SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.)
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Filed by the Registrant ◻ | ||||
Filed by a Party other than the Registrant ◻ | ||||
Check the appropriate box: | ||||
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HarborOne Bancorp, Inc. | ||||
(Name of Registrant as Specified In Its Charter) | ||||
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) | ||||
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![[MISSING IMAGE: lg_harboronebancorp-bw.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-051149/lg_harboronebancorp-bw.jpg)
NOTICE OF VIRTUAL ANNUAL MEETING OF SHAREHOLDERS
Dear Shareholder:
You are invited to attend the 20212022 annual meeting of shareholders of HarborOne Bancorp, Inc., which will be held virtually, by means of remote communication, on May 26, 202118, 2022 at 10:00 a.m., local time. You will not be able to attendtime at Lombardo’s, 6 Billings Street, Randolph, Massachusetts 02368. Shareholders may also vote their shares and participate virtually at the annual meeting in person.by means of remote communication. The annual meeting will be held for the following purposes:
1. | To elect the four Class III director nominees named in the proxy statement to serve on our Board of Directors for a term of three years and until their respective successors are duly elected and qualified; |
2. | To ratify the appointment of Crowe LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022; |
3. | A non-binding advisory resolution to approve the compensation of the Company’s named executive officers; and |
4. | A non-binding advisory resolution to select the frequency of future shareholder advisory votes to approve the compensation of the Company’s named executive officers. |
In addition, shareholders may be asked to consider and vote upon any other matters that may properly be brought before the annual meeting and at any adjournments or postponements thereof.
Any action may be taken on the foregoing matters at the annual meeting on the date specified above, or on any date or dates to which the annual meeting may be adjourned, or to which the annual meeting may be postponed.
Our Board of Directors has fixed the close of business on March 29, 202122, 2022 as the record date for determining the shareholders entitled to notice of, and to vote at, the annual meeting and at any adjournments or postponements thereof.
Whether or not you plan to attend the virtual annual meeting, please carefully read the proxy statement and other proxy materials and complete a proxy for your shares as soon as possible. You may authorize your proxy via the internet by following the instructions on the website indicated in the Notice of Internet Availability of Proxy Materials that you received in the mail. You also may request a paper or an e-mail copy of our proxy materials and a paper proxy card at any time. If you attend the virtual annual meeting, you may vote at the meeting if you wish, even if you previously have submitted your proxy.
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By Order of the Board of Directors, | ||
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Inez H. Friedman-Boyce |
![[MISSING IMAGE: sg_inezhfriedmanboyce-bw.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-051149/sg_inezhfriedmanboyce-bw.jpg){kind=small}
Brockton, Massachusetts
April 16, 20218, 2022
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on May 26, 2021:
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How does the Board recommend that I vote on each of the proposals? | 3 | |||||||
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Biographical Information Regarding Executive Officers Who Are Not Directors | 10 | |||||||
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Board Leadership Structure and the Role of the Board in Risk Oversight | 15 | |||||||
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Role of the Executive Peer Group and Compensation Benchmarking | | 24 | ||||||
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | | 43 |
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PROXY STATEMENT
FOR OUR 20212022 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
This proxy statement is being made available to shareholders of HarborOne Bancorp, Inc. (“we,” “us,” “our,” “ours” and the “Company”) in connection with the solicitation of proxies by the Board of Directors (the “Board”) for use at our 20212022 annual meeting of shareholders to be held virtually on May 26, 2021,18, 2022, at 10:00 a.m., local time, at Lombardo’s, 6 Billings Street, Randolph, Massachusetts 02368, or at any postponement or adjournment of the annual meeting. This proxy statement and a form of proxy have been made available to our shareholders on the internet, and the Notice of Internet Availability of Proxy Materials has been mailed to shareholders on or about April 16, 2021.
Shareholders who wish to attend the virtual annual meeting via remote communications must visit www.virtualshareholdermeeting.com/HONE2021HONE2022 and enter the control number found on the proxy card, voting instruction form or Notice of Annual Meeting. To ensure access to the live webcast, shareholders must check in to the webcast by 9:45 a.m., local time, on May 26, 2021.18, 2022. A technical support number will be made available on the webpage during check-in for shareholders who experience technical difficulties accessing the virtual annual meeting.
Holders of record of our common stock, $0.01 par value per share, at the close of business on March 29, 2021,22, 2022, the record date for the annual meeting, are entitled to receive notice of the annual meeting and to vote at the annual meeting. If you are a holder of record of our common stock as of the record date, you may vote the shares that you held on the record date even if you sell such shares after the record date. Each outstanding share of common stock as of the record date entitles its holder to cast one vote for each matter to be voted upon and, with respect to the election of directors, one vote for each director to be elected. Shareholders do not have the right to cumulate voting for the election of directors.
At the annual meeting, you will be asked to vote on the following proposals:
You also may be asked to consider and act upon any other matters that may properly be brought before the annual meeting and at any adjournments or postponements thereof.
The presence, in person or by proxy, of holders of a majority of the votes entitled to be cast at the annual meeting is necessary to constitute a quorum for the transaction of any business at the annual meeting. As of March 29, 2021,22, 2022, there were 56,228,76251,256,123 shares outstanding and entitled to vote at the annual meeting.
Each share of common stock outstanding on the record date is entitled to one vote on each matter properly submitted at the annual meeting and, with respect to the election of directors, one vote for each director to be elected. Abstentions and “broker non-votes” ((i.e., shares represented at the meeting held by brokers, as to which instructions have not been received from the beneficial owners or persons entitled to vote such shares and with respect to which, on a particular matter, the broker does not have discretionary voting power to vote such shares) will be counted for purposes of determining whether a quorum is present for the transaction of business at the annual meeting.
With respect to Proposal 1, directors are elected by a plurality of the votes cast by the shares entitled to vote in the election. Abstentions and broker non-votes with respect to Proposal 1 will have no effect on the election of directors. ProposalProposals 2 and 3 will be approved if the votes cast in favor of the proposal exceed the votes cast against the proposal. Abstentions and broker non-votes with respect to ProposalProposals 2 and 3 will have no effect on the votes for this proposal.
If you cast a vote by proxy, you may revoke it at any time before it is voted by:
If you attend the virtual annual meeting, you may vote whether or not you previously have given a proxy, but your attendance (without further action) at the annual meeting will not constitute revocation of a previously given proxy.
You may revoke a proxy for shares held by a bank, broker or other nominee by submitting new voting instructions to the bank, broker or other nominee or, if you have obtained a legal proxy from the bank, broker or other nominee giving you the right to vote the shares at the annual meeting, by attending the virtual annual meeting by means of remote communication and voting virtually.
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| the proxy holders named in the proxy card how to vote your shares of common stock in one of the following ways: |
| • | Vote Online. You can access proxy materials at www.harboronebancorp.com and vote at www.proxyvote.com. To vote online, you must have a shareholder identification number provided in the Notice of Internet Availability of Proxy Materials. |
Even if you plan to attend the virtual annual meeting, we recommend that you submit a proxy to vote your shares in advance so that your vote will be counted if you later are unable to attend the virtual annual meeting.
If you authorize your proxy to vote your shares electronically via the Internet or, if you received a proxy card by mail and you properly marked, signed, dated and returned it, the shares that the proxy represents will be voted in the manner specified on the proxy. If no specification is made, your shares will be voted FOR the election of the nominees for the directors named in this proxy statement andstatement; FOR ratification of the appointment of Crowe LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021.2022; FOR the approval of the named executive officer compensation; and for“1 Year” as the frequency of future shareholder advisory votes to approve the compensation of the Company’s named executive officers. It is not anticipated that any matters other than those set forth in this proxy statement will be presented at the annual meeting. If other matters are presented, proxies will be voted at the discretion of the proxy holders.
The Board recommends that you vote:
Our 20202021 Annual Report on Form 10-K, including our consolidated financial statements for the fiscal year ended December 31, 2020,2021, is being made available to you along with this proxy statement. You may obtain, free of charge, copies of our 20202021 annual report and the Annual Report on Form 10-K for the fiscal year ended December 31, 2020,2021, which contain additional information about the Company, on our website at www.harboronebancorp.com or by directing your request in writing to 770 Oak Street, Brockton, MAMassachusetts 02301, Attention: Investor
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Relations. The 20202021 annual report and the Annual Report on Form 10-K, however, are not part of the proxy solicitation materials, and the information found on, or accessible through, our website is not incorporated into, and does not form a part of, this proxy statement or any other report or document we file with or furnish to the United States Securities and Exchange Commission (the “SEC”).
This solicitation of proxies is made by and on behalf of the Board. We will pay the cost of the solicitation of proxies. In addition to the solicitation of proxies by mail, our directors, officers and employees may solicit proxies personally or by telephone. We have engaged Innisfree M&A Incorporated to solicit proxies held by brokers and nominees, and will reimburse it for reasonable out-of-pocket expenses incurred in the solicitation of proxies.
Why didn’t I automatically receive a paper copy of the proxy statement, proxy card and annual report?
Pursuant to rules adopted by the SEC, we have elected to provide access to our proxy materials via the internet. Accordingly, rather than paper copies of our proxy materials, we are sending a Notice of Internet Availability of Proxy Materials to our shareholders.
The Notice of Internet Availability of Proxy Materials includes instructions on how to access our proxy materials over the internet at www.harboronebancorp.com and how to request a printed set of the proxy materials by mail or an electronic set of materials by e-mail.
Instead of receiving a Notice of Internet Availability of Proxy Materials in the mail, shareholders may elect to receive future proxy materials in printed form by mail or electronically by e-mail on an ongoing basis.
If you participate in the HarborOne Bank Employee Stock Ownership Plan (the “ESOP”) or if you hold Company common stock through the HarborOne 401(k) Plan (the “401(k) Plan”), you will receive vote authorization form(s) that reflect all shares you may direct trustees to vote on your behalf under the plans. Under the terms of the ESOP, the ESOP trustee will vote all shares held by the ESOP in the same proportion as shares for which it has received timely voting instructions. Each ESOP participant may direct the trustee how to vote the shares of common stock allocated to his or her account. HarborOne Bank, as plan administrator of the 401(k) Plan, will vote any shares in the 401(k) Plan for which participants have not issued voting instructions as HarborOne Bank determines in its discretion and will direct the 401(k) plan trustee accordingly. The deadline for returning your voting instructions for shares that you hold in the ESOP and the 401(k) Plan, if any, is 11:59 p.m. on May 15, 20216, 2022.
If you have any questions about voting under the ESOP or the 401(k) Plan, please contact Inez H. Friedman-Boyce, Senior Vice President, General Counsel and Corporate Secretary.
No person is authorized on our behalf to give any information or to make any representations with respect to the proposals other than the information and the representations contained in this proxy statement, and, if given or made, such information and/or representations must not be relied upon as having been authorized.
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Our articles of organization provide for a classified board of directors consisting of three classes of directors. At each annual meeting of shareholders, a class of directors will be elected for a term of office to expire at the third succeeding annual meeting of shareholders after their election and until their respective successors are duly elected and qualified. Our articles of organization provide that the size of our Board will be determined from time to time by resolution of our Board. The Board currently consists of thirteentwelve members.
The Board, upon the recommendation of the Nominating and Governance Committee, has nominated Mandy L. Berman, Gordon Jezard, William A. Payne,Joseph F. Barry, James W. Blake, Dr. Timothy R. Lynch, and Wallace H. Peckham, III, MBA, CPADamian W. Wilmot, Esq. to serve as directors. Each of these nominees is a current director of the Company. The Board anticipates that each nominee will serve, if elected, as a director. However, if any nominee is unable to accept election, proxies voted in favor of such nominee will be voted for the election of such other person or persons as the Board may select. Directors are elected by a plurality of the votes cast by the shares entitled to vote in the election.
We will treat broker non-votes as shares that are present and entitled to vote for purposes of determining the presence or absence of a quorum. Abstentions and broker non-votes, if any, will have no effect on this proposal.
The Board unanimously recommends that you vote FOR each of the director nominees.
The following table sets forth certain information with respect to each director and director nominee, based upon information furnished by each director.
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Name |
| Age |
| Position(s) |
| Independent |
| Since (1) |
| Expires |
Joseph F. Barry | | 81 | | Director | | Yes | | 1987 | | 2022 |
Mandy L. Berman | | 51 | | Director | | Yes | | 2019 | | 2024 |
James W. Blake | | 71 | | Chief Executive Officer | | No | | 1995 | | 2022 |
Joseph F. Casey | | 61 | | President and Chief Operating Officer | | No | | 2017 | | 2023 |
David P. Frenette, Esq. | | 66 | | Director | | Yes | | 2007 | | 2023 |
Gordon Jezard | | 87 | | Director | | Yes | | 1983 | | 2024 |
Barry R. Koretz | | 77 | | Director | | Yes | | 1987 | | 2023 |
Dr. Timothy R. Lynch | | 66 | | Director | | Yes | | 2011 | | 2022 |
William A. Payne | | 64 | | Director | | Yes | | 2017 | | 2024 |
Andreana Santangelo | | 53 | | Director | | Yes | | 2020 | | 2023 |
Michael J. Sullivan, Esq. | | 67 | | Chairman of the Board | | Yes | | 2015 | | 2023 |
Damian W. Wilmot, Esq. | | 46 | | Director | | Yes | | 2019 | | 2022 |
| Name | | | Age | | | Position(s) | | | Independent | | | Since(1) | | | Expires | |
| Joseph F. Barry | | | 80 | | | Director | | | Yes | | | 1987 | | | 2022 | |
| Mandy L. Berman | | | 50 | | | Director | | | Yes | | | 2019 | | | 2021 | |
| James W. Blake | | | 70 | | | Chief Executive Officer | | | No | | | 1995 | | | 2022 | |
| Joseph F. Casey | | | 60 | | | President and Chief Operating Officer | | | No | | | 2017 | | | 2023 | |
| David P. Frenette, Esq. | | | 65 | | | Director | | | Yes | | | 2007 | | | 2023 | |
| Gordon Jezard | | | 86 | | | Director | | | Yes | | | 1983 | | | 2021 | |
| Barry R. Koretz | | | 76 | | | Director | | | Yes | | | 1987 | | | 2023 | |
| Timothy R. Lynch | | | 65 | | | Director | | | Yes | | | 2011 | | | 2022 | |
| William A. Payne | | | 64 | | | Director | | | Yes | | | 2017 | | | 2021 | |
| Wallace H. Peckham, III, MBA, CPA | | | 78 | | | Director | | | Yes | | | 1981 | | | 2021 | |
| Andreana Santangelo | | | 52 | | | Director | | | Yes | | | 2020 | | | 2023 | |
| Michael J. Sullivan, Esq. | | | 66 | | | Chairman of the Board | | | Yes | | | 2015 | | | 2023 | |
| Damian W. Wilmot, Esq. | | | 45 | | | Director | | | Yes | | | 2019 | | | 2022 | |
(1) | The dates for Messrs. Barry, Blake, Frenette, Jezard, Koretz, and Sullivan and Dr. Lynch reflect their initial appointment to the HarborOne Bank Board of Directors. |
The following includes a brief biography for each of our directors. There are no family relationships among any of our directors or executive officers. Unless otherwise stated, each director has held his or her current occupation for the last five years.
The biographical description below for each nominee includes specific experience, qualifications, attributes and skills that led to the conclusion by the Company’s Nominating and Governance Committee and the Board of Directors that such person should serve as a director of the Company. The biographical
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In addition to the information presented below regarding each person’s specific experience, qualifications, attributes and skills that led our Board to the conclusion that he or she should serve as a director, we also believe all of our directors have a reputation for integrity, honesty and adherence to high ethical standards. They each have demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment to service to the Company and its shareholders.
Each of the Company’s directors currently serves as a director of HarborOne Bank.Bank (the “Bank”).
