Attached files
| file | filename |
|---|---|
| EX-31.2 - EXHIBIT 31.2 - YADKIN FINANCIAL Corp | a12-31x1210kxa2exhibit312.htm |
| EX-31.1 - EXHIBIT 31.1 - YADKIN FINANCIAL Corp | a12-31x1210kxa2exhibit311.htm |
U.S. Securities and Exchange Commission
Washington, DC 20549
FORM 10-K/A
(Amendment No. 2)
[ X ] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2012. |
Commission File Number 000-52099
Yadkin Financial Corporation
North Carolina | (Exact name of registrant as specified in its charter) | 20-4495993 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
209 North Bridge Street
Elkin, North Carolina 28621-3404
(Address of principal executive offices)
(336) 526-6300
(Registrant's telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Exchange Act:
Title of each class | Exchange on which registered | |
Common Stock, Par Value $1.00 Per Share | The NASDAQ Stock Market, LLC | |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes [ ] No [ X ]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes [ ] No [ X ]
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [ X ] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [ ] No [ ]
Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] | Accelerated filer [ ] | ||||
Non-accelerated filer [ ] (Do not check if smaller reporting company) | Smaller reporting company [ X ] | ||||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes [ ] No [ X ]
The aggregate market value of the voting stock of the registrant held by non-affiliates was approximately $48 million based on the closing sale price of $2.65 per share on June 30, 2012. For purposes of the foregoing calculation only, all directors and executive officers of the registrant have been deemed affiliates. The number of shares of common stock outstanding as of November 4, 2013 was 14,383,986.
Documents Incorporated by Reference
None.
Explanatory Statement to Form 10-K Amendment
This Form 10-K/A is being filed solely for the purpose of changing the Summary Compensation Table in Item 11 by moving amounts from the column entitled “Non-Equity Incentive Plan Compensation” to the column entitled “Bonus” and adding a descriptive footnote with respect to such amounts.
In addition, as required by Rule 12b-15 under the Securities Exchange Act of 1934 (the “Exchange Act”), new certifications by our principal executive officer and principal financial officer are filed with this Form 10-K/A.
For purposes of this Form 10-K/A, and in accordance with Rule 12b-15 under the Exchange Act, Item 11 of the Form 10-K/A filed on March 14, 2013 (the “Original Form 10-K/A”) has been amended and restated in its entirety. Except as stated herein, this Form 10-K/A does not reflect events occurring after the filing of the Original Form 10-K/A and no attempt has been made in this Form 10-K/A to modify or update other disclosures as presented in the Original Form 10-K/A or in the Form 10-K for the fiscal year ended December 31, 2012, which was filed with the Securities and Exchange Commission on February 28, 2013. Accordingly, this Form 10-K/A should be read in conjunction with our filings with the SEC subsequent to the filing of the Original Form 10-K/A.
Item 11 - Executive Compensation
Executive Compensation
The following table summarizes for the fiscal years ended December 31, 2012 and 2011, the current and long-term compensation for the CEO and the two most highly compensated executive officers other than the CEO (the "named executive officers") for the year ended December 31, 2012. Each component of compensation is discussed in further detail in the footnotes following the table.
Summary Compensation Table
The following table summarizes for the fiscal years ended December 31, 2012 and 2011, the current and long-term compensation for the CEO, the CFO and the most highly compensated executive officers other than the CEO and CFO. Each component of compensation is discussed in further detail in the footnotes following the table.
Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($) | Option Awards ($) (2) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) (3) | Total ($) | |||||||||||
Joseph H. Towell | 2012 | 425,000 | 250,000 | 345,000 | — | — | — | 36,281 | 1,056,281 | |||||||||||
President and Chief | 2011 | 325,000 | — | 85,400 | — | — | — | 36,490 | 446,890 | |||||||||||
Executive Officer | ||||||||||||||||||||
Jan H. Hollar | 2012 | 240,000 | 70,000 | 138,000 | — | — | — | 26,143 | 474,143 | |||||||||||
Executive Vice President | 2011 | 205,000 | — | 24,400 | — | — | — | 13,128 | 242,528 | |||||||||||
& Chief Financial Officer | ||||||||||||||||||||
W. Mark DeMarcus | 2012 | 300,000 | 70,000 | 184,000 | — | — | — | 40,609 | 594,609 | |||||||||||
Executive Vice President | 2011 | 220,000 | — | 48,800 | — | — | — | 40,206 | 309,006 | |||||||||||
& Chief Operating Officer | ||||||||||||||||||||
(1) | These amounts represent bonuses paid as a result of accomplishment of strategic plan goals related to credit, capital, and other performance metrics during 2012 as approved by the Compensation Committee of the Board of Directors. |
(2) | Please refer to Footnote 12 in the Consolidated Financial Statements in the Company's Form 10-K for the year ended December 31, 2012 for a discussion of the assumptions made in the valuation of the option awards. |
(3) | Details on the amounts reported for “All Other Compensation” in 2012 are set forth in the following supplementary table: |
Details on All Other Compensation Reported in the Summary Compensation Table for 2012
Named Executive Officer (1) | Auto Provision ($) | Country Club/ Membership and Dues ($) | Medical Insurances ($) | Employer 401(k) Match ($) | Total ($) | |||||
Joseph H. Towell | 10,249 | 5,330 | 13,404 | 7,298 | 36,281 | |||||
Jan H. Hollar | 12,964 | — | 6,553 | 6,626 | 26,143 | |||||
W. Mark DeMarcus | 12,055 | 6,238 | 16,789 | 5,527 | 40,609 | |||||
(1) None of the above listed individuals received director's fees for 2012.
