enterprise_def14a.htm
SCHEDULE 14A
 
(Rule 14a-101)
 
INFORMATION REQUIRED IN PROXY STATEMENT
 
SCHEDULE 14A INFORMATION
 
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
 
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  ENTERPRISE FINANCIAL SERVICES CORP  
  (Name of Registrant as Specified In Its Charter)  
     
       
 
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
  

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ENTERPRISE FINANCIAL SERVICES CORP
 
150 NORTH MERAMEC
CLAYTON, MISSOURI 63105
 
NOTICE OF 2011 ANNUAL MEETING OF STOCKHOLDERS

The Annual Meeting of Stockholders of Enterprise Financial Services Corp will be held at the Donald Danforth Plant Science Center, 975 North Warson Road, Saint Louis, Missouri 63132 on Thursday, April 21, 2011, at 4:00 p.m. local time, for the following purposes:
 
  1.  
to elect 11 directors to hold office until the next Annual Meeting of Stockholders or until their successors are elected and have qualified; and
   
  2.  
to ratify the selection of Deloitte & Touche, LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2011.
   
       3.       
to consider adoption of an advisory (non-binding) resolution approving executive compensation.
 
The Board of Directors has fixed the close of business on March 1, 2011 as the record date for the determination of stockholders entitled to notice of and to vote at the meeting.
 
It is important that your shares be represented and voted at the meeting. You have three options for voting your shares:
 
  1.   vote via the Internet,
       
  2.   vote via the telephone or
       
              3.        complete and return the proxy card sent to you.
 
For Internet or telephone voting, instructions are printed on the proxy card sent to you. You can revoke a proxy at any time prior to its exercise at the meeting by following the instructions in the accompanying proxy statement.
 
By Order of the Board of Directors,
 
Noel J. Bortle, Secretary
Clayton, Missouri
March 11, 2011
 
 

TABLE OF CONTENTS
 
PROXY STATEMENT      1
     
       QUESTIONS ABOUT THE MEETING AND THESE PROXY MATERIALS   1
     
ELECTION OF DIRECTORS   4
     
BOARD AND COMMITTEE INFORMATION   7
     
       DIRECTOR COMPENSATION   7
       EXECUTIVE COMMITTEE   8
       AUDIT COMMITTEE   8
       NOMINATING AND CORPORATE GOVERNANCE COMMITTEE   9
       COMPENSATION COMMITTEE   9
     
EXECUTIVE COMPENSATION   10
     
       COMPENSATION DISCUSSION AND ANALYSIS   10
       COMPENSATION COMMITTEE REPORT   18
       SEVERANCE AND CHANGE IN CONTROL BENEFITS   20
       EXECUTIVE EMPLOYMENT AGREEMENTS   20
       SUMMARY COMPENSATION TABLE   23
       GRANTS OF PLAN BASED AWARDS   25
       OUTSTANDING EQUITY AWARDS AT YEAR END   26
       OPTION EXERCISES AND STOCK VESTED   27
       NONQUALIFIED DEFERRED COMPENSATION PLANS   27
       POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL   28
       COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION   28
     
PROPOSAL A – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC    
ACCOUNTING FIRM   29
     
PROPOSAL B – ADVISORY (NON-BINDING) APPROVAL OF EXECUTIVE COMPENSATION   30
     
INFORMATION REGARDING BENEFICIAL OWNERSHIP   31
     
RELATED PERSONS TRANSACTIONS   33
     
AUDIT COMMITTEE REPORT   34
     
INFORMATION CONCERNING PRINCIPAL ACCOUNTANT   34
     
PROPOSAL OF STOCKHOLDERS   36
     
OTHER MATTERS   36
     
ADDITIONAL INFORMATION   36

 

ENTERPRISE FINANCIAL SERVICES CORP
 
150 NORTH MERAMEC
CLAYTON, MISSOURI 63105
 
PROXY STATEMENT

These proxy materials are delivered by the Board of Directors of Enterprise Financial Services Corp (the “Company” or “EFSC”), in connection with the solicitation of proxies to be voted at the 2011 Annual Meeting of Stockholders or any adjournment or postponement thereof.
 