![[MISSING IMAGE: ph_josephbarry-bw.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-051149/ph_josephbarry-bw.jpg) | |||||
| Joseph F. Barry retired in 2003 as Senior Vice President of HMI, Inc., a travel marketing firm located in Norwood, Massachusetts, after 14 years with the company. Before joining HMI, Inc., Mr. Barry was Vice President at Knapp Shoes, Inc. from 1986 to 1989 and Vice President at Herman Shoe International, Inc. from 1983 to 1986. Mr. Barry was selected to serve as a director because of his business experience and ability to assist us in strategic planning. | ||||
| ![[MISSING IMAGE: ph_mandyberman-bw.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-051149/ph_mandyberman-bw.jpg) | Mandy L. Bermanserves as the Chief Operating Officer of Marathon Health, a leading provider of employer-sponsored on-site and near-site health centers in over 200 locations nationwide that is headquartered in Winooski, Vermont. Ms. Berman was formerly the Chief Operating Officer of 42 North Dental (2019 to 2020), a New England-based dental support organization supporting over two dozen practice brands with a principal office in Waltham, Massachusetts. Previously she was the Chief Administrative Officer and Executive Vice President, Operations of Bright Horizons Family Solutions, a NYSE listed company headquartered in Watertown, Massachusetts, a position she held from 2016 to February 2019. From 2005 to 2016, Ms. Berman held various roles at Bright Horizons Family Solutions, including Acting CIO (2014 to 2016) and Executive Vice President, Global and Back-Up Care Operations (2014 to 2015). Ms. Berman | |||
| ![[MISSING IMAGE: ph_jameswblake-bwlr.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-051149/ph_jameswblake-bwlr.jpg) | James W. Blake has served as Chief Executive Officer of HarborOne Bancorp, Inc. since 2016. He has served as Chief Executive Officer of HarborOne Bank since 1995, and served as President of HarborOne Bank from 1995 to 2017, after serving as Chief Operating Officer from 1993 to 1994. Prior to joining HarborOne Bank, Mr. Blake was Senior Vice President of Retail Banking and Marketing at Mechanics Bank in Worcester, Massachusetts, from 1986 to 1993. Mr. Blake has served on the Community Depository Institutions Advisory Council of the Federal Reserve Bank of Boston. Since 2011, he has served on the Signature Healthcare Executive Business Council, and the YMCA Foundation. He also currently serves on the board of the Connecticut Online Computer Center, a position he has held since 2003. He also served on the board of the Massachusetts Credit Union League, from 1998 to 2012. As Chief Executive Officer, Mr. Blake is familiar with our banking operations and provides the Board of Directors with insight into our challenges, opportunities and operations. In addition, he was selected to serve as a director because of his extensive banking experience and familiarity with our market area. |
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| ![[MISSING IMAGE: ph_josephcasey-bw.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-051149/ph_josephcasey-bw.jpg) | Joseph F. Casey joined HarborOne Bank in 2004. He has served as President and Chief Operating Officer of HarborOne Bancorp, Inc. since May 2018 and was previously Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer of the Company from 2016 until 2018. He was appointed President and Chief Operating Officer of HarborOne Bank in February 2017. Prior to his current position, he served as Executive Vice President and Chief Financial Officer of HarborOne Bank from 2006 to 2015 and Senior Vice President and Chief Financial Officer from 2004 to 2006. Before joining HarborOne Bank, Mr. Casey was Vice President at Seacoast Financial Services in New Bedford, Massachusetts, and Senior Vice President, Chief Financial Officer and Treasurer at Compass Bank for Savings in New Bedford, Massachusetts, from 2003 to 2004, and prior to that held various titles, including Chief Financial Officer, Treasurer, Controller and Internal Auditor during his 17 years with Andover Bancorp, Inc. in Andover, Massachusetts. He is an inactive Certified Public Accountant. Mr. Casey is Chair of the Board of Directors of the MetroSouth Chamber of Commerce. Mr. Casey is a member of the Board of Directors of the Old Colony YMCA and Chairman of its Investment Committee. Mr. Casey was selected to serve as a director because of his extensive banking, financial and accounting experience and familiarity with our banking operations and market area. | |||
| ![[MISSING IMAGE: ph_davidfrenette-bw.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-051149/ph_davidfrenette-bw.jpg) | David P. Frenette, Esq. is an attorney in solo practice in Brockton, Massachusetts, focusing primarily on elder law, estate planning, residential and commercial real estate and business organization. A graduate of Holy Cross College and New England School of Law, Mr. Frenette has practiced law for over | |||
| ![[MISSING IMAGE: ph_gordonjezard-bw.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-051149/ph_gordonjezard-bw.jpg) | Gordon Jezard retired in 2012 after a 28-year career in the automotive parts and supplies retail business, as owner of and director of operations at Bettridge Auto Parts, Inc. in Brockton, Massachusetts, which he sold in 2012. Prior to his tenure at Bettridge Auto Parts, Inc., Mr. Jezard held management positions at Eastern Edison Co., an electric company in Brockton, Massachusetts. Mr. Jezard is a graduate of Northeastern University with degrees in Business Management and Electrical Engineering. Mr. Jezard was selected to serve as a director because of his knowledge of and experience working with small businesses. | |||
| ![[MISSING IMAGE: ph_barrykoretz-bw.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-051149/ph_barrykoretz-bw.jpg) | Barry R. Koretz retired from BKA Architects, Inc. in 2017. He was the President and founder of BKA Architects, Inc. in Brockton, Massachusetts, a full-service commercial architecture and design firm he started in 1974. As President of BKA Architects, Inc., Mr. Koretz was responsible for matters related to finance, administration, business development and project management of the 50-person firm with approximately $7 million in annual billings. Mr. Koretz has served as co-chair of the Signature Healthcare Executive Business Council since 2012 and the Signature Healthcare Capital Campaign Steering Committee since 2015, and as a director of the Brockton Boys and Girls Club since 2000. Previously, Mr. Koretz was a member of the Board of Trustees of Brockton Hospital and the boards of directors of Metro South Chamber of Commerce and the United Way of Greater Plymouth County. Mr. Koretz was selected to serve as a |
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director because of his experience owning and managing a business in our market area, which, together with his knowledge of and service to our local community, provides a unique perspective on the needs of customers in our market area. | |
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![[MISSING IMAGE: ph_timothylynch-bw.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-051149/ph_timothylynch-bw.jpg) | Timothy R. Lynch, MD, FACP, CPE, has served as Senior Vice President and Chief Medical Officer of South Shore Health System since January 2019. Prior to that he served as Chief Medical Officer at South Shore Hospital from May 2017 to January 2019. He is also an Assistant Professor of Medicine and the South Shore Health Dean of Tufts University School of Medicine. He was Chairman of the Department of Medicine from March 2016 through May 2017, and has been a practicing internist at South Shore Medical Center since 2013. Dr. Lynch was the Chief Medical Officer at South Shore Physician Ambulatory Enterprise (SSPAE) in Weymouth, Massachusetts, from 2015 to 2016. Prior to that, Dr. Lynch was Lead Hospital Physician, South Region at Atrius Health from 2013 to 2015. From 1996 to 2013, Dr. Lynch held the following positions at Signature Healthcare: Vice President of Quality from 2011 to 2013; Vice President of the Medical Staff from 2010 to 2013; Vice Chairman, Physician Hospital Organization Board of Directors from 2003 to 2008; Trustee, Signature Healthcare Corporation from 2002 to 2013; Trustee, Signature Healthcare Brockton Hospital Incorporated from 2002 to 2013; and Patient Care Assessment Coordinator from 1996 to 2013. Dr. Lynch currently serves as a member of the board of directors of Connected Care of Southeastern Massachusetts. Dr. Lynch was selected to serve as a director because of his management experience, including strategic planning, budget development and state, federal and industry regulatory compliance. | ||||
| ![[MISSING IMAGE: ph_williampayne-bw.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-051149/ph_williampayne-bw.jpg) | William A. Payne is a principal and co-founder of PRW Wealth Management, LLC, an independent registered investment advisor serving the planning needs of both the mid-market corporate marketplace and high net worth families for over 30 years. Mr. Payne holds both the series 7 and 63 securities licenses. He also has several professional designations, including Chartered Financial Consultant and Masters in Financial Services. In 1999, Mr. Payne’s firm was one of the founding companies in National Financial Partners, a financial services company which became publicly traded on the NYSE in 2003. In addition, Mr. Payne has served on the board of the Old Colony YMCA since 1995, serving as Board Chairman from 2003 to 2005. Mr. Payne also serves on the board of Lion Street Inc., a financial services company based in Austin, Texas. Mr. Payne was selected to serve as a director because of his experience in wealth management and knowledge of the financial markets. | |||
| ![[MISSING IMAGE: ph_wallacepeckham-bw.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-051149/ph_wallacepeckham-bw.jpg) | ||||
![[MISSING IMAGE: ph_andreanasantangelo-bwlr.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-051149/ph_andreanasantangelo-bwlr.jpg) | Andreana Santangelo is Executive Vice President and Chief Financial Officer for Blue Cross Blue Shield of Massachusetts, the largest private health plan in Massachusetts and one of the largest independent, not-for-profit Blue Cross Blue Shield plans in the country, where she is responsible for all financial, investment, real estate, actuarial and underwriting activities related to the financial management of nearly $8 billion in annual revenues and more than $3 billion in assets. Ms. Santangelo formerly led the Actuarial and Analytic Services Department within the Finance Division at Blue Cross. Prior to joining Blue Cross in 2003, Ms. Santangelo held a number of leadership roles at CIGNA Corp. Her career has provided her with expertise in the areas of pricing and |
| underwriting strategy; financial modeling and analysis; asset and liability modeling and investment management; medical economics and analysis; health plan operations; medical utilization and unit cost management; and budgeting and financial operations. Ms. Santangelo is a fellow of the Society of Actuaries and a member of the American Academy of Actuaries. She is also a member of the board of directors at Junior Achievement of Northern New England. She holds a Bachelor of Science in mathematics from the University of Massachusetts, Amherst. |
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| |||||
![[MISSING IMAGE: ph_michaelsullivanbwlr.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-051149/ph_michaelsullivanbwlr.jpg) | Michael J. Sullivan, Esq. has been a partner at the Ashcroft Law Firm, LLC in Boston, Massachusetts since 2009. Mr. Sullivan is recognized as an expert in government investigations, corporate compliance and ethics, fraud, corruption, health care and corporate security, with extensive policy and regulatory experience. Prior to joining the Ashcroft Law Firm, LLC, Mr. Sullivan was a United States Attorney for the District of Massachusetts from 2001 to 2009. From 2006 until January 2009, Mr. Sullivan served as Presidentially Nominated Director of the Bureau of Alcohol, Tobacco, Firearms and Explosives in Washington, DC, and from 1995 to 2001 he served as the District Attorney for Plymouth County, Massachusetts. Mr. Sullivan has been a member of the board of directors of Signature Healthcare since May 2009, Old Colony YMCA from 1995 until 2001 and from 2009 until present, New Heights Charter School from 2015 to present, Continuing Education Institute from 1989 to 1994, and Consumer Credit Counseling Services from 1986 to 1989. Mr. Sullivan was selected to serve as a director because of his extensive policy and regulatory legal experience and continued service to the community. | ||||
| ![[MISSING IMAGE: ph_damianwilmot-bw.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-051149/ph_damianwilmot-bw.jpg) | Damian W. Wilmot, Esq. has served as the Chief Risk and Compliance Officer of Vertex Pharmaceuticals Incorporated since |
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As of the date of this proxy statement, our executive officers who are not directors are as follows:
| | | | | |||
Name | Age | Position(s) | |||||
Brenda C. Diepold | | 51 | | Executive Vice President - Retail Banking at HarborOne Bank | |||
Inez H. Friedman-Boyce, Esq. | | 55 | | Senior Vice President, General Counsel and Corporate Secretary at HarborOne Bancorp, Inc. and HarborOne Bank | |||
Kevin Hamel | | 53 | | Senior Vice President | |||
Joseph E. McQuade | | 44 | | Senior Vice President | |||
David B. Reilly | | 56 | | Executive Vice President | |||
H. Scott Sanborn | | 58 | | Executive Vice President, Chief Lending Officer at HarborOne Bank | |||
Linda H. Simmons | | 62 | | Executive Vice President, Chief Financial Officer at HarborOne Bancorp, Inc. and HarborOne Bank | |||
David E. Tryder | | 57 | | Senior Vice President, Chief Marketing Officer at HarborOne Bank | |||
Patricia M. Williams | | 62 | | Senior Vice President, Human Resources Officer at HarborOne Bank |
The following is a brief biography of each of our executive officers.
Brenda C. Diepold joined HarborOne Bank in September 2018 as Senior Vice President—Retail Banking and became Executive Vice President—Retail Banking in July 2021. Prior to joining HarborOne Bank, Ms. Diepold served as Director of Retail Sales, Operations and Support at Century Bank from 2016 to 2018; Senior Vice President, Director of Sales and Service Execution at Santander Bank, N.A. from 2013 to 2016 after starting her career at Fleet Bank, Boston, Massachusetts, and working in multiple positions of increasing authorities while it was acquired and transitioned to Sovereign Bank, which subsequently became Santander Bank, N.A.
Inez H. Friedman-Boyce, Esq. joined HarborOne Bancorp, Inc. and HarborOne Bank as Senior Vice President, — General Counsel and Corporate Secretary in November 2019. Prior to joining HarborOne Bank, Ms. Friedman-Boyce was a partner at Goodwin Procter LLP from 2005 to 2019, where she represented financial institutions in securities, corporate governance and complex business litigation matters. Ms. Friedman-Boyce began her legal career in 1995 at Testa, Hurwitz & Thibeault, LLP, where she was elected to the partnership in 2004. Ms. Friedman-Boyce also served as a Special Assistant District Attorney in the Middlesex County District Attorney’s Office in 2000. Ms. Friedman-Boyce holds a B.A. from Amherst College and J.D. from Georgetown University Law Center, where she graduated with honors.
Kevin Hameljoined HarborOne Bank as Senior Vice President —– Chief Information Officer in September 2020. Prior to joining HarborOne Bank, Mr. Hamel was Vice President, Chief Information Security Officer for Baystate Health in Springfield, Massachusetts, from 2017 to 2020; 1st Vice President, Chief Information Security Officer at COCC, Inc. in Southington, Connecticut, from 2003 to 2017; Vice President, Information Technology at PeoplesBank in Holyoke, Massachusetts, from 1995 to 2003; and various technology roles at Dow Jones & Co. in Chicopee, Massachusetts, from 1990 to 1995.
Joseph E. McQuade joined HarborOne Bank in December 2020 as Senior Vice President and Chief Enterprise Risk Officer. Prior to joining HarborOne Bank, Mr. McQuade was Senior Vice President and Chief Credit Officer for Consumer and Business Banking at Santander Bank, N.A. from 2015 to 2020 and Senior Vice President and Chief Operating Officer at Citizens Financial Group from 2009 to 2015. Prior to that, Mr. McQuade held various Risk Management roles with MasterCard and GE Capital from 2001 to 2009. Mr. McQuade isholds a faculty member ofB.S. and M.B.A. from Union College and recently completed the Consumer Bankers Association (CBA) Executive Banking School.
David B. Reilly has servedjoined HarborOne Bank in 2008 as Senior Vice President — President—Operations since joining HarborOne Bankand became Executive Vice President—Operations in 2008.July 2021. Prior to joining HarborOne Bank, Mr. Reilly was Senior Vice President — President—Operations from 2004 to 2008 and Vice President — President—Director Alternative Delivery and Customer Service in 2004 at Rockland Trust Company in Rockland, Massachusetts; Technology Integration On-Site Coordinator at Citizens Bank in Providence, Rhode Island in 2003; and Director, Information Technology from 2000 to 2003 and
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Vice President — President—Call Center Operations and Retail Delivery from 1996 to 2003 at Cambridgeport Bank in Cambridge, Massachusetts.
H. Scott Sanborn joined HarborOne Bank in 2014 and has been Executive Vice President-ChiefPresident—Chief Lending Officer since February 2020. He served as Executive Vice President — President—Commercial Lending from February 2018 to 2020 and Senior Vice President — President—Commercial Lending from 2014 to 2018. Prior to joining HarborOne Bank, Mr. Sanborn was Regional Vice President — President—Metro Boston & Rhode Island/Southeastern Massachusetts from 2011 to 2014 and Professionals Group Leader, Wealth from 2010 to 2011 at TD Bank in Boston, Massachusetts, and Senior Vice President — President—Regional Executive & Professionals Market Leader from 2005 to 2010 and Senior Vice President — President—Market Manager from 2000 to 2004 at Sovereign Bank (now Santander Bank, N.A.) based in Boston, Massachusetts.
Linda H. Simmons joined HarborOne Bank in May 2017 as the Chief Financial Officer of the Bank, became Senior Vice President and Chief Financial Officer of HarborOne Bancorp, Inc. in May 2018, and became Executive Vice President and Chief Financial Officer of HarborOne Bancorp, Inc. in July 2020. Prior to joining HarborOne Bank, Ms. Simmons was Senior Vice President, Chief Financial Officer and Treasurer of The Cooperative Bank of Cape Cod from 2012 to 2017; Executive Vice President, Chief Financial Officer and Treasurer of Bancorp Rhode Island from 2004 to 2011; and held various positions with responsibilities in the asset/liability management area at Bank of America from 1995 to 2004.
David E. Tryder has served as Senior Vice President — President—Chief Marketing Officer since joining HarborOne Bank in 2014. Prior to joining HarborOne Bank, Mr. Tryder was Director — Director—Digital Strategy Group in 2013, Director — Director—Interactive & Relationship Marketing from 2009 to 2013, and Senior Manager — Manager—Interactive
Patricia M. Williams, Senior Vice President — President—Human Resources Officer, joined HarborOne in 1986. During her tenure she has held the leadership role in the Human Resources Division and has been responsible for the development, implementation and oversight of human resources policies, training and development, benefits, talent acquisition and retention and culture.
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The Company is an equal opportunity employer and maintains hiring practices and policies that foster and promote a diverse and inclusive workforce. We strive to create an inclusive environment that encourages, embraces and recognizes the importance of diversity, equity and inclusion. The Company isare dedicated to recruiting, developing and promoting a diverse workforce to meet the current and future demands of our business.
Our focus on diversity, equity and inclusion begins at the highest levels of the organization. Shortly after going public in 2016, the Nominating and Governance Committee began using KLR Executive Search Group, LLC to broaden its search for new directors and identify qualified candidates from a range of backgrounds. In 2020, the Nominating and Governance Committee Charter was amended to include an explicit commitment to include in each search for new directors highly qualified candidates who reflect diverse backgrounds, including diversity of gender, race and ethnicity. The most recent three candidates recommended by the Nominating and Governance Committee for election as new directors and elected to the Board of Directors are women and/or members of historically underrepresented groups. We have also recentlyAdditionally, in February 2021 we hired a VP of Talent Management, a new position in our organization, to not only ensure that we develop, retain, and bring out the best in our staff, but also that we sharpen the focus on diversity in our recruiting, promoting and hiring practices.
In 2020, we launched an executive diversity committee, and in 2022 we are launching an all-level advisory council with a year-long calendar connected to our internal and external communities. We are focused on employee representation of the markets we serve, and we are proud that 21% of our employee population is an equal opportunity employer and maintains hiring practices and policies that foster and promote a diverse and inclusive workforce.comprised of professionals of color. As of September 30, 2020,December 31, 2021, our overall workforce (including HarborOne Mortgage) was 70%64% female and 20%18% racially or ethnically diverse. As of that date, our senior management team was 45%42% female. Of those employees in managerial, supervisory, or professional roles as of September 30, 2020, 67%December 31, 2021, 54% were female and 19%9% were racially or ethnically diverse.
The following charts reflect, as of February 9, 2022, the Company formed a Diversity, Equitygender diversity and Inclusion Committee, which today comprises nine members from across the organization, including four membersindependence of senior management. This committee meets no less than quarterly and has established goals to further the Company’s diversity, equity and inclusion efforts. The initial areasour Board of focus identified by the Committee include mortgage assistance, financial support for education, recruiting and hiring practices, internships and mentoring, and supply chain diversity.Directors:
| | | | |
Board Diversity Matrix (As of February 9, 2022) | ||||
Total Number of Directors | # | |||
| Female | Male | Non-Binary | Did Not Disclose Gender |
Part I: Gender Identity | ||||
Directors | 2 | 10 | | |
Part II: Demographic Background | ||||
African American or Black | | 1 | | |
Alaskan Native or Native American | | | | |
Asian | 1 | | | |
Hispanic or Latinx | | | | |
Native Hawaiian or Pacific Islander | | | | |
White | 1 | 9 | | |
Two or More Races or Ethnicities | | | | |
LGBTQ+ | | |||
Did Not Disclose Demographic Background | | |||
The Company recognizes its responsibility to the communities in which it operates and to the environment we share. Social responsibility and commitment to sustainable practices are integral to how we do business. We advance these commitments through multiple channels, including corporate donations and sponsorships, employee volunteering, non-profit board service by our employees and directors, advancing financial literacy and education
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through our HarborOne U program, dedication to our Community Reinvestment Act (“CRA”) responsibilities, and investing in environmentally sustainable projects. Highlights of how the Company is currently fulfilling these responsibilities include:
2021.
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Board Leadership Structure. The positions of our Chairman of the Board and Chief Executive Officer are separated. Separating these positions allows our Chief Executive Officer to focus on our day-to-day business, while allowing the Chairman of the Board to lead our Board in its fundamental role of providing advice to and independent oversight of management.
Our Board recognizes the time, effort and energy that the Chief Executive Officer must devote to histhe position in the current business environment, as well as the commitment required to serve as our Chairman, particularly as our Board’s oversight responsibilities continue to grow. Our Board also believes that this structure ensures a greater role for the independent directors in the oversight of the company and active participation of the independent directors in setting agendas and establishing priorities and procedures for the work of our Board.
Although our by-laws do not require that we separate the Chairman of the Board and Chief Executive Officer positions, our Board believes that having separate positions is the appropriate leadership structure for us at this time. Our Board recognizes that depending on the circumstances, other leadership models, such as combining the role of Chairman of the Board with the role of Chief Executive Officer, might be appropriate. Accordingly, our Board may periodically review its leadership structure. Our Board believes its administration of its risk oversight function has not affected its leadership structure.
Role of the Board in Risk Oversight. The Board is actively involved in oversight of risks that could affect the Company including credit risk, interest rate risk, liquidity risk, accounting risk, operational risk, regulatory/compliance risk, legal risk, strategic risk and reputation risk. This oversight is conducted in part through committees of the Board, but the full Board has retained responsibility for general oversight of risks. The Board satisfies this responsibility through reports by each committee regarding its considerations and actions, regular reports from officers responsible for oversight of particular risks within the Company as well as through internal and external audits. Risks relating to the direct operations of the Company are further overseen by the Board of Directors of HarborOne Bank, who are the same individuals who serve on the Board of the Company. Further, the Board oversees risks through the establishment of policies and procedures that are designed to guide daily operations in a manner consistent with applicable laws, regulations, and risks acceptable to the organization.
The NasdaqNASDAQ listing rules requires that independent directors compose a majority of a listed company’s board of directors. In addition, the Nasdaq listing rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation, and nominating and governance committees be independent and that audit committee members also satisfy independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Under NasdaqNASDAQ listing rules, a director will only qualify as an “independent director” if, in the opinion of our Board, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In order to be considered independent under the Exchange Act, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors or any other board committee: (1) accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries; or (2) be an affiliated person of the listed company or any of its subsidiaries. In addition to satisfying general independence requirements under the Nasdaq listing rules, a member of a compensation committee of a listed company may not, other than in his or her capacity as a member of the compensation committee, the board of directors or any other board committee, accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries. Additionally, the board of directors of the listed company must consider whether the compensation committee member is an affiliated person of the listed company or any of its subsidiaries and, if so, must determine whether such affiliation would impair the director’s judgment as a member of the compensation committee.
Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family and other relationships, including those relationships described under
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the section of this proxy statement entitled “Transactions with Related Parties,” our Board determined that each of our directors, with the exception of Mr. Blake and Mr. Casey, is “independent” under the Nasdaq listing rules. Mr. Blake is not considered independent because he currently serves as our Chief Executive Officer. Mr. Casey is not considered independent because he currently serves as President and Chief Operating Officer. Our Board also determined that each member of the audit, compensation, and nominating and governance committees satisfies the independence standards for such committees established by the SEC and the NasdaqNASDAQ listing rules, as applicable. In making these determinations on the independence of our directors, our Board considered the relationships that each such non-employee director has with our company and all other facts and circumstances our Board deemed relevant in determining independence.
Our independent directors will meet alone in executive session periodically. The purpose of these executive sessions is to promote open and candid discussion among the independent directors.
Our Board has established a Code of Business Conduct and Ethics that applies to our officers, directors and employees. Among other matters, our Code of Business Conduct and Ethics is designed to deter wrongdoing and to promote:
Any waiver of the Code of Business Conduct and Ethics for our directors or officers may be made only by our Board or a committee thereof, and will be promptly disclosed as required by law or NASDAQ regulations. We intend to disclose on our website any amendment to, or waiver of, any provisions of our Code of Business Conduct and Ethics applicable to our directors and executive officers that would otherwise be required to be disclosed under the rules of the SEC or NASDAQ. A copy of our Code of Business Conduct and Ethics is available under the “Investor Relations” tab at www.harborone.com
Shareholders wishing to communicate with our Board of Directors should address their communications to the Company’s investor relations department by telephone at (508) 895-1000 or by mail sent to the Company’s main address at 770 Oak Street, Brockton, Massachusetts 02301, Attention: Investor Relations. The mailing envelope should contain a clear notation indicating that the enclosed letter is a “Shareholder — “Shareholder—Board Communication” or “Shareholder — “Shareholder—Director Communication.” All such letters should clearly state whether the intended recipients are all members of the Board or certain specified individual directors. All communications will be reviewed by the Company’s investor relations department, which will determine whether the communication will be relayed to the Board or the director. Except for resumes, sales and marketing communications or notices regarding seminars or conferences, summaries of all shareholder communications will be provided to the Board.
Our Board has a standing Audit Committee, Compensation Committee, CRA Committee, Executive Committee, and Nominating and Governance Committee. The composition and responsibilities of each
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are described below. Members serve on these committees until their resignation or until otherwise determined by our Board.
The Board held 17 meetings during fiscal year 2020,2021, and all directors attended 98%96% or more of the Board meetings and meetings of the committees on which they served during the periods they served. While we do not have a formal policy related to Board member attendance at annual meetings of shareholders, directors are encouraged to attend each annual meeting to the extent reasonably practicable. Twelve directors attended the 20202021 annual meeting of shareholders.
The table below highlights the current membership of each committee along with the number of meetings held during 2020:2021. Andreana Santangelo succeeded Wallace H. Peckham, III as Chair of the Audit Committee upon Mr. Peckham’s retirement effective December 31, 2021.
| | | | | | | | | | | | | | | |
| | | | | | Compensation | | | Nominating and | | | Executive | | | CRA |
Name | | | Audit Committee | | | Committee | | | Governance Committee | | | Committee | | | Committee |
Joseph F. Barry | | | | | | | | | | | | | | | Chair |
Mandy L. Berman | | | | | | X | | | X | | | | | | |
James W. Blake | | | | | | | | | | | | | | | |
Joseph F. Casey | | | | | | | | | | | | | | | |
David P. Frenette, Esq. | | | | | | Chair | | | | | | X | | | |
Gordon Jezard | | | | | | X | | | | | | Chair | | | X |
Barry R. Koretz | | | X | | | | | | | | | | | | X |
Dr. Timothy R. Lynch | | | | | | | | | X | | | X | | | |
William A. Payne | | | X | | | | | | | | | X | | | |
Andreana Santangelo | | | Chair | | | | | | | | | | | | |
Michael J. Sullivan, Esq. | | | | | | | | | Chair | | | | | | |
Damian W. Wilmot | | | X | | | | | | | | | X | | | |
Total Meetings Held in 2021 | | | 8 | | | 6 | | | 2 | | | 4 | | | 4 |
| Name | | | Audit Committee | | | Compensation Committee | | | Nominating and Governance Committee | | | Executive Committee | | | CRA Committee | |
| Joseph F. Barry | | | | | | | | | Chair | | | | ||||
| Mandy L. Berman | | | | | | X | | | | | | | | | | |
| James W. Blake | | | | | | | | | | | | | | | | |
| Joseph F. Casey | | | | | | | | | | | | | | | | |
| David P. Frenette, Esq. | | | | | | Chair | | | | | | X | | | | |
| Gordon Jezard | | | | | | X | | | | | | Chair | | | X | |
| Barry R. Koretz | | | X | | | | | | | | | | | | X | |
| Timothy R. Lynch | | | | | | | | | X | | | X | | | | |
| William A. Payne | | | X | | | | | | | | | X | | | | |
| Wallace H. Peckham, III, MBA, CPA | | | Chair | | | X | | | X | | | | | | | |
| Andreana Santangelo | | | X | | | | | | | | | | | | | |
| Michael J. Sullivan, Esq. | | | | | | | | | Chair | | | | | | | |
| Damian W. Wilmot | | | X | | | | | | | | | | | | | |
| Total Meetings Held in 2020 | | | 8 | | | 8 | | | 3 | | | 7 | | | 4 | |
Audit Committee. The Audit Committee assists our Board in its oversight of the integrity of our financial statements, the qualifications and independence of our independent registered public accounting firm, and our internal financial and accounting controls. The Audit Committee has direct responsibility for the appointment, compensation, retention (including termination) and oversight of our independent registered public accounting firm, and our independent registered public accounting firm reports directly to the audit committee. The Audit Committee also prepares the Audit Committee report that the SEC requires to be included in our annual proxy statement.
Each member of the Audit Committee qualifies as an independent director under the corporate governance standards of the NasdaqNASDAQ listing rules and the independence requirements of the Exchange Act. Our Board has determined that Mr. PeckhamMs. Santangelo qualifies as an “audit committee financial expert” as such term is currently defined under SEC rules. The Audit Committee has adopted a written charter that satisfies the applicable standards of the SEC and the NasdaqNASDAQ listing rules, a copy of which is available under the “Investor Relations” tab at www.harborone.com.
Compensation Committee. The Compensation Committee approves our compensation objectives, approves the compensation of the Chief Executive Officer and approves or recommends to our Board for approval the compensation of other executives. The Compensation Committee reviews all compensation components, including base salary, bonus, benefits and other perquisites. The Compensation Committee solicits the input and recommendations of management for compensation awards to other executives, including the named executive officers. Such awards are further discussed in executive session, with decisions made by the Compensation Committee without management’s involvement.
Each member of the Compensation Committee is a “non-employee director” under the Exchange Act and each is an independent director as defined by the NasdaqNASDAQ listing rules. The Compensation Committee has adopted a written charter that satisfies the applicable standards of the SEC and the NasdaqNASDAQ listing rules, a copy of which is available under the “Investor Relations” tab at www.harborone.com.
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Nominating and Governance Committee. The Nominating and Governance Committee recommends to our Board candidates for directorships and the structure and composition of our Board and the Board committees. In addition, the Nominating and Governance Committee develops and recommends to our Board corporate governance guidelines and advises our Board on corporate governance matters.
Each member of the Nominating and Governance Committee is a “non-employee director” under the Exchange Act, and each is an independent director as defined by the NasdaqNASDAQ listing rules. The Nominating and Governance Committee has adopted a written charter that satisfies the applicable standards of the NasdaqNASDAQ listing rules, a copy of which is available under the “Investor Relations” tab at www.harborone.com.
Our Board of Directors may establish other committees from time to time.
The Nominating and Governance Committee is responsible for identifying, assessing and recommending the slate of candidates to be nominated for election to the Board of Directors. The Nominating and Governance Committee uses a variety of methods for identifying and evaluating nominees for director. In the course of establishing the slate of nominees for director each year, the Nominating and Governance Committee will consider whether any vacancies on the Board are expected due to retirement or otherwise, the skills represented by retiring and continuing directors, and additional skills identified by the Board that could improve the overall quality and ability of the Board to carry out its function. In the event that vacancies are anticipated or arise, the Nominating and Governance Committee considers various potential candidates for director. Candidates may come to the attention of the Nominating and Governance Committee through the business and other networks of the existing members of the Board or from management. The Nominating and Governance Committee may also solicit recommendations for director nominees from independent search firms or any other source it deems appropriate.
The Nominating and Governance Committee requires all nominees to have experience at a strategic or policymaking level in a business, government, non-profit or academic organization of high standing; to be highly accomplished in his or her respective field, with superior credentials and recognition; to be well regarded in the community and shall have a long-term reputation for the highest ethical and moral standards; to have sufficient time and availability to devote to the affairs of the Company, particularly in light of the number of boards on which the nominee may serve; and to the extent such nominee serves or has previously served on other boards, to have a demonstrated history of actively contributing at board meetings. In addition to reviewing a nominee’s background and accomplishments, nominees are reviewed in the context of the current composition of the Board of Directors and the evolving needs of the Company and whether the nominee, if elected, would assist in achieving a mix of board members that represents a diversity of background and experiences. The Nominating and Governance Committee Charter was amended in 2020 to include an explicit commitment to including in each search for new directors highly qualified candidates who reflect diverse backgrounds, including diversity of gender, race and ethnicity. The last three candidates proposed by the Nominating and Governance Committee for election as new directors were women and/or members of historically underrepresented groups.
Pursuant to the corporate governance guidelines established by the Board, a majority of the Board shall be “independent” under the NasdaqNASDAQ listing standards. On an annual basis, the Nominating and Governance Committee reviews the “independent” status of each member of the Board to determine whether any relationship is inconsistent with a determination that the director was independent. Additionally, the guidelines established by the Board require that the Company’s audit, compensation and nominating and governance committees shall be comprised entirely of independent directors and at least one member of the Audit Committee shall have such experience, education and other qualifications necessary to qualify as an “audit committee financial expert” as defined by SEC rules.
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Any shareholder of the Company entitled to vote for the election of directors at the annual meeting can submit the names of candidates for director by writing to the Corporate Secretary at HarborOne Bancorp, Inc., 770 Oak Street, Brockton, Massachusetts 02301. To be timely, a shareholder’s notice must be delivered not later than the close of business on the 90th90th day nor earlier than the close of business on the
The submission shall include the following information set forth below:
There were no submissions by shareholders of Board nominees for our 20212022 annual meeting.
During the year ended December 31, 2020,2021, the members of the Compensation Committee were Mandy L. Berman, David P. Frenette, Esq., Gordon Jezard and Wallace H. Peckham, III, MBA, CPA, each of whom are, or in the case of Mr. Peckham were, independent directors. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee (or other committee performing equivalent functions) of any entity that has one or more executive officers serving on our board of directors or compensation committee. No interlocking relationship exists between any member of the Board of Directors or Compensation Committee (or other committee performing equivalent functions) and any executive, member of our Board of Directors or member of the compensation committee (or other committee performing equivalent functions) of any other company.
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The following is a description of transactions, since January 1, 2020,2021, to which we have been a party or will be a party, in which the amount involved exceeded or will exceed $120,000, and in which any of our executive officers or directors, or an affiliate or immediate family member thereof, had or will have a direct or indirect material interest, other than compensation, termination and change in controlchange-in-control arrangements, which are described under “—Executive Compensation” and “—Director Compensation” below.
Loans and Extensions of Credit. The Sarbanes-Oxley Act of 2002 generally prohibits loans to our executive officers and directors. However, the Sarbanes-Oxley Act contains a specific exemption from such prohibition for loans by HarborOne Bank to its executive officers and directors in compliance with federal banking regulations. Federal regulations require that all loans or extensions of credit to executive officers and directors of insured institutions must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with persons not related to HarborOne Bank and must not involve more than the normal risk of repayment or present other unfavorable features. We have adopted written policies to implement the requirements of Regulation O, which restricts the extension of credit to directors and executive officers and their family members and other related interests. Under these policies, extensions of credit that exceed regulatory thresholds must be approved by the Board of Directors. We believe that all extensions of credit to our directors and officers satisfy the foregoing conditions. The aggregate amount of our loans to our directors, executive officers and their related entities was $187,000 at March 29, 2021.31, 2022. As of March 29, 2021,31, 2022, these loans were performing according to their original terms.
Other Transactions. Since January 1, 2020,2021, there have been no transactions and there are no currently proposed transactions in which we were or are to be a participant and the amount involved exceeds $120,000, and in which any of our executive officers or directors had or will have a direct or indirect material interest.
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In the year ending December 31, 2020,2021, each non-employee director received an annual cash retainer equal to $75,000. The chairman of the Board also received an additional $15,000, the Audit Committee chair received an additional $10,000, and all other committee chairs received an additional $7,500. All such retainers were paid in equal monthly installments, prorated to reflect any partial periods of service. In October 2020,March 2021, our chairman received a grant of 3,9503,199 shares and each other non-employee director received a grant of 2,8502,285 shares of restricted stock. Each such grant vests in full upon the first anniversary of the grant date.
The following table sets forth information regarding the compensation paid to our non-employee directors for the fiscal year ended December 31, 2020:2021:
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| | | | | | | | | | | | | | |
| | | | | | | | | Change in | | | | | |
| | | | | | | | | Pension Value | | | | | |
| | | | | | | | | and | | | | | |
| | | | | | | | | Nonqualified | | | | | |
| | | | | | | | | Deferred | | | | | |
| | | Fees Earned or | | | | | | Compensation | | All Other | | | |
Name (1) (2) | | | Paid in Cash (3) | | | Stock Awards (4) | | | Earnings (5) | | Compensation (6) | | | Total |
Joseph F. Barry | | $ | 82,500 | | $ | 27,306 | | $ | 14,740 | $ | 691 | | $ | 125,237 |
Mandy L. Berman | | | 75,000 | | | 27,306 | | | - | | 262 | | | 102,568 |
David P. Frenette, Esq. | | | 82,500 | | | 27,306 | | | 6,745 | | 8,228 | | | 124,779 |
Gordon Jezard | | | 82,500 | | | 27,306 | | | 16,819 | | 1,041 | | | 127,666 |
Barry R. Koretz | | | 75,000 | | | 27,306 | | | 13,381 | | 9,927 | | | 125,614 |
Dr. Timothy R. Lynch | | | 75,000 | | | 27,306 | | | 4,015 | | 170 | | | 106,491 |
William A. Payne | | | 75,000 | | | 27,306 | | | - | | 262 | | | 102,568 |
Wallace H. Peckham, III, MBA, CPA (6) | | | 85,000 | | | 27,306 | | | 15,881 | | 4,191 | | | 132,378 |
Andreana Santangelo | | | 75,000 | | | 27,306 | | | - | | 262 | | | 102,568 |
Michael J. Sullivan, Esq. | | | 97,500 | | | 38,228 | | | - | | 170 | | | 135,898 |
Damian W. Wilmot, Esq. | | | 75,000 | | | 27,306 | | | - | | 262 | | | 102,568 |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
(1) As of December 31, 2021, each director, other than Mr. Sullivan and Mr. Peckham, held 2,285 shares of unvested restricted stock. As of December 31, 2021, Mr. Sullivan held 3,199 shares of unvested restricted stock. Mr. Peckham retired from the Board as of December 31, 2021 and the vesting of his unvested restricted stock was accelerated to vest as of the same date. | ||||||||||||||
(2) As of December 31, 2021, (i) Mr. Payne, had 24,979 exercisable options outstanding, (ii) Ms. Berman, Ms. Santangelo and Mr. Wilmot held no outstanding options, and (iii) each other director had 83,263 exercisable options outstanding. | ||||||||||||||
(3) Includes annual retainer payments for board and committee service earned during the fiscal year, including additional annual retainers for the board and committee chairs, whether such fees were paid currently or deferred under the Director Retirement Plan. | ||||||||||||||
(4) Amounts included in the "Stock Awards" column for the year ended December 31, 2021, represent grants under our Equity Plan that were made on March 1, 2021. Amounts related to stock awards are reported in the table above pursuant to applicable SEC regulations that require that we report the full grant-date fair value of grants in the year in which such grants are made. The stock awards reflect the aggregate fair value at the close of trading on the day before the grant date of $11.95 per share. The dollar value is the grant date fair value of the awards, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 ("FASB ASC Topic 718"). Grants cliff vest in one year. | ||||||||||||||
(5)Amounts reflect the aggregate change in the actuarial present value of the individual’s accumulated benefits under the Director Retirement Plan. | ||||||||||||||
(6) Includes premiums for life insurance paid by HarborOne Bank on behalf of each director; premiums for dental insurance paid by HarborOne Bank on behalf of Messrs. Barry, Frenette, Jezard, Koretz and Peckham; premiums for health insurance paid by HarborOne Bank on behalf of Messrs. Frenette and Koretz and financial planning assistance for Messrs. Jezard, Koretz and Peckham. | ||||||||||||||
Name(1)(2) | | | Fees Earned or Paid in Cash(3) | | | Stock Awards(4) | | | All Other Compensation(5) | | | Total | | ||||||||||||
| Joseph F. Barry | | | | $ | 82,500 | | | | | $ | 26,334 | | | | | $ | 661 | | | | | $ | 109,495 | | |
| Mandy L. Berman | | | | | 75,000 | | | | | | 26,334 | | | | | | 200 | | | | | | 101,534 | | |
| David P. Frenette, Esq. | | | | | 82,500 | | | | | | 26,334 | | | | | | 8,092 | | | | | | 116,926 | | |
| Gordon Jezard | | | | | 82,500 | | | | | | 26,334 | | | | | | 1,011 | | | | | | 109,845 | | |
| Barry R. Koretz | | | | | 75,000 | | | | | | 26,334 | | | | | | 8,198 | | | | | | 109,532 | | |
| Timothy R. Lynch | | | | | 75,000 | | | | | | 26,334 | | | | | | 3,130 | | | | | | 104,464 | | |
| William A. Payne | | | | | 75,000 | | | | | | 26,334 | | | | | | 4,700 | | | | | | 106,034 | | |
| Wallace H. Peckham, III, MBA, CPA | | | | | 85,000 | | | | | | 26,334 | | | | | | 661 | | | | | | 111,995 | | |
| Andreana Santangelo | | | | | 18,750 | | | | | | 26,334 | | | | | | — | | | | | | 45,084 | | |
| Michael J. Sullivan, Esq. | | | | | 97,500 | | | | | | 36,498 | | | | | | 130 | | | | | | 134,128 | | |
| Damian W. Wilmot, Esq. | | | | | 75,000 | | | | | | 26,334 | | | | | | 200 | | | | | | 101,534 | | |
Director Retirement Plan. Directors of HarborOne Bank as of December 31, 2016 were eligible to participate in the HarborOne Bank Director Retirement Plan, which provides for annual payments to directors who have completed six or more years of service, and who have reached the retirement age specified in the participation agreement, of a specified percentage of the total director fees paid to the director in his or her final year serving as director, as follows: 30.0% annually for five years, for directors with at least six years of service; 45.0% annually for 10 years, for directors with at least 11 years of service or 60.0% annually for 10 years, for directors with at least 21 years of service. On December 31, 2017, the Company elected to freeze the Directors’ Retirement Plan and does not intend to replace it with an alternative plan at this time. The balance of the liability at December 31, 20202021 was $2.0 million and there were payouts of $37,000 in 2020.2021.
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COMPENSATION DISCUSSION AND ANALYSISTABLE OF CONTENTS
Despite the challenges in 2021, we had very strong annual performance results with our customers, shareholders and employees. Our vision for the business, our business strategy and our execution all came together seamlessly in 2021. The results are a testament to our team approach, unparalleled commitment to execution excellence, and the benefits of living our values while serving our customers. We are an “emerging growth company,” as definedcontinued our metro Boston expansion with the opening of three de novo branches in Brighton, Cambridge and Brookline in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. These include, but are not limited to, reduced disclosure obligations regarding executive compensation, including the requirement to include a Compensation Discussion and Analysis, as well as exemptions from the requirement to hold a non-binding advisory vote on executive compensation. fourth quarter.
