SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to § 240.14a-12
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Meridian Bancorp, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
N/A
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
N/A
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Proposed maximum aggregate value of transaction:
N/A
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Total fee paid:
N/A
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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Date Filed:
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April 10, 2019
Dear Fellow Stockholder:
You
are cordially
invited
to attend
the 2019 annual
meeting
of stockholders of Meridian Bancorp, Inc. The meeting
will be held at the Peabody office
of East Boston
Savings Bank, 67 Prospect Street,
Peabody, Massachusetts on May 15, 2019 at 11:00 a.m., local
time.
The notice
of annual
meeting
and proxy statement
appearing
on the following pages describe
the formal
business
to be transacted
at the meeting.
Officers of the Company, as well as a representative
of Wolf & Company, P.C.,
the Company’s independent
registered
public accounting
firm, are expected
to be present to respond to appropriate
questions of stockholders.
It is
important
that
your shares are represented
at this meeting,
whether or not you attend the meeting
in person and regardless
of the number of shares you own.
To make
sure your shares are represented,
we urge you to complete
and mail
the enclosed
proxy card promptly. If you attend
the meeting,
you may vote in person even if you have previously mailed
a proxy card.
We look forward to seeing you at the meeting.
Sincerely,
Richard
J.
Gavegnano
Chairman
of the Board, President
and Chief Executive
Officer
67 Prospect Street
Peabody,
Massachusetts
01960
(617)
567-1500
NOTICE
OF
2019 ANNUAL
MEETING
OF
STOCKHOLDERS
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TIME
AND DATE
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11:00
a.m. on May 15, 2019
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PLACE
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Peabody Office of
East Boston Savings Bank
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67 Prospect Street
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Peabody, Massachusetts
01960
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ITEMS OF
BUSINESS
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(1)
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To elect four directors to serve for a term of three years.
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(2)
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To
ratify
the selection of
Wolf
&
Company, P.C.
as our independent registered public accounting firm
for
fiscal year 2019.
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(3)
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To
consider a non-binding
proposal to
approve our executive compensation as described in
the proxy statement.
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(4)
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To
transact such other
business
as may properly
come before the meeting and any adjournment
or
postponement thereof.
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RECORD DATE
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To
vote, you must have been a stockholder at the close of business
on March 29, 2019.
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PROXY
VOTING
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It
is important
that your
shares
be represented
and voted at the meeting. You can vote your
shares
by completing and returning the proxy
card or
voting
instruction
card sent to
you. Voting instructions are printed
on your
proxy
or
voting
instruction
card and included in
the accompanying proxy
statement. You can revoke a proxy
at any time
before its exercise
at the meeting by following
the instructions in
the proxy
statement.
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Edward J. Merritt
Corporate
Secretary
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April 10, 2019
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Meridian Bancorp,
Inc.
Proxy
Statement
This
proxy
statement is furnished in
connection with
the solicitation of
proxies by the Board of Directors of
Meridian Bancorp, Inc. (the
“Company”
or
“Meridian Bancorp”) to
be used at the annual meeting of
stockholders of
the Company. The
Company is the holding
company for East Boston Savings Bank (the
“Bank”). The
annual meeting will
be held at the Peabody office
of
East Boston Savings Bank, 67 Prospect Street,
Peabody, Massachusetts
on Wednesday,
May 15, 2019
at 11:00
a.m., local time.
This
proxy
statement and the enclosed
proxy
card are being mailed to stockholders of
record on or
about April 10, 2019.
Voting and Proxy
Procedure
Who
Can
Vote at the Meeting
You are entitled to
vote your
Company common stock if
the records of
the Company show that you held your
shares
as of
the close of
business
on March 29, 2019. If
your
shares
are held in
a stock brokerage account or
by a bank or
other
nominee, you are considered the beneficial owner of
shares held in
“street name” and these proxy
materials are being forwarded to
you by your
broker
or
other nominee. As the beneficial owner, you have the right
to
direct your
broker
or
other
nominee how to vote.
As of
the close of
business
on March 29, 2019, there were 53,542,646 shares
of
Company common stock outstanding for
voting
purposes. Each share of
common stock has one vote. The Company’s Articles of
Incorporation
provide
that, subject to
certain exceptions,
record owners of
the Company’s common stock that is beneficially owned by a person who beneficially owns in
excess
of 10%
of
the Company’s outstanding shares,
are not
entitled to
any vote in
respect of
the shares
held in excess
of
the 10%
limit.
Attending
the Meeting
If
you were a stockholder as of
the close of
business
on March 29, 2019, you may attend the meeting. However, if
your
shares
of
Company common stock are held by a broker
or
other
nominee, you will
need proof
of
ownership to
be admitted to
the meeting. A recent brokerage statement or
a letter
from
a bank or
broker
are examples
of
proof
of
ownership. If
you want to
vote your
shares
of Company common stock held in
street name in
person at the meeting, you will
have to
get a written proxy
in
your
name from
the broker
or
other
nominee who holds your
shares.
Quorum
and
Vote Required
A majority
of
the outstanding shares
of
common stock entitled to
vote is required
to
be represented
at the meeting to
constitute a quorum
for
the transaction of
business.
If
you return
valid proxy
instructions or
attend the meeting in
person, your
shares
will
be counted for
purposes of determining
whether there is a quorum,
even if
you abstain from
voting.
Broker non-votes also will
be counted for
purposes of
determining
the existence
of
a quorum.
A broker
non-vote
occurs when a broker,
bank or
other
nominee holding
shares
for
a beneficial owner does not
vote on a particular proposal because
the nominee does not
have discretionary voting
power with
respect to
that item
and has not
received voting
instructions from
the beneficial owner.
In
voting
on the election of
directors, you may vote in
favor
of
all nominees, withhold
votes as to
all nominees or
withhold
votes as to
specific nominees. There
is no cumulative voting
for
the election of
directors. Directors are elected by a plurality
of
the votes cast at the annual meeting. This means that the nominees receiving the greatest number
of
votes will
be elected. V
otes that are withheld and broker
non-votes will
have no effect on the outcome of
the election.
In
voting
to
ratify
the appointment of
Wolf
&
Company, P.C.,
as our
independent registered public accounting firm,
you may vote in
favor
of
the proposal, against the proposal or
abstain from voting.
To
be approved, this matter
requires the affirmative
vote of
a majority
of
the votes cast at the annual meeting. Broker non-votes and abstentions
will
not
be counted as votes cast and will
have no effect on this proposal.
In
voting
on the non-binding
proposal to
approve our
executive compensation, you may vote in favor
of
the proposal, vote against the proposal or
abstain from
voting.
To
approve the proposal, the affirmative
vote of
a majority
of
the votes cast at the annual meeting is required.
Broker non-votes and abstentions
will
not
be counted as votes cast and will
have no effect on this proposal. While this vote is required
by law, it
will
neither be binding
on us or
the Board of
Directors, nor
will
it
create or
imply any change in
the fiduciary
duties of,
or
impose any additional fiduciary
duty
on us or
the Board of Directors.
Voting
by
Proxy
The
Company’s Board of
Directors is sending you this proxy
statement to
request that you allow your
shares
of
Company common stock to
be represented
at the annual meeting by the persons named in
the enclosed
proxy
card. All
shares
of
Company common stock represented
at the meeting by properly
executed
and dated proxies will
be voted according to
the instructions indicated on the proxy card. If
you sign, date and return
a proxy
card without
giving
voting
instructions, your
shares
will
be voted as recommended by the Company’s Board of
Directors. The
Board of
Directors recommends that you:
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vote
for
each of
the nominees for
director;
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vote
for
ratification
of
the appointment of
Wolf
&
Company, P.C.
as the Company’s independent registered public accounting firm; and
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vote
for
the approval of
our
executive compensation as described in
this proxy statement.
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If
any matters not
described in
this proxy
statement are properly
presented at the annual meeting, the persons named in
the proxy
card will
use their
judgment
to
determine how to
vote your shares.
This
includes a motion
to
adjourn
or
postpone the meeting to
solicit additional proxies. The Company does not
currently
know of
any other
matters to
be presented at the meeting.
You may revoke your
proxy
at any time
before the vote is taken at the meeting. To
revoke your proxy,
you must either advise the Corporate Secretary of
the Company in
writing
before your
common stock has been voted at the annual meeting, deliver a later dated proxy
or
attend the meeting and vote your
shares
in
person by ballot.
Attendance
at the annual meeting will
not
in
itself constitute revocation of
your
proxy.
2
If
your
Company common stock is held in
street name, you will
receive instructions from
your broker
or
other
nominee that you must follow
to
have your
shares
voted. Your
broker
or
other
nominee may allow you to
deliver your
voting
instructions via t
he telephone or
the Internet.
Please review the proxy
card or
instruction
form
provided
by your
broker
or
other
nominee that accompanies
this proxy statement.
Participants in
the ESOP and
401(k)
Plan
If
you participate in
the East Boston Savings Bank Employee
Stock
Ownership Plan
(the “ESOP”)
or
if
you hold
Company common stock through
the East Boston Savings Bank 401(k)
Plan
(the
“401(k)
Plan”),
you will
receive vote authorization form(s)
that reflect all shares
you may direct the trustees to
vote on your
behalf under the plans. Under the terms of
the ESOP,
the ESOP
trustee will
vote all shares
held by the ESOP,
but
each ESOP
participant may direct the trustee how to
vote the shares
of
common stock allocated to
his or
her account. The
ESOP
trustee, subject to
the exercise
of
its fiduciary
responsibilities, will
vote all unallocated shares
of
Company common stock held by the ESOP
and all allocated shares
for
which no voting
instructions are received in
the same proportion
as shares
for
which it
has received timely
voting
instructions. Although
not required
by the terms of
the 401(k)
Plan,
East Boston Savings Bank is providing
a participant the opportunity
to
provide
voting
instructions for
all shares
credited to
his or
her 401(k)
Plan
account and held in
the Meridian Bancorp, Inc. Stock
Fund.
Shares for
which no voting
instructions are given or
for
which instructions were not
timely
received will
be voted at the discretion of
the 401(k) plan trustee.
The deadline
for returning
your voting
instructions
is May 10, 2019.
If you
have any
questions
about
voting
under
the
401(k)
Plan
or ESOP,
please contact Eric Heath, Senior Vice President, Human Resources,
at
(978)
977-2820.
3
Corporate Governance
General
The
Company periodically reviews its corporate governance
policies and procedures to
ensure that the Company meets the highest standards
of
ethical conduct, reports results with
accuracy
and transparency
and maintains full
compliance with
the laws, rules and regulations that govern the Company’s operations. As part
of
this periodic corporate governance
review, the Board of
Directors reviews and adopts best corporate governance
policies and practices
for
the Company.
Code
of Ethics
and
Business
Conduct
The
Company has adopted a Code of
Ethics and Business
Conduct that is designed to
promote the highest standards
of
ethical conduct by the Company’s directors, executive officers and employees. The
Code of
Ethics and Business
Conduct requires that the Company’s directors, executive officers and employees
avoid conflicts of
interest, comply with
all laws and other
legal requirements, conduct business
in
an honest and ethical manner and otherwise act with
integrity
and in
the Company’s best interest. Under the terms of
the Code of
Ethics and Business
Conduct, directors, executive officers and employees
are required
to
report
any conduct that they believe in
good faith
to
be an actual or
apparent violation
of
the Code of
Ethics and Business
Conduct. A copy of
the Code of
Ethics and Business Conduct can be found
in
the
“Investor Relations—Corporate
Governance”
section of
the Company’s website,
www.ebsb.com
. Amendments to
and waivers from
the Code of
Ethics with
respect to
directors
and executive officers will
also be disclosed
on the Company’s website.
As a mechanism to
encourage
compliance with
the Code of
Ethics and Business
Conduct, the Company has established
procedures to
receive, retain and treat complaints regarding
accounting, internal
accounting controls and auditing
matters. These procedures ensure that individuals may submit concerns
regarding
questionable accounting or
auditing
matters in
a confidential and anonymous manner. The
Code of
Ethics and Business
Conduct also prohibits
the Company from
retaliating
against any director,
executive officer
or
employee who reports actual or
apparent violations of
the Code of Ethics and Business
Conduct.
Meetings of the Board
of Directors
The
Company conducts business
through
meetings of
its Board of
Directors and through activities of
its committees. During
2018, the Board of
Directors of Meridian Bancorp held 12 meetings (not
including committee meetings). No director
attended fewer than 75%
of
the total
meetings of
the Company’s and the Bank’s respective
Board of
Directors and the committees on which such director served (held
during
the period
for
which the director
has served as a director
or
committee member, as appropriate).
4
Committees of the Board
of Directors
The
following
table identifies our
Audit,
Compensation and Nominating/Corporate
Governance committees and their
members. All
members of
each committee are independent in
accordance
with the listing
rules of
the Nasdaq
Stock
Market, Inc. The
Company also maintains an Executive Committee as a standing committee. The
charters of
the Audit
Committee, Compensation Committee and Nominating/Corporate
Governance
Committee are available in
the
“Investor Relations—Corporate
Governance”
section of
the Company’s website,
www.ebsb.com
.
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Nominating/
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Corporate
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Audit
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Compensation
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Governance
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Director
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Committee
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Committee
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Committee
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Cynthia C. Carney
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X
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Marilyn A. Censullo
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X*
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X
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Russell L. Chin
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X
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Anna R. DiMaria
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X
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X
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Domenic A. Gambardella
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X*
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X*
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Thomas J. Gunning
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X
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Carl A. LaGreca
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X
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Gregory F. Natalucci
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Number of Committee Meeting in 2018
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9
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6
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1
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Audit
Committee.
Pursuant to
Meridian Bancorp’s Audit
Committee Charter, the Audit
Committee assists
the Board of
Directors in
its oversight of
the Company’s accounting and reporting
practices,
the quality
and integrity
of
the Company’s financial reports and the Company’s compliance with
applicable laws and regulations. The
Audit
Committee is also responsible for engaging the Company’s independent registered public accounting firm
and monitoring
its conduct and independence.
In
addition
to
meeting the independence
requirements of
the Nasdaq
Stock
Market, Inc., each member of
the Audit
Committee meets the audit committee independence
requirements of
the Securities and Exchange Commission. The
Board of
Directors has determined that each of Marilyn A. Censullo and Carl A. LaGreca qualifies as an audit committee financial expert under the rules of
the Securities and Exchange Commission. The
report
of
the Audit
Committee required
by the rules of
the Securities and Exchange Commission is included in
this proxy
statement. See
“Audit
Committee Report.”
Compensation
Committee.
Pursuant to
Meridian Bancorp’s Compensation Committee Charter, the Compensation Committee approves the compensation objectives for
the Company and the Bank and establishes
the compensation for
the Chief Executive Officer
and other executives.
The
Compensation Committee reviews corporate goals and objectives relevant to
our
Chief Executive Officer
compensation, evaluates
our
Chief Executive Officer’s performance in
light
of
those goals and objectives, and approves our
Chief Executive Officer’s compensation level based
on this evaluation. Our
Chief Executive Officer
makes recommendations as to
the appropriate mix
and level of compensation for
other
executive officers to
the Compensation Committee and determines the compensation for
subordinates of
executive officers. In
making his recommendations, the Chief Executive Officer
considers
the objectives of
our
compensation philosophy and the range of compensation programs authorized by the Compensation Committee. Our
Chief Executive Officer does not
participate in
discussions
related to
his compensation or
the Committee’s review of
any documents related to
the determination
of
his compensation. The
Compensation Committee reviews all compensation components for
the Company’s Chief Executive Officer
and other
executive officers’ compensation including
base
salary, annual incentive, long-term
incentives and other
perquisites. In addition
to
reviewing competitive market values, the committee also examines
the total
compensation mix,
pay-for-
5
performance
relationship, and how all elements, in
the aggregate, comprise the executive’s
total
compensation package.
