with the SEC on March 18, 2021, and are available on the SEC’s website at
https://www.sec.gov/edgar.shtml.
A shareholder may also request a copy of the bylaws by contacting the Assistant Corporate Secretary at Union Bankshares, Inc., 20 Lower Main Street, Morrisville, VT 05661.
The above process, which is governed by the Company’s Bylaws, is in addition to, and separate from (i) the process contained elsewhere in this proxy statement under the caption “PROPOSAL 1: TO ELECT DIRECTORS—Shareholder Recommendations for Board Nominations” for submitting names of possible director nominees for consideration by the Nominating and Corporate Governance Committee; and (ii) the process described immediately below under “Inclusion of Shareholder Proposals in Company Proxy Materials,” which is governed by SEC rules and which has an earlier notification deadline.
Inclusion of Shareholder Proposals in Company Proxy Materials
If a shareholder seeks to have a proposal included in the Company’s proxy materials for the 2025 annual meeting, there is a separate process from that described above, with an earlier notification deadline. That process is governed by SEC rules, and not by the Company’s Bylaws. The SEC process does not apply to shareholder nominations for election of directors, which are not eligible for inclusion in the Company’s proxy statement. In order to be considered for inclusion in the Company’s proxy material for the 2025 annual meeting, shareholder proposals must be submitted in writing to the Secretary of the Company not later than December 4, 2024, and must comply in all respects with applicable rules and regulations of the SEC relating to such inclusion, including rules governing shareholder eligibility and appropriate subject matter. Any such proposal will be omitted from or included in the Company’s proxy materials at the discretion of the Board of Directors, subject to such rules and regulations. Proponents must also provide any additional information required under section 2.4 of the Bylaws, as described above.
Use of Discretionary Authority Conveyed in the Proxy
Under SEC rules, management of the Company will be permitted to use its discretionary authority conferred in the proxy card for the annual meeting to vote on a shareholder proposal even if the proposal has not been discussed in the Company's proxy statement, unless the shareholder-proponent has given timely notice to the Company of his or her intention to present the proposal at the meeting. In order to be considered timely for consideration at the 2025 annual meeting, as described above under "Bylaw Requirements for Shareholder Nominations and Other Proposals," our Amended and Restated Bylaws require the shareholder-proponent to furnish written notice to the Company of the proposal no later than February 17, 2025. If timely notice is received, the Company may exercise its discretionary authority under the proxy in connection with such proposal only if otherwise permitted to do so under applicable SEC rules.
OTHER MATTERS
As of the date of this proxy statement, management knows of no business expected to be presented for action at the annual meeting, except as set forth above. If, however, any other business should properly come before the meeting, the persons named in the accompanying proxy form will vote in accordance with the recommendations of management.
Union Bankshares, Inc.
Morrisville, Vermont
39
APPENDIX A
UNION BANKSHARES, INC.
2024 EQUITY INCENTIVE PLAN - TABLE OF CONTENTS
A-1
A-2
UNION BANKSHARES, INC.
2024 Equity Incentive Plan
ARTICLE 1
PURPOSE
1.1
GENERAL
. The purpose of the Union Bankshares, Inc. 2024 Equity Incentive Plan (the “
Plan
”) is to promote the success, and enhance the value, of Union Bankshares, Inc. (the “
Company
”), by linking the personal interests of officers and directors of the Company or any Affiliate (as defined below) to those of Company stockholders and by providing such persons with an incentive for outstanding performance. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, hire and retain the services of officers and directors upon whose judgment, interest, and special effort the successful operation of the Company’s business is largely dependent. Accordingly, the Plan permits the grant of incentive Awards from time to time to selected officers, non-employee directors and certain prospective employees of the Company and its Affiliates.
ARTICLE 2
DEFINITIONS
2.1
DEFINITIONS
. When a word or phrase appears in this Plan with the initial letter capitalized, and the word or phrase does not commence a sentence, the word or phrase shall generally be given the meaning ascribed to it in this Section or in Section 1.1 unless a clearly different meaning is required by the context. The following words and phrases shall have the following meanings:
•
“
Affiliate
” means (i) any Subsidiary or Parent, or (ii) an entity that directly or through one or more intermediaries controls, is controlled by, or is under common control with, the Company, as determined by the Committee.
•
“
Award
” means any Option, Restricted Stock, Restricted Stock Unit or Dividend Equivalent granted to a Participant under the Plan.
•
“
Award
Certificate
” means a written document, in such form as the Committee prescribes from time to time, setting forth the terms and conditions of an Award. Award Certificates may be in the form of individual Award agreements or certificates or a program document describing the terms and provisions of an Award or series of Awards under the Plan. The Committee may provide for the use of electronic, internet or other nonpaper Award Certificates, and the use of electronic, internet or other nonpaper means for the acceptance thereof and actions thereunder by a Participant.
