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2011
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Proxy Statement
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44 Pages
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Trinity is a financial holding
company which owns all of the common shares of Los Alamos National Bank, a
national banking organization (“LANB”), and Title Guaranty & Insurance
Company, a New Mexico corporation (“Title Guaranty”), and four special purpose
business trusts, created for the sole purpose of issuing an aggregate of $37.1
million in trust preferred securities. LANB is the sole shareholder in TCC Advisors Corporation, a New Mexico Corporation;
holds 100% of the membership interests in Finance New Mexico Investment Fund
IV, LLC; 24% of the membership interests in Cottonwood Technology Group, a New
Mexico limited liability company; and 20% of the membership interests in Southwest
Medical Technologies, LLC, a New Mexico limited liability company.
Trinity’s Annual Report,
including the consolidated financial statements as of and for the year-ended
December 31, 2010, along with this Proxy Statement, is first being made
available to shareholders on or about April 8, 2011, via notice and electronic
delivery. Physical copies of this Proxy Statement and Trinity’s Annual Report
are available upon request.
Householding and Electronic Delivery.
We have
adopted a procedure approved by the Securities and Exchange Commission (“SEC”)
called “householding.” Under this
procedure, shareholders of record who have the same residential address or post
office box and last name, or are reasonably believed by us to be members of the
same family, will receive only one copy of Trinity’s Notice of Internet Availability
of Proxy Materials, unless one or more of these shareholders notifies us that
they wish to continue to receive individual copies. We have also adopted the
electronic delivery of the Annual Report and this Proxy Statement. Shareholders
may request physical copies of the Annual Report and Proxy Statement. Trinity
will mail such requested physical copies within three business days of the
request. These procedures reduce Trinity’s printing costs and postage fees from
mailings.
Shareholders who participate in householding and
electronic delivery will receive separate instruction pages for online voting
and Proxies for each account under which they own shares. Additionally,
householding and electronic delivery will not in any way affect dividend check
mailings and deposits.
Only shareholders of
record as of 5:00 p.m. on March 31, 2011, which is the “Record Date,” will be
entitled to vote at the Annual Meeting and will be entitled to cast one vote
for each common share of Trinity (“Share”) owned. Trinity’s records show that,
as of the Record Date, there were 6,449,726 votes entitled to be cast at the
Annual Meeting. Holders of Trinity’s
Fixed Rate Cumulative Perpetual Preferred Stock, Series A and Series B (“Series
A and B Preferred Stock”) are not entitled to vote the shares of Series A and B
Preferred Stock on any matters expected to be presented at the Annual Meeting.
Votes cast by proxy or in
person at the Annual Meeting will be tabulated by the judges of election. The
judges of election will also determine whether or not a quorum is present. The
presence, in person or by proxy, of a majority of the issued and outstanding shares
entitled to vote at the Annual Meeting is necessary to establish a quorum at
the Annual Meeting. Abstentions and
broker non-votes (“Non-Votes”) will be counted for purposes of determining the
presence or absence of a quorum, but are not counted as votes cast at the
meeting. Abstentions occur when the
authority to vote on any particular matter submitted to the shareholders for a
vote is withheld. Non-Votes occur when
brokers who hold their customers’ shares in street name submit proxies for such
shares on some matters, but not others.
Generally, this would occur when brokers have not received any
instructions from their customers. In
these cases, the brokers, as the holders of record, are permitted to vote on
“routine” matters, which typically include the ratification of the independent
registered public accounting firm, but not on non-routine matters. Brokers are not permitted to vote on the
election of directors without instructions from their customers.
Each properly executed Proxy
received prior to the Annual Meeting and not revoked will be voted as specified
thereon or, in the absence of specific instructions to the contrary, will be
voted:
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FOR the election of Jerry
Kindsfather, Steve W. Wells and Robert P. Worcester as directors of Trinity
for terms expiring in 2014;
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FOR the
ratification of the selection of Moss Adams, LLP as the independent
registered public accounting firm of Trinity for the current fiscal year; and
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FOR the approval of the
non-binding, advisory proposal on the compensation of Trinity’s named
executive officers.
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The Board of Directors recommends a vote “FOR” each of these proposals.
A proxy may be revoked at any time before it is
exercised by:
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Delivering a written notice of revocation to Trinity, 1200 Trinity
Drive, Los Alamos, NM 87544, Attention: TCC Stock Representative;
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Delivering a duly executed proxy bearing a later date to Trinity; or
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Attending the Annual Meeting and voting in person.
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Proxies may be solicited by the directors,
officers and other employees of Trinity in person or by telephone, facsimile,
electronic mail or U.S. mail without additional compensation. The cost of soliciting proxies will be borne
by Trinity.
Vote
Required
Election of Directors. At the Annual Meeting,
three directors will be elected for terms expiring in 2014. The three nominees receiving the greatest
number of votes will be elected as directors of Trinity for terms expiring in
2014. Broker Non-Votes and abstentions
are not counted toward the election of directors or toward the election of the
individual nominees specified on the proxy and thus will have no effect on this
matter. Because the election of directors has been determined to be a
“non-routine” matter, your broker is not permitted to vote in the election of
directors on a discretionary basis. Thus, if you hold Shares in street name and
do not instruct your broker how to vote in the election of directors, your
Shares will be considered Non-Votes and no votes will be cast on your behalf
with respect to the election of directors.
Ratification of Selection
of Independent Registered Public Accounting Firm. The affirmative vote of
the holders of a majority of the votes represented and voting in person or by
proxy at the Annual Meeting is necessary to ratify the selection of Moss Adams,
LLP (“Moss Adams”) as the independent registered public accounting firm of
Trinity for the current fiscal year. An
abstention is not counted toward the ratification of the selection of Moss
Adams as the independent registered public accounting firm, will have no effect
on the vote. The ratification of
auditors has been determined to be a “routine” matter upon which your broker
has the authority to vote uninstructed Shares.
Advisory Vote on
Executive Compensation. The affirmative vote of the holders of a majority
of the votes cast in person or by proxy at the Annual Meeting is necessary to
approve the non-binding, advisory proposal regarding the compensation of
Trinity’s named executive officers.
Non-Votes and abstentions are not counted toward the non-binding,
advisory proposal regarding the compensation of Trinity’s executive
officers. Thus, the effect of an
abstention or a Non-Vote is the same as an “Against” vote.
Voting Instructions
Your vote is very important. If you are the
record holder of your Shares, you may vote either online, by mail or in person
at the meeting. The following are instructions on how to vote using each of the
mechanisms provided by Trinity.
Voting Online. Shareholders
of record on the Record Date will receive a Notice of Availability of Proxy
Materials on or about April 8, 2011.
This Notice will include an Online Voting Information page and the codes
necessary to vote online. You will receive separate log-in codes for each of
your accounts. The log-in codes will also be contained on the Proxy you will receive
in the mail on or about April 18, 2011.
This information is designed to authenticate your identity and to allow you
to vote your Shares and confirm that your instructions have been properly
recorded.
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Please have this information available and go to: http://www.lanb.com/Annual-Report.aspx or
on the LANB webpage (www.lanb.com) and
click on the “TCC Annual Report” link.
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Click on the words “Vote Here” and enter the Holder ID and
Verification Code found on the Online Voting Information page of the Notice
of Availability or on your Proxy.
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Please click on the radio buttons to select how you wish to vote on
the electronic Proxy. When you have
entered your vote on each of the three items, click once on the “Submit”
button. You have then completed voting and will be taken back to the Annual
Meeting webpage.
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You may log on and vote at your convenience, 24 hours a day, 7 days
a week. The deadline for voting online is 6:00 p.m. MT on May 19, 2011.
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If you have multiple accounts, you must repeat
the process for each account in order for all shares to be voted.
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If you vote online and do not wish to change
your vote, please do not complete and return the Proxy.
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Answers to Frequently Asked Questions and instructions for online
voting can be found on the TCC Annual Meeting webpage or you can find it
directly at http://www.lanb.com/Company-FAQ.aspx.
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Voting by Mail. You
will receive a Form of Proxy in the mail on or about April 18, 2011. Complete
and sign the Form of Proxy and mail it to Trinity in the accompanying
pre-addressed envelope. No postage is required if mailed in the United States. If you do not receive a Form of Proxy in the
separate mailing, please contact us by May 15, 2011.
Voting in Person. If
you want to vote in person, please come to the Annual Meeting. We will distribute written ballots to anyone who wants to
vote at the Annual Meeting. Please note, however, that if your shares are held
in the name of your broker or fiduciary, you will need to arrange to obtain a
legal proxy from your broker or fiduciary, as described above, in order to vote
in person at the meeting. Even if
you plan to attend the Annual Meeting, you should vote online or complete, sign
and return your Proxy in advance of the Annual Meeting in case your plans
change.
If you have multiple accounts reflected in Trinity’s
stock transfer records and/or in accounts with brokers or fiduciaries, you will
receive Holder IDs and Control Numbers in the Notice of Availability for online
voting and one Form of Proxy for each account. Please vote online for each account or complete, sign and return all Proxies to ensure that all of your
shares are voted.
If you indicate how you want your Shares voted,
they will be voted as instructed. If you submit an online Proxy or sign and
return your Proxy, but do not indicate your voting instructions, the shares
represented by your Proxy will be voted “for” all three nominees named
in this Proxy Statement, “for” the ratification of Trinity’s independent
registered public accounting firm and “for”
approval of the advisory resolution approving the compensation of Trinity’s named
executive officers and in accordance with the judgment of the proxy judges on
any other matter properly brought before the meeting and any adjournments and
postponements of the meeting. The Board may, by resolution, provide for a
lesser number of directors or designate a substitute nominee in the event a
nominee cannot stand for election. In the latter case, shares represented by
proxies may be voted “for”
substitute nominees. Proxies cannot be voted for more than three nominees. The
Board has no reason to believe any nominee will be unable to stand for
re-election.
List of Shareholders
Pursuant to state law and the bylaws of Trinity, the names of the
shareholders of record entitled to vote at the Annual Meeting will be available
at the Annual Meeting and the 10 days prior to the Annual Meeting, during
regular business hours, at the corporate offices: 1200 Trinity Drive, Third
Floor, Los Alamos, New Mexico 87544.
Contact Us
You may find copies of Trinity’s Proxy Materials at
LANB’s website (www.lanb.com) under
the “TCC Annual Report” link or directly at http://www.lanb.com/Annual-Report.aspx. You may find copies of all of
Trinity’s filings on the SEC’s website through Trinity’s website at http://www.lanb.com/SEC-Filings.aspx. Please contact the Trinity Capital Corporation
Stock Representatives, Taylor Guskey or Danette Clark, to make the following
requests:
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if
you wish to receive physical copies of the Proxy Materials for the current
year and/or permanently (please specify);
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if
you currently receive multiple copies of materials and wish to receive only a
single copy of these documents for your household;
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if
you currently receive one copy of materials and wish to receive separate
copies and do not wish to participate in householding; or
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if you need to change or correct your name,
address or other information.
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You may contact us at:
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By Telephone at:
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(800)
525-9634; (505) 662-1099 or (505) 662-1036
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By E-Mail at:
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tcc@lanb.com
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By U.S. Mail at:
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Trinity
Capital Corporation
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Stock
Representative
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Post
Office Box 60
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Los
Alamos, New Mexico 87544
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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Code of Ethics
All Trinity and all of its subsidiaries’ directors and
employees, including Trinity’s principal executive officer, principal financial
officer and principal accounting officer or persons performing similar
functions, are required to abide by Trinity’s Code of Business Conduct and
Business Ethics (the “Code of
Ethics”). Accordingly, Trinity does not maintain
a separate code of ethics applicable solely to its directors, principal
executive officer, principal financial officer and/or its principal accounting
officer or the persons performing similar functions. The Trinity Board of Directors believes that
this Code of Ethics substantially confirms to the code of ethics required by
the rules and regulations of the SEC.
The Code of Ethics requires that the directors, executive officers, and
employees of Trinity and its subsidiaries, avoid conflicts of interest, comply
with all laws and other legal requirements, conduct business in an honest and
ethical manner, and otherwise act with integrity and in Trinity’s best interests. Under the terms of the Code of Ethics,
directors, executive officers and employees are required to report any conduct
that they believe in good faith to be an actual or apparent violation of the
Code of Ethics.
Trinity’s Code of Ethics
is available on its website at www.lanb.com through the link to
“TCC” and “View Corporate Governance” or may be found directly at www.lanb.com/TCC-BCE-Charter.aspx. Trinity intends to satisfy the disclosure
requirements under Item 5.05 of Form 8-K regarding any amendment to or waiver
of the Code by posting such information on its website. No waivers or
amendments to Trinity’s Code of Ethics were granted or made in 2010.
Board Leadership Structure
Trinity has a strong, independent
Board. It is Trinity’s policy that the
Board consists of a majority of independent directors. In 2010, six of
Trinity’s seven outside directors were considered independent, As of January 1,
2011, all seven outside directors were considered independent. Our key
committees (Audit, Compensation, Compliance and Nominating and Corporate
Governance) are chaired by, and comprised entirely of, independent
directors. While not prohibited by its
Bylaws, Trinity’s leadership structure since inception has been organized such
that the positions of Chairman of the Board and the President and Chief Executive Officer (the “CEO”) are filled by
two different persons, currently Robert P. Worcester and William C. Enloe,
respectively. The separation of these
positions allows for checks and balances with respect to the CEO role and the
audit functions of the Board.
Under Trinity’s Bylaws, the Chairman of the Board presides at all
meetings of the shareholders and of the Board and its executive sessions during
which management and staff are absent. Executive sessions of non-management
directors can be requested at any committee or Board meeting and are held
several times a year. The President and CEO’s duties include general supervision and control of all of the business
affairs of Trinity, as well as the authority to sign certain documents or other
instruments which the Board has authorized to be executed. In the absence of the Chairman of the Board,
the Vice-Chairman of the Board is authorized to perform all of the duties of
the Chairman of the Board.
Board
Risk Management
Oversight of risk management is central to the role
of the Board. While the full Board is charged with ultimate oversight
responsibility for risk management, various committees of the Board and members
of management also have specific responsibilities with respect to our risk
oversight. Each Board committee has been
assigned oversight responsibility for specific areas of risk and risk
management, and each committee considers risks within its areas of
responsibility. For example, the Audit Committee is responsible for
implementing internal audit controls and maintaining the safety, soundness and
integrity of the institution by properly identifying, prioritizing, mitigating
and managing risk and the steps taken to monitor and minimize such risks. The Audit Committee, along with the
Nominating and Corporate Governance Committee, is tasked with ensuring
the right risk and compliance culture exists at the organization by requiring
adherence to our Code of Ethics and adopting best practices in
corporate governance. The Audit
Committee has a prominent role in our credit risk management as well as our
operational risk, the integrity of our financial statements, compliance, legal
risk and overall policies and practices related to risk management. The day-to-day implementation is the
responsibility of the Internal Auditor.
This individual is independent from management and reports directly to
the Audit Committee, which provides regular updates to the full Board. Trinity's Audit Committee meets without
management at least once annually with our external auditing firm, and
individually with the Internal Auditor, Chief Financial Officer and General
Counsel. The report of the Audit
Committee is set forth in this Proxy Statement under the heading “Audit Committee Report” below.
The Compensation Committee is chiefly responsible for
compensation-related risks. The report
of the Compensation Committee is set forth in this Proxy Statement under the
heading “Compensation Committee Report on
Executive and Employee Compensation” below. In accordance with applicable requirements,
the Compensation Committee conducts a risk based assessment of Trinity’s
compensation plans, policies and practices to determine whether such plans,
policies and practices create risks that are reasonably likely to have a
material adverse effect on Trinity. As part of its assessment, the Compensation
Committee evaluated Trinity’s compensation plans and programs to determine
their propensity to cause undue risk taking by employees, including senior
executive officers, relative to the level of risk associated with Trinity’s
business model and operations.