See
“Compensation Discussion
and Analysis”
for
more information
regarding
the role
of
the Compensation Committee in
determining
and/or
recommending the amount or
form
of
executive compensation. The
report
of
the Compensation Committee required by the rules of
the Securities and Exchange Commission is included in
this proxy
statement. See
“Compensation Committee Report.”
Nominating/Corporate
Governance
Committee.
Pursuant to
the Meridian Bancorp’s Nominating/Corporate
Governance
Committee Charter, the Company’s Nominating/Corporate Governance
Committee assists
the Board of
Directors in
identifying
qualified
individuals to
serve as Board members, in
determining
the composition of
the Board of
Directors and its committees, in monitoring
a process
to
assess
Board effectiveness
and in
developing and implementing
the Company’s corporate governance
guidelines. The
Nominating/Corporate
Governance
Committee also considers
and recommends the nominees for
director
to
stand for
election at the Company’s annual meeting of
stockholders. The
procedures of
the Nominating/Corporate
Governance
Committee required
to
be disclosed
by the rules of
the Securities and Exchange Commission are included in
this proxy
statement. See
“Nominating/Corporate Governance
Committee Procedures.”
Risk
Oversight
The
Board of
Directors has an active role,
as a whole and also at the committee level, in overseeing management of
the Company’s risks. The
Board of
Directors regularly
reviews information regarding
the Company’s credit, liquidity
and operations, as well as the risks associated
with
such areas.
The
Company’s Compensation Committee is responsible for
overseeing the management of risks relating
to
the Company’s executive compensation plans and arrangements. The
Audit
Committee oversees
management of
financial risks. The
Nominating/Corporate
Governance
Committee manages risks associated
with
the independence
of
the Board of
Directors and potential conflicts of
interest.
While each committee is responsible for
evaluating certain risks and overseeing the management of such risks, the entire Board of
Directors is regularly
informed
about such risks. The
Board of
Directors annually reviews our
conflict
of
interest policy to
ensure all directors are in
compliance with
the policy.
Attendance
at the Annual
Meeting
The
Board of
Directors encourages
each director
to
attend annual meetings of
stockholders. All of
our
then-existing directors attended the 2018 Annual Meeting of
Stockholders.
Board
Leadership
Structure
The
Board of
Directors currently
combines the position
of
Chairman of
the Board with
the position
of
Chief Executive Officer,
coupled with
a lead independent director
to
further
strengthen the governance
structure. The
Board of
Directors believes
this provides an efficient
and effective leadership model for
the Company. Combining
the Chairman of
the Board and Chief Executive Officer positions fosters clear accountability, effective decision-making, a clear and direct channel of communication from
senior management to
the full
Board of
Directors and alignment on corporate strategy. To
further
strengthen the leadership of
the Board of
Directors, the Board selects
a lead independent director
on an annual basis,
currently Carl A. LaGreca. The
responsibilities of
the lead independent director
include leading all meetings of
non-management Directors. The
Board of Directors believes
its leadership structure and corporate governance
practices
enhance
the administration
of
its risk oversight function.
To
assure
effective independent oversight, the Board has adopted a number
of
governance
practices,
including
holding
executive sessions
of
the independent directors at least twice a year or
more
often
as needed. In
addition,
the Compensation Committee, which consists
only
of
independent directors, evaluates
the performance of
our
Chairman of
the Board and Chief Executive Officer
and presents
its findings
to
our
independent directors.
6
Stock Ownership
The
following
table provides information
as of
March 29, 2019, with
respect to
persons known by the Company to
be the beneficial owners of
more
than 5%
of
the Company’s outstanding common stock. A person may be considered to
own any shares
of
common stock over which he or
she has, directly
or
indirectly,
sole or
shared voting
or
investing power. Percentages
are based
on 53,542,646 shares
of
Company common stock outstanding for
voting
purposes as of
as of
March 29, 2019.
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Percent
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|
|
|
Number of
|
|
|
of Common
Stock
|
|
Name and Address
|
|
Shares Owned
|
|
|
Outstanding
|
|
T. Rowe Price Associates, Inc.
(1)
|
|
|
7,682,529
|
|
|
14.35%
|
|
100 E. Pratt Street
|
|
|
|
|
|
|
|
|
Baltimore, Maryland 21202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlackRock, Inc.
(1)
|
|
|
4,063,915
|
|
|
7.59%
|
|
55 East 52nd Street
|
|
|
|
|
|
|
|
|
New York, NY 10055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
East Boston Savings Bank
|
|
|
3,460,946
|
|
|
6.46%
|
|
Employee Stock Ownership Plan Trust
|
|
|
|
|
|
|
|
|
2321 Kochs Lane
|
|
|
|
|
|
|
|
|
Quincy, Illinois 62305
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dimensional Fund Advisors, LP
(1)
|
|
|
2,957,866
|
|
|
5.52%
|
|
Building One
|
|
|
|
|
|
|
|
|
6300 Bee Cave Road
|
|
|
|
|
|
|
|
|
Austin, Texas 78746
|
|
|
|
|
|
|
|
|
|
(1)
|
Amount of shares owned and reported on the most recent Schedule 13G
filings with the Securities
and Exchange Commission.
|
7
The
following
table provides information
as of
March 29, 2019 about the shares
of
Meridian Bancorp common stock that may be considered to
be beneficially owned by each director, named executive officer
and all directors and executive officers of
the Company as a group.
A person may be considered to
beneficially own any shares
of
comm
on stock over which he or
she has, directly
or
indirectly,
sole or
shared voting
or
investment power, or
which he or
she has the right
to
acquire beneficial ownership at any time
within
60 days after
March 29, 2019. Unless otherwise indicated, none of
the
shares
listed are pledged as collateral for
a loan, and each of
the named individuals has sole voting
power and sole investment power with
respect to
the number
of shares
shown. Percentages
are based
on
53,542,646
shares
of
Company common stock outstanding
for voting
purposes as of
as of
March 29, 2019.
|
|
|
|
|
|
|
|
Name
|
|
Number of Shares Owned
|
|
|
Percent of Common Stock Outstanding
|
|
Directors
|
|
|
|
|
|
|
|
|
|
|
|
Cynthia L. Carney
|
|
|
15,691
|
|
(1)
|
|
|
*
|
|
Marilyn A. Censullo
|
|
|
111,066
|
|
(2)
|
|
|
*
|
|
Russell L. Chin
|
|
|
7,186
|
|
(3)
|
|
|
*
|
|
Anna R. DiMaria
|
|
|
112,302
|
|
(4)
|
|
|
*
|
|
Domenic A. Gambardella
|
|
|
158,725
|
|
(5)
|
|
|
*
|
|
Richard J. Gavegnano
|
|
|
1,236,042
|
|
(6)
|
|
|
2.3%
|
|
Thomas J. Gunning
|
|
|
65,532
|
|
(7)
|
|
|
*
|
|
Carl A. LaGreca
|
|
|
104,973
|
|
(8)
|
|
|
*
|
|
Edward J. Merritt
|
|
|
112,801
|
|
(9)
|
|
|
*
|
|
Joyce A. Murphy
|
|
|
3,000
|
|
|
(10
|
)
|
|
*
|
|
Gregory F. Natalucci
|
|
|
88,068
|
|
|
(11
|
)
|
|
*
|
|
Peter F. Scolaro
|
|
|
12,856
|
|
|
(12
|
)
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Officers Who Are Not Also Directors
|
|
|
|
|
|
|
|
|
|
|
|
Mark L. Abbate
|
|
|
151,069
|
|
|
(13
|
)
|
|
*
|
|
John Migliozzi
|
|
|
77,897
|
|
|
(14
|
)
|
|
*
|
|
Frank P. Romano
|
|
|
242,602
|
|
|
(15
|
)
|
|
*
|
|
John A. Carroll
|
|
|
79,371
|
|
|
(16
|
)
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All directors and executives as a group (16 persons)
|
|
|
2,579,181
|
|
|
|
|
|
4.8%
|
|
|
(1)
|
Includes
2,400
restricted
shares,
4,407
shares
held in an individual retirement account (“IRA”)
and 3,213 shares
that
may be acquired under options
that
are presently
exercisable
or will become
exercisable
within 60 days.
|
|
(2)
|
Includes
10,000
restricted
shares,
2
,448 shares
held in an IRA
and 33,714 shares
that
may be acquired under options
that
are presently
exercisable
or will become
exercisable
within 60 days.
|
|
(3)
|
Includes
2,400
restricted
shares.
|
|
(4)
|
Includes
10,000
restricted
shares,
10
,000 shares
held in an IRA
and 32,490 shares
that
may be acquired
under options
that
are presently exercisable
or will become
exercisable
within 60 days.
|
|
(5)
|
Includes
10,000
restricted
shares, 3,554 shares pledged as collateral and 23,800 shares
that
may be acquired
under options
that
are presently
exercisable
or will become
exercisable
within 60 days.
|
8
|
(6)
|
Includes
120,000
restricted
shares,
15,465
shares
held in the
ESOP,
7,7
1
4
shares
held in the
401(k) plan,
25,000
shares
held in an IRA,
50,0
00 shares
pledged as collateral
and
262,50
1 shares
that
may be acquired
under options
that
are presently exercisable
or will become
exercisable
within 60 days.
|
|
(7)
|
Includes
10,000
restricted
shares
and 31,144 shares
that
may be acquired
under options
that
are presently exercisable
or will become
exercisable
within 60 days.
|
|
(8)
|
Includes
10,000
restricted
shares,
4,448
shares
held in a Uniform Transfers to Minors Act account and 26,004 shares
that
may be acquired
under options
that
are presently exercisable
or will become
exercisable
within 60 days.
|
|
(9)
|
Includes
10,000
restricted
shares,
8,855
shares
held in the
ESOP,
17,173
shares
held in the
401(k) plan, 22,356 shares
held in an IRA
and 38,135 shares
that
may be acquired
under options
that
are presently
exercisable
or will become
exercisable
within 60 days.
|
|
(10)
|
Includes 3,000 restricted shares.
|
|
(11)
|
Includes 10,000 restricted
shares,
879
shares
held in an IRA, and 27,472 shares
that
may be acquired
under options
that
are presently
exercisable
or will become
exercisable
within 60 days.
|
|
(12)
|
Includes 3,000 restricted shares, 2,548 held in an IRA.
|
|
(13)
|
Includes
10,000
restricted
shares,
10,691
shares
held in the
ESOP,
32,500
shares
held in the
401(k) plan and 25,893 shares
that
may be acquired
under options
that
are presently
exercisable
or will become
exercisable within 60 days.
|
|
(14)
|
Includes
5,000
restricted
shares,
8,018
shares
held in the
ESOP,
6,311
shares
held in the
401(k) plan, 5,937 shares held in an IRA
and 25,189 shares
that
may be acquired
under options
that
are presently
exercisable
or will become
exercisable
within 60 days.
|
|
(15)
|
Includes
10,000
restricted
shares,
7,447
shares
held in the
ESOP,
4,547
shares
held in the
401(k) plan, 139,713 shares held in an IRA,
5,357
shares held by Mr. Romano’s spouse and 50,377 shares
that
may be acquired
under options
that
are presently
exercisable
or will become
exercisable
within 60 days.
|
|
(16)
|
Includes
10,000
restricted
shares,
6,551
shares
held in the
ESOP,
3,462
shares
held in the
401(k) plan, 14,896 shares
held in an IRA
and 30,790 shares
that
may be acquired
under options
that
are presently
exercisable
or will become
exercisable
within 60 days.
|
9
Proposal 1—Election of
Directors
The
Board of
Directors of
Meridian Bancorp is presently composed of
12 members. The
Board is divided into
three classes, each with three-year staggered terms, with approximately one- third of the directors elected each year. The nominees for election this year are Anna R. DiMaria, Domenic A. Gambardella, Thomas J. Gunning and Peter F. Scolaro, all of whom are current directors of the Company.
All of our directors except for Messrs. Gavegnano and Merritt are independent under the current listing standards of the Nasdaq Stock Market, Inc. Messrs. Gavegnano and Merritt are not independent because they are executive officers of Meridian Bancorp and East Boston Savings Bank. In determining the independence of our other directors, the Board of Directors considered loans to directors and members of their affiliates, and legal fees and fees related to loan originations paid to, or received by, directly or indirectly, which transactions were not required to be disclosed individually under “—Transactions with Certain Related Persons.”
It
is intended that the proxies solicited by the Board of
Directors will
be voted for
the election of
the nominees named below. If
any nominee is unable to
serve, the persons named in
the proxy
card will
vote your
shares
to
approve the election of
any substitute proposed by the Board of
Directors. Alternatively, the Board of
Directors may adopt a resolution to
reduce the size of
the Board. At this time,
the Board of
Directors knows of
no reason why any nominee might
be unable to
serve.
The Board of
Directors
recommends a vote “FOR”
the
election of
all
nominees.
Information
regarding
the nominees and the directors continuing
in
office
is provided
below. Unless
otherwise stated, each individual
has held his or
her current
occupation for
the last five
years. The
age indicated in
each biography
is as of
December
31, 2018.
All
of
the nominees and directors continuing
in
office
are long
-
time
residents of
the communities served by the Company and its subsidiaries
and many of
such individuals have operated, or
currently
operate, businesses
located in
such communities. As a result, each nominee and director continuing
in
office
has significant knowledge of
the businesses
that operate in
the Company’s market area, an understanding of
the general real estate
market, values and trends in
such communities and an understanding of
the overall demographics of
such communities. Additionally,
as residents of
such communities, each nominee and continuing
director
has direct knowledge of
the trends and developments occurring
in
such communities. As a community
banking institution,
the Company believes
that the local knowledge and experience
of
its directors assists
the Company in
assessing
the credit and banking needs
of
its customers, developing products and services
to
better serve its customers and in
assessing
the risks inherent in
its lending operations. As local residents, our
nominees and directors are also exposed
to
the advertising, product
offerings
and community
development efforts of
competing institutions
which, in
turn,
assists
the Company in
structuring
its marketing
efforts
and community
outreach programs.
Nominees for Election
of Directors
The nominees standing
for election are:
Anna
R.
DiMaria
has been an Attorney
at Law with
the Law Offices of
Michael
A. D’Avolio for
over 20 years. Ms. DiMaria’s background as an attorney provides the Board of
Directors with
a unique perspective
in
addressing
the legal requirements of
the Company and its subsidiaries.
Her professional experience
also provides the Company with
expertise in
the areas
of
real estate
and estate law. Age 73. Director
since 2006.
10
Dome
nic A.
Gambardella
is the former
owner and President of
Meridian Insurance Agency Inc., an insurance agency, and was the owner of
a financial services
firm
focused on small businesses. Mr. Gambardella’s experience
as President of
an insurance agency gives
him
unique insights into
the Company’s challenges,
opportunities
and operations in
the insurance products field
and generally in the area of
wealth management and non-depository
products that are offered
by the Company and its subsidiaries.
Age 73. Direct
or
since 1995.
Thomas J. Gunning
is Executive Director
of
Building
Trades Employers
Association,
a multi-trade organization that represents
over 250 contractors affiliated
with
11 different
building
trade unions. Mr. Gunning’s experience
in
legislative matters, labor
relations and contract negotiations brings the Board of
Directors the perspective
of
someone who is familiar
with
all facets of
labor matters. Mr. Gunning served as a director
of
Mt. Washington Co-operative Bank since 2008 and became
a director
of
the Company as result of
the Bank’s acquisition of
Mt. Washington Co-operative Bank in
January 2010. Age 65. Director
since 2010.
