baynationaldef14a.htm
United
States
Securities
and Exchange Commission
Washington,
D.C.
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. _____)
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Filed
by the Registrant x
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Filed
by a Party other than the Registrant ¨
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Check
the appropriate box:
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¨
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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x
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to §240.14a-12
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BAY NATIONAL
CORPORATION
(Name of
Registrant as Specified In Its Charter)
(Name of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
x
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No
fee required.
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¨
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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Fee
paid previously with preliminary
materials.
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¨
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Check
box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its
filing.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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BAY
NATIONAL CORPORATION
April 15,
2008
Dear
Stockholder:
On behalf
of the Board of Directors, I cordially invite you to attend Bay National
Corporation’s 2008 Annual Meeting of Stockholders on Tuesday, May 27, 2008 at
2:30 p.m., local time, at Bay National Corporation’s office located at 2328 West
Joppa Road, Lutherville, Maryland 21093.
The
notice of meeting and proxy statement on the following pages contain information
about the meeting. In order to ensure your shares are voted at the meeting,
please return the enclosed proxy card at your earliest convenience. Every
stockholder’s vote is important.
Very
truly yours,
/s/ Hugh W.
Mohler
Hugh W.
Mohler
Chairman
and Chief Executive Officer
Bay
National Corporation
2328 West
Joppa Road, Lutherville, Maryland 21093
NOTICE OF
ANNUAL MEETING
TO BE
HELD MAY 27, 2008 at 2:30 P.M.
April
15, 2008
The
Annual Meeting of Stockholders will be held in Bay National Corporation’s office
located at 2328 West Joppa Road, Lutherville, Maryland 21093 to:
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1.
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Elect
three directors to serve for a three-year term ending at the Annual
Meeting of Stockholders to be held in 2011 in each case until their
successors are duly elected and
qualified;
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2.
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Ratify
the appointment of Stegman & Company as independent registered public
accountants to audit the financial statements of Bay National Corporation
for 2008; and
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3.
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Act
upon any other matter that may properly come before the meeting or any
adjournment or postponement
thereof.
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Only
stockholders of record of Bay National Corporation common stock at the close of
business on April 1, 2008 are entitled to notice of and to vote at the meeting,
or any adjournment or postponement thereof.
Whether
or not you plan to attend the meeting, please indicate your choices on the
matters to be voted upon, date and sign the enclosed proxy and return it in the
enclosed postage-paid return envelope. You may revoke your proxy at any time
prior to or at the meeting by written notice to Bay National Corporation, by
executing a proxy bearing a later date, or by attending the meeting and voting
in person.
By order
of the Board of Directors,
/s/ Mark A.
Semanie
Mark A.
Semanie
Secretary
PROXY
STATEMENT
INTRODUCTION
This
Proxy Statement is furnished on or about April 15, 2008 to stockholders of Bay
National Corporation in connection with the solicitation of proxies by Bay
National Corporation’s Board of Directors to be used at the annual meeting of
stockholders described in the accompanying notice (the “Annual Meeting”) and at
any adjournments or postponements thereof. The purposes of the Annual
Meeting are set forth in the accompanying notice of annual meeting of
stockholders.
This
proxy material is being sent to Bay National Corporation’s stockholders on or
about April 15, 2008. Bay National Corporation’s Annual Report on
Form 10-K for the year ended December 31, 2007 (“Annual Report”), as filed with
the Securities and Exchange Commission, has been mailed to all stockholders with
this proxy material.
SOLICITATION
AND REVOCATION OF PROXIES
The
enclosed proxy is solicited by the Board of Directors of Bay National
Corporation. The Board of Directors selected Warren F. Boutilier and Hugh L.
Robinson II, or either of them, to act as proxies with full power of
substitution at the Annual Meeting. The proxy is revocable at any
time prior to or at the Annual Meeting by written notice to Bay National
Corporation, by executing a proxy bearing a later date, or by attending the
Annual Meeting and voting in person. A written notice of revocation
of a proxy should be sent to the Secretary, Bay National Corporation, 2328 West
Joppa Road, Suite 325, Lutherville, MD 21093, and will be effective if received
by the Secretary prior to the Annual Meeting. The presence of a
stockholder at the Annual Meeting alone will not automatically revoke such
stockholder’s proxy.
In
addition to solicitation by mail, officers and directors of Bay National
Corporation may solicit proxies personally or by telephone. Bay
National Corporation will not specifically compensate these persons for
soliciting such proxies. Bay National Corporation will bear the cost
of soliciting proxies. These costs may include reasonable
out-of-pocket expenses in forwarding proxy materials to beneficial
owners. Bay National Corporation will reimburse brokers and other
persons for their reasonable expenses in forwarding proxy materials to customers
who are beneficial owners of the common stock of Bay National Corporation
registered in the name of nominees.
OUTSTANDING
SHARES AND VOTING RIGHTS
Stockholders
of record at the close of business on April 1, 2008 (the “Record Date”) are
entitled to notice of and to vote at the Annual Meeting. As of the
close of business on that date, there were outstanding and entitled to vote
2,140,933 shares of common stock, $0.01 par value per share, each of which is
entitled to one vote.
The
presence, in person or by proxy, of stockholders entitled to cast a majority of
all the votes entitled to be cast at the Annual Meeting will be necessary to
constitute a quorum at the Annual Meeting. Abstentions and broker
non-votes are counted for purposes of determining the presence or absence of a
quorum for the transaction of business at the Annual Meeting.
For the
election of directors, which requires a plurality of the votes cast, only
proxies and ballots indicating votes “FOR” a nominee or “WITHHOLD AUTHORITY” for
a nominee are counted to determine the total number of votes cast; abstentions
and broker non-votes have no effect on the outcome of the election.
Assuming
a quorum is present, the affirmative vote of a plurality of the shares cast in
person or represented by proxy at the Annual Meeting is required to elect the
director nominees. In other words, the nominees to receive the
greatest number of votes cast, up to the number of nominees up for election,
will be elected. Withheld votes and broker non-votes will not affect
the outcome of the election of directors.
The
affirmative vote of at least a majority of all votes cast in person or by proxy
at the Annual Meeting and entitled to vote on the matter is necessary to ratify
the appointment of Stegman & Company as our independent registered public
accountants. An abstention or broker non-vote is not included in
calculating votes cast with respect to these proposals and will have no effect
on the outcome of these proposals.
A broker
“non-vote” is a proxy received from a broker or nominee indicating that such
persons have not received instructions from the beneficial owner or other
persons entitled to vote shares on a particular matter with respect to which the
broker or nominee does not have discretionary power to vote.
All
proxies will be voted as directed by the stockholder on the proxy
form. A proxy, if executed and not revoked, will be voted in the
following manner (unless it contains instructions to the contrary, in which
event it will be voted in accordance with such instructions):
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FOR
the nominees for directors named below.
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FOR
ratification of the appointment of Stegman & Company as independent
registered public accountants for 2008.
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Proxies
will be voted in the discretion of the holder on such other business as
may properly come before the Annual Meeting or any adjournments or
postponements thereof.
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It
is anticipated that Bay National Corporation’s directors and officers will vote
their shares of common stock in favor of the nominees for election to the Board
of Directors listed herein and for the ratification of the appointment of
Stegman and Company.
SECURITY
OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS
The
following table sets forth the beneficial ownership of Bay National
Corporation's common stock as of April 1, 2008 by its directors, named executive
officers, and all directors and officers as a group and persons believed by
management to beneficially own more than five percent (5%) of the common stock.
The table includes warrants and options beneficially owned by these persons and
exercisable within 60 days as of April 1, 2008. Unless otherwise
noted below, management believes that each person named in the table has the
sole voting and sole investment power with respect to each of the shares of
common stock reported as beneficially owned by such person.
Name
of Beneficial Owner
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Number
of Shares
Beneficially
Owned
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Percentage
of
Class
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Gary
T. Gill (1)
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6,907
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.31%
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R.
Michael Gill (2)
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5,836
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.26%
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John
R. Lerch (3)
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53,228
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2.38%
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Donald
G. McClure, Jr. (4)
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19,500
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.87%
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Hugh
W. Mohler (5)
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103,467
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4.63%
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Robert
L. Moore (6)
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24,026
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1.07%
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James
P. O’Conor (7)
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6,034
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.27%
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Richard
J. Oppitz
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577
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.03%
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H.
Victor Rieger, Jr. (8)
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37,714
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1.69%
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William
B. Rinnier (9)
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15,222
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.68%
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Edwin
A. Rommel, III (10)
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56,231
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2.51%
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Mark
A. Semanie (11)
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22,341
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1.00%
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Richard
C. Springer
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3,300
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.15%
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Henry
H. Stansbury (12)
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41,370
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1.85%
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Kenneth
H. Trout (13)
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56,925
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2.55%
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Eugene
M. Waldron, Jr. (14)
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44,484
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1.99%
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Carl
A.J. Wright (15)
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15,836
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.71%
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All
directors and executive officers as a group
(17
persons) (16)
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512,998
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22.95%
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NexTier,
Inc. (17)
P.O.
Box 1550
Butler,
Pennsylvania 16003
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174,486
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7.80%
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(1)
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Pursuant
to notice provided to the Company on March 18, 2008, Mr. Gill chose not to
stand for re-election to the Board of Directors. As a Class A
director, Mr. Gill’s term expires on May 27, 2008. Mr. Gill did
not indicate any disagreement with the Company as a reason for not
standing for re-election. Includes 182 shares to be issued in
lieu of 2007 director fees within 60 days of April 1, 2008, and Mr. Gill
will not be able to vote these shares at the Annual
Meeting.
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(2)
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Includes
234 shares to be issued in lieu of 2007 director fees within 60 days of
April 1, 2008, and Mr. Gill will not be able to vote these shares at the
Annual Meeting.