In January 2010, in response to LANB’s entry into an
agreement with its primary regulator (the “Agreement”), the Board established
the Compliance Committee which is tasked with ensuring compliance with the
Agreement and providing an additional review of the risk management and
practices of LANB, particularly with respect to credit risk. The Board also has a standing Board Loan
Committee which is responsible for ensuring the implementation of policies and
procedures to ensure business is conducted within defined risk tolerances for
our lending function, including lending policies, credit trends, and
concentrations. This committee, along
with the Audit Committee, reviews our risks related to credit exposure and the
adequacy of our allowance for loan and lease losses and ensures the right risk
and compliance culture exists at the organization.
The Board also has an Asset/Liability Management
Committee which oversees key aspects of risks related to capital, liquidity,
interest rates and market risks. The
Board also has a Technology Committee which oversees the technology used, and
changes to such technology, in order to ensure the integrity and security of
our systems and to address any potential market or reputational risks
associated with our service delivery systems.
Finally, the Board has a Strategic Planning Committee which analyzes the
market and reputational risks of, and ensures alignment between, Trinity's
strategic objectives, business processes and resources. Additionally, the Board
regularly conducts succession planning during which the CEO discusses the
development of talent throughout the organization.
The
membership of these committees overlaps with all directors serving on several
of the committees and all directors are invited and often attend all committee
meetings. Each committee reports and makes recommendations to the full Board on
significant or risk-related matters within its responsibilities. Such interlocking memberships and sharing of
information allows the Board insight into the management of strategic, credit,
market, liquidity, compliance, operational and reputational risks facing Trinity.
Management provides reports and data to the Board committees as well as
participating in discussions. The Board interacts with key members of
management within the organization on a regular basis through both Board and
committee meetings and has access to these individuals outside of formal
meetings.
Director Independence
Trinity
annually examines the relationships with each director to determine whether
that director can be considered “independent,” “outside,” and “non-employee.”
The standards employed by Trinity are consistent with the requirements set
forth by the Internal Revenue Code, the SEC and the NASDAQ Stock Market
("NASDAQ"). This analysis is reviewed by the Nominating and Corporate
Governance Committee and the full Board. The Board has determined that each
director, other than Messrs. William C. Enloe and Steve W. Wells, are
independent within the meaning of the rules of the SEC and NASDAQ as of January
1, 2011. Deborah U. Johnson was not considered independent in 2010, as she was
an officer of a vendor as described under “Related
Party Transactions” in this Proxy Statement. In making these determinations, the Board was
aware of and considered the loan and deposit relationships with directors and
their related interests with which LANB enters into in the ordinary course of
business, and any other arrangements which are disclosed under “Related Party Transactions” in this
Proxy Statement.
Indemnification
The
shareholders approved an amendment to the Articles of Incorporation at the 2003
Annual Meeting restating the indemnification provided to Trinity’s directors.
The Articles of Incorporation provide for indemnification of directors to the
fullest extent permitted by New Mexico law. This indemnification is provided so
that Trinity’s directors may undertake their duties without undue concern
regarding their personal liability.
Meetings
and Committees of the Board of Directors
The Board of Trinity met 14 times for regularly
scheduled and special meetings during the fiscal year-ended December 31,
2010. The Board of Directors of LANB also
met 16 times for regularly scheduled and special meetings during the fiscal
year-ended December 31, 2010. Each director attended at least 75% of the
aggregate of the total meetings of the Boards of Directors and the total
meetings of the committees on which he or she served, with the exception of
Messrs. Arthur B. Montoya, Jr. and Stanley D. Primak.
Attendance by our directors at the Annual Meetings of
Shareholders gives directors an opportunity to meet, talk with and hear the
concerns of shareholders who attend those meetings. It is Trinity’s policy that
all directors shall attend the Annual Meetings, except in the event of illness
or other unanticipated conflicts. All of the directors then serving attended
Trinity’s 2010 Annual Meeting held on May 27, 2010.
2010 Committee
Membership
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Name
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Audit Committee
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Compensation Committee
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Nominating and Corporate Governance Committee
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William
C. Enloe (1)
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Jeffrey
F. Howell
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X (2)
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X
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X
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Deborah
U. Johnson
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X
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Jerry
Kindsfather
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X
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Arthur
B. Montoya, Jr.
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X
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X (2)
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Lewis
A. Muir (3)
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X
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X
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Stanley
D. Primak
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X
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X
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Charles
A. Slocomb
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X
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X
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Steve
W. Wells (1)
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Robert
P. Worcester
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X
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X (2)
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X
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Number of 2010 Committee Meetings
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4
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4
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1
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(1)
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Messrs. Enloe and Wells are Executive Officers and as such are
not members of the Board committees listed.
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(2)
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Committee
Chair.
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(3)
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Mr. Muir served on the Audit and Compensation Committees through May
of 2010 at which time he became a Director Emeritus.
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Compensation Committee
In 2010, the Compensation
Committee of Trinity consisted of Messrs. Worcester (Chair), Kindsfather, Muir
(through May 2010), Primak and Slocomb and Ms. Howell, each of whom was
“independent” as that term is defined by the SEC and NASDAQ. These committee members were also deemed to
be “outside” directors under Section 162(m) of the Internal Revenue Code of
1986 and all are “non-employee” directors.
The Compensation Committee has a written charter which may be found at
LANB’s website under “TCC,” “View Corporate Governance,” then “Compensation
Committee” or can be found directly at www.lanb.com/TCC-Compensation-Committee.aspx. The Compensation Committee of Trinity also
serves as the Compensation Committee of LANB.
The Compensation
Committee is responsible for making recommendations to the Board regarding
compensation and incentive compensation awards and plans, and other forms of
compensation for Messrs. Enloe and Wells as well as the contributions toward
the ESOP and profit sharing program and short- and long-term incentive
compensation for all employees. Trinity
is subject to certain compensation limitations and its Compensation Committee is
obligated to undertake certain risk assessment reviews of the incentive
compensation and compensation plans and policies. Such obligations and other
executive compensation requirements are described in more detail under the
heading “Compensation Discussion and
Analysis – U.S. Treasury’s Capital Purchase Program and Federal Reserve Risk
Analysis Rules.” The Compensation
Committee regularly conducts such risk assessments and also approves the
Compensation Committee Report for inclusion in the Trinity Proxy
Statement. The report of the
Compensation Committee is set forth in this Proxy Statement under the heading “Compensation Committee Report.”
Audit Committee
In 2010, the Audit Committee of Trinity consisted of Ms.
Howell (Chair) and Messrs. Montoya, Muir (through May 2010), Slocomb and
Worcester, each of whom was “independent” as that term is defined in the rules
of NASDAQ and met the criteria for independence set forth in Rule 10A-3 of the
Exchange Act of 1934, as amended (the “Exchange Act”). The Board has determined
that each Audit Committee member is financially literate and has determined
that Ms. Howell is an “audit committee financial expert” as defined under SEC
rules and regulations by virtue of her background and experience, as described
in her biography under the heading “Item
I: Election of Directors.” The Audit
Committee of Trinity also serves as the Audit Committee for LANB.
The responsibilities of
the Audit Committee include the following:
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selecting
and retaining Trinity’s independent
registered public accounting firm, approval of the services they will perform
and review of the results, both with management and in executive session with
the accounting firm;
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reviewing the performance of the independent
registered public accountants;
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reviewing
with management and the independent public accounting firm the systems of
internal controls, including the adequacy and effectiveness of the systems of
internal controls over financial reporting and any significant changes in
internal controls over financial reporting, accounting practices and
disclosure controls and procedures;
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reviewing annual and quarterly financial
statements and other Trinity filings;
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reviewing internal audit reports and associated
controls;
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instituting
procedures for the receipt, retention and treatment of complaints received by
Trinity regarding accounting, internal accounting controls or auditing
matters; and
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assisting
the Board in the oversight of:
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the
integrity of Trinity’s consolidated financial statements and the
effectiveness of Trinity’s internal control over financial reporting; and
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the
independent registered public accounting firm’s and internal auditor’s
qualifications and independence.
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The Audit Committee will also carry out any other
responsibilities delegated to the Audit Committee by the full Board. The report of the Audit Committee required by the rules
of the SEC is included in this Proxy Statement.
See “Audit Committee Report.” The Committee has adopted a written
charter which can be found at the LANB website under “TCC” then “View Corporate
Governance” then “Audit Committee” or directly at http://www.lanb.com/TCC-Audit-Committee.aspx setting forth the Committee’s duties and
functions.
Nominating
and Corporate Governance Committee
In 2010, the members of the Nominating and
Corporate Governance Committee consisted of Messrs. Montoya (Chair),
Worcester and Primak, Ms. Johnson and Ms. Howell. Each member of the
Committee was “independent” as discussed above, with the exception of Ms.
Johnson who was not deemed independent for 2010 but was deemed independent as
of January 1, 2011. The purpose of the Committee is to evaluate and recommend
to the Board nominees for consideration by Trinity’s shareholders to serve as
directors and to review and analyze the corporate governance policies and
practices of Trinity. The Committee has adopted a written charter, which can be
found on LANB’s website under “TCC” then “View Corporate Governance” then
“Nominating and Corporate Governance Committee” or directly at http://www.lanb.com/TCC-NCGC-Charter.aspx setting
forth the Committee’s duties and functions.
Nominating Process. The Nominating and Corporate Governance Committee
follows the procedures contained in Trinity’s Bylaws and the nominating
policies and procedures to identify, evaluate and select nominees for the
Board. The Nominating and Corporate Governance Committee considers candidates
suggested by the Board, management and shareholders. Existing directors whose
terms will expire at the next Annual Meeting will automatically be evaluated
unless that director expresses his or her intent not to stand for re-election.
After a new candidate for director is identified
by the Board or nominated by a shareholder, the Committee will compile the
information required in Trinity’s Bylaws and will make an initial determination
whether to entertain the candidate based on information provided to the
Committee, the directors’ own knowledge and any other inquiries made by the
Committee. This preliminary determination is also based on Trinity’s Director
Criteria, the current composition of the Board, the balance of management and
independent directors, and the need for Audit Committee members or other
expertise and any other factor deemed relevant by the Committee. While Trinity does
not have a separate diversity policy, the Committee considers diversity in
reviewing its current directors and any potential nominees. The Committee places value in a Board
composed of characteristics reflective of our communities in terms of gender
and race, as well as differing perspectives in terms of professional fields,
education, skills, and community service.
The Committee has broad discretion to consider any additional factors it
deems relevant to an assessment of a proposed nominee’s suitability for the
Board. If a candidate satisfies the initial review, the Committee will conduct
an interview of the candidate. The Committee conducts interviews with all
incumbent directors standing for re-election and reviews their independence,
qualifications, conduct, background and areas of expertise. After conducting
all interviews and evaluations, the Committee meets in closed-sessions to
discuss each nominee and makes its recommendations to the Board. The Board will
review the recommendations and make the final determination of which nominees
will be presented for election.
In considering potential
nominees to the Board, and when evaluating incumbent directors, the Nominating
and Corporate Governance Committee shall seek to, among other things, promote
collegiality among members of the Board, encourage directors to be active
participants in the communities served by Trinity and contribute to
organizations located in such communities.
The Board has adopted criteria for nominees to serve on Trinity’s Board
which can be found on LANB’s website at www.lanb.com under “TCC,” “View Corporate
Governance” then “Nominating and Corporate Governance Committee” then
“Nominating Policies and Procedures” or directly at http://www.lanb.com/TCC-NCGC-Nominating-Policies.aspx.
The
“independence” of non-management nominees will also be taken into account so
that at least a majority of the Board will be made up of directors who satisfy
the independence standards set forth by NASDAQ and the rules and regulations of
the SEC. Information regarding the
nominating policies and procedures, the director criteria and Trinity’s Bylaws
can be found on LANB’s website under “TCC” and “View Corporate Governance” or
can be located directly at http://www.lanb.com/TCC-Corporate-Governance.aspx.
There
are no arrangements or understandings between any of the nominees, directors or
executive officers and any other person pursuant to which any of Trinity’s
nominees, directors or executive officers have been selected for their
respective positions. No nominee, director or executive officer is related to
any other nominee, director or executive officer. No nominee or director is a
director of another “public corporation” (i.e. subject to the reporting
requirements of the Exchange Act) or of any investment company. We have no
knowledge that any nominee will refuse or be unable to serve, but if any of the
nominees are unavailable for election, the holders of the proxies reserve the
right to vote for substitute nominees proposed by the Board.
Shareholder
Nomination Procedure. Shareholders may nominate candidates for the
Board by following the procedures detailed in Trinity’s Bylaws. The Bylaws and
the Shareholder Nominating Procedure can be found on LANB’s website under
“TCC,” “View Corporate Governance,” then “Nominating and Corporate Governance
Committee” then “Shareholder Nomination Procedures” or directly at http://www.lanb.com/TCC-NCGC-Shareholder-Nominating-Policies.aspx.
The
following is a summary of the process for shareholder nominations:
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The
shareholder must provide a written statement suggesting an individual as a
candidate that includes the information required by Trinity’s Bylaws.
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The
statement must be received by the Corporate Secretary, in the case of an
annual meeting, not less than 60 days and not more than 90 days prior to the
first anniversary (day and month) of the previous year’s annual meeting or
special meeting.
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Nominations
that are not received at least 120 days prior to the anniversary of the mailing
date of the previous year’s annual meeting will not be included in Trinity’s Proxy
Statement but will be presented for a vote at the Annual Meeting. Shareholder nominations for the 2012 Annual
Meeting must be received by Trinity’s Secretary not later than January 20, 2012
for inclusion in the Proxy Statement and no earlier than February 19, 2012 and
no later than March 20, 2012 to be voted upon at the 2012 Annual Meeting.
The shareholder’s
written statement must set forth: (a) as to each person whom the shareholder
proposes to nominate for election as director: (i) the name, age, business
address and residential address of such person; (ii) the principal occupation
or employment and business experience for the previous five years of such
person; (iii) the class and number of shares of Trinity’s stock which are
beneficially owned by such person on the date of the written statement; and
(iv) any other information relating to such person that would be required to be
disclosed pursuant to rules and regulations promulgated under the Securities
Exchange Act; and (b) as to the nominating shareholder giving the written
statement: (i) the name and address, as they appear on Trinity’s books, of the
nominating shareholder and the name and principal business address of any other
record or beneficial shareholder known by the nominating shareholder to support
such nominee; and (ii) the class and number of shares of stock which are
beneficially owned by the nominating shareholder on the date of such written
statement and the number of shares owned beneficially by any other record or
beneficial shareholders known by the nominating shareholder to be supporting
such nominee on the date of such written statement. All submissions must be
accompanied by the written consent of the proposed nominee to be named as a
nominee and to serve as a director if elected. The Nominating and Corporate
Governance Committee may request additional information in order to make a
determination as to whether to nominate the person for director.
Any
deficiencies in a notice of shareholder nomination will be noted by the Corporate
Secretary and the nominating shareholder will be informed and provided an
opportunity to cure the defect, if possible. The presiding officer will
determine whether a nomination was timely made and will make that determination
at the shareholders meeting.
No
shareholder nominations were received by the Corporate Secretary by March 28,
2011. The Nominating and Corporate Governance Committee has not retained or
paid any third parties to assist in the identification of nominees. All of the
nominees approved by the Nominating and Corporate Governance Committee for
inclusion in this Proxy Statement and listed on the Proxy are incumbent
directors standing for re-election.