Peter F. Scolaro
is the Director of Property Services for Action for Boston Community Development (ABCD). Mr. Scolaros’ experience with ABCD preparing budgets and overseeing property and construction management benefits the Company with respect to real estate and construction lending. Mr. Scolaro has been affiliated with the Bank since 1984 as both corporator and trustee. Age 65. Director since 2018.
Directors
Continuing
in
Office
The following
directors have terms ending
in
2020:
Cynthia C. Carney
has been the Principal/Broker of Carney & Company, LLC, for over 20 years. Previously, Ms. Carney worked as a Commercial Real Estate Broker at the Hamilton Company and a Corporate Marketing & Leasing Coordinator at Corcoran Management Company in Boston. Ms. Carney provides the Board with significant experience in commercial real estate, residential real estate marketing, sales and leasing, business generation and business referrals. Age 69. Director since 2016.
Carl A.
LaGreca
is a Certified
Public
Accountant. He retired in January 2017 as the President of
Forman,
Itzkowitz, Berenson
&
LaGreca, PC,
an accounting firm
in
Waltham, Massachusetts,
where he was employed for
over
30 years, and is currently with DiCicco, Gulman & Company, LLP of Woburn, Massachusetts. Mr. LaGreca has significant expertise and background with
regard to accounting matters, the application of
generally accepted
accounting principles and matters of
business finance and business
transactions.
Mr. LaGreca’s professional and business
experience
provides the Board with
valuable insight
into
the accounting and public reporting
issues
faced by the Company and in
assessing
strategic transactions
involving
the Company. Age 72. Director since 2009.
Edward J. Merritt
serves
as Corporate Secretary of the Company and Executive Vice President, Business Development and Community Reinvestment of the Bank, and became
a Board member as a result of
the Bank’s acquisition of
Mt. Washington Co-operative Bank. Previously,
Mr. Merritt
served as the President and Chief Executive Officer
and a director
of
Mt. Washington Cooperative Bank for
over 11 years. Mr. Merritt’s
long-term
experience
with
managing the day-to-day
operations of
a community
banking institution
provides additional banking management experience to the Board, and his experience
operating in
a community
in
which the Company previously had limited
market penetration also provides the Board with
additional perspective
with
respect to
such market area and assists
the Board in
recognizing and assessing
growth opportunities
in
that market area. Age 59. Director
since 2010.
11
Joyce A. Murphy
retired in August 2018 as the
Exe
cutive Vice Chancellor and Chief Executive Officer of Commonwealth Medicine, the public service and operations division of University of Massachu
setts Medical School (“UMMS”).
Prior to joining UMMS in 2006, Ms. Murphy served for nine years as the President
and Chief Executive Officer of Carney Hospital, a community teachi
ng hospital located in Boston.
Ms. Murphy currently serves as Director on the Curry College Board of Directors. Ms. Murphy’s extensive leadership experience, as well as her knowledge of th
e Boston market, are valuable in assisting the Board of Directors with evaluating strategic
planning initiatives. Age 66.
Director since 2018.
The following
directors have terms ending
in
2021:
Marilyn A.
Censullo
, a Certified
Public
Accountant, has been a partner
in
the accounting firm of
Naffah &
Company, P.C.
since 2000, and has over 30 years of
experience
as an accountant. Ms. Censullo has significant experience
with
the application of
generally accepted
accounting principles and matters of
business
finance and business
transactions.
Ms. Censullo’s professional and business
experience
provides the Board with
valuable insight
into
the accounting and public reporting issues
faced by the Company and in
assessing
strategic transactions
involving
the Company. Age 61. Director
since 2007.
Russell L. Chin
is the Principal of Chin Law Firm and has practiced law in Massachusetts since 1981. Prior to launching his law firm, he partnered at various law firms within Boston, including Holland & Knight, LLP, Sherburne, Powers & Needham, P.C. and Chin, Wright & Branson, P.C. Mr. Chin’s extensive experience representing major governmental authorities, large financial institutions, multi-national companies and individual clients both in the United States, and abroad provides the Board with significant expertise in legal and regulatory matters. Age 63. Director since 2016.
Richard J. Gavegnano
was in
the investment business
for
37 years with
national New York Stock
Exchange member firms,
and retired
in
2006 ending his career as a Vice President with A.G. Edwards &
Sons, Inc. He has been associated
with
East Boston Savings Bank for
over
40 years serving as corporator,
trustee and director.
Mr. Gavegnano
has served as Chairman of
the Board of East Boston Savings Bank and the Company since 2003 and 2006, respectively. In
2007, Mr. Gavegnano
was appointed Chief Executive Officer
of the Company and Investor Relations Officer
of the Company, and in
2014 was appointed President of
East Boston Savings Bank and the Company. Mr. Gavegnano serves on the Federal Reserve Bank of Boston’s Community Depository Institutions Advisory Council. Mr. Gavegnano
has experience
in
business
development, commercial real estate
and investments. Mr. Gavegnano’s
positions as Chairman of
the Board and Chief Executive Officer
foster clear accountability, effective decision-making, a clear and direct channel of
communication from
senior management to
the full
Board, and alignment on corporate strategy. Age 71. Director
since 1995.
Gregory
F.
Natalucci
is a former
auditor
with
CNA Financial Corporation,
a commercial and property-casualty insurer. Mr. Natalucci practiced in
this field
for
over 35 years. In
connection with
his position
with
CNA Financial he gained extensive
knowledge of
audit practices
and of
the insurance industry.
Mr. Natalucci’s
experience
provides the Board with
experience
when assessing
the Company’s accounting and internal
audit practices
and with
respect to
its insurance needs
in
general. Age 73. Director
since 2002.
12
Proposal
2—Ratifi
cation
of Independent
Registered Public
Accounting Firm
The
Audit
Committee of
the Board of
Directors has appointed Wolf
&
Company, P.C.
to
be the Company’s independent registered public accounting firm
for
the 2019 fiscal year, subject to ratification
by stockholders. A representative
of
Wolf
&
Company, P.C.
is expected
to
be present at the annual meeting to
respond to
appropriate questions from
stockholders and will
have the opportunity
to make a statement should he or
she desire to
do so.
If
the ratification
of
the appointment of
the firm
is not
approved by a majority
of
the votes cast by stockholders at the annual meeting, other
independent registered public accounting firms
may be considered by the Audit
Committee of
the Board of
Directors.
The Board of
Directors
recommends that
stockholders vote “FOR”
the
ratification
of
the appointment
of
Wolf
&
Company,
P.C.
as the
Company’s
independent
registered
public accounting
firm.
Audit
Fees
The
following
table sets
forth
the fees paid by the Company for
the fiscal years ended December
31, 2018 and 2017 to
Wolf
&
Company, P.C.
|
|
2018
|
|
|
2017
|
|
Audit fees
|
|
$
|
399,000
|
|
|
$
|
394,000
|
|
Audit-related fees
|
|
$
|
38,600
|
|
|
$
|
37,400
|
|
Tax fees
|
|
$
|
32,500
|
|
|
$
|
33,500
|
|
All other fees
|
|
$
|
—
|
|
|
$
|
9,000
|
|
Audit
fees pertain to
the audit of
the Company’s annual consolidated financial statements, quarterly
review fees, and the audit of
internal
controls over financial reporting, and include out-of-pocket costs.
A
udit-related
fees pertain to
the audits of
the Company’s 401(k)
Plan
and employee stock ownership plan. Tax
fees pertain to tax return
preparation and other
tax matters. All
other
fees pertain to
services
related to information
technology.
Pre-Approval of Services
by
the Independent
Registered
Public Accounting
Firm
The
Audit
Committee is responsible for
appointing,
setting compensation and overseeing the work
of
the independent registered public accounting firm.
In
accordance
with
its charter, the Audit Committee approves, in
advance,
all audit and permissible non-audit
services
to
be performed
by the independent registered public accounting firm.
Such approval can be given
either by approving an engagement prior to the engagement or pursuant to a pre-approval policy with respect to particular services. Such approval process
ensures
that the independent registered public accounting firm
does not
provide
any non-audit
services
to
the Company that are prohibited
by law or
regulation.
During the years ended December 31, 2018 and 2017, 100% of audit and other services provided by Wolf & Company, P.C. were approved, in advance, by the Audit Committee.
13
Proposal 3—Advisory (Non-Binding) Vote on Executive Compensation
Stockholders are being given the opportunity
to vote on an advisory (non-binding)
“say-on-pay”
resolution at the Annual Meeting to
approve the compensation of our
“Named Executive Officers,” as described in
this proxy
statement under
“
Compensation
Discussion
and Analysis”
and the compensation tables and narrative disclosure.
The
purpose of
our
compensation policies and procedures is to
attract and retain experienced, highly
qualified
executives
critical to
the Company’s long-term
success
and enhancement
of stockholder value. The
Board of
Directors believes
the Company’s compensation policies and procedures achieve
this objective, and therefore recommend stockholders vote
“
For
”
the proposal.
Specifically, stockholders are being asked
to
approve the following
resolution:
“
RESOLVED
, that the compensation paid to
the Company’s Named Executive Officers, as disclosed
in
this proxy
statement pursuant to
Item
402 of
Securities and Exchange Commission Regulation S-K,
including
the Compensation Discussion
and Analysis,
compensation tables and narrative discussion
is hereby APPROVED.”
Although
non-binding,
the Board of
Directors and the Compensation Committee value constructive dialogue on executive compensation and other
important
governance
topics with
our stockholders and encourage
all stockholders to
vote their
shares
on this matter.
The
Board of
Directors and the Compensation Committee will
review the voting
results and take them into
consideration when making future
decisions
regarding
our
executive compensation programs.
Unless otherwise instructed,
validly
executed proxies will
be voted
“FOR”
this
resolution.
The
Board
of
Directors
recommends
that
you
vote
“FOR”
the
resolution
set
forth
in
Proposal
3.
Audit Committee Report
The
Company’s management is responsible for
the Company’s internal
controls and financial reporting
process.
The
Company’s independent registered public accounting firm
is responsible for performing
an independent audit of
the Company’s consolidated financial statements,
issuing an opinion
on the conformity
of
those financial statements
with
generally accepted
accounting principles, and issuing a report
on internal
control
over financial reporting.
The
Audit
Committee oversees
the Company’s internal
controls and financial reporting
process
on behalf of
the Board of
Directors.
In
this context, the Audit
Committee has met and held discussions
with
management and the independent registered public accounting firm.
Management
represented
to
the Audit
Committee that the Company’s consolidated financial statements
were prepared in
accordance
with
generally accepted accounting principles and the Audit
Committee has reviewed and discussed
the consolidated financial statements
with
management and the independent registered public accounting firm.
The
Audit Committee discussed
with
the independent registered public accounting firm
matters required
to
be discussed
under Public
Company Accounting Oversight Board (“PCAOB”) standards
including
the quality,
not
just the acceptability, of
the accounting principles, the reasonableness
of
significant judgments and the clarity
of
the disclosures
in
the consolidated financial statements.
In
addition,
the Audit
Committee has received the written
disclosures
and the letter
from
the independent registered public accounting firm
required
by the PCAOB and has discussed
with
the independent registered public accounting firm
the firm’s
independence
from
the Company and its management. In
concluding that the registered public accounting firm
is independent, the Audit Committee considered, among other
factors, whether the non-audit
services
provided
by the firm
were compatible with
its independence.
14
The
Audit
Committee discussed
with
the Company’s independent registered public accounting firm
the overall scope
and plans for
their
audit. The
Audit
Committee meets with
the independent registered
public accounting firm,
with
and without
management present, to
discuss
the results of
their audit, their
evaluation of
the Company’s internal
controls, and the overall quality
of
the Company’s financial reporting.
In
performing
all of
these functions, the Audit
Committee acts only
in
an oversight capacity. In its oversight role,
the Audit
Committee relies on the work
and assurances
of
the Company’s management, which has the primary
responsibility for
consolidated
financial statements
and reports, and of
the independent registered public accounting firm
who, in
their
report,
express
an opinion
on the conformity
of
the Company’s consolidated financial statements
to
generally accepted
accounting principles. The Audit
Committee’s oversight does not
provide
it
with
an independent basis
to
determine that management has maintained appropriate accounting and financial reporting
principles or
policies, or appropriate internal
controls and procedures designed to
assure
compliance with
accounting standards and applicable laws and regulations. Furthermore,
the Audit
Committee’s considerations
and discussions
with
management and the independent registered public accounting firm
do not
assure
that the Company’s consolidated financial statements
are presented in
accordance
with
generally accepted
accounting principles, that the audit of
the Company’s consolidated financial statements
has been carried out
in
accordance
with generally accepted
auditing
standards
or
that the Company’s independent registered public accounting firm
is in
fact “independent.”
In
reliance on the reviews and discussions
referred
to
above, the Audit
Committee recommended to
the Board of
Directors, and the Board has approved, that the audited consolidated financial statements
be included in
the Company’s Annual Report on Form
10-K
for
the year ended December
31, 2018, for
filing
with
the Securities and Exchange Commission. The
Audit
Committee also has approved, subject to
stockholder ratification,
the selection of
Wolf
&
Company, P.C.
as the Company’s independent registered public accounting firm,
for
the fiscal year ending December
31, 2019.
Audit
Committee
of
the
Board of
Directors
of Meridian Bancorp, Inc.
Marilyn A. Censullo, Chair
Carl A. LaGreca
Russell L. Chin
15
Information about Executive
Officers
The
following
provides information
regarding
our
executive officers as of
December
31, 2018, who are not
directors of
the Company.
Mark L.
Abbate
,
Executive Vice President, Treasurer and Chief Financial Officer
of
Meridian
Bancorp, Inc. and East Boston Savings Bank, joined us in
2010. In 2009, Mr. Abbate served as Chief Financial Officer
of
Home Loan
Investment Bank, FSB, Warwick, Rhode Island. From
2007 through
2009, Mr. Abbate was Executive Vice President and Chief Financial Officer
of
Service Bancorp, Inc. and Strata
Bank of
Franklin, Massachusetts.
Mr. Abbate was also a Certified Public Accountant in California and served in various accounting and financial leadership roles in the banking industry since 1978. Age 63.
John
Migliozzi
,
Executive Vice President, Real Estate Lending of
East Boston Savings Bank, joined us in
1998. Mr. Migliozzi began his career with
us as a Commercial Lender.
Age 61.
John A.
Carroll
, Executive Vice President, who was appointed Chief Operating Officer
of
Meridian Bancorp, Inc.
and East Boston Savings Bank in 2014, joined us in
2012. Mr. Carroll
previously served as our
Chief Information
Officer.
Previously,
Mr. Carroll
served as Senior
Vice President, Operations &
Technology for
nearly eight years at DanversBank
prior
to
its acquisition by People’s United Bank. Age 52.
Frank P. Romano
, Executive Vice President, Corporate Banking of East Boston Savings Bank, joined us in 2011. From 2003 to 2011, he served at the former DanversBank as Senior
Vice President, Group Head of Corporate Banking; prior to that, from 1999, he served at Warren Bank as Senior
Vice President, Head of Middle Market Lending. Mr. Romano had similar roles at Eastern Bank and The Bank for Savings since 1983. Age 64.