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(3)
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Includes
9,900 shares held by LFI partnership, of which Mr. Lerch is a general
partner; 4,400 shares held by Mr. Lerch’s spouse, over which he has shared
voting and investment power; and 550 shares held in trust for the benefit
of Mr. Lerch’s daughter for which Mr. Lerch is
custodian. Includes 234 shares to be issued in lieu of 2007
director fees within 60 days of April 1, 2008, and Mr. Lerch will not be
able to vote these shares at the Annual
Meeting.
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(4)
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Includes
3,300 shares issuable upon the exercise of options. Includes 11,000 shares
held in trust for the benefit of Mr. McClure’s children for which Mr.
McClure is a co-trustee and over which he has shared voting and investment
power. Includes 400 shares to be issued in lieu of 2007
director fees within 60 days of April 1, 2008 and Mr. McClure will not be
able to vote these shares at the Annual
Meeting.
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(5)
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Includes
44,287 shares issuable upon the exercise of options. Includes 1,100 shares
held by Mr. Mohler’s spouse, over which he has shared voting and
investment power.
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(6)
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Includes
3,300 shares issuable upon the exercise of options. Includes
8,668 shares held in trust for the estate of Charles E. Bounds for which
Mr. Moore is co-trustee and over which he is able to exercise full voting
and investment power. Includes 404 shares to be issued in lieu
of 2007 director fees within 60 days of April 1, 2008, and Mr. Moore will
not be able to vote these shares at the Annual
Meeting.
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(7)
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Includes
267 shares to be issued in lieu of 2007 director fees within 60 days of
April 1, 2008, and Mr. O’Conor will not be able to vote these shares at
the Annual Meeting.
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(8)
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Includes
1,100 shares held by Mr. Rieger’s spouse, over which he has shared voting
and investment power. Includes 2,907 shares to be issued in
lieu of 2007 director fees within 60 days of April 1, 2008, and Mr. Rieger
will not be able to vote these shares at the Annual
Meeting.
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(9)
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Includes
3,300 shares issuable upon the exercise of options. Includes 3,300 shares
held by Mr. Rinnier’s spouse, over which he has shared voting and
investment power. Includes 186 shares to be issued in lieu of
2007 director fees within 60 days of April 1, 2008, and Mr. Rinnier will
not be able to vote these shares at the Annual
Meeting.
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(10)
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Includes
3,300 shares issuable upon the exercise of options. Includes
429 shares to be issued in lieu of 2007 director fees within 60 days of
April 1, 2008, and Mr. Rommel will not be able to vote these shares at the
Annual Meeting.
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(11)
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Includes
20,493 shares issuable upon the exercise of
options.
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(12)
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Includes
3,300 shares issuable upon the exercise of options. Includes 13,750 shares
held by Mr. Stansbury’s spouse, over which he has shared voting and
investment power. Includes 445 shares to be issued in lieu of
2007 director fees within 60 days of April 1, 2008, and Mr. Stansbury will
not be able to vote these shares at the Annual
Meeting.
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(13)
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Includes
3,300 shares issuable upon the exercise of options. Includes 50,745 shares
held by Rosemore, Inc. Mr. Trout disclaims beneficial ownership as to the
shares held by Rosemore, Inc. Includes 340 shares to be issued
in lieu of 2007 director fees within 60 days of April 1, 2008, and Mr.
Gill will not be able to vote these shares at the Annual
Meeting.
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(14)
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Includes
3,300 shares issuable upon the exercise of options. Includes
242 shares to be issued in lieu of 2007 director fees within 60 days of
April 1, 2008, and Mr. Waldron will not be able to vote these shares at
the Annual Meeting.
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(15)
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Includes
218 shares to be issued in lieu of 2007 director fees within 60 days of
April 1, 2008, and Mr. Wright will not be able to vote these shares at the
Annual Meeting.
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(16)
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All
of the named individuals, other than Mr. Semanie, Mr. Springer and Mr.
Oppitz are directors of Bay National Corporation. Mr. Mohler is a director
and executive officer of Bay National Corporation. Mr. Springer
resigned as an officer effective July 20,
2007.
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(17)
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This
information is based on a Schedule 13G filed with the Securities and
Exchange Commission by NexTier Incorporated on March 28, 2006 and
information from the Company’s transfer agent at the close of business on
the Record Date.
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The
number of shares beneficially owned includes shares of common stock subject to
options held by the named persons that are exercisable as of, or within 60 days
of, April 1, 2008. Such shares are deemed outstanding for the purpose
of computing the percentage ownership of the person holding the options or
warrants, but are not deemed outstanding for the purpose of computing the
percentage ownership of any other person.
PROPOSAL
1. ELECTION OF DIRECTORS
The Board
of Directors currently has fourteen directors, divided into three classes –
Class A, Class B and Class C. Each class of director serves for a
three-year term and the term of office of one of the three classes expires each
year. The current Class A directors’ term expires at the Annual
Meeting on May 27, 2008. A director may only be removed by the
affirmative vote of at least 80% of the votes entitled to be cast on the
matter.
All of
the members of Bay National Corporation’s Board of Directors, except R. Michael
Gill, have served for at least one three-year term on the Board of Directors of
Bay National Corporation.
The Board
of Directors is recommending the election of John R. Lerch, James P. O’Conor and
Carl A.J. Wright as Class A directors for a term ending at the 2011 Annual
Meeting of Stockholders. All of the nominees are now directors of Bay National
Corporation and each nominee has consented to serve as a director, if
elected. Gary T. Gill, also a Class A director, notified the Company
on March 18, 2008 of his choice not to stand for re-election. As
such, his term will expire on May 27, 2008. Mr. Gill did not indicate
any disagreement with the Company as a reason for not standing for
re-election. Another former Class A director, Charles E. Bounds, is
not included as a nominee for re-election due to his death in 2007. The
directors whose terms have not expired will continue to serve as directors until
the expiration of their respective terms.
It is not
contemplated that any of the nominees will become unavailable to serve, but if
that should occur before the Annual Meeting, proxies that do not withhold
authority to vote for the nominees listed below will be voted for another
nominee, or nominees, selected by the Board of Directors.
The
proxies solicited hereby, unless directed to the contrary, will be voted “FOR” the election of the three
nominees named below as Class A directors with terms expiring at the 2011 Annual
Meeting of Stockholders. In order to be elected, a plurality of the
shares cast at the Annual Meeting is necessary. Abstentions and
broker non-votes have no effect on the outcome of the election.
Information
regarding the nominees and the directors, who will continue to serve unexpired
terms, and certain information relating to them, follows.
Nominees for election to the
Board of Directors for a three-year term expiring in 2011.
John R. Lerch, age 63, has been a director of
Bay National Corporation since June 1999 and a director of Bay National Bank
since April 2000. Since January 1999, Mr. Lerch has been self-employed as a
private investor trading as the Chesapeake Venture Group. From 1973 to January
1999, Mr. Lerch was president of Chesapeake Insurance-The Harris Riggin Agency,
an independent insurance agency based in Salisbury, Maryland. Mr. Lerch began
his business career in the securities industry, serving as a stockbroker at
firms in Washington, D.C. and Salisbury, Maryland. Mr. Lerch is a past director
of the Independent Insurance Agents of Maryland.
Mr. Lerch
is an alumnus of Dickinson College of Carlisle, Pennsylvania. He served as an
officer in the U.S. Army and holds a Bronze Star from his service in Vietnam. He
is a director of Barr International, Inc., a regional medium and heavy truck
sales and service organization. He is a past director of Peninsula Bank, a
subsidiary of former Baltimore-based Mercantile Bankshares Corporation. He is a
past director and vice-chairman of the Greater Salisbury Committee, past trustee
of the Peninsula Regional Medical Center in Salisbury, past president of
Salisbury-Wicomico Economic Development Corporation and past president and
campaign chairman of the United Way of the Lower Eastern Shore. He also has
served as a director for the Mid-Delmarva Family YMCA and was a former chairman
and a past trustee of The Ward Foundation.
James P. O’Conor, age 79, has been a director of
Bay National Corporation and Bay National Bank since July 2004. Mr. O’Conor is
the general partner of O’Conor Enterprises, a real estate investment and
consulting company, and he has served in that capacity since
2002. Mr. O’Conor co-founded the Maryland real estate brokerage firm
of O’Conor & Flynn in 1961. In 1984, that firm merged with
another large Maryland real estate brokerage firm, creating O’Conor, Piper &
Flynn. Mr. O’Conor served as its Chairman and CEO. In 1998, O’Conor,
Piper & Flynn was sold to NRT, the largest real estate company in the
country. Mr. O’Conor served as Senior Vice President of NRT until
2003.
Mr.
O’Conor currently serves on the Board of Directors of Saint Joseph’s Hospital,
Towson University, Signal 13 Foundation, Sheppard Pratt Hospital, and is
Chairman of the Jefferson School.
Carl A.J. Wright, age 53, has
been a director of Bay National Corporation and Bay National Bank since March
2003. Mr. Wright is the CEO of Stephen James Associates, an executive
search and staffing firm specializing in accounting, finance, human resources
and banking. He has served in that capacity since January 2006. From
1998 to May 2005, Mr. Wright was a senior vice president of Spherion (formerly
Interim Financial Solutions), an executive search and staffing firm specializing
in finance, human resources and information systems. From 1980 until 1998,
Mr. Wright was President and CEO of A.J. Burton Group. Mr. Wright served in the
auditing and tax departments of Ernst & Young from 1976 to 1980. Along with
his corporate responsibilities, he is an involved community member and active in
professional, civic and political organizations.
Mr.
