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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrantý | ||
Filed by a Party other than the Registranto | ||
Check the appropriate box: | ||
o | Preliminary Proxy Statement | |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
ý | Definitive Proxy Statement | |
o | Definitive Additional Materials | |
o | Soliciting Material under §240.14a-12 |
BANKUNITED, 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): | ||||
ý | No fee required. | |||
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||
(1) | Title of each class of securities to which transaction applies: | |||
(2) | Aggregate number of securities to which transaction applies: | |||
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |||
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o | Fee paid previously with preliminary materials. | |||
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||
(1) | Amount Previously Paid: | |||
(2) | Form, Schedule or Registration Statement No.: | |||
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(4) | Date Filed: |
14817 Oak Lane
Miami Lakes, FL 33016
April 25, 201311, 2014
Dear Stockholder:
We cordially invite you to attend BankUnited, Inc.'s 2014 Annual Meeting of Stockholders. The meeting will be held on May 23, 2013,14, 2014, at 12:10:00 p.m.a.m., Eastern Time, at the HeritageOrion Jet Center, 345 Park15000 NW 44th Avenue, New York, NY 10154.Opa Locka, FL 33054.
Details regarding admission to the Annual Meeting and the business to be conducted at the Annual Meeting are described in the accompanying Notice of Annual Meeting of Stockholders and Proxy Statement.
Your vote is important. At the meeting, stockholders will vote on a number of important matters. Please take the time to carefully read each of the proposals described in the attached Proxy Statement.
Thank you for your support of BankUnited, Inc.
Sincerely, | ||
![]() John A. Kanas Chairman, President and Chief Executive Officer |
14817 Oak Lane
Miami Lakes, FL 33016
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Time and Date | ||
Place | The | |
Items of Business | Proposal No. 1:To elect | |
Proposal No. 2:To ratify the appointment of KPMG LLP as our independent registered public accounting firm for | ||
Proposal No. 3:To approve the BankUnited, Inc. | ||
To transact any other business as may properly come before the Annual Meeting and any adjournments or postponements thereof. | ||
Record Date | You are entitled to vote at the Annual Meeting and at any adjournments or postponements thereof if you were a stockholder of record at the close of business on | |
Voting | Your vote is very important. Whether or not you plan to attend the Annual Meeting, we encourage you to read the attached Proxy Statement and submit your proxy or voting instructions as soon as possible. You may vote by either marking, signing and returning the enclosed proxy card or using telephone or internet voting, if available. For specific instructions on voting, please refer to the instructions on your enclosed proxy card. | |
Internet Availability of Proxy Materials | Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be held on May |
By Order of the Board of Directors, | ||
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April | ||
Miami, Florida |
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING | 1 | |||||||
Q: | Why am I receiving these materials? | 1 | ||||||
Q: | How do I get electronic access to the proxy materials? | 1 | ||||||
Q: | What proposals will be voted on at the Annual Meeting? | 1 | ||||||
Q: | What is the Board of Directors' voting recommendation? | 2 | ||||||
Q: | Who is entitled to vote? | 2 | ||||||
Q: | What is the difference between holding shares as a stockholder of record and as a beneficial owner? | 2 | ||||||
Q: | How can I vote my shares in person at the Annual Meeting? | |||||||
Q: | What must I do if I want to attend the Annual Meeting in person? | 3 | ||||||
Q: | How can I vote my shares without attending the Annual Meeting? | 3 | ||||||
Q: | What is the quorum requirement for the Annual Meeting? | 3 | ||||||
Q: | What happens if I do not give specific voting instructions? | 3 | ||||||
Q: | Which proposals are considered "routine" or "non-routine"? | 4 | ||||||
Q: | What is the voting requirement to approve each of the proposals? | 4 | ||||||
Q: | What does it mean if I receive more than one proxy or voting instruction card? | 5 | ||||||
Q: | Who will count the vote? | 5 | ||||||
Q: | Can I revoke my proxy or change my vote? | 5 | ||||||
Q: | Who will bear the cost of soliciting votes for the Annual Meeting? | 5 | ||||||
Q: | I share an address with another stockholder, and we received only one paper copy of the proxy materials. How may I obtain an additional copy of the proxy materials? | 5 | ||||||
Q: | Is my vote confidential? | 6 | ||||||
Q: | How can I obtain a copy of BankUnited, Inc.'s Annual Report on Form 10-K? | 6 | ||||||
Q: | Where can I find the voting results of the Annual Meeting? | 6 | ||||||
PROPOSALS TO BE VOTED ON BY BANKUNITED, INC. STOCKHOLDERS | 7 | |||||||
PROPOSAL NO. 1 ELECTION OF DIRECTORS | 7 | |||||||
Directors Elected Annually | 7 | |||||||
Board Nominations | 7 | |||||||
Information Regarding the Nominees for Election to the Board of Directors | ||||||||
BOARD OF DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE | ||||||||
Role of Board of Directors | ||||||||
Director Independence | ||||||||
Board of Directors Meetings and Attendance | 13 | |||||||
Board Leadership Structure | 13 | |||||||
Committees of the Board of Directors | 14 | |||||||
Risk Management and Oversight | 16 | |||||||
Corporate Governance Guidelines, Code of Conduct and Code of Ethics | ||||||||
Director Compensation | 17 | |||||||
Director Nominating Process and Diversity | ||||||||
Communications with the Board of Directors | 20 | |||||||
Executive Sessions | 20 | |||||||
Outside Advisors | ||||||||
Attendance at Annual Meeting | ||||||||
Compensation Committee Interlocks and Insider Participation | ||||||||
Section 16(a) Beneficial Ownership Reporting Compliance | 21 | |||||||
Executive Officers | 21 | |||||||
PROPOSAL NO. 2 RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 23 | |||||||
Proposal | 23 | |||||||
Report of the Audit and Risk Committee | 23 |
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Fees Paid to KPMG LLP | 24 | |||||||
Policy on Audit and Risk Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors | 24 | |||||||
COMPENSATION DISCUSSION AND ANALYSIS | 25 | |||||||
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EQUITY COMPENSATION PLAN INFORMATION | ||||||||
PROPOSAL NO. 3 APPROVAL OF THE BANKUNITED, INC. | ||||||||
Summary of the Material Terms of the | ||||||||
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BENEFICIAL OWNERSHIP OF THE COMPANY'S COMMON STOCK | ||||||||
CERTAIN RELATED PARTY RELATIONSHIPS | ||||||||
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REQUIREMENTS, INCLUDING DEADLINES, FOR SUBMISSION OF PROXY PROPOSALS, NOMINATION OF DIRECTORS AND OTHER BUSINESS OF STOCKHOLDERS | ||||||||
Appendix | A-1 |
ii
14817 Oak Lane
Miami Lakes, FL 33016
PROXY STATEMENT
The Board of Directors (the "Board of Directors" or "Board") of BankUnited, Inc. (the "Company," "we," "us" or "our") is soliciting your proxy to vote at the 20132014 Annual Meeting of Stockholders to be held on Thursday,Wednesday, May 23, 2013,14, 2014, at 12:10:00 p.m.a.m., Eastern Time, and at any adjournment or postponement of that meeting (the "Annual Meeting"). The Annual Meeting will be held at The Heritagethe Orion Jet Center, 345 Park15000 NW 44th Avenue, New York, NY 10154.Opa Locka, FL 33054. This Proxy Statement and the accompanying proxy card, the Notice of Annual Meeting of Stockholders and the 20122013 Annual Report to Stockholders (the "Annual Report") were first mailed on or about April 25, 2013,11, 2014, to stockholders of record as of April 18, 2013March 17, 2014 (the "Record Date").
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS
AND THE ANNUAL MEETING
This Proxy Statement and the Company's Annual Report to Stockholders are available on our website at http://ir.bankunited.com. If you are a stockholder of record, you may elect to receive future annual reports or proxy statements electronically by registering your email address at www.proxyvote.com. If you hold your shares in street name, you should contact your broker, bank or other nominee for information regarding electronic delivery of proxy materials.
An election to receive proxy materials electronically will remain in effect for all future annual meetings unless revoked. Stockholders requesting electronic delivery may incur costs, such as telephone and internet access charges, that must be borne by the stockholder.
On the Record Date, BankUnited, Inc. had approximately 100,452,185101,665,512 shares of common stock issued and outstanding.
Stockholder of Record. If your shares are registered directly in your name with the Company's transfer agent, Registrar and Transfer Company, you are considered, with respect to those shares, the stockholder of record, and these proxy materials are being sent directly to you by the Company. As the stockholder of record, you have the right to grant your voting proxy directly to certain officers of BankUnited, Inc. or to vote in person at the Annual Meeting. The Company has enclosed or sent a proxy card for you to use. You may also vote on the internet or by telephone, as described below under the heading "How can I vote my shares without attending the Annual Meeting?"
Beneficial Owner. If your shares are held in an account by a broker, bank or other nominee, like many of our stockholders, you are considered the beneficial owner of shares held in street name, and these proxy materials were forwarded to you by that organization. As the beneficial owner, you have the right to direct your broker, bank or other nominee how to vote your shares, and you are also invited to attend the Annual Meeting.
Since a beneficial owner is not the stockholder of record, you may not vote your shares in person at the Annual Meeting unless you obtain a "legal proxy" from the broker, bank or other nominee that is the stockholder of record of your shares giving you the right to vote the shares at the Annual Meeting. If you do not wish to vote in person or you will not be attending the Annual Meeting, you may vote by proxy. You may vote by proxy over the internet or by telephone, as described below under the heading "How can I vote my shares without attending the Annual Meeting?"
Meeting, please bring proof of identification. Even if you plan to attend the Annual Meeting, the Company recommends that you vote your shares in advance as described below so that your vote will be counted if you later decide not to attend the Annual Meeting.
Beneficial Owner. Shares held in street name may be voted in person by you only if you obtain a signed proxy from the stockholder of record giving you the right to vote the shares.
If you vote on the internet or by telephone, you do not need to return your proxy card or voting instruction card. Internet and telephone voting for stockholders will be available 24 hours a day and will close at 11:59 p.m., Eastern Time, on May 22, 2013.13, 2014.
shares on a particular proposal, then the proxy holders will vote your shares in accordance with the recommendations of the Board of Directors on all matters presented in this Proxy Statement. With
respect to any other matters properly presented for a vote at the Annual Meeting, the proxy holders will vote your shares in accordance with their best judgment.
Beneficial Owners. If you are a beneficial owner of shares held in street name and do not provide the broker, bank or other nominee that holds your shares with specific voting instructions, under the rules of the New York Stock Exchange (the "NYSE"), the broker, bank or other nominee that holds your shares may generally vote on routine matters but cannot vote on non-routine matters such as the election of directors. If the broker, bank or other nominee that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, the broker, bank or other nominee that holds your shares will inform the inspector of election that it does not have the authority to vote on this matter with respect to your shares. This is generally referred to as a "broker non-vote." Therefore, we urge you to give voting instructions to your broker. Shares represented by such broker non-votes will be counted in determining whether there is a quorum. Because broker non-votes are not considered entitled to vote, they will have no effect on the outcome other than reducing the number of shares present in person or by proxy and entitled to vote from which a majority is calculated.
The election of directors (Proposal No. 1) and the vote to approve the BankUnited, Inc. Annual2014 Omnibus Equity Incentive Plan (Proposal No. 3) are matters considered non-routine under applicable rules. A broker, bank or other nominee cannot vote without instructions on non-routine matters, and therefore there may be broker non-votes on Proposal Nos. 1 and 3.
The ratification of the appointment of our independent registered public accounting firm requires the affirmative vote of a majority of the votes represented at the meeting and entitled to vote on the proposal. In accordance with Delaware law, only votes cast "for" a matter constitute affirmative votes. A properly executed proxy marked "abstain" with respect to the ratification of the appointment of our independent registered public accounting firm will not be voted, although it will be counted for purposes of determining whether there is a quorum. Since abstentions will not be votes cast "for" the ratification of the appointment of our independent registered public accounting firm, they will have the same effect as negative votes or votes against that matter.
The approval of the BankUnited, Inc. Annual2014 Omnibus Equity Incentive Plan requires the affirmative vote of a majority of the votes represented at the meeting and entitled to vote on the proposal. In accordance with Delaware law, only votes cast "for" a matter constitute affirmative votes. A properly executed proxy marked "abstain" with respect to the approval of the BankUnited, Inc. Annual2014 Omnibus Equity Incentive Plan will not be voted, although it will be counted for purposes of determining
whether there is a quorum. Since abstentions will not be votes cast "for" the approval
of the BankUnited, Inc. Annual2014 Omnibus Equity Incentive Plan, they will have the same effect as negative votes or votes against that matter. Broker non-votes will have no effect on this proposal.
Please note that your attendance at the Annual Meeting in person will not cause your previously granted proxy to be revoked unless you specifically so request. Shares held in street name may be voted in person by you at the Annual Meeting only if you obtain a signed proxy from the stockholder of record giving you the right to vote the shares.
or to receive a separate copy of our proxy materials in the future, stockholders may write or call the Company at the following address and telephone number:
BankUnited, Inc.
Attn: Investor Relations
14817 Oak Lane
Miami Lakes, FL 33016
(305) 231-6400
Stockholders who hold shares in street name (as described above) may contact their broker, bank or other nominee to request information about householding. Stockholders sharing an address can request delivery of a single copy of our proxy materials if they are currently receiving multiple copies by following the same procedures outlined above.
PROPOSALS TO BE VOTED ON BY BANKUNITED, INC. STOCKHOLDERS
Our Board of Directors is currently comprised of teneleven members. The size of the Board of Directors may be fixed from time to time exclusively by our Board of Directors as provided in our Certificate of Incorporation. BankUnited, Inc.'s directors are elected each year by the stockholders at the Company's annual meeting. We do not have a staggered or classified board. TenNine directors will be elected at this year's Annual Meeting. Except for MichaelTere Blanca, Rajinder P. Singh and A. Robert Towbin who were elected to the Board since the last annual meeting of stockholders and Douglas J. Dowling,Pauls and Dr. Sanjiv Sobti who is aare new director nominee recommended by a non-management director,nominees, all of the nominees were elected to the Board of Directors at the last annual meeting. Richard LeFrak isThe Nominating and Corporate Governance Committee considered multiple candidates for nomination to the Board. Mr. Pauls was recommended for nomination by John A. Kanas and Dr. Sobti was recommended by Mr. Singh. Chinh E. Chu, Wilbur L. Ross, Jr., P. Olivier Sarkozy and Lance N. West are not standing for reelection. Each director's term will last until the 20142015 annual meeting of stockholders and until such director's successor is duly elected and qualified, or until such director's earlier death, resignation or removal.
Directors of BankUnited, Inc. have historically also served as directors of its wholly-owned subsidiary BankUnited, N.A. (the "Bank"). To the extent Mr. Pauls, Dr. Sobti and Mr. Towbin are elected to serve on the Bank's board of directors, their service on the Bank's board will be subject to prior receipt of any applicable regulatory consents or non-objection.
SixTwo of our directors are nominated pursuant to a director nomination agreement, as amended and restated on February 29, 2012 (the "Director Nomination Agreement"), by and among the Company, John A. Kanas and certain funds affiliated with The Blackstone Group ("Blackstone"), The Carlyle Group ("Carlyle"), Centerbridge Partners, L.P. ("Centerbridge") and WL Ross & Co. LLC ("WL Ross"), whom we refer to as our Sponsors.other entities. The Director Nomination Agreement provides for the rights of our Sponsors and Mr. Kanas to nominate individuals to our Board of Directors. Pursuant to the agreement, the Sponsors and Mr. Kanas have the right to nominate individuals to our Board of Directors at each meeting of stockholders where directors are to be elected, and subject to limited exceptions, we will include in the slate of nominees recommended to our stockholders for election as directors the number of individuals designated by the Sponsors and Mr. Kanas as follows:
In addition, each of Blackstone, Carlyle, WL Ross and Centerbridge has the right to appoint one non-voting observer to attend all meetings of our Board of Directors until such time as such Sponsor ceases to own 5% of our outstanding common stock.
Blackstone's nomineefor election to our Board of Directors is Chinh E. Chu; Carlyle's nominee is P. Olivier Sarkozy; WL Ross' nominee is Wilbur L. Ross, Jr.; and, Centerbridge's nominee is Lance N. West.subject to limited exceptions, we will recommend to our stockholders the election of those individuals. Pursuant to the Director Nomination Agreement and Mr. Kanas' designation, we recommend that our stockholders elect Mr. Kanas has nominated himself and John Bohlsen.
Table of ContentsMr. Singh as directors at the Annual Meeting.
Board candidates are also selected based uponon various criteria including their character and reputation, relevant business experience and acumen and relevant educational background. The Nominating and Corporate Governance Committee and Board of Directors review these factors, including diversity, in considering candidates for Board membership. Board members are expected to prepare for, attend and participate in all Board of Directors and applicable committee meetings and the Company's annual meetings of stockholders.
Information Regarding the Nominees for Election to the Board of Directors
Qualifications
In considering candidates for the Board of Directors, the Nominating and Corporate Governance Committee takes into consideration the Company's Corporate Governance Guidelines and all other factors deemed appropriate by the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee's determination is made based primarily on the following criteria: (i) a candidate's special skills, expertise and background that would enhance or complement the mix of the existing directors, (ii) a candidate's reputation and prominence in his or her business, professional activities or community, including a well-known reputation for addressing important issues that the Company may face, (iii) a candidate's commitment to high ethical business
standards and integrity and (iv) a candidate's time commitment and willingness to fully participate in the Board's affairs and perform his or her duties to the highest standards. For more information about the nominating process, see "Board of Directors, Executive Officers and Corporate Governance—Director Nominating Process and Diversity."
Biographical Information
Set forth below is biographical information concerning each nominee who is standing for election at the Annual Meeting. Following the biographical information for each nominee is a description of such nominee's specific experience, qualifications, attributes and skills that the Nominating and Corporate Governance Committee and the Board of Directors considered in determining whether to recommend the nominee for election to the Board of Directors. In addition to the information presented below, the Company believes that a board comprised of its nominees constitutes a board with a reputation for integrity, strong business acumen and the exercise of sound judgment; a board that is strong in its collective knowledge and leadership abilities; and a board that has a diversity of viewpoints and backgrounds. The ages of the nominees are as of the date of the Annual Meeting, May 23, 2013.14, 2014.
John A. Kanas, 66,67, has served on our Board since its inception in May 2009. He has also servedand as our Chairman, President and CEO since our inception in May 2009. Mr. Kanas served as the Chairman of our Executive Committee up until the time the Committee was eliminated in February 2012 as part of the Company's conversion to a bank holding company. Prior to joining BankUnited, Inc., Mr. Kanas was President and CEO of North Fork Bancorporation, Inc. from 1977 until its acquisition by Capital One Financial Corporation in December 2006, at which time North Fork was one of the top 25 bank holding companies in the United States.2006. He also served as Chairman of North Fork from 1986 to 2006. In December 2006, he became President of Capital One's banking segment, which included North Fork, the former Hibernia Bank in Louisiana and Texas and Capital One Direct Bank in Richmond, Virginia. Mr. Kanas retired from that position in August 2007. Between August 2007 and May 2009, Mr. Kanas was an independent consultant. Mr. Kanas holds a B.A. degree from Long Island University. He is a past president of the New York State Bankers Association. Mr. Kanas was also a member of the NYSE Listed Company Advisory Committee and is currently a member of the board of trustees of Long Island University and Weill Cornell Medical College. In 2005, Mr. Kanas was recognized by "Institutional Investor" as the best regional bank CEO in America. In May 2007, Mr. Kanas received the Woodrow Wilson Award for Corporate Citizenship and was also conferred an Honorary Doctorate of Humane Letters from Dowling College. In 2012, Mr. Kanas was conferred an Honorary Doctorate of Sciences from Gordon College. Mr. Kanas' qualifications to serve on our Board include his 29-year36-year career at North Fork, his extensive experience in the banking industry and his long-standing relationships within the business, political and charitable communities.
John Bohlsen, 70, has served on our Board since its inception in May 2009. He is also our Vice Chairman and has served as Chief Lending Officer since May 2009. From December 2006 until August 2007, Mr. Bohlsen led the Commercial Banking division for Capital One's banking segment, which included North Fork, the former Hibernia Bank in Louisiana and Texas and Capital One Direct Bank in Richmond, Virginia. Mr. Bohlsen was a part of North Fork's management team when they were acquired by Capital One in December 2006. During his tenure at North Fork from January 1986 to December 2006, he served on the board of directors and became Vice Chairman in 1989. Mr. Bohlsen also served as Chairman of several bank management committees during that time. Between August 2007 and May 2009, Mr. Bohlsen was active in other business activities involving restaurants and other real estate endeavors. He is active in various outside businesses involving real estate and construction, and is president of a restaurant operating company doing business in the New York metropolitan area. Mr. Bohlsen has a B.S. and a M.B.A. from Michigan State University. In addition, he is a veteran of the U.S. Navy, having served as an officer during the Vietnam War. Mr. Bohlsen has served on many professional, academic and community boards and organizations, and he and his family are well known for their philanthropic endeavors. Mr. Bohlsen's qualifications to serve on our Board include his extensive experience in the banking industry and his previous experience serving as a director on the board of a public company.
Rajinder P. Olivier SarkozySingh, 43, has served on our Board since its inception inJuly 2013 and is currently our Chief Operating Officer, and one of the founding organizers of our Company. Mr. Singh has been our Chief Operating Officer since October 2010, and prior to that, he served as our Head of Mortgage Banking and Corporate Development since May 2009. Since MarchMr. Singh also served as Corporate Secretary of the Company from May 2009 to June 2013. From April 2008 to May 2009, Mr. Singh led the financial services practice of WL Ross & Co., a private equity firm and one of the original investors in the Company. From December 2006 through April 2008, Mr. Sarkozy hasSingh served as Executive Vice President for Capital One's banking segment which includes retail, small business and commercial banking businesses in New York, New Jersey, Connecticut, Louisiana and Texas and a national direct deposit gathering franchise. Mr. Singh was a member of Capital One's Bank Leadership Team and chaired the Deposit Pricing Committee. He also served on Capital One's ALCO and brand board. Previously, Mr. Singh served as Head of Corporate Development and Strategy for North Fork from February 2005 to December 2006. During his tenure, North Fork was acquired by Capital One for $13.2 billion. Prior to joining North Fork in February 2005, Mr. Singh spent nine years at FleetBoston Financial Corporation and last served as Managing Director of the Carlyle Group, or Carlyle, one of our principal investors,Corporate Development and head of the Carlyle Global Financial Services Partners fund, one of the Carlyle affiliated funds that has invested in us. From January 2003 until March 2008,Strategy. Mr. Sarkozy was Global Co-Head of the Financial Institutions Group at UBS Investment Bank. Prior to joining UBS, Mr. Sarkozy worked for 11 years at Credit Suisse First Boston, where he was the Managing Director in charge of the Depository Institutions Group. Mr. Sarkozy receivedSingh earned his Masters in Medieval History (with Honors)M.B.A. from St. AndrewsCarnegie Mellon University in Scotland. Mr. Sarkozy's qualifications to serve on our Board include his extensive experience working with depository institutionsPittsburgh and his expertiseB.S. in structuring bank mergers and acquisitions.
Wilbur L. Ross, Jr., 75, has served on our Board since its inception in May 2009. Mr. Ross ischemical engineering from the Chairman and Chief Executive Officer of WL Ross & Co. LLC, a private equity firm. Mr. Ross is currently a member of the board of directors of ArcelorMittal, a steel and mining company; Air Lease Corporation, an aircraft leasing company; Assured Guaranty Ltd., a holding company that provides credit protection products to the United States and international public finance, infrastructure and structured finance markets; The Governor and Company of the Bank of Ireland, a commercial bank operation in Ireland; Exco Resources Inc., a natural oil and gas company; International Textile Group, Inc., a global, diversified textile provider; Navigator Holdings Ltd., a provider of international seaborne transportation services; Ocwen Financial Corp, a mortgage servicing company; Talmer Bancorp, a bank holding company; and Plascar Participacoes SA, a manufacturer of automotive interiors. Mr. Ross formerly served as a member of the board of directors of International Coal Group from April 2005 to June 2011; Montpelier Re Holdings Ltd., a reinsurance company, from 2006 to March 2010; The Greenbrier Companies, a supplier of transportation equipment and services to the railroad industry, from June 2009 until January 2013; and Syms Corp., a retail store operator, from 2000 through 2007. Mr. Ross was Executive Managing Director of Rothschild Inc. for 24 years before acquiring that firm's private equity partnerships in 2000. Mr. Ross holds an A.B. from Yale University and an M.B.A., with distinction, from Harvard University. Through the course of Mr. Ross' career, he has served as a principal financial adviser to, investor in and director of various companies across the globe operating in diverse industries, and he has assisted in restructuring more than $300 billion of corporate liabilities. Mr. Ross' qualifications to serve on our Board include his keen business acumen as well as his significant experience in finance and knowledge of the capital markets that provides the Board of Directors with invaluable transactional and financial assistance and insight.Indian
Chinh E. Chu, 46, has served on our Board since its inceptionInstitute of Technology in May 2009. He is a Senior Managing Director in the Blackstone Private Equity Group, or Blackstone, one of our principal investors. Since joining Blackstone in 1990,New Delhi. Mr. Chu has led Blackstone's investments in Alliant, Biomet, Catalent Pharma Solutions, Celanese, Nalco, Nycomed and LIFFE, ReAble Therapeutics as well as ReAble Therapeutics' acquisition of DJ Orthopedics, Stiefel Laboratories and SunGard Data Systems. Mr. Chu is currently a director of Alliant, Catalent Pharma Solutions and Freescale Semiconductor, Inc. and previously served on the boards of directors of Celanese Corporation, Graham Packaging Company Inc. and LIFFE. Before joining Blackstone, Mr. Chu worked at Salomon Brothers in the Mergers and Acquisitions Department. Mr. Chu received a B.S. in Finance from the University of Buffalo. Mr. Chu'sSingh's qualifications to serve on our Board include his significant experience overseeing the business of Blackstone's numerous portfolio companies, including significant public companybanking experience and his significant financial, investmentunderstanding of regulatory and strategic business planning experience.corporate governance matters.
Lance N. WestTere Blanca, 52,53, has served on our Board since its inception in May 2009. Since May 2006, Mr. West has been a PartnerSeptember 2013. Ms. Blanca is the founder, President and Senior Managing DirectorChief Executive Officer of Centerbridge Partners LP, or Centerbridge, a multi-strategy, private investment management company and one of our principal investors. From January 1999 until May 2006, Mr. West was a Partner and Managing Director at Goldman, Sachs & Co., where he was head of the firm's Principal Finance Group, a proprietary investment platform focusing on a variety of private and public equity and debt investments in the Americas, with a particular emphasis on real estate and financial institutions. Mr. West was a member of Goldman's Asian Special Situations Group and was a member of the Investment Committees for Goldman's American Special Situations and Specialty Lending Groups. From January 1992 until January 1999, Mr. West served as Chairman and CEO of Greenthal Realty Partners LP and GRP Financial in New York, which Mr. West founded as a Resolution Trust Company Standard Asset Management and Disposition Asset Manager providing real estate asset management, special servicing and distressed debt investment management. Prior to founding GRP, Mr. West was an executive vice president with The Charles H. Greenthal Group,Blanca Commercial Real Estate, Inc., a leading Miami-based commercial property real estate asset managementadvisory services and investment company, and a memberbrokerage firm. Ms. Blanca has more than 25 years of experience in the technical staff at AT&T Bell Laboratories from 1982South Florida real estate sector. Prior to 1984. Mr. West earned his M.S.launching Blanca Commercial Real Estate in Electrical Engineering fromMarch 2009, she served as senior managing director for Cushman & Wakefield of Florida, Inc., where she led the California Institute of Technology in 1983 and graduated magna cum laude with a B.S. in Electrical Engineering from Tufts University in 1982. Mr. Westfirm's South Florida operations. Ms. Blanca is a memberpast chair of the board of overseers of Tufts University, a member of the Chair'sThe Beacon Council, for the Humanities and Social Sciences division at the California Institute of Technology, a memberchair of the board of directors of the Metropolitan Council on Jewish Poverty andCity Year Miami, a member of the Economic StudiesUniversity of Miami's President's Council, School of Business Real Estate Advisory Board, and Alumni Association Board, a member of Strategic Forum and the World Presidents' Organization Miami-Ft. Lauderdale Chapter, and an associate member of the Brookings Institution. Mr. West serves onYoung Presidents' Organization. She also is a member of Commercial Real Estate Women, a member of the boardsNational Association of directorsIndustrial and Office Properties South Florida Chapter and a trustee member of Aktua Soluciones Financieras, S.L., GTH, LLC, Intrepid Aviation Holdings, LLCthe Greater Miami Chamber of Commerce. Ms. Blanca has earned several honors, including being named among the 2013 "Top 25 Women in Real Estate" by Commercial Property Executive, 2013 "Women of Influence: Legends" and Resort Finance America, LLC. Mr. West's2010 "Women of Influence" by Real Estate Forum, 2010 "Top Dealmakers of the Year" by the Daily Business Review, 2009 "Most Influential Business Women" by the South Florida Business Journal, 2008 Camacol's "Successful Hispanic Women of the Year" and 2007 "Ultimate CEOs" by the South Florida Business Journal. Ms. Blanca earned a B.B.A. with a concentration in international marketing and finance and a M.B.A. from the University of Miami. Ms. Blanca's qualifications to serve on our Board include his extensive financialher leadership and investmentmanagement experience as well as his real estate experience.her relationships in the business community.