Executive
Compensation
Compensation
Discussion
and
Analysis
The following Compensation Discussion and Analysis provides information regarding our Named Executive Officers (the “NEOs”) as of December 31, 2018:
|
•
|
Richard J. Gavegnano, Chairman of the Board, President and Chief Executive Officer
|
|
•
|
Edward J. Merritt, Executive Vice President, Business Development and Community Reinvestment, and Corporate Secretary
|
|
•
|
Mark L. Abbate, Executive Vice President, Treasurer and Chief Financial Officer
|
|
•
|
John Migliozzi, Executive Vice President, Real Estate Lending
|
|
•
|
Frank P. Romano, Executive Vice President, Corporate Banking
|
Executive Summary
The Company is the holding company for East Boston Savings Bank, a high-performing stock savings bank serving the greater Boston metropolitan market.
16
We
continued our st
rong performance through 2018.
Highlights of our accomplishments include:
|
•
|
Net income increased $12.8 million, or 30%, to a record $55.8 million, which reflected a reduction in the statutory federal tax rate to 21% from 35% related to the enactment of the Tax Cut and Jobs Act (the “Tax Act”) effective January 1, 2018 (compared to $42.9 million for 2017, reflecting a $7.1 million tax charge in the fourth quarter of 2017 resulting from the Tax Act)
|
|
•
|
Diluted earnings per share (EPS) of $1.06, (compared to $0.82 EPS for 2017, which was reduced by $0.13 per share due to the fourth quarter tax charge resulting from the Tax Act)
|
|
•
|
Return on average assets of 0.99% and return on average equity of 8.36% (compared to 0.89% and 6.82% for 2017)
|
|
•
|
Total assets grew $879.2 million, or 17%, to $6.2 billion
|
|
•
|
Loans, net grew a record $970.6 million, or 21%, to $5.6 billion on loan originations of $1.6 billion
|
|
•
|
Total deposits grew a record $776.3 million, or 19%, to $4.9 billion
|
|
•
|
Net interest income rose $18.2 million, or 13%, to $164.4 million
|
|
•
|
The two branches in the Boston neighborhoods of Dorchester and Roslindale from the December 2017 acquisition of Meetinghouse Bank were successfully integrated into the Bank in the first quarter of 2018
|
|
•
|
Efficiency ratio was 53.95%, along with an improvement in non-interest expense to total assets to 1.68%, even with the addition of four new locations that increased the branch network to 38
|
|
•
|
Asset quality continued to improve, as non-performing assets were reduced $1.1 million, or 14%, to $6.9 million, or 0.11% of total assets, with negligible charge-off activity
|
|
•
|
Increased quarterly dividends during the year to $0.07 per share
|
|
•
|
The Company repurchased 1,209,734 shares of its common stock at an average price of $16.86 per share in 2018, following the amendment of its stock repurchase program in the fourth quarter to increase the number of shares available for repurchase by 636,287 shares
|
17
Over the prior five years, the Company’s compound annual growth r
ate has ranked above the S
NL U.
S. Thrift Index.
Our compensation program continues to transition and evolve with our fully public company status that began in 2014. Following our initial minority stock offering in 2008, our stockholders approved and we granted stock from our 2008 Equity Incentive Plan (“2008 EIP”). Consistent with bank regulatory guidelines, those awards were granted with an initial “conversion” grant that aligned our executives, employees and directors with our new stockholders. Most of the shares and vesting from that plan ended in 2014. In September 2015, our stockholders approved our 2015 Equity Incentive Plan (“2015 EIP”), which enables us to continue to provide stock-based compensation to our executives, employees and directors. This component of compensation allows us to provide rewards that align our executives and employees with the returns to our stockholders. The 2015 EIP and award allocations coincided with our second-step conversion to a fully public company and were developed in line with regulatory guidelines of the Office of the Comptroller of Currency. Mutual conversion stock plans and grant practices are unique in their structure and vesting which utilizes a mix of stock options and restricted stock as the equity instruments. For the 2015 grants, the Company relied on the regulations, consideration of practices of other financial institutions that had recently completed second-step conversions, and our historical practice in 2008 as a reference for developing its equity grant strategy for the 2015 EIP. The grants made in 2017 were in line with regulatory limitations for converting thrift institutions. There were no grants of any equity awards to our executive officers in 2018.
Our executive compensation program consists of four components (base salary, annual cash incentive, equity grants and benefits) that work together to enable us to attract, retain, motivate and reward our employees and executives with a competitive performance-based program that rewards long term performance and stockholder value. Our total compensation program is designed to:
|
•
|
Reward achievements to specific strategic goals and to encourage performance
|
|
•
|
Align our interests with our stockholders
|
|
•
|
Provide a balanced, and risk-appropriate compensation program
|
|
•
|
Provide a competitive pay program that attracts and retains talent
|
18
We will continue to monitor and evolve our compensation program as we transition from our mutual ownershi
p structure to public company.
We look forward to reinforcing our strong pay-for- performance
focus and team culture. Our compensation programs, including stock, is part of all employees’ compensation, a culture we believe has led to our sustained, strong performance over many years.
2018 Say-on-Pay Results
At the Company’s 2018 Annual Meeting, stockholders cast an advisory vote regarding the Company’s executive compensation (“Say-on-Pay” proposal). Over 82% of
the votes cast on the Say-on-Pay proposal were voted in favor of the Company’s executive compensation program. Our Board of Directors and Compensation Committee appreciate the support of our stockholders and continue to take an informed and responsible approach to executive compensation that is performance based and aligned with our stockholder interests. We have considered the most recent Say-on-Pay advisory vote in
determining compensation policies and decisions.
In
light
of
strong support, the Compensation Committee concluded that no revisions were necessary
to
our
executive officer
compensation program at this time, but will continue to monitor and review our practices in light of changing needs and stockholder perspectives.
Our Executive Compensation
Philosophy.
Our
compensation philosophy starts from
the premise that the success
of
the Company
depends,
in
large part,
on the dedication and commitment
of
the people we place in
key operating positions to
drive
our
business strategy. We strive to
provide
our
executive and
management team with
incentives tied to
the successful implementation
of
our
corporate objectives. We also recognize that we operate in
a competitive environment
for
talent. Therefore,
our
approach to
compensation considers
the full
range of compensation techniques
that enable us to
be competitive
with
our
peers as we seek
to
attract and retain key personnel.
As a relatively new public company, we expect our mix
of
base
salary, bonus and long-term
equity compensation will
evolve to be more focused on performance-based components with a greater ongoing focus on equity,
depending upon the role
of
the individual
officer
in
the organization.
We base
our
executive
compensation decisions
on four
basic principles:
|
•
|
Meeting the Demands
of
the Market—Our goal is to
target our pay opportunities to be in line
with other community banks in our market.
We strive to
position
the bank as a preferred
employer among our
peers who provide
similar
financial services
in
the regional market. Providing competitive compensation package has helped us attract and retain the talent we need to continue to be successful.
|
|
•
|
Aligning
with
Stockholders—We believe equity-based compensation is a key component of
our total compensation mix. Providing a component of pay in stock-based rewards helps to
reinforce
a culture of
ownership among our
executives and employees,
and to align their
individual
financial interests with
the interests of
our
stockholders. Long-term
incentives such as the 2015 EIP
and the Employee Stock
Ownership Plan
(the
“ESOP”)
are important
in
aligning
all of our
interests with those of our stockholders.
|
19
|
•
|
Driving
Performance—We
structure
compensation
around
the
attainment
of
company-wide,
business
unit
and
individual
targets
that
return
positive
results
to
our
bottom
line and stockholders.
Base
pay
rates
are
subject
to
annual
merit
increases
that
result
from
performance
evaluations.
Our
annual cash
bonus plan (the
“Incentive Compensation Plan”)
focuses
rewards on current
year individual
and bank performance. Our 2015 EIP provides equity based compensation through stock options and restricted stock that was developed in line with bank regulatory guidelines and support our ownership and stockholder alignment objectives.
|
|
•
|
Reflecting our
Business
Philosophy—Our
approach to
compensation reflects our
business goals,
values and the way we do business
in
the communities we serve. Compensation rates need to be valued by the market and prudent
for
the organization’s strategic well-being. Base
pay and the incentive compensation plan are meant to
place a recognizable fair
value on our performance in our roles. Long-term
incentives, such as the EIP,
help retain our top performers and
represent our longer-term
goals to drive stockholder
value.
|
2018 Compensation Program and Pay Decisions
The
executive compensation program
has three key elements of
total
direct compensation: base
salary, annual incentives and long-term
incentives, such as stock option
and restricted stock awards. Below we summarize our programs and the resulting pay decisions approved by our Compensation Committee for 2018.
Base
Compensation.
The
salaries
of
our
executive and other
officers are reviewed annually to
assess
our
competitive position
and make any necessary
adjustments. Our
goal is to maintain salary levels for
our
officers at a level consistent
with
base
pay received by those in comparable positions at peer banks. To
further
that goal, we obtain benchmark
data
from
a variety of
independent survey sources.
Our
primary
survey
sources are the “Pearl Meyer & Partners Banking Compensation Survey” conducted in conjunction with the Massachusetts
Bankers
Association and the McLagan Regional & Community Banks Compensation Survey. For both surveys, we used the asset size scope that included our Company's asset size
as our reference for comparing base salaries, determining projected pay raise budgets, guiding our adjustments to
pay grades and providing reference to confirm our short-term incentive targets.
We utilize a salary structure approach for all employees, from teller to Chief Executive Officer. The
midpoints
of
our
pay grades are compared to
salary data and individual salaries are reviewed with
the comparable surveyed position.
Ultimately,
any individual’s
rate of
pay is determined with
these criteria
in
mind,
as well as
performance evaluations and the individual’s contribution in their role.
In determining 2018 base salaries for the NEOs, the Compensation Committee reviewed salaries of similar executive roles using the data from surveys indicated above. Using this data, the Committee determined equitable pay scales within which annual merit increases would be made. The Committee then determined the merit increases based on written analyses of the accomplishments and attainment of goals for each executive during the preceding year. The Compensation Committee approved annual base salaries of $845,000 for Mr. Gavegnano, $266,359 for Mr. Merritt, $276,986 for Mr. Abbate, $310,000 for Mr. Migliozzi and $270,000 for Mr. Romano for 2018.
Annual
Cash Bonuses under our Incentive Compensation
Plan.
The objective of our Incentive Compensation Plan is to motivate and reward all eligible employees, including our NEOs for achieving specific company and individual goals that support our strategic plan. While we set specific goals, weights and ratings, these are to serve as a reference for the Compensation Committee when making awards under the plan. All bonus payments under this plan are determined by the Compensation Committee and no participant has a right to a bonus under this plan unless authorized by the Compensation Committee. Rewards under this plan represent compensation that must be earned each year based on performance relative to company and individual standards.
20
For
2018, the Compensation Committee determined the bonus amounts by reviewing the Company’s loan growth,
deposit growth,
cost of
funds, net operating
income, efficiency ratio and other discretionary factors,
as wel
l as the individual contributions
of
our
NEOs
to
our
success.
These metrics were determined by the Committee to serve as a balanced perspective of our performance and ability to drive our strategic goals.
The
amounts of
the bonuses
paid in
2019 for
the year 2018 under this plan are included in
the Summary
Compensation Table in
the column labeled “Bonus.”
For
2018, the amount of
the incentive cash
bonus could range from
0%
to
50%
of
the CEO’s salary and 0% to 40% of
other NEO salaries.
The
total
bonus pool
which may be distributed
under the Incentive Compensation Plan
equals 10%
of
the net operating income of
the Company, unless
the Compensation Committee authorizes a different
amount.
To
determine the amount of
the cash
bonus payable to
our
NEOs for 2018, Company goals, which are defined each year, are first
measured by comparing our performance against defined goals for each of the five performance measures. For
2018, the performance measures
and goals
were as follows:
|
|
Weight
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
|
|
|
|
|
Weighted
|
Performance Measure (1)
|
|
(%)
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Results
|
|
|
Points
|
|
Points
|
Net Loan Growth
|
|
|
25.0
|
|
|
|
10.51
|
%
|
|
|
13.00
|
%
|
|
|
14.50
|
%
|
|
|
20.91
|
%
|
|
5
|
|
5
|
Deposit Growth
|
|
|
12.5
|
|
|
|
9.51
|
%
|
|
|
12.00
|
%
|
|
|
13.50
|
%
|
|
|
18.90
|
%
|
|
5
|
|
2.5
|
Cost of Funds
|
|
|
12.5
|
|
|
|
1.35
|
%
|
|
|
1.23
|
%
|
|
|
1.07
|
%
|
|
|
1.28
|
%
|
|
3
|
|
1.5
|
Net Operating Income
|
|
|
25.0
|
|
|
$66,001
|
|
|
$76,500
|
|
|
$91,000
|
|
|
$72,972
|
|
|
3
|
|
3
|
Efficiency Ratio
|
|
|
25.0
|
|
|
|
56.08
|
%
|
|
|
53.59
|
%
|
|
|
51.77
|
%
|
|
|
53.95
|
%
|
|
3
|
|
3
|
|
(1)
|
The Performance
Measures
are calculated
in accordance
with Generally
Accepted Accounting Principles (“GAAP”)
or from
amounts
presented
in accordance
with GAAP, except where noted as follows.
Net Operating
Income
is referred
to as Income
before
Income
Taxes included in the Company’s Form 10-K filed
on March 1, 2019 with the Securities and Exchange Commission, excluding merger and acquisition expenses and gains and losses on marketable equity securities. The efficiency ratio is a non-GAAP measure representing non-interest expense, excluding merger and acquisition expenses, divided by the sum of net interest income and non-interest income excluding gains and losses on marketable equity securities. The efficiency ratio is a common measure used by banks to understand expenses related to the generation of revenue. We have removed merger and acquisition expenses and gains and losses on marketable equity securities as management deems them to be not representative of operating performance. Presented on a basis including merger and acquisition expenses and losses on marketable equity securities, the efficiency ratio was 54.66% for the year ended December 31, 2018.
|
The
Incentive Compensation Plan
weights the relative importance of
each of
the performance measures
and assigns
a number
of
points (from
1 to
5) to
represent
the level of
achievement
of
each performance measure. The
Plan
may result in
five
points if
the maximum
goal is achieved
and no points if
the threshold goal is not achieved.
Achievement between threshold and maximum
will
result in
one to
four
points for
each
performance measure.
21
For
2018, based
on actual results, the
Compensation Committee assigned five
points for Net Loan Growth,
five
points for
Deposit
Growth,
three
points for
Cost of
Funds,
three
points for
Net Operating Income and
three
points for Efficiency
Ratio. The
points achieved
were then adjusted based
on
the relative weight given to
the performance measure and the weighted points were multiplied
by “5” in
order
to
determine the percentage
achievement
of
the performance goals. After
determining
the Company performance, the Compensation Committee uses
a tabl
e to
determine the amount of
the bonus payable to
a Named Executive Officer as follows:
|
|
|
|
|
|
Amount of Bonus for
|
|
|
|
|
|
|
|
Edward J. Merritt,
|
|
Performance scale
|
|
|
|
|
|
Mark L. Abbate,
|
|
(% of maximum
|
|
Amount of Bonus for
|
|
|
John Migliozzi
|
|
performance)
|
|
Richard J. Gavegnano
|
|
|
and Frank Romano
|
|
20
|
|
12%
|
|
|
10%
|
|
40
|
|
16% - 20%
|
|
|
12% - 16%
|
|
60
|
|
20% - 28%
|
|
|
16% - 20%
|
|
80
|
|
28% - 38%
|
|
|
20% - 30%
|
|
100
|
|
38% - 50%
|
|
|
30% - 40%
|
|
The Company achieved 75% of maximum performance based on the Incentive Compensation Plan’s performance measures and goals established for 2018. Based on the results of those performance measures, Mr. Gavegnano was eligible to receive a bonus between 20% to 28% of his base salary, and the other NEOs were eligible to receive a bonus between 16% to 20% of their base salary. The Compensation Committee considered the executive’s individual performance in determining the amount of the actual award. As described above, all bonuses are subject to the discretion of the Compensation Committee. Based on such discretion, the Compensation Committee also considered and adjusted the bonus amounts to reflect the Company’s substantial achievements in 2018 in addition to those reflected in the results of the performance measures. These achievements included new records for net income, loan growth and deposit growth, significant improvements in return on assets and return on equity, the successful completion of the integration of Meetinghouse Bank, and the opening of four new branches.