Board
Policies Regarding Communications with the Board of Directors
Trinity’s Board maintains
a process for shareholders to communicate with the Board of Directors. Shareholders wishing to communicate with the
Trinity Board should send any communication to the General Counsel of Trinity
at 1200 Trinity Drive, Los Alamos, New Mexico 87544. The General Counsel of
Trinity will forward such communication to the full Board of Directors or to
any individual director or directors to whom the communication is directed
unless the communication is unduly hostile, threatening, illegal or similarly inappropriate,
in which case the Trinity General Counsel has the authority to discard the
communication or take appropriate legal action. Communications will be
forwarded to the addressee and/or the appropriate committee chair or director.
The General Counsel may summarize the contents of any communication prior to
forwarding the message to its intended recipient. Directors may review a log of
all communications received or request copies of any communications at any
time. Concerns relating to accounting, internal controls and auditing matters
will be promptly raised with Trinity’s internal auditor, if appropriate, and
reported to the Audit Committee.
Trinity’s communication
policy is available on LANB’s website (www.lanb.com) under the links to
“TCC” and “View Corporate Governance” then “Communication with Directors
Policy” or can be found directly at http://www.lanb.com/TCC-commpolicy.aspx. Communications regarding concerns
over the management or financial reporting of Trinity can also be addressed
directly to the Audit Committee Chair through LANB’s website (www.lanb.com) under the links to “TCC” and “View Corporate Governance” or can be
found directly at http://www.lanb.com/AnonContact.aspx or
by emailing auditchair@lanb.com.
Certain
Relationships and Related Transactions
Trinity’s
written Related Party Transaction Policy provides that all relationships
between Trinity and any director, executive officer or an entity related to a
director or executive officer, will be reviewed, approved or ratified by the
Audit Committee of the Board, excluding loan transactions falling within the
ordinary course of business exception for LANB. All transactions will be
reviewed, regardless of type, when the transaction is anticipated to or
actually meets or exceeds $120,000 in compensation to the director, executive
officer or an entity related to a director or executive officer. The review
will include the details of the relationship, including the nature of the
relationship, the anticipated amount of compensation to be paid under the
transaction, and, if possible, a comparison of market rates for similar
products or services. The Audit Committee will consider the proposed
relationship and either approve or deny the engagement. Additionally, the
relationships with directors and their related entities will be reviewed each
year as part of the determination of independence of each director and nominee.
In the event that a relationship is entered into without prior approval of the
Audit Committee, the Committee will be provided with detailed information regarding
the relationship for ratification. If the Committee does not ratify the
relationship, Trinity will terminate the relationship. Once a relationship has
been created, Trinity will cause a request for proposals to be issued to the
director, executive officer or entity related to a director or executive
officer not less than every five years. This request will serve to ensure that
Trinity is obtaining products and services on terms at least as favorable as if
they were from an unrelated third party.
Trinity
engaged the services of Rick Johnson & Company (“RJC”), an advertising and
marketing firm, in 2010. Deborah U. Johnson, a Trinity director, was an officer
of RJC in 2010. Under the terms of Trinity’s agreement with RJC, we paid RJC
approximately $482,000 in 2010 for advertising and marketing services, which is
over 5% of RJC’s annual gross revenue, resulting in Ms. Johnson not being
considered an independent director under the NASDAQ rules. Trinity’s policy did
not require review, approval or ratification of its relationship with RJC, as
described above, as this relationship was in existence prior to the adoption of
its Related Party Transaction Policy. However, Trinity has followed its policy
with regard to renewals and modifications in its relationship with RJC. Based
upon a Request for Proposals issued during 2007, we believe that the quality
and terms for the advertising and marketing services provided by RJC are
similar to those we would find with an unrelated third party. Effective
December 31, 2010, Ms. Johnson stepped down as Chair of RJC and is no longer
affiliated with RJC. As a result, Ms.
Johnson is considered independent as of January 1, 2011.
The types of
transactions, relationships and arrangements that are considered in determining
independence but are not disclosed as a related party transaction include, but
are not limited to, borrowing relationships and business relationships. Trinity
has no indebtedness transactions with its Directors or NEOs. Trinity is a
financial holding company which controls LANB, a national bank. LANB commonly
enters into customary loan, deposit and associated relationships with its
Directors and NEOs, all of which are made in the ordinary course of business,
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons and
did not involve more than the normal risk of collectability or present other
unfavorable features. All loans by LANB to Trinity’s Directors and executive
officers are subject to the regulations of the Office of the Comptroller of
Currency. National banks are generally prohibited from making loans to their
directors and executive officers at favorable rates or on terms not comparable
to those available to the general public or other employees. LANB does not
offer any preferential loans to Trinity’s directors or NEOs.
Security
Ownership of Certain
Beneficial
Owners, Directors and Management
The
following table sets forth certain information regarding beneficial ownership of
Trinity’s Shares as of March 31, 2011 by:
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Any person who is known to Trinity to
own beneficially more than 5% of Trinity’s Shares;
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Each of Trinity’s directors;
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The Named Executive Officers (“NEO”)
of Trinity; and
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All current executive officers and
Directors as a group.
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All Shares are owned with
sole voting and investment power by each person listed, unless otherwise
indicated by a footnote. Beneficial ownership has been determined for this
purpose in accordance with Rule 13d-3 under the Exchange Act, under which a
person is deemed to be the beneficial owner of securities if he or she has or
shares voting power or investment power with respect to such securities or has
the right to acquire beneficial ownership of securities within 60 days of March 31, 2011. The shares of
common stock subject to options currently exercisable or exercisable within 60
days of March 31, 2011 are deemed outstanding for calculating the percentage of
outstanding shares of the person holding those options, but are not deemed
outstanding for calculating the percentage of any other person. The address of each beneficial owner is c/o
Trinity, at 1200 Trinity Drive, Los Alamos, New Mexico 87544, unless otherwise
indicated by footnote. As of March 31,
2011, there were 6,449,726 Shares outstanding, each share entitled to one vote.
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Directors and Executive Officers
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Name of Individual or Individuals in
Group
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Reporting Type
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Beneficial Ownership
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Percent of Class
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William C. Enloe (1)
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Director
and
Named
Executive Officer
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200,407
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3.05%
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Jeffrey F. Howell (2)
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Director
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7,028
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*
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Deborah U. Johnson (3)
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Director
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10,000
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*
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Jerry Kindsfather (4)
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Director
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244,293
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3.78%
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Arthur B. Montoya, Jr. (5)
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Director
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8,549
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*
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Stanley D. Primak (6)
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Director
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8,866
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*
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Charles A. Slocomb (7)
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Director
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4,836
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*
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Steve W. Wells (8)
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Director
and
Named
Executive Officer
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117,384
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1.80%
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Robert P. Worcester (9)
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Director
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8,888
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*
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Daniel R. Bartholomew (10)
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Named
Executive Officer
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21,383
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*
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Total of Directors and Executive Officers (11)
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631,634
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9.55%
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* Indicates that the individual or entity owns less than one percent
of Trinity’s common stock.
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Persons known to Trinity to own more
than 5% of the outstanding shares
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Name of Individual or Individuals in
Group
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Reporting Type
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Beneficial Ownership
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Percent of Class
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Trinity Capital
Corporation ESOP (12)
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5%
Shareholder
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628,914
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9.75%
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George A. Cowan (13)
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5%
Shareholder
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729,097
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11.30%
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(1)
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Includes 24,740 shares over which Mr. Enloe shares voting and
investment power with his spouse, 63,667 shares held by Mr. Enloe in
Trinity’s ESOP and 112,000 shares available to Mr. Enloe through the
exercise of options. All options which Mr. Enloe may exercise within 60 days
of March 31, 2011 are included in his percentage of ownership.
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(2)
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This number includes 100 shares held by Ms. Howell’s spouse to which
she has disclaimed any beneficial ownership.
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(3)
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Ms. Johnson
holds 1,800 shares in her individual retirement account.
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(4)
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Mr. Kindsfather holds 15,709 shares in the Kindsfather Family
Revocable Trust. Mr. Kindsfather’s beneficial ownership also includes 114,292
shares, one-half of the 228,584 shares held by J&G Investments, in which
Mr. Kindsfather is a 50% partner with shared voting and investment
power.
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(5)
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Dr. Montoya shares voting and investment power in 8,249 shares
with his spouse. The remaining 300 shares are held by the Arthur B. Montoya,
Jr., DDS Profit Sharing Plan
over which Dr. Montoya shares voting and investment power.
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(6)
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Includes 8,452 shares over which Mr. Primak shares voting and
investment power with his spouse, 206 shares held in his individual
retirement account and 208 shares held in the individual retirement account
of his spouse.
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(7)
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Mr. Slocomb shares voting and investment power in such shares
with his spouse.
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(8)
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Includes 47,355 shares Mr. Wells owns in Trinity’s ESOP, 12,705
shares held in his individual retirement account, 14,263 shares over which
Mr. Wells has sole voting and investment power and 42,000 shares
available to Mr. Wells through the exercise of options. This number
includes 1,061 shares held by Mr. Wells’ spouse, obtained prior to
marriage, to which he has disclaimed any beneficial ownership. All options
which Mr. Wells may exercise within 60 days of March 31, 2011 are included in
his percentage of ownership.
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(9)
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Mr. Worcester shares voting and investment power over such
shares with his spouse.
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(10)
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Mr. Bartholomew owns 14,273 shares through Trinity’s ESOP, 110
shares over which Mr. Bartholomew shares voting and investment power
with his wife. Additionally, 7,000 shares are available to
Mr. Bartholomew through the exercise of options. All options which Mr.
Bartholomew may exercise within 60 days of March 31, 2011 are included in his
percentage of ownership.
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(11)
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The total of all Directors and Executive Officers does not include
George A. Cowan as he is no longer a Director but serves as a Director
Emeritus and is the beneficial owner of more than 5% of Trinity’s outstanding
common stock. The total percentage of ownership for all Directors and
Executive Officers includes all options exercisable within 60 days.
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(12)
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Of the 628,914 shares held by Trinity’s ESOP, all are allocated or
will be allocated in 2011 to the individual participants’ accounts,
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(13)
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Dr. Cowan’s shares are held by The Delle Foundation, a
non-profit corporation controlled by Dr. Cowan and his spouse.
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Section 16(a) Beneficial Ownership Reporting
Compliance
Section
16(a) of the Securities Exchange Act of 1934 requires that the directors,
executive officers and persons who own more than 10% of Trinity’s common stock
file reports of ownership and changes in ownership with the Securities and
Exchange Commission. These persons are also required to furnish us with copies
of all Section 16(a) forms they file. Based solely on Trinity’s review of the
copies of such forms furnished to us and, if appropriate, representations made
by any reporting person concerning whether a Form 5 was required to be filed
for 2010, there was one reported late filing required under Section 16(a)
during 2010. A Form 4 reporting the purchase of 1,500 shares of stock on November
29, 2010 by Charles A. Slocomb was reported on December 10, 2010.
Compensation
Discussion and Analysis
This
Compensation Discussion and Analysis (“CD&A”)
describes Trinity’s compensation philosophy and policies, as well
as the compensation decisions made for 2010 as applicable to the Named
Executive Officers (“NEOs”). This CD&A explains
the structure and rationale associated with each material element of the NEOs’
compensation, and the rationale for the compensation determinations made by the
Compensation Committee in 2010. The CD&A also provides important context for the more detailed disclosure
tables and specific compensation amounts provided following the section.
The difficult economic environment in 2010
presented significant challenges to Trinity.
Pressure on the economy and particularly on real estate values led to
increased nonperforming assets held by the Bank and significantly increased
provisions for loan losses. Because our
compensation programs are designed to align the compensation of our NEOs with
the financial performance of Trinity, the 2010 financial performance impacted
the compensation of our NEOs. The Board determined that pay raises would not be
awarded to Mr. Enloe or Mr. Wells and that no bonuses or stock incentives would
be granted to any employees, including under the profit sharing program shared by all eligible employees of Trinity. Mr. Bartholomew received a base salary raise due to his performance and due to the significant deviation from
average and median peer compensation and internal pay equity.
Compensation
Philosophy and Objectives
The
Compensation Committee seeks to achieve four goals in connection with the
compensation program and decisions regarding the NEOs. Trinity’s compensation programs align with Trinity’s culture, philosophy and strategy to provide long-term
sustainable growth for its investors. In keeping with this strategy, Trinity’s
compensation programs are focused on four factors. First, the compensation
awarded should reflect the qualifications, skills, experience and
responsibilities of each NEO. Second,
the Compensation Committee structures the compensation program in a manner that
the Committee believes will enable Trinity and the Bank to retain the most
qualified, intelligent, honest and loyal employees by providing competitive
compensation and benefits. Third, the Compensation Committee establishes the
compensation program to provide each NEO with incentive and motivation to
achieve superior job performance, deliver excellent customer service, and
achieve his or her personal goals and contribute to the overall success of the
organization. Finally, the compensation programs are designed to encourage both
generation of income and reduction of expenses by making all employees owners
of Trinity thereby aligning their interests with those of Trinity’s
shareholders. However, so long as
Trinity is participating in the Capital Purchase Program (“CPP”) element of the Treasury’s
Troubled Asset Relief Program (“TARP”),
certain limitations on the compensation of senior executive officers are
applicable and may affect the available elements of the compensation
program. See “Changing Regulatory
Environment” below.
Compensation is awarded
both on the basis of individual performance and Trinity’s success. NEOs share
in many of the same compensatory programs as other employees and many of these
programs are shared in equal proportions by NEOs and employees, including the
profit sharing program and the Trinity Capital Corporation Employee Stock Ownership Plan (“ESOP”).
These programs are designed to reward longevity and corporate performance, thereby
aligning Trinity’s employees’ interests with those of its shareholders.
Trinity’s contributions to the ESOP and profit sharing program are based upon
its profitability.
Compensation Factors and Committee Processes
General. Trinity’s NEOs’ base
salaries reflect individual performance, while short-term and long-term
incentives reflect corporate performance and provide incentives for Trinity’s
NEOs and other employees to ensure the long-term profitability of Trinity.
Trinity reviews the compensation practices of several peer groups, as discussed
below, to ensure its compensation is competitive. Trinity does not use static
performance criteria or measures, but instead looks at the complete picture of
our returns in light of the market environment, competitors, economic
conditions and other relevant factors that affect the profitability of Trinity.
The Compensation Committee has discretion to take into account all factors and
measures throughout the year, as well as the agility and performance of its
NEOs in responding to challenges and opportunities as they arise, rather than
certain items set at the beginning of the year that circumstances may make a lower priority over the course of the year.
Corporate Performance. In
establishing compensation for Trinity’s NEOs for 2010, the Compensation
Committee weighed the financial and other performance indicators and levels of
success desired and expected in assessing the performance of its NEOs. The
financial indicators were based upon the budget created by management and
approved by the Board and focus primarily on the returns for LANB, including
return on average equity, asset quality, efficiency, net income, return on
average assets and regulatory compliance. The Compensation
Committee sets expectations of meeting or exceeding these goals, but takes into
account other internal and external factors that influence the levels of
success that can be achieved in the given year. Additionally, Trinity provides
equal consideration to LANB’s customer satisfaction levels and employee
satisfaction levels. Trinity’s goals are set as “stretch” goals which are not
easily attainable. As a result, Trinity retains the flexibility and full
discretion to determine whether to reward its NEOs and to determine at what
level based on corporate performance even if the measures contained in the
budget are or are not fully achieved.
Individual Performance. Included
in the consideration of individual performance is the expertise, skill set and
workload requirements for each position, as well as the
responsibilities resultant from being a public company. All employees of
Trinity and its subsidiaries set individual goals each year that align with departmental goals which, in turn, align with
corporate goals and strategies. The goals are set by the employees and are
discussed with, and approved by, each employee’s supervisor. In developing
annual and long-term goals, Trinity is focused on excellence in customer
service, employee satisfaction and investor returns. Goals for Trinity’s NEOs
typically include achievement
of budget for financial measures,
progress toward or achievement of Trinity’s strategic goals, meeting
opportunities and challenges as they arise, personnel management and
development, and community support and involvement.