We have elected to provide the scaled disclosure requirements applicable to emerging growth companies. Our emerging growth company status is scheduled to end December 31, 2021.
Notwithstanding the challenges of 2020,2021, our financial results were strong. For the year ended December 31, 2020,2021, net income was $58.5 million, or $1.14 per diluted share, compared to $44.8 million, or $0.82, per basic and diluted share, compared to $18.3 million, or $0.33 per basic and diluted share, for the year ended December 31, 2019. Our efficiency ratio for2020 an increase of $13.7 million or 30.6%. For the year ended December 31, 20202021 return on average assets was 63.55%1.29% and return on average equity was 8.45%. Commercial loan growth of $240.9 million, or 12.1% year over year, excluding U.S. Small Business Administration Paycheck Protection Program (“PPP”) loans. Net interest income increased $11.3 million, or 9.4%, comparedyear over year.
This Compensation Discussion and Analysis provides a detailed description of our executive compensation philosophy, programs and the decisions made in 2021, and the factors considered in making those decisions. The following executives are referred to 82.49%as our “Named Executive Officers” (“NEOs”):
| |
Executive | Title |
James W. Blake | Chief Executive Officer |
Joseph F. Casey | President and Chief Operating Officer |
Linda H. Simmons | Executive Vice President, Chief Financial Officer |
H. Scott Sanborn | Executive Vice President, Chief Lending Officer |
Inez H. Friedman-Boyce, Esq. | Senior Vice President, General Counsel and Corporate Secretary |
Compensation Philosophy and Objectives
HarborOne’s executive compensation program is designed with an emphasis on rewarding for the prior year.
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Highlights of our executive pay and governance practices:
What We Do
| ● | Pay for performance with a significant portion of compensation “at risk.” |
| ● | Subject cash and equity incentive awards to a clawback policy. |
| ● | Engage with an independent compensation advisor who reports directly to the Compensation Committee. |
| ● | Benchmark our compensation practices to ensure executive compensation remains consistent with market. |
| ● | Require double-trigger change-in-control provisions in our agreements with executives. |
What We Don’t Do
| ● | We don’t provide excise tax gross-ups in change-in-control agreements. |
| ● | We don’t permit executives to engage in hedging or pledging of Company stock without prior authorization. |
| ● | We don’t allow repricing of underwater stock options without shareholder approval. |
Say on Pay Vote on Executive Compensation
In prior years, HarborOne was an “emerging growth company” as defined in change in control agreements
Determining Executive Compensation
The Compensation Committee evaluates multiple factors when establishing and maintaining the Bank’s executive compensation programs including: an annual review and selection of a relevant peer group, banking and industry surveys, financial affordability, legal and regulatory considerations to inform the total compensation for the Chief Executive Officer and Senior Management. The CEO is evaluated primarily on Bank performance including financial, strategic and operational goal achievement. NEOs are evaluated on Bank, individual performance and future potential.
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Roles and Responsibilities in Executive Compensation
| | | | |
Role | | Relationship | | Responsibilities |
Compensation Committee of the Board of Directors | | Independent Non-Employee Directors Appointed by the Board of Directors | | ● Fulfills responsibilities and requirements of the Compensation Committee Charter |
Management | | Executive Employees of the Bank | | ● Provides proposed financial targets and results to the Committee |
Pearl Meyer & Partners, LLC | | Independent Compensation Consultant Engaged by the Compensation Committee | | ● Provides independent executive compensation consulting services to the Compensation Committee |
Role of the Executive Peer Group and Compensation Benchmarking
The Compensation Committee engages Pearl Meyer & Partners, LLC to conduct an annual executive compensation assessment. This assessment and information is essential in the Committee’s evaluation of executive compensation relative to banks of comparable size in the banking sector.
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Pearl Meyer & Partners, LLC utilizes a criteria-based selection process and guiding principles to filter broad industry information based on potential peers that were of comparable size with assets generally in the range of one-half to two times HarborOne Bank’s assets, geography with banks in the Northeast and adjacent states, branch network, and business model, among other criteria to recommend the proposed Peer Group. The two sources used to benchmark executive compensation are:
| ● | The Peer Group – a group of 19 similarly sized banks with information extracted from the peer group annual proxy statements. |
| ● | Compensation Surveys – industry-specific surveys are used to supplement the compensation information from peer proxies. |
Review of the proposed Peer Group is selected in collaboration with HarborOne management, Pearl Meyer & Partners, LLC and the Compensation Committee. The Peer Group is reviewed annually for appropriateness in advance of the executive compensation pay assessment.
As a result of the Peer Group assessment for 2021, the Committee approved the following Peer Group:
| | | | | | | | | | |
Company | | Ticker | | Company | | Ticker | | Company | | Ticker |
Brookline Bancorp, Inc. | | BRKL | | Bridge Bancorp, Inc. | | BDGE | | Arrow Financial Corp. | | AROW |
ConnectOne Bancorp, Inc. | | CNOB | | Bryn Mawr Bank Corp. | | BMTC | | Cambridge Bancorp | | CATC |
Meridian Bancorp, Inc. | | EBSB | | Camden National Corp. | | CAC | | Farmers National Banc Corp. | | FMNB |
Peapack-Gladstone Financial Corp. | | PGC | | Financial Institutions, Inc. | | FISI | | Peoples Financial Services Corp. | | PFIS |
Washington Trust Bancorp, Inc. | | WASH | | CNB Financial Corp. | | CCNE | | Orrstown Financial Services, Inc. | | ORRF |
Century Bancorp, Inc. | | CNBKA | | Bar Harbor Bankshares, Inc. | | BHB | | | | |
Univest Financial Corp. | | UVSP | | Republic First Bancorp, Inc. | | FRBK | | | | |
Evaluating Executive Performance
Consistent with the annual performance management process of the Bank, executive performance of the Senior Leadership, including the CEO and the President and COO, is evaluated by the Compensation Committee in February. The CEO and the President and COO provide an overview to the Compensation Committee of the performance of each executive and their recommended merit increase, equity grant and incentive payout. The performance analysis provides an assessment of (i) individual achievement; (ii) contribution to the Bank’s short and long-term performance; and (iii) the Bank’s values and leadership competencies.
For the CEO and the President and COO, the Board’s Chairman gathers input from the Board and makes recommendations for the Compensation Committee’s consideration relative to the CEO and the President and COO compensation. Their performance and compensation is evaluated based upon the Bank’s performance.
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Elements of Total Compensation
Our executive compensation consists of four major elements: base salary, annual incentive, long-term incentives, and benefits. A description of each element is described below:
| | | | |
Compensation Element | Description | Purpose | ||
Base Salary | | Fixed cash pay for the position duties, responsibilities and executive experience, and individual performance | | Offer a stable source of base compensation balanced with at-risk pay |
Annual Incentive | | Annual cash incentive aligned to the achievement of Bank, Division and Individual goals (as applicable) | | Motivate and reward for annual goal achievement |
Long-Term Incentives | | Equity awards earned based on time and performance-based requirements | | Create alignment with shareholder interests and long-term performance |
Benefits and Perquisites | | Competitive health, welfare, survivor and retirement benefits | | Promote health and wellness in the workforce and retirement planning and saving opportunities |
Each of our Named Executive Officers receives a base salary, short-term incentive compensation and long-term incentive compensation as part of their total direct compensation package. Mr. Blake’s 20202021 compensation consisted of approximately 39%40% base salary, 30% short-term incentive compensation, 22%23% long-term incentive compensation, and 9%7% benefits and perquisites; Mr. Casey’s 20202021 compensation consisted of approximately 43%44% base salary, 28% short-term incentive compensation, and 20%21% long-term incentive compensation, and 9%7% benefits and perquisites; and Ms. Simmons’ 20202021 compensation consisted of approximately 50%53% base salary, 23% short-term incentive compensation, 20% long-term incentive compensation and 4% benefits and perquisites. Mr. Sanborn’s 2021 compensation consisted of approximately 51% base salary, 23% short-term incentive compensation, 18% long-term incentive compensation and 9%8% benefits and perquisites. Ms. Friedman-Boyce’s 2021 compensation consisted of approximately 61% base salary, 19% short-term incentive compensation, 16% long-term incentive compensation and 4% benefits and perquisites.
Base Salaries. Base salaries are provided to recognize the experience, skills, knowledge, and responsibilities required of all our employees, including our Named Executive Officers. Base salaries are reviewed annually, typically in connection with our annual performance review process, and adjusted from time to time to realign salaries with market levels after taking into account individual responsibilities, performance, and experience.
| | | | | | |
Named Executive Officer |
| 2020 Base Salary ($) |
| 2021 Base Salary ($) |
| Increase From Fiscal 2020 (%) |
James W. Blake | | $ 820,152 | | $ 844,757 | | 3% |
Joseph F. Casey | | $ 555,660 | | $ 577,886 | | 4% |
Linda H. Simmons | | $ 357,000 | | $ 371,281 | | 4% |
H. Scott Sanborn(1) | | $ 303,874 | | $ 352,800 | | 15.5% |
Inez H. Friedman-Boyce, Esq. | | $ 285,000 | | $ 302,100 | | 6% |
(1) Mr. Sanborn received a merit increase of 7.5% on March 1, 2021 and a market adjustment of 8% in July 2021 to better align his salary with the market range for his position and his performance and contributions. His 2021 base salary reported in this table reflects his base salary following the July 2021 market adjustment. | ||||||
Annual Incentive Plan.We believe that equity grants with a time-based vesting feature promote executive retention, becausemaintain an Annual Incentive Plan to provide for short-term incentive opportunities for our executive officers that align with the Bank’s annual financial and non-financial goals. Under the Annual Incentive Plan, our Named Executive Officers are incentivizedeligible for cash awards based upon the achievement of pre-established Bank performance goals.
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Fiscal 2021 Target Short-Term Incentive Opportunities:
Each Named Executive Officer’s target short-term incentive is reviewed annually, typically in connection with our annual performance review process, and adjusted from time to remaintime to realign target short-term incentives with market levels after taking into account individual responsibilities, performance, and experience. No adjustments were made with respect to short-term incentive targets for fiscal year 2021.
| | | | | | | |
| | | 2020 Target Bonus | | | | 2021 Target Bonus |
| | | (% of Eligible | | | | (% of Eligible |
Named Executive Officer | | | Earnings) | | | | Earnings) |
James W. Blake | | | 60% | | | | 60% |
Joseph F. Casey | | | 50% | | | | 50% |
Linda H. Simmons | | | 35% | | | | 35% |
H. Scott Sanborn | | | 35% | | | | 35% |
Inez H. Friedman-Boyce, Esq. | | | 25% | | | | 25% |
Fiscal 2021 Performance Goals:
At the beginning of the fiscal year, the Compensation Committee approved the following performance goals for 2021 under the Annual Officer Incentive Plan:
| ● | Return On Assets—Net Income divided by Average Total Assets. |
| ● | Earnings Per Share—Earnings Per Shareis defined as basic earnings per share, which is net income divided by the weighted-average number of common shares outstanding during the period. Unallocated ESOP shares are not deemed outstanding in basic earnings per share. |
| ● | Core Deposit Growth—Core deposits are all deposits excluding certificates of deposit. Growth is measured using the month-to-date average from the previous fiscal year end to the month-to-date average from the current fiscal year end in dollars and compared to the budgeted growth. |
| ● | Commercial and Small Business Loan Growth—Commercial loans include commercial real estate loans, commercial construction loans, and commercial and industrial loans (which include small business loans). Growth is measured from the previous fiscal year end to the current fiscal year end in dollars and compared to the budgeted growth. |
The performance range for Threshold, Target (set at the Company’s budget), and Superior results was set by the Compensation Committee for each of the Performance Goals. These, in our employment duringturn, corresponded to a range of potential incentives that could be earned for each Performance Goal, which were also approved by the vesting period. In MarchCompensation Committee. For each Performance Goal, no incentives would be earned for results below Threshold, and incentives would be capped if results met or exceeded the Superior level. The tables below set forth the ranges for each Performance Goal, the Company’s 2021 actual performance on each Goal, and the payout level for each Goal:
Percent Goal Attainment | Performance Goal | Incentive Payout Guideline |
130% | Superior | 130% of incentive target |
100% | Target or Meets Goal | 100% of incentive target |
80% | Threshold | 50% of incentive target |
Below 80% | Unsatisfactory/Below Threshold | 0% of incentive target |
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| | | | | | | | | | | | |
2021 Annual Incentive Plan | ||||||||||||
| | Goal | | Threshold | | Target | | Superior | | | | Payout % of |
2021 Goal Metrics | | Weight | | 80% | | 100% | | 130% | | Actual | | Target |
Return On Assets (ROA) | | 25% | | 0.66% | | 0.83% | | 1.08% | | 1.29% | | 130% |
Earnings Per Share (EPS) | | 25% | | $ 0.58 | | $ 0.72 | | $ 0.94 | | $ 1.14 | | 130% |
Core Deposit Growth (millions) | | 25% | | $ 87,038 | | $ 108,797 | | $ 141,436 | | $ 366,404 | | 130% |
Commercial & Small Business Loan Growth (millions) | | 25% | | $ 97,628 | | $ 122,035 | | $ 158,645 | | $ 143,059 | | 117% |
| | | | | | | | | | Overall | | 127% |
Fiscal 2021 Annual Incentive Targets vs. Results:
Incentives paid to the Named Executive Officers for fiscal year 2021 were based solely on the Bank’s performance and the result of the Bank’s overall goal achievement for Return On Assets, Earnings Per Share, Core Deposit Growth, and Commercial and Small Business Loan Growth. Performance results on goals resulted in orderthe NEOs earning 127% of their respective target incentives. The table below sets forth the annual incentives earned by and paid to further align the interestseach of our executives with thatNamed Executive Officers for 2021:
| | | | | |
2021 Annual Incentive Plan | |||||
| 2021 | Incentive | | | |
| Incentive | Eligible | Target | Incentive | 2021 |
NAMED EXECUTIVE OFFICER | Target % | Earnings | Incentive $ | Result | Payout |
James W. Blake | 60% | $ 840,498 | $ 504,299 | 127% | $ 640,459 |
Joseph F. Casey | 50% | $ 574,040 | $ 287,020 | 127% | $ 364,515 |
Linda H. Simmons | 35% | $ 368,809 | $ 129,083 | 127% | $ 163,936 |
H. Scott Sanborn | 35% | $ 333,778 | $ 116,822 | 127% | $ 148,364 |
Inez H. Friedman- Boyce, Esq. | 25% | $ 299,141 | $ 74,785 | 127% | $ 94,977 |
Long-Term Incentives
On September 29, 2020, the shareholders of our shareholders, executives were granted performance-basedthe Company approved the 2020 Equity Incentive Plan, which provides for the grant of options, restricted stock, restricted stock units, (“PRSUs”), which vest based on a combinationcash-based awards, performance awards, and dividend equivalent rights to officers, employees and directors of the Company and its subsidiaries. Total shares of the Company’s common stock reserved for issuance under the plan are 4,500,000.
The Bank’s long-term incentive program reinforces the importance of growth in shareholder value, rewards for long-term bank performance and service requirements, in addition topromotes stock ownership while managing compensation expense and dilution.
The Compensation Committee believes that long-term incentive grants with time-based restricted stock awards (“RSAs”). As(RSAs) promote executive retention and performance-restricted stock units (PSUs) promote the achievement of strategic, long-term objectives established by the Bank to maximize shareholder returns.
In March 2021, the Bank implemented an annual long-term incentive grant process for our Named Executive Officers and other leaders influencing the long-term objectives of the Bank. The equity awards included a result, an increasing percentagemix of time-based and performance-based equity awards. The time-based equity awards consist of grants of RSAs, which vest ratably over three years. These RSAs enable our NEOs and other executives to participate in the long-term appreciation of our executives’ totalshareholder value, while feeling personally invested in the impact of any business setbacks,
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whether Company-specific or industry-based. The performance-based equity awards consist of grants of PSUs, which cliff vest in three years following the end of the performance period based on Bank performance of Tangible Book Value per Share. Based on the grant date value of the awards and assuming target level of achievement, the March 2021 awards granted to our NEOs were comprised 50% of RSAs and 50% of PSUs.
The Compensation Committee selected Tangible Book Value per Share as the performance metric for the March 2021 PSU awards, because it believes this metric is a good indicator of shareholder value creation. Further, because the Compensation Committee has drawn the “Target” Tangible Book Value per Share goal from the Company’s recent three-year strategic plan, with the “Threshold” and “Stretch” levels set at 20% below and 20% above the Target level, respectively, it believes that it has set challenging, yet attainable, forward-looking incentive goals. While the Company believes in transparency and discloses as much information to shareholders as is necessary to understand how our executive compensation program works, we believe that disclosing the individual target incorporated into the Tangible Book Value per Share goal on a prospective basis would provide our competitors with insight regarding confidential business strategies and plans for use of capital without meaningfully adding to our shareholders’ understanding of the metric, and would thereby result in competitive harm to the Company. We will disclose, however, the goals and actual performance on a retrospective basis for PSUs that vest each year.
Any dividends declared during the performance period are accrued and paid out in cash only to the extent that the PSUs ultimately vest following the completion of the performance period.
Tangible Book Value, or “TBV,” means, measured as of the last day of the Performance Period, Total Shareholders’ Equity, less Goodwill and Other Intangible Assets, in each case, as reported in the Company’s audited financial statements. The TBV is divided by the number of common shares issued and outstanding as of the last day of the Performance Period to derive “TBV per Share,” which is subject to adjustment for unanticipated circumstances not factored into setting the performance levels.
During the year ended December 31, 2021, the Compensation Committee granted RSAs and PSUs to our Named Executive Officers as shown in the following table:
| | | | | | | | | | |
Named Executive Officer |
| Grant Date Value* |
| Total Shares |
| Time-Based Restricted Stock Awards - 50% |
| Performance-Restricted Stock Units - 50% |
| Performance Metric |
James W. Blake | | $ 492,722 | | 41,232 | | 20,616 | | 20,616 | | |
Joseph F. Casey | | $ 273,129 | | 22,856 | | 11,428 | | 11,428 | | Tangible Book Value |
Linda H. Simmons | | $ 136,481 | | 11,421 | | 5,711 | | 5,710 | | (TBV) per Share |
H. Scott Sanborn | | $ 116,178 | | 9,722 | | 4,861 | | 4,861 | | |
Inez H. Friedman-Boyce | | $ 77,830 | | 6,513 | | 3,257 | | 3,256 | | |
* FMV $11.95 per share | ||||||||||
Benefits and Perquisites
We provide an auto allowance and fuel reimbursement to each of Mr. Blake, Mr. Casey, and Mr. Sanborn, and we reimburse Mr. Blake and Mr. Sanborn for their country club memberships. In addition, each of our Named Executive Officers is also entitled to participate in our retirement plans and nonqualified deferred compensation plans as described in more detail in the section entitled “Nonqualified Retirement Benefits.”
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Nonqualified Retirement Benefits
Split-Dollar Life Insurance Arrangements. In 2000, HarborOne Bank entered into a collateral assignment split-dollar life insurance arrangement with Mr. Blake in order to provide a death benefit to the executive’s beneficiaries and to allow the executive access to the cash surrender value of the policy in excess of the amount of premiums paid by HarborOne Bank upon his retirement from HarborOne Bank. In anticipation of the reorganization of HarborOne Bank in 2016, HarborOne Bank terminated this arrangement with Mr. Blake, Mr. Blake transferred the ownership of the life insurance policy to HarborOne Bank, and Mr. Blake entered into a new endorsement split-dollar life insurance agreement that will provide Mr. Blake with a $1,400,000 lifetime death benefit.
Supplemental Executive Retirement Plan Agreements. HarborOne Bank maintains a supplemental executive retirement plan agreement with each of Messrs. Blake and Casey.