Wright is an alumnus of Loyola College in Maryland and Loyola Blakefield and has
served on boards and committees of both institutions. He is past
president of the Baltimore Junior Association of Commerce and served on Maryland
Governor Robert L. Ehrlich Jr.’s Strategic and Finance Committees. He
was chairman of the Maryland Stadium Authority from 2003–2006. In addition, Mr.
Wright is a board member of Catholic Charities and supporter of Maryland
Business for Responsive Government.
The
Board of Directors recommends that stockholders vote “FOR” the election of all
nominees.
Continuing Class B Directors
– Terms Expiring in 2009.
Hugh W. Mohler, age 62, serves
as chairman, president, and chief executive officer. He has been a director of
Bay National Corporation since June 1999 and a director of Bay National Bank
since April 2000. Mr. Mohler has 40 years experience in the financial services
industry, holding positions in executive management, commercial lending and
business development. From 1977 to 1999, Mr. Mohler was affiliated with former
Baltimore-based Mercantile Bankshares Corporation, most recently serving as
executive vice president with responsibility for 20 community banks in a
three-state area. For 17 years, from 1977 to 1994, he was president of
Mercantile’s Salisbury, Maryland-based affiliate, Peninsula Bank, the largest
financial institution on Maryland’s Eastern Shore. Earlier, he was a vice
president in commercial lending at First National Bank of Maryland.
A native
of Baltimore, Mr. Mohler earned his undergraduate degree in economics from
Loyola College in Maryland and his master of business administration degree from
the University of Baltimore. He is a past president of the board of trustees of
Associated Catholic Charities, Inc. in the Roman Catholic Archdiocese of
Baltimore. In the past, Mr. Mohler has served as a trustee of Loyola Blakefield,
Goucher College and the Independent College Fund of Maryland. Mr. Mohler is
Chairman of the Board of Sponsors of the Sellinger School of Business at Loyola
College in Maryland and serves on the Board of Governors of The Maryland Club.
In 2004, he was appointed by Governor Robert L. Ehrlich, Jr. to the Maryland
Economic Development Commission. He also serves on the President’s Advisory
Council of Villa Julie College, is a member of the finance committee for the
Maryland Jesuit Province, and is past President of the Baltimore Chapter of
Legatus International. He also serves on the board of The Baltimore
Equitable Society, a mutual, perpetual insurance company dating back to
1794.
Mr.
Mohler’s prior civic experiences include serving as chairman of the Greater
Salisbury Committee, chairman of the Salisbury School, and chairman of the
Governor’s Lower Shore Economic Task Force. He also served on the boards of
Peninsula Regional Medical Center, Maryland Chamber of Commerce,
Salisbury-Wicomico Economic Development Committee and the Somerset County
Economic Development Committee. Mr. Mohler also served as president
of the Maryland Bankers Association and on several committees of the American
Bankers Association.
R. Michael Gill, age 57, has
been a director of Bay National Corporation and Bay National Bank since March
2006. Mr. Gill is chairman of Curtis Engine, a Baltimore-based locally owned and
operated provider of power solutions equipment and he has served in that
capacity since January 2006. In 2003, Mr. Gill formed Hoyt Capital, an
investment firm that provides capital and business advising to start-up and
existing enterprises, of which he currently serves as principal. For sixteen
years, beginning in 1984, he served as CEO of AMERICOM, a provider of cellular
products and services. In 2000, AMERICOM was acquired by Solectron, a leader in
the electronics manufacturing sector.
Mr. Gill
is an alumnus of Towson University where he received an honorary Doctor of
Humane Letters degree in 1996. In May 2005, he received Towson University’s
Distinguished Alumnus Award. Prior to transferring to Towson University, Mr.
Gill attended Clemson University, which recently named him to its President’s
Advisory Board. He also serves as Executive Chairman of Bluefire
Security Technologies, a developer of security software solutions for
mobile devices, and serves on the board of advisors of Evergreen Capital. In
2004, Governor Robert L. Ehrlich, Jr. appointed Mr. Gill to a five-year term on
the Board of Regents of the University System of Maryland, a public system of
higher education comprised of 11 degree-granting and two research
institutions.
Donald G. McClure, Jr., age
64, has been a
director of Bay National Corporation and Bay National Bank since April 2000. Mr.
McClure is a principal in the McClure Group, Inc., a Baltimore-based private
equity investment firm originated in 1979. He is the former Chairman and
Co-Chief Executive of Americom Wireless Services, Inc., which merged with a
Fortune 200 company in 2000. McClure Group, Inc. holdings include operations
based in Texas, Florida, Colorado as well as Maryland.
Mr.
McClure presently devotes substantial time to several other boards in the
private sector and has been a lifelong director to a variety of educational and
non-profit organizations. He is presently leading the development of
McClure Family Vineyards in Sparks, Maryland.
Robert L. Moore, age 54, has been a director of
Bay National Corporation since February 2001 and Bay National Bank since June
2001. Mr. Moore is a certified public accountant. He received his
CPA designation twenty-nine years ago, and is the owner and founder of the
Salisbury, Maryland accounting firm of Moore & Company, P.A. His
professional concentration is income tax and estate tax planning and all facets
of business consulting.
Mr. Moore
received his Bachelor of Science degree from the University of Virginia in
1976. Currently, he serves as Chairman of the Trustees of the Wicomico
County Pension System, a board member of Salisbury-Wicomico Economic Development
Corporation, a board member of the Greater Salisbury Committee, a member of the
Salisbury Area Chamber of Commerce, and vice-chairman of the Finance Committee
of Trinity United Methodist Church.
Mr. Moore
is a past president of the Eastern Shore Chapter of the Maryland Association of
CPAs. Previously, Mr. Moore served on the Board of Directors of the Bank of
Fruitland, Maple Shade Residential Homes, Inc., and the Holly Foundation.
He was also a member of the Executive Committee and Board of Directors of the
Green Hill Yacht & Country Club and a member and officer of the Salisbury
Jaycees.
H. Victor Rieger, Jr., age 70,
has been a director of Bay National Corporation since June 1999 and a director
of Bay National Bank since April 2000. Mr. Rieger retired from Signet Banking
Corporation, successor to Union Trust Company of Maryland, in December 1997
after nearly four decades of service. Mr. Rieger served in numerous capacities
for Signet, including regional executive vice president of international banking
and as part of Signet's Maryland commercial banking group. Mr. Rieger has
extensive experience in commercial relationship banking, credit administration
and loan policy.
An
alumnus of Johns Hopkins University, Mr. Rieger is a graduate of the Stonier
School of Banking at Rutgers University. He is past president and a current
trustee of Family and Children's Services of Central Maryland, past treasurer
and board member of the National Flag Day Foundation and a past vice-president
and director of the Baltimore Junior Association of Commerce. He is a former
member of the loan committee for the Minority Small Business Investment Company
and a past advisory board member of the U.S. Small Business Administration. Mr.
Rieger also is past president of the Chesapeake Chapter of Robert Morris
Associates.
Continuing Class C Directors
– Terms Expiring in 2010.
William B. Rinnier, age
66, has been a
director of Bay National Corporation since August 1999 and a director of Bay
National Bank since April 2000. Mr. Rinnier is the owner and president of
Rinnier Development Company, a Salisbury, Maryland based real estate development
company, which specializes in the development and sale or management of resort
condominiums, multi-family apartments, and commercial and industrial buildings.
He joined Rinnier Development Company nearly three decades ago after his
honorable discharge from the U.S. Navy.
A native
of Salisbury, Maryland, Mr. Rinnier earned a degree in aerospace engineering
from the Georgia Institute of Technology and attended the Graduate School of
Business at the University of Virginia. He is a board member of the Greater
Salisbury Committee and is past president of the Salisbury-Wicomico Economic
Development Corporation and the Coastal Board of Realtors.
Edwin A. Rommel III, age
58, has been a
director of Bay National Corporation since June 1999 and a director of Bay
National Bank since April 2000. Mr. Rommel is a certified public accountant who,
since 1974, has been a partner in the Salisbury, Maryland, accounting firm of
Twilley, Rommel & Stephens, P.A. Mr. Rommel has been certified as a
valuation analyst and accredited in Business Valuation by the American Institute
of Certified Public Accountants.
A
Baltimore native, Mr. Rommel earned his undergraduate degree from Loyola College
in Maryland. Mr. Rommel is an officer of the Eastern Shore Chapter of the
Maryland Association of Certified Public Accountants and serves on the Board of
Directors of the Loyola College Alumni Association. He is also a past Chairman
of the Maryland Association of Certified Public Accountants, and is a member of
the governing board of the American Institute of Certified Public Accountants.
Mr. Rommel is past president of the Salisbury Area Chamber of Commerce and
previously served as a director of the Greater Salisbury Committee and as a
director of the Maryland Association of Certified Public Accountants. Mr. Rommel
is also past president of the St. Francis de Sales Board of Trustees and past
member of the Wicomico County Democratic Central Committee.
Henry H. Stansbury, age
68, has been a
director of Bay National Corporation since June 1999 and a director of Bay
National Bank since April 2000. Since 1975, Mr. Stansbury has been the Chairman
of the Board of Agency Services, Inc., an independently owned premium finance
company. Since 1989, Mr. Stansbury has been the Chairman of the Board of
Directors of Agency Insurance Company of Maryland, Inc., a privately owned
multi-line property/casualty insurance company. Mr. Stansbury is a past
president of the Maryland Association of Premium Finance Companies and is a past
president of the National Association of Premium Finance Companies.
Mr.
Stansbury is the Chairman of the Board of the Maryland Historical Society. He
served as director and chairman of the museum committee for the Lacrosse Hall of
Fame at the Johns Hopkins University and as trustee of the St. Paul's School for
Boys and The Ward Museum of Wildfowl Art. He is also past president of
ReVisions, Inc., a nonprofit organization that serves the mentally ill. Mr.