Sue M. Cobb,Ambassador of the United States, ret., 75,76, has served on our Board since January 2010. Since February 2007, Ambassador Cobb has been engaged in private sector business activities with Cobb Partners, Inc., a privately held Florida-based investment firm. From September 2001 to February 2005, she served as the United States Ambassador to Jamaica. Ambassador Cobb was Secretary of State of Florida from December 2005 to January 2007. From 2002 to 2008, Ambassador Cobb was engaged at the U.S. Department of State's Leadership and Management School as co-chair of periodic mandatory seminars for newly designated U.S. ambassadors. Ambassador Cobb served seven years on the board, and three as chair of the board of the Federal Reserve Bank, Miami Branch. She was the founding partner of the Public Finance Department of the Greenberg Traurig law firm where she practiced as a public finance attorney. She currently sits on the board of directors of the Durango Mountain Resort and Kirkwood Associates Inc., both private resort development companies. Ambassador Cobb is President Emeritus of the American Friends of Jamaica, a New York-based charitable institution, and President of Miami-based Cobb Family Foundation. She is Trustee of the Center for Strategic and International Studies, an active member of The Council of American Ambassadors and an active member of the Council on
Foreign Relations. Ambassador Cobb has also been an officer and director of many civic and charitable organizations and has received numerous awards including national honors from the nations of Jamaica and Iceland. Previously, she has been the University of Miami Alumnus of the year, the Red Cross Humanitarian of the Year and the Silver Medallion Awardee from the National Conference of Christians and Jews for contributions to civic causes and humanity. Ambassador Cobb received a B.A. from Stanford University and a J.D. from the University of Miami School of Law. Ambassador Cobb's qualifications to serve on our Board include her broad and diverse background in leadership and management, including experience with public companies such as the Audit Committee Chair (1999 - 2000) of the LNR Property Corporation, a then public real estate investment, finance and management company.
Eugene F. DeMark, 65,66, has served on our Board since September 2010. From June 1969 until his retirement in October 2009, Mr. DeMark worked for KPMG LLP, a global professional services firm. Mr. DeMark served as the Advisory Northeast Area Managing Partner at KPMG LLP from October 2005 until his retirement. Since his retirement, Mr. DeMark has been an independent consultant. StartingFrom
January 2010 until he joined our Board in JanuarySeptember 2010, Mr. DeMark has advised our Audit and Compensation Committees. In January 2012, Mr. DeMark joined the board of directors and audit committee of 1-800-FLOWERS.COM, Inc. a national floral and thoughtful gifting company. In December 2013 Mr. DeMark became chairman of its audit committee. Between 1988 and 2001, Mr. DeMark had been the Northeast Area Managing Partner of the Information, Communications and Entertainment Practice and the Managing Partner of KPMG's Long Island Office Managing Partner.Office. During his career at KPMG, Mr. DeMark had responsibilities to lead a number of specialized practices in Banking, High Technology, Media and Entertainment and Aerospace and Defense. He joined KPMG in 1969 and was elected to its partnership in 1979. On special assignments, he worked on the research staff of the Commission on Auditor's Responsibilities, the predecessor to the Treadway Commission, formed to assess increases in fraudulent financial reporting. Mr. DeMark also developed the firm's first study guide on SEC reporting. Mr. DeMark holds a B.B.A. degree from Hofstra University, is a Certified Public Accountant and is a member of the American Institute of Certified Public Accountants (AICPA) and the New York State Society of Certified Public Accountants. Mr. DeMark has served as Chairman of the Long Island Chapter of the National Multiple Sclerosis Society, President of the Nassau County council of the Boy Scouts of America and Northeast Regional board member of the of the National organization, President of the Nassau Chapter of the National Association of Accountants, Treasurer of the New Long Island Partnership and Chairman of the Economic Development Task Force—Project Long Island. Mr. DeMark also was active in the United Way on Long Island and in New York, served on its board of directors and chaired the nominating committee. Mr. DeMark's qualifications to serve on our Board include his 40 years of financial experience at KPMG LLP, including 35 years in various positions in the firm's audit practice.
Thomas M. O'Brien, 62, has served on our Board since May 2012. Mr. O'Brien is a 34-year banking veteran and most recently served as President and CEO of State Bank of Long Island/State Bancorp, Inc. from November 2006 to January 2012. From 2000 to 2006 Mr. O'Brien was President and CEO of Atlantic Bank of NY and, following the acquisition of Atlantic Bank of NY by New York Commercial Bank, served as President and CEO during post-closing transition. From 1996 to 2000, Mr. O'Brien was Vice Chairman and a board member of North Fork Bank and North Fork Bancorporation, Inc. From 1977 to 1996, Mr. O'Brien was Chairman, President and CEO of North Side Savings Bank. Mr. O'Brien served as a director of the Federal Home Loan Bank of New York from 2008 to 2012 and served as Chairman of NY Bankers Association. Mr. O'Brien is currently Trustee and Chairman of the Audit Committee of Prudential Insurance Company of America Mutual Fund Complex, Vice-Chairman of the board and Chairman of the Finance Committee of Catholic Healthcare System and Catholic Healthcare Foundation and advisor and board member of Flax Trust, Belfast, Northern Ireland. Mr. O'Brien is the immediate Past-President of the Society of the Friendly Sons of Saint Patrick in the City of New York, and is founder and sole benefactor of Galway Bay Foundation, Inc. Mr. O'Brien received a B.A. in Political Science from Niagara University in 1972 and an M.B.A from Iona College in 1982. Mr. O'Brien's qualifications to serve on our Board include his
34 years of banking experience and his deep understanding of financial statements, regulation, compliance and corporate governance.
Michael J. Dowling, 64, has served on our Board since May 2013. Mr. Dowling is the President and Chief Executive Officer of the North Shore-LIJ Health System, the largest integrated healthcare system in New York State and the nation's third-largest, non-profit secular health system with more than 6,000 beds and a total workforce of more than 46,000 employees. Prior to becoming President and CEO in 2002, Mr. Dowling was the health system's Executive Vice President and Chief Operating Officer. Before joining North Shore-LIJ in 1995, he was a senior vice president at Empire Blue Cross/Blue Shield. Mr. Dowling served in New York State government for 12 years, including seven years as State Director of Health, Education and Human Services and Deputy Secretary to the Governor. He was also Commissioner of the New York State Department of Social Services. Before his public service career, Mr. Dowling was a professor of Social Policy and Assistant Dean at the Fordham University Graduate School of Social Services and Director of the Fordham Campus in Westchester County. Mr. Dowling is a member of the Institute of Medicine of the National Academies and Chairman of the North American Board of the Smurfit School of Business at University College, Dublin, Ireland. He also serves as a board member of the Institute for Healthcare Improvement (IHI) and board member and Fellow of the New York Academy of Medicine. He is also past Chairman and current board member of the National Center for Healthcare Leadership (NCHL), the Greater New York Hospital Association (GNYHA), the Healthcare Association of New York State (HANYS) and the League of Voluntary Hospitals of New York. Mr. Dowling grew up in Limerick, Ireland and earned his undergraduate degree from University College Cork (UCC). He has a Master's Degreemaster's degree from Fordham University and honorary doctorates from Hofstra University and Dowling College. Mr. Dowling's qualifications to serve on our Board include his extensive background in leadership and management as well as his relationships within the business, political and charitable communities.
Douglas J. Pauls, 55, served as our Chief Financial Officer from September 2009 to February 2013. From March 2013 to December 2013, Mr. Pauls served as a senior advisor to the Company. In December 2013, Mr. Pauls joined the board of directors, risk committee and audit committee of Essent Group Ltd., and serves as chairman of the audit committee of Essent Group. Between March 2009 and August 2009, Mr. Pauls was self-employed as a consultant. From April 2008 until February 2009, Mr. Pauls served as Executive Vice President of Finance for TD Bank, NA following TD Bank's
acquisition of Commerce Bancorp, Inc. in March 2008. Mr. Pauls served as Chief Financial Officer of Commerce Bancorp from March 2002 until the acquisition by TD Bank in March 2008. Mr. Pauls was a member of the three person Office of the Chairman, responsible for overall management, policy making and strategic direction of Commerce Bancorp. From October 1995 to March 2002, Mr. Pauls served as the Chief Accounting Officer of Commerce Bancorp, its Senior Vice President from January 1999 to April 2006 and its Executive Vice President from April 2006 to April 2008. Earlier in his career, Mr. Pauls was a Senior Manager in the Audit Department of Ernst & Young in Philadelphia and Pittsburgh, Pennsylvania. Mr. Pauls received a B.A. in Economics magna cum laude from Dickinson College. Mr. Pauls currently serves on the board of trustees of Dickinson College and as a Member of the Committee on Finance, Budget and Audit, as well as the Campaign Steering Committee. Mr. Pauls' qualifications to serve on our Board include his extensive banking experience, including his previous service as our Chief Financial Officer, and his deep understanding of financial statements, regulation, compliance and corporate governance.
A. Robert Towbin, 78, has served on our Board since April 2014. Mr. Towbin has served as Executive Vice President of Stephens, Inc. since 2003 and as Managing Director from October 2001 until 2003. Mr. Towbin served as a member of the board of directors of Globecomm Systems Inc. from 1997 until December 2013. From January 2000 to November 2001, he was Co-Chairman of C.E. Unterberg, Towbin, and from 1995 to 1999 was Senior Managing Director of that firm. From January 1994 to September 1995, Mr. Towbin was President and CEO of the Russian-American Enterprise Fund, a U.S. government-owned investment company with headquarters in Moscow and New York, and offices in Khabarovsk in the Russian far east. He was later Vice Chairman of its successor fund, The U.S. Russia Investment Fund. From January 1987 until January 1994, Mr. Towbin was co-head of Technology Investment Banking of Lehman Brothers, and from 1959 to 1987 was Vice Chairman and a Director of L.F. Rothschild, Unterberg, Towbin Holdings Inc. and its predecessor companies. Mr. Towbin received his B.A. from Dartmouth College in 1957. Mr. Towbin's qualifications to serve on our board include his extensive background in leadership and management as well as his public company and financial experience.
Sanjiv Sobti, Ph.D., 52, has served at several preeminent Wall Street firms during a career spanning more than 25 years. Since 2007 Dr. Sobti has had an independent consulting business and has served as a senior advisor to Credit Suisse since 2008. In 2006 he co-founded FIRE Capital Fund Management Mauritius Private Limited, the manager for a private equity fund, and served as the Chairman of its Board of Directors until 2011. He continues to serve on the Board of Directors of several investee companies of FIRE Capital Fund. From 2001 through 2008, Dr. Sobti was a Senior Managing Director of Bear, Stearns & Co. Inc. where he was appointed to the President's Advisory Council and Fairness Opinion Committee. From 1999 to 2001, Dr. Sobti was a Managing Director at J.P. Morgan & Co. where he was recruited as head of Mergers and Acquisitions for Financial Institutions. Previously Dr. Sobti was with Lehman Brothers Inc. from 1989 to 1999 culminating in his serving as Managing Director and co-head of Mergers and Acquisitions for Financial Institutions. Earlier Dr. Sobti worked at Goldman, Sachs & Co. from 1986 through 1989. Dr. Sobti is co-Chair of the International Advisory Board of the University of Pennsylvania's Center for the Advanced Study of India. Dr. Sobti holds a B.A. from St. Stephen's College, University of Delhi, and an M.B.A. and Ph.D. in Finance from The Wharton School, University of Pennsylvania. Dr. Sobti's qualifications to serve on our Board include over 25 years of experience in serving as a corporate finance and mergers specialist advising the financial services industry, expertise in valuation analyses and capital markets transactions, experience in analyzing and evaluating various financial services businesses, and knowledge of complex financial instruments including asset-backed securities and derivatives.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
"FOR" THE ELECTION OF THE FOREGOING TENNINE NOMINEES
TO THE BOARD OF DIRECTORS.
BOARD OF DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The Company's business and affairs are managed under the direction of the Board of Directors, which is the Company's ultimate decision-making body, except with respect to those matters reserved to the Company's stockholders. The Board of Directors' mission is to maximize long-term stockholder value. The Board of Directors establishes the Company's overall corporate policies, evaluates the Company's CEO and the senior leadership team and acts as an advisor and counselor to senior management. The Board of Directors also oversees the Company's business strategy and planning, as well as the performance of management in executing the Company's business strategy, assessing and managing risks and managing the Company's day-to-day operations.
Under the NYSE listing standards, in order to consider a director independent, the Board of Directors must affirmatively determine that he or she has no material relationship with BankUnited, Inc.the Company. The standards specify the criteria for determining whether directors are independent and contain guidelines for directors and their immediate family members with respect to employment or affiliation with BankUnited, Inc.the Company or its independent registered public accounting firm. In addition to the NYSE's standards for independence, theThe Board of Directors also has adopted additional independence standards to assist it in making independence determinations. The Company's Director Independence Standards contain the formal director qualification and independence standards adopted by the Board of Directors, and are available as part of the Company's Corporate Governance Guidelines on the Company's Web sitewebsite at http://ir.bankunited.com.
The Board of Directors determines annually whether a director is independent at the time the Board of Directors approves director nominations for inclusion in the Company's proxy statement and when a director joins the Board of Directors between annual meetings. Although the determination of whether a director is independent relies on the Board's subjective assessment of all of the relevant facts and circumstances, the Company's Director Independence Standards provide that a director will not qualify as independent if:
The Board undertook its annual review of director independence in April 2013.2014. As a result of this review, the Board affirmatively determined that all of the directors and nominees are independent of the Company and its management under the corporate governance standards of the NYSE, with the exception of John A. Kanas, Rajinder P. Singh and John Bohlsen. EachDouglas J. Pauls. Messrs. Kanas and Singh are considered not independent because of their employment as senior executives of the Company. Mr. Pauls is considered not independent because of his previous employment as a senior executive of the Company and certain relationships with the Company.
In April 2013,making the Board affirmatively determineddetermination that Mr. DowlingDr. Sobti is independent of the Company and its management, under the corporate governance standardsBoard of Directors considered that Dr. Sobti is a senior advisor to Credit Suisse, which is a full-service financial institution that, with its affiliates, has directly and indirectly engaged, and may in the NYSE.future engage, in financial advisory, investment banking and commercial banking services for us and our affiliates, for which it received, or may receive, customary compensation, fees and expense reimbursement. The Board considered that Dr. Sobti is not an employee of Credit Suisse and also has had an independent consulting business since 2007.
Board of Directors Meetings and Attendance
The Board of Directors held 1113 meetings during 20122013 and acted by written consent fivesix times. All of the directors with the exception of Ms. Blanca attended at least 75% of the total of all the meetings of the Board of Directors and Board committees on which they served during 2012.2013. Ms. Blanca joined the Board in September 2013 and was not able to attend one meeting due to a business commitment made prior to joining the Board.
The Board of Directors regularly reviews and assesses the effectiveness of the Company's leadership structure in the context of the Company's specific circumstances, culture, strategic objectives and challenges.
The Board of Directors does not have a fixed policy regarding the separation of the offices of Chairman and CEO because it believes that it should maintain flexibility to select the Chairman and determine the Board leadership structure, from time to time, based on criteria that it deems to be in the best interests of the Company and its stockholders. Currently, the Board of Directors believes that having a combined Chairman/Chairman and CEO, along with a Lead Independent Director and a substantial majority of independent directors, and independent key board committees provides anthe most effective and appropriate leadership structure for the Company.
The Company's Corporate Governance Guidelines provide that In particular, the Board of Directors will select its Chairman and the Company's CEO in the manner it considers in the best interests of the Company at any given point in time. At this time, the Board of Directors combines the role of Chairman of the Board of Directors and the Company's CEO. The Board of Directors believes that combining the roles of Chairman and CEO roles fosters unified leadership and direction for the Board of Directors and executive management and allows for alignment and clear accountability in the development and execution of the Company's strategic initiatives and business plans. Based on Mr. Kanas isKanas' extensive experience in the director most familiarbanking industry, including serving as our CEO since May 2009, and his familiarity with the Company's business and industry, and by serving in these dual capacities, he is best
situated to effectively identify strategic priorities and lead discussions on key business issues that impact all of the Company's stakeholders. The Board of Directors also considered Mr. Kanas' prior history and performance in serving in these dual capacities and believes that Mr. Kanas is best suited to serve as our Chairman and CEO. Mr. Kanas' historical performance as our Chairman and CEO has provided effective leadership and guidancedemonstrated his ability to effectively lead the Company in the pursuit of its strategic objectives.
Although the Company's strategic objectives during his tenureBoard of Directors believes that, at this time, it is more effective to have one person serve as the Company's Chairman and CEO.
The Company'sCEO, the Board also believes that independent, objective oversight of management's performance is a critical aspect of effective Board leadership. Accordingly, the Board of Directors has appointed Mr. DeMark to serve as our Lead Independent Director. Mr. DeMark, who has served as Lead Independent Director is appointedsince November 2012, provides an independent voice on important issues facing the Company and ensures that those issues are fully considered by the Board of Directors. The currentIn his role as Lead Independent Director, is Mr. DeMark, and he has served in this position since November 2012. The Lead Independent Director's role andDeMark's duties include, but are not limited to:to, presiding over regularly scheduled executive sessions of the non-management directors, serving as a liaison between the non-management directors and executive management and assisting the Board of Directors and executive management to ensure compliance with the Company's Corporate Governance Guidelines.
Further enhancing the overallIn addition, our Corporate Governance Guidelines provide for additional independent functioningoversight of our operations, risks, business strategy and compensation practices. Consistent with our Corporate Governance Guidelines, the Board of Directors is the fact that the Boardcurrently consists of Directors is comprised of over a two-thirdssubstantial majority of independent directors. TheOur Corporate Governance Guidelines also require that the non-management directors meet regularly in executive session without the presence of management, which provides an opportunity for the independent directors also reviewto freely express their views on important issues. In addition, the independent directors regularly evaluate Mr. Kanas' performance in his dual capacities of Chairman and CEO. In addition, the Company's governance structure is strengthened by virtue of each of its Nominating and Corporate Governance, Compensation and Audit and Risk committees consisting entirely of independent directors. These committees provide additional independent oversight of management.
Through the Company's overall governance structure described above, the Board of Directors believes it has effectively balanced the need for strategic leadership by the Company's Chairman and CEO with the oversight and objectivity of the independent directors and has created an effective and appropriate leadership structure that is conducive to the risk oversight process. The Board of Directors recognizes that, depending on the circumstances, other leadership structures might be appropriate and in the best interests of the Company. Accordingly, the Board of Directors has the discretion to modify itsthe Company's leadership structure in the future if it deems itbelieves doing so would be in the best interests of the Company to do so.Company.
Committees of the Board of Directors
The Board of Directors maintains three standing committees: the Audit and Risk Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. A description of each Board committee is set forth below.
The Audit and Risk Committee, the Compensation Committee and the Nominating and Corporate Governance Committee operate under a written charter. Copies of the charters of the Audit and Risk Committee, Compensation Committee and Nominating and Corporate Governance Committee are available on our website at http://ir.bankunited.com and may also be obtained upon request without charge by writing to the Corporate Secretary, BankUnited, Inc., 14817 Oak Lane, Miami Lakes, FL 33016.
Audit and Risk Committee
The Audit and Risk Committee was formerly referred to as the "Audit Committee" until its name was changed and its risk oversight functions were expanded in February 2013. The former Audit and Risk Committee held 10ten meetings during 2013. At each of its in 2012.person meetings, the Audit and Risk Committee meets privately in separate executive sessions with the Bank's Chief Internal Auditor, the Chief Risk Officer and our independent registered public accounting firm. The Audit and Risk Committee may also meet separately with other members of management in executive sessions as needed.
The Audit and Risk Committee is a separately-designated standing Audit and Risk Committeeaudit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Our Audit and Risk Committee assists our Board of Directors in its oversight of (i) the integrity of our financial statements and the financial reporting process, including the system of disclosure controls; (ii) our compliance with legal and regulatory requirements; (iii) the performance of our internal audit function and our independent registered public accounting firm, including its appointment, qualifications, compensation and independence; (iv) the effectiveness of our systems of internal controls and policies and procedures for risk assessment and risk management; and (v) the effectiveness our procedures for risk assessment and risk management of material credit, interest rate, liquidity, operational, legal and compliance, and other material risks, and the adequacy of capital available to absorb such risks.
In carrying out its oversight role, the Audit and Risk Committee, among other things: (i) reviews the audit plans and findings of our independent registered public accounting firm and our internal
audit team,department, as well as the results of regulatory examinations, and tracks management's corrective action plans where necessary; (ii) reviews our financial statements, including any significant financial items and changes in accounting policies, with our senior management and independent registered public accounting firm; (iii) reviews our financial risk and control procedures, compliance programs and significant tax, legal and regulatory matters; and (iv) reviews our policies and practices with respect to the assessment and management of material categories of risk. In addition, the Audit and Risk Committee has the sole discretion to appoint annually our independent registered public accounting firm, evaluate its independence and performance and set clear hiring policies for employees or former employees of the independent registered public accounting firm.
The current members of the Audit and Risk Committee are Messrs. DeMark (Chairman) and O'BrienTowbin and Ambassador Cobb, each of whom the Board of Directors has determined qualifies as an "independent" director as defined under the applicable rules and regulations of the SEC and the NYSE. Mr. LeFrak resigned from the committee on May 9, 2012 and Mr. O'Brien joined the committee as of the same date. All of the members of the Audit and Risk Committee are financially literate and have accounting or related financial management expertise within the meaning of the NYSE rules. The Board also has determined that Mr. DeMark qualifies as an "audit committee financial expert" as defined by SEC rules. Mr. DeMark's relevant experience includes 40 years with KPMG LLP, including 30 years as a partner. Mr. Demark holds a B.B.A. degree from Hofstra University, is a Certified Public Accountant and is a member of the American Institute of Certified Public Accountants (AICPA) and the New York State Society of Certified Public Accountants.
Thomas M. O'Brien was a member of the Board of Directors and served as a member of the Audit and Risk Committee until April 2, 2014. On that date, he resigned effective immediately from the Board after agreeing to become the president and chief executive officer of Sun Bancorp, Inc. and Sun National Bank.
Compensation Committee
Since our inception, in accordance with the terms of its charter, our Compensation Committee has been responsible for such matters as the determination of discretionary bonus amounts, if any, to be paid to our named executive officers and the implementation of the BankUnited, Inc. 2009 Stock Option Plan and the 2010 Omnibus Equity Incentive Plan and, if approved by stockholders, the 2014 Omnibus Equity Incentive Plan, including the determination of grant amounts, vesting terms and exercise prices, as well as approval of the Employment Agreements (as defined in "Compensation Discussion and Analysis") and the BankUnited, Inc. Annual Incentive Plan (the "Annual Incentive Plan"). In addition, ourthe Compensation Committee was responsible for vetting and approving our 401(k) plan and Nonqualified Deferred Compensation Plan. The Compensation Committee reviews and approves corporate goals and objectives relevant to compensation of our CEO and other executive officers, evaluates the performance of these officers in light of those goals and objectives and recommends the compensation of these officers based on such evaluations. The Compensation Committee also administers the issuance of stock options and other awards under our stock plans.
In July 2012, our Compensation Committee engaged Pearl Meyer & Partners ("Pearl Meyer"), to serve as its independent compensation consultant. More information on the engagement and independence of Pearl Meyer appears in "Compensation Discussion and Analysis."
The Compensation Committee held sevensix meetings and acted by written consent once during 2012.2013. The Compensation Committee is currently comprised of Messrs. LeFrakDowling (Chairman), and DeMark, and O'BrienMs. Blanca and Ambassador Cobb, each of whom qualifies as an "independent" director as defined under the applicable rules and regulations of the SEC and the NYSE.
Given Mr. LeFrak's decision to not stand for reelection, the Board of Directors expects to appoint Mr. DowlingO'Brien served as Chairmana member of the Compensation Committee upon his election tountil April 2, 2014, when he resigned effective immediately from the Board after agreeing to become the president and chief executive officer of Directors. The Board of Directors has determined that Mr. Dowling will, when elected, qualify as an independent director as defined under the applicable rulesSun Bancorp, Inc. and regulations of the SEC and the NYSE.
Table of ContentsSun National Bank.
Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee is responsible for making recommendations to our Board of Directors regarding candidates for directorships and the size and
composition of our Board of Directors. In addition, the Nominating and Corporate Governance Committee is responsible for overseeing our corporate governance guidelines and reporting and making recommendations to our Board of Directors concerning governance matters.
The Nominating and Corporate Governance Committee, in consultation with our CEO, also reviews the Company's management succession plans to ensure that an effective succession process is in place and to discuss potential internal successors for both emergency and long-term executive succession. The succession planning activities of the Nominating and Corporate Governance Committee and the Compensation Committee are discussed with the full Board of Directors.
The Nominating and Corporate Governance Committee held twothree meetings and acted by written consent once during 2012.2013. The Nominating and Corporate Governance Committee is currently comprised of Ambassador Cobb (Chairman), Ms. Blanca and Messrs. DeMark and LeFrak,Dowling, each of whom qualifies as an "independent" director as defined under the applicable rules and regulations of the SEC and the NYSE.
Given Mr. LeFrak's decision to not stand for reelection, the Board of Directors expects to appoint Mr. Dowling as a member of the Nominating and Corporate Governance Committee upon his election to the Board of Directors. The Board of Directors has determined that Mr. Dowling will, when elected, qualify as an independent director as defined under the applicable rules and regulations of the SEC and the NYSE.
Copies of the charters of the Audit and Risk Committee, Compensation Committee and Nominating and Corporate Governance Committee are available on our website at http://ir.bankunited.com and may also be obtained upon request without charge by writing to the Corporate Secretary, BankUnited, Inc., 14817 Oak Lane, Miami Lakes, FL 33016.
Our Board of Directors oversees our risk management process, including the company-wide approach to risk management, carried out by our management. Our full Board of Directors determines the appropriate levels of risk for the Company generally, assesses the specific risks faced by us and reviews the steps taken by management to manage those risks. While our full Board of Directors maintains the ultimate oversight responsibility for the risk management process, its committees oversee risk in certain specified areas.
In particular, the Audit and Risk Committee plays a key role in the Board of Directors' exercise of its risk oversight function. The Audit and Risk Committee is primarily responsible for overseeing matters involving the Company's financial and operational risks and the guidelines, policies and processes for managing such risks, including internal controls. The Audit and Risk Committee conducts its risk oversight in a variety of ways, including reviewing management's assessment of the Company's internal control over financial reporting, reviewing the results of regulatory examinations and receiving quarterly reports on legal and regulatory matters. Additionally, the Company's independent registered public accounting firm regularly discusses risks and related mitigation measures that may arise during its regular reviews of the Company's financial statements with the Audit and Risk Committee. To ensure candid and complete reporting, the Audit and Risk Committee regularly meets in separate executive sessions with management, the head of the Company's internal audit department and the Company's independent registered public accounting firm.