Upon Mr. Blake’s “separation from service” (as defined therein), disability or death, Mr. Blake (or his beneficiary in the case of death) shall receive a lump sum payment in an amount equal to the actuarial equivalent of a single life annuity equal to 60% of Mr. Blake’s final average three-year salary and bonus reduced by the primary Social Security benefits payable upon Mr. Blake’s separation from service and the amount payable to Mr. Blake from HarborOne Bank’s 401(k) plan attributable to employer contributions. This lump sum payment is further reduced by the amount paid by HarborOne Bank to Mr. Blake when he reached age 65 in 2015 pursuant to his 2008 supplemental executive retirement plan agreement, with interest at a rate of 3.0% per year from the date of payment. Under the terms of the supplemental executive retirement plan agreement with Mr. Casey, upon the earliest of attaining age 65, termination other than for “cause,” disability, death or a “change in control” of HarborOne Bank (as each such term is defined therein), Mr. Casey shall receive a lump sum payment equal to the actuarial equivalent value of a single life annuity equal to 60% of the executive’s average three-year salary and bonus reduced by projected Social Security benefits and the amount payable to the executive from HarborOne Bank’s 401(k) Plan attributable to employer contributions.
Senior Management Long Term Incentive Plan. Under the HarborOne Bank Senior Management Long Term Incentive Plan, all executive officers of HarborOne Bank with a title of Senior Vice President or above who were hired prior to January 1, 2018, including Messrs. Blake and Casey, may be awarded deferred cash incentive awards. A deferred incentive award is equal to the deferral percentage multiplied by the executive’s base salary for the applicable year. The deferral percentage is determined by the Board of HarborOne Bank based on the executive’s or HarborOne Bank’s achievement of performance goals. The terms “deferred incentive award,” “deferred percentage” and “performance goals” are defined in the HarborOne Bank Senior Management Long Term Incentive Plan. Each deferred incentive award is payable three years following the grant of such award, subject to the executive’s continued employment with HarborOne Bank. Awards are immediately payable upon the executive’s death, disability, retirement or “separation from service” (as defined therein) within 24 months of a “change in control” (as defined therein) of HarborOne Bank or the Company. Retirement for this purpose means an executive’s reaching the age of 62 or older after completing 10 or more years of service with HarborOne Bank. Accordingly, once an executive satisfies the condition for retirement, he or she would be entitled to the deferred incentive award.
The Board of Directors amended this plan effective January 1, 2018 so that no further deferred incentive awards will be comprisedgranted. The balance of variable components.the liability at December 31, 2021 was $0. The final payment under this plan was made in January 2021.
ESOP Restoration Plan. HarborOne Bank provides an ESOP Restoration Plan for the benefit of selected executives whose annual compensation exceeds the amount of annual compensation, which was $290,000 in 2021, permitted to be recognized under the ESOP by the Internal Revenue Code. Under the ESOP Restoration Plan, eligible participants receive a credit each year equal to the amount they would have received under the ESOP but for the Internal Revenue Service-imposed compensation limit. Any benefits earned under the ESOP Restoration Plan become payable the earliest of six months and a day after the participant’s “separation from service” from HarborOne Bank, the participant’s death, a “change in control” of the Company or upon the termination of the ESOP Restoration Plan (as each such term is defined therein).
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401(k) Profit Sharing Plans. HarborOne Bank currently maintains the HarborOne 401(k) Plan (the “HarborOne 401(k) Plan”), and HarborOne Mortgage, LLC, HarborOne Bank’s wholly owned subsidiary, maintains the HarborOne Mortgage Retirement Plan (the “HarborOne Mortgage 401(k) Plan” and together with the HarborOne 401(k) Plan, the “401(k) Plans”), which are tax-qualified profit sharing plans with salary deferral features under Section 401(k) of the Internal Revenue Code. All employees of HarborOne Bank who have attained age 21 are eligible to participate in the HarborOne 401(k) Plan and make salary deferrals. All employees, other than seasonal employees and nonresident alien employees, of HarborOne Mortgage are eligible to participate in the HarborOne Mortgage 401(k) Plan and make salary deferrals. Seasonal employees of HarborOne Mortgage who have attained age 21 and completed 1,000 hours of service are eligible to participate in the HarborOne Mortgage 401(k) Plan.
A participant may contribute up to 100.0% of his or her compensation to the HarborOne 401(k) Plan on a pre-tax or after-tax basis, subject to the limitations imposed by the Internal Revenue Code. A participant may contribute up to 100.0% of his or her compensation to the HarborOne Mortgage 401(k) Plan on a pre-tax basis, subject to the limitations imposed by the Internal Revenue Code.
For 2021, the deferral contribution limit was $19,500. A participant over age 50 may contribute an additional $6,500 to the 401(k) Plans. A participant in the HarborOne 401(k) Plan is always 100.0% vested in his or her salary deferral contributions, and will become vested in his or her share of Bank contributions under a six-year vesting schedule with 20.0% vesting after completion of two years of service, and increased by 20.0% for each subsequent year of service. A participant in the HarborOne Mortgage 401(k) Plan is always 100.0% vested in his or her salary deferral contributions, and will become vested in his or her share of employer contributions under a four-year vesting schedule with 25.0% vesting after completion of one year of service, and increased by 25.0% for each subsequent year of service.
Both 401(k) Plans provide certain in-service withdrawals, including hardship withdrawals and full withdrawals after age 59 ½. Distributions from both 401(k) Plans are available in a lump sum or installments upon a participant’s retirement, termination of employment, death or disability.
The 401(k) Plans permit a participant to direct the investment of his or her own account into various investment options. The participants in the 401(k) Plans are permitted to invest up to 25% of their account balances in the 401(k) Plan in common stock of the Company.
Employee Stock Ownership Plan. The Company currently maintains an ESOP. Eligible employees who have attained age 21 and have completed one year of service are able to participate in the ESOP. Participants vest in the benefits allocated under the ESOP pursuant to a six-year vesting schedule, with 20.0% vesting after completion of two years of service, and increased by 20.0% for each subsequent completed year of service. A participant becomes fully vested at retirement, upon death or disability or upon termination of the ESOP. Any unvested shares that are forfeited upon a participant’s termination of employment will be reallocated among the remaining ESOP participants.
Shares of the Company’s common stock purchased by the ESOP through the proceeds of a loan are held in a suspense account for allocation among participants. ESOP shares are released as the loan is repaid. Discretionary contributions to the ESOP and shares released from the suspense account are allocated among participants in accordance with compensation, on a pro rata basis.
Participants in the ESOP will receive a vote authorization form that reflects all shares the participant may direct the trustee to vote on his or her behalf under the plan. Under the terms of the ESOP, the ESOP trustee votes all shares held by the ESOP, but each ESOP participant may direct the trustee how to vote the shares of Company common stock allocated to his or her account. The ESOP trustee will vote all unallocated shares of Company common stock held by the ESOP in the same proportion as shares for which it has received timely voting instructions. The ESOP trustee will not vote allocated shares for which no voting instructions are received.
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Employment and Change in Control Agreements
The Bank has entered into an Employment Agreement with our CEO and our President and COO, and Change in Control Agreements with the remaining Named Executive Officers. These agreements are intended to provide the Company with the continued employment and undivided attention of its Named Executive Officers without the potential distraction resulting from the reduction of job security inherent in employment by a publicly held institution. For detailed descriptions of the Employment Agreements and Change in Control Agreements we have entered into with our Named Executive Officers, see “Employment and Change in Control Agreements” below.
Other Compensation Policies and Practices
Clawback Policy
The Compensation Committee has adopted a policy that requires that, in the event of any accounting restatement due to material non-compliance with any financial reporting requirements, the Compensation Committee will recover any excess incentive compensation (cash or equity) paid during the three-year period prior to the determination such restatement is required (i) to any executive officer, regardless of any misconduct or whether the executive officer is directly or indirectly responsible and (ii) to any other employee of the Company who the Compensation Committee determines was directly responsible for the misstatement. In addition, the clawback policy provides that if the Compensation Committee concludes that an executive officer or employee committed a significant legal or compliance violation in connection with the officer’s or employee’s employment, the Compensation Committee may, in its discretion, seek recovery of all or a portion of the compensation awarded to the employee or the executive officer for the performance period in which the violation occurred or conclude that any unpaid or unvested compensation has not been earned and must be forfeited. The Compensation Committee believes that the clawback policy reflects good standards of corporate governance and reduces the potential for excessive risk taking by executive officers.
Policy Prohibiting Hedging and Pledging of Equity Securities
The Board annually reviews and approves the Company’s policy with regard to insider trading. The Company’s Insider Trading Policy prohibits insiders from pledging shares on margin, trading in derivative securities of the Company’s common stock, engaging in short sales of the Company’s securities, or purchasing any other financial instrument that is designed to hedge or offset any decrease in the market value of the Company’s securities, all without prior Board approval. The Company’s Insider Trading Policy also prohibits engaging in short sales of the Company’s securities.
Impact of Tax and Accounting on Compensation
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), generally places a $1 million limit on the amount of compensation a company can deduct in any one year for certain executive officers and certain other individuals. For taxable years beginning before January 1, 2018, (i) these executive officers consisted of a public corporation’s principal executive officer and up to three other executive officers (other than the principal financial officer) whose compensation is required to be disclosed to stockholders under the Exchange Act, because they are our most highly compensated executive officers and (ii) qualifying “performance-based compensation” was not subject to this deduction limit if specified requirements were met. The exemption from Section 162(m)’s deduction limit for performance-based compensation has been repealed, and compensation paid to our principal financial officer is also subject to the deduction limit, effective for taxable years beginning after December 31, 2017, such that compensation paid to our named executive officers in excess of $1 million will not be deductible unless it qualifies for the limited transition relief applicable to certain arrangements in place as of November 2, 2017, that are not materially modified. While the Compensation Committee considers tax deductibility as one factor in determining executive compensation, the Compensation Committee also looks at other factors in making its decisions, as noted above, and retains the flexibility to award compensation that it determines to be
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consistent with the goals of our executive compensation program even if the awards are not deductible by us for tax purposes. Accordingly, Compensation Committee reserves the right to modify compensation that was initially intended to be exempt from Section 162(m) if it determines that such modifications are consistent with our business needs. The Compensation Committee believes that shareholder interests are best served if its discretion and flexibility in awarding compensation is not restricted, even though some compensation awards may result in non-deductible compensation expenses.
Stock-Based Compensation Expense
The Bank recognizes stock-based compensation expense under the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718. In determining the appropriate long-term incentive grants, the Bank sought to balance its long-term incentive goals with the need to reduce shareholder dilution and manage stock compensation expense.
Independent Compensation Committee
Executive compensation decisions are approved by the Compensation Committee which is comprised of only independent members of the Board of Directors.
Independent Compensation Consultant
Pearl Meyer & Partners, LLC, our compensation consultant, reports directly to the Compensation Committee and provides no other services to the Bank or management. The Committee considered the firm’s independence under the relevant SEC and stock exchange factors, and determined the firm satisfied the requirements for independence.
Relationship between Compensation Policies and Risk
The Compensation Committee regularly reviews the Company’s compensation programs to ensure that they effectively incentivize employee performance without promoting excessive risk taking. A significant portion of each Named Executive Officer’s compensation is considered to be “at risk.”
| ● | Annual Incentive Plan – annual cash incentive awards are intended to directly link a significant amount of cash compensation to the achievement of measurable Bank one-year financial goals. |
| ● | Long-Term Incentive Plan – our equity compensation incentives our Named Executive Officers to create shareholder value and focus on long-term growth. Restricted Stock Awards vest over a three year period and Performance Restricted Stock Units cliff vest at the end of the three year period. |
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Executive CompensationTABLE OF CONTENTS
2021 Summary Compensation Table
The following table sets forth information regarding the compensation awarded to, earned by or paid to each person who served as our namedChief Executive Officer, each person who served as our Chief Financial Officer, and the three most highly compensated executive officers (other than the Chief Executive Officer and Chief Financial Officer) who were serving as executive officers at the end of the fiscal year ended December 31, 2021 for the fiscal years ended December 31, 2020 and 2019:indicated. Each of these individuals is referred to as a “Named Executive Officer:
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| Name and Principal Position | | Year | | Salary | | Stock Awards(1) | | Option Awards(2) | | Non-equity Incentive Plan Compensation(3) | | All Other Compensation(4) | | Total | |
| | Year |
| | Salary |
| | Bonus | | | Awards (1) |
| | Awards (2) |
| | Compensation (3) |
| | Earnings (4) | | | Compensation (5) |
| | Total | ||||||||||||||||||||||||||||
| James W. Blake | | | | 2020 | | | | $ | 831,668 | | | | $ | 468,468 | | | | $ | — | | | | $ | 648,701 | | | | $ | 195,046 | | | | $ | 2,143,883 | | | | | 2021 | | $ | 840,498 | | $ | - | | $ | 492,722 | | $ | - | | $ | 640,459 | | $ | 800,591 | | $ | 306,587 | | $ | 3,080,857 | |||||||
| Chief Executive Officer | | | | 2019 | | | | | 776,805 | | | | | 921,320 | | | | | 384,519 | | | | | 224,989 | | | | | 2,307,633 | | | | | | | | | | 2020 | | $ | 831,668 | | $ | - | | $ | 468,468 | | $ | - | | $ | 648,701 | | | | | $ | 195,046 | | $ | 2,143,883 | |||||||
| | | 2019 | | $ | 776,805 | | $ | - | | $ | - | | $ | 921,320 | | $ | 384,519 | | | | | $ | 224,989 | | $ | 2,307,633 | |||||||||||||||||||||||||||||||||||||||||||
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| Joseph F. Casey | | | | 2020 | | | | $ | 563,463 | | | ��� | | $ | 259,644 | | | | $ | — | | | | $ | 366,251 | | | | $ | 126,973 | | | | $ | 1,316,331 | | | | | 2021 | | $ | 574,040 | | $ | - | | $ | 273,129 | | $ | - | | $ | 364,515 | | $ | 388,612 | | $ | 184,764 | | $ | 1,785,060 | ||||||
| President and Chief Operating Officer | | | | 2019 | | | | | 526,293 | | | | | — | | | | | 384,053 | | | | | 217,096 | | | | | 150,340 | | | | | 1,277,782 | | | | | 2020 | | $ | 563,463 | | $ | - | | $ | 259,644 | | $ | - | | $ | 366,251 | | | | | $ | 126,973 | | $ | 1,316,331 | |||||||
| Linda Simmons | | | | 2020 | | | | $ | 354,030 | | | | $ | 129,822 | | | | $ | — | | | | $ | 161,084 | | | | $ | 59,050 | | | | $ | 703,986 | | | ||||||||||||||||||||||||||||||||||
| Chief Financial Officer | | | | 2019 | | | | | 325,401 | | | | | — | | | | | — | | | | | 93,960 | | | | | 80,169 | | | | | 499,530 | | | ||||||||||||||||||||||||||||||||||
| | | 2019 | | $ | 526,293 | | $ | - | | $ | - | | $ | 384,053 | | $ | 217,096 | | | | | $ | 150,340 | | $ | 1,277,782 | |||||||||||||||||||||||||||||||||||||||||||
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Linda H. Simmons | | | 2021 | | $ | 368,809 | | $ | - | | $ | 136,481 | | $ | - | | $ | 163,936 | | | - | | $ | 92,569 | | $ | 761,795 | |||||||||||||||||||||||||||||||||||||||||||
Executive Vice President, Chief Financial Officer | | | 2020 | | $ | 354,030 | | $ | - | | $ | 129,822 | | $ | - | | $ | 161,084 | | | | | $ | 59,050 | | $ | 703,986 | |||||||||||||||||||||||||||||||||||||||||||
| | | 2019 | | $ | 325,401 | | $ | - | | $ | - | | $ | - | | $ | 93,960 | | | | | $ | 80,169 | | $ | 499,530 | |||||||||||||||||||||||||||||||||||||||||||
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H. Scott Sanborn | | | 2021 | | $ | 333,778 | | $ | - | | $ | 116,178 | | $ | - | | $ | 148,364 | | | - | | $ | 110,208 | | $ | 708,528 | |||||||||||||||||||||||||||||||||||||||||||
Executive Vice President, Chief Lending Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||
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Inez H. Friedman-Boyce, Esq. | | | 2021 | | $ | 299,141 | | $ | - | | $ | 77,830 | | $ | - | | $ | 94,977 | | | - | | $ | 63,343 | | $ | 535,291 | |||||||||||||||||||||||||||||||||||||||||||
Senior Vice President, General Counsel and Corporate Secretary | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||
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(1) Amounts included in the “Stock Awards” columns for the year ended December 31, 2021, represent the aggregate grant date fair value of the time-based restricted stock awards and performance-based restricted stock unit awards calculated in accordance with ASC 718. Amounts related to stock awards are reported in the table above pursuant to applicable SEC regulations that require that we report the full grant-date fair value of grants in the year in which such grants are made as compared to the actual vesting which occurs ratable over three years. The portion of the amount attributable to performance-based restricted stock units represents the value at the grant date assuming the probable outcome of performance conditions, which is assumed at the target value. The value of each named executive officer’s performance-based restricted stock unit award at the grant date assuming the highest level of performance achievement, or maximum value, is as follows: Mr. Blake, $320,270, Mr. Casey, $177,534, Ms. Simmons, $88,705, Mr. Sanborn, $75,516, Ms. Friedman-Boyce, $50,582. The stock awards reflect a grant date fair value of $11.95. | (1) Amounts included in the “Stock Awards” columns for the year ended December 31, 2021, represent the aggregate grant date fair value of the time-based restricted stock awards and performance-based restricted stock unit awards calculated in accordance with ASC 718. Amounts related to stock awards are reported in the table above pursuant to applicable SEC regulations that require that we report the full grant-date fair value of grants in the year in which such grants are made as compared to the actual vesting which occurs ratable over three years. The portion of the amount attributable to performance-based restricted stock units represents the value at the grant date assuming the probable outcome of performance conditions, which is assumed at the target value. The value of each named executive officer’s performance-based restricted stock unit award at the grant date assuming the highest level of performance achievement, or maximum value, is as follows: Mr. Blake, $320,270, Mr. Casey, $177,534, Ms. Simmons, $88,705, Mr. Sanborn, $75,516, Ms. Friedman-Boyce, $50,582. The stock awards reflect a grant date fair value of $11.95. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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(2)Amounts included in the “Option Awards” columns for the year ended December 31, 2019, represent grants under our 2017 Stock Option and Incentive Plan that were made on February 27, 2019. Amounts related to stock awards and option awards are reported in the table above pursuant to applicable SEC regulations that require that we report the full grant-date fair value of grants in the year in which such grants are made as compared to the actual vesting which occurs ratable over three years. The option awards reflect a grant date fair value of $2.47 per stock option in 2019 with an exercise price of $8.98. The dollar value is the grant date fair value of the awards, calculated in accordance with FASB ASC Topic 718. The assumptions used in the valuation of these options are included in Note 18 of the Notes to our Consolidated Financial Statements. | |||||||||||||||||||||||||||
(3) Amounts reported reflect annual cash incentives earned by our named executive officers for performance in 2021, 2020 and 2019. | |||||||||||||||||||||||||||
(4) Amounts reflect the aggregate change in the actuarial present value of the individual’s accumulated benefits under the Supplemental Executive Retirement Plan Agreements. | |||||||||||||||||||||||||||
(5) The summary of “All Other Compensation” from the table above for the components for 2021 are shown below. |
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| | | | | | | | | | | | Auto Allowance | | | Life & LTD | | | | | | |
| | | 401(k) Employer | | | Country Club | | | Financial | | | & Fuel | | | Insurance | | | | | | ESOP |
Name |
| | Contributions |
| | Membership |
| | Planning |
| | Reimbursement |
| | Premiums | | | ESOP (1) |
| | Restoration (1) |
Mr. Blake | | $ | 14,500 | | $ | 1,800 | | $ | 4,121 | | $ | 26,075 | | $ | 98,623 | | $ | 31,237 | | $ | 130,231 |
Mr. Casey | | $ | 14,500 | | $ | — | | $ | 4,326 | | $ | 20,975 | | $ | 43,700 | | $ | 31,237 | | | 70,026 |
Ms. Simmons | | $ | 14,500 | | $ | — | | $ | 865 | | $ | — | | $ | 20,195 | | $ | 31,237 | | | 25,772 |
Mr. Sanborn | | $ | 14,500 | | $ | 9,419 | | $ | 7,875 | | $ | 10,020 | | $ | 15,402 | | $ | 31,237 | | | 21,755 |
Ms. Friedman-Boyce | | $ | 14,500 | | $ | — | | $ | 3,375 | | $ | — | | $ | 4,331 | | $ | 31,237 | | | 9,900 |
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(1) Represents the aggregate value of the shares allocated to the named executive officer's Employee Stock Ownership Plan, “ESOP,” account and amounts credited to the named executive officer's ESOP Restoration Plan account for the plan year, determined based on the number of shares allocated to the named executive officer under the ESOP or ESOP Restoration Plan, multiplied by $14.84, which was the fair market value of the HarborOne Bancorp common stock as of December 31, 2021, the final trading date of 2021. | |||||||||||||||||||||
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The following table sets forth information with respect to each grant of an award made to a named executive officer in the year ended December 31, 2021. All equity awards reflected in this table were granted pursuant to the 2020 Equity Incentive Plan, described above and shown below.