This Proxy Statement and the proxy card were first mailed to stockholders on or about March 11, 2011.
 
QUESTIONS ABOUT THE MEETING AND THESE PROXY MATERIALS

What may I vote on?
 
  1.  
The election of 11 directors to hold office until the next Annual Meeting of Stockholders or until their successors are elected and have qualified.
   
  2.  
Proposal A, ratification of the selection of Deloitte & Touche LLP as independent registered public accounting firm for fiscal 2011.
   
     3.     
Proposal B, an advisory (non-binding) vote to approve our executive compensation, as disclosed in this proxy statement.
 
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION AS DIRECTORS OF THE
NOMINEES NAMED HEREIN AND A VOTE IN FAVOR OF PROPOSALS A AND B.
 
Who can vote at the meeting? Our Board of Directors has set March 1, 2011 as the record date for the Annual Meeting. All stockholders who owned our common stock at the close of business on the record date may attend and vote at the Annual Meeting. On the Record Date, there were 14,928,324 shares of common stock outstanding. Shares held as of the record date include shares that are held directly in your name as the stockholder of record and those shares held for you as a beneficial owner through a stockbroker, bank or other nominee.
 
How do I vote my shares?
If your shares are registered directly in your name with our stock transfer agent, Computershare, you are considered a stockholder of record and the beneficial owner of those shares. As a stockholder of record, you have the right to grant your voting proxy directly to the Company, or to vote in person at the meeting.
 
If your shares are held in a stock brokerage account or by a bank, you are still considered the beneficial owner of those shares, but your shares are said to be held in “street name.” Generally, only stockholders of record may vote in person at the meeting. If your shares are held in street name, you will receive a form from your broker or bank seeking instruction as to how your shares should be voted. If you desire to vote shares held in street name in person at the meeting, you need to contact your broker and ask how to obtain a “legal proxy” to directly vote such shares.
 
Distribution of Proxy Solicitation and Other Required Annual Meeting Materials
Rules adopted by the U.S. Securities & Exchange Commission, or SEC, permit us to mail a notice to our stockholders advising that our proxy statement, annual report to stockholders, electronic proxy card and related materials are available for viewing, free of charge, on the Internet. Stockholders may then access these materials and vote over the Internet or request delivery of a full set of materials by mail or email. These rules help us lower the cost of conducting our annual meeting by reducing costs associated with printing and postage.
 
We will begin mailing the required Notice of Internet Availability of Proxy Materials to stockholders on or about March 11, 2011. The proxy materials will be posted on the Internet, at www.proxyvote.com, no later than the day we begin mailing the Notice. If you receive the Notice, you will not receive a paper or email copy of the proxy materials unless you request one in the manner set forth in the Notice.
 
The Notice of Internet Availability of Proxy Materials contains the following important information:
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Can I change my vote? Yes. If you are the stockholder of record, you may revoke your proxy at any time before the Annual Meeting by:
To change your vote for shares you hold in street name, you will need to follow the instructions provided by your broker or bank.
 
How are shares of Common Stock voted at the meeting? Each holder of Common Stock is entitled to one vote for each share of Common Stock held with respect to each matter to be voted upon; provided, however, that cumulative voting is available for the election of directors.
 
All shares of Common Stock represented at the Annual Meeting by properly executed proxies received prior to or at the Annual Meeting which are not properly revoked will be voted at the Annual Meeting in accordance with the instructions indicated on the proxies. If no contrary instructions are indicated, proxies will be voted FOR the election of the Board's director nominees and FOR approval of Proposals A and B.
 