Additionally, ourthe Compensation Committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements, as well as the incentives created by the compensation awards it administers, and ourthe Nominating and Corporate Governance Committee is
responsible for overseeing the management of risks associated with the independence of our Board. Pursuant to our Board's instruction, management regularly reports on applicable risks to the relevant committee or the full Board, as appropriate, with additional review or reporting on risks conducted as needed or as requested by our Board and its committees.
Corporate Governance Guidelines, Code of Conduct and Code of Ethics
Our Board has adopted Corporate Governance Guidelines, which set forth a flexible framework within which our Board, assisted by Board committees, directs the affairs of the Company. The Corporate Governance Guidelines address, among other things, the composition and functions of the Board, director independence, compensation of directors, management succession and review, Board committees and selection of new directors.
We also have a Code of Conduct, which is applicable to all directors, officers, employees, agents (including consultants and contractors) and temporary personnel of the Company. We have a separate Code of Ethics for Principal Executive and Senior Financial Officers, which contains provisions
specifically applicable to our principal executive officer, principal financial officer, principal accounting officer and controller (or persons performing similar functions).
The Corporate Governance Guidelines, the Code of Conduct and the Code of Ethics for Principal Executive and Senior Financial Officers are available on our website at http://ir.bankunited.com. We expect that any amendments to these codes, or any waivers of their requirements, will be disclosed on our website.
We use a combination of cash and stock-based incentive compensation to attract and retain independent, qualified candidates to serve on the Board of Directors. In setting director compensation, we consider the significant amount of time that directors expend in fulfilling their duties, as well as the skill level we require of members of our Board of Directors.
The following table shows compensation paid, earned or awarded to each of the non-employee members of our Board for 2012.2013.
Director Compensation for 20122013
Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(3) | Total ($) | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(4) | Total ($) | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Chinh E. Chu | — | 2,308 | 2,308 | — | — | — | ||||||||||||||
Richard S. LeFrak | 100,000 | 23,230 | 123,230 | |||||||||||||||||
Tere Blanca | 29,167 | (2) | — | 29,167 | ||||||||||||||||
Michael J. Dowling | 58,333 | (3) | 24,710 | 83,043 | ||||||||||||||||
Wilbur L. Ross, Jr. | — | 2,308 | 2,308 | — | — | — | ||||||||||||||
P. Olivier Sarkozy | — | 2,308 | 2,308 | — | — | — | ||||||||||||||
Lance N. West | — | 2,308 | 2,308 | — | — | — | ||||||||||||||
Eugene F. DeMark | 175,000 | 23,230 | 198,230 | 175,000 | 73,590 | 248,590 | ||||||||||||||
Ambassador Sue M. Cobb | 100,000 | 23,230 | 123,230 | 100,000 | 24,530 | 124,530 | ||||||||||||||
Thomas M. O'Brien | 64,247 | (2) | 24,240 | 88,487 | 100,000 | 24,530 | 124,530 |
Mr. Bohlsen,Singh, who are executive officers of the Company, are also members of our Board but do not receive any additional compensation for their services on our Board.
The following table sets forth the compensation for future services expected to be paid annually to our non-employee directors for their service on our Board. The amounts set forth below are annual amounts based on current agreements but are paid on a monthly basis.
Name | Retainer Fees | |||
---|---|---|---|---|
Chinh E. Chu | — | |||
Ambassador Sue M. Cobb | $ | 100,000 | ||
Eugene F. DeMark | $ | 175,000 | ||
Thomas M. O'Brien | $ | 100,000 | ||
Wilbur L. Ross, Jr. | — | |||
Pierre Olivier Sarkozy | — | |||
Lance N. West | — |
Name | Retainer Fees | |||
---|---|---|---|---|
Tere Blanca | $ | 100,000 | ||
Ambassador Sue M. Cobb | $ | 150,000 | ||
Eugene F. DeMark | $ | 225,000 | ||
Michael Dowling | $ | 100,000 | ||
A. Robert Towbin | $ | 150,000 |
Each non-employee director receives an annual retainer fee of $100,000 for his or her service on our Board and any committee thereof, except thatthe Compensation Committee and/or Nominating and Corporate Governance Committee. Each member of the Audit and Risk Committee receives an additional $50,000, and Mr. DeMark receives an additional $75,000 for his role as Chairman of the Audit and Risk Committee.Committee Chairman. Directors who are also our employees have not received and will not receive any compensation from us for service on our Board or Board committees.
Stock-Based Compensation
On February 15, 2012, Messrs. LeFrak and DeMark and Ambassador Cobb each received a grant of 1,000 shares of restricted common stock. This restricted common stock vests in three substantially equal annual installments commencing February 15, 2013, except for accelerated vesting in the event of a director's death or disability and in certain circumstances relating to a change in control of the Company.
On May 9, 2012, Mr. O'Brien received a grant of 1,000 shares of restricted common stock. This restricted common stock vests in three substantially equal annual installments commencing May 9, 2013, except for accelerated vesting in the event of a director's death or disability and in certain circumstances relating to the a change in control of the Company,
On February 24, 2012, Messrs. Chu, Ross, Sarkozy and West each received a grant of 100 shares of common stock.
On April 19, 2013, our Board of Directors approved a grant of 1,000 shares of restricted common stock for each of Messrs. DeMark and O'Brien and Ambassador Cobb, as well as an additional grant of 2,000 shares of restricted common stock for Mr. DeMark as the Lead Independent Director.
On May 23, 2013, Mr. Dowling received a grant of 1,000 shares of restricted common stock.
Table On April 8, 2014, our Board of ContentsDirectors approved a grant of 1,000 shares of restricted common stock for each of Messrs. DeMark, Dowling and Towbin and Ambassador Cobb and Ms. Blanca, as well as an additional grant of 2,000 shares of restricted common stock for Mr. DeMark as the Lead Independent Director. Each of the director's restricted common stock grant vests in three substantially equal annual installments commencing on the first anniversary of the date of grant, except for accelerated vesting in the event of a director's death or disability and in certain circumstances relating to a change in control of the Company.
Director Expenses
The Company also reimburses expenses incurred by directors to attend Board and committee meetings, educational seminars and other expenses directly related to the Company's business.
Director Nominating Process and Diversity
The Board of Directors is responsible for nominating members for election to the Board of Directors and for filling vacancies on the Board of Directors that may occur between annual meetings of stockholders. The Nominating and Corporate Governance Committee is responsible for identifying, screening and recommending candidates to the Board of Directors for Board membership. When formulating its Board of Directors membership recommendations, the Nominating and Corporate Governance Committee may also consider advice and recommendations from others, including stockholders, as it deems appropriate.
The Nominating and Corporate Governance Committee and the Board of Directors believe that diversity along multiple dimensions, including opinions, skills, perspectives, personal and professional experiences and other differentiating characteristics, is an important element of nomination for Board membership. The Nominating and Corporate Governance Committee has not identified any specific minimum qualifications whichthat must be met for a person to be considered as a candidate for director.
However, Board candidates are selected based uponon various criteria including experience, skills, expertise, diversity, personal and professional integrity, character, business judgment, time availability in light of other commitments, dedication, conflicts of interest and such other relevant factors that the Nominating and Corporate Governance Committee considers appropriate in the context of the needs of the Board of Directors. Although the Board of Directors does not have a formal diversity policy, the Nominating and Corporate Governance Committee and Board of Directors review these factors, including diversity, in considering candidates for board membership. Board members are expected to prepare for, attend and participate in all Board of Directors and applicable committee meetings and the Company's annual meetings of stockholders.
Candidates Nominated by Stockholders
The Nominating and Corporate Governance Committee will also consider nominees recommended by stockholders. Our Corporate Governance Guidelines provide that nominees recommended by stockholders should be given appropriate consideration in the same manner as other nominees. Pursuant to the Company's Amended and Restated By-Laws, stockholders who wish to nominate a candidate for consideration by the Nominating and Corporate Governance Committee for election at the 20142015 annual meeting may do so by delivering written notice, no earlier than January 23, 201414, 2015 and no later than February 22, 2014,13, 2015, of such nominees' names to BankUnited, Inc., 14817 Oak Lane Miami Lakes, FL 33016, Attention: Corporate Secretary. Any stockholder of record or beneficial owner of common stock on whose behalf a nomination is being proposed must (i) be a stockholder of record or beneficial owner on the date of the giving of such notice, on the record date for the determination of stockholders entitled to notice of and to vote at the 20142015 annual meeting of stockholders and at the time of the 20142015 annual meeting of stockholders and (ii) comply with the applicable notice procedures set forth in the Company's Amended and Restated By-Laws.
The Company's Amended and Restated By-Laws require that certain information must be included in the notice provided to the Company's Corporate Secretary regarding the nomination and the stockholder giving the notice, the beneficial owner on whose behalf the notice is made, if any, and any affiliate or associate of the stockholder or the beneficial owner (collectively, the "Nominating Person"). The information required to be set forth in such notice includes (i) the name and address of the Nominating Person, (ii) information regarding the common stock owned, directly or indirectly, beneficially or of record by the Nominating Person, (iii) whether and the extent to which any derivative
or other instrument, transaction, agreement or arrangement has been entered into by or on behalf of the Nominating Person with respect to the common stock and certain additional information relating to any such instrument, transaction, agreement or arrangement as described in the Company's Amended and Restated By-Laws, (iv) any other information relating to the Nominating Person that would be required to be disclosed in a proxy statement or other filings made with the SEC in connection with the solicitation of proxies with respect to such business and (v) a description of all arrangements or understandings (including any anticipated benefits to the Nominating Person as a result of the nomination) between or among the Nominating Person and the candidate and any other person in connection with the proposed nomination. The notice must also include a representation that the stockholder giving the notice intends to appear in person or by proxy at the 20142015 annual meeting to nominate the person named in the notice.
The Company's Amended and Restated By-Laws also require that the notice provide certain information regarding the candidate whom the Nominating Person proposes to nominate as a director, including (i) certain biographical information, such as name, age, business and residential address and principal occupation, (ii) the information that would be required to be provided if the candidate were a Nominating Person, (iii) a resume or other written statement of the qualifications of the candidate and (iv) all other information regarding the candidate, including the written consent of the candidate indicating that the candidate is willing to be named in the proxy statement as a nominee and serve as a
director if elected, that would be required to be disclosed in a proxy statement or other filings made with the SEC in connection with the solicitation of proxies for director elections.
For a complete description of the procedures and disclosure requirements to be complied with by stockholders in connection with submitting director nominations, stockholders should refer to the Company's Amended and Restated By-Laws.
No candidates for director nominations were submitted by any stockholder in connection with the Annual Meeting.
Communications with the Board of Directors
Any interested parties desiring to communicate with the Board of Directors or any of the independent directors regarding the Company may directly contact such directors by delivering such correspondence to such directors (or the entire Board) in care of the Company's Corporate Secretary at BankUnited, Inc., 14817 Oak Lane, Miami Lakes, FL 33016.
The Audit and Risk Committee of the Board of Directors has established procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls and auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters. Persons wishing to communicate with the Audit and Risk Committee may do so by writing in care of the Chairman, Audit and Risk Committee, BankUnited, Inc., 14817 Oak Lane, Miami Lakes, FL 33016.
The rules of the NYSE require the non-management directors of the Company to regularly meet in executive session without management. In 2012,2013, non-management directors of the Company met in executive session twofour times. The Company's Corporate Governance Guidelines state that a non-management independent director shall be chosen to preside at each executive session. Mr. DeMark currently serves as the Presiding Director. For information regarding how to communicate with non-management directors as a group and one or more individual members of the Board, including the Presiding Director, see "Communications with the Board of Directors" above.
Our Board of Directors and each of its committees may retain outside advisors and consultants of their choosing at our expense. The Board of Directors need not obtain management's consent to retain outside advisors.
As stated in our Corporate Governance Guidelines, each director is expected to attend all annual meetings of stockholders. All of the current directors except Mr. Ross, attended the 20122013 annual meeting of stockholders.stockholders except for Tere Blanca and A. Robert Towbin who were not directors at the time.
Compensation Committee Interlocks and Insider Participation
During 2012,2013, our Compensation Committee consisted of Messrs. LeFrak andDowling (Chairman), DeMark and O'Brien and Ambassador Cobb. Mr. O'Brien was nominatedCobb and appointed to the Committee in May 2012.Ms. Blanca. None of them had at any time in the last fiscal year been one of our officers or employees, and none has had any relationships with our company of the type that is required to be disclosed under Item 404 of Regulation S-K.
None of our executive officers serves or has served as a member of the Boardboard of Directors, Compensation Committeedirectors, compensation committee or other board committee performing equivalent functions of any entity that has one or more executive officers serving as one of our directors or on our Compensation Committee.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires BankUnited, Inc.'s directors and executive officers and persons who own more than 10% of the issued and outstanding shares of the Company's common stock to file reports of initial ownership of common stock and other equity securities and subsequent changes in that ownership with the SEC and the NYSE. Based solely on a review of such reports and written representations from the directors and executive officers, the Company believes that all such filing requirementsreports that were metrequired to be filed under Section 16(a) during 2012.2013 were timely filed, except, due to an administrative error by the Company, a Form 3 was filed late on behalf of Ms. Lunak, a Form 4 reporting one transaction was filed late on behalf of Ambassador Cobb, a Form 4 reporting one transaction was filed late on behalf of Mr. DeMark and a Form 4 reporting one transaction was filed late on behalf of Mr. O'Brien.
Set forth below is information, as of the date of the Annual Meeting, May 23, 2013, concerning the Company's executive officers and Mr. Melby, anMessrs. Starr and Bagnoli, executive officerofficers of BankUnited, National Association (the "Bank").the Bank.
Name | Age | Position | |||
---|---|---|---|---|---|
John A. Kanas | Chairman, President and CEO | ||||
| |||||
Leslie Lunak | Chief Financial Officer | ||||
| |||||
|
John A. Kanas. For biographical information regarding Mr. Kanas, see page 8.
John Bohlsen.Rajinder P. Singh. For biographical information regarding Mr. Bohlsen,Singh, see page 9.8.
Leslie Lunak has been our Chief Financial Officer since March 1, 2013 and previously2013. Ms. Lunak served as the Bank's Executive Vice President and Chief Accounting Officer sincefrom June 2012 through March 2013 and as Senior Vice President, Finance from October 2010.2010 through June 2012. From August 2004 through October 2010, Ms. Lunak was an Audit Director at the public accounting firm McGladrey & Pullen, LLP. Her responsibilities included overseeing audit engagements and the performance of financial and accounting consulting services for clients primarily engaged in the
financial services industry, serving as a designated national financial services industry specialist and serving as a subject matter expert in a variety of technical accounting areas, including derivatives, equity instruments, fair value accounting and acquisition accounting. She was also responsible for the development and presentation of a wide variety of continuing education courses for both internal and external audiences. From 2001 through August 2004, Ms. Lunak was a senior audit manager with the certified public accounting firm Adair, Fuller, Witcher and Malcom, with oversight responsibility for all of the firm's audit engagements. From June 1985 through 2001, Ms. Lunak was an independent consultant, providing finance and accounting related services to clients consisting primarily of community banks and thrifts and the U.S. Drug Enforcement Administration. From 1979 through June 1985, Ms. Lunak was with the public accounting firm Deloitte, where she was an audit manager serving primarily clients in the banking industry and was designated a national banking industry specialist. Ms. Lunak is a Florida CPA and received a B.S. in Accounting from Oklahoma State University.
Rajinder P. SinghJeffrey Starr is our Chief Operating Officer and has been with usthe Bank's General Counsel since our inceptionAugust 2009. In his role as General Counsel, Mr. Starr is responsible for overseeing the Bank's Legal, Compliance, Corporate Fraud and Community Development and Outreach departments. Mr. Starr has more than 20 years of experience representing financial institutions, and in May 2009.2011 was named as a General Counsel Leading Lawyer by the South Florida Business Journal. Prior to joining us, Mr. Singh led the financial services practice of WL Ross & Co., a private equity firm and investor in the Company,BankUnited, from April 2008 to May 2009. From December 2006 through April 2008,2009, Mr. Singh served as Executive Vice President for Capital One's banking segment, which includes retail, small business and commercial banking businesses in New York, New Jersey, Connecticut, Louisiana and Texas and a national direct deposit gathering franchise. Mr. Singh was a member of Capital One's Bank Leadership Team and chaired the Deposit Pricing Committee. He also served on Capital One's ALCO and brand board. Previously, Mr. Singh served as Head of Corporate Development and Strategy for North Fork from February 2005 to December 2006. During his tenure, North Fork was acquired by Capital One for $13.2 billion. Prior to joining North Fork in February 2005, Mr. Singh spent nine years at FleetBoston Financial Corporation and lastStarr served as Managing Director of Corporate Development and Strategy. Mr. Singh earned his M.B.A. from Carnegie Mellon University in Pittsburgh and his B.S. in chemical engineering from the Indian Institute of Technology in New Delhi.
Randy R. Melby joined the Bank in September 2009 as Executive Vice President and Chief Risk Officer and was promoted to Senior Executive Vice President, Chief Risk Officer in February 2011.Counsel for Capital One, N.A. Mr. Melby is responsible for enterprise risk oversight, which includes loan review, internal audit, compliance, including BSA and AML, and overall operations and credit risk management. Prior to joining theStarr joined Capital One when it acquired North Fork Bank, Mr. Melbywhere he had served as Senior Vice President and General Auditor for Washington Mutual/JP Morgan ChaseCounsel since 1997. Earlier in Seattlehis career, Mr. Starr was associated with the law firms of Wickham, Wickham & Bressler, Lord Day & Lord, Barrett Smith and Finley, Kumble, Wagner, Underberg, Manley, Myerson & Casey where he represented a multitude of clients including several in the financial services industry. Mr. Starr received his J.D. from The Jacob D. Fuchsberg Law Center at Touro College and his B.A. in political science from Muhlenberg College.
Mark Bagnoli has been the Bank's Chief Risk Officer since December 2004 to January 2009. Before this, he spent 24 years with Norwest Corporation/Wells Fargo. He held a variety of leadership positions in the2013. Mr. Bagnoli is an internal audit and commercial loan operations areas.risk management professional with more than 25 years of experience in large to mid-size financial services companies, and he most recently served as the Bank's Executive Vice President and Chief Auditor from December 2009 through December 2013. Prior to joining BankUnited, Mr. Melby received a B.S. in accountingBagnoli served as an independent consultant from 2008 through 2009 and management from the University of North Dakota. Mr. Melby is a memberas Executive Vice President and Chief Risk Officer of the Institute of Internal Auditors, graduatedFederal Home Loan Bank in Chicago from 2005 through 2008. Prior to that position, he was with honorsJPMorgan Chase/Bank One for more than 20 years where he rose through the ranks to Senior Vice President, Corporate Audit. Mr. Bagnoli has a master's degree from the Pacific Coast School of Banking and is also a graduate of the BAINorthwestern University's Kellogg Graduate School of Bank Operations & Technology.Management and an undergraduate degree in accounting from Seton Hall University.
PROPOSAL NO. 2
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit and Risk Committee has appointed KPMG LLP to serve as BankUnited, Inc.'s independent registered public accounting firm for its fiscal year ending December 31, 2013.2014. The Audit and Risk Committee and the Board of Directors seek to have the stockholders ratify the Audit and Risk Committee's appointment of KPMG LLP, which has served as BankUnited, Inc.'s independent registered public accounting firm or independent auditor since 2009. Although BankUnited, Inc. is not required to seek stockholder approval of this appointment, the Board of Directors believes it to be sound corporate governance to do so. If the appointment of KPMG LLP is not ratified by the stockholders, the Audit and Risk Committee may appoint another independent registered public accounting firm or may decide to maintain its appointment of KPMG LLP.
Representatives of KPMG LLP will be present at the Annual Meeting and will have the opportunity to make a statement, if they desire to do so, and to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE RATIFICATION
OF THE APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR 2013.2014.
Report of the Audit and Risk Committee
The Audit and Risk Committee reviews the Company's financial reporting process on behalf of the Board of Directors. The Audit and Risk Committee consists of directors who have been determined by the Board of Directors to be independent of the Company as prescribed by the NYSE and the SEC. The Company's management has the primary responsibility for the financial statements and for the reporting process, including the establishment and maintenance of the system of internal control over financial reporting. TheKPMG LLP, the Company's independent registered public accounting firm, is responsible for auditing the financial statements prepared by management, expressing an opinion on the conformity of those audited financial statements with U.S. generally accepted accounting principles and auditing the Company's internal control over financial reporting and expressing an opinion on the effectiveness thereof. In this context, the Audit and Risk Committee has reviewed the audited financial statements and met and held discussions with management and KPMG LLP the Company's independent registered public accounting firm, regarding the fair and complete presentation of the Company'sthose financial statements and the assessment of the Company's internal control over financial reporting.
The Audit and Risk Committee has discussed with KPMG LLP matters required to be discussed by Statement on Auditing StandardsStandard No. 61, as amended (AICPA,Professional Standards, Vol. 1, AU section 380),16, as adopted by the Public Company Accounting Oversight Board (the "PCAOB") in Rule 3200T and has reviewed and discussed KPMG LLP's independence from the Company and its management. As part of that review, the Audit and Risk Committee has received the written disclosures and the letter required by applicable requirements of the PCAOB regarding KPMG LLP's communications with the Audit and Risk Committee concerning independence. The Audit and Risk Committee also has considered whether KPMG LLP's provision of non-audit services to the Company is compatible with the auditor's independence. The Audit and Risk Committee has concluded that KPMG LLP is independent from the Company and its management.
The Audit and Risk Committee meets with the Chief Financial Officer and representatives of KPMG LLP, in regular and executive sessions, to discuss the results of their examinations, the evaluations of the Company's internal controls and the overall quality of the Company's financial reporting and compliance programs.
In reliance on the reviews and discussions referred to above, the Audit and Risk Committee has recommended to the Board of Directors, and the Board has approved, that the audited financial statements be included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012,2013, for filing with the SEC.
The Audit and Risk Committee
Eugene DeMark (Chairman)Thomas M. O'Brien
Ambassador Sue M. Cobb
The following table presents fees for professional services provided by KPMG LLP in each of the last two fiscal years in each of the following categories, including related expenses:
| 2012 | 2011 | 2013 | 2012 | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Audit Fees | $ | 1,965,000 | $ | 1,767,500 | $ | 2,170,500 | $ | 1,965,000 | ||||||
Audit-Related Fees | $ | 270,000 | $ | 267,500 | 274,500 | 270,000 | ||||||||
Tax Fees | — | — | — | — | ||||||||||
All Other Fees | — | — | 99,355 | — | ||||||||||
| | | | | | |||||||||
Total Fees | $ | 2,235,000 | $ | 2,035,000 | 2,544,355 | 2,235,000 |
Audit Fees: Includes the aggregate fees billed by KPMG LLP for professional services and expenses rendered for the audit of the Company's consolidated financial statements, reviews of consolidated financial statements included in the Company's FormsQuarterly Reports on Form 10-Q and the audit of the effectiveness of the Company's internal control over financial reporting. Also includes the aggregate fees billed for professional services performed in connection with the Company's filing of certain registration statements and the related issuance of consents and comfort letters.
Audit-Related Fees: Includes the aggregate fees billed by KPMG LLP for assurance and related services that are reasonably related to the performance of the audit of the Company's consolidated financial statements and are not reported under "Audit Fees." These services primarily relate to attestation services performed to report on the Company's compliance with certain contractual provisions of the Purchase and Assumption Agreement between the Company and the FDIC, compliance with certain requirements applicable to the U.S. Department of Housing and Urban Development and the audit of the BankUnited 401(k) Plan.
All Other Fees: Includes the aggregate fees billed by KPMG LLP for risk management and regulatory advisory services provided to the Company.
Policy on Audit and Risk Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors
The Audit and Risk Committee has adopted a policy that requires advance approval of all audit, audit related tax services and other services performed by the independent auditor. The policy provides for pre-approval by the Audit and Risk Committee of specifically defined audit and non-audit services. Unless the specific service has been previously pre-approved with respect to that year, the Audit and Risk Committee must approve the permitted service before the independent auditor is engaged. The Audit and Risk Committee pre-approved all of the audit and non-audit services provided to the Company by KPMG LLP in fiscal year 2012.2013.
COMPENSATION DISCUSSION AND ANALYSIS
The following Compensation Discussion and Analysis provides information regarding the objectives and elements of our compensation philosophy, policies and practices with respect to the compensation of the executive officers who appear in the "Summary"—Summary Compensation Table for 2012"2013" below (referred to collectively throughout this section as our "named executive officers" and with respect to our named executive officers other than Messrs. Pauls and Melby, the "Management Members"). Our named executive officers for the fiscal year ended December 31, 20122013 were:
Objectives of Our Executive Compensation Program
Our executive compensation philosophy is primarily based on pay-for-performance. Accordingly, our executive compensation programs are designed to achieve the following objectives:
Setting Executive Compensation
Prior to August 29, 2012, our executive compensation program was largely based on arrangements that were negotiated at the time that our Company was founded. BankUnited, Inc. was organized by a management team led by the Management Members and our former Chief Financial Officer, John DiGiacomo, on April 28, 2009. At that time, the founding members of the management team directly negotiated the terms of their compensation with the investors.
On August 29, 2012, the Compensation Committee approved the amended and restated employment agreements (the "Employment Agreements") by and between each of the Management Members and the Company and by and between each of the Management Members and the Bank.
Mr. Pauls replaced our former Chief Financial Officer in 2009, and as a result, Mr. Pauls' compensation components were similar to those provided to that former Chief Financial Officer prior to his departure. The level of Mr. Pauls' compensation was negotiated by him and the Company and was ultimately subject to approval by our Board. On August 30, 2012, the Company announced the retirement of Mr. Pauls as Chief Financial Officer of the Company and the Bank, effective February 28, 2013. His retirement was not due to any disagreement with the Company on any matter related to the Company's operations, policies or practices. Following February 28, 2013, Mr. Pauls agreed to remain with the Company in a non-executive consulting capacity to assist with all matters
necessary through December 31, 2013. The Company also announced the promotion of Leslie Lunak, as of March 1, 2013, to Chief Financial Officer of the Company and the Bank.
Mr. Melby, who is not a founding member of our management team, commenced employment with the Bank on September 28, 2009 and the terms of his compensation were the product of negotiation between Mr. Melby and the Bank and subject to final approval by the Bank's Board of Directors.
Role of Compensation Committee
Since our inception, our Compensation Committee has been responsible for such matters as the determination of discretionary bonus amounts, if any, to be paid to our named executive officers, the implementation of the BankUnited, Inc. 2009 Stock Option Plan and 2010 Omnibus Equity Incentive Plan, including the determination of grant amounts, vesting terms and exercise prices of awards under such plans, as well as the approval of employment agreements with the Employment Agreementsnamed executive officers and the Annual Incentive Plan. In addition, our Compensation Committee was responsible for vetting and approving our 401(k) plan and Nonqualified Deferred Compensation Plan. Our Compensation Committee was also involved in decisions regarding the terms of our 2014 Omnibus Equity Incentive Plan.
Role of Compensation Consultant
In July 2012, theThe Compensation Committee did not engage a compensation consultant for compensation decisions made with respect to the 2013 fiscal year. In January 2014, the Company engaged Pearl Meyer,Towers Watson, a compensation consulting firm, to provide advice with respect to executive compensation matters, including with respect to the terms and conditions2014 Omnibus Equity Incentive Plan.
The Audit and Risk Committee of our Board, which is comprised of non-employee directors, is currently responsible for risk oversight within our Company, including with respect to compensation practices. Mr. MelbyBagnoli is responsible for developing an Enterprise Risk Management framework to identify, manage and mitigate risks across our Company. This framework, which involves ongoing participation and oversight by our Board, captures compensation-related risk amongst various other dimensions of risk. In addition, our Company is a bank holding company subject to ongoing supervision, examination and regulation by the Federal Reserve, including its guidance on compensation practices. We do not believe that our overall compensation policies and practices create risks that are reasonably likely to have a material adverse effect on our Company.