Stansbury is a graduate of Leadership Maryland and a director of Leadership
Baltimore County. He is the author of two books; Lloyd J. Tyler: Folk Artist and
Decoy Maker and Ira
Hudson and Family, Chincoteague Carvers. He is also a contributing writer
for Decoy Magazine. Mr.
Stansbury is an alumnus of the University of Maryland and holds a master of
business administration degree from George Washington University.
Kenneth H. Trout, age 59, has been a director of
Bay National Corporation since October 1999 and a director of Bay National Bank
since April 2000. Since January 1999, Mr. Trout has served as the president and
chief executive officer of Rosemore, Inc., a Baltimore-based privately held
investment company primarily engaged in the business of oil and gas exploration
and production. He also serves as a director of Rosemore Holdings, Inc.,
Rosemore Calvert, Inc., Tema Oil and Gas Company and Gateway Gathering and
Marketing Company, which are all subsidiaries of Rosemore, Inc. He is also a
director of KCI Technologies, Inc. From 1970 to November 1997, Mr. Trout was
employed by Signet Banking Corporation. During his last five years of tenure
with Signet, he served as senior executive vice president-commercial banking and
as president and chief executive officer of Signet Bank-Maryland. Mr. Trout was
retired from December 1997 to December 1998.
A
Bridgeton, New Jersey native, Mr. Trout received his undergraduate degree in
economics and business administration from Methodist College in North Carolina.
He is a member of the Board of Trustees of The College of Notre Dame of
Maryland.
Eugene M. Waldron, Jr., age
64, has been a
director of Bay National Corporation since June 1999 and a director of Bay
National Bank since April 2000. Mr. Waldron is a Chartered Financial Analyst and
since September 1998 has been a senior vice president in the Washington, D.C.,
office of Capital Guardian Trust Company, an employee-owned firm based in Los
Angeles dedicated to institutional investment management. From March 1994 to
August 1998, Mr. Waldron was employed by Loomis, Sayles & Company, an
investment management firm. Mr. Waldron's more than three decades of investment
experience include employment at CS First Boston Asset Management, Fidelity
Management Trust Company, T. Rowe Price Associates and Ferris, Baker, Watts
& Company.
An
alumnus of Mt. St. Mary's University, Emmitsburg, Maryland, Mr. Waldron earned
his master of business administration degree at the Bernard M. Baruch College of
the City University of New York. A native of Annapolis, Maryland, he is Vice
Chairman of the Board of Trustees of Mt. St. Mary’s University and a member of
the Mt. St. Mary's Endowment Committee.
Other
than Gary T. Gill and R. Michael Gill who are brothers, and Hugh W. Mohler and
Eugene M. Waldron, Jr. who are first cousins, there are no family relationships
between any director or executive officer and any other director or executive
officer of Bay National Corporation.
The Board
of Directors has determined that all directors, other than Gary T. Gill and Hugh
W. Mohler are “independent” as defined under the applicable rules and listing
standards of the NASDAQ Stock Market LLC. Please see “Certain
Relationships and Related Transactions” for a description of the relationships
that the Board of Directors considered in making such independence
determinations.
Bay
National Corporation’s charter and bylaws provide that Bay National Corporation
shall have at least three directors, and that the number of directors may be
increased or decreased by the Board of Directors. As of April 1,
2008, the number of directors has been fixed at fourteen with all positions
filled. It is anticipated that the Board will decrease the number of directors
to thirteen as of the adjournment of the Annual Meeting since Gary T. Gill, one
of our current directors, is not running for re-election. Proxies
cannot be voted for a greater number of persons than the number of nominees
named herein. Pursuant to Bay National Corporation’s charter and
bylaws, the Board of Directors is divided into three classes, with each class
serving a three-year term, and the term of one class expiring each year. A
director may only be removed by the affirmative vote of at least 80% of the
votes entitled to be cast on the matter. Bay National Corporation's
officers are appointed by the Board of Directors and hold office at the will of
the board or as otherwise provided in an employment agreement between an officer
and Bay National Bank.
As Bay
National Corporation is the sole stockholder of Bay National Bank, each director
of Bay National Bank is elected by the Board of Directors of Bay National
Corporation. Directors of Bay National Bank serve for a term of one
year and are elected each year at Bay National Bank's annual meeting of
stockholders. Bay National Bank's officers are appointed by its Board
of Directors and hold office at the will of the board.
Bay
National Corporation has established advisory boards of directors for its two
branch locations. These are comprised of professionals and business persons, who
provide advice to Bay National Corporation and Bay National Bank’s Boards of
Directors and who promote the interests of Bay National Corporation and Bay
National Bank. An advisory board of directors is not required by any
Maryland or federal law or regulation and advisory directors are not subject to
regulatory approval or supervision. The advisory directors do not
have the power to vote on any matter considered by the Board of Directors and
they serve at the pleasure of the board.
Information Regarding
Executive Officers Who Are Not Directors.
There are
two executive officers of Bay National Corporation and Bay National Bank that do
not serve on the Board of Directors of Bay National Corporation. Biographical
information concerning these executive officers is set forth below.
Richard J. Oppitz, age 61,
serves as Executive Vice President and Chief Credit Officer of Bay National
Bank. He has been in banking since 1971 with extensive experience in all aspects
of commercial banking. He joined Bay National in January 2006, having previously
been with Provident Bank, since March 1993, where he was an Executive Vice
President with responsibilities that included roles as Senior Credit Officer,
Group Head - Commercial Banking, Group - Head Consumer Lending and President of
Court Square Leasing, a wholly - owned subsidiary of Provident.
A native
of Maryland, Mr. Oppitz earned a Bachelor of Science in Economics from Loyola
College in Maryland. He currently serves on the Board of Directors of The Babe
Ruth Museum, Empower Baltimore Management Corporation and the Loyola College
Alumni Association.
Mark A. Semanie, age 44, has served as
Executive Vice President and Chief Financial Officer, Treasurer and Secretary of
Bay National Corporation and Executive Vice President and Chief Financial
Officer, Chief Compliance Officer, Treasurer and Secretary of Bay National Bank
since October 2000. Mr. Semanie is a Certified Public Accountant. Mr. Semanie
worked in the insurance industry for over seven years. From July 1996 to October
2000, he served as Executive Vice President and Chief Financial Officer for
Agency Holding Company of Maryland, Inc., parent company of Baltimore-based
Agency Services, Inc., an insurance premium finance company, and Agency
Insurance Company of Maryland, Inc., a multi-line property/casualty insurance
company. From March 1993 to July 1996, he was associated with USF&G
Corporation where he served in various capacities, including Manager of SEC and
External Reporting. From August 1985 to March 1993, Mr. Semanie worked in the
Boston and Baltimore offices of the international accounting firm of KPMG LLP.
He last served as a Senior Manager in the Audit practice with the firm. His
background includes experience in financial planning and reporting, backroom
operations, human resources and regulatory compliance.
A native
of Connecticut, Mr. Semanie earned a Bachelor of Science degree in accounting
from Bentley College. He currently serves on the Board of Directors of Agency
Insurance Company of Maryland, Inc., as a member of the Board of Directors and
Treasurer of No More Stolen
Childhoods and as a member of the Finance Committee of St. Margaret’s
Roman Catholic Church in Bel Air, Maryland. He is a member of the American
Institute of Certified Public Accountants, the Maryland Association of Certified
Public Accountants, the American Institute of Chartered Property Casualty
Underwriters, and Financial Executives International.
BOARD
MEETINGS AND COMMITTEES
Bay
National Corporation’s Board of Directors convenes at regularly-scheduled
meetings nine times per year (usually the fourth Tuesday of each month with the
exception of February, August and December) and such special meeting as
circumstances may require. The Board of Directors of Bay National
Corporation and Bay National Bank met ten times during 2007. Each
director, other than Gary T. Gill, William B. Rinnier, Kenneth H. Trout and Carl
A.J. Wright, attended at least 75% of the total number of meetings of
the Board of Directors and the Board committees of Bay National Corporation and
Bay National Bank of which he or she was a member during 2007.
The Board
of Directors of Bay National Corporation has standing Audit, Nominating and
Compensation Committees. The Board of Directors of Bay National Bank
also has a number of standing committees, including the Asset & Liability
Committee, Audit Committee, Capital Committee, Compensation Committee, Executive
Committee, Nominating Committee, Governance Committee, Business Development
& Marketing Committee and Strategic Planning Committee. The
members for each of the Audit, Nominating and Compensation Committees of Bay
National Corporation and Bay National Bank are the same, and these committees
each typically hold joint meetings.
Bay
National Corporation’s policy requires that, in the absence of an unavoidable
conflict, all directors are expected to attend the annual meeting of Bay
National Corporation’s stockholders. Eleven of the members of the Board of
Directors of Bay National Corporation attended the 2007 annual
meeting.
Audit
Committee.
Bay National Corporation’s Audit Committee members are Edwin A. Rommel,
III, Chairman, James P. O’Conor, Henry H. Stansbury and Kenneth H.
Trout. The Board of Directors has determined that each of these
individuals is “independent,” as defined under the applicable rules and listing
standards of the NASDAQ Stock Market LLC and the rules and regulations of the
Securities and Exchange Commission. In addition, the Board of
Directors has determined that each committee member is able to read and
understand fundamental financial statements, including Bay National
Corporation’s consolidated balance sheet, income statement and cash flow
statement. In addition, the Board of Directors has determined that
Edwin A. Rommel, III is an “audit committee financial expert” as that term is
defined by the rules and regulations of the Securities and Exchange
Commission.