•
“
Beneficial
Owner
” shall have the meaning given such term in Rule 13d-3 of the General Rules and Regulations under the 1934 Act.
•
“
Board
” means the Board of Directors of the Company.
•
“
Cause
” as a reason for a Participant’s termination of employment shall have the meaning assigned such term in the employment, severance, change in control, or similar agreement, if any, between such Participant and the Company or an Affiliate, provided, however that if there is no such employment, severance, change in control, or similar agreement in which such term is defined, and unless otherwise defined in the applicable Award Certificate, “Cause” shall mean any of the following acts by the Participant, as determined by the Committee: gross neglect of duty; prolonged absence from duty without the consent of the Company; material breach by the Participant of any published Company or Affiliate personnel policy, code of conduct or code of ethics; or willful misconduct, misfeasance or malfeasance of duty which is reasonably determined to be detrimental to the Company; or conviction of a felony or entering of a plea of nolo contendere to a felony. With respect to a Participant’s termination of directorship, “Cause” means an act or failure to act that constitutes cause for removal of a director under applicable Vermont law. The determination of the Committee as to the existence of “Cause” shall be conclusive on the Participant and the Company.
•
“
Change
in
Control
” , subject to Section 13.3 (b). means and includes the occurrence of any one of the following events:
(i)
individuals who, on the Effective Date, constitute the Board of Directors of the Company (the “
Incumbent Directors
”) cease for any reason to constitute at least a majority of such Board, provided that any person becoming a director after the Effective Date and whose election or nomination for election was approved by a vote of at least a majority of the Incumbent Directors then on the Board shall be deemed an Incumbent Director;
provided, however
, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to the election or removal of directors (“
Election Contest
”) or other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board (“
Proxy Contest
”), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest, shall be deemed an Incumbent Director; or
A-3
(ii)
if any Person, or group of Persons acting in concert, is or becomes a “
beneficial
owner
” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Company Voting Securities representing more than fifty percent (50%) of the combined voting power of the Company Voting Securities;
provided, however,
that notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred by virtue of any of the following acquisitions of Company Voting Securities: (A) by the Company or any Affiliate; (B) by any employee benefit plan or trust sponsored, maintained or created by the Company or any Affiliate; (C) by any underwriter temporarily holding Company Voting Securities pursuant to an offering of such securities; (D) by any beneficial owner whose increase in the percentage ownership of outstanding Company Voting Securities is as a result of a repurchase of securities by the Company; or (E) pursuant to a transaction in which Company Voting Securities are acquired from the Company in a transaction approved by a majority of the Incumbent Directors; or
(iii)
consummation of a merger, consolidation share exchange or similar form of corporate transaction involving the Parent or a Subsidiary (a “
Reorganization
”),
unless
immediately following such Reorganization, all three of the following conditions are satisfied: (A) immediately following the consummation of the Reorganization more than fifty percent (50%) of the total voting power of the resulting corporation (the “
Surviving Corporation
”) or, if applicable, its ultimate parent corporation (the “
Surviving Parent Corporation
”) is held by Persons who were the holders of Company Voting Securities outstanding immediately prior to such Reorganization; (B) no person (other than any employee benefit plan or trust sponsored, maintained or created by the Surviving Corporation or the Surviving Parent Corporation) is or becomes the beneficial owner, directly or indirectly, of thirty percent (30%) or more of the total voting power of the outstanding voting securities of the Surviving Parent Corporation (or, if there is no Surviving Parent Corporation, the Surviving Corporation); and (C) at least a majority of the members of the board of directors of the Surviving Parent Corporation (or, if there is no Surviving Parent Corporation, the Surviving Corporation) are individuals who were Incumbent Directors of the Company at the time of the Company Reorganization Board’s approval of the execution of the initial agreement providing for such Reorganization; or
(iv)
consummation of the sale, directly or indirectly, of all or substantially all of the banking assets of the Company to an entity not owned or controlled (directly or indirectly) by the Company’s stockholders; or
(v)
approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.
•
“
Code
” means the Internal Revenue Code of 1986, as amended from time to time. For purposes of this Plan, references to sections of the Code shall be deemed to include references to any applicable regulations thereunder and any successor or similar provision.
•
“
Committee
” means the Compensation Committee of the Board.
•
“
Company
” means Union Bankshares, Inc., a Vermont corporation, or any successor corporation.
•
“
Company Voting Securities
” means securities of the Company eligible to vote in the election of directors of the Company.