Executive Officer Compensation
Principal Components of Compensation of Our Named Executive Officers
The compensation package offered to our executive officers, including our named executive officers, consists of:
and/or on an annual basis thereafter. Additionally, in connection with their respective Employment Agreements, the Management Membersemployment agreements, Messrs. Kanas, Bohlsen and Singh entered into long-term equity-based compensation arrangements for retention purposes and also have an opportunity to receive performance-based long-term equity-based compensation awards.
Our current compensation package is designed to provide a strong link between the compensation of our executives and the success of our Company and our stockholders generally. The cash components—base salary and cash bonus compensation—collectively represent what we believe is appropriate pay for expected performance during the year. The equity-based compensation component is designed to encourage high performance by closely aligning an executive's pay with the interests of our stockholders. The allocation between different elements of compensation with respect to our named executive officers has been a product of individual negotiations to date. Furthermore, as discussed below, with respect to the Management Members,Messrs. Kanas, Bohlsen and Singh, base salaries were reduced in 2012 and long-term cash and equity-based compensation arrangements were increased in order to promote the retention of each Management Member,Messrs. Kanas, Bohlsen and Singh, as well as to tie total compensation to the long-term success of Company and align with the interests of stockholders, as opposed to guaranteeing compensation in the form of higher base salaries.
We entered into the Employment Agreementsa negotiated employment agreement with each of the Management Members.Messrs. Kanas, Bohlsen and Singh when our Company was founded. On August 29, 2012, the Compensation Committee approved amended and restated employment agreements (the "Employment Agreements") between each of Messrs. Kanas, Bohlsen and Singh and the Company and between each of the Messrs. Kanas, Bohlsen and Singh and the Bank. The term of employment under each of the agreementsEmployment Agreements for Messrs. Kanas and Singh is for three years from July 1, 2012, in the case of Messrs. Kanas and Singh, and one year from2012. Mr. Bohlsen's Employment Agreements expired on July 1, 2012,2013, and on such date Mr. Bohlsen resigned from his position as Chief Lending Officer of the Company and Vice Chairman and Chief Lending Officer of BankUnited, N.A. Mr. Bohlsen also resigned from the Board. Mr. Bohlsen agreed to continue to serve the Company as Senior Advisor to the Chairman of the Board following his resignation. Mr. Bohlsen did not enter into an employment agreement with the Company in the case ofconnection with his services as Senior Advisor.
Mr. Bohlsen. Mr. Pauls' employment agreements expired on September 1, 2012, and werePauls was not renewed. Mr. Melby is nota party to an employment agreement for the 2013 fiscal year. Mr. Pauls retired from his position as Chief Financial Officer of the Company on February 28, 2013. Following February 28, 2013, Mr. Pauls agreed to remain with the Company in a non-executive capacity to assist with all matters through December 31, 2013.
Mr. Melby and Ms. Lunak have not entered into employment agreements with the Company and instead hisMs. Lunak's employment is subject to the terms of an offer letter and a change in control agreement, each with the Bank. Mr. Melby's employment had been subject to an offer letter and change in control agreement with the Bank, each of which was terminated effective March 31, 2014 in connection with Mr. Melby's resignation.
The Employment Agreements, offer letters and offer letterchange in control agreements set forth the compensatory terms of each of our named executive officers' employment. For additional information regarding certain provisions of each named executive officer's employment agreement, or offer letter, or change in control agreement, see "Potential"—Potential Payments Upon Termination or Change-in-Control."
Base Salary
We provide each of our executive officers and other employees with a base salary to compensate them for services rendered during the year. We believe that, with respect to our named executive officers, base salary should compensate the executives for their service and performance but that superior contributions and performance should be rewarded by other forms of compensation, including long-term equity-based compensation. The base salary for each of our named executive officers was set in his employment agreement or offer letter. Under each of the Employment Agreements, the base salary of each of the Management Members was reduced effective as of September 1, 2012 as follows: Mr. Kanas—from $2,250,000 to $0; Mr. Bohlsen—from $1,250,000 to $500,000; and Mr. Singh—from $1,000,000 to $500,000. The base salaries of each of Mr. Pauls and Mr. Melby in 2012 did not change from their respective 2011 base salaries.compensation
Performance-Based Annual Bonuses
Commencing in 2013 and pursuant to the terms of their respective Employment Agreements, each of the Management Members will beMessrs. Kanas, Bohlsen and Singh was eligible to receive a performance-based annual bonus award for the current performance period that began on July 1, 2012 and endsended on June 30, 2013. The target bonus opportunities set forth in the Employment Agreements arewere as follows: $1,530,000 for Mr. Kanas and 75% of annual base salary (i.e., $375,000) for each of Messrs. BohlenBohlsen and Singh. Maximum bonus opportunities are equal to $1,870,000 for Mr. Kanas and 100% of annual base salary for Mr. Singh. Mr. Bohlsen's maximum bonus opportunity was equal to 100% of his annual base salary. Messrs. Kanas and Singh are eligible to receive a performance-based annual bonus award for the performance period that began on July 1, 2013 and ends on June 30, 2014.
Actual bonus amounts will bewere determined by the Compensation Committee following the conclusion of the performance period ending June 30, 2013, based upon the achievement of the applicable performance criteria established by the Compensation Committee. The applicable performance criteria for each Management Member include,of Messrs. Kanas, Bohlsen and Singh included, for example, net interest margin goals as compared to industry peers, goals related to minimizing non-performing assets ratios, increasing total deposits and reducing costs of deposits, and successfully launching into specified geographical markets.
Retention and Other Cash Bonuses
Pursuant to the terms of their respective Employment Agreements, each of the Management Members earned the following cash retention awards on December 31, 2012 by remaining employed through such date: $1,500,000 for Mr. Kanas and $750,000 for each of Messrs. Bohlsen and Singh. The purpose of the retention bonuses is to incentivize Management MembersMessrs. Kanas and Singh to continue their employment with us and the Bank and, in that regard, the size of the respective bonuses were determined to provide retentive value. Pursuant to the terms of their respective Employment Agreements, Messrs. Kanas and Singh received the following cash retention awards on December 15, 2013 by remaining employed through such date: $1,500,000 for Mr. Kanas and $750,000 for Mr. Singh. Messrs. Kanas and Singh are eligible to earn the same respective retention bonus amounts on each of December 31, 2013 and December 31, 2014, subject to their continued employment through such dates.date.
Discretionary Bonuses
On December 10, 2012,February 12, 2014, we awarded Mr. Pauls $200,000Ms. Lunak $350,000 and Mr. Melby $325,000 for their respective performancesperformance in the 20122013 fiscal year and overall contribution to the Company. Pursuant to his offer letter, Mr. Melby is eligible to receive an annual bonus with a target bonus opportunity equal to $300,000, due to his role as the Chief Risk Officer of the Bank and our belief that a lesser portion of his overall compensation should be in the form of equity-based compensation and, accordingly, at-risk. Consistent with the Company's Policy on Incentive Compensation Arrangements, the bonus amountsamount ultimately determined for Mr. Paulseach of Ms. Lunak and Mr. Melby werewas based on a subjective evaluation of such factors as their overall individual performance, organizationorganizational performance, individual contribution to organizational performance, business segment performance, and/or level of individual responsibilities, and not based on the achievement of any performance goals established by the Compensation Committee in advance.
Equity-Based Compensation
Background/LLC Liquidation
The Management Members and Mr. Pauls previously held equity-based compensation in the form of profits interest units, or PIUs, in BU Financial Holdings LLC (the "LLC"), our parent company prior to the reorganizations consummated in connection with our IPO. The PIUs represented the right of the holder to share in distributions from the LLC after investors had received certain returns on their investment. In connection with the IPO, the LLC was liquidated and the Management Members received a combination of common stock (both shares not subject to vesting schedules and restricted shares that were subject to vesting schedules) and options to purchase common stock (both vested and unvested) as well as certain dividend equivalent rights, in each case, in respect of the vested and unvested PIUs that were then held by the Management Members and Mr. Pauls in the LLC. The shares issuable upon exercise of options are newly issued shares that are issued under the BankUnited, Inc. 2010 Omnibus Equity Incentive Plan. Mr. Melby did not previously hold PIUs and had instead been awarded stock options to purchase shares of our common stock under the BankUnited, Inc. 2009 Stock Option Plan.
The PIUs were divided into two equal types of profits interests. Half of the PIUs, referred to as time-based PIUs, vested with the passage of time following the grant date. The remaining half of the PIUs, referred to as IRR-based PIUs, vested immediately prior to the consummation of the IPO.
In conjunction with the IPO, the PIUs were exchanged for a combination of vested and unvested common shares and vested and unvested stock options. The equity instruments issued in exchange for PIUs included:
The unvested instruments corresponded to the unvested time-based PIUs and continued to vest according to the original vesting schedule of such time-based PIUs. The remainder of these instruments vested in 2012.
Dividend Equivalent Rights
In respect of the vested PIUs held by each of the Management Members and Mr. Pauls, such individual received, among other forms of equity, a dividend equivalent right entitling the holder to receive the economic benefit, for a period of ten years following the date of grant, of any dividends paid with respect to our common stock after the IPO as though such holder owned the number of shares of our common stock that would be issuable upon exercise of the vested options received by such holder.
In respect of the unvested PIUs held by each of the Management Members, such individual received, among other forms of equity, a dividend equivalent right entitling the holder to an aggregate payment from us, at the time the unvested options received by such holder vest in accordance with their terms, in an amount equal to the amount of all dividends that would have been paid in respect of such unvested options after the date of the IPO and prior to such vesting date as though such holder owned the number of shares of our common stock that would be issuable upon the vesting and exercise of such options. The last vesting of these PIUs occurred in 2012, and as such, the Management Members and Mr. Pauls have no continuing dividend equivalent rights with respect to these PIUs.
Stock Options
Although the Compensation Committee has awarded stock options to executive officers in prior years, in 2012,2013, the Compensation Committee did not award stock options to any named executive officer as part of his or her long-term equity-based compensation. Should stock options be granted to
named executive officers in the future, these awards will be determined following the key principles under the Company's Policy on Incentive Compensation Arrangements, including their valuable contribution to the organization, disciplined balance of risk and financial results, exceptional focus on risk management and internal controls and strong corporate governance.
Restricted Shares
On August 29, 2012, pursuant to their respective employment agreements,Employment Agreements, Mr. Kanas was granted 178,643 restricted shares, Mr. Bohlsen was granted 29,774 restricted shares, and Mr. Singh was granted 89,322 restricted shares, in each case as a retention-based equity incentive award. In the case of Messrs. Kanas and Singh, each restricted stock award vested as to one-third on December 31, 2012 by remaining employed through such date,and one-third on December 31, 2013 and the remaining two-thirdsone-third of the shares subject to the awards will vest in equal portions on each of December 31, 2013 and December 31, 2014, subject to theirthe applicable named executive officer's continued employment through such dates.date. Additionally, each such one-third installment ofthe restricted shares isare subject to a one-year transfer restriction following vesting. In the case of Mr. Bohlsen, the restricted stock award will fully vestvested on June 30, 2013 subject to his continued employment through such date, and his employment term will expire on July 1, 2013.without any transfer restrictions.
Pursuant to his offer letter, Mr. Melby is eligible to receive grants of equity-based compensation. After a review of subjective criteria relative to Mr. Melby's performance and to provide Mr. Melby with continued long-term incentive opportunities, the Compensation Committee granted him 15,000On February 12, 2014, Ms. Lunak was awarded 12,500 restricted shares on December 10, 2012 in respect of hisfor her performance in the 20122013 fiscal year.year and overall contribution to the Company. The restricted shares vest in substantially equal, annual installments on each of the first three anniversaries of the grant date subject to Mr. Melby's continued employment with the Company through such dates. The named executive officers are entitled to receive dividend payments in respect of their restricted shares.
Table of Contentsgrant.
Performance-Based Share Awards
Commencing in 2013 and pursuant to the terms of their respective Employment Agreements, each of the Management Members will beMessrs. Kanas, Bohlsen and Singh was eligible to receive an award of performance-based shares based on performance during the current performance period that began on July 1, 2012 and endsended on June 30, 2013. The target award opportunities are as set forth under the Employment Agreements are as follows: $680,000 for Mr. Kanas and $375,000 for each of Messrs. BohlenBohlsen and Singh. Actual awards have not yet been granted (under FASB ASC Topic 718 or otherwise)Maximum award opportunities are equal to $1,020,000 for Mr. Kanas and will only be granted as determined by$500,000 for each of Messrs. Bohlsen and Singh. Messrs. Kanas and Singh are eligible to receive an award of performance-based shares based on performance during the performance period that began on July 1, 2013 and ends on June 30, 2014.
On August 7, 2013, the Compensation Committee following the conclusion ofawarded Mr. Kanas 33,742 performance shares and Messrs. Bohlsen and Singh 16,540 performance shares for the performance period based upon the achievement of the applicable performance criteria established by the Compensation Committee, including net interest margin goals as compared to industry peers, goals related to minimizing non-performing assets ratios, increasing total deposits and reducing costs of deposits, and successfully launching into specified geographical markets.ended June 30, 2013. In the case of Messrs. Kanas and Singh, any awards that are granted will bethe award vested as to one-third ason August 7, 2013 and one-half of the end of the performance period (e.g., June 30, 2013) and the unvested portion of the awards will vest on each of June 30, of each of the two subsequent years,2014 and June 30, 2015, subject to theirthe applicable executive's continued employment through such dates. In the case of Mr. Bohlsen, hisBohlsen's award willwas fully vestvested on June 30, 2013, subject to his continued employment through such date, and his employment term will expire on July 1,August 7, 2013.
In connection with the formation of our Company, our Management Members and Mr. Pauls were required to invest a portion of their personal assets in our Company. Mr. Kanas invested $23,500,000, Mr. Bohlsen invested $10,000,000 and Mr. Singh invested $1,000,000. Mr. Pauls invested $1,000,000 in our Company in connection with the commencement of his employment. The amounts that the Management Members and Mr. Pauls were initially required to invest varied and each executive's investment amount was in relation to his net worth. Mr. Melby joined the Bank subsequent to our formation and was not required to invest any of his personal assets in our Company.
In connection with the IPO, and in exchange for the PIUs vesting described above, we adopted a policy to which the Management Members agreed relating to the minimum amount of equity securities that such Management Membersthe named executive officers must retain for so long as they are employed by us. This policy, which may be waived from time to time by the Compensation Committee, but has not been waived since its adoption, provides that so long as Mr. Kanas is CEO, he will not sell equity if, after giving effect to such sale, his retained equity (including vested and unvested equity, including options) has a value that is less than twelve times his base salary. Although Mr. Kanas' base salary was eliminated in September 2012, as of April 18, 2013,March 17, 2014, he held equity securities (including vested and unvested equity, including options) having a value greater than 27 timeswell in excess of his base salary that was in effect immediately prior to its being eliminated. Additionally, for Messrs. Bohlsen andMr. Singh, the policy provides that so long as they arehe is employed and areis a named executive officersofficer of the Company, theyhe will not sell equity if, after giving effect to such sale, theirhis respective retained equity (including vested and unvested equity, including options) has a value that is less than five times their respectivehis base salaries.salary. We believe that requiring members of
our senior management to invest and maintain ownership in our Company serves to align their interests with the interests of our stockholders generally. Each of the Management Members'Messrs. Kanas and Singh and Ms. Lunak's equity holdings far exceedexceeds our equity ownership policy guidelines.
We value the opinions of our stockholders. At the 2012 annual meeting of stockholders, approximately 99% of the votes cast on the stockholder advisory vote proposal on the compensation of our named executive officers ("Say on Pay") were cast in favor of our executive compensation program. In addition, over a majority of the votes cast on the Say on Pay frequency vote proposal were in favor of holding a Say on Pay vote every three years such that there will not be a Say on Pay vote until the
2015 annual meeting of stockholders. The Compensation Committee reviewed the results of the Say on Pay vote in 2012 and did not make changes to our executive compensation program based on the outcome of the vote and decided to retain the same general approach to our program. However, as described in greater detail above, certain changes to our executive compensation program were made in 2012 in an effort to improve our compensation practices generally and to further align our compensation practices with the interests of our stockholders and otherwise in the interests of retaining key executives, such as entering into the Employment Agreements with the Management Members,Messrs. Kanas, Bohlsen and Singh, which includeincluded expiring provisions on gross-up payments for golden parachute excise taxes eliminatingand eliminated possible discretionary cash bonuses in favor of performance-based cash incentives for the Management Members, and eliminating certain time-based equity incentive awards in favor of performance-based cash and equity incentives for the Management Members.each of Messrs. Kanas, Bohlsen and Singh.
Tax and Accounting Implications
Transition provisions underThe Compensation Committee considers the tax implications of our compensation programs, including the implications of Section 162(m) of the Internal Revenue Code of 1986, as amended, may applyreferred to herein as the Internal Revenue Code, which limits the deductibility of certain compensation to US$1 million per year for a period of three years following the consummationour CEO and for each of the IPO to certainother three most highly compensated named executive officers (other than our CFO) who are employed at year-end. Performance-based compensation arrangements that were entered into by a corporation before it was publicly held.may be excluded from this limitation.
The information contained in this report shall not be deemed to be "soliciting material" or "filed" with the SEC or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that the Company specifically incorporates it by reference into a document filed under the Securities Act or the Exchange Act.
The Compensation Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
The Compensation Committee
Richard S. LeFrak,Michael J. Dowling, Chair
Tere Blanca
Eugene F. DeMark
Ambassador Sue M. CobbThomas M. O'Brien
The following summary compensation table sets forth the total compensation paid or accrued for the year ended December 31, 20122013 to our named executive officers.
Summary Compensation Table for 20122013
Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($) | Option Awards ($)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings $(5) | All Other Compensation ($) | Total ($) | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
John A. Kanas | 2012 | 1,500,000 | 1,500,000 | 3,980,250 | (2) | — | 14,019 | 510,873 | (6) | 7,505,142 | |||||||||||||||
Chairman, | 2011 | 2,250,000 | — | — | — | 5,319 | 183,462 | 2,438,781 | |||||||||||||||||
President and CEO | 2010 | 2,250,000 | — | 131,276 | (3) | — | 7,139 | 107,283 | 2,495,698 | ||||||||||||||||
Douglas J. Pauls | 2012 | 650,000 | 200,000 | — | — | 4,781 | 66,452 | (7) | 921,233 | ||||||||||||||||
Chief Financial | 2011 | 650,000 | — | — | 719,000 | 1,599 | 44,250 | 1,414,849 | |||||||||||||||||
Officer | 2010 | 650,000 | — | 10,592 | (3) | — | 2,044 | 44,250 | 706,886 | ||||||||||||||||
John Bohlsen | 2012 | 1,000,000 | 750,000 | 750,000 | (2) | — | 6,046 | 321,801 | (8) | 2,827,847 | |||||||||||||||
Vice Chairman and | 2011 | 1,250,000 | — | — | 719,000 | 2,288 | 148,058 | 2,119,346 | |||||||||||||||||
Chief Lending Officer | 2010 | 1,250,000 | — | 67,338 | (3) | — | 3,071 | 62,283 | 1,382,692 | ||||||||||||||||
Rajinder P. Singh | 2012 | 833,334 | 750,000 | 1,990,125 | (2) | — | 6,079 | 218,467 | (9) | 3,798,005 | |||||||||||||||
Chief Operating | 2011 | 1,000,000 | — | 719,000 | 2,288 | 60,520 | 1,781,808 | ||||||||||||||||||
Officer | 2010 | 1,000,000 | — | 58,448 | (3) | — | 3,071 | 55,218 | 1,116,737 | ||||||||||||||||
Randy R. Melby | 2012 | 325,000 | 325,000 | 347,700 | (2) | — | — | 43,540 | (10) | 1,041,240 | |||||||||||||||
Senior Executive Vice | 2011 | 325,000 | 300,000 | 576,270 | (2) | — | — | 23,025 | 1,224,295 | ||||||||||||||||
President, Chief Risk | 2010 | 325,000 | 300,000 | — | — | — | 37,172 | 662,172 |
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings $ | All Other Compensation ($) | Total ($) | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
John A. Kanas | 2013 | — | 3,370,000 | (5) | 1,020,021 | (6) | — | 21,249 | (8) | 236,061 | (9) | 4,647,331 | |||||||||||||
Chairman, President and Chief | 2012 | 1,500,000 | (1) | 1,500,000 | 3,980,250 | — | 14,019 | 510,873 | 7,505,142 | ||||||||||||||||
Executive Officer | 2011 | 2,250,000 | — | — | — | 5,319 | 183,462 | 2,438,781 | |||||||||||||||||
Leslie N. Lunak | 2013 | 383,335 | (2) | 350,000 | (5) | — | (7) | — | — | 24,108 | (10) | 757,443 | |||||||||||||
Chief Financial Officer | |||||||||||||||||||||||||
Rajinder P. Singh | 2013 | 500,000 | 1,250,000 | (5) | 500,004 | (6) | — | 10,214 | (8) | 106,574 | (11) | 2,366,792 | |||||||||||||
Chief Operating Officer | 2012 | 833,334 | 750,000 | 1,990,125 | — | 6,079 | 218,467 | 3,798,005 | |||||||||||||||||
2011 | 1,000,000 | — | — | 719,000 | 2,288 | 60,520 | 1,781,808 | ||||||||||||||||||
John Bohlsen | 2013 | 1,750,000 | (3) | 500,000 | (5) | 500,004 | (6) | — | 10,437 | (8) | 199,192 | (12) | 2,959,633 | ||||||||||||
Senior Advisor and Former Vice | 2012 | 1,000,000 | 750,000 | 750,000 | — | 6,046 | 321,801 | 2,827,847 | |||||||||||||||||
Chairman and Chief Lending Officer | 2011 | 1,250,000 | — | — | 719,000 | 2,288 | 148,058 | 2,119,346 | |||||||||||||||||
Randy R. Melby | 2013 | 325,000 | 325,000 | (5) | — | — | — | 40,050 | (13) | 690,050 | |||||||||||||||
Former Chief Risk Officer of | 2012 | 325,000 | 325,000 | 347,700 | — | — | 43,540 | 1,041,240 | |||||||||||||||||
BankUnited | 2011 | 325,000 | 300,000 | 576,270 | — | — | 23,025 | 1,224,295 | |||||||||||||||||
Douglas J. Pauls | 2013 | 282,693 | (4) | — | — | — | 7,148 | (8) | 8,213 | (14) | 298,054 | ||||||||||||||
Senior Advisor and Former Chief | 2012 | 650,000 | 200,000 | — | — | 4,781 | 66,452 | 921,233 | |||||||||||||||||
Financial Officer | 2011 | 650,000 | — | — | 719,000 | 1,599 | 44,250 | 1,414,849 |
The following table sets forth certain information with respect to the plan-based awards granted to each of our named executive officers during 2012.2013.
20122013 Grants of Plan-Based Awards
| | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | All Other Stock Awards: Number of Shares of Stock (#) | | | ||||||||||||||||||
| | Closing Market Price on Date of Grant ($/Sh) | Grant Date Fair Value of Stock Awards ($) | |||||||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | ||||||||||||||||||
Mr. Kanas | 8/29/2012 | 1,190,000 | 1,530,000 | 1,870,000 | 178,643 | (2) | 25.19 | 3,980,250 | (5) | |||||||||||||
Mr. Pauls | N/A | — | — | — | — | — | — | |||||||||||||||
Mr. Bohlsen | 8/29/2012 | 250,000 | 375,000 | 500,000 | 29,774 | (3) | 25.19 | 750,000 | ||||||||||||||
Mr. Singh | 8/29/2012 | 250,000 | 375,000 | 500,000 | 89,322 | (2) | 25.19 | 1,990,125 | (5) | |||||||||||||
Mr. Melby | 12/10/2012 | — | — | — | 15,000 | (4) | 23.18 | 347,700 |
| | Estimated Payouts Under Non- Equity Incentive Awards(1) | | | | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | Number of Shares of Stock (#)(2) | Closing Market Price on Date of Grant ($/Sh) | | |||||||||||||||||
| | Grant Date Fair Value of Stock Awards ($)(4) | |||||||||||||||||||
| Grant Date | Threshold ($) | Target ($) | Maximum ($) | |||||||||||||||||
John A. Kanas | 8/7/2013 | 1,190,000 | 1,530,000 | 1,870,000 | 33,742 | 30.23 | 1,020,021 | ||||||||||||||
Leslie N. Lunak(3) | N/A | — | — | — | — | — | — | ||||||||||||||
Rajinder P. Singh | 8/7/2013 | 250,000 | 375,000 | 500,000 | 16,540 | 30.23 | 500,004 | ||||||||||||||
John Bohlsen | 8/7/2013 | — | — | — | 16,540 | 30.23 | 500,004 | ||||||||||||||
Randy R. Melby | N/A | — | — | — | — | — | — | ||||||||||||||
Douglas J. Pauls | N/A | — | — | — | — | — | — |
Outstanding Equity Awards at Fiscal Year-End
The following table shows grants of equity awards outstanding on December 31, 20122013 for each of our named executive officers:
Outstanding Equity Awards at 20122013 Fiscal Year-End
| Option Awards | Stock Awards | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares that Have Not Vested | Market Value of Shares That Have Not Vested(1) | |||||||||||||
Mr. Kanas | 2,226,258 | — | 27.00 | 2/2/2021 | |||||||||||||||
119,095 | (2) | 2,910,682 | |||||||||||||||||
Mr. Pauls | 181,399 | — | 27.00 | 2/2/2021 | |||||||||||||||
33,334 | 66,666 | (3) | 22.31 | 12/16/2021 | |||||||||||||||
Mr. Bohlsen | 1,137,865 | — | 27.00 | 2/2/2021 | |||||||||||||||
33,334 | 66,666 | (3) | 22.31 | 12/16/2021 | |||||||||||||||
29,774 | (2) | 727,677 | |||||||||||||||||
Mr. Singh | 989,448 | — | 27.00 | 2/2/2021 | |||||||||||||||
33,334 | 66,666 | (3) | 22.31 | 12/16/2021 | |||||||||||||||
59,548 | (2) | 1,455,353 | |||||||||||||||||
Mr. Melby | 9,733 | 4,867 | (4) | 17.86 | 3/29/2020 | ||||||||||||||
30,333 | (5) | 741,339 |
| Option Awards | Stock Awards | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares that Have Not Vested | Market Value of Shares That Have Not Vested(6) | |||||||||||||
John A. Kanas | 2,226,258 | — | 27.00 | 2/2/2021 | |||||||||||||||
82,041 | (2) | $ | 2,700,790 | ||||||||||||||||
Leslie N. Lunak | 18,000 | — | 22.24 | 11/17/2020 | |||||||||||||||
15,666 | (3) | $ | 515,725 | ||||||||||||||||
Rajinder P. Singh | 989,448 | — | 27.00 | 2/2/2021 | |||||||||||||||
66,667 | 33,333 | (1) | 22.31 | 12/16/2021 | 40,800 | (4) | $ | 1,343,136 | |||||||||||
John Bohlsen | 1,137,865 | — | 27.00 | 2/2/2021 | |||||||||||||||
66,667 | 33,333 | (1) | 22.31 | 12/16/2021 | — | — | |||||||||||||
Randy R. Melby | 10,600 | — | 17.86 | 3/29/2020 | |||||||||||||||
17,667 | (5) | $ | 581,598 | ||||||||||||||||
Douglas J. Pauls | 181,399 | — | 27.00 | 2/2/2021 | |||||||||||||||
33,333 | — | 22.31 | 12/16/2021 | — | — |
Option Exercises and Stock Vested
The following table contains information regarding equity held by our named executive officers, which vested during fiscal year 2012.2013.