The Compensation Committee awarded bonuses
to
Mr. Gavegnano, Mr. Merritt,
Mr. Abbate, Mr. Migliozzi and Mr. Romano in
the amounts of
$353,210, $87,899, $91,405, $102,300 and $89,100 respectively, with
such bonuses
paid in
the first
quarter
of
2019; equaling 42% for Mr. Gavegnano, and 33% for the other NEOs.
Long-Term
Compensation.
As part of our second-step conversion to full public status, and following stockholder approval of the 2015 EIP in September 2015, the Compensation Committee established
a long-term
incentive compensation program
to
deliver equity based compensation to
our
employees and executives going forward
. The goal of the long-term incentive program is
to
reward outstanding performance with
stock based compensation that provides a continuing stake in our success and aligns our employees and executives’ interests with those of our stockholders. Time-based restricted stock and stock option grants were made to officers of the Bank, including the NEOs, and directors on July 31, 2017 in line with regulatory limitations for converting thrift institution. There were no grants of equity awards made to NEOs in 2018.
Conversion grants are awards that are larger than typical annual grants, but with vesting over five years (20% per year). We do not provide annual grants. The concept of the bank regulations is to provide meaningful alignment with stockholders with a focus on stock options that provide direct alignment with stock values delivered to stockholders.
22
The Compensation Committee considered the regulatory guidelines and the allocation process used for the 2015 equit
y grants.
Grants were generally made at the same level to all of the NEOs, to reinforce a team approach and competitive grants fo
r their roles, however the President and Chief Executive Officer received a larger award in line with regulatory limitations and recognition of his role and special contributions to the Company.
All grants (2017, and in aggregate with 2015 grants) were wit
hin or less than the regulatory
limitations, and in line with those of converted financial institutions.
Retirement Benefits.
All of our NEOs participate in
our
401(k)
plan and ESOP. (See
“Employee Stock Ownership
Plan”
following the “Summary Compensation Table” for more details on this retirement plan.
) In addition to the tax-qualified plans, the Company maintains non-qualified supplemental executive retirement agreements with Messrs.
Gavegnano and Merritt (See “
Pension Benefits - Supplemental Executive Retirement Agreement”
and “Non-qualified Deferred Compensation”
following the “Summary Compensation Table" for more details on these non-qualified plans.
)
Executive Agreements.
An important consideration in our ability to attract and retain key executives is our ability to minimize the impact on our management team of the possible disruption associated with our analysis of strategic opportunities. Accordingly, we believe it is in the best interest of the Company and its stockholders to provide our key executives with reasonable financial arrangements in the event of termination of employment. Therefore, we maintain an employment agreement with Mr. Gavegnano and change in control agreements with our other NEOs.
The use of employment and change in control agreements is common among our competitors and therefore influences our use of such arrangements to retain our current management team. The Compensation Committee periodically reviews the terms of the employment and change in control agreements. For additional information regarding the executive agreements, see the section headed “Employment-Related Arrangements and Potential Payments Upon Termination of Change in Control” following the “Summary Compensation Table.”
Perquisites
. We provide our NEOs with reasonable perquisites to further their ability to promote the business interests of the Company in our markets and to reflect competitive practices for similarly situated officers employed by our peers. The perquisites are reviewed periodically and adjusted as necessary.
Process and Roles
The Compensation Committee accesses information and advice from a number of perspectives. This section summarizes the role of our Compensation Committee, management and the independent Compensation Consultant.
Role of
the
Compensation
Committee.
The Compensation Committee of the Board of Directors of the Company develops our
executive compensation program
and monitors
the success
of
the program
in
achieving the objectives of
our
compensation philosophy. The
Committee, which consists
of
Ms. Censullo, Ms. DiMaria and Mr. Gambardella, all independent directors, are responsible for
the administration
of
our
compensation programs and policies, including
the administration
of
our
cash- and stock-based
incentive programs. The
Committee evaluates
the performance of
our
Chief Executive Officer
and other
executive officers and approves all compensation decisions
relating
to
our
executive officers. The
Chief Executive Officer
does not participate in
discussions
related to
his compensation or
the Committee’s review of
any documents specifically related to
his compensation. The Committee meets in executive session without the presence of management as desired. The
Committee operates under the mandate of
a formal charter that establishes
a framework
for
the fulfillment
of
its responsibilities. The Charter can be found on our website.
23
Role of
Management.
Although the Compensation Committee makes independent determination on all matters related to compensation of the NEOs,
including the Chief Executive Officer, certain members of management are requested to attend meetings and/or provide input to the
Compensation Committee.
Input may be sought from the Chief Executive Officer, Chief Financial Officer, Human Resources Depart
ment or others to ensure the Compensation Committee has the information and perspective to carry out its duties.
Our
Chief Executive Officer
provides input and
recommendations to
the Compensation Committee on pay decisions related to the other NEOs and other
executive officers, but does not participate in
discussions
related to
his compensation or
the Committee’s review of
any documents related to
the determination
of
his compensation.
Role of Consultant.
The Compensation Committee has the authority to retain a compensation consultant to advise on executive compensation matters. The Compensation Committee also has access to outside legal counsel and other experts as needed. These advisors serve at the request of the Compensation Committee, which has the power and authority to retain such experts and approve fees and retention terms.
During 2018, the Compensation Committee’s independent compensation consultant, Meridian Compensation Partners, LLC (“Meridian”), reviewed and provided feedback on the Company’s stock compensation grant and award practices, as well as other compensation matters.
Meridian reported directly to the Compensation Committee. In retaining Meridian, the Compensation Committee reviewed their independence relative to the standards adopted by the Securities and Exchange Commission and Nasdaq regarding compensation advisor independence and conflicts of interest. The Compensation Committee concluded Meridian was independent and did not have any conflicts of interest. The Compensation Committee will continue to monitor compliance with these requirements on an ongoing basis.
Policies and Practices
Tax
and
Accounting
Considerations.
In
consultation with
our
advisors, we evaluate the tax and accounting treatment of
each of
our
compensation programs at the time
of
adoption and on an annual basis
to
ensure that we understand the financial impact of
the program.
Our
analysis
includes a detailed review of
recently adopted and pending changes
in
tax and accounting requirements. As part of
our
review, we consider modifications and/or
alternatives to
existing programs to
take advantage
of favorable changes
in
the tax or
accounting environment
or
to
avoid adverse
consequences.
To
preserve maximum
flexibility
in
the design and implementation
of
our
compensation program,
we have not adopted a formal
policy that requires all compensation to
be tax deductible; however it
is our
intent
to
structure our
compensation programs in
a tax efficient
manner.
Stock
Compensation
Grant and
Award Practices.
As a public company, we expect that our Compensation Committee’s grant-making
process
will
be independent of
any consideration of
the timing
of
the release
of
material nonpublic information,
including
with
respect to
the determination
of grant
dates or
stock option
exercise
prices. Similarly,
we expect that the release
of
material nonpublic information
will
never be timed
with
the purpose or
intent
to
affect the value of
executive compensation. The 2008 EIP and the 2015 EIP expressly prohibits repricing of stock options without stockholder approval.
24
Risk Assessment.
The
Compensation Committee believes
that any risks arising from
our
compensation policies and practices
for
our
employees
are not
reasonably likely
to
have a material adverse
effect on Meridian Bancorp
, Inc. and East Boston Savings Bank. In
addition,
the Compensation Committee believes
that the mix
and design of
the elements of
our
executive compensation does not
encourage management to
assume
excessive
risks. In
its review, the Compensation Committee c
oncluded that significant weighting towards long-term
incentive compensation discourages
short-term
risk taking and that the significant number
of
shares
of
stock of
Meridian Bancorp, Inc. owned by the NEOs discourages
excessive
risk taking.
Compensation
Decisions
for the
Named Executive Officers for
2019
For 2019, the Compensation Committee reviewed base
salaries
for the NEOs based on a review of market data and in consideration of each executive’s role, contributions and performance, and increased the base salary for Mr. Gavegnano,
Mr. Merritt,
Mr. Abbate, Mr. Migliozzi and Mr. Romano to
$905,000, $275,749
, $286,335, $321,393 and $287,500, respectively.
Increases for the NEOs averaged 4.26%. Mr. Gavegnano’s increase was 7.1%. The Compensation Committee considered many factors including his service as Chairman, President and Chief Executive Officer, exceptional strategic leadership and achievements relating to the dramatic growth and quality of the commercial loan portfolio. Compensation Committee also recognized his direct effect on the strategic growth of the Bank’s market footprint by finding and evaluating new markets and exerting strategic direction over the Bank’s marketing and advertising initiatives. And the Compensation Committee recognized his responsibility and success in managing the Bank’s equity portfolio. Additionally, the Compensation Committee placed importance on Mr. Gavegnano’s role as Investor Relations Officer and the value of his decades-long affiliation with the Bank and the perspective that brings to his executive insights and decision-making. In all, the Compensation Committee concluded that a 7.1% merit increase to salary was appropriate, mindful that Mr. Gavegnano’s Incentive Compensation Plan cash bonus is comparably below median, at less than the 25th percentile according to the McLagan 2018 Regional and Community Bank Survey utilized by the Compensation Committee.
Compensation Committee Report
The
Compensation Committee has reviewed and discussed
the Compensation Discussion
and Analysis
that is required
by the rules established
by the Securities and Exchange Commission. Based on such review and discussions,
the Compensation Committee recommended to
the Board of
Directors that the Compensation Discussion
and Analysis
be included in
this proxy
statement. See “
Compensation Discussion
and Analysis
.”
Compensation
Committee
of
the
Board of
Directors
of Meridian Bancorp, Inc.
Domenic A. Gambardella, Chair
Marilyn A. Censullo
Anna R. DiMaria
25
Summary
Compensation
Table
The
following
table sets
forth
information
concerning compensation received for
the years ended December
31, 2018, 2017 and 2016, respectively by the Named Executive Officers.
Name and Principal
Position
|
|
Year
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
($)(1)
|
|
|
Option
Awards
($)(1)
|
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(2)
|
|
|
All Other
Compensation
($)(3)
|
|
|
Total ($)
|
|
Richard J. Gavegnano,
|
|
2018
|
|
|
845,000
|
|
|
|
353,210
|
|
|
|
—
|
|
|
|
—
|
|
|
|
380,246
|
|
|
|
86,010
|
|
|
|
1,664,466
|
|
|
Chairman of the Board, President and
|
|
2017
|
|
|
782,350
|
|
|
|
356,752
|
|
|
|
1,323,750
|
|
|
|
795,000
|
|
|
|
356,408
|
|
|
|
72,008
|
|
|
|
3,686,268
|
|
|
Chief Executive Officer
|
|
2016
|
|
|
708,750
|
|
|
|
296,258
|
|
|
|
—
|
|
|
|
—
|
|
|
|
220,317
|
|
|
|
66,005
|
|
|
|
1,291,330
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edward J. Merritt,
|
|
2018
|
|
|
266,359
|
|
|
|
87,899
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
27,340
|
|
|
|
381,598
|
|
|
Executive Vice President,
|
|
2017
|
|
|
258,050
|
|
|
|
92,898
|
|
|
|
105,900
|
|
|
|
63,736
|
|
|
|
—
|
|
|
|
27,069
|
|
|
|
547,653
|
|
|
Business Development and Community
|
|
2016
|
|
|
250,000
|
|
|
|
82,500
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
30,561
|
|
|
|
363,061
|
|
|
Reinvestment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark L. Abbate,
|
|
2018
|
|
|
276,986
|
|
|
|
91,405
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
32,498
|
|
|
|
400,889
|
|
|
Executive Vice President,
|
|
2017
|
|
|
268,164
|
|
|
|
96,539
|
|
|
|
105,900
|
|
|
|
63,736
|
|
|
|
—
|
|
|
|
32,131
|
|
|
|
566,470
|
|
|
Treasurer and Chief Financial Officer
|
|
2016
|
|
|
259,622
|
|
|
|
85,675
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
34,896
|
|
|
|
380,193
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Migliozzi,
|
|
2018
|
|
|
297,308
|
|
|
|
102,300
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
30,128
|
|
|
|
429,736
|
|
|
Executive Vice President,
|
|
2017
|
|
|
281,451
|
|
|
|
101,322
|
|
|
|
105,900
|
|
|
|
63,736
|
|
|
|
—
|
|
|
|
29,734
|
|
|
|
582,143
|
|
|
Real Estate Lending
|
|
2016
|
|
|
272,118
|
|
|
|
89,799
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
31,468
|
|
|
|
393,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Frank P. Romano,
|
|
2018
|
|
|
270,000
|
|
|
|
89,100
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
33,402
|
|
|
|
392,502
|
|
|
Executive Vice President,
|
|
2017
|
|
|
257,542
|
|
|
|
92,715
|
|
|
|
105,900
|
|
|
|
63,736
|
|
|
|
—
|
|
|
|
33,213
|
|
|
|
553,106
|
|
|
Corporate Banking
|
|
2016
|
|
|
249,339
|
|
|
|
82,282
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
33,191
|
|
|
|
364,812
|
|
|
|
(1)
|
The amounts shown reflect the grant date fair value of restricted stock awards or stock options, as applicable, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 718. Refer to the Company’s Form 10-K filed on March 1, 2019 with the Securities and Exchange Commission for the assumptions relating to these awards.
|
|
(2)
|
Represents the actuarial change in pension value in the executive’s account from December 31 of the prior year to December 31 of the reported year under a Supplemental Executive Retirement Agreement.
|
|
(3)
|
For 2018, employer
contributions
under the company match
and safe
harbor
provisions
of the 401(k) Plan were $19,250, $15,182, $18,250, $16,535 and $19,154 for Messrs.
Gavegnano, Merritt,
Abbate, Migliozzi and Romano, respectively.
The amount
of premiums
paid for long term
care
and disability
insurances
were $6,738 for Mr. Gavegnano. For 2018, employer
contributions
under the ESOP
were $7,855 for each of Messrs. Gavegnano, Merritt,
Abbate, Migliozzi and Romano, respectively.
For 2018, imputed
income
from life
insurance
provided
by the Bank was $19,746, $1,474, $3,564, $2,909 and $3,564 for Messrs. Gavegnano, Merritt,
Abbate, Migliozzi and Romano, respectively. For 2018, dividends received from unvested restricted stock were $32,421 for Mr. Gavegnano and $2,829 for each of Messrs. Merritt,
Abbate, Migliozzi and Romano, respectively.
|
26
Employment Agreements
East Boston Savings Bank has entered into
an employment agreement
with Richard J. Gavegnano,
its President and Chief Executive Officer.
The employment agreement provides for
a two-year term that extends on a daily basis,
unless
written
notice of
non-renewal is given by the Board of
Directors of
East Boston Savings Bank or
by the executive. The
current
base
salary under the employment agreement for
Mr. Gavegnano
is $905,000.
In
addition
to
a base
salary, the employment agreement provides for, among other
things, participation
in
our
annual incentive plan and certain employee benefits plans. The employment agreement provides for
termination
by East Boston Savings Bank for
cause,
as defined in
the agreement, at any time.