•
“
Continuous Service
” means the absence of any interruption or termination of service as an officer or director of the Company or any Affiliate, as applicable;
provided, however
, that for purposes of an Incentive Stock Option “Continuous Service” means the absence of any interruption or termination of service as an employee of the Company or any Parent or Subsidiary, as applicable, pursuant to applicable tax regulations. Continuous Services hall not be considered interrupted in the following cases: (i) a Participant transfers employment between the Company and an Affiliate or between Affiliates; or (ii) in the discretion of the Committee as specified at or prior to such occurrence, in the case of a spin-off, sale or disposition of the Participant’s employer from the Company or any Affiliate; or (iii) any leave of absence authorized in writing by the Company prior to its commencement;
provided, however
, that for purposes of Incentive Stock Options, no such leave may exceed 90 days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, on the 91st day of such leave any Incentive Stock Option held by the Participant shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Non-Qualified Stock Option. Whether military, government or other service or other leave of absence shall constitute a termination of Continuous Service shall be determined in each case by the Committee at its discretion, and any determination by the Committee shall be final and conclusive.
•
“
Disability
” of a Participant, subject to Section 13.3 (b), means any mental or physical condition with respect to which the grantee qualified for and receives benefits under a long-term disability plan of the Company or Subsidiary, or in the absence of such a long-term disability plan or coverage under such plan, “Disability” shall mean a physical or mental condition which, in the sole discretion of the Committee, is reasonably expected to be of indefinite duration and to substantially prevent the grantee from fulfilling his or her duties or responsibilities to the Company or a Subsidiary. If an Award is determined to be subject to Code Section 409A, then notwithstanding anything else herein to the contrary “Disability” or “Disabled” shall mean that the Participant (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; (ii) is, by reason of any medically
A-4
determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Participant’s employer; or (iii) is determined to be totally disabled by the Social Security Administration. If the determination of Disability relates to an Incentive Stock Option, Disability means Permanent and Total Disability as defined in Code Section 22(e)(3). Except to the extent prohibited (if applicable) by Code Section 409A, in the event of a dispute, the determination of whether a Participant is Disabled will be made by the Committee and may be supported by the advice of a physician competent in the area to which such Disability relates.
•
“
Dividend Equivalent
” means a right granted to a Participant under section 8.4 in conjunction with the grant of Restricted Stock Units.
•
“
Effective Date
” has the meaning assigned such term in Section 3.1.
•
“
Eligible Person
” means an officer or Non-employee director of the Company or any Affiliate, or any prospective employee of the Company or any Affiliate who will be an officer upon his or her date of hire.
•
“
Exchange
” means The NASDAQ Stock Market or any other national securities exchange on which the Stock may from time to time be listed or traded.
•
“
Fair Market Value
,” on any date, means (i) if the Stock is listed on an Exchange, the closing sales price on such Exchange or over such system on such date or, in the absence of reported sales on such date, the closing sales price on the immediately preceding date on which sales were reported, or (ii) if the Stock is not listed on an Exchange, the mean between the bid and offered prices as quoted by the applicable interdealer quotation system for such date, provided that if the Stock is not quoted on such interdealer quotation system or it is determined that the fair market value is not properly reflected by such quotations, Fair Market Value will be determined by such other method as the Committee determines in good faith to be reasonable and in compliance with Code Section 409A .
•
“
Full Value Award
” means an Award of Restricted Stock or an Award of a Restricted Stock Unit which is or may be settled by the issuance of Stock (or at the discretion of the Committee, settled in cash valued by reference to Stock value).
•
“
Grant Date
” of an Award means the first date on which all necessary corporate action has been taken to approve the grant of the Award as provided in this Plan, or such later date as is determined and specified as part of that authorization process. Notice of the grant shall be a provided to the Participant within a reasonable time after the Grant Date.
•
“
Incentive Stock Option
” means an Option that is intended to be an incentive stock option and meets the requirements of Code Section 422 or any successor provision.
•
“
Incumbent Directors
” has the meaning specified above in the definition of “Change in Control.”
•
“
Independent Directors
” means those members of the Board of Directors who qualify at any given time as (i) “independent” directors under Nasdaq Stock Market Rule 5605(a)(2), and (ii) “non-employee” directors under Rule 16b-3 of the 1934 Act,
•
“
Non-employee Director
” means a director of the Company or an Affiliate who is not a common law employee of the Company or an Affiliate.
•
“
Non-Qualified Stock Option
” means an Option that is not an Incentive Stock Option.
•
“
Option
” means a right granted to a Participant under Article 7 of the Plan to purchase Stock at a specified price during specified time periods. An Option may be either an Incentive Stock Option or a Non-Qualified Stock Option.
•
“
Parent
” means a corporation, limited liability company, partnership or other entity which owns of record or beneficially a majority of the outstanding voting stock or voting power of the Company. Notwithstanding the above, with respect to an Incentive Stock Option, Parent shall have the meaning set forth in Code Section 424(e).
•
“
Participant
” means a person who, as an officer or director of the Company or any Affiliate, or as a prospective employee of the Company or an Affiliate, has been granted an Award under the Plan;
provided, however,
that in the case of the death of a Participant, the term “Participant” refers to a beneficiary designated pursuant to Section 10.4 or the legal guardian or other legal representative acting in a fiduciary capacity on behalf of the Participant under applicable state law and court supervision.