20122013 Option Exercises and Stock Vested
| Option Awards | Stock Awards | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#)(1) | Value Realized on Vesting ($)(2) | |||||||||
Mr. Kanas | — | — | 533,703 | 12,735,501 | |||||||||
Mr. Pauls | — | — | 38,635 | 975,534 | |||||||||
Mr. Bohlsen | — | — | 242,346 | 5,765,411 | |||||||||
Mr. Singh | — | — | 240,510 | 5,741,086 | |||||||||
Mr. Melby | — | — | 7,667 | 177,174 |
| Option Awards | Stock Awards | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(3) | |||||||||
John A. Kanas | — | — | 70,796 | (1) | 2,300,347 | ||||||||
Leslie Lunak | — | — | 11,500 | (2) | 342,583 | ||||||||
Rajinder P. Singh | — | — | 35,288 | (1) | 1,146,848 | ||||||||
John Bohlsen | — | — | 46,314 | (1) | 1,274,426 | ||||||||
Randy R. Melby | 4,000 | 59,800 | 12,666 | (2) | 382,353 | ||||||||
Douglas J. Pauls | 33,334 | 254,835 | — | — |
Nonqualified Deferred Compensation
The Management MembersMessrs. Kanas, Bohlsen, Singh and Mr. Pauls arewere eligible to participate in our Nonqualified Deferred Compensation Plan for fiscal year 2013. In 2014, we approved a new Nonqualified Deferred Compensation Plan in which all our named executive officers (as well as certain other employees) may participate. Our Nonqualified Deferred Compensation Plan allows each named executive officer the ability to defer compensation in excess of annual IRS limits that are applicable to our qualified 401(k) plan. Mr. Melby does not participate in our Nonqualified Deferred Compensation Plan. Each Management Memberof Messrs. Kanas, Bohlsen and Singh is (and Mr. Pauls is alsowas) eligible to receive company matching contributions under the plan. For the 20122013 plan year, we contributed an amount equal to one hundred percent of the first one percent plus seventy percent of the next five percent of eligible compensation that the executive electsMessrs. Kanas, Bohlsen, Singh and Pauls elected to defer under the plan. Amounts deferred by thea named executive officer are vested at all times and amounts that we contribute on histhe executive's behalf will become vested upon the earlier to occur of a change in control (as defined in the plan), the executive's death, disability, attainment of "Normal Retirement Age" under our 401(k) plan or completion of two years of service. Amounts deferred under our Nonqualified Deferred Compensation Plan are distributed upon a date specified by the executive, which may be no earlier than January 1 of the third plan year following the plan year in which the compensation would have otherwise been paid to the executive, or upon the earliest to occur of the executive's separation from service, disability or a change in control.
Nonqualified Deferred Compensation Table for 2012
2013
| Executive Contributions in Last FY ($)(1) | Registrant Contributions in Last FY ($)(2) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals / Distributions ($) | Aggregate Balance at Last FYE ($) | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mr. Kanas | 150,000 | 112,500 | 31,984 | (72,868 | ) | 739,368 | ||||||||||
Mr. Pauls | 40,000 | 12,992 | 10,908 | — | 221,296 | |||||||||||
Mr. Bohlsen | 75,000 | 56,250 | 13,793 | (31,348 | ) | 336,432 | ||||||||||
Mr. Singh | 80,000 | 60,000 | 13,869 | (31,348 | ) | 345,258 | ||||||||||
Mr. Melby | — | — | — | — | — |
| Executive Contributions in Last FY ($)(1) | Registrant Contributions in Last FY ($)(2) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals / Distributions ($) | Aggregate Balance at Last FYE ($) | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
John A. Kanas | 171,900 | 128,925 | 40,996 | (122,024 | ) | 959,165 | ||||||||||
Leslie Lunak | — | — | — | — | — | |||||||||||
Rajinder P. Singh | 89,700 | 67,275 | 19,705 | (52,495 | ) | 469,444 | ||||||||||
John Bohlsen | 104,700 | 78,525 | 20,135 | (52,495 | ) | 487,697 | ||||||||||
Randy R. Melby | — | — | — | — | — | |||||||||||
Douglas J. Pauls | 6,583 | 2,963 | 13,790 | — | 244,631 |
Potential Payments Upon Termination or Change-in-Control
The Employment Agreementsemployment arrangements with our named executive officers provide for certain severance payments and benefits, to the extent applicable, in the event of a termination of employment.employment as described below:
Employment Agreements with Messrs. Kanas, Singh and Bohlsen. The Employment Agreements for Messrs. Kanas and Singh and the former Employment Agreements for Mr. Pauls' employment agreements expired on September 1, 2012, and therefore, he is not entitled to severance payments or benefits in the event of a termination of his employment. Mr. Melby is entitled to certain severance payments under the terms of his change in control agreement with the Bank; however, Mr. Melby is not entitled to severance payments or benefits under the terms of his offer letter with the Bank.
Each of the Employment AgreementsBohlsen provide that in the event of an executive's termination of employment by either the Bank or the Company without Cause (as defined in the respective agreements) or by the Executive for Good Reason (as defined in the respective agreements), such executive will be entitled to receive, subject to the executive's execution of a release of claims against the Bank or the Company, as applicable, payment of any unpaid retention awards, the accelerated vesting of equity awards (subject to certain exceptions), continued coverage under the employer's group health plans at the employer's expense for 24 months, as well as a payment equal to the following: $1,530,000 and $1,530,000 under Mr. Kanas' Employment Agreements with the Bank and the Company, respectively; and $1,312,500 and $437,500 under Mr. Singh's Employment Agreements with the Bank and the Company, respectively; and $1,487,500 and $262,500 under Mr. Bohlsen'sCompany. The Employment Agreements with Mr. Bohlsen expired on July 1, 2013 and as of such date Mr. Bohlsen was no longer entitled to any severance benefits under the Employment Agreements.
Each of the Employment Agreements also provide that in the event of death or disability, the portion of any outstanding equity award held by the applicable executive which would have vested in the 12 months immediately following the executive's death or disability will vest. Furthermore, each applicable executive and his dependents are generally entitled to receive continued coverage under the group health plans of the Bank andor the Company, respectively.as applicable, at the sole expense of the Bank or the Company, as applicable, for 24 months following the executive's disability or death.
Each of the Employment Agreements with the Bank provide that in the event that on or prior to August 31, 2013 (prior(or prior to the expiration of the employment term, in the case of Mr. Bohlsen), it is publicly announced that a binding agreement has been entered into by the Bank and/or the Company with respect to a transaction that, if consummated, would constitute a change in control transaction giving rise to payments and benefits that trigger excise taxes under Section 4999 of the Internal Revenue Code, the Bank will reimburse the executive for any such excise taxes and for the taxes imposed on
such reimbursement amount, as well as for certain related costs incurred by Executive. After August 31, 2013, suchthe executive. Such excise tax reimbursement obligation will expireexpired on August 31, 2013 and havehas no continued effect.
Each of the Management MembersMessrs. Kanas, Bohlsen and Singh are subject to confidentiality and non-disparagement obligations under the Employment Agreements, as well as non-competition and non-solicitation covenants for a period of 18 months following a termination of employment by the Company for Cause or following Management Member'sthe applicable executive's voluntary resignation without Good Reason.
The Employment Agreements are subject to regulatory laws to the extent applicable.
Employment Agreement with Mr. Pauls. Mr. Pauls' employment agreements expired on September 1, 2012, and therefore, he is not entitled to severance payments or benefits in the event of a termination of his employment.
Change in Control Agreements with Mr. Melby and Ms. Lunak. Ms. Lunak is, and Mr. Melby was, a party to a change in control agreement which provides that, if the executive's employment is terminated by the Company without Cause (as defined in the change in control agreement), or by the executive due to a reduction in base salary, each within six months following a change in control of the Company, the executive will be entitled to a payment in the amount equal to one year of his or her base salary, payable on the date that is six months following the change in control. The agreement further provides for payment, on the date that is six months following completion of the change in control, of a lump sum retention bonus equal to one year of base salary (as in effect immediately prior to the change in control), subject to the executive's continued employment with BankUnited and any successor to BankUnited through such date. Mr. Melby's offer letter and change in control agreement were terminated effective March 31, 2014, in connection with Mr. Melby's resignation and therefore Mr. Melby is no longer entitled to any severance or change in control protections under those agreements.
Equity Awards. In the event of a change in control (as defined in the Company's 2010 Omnibus Equity Incentive Plan), all outstanding awards held by the named executive officers that are then unvested would be subject to accelerated vesting, and any performance-based shares to be prospectively awarded with respect to a pending performance period would be granted and vested at target levels. Furthermore, under the terms of his change in control agreement, Mr. Melby would be entitled to a payment in the amount equal to one year of his base salary, payable on the date that is six months following completion of a change in control.
Pursuant to the Employment Agreements, in the event of death or disability, the portion of the outstanding equity award which would have vested in the 12 months immediately following the Management Member's death or disability will vest. Furthermore, each Management Member and his dependents are generally entitled to receive continued coverage under the group health plans of the Bank or the Company, as applicable, at the sole expense of the Bank or the Company, as applicable, for 24 months following his disability or death.
The following table provides information concerning the estimated payments and benefits that would be provided in the circumstances described above for each of the named executive officers, which were estimated assuming that the triggering event took place on the last business day of the fiscal year (December 31, 2012)2013) and calculated using the closing price per share of our common stock
on such date ($24.44)32.92), and also assumes a cash-out of equity awards in connection with a change in control.
| Cash Severance ($) | Continued Benefits ($) | Value of Acceleration of Equity ($) | Excise Tax Gross-Up ($) | Total ($) | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mr. Kanas | ||||||||||||||||
Death / Disability | — | 35,964 | 1,682,008 | — | 1,717,971 | |||||||||||
For Cause / Without Good Reason | — | — | — | — | — | |||||||||||
Without Cause / For Good Reason | 3,060,000 | 35,964 | 3,590,682 | — | 6,686,646 | |||||||||||
Change in Control | — | — | 3,590,682 | — | 3,590,682 | |||||||||||
Mr. Pauls | ||||||||||||||||
Change in Control | — | — | 141,999 | — | 141,999 | |||||||||||
Mr. Bohlsen | ||||||||||||||||
Death / Disability | — | — | (1) | 923,676 | — | 923,676 | ||||||||||
For Cause / Without Good Reason | — | — | — | — | — | |||||||||||
Without Cause / For Good Reason | 1,750,000 | — | (1) | 1,244,675 | — | 2,994,675 | ||||||||||
Change in Control | — | — | 1,244,675 | — | 1,244,675 | |||||||||||
Mr. Singh | ||||||||||||||||
Death / Disability | — | 31,514 | 923,676 | — | 955,190 | |||||||||||
For Cause / Without Good Reason | — | — | — | — | — | |||||||||||
Without Cause / For Good Reason | 1,750,000 | 31,514 | 1,972,352 | — | 3,753,866 | |||||||||||
Change in Control | — | — | 1,972,352 | — | 1,972,352 | |||||||||||
Mr. Melby | ||||||||||||||||
Change in Control | 325,000 | — | 406,757 | — | 731,757 |
| Cash Severance ($) | Continued Benefits ($) | Value of Acceleration of Equity ($) | Excise Tax Gross-Up ($) | Total ($) | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mr. Kanas | ||||||||||||||||
Death / Disability | — | 39,389 | 2,557,205 | — | 2,596,594 | |||||||||||
For Cause / Without Good Reason | — | — | — | |||||||||||||
Without Cause / For Good Reason | 3,060,000 | 39,389 | 2,700,790 | — | 5,800,179 | |||||||||||
Change in Control | — | — | 3,380,790 | — | 3,380,790 | |||||||||||
Leslie Lunak | ||||||||||||||||
Change in Control | 400,000 | — | 927,225 | — | 1,327,225 | |||||||||||
Rajinder Singh | ||||||||||||||||
Death / Disability | — | 39,590 | 1,640,311 | — | 1,679,901 | |||||||||||
For Cause / Without Good Reason | — | — | — | — | — | |||||||||||
Without Cause / For Good Reason | 1,750,000 | 39,590 | 1,696,799 | — | 3,786,389 | |||||||||||
Change in Control | — | — | 2,071,799 | — | 2,071,799 | |||||||||||
John Bohlsen | ||||||||||||||||
Change in Control | — | 353,663 | — | 353,663 | ||||||||||||
Randy R. Melby | ||||||||||||||||
Change in Control | — | — | 581,598 | — | 581,598 | |||||||||||
Douglas J. Pauls | ||||||||||||||||
Change in Control | — | — | — | — | — |
EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes information, as of December 31, 2012,2013, relating to the Company's equity compensation plans pursuant to which grants of equity incentive awards to acquire shares of our common stock may be granted from time to time.
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities available for issuance under equity compensation plans (excluding securities reflected in first column) | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities available for issuance under equity compensation plans (excluding securities reflected in first column) | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity compensation plans approved by securityholders | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||
Equity compensation plans not approved by securityholders(2) | 6,689,745 | (1) | $ | 25.66 | (3) | 1,172,566 | (4) | |||||||||||||
Equity compensation plans not approved by securityholders(1)(2) | 5,726,579 | $ | 26.27 | (3) | 1,177,909 | (4) | ||||||||||||||
Total | 6,689,745 | 1,172,566 | 5,726,579 | 1,177,909 | ||||||||||||||||
| | | | | | | | |||||||||||||
| | | | | | | | |||||||||||||
Pursuant to the terms of the 2009 Plan the Board may grant up to 2,312,500 non-qualified stock options to key employees of the Companywas frozen on February 12, 2014 and its affiliates. Stock options may be granted with an exercise price equal to or greater than the stock's fair value at the date of grant. The terms and conditions applicable to options grantedno further awards are available for issuance under the 2009 Plan are determined by the Board or a committee thereof, provided however, that each stock option shall expire on the tenth anniversary of the date of the grant, unless it is earlier exercised or forfeited. Options granted to date under the 2009 Plan vest over a period of three years. Shares of common stock delivered under the 2009 Plan may be authorized but unsold common stock or previously issued common stock reacquired by the Company. Vesting of stock options may be accelerated in the event of a change in control, as defined. The Company does not intend to issue any new awards under the 2009 Plan.
In connection with the IPO, the Company adopted the 2010 Plan. The 2010 Plan is administered by the Board or a committee thereof and provides for the grant of non-qualified stock options, share appreciation rights, restricted shares, deferred shares, performance shares, unrestricted shares and other share-based awards to selected employees, directors or independent contractors of the Company and its affiliates. The number of shares of common stock authorized for award under the 2010 Plan is 7,500,000, of which 1,172,5661,177,909 shares remainremained available for issuance as of December 31, 2012.2013. In February 2014, the Compensation Committee approved awards of 620,180 shares subject to restricted share awards to employees in recognition of their contribution to the Company's performance in fiscal year 2013. Shares of common stock delivered under the 2010 Plan may consist of authorized but unissued shares or previously issued shares reacquired by the Company. The term of a share option or stock appreciation right issued under the 2010 Plan may not exceed ten years from the date of grant and the exercise price may not be less than the fair market value of the Company's common stock at the date of grant. Unvested awards generally become fully vested in the event of a change in control (as defined in the 2010 Plan).
APPROVAL OF THE BANKUNITED, INC. ANNUAL2014 OMNIBUS EQUITY INCENTIVE PLAN
InOn April 2013,8, 2014, the Board of Directors approved the BankUnited, Inc. Annual2014 Omnibus Equity Incentive Plan (the "Incentive"2014 Omnibus Plan"), subject to approval by our stockholders, pursuant to which certain annual bonus awards are intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended ("Section 162(m)").
Generally, Section 162(m) does not permit a tax deduction for compensation in excess of $1 million paid in any taxable year by a publicly-held company to its chief executive officer or any of its three other most highly compensated executive officers (other than its principal financial officer). However, compensation based solely on the attainment of performance goals is excluded from this deduction limitation if the following criteria are satisfied: (i) the performance goals are objective, pre-established and determined by a compensation committee of the board of directors, which compensation committee is comprised solely of two or more outside directors; (ii) the material terms of the performance goals under which the compensation is to be paid are disclosed to the stockholders and approved by a majority stockholder vote; and (iii) the compensation committee certifies that the performance goals and other material terms were in fact satisfied before the compensation is paid.stockholders.
The Board of Directors believes that the adoption of the Incentive2014 Omnibus Plan is in the best interests of the Company and its stockholders, and, as partstockholders. As a key element of our compensation program, isour equity grants are designed to enhance stockholder value by (i) aligning the interests of ourprovide additional incentives to selected management, team with those of our stockholders,employees, directors, independent contractors and (ii) retaining management. Eachconsultants of the compensation programs, includingCompany or its Affiliates in order to retain such persons whose efforts will facilitate the Incentive Plan, that the Company has developedlong-term growth and implemented satisfies one or moreprofitability of the following specific objectives:Company. Stockholder approval of the 2014 Omnibus Plan will accomplish the following:
TheIf the 2014 Omnibus Plan is not approved by stockholders, are being asked to approve the Incentive Plan so that certain awards granted under the plan may qualify as performance-based compensation under Section 162(m). Stockholder approval of the Incentive2010 Plan will enable the Company to beremain in a position to continue to grant annual cash incentive awards while preserving the tax deductibility of these awards.effect in accordance with its existing terms.
Rationale for Adopting 2014 Omnibus Plan
In considering the proposal to adopt the 2014 Omnibus Plan, the Compensation Committee considered the number of shares required to continue making equity awards at levels consistent with prior practice and the dilutive impact that additional shares would have on our stockholders. If we do not approve the 2014 Omnibus Plan, the Company expects that we will exhaust the share reserve under the 2010 Plan within fewer than two years, at which time we would lose an important compensation tool designed to align stockholder interests and attract, motivate and retain highly qualified talent. The Compensation Committee has determined that 4,000,000 shares should satisfy our compensation needs for at least the next four years while maintaining acceptable levels of potential stockholder dilution. In its determination to adopt the 2014 Omnibus Plan, including the share reserve thereunder, the Compensation Committee considered the review prepared by Towers Watson, its independent compensation consultant, which included an analysis of the burn rate, dilution and overhang metrics discussed below.
We are committed to effectively managing the Company's equity compensation share reserve while minimizing stockholder dilution. The Company has carefully managed its equity-based compensation in order to maintain an acceptable burn rate. Using the current methodology of Institutional Shareholder Services ("ISS"), the Company's gross burn rate for each of the last three fiscal years is within the guidelines recommended by ISS. Our burn rate for the last three years ending on December 31, 2013 was 1.60%, well below the ISS cap of 3.13% for our industry classification. The requested share increase under the 2014 Omnibus Plan represents approximately 4.0% of outstanding shares of the Company as of December 31, 2013. The total potential dilution, assuming all the shares that are proposed to be reserved for issuance under the 2014 Omnibus Plan are issued, will be 3.8% of our common stock outstanding as of December 31, 2013. The Company also believes that it maintains a reasonable overhang, calculated by dividing the total number of shares subject to equity awards
outstanding under all of the Company's equity plans at a point in time by the number of shares outstanding at the same point in time, which was 5.7% as of December 31, 2013.
Summary of the Material Terms of the Incentive2014 Omnibus Plan
The following is a description of the material features of the Incentive2014 Omnibus Plan. It does not purport to be complete and is qualified in its entirety by the full text of the Incentive2014 Omnibus Plan, which is attached hereto as Appendix A. The Incentive2014 Omnibus Plan is not intended to be (and will not be construed and administered as) an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended.
AdministrationPurpose
At the discretionThe purposes of the Board2014 Omnibus Plan are to provide additional incentives to selected employees, directors, or independent contractors of Directors,and consultants to us or certain of our affiliates, in order to strengthen their commitment, motivate them to faithfully and diligently perform their responsibilities and to attract and retain competent and dedicated persons who are essential to the success of our business and whose efforts will impact our long-term growth and profitability.
The 2014 Omnibus Plan provides for the grant of options to acquire shares of common stock (all options granted under the 2014 Omnibus Plan are intended to be non-qualified options and are not intended to qualify as "incentive stock options" within the meaning of Section 422 of the Internal Revenue Code), share appreciation rights ("SARs"), restricted shares, deferred shares, performance shares, unrestricted shares and other share-based awards.
Plan Administration; Eligibility
The 2014 Omnibus Plan may be administered by theour Board of Directors or by a committee of directors designated by our Board (the "Administrator"). The Administrator has broad administrative authority to interpret the Compensation Committee. However,2014 Omnibus Plan and may prescribe, amend and rescind rules and make all other determinations necessary or desirable for the administration of the 2014 Omnibus Plan. Pursuant to its administrative authority, the Administrator may, among other things: select the persons who will receive awards and determine the types of awards to be granted; determine the terms and conditions of those awards, and amend the terms and conditions of outstanding awards. Employees, directors, independent contractors and consultants of the Company and its affiliates are eligible to participate in the 2014 Omnibus Plan. As of April 1, 2014, there were approximately 1,700 individuals who would be eligible to participate in the 2014 Omnibus Plan.
Shares of Common Stock Subject to Awards
The number of shares of our common stock available for issuance under the 2014 Omnibus Plan is 4,000,000. The aggregate awards granted during any single year to a person who is likely to be a "covered employee" (within the meaning of Section 162(m) of the Internal Revenue Code) may not exceed 400,000 shares of our common stock.
The shares of our common stock issued under the 2014 Omnibus Plan may consist of authorized but unissued shares or shares that we may reacquire in the open market, in private transactions, or otherwise. If any shares of common stock subject to an award granted under the 2014 Omnibus Plan are forfeited, cancelled, exchanged or surrendered or if an award otherwise terminates or expires without a distribution of shares to the extentparticipant, those shares will again be available for awards under the 2014 Omnibus Plan.
The 2014 Omnibus Plan provides that, in the event of a merger, consolidation, recapitalization, share dividend or other change in corporate structure affecting our common stock, the Administrator
will make, in its sole discretion, an equitable substitution or proportional adjustment in (i) the aggregate number of shares of common stock reserved for issuance under the 2014 Omnibus Plan, (ii) the maximum number of shares of common stock that may be subject to awards granted to a participant in any calendar year, (iii) the kind, number and exercise price subject to outstanding options and SARs granted under the 2014 Omnibus Plan, and (iv) the kind, number and purchase price of shares of common stock subject to outstanding awards of restricted shares, deferred shares, performance shares or other share-based awards granted under the Incentive Plan2014 Omnibus Plan. In addition, in the event of a merger, amalgamation, consolidation, reclassification, spin-off, spin-out, repurchase, reorganization, recapitalization, share dividend or other change in corporate structure affecting the common stock, the Administrator may, in its discretion, terminate all awards in exchange for the payment of cash or in-kind consideration.
Awards
General. The terms and conditions of each award granted under are intended to satisfy the requirements of Section 162(m), the Incentive2014 Omnibus Plan will be administeredset forth in an award agreement in a form to be determined by the Compensation CommitteeAdministrator.
Options. The exercise period of an option may not exceed ten years from the date of grant and consistthe exercise price may not be less than 100% of the fair market value of a share of common stock on the date of grant.
An optionee will have no rights to dividends or distributions or other rights of a stockholder with respect to the shares of common stock subject to an option until the optionee has given written notice of exercise and paid the exercise price and applicable withholding taxes.
Unless the award agreement provides otherwise, in the event of an optionee's termination of employment or service for any reason other than for cause, retirement, disability or death, the optionee's options (to the extent exercisable at the time of such termination) generally will remain exercisable until 90 days after such termination and will then expire. Unless the applicable option agreement provides otherwise, in the event of an optionee's termination of employment or service due to retirement, disability or death, the optionee's options (to the extent exercisable at the time of such termination) generally will remain exercisable until one year after such termination and will then expire. Options that were not fewerexercisable on the date of termination of the optionee's employment or service for any reason other than two members who are "outside directors" withinfor cause will expire at the meaningclose of Section 162(m)business on the date of such termination. In the event of an optionee's termination of employment or service for cause, the optionee's outstanding options will expire at the commencement of business on the date of such termination.
Share Appreciation Rights. SARs may be granted under the 2014 Omnibus Plan either alone ("free-standing SAR") or in conjunction with all or part of any option granted under the 2014 Omnibus Plan ("related SAR"). It is currently contemplated thatA free-standing SAR granted under the Incentive2014 Omnibus Plan will be administeredentitle its holder to receive, at the time of exercise, an amount per share equal to the excess of the fair market value (at the date of exercise) of a share of common stock over a specified price fixed by the Compensation Committee.Administrator on the date of grant (which shall be no less than fair market value at the date of grant). A related SAR granted under the 2014 Omnibus Plan will entitle its holder to receive, at the time of exercise of the SAR and surrender of the applicable portion of the related option, an amount per share equal to the excess of the fair market value (at the date of exercise) of a share of common stock over the exercise price of the related option. The Administrator may determine to settle the exercise of a SAR in shares of common stock, cash or any combination of both. The exercise price of a SAR may not be less than 100% of the fair market value of a share of common stock on the date of grant. The exercise period of a free-standing SAR may not exceed ten years from the date of grant. The exercise period of a related SAR will expire upon the expiration of its related award.
The Compensation Committee hasParticipants who are granted SARs shall have no rights as stockholders of BankUnited, Inc. with respect to the authority, in its sole discretion,grant or exercise of such rights.
In the event of a participant's termination of employment or service, free-standing SARs will be exercisable at such times and subject to such terms and not inconsistentconditions as determined by the Administrator in the applicable award agreement, while related SARs will be exercisable at such times and subject to the terms and conditions applicable to the related option.
Restricted Shares, Deferred Shares and Performance Shares. Restricted shares, deferred shares and performance shares may be issued either alone or in addition to other awards granted under the 2014 Omnibus Plan. The Administrator will determine the purchase price and performance objectives, if any, with respect to the expressgrant of restricted shares, deferred shares and performance shares. Subject to the provisions of the Incentive Plan, to administer the Incentive2014 Omnibus Plan and the applicable award agreement, the Administrator has the sole discretion to exerciseprovide for the lapse of restrictions in installments or the acceleration or waiver of restrictions (in whole or part) under certain circumstances, including the attainment of certain performance goals, a participant's termination of employment or service or a participant's death or disability.
Unless the award agreement provides otherwise, participants with restricted shares and performance shares will generally have all of the powersrights of a shareholder, including dividend or distribution rights; provided, however that any dividends or dividend equivalents provided with respect to restricted shares, deferred shares or performance shares that are subject to the attainment of specified performance goals will be subject to the same terms, conditions and authorities either specifically granted underrisk of forfeiture as the Incentive Planunderlying awards. Participants with deferred shares will generally not have the rights of stockholders, but, during the restricted period, deferred shares may be credited with dividend or necessarydistribution equivalent rights, if the award agreement so provides.
The rights of a participant with respect to restricted shares, deferred shares and performance shares upon termination of the participant's employment or advisableservice will be set forth in the administration of the Incentive Plan, including, without limitation, the authority to grant awards, to determine the persons to whom and the time or times at which awards will be granted, to determine the terms, conditions, restrictions and performance criteria (including applicable performance goals) relating to any award to determine whether, to what extent and under what circumstances an awardagreement.
Performance shares may be settled, cancelled, forfeited or surrendered, to construe and interpret the Incentive Plan and any award, to prescribe, amend and rescind rules and regulations relatingsubject to the Incentive Plan, and to make all other determinations deemed necessary or advisable for the administration of the Incentive Plan. All decisions made by the Compensation Committee will be final and binding on the Company and Incentive Plan participants.
Eligibility
Awards under the Incentive Plan may be granted to those employees of the Company and its subsidiaries who are selected by the Compensation Committee, taking into account such factors as the Compensation Committee deems relevant in connection with accomplishing the purposes of the Incentive Plan. Currently, only three employees are eligible for participation in the Incentive Plan.
Performance Period
The length of any performance period under the Incentive Plan will be no longer than 12 months, unless otherwise determined by the Compensation Committee.
Performance Goals
The payment of awards under the Incentive Plan that are intended to comply with Section 162(m) of the Code will be based upon the attainmentachievement of one or more of the following performance goals (collectively, the "Performance Goals"):
resources management, supervision of litigation, regulatory matters, information technology, and goals relating to acquisitions, divestitures, joint ventures and/or similar transactions, and/or budget comparisons;
Terms Related to the Performance Goals
Other Share-Based Awards. The Administrator may grant other share-based awards upon terms and conditions determined by the Administrator at the date of grant or thereafter.