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| | | | Estimated Future Payouts Under | | | | | | | | | ||||||||
| | | | Non-Equity Incentive Plan | | Estimated Future Payouts Under | | | | All Other | | | ||||||||
| | | | Awards (1) | | Equity Incentive Plan Awards (2) | | All Other | | Option Awards: | | Grant Date | ||||||||
| | | | | | | | | | | | | | | | Stock Awards: | | Number of | | Fair Value |
| | | | | | | | | | | | | | | | Number of | | Securities | | of Stock |
| | | | | | | | | | | | | | | | Shares of | | Underlying | | and Option |
| | Grant | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | Stock or Units | | Options | | Awards (3) |
Name |
| Date |
| |
| |
| |
| (#) |
| (#) |
| (#) |
| (#) |
| (#) |
| ($) |
James W. Blake | | | | $ 403,439 | | $ 504,299 | | $ 655,588 | | | | | | | | | | | | |
| | 3/1/2021 | | | | | | | | 10,308 | | 20,616 | | 30,924 | | | | | | $ 369,542 |
| | 3/1/2021 | | | | | | | | | | | | | | 20,616 | | - | | $ 246,361 |
Joseph F. Casey | | | | $ 229,616 | | $ 287,020 | | $ 373,126 | | | | | | | | | | | | |
| | 3/1/2021 | | | | | | | | 5,714 | | 11,428 | | 17,142 | | | | | | $ 204,847 |
| | 3/1/2021 | | | | | | | | | | | | | | 11,428 | | - | | $ 136,565 |
Linda H. Simmons | | | | $ 103,267 | | $ 129,083 | | $ 167,808 | | | | | | | | | | | | |
| | 3/1/2021 | | | | | | | | 2,855 | | 5,710 | | 8,565 | | | | | | $ 102,370 |
| | 3/1/2021 | | | | | | | | | | | | | | 5,711 | | - | | $ 68,246 |
H. Scott Sanborn | | | | $ 93,458 | | $ 116,822 | | $ 151,869 | | | | | | | | | | | | |
| | 3/1/2021 | | | | | | | | 2,431 | | 4,861 | | 7,292 | | | | | | $ 87,133 |
| | 3/1/2021 | | | | | | | | | | | | | | 4,861 | | - | | $ 58,089 |
Inez H. Friedman-Boyce, Esq. | | | | $ 59,828 | | $ 74,785 | | $ 97,221 | | | | | | | | | | | | |
| | 3/1/2021 | | | | | | | | 1,628 | | 3,256 | | 4,884 | | | | | | $ 58,382 |
| | 3/1/2021 | | | | | | | | | | | | | | 3,257 | | - | | $ 38,921 |
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(1) Represents the threshold, target and maximum annual cash incentive awards under our 2021 Annual Incentive Plan. The threshold amount for each Named Executive Officer is 80% of target, as the minimum amount payable if threshold performance is achieved. If the threshold is not achieved, the payment to the Named Executive Officers would be zero. The target amount is based upon achievement within the target ranges for the performance measures listed in “2021 Annual Incentive Plan ” in the CD&A beginning on page 27. The maximum amount represents 130% of target. The actual amounts earned by each Named Executive Officer are set forth under "Fiscal 2021 Annual Incentive Targets vs. Results" in the CD&A beginning on page 28. | ||||||||||||||||||||
(2)These amounts represent the threshold, target and maximum number of shares that each named executive officer may earn with respect to the performance-based restricted stock units granted in 2021. | ||||||||||||||||||||
(3)The grant date fair value per share for the performance-based restricted stock unit awards and time-based restricted stock awards was $11.95. The performance-based stock awards are included at probable achievement of 150%. | ||||||||||||||||||||
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Outstanding Equity Awards at Year End
The following table sets forth information with respect to outstanding equity awards as of December 31, 2021 for the Named Executive Officers. All equity awards reflected in this table were granted pursuant to either the 2017 Stock Option and Incentive Plan that were made on February 27, 2019. Amounts related to stock awards and option awards are reported inor the table above pursuant to applicable SEC regulations that require that we report the full grant-date fair value of grants in the year in which such grants are made as compared to the actual vesting which occurs ratable over three years. The option awards reflect a grant date fair value of $2.47 per stock option in 2019 with an exercise price of $8.98. The dollar value is the grant date fair value of the awards, calculated in accordance with FASB ASC Topic 718. The assumptions used in the valuation of these options are included in Note 18 of the Notes to our Consolidated Financial Statements.
| Name | | | 401(k) Employer Contributions | | | Country Club Membership | | | Financial Planning | | | Auto Allowance & Fuel Reimbursement | | | Life & LTD Insurance Premiums | | | ESOP(1) | | | ESOP Restoration(1) | | |||||||||||||||||||||
| Mr. Blake | | | | $ | 14,250 | | | | | $ | 1,517 | | | | | $ | 4,782 | | | | | | 24,668 | | | | | | 43,028 | | | | | $ | 24,488 | | | | | $ | 82,313 | | |
| Mr. Casey | | | | | 14,250 | | | | | | — | | | | | | 5,385 | | | | | | 22,169 | | | | | | 18,071 | | | | | | 20,814 | | | | | | 46,284 | | |
| Ms. Simmons | | | | | 14,250 | | | | | | — | | | | | | 845 | | | | | | — | | | | | | 7,551 | | | | | | 20,814 | | | | | | 15,590 | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | Option Awards (1) | | Stock Awards | |||||||||||||||
| | | | | | | | | | | | Restricted Stock Awards | | Performance-based Awards | |||||||
| | | | | | | | | | | | | | | | | | Equity | | | Equity |
| | | | | | | | | | | | | | | | | | Incentive Plan | | | Incentive Plan |
| | | | | | | | | | | | | | | | Awards: | | Awards: | |||
| | | | Number of | | Number of | | | | | | | | | | | | Number of | | | Market or Payout |
| | | | Securities | | Securities | | | | | | Number of | | Market Value | | Unearned | | Value of Shares | |||
| | | | Underlying | | Underlying | | | | | | Shares or Units of | | of Shares or | | Shares or Other | | or Units or | |||
| | | | Unexercised | | Unexercised | | Option | | Option | | Stock that | | Units of Stock | | Rights that | | Other Rights | |||
| | | | Options (#) | | Options (#) | | Exercise | | Expiration | | Have Not | | that Have Not | | Have Not | | that Have Not | |||
Name |
| Grant Date(7) |
| Exercisable |
| Unexercisable |
| Price ($) |
| Date |
| Vested (#) |
| Vested (4) | | Vested (#) |
| Vested (4) | |||
James W. Blake | | 8/16/2017(2) | | 133,219 | | — | | $ | 10.23 | | 8/16/2027 | | | | | | | | | | |
| | 11/26/2018(2) | | 133,219 | | — | | $ | 9.79 | | 11/25/2028 | | | | | | | | | | |
| | 2/27/2019(2) | | 248,669 | | 124,335 | | $ | 8.98 | | 2/27/2029 | | | | | | | | | | |
| | 10/29/2020(3) | | | | | | | | | | | 25,350 | | $ | 376,194 | | | | | |
| | 3/1/2021(5) | | | | | | | | | | | 20,616 | | $ | 305,941 | | | | | |
| | 3/1/2021(6) | | | | | | | | | | | | | | | | 20,616 | | $ | 458,912 |
| | | | | | | | | | | | | | | | | | | | | |
Joseph F. Casey | | 8/16/2017(2) | | 133,219 | | — | | $ | 10.23 | | 8/16/2027 | | | | | | | | | | |
| | 11/26/2018(2) | | 133,219 | | — | | $ | 9.79 | | 11/25/2028 | | | | | | | | | | |
| | 2/27/2019(2) | | 51,830 | | 51,830 | | $ | 8.98 | | 2/27/2029 | | | | | | | | | | |
| | 10/29/2020(3) | | | | | | | | | | | 28,100 | | $ | 417,004 | | | | | |
| | 3/1/2021(5) | | | | | | | | | | | 11,428 | | $ | 169,592 | | | | | |
| | 3/1/2021(6) | | | | | | | | | | | | | | | | 11,428 | | $ | 254,387 |
| | | | | | | | | | | | | | | | | | | | | |
Linda Simmons | | 8/16/2017(2) | | 62,840 | | — | | $ | 10.23 | | 8/16/2027 | | | | | | | | | | |
| | 10/29/2020(3) | | | | | | | | | | | 14,050 | | $ | 208,502 | | | | | |
| | 3/1/2021(5) | | | | | | | | | | | 5,711 | | $ | 84,751 | | | | | |
| | 3/1/2021(6) | | | | | | | | | | | | | | | | 5,710 | | $ | 127,105 |
| | | | | | | | | | | | | | | | | | | | | |
H. Scott Sanborn | | 8/16/2017(2) | | 62,840 | | — | | $ | 10.23 | | 8/16/2027 | | | | | | | | | | |
| | 10/29/2020(3) | | | | | | | | | | | 6,000 | | $ | 89,040 | | | | | |
| | 3/1/2021(5) | | | | | | | | | | | 4,861 | | $ | 72,137 | | | | | |
| | 3/1/2021(6) | | | | | | | | | | | | | | | | 4,861 | | $ | 108,206 |
| | | | | | | | | | | | | | | | | | | | | |
Inez H. Friedman-Boyce, Esq. | | 12/2/2019 | | 6,750 | | 3,375 | | $ | 10.52 | | 12/2/2029 | | 1,134 | | $ | 16,829 | | | | | |
| | 10/29/2020(3) | | | | | | | | | | | 4,025 | | $ | 59,731 | | | | | |
| | 3/1/2021(5) | | | | | | | | | | | 3,257 | | $ | 48,334 | | | | | |
| | 3/1/2021(6) | | | | | | | | | | | | | | | | 3,256 | | $ | 72,479 |
37
(1) All historical share and price information for awards granted prior to the Offering in August 2019 has been restated to reflect the 1.795431 exchange ratio. | |||||||||||||||||||||
(2) This award vests over three years from the date of grant in three equal installments. | |||||||||||||||||||||
(3) This award vests over two years from the date of grant in two equal installments. | |||||||||||||||||||||
(4) Based on closing market price of $14.84 on December 31, 2021. | |||||||||||||||||||||
(5) The stock awards vest over three years from the date of the grant in three equal installments. | |||||||||||||||||||||
(6) The restricted stock units vest three years from the dates of grant assuming the attainment of identified performance targets. The actual number of shares that will be earned pursuant to the performance based awards are dependent upon the Bank's performance with respect to the performance targets described in the Compensation Discussion and Analysis above for the identified performance period. For purposes of the table, we have assumed the maximum level which we consider the probable outcome. | |||||||||||||||||||||
(7) Each award granted prior to 2020 was granted pursuant to our 2017 Stock Option and Incentive Plan and each award granted in 2020 or later has been granted under our 2020 Equity Incentive Plan. Each award granted under our 2020 Equity Incentive Plan will accelerate and vest in full upon the executive's death or disability, or upon a change in control (with any awards subject to performance conditions vesting assuming achievement at target). | |||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | |
38
Option Exercises and Stock Vested Table
The following performance goals for 2020 under the Annual Officer Incentive Plan:
| 2020 Goal Description | | | Officer Incentive Plan Performance Goals vs. Actual | | |||||||||||||||||||||||||||||||||
| | Goal Weight | | | Threshold 80% | | | Target 100% | | | Superior 130% | | | Actual | | | Payout Level | | ||||||||||||||||||||
| Return on Assets (ROA) | | | | | 25% | | | | | | 0.48% | | | | | | 0.60% | | | | | | 0.78% | | | | | | 1.05% | | | | | | 130% | | |
| Earnings Per Share (EPS) | | | | | 25% | | | | | $ | 0.37 | | | | | $ | 0.46 | | | | | $ | 0.60 | | | | | $ | 0.82 | | | | | | 130% | | |
| Core Deposit Growth (millions) | | | | | 25% | | | | | $ | 201,858 | | | | | $ | 252,322 | | | | | $ | 328,019 | | | | | $ | 718,116 | | | | | | 130% | | |
| Commercial & Small Business Loan Growth (millions) | | | | | 25% | | | | | $ | 154,752 | | | | | $ | 193,440 | | | | | $ | 251,472 | | | | | $ | 486,389 | | | | | | 130% | | |
| Name | | | Fiscal 2020 | | | Fiscal 2019 | | ||||||
| Mr. Blake | | | | | 60% | | | | | | 60% | | |
| Mr. Casey | | | | | 50% | | | | | | 50% | | |
| Ms. Simmons | | | | | 35% | | | | | | 35% | | |
| Name | | | Fiscal 2020 Incentive Target as of % of Eligible Base Salary | | | Fiscal 2020 Incentive Target ($) | | | Fiscal 2020 Goal Achievement (%) | | | Fiscal 2020 Actual Incentive ($) | | ||||||||||||
| Mr. Blake | | | | | 60% | | | | | $ | 499,000 | | | | | | 130% | | | | | $ | 648,701 | | |
| Mr. Casey | | | | | 50% | | | | | $ | 281,731 | | | | | | 130% | | | | | $ | 366,251 | | |
| Ms. Simmons | | | | | 35% | | | | | $ | 123,910 | | | | | | 130% | | | | | $ | 161,084 | | |
| | | | | | | | | |
| | Option Awards | | Stock Awards | |||||
| | Number of | | | | Number of | | | |
| | Shares | | Value | | Shares | | | Value |
| | Acquired on | | Realized on | | Acquired on | | | Realized on |
| | Exercise | | Exercise | | Vesting | | | Vesting |
Name | | (#) | | ($) | | (#) | | | ($) |
James W. Blake | | - | | - | | 25,350 | | $ | 362,505 |
Joseph F. Casey | | - | | - | | 14,050 | | $ | 200,915 |
Linda H. Simmons | | - | | - | | 7,025 | | $ | 100,458 |
H. Scott Sanborn | | - | | - | | 6,000 | | $ | 85,800 |
Inez H. Friedman-Boyce, Esq. | | - | | - | | 5,158 | | $ | 73,363 |
Pension Benefit Table
The following table sets forth information with respect to the Compensation Committee granted RSAs to ourpension benefits of the named executive officers, as described in more detail in the “Outstanding Equity Awards at Year End” table. During the years ended December 31, 2018 and December 31, 2019, the Compensation Committee granted stock options to Mr. Blake and Mr. Casey.officers.
| | | | | | | | |
| | | | Number of | | Present Value | | Payment |
| | Plan | | Years Credited | | of Accumulated | | During Last |
Name | | Name | | Service (#) | | Benefit ($) | | Fiscal Year ($) |
James W. Blake | | SERP | | 17.917 | | $ 1,852,144 | | $ - |
Joseph F. Casey | | SERP | | 13.583 | | $ 7,307,894 | | $ - |
Linda H. Simmons | | N/A | | | | | | |
H. Scott Sanborn | | N/A | | | | | | |
Inez H. Friedman-Boyce, Esq. | | N/A | | | | | | |
| Fiscal Year | | | CEO Grants | | | Grants to All NEOs | | | Total Grants to All Recipients | | |||||||||
| 2018 | | | | | 133,219 | | | | | | 266,438 | | | | | | 298,686 | | |
| 2019 | | | | | 373,004 | | | | | | 528,491 | | | | | | 630,841 | | |
| 2020 | | | | | 50,700 | | | | | | 155,627 | | | | | | 354,427 | | |
| Three-Year Total Grants | | | | | 556,923 | | | | | | 950,556 | | | | | | 1,283,954 | | |
| Three-Year Average | | | | | 185,641 | | | | | | 316,852 | | | | | | 427,985 | | |
Employment and Change in ControlChange-in-Control Agreements
Employment Agreements. HarborOne Bank and the Company are parties to an employment agreement with each of Mr. Blake and Mr. Casey.
Mr. Blake’s and Mr. Casey’s employment agreements provide for minimum annual base salaries, which are subject to annual review and adjustment by the Board. Mr. Blake’s and Mr. Casey’s annual base salaries for 20202021 are referenceddiscussed in the Summary Compensation Table,Discussion and Analysis above. The employment agreements also provide for discretionary incentive and/or bonus compensation, participation on generally applicable terms and conditions in other compensation and fringe benefit plans, and certain perquisites, including for Mr. Blake: the use of an automobile and reimbursement of automobile-related expenses; club membership; travel to and attendance at industry conferences and seminars; five weeks’ paid vacation; life insurance equal to three times the executive’s base salary; technology assistance for remote access to HarborOne Bank’s and the Company’s systems; and supplemental medical insurance upon reaching age 65. For Mr. Casey, such perquisites include: the use of an automobile and reimbursement of automobile related expenses; club membership; five weeks’ paid vacation; life insurance equal to three times the executive’s base salary; technology assistance for remote access to HarborOne Bank’s and the Company’s systems; and supplemental medical insurance upon reaching age 65.
HarborOne Bank and the Company may terminate the employment of either Mr. Blake or Mr. Casey, and each such executive may resign, at any time for any reason. In the event of termination without “cause” or “good
39
reason” (as(as each such term defined in the respective employment agreement), HarborOne Bank and the Company will pay to the executive, for a period of two years, severance benefits equal to his monthly base salary in effect at the time of his termination and annual incentive compensation equal to the average incentive compensation received by the executive during the three full fiscal years immediately preceding termination. HarborOne Bank and the Company will also make an additional payment to the executive in an amount equal to the aggregate amount of employer contributions that would have been made to any qualified pension, profit sharing or 401(k) or similar plan on behalf of the executive if the executive had remained an employee of HarborOne Bank and the Company for an additional 24-month period. In addition, HarborOne Bank and the Company will make a monthly cash payment for 18 months or the executive’s COBRA health continuation period, whichever ends earlier, in the amount that HarborOne Bank and the Company would have made to provide health insurance to the executive.
In the event the executive’s employment is involuntarily terminated for reasons other than for cause, disability or death, or the executive voluntary resigns for good reason, in either case within 24 months after a change in control of the Company, the severance benefits increase from two times the sum of the executive’s base salary to three times the sum of the executive’s base salary, and will be paid in a lump sum. Any payments required under the employment agreements will be reduced to the extent necessary to avoid penalties under Section 280G of the Internal Revenue Code if such reduction would result in a higher after-tax amount to Mr. Blake or Mr. Casey. The employment agreements provide for certain post-employment obligations with respect to the executive’s ability to compete with HarborOne Bank and the Company and to solicit customers and employees of HarborOne Bank and the Company.
In the event of the executive’s death and the executive is survived by his spouse, HarborOne Bank will continue to pay his surviving spouse the executive’s base salary for two months following his death.