The Audit
Committee of Bay National Corporation and Bay National Bank held three meetings
in 2007. The Audit Committee’s primary responsibilities are to
assist the Board by monitoring (i) the integrity of Bay National
Corporation’s financial statements; (ii) the independent auditors’
qualifications and independence; (iii) the performance of Bay National
Corporation’s independent auditors and internal audit firm; (iv) Bay National
Corporation’s system of internal controls; (v) Bay National Corporation’s
financial reporting and system of disclosure controls; and (vi) Bay National
Corporation’s compliance with legal and regulatory requirements.
In
addition, the Audit Committee was appointed to oversee treatment of, and any
necessary investigation concerning, any employee complaints or concerns
regarding Bay National Corporation’s accounting and auditing
matters. Pursuant to procedures adopted by Bay National Corporation,
any employee with such complaints or concerns is encouraged to report them,
anonymously if they desire, to the Chair of the Audit Committee for
investigation, and appropriate corrective action, by the Audit
Committee.
The Audit
Committee has adopted a written charter, a copy of which is available on our
website at www.baynational.com.
Nominating
Committee.
Bay National Corporation’s Nominating Committee members are Carl A.J.
Wright, Chairman, Donald G. McClure, Jr., Robert L. Moore, H. Victor Rieger, Jr.
and Edwin A. Rommel, III. The Board of Directors has determined that
each of these individuals is “independent,” as defined under the applicable
rules and listing standards of the NASDAQ Stock Market LLC. The
Nominating Committee of Bay National Corporation and Bay National Bank held one
meeting during 2007. The Nominating Committee has adopted a written
charter, a copy of which is available on our website at www.baynational.com.
The
Nominating Committee determines whether the incumbent directors should stand for
reelection to the Board of Directors and identifies and evaluates candidates for
membership on the Board of Directors. In the case of a director
nominated to fill a vacancy on the Board of Directors due to an increase in the
size of the Board of Directors, the Nominating Committee recommends to the Board
of Directors the class of directors in which the director-nominee should
serve. The Nominating Committee also conducts appropriate inquiries
into the backgrounds and qualifications of possible director candidates and
reviews and makes recommendations regarding the composition and size of the
Board of Directors.
The
Nominating Committee also evaluates candidates for nomination to the Board of
Directors who are recommended by a stockholder. Stockholders who wish
to recommend individuals for consideration by the Nominating Committee to become
nominees for election to the Board may do so by submitting a written
recommendation to the Secretary of Bay National Corporation at 2328 West Joppa
Road, Suite 325, Lutherville, MD 21093. Submissions must include
sufficient biographical information concerning the recommended individual,
including age, five year employment history with employer names and a
description of the employer’s business, whether such individual can read and
understand basic financial statements and board memberships for the Nominating
Committee to consider. A written consent of the individual to stand
for election if nominated and to serve if elected by the stockholders must
accompany the submission. The Nominating Committee will consider
recommendations received by a date not later than 120 calendar days before the
date the Proxy Statement was released to stockholders in connection with the
prior year’s annual meeting for nomination at that annual
meeting. The Nominating Committee will consider nominations received
beyond that date at the annual meeting subsequent to the next annual
meeting.
In
addition to candidates recommended by stockholders, the Nominating Committee
identifies potential candidates through various methods, including but not
limited to, recommendations from existing directors, customers and
employees. In identifying and evaluating candidates for membership on
the Board of Directors, the Nominating Committee takes into account all factors
it considers appropriate. These factors may include, without
limitation:
|
·
|
Ensuring
that the Board of Directors, as a whole, is diverse and consists of
individuals with various and relevant career experience, relevant
technical skills, industry knowledge and experience, financial expertise
(including, if determined by the Committee to be appropriate, expertise
that could qualify a director as an “audit committee financial expert,” as
that term is defined by the rules of the Securities and Exchange
Commission), local or community ties;
and
|
|
·
|
Minimum
individual qualifications, including high moral character, mature
judgment, familiarity with the Company’s business and industry,
independence of thought and an ability to work
collegially.
|
The
selection process for new members on the Board of Directors is as
follows:
|
·
|
Full
Board of Directors identifies a need to add new Board member with specific
criteria or to fill a vacancy on the
Board.
|
|
·
|
Chair
of Committee or other designated Committee member initiates search seeking
input from Board members and Company management, and hiring a search firm,
if necessary.
|
|
·
|
Candidate
or slate of candidates that will satisfy specific criteria and/or
otherwise qualify for membership on the Board, based on the factors
described above, are identified and presented to the
Committee.
|
|
·
|
Chairman
of the Board, the Company’s CEO and all or at least one member of the
Committee interviews prospective candidate(s). Chair of
Nominating Committee will keep the full Board of Directors informed of
progress.
|
|
·
|
Committee
meets to consider and approve final candidate(s) (and conduct additional
interview if deemed necessary) or recommend candidate(s) to the full Board
of Directors.
|
Compensation
Committee.
Bay National Corporation’s Compensation Committee members are Henry H.
Stansbury, Chairman, Edwin A. Rommel, III, R. Michael Gill, James P. O’Conor and
Carl A.J. Wright. The Board of Directors has determined that
each of these individuals is “independent,” as defined under the applicable
rules and listing standards of the NASDAQ Stock Market LLC. The
Compensation Committee has adopted a written charter, a copy of which is
available on our website at www.baynational.com.
The Compensation Committee of Bay National Corporation and Bay National Bank
held two meetings in 2007.
The
Compensation Committee evaluates the performance of the President and Chief
Executive Officer and makes recommendations to the Board of Directors regarding
the President and Chief Executive Officer’s compensation. The Compensation
Committee also reviews the current industry practices regarding compensation
packages provided to executive management and the Board of Directors, including
salary, bonus, stock options and other perquisites. Based on
recommendations from the President and Chief Executive Officer, the Compensation
Committee approves compensation provided to members of executive management,
excluding the President and Chief Executive Officer. The Compensation
Committee also develops a recommendation for compensation of the President and
Chief Executive Officer and presents the recommendations to the Board of
Directors for approval. The Compensation Committee also evaluates and recommends
to the Board of Directors fees for non-employee board members.
DIRECTOR
COMPENSATION
The
following table sets forth information with respect to the compensation earned
by our directors during 2007:
DIRECTOR
COMPENSATION(3)
Name
|
Fees
Earned or Paid in Cash
(1)
($)
|
Stock
Awards
($)
|
Option
Awards
(2)
($)
|
Non-Equity
Incentive
Plan
Compensation
($)
|
Nonqualified
Deferred
Compensation
Earnings
($)
|
All
Other
Compensation
($)
|
Total
($)
|
Charles
E. Bounds
|
1,800
|
-
|
-
|
-
|
-
|
-
|
1,800
|
Gary
T. Gill
|
2,250
|
-
|
-
|
-
|
-
|
-
|
2,250
|
R.
Michael Gill
|
2,900
|
-
|
-
|
-
|
-
|
-
|
2,900
|
John
R. Lerch
|
4,500
|
-
|
-
|
-
|
-
|
-
|
4,500
|
Donald
G. McClure, Jr.
|
4,950
|
-
|
-
|
-
|
-
|
-
|
4,950
|
Robert
L. Moore
|
5,000
|
-
|
-
|
-
|
-
|
-
|
5,000
|
James
P. O’Conor
|
3,300
|
-
|
-
|
-
|
-
|
-
|
3,300
|
H.
Victor Rieger, Jr.
|
35,900
|
-
|
-
|
-
|
-
|
-
|
35,900
|
William
B. Rinnier
|
2,300
|
-
|
-
|
-
|
-
|
-
|
2,300
|
Edwin
A. Rommel, III
|
5,300
|
-
|
-
|
-
|
-
|
-
|
5,300
|
Henry
H. Stansbury
|
5,500
|
-
|
-
|
-
|
-
|
-
|
5,500
|
Kenneth
H. Trout
|
4,200
|
-
|
-
|
-
|
-
|
-
|
4,200
|
Eugene
M. Waldron, Jr.
|
3,000
|
-
|
-
|
-
|
-
|
-
|
3,000
|
Carl
A.J. Wright
|
2,700
|
-
|
-
|
-
|
-
|
-
|
2,700
|
The
following table provides information about our directors’ outstanding option
awards as of December 31, 2007:
OUTSTANDING
OPTION AWARDS AT FISCAL YEAR-END (2)
Option
Awards
|
Name
|
Number
of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
|
Number
of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Charles
E. Bounds
|
-
|
-
|
-
|
-
|
-
|
Gary
T. Gill
|
-
|
-
|
-
|
-
|
-
|
R.
Michael Gill
|
-
|
-
|
-
|
-
|
-
|
John
R. Lerch
|
-
|
-
|
-
|
-
|
-
|
Donald
G. McClure, Jr.
|
3,300
|
-
|
-
|
6.89
|
November
19, 2009
|
Robert
L. Moore
|
3,300
|
-
|
-
|
6.89
|
November
19, 2009
|
James
P. O’Conor
|
-
|
-
|
-
|
-
|
-
|
H.