What does cumulative voting in the election of directors involve? Under cumulative voting, each stockholder is entitled to cast a number of votes equal to the number of shares held by such stockholder multiplied by the total number of directors to be elected. These votes may be divided among all nominees equally or may be voted for one or more of the nominees, either in equal or unequal amounts, as the stockholder may elect. A plurality of votes cast at the Annual Meeting is required for the election of each director, which effectively means that the twelve persons receiving the most votes will be elected as directors. Shares held by a stockholder who elects to withhold authority to vote for all nominees will not participate in the election for directors but will be present for other quorum and business purposes. A stockholder who withholds authority to vote for one or more (but less than all) director nominees will be deemed to have elected to allocate all his votes equally among all remaining director nominees. Notwithstanding the foregoing, the proxies have, and may exercise, authority to cumulate and allocate votes among the nominees, including to allocate votes from other stockholders to vote in favor of the nominees as to which the “withholding stockholder” has withheld authority. If any other proposals were to come before the meeting, each stockholder would be entitled to one vote for each share of Common Stock held by such stockholder.
 
How many votes are required to adopt the other proposals? The non-binding proposal relating to our executive compensation and the proposal to ratify the engagement of Deloitte & Touche LLP as our independent registered public accounting firm each require a majority of the shares actually voting upon the matter regardless of whether the number of favorable votes constitutes a majority of the shares outstanding or a majority of the shares present at the meeting.
 
How do abstentions and broker non-votes affect the proposals to be voted on at the meeting? The abstention from voting by a stockholder present in person or by proxy will have no effect. If a broker or other nominee holder indicates on the Proxy Card that it does not have discretionary authority to vote the on a proposal (referred to as broker non-votes), those shares will be considered as present solely for purposes of determining whether a quorum is present.
 
Employees who are stockholders; voting shares in certain benefit plans. If you are a current or former employee of the Company or one of its subsidiaries and you have any portion of your investment funds allocated to the EFSC Common Stock Fund in the EFSC Incentive Savings Plan ("Savings Plan"), you may instruct the Savings Plan’s trustees how to vote the shares of EFSC Common Stock allocated to your account under the Savings Plan. You will instruct the voting of your stock in the same manner as other stockholders, i.e., by submitting your voting instructions by telephone or through the Internet or by requesting a proxy card to sign and return. Please see the Notice of Internet Availability of Proxy Materials we sent to you or this proxy statement for specific instructions on how to provide voting instructions by any of these methods. Please note that your voting instructions for stock you hold in the Savings Plan must be returned by 11:59 p.m. Eastern Time on April 15, 2011.
 
What if I don’t give specific voting instructions?
If you indicate a choice on your proxy on a particular matter to be acted upon, the shares will be voted as indicated.
 
If you are a stockholder of record and you return a signed proxy card but do not indicate how you wish to vote, the shares will be voted in favor of the election as directors of the nominees described in this proxy statement and for the other proposals. If you do not return the proxy card, your shares will not be voted and will not be deemed present for the purpose of determining whether a quorum exists.
 
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If you are a beneficial owner and the broker or intermediary holding your account does not receive instructions from you as to how to vote those shares, under the rules of the New York Stock Exchange, that organization may not vote on either of our proposals, both of which are considered “non-routine” under those rules. As a beneficial owner, you will not be deemed to have voted on such non-routine proposals. The shares that cannot be voted by brokers on non-routine matters are commonly referred to as “broker non-votes”. Therefore, it is important that you vote your shares.
 
Who pays for this proxy solicitation? The Company will pay the entire cost of preparing, assembling, printing, mailing and distributing these proxy materials. In addition to solicitation by mail, proxies may be solicited in person or by telephone or by other means by the Company’s directors, officers or employees, who will not receive any additional compensation for solicitation activities. The Company has engaged Broadridge Financial Solutions, Inc., for a fee to be determined, to assist in the distribution and tabulation of proxies. The Company will also reimburse brokerage firms and other nominees, custodians and fiduciaries for costs incurred by them in mailing proxy materials to the beneficial owners of common stock as of the record date.
 
________________________
 
The date of this Proxy Statement is March 11, 2011.
 
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ELECTION OF DIRECTORS

The Board of Directors, upon recommendations of its Nominating and Governance Committee, has nominated for election the 11 persons named below. It is intended that proxies solicited will be voted for such nominees, in accordance with our cumulative voting structure as discussed above. The Board of Directors believes that each nominee named below will be able to serve, but should any nominee be unable to serve as a director, the persons named in the proxies have advised that they will vote for the election of such substitute nominee as the Board of Directors may propose.
 
