MIDDLEFIELD BANC CORP appointed James R. Heslop, II as new CEO

ITEM 5.02 
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers 


Executive Succession 

Thomas G. Caldwell notified Middlefield Banc Corp. (the "Company") of his decision to resign from the Board of Directors of the Company effective at the close of business on March 31, 2022. Mr. Caldwell informed the Company that his decision to resign is not the result of any disagreement with management or the Board of Directors on any matters relating to the Company's operations or practices. 

The Company previously reported in June, 2021 that Mr. Caldwell would retire as President and Chief Executive Officer of the Company and The Middlefield Banking Company as of March 31, 2022 and that Mr. Caldwell intended to complete his term as director that would end at the Company's 2022 annual meeting of shareholders. 

The Board of Directors has taken action to reduce the size of the Board of Directors from ten to nine effective as of April 1, 2022. 

The Board of Directors has appointed James R. Heslop, II as the Company's President and Chief Executive Officer, succeeding Mr. Caldwell. Mr. Heslop, age 68, currently Executive Vice President, Chief Operating Officer and Director of the Company, will assume the role of President and Chief Executive Officer of the Company upon Mr. Caldwell's retirement on April 1, 2022. At the same time, Mr. Heslop will also assume the role of President and Chief Executive Officer of the Company's subsidiary, The Middlefield Banking Company (the "Bank"). Mr. Heslop has served as Executive Vice President and Chief Operating Officer of the Bank since 1996 and Executive Vice President and Chief Operating Officer of the Company since 2000. He has been a director of the Bank since July 1999 and a director of the Company since November 2001. 

Mr. Heslop does not have a direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K. 

Changes in Compensation for Mr. Heslop 

In connection with his promotion, Mr. Heslop will receive an increase in his base salary, effective April 1, 2022, from $262,912 to $325,000. Mr. Heslop's potential cash incentive under the Bank's Annual Incentive Plan will be adjusted to the level previously established by the Board of Directors for the President and Chief Executive Officer position. The Annual Incentive Plan is a short-term cash incentive plan that rewards employees with additional cash compensation if specific objectives are achieved. As President and Chief Executive Officer of the Bank, Mr. Heslop will be eligible for a cash bonus in an amount ranging from a minimum of 12% of his salary if actual performance is 90% of targeted performance goals established by the Bank's Compensation Committee, 24% of salary if actual performance is 100% of targeted performance goals, and a maximum of 36% of salary if actual performance is 110% or more of targeted performance goals. Mr. Heslop's annual award under the Annual Incentive Plan will be exclusively determined by the Bank's performance. A copy of the Annual Incentive Plan is included as exhibit 10.22 to the Form 8-K Current Report that the Company filed with the Securities and Exchange Commission on March 12, 2019.