Victor Rieger, Jr.
|
3,300
|
-
|
-
|
6.89
|
November
19, 2009
|
William
B. Rinnier
|
3,300
|
-
|
-
|
6.89
|
November
19, 2009
|
Edwin
A. Rommel, III
|
3,300
|
-
|
-
|
6.89
|
November
19, 2009
|
Henry
H. Stansbury
|
3,300
|
-
|
-
|
6.89
|
November
19, 2009
|
Kenneth
H. Trout
|
3,300
|
-
|
-
|
6.89
|
November
19, 2009
|
Eugene
M. Waldron, Jr.
|
3,300
|
-
|
-
|
6.89
|
November
19, 2009
|
Carl
A.J. Wright
|
-
|
-
|
-
|
-
|
-
|
|
1)
|
On
January 22, 2008, the Compensation Committee approved a 17% reduction in
director fees earned during 2007. On February 26, 2008, the
Board of Directors, pursuant to the Compensation Committee’s
recommendation, unanimously approved, at the director’s option, the
issuance of stock in lieu of cash for these reduced fees. The
issuance will be based on the closing stock price on March 3, 2008 of
$10.25 per share and cash will be issued for any fractional
shares. All directors except for Charles E. Bounds opted to
receive stock in lieu of cash owed for their 2007 director
fees. Charles E. Bound’s fees will be paid in cash for estate
planning purposes as he was deceased at the time of the Board’s
decision.
|
|
2)
|
In
November 2001, Bay National Corporation granted each of its then directors
options to purchase 3,300 shares of its common stock at $6.89 per share,
the then fair market value. A total of 42,900 options were
issued. The options vested in four equal installments with the
first 25% installment vesting on the third anniversary of the individual
director’s appointment to Bay National Corporation’s Board of Directors.
The remaining 25% installments vested on the fourth, fifth, and sixth
anniversary of the individual director’s appointment to the Board of
Directors. As of April 1, 2008, options to purchase 16,500 shares had been
exercised. Options to purchase 26,400 shares were exercisable as of, or
within 60 days of, April 1, 2008. The options expire on November 19,
2009.
|
Hugh W.
Mohler is a director and named executive officer of Bay National
Corporation. Mr. Mohler’s unexercised options at December 31, 2007
pursuant to the 2001 grant described above are included in the “Executive
Compensation” section below.
The fair
value of each option grant is estimated on the date of grant using the
Black-Scholes option pricing model with the following weighted average
assumptions used for grants during the year ended December 31:
|
|
|
2002
|
|
Dividend
yield
|
|
|
-
|
|
Expected
volatility
|
|
|
20.00
|
%
|
Risk-free
interest rate
|
|
|
4.17
|
%
|
Expected
lives (in years)
|
|
|
8
|
|
|
3)
|
Hugh
W. Mohler is our President and Chief Executive Officer. He is
not compensated for his services as
director.
|
Pursuant
to our Director Compensation Policy, Bay National Bank pays directors who are
not officers or employees of Bay National Corporation or Bay National Bank
(e.g., all directors other than Mr. Mohler) (“Qualified Directors”) $300 for
each attended regularly scheduled meeting and each special meeting of the Board
of Directors of Bay National Bank, and $150 for each attended regularly
scheduled meeting and each special meeting of a committee of the Board of
Directors of Bay National Bank. Qualified Directors of Bay National Bank are
also entitled to reimbursement for their reasonable travel costs related to
their attendance at board and committee meetings, and all directors of Bay
National Corporation and Bay National Bank are reimbursed for reasonable
expenses incurred on behalf of Bay National Corporation and Bay National
Bank. In addition, the chair of the Executive Committee and the
chair of the Audit Committee of the Board of Directors of Bay National Bank
receive an additional $100 for each attended regularly scheduled meeting and
each special meeting. The Director Compensation Policy also provides
that the Board of Directors or the compensation committee of the Board of
Directors of Bay National Bank may authorize discretionary payments to Qualified
Directors as a result of outstanding service by the Qualified
Director. Furthermore, the Director Compensation Policy provides that
the policy may be changed from time to time. During 2007, Bay
National Bank accrued $71,588 for these meeting fees and discretionary
payments.
Included
in the accrued fees was a special payment of $24,900 to Mr. H. Victor Rieger,
Jr., a director of Bay National Corporation and Bay National Bank, in
recognition of Mr. Rieger’s outstanding service as a key member of Bay National
Bank’s Executive Committee. Since 2001, Bay National Bank has made
annual special payments to Mr. Rieger in recognition of his outstanding
service.
During
2007, Bay National Corporation and Bay National Bank did not reimburse any
travel costs or expenses.
Bay
National Corporation does not pay cash remuneration to its
directors. It is expected that unless and until Bay National
Corporation becomes actively involved in additional businesses other than owning
all the capital stock of Bay National Bank, no separate cash compensation will
be paid to the directors of Bay National Corporation in addition to that paid to
them by Bay National Bank in their capacities as directors of Bay National
Bank. However, Bay National Corporation may determine in the future
that such separate cash compensation is appropriate.
EXECUTIVE
COMPENSATION
Summary
Compensation Table The following table sets
forth the compensation paid by Bay National Corporation and Bay National Bank to
its named executive officers (“NEO”) including the Chief Executive Officer of
Bay National Corporation and Bay National Bank and any other executive officer
of Bay National Corporation and Bay National Bank who received compensation in
excess of $100,000 during 2007.
Summary Compensation
Table
|
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan Compensation
($)
|
Nonqualified
Deferred Compensation Earnings
($)
|
All
Other Compensation
($)
|
Total
($)
|
Hugh
W. Mohler,
President
and Chief
Executive
Officer (1)
|
2007
|
240,000
|
10,000
|
-
|
-
|
-
|
-
|
10,798
|
260,798
|
|
2006
|
225,000
|
100,000
|
-
|
28,412
|
-
|
-
|
11,313
|
364,725
|
|
2005
|
200,000
|
75,000
|
-
|
-
|
-
|
-
|
9,662
|
284,662
|
Richard
J. Oppitz,
Executive
Vice
President
(2)
|
2007
|
154,000
|
10,000
|
-
|
-
|
-
|
-
|
7,521
|
171,521
|
|
2006
|
140,000
|
56,000
|
-
|
-
|
-
|
-
|
2,544
|
198,544
|
|
2005
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Mark
A. Semanie,
Executive
Vice
President
and CFO (3)
|
2007
|
185,000
|
10,000
|
-
|
-
|
-
|
-
|
9,084
|
204,084
|
|
2006
|
180,000
|
72,000
|
-
|
14,215
|
-
|
-
|
9,410
|
275,615
|
|
2005
|
165,000
|
60,000
|
-
|
-
|
-
|
-
|
8,270
|
233,270
|
Richard
C. Springer,
Executive
Vice
President
(4)
|
2007
|
118,664
|
-
|
51,300
|
-
|
-
|
-
|
6,786
|
176,750
|
|
2006
|
116,923
|
100,000
|
33,162
|
-
|
-
|
-
|
3,866
|
253,951
|
|
2005
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1) Other
compensation includes $10,026, $10,651 and $9,000 of contributions to the
Company’s 401(k) retirement plan for 2007, 2006 and 2005, respectively, and
$772, $662 and $651 of term life insurance premiums paid by the Bank on Mr.
Mohler’s behalf for 2007, 2006 and 2005, respectively.
(2) Other
compensation includes $6,859 and $1,938 of contributions to the Company’s 401(k)
retirement plan and $662 and $606 of term life insurance premiums paid by the
Bank on Mr. Oppitz’s behalf for 2007 and 2006, respectively.
(3) Other
compensation includes $8,202, $8,528 and $7,388 of contributions to the
Company’s 401(k) retirement plan for 2007, 2006 and 2005, respectively, and
$882, $882 and $868 of term life insurance premiums paid by the Bank on Mr.
Semanie’s behalf for 2007, 2006 and 2005, respectively.
(4) Pursuant
to a separation agreement, Mr. Springer resigned effective July 20,
2007. Other compensation includes $6,271 and $3,462 of contributions
to the Company’s 401(k) retirement plan for 2007 and 2006, respectively, and
$515 and $404 of term life insurance premiums paid by the Bank on Mr. Springer’s
behalf for 2007 and 2006, respectively.
EMPLOYMENT
AGREEMENTS
On June
1, 2006, Bay National Bank (the “Bank”) and Hugh W. Mohler entered into an
Amended and Restated Employment Agreement (the “Restated Agreement”), pursuant
to which Mr. Mohler will continue to serve as President and Chief Executive
Officer of the Bank and the Company.
The
Restated Agreement provides for an initial annual base salary of $225,000. In
addition, Mr. Mohler is eligible for annual incentive compensation bonuses as
determined by the Bank’s board of directors and is entitled to participate in
any bonus, incentive and other executive compensation program available to
senior management. As of January 1, 2008, Mr. Mohler’s annual base
salary was increased from $240,000 to $255,000.
The
Restated Agreement has an initial three-year term that, unless written notice
that the Restated Agreement will not be renewed is provided to Mr. Mohler, is
renewed for an additional year on the anniversary of its effective date, such
that the remaining term at each such anniversary date will be three years. The
Restated Agreement provides for earlier termination in certain
circumstances.
If Mr.
Mohler’s employment is terminated by the Bank without Cause or upon Mr. Mohler’s
Permanent Disability, by Mr. Mohler for Good Reason or upon his Permanent
Disability (all as defined in the Restated Agreement), or upon Mr. Mohler’s
death, Mr. Mohler (or his personal representative) will be entitled to receive
an amount equal to his current base salary plus all benefits he is then
receiving for a period equal to the remaining term of the Restated Agreement
plus any incentive compensation already accrued for that year.
If the
Bank does not renew the Restated Agreement by providing the notice of
nonrenewal, then, assuming a Change of Control (as defined in the Restated
Agreement) has not occurred, Mr. Mohler will be entitled to receive at the end
of the then-current term of employment an amount equal to 50% of his base salary
for the preceding 12-month period either in a lump sum or in six equal monthly
installments, at his option, as well as continuation of employee benefits
substantially similar to those he is then receiving for a period of six
months.
If,
within 12 months following a Change in Control, the Restated Agreement is
terminated by Mr. Mohler for any reason or by the Bank without Cause, then,
instead of the payments provided for above, Mr. Mohler will be entitled to (i) a
lump sum payment equal to the sum of (a) 2.99 times his average annual taxable
compensation during the last five years minus the aggregate present value of any
other payments he receives that are treated as contingent upon the Change in
Control and (b) a pro-rated bonus; (ii) immediate vesting of all stock awards;
(iii) immediate exercisability of any unexercised stock options; and (iv)
continued medical coverage for two years as available to the Bank’s other
employees.