The following biographical information is furnished with respect to each member of the Board of Directors of the Company, some of whom also serve as directors and officers of one or more of the Company’s subsidiaries, including Enterprise Bank & Trust (the “Bank”).
 
There are no family relationships between or among any directors or executive officers of the Company. Except as noted below, none of the Company’s directors or executive officers serves as a director of (i) any company other than EFSC that has a class of securities registered under or that is subject to the periodic reporting requirements of the Securities Exchange Act of 1934, or (ii) any investment company registered under the Investment Company Act of 1940. All directors, other than Mr. Benoist have been determined to be independent for purposes of Rule 5605(a)(2) of the NASDAQ stock market.
 
Name      Age      Director Since
Peter F. Benoist   63   2002
         
Michael A. DeCola   57   2007
         
William H. Downey   66   2002
         
John S. Eulich   60   2010
         
Robert E. Guest, Jr.   56   2002
         
Lewis A. Levey   69   2005
         
Birch M. Mullins   67   1996
         
James J. Murphy, Jr.   67   2002
         
Brenda D. Newberry   57   2007
         
John M. Tracy   52   2010
         
Sandra A. Van Trease   50   2005

The biographies of the nominees below contain information regarding the person’s service as a director, business experience, director positions held currently or at any time during the last five years, information regarding involvement in certain legal or administrative proceeds, if applicable, and the experience, qualifications, attributes or skills that caused the Nominating and Corporate Governance Committee and the Board to determine that the person should serve as a director.
 
James J. Murphy has been a director of the Company since 2002. Since 1982, Mr. Murphy has been the Chairman and Chief Executive Officer of Murphy Company, a mechanical specialty contracting firm. Mr. Murphy has been the Chairman of the Board of the Company since 2008 and served as the Lead Independent Director of the Company from November 2005 through May 2008. He is also a past chairman of the St. Louis Regional Business Council and is currently engaged in various community activities. Mr. Murphy has built a successful, private business and brings a long history of entrepreneurship which is the cornerstone of EFSC’s strategy of focusing on the banking and wealth management needs of privately-held businesses, their owner families and other success-minded individuals.
 
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Peter F. Benoist has been a director of the Company since 2002. Since May 2008, Mr. Benoist has been the President and Chief Executive Officer of the Company. Mr. Benoist was the Executive Vice President and Chairman and Chief Executive Officer of the Bank from October 2002 through May 2008, and served as the Chairman of the Company’s Board from November 2005 through May 2008. Mr. Benoist was the Executive Director of the St. Louis Regional Housing and Community Development Alliance from 1999 through 2002. He has over thirty years of public company banking experience as an officer and director and has served on public company boards. Mr. Benoist brings deep knowledge of the Company and its business and is the voice of management on the Board.
 
Michael A. DeCola has been a director of the Company since 2007. Mr. DeCola has been the President and Chief Executive Officer of Mississippi Lime Company (calcium based chemical products) since 1999. Mr. DeCola serves on several private company boards in the St. Louis community and is the past chairman of the St. Louis Regional Business Council.
 
William H. Downey has been a director of the Company since 2002. Since 2003, Mr. Downey has been the President, Chief Operating Officer and a director of Great Plains Energy Inc., (NYSE: GXP), an electric utility company. Mr. Downey has also been the President and Chief Operating Officer of Great Plains Energy’s subsidiary, Kansas City Power & Light Company since 2003 and 2008, respectively and served as Chief Executive Officer from 2003 to 2008. In addition, since 2008, he has served as President and Chief Operating Officer of Greater Missouri Operations, a subsidiary of Great Plains Energy. He also serves on several private company boards in the Kansas City community. Mr. Downey’s broad strategic experience and knowledge of operations along with his experience in a publicly traded utility company and the related experience in regulatory relations at both a federal and state level is an asset for the board.
 