Peer Comparison. Trinity’s
Compensation Committee believes that the compensation paid to similarly
situated executives at other financial institutions should be a point of
reference for measurement, but not the determinative factor in setting the
compensation for Trinity’s NEOs. Recognizing the inherent difficulty in
assessing and comparing compensation programs and awards, the Compensation
Committee retains the discretion to determine the nature and extent of use of
comparative compensation data.
In its 2010 compensation review, the Committee compared Trinity's compensation
program to certain peer financial institutions. Data was provided by SNL
Financial, Inc. regarding the 2009 reported compensation of NEOs for several
peer sets of financial institutions, including: financial institutions by asset
size, by CPP participation status, by geographic region, and by 2009 peer group
(based on asset size and geography). The primary peer group used for 2010
included 21 banking organizations
primarily located within our region (the Southwestern and Western United
States) with total assets ranging from $1.2 billion to $3.0
billion. Approximately one
third of our primary peer group participated
in CPP. The peer group was chosen because of the relative size in total assets,
the geographic location and CPP participation status.
The
institutions included within the Compensation Committee’s primary peer group
analysis were:
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Beverly Hills Bancorp,
Inc.
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Home Federal Bancorp, Inc.
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Cascade Financial Corporation
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NARA Bancorp, Inc.
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Center Financial Corporation
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Mechanics Bank
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CoBiz Financial, Inc.
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MetroCorp Bancshares,
Inc.
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Community Bancorp
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Pacific Continental Corporation
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Encore Bancshares, Inc.
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Preferred Bank
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Exchange Bank
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PremierWest Bancorp
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F & M Bancorporation, Inc.
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Sierra Bancorp
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First California Financial Group, Inc
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TriCo Bancshares
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Guaranty Bancorp
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West Coast Bancorp
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Heritage Financial Corporation
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The Compensation Committee believes that the peer
groups are representative of the sector in which Trinity operates. The
Committee concluded based on its analysis that
the
NEOs’ total compensation is generally below the median and average levels for Trinity’s peers and Trinity’s 2010 performance was generally above median and average total compensation levels. The
Committee does not target a benchmark within its peer group, but rather, uses
the peer evaluation to validate that Trinity's compensation is competitive with
our peers.
Compensation Committee
Interlocks and Insider Participation.
During the fiscal year
2010, no executive officer of Trinity served as: a member of a compensation
committee (or other board committee performing equivalent functions, or in the absence
of such committee the entire board of directors) of another entity whose
executive officers served on Trinity’s compensation committee; a director of
another entity whose executive officers served on Trinity’s compensation
committee; or a member of the compensation committee (or other board committee
performing equivalent functions, or in the absence of any such committee, the
entire board of directors) of another entity whose executive officers served as
a director of Trinity. In addition, none
of the members of the Compensation Committee was an officer or employee of
Trinity or any of its subsidiaries in 2010, was formerly an officer or employee
of Trinity or any of its subsidiaries, or had any relationship requiring
disclosure under “Related Party
Transactions” contained herein.
Role of
Management and Compensation Consultants
William
C. Enloe, Trinity’s Chief Executive Officer (CEO), sets the salary and bonus
for Mr. Bartholomew. Mr. Enloe provides input and recommendations to the Compensation Committee with regard to the salary and bonus for Mr.
Wells. Mr. Enloe provides recommendations regarding the stock incentives
awarded and on the amount of Trinity’s contributions to the ESOP, profit
sharing and other bonus programs. Mr. Enloe plays no role in determining the
form or amount of his own compensation and does not make recommendations with
regard to director compensation. Mr. Wells and Mr. Bartholomew do not
participate in discussions regarding the other NEOs’ compensation.
The Compensation Committee has engaged compensation
consultants from time to time, as deemed appropriate and as pursuant to its authority under its charter. When such consultants are retained, they are contracted
for, and the scope of the engagement, is established by the Committee. In 2010, no compensation
consultant was engaged by the Compensation Committee, Board of Directors or
management to assist with establishing executive compensation.
Changing Regulatory Environment
In order to
more fully understand the Compensation Committee’s decisions with respect to
compensation during 2009 and 2010, the Committee believes it is beneficial to
understand the changing regulatory context in which these decisions were
made. In some cases, the regulatory
changes clearly impacted the Compensation Committee’s decisions with respect to
compensation paid to the NEOs, while in other cases the regulatory changes
simply required the Committee to reconfirm its existing processes and
procedures for determining executive compensation.
Troubled
Asset Relief Program—Capital Purchase Program.
On March 27, 2009, Trinity became a
participant in TARP by participating in the CPP. As a result of its
participation in the CPP, Trinity and certain of its employees will be subject
to compensation related limitations and restrictions for the period that Trinity
continues to participate in the CPP (the “Participation
Period”). The CPP compensation
limitations and restrictions include the following:
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Except in limited
circumstances, Trinity’s five most highly compensated employees (as determined on an annual basis) will be prohibited
from receiving cash bonus payments during the Participation
Period. Messrs. Enloe and Wells were
subject to this limitation during 2010 and Messrs. Enloe, Wells and Bartholomew
will be subject to this limitation during 2011.
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Except in limited
circumstances, Trinity’s NEOs and its next five most highly compensated employees (as determined on an annual basis) will be prohibited
from receiving any severance payments upon a
termination of employment or any
payments triggered by the occurrence of a change control.
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Trinity’s NEOs and
next 20 most highly compensated employees will be subject to a “clawback” of
incentive compensation if that compensation is based on materially inaccurate financial statements or performance metrics.
Further, no one in this group of employees can receive any tax
gross-up payment during the Participation Period.
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Trinity will be
limited to an annual tax
deduction of $500,000 with respect to the compensation paid to each of its
NEOs.
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In January 2010, Trinity awarded profit sharing payments based upon year-end performance
metrics to eligible recipients, which excluded the five
most highly-compensated employees.
Subsequent to the payment, Trinity was required to materially change the
financial metrics that the 2009 profit sharing payments were based upon and,
consequently, required to “claw-back” a
portion of the payments from the
eighteen individuals who were subject to the CPP “clawback” requirement. All of the individuals repaid the amount required
to be “clawed-back” during 2010. The
total amount “clawed-back” was $16,700.
In connection with the CPP transaction, Trinity
obtained waivers from its NEOs and five most highly compensated employees
waiving claims against Treasury or Trinity for changes to the individual's
compensation or benefits in order to comply with the CPP rules.
Trinity also obtained omnibus compensation amendments from its NEOs and
five most highly compensated employees modifying the terms of the employment agreements with Mr. Enloe and Mr. Wells and the general terms and
arrangements, policies and agreements with the remaining employees with respect
to such compensation prohibited by the CPP rules
during the Participation Period. As a consequence of such modifications to
the employment agreements with Mr. Enloe and Mr. Wells, the non-compete provisions of
their employment agreements were removed during the Participation
Period.
As
a result of its participation in the CPP,
the primary methods remaining for compensating the employees
covered by the CPP rules are now
limited to cash salary, salary stock and, on a limited basis, restricted shares compliant with
the CPP rules. The Compensation Committee
made significant efforts in 2010 to determine how best to continue to meet the
objectives of our compensation program within the context of these limitations,
specifically the ability to attract and retain our key employees. It was determined at that time that Trinity would
not increase the compensation of Mr. Enloe or Mr. Wells.
Trinity also implemented an Excessive or Luxury
Expenses Policy effective September 13, 2009 which can be found on the LANB
website under “TCC” then
“View Corporate Governance” the “TCC
Luxury Expenses Policy” or can be located
directly at http://www.lanb.com/CMFiles/Docs/TCC/TCCLuxuryExpense.pdf. The adoption
of this policy was required under the CPP rules. Its
implementation did not result in material changes to Trinity's
previous expense policies.
In addition
to the foregoing, the CPP rules and regulations require the Compensation
Committee to undertake a semi-annual risk assessment with respect to certain of
the compensation plans, programs and arrangements maintained by Trinity. The risk
assessments are intended to reduce the chance that any employee will be
incentivized to take unacceptable risks in order to maximize his or her
compensation under such plans, programs and arrangements. The Compensation Committee is required to
certify that it has conducted these assessments and made all reasonable changes. Trinity's Compensation Committee has so
certified within the Compensation Committee Report on page
42 of this Proxy Statement.
As the CPP final rules were implemented in 2009, the Committee
continually discussed its compliance obligations with respect to our executive
compensation programs at each Committee meeting. It has depended upon guidance from our legal
counsel to fully interpret the extent of the application of each of these
requirements on our executive compensation programs. As a result of Trinity's participation in the CPP,
the Compensation Committee modified its charter to require semi-annual meetings
to undertake the required semi-annual risk
assessments and to require all members be qualified as
independent directors.
Federal Reserve Guidance on Sound
Incentive Compensation Policies. In June 2010, the Federal Reserve, along with
the FDIC, Office of the Comptroller of the Currency and the Office of Thrift
Supervision, jointly issued final “Guidance on Sound Incentive Compensation
Policies” or “Final Guidance.” The Final
Guidance sets forth a framework to be used in compensation decisions by
financial institutions to assess the soundness of
incentive compensation plans, programs and arrangements. The Final Guidance applies to all financial
institutions, and it is designed to help ensure that incentive compensation
policies do not encourage excessive risk-taking and are consistent with the
safety and soundness of the organization by requiring financial institutions to
adhere to three guiding principles of a sound incentive compensation
system. The three principles of the
Final Guidance require the Compensation Committee to ensure that:
The Final
Guidance applies to incentive compensation arrangements for executive and
non-executive personnel who have the ability to expose Trinity to material risk,
including arrangements for:
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senior executives
and others who are responsible for oversight of company-wide activities or
material business lines;
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individual
employees, including non-executive employees, whose activities may expose
Trinity to material amounts of risk; and
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groups of
employees who are subject to the same or similar incentive compensation
arrangements and who, in the aggregate, may expose Trinity to material risk,
even if no individual employee is likely to expose Trinity to material risk
(e.g., loan officers who, as a group, originate loans that account for a
material amount of the organization’s credit risk).
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The
Compensation Committee will make use of the framework set forth in the Final
Guidance as it moves forward with its compensation actions and decisions. Based on its on-going risk assessment of
compensation arrangements in connection with its CPP obligations, the Committee
does not believe that any of our compensation plans or arrangements incentivizes
the taking of inappropriate risks.
Dodd-Frank Act. The Dodd-Frank Wall Street Reform and
Consumer Protection Act requires financial institutions to avoid inappropriate
risks in connection with their compensation plans and arrangements. On February 7, 2011, the Agencies that signed
on to the Final Guidance described above, issued proposed guidance under the
Dodd-Frank Act’s risk assessment provisions.
The Compensation Committee will continue to monitor this proposed
guidance and will take necessary steps to work toward compliance with the
requirements as they may be finally set forth when the proposed guidance is
finalized.
SEC Risk
Assessment Requirement. The SEC also requires a company to assess
compensation policies and practices in order to determine if any such policies
or practices have the potential to have a materially adverse effect on
Trinity. We believe our risk assessment
under the Final Guidance satisfies this requirement of the SEC.
Compensation
Components
Trinity’s
compensation program includes the following elements which are available to all
eligible employees: base salary, profit sharing program, ESOP, discretionary performance bonuses, and benefits
which include health insurance, life and disability insurance, flexible
spending accounts, leave (vacation, sick and sabbatical), leave incentives,
401(k) plan, health
club memberships, education assistance, and product and service discounts.
Trinity does not contribute to, or match contributions to, any employee’s 401(k) plan account. Trinity pays commissions in limited
circumstances. Trinity’s managers may award performance bonuses to select
employees for extraordinary efforts; however, certain employees are ineligible
for bonuses under the CPP rules. Trinity also pays a portion of the premiums
for certain insurance plans and makes available other plans at the employees'
expense. In addition, Trinity has stock
incentive and deferred income plans for
employees designated by the Board. Trinity recognizes and celebrates each
employee’s employment anniversary with the grant of additional vacation hours at
each such anniversary, pins at 1, 3, 5, 10, 20, 25 and 30 years of
service, four-week paid sabbaticals for every 10 years of
employment and special awards every five years beginning with an employee’s 20th
anniversary. The anniversary
award program has also been suspended for employees subject to the CPP bonus
prohibition.
NEO compensation historically consisted of base salary, benefits,
profit sharing, ESOP contributions, ESOP top-heavy cash payments for salaries
in excess of plan caps, discretionary performance bonuses and discretionary
stock incentives. NEOs are eligible to participate in all benefits on an equal
basis with all other employees; however, during the CPP Participation Period,
the top five highest compensated employees are not eligible to receive profit
sharing, ESOP top-heavy cash payments, discretionary performance bonuses or
discretionary stock incentives except as permitted by the CPP rules. Mr. Enloe
is provided with a vehicle allowance for one-half of his car lease, insurance,
maintenance, gas and expenses for this vehicle.
Base Salary. Trinity’s base salary
program is designed to provide a competitive base salary to
management and other employees. The
salary levels of all employees, including the NEOs, are set to reflect the
duties and levels of responsibilities inherent in the position, the competitive
conditions in the banking business in Trinity’s market area and the value received by Trinity from that employee.
Comparative salaries paid by peer financial institutions and market
salaries are considered in establishing the salary for NEOs. Comparative
information collected from publicly available information and other independent
sources of salaries paid to executive officers of other bank holding companies
and financial institutions similar in size, markets and other characteristics are used in such determinations. The base salaries of the NEOs are reviewed
annually, taking into account the competitive level of pay as reflected in the
data utilized. In setting base
salaries, a number of factors relating to the individual, including the
individual performance, historic salary levels, general market conditions, job
responsibilities, level of expertise, ability and knowledge of position and
complexity of Trinity’s operations are also considered. These factors are considered in the aggregate
and none of the factors are accorded a specific weight. See “Executive
Compensation –Summary Compensation Table” for base salaries paid to the
NEOs during 2010. Salaries for Mr. Enloe and Mr. Wells are set annually by the
Board, based on the recommendations of the Compensation
Committee. Mr. Enloe sets the salary for
Mr. Bartholomew.
At its March 23, 2010 meeting, the Compensation
Committee determined that Mr. Enloe and Mr. Wells would not receive salary
increases for 2010. In making this determination, the Committee recognized that Trinity’s
financial performance in 2009, while better than many peer companies and
direct competitors, did not meet budgeted levels. In addition, due to the
economic environment and the continuing challenges, the Committee determined
that it would continue a conservative approach to compensation. The
Compensation Committee and management determined that such a short-term course
was prudent and that the best interests of the shareholders was to continue
holding executive compensation expense generally static for 2010. Mr. Enloe provided Mr.
Bartholomew a 10% salary increase on February 20, 2010. Mr. Bartholomew’s salary increase was based
upon his individual performance in 2009 in the management of the Cashiers’
Department, financial reporting and controls, accomplishment of departmental
goals and service to the community and, in part, to make Mr. Bartholomew's
compensation more competitive with Trinity's peers. The Board determined at its December 21, 2010
meeting to provide a 3% salary increase each to Mr. Enloe and Mr. Wells for
2011. The Board determined that, based
upon the improvements made in the financial results for the second
half of 2010 and the progress made on Trinity’s strategic goals,
as well as the performance of both Mr. Enloe and Mr. Wells in confronting the
many challenges faced in 2010, that the salary increases were warranted.
In January 2011, Mr. Enloe determined that Mr. Bartholomew would not receive a
salary increase for 2011.
Short-Term Incentives.
Performance Bonuses. Trinity
does not employ a bonus plan but rather provides for discretionary bonuses to
its NEOs and other key employees based upon the efforts and results for each
fiscal year, based upon the goals, objectives, challenges and opportunities for
the given year. In 2010, Trinity’s NEOs
were not eligible for cash bonus payments under the applicable limitations
imposed by virtue of Trinity’s participation in the CPP and did not receive any
bonus payments.