If any
severance payment or distribution made to Mr. Mohler is determined to be subject
to the limitations of Section 280G of the Internal Revenue Code of 1986, as
amended (the “Code”) (a “Parachute Payment”), Mr. Mohler will be
entitled to a full tax “gross-up” to cover any excise taxes on such amount,
unless the total value of all such payments and benefits (as measured for
purposes of Section 280G) exceeds the taxable threshold by ten percent or less,
in which event the payments and benefits will instead be reduced so as to fall
below the taxable threshold.
Under the
Restated Agreement, Mr. Mohler is bound by confidentiality and proprietary
information covenants during his employment and for three years thereafter. He
is also prohibited, during the period that any payments in connection with the
termination or non-renewal of the Restated Agreement are being made, from
competing with the Bank, soliciting its customers, and soliciting, recruiting or
hiring its employees (other than his administrative assistant).
If the
change of control severance payment were required to be paid in 2008, Mr. Mohler
would receive approximately $760,000.
Bay
National Bank has purchased "key man" life insurance on Mr. Mohler.
On June
1, 2006, the Bank entered into an employment agreement with Richard C. Springer
to serve as Executive Vice President of the Bank.
The
Agreement provided for (i) an initial annual base salary of $200,000; (ii) a
potential maximum annual bonus of 60% of base salary as determined by the Board;
(iii) subject to certain vesting requirements and continued employment, a grant
of 12,000 shares of the Company’s common stock; (iv) $30,000 paid to Mr.
Springer on June 1, 2006; and (v) $30,000 payable to Mr. Springer on December 1,
2006 if he was then employed with the Bank pursuant to the Agreement and was not
then suspended without pay as provided for in the Agreement. Mr.
Springer also was entitled to participate in any bonus, incentive and other
executive compensation program available to senior management.
The
Agreement had an initial three-year term that, unless written notice that the
Agreement would not be renewed was provided to Mr. Springer, was renewed for an
additional year on the anniversary of its effective date, such that the
remaining term at each such anniversary date would be three years. The Agreement
provided for earlier termination in certain circumstances.
The
agreement also provided for the payment of certain payments to Mr. Springer and
immediate vesting of his stock and option awards if the Bank terminated his
employment without Cause or upon Mr. Springer’s Permanent Disability or if Mr.
Springer terminated his employment for Good Reason (all as defined in the
Agreement), or if the Bank did not renew the Agreement. The Agreement
also contained confidentiality, non-competition and non-solicitation
provisions.
As
previously disclosed, Mr. Springer voluntarily resigned from the Bank effective
July 20, 2007. Pursuant to a Separation Agreement entered into
between Mr. Springer and the Bank, Mr. Springer received 3,300 shares of Company
stock pursuant to the terms of his employment agreement. Mr. Springer
did not receive any additional compensation in connection with his resignation
other than compensation owed for services provided prior to the effective date
of his resignation. In addition, the Bank released Mr. Springer from
the non-competition and non-solicitation provisions of the
Agreement.
Mark A.
Semanie. Bay
National Bank has agreed to employ Mr. Semanie on an at will basis at an annual
rate of pay of $200,000 as of January 1, 2008. Mr. Semanie is also eligible for
incentive bonuses at the discretion of the Compensation Committee of the Board
of Directors, and is entitled to all benefits available to full time employees
of Bay National Bank. Mr. Semanie is not a party to a written agreement with Bay
National Bank.
Richard J.
Oppitz. Bay National Bank has agreed to employ Mr.
Oppitz on an at will basis at an annual rate of pay of $175,000 as of January 1,
2008. Mr. Oppitz is also eligible for incentive bonuses at the discretion of the
Compensation Committee of the Board of Directors, and is entitled to all
benefits available to full time employees of Bay National Bank. Mr. Oppitz is
not a party to a written agreement with Bay National Bank.
Outstanding
Equity Awards at Fiscal Year-End The following table
provides information about our NEOs’ unexercised options, stock awards that have
not vested, and equity incentive plan awards outstanding as of December 31, 2007
and the market value thereof as follows:
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
|
Option
Awards
|
Stock
Awards
|
Name
|
Number
of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
|
Number
of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
(#)
|
Market
Value
of
Shares
or Units of
Stock
That
Have
Not
Vested
($)
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have
Not
Vested
(#)
|
Equity
Incentive
Plan
Awards:
Market
or
Payout
Value
Of
Unearned
Shares,
Units
Or
Other
Rights
That
Have
Not
Vested
($)
|
|
Hugh
W. Mohler (1)
|
44,287
|
-
|
-
|
6.89
|
November
19,
2009
|
-
|
-
|
-
|
-
|
|
Richard
J. Oppitz
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Mark
A. Semanie (2)
|
20,493
|
-
|
-
|
6.89
|
November
19,
2009
|
-
|
-
|
-
|
-
|
|
Richard
C. Springer
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
1)
|
In
November 2001, Bay National Corporation granted Mr. Mohler options to
purchase 40,987 shares of its common stock at $6.89 per share, the then
fair market value. The options vested in four equal
installments with the first 25% installment vesting on the third
anniversary of Mr. Mohler’s date of employment with Bay National
Bank. The remaining 25% installments vested on the fourth,
fifth and sixth anniversary of Mr. Mohler’s employment
date. Mr. Mohler was also granted options to purchase
3,300 shares of its common stock for his role as director of Bay National
Corporation (see “Director Compensation” section above for detailed
information on this grant).
|
|
2)
|
In
November 2001, Bay National Corporation granted Mark A. Semanie options to
purchase 20,493 shares of its common stock at $6.89 per share, the then
fair market value. The options vested in four equal
installments with the first 25% installment vesting on the third
anniversary of Mr. Semanie’s date of employment with Bay National
Bank. The remaining 25% installments vested on the fourth,
fifth and sixth anniversary of Mr. Semanie’s employment
date.
|
|
3)
|
The
fair value of each option grant is estimated on the date of grant using
the Black-Scholes option pricing model with the following weighted average
assumptions used for grants during the year ended December
31:
|
|
|
2002
|
|
Dividend
yield
|
|
-
|
|
Expected
volatility
|
|
20.00
|
%
|
Risk-free
interest rate
|
|
4.17
|
%
|
Expected
lives (in years)
|
|
8
|
|
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The
Company’s directors and executive officers, and persons who own more than 10% of
the Company’s Common Stock, are required to file with the Securities and
Exchange Commission initial reports of beneficial ownership and reports of
changes in beneficial ownership of any securities of the Company. To the
Company’s knowledge, based solely on a review of the copies of such reports
furnished to the Company and written representations that no other reports were
required, all of the Company’s directors, executive officers and beneficial
owners of greater than 10% of the Company’s Common Stock made all required
filings during the fiscal year ended December 31, 2007.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Lucy
Mohler, the spouse of Hugh W. Mohler, serves as Bay National Corporation’s and
Bay National Bank’s Senior Vice President of Marketing and Investor
Relations. E. Matthew Waldron, III, the son of director Eugene M.
Waldron, and C. Bradford Wright, the son of director Carl A.J. Wright are
employees of Bay National Bank. None earned aggregate compensation in excess of
$120,000 during 2006 or 2007.
Director
John R. Lerch owns a 100% interest in the property being leased for Bay National
Bank's Salisbury, Maryland branch office. Bay National Corporation’s lease
payments totaled $27,500 during each of 2006 and 2007.
Director
Carl A.J. Wright is chief executive officer of Stephen James Associates, an
executive search and staffing firm. During 2007, Bay National Bank
utilized their services for the hiring of a commercial lender. Bay
National Bank’s payment for this service totaled $60,000 during
2007.
Director
Gary T. Gill is president and chief executive officer of the MacKenzie
Companies, which owns the property being leased for Bay National Bank's
Lutherville, Maryland corporate and branch offices. Bay National Corporation was
a party to two leases with this landlord dated July 16, 1999. These leases
were effectively combined during 2004 and extended to February 28,
2010. Bay National Corporation has the right to extend the leases for
one additional five year term, to February 29, 2015.
As of
December 31, 2007, Bay National Corporation was leasing 4,067 square feet on the
first floor of the building, 6,206 square feet on the third floor of the
building, and 1,429 square feet in the basement of the building and was paying
$29,979 in monthly rent, which includes Bay National Corporation’s share of
taxes and building operating costs. Bay National Corporation paid the
landlord $350,450 during 2006 and $358,000 during 2007.
The
leases were originally entered into well in advance of Mr. Gill’s appointment to
the Board of Directors in January 2003. Although Bay National Corporation did
not have an independent third party reevaluate the lease terms in connection
with the renewal, or evaluate the terms of the lease of additional space,
management believes that the terms of the lease are at least as favorable as
could be obtained from an independent third party.
In
addition, Bay National Corporation paid another division of the Mackenzie
Companies for construction work performed to modify some of the leased space to
meet the Company’s needs. Bay National Corporation paid the contracting company
$16,179 and $29,302 during 2006 and 2007, respectively.
Some of
Bay National Bank’s directors and officers and the business and professional
organizations with which they are associated have banking transactions with Bay
National Bank in the ordinary course of business. It is Bay National Bank’s
policy that any loans and loan commitments will be made in accordance with
applicable laws and on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions with
other persons of comparable credit standing. Loans to directors and officers
must comply with Bay National Bank's lending policies and statutory lending
limits; therefore, directors with a personal interest in any loan application
are excluded from considering any such loan application.