John S. Eulich has been a director of the Company since March 11, 2010. Mr. Eulich has been the President and Chief Executive Officer of INDEECO, a manufacturing company, since 2005. He has been a member of the Enterprise Bank & Trust Board of Directors since July 2009. Since 2005, Mr. Eulich has also been a director of LMI Aerospace (NASDAQ: LMIA) where he currently serves as a member of LMIA’s Audit Committee and as the Chairman of LMIA’s Compensation Committee. In addition to his public company experience, he is a successful entrepreneur and familiar with the needs of privately held businesses. He also is engaged in the St. Louis community through various boards.
 
Robert E. Guest, Jr. has been a director of the Company since 2002. Since 2007, Mr. Guest has been a partner at The Affinity Law Group. Mr. Guest was a partner at Doster Mickes James Ullom Benson & Guest, LLC, a law firm, from 2005 through 2007, and prior to that he was a partner at the law firm of Benson & Guest LLP, from 1986 through 2005. Mr. Guest brings significant legal experience in commercial activities and merger and acquisitions. He is also very familiar with the St. Louis and Kansas City business communities.
 
Lewis A. Levey has been a director of the Company since 2005. Since 1997, Mr. Levey has been the Chairman and Chief Executive Officer of Enhanced Value Strategies, Inc., a real estate consulting company. Mr. Levey serves as Trust Manager (Director) and Lead Independent Trust Manager of Camden Property Trust, a REIT focused on multi-family residential housing (NYSE: CPT). Mr. Levey brings expertise in local and national commercial real estate development and public company governance. He also has strong ties to the St. Louis business community.
 
Birch M. Mullins has been a director of the Company since 1996. He has been the President of Baur Properties, a real estate investment company, since 1988. Mr. Mullins is a successful real estate developer and brings expertise in St. Louis commercial real estate.
 
Brenda D. Newberry has been a director of the Company since 2007. Ms. Newberry is the retired Chairman of The Newberry Group, a global IT company she founded in 1996. She was the Chairman and Chief Executive Officer from 2006 through 2009, and was President and Chief Executive Officer from 1996 through 2005. Ms. Newberry has been a director of The Laclede Group, a natural gas distribution company, (NYSE: LG), since 2007 and has served on that company’s Audit, Compensation and Investment committees. Ms. Newberry started, built and sold a successful, privately-held business after serving in the USAF for 6 years, a major defense contractor for 5 years and MasterCard International for 12 years, where she served in positions ranging from technology specialist to a global VP of a profit and loss business unit. She is also very active in the St. Louis community, especially programs encouraging education, as well as, youth and minority development. Ms. Newberry’s experience in global operations combined with her entrepreneurial background and service on other publicly-traded company boards provides a broad and valuable perspective to our Board.
 
John M. Tracy has been a director of the Company since March 11, 2010. Mr. Tracy has been the Chief Executive Officer of Dot Foods, a food distribution company, since 2006. He has been employed by Dot Foods since 1980 and has held several positions in the organization including sales, marketing and operations. Mr. Tracy serves on several private company boards in the St. Louis metro area. He is also the current -chairman of the St. Louis Regional Business Council. Mr. Tracy’s experience leading a successful, privately-held business provides entrepreneurial perspective. In addition, he brings his experience in and perspective of the Illinois markets of the St. Louis area. 
 
5
 
 

Sandra A. Van Trease has been a director of the Company since 2005. Since 2004, Ms. Van Trease has been the Group President of BJC HealthCare, a not-for-profit operator of hospitals and the largest healthcare institution is the St. Louis area. Ms. Van Trease was President and Chief Executive Officer at UNICARE, an operating unit of Well Point Inc., a health insurance company, from 2002 through 2004, and she was President, Chief Financial Officer and Chief Operating Officer of RightChoice, a health insurance company, from 2000 through 2002. Ms. Van Trease has been a director of Peabody Energy (NYSE: BTU) since 2002, where she has served as a member of their Audit Committee since 2002 and a member of their Health, Safety and Environmental Committee since 2010. Ms. Van Trease is also a Certified Public Accountant. Ms. Van Trease’s executive management and experience at these institutions together with her service on other publicly-traded company boards and strong community service make her a valued advisor and highly qualified to serve on our board and its committees.
 
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE
INDIVIDUALS LISTED ABOVE FOR ELECTION AS DIRECTORS OF THE COMPANY.
 