•
“
Performance Award
” means any Award granted under the Plan pursuant to Article 9.
•
“
Person
” means any individual, entity or group, within the meaning of Section 3(a)(9) of the 1934 Act and as used in Section 13(d)(3) or 14(d)(2) of the 1934 Act.
•
“
Plan
” means the Union Bankshares, Inc. 2024 Equity Incentive Plan, as amended from time to time.
•
“
Restricted Stock
” means Stock granted to a Participant under Article 8 that is subject to such restrictions as are specified in the related Award Certificate, and to risk of forfeiture.
A-5
•
“
Restricted Stock Unit
” means a right granted to a Participant under Article 8 to receive shares of Stock (or the equivalent value in cash if the Committee so provides) in the future, which right is subject to such restrictions as are specified in the related Award Certificate, and to risk of forfeiture.
•
“
Retirement
” means a Participant’s voluntary termination of employment with the Company or an Affiliate after attaining any normal retirement age specified in any pension, profit sharing or other retirement program sponsored by the Company or an Affiliate, or, in the event of the inapplicability thereof with respect to the Participant in question, after attaining age 65 with at least five years of service with the Company or its Affiliates.
•
“
Substitute Award
” has the meaning assigned to such term in Section 10.10.
•
“
Shares
” means shares of the Company’s Stock. If there has been an adjustment or substitution pursuant to Section 11.1, the term “Shares” shall also include any shares of stock or other securities that are substituted for Shares or into which Shares are adjusted pursuant to Section 11.1.
•
“
Stock
” means the $2.00 par value common stock of the Company and such other securities of the Company as may be substituted for Stock pursuant to Section 11.1.
•
“
Subsidiary
” means any corporation, limited liability company, partnership or other entity of which a majority of the outstanding voting stock or voting power is beneficially owned directly or indirectly by the Company. Notwithstanding the above, with respect to an Incentive Stock Option, Subsidiary shall have the meaning set forth in Code Section 424(f).
•
“
Surviving Entity
” means the “Surviving Corporation” or the “Surviving Parent Corporation” (as such terms are defined in the definition of “Change in Control”), as the circumstances warrant.
•
“
1933 Act
” means the federal Securities Act of 1933, as amended from time to time.
•
“
1934 Act
” means the federal Securities Exchange Act of 1934, as amended from time to time.
ARTICLE 3
EFFECTIVE TERM OF PLAN
3.1
EFFECTIVE DATE
. The Plan shall be effective as of the date it is approved by the stockholders of the Company (the “
Effective Date
”). No Award shall be made prior to the Effective Date.
3.2
TERMINATION OF PLAN
. The Plan shall terminate on the tenth anniversary of the Effective Date unless earlier terminated as provided herein. The termination of the Plan on such date shall not affect the validity of any Award outstanding on the date of termination, which shall continue to be governed by the applicable terms and conditions of this Plan. Notwithstanding the foregoing, no Incentive Stock Options may be granted more than ten (10) years after the earlier of (i) adoption of this Plan by the Board, or (ii) the Effective Date.
ARTICLE 4
ADMINISTRATION
4.1
COMMITTEE
. The Plan shall be administered by the Compensation Committee appointed by the Board, which shall consist of at least three directors, each of whom shall be an Independent Director. In its discretion, the Board may reserve to itself any or all of the authority and responsibility of the Committee under the Plan or may act as administrator of the Plan for any and all purposes. To the extent the Board has reserved any authority and responsibility or during any time that the Board is acting as administrator of the Plan, (i) only those members of the Board who qualify as Independent Directors shall participate in any determinations or votes relating to the administration of the Plan (including the granting of any Award); and (ii) the Board (acting through its Independent Directors) shall have all the powers of the Committee hereunder, and any reference herein to the Committee (other than in this Section 4.1) shall include the Board. The mere fact that a Committee member or Board member shall fail to qualify as an Independent Director or shall fail to abstain from any action in administering the Plan shall not invalidate any Award made hereunder which is otherwise validly made under the Plan. To the extent any action of the Board under the Plan conflicts with actions taken by the Committee, the actions of the Board shall control.
4.2
ACTION AND INTERPRETATIONS BY THE COMMITTEE
. For purposes of administering the Plan, the Committee may from time to time adopt rules, regulations, guidelines and procedures for carrying out the provisions and purposes of the Plan and make such other determinations, not inconsistent with the Plan, as the Committee may deem appropriate. The Committee’s interpretation of the Plan, any Awards granted under the Plan, any Award Certificate and all decisions and determinations by the Committee with respect to the Plan and any plan award are final, binding, and conclusive on all parties. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Affiliate, the Company’s or an Affiliate’s
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