Profit Sharing Program. Trinity contributes to
the profit sharing program based on its belief that sharing corporate profits
is an effective motivating technique for employees. Trinity believes that profit sharing leads to
employees who are more conscientious in reducing costs and increasing income
and efficiency, thereby aligning their interests with those of our
shareholders. All eligible employees
participate, on a proportional basis, in Trinity’s profit sharing program. All
eligible employees receive the same percentage of their eligible compensation,
consisting primarily of their base salaries, through the program. Full time employees become eligible for
profit sharing participation the year following the completion of 18 months of
service. Trinity’s contribution to the
profit sharing program is based upon the recommendation of the Compensation
Committee and determined by the full Board based upon the profitability of Trinity
and is entirely discretionary. The Board decided not to make a profit sharing contribution on behalf of Trinity’s employees for 2010.
Employee Stock Ownership Plan. Trinity contributes to the profit sharing
program based on its belief that employee/owners act differently than employees
who do not have a personal stake in their company. Trinity contributes to
the ESOP in accordance with its culture of ownership and as a method for
providing retirement funds for its employees. The ESOP is fully funded by the
discretionary contributions of Trinity and participants cannot invest in the
Plan. The ESOP is the second-largest shareholder of Trinity, tying the
financial interest of our employees to the interests of our shareholders
in enhancing the value of Trinity’s stock.
All eligible hourly and salaried employees participate, on a
proportional basis, in Trinity’s ESOP program. All eligible employees receive
the same percentage of their eligible compensation, consisting primarily of
their base salaries. Full-time employees become eligible for ESOP participation
the year following the completion of 1,000 hours of service. An employee’s
ownership of his or her ESOP account currently vests incrementally over a
period of six years. Trinity’s contribution to the ESOP program is recommended
by the Compensation Committee and determined by the full Board based on the
profitability of Trinity and is entirely discretionary. In 2010, the Board approved a contribution of $140,000 to the ESOP.
Trinity’s NEOs are permitted to participate in the ESOP.
Long-Term
Equity Incentive Compensation Program. In
prior years, the Compensation Committee, from time to time, included grants of
long-term equity compensation awards as part of the annual compensation
provided to the NEOs, primarily in the form of nonqualified stock options (“NQSOs”) or stock appreciation rights (“SARs”). Trinity
granted stock incentives to key employees, including its NEOs, as motivation to
enhance the appreciation of Trinity’s stock price and returns and to reward
their efforts through the long-term appreciation of Trinity’s stock price and
to strengthen retention of key employees and NEOs. While such grants have a
minimal dilutive effect on the interests of existing shareholders, the
Committee and the Board believe that aligning the senior leaders’ personal
long-term interests with those of the shareholders outweighs this effect. The
full benefit of the stock incentives are only realized upon the appreciation of
Trinity’s stock price, providing an incentive for participants to create value
for Trinity’s shareholders by delivering consistent and sustainable returns and
equity in Trinity. Under the CPP rules and regulations, Trinity is
prohibited from granting equity compensation awards to NEOs unless such awards
are made in the form of “long-term restricted stock” that complies with various
requirements specified in the regulations through which the recipient would
receive stock or equivalent stock units that would then have certain vesting
and retention requirements. In deciding to award stock incentives, the
Compensation Committee considers a number of factors, including the number of
options outstanding or previously granted and the aggregate size and value of
current awards. Trinity did not grant any stock incentives to
the NEO’s during 2009 or 2010.
Trinity
Capital Corporation 2005 Stock Incentive Plan (“2005 Plan”). The
following is a brief description of the material terms of the 2005 Plan. The
following summary is qualified in its entirety by reference to the full Plan
which may be found as Appendix A to Trinity’s 2005 Proxy Statement.
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A maximum of 500,000 shares of Trinity’s common
stock are reserved for issuance. A maximum of 100,000 options and SARs
may be granted to an individual during any calendar year. Shares delivered
will be authorized but unissued shares of Trinity common stock, treasury
shares or shares purchased in the open market or otherwise.
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In the event of recapitalizations,
reclassifications or other specified events affecting Trinity or shares of
Trinity’s common stock, appropriate and equitable adjustments will be made to the number and kind of shares of Trinity’s
common stock available for grant, as well as to other maximum limitations
under the 2005 Plan, and the number and kind of shares of Trinity common
stock or other rights and prices under outstanding awards.
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The 2005 Plan is an “omnibus” stock plan that
permits the Compensation Committee to utilize various types of equity-based
awards.
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The exercise price
of any stock option granted may not be less than the fair market value of
Trinity’s common stock on the date the option is granted. The option price is
payable in cash, shares of Trinity’s common stock, through a broker-assisted cashless exercise or as otherwise
permitted by the Compensation Committee.
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The 2005 Plan does not permit the repricing of
options or SARs without the
approval of shareholders or permit the granting of discounted options.
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The 2005 Plan was approved by shareholders at
the 2005 Annual Shareholder Meeting and expires on May 26,
2015, unless terminated earlier by the Board. The Board may at any time and
from time to time, and in any respect, amend or modify the 2005 Plan. The
Board may seek the approval of any amendment or modification by Trinity’s
shareholders to the extent it deems necessary or advisable in its sole discretion
for purposes of compliance with Section 162(m) or Section 422 of the Internal
Revenue Code of 1986,
as amended (the “Code”), or another
exchange or securities market or for any other purpose.
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1998 Stock Option Plan for Trinity Capital Corporation (“1998 Plan”). Awards granted prior to January 1, 2005 were
issued under the 1998 Plan. This Plan can be found as
Exhibit 10.4 to Trinity’s Form 10 filed on April 30, 2003. Trinity no longer
grants awards under the 1998 Plan. Stock Options to
purchase 201,000 shares of Trinity common stock issued under the 1998 Plan were
outstanding as of December 31, 2010.
Equity
Awards. Mr. Enloe makes recommendations to the Board with regard to the amount
and type of stock awards for all other employees. These recommendations are
considered by the Compensation Committee which, in turn, provides its own recommendations
for approval by the full Board. The Committee delegates administration of the
awards to management. Trinity does not have a program, plan or practice to time
equity award grants to its executives in coordination with the release of
material nonpublic information nor does Trinity time the release of material
non-public information for the purpose of affecting the values of executive
compensation. Trinity has not repriced any compensation awards, including stock
options or SARs, nor has it made any material modifications to its stock incentive plans or awards. Trinity typically determines grants of stock
incentives near the end of each fiscal year and announces those awards as soon
as practicable following the grant.
Trinity’s stock incentive awards have been priced at or above the
market value of the Trinity stock based on the last reported sale price as of the date
of grant which is also the date of approval, with the exception of the July
1998 stock option grant, which was granted at $0.25 below the last reported sale
price.
Trinity has awarded all stock options and SARs
based on the last reported market price of Trinity’s stock on the award grant date, with the exception of the July 1998 grant described above. Trinity will in the future price all
options and other equity awards at or above market price as of the actual grant
date.
Trinity
shifted from the grant of NQSOs to the grant of SARs beginning in 2006 due to several
considerations. The Compensation Committee and the Board determined that the dilutive effect
of NQSOs were reduced by the grant of SARs rather than NQSOs as
fewer shares will be issued upon maturity, thereby benefitting Trinity’s
shareholders. Additionally, the Committee and the Board considered the expense
to exercise and pay taxes associated with NQSOs, thereby limiting the
motivational effect on grantees. The Committee and the Board concluded that the
grant of SARs, rather than NQSOs, better served the interests of both grantees
and shareholders. As noted above, Trinity did not award any stock incentives to the NEOs in
2009 or 2010.
Tax and
Accounting Considerations
In
consultation with advisors, the tax and accounting treatment of each of
Trinity’s compensation programs is evaluated at the time of adoption and, as
necessary, with changes in tax or other applicable rules or conditions making
such a review prudent to ensure we understand the financial impact of each
program on Trinity and the value of the benefit provided to our officers and
employees.
Code Section
162(m) limits the Bank’s Federal income tax deduction
for certain executive compensation in excess of $1 million paid to each NEO. The $1 million deduction limit does not apply, however,
to “performance-based compensation” as that term is defined in Code Section 162(m). The Compensation Committee recognizes the
possibility that if the amounts of the base salary of an NEO, and other compensation not
described in the preceding paragraph, exceeds $1 million, it may not be fully
deductible for Federal income tax purposes.
The Compensation Committee will make a determination at any such time
whether to authorize the payment of such amounts without regard to
deductibility or whether the terms of payment should be modified as to preserve
any deduction otherwise available.
Notwithstanding the foregoing, for so long as any NEO is a “senior executive officer”
within the meaning of TARP,
Trinity’s annual federal tax deduction for compensation paid to each “senior
executive officer” is limited to $500,000, with no exception for
performance-based compensation. The
Compensation Committee evaluates this limitation when making determinations
whether to authorize payment of an amount that would exceed this limit. In
2010, the limitation on deductibility of compensation to the senior executive
officers did not affect Trinity’s compensation practices nor did Trinity pay
any senior executive officer an amount in excess of the applicable deductibility
limit.
Stock
Ownership Requirements
Trinity has not adopted
stock ownership requirements for the NEOs or Directors apart from the
requirements of the bank regulators under 12 U.S.C. Section 72, which requires directors to own a
minimum of $1,000 in Trinity’s stock.
Each of Trinity’s directors satisfies this requirement. See “Security
Ownership of Certain Beneficial Owners, Director and Management.” As a practical matter, the NEOs and directors
hold significant interests in Trinity’s stock, which they have accumulated
primarily through individual purchases and, for NEOs, through the exercise of
stock incentive awards, as
reflected in the Security Ownership table on page 13.
Executive Compensation
Trinity currently has three NEOs. These officers
are: William C. Enloe, Chief Executive Officer and President of Trinity, Chief
Executive Officer and Chairman of LANB and Chief Executive Officer and Chairman
of Title Guaranty; Steve W. Wells, Secretary of Trinity and President and Chief
Administrative Officer of LANB; and Daniel R. Bartholomew, Chief Financial
Officer of Trinity and LANB. The following table contains the summary of
compensation to Trinity’s NEOs from 2008 to 2010. Trinity’s NEOs are
compensated by Trinity’s subsidiary, LANB.
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Name and
Principal Position
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Year
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Salary
(1)
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Bonus
(2)
|
Option
Awards
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All
Other Compensa-tion
|
Total
|
|
($)
|
($)
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($)
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($)
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($)
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(a)
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(b)
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(c)
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(d)
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(f)
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(i)
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(j)
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William C. Enloe, Chief Executive Officer of Trinity
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2010
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379,775
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0
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0
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4,803
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384,578
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2009
2008
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372,339
372,339
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0
250
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0
0
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29,054
57,542
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401,393
430,131
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Steve W. Wells, President of
LANB
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2010
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260,464
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0
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0
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2,774
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263,238
|
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2009
2008
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255,549
255,549
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0
250
|
0
0
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27,187
44,590
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282,736
300,389
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Daniel R. Bartholomew, Chief Financial Officer of Trinity
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2010
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165,798
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0
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0
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3,456
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169,254
|
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2009
2008
|
149,248
149,248
|
0
0
|
0
0
|
12,218
20,532
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161,466
169,780
|
|
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(1)
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Base salaries did not increase from 2009 to
2010, but there was an additional pay period in 2010 resulting in increased
salary paid from the previous year. The Salary column includes amounts
deferred at the NEOs’ election
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(2)
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”All Other Compensation” for the NEOs during
fiscal 2010 is summarized below.
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|
Name
|
Perquisites and Other Personal Benefits
|
Profit Sharing
|
Insurance Premiums ($)
|
Company Contributions Related to ESOP
|
Total
($)
|
|
($)
|
($)
|
($)
|
|
William C. Enloe
|
-
|
0
|
2,608
|
2,195
|
4,803
|
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Steve W. Wells
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-
|
0
|
579
|
2,195
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2,774
|
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Daniel R. Bartholomew
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-
|
1,810
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144
|
1,502
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3,456
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Profit sharing
contributions made on behalf of Mr. Bartholomew in 2010 were based upon the financial
performance of Trinity in 2009, during which period Mr. Bartholomew was
eligible for such payment under the provisions of the CPP. In addition, Mr. Bartholomew was subject to
the “clawback” conducted in 2010, as described in the CD&A above. Included in “Insurance Premiums” is excess life
insurance for our NEOs which are provided on the same terms to all employees.
“Company Contributions Related to ESOP” consists of contributions to the ESOP.
2010 Grants of Plan-Based Awards. Trinity did not grant any awards
to the NEOs in 2010 and therefore the Grants of Plan-Based Awards table has
been omitted.
Outstanding
Equity Awards at 2010 Fiscal Year-End. The
following table provides information as of December 31, 2010, regarding
Trinity’s outstanding stock incentive awards to the NEOs under the 1998 Plan
and the 2005 Plan.
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Number of Securities Underlying
Unexercised Options (#)
|
|
Type of Equity Award
|
|
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Name
|
Exercisable
|
Unexercisable
|
Option Exercise Price ($)
|
Option Expiration Date
|
|
William C. Enloe
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0
|
16,000
|
25.00
|
SAR
|
12/18/2012
|
|
|
0
|
18,000
|
28.75
|
SAR
|
1/16/2012
|
|
|
0
|
28,000 (3)
|
28.00
|
SAR
|
1/1/2011
|
|
|
28,000
|
0
|
30.50
|
NQSO
|
8/16/2015
|
|
|
28,000
|
0
|
32.00
|
NQSO
|
12/18/2013
|
|
|
28,000
|
0
|
22.00
|
NQSO
|
12/19/2012
|
|
|
28,000
|
0
|
20.00
|
NQSO
|
12/20/2011
|
|
Steve W. Wells
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0
|
8,000
|
25.00
|
SAR
|
12/18/2012
|
|
|
0
|
9,000
|
28.75
|
SAR
|
1/16/2012
|
|
|
0
|
14,000 (3)
|
28.00
|
SAR
|
1/1/2011
|
|
|
14,000
|
0
|
30.50
|
NQSO
|
8/16/2015
|
|
|
14,000
|
0
|
32.00
|
NQSO
|
12/18/2013
|
|
|
14,000
|
0
|
22.00
|
NQSO
|
12/19/2012
|
|
Daniel R.
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0
|
4,000
|
25.00
|
SAR
|
12/18/2012
|
|
Bartholomew
|
0
|
4,000
|
28.75
|
SAR
|
1/16/2012
|
|
|
0
|
7,000 (3)
|
28.00
|
SAR
|
1/1/2011
|
|
|
7,000
|
0
|
30.50
|
NQSO
|
12/16/2014
|
|
|
(1)
|
SARs vest on the fifth anniversary of the date
of grant.
|
|
|
(2)
|
NQSOs vest in equal amounts over the first
three years following grant and expire on the tenth anniversary of the date
of grant.
|
|
|
(3)
|
The SARs matured on January 1, 2011 without any
payment to the awardees as they were granted at an amount greater than the
market price at maturity.
|
Employment Agreements
Trinity has entered into employment
agreements with Mr. Enloe and Mr. Wells. Trinity entered into these
agreements to provide certainty in the relationship between Trinity and these
two key employees in relation to their positions, non-compete and
non-solicitation agreements and change of control provisions. The key
provisions to these agreements are discussed below in the “Potential Payments Upon Termination or Change in Control” section
and are qualified in their entirety by reference to the full employment agreements,
which may be found as Exhibits 10.11 and 10.12 to Trinity’s Form 10-K filed on
March 16, 2007, as amended on March 13, 2008, which amendments may be found as
Exhibits 10.11 and 10.12 to Trinity’s Form 10-K filed on March 17, 2008, and as
further amended by an omnibus compensation amendment executed on March 24,
2009, the form of which amendments may be found as Exhibit 10.3 to Trinity’s
Form 8-K filed on March 27, 2009. In
addition, Mr. Enloe and Mr. Wells have entered into a waiver, the form of which
may be found as Exhibit 10.2 to Trinity’s Form 8-K filed on March 27, 2009,
waiving certain rights under the employment agreements and other benefit and
compensation plans pursuant to the requirements for participation in the CPP.