Outstanding Equity Awards at Fiscal Year-End
The Outstanding Equity Awards at Fiscal Year-End Table below reflects each named executive officer's equity award holdings at December 31, 2012 on an individual award basis.
Option Awards | Stock Awards | |||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable (1) | Number of Securities Underlying Unexercised Options (#) Unexercisable | Options 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 | ||||||||
Joseph H. Towell | 10,000 | — | 14.91 | 2/19/2018 | 185,000 | 543,900 | — | — | ||||||||
Jan H. Hollar | 3,000 | 2,000 | 3.84 | 12/8/2019 | 66,667 | 196,001 | — | — | ||||||||
W. Mark DeMarcus | 8,517 | — | 10.21 | 3/18/2018 | 93,334 | 274,402 | — | — | ||||||||
(1) | These options vest at 20% each year, beginning on the first anniversary of the grant date. |
(2) | Restricted shares not vested includes shares issued with performance and service conditions. Vesting of these shares is based on achieving certain earnings per share and credit performance standards and requires a minimum of two years of service. Performance based restricted shares not vested are as follows: Towell: 150,000; Hollar: 60,000; and DeMarcus: 80,000. |
Terms of Named Executive Officer Employment Agreements
The Company has employment agreements with most of its senior executive officers. In November 2010, the Bank and Joseph H. Towell, President and CEO of the Bank, entered into an amendment to the amended and restated employment contract entered into in December 2008 (the “Towell Agreement”) to extend the term to three years. In June 2010, the Company and the Bank entered into an employment contract with Jan H. Hollar, CFO of the Company and the Bank (the “Hollar Agreement”), for a term of one year. The Hollar Agreement was amended in November 2010 to extend the term of the employment contract from one year to three years. In November 2010, the Company and the Bank entered into an employment contract with W. Mark DeMarcus, the Chief Operating Officer of the Bank (the “DeMarcus Agreement”, together with the Towell Agreement and the Hollar Agreement, the "Employment Agreement"), for a term of three years.
On each anniversary of the effective date of each Employment Agreement, the term of the Employment Agreement is automatically extended for an additional one year period beyond the then effective expiration date unless written notice from the Bank or the officer is received 90 days prior to the anniversary date advising the other that the Employment Agreement shall not be further extended. The officers have the option to terminate the Employment Agreements upon 60 days' written notice to the Bank. While each officer is employed by the Bank and for one year following termination of employment for Messrs. Towell, and DeMarcus, and for two years following termination of employment for Ms. Hollar, the Employment Agreements prohibit each officer from competing with the Bank.
The Company participated in the Troubled Asset Relief Program Capital Purchase Program (the "CPP"), which limited certain types of executive compensation that could be provided to executives until the U.S. Treasury sold all of its Fixed Rate Cumulative Preferred Stock, Series T and Series T-ACB to private investors through a registered public offering on September 18, 2012. As of September 18, 2012, the CPP constraints on executive compensation ceased to be applicable to the Company.
Under the Employment Agreements, the officers receive an annual cash salary, with annual adjustments and discretionary bonuses, which were subject to the CPP constraints until September 28, 2012, as determined by the Board of Directors. Under the Employment Agreements, each officer is also entitled to all fringe benefits generally provided by the Bank to its employees and its executive officers.
Under the terms of the Employment Agreements, each officer has the right to terminate his employment if he determines, in his sole discretion, that within 24 months after a “change in control,” there has been a material diminution in (i) his base compensation, (ii) his authority, duties, or responsibilities, (iii) the authority, duties, or responsibilities of the person to whom he is required to report, (iv) the budget over which he retains authority or either a (v) material change in the geographic location at which he must perform the services or (vi) any other action or inaction that constitutes a material breach by the Company or Bank of the Employment Agreement. A “change of control” is defined to mean as defined by Treasury Regulation § 1.409A-3(i)(5) as to the Company or the Bank.
The Bank has the right, under each Employment Agreement, to reduce any such payments as necessary under the Internal Revenue Code to avoid the imposition of excise taxes on the officer or the disallowance of a deduction to the Bank. See Post-Employment Benefits - Potential Payments Upon Termination following a Change in Control below for a further discussion of these payments.
As discussed above, the Company participated in the CPP established under TARP until September 18, 2012. As required by the terms of the CPP, our senior executive officers entered into agreements with the Company that amended the executive compensation programs that such officers participate in. These agreements ceased to be effective as of September 18, 2012.