Treatment of Outstanding Awards upon a Change in Control
The 2014 Omnibus Plan provides that, unless otherwise determined by the Administrator and evidenced in an award agreement, if a change in control occurs, then (i) any unvested or unexercisable portion of an award carrying a right to exercise shall become fully vested and exercisable and (ii) the restrictions, deferral limitations, payment conditions and forfeiture conditions applicable to any other award granted under the 2014 Omnibus Plan will lapse and such unvested awards will be governeddeemed fully vested and any performance conditions imposed with respect to such awards will be deemed to be fully achieved.
For purposes of the 2014 Omnibus Plan a "change in control" means, in general: (i) a person or entity acquires securities representing 50% or more of our voting power; (ii) certain mergers or amalgamations involving us or any of our subsidiaries and another corporation; (iii) an unapproved change in the majority membership of our Board; (iv) the approval by Section 162(m) restrictions.
TermsTermination of Employment and Service
Unless otherwise provided in an award agreement, upon a participant's termination of employment or service, the participant will forfeit any options to the extent they were not exercisable on the date of such termination. Related SARs shall be exercisable at such time or times and subject to such terms and conditions as the related option. The rights of participants granted free-standing SARs, restricted shares, deferred shares, performance shares or other share-based awards upon a termination of employment or service shall be set forth in the award agreement.
Transferability of Awards
The Compensation Committee will specifyUntil such time as the Performance Goals applicableawards are fully vested and/or exercisable in accordance with the 2014 Omnibus Plan or an award agreement thereunder, no purported sale, assignment, mortgage, hypothecation, transfer, charge, pledge, encumbrance, gift, transfer in trust (voting or other) or other disposition of, or creation of a security interest in or lien on, any award or any agreement or commitment to each award under the Incentive Plan generally no later than 90 days following the commencementdo any of the applicable performance period. At such time,foregoing by any holder thereof in violation of the Compensation Committeeprovisions of the 2014
Omnibus Plan or an award agreement will also, if applicable, specifybe valid, except with the threshold, target and maximum levelsprior written consent of performance applicable to the Performance Goals. Awards under the Incentive Plan with respect to any performance periodAdministrator, which consent may be expressed as a dollar amountgranted or as a percentagewithheld in the sole discretion of the participant's base salary asAdministrator. Unless otherwise determined by the Administrator, an option may be exercised, during the lifetime of the dateparticipant, only by the participant or, during any period during which the participant is under a legal disability, by the participant's guardian or legal representative.
Amendment or Termination of Plan
Our Board may amend, alter or terminate the 2014 Omnibus Plan, provided that no such amendment, alteration or termination shall be made that would impair the rights of a participant under any award theretofore granted without such participant's consent. Unless the Board determines otherwise, the Board shall obtain approval of the Company's stockholders for any amendment that would require such approval in order to satisfy the requirements of Section 162(m) of the Internal Revenue Code, any rules of the stock exchange on which the Company's common stock is traded or other applicable Performance Goals are establishedlaw, including, without limitation, repricing of stock options and option exchanges.
Determination of Fair Market Value
The fair market value of a share of common stock will be determined by the Compensation Committee.
No later than 45 days following the end of a performance period, the Compensation Committee will determine and certify in writing whether, and to what extent, the applicable Performance Goals have been satisfied for an applicable performance period. The Compensation Committee may,Administrator in its sole discretion, reducesubject to certain limitations, including if our common stock is admitted to trading on a national securities exchange, the fair market value of a share of common stock will be the closing sales price per share on the applicable date, or if no sale was reported on that date, for the last preceding date on which there was a sale of shares of common stock on the exchange.
Certain Federal Income Tax Consequences
Options
All options to acquire shares of common stock granted under the 2014 Omnibus Plan are intended to be non-qualified options and are not intended to qualify as "incentive stock options" within the meaning of Section 422 of the Internal Revenue Code. A participant generally will not recognize taxable income upon the grant of an option. Rather, at the time of exercise of the option, the participant will recognize ordinary income for income tax purposes in an amount of an award otherwise determined pursuantequal to the Incentive Plan. All bonus payments underexcess of the Incentive Planfair market value of the shares of common stock purchased over the exercise price. The Company generally will be madeentitled to a tax deduction at such time and in the same amount that the participant recognizes ordinary income. If the shares of common stock acquired upon the exercise of a non-qualified option are later sold or exchanged, then the difference between the amount received upon such sale or exchange and the fair market value of such shares on the date of such exercise will generally be taxable as long-term or short-term capital gain or loss (if the shares are a capital asset of the optionee), depending upon the length of time such shares were held by the participant.
Share Appreciation Rights
A participant generally will not recognize taxable income upon the grant of a SAR. Rather, at the time of exercise of the SAR, the participant will recognize ordinary income for income tax purposes in an amount equal to the value of any cash noreceived and the fair market value on the date of exercise of any shares of common stock received. The Company generally will be entitled to a tax deduction at such time and in the same amount that the optionee recognizes ordinary income. The participant's tax basis in any shares received will be the fair market value on the date of exercise and, if the shares are later than 60 days followingsold or exchanged, then the difference between the amount received upon such sale or exchange and the fair market value of the shares on the date of exercise will generally be taxable as long-term or short-term capital gain or loss (if the shares are a capital asset of the participant) depending upon the length of time such shares were held by the participant.
last dayRestricted Shares and Performance Awards
A participant generally will not be taxed upon the grant of a restricted share or performance award, but rather will recognize ordinary income in an amount equal to the fair market value of the related performance period and generally no later than the 15th day of the third month following the end of the Company's fiscal year in which the relevant performance period ended. The Compensation Committee has the authority to establish a deferred compensation program for participants to defer receipt of their Awards.
No employee of the Company or any of its subsidiaries may have any claim to be granted an award under the Incentive Plan. There is no obligation for uniformity of treatment among participants under the Incentive Plan. The Incentive Plan does not constitute a contract of employment or confer upon any participant the right to continued employment by the Company. A participant's only interest under the Incentive Plan will be the right to receive a payment of cash pursuant to the terms of the applicable award and the Incentive Plan. The Incentive Plan is intended to constitute an "unfunded" plan for incentive compensation, and no participant will have any rights that are greater than those of a general creditor of the Company with respect to any payments not yet made pursuant to an award granted under the Incentive Plan.
Covered Awards
A "Covered Award" is an award (i) that will be paid to a "covered employee" within the meaning of Section 162(m)(3), (ii) that the Compensation Committee expressly designates as performance-based compensation and intends to be fully deductible under Section 162(m), and (iii) that will be paid following the shareholder approval required by Section 162(m)(4)(C)(ii). Notwithstanding any provision to the contrary, the following provisions will control with respect to any Covered Award:
Toon the extent any provision ofshares before the Incentive Plan or an award or any action of the Compensation Committee or the Company as it relates to an award intended to qualify as performance-based compensation under Section 162(m) results in the application of Section 162(m)(1) to such award, such provision or actionrestrictions lapse will be deemed null and void to the extent permitted by law and deemed advisable by the Compensation Committee.
Change in Control
In the event of a change in control, with respect to the performance period then in effect, each participant under the Incentive Plan will be paid, upon such change in control, an amount in cash equal to such participant's award with respect to the performance period assuming that the greater of (x) target levels of performance for the entire performance period or (y) actual levels of performance through the end of the calendar month immediately preceding the calendar month in which the change in control occurs, on an annualized basis, had been met, prorated based on the number of days elapsed in such performance period as of the date on which the change in control occurs. Additionally, any award payable in accordance with the terms of the Incentive Plan in respect of a completed performance period, but unpaid, will be paidtaxable to the participant upon such change in control.
For purposesas additional compensation (and not as dividend income). Under Section 83(b) of the Incentive Plan,Internal Revenue Code, a "changeparticipant may elect to recognize ordinary income at the time the restricted or performance shares are awarded in control" generally meansan amount equal to their fair market value at that time, notwithstanding the firstfact that such shares are subject to occurrestrictions and a substantial risk of any of the following:
Termination of Employment
In the event that a participant's employment terminates prior to the end of a performanceholding period for any reason, no amountcapital gains purposes will be payable to such participant under the Incentive Plan with respect tobegin at that performance period. However, at the time of termination, the participanttime. The Company generally will be entitled to receive an award in respect of a completed performance period for which an award has been determined to be payable in accordance withtax deduction at the terms of the Incentive Plan (or,time when, and to the extent paymentthat, ordinary income is recognized by such participant.
Deferred Shares
In general, the grant of deferred shares will not result in income for the participant or in a tax deduction for the Company. Upon the settlement of such an award, has been deferred pursuant to an arrangement established for such purposes, the award will be paid in full at the earliest such time as permissible under such arrangement).
Awards Not Transferable
A participant's rights and interests in and to payment of any award under the Incentive Plan may not be assigned, transferred, encumbered or pledged other than by will or the laws of descent and distribution; and are not subject to attachment, garnishment, execution or other creditor's processes.
Amendment and Termination of the Incentive Plan
The Incentive Plan may be amended, modified or terminated at any time by the Compensation Committee. Such amendment, modification, or termination of the Incentive Plan will not require the consent, ratification, or approval of any party, including any participant. The Compensation Committee may amend the performance goals as well as any award (including increasing, decreasing or eliminating any or all awards) prior to the payment thereof to the extent it deems appropriate for any reason, including compliance with applicable securities laws. Notwithstanding the foregoing, to the extent the Compensation Committee expressly designates such award as performance-based compensation under Section 162(m), the Compensation Committee will not have any authority to amend or modify the terms of such award in any manner that would impair its deductibility under Section 162(m).
Federal Income Tax Consequences
Generally, a participant will recognize ordinary income equal to the aggregate value of the payment received, and the Company generally will be entitled to a tax deduction in the same amount.
Deductibility Limit on Compensation in Excess of $1 Million
Section 162(m) of the Internal Revenue Code generally limits the deductible amount of the award receivedtotal annual compensation paid (including, unless an exception applies, compensation otherwise deductible in connection with awards granted under the Incentive2014 Omnibus Plan) by a public company to each "covered employee" to no more than $1 million. Excluded from total compensation for this purpose is compensation that is "performance-based" within the meaning of Section 162(m) of the Internal Revenue Code. Unless an exception applies, compensation otherwise deductible in connection with awards granted under the 2014 Omnibus Plan in the year of receipt. That income will be subject to applicable income and employment tax withholding bythis limit.
The comments set forth in the Company. If and toabove paragraphs are only a summary of certain of the extent that the Incentive Plan payments satisfy the requirements of Section 162(m) and otherwise satisfy the requirements for deductibility underUnited States federal income tax law, the Company may deduct the amounts paidconsequences relating to participantsU.S. residents under the Incentive2014 Omnibus Plan. No consideration has been given to the effects of foreign, state, local and other laws (tax or other) on the 2014 Omnibus Plan or on a participant, which laws will vary depending upon the particular jurisdiction or jurisdictions involved.
In August 2012, the Compensation Committee approved the participants and performance goalsThe benefits that will be awarded or paid under the Incentive2014 Omnibus Plan for the performance periodto particular individuals or groups cannot currently be determined. The number of July 1, 2012 through June 30, 2013, subject to
stockholder approval of the Incentive Plan prior to the payment of any bonuses thereunder. The following table sets forth information with respect to the awards granted in August 2012(if any) that an individual may receive under the Incentive Plan.
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Future participation under the Incentive2014 Omnibus Plan is in the discretion of the Compensation Committee. Moreover, future awards under the Incentive Plan for a given performance period are subject to the performance objectivesCommittee and targets established by the Compensation Committee in accordance with the terms of the Incentive Plan. Accordingly, it ishas not possible to determine the actual amounts that will be paid to particular individuals in thedetermined future under the Incentive Plan.awards or who might receive them.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OFRESOLUTION
APPROVING THE BANKUNITED, INC. ANNUAL2014 OMNIBUS EQUITY INCENTIVE PLAN.
BENEFICIAL OWNERSHIP OF THE COMPANY'S COMMON STOCK
The following table sets forth certain information with respect to the beneficial ownership of the Company's equity securities as of April 18, 2013:March 17, 2014 by: (1) each person or entity, based on information contained in Schedules 13G filed with the SEC, who owns of record or beneficially more than 5% or more of any class of the Company's voting securities; (2) each of the Company's executive officers and directors; and (3) all of the Company's directors and named executive officers as a group. Beneficial ownership is determined in accordance with the rules of SEC. To our knowledge, each stockholder will have sole voting and investment power with respect to the shares indicated as beneficially owned, unless otherwise indicated in a footnote to the following table. Unless otherwise indicated in a footnote, the business address of each person is our corporate address, c/o BankUnited, Inc., 14817 Oak Lane, Miami Lakes, FL 33016.
In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we deemed outstanding shares of common stock subject to options or warrants held by that person that are currently exercisable or exercisable within 60 days of April 18, 2013.March 17, 2014. We did not, however, deem these shares outstanding for the purpose of computing the percentage ownership of any other person. Beneficial ownership representing less than 1% is denoted with an asterisk (*).
| Shares of Common Stock Beneficially Owned | ||||||
---|---|---|---|---|---|---|---|
Name of beneficial owner | Number | % | |||||
Executive Officers and Directors: | |||||||
John A. Kanas(1) | 4,724,335 | 4.7 | |||||
John Bohlsen(2) | 1,916,696 | 1.9 | |||||
Douglas J. Pauls(3) | 283,663 | * | |||||
Rajinder P. Singh(4) | 1,231,504 | 1.2 | |||||
Randy R. Melby(5) | 52,600 | * | |||||
Leslie N. Lunak(6) | 46,500 | * | |||||
Chinh E. Chu(7) | 100 | — | |||||
Ambassador Sue M. Cobb(8) | 114,559 | * | |||||
Eugene F. DeMark(9) | 15,067 | * | |||||
Richard S. LeFrak(10) | 485,426 | * | |||||
Thomas M. O'Brien(11) | 6,000 | * | |||||
Wilbur L. Ross, Jr.(12) | 8,189,631 | 8.2 | |||||
Pierre Olivier Sarkozy(13) | 100 | * | |||||
Lance N. West(14) | 100 | * | |||||
All executive officers and directors as a group (14 persons)(15) | 16,951,722 | 16.9 | |||||
Greater than 5% Stockholders (Other than Executive Officers and Directors): | |||||||
Investment funds affiliated with WL Ross & Co. LLC(15) | 8,189,631 | 8.2 | |||||
Investment funds affiliated with The Carlyle Group: | |||||||
DBD Cayman Holdings, Ltd.(16) | 4,517,151 | 4.5 | |||||
TCG Holdings, L.L.C.(17) | 3,672,480 | 3.7 | |||||
Investment funds affiliated with Centerbridge Partners, L.P.(18) | 6,432,204 | 6.4 | |||||
Investment funds affiliated with The Blackstone Group(19) | 8,189,631 | 8.2 | |||||
T. Rowe Price Associates, Inc.(20) | 9,095,420 | 9.1 |
| Shares of Common Stock Beneficially Owned | ||||||
---|---|---|---|---|---|---|---|
Name of beneficial owner | Number | % | |||||
Executive Officers, Directors and Director Nominees: | |||||||
John A. Kanas(1) | 4,215,430 | 4.2 | |||||
Douglas J. Pauls(2) | 281,162 | * | |||||
Rajinder P. Singh(3) | 1,274,798 | 1.3 | |||||
Leslie N. Lunak(4) | 63,899 | * | |||||
John Bohlsen(5) | 1,204,532 | * | |||||
Randy Melby(6) | 52,600 | * | |||||
Tere Blanca | 1,000 | * | |||||
Ambassador Sue M. Cobb(7) | 115,559 | * | |||||
Eugene F. DeMark(8) | 17,682 | * | |||||
Michael Dowling(9) | 1,000 | * | |||||
Chinh E. Chu | 100 | * | |||||
Wilbur L. Ross, Jr. | 100 | * | |||||
Pierre Olivier Sarkozy | 100 | * | |||||
Lance N. West | 100 | * | |||||
Sanjiv Sobti | — | ||||||
A. Robert Towbin | — | ||||||
All executive officers and directors as a group (18 persons) | 7,285,253 | 7.2 | |||||
Greater than 5% Stockholders (Other than Executive Officers and Directors): | |||||||
Wellington Management Company, LLP(10) | 9,918,366 | 9.8 | |||||
Neuberger Berman Group LLC(11) | 5,280,290 | 5.2 |
following April 18, 2013. Also includes 709,045 shares of common stock held by the Kanas 2011 Annuity Trust, which is a grantor retained annuity trust. Mr. Kanas is the trustee of the Kanas 2011 Annuity Trust. Mr. Kanas disclaims any beneficial ownership of these shares except to the extent of his pecuniary interests therein, if any. The address of the Kanas 2011 Annuity Trust is 32 Adelaide Ave., East Moriches, NY 11940.
and his sons Harrison T. LeFrak and James T. LeFrak via various LLCs and trusts. Richard LeFrak is a member of our Board. Mr. LeFrak is the sole member of the Richard S. and Karen LeFrak Charitable Foundation. Mr. LeFrak disclaims beneficial ownership of the shares held by the Richard S. and Karen LeFrak Charitable Foundation except to the extent of his pecuniary interests therein, if any. The address of each of the entities and persons identified in this note is c/o The LeFrak Organization, 40 West 57th Street, New York, NY 10019. The address of the Richard S. and Karen LeFrak Charitable Foundation, Inc. is 1007 North Orange Street, Suite 210; Wilmington, DE 19801.
David M. Rubenstein each disclaim beneficial ownership of the DBD Cayman Holdings Shares. The address of each of the entities and persons identified in this note is c/o The Carlyle Group, 1001 Pennsylvania Avenue NW, Suite 220 South, Washington, DC 20004.
CERTAIN RELATED PARTY RELATIONSHIPS
Review and Approval of Transactions with Related Persons
Transactions by us with related parties are subject to a formal written policy, as well as regulatory requirements and restrictions. These requirements and restrictions include Sections 23A and 23B of the Federal Reserve Act (which govern certain transactions by the Bank with its affiliates) and the Federal Reserve's Regulation O (which governs certain loans by the Bank to its executive officers, directors and principal stockholders). We have adopted policies to comply with these regulatory requirements and restrictions. In addition, certain of our original investors (investment funds affiliated with The Blackstone Group ("Blackstone"), The Carlyle Group ("Carlyle"), Centerbridge Partners, L.P. ("Centerbridge") and WL Ross & Co. LLC ("WL Ross" and, together with Blackstone, Carlyle and Centerbridge, the "Sponsors")) entered into passivity commitments ("Passivity Commitments") with the Board of Governors of the Federal Reserve System (the "Federal Reserve") at the time that the Company became a bank holding company in February 2012. The Passivity Commitments replaced Rebuttal of Control Agreements with the Office of Thrift Supervision (the "OTS")that had been in connectionplace with their initial investments in us. On July 21, 2011, the OTS became part of the Office of the Comptroller of the Currency (the "OCC"). Pursuant to 12 USC § 5414, the Rebuttal of Control Agreements in connection with these investment funds' initial investments in us. The Passivity Commitments will continue in effect according tountil such time as the Federal Reserve releases the investment funds from their terms and are enforceable byrespective commitments. Among other things, the OCC. The Rebuttal of Control AgreementsPassivity Commitments limit the ability of these investorsinvestment funds to conduct transactions and have business relationships with us or our affiliates.affiliates, to have representation on the Board of Directors and certain Board committees and otherwise to exercise significant influence over our management and policies. We have adopted a policy to assist these investorsinvestment funds in complying with this aspect of their respective Rebuttal of Control Agreements.Passivity Commitments.
Our Board of Directors has also adopted a written policy governing the approval of related party transactions that complies with all applicable requirements of the SEC and the NYSE concerning related party transactions. Related party transactions are transactions in which our Company is a participant, the amount involved exceeds $120,000 and a related party has or will have a direct or indirect material interest. Related parties of our Company include directors (including nominees for election as directors), executive officers, greater than 5% stockholders of our Company and the immediate family members of these persons. The General Counsel,Our general counsel, in consultation with management and outside counsel, as appropriate, will review potential related party transactions to determine if they are subject to our Related Party Transactions Policy. If so, the transaction will be referred for approval or ratification to the Nominating and Corporate Governance Committee. In determining whether to approve a related party transaction, the Nominating and Corporate Governance Committee will consider, among other factors, the fairness of the proposed transaction; the direct or indirect nature of the director's, executive officer's or related party's interest in the transaction; the appearance of an improper conflict of interests for any director or executive officer of the Company, taking into account the size of the transaction and the financial position of the director, executive officer or related party; whether the transaction would impair an outside director's independence; the acceptability of the transaction to the Company's regulators; and the potential violations of other Company policies. Our Related Party Transactions Policy is available on our website at http://ir.bankunited.com, as Annex B to our Corporate Governance Guidelines.
Blackstone Exchange Agreement and Secondary Offering
Blackstone Exchange Agreement
On February 29, 2012, BankUnited, Inc. entered into an exchange agreement (the "Exchange Agreement") with funds affiliated with The Blackstone Group (collectively, the "Blackstone Funds") pursuant to which the Blackstone Funds exchanged (the "Blackstone Exchange") 5,415,794 shares of common stock, par value $0.01 per share, of the Company held by the Blackstone Funds for 5,415,794 shares of a newly created series of preferred stock, par value $0.01 per share, of the Company designated "Series A Nonvoting Convertible Preferred Stock" (the "Series A Preferred Stock"). Other than the Blackstone Funds, no stockholder of the Company was issued shares of Series A Preferred Stock.
Secondary Offering
In March 2013, certain stockholders of the Company, including the Blackstone Funds, sold 22,540,000 shares of common stock in a registered secondary offering (the "Secondary Offering"). As a
result of the Secondary Offering, and in accordance with the terms of the Series A Preferred Stock, all shares of Series A Preferred Stock held by the Blackstone Funds were automatically converted into an equal number of shares of common stock. All of the shares of common stock into which the Series A Preferred Stock were automatically converted were sold in the Secondary Offering. As of April 18, 2013, the Blackstone Funds collectively hold approximately 8.2% of the Company's outstanding common stock, and there are no shares of Series A Preferred Stock outstanding.
In connection with our IPO, BankUnited, Inc., certain investment funds affiliated with the Sponsors, LF Moby LLC, (which is beneficially owned by Mr. LeFrak and his sons), Mr. DeMark, Ambassador Cobb, Mr. Kanas, Mr.John Bohlsen, Mr. Pauls, Mr. Singh and certain former members of BU Financial Holdings LLC (our parent Companycompany prior to the initial public offering) entered into a registration rights agreement, dated February 2, 2011 (the(as amended February 29, 2012, the "Registration Rights Agreement"). In connection with the Blackstone Exchange, on February 29, 2012, the Company and certain of the stockholders party thereto entered into an amendment to the Registration Rights Agreement in order to provide the Blackstone Funds with substantially the same rights under the Registration Rights Agreement, as amended, with respect to the Series A Preferred Stock as the Blackstone Funds then had with respect to the common stock (other than the right to list the common stock on a U.S. securities exchange).
Pursuant to the Registration Rights Agreement, Blackstone, Carlyle, Centerbridge and WL Rossthe Sponsors have demand registration rights. The registration rights provisions require us to register the shares of common stock beneficially owned by the demanding Sponsor with the SEC for
sale by it to the public, provided that the value of the registrable securities proposed to be sold by such demanding Sponsor is at least the lesser of $50.0 million or the value of all registrable securities held by such Sponsor. The registration rights provisions also provide that we may be required under certain circumstances to file a shelf registration statement for an offering to be made on a continuous basis pursuant to Rule 415 of the Securities Act. We may postpone the filing of such a registration statement or suspend the effectiveness of any registration statement for a reasonable "blackout period" not in excess of 90 days if our Board determines that such registration or offering could materially interfere with a bona fide business or financing transaction of the Company or is reasonably likely to require premature disclosure of material, non-public information, the premature disclosure of which the Board reasonably determines in the exercise of its good faith judgment would not be in the best interests of the Company; provided that we shall not postpone the filing of a registration statement or suspend the effectiveness of any registration statement for more than 90 days in the aggregate in any 360-day period.
In addition, pursuant to the registration rights provisions, in the event that we are registering additional shares of common stock for sale to the public, whether on our own behalf (except in connection with a registration on Form S-4 or Form S-8 or any successor or similar form or in a registration of securities solely relating to an offering and sale to employees pursuant to any employee stock plan or other employee benefit plan arrangement) or through a demand registration on behalf of a Sponsor (as described above), we are required to give notice of such registration to all parties to the Registration Rights Agreement that hold registrable securities (which includes members of our management that hold shares of our common stock) of the intention to effect such a registration. Such notified persons have piggyback registration rights providing them the right to have us include the shares of common stock owned by them in any such registration if we have received written requests for inclusion therein within prescribed time limits, subject to other provisions under the Registration Rights Agreement.
Table Between March 2013 and March 2014, the Sponsors sold 51,931,097 shares of Contentsour common stock in registered secondary offerings (the "Secondary Offerings"). As a result of the Secondary Offerings, as of March 7, 2014, the Sponsors no longer own any shares of our common stock.
In January 2011,connection with our IPO, we entered into the Director Nomination Agreement with John A.Mr. Kanas and certain funds affiliated with ourthe Sponsors. The Director Nomination Agreement provides for the rights of our Sponsors and Mr. Kanas to nominate individuals to our Board of Directors. Pursuant to the agreement, the Sponsors and Mr. Kanas have the right to nominate individuals to our Board of Directors at each meeting of stockholders where directors are to be elected and, subject to limited exceptions, we will include in the slate of nominees recommended to our stockholders for election as directors the number of individuals designated by the Sponsors and Mr. Kanas as follows:
In addition, eachfor election to the Board of Blackstone, Carlyle, WL RossDirectors and, Centerbridge hassubject to limited exceptions, we will recommend to our stockholders the right to appoint one non-voting observer to attend all meetingselection of those individuals. Two of our Board until such time as such Sponsor ceasescurrent directors, Mr. Kanas and Mr. Singh, were designated consistent with this arrangement, and pursuant to own 5% of our outstanding common stock.
In connection with the Blackstone Exchange, on February 29, 2012, the Company and the shareholders party thereto amended and restated the Director Nomination Agreement in orderand Mr. Kanas' designation, we have recommended that our stockholders elect Mr. Kanas and Mr. Singh as directors at the Annual Meeting.
The Director Nomination Agreement also granted each Sponsor the right to providedesignate one individual for nomination to the recognitionBoard of Directors for as long as such Sponsor owned more than 40% of the Series A Preferred Stock heldcommon stock that it owned immediately prior to the consummation of our IPO. Four of our current directors were designated pursuant to this arrangement, including Mr. Chu by Blackstone; Mr. Sarkozy by Carlyle; Mr. Ross by WL Ross; and Mr. West by Centerbridge. Because the Blackstone Funds with respect to certain ownership thresholds for the existence of the rights provided by such agreement. As discussed under "Blackstone Exchange Agreement and Secondary Offering," there areSponsors no longer own any shares of Series A Preferred Stock outstanding.our common stock as of March 7, 2014, each no longer has any right to designate individuals for nomination to our Board of Directors. As reported on a Current Report on Form 8-K filed with the SEC on March 14, 2014, the Sponsors' prior designees are not standing for re-election at the Annual Meeting.
REQUIREMENTS, INCLUDING DEADLINES, FOR SUBMISSION OF PROXY PROPOSALS,
NOMINATION OF DIRECTORS AND OTHER BUSINESS OF STOCKHOLDERS
In order to submit stockholder proposals for the 20142015 annual meeting of stockholders for inclusion in the Company's Proxy Statement pursuant to SECExchange Act Rule 14a-8, materials must be received by the Corporate Secretary at the Company's principal office in Miami Lakes, Florida, no later than December 26, 2013.12, 2014.
The proposals must comply with all of the requirements of SECExchange Act Rule 14a-8. Proposals should be addressed to: Corporate Secretary, BankUnited, Inc., 14817 Oak Lane, Miami Lakes, FL 33016. As the rules of the SEC make clear, simply submitting a proposal does not guarantee its inclusion.