Trinity’s employment agreements contain
non-competition, non-solicitation, non-disparagement and confidentiality
provisions, equitable enforcement provisions, and dispute resolution
provisions. Mr. Enloe and Mr. Wells are required to provide 60 days’ notice of
their intent to terminate employment voluntarily under their Employment
Agreements. These provisions were consideration to induce Trinity to enter into
the agreements and thus, any benefit conferred by the employment agreements is
conditioned on the honoring of these terms by the employee. Trinity’s employment
agreements further precondition the receipt of any severance pay or other
benefits upon the employee remaining available for consultation for a twelve
month period following termination, not to exceed 100 hours and the release of
any employment related claims. Trinity modified these employment agreements on
March 24, 2009, through an omnibus amendment and waiver in order to comply with
the CPP rules, as discussed in more detail in the CD&A above. The omnibus amendments
and waivers, among other provisions, required Mr. Enloe and Mr. Wells to
relinquish all rights to severance payments during the CPP Participation
Period. Trinity determined that it was appropriate to eliminate the non-compete
provisions of those employment agreements in the limited circumstance that the
employment of Mr. Enloe or Mr. Wells is terminated and said employee(s) are
prohibited by law from receiving the severance provided in consideration for
such non-competition provisions. The non-solicitation and non-disparagement
provisions remain in full effect regardless of the receipt of severance or
other benefits. Upon repayment in full
of CPP funds, Mr. Enloe and Mr. Wells will again be entitled to severance payments
in accordance with the terms of the employment agreements and will again be
subject to their non-compete provisions.
The
omnibus amendment and waiver to the employment agreements also included the
imposition of a provision that requires the adjustment or recovery of awards or
payments upon restatement or other adjustment of relevant company financial
statements or performance metrics. Thus, to the extent that such adjustment or
recovery is required under applicable securities law, the CPP rules or other
law, Trinity’s employment agreements with Mr. Enloe and Mr. Wells
provide that they will make restitution.
Awards or payments made to Mr. Bartholomew and the top twenty highest
compensated employees will likewise be subject to recovery upon restatement or
other adjustment of relevant company financial statements or performance
metrics.
Potential
Payments Upon Termination or Change in Control
The CPP rules will prohibit Trinity from making any payment to the
NEOs for departure from Trinity for any reason, except for payments "for
services performed or benefits accrued."
Except in the case of an NEO's death or disability, the CPP rules
generally will prohibit the payment of any severance amounts and will also
serve to restrict the ability of Trinity to accelerate the vesting of any
compensation and/or benefits upon a termination of employment or a change in
control. The Compensation Committee believes that, even though the CPP rules
will prohibit such payments if a change in control or other termination of
employment occurs during the Participation Period, it is beneficial to
understand the terms of the arrangements that would apply except for such CPP
rules.
Upon the conclusion of the CPP Participation
Period, when the CPP rules are no long applicable to Trinity and its employees,
Mr. Enloe and Mr. Wells will again be eligible to receive certain severance
payments under their employment agreements as described below. Based upon the
last reported sale price of Trinity’s common stock on December 31, 2010 of
$9.75 per share, no post-termination payments would be made in connection with
outstanding stock incentives held by the NEOs, as all stock incentives that may
be exercisable would be out-of-the-money as the strike prices are all above the
last reported sale price. Trinity does not have a pension benefits plan nor
have its employees chosen to participate in the Trinity Capital Corporation
2005 Deferred Income Plan. Trinity’s NEOs participate in Trinity’s ESOP, which
is a qualified retirement plan, in the same manner as all other Trinity employees.
All of Trinity’s NEOs are fully vested in the ESOP and would be entitled to
distribution of their account balances upon termination for any reason. The
values of the NEOs’ ESOP accounts are not included in the table immediately below
and would not be subject to the CPP's prohibition on severance payments.
Reason
for Termination
|
William C. Enloe
|
Steve W. Wells
|
Daniel R. Bartholomew
|
|
Voluntary Termination, including retirement
|
None
|
None
|
None
|
|
Termination Without Cause
(without Change of Control)
|
None
($372,609 if no CPP restriction on severance)
|
None
($255,549 if no CPP restriction on severance)
|
None
|
|
Termination For Cause
(without Change of Control)
|
None
|
None
|
None
|
|
Termination following Change of Control
|
None
($372,609 if no CPP restriction on severance)
|
None
($255,549 if no CPP restriction on severance)
|
None
|
|
Termination due to Death or Disability
|
None
|
None
|
None
|
The
following is a description of the applicable post-employment plans and benefits
provided by Trinity through its employment plans and agreements to its NEOs. As
New Mexico is an “at will” employment state, and does not require severance
payments upon termination with or without cause in the absence of an agreement
to the contrary, Mr. Bartholomew is not eligible to receive any severance as he
is not a party to an agreement that provides for any such payments upon a
termination of employment.
Payments
upon Voluntary Termination. None of
Trinity’s NEOs are entitled to payment of severance upon voluntary
termination. The NQSOs granted under the
1998 Plan exercisable as of the date of an NEO or other recipient’s voluntary
termination must be exercised by the earlier of the specified expiration date
or two years following the date of termination and all non-vested NQSOs are
forfeited on the date of voluntary termination.
Under the 2005 Plan, NEOs or other recipient employees who voluntarily
terminate must exercise all vested NQSOs within 90 days following termination. NQSOs granted under the 2005 Plan that are
not vested on the date of voluntary termination are forfeited. Under the 2005 Plan, all SARs immediately
vest and are settled as of the date of voluntary termination.
Payments
upon Termination Without Cause (without Change in Control). Pursuant to their employment agreements, Mr.
Enloe and Mr. Wells are entitled to payment of severance in the amount of 12
months’ base salary upon termination without cause during the term of their employment
agreements. NQSOs granted under the 1998 Plan exercisable as of the date of
termination without cause must be exercised by the earliest of the specified
expiration date or two years following the date of termination. All non-vested
NQSOs issued under the 1998 Plan are forfeited on the date of termination
without cause. Under the 2005 Plan,
employees who are terminated without cause must exercise all vested NQSOs
within 90 days following termination. NQSOs granted under the 2005 Plan that
are not yet vested are forfeited. Under the 2005 Plan, all SARs immediately
vest and are settled as of the date of termination without cause. This acceleration of SAR vesting would not be
permitted under the CPP rules with respect to a termination occurring during
the Participation Period.
Payments upon Termination for Cause (without
Change in Control). None of Trinity’s NEOs are entitled to payment
of severance upon termination for cause.
NQSOs granted under the 1998 Plan exercisable as of the date of
termination for cause must be exercised by the earliest of the specified
expiration date or two years following the date of termination. All non-vested
NQSOs granted under the 1998 Plan are forfeited on the date of termination for
cause. Under the 2005 Plan, all NQSOs
expire the day prior to termination when termination is for cause. SARs granted
under the 2005 Plan are forfeited if termination is for cause.
Payments upon Termination Following a Change in
Control. In the event that
Messrs. Enloe or Wells are terminated within 12 months of a change of
control, either with or without cause, each shall be entitled to a lump sum
payment of 12 months’ salary (based upon his then-current rate). Should
Messrs. Enloe or Wells be terminated for non-renewal of his employment agreement
within 6 months of a change of control, each shall be entitled to the change of
control payments specified above. Should Messrs. Enloe or Wells terminate
his employment due to a detrimental change within 24 months of a change of
control, each shall be entitled to the change of control payments specified
above. All change of control payments are limited in amount in order to avoid
application of an excise tax under Internal Revenue Code Section 280G.
The
1998 Plan provides that upon a change in control, all outstanding NQSOs
immediately vest and are exercisable. The 1998 Plan also provides that the
grantee must exercise all vested NQSOs by the earlier of the specified
expiration date or the second anniversary of termination due to change in
control. NQSOs granted under the 2005 Plan immediately vest and are exercisable
upon a change in control, unless vesting is conditioned upon performance in
which case certain percentages of the awards are vested and exercisable in
accordance with the percentages of performance attained as more specifically
provided in the 2005 Plan. Under the 2005 Plan, all SARs immediately vest and
are settled as of the date of termination due to a change in control. The acceleration of equity award vesting
would not be permitted under the CPP rules with respect to a termination
occurring during the Participation Period.
Payments upon Termination due to Disability or
Death. None of Trinity’s NEOs are entitled to payment of severance upon
termination due to disability or death. NQSOs granted under the 1998 Plan
exercisable as of the date of termination due to disability must be exercised
by the earliest of the specified expiration date or two years following the
date of termination and all non-vested options are forfeited on the date of
termination due to disability. NQSOs issued under the 1998 Plan exercisable as
of the date of death must be exercised by the earlier of the specified
expiration date or the first anniversary of the date of death. All non-vested
options are forfeited on the date of death. Under the 2005 Plan, all stock
options exercisable as of the date of termination due to disability or the date
of death must be exercised by the earlier of the specified expiration date or
the first anniversary of the date of termination due to disability or the date
of death. All non-vested options are forfeited. Under the 2005 Plan, all SARs
immediately vest and are settled as of the date of termination due to
disability or the date of death.
Director Compensation
Trinity’s Board consisted of ten members from January to May
2010. In May 2010, Lewis A. Muir was no
longer eligible for re-election based upon Trinity’s age restrictions. Mr. Muir was not replaced and was appointed a
Director Emeritus. In addition, George
A. Cowan served as Director Emeritus throughout 2010. Two of Trinity’s Directors are employed as
executive officers. Trinity provides compensation to Trinity’s outside
directors based on the service they provide to Trinity. Trinity’s employed
directors, William C. Enloe and Steve W. Wells, and Trinity’s Directors
Emeriti, George A. Cowan and Lewis A. Muir, are provided no compensation for
their services as directors. Trinity’s employed directors are compensated for
their positions within Trinity as described above.
The following table sets
forth compensation provided to each of the non-employee directors of Trinity
and includes their services as directors of the Bank.
|
2010 Director Compensation
|
|
Name
|
Fees Earned or Paid in Cash
($)
|
All Other Compensation (1)
($)
|
Total ($)
|
|
Jeffrey F. Howell
|
18,000
|
1,305
|
19,305
|
|
Deborah U. Johnson
|
18,000
|
1,305
|
19,305
|
|
Jerry Kindsfather
|
23,000
|
1,668
|
24,668
|
|
Arthur B. Montoya, Jr.
|
18,000
|
1,305
|
19,305
|
|
Lewis A. Muir (2)
|
9,000
|
647
|
9,647
|
|
Stanley D. Primak
|
21,600
|
1,566
|
23,166
|
|
Charles A. Slocomb
|
23,000
|
1,668
|
24,668
|
|
Robert P. Worcester
|
29,000
|
2,103
|
31,103
|
|
George A.
Cowan
|
-
|
-
|
-
|
|
|
(1)
|
All Other Compensation consists of tax
gross-ups. Trinity does not provide for the payment of any tax gross-ups to
its NEOs.
|
|
|
(2)
|
Mr. Muir became a Director Emeritus effective
in May 27, 2010 and did not receive director fees after that time.
|
The entire Board annually reviews and determines
compensation for Trinity’s non-employee directors. As a starting point for its review, the
Compensation Committee uses the peer group compensation data prepared by management.
Trinity did not increase the levels of director compensation in 2010 with the
exception of adding compensation to the members of the Compliance Committee.
Each
non-employee of the Board receives a retainer on a monthly basis for their
service to Trinity and LANB. No compensation
is paid to the Directors of Title Guaranty. The directors are paid $500 per
month for service on the Trinity board. The directors are paid $1,000 per month
for service on
LANB board. The Chairman of the Board of Directors of Trinity receives an additional
$500 per month for his service and the Vice-Chairman of the Board of Directors
of Trinity receives an additional $300 per month for his service. Committee Chairs are not paid additional
fees. The members of the Compliance
Committee, beginning in March 2010, received an additional $500 per month for
their service.
ITEM I: ELECTION OF DIRECTORS
Trinity’s Board is divided into three classes
with one class elected each year to serve for a three-year term. For 2011, the Board resolved to continue with
a Board consisting of nine directors. Three Class II directors, all incumbent
nominees, are to be elected at the Annual Meeting to serve until the Annual Meeting
of Shareholders in 2014 or until their respective successors are elected or
appointed. If any nominee is unable to
stand for election, the proxies will be voted for such substitute as the Board
of Directors recommends. As of the date
of mailing this Proxy Statement, the Board of Directors knows of no reason why
any nominee would be unable to serve if elected.
The following descriptions provide the background
and qualifications for each person who has been nominated for election as a
director and for continuing directors, including the year each became a
director of Trinity and his or her positions with us. The age indicated for
each individual is as of April 8, 2011.
There are no family relationships among directors or executive officers
of Trinity.
2011 DIRECTOR
NOMINEES
|
Nominee
|
|
Principal Occupation, Directorships,
Qualifications, Attributes and Skills
|
|
JERRY KINDSFATHER
Age 61
Director Since 1984
Current Term expires 2011
|
Mr. Kindsfather served
as the Chairman of the Board of Trinity from 2000 to 2004.
Mr. Kindsfather has served as a member of the Boards of Directors of
Trinity and Los Alamos National Bank since 1984 and as a member of the Board
of Directors of Title Guaranty & Insurance Company since May 2000. He is
also a member of the Compliance, Compensation, Strategic Planning, Technology,
Loan and Funds Management Committees. Mr. Kindsfather retired in
November 2003 after serving as the President of AKC,
Inc. since 1970 and as co-owner of Ed’s Foods, a retail grocery store located
in Los Alamos, New Mexico, since 1970. Mr. Kindsfather is a partner in
J&G Investments and is a managing member of KKSE, LLC.
Mr. Kindsfather has business
management experience and experience as a small business owner. Mr. Kindsfather has extensive accounting
and financial expertise. Mr.
Kindsfather has significant experience serving as a director for Trinity for
over 25 years.
|
STEVE W. WELLS
Age 55
Director Since 1985
Current Term expires 2011
|
Mr. Wells has served as President and
Chief Administrative Officer of Los Alamos National Bank since 1994. He has
served on the Boards of Directors of Los Alamos National Bank and Trinity
since 1986, as Trinity’s Secretary since 1986 and as a member of the Board of
Directors of Title Guaranty since May 2000.
He is also a member of the Board’s Loan, Funds Management, Technology,
Trust and Strategic Planning Committees. Mr. Wells has been employed by
Los Alamos National Bank since 1985 and previously held the position of
Executive Vice President from 1985 to 1994. He is currently a member of the
Boards of Directors and Chair of the Los Alamos Medical Center Advisory
Board, and a member of the Board of Directors of Northern New Mexico Health
Grant Group, and the Regional Development Corporation.
Mr. Wells’ qualifications
include his extensive banking career beginning in 1978, including executive
experience as President. Mr. Wells has
served on countless boards and organizations serving the communities in which
Trinity operates.
|
ROBERT P. WORCESTER
Age 64
Director Since 1995
Current Term expires 2011
|
Mr. Worcester has been a member of the Boards of Directors of
Trinity and Los Alamos National Bank since 1995 and has served as the
Chairman of the Board of Directors since 2008. Mr. Worcester served as the
Vice Chairman of the Board from 2004 to 2008.