The
officers and directors of Bay National Corporation and Bay National Bank have
loans due to Bay National Bank in the amounts of $13,520,043 and $11,245,284 at
December 31, 2007 and 2006, respectively. All loans were made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with unaffiliated third
parties and do not involve more than the normal risk of repayment or present
other unfavorable features.
PROPOSAL
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
The Board
of Directors has ratified and confirmed the Audit Committee’s selection of
Stegman & Company as Bay National Corporation’s independent registered
public accountants for 2008, subject to ratification by the
stockholders. Stegman & Company has served as Bay National
Corporation’s independent public accountants since inception in 1999 and is
considered by the Audit Committee and management to be well
qualified. No qualified opinions have been issued during such
engagement.
A
representative of Stegman & Company will be present at the Annual Meeting to
respond to appropriate questions and to make a statement if he or she desires to
do so.
A
majority of votes cast at the meeting is required for approval of this
proposal. Abstentions and broker non-votes will have no effect on the
vote for this proposal. If the stockholders fail to ratify this
appointment, the Audit Committee will reconsider whether to retain Stegman &
Company and may retain that firm or another firm without resubmitting the matter
to our stockholders. Even if the appointment is ratified, the Audit
Committee may, in its discretion, direct the appointment of a different
independent registered public accounting firm at anytime during the year if it
determines that such change would be in the Company’s best interests and in the
best interests of our stockholders.
The
Board of Directors recommends that stockholders vote “FOR” the ratification of
the appointment of Stegman & Company as independent registered public
accountants for 2008.
AUDIT
COMMITTEE REPORT
The Audit
Committee has: (1) reviewed and discussed Bay National Corporation’s
audited financial statements with Bay National Corporation’s management and
representatives of Stegman & Company, the independent auditors;
(2) discussed with Stegman & Company all matters required to be
discussed by SAS No. 61, as modified or supplemented; and (3) has
received the written disclosures and the letter from Stegman & Company
required by Independence Standards Board Standard No. 1, as modified or
supplemented and has discussed with Stegman & Company the independence of
Stegman & Company. Based on its review and discussions, the Audit
Committee recommended to the Board of Directors that the audited financial
statements for the year ended December 31, 2007 be included in Bay National
Corporation’s Annual Report on Form 10-K for the last fiscal
year.
Edwin
A. Rommel, III, Chairman
James
P. O’Conor
Henry
H. Stansbury
Kenneth
H. Trout
Audit
and Non-Audit Fees.
The
following table presents fees for professional audit services rendered by
Stegman & Company for the audit of Bay National Corporation’s annual
consolidated financial statements for the years ended December 31, 2007 and
December 31, 2006 and fees billed for other services rendered by Stegman &
Company during those periods.
|
|
|
|
|
Years
Ended December 31
|
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
Audit
Fees (1)
|
|
|
|
$
|
58,827
|
|
$
|
58,131
|
|
Audit
Related Fees (2)
|
|
|
|
|
-
|
|
|
-
|
|
Tax
Fees (3)
|
|
|
|
|
4,750
|
|
|
5,400
|
|
All
Other Fees (4)
|
|
|
|
|
-
|
|
|
-
|
|
Total
|
|
|
|
$
|
63,577
|
|
$
|
63,531
|
|
(1) Audit
Fees consist of fees billed for professional services rendered for the audit of
the Company’s consolidated annual financial statements and review of the interim
consolidated financial statements included in quarterly reports and services
that are normally provided by Stegman & Company in connection with statutory
and regulatory filings or engagements.
(2)
Audit-Related Fees would normally consist of fees billed for assurance and
related services that are reasonably related to the performance of the audit or
review of the Company’s consolidated financial statements and are not reported
under “Audit Fees.”
(3) Tax
Fees consist of fees billed for professional services rendered for federal and
state tax compliance, tax advice and tax planning.
(4) All
Other Fees would normally consist of fees for services other than the services
reported above.
Policy
on Audit Committee Pre-Approval of Audit and Non-Audit Services of Independent
Registered Public Accounting Firm.
Before
the accountant is engaged by Bay National Corporation or Bay National Bank to
render any audit or non-audit services, the engagement is approved by Bay
National Corporation’s Audit Committee.
Bay
National Corporation has adopted a formal process by which shareholders may
communicate with the Board of Directors. If you would like to
communicate with the Board of Directors, including a committee of the Board of
Directors or individual directors, you can send an email to the Secretary of Bay
National Corporation, [email protected], or write to the following
address:
Bay
National Corporation
Board of
Directors
c/o
Corporate Secretary
Mark A.
Semanie
2328 West
Joppa Road, Suite 325
Lutherville,
Maryland 21093
You may
also choose to communicate directly with the Board of Directors, including a
committee of the Board of Directors or individual directors, by
contacting:
Henry H.
Stansbury
Agency
Services, Inc.
Suite
200
939
Elkridge Landing Road
Linthicum,
Maryland 21090
The
Corporate Secretary and/or Henry Stansbury will compile all communications and
will submit them to
the Board
of Directors, the Committee or the individual Directors on a periodic
basis.
YOU
MAY MAKE YOUR COMMUNICATIONS ANONYMOUSLY AND/OR CONFIDENTIALLY.
STOCKHOLDER
PROPOSALS FOR THE 2009 ANNUAL MEETING
In order
to be included in the proxy materials for Bay National Corporation’s 2009 Annual
Meeting, shareholder proposals submitted to Bay National Corporation in
compliance with SEC Rule 14a-8 (which concerns shareholder proposals that are
requested to be included in a company’s proxy statement) must be received in
written form at Bay National Corporation’s executive offices on or before
December 16, 2008. In order to curtail controversy as to compliance
with this requirement, shareholders are urged to submit proposals to the
Secretary of Bay National Corporation by Certified Mail—Return Receipt
Requested.
Pursuant
to the proxy rules under the Securities Exchange Act of 1934, as amended, Bay
National Corporation’s stockholders are notified that the deadline for providing
us with timely notice of any stockholder proposal to be submitted outside of the
Rule 14a-8 process for consideration at the 2009 Annual Meeting will be March 1,
2009. As to all such matters which we do not have notice on or prior
to that date, discretionary authority to vote on such proposal will be granted
to the persons designated in Bay National Corporation’s proxy related to the
2009 Annual Meeting.
OTHER
BUSINESS
The
management of the Bay National Corporation does not intend to present any other
matters for action at the Annual Meeting, and the Board of Directors has not
been informed that other persons intend to present any matters for action at the
Annual Meeting. However, if any other matter should properly come
before the Annual Meeting, the persons named in the accompanying form of proxy
intend to vote thereon, pursuant to the proxy, in accordance with their judgment
of the best interests of Bay National Corporation.
ANNUAL
REPORT
The Bay
National Corporation’s Annual Report has been mailed with this proxy
statement. Copies of the report will also be available at the Annual
Meeting on May 27, 2008.
A
copy of Bay National Corporation’s Annual Report, including financial statements
and the schedules thereto, will be furnished by management to any beneficial
owner of its securities without charge upon receipt of a written request from
such person. Requests in writing should be directed to:
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Bay
National Corporation
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c/o
Corporate Secretary
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Mark
A. Semanie
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2328
West Joppa Road, Suite 325
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Lutherville,
MD 21093
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Each
request must set forth a good faith representation that, as of April 1, 2008,
the record date for the Annual Meeting of Stockholders, the person making the
request was a beneficial owner of securities entitled to vote at such
meeting.
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REVOCABLE
PROXY
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[X]
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PLEASE
MARK VOTES
AS
IN THIS EXAMPLE
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BAY
NATIONAL CORPORATION
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With-
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For
All
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For
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hold
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Except
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REVOCABLE
PROXY FOR
ANNUAL
MEETING OF SHAREHOLDERS
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1. Elect three Directors:
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TUESDAY,
MAY 27, 2008
SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS
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John R. Lerch; James P. O’Conor; and
Carl A.J. Wright
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The
undersigned hereby appoints Warren F. Boutilier and Hugh L. Robinson II,
and each of them, to vote all of the shares of Bay National Corporation
standing in the undersigned's name at the Annual Meeting of Shareholders,
to be held at 2328 West Joppa Road, Lutherville, Maryland, 21093, on
Tuesday, May 27, 2008 at 2:30 p.m., local time. The undersigned hereby
revokes any and all proxies heretofore given with respect to such
meeting.
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TO WITHHOLD AUTHORITY FOR ANY OF THE ABOVE
NAMED NOMINEES, PRINT THE
NOMINEE'S NAME ON THE LINE BELOW:
_____________________________________________________
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For
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Against
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Abstain
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2. Ratify the appointment of Stegman
& Company as
independent registered public
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accountants to audit the financial
statements of Bay National
Corporation for 2008.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
EACH OF THE LISTED PROPOSALS.
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This proxy will be voted as specified above. If no choice is specified,
the proxy will be voted “FOR” Management's
nominees to the
Board
of
Directors and “FOR” the ratification of Stegman &
Company
as our
independent registered public accounting firm.
If any other business
is presented at
the Annual Meeting, this
revocable proxy will
be voted in the discretion of the proxies.
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Please
be sure to sign and date
this
Proxy in the box below.
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Date
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Shareholder
sign
above Co-holder
(if any) sign above
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Detach
above card, sign, date and mail in postage paid envelope provided.
BAY
NATIONAL CORPORATION
(Please
sign exactly as your name appears. When signing as an executor,
administrator, guardian, trustee or attorney, please give your title as
such.
If
signer is a corporation, please sign the full corporate name and then an
authorized officer should sign his name and print his name and title below
his signature. If the shares are held in joint name, all joint owners
should sign.)
PLEASE
DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED RETURN
ENVELOPE.
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IF YOUR
ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED BELOW AND
RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.
_________________________________________________
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__________________________________________________
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__________________________________________________
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