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BOARD AND COMMITTEE INFORMATION

The Board of Directors has determined that having an independent director serve as Chairman of the Board is in the best interest of shareholders at this time. The structure ensures a greater role for the independent directors in the oversight of the Company and active participation of the independent directors in setting agendas and establishing priorities and procedures for the work of the Board.
 
The Board is actively involved in oversight of risks that could affect the Company. This oversight is conducted primarily through committees of the Board, as disclosed in the descriptions of each of the committees below and in the charters of each of the committees, but the full Board has retained responsibility for general oversight of risks. The Board satisfies this responsibility through full reports by each committee chair regarding the committee’s considerations and actions, as well as through regular reports directly from officers responsible for oversight of particular risks within the Company.
 
All Committee members are appointed by the Board. In addition, the Board has established membership standards for each committee which requires that a certain number of committee members must be “independent directors,” as that term is defined in Rule 5605(a)(2) of the NASDAQ rules.
 
The Board met eight times in 2010. All directors attended at least 75% of all meetings of the full Board and of those committees on which they served in 2010. The Company’s Board of Directors periodically held executive sessions of the members of the Board who met the then current standards of independence. Executive sessions of the Board were presided over by the Chairman. In 2011, the Board is scheduled to meet eight times.
 
DIRECTOR COMPENSATION
 
The following table sets forth compensation paid to each of the Company’s directors during 2010.
 
    Fees Earned or   Stock   Total Annual
    Paid in Cash   Awards   Compensation
Name      ($) (a)      ($)      ($)
Michael A. DeCola   766   32,234   33,000
William H. Downey   13,387   11,863   25,250
John S. Eulich   11,388   11,362   22,750
Robert E. Guest, Jr.   16,507   16,493   33,000
Lewis A. Levey   15,877   15,123   31,000
Birch M. Mullins   2,255   26,495   28,750
James J. Murphy, Jr.   1   49,999   50,000
Brenda D. Newberry   16,136   15,364   31,500
John M. Tracy   769   20,481   21,250
Sandra A. Van Trease   759   31,491   32,250
Henry D. Warshaw (b)   768   26,232   27,000

(a)   Includes fractional shares paid in cash.
 
(b)     
Mr. Warshaw elected not to stand for re-election at the 2011 Annual Meeting.
 
In 2010, non-employee Directors received a $12,000 annual retainer and $1,000 per board meeting attended. For Committee service, the Chairpersons received an additional retainer as follows: Audit Committee ($10,000), Compensation Committee ($8,000) and Nominating and Governance Committee ($6,000). Non-Chairperson committee members receive $750 per committee meeting attended. Chairman Murphy receives only an annual fee of $50,000.
 
Directors select whether to receive their compensation in 100% EFSC common Stock or 50% cash/50% EFSC common stock. The shares are issued under a Stock Plan for Non-Management Directors, approved by the stockholders in 2006.
 
7
 
 

EXECUTIVE COMMITTEE
 
The Executive Committee is empowered to act on behalf of, and to exercise the powers of, the full Board of Directors in the management of the business and affairs of the Company when the full Board of Directors is not in session, except to the extent limited by applicable Delaware law. The charter for the Executive Committee may be found in the investor relations section of the Company’s website at www.enterprisebank.com. All actions by the committee are reported at the next regular Board of Directors meeting. In addition, approved Executive Committee minutes are shared with all Directors. In 2010, the committee met six times.
 
The Committee consists of five non-employee directors who are “independent directors” as defined in the NASDAQ standards. For 2010, the independent members of the Executive Committee consisted of Directors Murphy (Committee Chairman), DeCola, Levey, Van Trease and Warshaw. The non-independent member of the Committee was Director Benoist.
 
AUDIT COMMITTEE
 
The Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors by reviewing all audit processes and fees, the financial information provided to the stockholders and the Company’s systems of internal financial controls. The Audit Committee has the authority and responsibility to select and evaluate and, where appropriate, replace the Company’s independent registered public accounting firm (the “independent auditors”).
 
