Additional Proxy Soliciting Materials (Form DEFA14A)
SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14A
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Executive Compensation Program and Proposal to Amend the Equity Incentive Plan Overview and Key Considerations
Forward - Looking Statements This presentation contains "forward - looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 . Examples of forward - looking statements include but are not limited to the future financial condition and capital ratios, results of operations, outlook, business and equity incentive awards of
MCB Share Price Performance and Valuation 50 100 150 200 250 300
Compensation Program Is Designed to Align Corporate Performance and Executive Incentives What we do • Engage proactively with shareholders and other stakeholders • Tie executive pay with shareholder returns through equity compensation • Significant portion of compensation tied to both Company and individual performance and formulaic bonus plan • Designed with rigorous goal setting • Independent compensation consultant reporting to Compensation Committee • Annual risk assessments • Incentive plans subject to payment caps • Clawback policy and stock ownership guidelines for executives What we avoid • Hedging of Company stock • Encouraging excessive risk - taking • Guaranteed bonuses with executives • Ongoing service - based pension accruals for executives • Supplemental executive retirement plans • Excessive perks • Spring loading or back dating equity grants The Compensation Committee has adopted certain practices, and avoids others, that align to our compensation philosophy and serve stockholder interests The Board approved target annual compensation for 2024 for
78% of our CEO's Compensation is "At - Risk", Aligned to Shareholder Interests Rationale / Description Weight 2024 Metric Pay Element Attracts and retains high - performing executives by providing market - competitive fixed pay -- -- Base Salary (22% of Target Total Pay) Incentivizes effective growth through revenue generation and prudent cost management 40% Adj. Net Income Growth Annual Cash Component of Short - Term Incentive (22% of Target Total Pay) Profitability ratio that incentivizes effective capital management to generate earnings for shareholders 40% Adj. ROATCE Incentivizes sound risk management of the Company; assessed through audits of the independent registered public accountant, results of regulatory examinations, Asset Liability Committee reports, write - offs, portfolio risk metrics and other metrics/ indicators of the safety and soundness of the Bank 20% Safety and Soundness Places value on long - term ownership and directly aligns compensation with the stockholder interests 20% Time - Based RSUs -- Vest Over Three Years Equity Incentives (Equity Component of Annual Bonus and Performance - Based Long - Term Incentives) (56% of Target Total Pay) Based upon: (a) 50% Adj. ROATCE relative to peers, which measures the relative effectiveness of the Company's capital management to generate profits (b) 50% Safety and Soundness goals, which incentivizes a risk - conscious approach to growth For the 2024 performance period, PRSUs earned out at 50% of target 80% Performance - Based RSUs ("PRSUs") -- Vest Over Three Years ANNUAL PRSUs NEW FOR 2024 1 1 PRSUs last granted to CEO in 2021.
Considerations for Proposal #4 - Amendment to the Amended and Restated 2022 Equity Incentive Plan Proposal Overview • The Board has approved an amendment to increase the number of shares authorized for issuance under the Company's equity incentive plan by 750,000 • The sole effect of the Equity Incentive Plan Amendment is to increase the total number of shares issuable under the plan from 716,000 shares to 1,466,000 • We do not anticipate having sufficient equity to grant any significant additional equity awards until stockholders approve additional shares under the current incentive plan • Subject to changes in our stock price and other factors, the supplemental 750,000 shares is expected to support our equity compensation needs for an additional three years . Key Considerations • Equity incentives are critical to MCB's human capital management and corporate strategy • Our pay mix is focused more heavily on equity - based compensation by design: • 'Pay - for - performance' oriented culture, with demonstrated outperformance against peers • Employees incentivized to act like 'owners' • Plan is broad - based ( 22% of employees participate, 77% of participants are not executives or directors ); employees feel like they can share in Company's growth • Supports efforts to target and attract top talent • Three - year vesting encourages retention • The Compensation Committee and the Board considered, among othe r factors, the Company's ongoing share repurchase program in approving the plan amendment • As of
No Other Terms of the Amended and Restated 2022 Equity Incentive Plan Will Be Changed No "evergreen" provision (which would automatically increase the number of shares) Awards subject to minimum 1 - year vesting period Stock option repricing is prohibited Awards subject to double - trigger change - in - control provision No 280G excise tax gross up Limitation on grants to non - employee directors No liberal recycling of awards Awards subject to the Company's insider trading, hedging/ pledging and clawback policies No dividends or dividend equivalents on unvested performance awards The provisions of the Company's equity incentive plan generally align with market best practices, including:
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