Change in ControlChange-in-Control Agreements. The Company has entered into change in controlchange-in-control agreements with each of its executive officers other than Messrs. Blake and Casey. The agreements for all executive officers except Ms. Simmons and Mr. Sanborn are substantially similar, and provide that if the executive’s employment is involuntarily terminated for reasons
On March 9, 2022, the Company entered into a collateral assignment split-dollar life insurance arrangementrevised change-in-control agreements with Ms. Simmons and Mr. Blake in order to provide a death benefitSanborn, which agreements supersede the previous change-in-control agreements with those executives dated June 7, 2017 and March 30, 2016, respectively. Pursuant to the executive’s beneficiaries and to allownew change-in-control agreements, upon a change in control the executive accesswould be entitled to the cash surrender value of the policy in excess of the amount of premiums paid by HarborOne Bank upon his retirement from HarborOne Bank. In anticipation of the reorganization of HarborOne Bank in 2016, HarborOne Bank terminated this arrangement with Mr. Blake, Mr. Blake transferred the ownership of the life insurance policy to HarborOne Bank, and Mr. Blake entered into a new endorsement split-dollar life insurance agreement that will provide Mr. Blake with a $1,400,000 lifetime death benefit.
40
Potential Payments Upon Termination or a “change in control”Change of HarborOne Bank(as each such term is defined therein), Mr. Casey shall receive a lump sum payment equalControl. The following table presents information concerning estimated payments and benefits that would be provided pursuant to the actuarial equivalent valuearrangements described above for each of a single life annuity equal to 60.0%our named executive officers serving as of the executive’s average three-year salaryend of fiscal 2021. The payments and bonus reduced by projected Social Security benefits and the amount payable to the executive from HarborOne Bank’s 401(k) Plan attributable to employer contributions.
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Termination | | |
| | | | | | | | | | | | | by Employee | | |
| | | | | | | | | | | | | for Good | | |
| | | | | | | Termination | | Termination | | Termination | | Reason in | | |
| | Termination | | | Termination | | by Employee | | by Employer | | by Employee | | Connection with | | |
| | Due to | | | Due to | | Without | | Without | | With Good | | a Change in | | Change in |
Name | | Death | | | Disability | | Good Reason | | Cause | | Reason | | Control | | Control |
James W. Blake | | | | | | | | | | | | | | | |
Severance(1) | $ | 140,793 | (2) | $ | - | $ | - | $ | 2,247,407 | $ | 2,247,407 | $ | 3,092,164 | $ | - |
Equity awards acceleration(3) | | 1,006,815 | | | 1,006,815 | | - | | - | | - | | 1,006,815 | | 1,006,815 |
Life insurance(4) | | 5,119,650 | | | - | | - | | - | | - | | - | | |
Other compensation(5) | | - | | | - | | - | | 53,276 | | 53,276 | | 53,276 | | |
Total | $ | 6,267,258 | | $ | 1,006,815 | $ | - | $ | 2,300,683 | $ | 2,300,683 | $ | 4,152,255 | $ | 1,006,815 |
| | | | | | | | | | | | | | | |
Joseph F. Casey | | | | | | | | | | | | | | | |
Severance(1) | $ | 96,314 | | $ | - | $ | - | $ | 1,471,726 | $ | 1,471,726 | $ | 2,049,612 | $ | - |
Equity awards acceleration(3) | | 766,573 | | | 766,573 | | - | | - | | - | | 766,573 | | 766,573 |
Life insurance(4) | | 2,833,661 | | | - | | - | | - | | - | | - | | |
Other compensation(5) | | - | | | - | | - | | 51,250 | | 51,250 | | 51,250 | | |
Total | $ | 3,696,548 | | $ | 766,573 | $ | - | $ | 1,522,976 | $ | 1,522,976 | $ | 2,867,435 | $ | 766,573 |
| | | | | | | | | | | | | | | |
Linda H. Simmons | | | | | | | | | | | | | | | |
Severance | $ | - | | $ | - | $ | - | $ | - | $ | - | $ | 510,941 | $ | - |
Equity awards acceleration(3) | | 383,181 | | | 383,181 | | - | | - | | - | | 383,181 | | 383,181 |
Life insurance(4) | | 900,000 | | | - | | - | | - | | - | | - | | |
Health benefits(6) | | - | | | - | | - | | - | | - | | 25,428 | | |
Total | $ | 1,283,181 | | $ | 383,181 | $ | - | $ | - | $ | - | $ | 919,550 | $ | 383,181 |
| | | | | | | | | | | | | | | |
H. Scott Sanborn | | | | | | | | | | | | | | | |
Severance | $ | - | | $ | - | $ | - | $ | - | $ | - | $ | 476,222 | $ | - |
Equity awards acceleration(3) | | 237,739 | | | 237,739 | ��� | - | | - | | - | | 237,739 | | 237,739 |
Life insurance(4) | | 1,000,000 | | | - | | - | | - | | - | | - | | |
Health benefits(6) | | - | | | - | | - | | - | | - | | 22,250 | | |
Total | $ | 1,237,739 | | $ | 237,739 | $ | - | $ | - | $ | - | $ | 736,211 | $ | 237,739 |
| | | | | | | | | | | | | | | |
Inez H. Friedman-Boyce, Esq. | | | | | | | | | | | | | | | |
Severance | $ | - | | $ | - | $ | - | $ | - | $ | - | $ | 396,792 | $ | - |
Equity awards acceleration(3) | | 176,178 | | | 176,178 | | - | | - | | - | | 176,178 | | 176,178 |
Life insurance(4) | | - | | | - | | - | | - | | - | | - | | |
Health benefits(6) | | - | | | - | | - | | - | | - | | 22,658 | | |
Total | $ | 176,178 | | $ | 176,178 | $ | - | $ | - | $ | - | $ | 595,628 | $ | 176,178 |
| | | | | | | | | | | | | | | |
(1) Except as otherwise described, severance payments are forfeited upon a participant’s termination of employment will be reallocated among the remaining ESOP participants.
(2) Severance payments upon death represent two months of December 31, 2020. Followingcontinued base salary to the adoptionexecutive’s surviving spouse.
(3) Reflects the value of our 2020 Equity Incentive Plan, no further awards wereaccelerated equity granted under our 2017 Stock Option and Incentive Plan.
(4) Represents the value of payouts certain life insurance policies.
(5) Represents an estimate of the Company and its subsidiaries. Total sharesemployer contributions that would have been made to any qualified pension, profit sharing or 401(k) or similar plan on behalf of the Company’s common stock reservedexecutive if the executive had remained an employee for issuance underan additional 24-month period.
(6) Represents the plan are 4,500,000.
41
The Compensation Committee of HarborOne Bancorp, Inc. has reviewed and discussed with management the named executive officers. All equity awards reflected“Compensation Discussion and Analysis” section included in this table were granted pursuantproxy statement required by Item 402(b) of Regulation S-K, and based on such review and discussion, the Compensation Committee recommended to either the 2017 Stock Optionour Board of Directors that this “Compensation Discussion and Incentive Plan or the 2020 Equity Incentive Plan, described above and shown below.
| Name | | | Grant Date | | | Option Awards(1) | | | Stock Awards(1) | | |||||||||||||||||||||||||||||||||
| | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares of Stock that Have Not Vested (#) | | | Market Value of Shares or Units of Stock that Have Not Vested(4) | | ||||||||||||||||||||||||||
| James W. Blake | | | | | 8/16/2017(2)(5) | | | | | | 133,219 | | | | | | — | | | | | $ | 10.23 | | | | | | 8/16/2027 | | | | | | | | | | | | | | |
| | | | 11/26/2018(2) | | | | | | 88,812 | | | | | | 44,407 | | | | | $ | 9.79 | | | | | | 11/25/2028 | | | | | | | | | | | | | | | ||
| | | | 2/27/2019(2) | | | | | | 124,335 | | | | | | 248,669 | | | | | $ | 8.98 | | | | | | 2/27/2029 | | | | | | | | | | | | | | | ||
| | | | 10/29/2020(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 50,700 | | | | | $ | 550,602 | | | ||
| Joseph F. Casey | | | | | 8/16/2017(2)(5) | | | | | | 133,219 | | | | | | — | | | | | $ | 10.23 | | | | | | 8/16/2027 | | | | | | | | | | | | | | |
| | | | 11/26/2018(2) | | | | | | 88,812 | | | | | | 44,407 | | | | | $ | 9.79 | | | | | | 11/25/2028 | | | | | | | | | | | | | | | ||
| | | | 2/27/2019(2) | | | | | | 51,830 | | | | | | 103,657 | | | | | $ | 8.98 | | | | | | 2/27/2029 | | | | | | | | | | | | | | | ||
| | | | 10/29/2020(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 28,100 | | | | | $ | 305,166 | | | ||
| Linda Simmons | | | | | 8/16/2017(2) | | | | | | 62,840 | | | | | | — | | | | | $ | 10.23 | | | | | | 8/16/2027 | | | | | | | | | | | | | | |
| | | | 10/29/2020(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 14,050 | | | | | $ | 152,583 | | | ||
MEMBERS OF THE COMPENSATION COMMITTEE
David P. Frenette, Esq. (Chair)
Mandy L. Berman
Gordon Jezard
42
The following table details, as of March 29, 2021,31, 2022, information concerning beneficial ownership of our common stock by:
Name(1) | | | Number of Shares(2)(3) | | | Percent of Common Stock Outstanding(4) | | ||||||
Joseph F. Barry(5) | | | | | 135,680 | | | | | | *% | | |
Mandy L. Berman(6) | | | | | 16,157 | | | | | | * | | |
James W. Blake(7) | | | | | 886,312 | | | | | | 1.58 | | |
Joseph F. Casey(8) | | | | | 680,649 | | | | | | 1.21 | | |
David P. Frenette, Esq.(9) | | | | | 215,566 | | | | | | * | | |
Inez H. Friedman-Boyce, Esq.(10) | | | | | 17,966 | | | | | | * | | |
Kevin Hamel(11) | | | | | 11,307 | | | | | | * | | |
Gordon Jezard(12) | | | | | 144,657 | | | | | | * | | |
Brenda C. Kerr(13) | | | | | 42,323 | | | | | | * | | |
Barry R. Koretz(14) | | | | | 153,634 | | | | | | * | | |
Timothy R. Lynch(15) | | | | | 135,680 | | | | | | * | | |
Joseph E. McQuade(16) | | | | | 10,534 | | | | | | * | | |
William A. Payne(17) | | | | | 52,094 | | | | | | * | | |
Wallace H. Peckham, III, MBA, CPA(18) | | | | | 129,987 | | | | | | * | | |
David B. Reilly(19) | | | | | 107,034 | | | | | | * | | |
H. Scott Sanborn(20) | | | | | 130,376 | | | | | | * | | |
Andreana Santangelo(21) | | | | | 5,335 | | | | | | * | | |
Linda H. Simmons(22) | | | | | 112,320 | | | | | | * | | |
Michael J. Sullivan, Esq.(23) | | | | | 150,592 | | | | | | * | | |
David E. Tryder(24) | | | | | 94,044 | | | | | | * | | |
Patricia M. Williams(25) | | | | | 103,162 | | | | | | * | | |
Damian W. Wilmot, Esq.(26) | | | | | 16,120 | | | | | | * | | |
| All directors and executive officers as a group (22 persons) | | | | | 3,351,529 | | | | | | 5.96% | | |
AllianceBernstein L.P.(27) | | | | | 3,785,837 | | | | | | 6.73% | | |
BlackRock, Inc.(28) | | | | | 4,254,650 | | | | | | 7.57% | | |
T.Rowe Price Group, Inc.(29) | | | | | 5,632,444 | | | | | | 10.02% | | |
HarborOne Bank Employee Stock Ownership Plan Trust(30) | | | | | 4,563,160 | | | | | | 8.12% | | |
| | | | | | |
| | | | | Percent of | |
| | Number of | | | Common Stock | |
Name (1) | | Shares (2)(3) | | | Outstanding (4) | |
| | | | | | |
Joseph F. Barry(5) | | 137,358 | | | * | % |
Mandy L. Berman(6) | | 17,835 | | | * | |
James W. Blake(7) | | 406,158 | | | 0.79 | |
Joseph F. Casey(8) | | 783,432 | | | 1.53 | |
Brenda C. Diepold(9) | | 51,233 | | | * | |
David P. Frenette, Esq.(10) | | 217,244 | | | * | |
Inez H. Friedman-Boyce, Esq.(11) | | 25,981 | | | * | |
Kevin Hamel(12) | | 12,739 | | | * | |
Gordon Jezard(13) | | 146,335 | | | * | |
Barry R. Koretz(14) | | 139,312 | | | | |
Dr. Timothy R. Lynch(15) | | 137,358 | | | * | |
Joseph E. McQuade(16) | | 12,597 | | | * | |
William A. Payne(17) | | 53,772 | | | * | |
David B. Reilly(18) | | 111,988 | | | * | |
H. Scott Sanborn(19) | | 134,817 | | | * | |
Andreana Santangelo(20) | | 7,013 | | | * | |
Linda H. Simmons(21) | | 116,064 | | | * | |
Michael J. Sullivan, Esq.(22) | | 152,941 | | | * | |
David E. Tryder(23) | | 82,458 | | | * | |
Patricia M. Williams(24) | | 106,057 | | | * | |
Damian W. Wilmot, Esq.(25) | | 17,798 | | | * | |
All directors and executive officers as a group (21 persons) | | 2,870,490 | | | 5.60 | % |
| | | | | | |
AllianceBernstein L.P.(26) | | 3,639,216 | | | 7.10 | % |
BlackRock, Inc.(27) | | 3,762,130 | | | 7.34 | % |
T.Rowe Price Group, Inc.(28) | | 5,511,879 | | | 10.75 | % |
HarborOne Bank Employee Stock Ownership Plan Trust(29) | | 4,500,247 | | | 8.78 | % |
| | | | | | |
* Less than 1%. | | | | | | |
(1) | Unless otherwise indicated, the address for each director and named executive officer is c/o HarborOne Bancorp, Inc., 770 Oak St., Brockton, Massachusetts 02301. |
(2) | The number of shares reported by officers as being held through the HarborOne 401(k) Plan may be different from the number of shares previously reported as having been acquired through the HarborOne 401(k) Plan because Company stock held in the HarborOne 401(k) Plan is held in a unitized fund that includes both Company common stock and cash. The percentage of each unit that is Company common stock fluctuates daily, through no volitional act of the HarborOne 401(k) Plan participant. |
(3) | The number of shares of common stock “beneficially owned” by each shareholder is determined under rules issued by the SEC regarding the beneficial ownership of securities. This information is not necessarily indicative of beneficial ownership for any other purpose. “Number of Shares Beneficially Owned” includes shares of common stock that may be acquired upon the exercise of options to acquire shares of common stock that are exercisable on or within 60 days after March 31, 2022 of 1,290,883. Except as otherwise noted, each beneficial owner has sole voting and investment power over the shares and units. |
(4) | The total number of shares outstanding used in calculating this percentage assumes the exercise of all options to acquire shares of common stock that are exercisable on or within 60 days after March 31, 2022 and that no options held by other beneficial owners are exercised. Percentages are based on 51,261,143 shares of Company common stock outstanding as of March 31, 2022. |
(5) | Includes 13,977 shares held jointly with his spouse, 1,678 shares of unvested restricted stock awarded under the 2020 Equity Incentive Plan, and 83,263 shares that may be acquired under options that are presently exercisable or will become exercisable within 60 days. |
(6) | Includes 1,678 shares of unvested restricted stock. |
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(7) | Includes 104,036 shares held in the HarborOne 401(k) Plan, 35,908 held by his spouse and daughter as joint tenants, 39,094 shares of unvested restricted stock awarded under the 2020 Equity Incentive Plan, and 10,501 shares held by the ESOP and allocated to his account. |
(8) | Includes 30,396 shares of unvested restricted stock awarded under the 2020 Equity Incentive Plan, 60,116 shares held in his IRA, 203,300 shares held in trust of which Mr. Casey is trustee with his spouse with shared voting power, 60,707 shares held in the HarborOne 401(k) Plan, 6,988 shares held by the ESOP and allocated to his account, and 421,925 shares that may be acquired under options that are presently exercisable or will become exercisable within 60 days. |
(9) | Includes 320 shares held in the HarborOne 401(k) Plan, 8,880 shares of unvested restricted stock awarded under the 2020 Equity Incentive Plan and 2017 Stock Option and Incentive Plan, 5,000 shares held in an IRA, 4,505 shares held by the ESOP and allocated to her account, and 23,451 shares that may be acquired under options that are presently exercisable or will become exercisable within 60 days. |
(10) | Includes 97,168 shares held jointly with his spouse, 30,000 shares held in his IRA, 1,678 shares of unvested restricted stock awarded under the 2020 Equity Incentive Plan, and 83,263 shares that may be acquired under options that are presently exercisable or will become exercisable within 60 days. |
(11) | Includes 9,866 unvested restricted stock awarded under the 2020 and 2017 Equity Incentive Plans, 2,322 shares held by the ESOP, and 6,750 shares that may be acquired under options that are presently exercisable or will become exercisable within 60 days. |
(12) | Includes 8,622 unvested restricted stock awarded under the 2020 Equity Plans and 565 shares held by the ESOP. |
(13) | Includes 22,954 shares held by the Jezard Family Revocable Trust, 1,678 shares of unvested restricted stock awarded under the 2020 Equity Incentive Plan, and 83,263 shares that may be acquired under options that are presently exercisable or will become exercisable within 60 days. |
(14) | Includes 31,931 shares held jointly with his spouse, 1,678 shares of unvested restricted stock awarded under the 2020 Equity Incentive Plan and 83,263 shares that may be acquired under options that are presently exercisable or will become exercisable within 60 days. |
(15) | Includes 5,000 shares held jointly with his spouse, 1,678 shares of unvested restricted stock awarded under the 2020 Equity Incentive Plan and 83,263 shares that may be acquired under options that are presently exercisable or will become exercisable within 60 days. |
(16) | Includes 11,888 unvested restricted stock awarded under the 2020 Equity Incentive Plan. |
(17) | Includes 4,488 shares held in his IRA, 1,678 shares of unvested restricted stock awarded under the 2020 Equity Incentive Plan, and 24,979 shares that may be acquired under options that are presently exercisable or will become exercisable within 60 days. |
(18) | Includes 8,886 shares of unvested restricted stock awarded under the 2020 Equity Incentive Plan, 7,527 shares held by the ESOP and allocated to his account, and 62,840 shares that may be acquired under options that are presently exercisable or will become exercisable within 60 days. |
(19) | Includes 13,385 shares of unvested restricted stock awarded under the 2020 Equity Incentive Plan, 17,350 shares held in the HarborOne 401(k) Plan, 7,010 shares held by the ESOP and allocated to his account, and 62,840 shares that may be acquired under options that are presently exercisable or will become exercisable within 60 days. |
(20) | Includes 1,678 unvested restricted stock awarded under the 2020 Equity Incentive Plan. |
(21) | Includes 15,194 shares of unvested restricted stock awarded under the 2020 Equity Incentive Plan, 5,951 shares held by the ESOP and allocated to her account, and 62,840 shares that may be acquired under options that are presently exercisable or will become exercisable within 60 days. |
(22) | Includes 2,349 shares of unvested restricted stock awarded under the 2020 Equity Incentive Plan and 83,263 shares that may be acquired under options that are presently exercisable or will become exercisable within 60 days. |
(23) | Includes 7,418 shares of unvested restricted stock awarded under the 2020 Equity Incentive Plan, 1,741 shares held in the HarborOne 401(k) Plan, 8,261 shares held by the ESOP and allocated to his account, and 62,840 shares that may be acquired under options that are presently exercisable or will become exercisable within 60 days. |
(24) | Includes 6,386 shares held jointly with her spouse, 7,390 shares of unvested restricted stock awarded under the 2020 Equity Incentive Plan, 8,021 shares held by the ESOP and allocated to her account, and 62,840 shares that may be acquired under options that are presently exercisable or will become exercisable within 60 days. |
(25) | Includes 1,678 shares of unvested restricted stock. |
(26) | Based exclusively on a Schedule 13G filed by AllianceBernstein L.P. on February 14, 2022. The filer claimed sole power to vote or direct the vote of 3,188,400 shares and sole power to dispose or direct the disposition of 3,639,216 shares. AllianceBernstein L.P.’s address is 1345 Ave. of the Americas, New York, NY 10105. |
(27) | Based exclusively on a Schedule 13G filed by BlackRock, Inc. on February 7, 2022. The filer claimed sole power to vote or direct the vote of 3,629,099 shares and sole power to dispose or direct the disposition of 3,762,130 shares. BlackRock, Inc.’s address is 55 East 52nd Street, New York, NY 10105. |
(28) | Based exclusively on a Schedule 13G/A filed by T. Rowe Price Group, Inc. on February 14, 2022. The filer claimed sole power to vote or direct the vote of 1,951,794 shares and sole power to dispose or direct the disposition of 5,511,879 shares. T. Rowe Price Group, Inc.’s address is 100 East Pratt Street, Baltimore, MD 21202. |
(29) | Reflects shares held in the ESOP. Under the terms of the ESOP, plan participants are entitled to direct the plan trustee on how to vote shares of common stock allocated to their accounts. The trustee will vote shares of common stock allocated to the accounts of plan participants as instructed by the plan participants and will vote unallocated shares of common stock held in the ESOP in the same ratio as allocated shares are voted on each proposal, subject to the fiduciary responsibilities of the trustee. The ESOP’s address is c/o HarborOne Bancorp, Inc., 770 Oak Street, Brockton Massachusetts 02301. |
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Section 16(a) of the Exchange Act requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC. Officers, directors and persons who own more than 10% of a registered class of our equity securities are required by SEC regulation to furnish us with copies of all Section 16(a) forms that they file. To our knowledge, based solely on review of the copies of such reports and any amendments thereto furnished to us during or with respect to our most recent fiscal year, each of Messrs. Barry, Blake, Casey, Frenette, Hamel, Jezard, Koretz, Lynch, McQuade, Payne, Peckham, Reilly, Sanborn, Sullivan, Tryder and Sanborn,Wilmot, and Mss. Williams andBerman, Diepold, Friedman-Boyce, Santangelo, Simmons and Christopher GibbonsWilliams filed one late report on Form 4. Mr. Casey filed two late reports on Form 4.