Mr. Worcester is also the Chair of the Compensation Committee and
the Compliance Committee. He is a member of the Audit, Loan, Funds
Management, Trust and Strategic Planning Committees. He has been the
President and a 50% shareholder of Worcester & McKay, P.C. since 1993,
where he is a practicing attorney, and is a member of Worcester & McKay,
LLC. In 2010, Mr. Worcester was recognized by “Best Lawyers in America” as
Santa Fe Trusts and Estates Lawyer of the Year. Mr. Worcester has been
recognized by “The Best Lawyers in America” for the last 16 years and has
been recently recognized by “Outstanding Lawyers in America” and in “Super
Lawyers of the Southwest.” He is also a Fellow of the American College of
Trust and Estate Counsel. He is the past President of the Georgia O’Keefe
Foundation. In addition, Mr. Worcester serves as a member of the Board
of Directors and President of the Santa Fe Art Foundation, as a member of the
Board of Directors and as President of the John Bourne Foundation, as a
member of the Board of Directors and Secretary of the Allan Houser
Foundation, as a member of the Board of Directors and Secretary of the
Veritas Foundation and as a member of the Council of Benefactors of the Santa
Fe Community Foundation, as a member of the Endowment Committee of St.
Michael’s High School, Director and Vice-President of the First Tee of Santa
Fe, as a member of the Council on International Relations and as a member of
the Board of Directors of the National Dance Institute (NDI).
Mr. Worcester’s qualifications include his knowledge and expertise
as a trust and estate attorney. Mr.
Worcester has knowledge of a broad range legal and business issues. Mr. Worcester has also served the
communities through professional, educational and community service
organizations.
|
|
|
|
|
Recommendation of the Board of Directors
The Board recommends a vote “FOR” the election of all
nominees named above.
CONTINUING DIRECTORS
|
Director
|
Principal Occupation, Directorships,
Qualifications, Attributes and Skills
|
|
WILLIAM C. ENLOE
Age 62
Director Since 1979
Term will expire 2013
|
Mr. Enloe has served as
President and Chief Executive Officer of Trinity since 1979. He is a member
of the Board’s Loan, Funds Management, Technology, Trust and Strategic
Planning Committees. Mr. Enloe has also served as the Chairman and Chief
Executive Officer of Los Alamos National Bank since 1994. Mr. Enloe has
been employed by Los Alamos National Bank since 1971 and served as the
President and Chief Executive Officer from 1978-1994; Vice President from
1975-1978; Cashier from 1973-1975; and as a Loan Officer from 1971-1973.
Additionally, he has served as Chief Executive Officer and Chairman of the
Board of Title Guaranty since May 2000 and TCC Advisors since its formation in
February 2006. In addition to his service to Trinity, Mr. Enloe is
committed to New Mexico charities and economic development efforts.
Mr. Enloe is the Chair of the Los Alamos Economic Development Land Use
Committee, and serves as a member on the Board of the LANS Venture
Acceleration Fund Review Panel (RAB), and the Los Alamos Economic Development
Corporation. Additionally, he serves as a member of the Boards of Directors
of the Santa Fe Institute, the Delle Foundation, Los Alamos Technical
Associates, Inc. and is also a managing member of KKSE, LLC. Mr. Enloe served
as a director for the Federal Reserve Board in Denver from 2008 to January
2010.
Mr. Enloe’s qualifications
include his extensive banking career beginning in 1971, with executive
experience in all areas of banking.
Mr. Enloe has extensive knowledge of the local, state and national
economy, and has served on countless boards and organizations serving the
communities in which Trinity operates.
|
|
JEFFREY F. HOWELL
Age 58
Director Since 2002
Current Term expires 2012
|
Ms. Howell has served as a member of the Boards of Directors of
Trinity and Los Alamos National Bank since 2002 and was Chairman of the Board
of Trinity from 2004 to 2008. She is the Chair of the Audit Committee and
serves as the audit committee financial expert. Ms. Howell is also a
member of the Board’s Compensation, Nominating and Corporate Governance and
Funds Management Committees. She was President and Chief Executive Officer of
Howell Fuel and Lumber Company, Inc., headquartered in Wallkill, New York.
She was the founder and managing Director of Howell Meyers Associates from
1997 to 2001, was employed in various capacities at Harvard University from
1985 to 1991, including as Associate Director for Administration at Harvard
College Observatory and Assistant Dean for Financial Operations in the Faculty
of Arts and Sciences. She was an accountant in the Emerging Business Systems
Group at Coopers & Lybrand from 1982 to 1984 after receiving her Masters
of Business Administration from Yale University. She is also a member of the
Board of Directors of The Delle Foundation, member of the League of Women
Voters of Los Alamos, a member of Rotary International and the J. R.
Oppenheimer Memorial Committee, a former member of the Board of Directors of
the Los Alamos National Laboratory Foundation of which she is a past
President, and a past dog handler and search and rescue volunteer for the K-9
Unit of the Pajarito Ski Patrol. Ms.
Howell is a member of the Executive Committee of the Lady Bird Johnson
Wildflower Center Advisory Council.
Ms. Howell’s qualifications include her business experience and
financial expertise. Ms. Howell has
extensive experience in business operations and has served as the Chair of
Trinity's Audit Committee since 2003.
|
|
DEBORAH
U. JOHNSON
Age 59
Director Since 2001
Term will expire 2013
|
Ms. Johnson has served
as a member of the Boards of Directors of Trinity and Los Alamos National
Bank since 2001. She has also served as Strategic Planning Committee Chair
since 2002 and is a member of the Nominating and Corporate Governance, Funds
Management and Trust Committees. Ms. Johnson served on the Compensation Committee
from 2001 to 2009. Ms. Johnson was a co-owner and managing partner in RJC for
over 30 years. RJC was a communications firm in Albuquerque, New Mexico. Effective
December 31, 2010, Ms. Johnson stepped down as Chair of RJC and is no longer
affiliated with RJC. Currently, Ms.
Johnson is an Executive Director of REISTER, an advertising and marketing
firm headquartered in Phoenix, Arizona. Ms. Johnson is a member of the
Federal Reserve Bank of Kansas City’s Tenth District Economic Advisory
Council. Very active in the business community in Albuquerque,
Ms. Johnson serves as Director for the Albuquerque Chamber of Commerce Economic
Development Committee (Chairman 2002 and 2003), and has served on the
University of New Mexico Anderson Schools of Management (Chairman 1999), the
New Mexico Better Business Bureau (Chairman 1999), and the Central New Mexico
Susan G. Komen Foundation (Chairman 2001), and the United Way Women’s
Leadership Council. Ms. Johnson has a long history of commitment to the
business community as well as charitable organizations in New Mexico and has
served as, among other positions, a Director of the New Mexico Association of
Commerce and Industry, Quality New Mexico and the Governor’s Business
Executives for Education. Ms. Johnson is past chairman of Affiliated
Advertising Agencies International, and has received numerous professional
awards including “Female Executive of the Year” by the New Mexico Chapter, National
Association of Female Executives; “Top 100 Power Broker” by New Mexico
Business Weekly; “Woman on the Move,” 1996 and “New Mexico of Vision,” 2004,
by the YWCA; “Top 25 Women Business Owners” by New Mexico Woman Magazine;
“Maxie Anderson Small Business Award” by the Greater Albuquerque Chamber of
Commerce, 1999; and The “ZIA” Achievement Award from the University of New
Mexico. The New Mexico Business Weekly named her one of the state’s ten “Most
Influential Women.”
Ms. Johnson’s qualifications
include extensive executive, public relations and strategic planning
experience. Ms. Johnson’s skills and
experience as an advertising executive aid in communications to shareholders
and customers. Ms. Johnson’s clear
commitment to the business and economic development in New Mexico make her
knowledgeable about the Albuquerque market and the state as a whole.
|
|
ARTHUR B. MONTOYA, JR.
Age 47
Director Since 2001
Current Term expires 2012
|
Dr. Montoya has served as a member of the Boards of Directors
of Trinity and Los Alamos National Bank since 2001. Dr. Montoya has served as
Secretary for Los Alamos National Bank since 2010. He is Chair of the Board’s
Nominating and Corporate Governance Committee and is a member of the Board’s
Audit and Loan Committees. Dr. Montoya runs a successful dental practice
in Los Alamos, New Mexico. He also serves as a member of the Board of
Directors of the Los Alamos Girls Basketball League, and is a director and
Secretary for the Los Alamos Historical Society. Dr. Montoya
has been on the Pajarito Home Owners Association Board of Directors
and is a past Chairman, taught religious education at Immaculate Heart of
Mary Catholic Church, is a past Chairman and member of the Board of Directors
of the Los Alamos Chamber of Commerce, a past Chairman and member of the
Board of Directors for the Los Alamos Medical Center, is active in the
Northern New Mexico Interdisciplinary Study Club, is a girls basketball coach
at Los Alamos Middle School, is a volunteer for the Los Alamos Fusion
Volleyball Club and is involved in the Special Olympics of New Mexico.
Dr.
Montoya provides insight from his experience as a small business owner as
well as from the dental and general medical community. Dr. Montoya has served the community
through his participation in various boards and organizations.
|
|
STANLEY D. PRIMAK
Age 60
Director Since 2001
Current Term expires 2012
|
Mr. Primak has served
as a member of the Boards of Directors of Trinity and Los Alamos National
Bank since 2001 and Vice Chairman of the Board since 2008. He is also a
member of the Board’s Loan, Technology, Compensation and Nominating and
Corporate Governance Committees. Mr. Primak is Vice President of Primak
Builders, Inc., a residential construction company in Los Alamos, New Mexico,
a position he has held since 1996, and is Vice-President of Tranquillo
Partners, a residential construction and real estate management company. He
is also a member of the Board of Directors and Chairman of the Los Alamos
Commerce and Development Corporation, a member of the Los Alamos County
Personnel Board, a member of the League of Women Voters and is President of
the Los Alamos Chamber of Commerce. Mr. Primak is also a member of the
Green Builders Association, the Santa Fe Area Homebuilders Association and the
New Mexico Homebuilders Association.
Mr. Primak also serves on the Design and Build Committee for the
Habitat for Humanity for Los Alamos and Rio Arriba Counties. Mr. Primak took
the lead and served as the Project Manager for LANB’s Habitat for Humanity
House in Espanola, New Mexico in 2008.
Mr. Primak's professional
knowledge of the construction and building industry in our markets makes him
a valuable resource for Trinity’s credit activities. As a small business owner, Mr. Primak also
provides insight into the challenges and needs of this significant customer
segment.
|
|
CHARLES A. SLOCOMB
Age 64
Director Since 1999
Term will expire 2013
|
Mr. Slocomb has been a
member of the Boards of Directors of Trinity and Los Alamos National Bank
since 1999. Mr. Slocomb is a member of the Board’s Compliance,
Technology, Trust, Compensation and Audit Committees. He retired from the Los
Alamos National Laboratory in August of 2004 and accepted a job with SAIC as
a consulting employee in November 2004. He held various management positions
at the Laboratory, including Project Director, Division Director and Group
Leader. He also serves as a member of the Board of Directors of Laguna Vista
Land Owners Association and as a volunteer firefighter for the Laguna Vista
Volunteer Fire Department. He and his wife, Connie, live in Santa Fe, New
Mexico.
Mr. Slocomb’s qualifications
include his expertise in technology and computing, including data
security. Mr. Slocomb has been a
long-time resident of Los Alamos and has knowledge about our communities and
the Laboratory which constitutes a major employer and business in our
markets.
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DIRECTORS EMERITI
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GEORGE A. COWAN
Age 91
Director Emeritus Since 2006
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Dr. Cowan served as a member of the Board of Directors of Trinity
since its formation in 1975 to 2006 and was a director of Los Alamos National
Bank from 1963 to 2006. Dr. Cowan resigned at the end of his term in May
2006. Dr. Cowan was Chairman of the Board of Trinity from 1977 to 1995
and of Los Alamos National Bank from 1965 to 1994. In 1988, he retired from
Los Alamos National Laboratory after 40 years of service, over which period
he was employed as a staff member, Associate Director for Research and Senior
Fellow. Dr. Cowan continues to serve as a Senior Fellow Emeritus to the
Laboratory and was awarded the Los Alamos National Laboratory Medal in 2002.
He served as a member of the White House Science Council under President
Reagan from 1982 to 1985. Dr. Cowan is the founding member of the Santa
Fe Institute, serving as its President from 1984 to 1991. He continues to
serve on the Board of Directors as a Lifetime Director Emeritus and is a
Distinguished Fellow of the Institute. He also served as a member of the
Board of Directors of Los Alamos National Laboratory Foundation and serves as
a member of the Advisory Board for the Center for Neural Basis of Cognition.
Dr. Cowan was awarded a Presidential Citation from the Department of
Energy in 1990, the New Mexico Academy of Science Distinguished Scientist
Award in 1975, the Robert H. Goddard Award in 1984, the E.O. Lawrence Award
in 1965 and the Enrico Fermi Prize in 1991 for contributions during his
career as a nuclear scientist. He was awarded the Los Alamos Living Treasures
Award in 2003. He is a fellow and/or member of several societies, including
the American Academy of Arts and Sciences, the American Chemical Society, the
American Physical Society and Sigma Xi and has received honorary degrees from
several universities.
Dr.
Cowan's long knowledge of the community, his connections within the
scientific community and institutional knowledge from Trinity's inception
make him an invaluable resource.
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LEWIS A. MUIR
Age 78
Director
Emeritus since 2010
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Mr. Muir
served as a member of the Boards of Directors of Trinity and Los Alamos
National Bank from 1990 to 2010, and was the Audit Committee Chair from 1999
to 2003. Mr. Muir also serves as President and a member of the Board of
Directors of Universal Properties, and is a member of the Los Alamos Chamber
of Commerce where he was a past ex officio member of the Board of Directors.
He was also a member of the Board of Directors of the Maternal Child Health
Council. Mr. Muir has been extensively involved in Los Alamos County
government for many years, serving as a member of the Council of the
Incorporated County of Los Alamos from 1993 to 2003, as a member of the Board
of Directors and as Treasurer of the New Mexico Association of Counties from
1993 to 2003. Mr. Muir is a current member and past President of the Los
Alamos Rotary Club. He is a former member of the Board of Directors and past
President of the Los Alamos Retirement Center. Mr. Muir serves as a
Consultant Pharmacist for the Los Alamos County Detention Center, the Los
Alamos Endoscopy Center and works part-time at the Los Alamos Medical Center
Pharmacy.
Mr. Muir provides insight from his experience as a small business
owner as well as a member of the medical community. Mr. Muir has served the community through
his participation in various boards and organizations, most notably his long
service to the County of Los Alamos.
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In addition, the following
individual serves as an executive officer of Trinity and LANB:
Daniel
Bartholomew. Mr. Bartholomew,
age 45, has served as Chief Financial Officer of Trinity and Vice President and
Chief Financial Officer of Los Alamos National Bank since February 2003.
Mr. Bartholomew has been with Los Alamos National Bank since 1987, serving
in a variety of positions, including Teller Supervisor, Assistant Cashier, Cashier
and Vice President/Cashier. He is also the Chairman of the Board’s
Asset/Liability Management Committee and a member of the ESOP Advisory Board of
Trinity Capital Corporation.
ITEM II: APPROVAL OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTANTS
The Board selected Moss Adams, LLP as the independent
registered public accounting firm of Trinity and LANB for the year-ending
December 31, 2011. Moss Adams has been
the auditor of Trinity since January 1, 2006.
In the event that the ratification of the selection of the independent
registered public accounting firm is not approved by a majority of the Shares represented
and voting, the Audit Committee and the Board will review the matter of
appointment of independent registered public auditors.
Management expects that a representative of Moss Adams
will be present at the Annual Meeting, will have the opportunity to make a
statement if he or she desires and will be available to respond to appropriate
questions.