Post-Employment Benefits
If a named executive officer exercises any vested stock options held by the officer on or before the final date of employment, they may realize gain on the difference between the exercise price and the fair market value of the stock options. See Outstanding Equity Awards at Fiscal Year-End above for a listing of each officer's stock option holdings. Using the fair market value of the Company's common stock as of December 31, 2012, there would have been no gain due to a decrease in the stock price. Pursuant to the terms of their employment agreements, in the event a named executive officer's employment is terminated by the Company for any reason other than for cause, or in the event of certain events following a change in control, the officers will continue to receive certain payments, as described below. The named executive officers had waived this right until the CPP constraints ceased to be applicable on September 18, 2012.
Potential Payments Upon Termination following a Change in Control
Under the terms of the Employment Agreements with Mr. Towell, Ms. Hollar, or Mr. DeMarcus upon the occurrence of the events constituting termination of employment described above under Terms of the Employment Agreements, the Bank has agreed to pay each officer an amount equal to 2.99 times his or her “base amount” as defined in Section 280G(b)(3) of the Internal Revenue Code. This compensation is payable in a single lump sum payment due 15 days following his or her termination.
Upon the effective date of a reorganization, merger, or consolidation of the Company with one or more other corporations in which the Company is not the surviving corporation, or the transfer of all or substantially all of the assets or shares of the Company to another person or entity, or the acquisition of stock representing more than 25% of the voting power of the capital stock of the Company then outstanding by another corporation, bank, other entity or person, other than pursuant to a merger in which the Company is the surviving entity (any such transaction being hereinafter referred to as a “Change in Control Transaction”), the Nominating and Compensation Committee may, in its absolute discretion, declare all or any part of the options granted under the Company's Omnibus Plan immediately exercisable in full, and they may thereafter be exercised at any time before the date of consummation of the Change in Control Transaction.
Potential Payments Upon Termination Without Cause
In the event the employment of Towell, Hollar, or DeMarcus is terminated by the Bank for any reason other than for Cause, their employment agreements provide that the Bank will pay their base annual salary for the remaining term of the Employment Agreement, subject to a potential six-month delay for tax compliance. Termination for Cause is defined to include termination because of the officer's personal dishonesty or moral turpitude, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule, or regulation (other than traffic violations or similar offenses) or final cease-and-desist order, or material breach of any provision of the employment agreement.
Potential Payments Upon Death
In the event the employment of Towell, Hollar, or DeMarcus are terminated upon their death, their employment agreements provide that the Bank will pay the officer's estate within 30 days of the officer's death compensation due through the last day of the calendar month in which the officer's death occurred and for a period of one month thereafter.
Directors Compensation
The following table sets forth certain information regarding the compensation paid by the Bank to our directors during the fiscal year ended December 31, 2012.
2012 Director Compensation | ||||||
Name | Fees earned or Paid In Cash ($) | Non-qualified Deferred Compensation ($) | Total ($) | |||
Nolan G. Brown | 36,938 | — | 36,938 | |||
Harry M. Davis | 29,703 | — | 29,703 | |||
Thomas J. Hall | 24,688 | — | 24,688 | |||
James A. Harrell, Jr. | 21,250 | — | 21,250 | |||
Larry S. Helms | 25,375 | — | 25,375 | |||
Dan W. Hill, III | 28,180 | — | 28,180 | |||
James L. Poindexter | 24,750 | — | 24,750 | |||
Alison J. Smith | 28,475 | — | 28,475 | |||
James N. Smoak | 32,538 | — | 32,538 | |||
Harry C. Spell | 31,937 | — | 31,937 | |||
Joseph H. Towell | — | — | — | |||
C. Kenneth Wilcox | 7,052 | — | 7,052 | |||
(1) | Mr. Wilcox retired from the Board of Directors at the expiration of his term on May 17, 2012. |
The annual retainer fee for service on the Board of Directors is $7,500 and the Board meeting attendance fee is $750. The amount for committee meetings is $250 per hour.
The Company offers a Directors Deferred Compensation Plan which allows each director to make an annual election to defer receipt of all or any portion of their directors' fees in the form of cash or stock. If the deferral is in cash, it earns interest at a rate equal to the 10 Year T-Bill Rate. If the deferral is in stock, it is invested by the trustee in the Company's common stock purchased on the open market. No director is currently participating in the plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Nominating and Compensation Committee during fiscal 2012 were: Nolan G. Brown (Ex-Officio), Thomas J. Hall, James A. Harrell, Jr., Larry S. Helms, Dan W. Hill, III and James L. Poindexter. No member of this committee was at any time during fiscal 2012 or at any other time an officer or employee of the Company, and no member of this committee had any relationship with the Company requiring disclosure under Item 404 of Regulation S-K. No executive officer of the Company has served on the board of directors or compensation committee of any other entity that has or has had one or more executive officers who served as a member of the Nominating and Compensation Committee during fiscal 2012.
Signatures
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
YADKIN VALLEY FINANCIAL CORPORATION
By: | /s/Joseph H. Towell | Date: November 4, 2013 | |
Joseph H. Towell | |||
President and Chief Executive Officer | |||
By: | /s/ Jan H. Hollar | Date: November 4, 2013 | |
Jan H. Hollar | |||
Executive Vice President & Chief Financial Officer | |||