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Crowe LLP currently serves as our independent registered public accounting firm and was the firm that conducted the audit of our consolidated financial statements for the fiscal year ending December 31, 2020.2021. The Audit Committee has appointed Crowe LLP to serve as the independent registered public accounting firm to conduct an audit of our consolidated financial statements for the fiscal year ending December 31, 2021.
Although ratification by shareholders is not required by law or by our by-laws, the Audit Committee believes that submission of its selection to shareholders is a matter of good corporate governance. Even if the appointment is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time if the Audit Committee believes that such a change would be in the best interests of the Company and its shareholders. If our shareholders do not ratify the appointment of Crowe LLP, the Audit Committee will take that fact into consideration, together with such other factors it deems relevant, in determining its next selection of independent auditors.
It is anticipated that a representativesrepresentative of Crowe LLP will attend the annual meeting of shareholders, will have an opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions.
The following is a summary of the fees incurred for professional services rendered by the independent registered public accounting firmsfirm Crowe LLP for the fiscal years ended December 31, 2020(Crowe LLP)2021 and December 31, 2019 (Wolf & Company, P.C.):2020:
| | | | | | |
| | | 2021 | | | 2020 |
| | | | | | |
Audit fees(1) | | $ | 496,000 | | $ | 460,000 |
Audit related fees(2) | | | 52,000 | | | 50,000 |
All other fees(3) | | | — | | | 12,500 |
Total | | $ | 548,000 | | $ | 522,500 |
| | | | 2020 | | | 2019 | | ||||||
Audit fees(1) | | | | $ | 460,000 | | | | | $ | 312,000 | | |
Audit related fees(2) | | | | | 50,000 | | | | | | 125,900 | | |
All other fees(3) | | | | | 12,500 | | | | | | 204,500 | | |
| Total | | | | $ | 522,500 | | | | | $ | 642,400 | | |
(1) | Audit Fees include fees associated with professional services rendered for the audit of the financial statements and services that are normally provided by the registered public accounting firm in connection with statutory and regulatory filings or engagements. For example, audit fees include fees for professional services rendered in connection with quarterly and annual reports, and the issuance of consents to be named in our registration statements and to the use of their audit report in the registration statements. |
(2) | Audit Related Fees refers to fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements. |
(3) | All Other Fees refers to fees and related expenses for products and services other than services described above. Our Audit Committee considers whether the provision by Crowe LLP of any services that would be required to be described under “All Other Fees” would be compatible with maintaining Crowe LLP’s independence from both management and the Company. |
Our Audit Committee must pre-approve all audit services and permissible non-audit services provided by our independent registered public accounting firm, except for any de minimis non-audit services. Non-audit services are considered de minimis if: (i) the aggregate amount of all such non-audit services constitutes not more than five percent of the total amount of revenues we paid to our independent registered public accounting firm during the fiscal year in which they are provided; (ii) we did not recognize such services at the time of the engagement to be non-audit services; and (iii) such services are promptly brought to our Audit
The Board unanimously recommends a vote FOR the ratification of the appointment of Crowe LLP as our independent registered public accounting firm for 2021.
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Notwithstanding anything to the contrary set forth in any of our previous or future filings under the Securities Act of 1933, as amended, or the Exchange Act, that might incorporate this proxy statement or future filing with the SEC, in whole or in part, the following report shall not be deemed incorporated by reference into any such filing.
The undersigned members of the Audit Committee of the Board of Directors of HarborOne Bancorp, Inc. submit this report in connection with the committee’s review of the financial reports for the fiscal year ended December 31, 20202021 as follows:
| 1. | the Audit Committee has reviewed and discussed with management the audited consolidated financial statements of HarborOne Bancorp, Inc. for the fiscal year ended December 31, 2021; |
| 2. | the Audit Committee has discussed with representatives of Crowe LLP the matters required to be discussed with them the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC; and |
| 3. | the Audit Committee has received the written disclosures and the letter from Crowe LLP required by applicable requirements of the PCAOB regarding Crowe LLP’s communications with the Audit Committee concerning independence, and has discussed with Crowe LLP its independence |
Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 20202021 for filing with the SEC.
Wallace H. Peckham, III, MBA, CPAAndreana Santangelo (Chair)
Barry R. Koretz
William A. PayneAndreana Santangelo
Damian W.WilmotW. Wilmot
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PROPOSAL 3: A NON-BINDING ADVISORY RESOLUTION TO APPROVE
THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVEOFFICERS
As required by Section 14A of the Exchange Act, our Board of Directors is submitting for shareholder approval, on a non-binding advisory basis, the compensation paid to our named executive officers as described in this Proxy Statement pursuant to Item 402 of Regulation S-K.
The resolution that is the subject of this proposal is a non-binding advisory resolution. Accordingly, the resolution will not have any binding legal effect regardless of whether or not it is approved and may not be construed as overruling a decision by the Company or the Board of Directors or to create or imply any change to the fiduciary duties of the Board of Directors. Furthermore, because this non-binding advisory resolution primarily relates to compensation of our named executive officers that has already been paid or contractually committed, there is generally no opportunity for us to revisit those decisions. However, the Compensation Committee intends to take the results of the vote on this proposal into account in its future decisions regarding the compensation of our named executive officers.
The Company has five named executive officers listed in this Proxy Statement. The Company’s compensation program is designed to attract, motivate and retain the Named Officers who are critical to the Company’s success, offering a combination of base salary and both annual and long-term incentives that are closely aligned with the Company’s annual and long-term performance objectives. Please see the section titled “Compensation Discussion and Analysis” for additional information about the Company’s executive compensation programs.
We believe that the effectiveness of our compensation programs is demonstrated by the accomplishments of management over the last fiscal year as detailed in our discussion section titled “Compensation Discussion and Analysis.”
For these reasons, the Board of Directors recommends that stockholders vote in favor of the following resolution:
RESOLVED, that the compensation of the Company’s Named Officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the compensation tables and narrative discussion, be approved.
The Board unanimously recommends a vote FOR approval of the compensation of the Company’s named executiveofficers.
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PROPOSAL 4: NON-BINDING ADVISORY RESOLUTION TO SELECT
THE FREQUENCY OF FUTURE SHAREHOLDER ADVISORY VOTES
TO APPROVE THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS
As required under the Dodd-Frank Act, our Board of Directors is also submitting for shareholder consideration a proposal to determine, on an advisory basis, whether future shareholder advisory votes to approve the compensation paid to our named executive officers should be sought either annually, every 2 years or every 3 years.
The subject of this proposal is a non-binding advisory resolution. Accordingly, the resolution will not have any binding legal effect and may not be construed as overruling a decision by the Company or the Board of Directors or to create or imply any change to the fiduciary duties of the Board of Directors. However, the Board of Directors intends to take the results of the vote on this proposal into account in its decision regarding the frequency with which Company submits say-on-pay proposals in the future.
The Board of Directors values the importance of receiving regular input from our shareholders on important matters such as the compensation of the Company’s executive officers. We appreciate the past support and approval of employee incentive programs by our shareholders. Accordingly, as indicated below, the Board of Directors recommends that you vote for a frequency of every “1 year” for future shareholder advisory votes to approve the compensation of the Company’s named executive officers.
The enclosed proxy card gives you four choices on voting on this item. In addition to considering whether future shareholder advisory votes to approve the compensation of the Company’s named executive officers should occur every 1 year, 2 years, or 3 years, you also may choose to abstain from voting on this item.
Please note that you are not voting to approve or disapprove the Board’s recommendation on this item.
The Board unanimously recommends that shareholders vote for a frequency of every “1 year” for future shareholder advisory votes to approve the compensation of the Company’s named executive officers.
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We will pay the cost of solicitation of proxies. Our directors, officers and employees may solicit proxies personally, by telephone, via the internet or by mail without additional compensation for such activities. We also will request persons, firms and corporations holding shares in their names or in the names of their nominees, which are beneficially owned by others, to send a Notice of Internet Availability of Proxy Materials to and obtain proxies from such beneficial owners. We will reimburse such holders for their reasonable expenses. We have engaged Innisfree M&A Incorporated to solicit proxies held by brokers and nominees for a fee of $15,000, and will reimburse it for reasonable out-of-pocket expenses incurred in the solicitation of proxies.
Shareholders who, in accordance with the Rule 14a-8 under the Exchange Act, wish to present proposals for inclusion in the proxy materials to be distributed by us in connection with our 20222023 annual meeting must submit their proposals to our Corporate Secretary on or before December 17, 2021.6, 2022. To comply with the universal proxy rules (once effective), shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 20, 2023. Shareholders may also propose business to be brought before an annual meeting pursuant to our Bylaws. Under our Bylaws, to be timely, a shareholder’s notice for the 20222023 annual meeting of shareholders must be received by the Company no earlier than January 26, 202218, 2023 and no later than February 25, 2022.17, 2023. However, if an annual meeting is held on a date more than 30 days before, or more than 60 days after, the anniversary of the preceding year’s annual meeting, a shareholder proposal must be delivered not earlier than the close of business on the 120th120th day prior to such annual meeting and not later than the close of business on the later of the 90th90th day prior to such annual meeting or the 10th10th day following the day on which public announcement of the date of such meeting is first made.
All shareholders of record of shares of common stock at the close of business on the record date, or their designated proxies, are authorized to attend the annual meeting. If you are not a shareholder of record but hold shares through a broker, bank or other nominee, you should provide proof of beneficial ownership as of the record date, such as an account statement reflecting your stock ownership as of the record date, a copy of the voting instruction card provided by your broker, bank or other nominee, or other similar evidence of ownership. If you do not have proof of ownership, you may not be admitted to the annual meeting. Each shareholder and proxy may be asked to present a valid government-issued photo identification, such as a driver's license or passport, before being admitted. Cameras, recording devices and other electronic devices will not be permitted, and attendees may be subject to security inspections and other security precautions
All shareholders may also attend the annual meeting virtually by means of remote communications. If you are not a shareholder of record but hold shares through a broker, bank or other nominee, you will need only your 16-digit control number to access the virtual meeting.
If you and other residents at your mailing address own shares of common stock in street name, your broker, bank or other nominee may have sent you a notice that your household will receive only one Notice of Internet Availability of Proxy Materials, annual report and/or proxy statement, as applicable. This procedure, known as “householding,” is intended to reduce the volume of duplicate information shareholders receive and also reduce our printing and postage costs. Under applicable law, if you consented or were deemed to have consented, your broker, bank or other nominee may send one copy of the applicable proxy materials to your address for all residents that own shares of common stock in street name. If you wish to revoke your consent to householding, you must contact
50
your broker, bank or other nominee. If you are receiving multiple copies of our proxy materials, you may be able to request householding by contacting your broker, bank or other nominee.
If you wish to request extra copies free of charge of our proxy materials, please send your request in writing to HarborOne Bancorp, Inc., 770 Oak Street, Brockton, Massachusetts 02301, Attention: Investor Relations or by telephone at (508) 895-1000.
The Board does not know of any matters other than those described in this proxy statement that will be presented for action at the 20212022 annual meeting. If other matters are presented, proxies will be voted in accordance with the discretion of the proxy holders.
| | |
By Order of the Board of Directors, | ||
|
| |
| Inez H. Friedman-Boyce |
Brockton, Massachusetts
April 16, 20218, 2022
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| VIEW MATERIALS & VOTE w SCAN TO HARBORONE BANCORP, INC. ATTN: INEZ FRIEDMAN-BOYCE 770 OAK STREET BROCKTON, MA 02301 VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on May 17, 2022. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on May 17, 2022. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D74198-P66693 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. HARBORONE BANCORP, INC. THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES LISTED IN PROPOSAL 1, “FOR” PROPOSALS 2 AND 3, AND IN FAVOR OF ONE YEAR ON PROPOSAL 4. 1. The election of the four Class III director nominees named in the proxy statement to serve on our Board of Directors for a term of three years and until their respective successors are duly elected and qualified; For Withhold For Against Abstain 3. A non-binding advisory resolution to approve the compensation of the Company’s named executive officers; and 1 Year ! ! ! ! For ! ! ! ! Against Abstain ! 2 Years ! 3 Years ! Abstain 1a. Joseph F. Barry 1b. James W. Blake 4. A non-binding advisory resolution to select the frequency of future shareholder advisory votes to approve the compensation of the Company’s named executive officers. ! ! ! ! 1c. Dr. Timothy R. Lynch 1d. Damian W. Wilmot, Esq. 2. The ratification of the appointment of Crowe LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022; ! ! ! Note: Please sign exactly as name appears hereon. When shares are held by joint owners, both should sign. When signing as attorney, executor, administrator, trustee, guardian, or corporate officer, please give title as such. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date |
| Important Notice Regarding the Internet Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on May 18, 2022 The Notice of the Annual Meeting, 2022 Proxy Statement, and the 2021 Annual Report to Shareholders are available at: http://www.harboronebancorp.com D74199-P66693 PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS HarborOne Bancorp, Inc. The undersigned appoints James W. Blake and Joseph F. Casey, and each of them acting singly, as proxies, each with the power to appoint his substitute, and authorizes each of them to represent and to vote, as designated on the reverse hereof, all of the shares of common stock of HarborOne Bancorp, Inc. held of record by the undersigned at the close of business on March 22, 2022 at the Annual Meeting of Shareholders of HarborOne Bancorp, Inc. to be held on May 18, 2022, or at any adjournment thereof. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS INDICATED. IF NO SPECIFICATION IS MADE, THE SHARES WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR THE DIRECTORS NAMED IN THE PROXY STATEMENT, FOR RATIFICATION OF THE APPOINTMENT OF CROWE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2022, FOR A NON-BINDING ADVISORY RESOLUTION TO APPROVE THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS, AND IN FAVOR OF ONE YEAR ON A NON-BINDING ADVISORY RESOLUTION TO SELECT THE FREQUENCY OF FUTURE SHAREHOLDER ADVISORY VOTES TO APPROVE THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS. IF OTHER MATTERS ARE PRESENTED, PROXIES WILL BE VOTED AT THE DISCRETION OF THE PROXY HOLDERS. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned revoke(s) any proxy or proxies heretofore given. This proxy may be revoked at any time before it is executed. (Continued and to be marked, dated and signed, on the other side) |
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| VIEW MATERIALS & VOTE w SCAN TO HARBORONE BANCORP, INC. ATTN: INEZ FRIEDMAN-BOYCE 770 OAK STREET BROCKTON, MA 02301 VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on May 6, 2022. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on May 6, 2022. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D74200-P66693 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. HARBORONE BANCORP, INC. THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES LISTED IN PROPOSAL 1, “FOR” PROPOSALS 2 AND 3, AND IN FAVOR OF ONE YEAR ON PROPOSAL 4. 1. The election of the four Class III director nominees named in the proxy statement to serve on our Board of Directors for a term of three years and until their respective successors are duly elected and qualified; For Withhold For Against Abstain 3. A non-binding advisory resolution to approve the compensation of the Company’s named executive officers; and 1 Year ! ! ! ! For ! ! ! ! Against Abstain ! 2 Years ! 3 Years ! Abstain 1a. Joseph F. Barry 1b. James W. Blake 4. A non-binding advisory resolution to select the frequency of future shareholder advisory votes to approve the compensation of the Company’s named executive officers. ! ! ! ! 1c. Dr. Timothy R. Lynch 1d. Damian W. Wilmot, Esq. 2. The ratification of the appointment of Crowe LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022; ! ! ! Note: Please sign exactly as name appears hereon. When shares are held by joint owners, both should sign. When signing as attorney, executor, administrator, trustee, guardian, or corporate officer, please give title as such. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date |
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| Important Notice Regarding the Internet Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on May 18, 2022 The Notice of the Annual Meeting, 2022 Proxy Statement, and the 2021 Annual Report to Shareholders are available at: http://www.harboronebancorp.com D74201-P66693 ESOP and HarborOne 401(k) Plan Vote Authorization Form HarborOne Bancorp, Inc. The undersigned directs the trustee of the HarborOne Bancorp, Inc. Employee Stock Ownership Plan (the "ESOP") and the trustee of the HarborOne 401(k) Plan (the "HarborOne 401(k) Plan") to vote, as designated on the reverse hereof, all shares of common stock of HarborOne Bancorp, Inc. allocated to the participant’s account(s), if any, for which the participant is entitled to direct the voting at Annual Meeting of Shareholders of HarborOne Bancorp, Inc. to be held on May 18, 2022, or at any adjournment thereof. If this form is not returned in a timely manner, the ESOP trustee will vote all unallocated shares of Company common stock held by the ESOP in the same proportion as shares for which it has received timely voting instructions. The ESOP trustee will not vote allocated shares for which no voting instructions are received. HarborOne Bank, as plan administrator, will vote any shares in the HarborOne 401(k) Plan for which participants have not issued voting instructions as HarborOne Bank determines in its discretion and will direct the HarborOne 401(k) Plan trustee accordingly. If any other business is brought before the Annual Meeting, this form will be voted by the trustees in a manner intended to represent the best interest of the participants and beneficiaries of the ESOP and the HarborOne 401(k) Plan. At the present time, HarborOne Bancorp, Inc. knows of no other business to be brought before the Annual Meeting. IF NO INSTRUCTION IS SPECIFIED AND THIS AUTHORIZATION FORM IS RETURNED SIGNED, THIS VOTE AUTHORIZATION FORM WILL BE CONSIDERED A VOTE FOR THE NOMINEES LISTED IN PROPOSAL 1, FOR PROPOSALS 2 AND 3, AND IN FAVOR OF ONE YEAR ON PROPOSAL 4. (Continued and to be marked, dated and signed, on the other side) |
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