Required Vote
The affirmative vote of the holders of a majority of
the Shares represented and voting in person or by proxy at the Annual Meeting
is necessary to ratify the selection of Moss Adams as the independent registered
public accounting firm of Trinity for the current fiscal year. Abstentions and Non-Votes have no effect on
this proposal. If, however, a shareholder
has signed and dated a proxy, but has not voted on the ratification of the
selection of Moss Adams as the independent registered public accounting firm by
marking the appropriate box on the proxy, such person’s Shares will be voted
“FOR” the ratification of the selection of Moss Adams as the independent
registered public accounting firm and will not be considered Non-Votes.
Audit and
Other Fees Paid to Moss Adams
Aggregate fees for professional services rendered for
Trinity and LANB by Moss Adams for the years ended December 31, 2010 and 2009
are described below.
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Services Provided
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2010
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2009
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Audit Fees, including audits of our consolidated financial
statements, the audit of management’s assertion on internal control over
financial reporting and reviews of our interim consolidated financial
statements including in our Quarterly Reports on Form 10-Q
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$ 208,300
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$ 213,600
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Audit Related Fees, including assurance related services the majority of
which relate to the audits of Trinity’s ESOP and 401(k) plan and evaluation
of compliance with the Sarbanes-Oxley Act of 2002
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$
56,300
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$
45,000
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Tax Fees, including preparation of our federal and state
income tax returns and non-routine tax consultations
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$
15,000
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$
19,800
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All Other Fees
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$
-
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$
-
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TOTAL
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$
279,600
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$
278,400
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Policy on Audit Committee
Pre-Approval of Audit and Permissible Non-Audit Services of Independent
Registered Public Accounting Firm
The Audit Committee is responsible for appointing and
reviewing the work of the independent registered public accounting firm and
setting the independent registered public accounting firm’s compensation. In accordance with its charter, the Audit
Committee reviews and pre-approves all audit services and permitted non-audit
services provided by the independent registered public accounting firm to
Trinity or LANB and ensures that the independent public accounting firm is not
engaged to perform the specific non-audit services prohibited by law, rule or
regulation. During the years ended
December 31, 2010 and 2009, all services were approved in advance by the Audit
Committee in compliance with these processes. The Committee concluded that the
provision of such services by Moss Adams was compatible with the maintenance of
that firm’s independence in the conduct of its auditing functions.
Recommendation of the Board of Directors
The Board recommends a vote “FOR” the ratification of
the selection of Moss Adams as the independent registered public accounting
firm of Trinity for the year-ending December 31, 2011.
Audit Committee Report
The report of the Audit Committee below shall not be deemed
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act or under the
Exchange Act, except to the extent Trinity specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
The Committee obtained
from Moss Adams a formal written statement describing all relationships between
Moss Adams and Trinity that might bear on the independent registered public
accounting firm’s independence, consistent with the applicable requirements of
the Public Company Accounting Oversight Board regarding the independent
accountant’s communications with the audit committee, and discussed with Moss
Adams any relationships that may impact its objectivity and independence, and
satisfied itself as to the firm’s independence.
The Committee also reviewed its composition and concluded that all
directors serving on the Committee are independent pursuant to the standards
promulgated by NASDAQ.
The Committee met and held
discussions with management and Moss Adams regarding the fair and complete
presentation of Trinity’s results and the assessment of the quality and
adequacy of Trinity’s internal control over financial reporting. The Committee reviewed and discussed
Trinity’s policies with respect to risk assessment and risk management. The
Committee discussed with Trinity’s internal auditor and Moss Adams the overall
identification of audit risks, scope and plans for their respective audits. The
Audit Committee has reviewed and discussed Trinity’s audited financial
statements as of and for the year-ended December 31, 2010 with Trinity’s
management, Trinity’s internal auditors and Moss Adams.
The Committee met with the
internal auditor and Moss Adams, with and without management present, to
discuss the results of their examinations, the evaluations of Trinity’s
internal controls, and the overall quality of Trinity’s financial reporting.
The Audit Committee discussed and reviewed with the independent registered
public accounting firm all communications required by generally accepted
accounting standards, including those described in Statement on Auditing
Standards No. 114, “The Auditor’s
Communication with those Charged with Governance,” as amended. Management
has the responsibility for the preparation of Trinity’s financial statements
and the independent registered public accounting firm has the responsibility
for the audit of those statements in accordance with the standards of the
Public Company Accounting Oversight Board.
Based on the review and
discussions with management and Moss Adams, the Committee has recommended to
the Board, and the Board has approved, that the audited financial statements be
included in Trinity’s Annual Report on Form 10-K for the year-ended December
31, 2010, for filing with the Securities and Exchange Commission. The Audit
Committee also reappointed the independent registered public accounting firm,
Moss Adams, and the Board concurred in such reappointment.
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The Audit Committee:
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Jeffrey F. Howell, Chair
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Arthur B. Montoya, Jr.
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Charles A. Slocomb
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Robert P. Worcester
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ITEM III: APPROVAL OF A NON-BINDING ADVISORY RESOLUTION
APPROVING
THE COMPENSATION OF TRINITY’S NAMED EXECUTIVE OFFICERS
The
American Recovery and Reinvestment Act of 2009 (the “ARRA”), signed into law on
February 17, 2009, includes a provision requiring CPP participants, during the
Participation Period, to submit a separate non-binding shareholder vote each
year to approve the compensation of the NEOs as disclosed pursuant to the
compensation rules of the SEC. This
proposal, commonly known as a “Say-on-Pay” proposal, gives shareholders the
opportunity to endorse or not endorse Trinity’s executive pay program. This
vote is advisory, meaning that it will not be binding upon the Board, will not
overrule any decision by the Board or Compensation Committee and does not imply
any additional fiduciary duty owed by the directors. However, the Compensation
Committee may take into account the outcome of the vote when considering future
executive compensation arrangements.
In
addition, under the rules promulgated by the SEC as part of the implementation
of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, certain
public companies are required to hold an advisory Say-on-Pay vote at least once
each three years and must also hold an advisory vote on the frequency of
presentation of the Say-on-Pay vote at least every six years by submitting to a
non-binding vote of shareholders whether to hold the Say-on-Pay vote every one,
two or three years. As a CPP participant, Trinity is not required to comply
with the Dodd-Frank Say-on-Pay rules during the Participation Period.
Resolution to be Approved
The holders of a majority of the votes cast in person
or by proxy at the Annual Meeting are asked to approve the following
resolution:
“Resolved, that the shareholders approve the compensation of Trinity
Capital Corporation’s executives as disclosed in the Compensation Discussion
and Analysis, the compensation tables, and the accompanying narrative
disclosures contained in the Proxy Statement dated April 8, 2011.”
Required Vote
The affirmative vote of the holders of a majority of
the shares represented and voting in person or by proxy at the Annual Meeting
is necessary to approve the non-binding, advisory resolution relating to
Trinity’s executive compensation policies and procedures. Abstentions and Non-Votes have no effect on
this proposal. If, however, a
shareholder submits a signed and dated proxy but has not voted on the
non-binding, advisory resolution relating to Trinity’s executive compensation
policies and procedures by marking an appropriate box on the proxy, such
person’s shares will be voted “For” the approval of the non-binding, advisory
resolution relating to Trinity’s executive compensation policies and
procedures.
Recommendation
of the Board of Directors
The Board recommends a
vote “FOR” the approval of the non-binding, advisory resolution relating to
Trinity’s executive compensation policies and procedures. As discussed in the
Compensation Discussion and Analysis contained in this Proxy Statement, the
Compensation Committee believes that the executive compensation for 2010 was
reasonable and appropriate, is justified by the performance of Trinity in an
extremely difficult environment and is consistent with Trinity’s compensation
philosophy.
Compensation Committee Report
The report of the Compensation Committee below
shall not be deemed incorporated by reference by any general statement
incorporating by reference this Proxy Statement into any filing under the
Securities Act or under the Exchange Act, except to the extent Trinity
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
The
Compensation Committee reviewed and discussed Trinity’s Compensation Discussion
and Analysis with management. The Compensation Committee also reviewed its
composition and concluded that a majority of directors serving on the
Compensation Committee are independent pursuant to the standards promulgated by
NASDAQ. The Compensation Committee has met and held discussions with management
regarding the fair and complete presentation of Trinity’s compensation
practices, policies and plans.
In addition, the Compensation Committee certifies
that, at least once every six months, during the twelve month period ending on
December 31, 2010 (collectively the “Risk Assessment”):
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it reviewed with the senior risk officer (the “SRO”), the senior
executive officers’ (“SEO”) compensation arrangements and has made all
reasonable efforts to ensure that such arrangements do not encourage SEOs to
take unnecessary and excessive risks that threaten the value of Trinity;
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It has reviewed with the SRO the employee compensation plans and has
made all reasonable efforts to limit any unnecessary risks these plans pose
to Trinity; and
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it has reviewed with the SRO the employee compensation plans to
eliminate any features of these plans that would encourage the manipulation
of reported earnings of Trinity to enhance the compensation of any employee.
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The
certification above is being provided in accordance with the requirement of the
Interim Final Rule issued June 15, 2009 by the U.S. Department of the Treasury.
In the course of conducting its Risk Assessment, the Compensation
Committee considered the overall business and risk environment confronting
Trinity and how the NEO compensation plans and employee compensation plans
serve to motivate employee behavior when operating within that
environment. In particular, the
Compensation Committee’s Risk Assessment focused on the following compensation
plans (* denotes plans in which NEOs participate):
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Base Salary*
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Employee Stock Ownership Plan*
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Performance Bonuses*
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Equity Incentive Plan*
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Annual Bonuses
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Change in Control Agreements*
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Profit Sharing*
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401(k) Plan*
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With the exception of
Change in Control Agreements, Trinity does not maintain any compensation plans
in which only NEOs participate. For
purposes of this discussion, references to “NEO compensation plans” mean the
portion of an employee plan in which the NEOs participate.
With respect to the NEO compensation plans, the Compensation Committee
believes that such plans do not encourage Trinity's NEOs to take unnecessary or
excessive risks that could harm the value of Trinity. The Compensation Committee believes this to
be true because, as is more fully described in the Compensation Discussion and
Analysis, the Compensation Committee strives to provide a balanced aggregate
compensation package to our NEOs that serves to incentivize our NEOs to manage
the business of Trinity in a way that will result in company-wide financial
success and value growth for our shareholders, subject to the limitations of
the CPP rules and regulations without incentivizing undue risk.
The Compensation Committee believes it is appropriate for our NEOs to
focus certain of their efforts on near-term goals that have importance to Trinity;
however, the Compensation Committee also acknowledges that near-term focus
should not be to the detriment of a focus on the long-term health and success
of Trinity. In practice, providing base
salary to any employee provides the most immediate reward for job
performance. The Compensation Committee
engages in an annual process, as is described in the Compensation Discussion
and Analysis, to set base salary. We
believe our process for establishing base salary is relatively free from risk
to Trinity, as we do not typically make significant adjustments to base salary
based on a single year’s performance.
The Compensation Committee believes it is appropriate to reward our NEO’s
focus on near-term goals, when such goals correspond to the overall goals and
direction set by our Board. To reward
the NEOs for such focus, the Committee may award, at its full discretion, cash
bonuses to our executives. In awarding
cash bonuses through our profit sharing program, we try to provide an adequate level
of reward and future incentive for the achievement of corporate goals, while
also ensuring that the amounts awarded are not such a substantial portion of
the total compensation that they could promote behavior that would encourage
unreasonable or excessive risks. In this
way, we believe the awards under our profit sharing program do not encourage
our executives to take unnecessary or excessive risks that could harm the value
of Trinity.
The other incentive compensation elements offered to our NEOs, with
the exception of perquisites, are intended to reward performance over the
long-term or are intended to focus the NEOs’ attention on the long-term
performance of the company. The
Compensation Committee feels there is little, if any, risk associated with our
ESOP and 401(k) Plan as they are tax-qualified retirement plans that are
subject to and maintained in accordance with the mandates of the Internal
Revenue Code and the Employee Retirement Income Security Act. The Compensation Committee believes our equity
incentive plans help to tie the NEOs’ interests more closely to those of our
shareholders by giving them an equity interest in Trinity. The Compensation Committee feels this equity
interest in Trinity promotes a long-term focus among our executives on the
financial success of Trinity. Finally,
while Trinity has adopted a deferred compensation plan, it has not yet granted
its use by any employee or NEO.
With respect to the employee compensation plans, the Risk Assessments
resulted in a determination by the Compensation Committee that no changes were
necessary to bring the plans into compliance with the CPP rules. The Committee believes there exist adequate
policies and procedures to balance and control any risk-taking that may be
incentivized by the employee compensation plans. The Compensation Committee further believes
that such policies and procedures will work to limit the risk that any employee
would manipulate reporting earnings in an effort to enhance his or her
compensation.
The Compensation Committee intends to continue, in accordance with its
obligations under the CPP and applicable rules and regulations of the federal
banking regulators, to periodically review and assess the NEO compensation
plans and employee compensation plans to ensure that the risk-taking behavior
incentivized by such plans is kept to an appropriate level. The Compensation Committee will, as
necessary, amend or discontinue any plan or revise any company policy or
procedure to meet its obligations under the CPP and applicable rules and
regulations of the federal banking regulators.
Based
on review and discussions, the Compensation Committee determined that the risk
management oversight and the internal controls embedded within the
organization, the discretionary nature of most compensation plans or a
combination of these features, are key features that serve to ensure that the
compensation plans do not encourage undesirable risk-taking activities or the
manipulation of earnings. The
Compensation Committee has recommended to the Board, and the Board has
approved, that the Compensation Discussion and Analysis contained herein be
included in Trinity’s Annual Report on Form 10-K for the year-ended December
31, 2010 and this Proxy Statement, for filing with the Securities and Exchange
Commission.
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The Compensation
Committee:
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Robert
P. Worcester (Chair)
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Jeffrey Howell
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Jerry Kindsfather
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Stanley D. Primak
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Charles A. Slocomb
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PROPOSALS OF SHAREHOLDERS
Under Trinity’s Bylaws, no business may be
brought before an Annual Meeting unless it is specified in the notice of the
meeting or is otherwise brought before the meeting by or at the direction of
the Board or by a shareholder entitled to vote who has delivered written notice
to Trinity’s Corporate Secretary. Such
written notice of proposal (containing certain information specified in the Bylaws
about the shareholders and proposed action) must be submitted to Trinity's
Secretary not later than 120 days prior to the first anniversary of the
preceding year's annual meeting to be included in Trinity's Proxy Statement.
For proposals to be otherwise brought by a shareholder and voted upon at an Annual
Meeting, the shareholder must file written notice of the proposal (containing
certain information specified in the bylaws about the shareholder and the
proposed action) to Trinity’s Corporate Secretary no less than 60 days prior to
the first anniversary of the preceding year’s annual meeting.
No shareholder proposals were received by Trinity
by March 28, 2011.
To be considered for inclusion in Trinity’s Proxy
Statement and form of Proxy for Trinity’s 2012 Annual Meeting of Shareholders,
shareholder proposals must be received by Trinity’s Corporate Secretary, at the
above address, no later than December 13, 2011, and must otherwise comply with
the notice and other provisions of Trinity’s bylaws, as well as SEC rules and
regulations. For Trinity’s 2012 Annual
Meeting of Shareholders, to be considered for a vote, such proposal must be
filed with Trinity’s Corporate Secretary not later than March 20, 2012. Additional information on shareholder
nominations is provided on page 10 of this Proxy Statement.
OTHER MATTERS
Management knows of no other
business that may be brought before the Annual Meeting, including matters
incident to the conduct of the Annual Meeting. It is the intention of the
persons named as proxy judges on the proxy to vote such proxy in accordance
with their best judgment on any other matters that may be brought before the
Annual Meeting.