If
East Boston Savings Bank terminates the executive’s employment for
reasons
other
than for
cause,
or
if
the executive resigns from
East Boston Savings Bank for
good reason (as defined in
the employment agreement), then the executive would receive a lump
sum severance
payment equal to
the sum of
(i)
two times current
annual base
salary,
and (ii)
the value of
24 months of
health insurance premiums. In
that case,
assuming a December
31, 2018 termination (at his prior salary of $845,000),
Mr. Gavegnano
would receive a severance
benefit equal to $1,710,338. Upon termination
of the executive for
reasons
other
than a change in
control
(see below), the executive must adhere to
a two-year non-competition
restriction.
Under the employment agreement, if
voluntary
or
involuntary
termination
follows a change in control
of
East Boston Savings Bank or
Meridian Bancorp, the executive would receive a severance
payment equal to
2.99 times the executive’s
“base
amount,” less
any other
“parachute
payments,”
as those terms are defined under Section 280G of
the Internal
Revenue
Code. Generally, an executive’s
“base amount” equals the average
of
the taxable compensation paid during
the preceding five
taxable years. In
the event severance
payments to
the executive include an “excess
parachute payment” as defined in Section 280G of
the Internal
Revenue
Code, such payment would be reduced by the minimum
dollar amount necessary
to
avoid this result. Accordingly, in the event the executive had terminated employment in
connection with
a change in
control, as of December 31, 2018,
the estimated severance
payment Mr. Gavegnano would have received (based on taxable compensation earned during the prior five years) would be equal to approximately $3,398,054, which such amount reflects a reduction of $429,568 due to the 280G reduction provisions in the employment agreement.
Change
in
Control Agreements
East Boston Savings Bank has entered into
substantially similar
change in
control
agreements with Mark L. Abbate, its Executive Vice President, Treasurer and Chief Financial Officer, Edward J. Merritt, its Executive Vice President for Business Development and Community Reinvestment, John Migliozzi, its Executive Vice President, Real Estate Lending and with Frank P. Romano, its Executive Vice President, Corporate Banking.
The
change in
control
agreements provide
that upon an involuntary
termination,
other
than for
cause,
or
voluntary
termination
for
good reason (as defined in
the agreement) following
a change in
control
of
Meridian Bancorp or East Boston Savings Bank, the executives
would be entitled to
a cash
severance
payment equal to
two times their
base
salary and the highest level of
cash
bonus earned in
any one of
the three calendar years preceding the year of
termination.
In
addition,
the executives
would be entitled to
receive non-taxable medical and dental coverage
substantially identical to
the coverage
maintained for
the executive prior to
their
termination
of
employment for
24 months following
their
termination
of
employment. In
the event severance
payments to
the executives
include an “excess
parachute payment” as defined in Section 280G of
the Internal
Revenue
Code, such payment will
be cutback by the minimum
dollar amount necessary
to
avoid this result. In
the event of
a termination
of
employment in
connection with
a change in
control,
the maximum
severance
payment Mr. Abbate, Mr. Merritt, Mr. Migliozzi and Mr. Romano would receive (based on taxable compensation earned) equals $793,340, $773,860, $880,986 and $765,160, respectively, assuming a December
31, 2018 termination
of
employment.
27
Benefit Plans
Employee Stock
Ownership Plan.
East Boston Savings Bank maintains an employee stock ownership plan (“ESOP”) for
eligible employees
of
East Boston Savings Bank. Eligible
employees
who have attained age 18 and completed three months of
service during
a continuous 12-month
period
are eligible to
participate in
the ESOP as of
the first
entry
date following completion of
the plan’s eligibility
requirements. The
ESOP received a favorable determination
letter
from
the Internal
Revenue
Service as recently as January 15, 2015.
In 2008, the ESOP borrowed funds from Meridian Interstate Funding Corp. pursuant to a loan in order to purchase 828,000 shares of common stock in connection with Meridian Interstate Bancorp, Inc.’s initial public offering (the “2008 Loan”). In connection with the second-step conversion on July 28, 2014, the ESOP borrowed additional funds and purchased an additional 1,625,000 shares of Meridian Bancorp, representing 5% of the shares issued in Meridian Bancorp’s second-step offering, with proceeds from Meridian Bancorp’s loan to the ESOP. The
new
loan amount equaled the aggregate purchase price of the common stock plus the outstanding balance of the 2008 Loan. This loan is repaid principally through East Boston Savings Bank’s contributions
to
the ESOP and dividends payable on common stock held by the ESOP over the 25-year term
of
the loan. The interest rate for the ESOP loan is 3.25%.
Shares purchased
by the ESOP are held in
a suspense
account, and shares will be allocated to the participants’ accounts as the loan is repaid on a pro-rata basis. Shares
released
from
the suspense
account are allocated among participants’ accounts on the basis
of
each participant’s proportional
share of
compensation relative to all participants’ compensation.
Participants vest 100%
in
the benefits allocated under the ESOP upon completing three years of
service with
East Boston Savings Bank or
its affiliates. A participant will become fully
vested at retirement,
upon death or
disability,
upon a change in
control
or
upon termination
of
the ESOP. Benefits are generally distributable upon a participant’s separation from
service. Any unvested shares
that are forfeited
upon a participant’s termination
of
employment will
be reallocated among the remaining
plan participants.
Plan
participants are entitled to
direct the ESOP trustee on how to
vote common stock allocated to their
accounts.
The
trustee will
vote allocated shares
held in
the ESOP as instructed by the plan participants and unallocated shares
and allocated shares
for
which no instructions are received will
be voted in
the same ratio
on any matter
as those shares
for
which instructions are given.
Under applicable accounting requirements, Meridian Bancorp will record a compensation expense each year in an amount equal to the average
fair
market value of
the ESOP shares
when committed
to
be released from the suspense account
to
participants’ accounts.
28
Outstanding
Equity
Awards
at Fiscal
Year-End
The
following
table provides information
concerning unexercised
stock options and stock awards that have not
vested as of
December
31, 2018 for
each Named Executive Officer.
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
Number of
|
Market Value
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
Shares or
|
of Shares
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
Units of
|
or Units
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
Option
|
|
|
|
|
Stock
|
of Stock
|
|
|
|
Options
|
|
|
Options
|
|
Exercise
|
|
|
Option
|
|
That Have
|
That Have
|
|
|
|
Exercisable
|
|
|
Unexercisable
|
|
Price
|
|
|
Expiration
|
|
Not Vested
|
Not Vested
|
|
Name
|
|
(#)
|
|
|
(#)
|
|
($)
|
|
|
Date
|
|
(#)
|
($) (4)
|
|
Richard J. Gavegnano
|
|
|
18,363
|
|
|
|
—
|
|
|
|
$
|
7.47
|
|
|
04/23/2023
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
225,000
|
|
|
|
150,000
|
|
(1)
|
|
$
|
14.20
|
|
|
11/02/2025
|
|
|
60,000
|
|
(1)
|
$
|
859,200
|
|
|
|
|
37,500
|
|
|
|
150,000
|
|
(3)
|
|
$
|
17.65
|
|
|
07/31/2027
|
|
|
60,000
|
|
(3)
|
$
|
859,200
|
|
Edward J. Merritt
|
|
|
12,242
|
|
|
|
—
|
|
|
|
$
|
3.79
|
|
|
01/26/2020
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
2,448
|
|
|
|
—
|
|
|
|
$
|
7.47
|
|
|
04/23/2023
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
1,800
|
|
|
|
1,200
|
|
(2)
|
|
$
|
13.06
|
|
|
03/26/2025
|
|
|
800
|
|
(2)
|
$
|
11,456
|
|
|
|
|
18,038
|
|
|
|
12,024
|
|
(1)
|
|
$
|
14.20
|
|
|
11/02/2025
|
|
|
4,800
|
|
(1)
|
$
|
68,736
|
|
|
|
|
3,007
|
|
|
|
12,025
|
|
(3)
|
|
$
|
17.65
|
|
|
07/31/2027
|
|
|
4,800
|
|
(3)
|
$
|
68,736
|
|
Mark L. Abbate
|
|
|
2,448
|
|
|
|
—
|
|
|
|
$
|
7.47
|
|
|
04/23/2023
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
1,800
|
|
|
|
1,200
|
|
(2)
|
|
$
|
13.06
|
|
|
03/26/2025
|
|
|
800
|
|
(2)
|
$
|
11,456
|
|
|
|
|
18,038
|
|
|
|
12,024
|
|
(1)
|
|
$
|
14.20
|
|
|
11/02/2025
|
|
|
4,800
|
|
(1)
|
$
|
68,736
|
|
|
|
|
3,007
|
|
|
|
12,025
|
|
(3)
|
|
$
|
17.65
|
|
|
07/31/2027
|
|
|
4,800
|
|
(3)
|
$
|
68,736
|
|
John Migliozzi
|
|
|
6,121
|
|
|
|
—
|
|
|
|
$
|
3.67
|
|
|
10/27/2019
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
6,121
|
|
|
|
—
|
|
|
|
$
|
5.47
|
|
|
05/11/2021
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
1,224
|
|
|
|
—
|
|
|
|
$
|
7.47
|
|
|
04/23/2023
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
900
|
|
|
|
600
|
|
(2)
|
|
$
|
13.06
|
|
|
03/26/2025
|
|
|
400
|
|
(2)
|
$
|
5,728
|
|
|
|
|
9,019
|
|
|
|
6,012
|
|
(1)
|
|
$
|
14.20
|
|
|
11/02/2025
|
|
|
2,400
|
|
(1)
|
$
|
34,368
|
|
|
|
|
1,504
|
|
|
|
6,012
|
|
(3)
|
|
$
|
17.65
|
|
|
07/31/2027
|
|
|
2,400
|
|
(3)
|
$
|
34,368
|
|
Frank P. Romano
|
|
|
24,484
|
|
|
|
—
|
|
|
|
$
|
5.61
|
|
|
07/08/2021
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
2,448
|
|
|
|
—
|
|
|
|
$
|
7.47
|
|
|
04/23/2023
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
1,800
|
|
|
|
1,200
|
|
(2)
|
|
$
|
13.06
|
|
|
03/26/2025
|
|
|
800
|
|
(2)
|
$
|
11,456
|
|
|
|
|
18,038
|
|
|
|
12,024
|
|
(1)
|
|
$
|
14.20
|
|
|
11/02/2025
|
|
|
4,800
|
|
(1)
|
$
|
68,736
|
|
|
|
|
3,007
|
|
|
|
12,025
|
|
(3)
|
|
$
|
17.65
|
|
|
07/31/2027
|
|
|
4,800
|
|
(3)
|
$
|
68,736
|
|
|
(1)
|
Awards vest at a rate of 20% per year with the remaining awards vesting on November 2, 2019 and 2020.
|
|
(2)
|
Awards vest at a rate
of 20% per year with the remaining
awards vesting on March 26, 2019 and 2020.
|
|
(3)
|
Awards vest at a rate
of 20% per year with the remaining
awards vesting on July 31, 2019, 2020, 2021 and 2022.
|
|
(4)
|
Based on the $14.32 per share
trading
price
of our common
stock on December
31, 2018.
|
29
Option
Exercises
and
Stock
Vested
The
following
table sets
forth
information
regarding
the value realized by our
Named Executive Officers upon exercise of stock options
and the vesting of stock awards during
the year ended December
31, 2018.
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
Shares
Acquired On
|
|
|
Value
Realized on
|
|
|
Shares
Acquired On
|
|
|
Value
Realized on
|
|
Name
|
|
Exercise (#)
|
|
|
Exercise ($)
|
|
|
Vesting (#)
|
|
|
Vesting ($)
|
|
Richard J. Gavegnano
|
|
|
598,100
|
|
|
|
8,077,131
|
|
|
|
46,714
|
|
|
|
798,723
|
|
Edward J. Merritt
|
|
|
—
|
|
|
|
—
|
|
|
|
4,489
|
|
|
|
79,046
|
|
Mark L. Abbate
|
|
|
13,996
|
|
|
|
169,916
|
|
|
|
4,489
|
|
|
|
79,046
|
|
John Migliozzi
|
|
|
24,484
|
|
|
|
318,292
|
|
|
|
4,487
|
|
|
|
79,005
|
|
Frank P. Romano
|
|
|
—
|
|
|
|
—
|
|
|
|
4,489
|
|
|
|
79,046
|
|
Equity
Award
Plans
Under the 2015 Equity Incentive Plan, the maximum number of shares of Company common stock that may be available for awards of stock options (both incentive and non-qualified) is 3,250,000, and 1,300,000 for awards of restricted stock, restricted stock units and performance awards. To the extent any shares of stock covered by an award (including restricted stock awards, restricted stock units and performance awards) under the 2015 Equity Incentive Plan are not delivered to a participant or beneficiary because the award is forfeited or canceled or because a stock option is not exercised, then such shares shall not be deemed to have been delivered for purposes of determining the maximum number of shares of stock available for delivery under the plan. As of December 31, 2018, there were 448,900 restricted stock awards and 1,204,969 stock options that remain available for future grants under the 2015 Equity Incentive Plan. As of December 31, 2018, there were no restricted stock awards and stock options that remain available for future grants under the 2008 Equity Incentive Plan.
Under each plan, upon a participant’s termination
of
service for
reasons
of
death or disability,
or
in
the event of
a change in
control,
the participant would become fully
vested in
all equity awards under the plan.
As of
December
31, 2018, upon death or
disability, or in the event of a change in control,
Messrs.
Gavegnano, Merritt,
Abbate, Migliozzi and Romano would be entitled to
the acceleration
of
their
unvested restricted stock awards in
the amount of
$1.7 million, $149,000, $149,000, $74,500 and $149,000,
respectively.
Pension
Benefits
Supplemental
Executive Retirement Agreement.
East Boston Savings Bank has entered into
a supplemental executive retirement
agreement with
Mr. Gavegnano.
30
The
following
table provides information
with
respect to
Mr. Gavegnano’s
supplemental executive retirement
benefits that are not
defined contribution
plans and that provide
for
payments or
benefits in
connection with
his retirement
as of
December
31, 2018.
|
|
|
|
Number of
|
|
Present
|
|
|
Payments
|
|
|
|
|
|
Years
|
|
Value of
|
|
|
during
|
|
|
|
|
|
Credited
|
|
Accumulated
|
|
|
Last Fiscal
|
|
Name
|
|
Plan Name
|
|
Service
|
|
Benefit (1)
|
|
|
Year
|
|
Richard J. Gavegnano
|
|
Supplemental Executive Retirement Agreement
|
|
12.5
|
|
$
|
6,091,032
|
|
|
|
—
|
|
|
(1)
|
Refer to note 10 of the notes to the consolidated financial statements included in the Company’s Form 10-K filed on March 1, 2019 for additional information relating to the plan.
|
Under Mr. Gavegnano’s
agreement, if
the executive terminates employment for
any reason other
than for
cause,
he will
receive an annual benefit (paid
monthly)
equal to
70%
of
his final
average compensation. For
purposes of
the agreement, final
average
compensation equals the three years’ base salary that results in
the highest average.
The
annual benefit is generally payable in
the form
of
an unreduced life
annuity with
a 50%
spousal
survivor
annuity, or the actuarial equivalent of this benefit as a single lump
sum distribution. Mr. Gavegnano elected a lump sum payment in
compliance with
Internal
Revenue
Code Section 409A. Mr. Gavegnano
became 100%
vested in
the annual benefit after the completion of
eight years of
service.
Upon death, Mr. Gavegnano’s
beneficiary is entitled to
the annual benefit, which will
be calculated
as if
Mr. Gavegnano
had retired
the day before his death. In
the event Mr. Gavegnano becomes
disabled, he will
be entitled to
his annual benefit, which will
be calculated
as if
he had terminated his employment on the date of
his disability.