The Company's Amended and Restated By-Laws also establish an advance notice procedure with regard to director nominations and stockholder proposals that are not submitted for inclusion in the Proxy Statement, but that a stockholder instead wishes to present directly at an annual meeting. To be properly brought before the 20142015 annual meeting of stockholders, a notice of the nomination or the matter the stockholder wishes to present at the meeting must be delivered to the Corporate Secretary at the Company's principal office in Miami Lakes, Florida (see above), not less than 90 or more than 120 days prior to the first anniversary of the date of this year's Annual Meeting. As a result, any notice given by or on behalf of a stockholder pursuant to these provisions of the Company's Amended and Restated By-Laws (and not pursuant to Exchange Act Rule 14a-8) must be received no earlier than January 23, 2014,14, 2015, and no later than February 22, 2014.13, 2015. All director nominations and stockholder proposals must comply with the requirements of the Company's By-Laws, a copy of which may be obtained at no cost from the Corporate Secretary of the Company.
Other than the three proposals described in this Proxy Statement, the Company does not expect any matters to be presented for a vote at the Annual Meeting. If you grant a proxy, the persons named as proxy holders on the proxy card will have the discretion to vote your shares on any additional matters properly presented for a vote at the Annual Meeting. If for any unforeseen reason, any one or more of the Company's nominees is not available as a candidate for director, the persons named as proxy holders will vote your proxy for such other candidate or candidates as may be nominated by the Board of Directors.
The chairman of the meeting may refuse to allow the transaction of any business not presented beforehand, or to acknowledge the nomination of any person not made in compliance with the foregoing procedures.
APPENDIX A
BANKUNITED, INC.ANNUAL2014 OMNIBUS EQUITY INCENTIVE PLAN
Section 1. Purpose.Purpose of Plan.
The name of the Plan is the BankUnited, Inc. 2014 Omnibus Equity Incentive Plan (the "Plan"). The purposes of the BankUnited, Inc. Annual Incentive Plan are to reinforce corporate, organizationalprovide an additional incentive to selected management, employees, directors, independent contractors, and business-development goals, to promote the achievement of year-to-year financial and other business objectives and to reward the performance of selected executive officers in fulfilling their professional responsibilities. The Plan is consistent with the objectivesconsultants of the BankUnited, Inc. Policy on Incentive Compensation adopted byCompany or its Affiliates (as hereinafter defined) whose contributions are essential to the Board. Thegrowth and success of the Company's business, in order to strengthen the commitment of such persons to the Company and its Affiliates, motivate such persons to faithfully and diligently perform their responsibilities and attract and retain competent and dedicated persons whose efforts will result in the long-term growth and profitability of the Company. To accomplish such purposes, the Plan is not intended to be (and shall not be construed and administered as) an employee benefit plan withinprovides that the meaningCompany may grant Options, Share Appreciation Rights, Restricted Shares, Deferred Shares, Performance Shares, Other Share-Based Awards, or any combination of ERISA.the foregoing.
Section 2. Definitions.
TheFor purposes of the Plan, the following terms shall be defined as used herein, shall have the following meanings:set forth below:
(a) "Administrator" means the Board, or, if and to the extent the Board does not administer the Plan, the Committee in accordance with Section 3 hereof.
(b) "Affiliate" means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified. An entity shall be deemed an Affiliate of the Company for purposes of this definition only for such periods as the requisite ownership or control relationship is maintained.
(b)(c) "Award" means an incentive compensation award,any Option, Share Appreciation Right, Restricted Share, Deferred Share, Performance Share, or Other Share-Based Award granted pursuant tounder the Plan, that is contingent upon the attainment of one or more Performance Goals with respect to a Performance Period.Plan.
(c)(d) "Base SalaryAward Agreement" means a Participant's annual base salary as in effect on the date on which the applicable Performance Goals are established with respect to a Performance Period.any written agreement, contract or other instrument or document evidencing an Award.
(d)(e) "Beneficial Owner" (or any variant thereof) has the meaning defined in Rule 13d-3 under the Exchange Act.
(f) "Board" means the Board of Directors of the Company.
(e)(g) "By-laws" mean the by-laws of the Company, as may be amended and/or restated from time to time.
(h) "Cause" shall have the meaning assigned to such term in any individual employment or severance agreement or Award Agreement with the Participant or, if no such agreement exists or if such agreement does not define "Cause," Cause shall mean (i) the Participant commits any act of fraud, intentional misrepresentation or serious misconduct in connection with the business of the Company or any Affiliate, including, but not limited to, falsifying any documents or agreements (regardless of form); (ii) the Participant materially violates any rule or policy of the Company or any Affiliate (A) for which violation an employee may be terminated pursuant to the written policies of the Company or any Affiliate reasonably applicable to such an employee, (B) which violation results in material damage to the Company or any Affiliate or (C) which, after written notice to do so, the Participant fails to correct within a reasonable time; (iii) other than solely due to Disability, the Participant willfully breaches or habitually neglects any material aspect of the Participant's duties assigned to the Participant by the Company or any Affiliate, which assignment was reasonable in light of the Participant's position with the Company or its Subsidiaries (all of the foregoing duties, "Duties");
(iv) other than solely due to Disability, the Participant fails, after written notice, adequately to perform any Duties and such failure is reasonably likely to have a material adverse impact upon the Company or any Affiliate or the operations of any of them;provided, that, for purposes of this clause (iv), such a material adverse impact will be solely determined with reference to the Participant's Duties and annual compensation as such Duties and compensation relate to the Participant's job classification; (v) the Participant materially fails to comply with a direction from the Chief Executive Officer of the Company, the Board or the board of directors of any Affiliate of the Company with respect to a material matter, which direction was reasonable in light of the Participant's position with the Company or any Affiliate; (vi) while employed by or providing services to the Company or any Affiliate, and without the written approval of the Board, the Participant performs services for any other corporation or person which competes with the Company or any of its Subsidiaries, or otherwise violates any restrictive covenants contained in any Award Agreement or any other agreement between the Participant and the Company or any Affiliate; (vii) the Participant's indictment, conviction, or entering a plea of guilty ornolo contendere to, a felony (other than a traffic or moving violation) or any crime involving dishonesty; (viii) the Participant engages in any other action that may result in termination of an employee for cause pursuant to any generally applied standard, of which standard the Participant knew or reasonably should have known, adopted in good faith by the Board or the board of directors of any of the Company's Subsidiaries from time to time but prior to such action or condition; or (ix) any willful breach by the Participant of his fiduciary duties as a director of the Company or any of its Subsidiaries.
(i) "Change in Capitalization" means any (1) merger, amalgamation, consolidation, reclassification, recapitalization, spin-off, spin-out, repurchase or other reorganization or corporate transaction or event, (2) special dividend (whether in the form of cash, Common Stock or other property), share split or reverse share split, (3) combination or exchange of shares, (4) other change in corporate structure, or (5) any other transaction, distribution or action, which, in any such case, the Administrator determines, in its sole discretion, affects the Shares such that an adjustment pursuant to Section 5 hereof is appropriate.
(j) "Change in Control" shall mean the first to occur of the following events:
(1) any Person is or becomes the Beneficial Owner, (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company (not including the securities beneficially owned by such Person or any securities acquired directly from the Company or any Affiliate thereof) representing 50%fifty percent (50%) or more of the combined voting power of the Company's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (A) of paragraph (3) below; or
(2) the following individuals cease for any reason to constitute a majority of the number of directors then serving on the Board: individuals who, on the date hereof, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including, but not limited to, a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company's shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended; or
(3) there is consummated a merger, amalgamation or consolidation of the Company or any Subsidiary thereof with any other corporation, other than (A) a merger, amalgamation or consolidation which results in the voting securities of the Company outstanding immediately prior to such merger, amalgamation or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent
thereof) at least 50%fifty percent (50%) of the combined voting power of the securities of the Company or such
surviving entity or any parent thereof outstanding immediately after such merger, amalgamation or consolidation or (B) a merger, amalgamation or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 50%fifty percent (50%) or more of the combined voting power of the Company's then outstanding securities; or
(4) the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets, other than (A) a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 50%fifty percent (50%) of the combined voting power of the voting securities of which are owned by shareholders of the Company following the completion of such transaction in substantially the same proportions as their ownership of the Company immediately prior to such sale or (B) a sale or disposition of all or substantially all of the Company's assets immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the board of directors of the entity to which such assets are sold or disposed or, if such entity is a subsidiary, the ultimate parent thereof.
For each Award that constitutes deferred compensation under Section 409A of the Code, a Change in Control shall be deemed to have occurred under the Plan with respect to such Award, resulting in the payment of such Award, only if a change in the ownership or effective control of the Company or a change in ownership of a substantial portion of the assets of the Company shall also be deemed to have occurred within the meaning of Section 409A of the Code.
Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the holders of shares of Common Stock immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.
(f)(k) "Code" means the Internal Revenue Code of 1986, as amended.amended from time to time, or any successor thereto.
(g)(l) "Committee" means any committee or subcommittee the Compensation CommitteeBoard may appoint to administer the Plan. Subject to the discretion of the Board, whichthe Committee shall be comprised solelycomposed entirely of two or more outside directors meetingindividuals who meet the requirementsqualifications of an "outside director" within the meaning of Section 162(m) of the Code, a "non-employee director" within the meaning of Rule 16b-3 under the Exchange Act ("Rule 16b-3") and any other qualifications required by the applicable stock exchange on which the Common Stock is traded. If at any time or to any extent the Board shall not administer the Plan, then the functions of the Administrator specified in the Plan shall be exercised by the Committee. Except as otherwise provided in the Articles of Incorporation or By-laws of the Company, any action of the Committee with respect to the extentadministration of the Plan shall be taken by a majority vote at a meeting at which a quorum is intended to satisfy the requirements of Section 162(m)duly constituted or unanimous written consent of the Code.Committee's members.
(h)(m) "Common Stock" means the common stock of the Company, par value $0.01 per share, of the Company.
(n) "Company" means BankUnited, Inc., a Delaware corporation. (or any successor company, except as the term "Company" is used in the definition of "Change in Control" above).
(i)(o) "Covered Award" means an Award (i) that will be paid to a Covered Employee, (ii) that the Committee expressly designates as performance-based compensation and intends to be fully deductible under Section 162(m) of the Code, and (iii) that will be paid following the shareholder approval required by Section 162(m)(4)(C)(ii) of the Code.
(j) "Covered Employee" means an individual who is a "covered employee" within the meaning ofemployee," as such term is defined in Section 162(m)(3) of the Code.
(k) "ERISA" (p) "Deferred Shares" means the Employee Retirement Income Security Actright granted pursuant to Section 9 hereof to receive Shares at the end of 1974, as amended.a specified deferral period or periods and/or upon attainment of specified performance objectives.
(l)(q) "Disability" means, with respect to any Participant, that such Participant (i) as determined by the Administrator in its sole discretion, is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company or an Affiliate thereof.
(r) "Eligible Recipient" means an employee, director, independent contractor or consultant of the Company or any Affiliate of the Company who has been selected as an eligible participant by the Administrator;provided,however, to the extent required to avoid the imposition of additional taxes under Section 409A of the Code, an Eligible Recipient of an Option or a Share Appreciation Right means an employee, director, independent contractor or consultant of the Company or any Subsidiary of the Company who has been selected as an eligible participant by the Administrator.
(s) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time.
(m)(t) "ParticipantExercise Price" means, with respect to any Award under which the holder may purchase Shares, the per share price at which a holder of such Award granted hereunder may purchase Shares issuable upon exercise of such Award.
(u) "Fair Market Value" as of a particular date shall mean the fair market value of a share of Common Stock as determined by the Administrator in its sole discretion;provided,however, that (i) if the Common Stock is admitted to trading on a national securities exchange, the fair market value of a share of Common Stock on any date shall be the closing sale price reported for such share on such exchange on such date or, if no sale was reported on such date, on the last day preceding such date on which a sale was reported, (ii) if the Common Stock is admitted to quotation on the New York Stock Exchange ("NYSE") system or other comparable quotation system and has been designated as a National Market System ("NMS") security, the fair market value of a share of Common Stock on any date shall be the closing sale price reported for such share on such system on such date or, if no sale was reported on such date, on the last date preceding such date on which a sale was reported, or (iii) if the Common Stock is admitted to quotation on NYSE but has not been designated as an NMS security, the fair market value of a share of Common Stock on any date shall be the average of the highest bid and lowest asked prices of such share on such system on such date or, if both bid and ask prices were not reported on such date, on the last date preceding such date on which both bid and ask prices were reported.
(v) "GAAP" means U.S. generally accepted accounting principles.
(w) "Option" means an employeeoption to purchase shares of the Company or any Subsidiary who is,Common Stock granted pursuant to Section 47 hereof.
(x) "Other Share-Based Award" means a right or other interest granted pursuant to Section 10 hereof that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, shares of the Plan, selectedCommon Stock, including, but not limited to, participate herein.unrestricted Shares, restricted share units, dividend equivalents or performance units, each of which may be subject to the
attainment of Performance Goals or a period of continued employment or other terms or conditions as permitted under the Plan.
(n)(y) "Participant" means any Eligible Recipient selected by the Administrator, pursuant to the Administrator's authority provided for in Section 3 below, to receive grants of Options, Share Appreciation Rights, Restricted Shares, Deferred Shares, Performance Shares, Other Share-Based Awards or any combination of the foregoing, and, upon his or her death, his or her successors, heirs, executors and administrators, as the case may be.
(z) "Performance Goals" means performance goals based on one or more of the following criteria: (i) earnings, including one or more of operating income, earnings before or after taxes, earnings before or after interest, depreciation, amortization, adjusted EBITDA, economic earnings, or extraordinary or special items, (ii) book value per share (which may exclude nonrecurring items), tangible book value per share and/or growth thereof; (iii) levels of or changes in levels of pre-tax income, after-tax income, net income, net interest income, or fee income; (iv) earnings per share (basic or diluted), core earnings per share and/or growth thereof; (v) operating profit; (vi) revenue, revenue growth or rate of revenue growth; (vii) return measures, including one or more of return on assets (gross or net), return on tangible assets, cash return on assets, or cash return on tangible assets; (ii)assets, return on investment, return on capital, or return on equity, return on tangible equity, cash return on equity, or cash return on tangible equity; (iii)(viii) operating expenses; (ix) share price, absolute and/or relative metrics of stock performance, dividends, and/or total capital returned to shareholders; (x) implementation or completion of critical projects or processes; (xi) cumulative earnings per share growth; (xii) levels of or changes in levels of net interest income, net interest margin, operating margin or profit margin; (xiii) levels of or changes in levels of efficiency ratio or cash efficiency ratio,ratio; (xiv) cost targets, reductions and savings, productivity and efficiencies; (xv) levels of or trends in non-performing assets; (xvi) achieving or maintaining specified levels of GAAP and/or regulatory capital; (xvii) levels of or changes in levels of provision, provision rate, net charge-off, net charge-off ratio, fee income, total revenue, pre-tax income, or net income; (iv)net-charge-off ratio; (xviii) levels of or trends in specified financial statement line items or components thereof, (may includeincluding, but not limited to, cost of deposits, growth of deposits, cost of funds, loan growth, loan yields, or interest earningearnings asset yields); (v) levels of or trends in non-performing assets; (vi) earnings per share (basic or diluted), or core earnings per share and growth (vii) book value per share, tangible book value per share or growth thereof; (viii) absolute or relative metrics of stock performance, dividends, and total capital returned to shareholders; (ix) achieving or maintaining specified levels of GAAP and/or regulatory capital (x)yields; (xix) strategic business criteria, consisting of one or more objectives based on meeting specified market penetration, geographic business expansion, customer satisfaction, employee satisfaction, human resources management, supervision of litigation, regulatory matters, information technology, and goals relating to acquisitions, divestitures, joint ventures andand/or similar transactions, andand/or budget comparisons; (xi)(xx) personal professional objectives, including any of the foregoing performance goals, the implementation of policies and plans, the negotiation of transactions, the development of long term business goals, formation of joint ventures, and the completion of other corporate transactions; and (xii)(xxi) any combination of, or a specified increase in, any of the foregoing, and any of the foregoingforegoing. Performance goals may be measured at enterprise level or at business line or geographic level. Performance Goals not specified herein may be used to the extent that an Award is not intended to comply with Section 162(m) of the Code. Where applicable, the Performance Goals may be expressed in terms of attaining a specified level of the particular criteria or the attainment of a percentage increase or decrease in the particular criteria, and may be applied to one or more of the Company or Affiliate thereof, or a division, or strategic business unit or geographic unit of the Company, or may be applied to the performance of the Company relative to a market index, a group of other companies or a combination thereof, all as determined by the Committee. The Performance Goals may include a threshold level of performance below which no payment shall be made (or no vesting shall occur), levels of performance at which specified payments shall be made (or specified vesting shall occur), and a maximum level of performance above which no additional payment shall be made (or at which full vesting shall occur). Each of the foregoing Performance Goals shall be determined in accordance with generally accepted accounting principles and shall be subject to certification by the Committee;provided, that, to the extent permitted by Section 162(m) of the Code, the Committee shall have the authority to make equitable adjustments to the Performance Goals in recognition of unusual or non-recurring events affecting the Company or any Affiliate thereof or the financial statements of the Company or any Affiliate thereof, in response to changes in applicable laws
or regulations, or to account for items of gain, loss or expense determined to be extraordinary or unusual in nature or infrequent in occurrence or related to the disposal of a segment of a business or related to a change in accounting principles, provided that the Committee's ability to make equitable adjustments to the Performance Goals applicable to any Covered Awards shall be governed by Section 8(d).principles.
(o)(aa) "Performance PeriodShares" means unlessShares that are subject to restrictions that lapse upon the Committee determines otherwise, a periodattainment of no longer than 12 months.specified performance objectives and that are granted pursuant to Section 9 below.
(p)(bb) "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any Subsidiary thereof, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary thereof, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of shares of the Company.
(q)(cc) "Restricted Shares" means Shares granted pursuant to Section 9 below subject to certain restrictions that lapse at the end of a specified period or periods.
(dd) "Retirement" means a termination of a Participant's employment, other than for Cause, on or after the attainment of age 65.
(ee) "Shares" means shares of Common Stock reserved for issuance under the Plan, as adjusted pursuant to the Plan, and any successor security (pursuant to a merger, amalgamation, consolidation or other reorganization).
(ff) "Share Appreciation Right" means the BankUnited, Inc. Annual Incentive Plan,right pursuant to an Award granted under Section 8 below to receive an amount equal to the excess, if any, of (i) the aggregate Fair Market Value, as amended from time to time.
Table of Contentsthe date such Award or portion thereof is surrendered, of the Shares covered by such Award or such portion thereof, over (ii) the aggregate Exercise Price of such Award or such portion thereof.
(r)(gg) "Subsidiary" means, with respect to any Person, as of any date of determination, any other Person as to which such first Person owns or otherwise controls, directly or indirectly, more than 50%fifty percent (50%) of the voting shares or other similar interests or a sole general partner interest or managing member or similar interest of such other Person. An entity shall be deemed a Subsidiary of the Company for purposes of this definition only for such periods as the requisite ownership or control relationship is maintained.
(hh) "Transfer" has the meaning set forth in Section 16.
Section 3. Administration.
(a) Administrator. At the discretion of the Board, the The Plan shall be administered either (i) by the Board or (ii) by the Committee. In the event the Board is the administrator of the Plan, references herein to the Committee shall be deemed to include the Board. The PlanAdministrator and shall be administered in accordance with the requirements of Section 162(m) of the Code (but only to the extent necessary and desirable to maintain qualification of Covered Awards under the Plan under Section 162(m) of the CodeCode) and, to the extent applicable, Rule 16b-3 under16b-3. The Plan is intended to comply with or be exempt from Section 409A of the Exchange.Code, and shall be administered, construed and interpreted in accordance with such intent. To the extent that an Award, issuance and/or payment is subject to or exempt from Section 409A of the Code, it shall be awarded and/or issued or paid in a manner that will comply with Section 409A of the Code or the applicable exemption of Section 409A of the Code, including any applicable regulations or guidance issued by the Secretary of the United States Treasury Department and the Internal Revenue Service with respect thereto.
(b) Powers and Authorities. The Pursuant to the terms of the Plan, the Administrator, subject, in the case of any Committee, to any restrictions on the authority delegated to it by the Board, shall have the power and authority, in its sole discretion, subjectwithout limitation:
(1) to select those Eligible Recipients who shall be Participants;
(2) to determine whether and to what extent Options, Share Appreciation Rights, Restricted Shares, Deferred Shares, Performance Shares, Other Share-Based Awards or a combination of any of the foregoing, are to be granted hereunder to Participants;
(3) to determine the number of Shares to be covered by each Award granted hereunder;
(4) to determine the terms and conditions, not inconsistent with the expressterms of the Plan, of each Award granted hereunder (including, but not limited to, (i) the restrictions applicable to Restricted Shares or Deferred Shares and the conditions under which restrictions applicable to such Restricted Shares or Deferred Shares shall lapse, (ii) the performance goals and periods applicable to Awards, (iii) the Exercise Price of each Award, (iv) the vesting schedule applicable to each Award, (v) the number of Shares or amount of cash or other property subject to each Award and (vi) subject to the requirements of Section 409A of the Code (to the extent applicable), any amendments to the terms and conditions of outstanding Awards, including, but not limited to, extending the exercise period of such Awards and accelerating the vesting schedule of such Awards), and, if the Administrator in its discretion determines to accelerate the vesting of Options and/or Share Appreciation Rights in connection with a Change in Control, the Administrator shall also have discretion in connection with such action to provide that all Options and/or Share Appreciation Rights outstanding immediately prior to such Change in Control shall expire on the effective date of such Change in Control;
(5) to determine the terms and conditions, not inconsistent with the terms of the Plan, which shall govern all written instruments evidencing Options, Share Appreciation Rights, Restricted Shares, Deferred Shares, Performance Shares or Other Share-Based Awards or any combination of the foregoing granted hereunder;
(6) to determine the Fair Market Value;
(7) to determine the duration and purpose of leaves of absence which may be granted to a Participant without constituting termination of the Participant's employment for purposes of Awards granted under the Plan;
(8) to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall from time to time deem advisable; and
(9) to construe and interpret the terms and provisions of the Plan and any Award issued under the Plan (and any Award Agreement relating thereto), and to administerotherwise supervise the administration of the Plan and to exercise all the powers and authorities either specifically granted to it under the Plan or necessary orand advisable in the administration of the Plan, including, without limitation, the authority to: (i) grant Awards; (ii) determine the persons to whom and the time or times at which Awards shall be granted; (iii) determine all of the terms and conditions (including but not limited to the Performance Goals) relating to any Award; (iv) determine whether, to what extent, and under what circumstances an Award may be settled, cancelled or forfeited; (v) make adjustments in the Performance Goals; (vi) construe and interpret the Plan and any Award; (vii) prescribe, amend and rescind rules and regulations relating to the Plan; and (viii) make all other determinations deemed necessary or advisable for the administration of the Plan.
(c) Binding Effect. All decisions made by the CommitteeAdministrator pursuant to the provisions of the Plan shall be final, conclusive and binding on all persons, including the Company and the Participants. No member of the Board or the Committee, nor any officer or employee of the Company or any Subsidiary thereof acting on behalf of the Board or the Committee, shall be personally liable for any action, omission, determination, or interpretation taken or made in good faith with respect to the Plan, and all members of the Board or the Committee and each and any officer or employee of the Company and of any Subsidiary thereof acting on their behalf shall, to the maximum extent permitted by law, be fully indemnified and protected by the Company in respect of any such action, omission, determination or interpretation.
Section 4. Shares Reserved for Issuance Under the Plan.
(a) Subject to Section 5 hereof, the number of shares of Common Stock that are reserved and available for issuance pursuant to Awards granted under the Plan is 4,000,000 Shares. From and after such time as the Plan is subject to 162(m) of the Code, the aggregate Awards granted during any single fiscal year to any individual who is likely to be a Covered Employee shall not exceed 1,000,000 Shares.
(b) Shares issued under the Plan may, in whole or in part, be authorized but unissued Shares or Shares that shall have been or may be reacquired by the Company in the open market, in private transactions, or otherwise. If any Shares subject to an Award are forfeited, cancelled, exchanged or surrendered, settled in cash or if an Award otherwise terminates or expires without a distribution of Shares to the Participant, the Shares with respect to such Award shall, to the extent of any such forfeiture, cancellation, exchange, surrender, settlement, termination or expiration, again be available for Awards under the Plan. The reserve of Shares shall not be reduced by any Awards granted in substitution for, or in assumption of, outstanding awards previously granted by an entity acquired by the Company or an Affiliate or with which the Company or Affiliate combines. Notwithstanding the foregoing, Shares surrendered or withheld as payment of either the Exercise Price of an Award (including Shares otherwise underlying an Award of a Share Appreciation Right that are retained by the Company to account for the grant price of such Share Appreciation Right) and/or withholding taxes in respect of an Award shall no longer be available for grant under the Plan.
Section 5. Equitable Adjustments.
In the event of any Change in Capitalization, an equitable substitution or proportionate adjustment shall be made, in each case, as may be determined by the Administrator, in its sole discretion, in (i) the aggregate number of shares of Common Stock reserved for issuance under the Plan and the maximum number of Shares that may be subject to Awards granted to any Participant in any calendar or fiscal year, (ii) the kind, number and Exercise Price subject to outstanding Options and Share Appreciation Rights granted under the Plan, and (iii) the kind, number and purchase price of Shares subject to outstanding Restricted Shares, Deferred Shares, Performance Shares or Other Share-Based Awards granted under the Plan;provided,however, that any fractional shares resulting from the adjustment shall be eliminated;provided,further, that no such adjustment shall cause any Award hereunder which is or could be subject to Section 409A of the Code to fail to comply with the requirements thereof. Such other equitable substitutions or adjustments shall be made as may be determined by the Administrator, in its sole discretion. Without limiting the generality of the foregoing, in connection with a Change in Capitalization, the Administrator may provide, in its sole discretion, for the cancellation of any outstanding Award granted hereunder in exchange for payment (if any) in cash or other property having an aggregate Fair Market Value equal to the Fair Market Value of the Shares, cash or other property covered by such Award, reduced by the aggregate Exercise Price or purchase price thereof, if any. The Administrator's determinations pursuant to this Section 5 shall be final, binding and conclusive.
Section 6. Eligibility.
Awards may be granted to employees ofThe Participants under the Company and its Subsidiaries. In determining the persons to whom AwardsPlan shall be granted andselected from time to time by the Performance Goals relating to each Award, the Committee shall take into account such factorsAdministrator, in its sole discretion, from those individuals that qualify as the Committee shall deem relevant in connection with accomplishing the purposes of the Plan.Eligible Recipients.
5. Terms of Awards.Section 7. Options.
(a) Determination of Performance Goals; Notification.General. With respect to each Performance Period,Each Participant who is granted an Option shall enter into an Award Agreement with the CommitteeCompany, containing such terms and conditions as the Administrator shall specifydetermine, in its sole discretion, which Award Agreement shall set forth, among other things, the Performance Goals applicable to each Award no later than 90 days following the commencement of such Performance Period. At such time the Committee shall also, if applicable, specify the threshold, target and maximum levels of performance applicable to the Performance Goals. Performance Goals need not be the same for each Participant. Awards for any Performance Period may be expressed as a dollar amount or as a percentageExercise Price of the Participant's BaseOption, the term of the Option and provisions regarding exercisability of the Option. Notwithstanding
Salary. Participantsthe foregoing, except as otherwise determined by the Administrator, the prospective recipient of an Option shall not have any rights with respect to such Award, unless and until such recipient has executed an Award Agreement and delivered a fully executed copy thereof to the Company, within a period of sixty (60) days (or such other period as the Administrator may specify) after the award date. The provisions of each Option need not be notified of their Awardsthe same with respect to each Performance Period. Such notification shall include the Performance Goals with respectParticipant. More than one Option may be granted to the Award, the weight tosame Participant and be given to each such Performance Goal and, if applicable, the threshold, target and maximum levels of performance applicable to such Performance Goals.
(b) Determination of Achievement of Performance Goals. Following the end of the Performance Period and prior to the payment of an amount under any Award, and in any event not later than 45 days following the end of such Performance Period, the Committee shall determine whether, and to what extent, the applicable Performance Goals have been satisfied. Notwithstanding the foregoing and the terms of Section 2(n), the Committee may, in its sole discretion, reduce an amount of an Award otherwise determined pursuant to the Plan.