As of
December
31, 2018, Mr. Gavegnano’s
lump
sum benefit under his agreement is $6.1 million upon his voluntary
or
involuntary
termination,
disability,
death, or
in
the event of
a change in
control
of
Meridian Bancorp or
East Boston Savings Bank followed
by his termination
of employment.
Non-qualified
Deferred
Compensation
East Boston Savings Bank entered into
a
supplemental executive retirement agreement
with
Edward
J. Merritt.
Under the terms of
the agreement, Mr. Merritt is entitled to the value of the accumulation account upon his termination of employment, death or disability. This accumulation account had a beginning balance of $716,921 and East Boston Savings Bank credited the accumulation account with
an additional
$50,000, as
of
each December
31
st
. A final contribution was made on December 31, 2015, as East Boston Savings Bank and Mr. Merritt agreed to freeze the accumulation of this benefit as of such date.
Upon a termination
of
employment, death or
disability,
the accumulation account shall be paid in
installments to
Mr. Merritt
or
his beneficiary, as applicable. As of
December
31, 2018, Mr. Merritt
would have received installment payments in the aggregate amount of
$1,016,921 if
his
employment had terminated due to death, disability
or
if
the executive voluntarily
resigned. In
the event his
employment is terminated by East Boston Savings Bank without
cause
or
by the executive for
good reason within
one year
of
a change in
control
(as defined in
the agreement), an amount equal to
$1,016,921 shall be paid to
Mr. Merritt,
in
a single lump
sum.
31
CEO Pay Ratio
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the median of the annual total compensation of employees of the Company and the annual total compensation of our CEO.
For 2018, our median annual total compensation for all employees other than our CEO was $74,356. The total annual compensation for our CEO for the same period was $1,664,466. The ratio of our CEO’s compensation to the median employee’s compensation was 22:1.
We identified our median employee using our entire workforce, including employees who were employed on a full-time, part-time or seasonal basis, as of December 31, 2018. For purposes of identifying the median employee from our employee population base, we used each employee’s “regular earnings” in 2018, including annual base salary, cash bonus, and any amounts paid for paid time off benefits available to all employees, by our employees, as compiled from our payroll records.
We determined the total annual compensation for our median employee based on total cash compensation, which included base pay, commissions and bonuses, plus the value of non-discriminatory benefits funded by the Company, including 401(k) matching and profit sharing contributions, taxable value of life insurance and the share of health insurance premiums paid by the Company. The CEO’s total compensation included the values of executive long-term disability and long-term care coverages, as well as the increase in pension value.
As the SEC rule for identifying the median employee allow companies to adopt various methodologies, to apply certain exclusions, to make reasonable assumptions and to apply various assumptions, the pay ratio reported by the Company may not be comparable to the pay ratio reported by other companies.
32
Director
Compensation
The
following
table provides the compensation we paid to
our
directors for
the year ended December
31, 2018, other than Messrs.
Gavegnano
and Merritt.
Messrs.
Gavegnano
and Merritt do not receive separate
compensation for
their
service as a director,
and information
with
respect to
the compensation paid to
Messrs.
Gavegnano
and Merritt
is included above in
the Summary
Compensation Table.
Name
|
|
Fees
Earned
or Paid
in Cash
($) (15)
|
|
|
Stock
Awards
($) (1)
|
|
|
Option
Awards
($) (1)
|
|
|
Change in
Pension
Value and
Nonqualified
Deferred
($) (13)
|
|
|
All Other
Compensation
($) (14)
|
|
|
Total
($)
|
|
Cynthia Carney (2)
|
|
|
63,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
63,000
|
|
Marilyn A. Censullo (3)
|
|
|
49,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
49,000
|
|
Russell Chin (4)
|
|
|
36,500
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
36,500
|
|
Anna R. DiMaria (5)
|
|
|
28,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
28,000
|
|
Domenic A. Gambardella (6)
|
|
|
74,400
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,636
|
|
|
|
79,036
|
|
Thomas J. Gunning (7)
|
|
|
17,600
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
17,600
|
|
Carl A. LaGreca (8)
|
|
|
43,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
43,000
|
|
Joyce A. Murphy (9)
|
|
|
9,600
|
|
|
|
57,900
|
|
|
|
35,175
|
|
|
|
—
|
|
|
|
—
|
|
|
|
102,675
|
|
Gregory F. Natalucci (10)
|
|
|
67,200
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,130
|
|
|
|
71,330
|
|
James G. Sartori (11)
|
|
|
62,700
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,893
|
|
|
|
67,593
|
|
Peter F. Scolaro (12)
|
|
|
17,600
|
|
|
|
57,900
|
|
|
|
35,175
|
|
|
|
—
|
|
|
|
—
|
|
|
|
110,675
|
|
|
(1)
|
The amounts shown reflect the grant date fair value of restricted stock awards or stock options, as applicable, computed in accordance with FASB ASC Topic 718. Refer to the Company’s Form 10-K filed on March 1, 2019 with the Securities and Exchange Commission for the assumptions relating to these awards.
|
|
(2)
|
At December 31, 2018, Ms. Carney h
ad
3,213
vested
stock
options,
6,000
unvested stock options and
2,400
unvested
shares
of
restricted
stock.
|
|
(3)
|
At December 31, 2018, Ms. Censullo
had
39,014
vested
stock
options,
25,400
unvested stock options and
10,400
unvested
shares
of
restricted
stock.
|
|
(4)
|
At December 31, 2018, Mr. Chin had 1,500 vested stock option, 6,000
unvested stock options and
2,400
unvested
shares
of
restricted
stock.
|
|
(5)
|
At December 31, 2018, Ms. DiMaria
had
37,790
vested
stock
options,
25,400
unvested stock options and
10,400
unvested
shares
of
restricted
stock.
|
|
(6)
|
At December 31, 2018, Mr.
Gambardella
had
51,205
vested
stock
options,
25,400
unvested stock options and
10,400
unvested
shares
of
restricted
stock.
|
|
(7)
|
At December 31, 2018, Mr.
Gunning
had
30,444
vested
stock
options,
25,400
unvested stock options and 10,400 unvested
shares
of
restricted
stock.
|
|
(8)
|
At December 31, 2018, Mr. LaGreca
had
25,304
vested
stock
options,
25,400
unvested stock options and
10,400
unvested
shares
of
restricted
stock.
|
|
(9)
|
At Decembr 31, 2018, Ms. Murphy had 7,500 shares of unvested stock options and 3,000 shares of unvested restricted stock.
|
|
(10)
|
At December 31, 2018, Mr. Natalucci
had
39,014
vested
stock
options,
25,400
unvested stock options and
10,400
unvested
shares
of
restricted
stock.
|
|
(11)
|
Mr. Sartori retired from the Board of Directors effective December 31, 2018. At December 31, 2018, Mr. Sartori
had
29,221
vested
stock
options,
25,400
unvested stock options and
10,400
unvested
shares
of
restricted
stock.
|
|
(12)
|
At December 31, 2018, Mr. Scolaro had 7,500 unvested stock options and 3,000 unvested shares of restricted stock.
|
|
(13)
|
Represents
the actuarial
change in pension value in the directors’
accounts
from
January
1, 2018 to December
31, 2018 under each director’s
Supplemental
Retirement
Agreement. However, for the year ended December 31, 2018, Messrs. Gambardella, Natalucci and Sartori had a decrease in pension value of $83,100, $5,000 and $59,800, respectively. Applicable Securities and Exchange Commission regulations require that we not reflect such negative values in the summary compensation table.
|
33
|
(14)
|
Represents
premiums
paid for long-term
care
insurance
and life
insurance,
respectively,
as follows:
|
$3,946 and $690 for Mr. Gambardella; $3,448 and $682 for Mr. Natalucci;
and $3,880 and $1,013 for Mr. Sartori.
|
(15)
|
Represents
the following fees:
|
Name
|
|
Audit
Committee
Meeting
Fees ($)
|
|
|
Compensation
Committee
Meeting
Fees ($)
|
|
|
Nominating/Corporate
Governance
Committee Meeting
Fees ($)
|
|
|
Executive
Committee
Meeting Fees ($)
|
|
|
All Other
Meeting
Fees ($)
|
|
|
Total
($)
|
|
Cynthia Carney
|
|
|
—
|
|
|
|
—
|
|
|
|
1,200
|
|
|
|
46,200
|
|
|
|
15,600
|
|
|
|
63,000
|
|
Marilyn A. Censullo
|
|
|
28,800
|
|
|
|
7,200
|
|
|
|
—
|
|
|
|
1,000
|
|
|
|
12,000
|
|
|
|
49,000
|
|
Russell Chin
|
|
|
20,300
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,000
|
|
|
|
13,200
|
|
|
|
36,500
|
|
Anna R. DiMaria
|
|
|
—
|
|
|
|
7,200
|
|
|
|
1,200
|
|
|
|
4,000
|
|
|
|
15,600
|
|
|
|
28,000
|
|
Domenic A. Gambardella
|
|
|
—
|
|
|
|
7,200
|
|
|
|
1,200
|
|
|
|
50,400
|
|
|
|
15,600
|
|
|
|
74,400
|
|
Thomas J. Gunning
|
|
|
—
|
|
|
|
—
|
|
|
|
1,200
|
|
|
|
2,000
|
|
|
|
14,400
|
|
|
|
17,600
|
|
Carl A. LaGreca
|
|
|
23,400
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,000
|
|
|
|
15,600
|
|
|
|
43,000
|
|
Joyce A. Murphy
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9,600
|
|
|
|
9,600
|
|
Gregory F. Natalucci
|
|
|
—
|
|
|
|
—
|
|
|
|
1,200
|
|
|
|
50,400
|
|
|
|
15,600
|
|
|
|
67,200
|
|
James G. Sartori
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
48,300
|
|
|
|
14,400
|
|
|
|
62,700
|
|
Peter F. Scolaro
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,000
|
|
|
|
15,600
|
|
|
|
17,600
|
|
Supplemental
Retirement Agreements.
East Boston Savings Bank has entered into supplemental retirement
agreements
with
each of
Messrs.
Gambardella,
Natalucci and Sartori.
Under the agreements,
if
the director
terminates service for
any reason, the director
will
receive an annual benefit equal to
50%
of
his final
average
compensation. For
purposes of
the agreements,
a director’s
final
average
compensation equals the average
of
the director’s
annual fees from
East Boston Savings Bank and Meridian Bancorp, Inc. for
the three years during
which the director’s annual fees were the highest. The
annual benefit is generally payable in
the form
of
an unreduced life annuity with
a 50%
spousal
survivor
annuity, or the actuarial equivalent of this benefit as a lump sum distribution. All of the directors elected a lump sum payment in
compliance with
Internal
Revenue
Code Section 409A.
Notwithstanding the foregoing,
the director’s
annual benefit will
be reduced by 2.5%
for
each year that he terminates service prior
to
reaching age 72. Upon death, the director
is entitled to
the annual benefit, which will
be calculated
as if
the director
had retired
the day before his death. In
the event the director
becomes
disabled, the director
will
be entitled to
the annual benefit, calculated
as if the director
had retired
at
age 72 with
120 months of
service.
34
Meeting Fees
for Non-Employee Directors.
The
following
table sets
forth
the
applicable fees that will
be paid to
our
non-employee directors for
their
service on the boards of
directors of Meridian Bancorp and East Boston Savings Bank during
2019. The
meeting fee for
East Boston Savings Bank is paid only
to
the two independent dire
ctors of
the Bank who are not
directors of
the Company.
Meridian Bancorp
|
|
|
Board meeting fee
|
|
$1,250
|
Meeting fee for Audit Committee member
|
|
$2,700
|
Meeting fee for Audit Committee chairman
|
|
$3,400
|
|
|
|
East Boston Savings Bank
|
|
|
Monthly fee for Executive Committee members
|
|
$4,300
|
Meeting fee for independent non-holding company members
|
|
$2,000
|
Compensation Committee Interlocks and Insider Participation
Our
Compensation Committee determines the salaries
to
be paid each year to
the Chief Executive Officer
and those executive officers who report
directly
to
the President and Chief Executive Officer.
The Compensation Committee consists
of
Directors Gambardella, who serves
as Chairman, Censullo and DiMaria. None of
these individuals was an officer
or
employee of
the Company during
the year ended December
31, 2018, or
is a former
officer
of
the Company. For
the year ended December
31, 2018, none of
the members of
the Compensation Committee had any relationship requiring
disclosure under “Transactions
with
Certain Related Persons.”
During
the year ended December
31, 2018, (i)
no executive officer
of
the Company served as a member of
the Compensation Committee (or
other
board committee performing
equivalent functions or,
in
the absence
of
any such committee, the entire Board of
Directors) of
another entity,
one of
whose executive officers served on the Compensation Committee of
the Company; (ii)
no executive officer
of the Company served as a director
of
another entity,
one of
whose executive officers served on the Compensation Committee of
the Company; and (iii)
no executive officer
of
the Company served as a member of
the Compensation Committee (or
other
board committee performing
equivalent functions or,
in
the absence
of
any such committee, the entire Board of
Directors) of
another entity,
one of
whose executive officers served as a director
of
the Company.
Section
16(a) Beneficial
Ownership Reporting Compliance
Section 16(a)
of
the Securities Exchange Act of
1934 requires the Company’s executive officers and directors, and persons who own more
than 10%
of
any registered class
of
the Company’s equity securities,
to
file
reports of
ownership and changes
in
ownership with
the Securities and Exchange Commission. Executive officers, directors and greater than 10%
stockholders are required
by regulation
to
furnish
the Company with
copies of
all Section 16(a)
reports they file.
Based
solely on the Company’s review of
copies of
the reports it
has received and written representations
provided
to
it
from
the individuals required
to
file
the reports, the Company believes that Director Domenic A. Gambardella filed one late Form 4 to report four sales of common stock totaling 15,000 shares, and Executive Vice President John Migliozzi filed two late Form 4s: one to report 903 vested shares of restricted stock withheld to pay for the tax liability and the second to report the transfer shares of common stock totaling 38,379 and 37,513 shares that may be acquired under stock options to his former spouse pursuant to a divorce settlement, and that each of
its other executive officers and directors has complied with
applicable reporting
requirements for transactions
in
Meridian Bancorp common stock during
the year ended December
31, 2018.
35
Transactions with
Certain
Related
Persons
The
aggregate amount of
loans by East Boston Savings Bank to
executive officers and directors, and their affiliates of
East Boston Savings Bank and the Company, was $61.4 million
at December
31, 2018. The
outstanding loans made to
the Company’s and East Boston Savings Bank’s directors and executive officers, and their affiliates, were made in
the ordinary
course of
business,
were made on substantially the same terms, including
interest rates and collateral, as those prevailing
at the time
for comparable loans with
persons not
related to
East Boston Savings Bank, and did
not
involve more
than the normal
risk of
collectability
or
present other
unfavorable features.
Pursuant to
Meridian Bancorp’s Audit
Committee Charter, the Audit
Committee periodically reviews, no less
frequently
than quarterly,
a summary of
Meridian Bancorp’s transactions
with
directors and executive officers of
Meridian Bancorp and with
firms
that employ directors, as well as any other
related person transactions,
for
the purpose of
recommending to the disinterested members of
the Board of
Directors that the transactions
are fair,
reasonable
and within Company policy and should be ratified
and approved. Also, in
accordance
with
banking regulations, the Board of
Directors reviews all loans made to
a director
or
executive officer
in
an amount that, when aggregated with
the amount of
all other
loans to
such person and his or
her related interests, exceed
the greater of
$25,000 or
5%
of
Meridian Bancorp’s capital and surplus (up
to
a maximum
of $500,000)
and such loan must be approved in
advance
by a majority
of
the disinterested members of the Board of
Directors. Additionally,
pursuant to
the Company’s Code of
Ethics and Business
Conduct, all executive officers and directors of
Meridian Bancorp must disclose
any existing or emerging conflicts of
interest to
the Chairman of
the Board and Chief Executive Officer
of
Meridian Bancorp. Such potential conflicts of
interest include, but
are not
limited
to,
the following: Meridian Bancorp conducting business
with
or
competing against an organization in which a family
member of
an executive officer
or
director
has an ownership or
employment interest and (ii)
the ownership of
more
than 1%
of
the outstanding securities
or
5%
of
total
assets
of
any business
entity
that does business
with
or
is in
competition
with
Meridian Bancorp.
Nominating/Corporate Governance Committee Procedures
General
It
is the policy of
the Nominating/Corporate
Governance
Committee of
the Board of
Directors of
the Company to
consider director
candidates
recommended by stockholders who appear to
be qualified
to
serve on the Company’s Board of
Directors. The
Nominating/Corporate
Governance Committee may choose
not
to
consider an unsolicited recommendation if
no vacancy
exists on the Board of
Directors and the Nominating/Corporate
Governance
Committee does not
perceive a need to increase
the size of
the Board of
Directors. To
avoid the unnecessary
use of
the Nominating/Corporate Governance
Committee’s resources,
the Nominating/Corporate
Governance
Committee will
consider only
those director
candidates
recommended in
accordance
with
the procedures set forth
below.
Diversity Considerations
In
identifying
candidates
for
Director,
the Nominating/Corporate
Governance
Committee and the Board of
Directors takes into
account (1)
the comments and recommendations of
Board members regarding
the qualifications and effectiveness
of
the existing Board of
Directors or
additional qualifications that may be required
when selecting new Board members, (2)
the requisite expertise and sufficiently
diverse backgrounds of
the Board of
Directors’ overall membership composition, (3)
the independence
of
outside Directors and other
possible conflicts of
interest of
existing and potential members of
the Board of
Directors and (4)
all other
factors it
considers
appropriate. The
Company does not
have a written
policy for
executing this responsibility because
it
believes
that the most appropriate process
will
depend on the circumstances
surrounding
each such decision.
36
Procedures
to be Followed by
Stockholders
To
submit
a recommendation of
a director
candidate to
the Nominating/Corporate
Governance Committee, a stockholder should submit
the following
information
in
writing
to
the main office
of
the Company, addressed
to
the Chairman of
the Nominating/Corporate
Governance
Committee, care of
the Corporate Secretary, 67 Prospect Street,
Peabody, Massachusetts
01960:
|
1.
|
The
name of
the person recommended as a director
candidate;
|
|
2.
|
All
information
relating
to
such person that is required
to
be disclosed
in
solicitations of proxies for
election of
directors pursuant to
Regulation 14A under the Securities Exchange Act of
1934;
|
|
3.
|
The
written
consent of
the person being recommended as a director
candidate to
being named in
the proxy
statement as a nominee and to
serving as a director
if
elected;
|
|
4.
|
As to
the stockholder making the recommendation, the name and address
of
such stockholder as they appear on the Company’s books; provided,
however, that if
the stockholder is not
a registered holder
of
the Company’s common stock, the stockholder should submit
his or
her name and address
along with
a current
written
statement from
the record holder
of
the shares
that reflects ownership of
the Company’s common stock; and
|
|
5.
|
A statement disclosing whether such stockholder is acting with
or
on behalf of
any other person and, if
applicable, the identity
of
such person.
|
In order for a director candidate to be considered for nomination at the Company’s annual meeting of stockholders, the recommendation must be received by the Nominating/Corporate Governance Committee by January 1 of the year in which the election is proposed.
Process for Identifying
and
Evaluating
Nominees
The
process
that the Nominating/Corporate
Governance
Committee follows to
identify
and evaluate individuals to
be nominated for
election to
the Board of
Directors is as follows:
Identification.
For
purposes of
identifying
nominees for
the Board of
Directors, the Nominating/Corporate
Governance
Committee relies on personal contacts
of
the committee members and other
members of
the Board of
Directors, as well as its knowledge of
members of
the communities served by East Boston Savings Bank. The
Nominating/Corporate
Governance
Committee will
also consider director
candidates
recommended by stockholders in
accordance
with
the policy and procedures set forth
above. The
Nominating/Corporate
Governance
Committee has not
previously used an independent search
firm
to
identify
nominees.
Evaluation.
In
evaluating potential nominees, the Nominating/Corporate
Governance Committee determines whether the candidate is eligible and qualified
for
service on the Board of Directors by evaluating the candidate under certain criteria,
which are described below. If
such individual
fulfills
these criteria,
the Nominating/Corporate
Governance
Committee will
conduct a check of
the individual’s
background and interview the candidate to
further
assess
the qualities of
the prospective nominee and the contributions
he or
she would make to
the Board of
Directors.
37
Qualifications
The
Nominating/Corporate
Governance
Committee has adopted a set of
criteria
that it
considers when it
selects
individuals to
be nominated for
election to
the Board of
Directors. A candidate must meet the eligibility
requirements set forth
in
the Company’s bylaws, which include an age restriction and a restriction
on service with
a financial institution. A candidate also must meet any qualification
requirements set forth
in
any Board or
committee governing
documents.
If
the candidate is deemed eligible for
election to
the Board of
Directors, the Nominating/ Corporate Governance
Committee will
then evaluate the following
criteria
in
selecting nominees:
|
•
|
financial, regulatory
and business
experience;
|
|
•
|
familiarity
with
and participation
in
the local community;
|
|
•
|
integrity,
honesty and reputation
in
connection with
upholding
a position
of
trust
with respect to
customers;
|
|
•
|
dedication to
the Company and its stockholders; and
|
The
Committee will
also consider any other
factors the Nominating/Corporate
Governance Committee deems relevant, including
age, diversity, size of
the Board of
Directors and regulatory disclosure obligations.
With respect to
nominating
an existing director
for
re-election to
the Board of
Directors, the Nominating/Corporate
Governance
Committee will
consider and review an existing director’s
board and committee attendance
and performance; length of
board service; experience,
skills and contributions
that the existing director
brings to
the board;
and independence.
Majority Voting Policy
The Board of Directors has adopted a majority voting policy (the “Policy”), which shall be utilized for the election of any director at any meeting of stockholders for uncontested elections and shall not be applicable for contested elections. For the purpose of the Policy, an “uncontested election” shall mean an election of directors where the only director nominees are those individuals recommended by the Board of Directors of the Company.
Pursuant to the Policy, any incumbent director nominee in an uncontested election who receives a greater number of votes “WITHHELD” than votes cast “FOR” at the stockholders meeting shall promptly tender his or her proposed resignation following certification of the stockholder vote.
The Nominating/Corporate Governance Committee will promptly consider the resignation and will recommend to the Board of Directors whether to accept the resignation or to take other action, including rejecting the resignation and addressing any apparent underlying causes of the failure of the director to obtain a majority of votes “FOR” such nominee. When considering the resignation and making its recommendation, the Nominating/Corporate Governance Committee will consider all factors deemed relevant by its members including, without limitation, the underlying reasons for the stockholder’s WITHHELD votes for the director (to the extent ascertainable), the length of service and qualifications of the director, the director’s contributions to the Company, whether the acceptance or rejection of the resignation will have any adverse effect on the Company’s compliance with any applicable law, rule, regulation or governing document, to determine whether the acceptance of the resignation is in the best interests of the Company and its stockholders.
38
The Board of Directors will act on the Nominating/Corporate Governance Committee’s recommendation no later than at its first regularly scheduled meeting following certification of the stockholder vo
te, but in any case, no later than 90 days following the certification of the stockholder vote.
If a majority of the members of the Nominating/Corporate Governance Committee are required to tender a resignation at the same election, then the other independent directors will appoint a special board committee amongst themselves solely for the purpose of considering the resignations and will recommend to the Board whether to accept, reject or take other action as to the resignations.
Submission of Business Proposals
and Stockholder
Nominations
The
Company must receive proposals that stockholders seek
to
include in
the proxy
statement for
the Company’s next annual meeting no later than December 12, 2019. If
next year’s annual meeting is held on a date more
than 30 calendar days from
May 15, 2020
, a stockholder proposal must be received by a reasonable
time
before the Company begins to
print
and mail
its proxy
solicitation for such annual meeting. Any stockholder proposals will
be subject to
the requirements of
the proxy
rules adopted by the Securities and Exchange Commission.
The
Company’s Bylaws
generally provides that any stockholder desiring to
make a proposal for new business
at a meeting of
stockholders or
to
nominate one or
more
candidates
for
election as directors must submit
written
notice filed
with
the Secretary of
the Company not
less
than 120 days nor more
than 150 days in
advance
of
the first
anniversary of
the date of
the Company’s proxy
statement for
the previous year’s annual meeting. For
the 2020 annual meeting of
stockholders, the notice would have to
be received between November 12, 2019 and December 12, 2019. If
next year’s annual meeting is held on a date more
than 30 calendar days from
May 15, 2020
, a stockholder’s notice must be received not
later than the close of
business
on the 10
th
calendar day following
the day
on which notice of
the date of
the scheduled
annual meeting is publicly
disclosed.
The
stockholder must also provide
certain information
in
the notice, as set forth
in
the Company’s Bylaws.
Failure
to
comply with these advance
notice requirements will
preclude such nominations or
new business
from
being considered at the meeting.
Nothing
in
this proxy
statement or
our
Bylaws
shall be deemed to
require
us to
include in
our proxy
statement and proxy
relating
to
an annual meeting any stockholder proposal that does not
meet all of
the requirements for
inclusion established
by the Securities and Exchange Commission in
effect at the time
such proposal is received.
39
Stockholder Communica
tions
The
Company encourages
stockholder communications to
the Board of
Directors and/or individual
directors. All
communications from
stockholders should be addressed
to
Meridian Bancorp, Inc., 67 Prospect Street,
Peabody, Massachusetts
01960. Communications to
the Board of Directors should be in
the care of
Edward J. Merritt,
Corporate Secretary. Communications to individual
directors should be sent to
such director
at the Company’s address.
Stockholders who wish to
communicate with
a Committee of
the Board should send their
communications to
the care of
the Chair of
the particular
committee, with
a copy to
Dominic A. Gambardella, the Chair of
the Nominating/Corporate
Governance
Committee. It
is in
the discretion of
the Nominating/Corporate Governance
Committee whether any communication sent to
the full
Board should be brought
before the full
Board.
Miscellaneous
The
Company will
pay the cost of
this proxy
solicitation. The
Company will
reimburse brokerage firms
and other
custodians,
nominees and fiduciaries for
reasonable
expenses
incurred
by them in
sending proxy
materials to the beneficial owners of the Company. Additionally, directors, officers and other employees of the Company may solicit proxies personally or by telephone without receiving additional compensation. The Company has retained Equiniti (US) Services LLC to assist the Company in soliciting proxies, and has agreed to pay Equiniti (US) Services LLC a fee of $6,000 plus out-of-pocket expenses and charges for telephone calls made and received in connection with the solicitation
.
The
Company’s Annual Report to
Stockholders has been included with
this proxy
statement. Any stockholder who has not
received a copy of
the Annual Report may obtain a copy by writing
to the Corporate Secretary of
the Company at 67 Prospect Street,
Peabody, Massachusetts
01960. The Annual Report is not
to
be treated as part
of
the proxy
solicitation material or
as having been incorporated by reference into
this proxy
statement.
A copy of
the
Company’s
Annual
Report on
Form
10-K,
without
exhibits,
for the
year ended December
31, 2018 as filed
with
the
Securities and
Exchange Commission,
will
be furnished without
charge to
persons who
were
stockholders as of
the
close of
business on
March 29, 2019 upon
written
request to
the
Company’s
Corporate Secretary
at
the
address listed
above.
If
you and others who share your
address
own your
shares
in
“street name,” your
broker
or other
holder
of
record may be sending only
one annual report
and proxy
statement to
your
address. This
practice, known as “householding,”
is designed to
reduce our
printing
and postage costs.
However, if
a stockholder residing at such an address
wishes
to
receive a separate
annual report
or proxy
statement in
the future,
he or
she should contact the broker
or
other
holder
of
record. If
you own your
shares
in
“street name” and are receiving multiple
copies of
our
annual report
and proxy statement, you can request householding by contacting your
broker
or
other
holder
of
record.
Whether or
not
you plan to
attend the annual meeting, please
vote by marking,
signing, dating and promptly
returning
the enclosed
proxy
card in
the enclosed
envelope.
40
Important Notice Regarding the Availability of Proxy Materials
The
Company’s Proxy
Statement, including
the Notice of
the Annual Meeting of
Stockholders, and the 2018 Annual Report to
Stockholders are each available on the internet
at
www.edocumentview.com/EBSB.
BY ORDER OF
THE
BOARD
OF
DIRECTORS
Edward J. Merritt
Corporate
Secretary
Peabody, Massachusetts
April 10, 2019
41
Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. Annual Meeting Proxy Card qIF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q A Proposals — THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS. 1. Election of Directors: 01 - Anna R. DiMaria 04 - Peter F. Scolaro 02 - Domenic A. Gambardella 03 - Thomas J. Gunning For Withhold For Withhold For Withhold 2. The ratification of the appointment of Wolf & Company, P.C. as independent registered public accounting firm of Meridian Bancorp, Inc. for the fiscal year ending December 31, 2019. 3. An advisory (non-binding) resolution to approve the Company’s executive compensation as described in the proxy statement. For Against Abstain For Against Abstain B Authorized Signatures — This section must be completed for your vote to count. Please date and sign below. Please sign exactly as name(s) appears hereon. Joint owners should each sign, but only one signature is required. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. 030TNB C 1234567890 J N T MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND 4 2 B V 4 1 4 9 6 3 ENDORSEMENT_LINE______________ SACKPACK_____________ DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 MR A SAMPLE 000000000.000000 ext C123456789 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext
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Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Stockholders. The material is available at: www.edocumentview.com/EBSB qIF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q REVOCABLE PROXY — MERIDIAN BANCORP, INC. ANNUAL MEETING OF STOCKHOLDERS MAY 15, 2019 11:00 A.M., LOCAL TIME THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned hereby appoints the members of the official proxy committee of Meridian Bancorp, Inc. (the “Company’’), or any of them, with full power of substitution in each, to act as proxy for the undersigned, and to vote all shares of common stock of the Company which the undersigned is entitled to vote only at the Annual Meeting of Stockholders to be held on May 15, 2019 at 11 :00 a.m., local time, at the Peabody, Massachusetts office of East Boston Savings Bank, 67 Prospect Street, Peabody, Massachusetts and at any and all adjournments thereof, with all of the powers the undersigned would possess if personally present at such meeting as follows: This proxy is revocable and will be voted as directed, but if no instructions are specified, this proxy, properly signed and dated, will be voted for proposals 1, 2 and 3. If any other business is presented at the Annual Meeting, including whether or not to adjourn the meeting, this proxy will be voted by the proxies in their judgement. At the present time, the Board of Directors knows of no other business to be presented at the Annual Meeting. This proxy also confers discretionary authority on the proxy committee of the Board of Directors to vote (1) with respect to the election of any person as director, where the nominees are unable to serve or for good cause will not serve and (2) mailers incident to the conduct of the meeting. PLEASE COMPLETE, DATE, SIGN, AND PROMPTLY MAIL THIS PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE C Non-Voting Items + + Change of Address — Please print new address below. Comments — Please print your comments below. Meeting Attendance Mark box to the right if you plan to attend the Annual Meeting.
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