(c) Time and Form of Payment. All payments in respect of Awardsoutstanding concurrently hereunder. Options granted under the Plan shall be madesubject to the terms and conditions set forth in cash no later than 60 days followingthis Section 7 and shall contain such additional terms and conditions, not inconsistent with the last dayterms of the Performance PeriodPlan, as the Administrator shall deem desirable and set forth in the applicable Award Agreement. Each Option granted hereunder is intended to whichbe a non-qualified Option and is not intended to qualify as an "incentive stock option" within the meaning of Section 422 of the Code.
(b) Exercise Price. The Exercise Price of Shares purchasable under an Option shall be determined by the Administrator in its sole discretion at the time of grant, but in no event shall the Exercise Price of an Option be less than one hundred percent (100%) of the Fair Market Value of the shares of Common Stock on the date of grant.
(c) Option Term. The maximum term of each Option shall be fixed by the Administrator, but no Option shall be exercisable more than ten (10) years after the date such Option is granted. Each Option's term is subject to earlier expiration pursuant to the applicable provisions in the Plan and the Award relates.Agreement. Notwithstanding the foregoing, paymentthe Administrator shall have the authority to accelerate the exercisability of Awards intended to comply withany outstanding Option at such time and under such circumstances as the "short-term deferral" exemption from Section 409A of the Code shall be made no later than the 15th day of the third month following the later to occur of (i) the end of the Company's fiscal yearAdministrator, in which the relevant Performance Period ended and (ii) the end of the calendar year in which such Performance Period ended.its sole discretion, deems appropriate.
(d) Deferral of Payment.Exercisability. The Committee shall have the authority to establish such procedures and programs that it deems appropriate to provide Participants with the ability to defer receipt of cash under Awards. If such a deferral procedure or program is adopted, the terms of such procedure or programEach Option shall be set forth in writing priorexercisable at such time or times and subject to its adoptionsuch terms and shall comply with Section 409Aconditions, including the attainment of the Code.
6. Change in Control.
In the event of a Change in Control, (i) any Award payable in accordance with Section 5(b) in respect of a completed Performance Period, but unpaid,pre-established corporate performance goals, as shall be paid todetermined by the Participant upon such ChangeAdministrator in Control and (ii) each Participant with respect to each Performance Period then in effectthe applicable Award Agreement. The Administrator may also provide that any Option shall be paid, upon such Changeexercisable only in Control, an amount in cash equal to (A) such Participant's Award with respect to the entire Performance Period, assuming that the greater of (x) target levels of performance for the entire Performance Period or (y) actual levels of performance through the end of the calendar month immediately preceding the calendar month in which the Change in Control occurs and annualized for purposes of this calculation, had been met, multiplied by (B) a fraction, (x) the numerator of which is the number of days elapsed in such Performance Period as of the date on which the Change in Control occurs and (y) the denominator of which is the total number of days in such Performance Period.
7. Termination of Employment.
In the event that a Participant's employment with the Company and its Subsidiaries is terminated during a Performance Period, such Participant shall not be entitled to any portion of such Participant's Award with respect to such Performance Period. Any Award payable in accordance with Section 5(b) in respect of a completed Performance Period, but unpaid, shall be paid to such Participant in accordance with Section 5(c) or, to the extent payment of the Award has been deferred pursuant to Section 5(d), the Award shall be paid in full at the earliest such time as is provided under such deferral arrangement.
8. Special Rules for Covered Awards.
Notwithstanding any other provision of this Plan to the contrary, the following provisions shall control with respect to any Covered Award:
(a) Pre-established Incentive Opportunity and Performance Goals. The Performance Goals upon which a Covered Award is based or subject shall be established by the Committee in writing not later than 90 days after the commencement of the Performance Period, provided that the outcome is substantially uncertain at the time the Committee actually establishes such factorsinstallments, and the objectives upon which they are based (orAdministrator may waive such installment exercise provisions at such earlierany time, as may be required or such later time as may be permissible under Section 162(m) of the Code). The Committee shall not make Covered Awards based on Performance Goals not specifically provided under this Plan if it determines that use of such Performance Goals would cause a Covered Award to not be deductible under Section 162(m) of the Code.
(b) Certification of Performance Goals. Prior to the payment of a Covered Award, the Committee shall determine and certify in writing whether and to what extent the Performance Goals referred to in Section 8(a) have been satisfied for an applicable Performance Period.
(c) Discretionary Reduction of Covered Award. Notwithstanding anything in this Plan to the contrary, the Committee may, in its sole discretion, reduce a Covered Award otherwise determined pursuant to the Plan.
(d) Limited Adjustments of Selected Performance Goals. In the event of (i) any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, extraordinary dividend or divestiture (including a spin-off) or any other change in corporate structure or shares; (ii) any purchase, acquisition, sale, disposition or write-down of a significant amount of assets or a significant business; (iii) any change in accounting principles or practices, tax laws or other such laws or provisions affecting reported results; (iv) any uninsured catastrophic losses or extraordinary non-recurring items as described in Accounting Principles Board Opinion No. 30 or in management's discussion and analysis of financial performance appearing in the Company's annual report to stockholders for the applicable year; or (v) any other similar change, in each case with respect to the Company or any other entity whose performance is relevant to the achievement of any Performance Goal included in a Covered Award, the Committee (or, if the Company is not the surviving corporation in any such transaction, a committee of the board of directors of the surviving corporation consisting solely of two or more "outside directors" within the meaning of Section 162(m)(4)(C)(i) of the Code) may, without the consent of any affected Participant, amend or modify the terms of any outstanding Covered Award that includes any Performance Goals based in whole or in part, based on such factors as the financial performance ofAdministrator may determine in its sole discretion. Notwithstanding anything to the Company (or any Subsidiary or division thereof) or such other entity so as equitably to reflect such event, such that the criteria for evaluating such financial performance of the Company or such other entity (and the achievement of the corresponding Performance Goals) shall be substantially the same (as determined by the Committee or such committee of the board of directors of the surviving corporation) following such event as prior to such event; provided, however, that any such change to any outstanding Covered Award pursuant to this Section 8(d) must be made in such a manner that it is independently determinable by a hypothetical third party having knowledge of the relevant facts, and the Committee shall take no action pursuant to this Section 8(d) that would constitutecontrary contained herein, an impermissible exercise of discretion within the meaning of Section 162(m) of the Code, or would otherwise cause the Covered Award toOption may not be deductible under Section 162(m)exercised for a fraction of the Code.a share.
(e) Maximum Amount.Method of Exercise. The maximum amountOptions may be exercised in whole or in part by giving written notice of any Covered Awardexercise to any Covered Employeethe Company specifying the number of whole Shares to be purchased, accompanied by payment in full of the aggregate Exercise Price of the Shares so purchased in cash or its equivalent, as determined by the Administrator. As determined by the Administrator, in its sole discretion, with respect to any Option or category of Options, payment in whole or in part may also be made (i) by means of consideration received under any cashless exercise procedure approved by the Administrator (including the withholding of Shares otherwise issuable upon exercise), (ii) in the form of unrestricted Shares already owned by the Participant which, (x) in the case of unrestricted Shares acquired upon exercise of an Option, have been owned by the Participant for more than six (6) months on the date of surrender, and (y) have a Performance Period, determined asFair Market Value on the date of surrender equal to the aggregate exercise price of the timeShares as to which such Option shall be exercised, (iii) any other form of consideration approved by the Covered Award isAdministrator and permitted by applicable law or (iv) any combination of the foregoing.
(f) Rights as Shareholder. A Participant shall have no rights to dividends or distributions or any other rights of a shareholder with respect to the Shares subject to an Option until the Participant has given written notice of the exercise thereof, has paid shall not exceed $5,000,000.in full for such Shares and has satisfied the requirements of Section 15 hereof.
9. General Provisions. (g) Termination of Employment or Service.
(1) Unless the applicable Award Agreement provides otherwise, in the event that the employment or service of a Participant with the Company and all Affiliates thereof shall terminate for any reason other than Cause, Retirement, Disability, or death, (A) Options granted to such Participant, to the extent that they are exercisable at the time of such termination, shall remain exercisable until the date that is ninety (90) days after such termination, on which date they shall expire, and (B) Options granted to such Participant, to the extent that they were not exercisable at the time of such termination, shall expire at the close of business on the date of such termination. The ninety (90) day period described in this Section 7(g)(1) shall be extended to one (1) year after the date of such termination in the event of the Participant's death during such ninety (90) day period. Notwithstanding the foregoing, no Option shall be exercisable after the expiration of its term.
(2) Unless the applicable Award Agreement provides otherwise, in the event that the employment or service of a Participant with the Company and all Affiliates thereof shall terminate on account of the Retirement, Disability, or death of the Participant, (A) Options granted to such Participant, to the extent that they were exercisable at the time of such termination, shall remain exercisable until the date that is one (1) year after such termination, on which date they shall expire and (B) Options granted to such Participant, to the extent that they were not exercisable at the time of such termination, shall expire at the close of business on the date of such termination. Notwithstanding the foregoing, no Option shall be exercisable after the expiration of its term.
(3) In the event of the termination of a Participant's employment or service for Cause, all outstanding Options granted to such Participant shall expire at the commencement of business on the date of such termination.
(h) Other Change in Employment Status. An Option may be affected, in the sole discretion of the Administrator, both with regard to vesting schedule and termination, by leaves of absence, changes from full-time to part-time employment, partial disability or other changes in the employment status of an Participant.
Section 8. Share Appreciation Rights.
(a) Compliance With Legal Requirements.General. Share Appreciation Rights may be granted either alone ("Free Standing Rights") or in conjunction with all or part of any Option granted under the Plan ("Related Rights"). Related Rights may be granted either at or after the time of the grant of such Option. The Administrator shall determine the Eligible Recipients to whom, and the time or times at which, grants of Share Appreciation Rights shall be made, the number of Shares to be awarded, the price per Share, and all other conditions of Share Appreciation Rights. Notwithstanding the foregoing, no Related Right may be granted for more Shares than are subject to the Option to which it relates and any Share Appreciation Right must be granted with an Exercise Price not less than the Fair Market Value of shares of Common Stock on the date of grant. The provisions of Share Appreciation Rights need not be the same with respect to each Participant. Share Appreciation Rights granted under the Plan shall be subject to the following terms and conditions set forth in this Section 8 and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable, as set forth in the applicable Award Agreement.
(b) Awards; Rights as Shareholder. The prospective recipient of a Share Appreciation Right shall not have any rights with respect to such Award, unless and until such recipient has executed an Award Agreement and delivered a fully executed copy thereof to the Company, within a period of sixty (60) days (or such other period as the Administrator may specify) after the award date. Participants who are granted Share Appreciation Rights shall have no rights as shareholders of the Company with respect to the grant or exercise of such rights.
(c) Exercisability.
(1) Share Appreciation Rights that are Free Standing Rights shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Administrator in the applicable Award Agreement.
(2) Share Appreciation Rights that are Related Rights shall be exercisable only at such time or times and to the extent that the Options to which they relate shall be exercisable in accordance with the provisions of Section 7 hereof and this Section 8 of the Plan.
(d) Payment Upon Exercise.
(1) Upon the exercise of a Free Standing Right, the Participant shall be entitled to receive up to, but not more than, that number of Shares equal in value to the excess of the Fair Market Value as of the date of exercise over the price per share specified in the Free Standing Right multiplied by the number of Shares in respect of which the Free Standing Right is being exercised, with the Administrator having the right to determine the form of payment.
(2) A Related Right may be exercised by a Participant by surrendering the applicable portion of the related Option. Upon such exercise and surrender, the Participant shall be entitled to receive up to, but not more than, that number of Shares equal in value to the excess of the Fair Market Value as of the date of exercise over the Exercise Price specified in the related Option multiplied by the number of Shares in respect of which the Related Right is being exercised, with the Administrator having the right to determine the form of payment. Options which have been so surrendered, in whole or in part, shall no longer be exercisable to the extent the Related Rights have been so exercised.
(3) Notwithstanding the foregoing, the Administrator may determine to settle the exercise of a Share Appreciation Right in cash (or in any combination of Shares and cash).
(e) Termination of Employment or Service.
(1) In the event of the termination of employment or service with the Company and all Affiliates thereof of a Participant who has been granted one or more Free Standing Rights, such rights shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Administrator in the applicable Award Agreement.
(2) In the event of the termination of employment or service with the Company and all Affiliates thereof of a Participant who has been granted one or more Related Rights, such rights shall be exercisable at such time or times and subject to such terms and conditions as set forth in the related Options.
(f) Term.
(1) The term of each Free Standing Right shall be fixed by the Administrator, but no Free Standing Right shall be exercisable more than ten (10) years after the date such right is granted.
(2) The term of each Related Right shall be the term of the Option to which it relates, but no Related Right shall be exercisable more than ten (10) years after the date such right is granted.
Section 9. Restricted Shares, Deferred Shares and Performance Shares.
(a) General. Restricted Shares, Deferred Shares or Performance Shares may be issued either alone or in addition to other Awards granted under the Plan. The Administrator shall determine the Eligible Recipients to whom, and the time or times at which, Restricted Shares, Deferred Shares or Performance Shares shall be made; the number of Shares to be awarded; the price, if any, to be paid by the Participant for the acquisition of Restricted Shares, Deferred Shares or Performance Shares; the
period of time prior to which such shares become vested and free of restrictions on Transfer (the "Restricted Period"), if any, applicable to Restricted Shares, Deferred Shares or Performance Shares; the performance objectives (if any) applicable to Deferred Shares or Performance Shares; and all other conditions of the Restricted Shares, Deferred Shares and Performance Shares. If the restrictions, performance objectives and/or conditions established by the Administrator are not attained, a Participant shall forfeit his or her Restricted Shares, Deferred Shares or Performance Shares, in accordance with the terms of the grant. The provisions of the Restricted Shares, Deferred Shares or Performance Shares need not be the same with respect to each Participant.
(b) Restrictions and Conditions. The Restricted Shares, Deferred Shares and Performance Shares granted pursuant to this Section 9 shall be subject to the following restrictions and conditions and any additional restrictions or conditions as determined by the Administrator at the time of grant or, subject to Section 409A of the Code, thereafter:
(1) The Administrator may, in its sole discretion, provide for the lapse of restrictions in installments and may accelerate or waive such restrictions in whole or in part based on such factors and such circumstances as the Administrator may determine, in its sole discretion, including, but not limited to, the attainment of certain performance related goals, the Participant's termination of employment or service as a director, independent contractor or consultant to the Company or any Affiliate thereof, or the Participant's death or Disability;provided,however, that the Administrator may not waive the attainment of Performance Goals in the case of any Award that is intended to qualify as "performance-based compensation" under Section 162(m) of the Code. Notwithstanding the foregoing, upon a Change in Control, the outstanding Awards shall be subject to Section 13 hereof.
(2) Except as provided in Section 17 or in the applicable Award Agreement, the Participant shall generally have the rights of a shareholder of the Company with respect to Restricted Shares or Performance Shares during the Restricted Period. Except as provided in Section 17 or in the applicable Award Agreement, the Participant shall generally not have the rights of a shareholder with respect to Shares subject to Deferred Shares during the Restricted Period;provided,however, that, subject to Section 409A of the Code, an amount equal to dividends declared during the Restricted Period with respect to the number of Shares covered by Deferred Shares shall be paid to the Participant as set forth in the Award Agreement, provided that the Participant is then providing services to the Company. Any dividends or dividend equivalents provided with respect to Restricted Shares, Deferred Shares, or Performance Shares that are subject to the attainment of specified performance goals will be subject to the same terms, conditions and risk of forfeiture as the underlying Awards. Certificates for Shares of unrestricted shares of Common Stock may, in the Company's sole discretion, be delivered to the Participant only after the Restricted Period has expired without forfeiture in respect of such Restricted Shares, Deferred Shares or Performance Shares, except as the Administrator, in its sole discretion, shall otherwise determine.
(3) The rights of Participants granted Restricted Shares, Deferred Shares or Performance Shares upon termination of employment or service as a director, independent contractor, or consultant to the Company or to any Affiliate thereof terminates for any reason during the Restricted Period shall be set forth in the Award Agreement.
Section 10. Other Share-Based Awards.
The Administrator is authorized to grant Awards to Participants in the form of Other Share-Based Awards, as deemed by the Administrator to be consistent with the purposes of the Plan and as evidenced by an Award Agreement. The Administrator shall determine the terms and conditions of such Awards, consistent with the terms of the Plan, at the date of grant or thereafter, including any Performance Goals and performance periods. Any dividends or dividend equivalents provided with
respect to Other Share-Based Awards that are subject to the attainment of specified performance goals will be subject to the same terms, conditions and risk of forfeiture as the underlying Awards. Common Stock or other securities or property delivered pursuant to an Award in the nature of a purchase right granted under this Section 10 shall be purchased for such consideration, paid for at such times, by such methods, and in such forms, including, without limitation, Shares, other Awards, notes or other property, as the Administrator shall determine, subject to any required corporate action.
Section 11. Performance-Based Awards.
To the extent that the Plan is subject to Section 162(m) of the Code, no payment with respect to an Award made under Section 9 or 10 hereof which is intended to qualify as "performance-based compensation" (within the meaning of Section 162(m) of the Code) shall be made to a Participant that is likely to be a Covered Employee prior to the certification by the Committee that the applicable performance criteria based upon one or more Performance Goals have been attained. Such performance criteria shall be established in writing by the Committee not later than the time period prescribed under Section 162(m) of the Code and the regulations thereunder. All provisions of such Awards that are intended to qualify as "performance-based compensation" (within the meaning of Section 162(m) of the Code) shall be construed in a manner to so comply.
Section 12. Accelerated Vesting In Connection With a Change in Control.
Unless otherwise determined by the Administrator and evidenced in an Award Agreement, in the event that a Change in Control occurs, then:
(1) any unvested or unexercisable portion of any Award carrying a right to exercise shall become fully vested and exercisable; and
(2) the restrictions, deferral limitations, payment conditions and forfeiture conditions applicable to an Award granted under the Plan shall lapse and such Awards shall be deemed fully vested and any performance conditions imposed with respect to such Awards shall be deemed to be fully achieved.
Section 13. Amendment and Termination.
The Board may amend, alter or terminate the Plan, but no amendment, alteration, or termination shall be made that would impair the rights of a Participant under any Award theretofore granted without such Participant's consent. Unless the Board determines otherwise, the Board shall obtain approval of the Company's shareholders for any amendment that would require such approval in order to satisfy the requirements of Section 162(m) of the Code, any rules of the stock exchange on which the Common Stock is traded or other applicable law, including, without limitation, repricing of stock options and option exchanges. The Administrator may amend the terms of any Award theretofore granted, prospectively or retroactively, but, subject to Section 5 of the Plan and the granting andimmediately preceding sentence, no such amendment shall impair the rights of any Participant without his or her consent.
Section 14. Unfunded Status of Plan.
The Plan is intended to constitute an "unfunded" plan for incentive compensation. With respect to any payments not yet made to a Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general creditor of the Company.
Section 15. Withholding Taxes.
Each Participant shall, no later than the date as of which the value of an Award first becomes includible in the gross income of such Participant for federal and/or state income tax purposes, pay to the Company, or make arrangements satisfactory to the Administrator regarding payment of, Awards, andany federal, state, or local taxes of any kind required by law to be withheld with respect to the otherAward. The obligations of the Company under the Plan and any Award, shall be subjectconditional on the making of such payments or arrangements, and the Company shall, to all applicable Federal and state laws, rules and regulations (including 12 C.F.R. part 359) andthe extent permitted by law, have the right to required approvals bydeduct any regulatory or governmental agency.
(b) Nontransferability. A Participant's rights and interests in and tosuch taxes from any payment of any kind otherwise due to such Participant. Whenever cash is to be paid pursuant to an Award under the Plan may not be assigned, transferred, encumbered or pledged other than by will or the laws of descent and distribution; and are not subject to attachment, garnishment, execution or other creditor's processes.
(c) Participant Rights. No employee ofgranted hereunder, the Company or any Subsidiary or any other person shall have any claim to be granted any Award under the Plan. There is no obligation for uniformity of treatment among Participants. Nothing in the Plan or in any Award granted pursuant hereto shall constitute a contract of employment or confer upon any Participant the right to continue in the employ of the Company in any position or at any level of compensation, to be entitled to any remuneration or benefits not set forth in the Plan or under such Award, or to interfere with or limit in any way the right of the Company to terminate such Participant's employment. The granting of one Award to an eligible employee shall not entitle such individual to any additional grants of Awards thereafter.
(d) Withholding Taxes. The Company or its Subsidiary shall have the right to deduct therefrom an amount sufficient to satisfy any federal, state and local withholding tax requirements related thereto. Whenever Shares are to be delivered pursuant to an Award, the Company shall have the right to require the Participant to remit to the Company in cash an amount sufficient to satisfy any related federal, state and local taxes to be withheld and applied to the tax obligations. With the approval of the Administrator, a Participant may satisfy the foregoing requirement by electing to have the Company withhold from delivery of Shares or by delivering already owned unrestricted shares of Common Stock, in each case, having a value not exceeding the minimum federal, state and local taxes required to be withheld and applied to the tax obligations. Such Shares shall be valued at their Fair Market Value on the date of which the amount of any taxes that the Company or such subsidiarytax to be withheld is determined. Fractional share amounts shall be settled in cash. Such an election may be requiredmade with respect to withhold before deliveryall or any portion of the Shares to be delivered pursuant to an Award. The Company may also use any other method of obtaining the necessary payment or proceeds, as permitted by law, to satisfy its withholding obligation with respect to any Option or other Award.
Section 16. Transfer of Awards.
Until such time as the Awards are fully vested and/or exercisable in accordance with the Plan or an Award to the ParticipantAgreement, no purported sale, assignment, mortgage, hypothecation, transfer, charge, pledge, encumbrance, gift, transfer in trust (voting or other) or other person entitleddisposition of, or creation of a security interest in or lien on, any Award or any agreement or commitment to such payment, or to make such other arrangements for the withholding of taxes that the Company deems satisfactory.
(e) Compliance with Section 162(m)do any of the Code.foregoing (each, a "Transfer To") by any holder thereof in violation of the extent any provisionprovisions of the Plan or an Award Agreement will be valid, except with the prior written consent of the Administrator, which consent may be granted or withheld in the sole discretion of the Administrator. Any purported Transfer of an Award or any actioneconomic benefit or interest therein in violation of the CommitteePlan or the Company as it relates to a Coveredan Award may result in the application of Section 162(m)(1) of the Code to compensation payable to a Covered Employee, such provision or actionAgreement shall be deemed null and voidab initio, and shall not create any obligation or liability of the Company, and any person purportedly acquiring any Award or any economic benefit or interest therein transferred in violation of the Plan or an Award Agreement shall not be entitled to be recognized as a holder of such Shares. Unless otherwise determined by the extent permittedAdministrator in accordance with the provisions of the immediately preceding sentence, an Option may be exercised, during the lifetime of the Participant, only by law and deemed advisable to the Committee.Participant or, during any period during which the Participant is under a legal disability, by the Participant's guardian or legal representative.
(f)Section 409A.17. Continued Employment.
The adoption of the Plan shall not confer upon any Eligible Recipient any right to continued employment or service with the Company or any Affiliate thereof, as the case may be, nor shall it interfere in any way with the right of the Company or any Affiliate thereof to terminate the employment or service of any of its Eligible Recipients at any time. Awards are subject to any clawback policy adopted by the Company from time to time.
Section 18. Effective Date.
The Plan was adopted by the Board on April 8, 2014, and shall become effective on the date that it is intendedapproved by shareholders of the Company (the "Effective Date"). No Awards may be granted under the Plan prior to the time that the shareholders have approved the Plan. The approval or disapproval of the Plan by the shareholders of the Company shall have no effect on any other equity compensation plan, program or arrangement sponsored by the Company or any of its Affiliates.
Section 19. Term of Plan.
No Award shall be granted pursuant to the Plan on or after the tenth anniversary of the Effective Date, but Awards theretofore granted may extend beyond that date.
Section 20. Section 409A of the Code.
The intent of the parties is that payments and benefits under the Plan comply with the requirements of Section 409A of the Code to the extent subject thereto or an exception or exemption therefrom, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted and be administered to be in accordance with such intention.compliance therewith. Any payments described in the Plan that are due within the "short-term deferral period" as defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable law requires otherwise. All paymentsNotwithstanding anything to be made upon a termination of employmentthe contrary in the Plan, no payment or distribution under this Agreement shall, to the extent required to avoidPlan that constitutes an accelerated or additional taxitem of deferred compensation under Section 409A of the Code and becomes payable by reason of a Participant's termination of employment or service with the Company will be made only uponto such Participant until such Participant's termination of employment or service constitutes a "separation from service" within the meaning underof Section 409A of the Code. In addition,Notwithstanding anything to the contrary in the Plan, to the extent required in order to avoid an accelerated taxation and/or additional tax penalties under Section 409A of the Code, amounts that would otherwise be payable pursuant to this Agreementand benefits that would otherwise be provided during the six-monthsix (6) month period immediately following Executive's separation from servicethe Participant's termination of employment shall instead be paid on the first business day after the date that is six (6) months following Executive'sthe Participant's separation from service (or upon the Participant's death, if earlier, Executive's death)earlier).
(g) Amendment and Termination In addition, each amount to be paid or benefit to be provided to the Participant, which constitutes deferred compensation subject to Section 409A of the Plan. The Plan may at any timeCode, shall be amended, modified, or terminated,construed as the Committee in its discretion determines. Such amendment, modification, or terminationa separate identified payment for purposes of Section 409A of the Plan shall not require the consent, ratification, or approval of any party, including any Participant.Code. The Committee may amend the Performance Goals as well as any Award (including increasing, decreasing or eliminatingCompany makes no representation that any or all Awards) priorof the payments or benefits described in this Plan will be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to any such payment. The Participant shall be solely responsible for the payment thereof to the extent it deems appropriate for any reason, including compliance with applicable securities laws. Notwithstanding the foregoing, to the extent the Committee has expressly designated an Award as a Covered Award, the
Committee shall not have any authority to amend or modify the terms of any Covered Award in any manner that would impair its deductibilitytaxes and penalties incurred under Section 162(m) of the Code.409A.
(h)Section 21. Governing Law. Unfunded Status of Awards. A Participant's only interest under the
The Plan shall be the right to receive a payment of cash pursuant to the terms of an applicable Awardgoverned by and the Plan. The Plan is intended to constitute an "unfunded" plan for incentive compensation, and no portion of the amount payable to a Participant under this Plan shall be held by the Company or any Subsidiaryconstrued in trust or escrow or any other form of asset segregation. With respect to any payments not yet made to a Participant pursuant to an Award, to the extent that a Participant acquires a right to receive a payment of cash under the Plan, nothing contained in the Plan or any Award shall give any such Participant any rights that are greater than those of a general creditor of the Company, and no trust in favor of any Participant shall be implied.
(i) Governing Law. The Plan and all determinations made and actions taken pursuant hereto shall be governed byaccordance with the laws of the State of New York, without giving effect to the conflictprinciples of laws principles thereof.
(j) Effective Date. The Plan shall take effect asconflicts of the datelaw of its approval by the shareholders of the company.such state.
1 1 12345678 12345678 12345678 12345678 12345678 12345678 12345678 12345678 000000000000 NAME THE COMPANY NAME INC. - COMMON 123,456,789,012.12345 THE COMPANY NAME INC. - CLASS A 123,456,789,012.12345 THE COMPANY NAME INC. - CLASS B 123,456,789,012.12345 THE COMPANY NAME INC. - CLASS C 123,456,789,012.12345 THE COMPANY NAME INC. - CLASS D 123,456,789,012.12345 THE COMPANY NAME INC. - CLASS E 123,456,789,012.12345 THE COMPANY NAME INC. - CLASS F 123,456,789,012.12345 THE COMPANY NAME INC. - 401 K 123,456,789,012.12345 . x 02 0000000000 JOB # 1 OF 2 1 OF 2 PAGE SHARES CUSIP # SEQUENCE # THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: Signature (Joint Owners) Signature [PLEASE SIGN WITHIN BOX] Date Date CONTROL # SHARES To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. 0 0 0 0 0 0 0 0 0 |
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