The Audit Committee is responsible for oversight of Company risks relating to accounting matters, financial reporting, legal and regulatory compliance and the Company’s anonymous reporting system. To satisfy these oversight responsibilities, the Committee separately meets regularly with the Company’s chief financial officer, director of internal audit, Deloitte & Touche LLP and management. The Committee chair periodically meets between formal Committee meetings with the Company’s chief financial officer, director of internal audit and Deloitte & Touche LLP. The Committee also receives regular reports regarding issues such as the status and findings of audits being conducted by the internal and independent auditors, the status of material litigation, accounting changes that could affect the Company’s financial statements and proposed audit adjustments.
 
All members of the Audit Committee meet the NASDAQ independence standards. In 2010, the Audit Committee consisted of Directors Van Trease (Committee Chairperson), Guest, Newberry and Levey, who served a full year, and Director Eulich, who was appointed in July 2010. The Audit Committee met ten times in 2010.
 
The Board of Directors has determined that Directors Guest and Van Trease satisfy the requirements of a “financial expert” as defined in Item 407(d)(5) of Regulation S-K and satisfy the definition of “financially sophisticated” under NASDAQ Rule 5605(c).
 
The Company’s Board has determined that none of the Directors on the Audit Committee have a relationship with the Company or the Bank that would interfere with the exercise of independent judgment in carrying out their responsibilities as director. None of them is, or have been for the past three years, an employee of the Company or the Bank, and none of their immediate family members is, or have for the past three years, been an executive officer of the Company or the Bank.
 
As noted in the Audit Committee’s charter, which is available on the Company’s website at www.enterprisebank.com, the Company’s management is responsible for preparing the Company’s financial statements. The Company’s independent auditors are responsible for auditing the financial statements. The activities of the Audit Committee are in no way designed to supersede or alter those traditional responsibilities. The Audit Committee’s role does not provide any special assurances with regard to the Company’s financial statements, nor does it involve a professional evaluation of quality of audits performed by the independent auditors. The Audit Committee reassesses the adequacy of the charter on an annual basis.
 
The Audit Committee has considered whether the provision by Deloitte & Touche LLP of the services covered by the audit fees is compatible with maintaining Deloitte & Touche LLP’s independence and concluded that it is compatible. The Audit Committee is responsible for pre-approving all auditing services and permitted non-auditing services to be performed by the Company’s independent auditors. The Chairperson of the Audit Committee has authority to approve in advance all audit or non-audit services to be performed by the independent auditors but must report any such approval to the full Audit Committee at the next regularly scheduled meeting.
 
The Report of the Audit Committee appears on page 34 of this Proxy Statement.
 
8
 
 

NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
 
The Nominating and Corporate Governance Committee assists the Board in identifying and recommending qualified director nominees for election at the stockholders’ annual meeting. The charter for the Nominating and Corporate Governance Committee may be found at the Company’s website at www.enterprisebank.com. The Committee also recommends membership on Board committees, recommends corporate governance guidelines and oversees an annual Board self-evaluation.
 
All members of the Committee meet the NASDAQ independence standards. Nominating and Corporate Governance Committee members for 2010 were Directors Guest (Committee Chairman), Murphy, Newberry, Warshaw, who served a full year, and Director Tracy, who was appointed in April 2010. The Committee met five times in 2010.
 
The Nominating and Corporate Governance Committee may consider candidates for Board membership coming to its attention through current Board members, search firms, stockholders and other persons. Suggestions for nominees from stockholders are evaluated in the same manner as other nominees. Any stockholder nomination must be submitted in writing to the Secretary, Enterprise Financial Services Corp, 150 North Meramec, Clayton, Missouri 63105 and should include the stockholder’s name, address and number of the Company’s shares owned by the stockholder along with the nominee’s name and qualifications.
 
There is no fixed process for identifying and evaluating potential candidates to be nominees for directors, and there is no fixed set of qualifications that must be satisfied before a candidate will be considered. Rather, the Nominating and Corporate Governance Committee has the flexibility to consider such factors as it deems appropriate. These factors may include education, diversity, experience with business and other organizations comparable with EFSC, the interplay of the candidate’s experience with that of other members of the Board of Directors, and the extent to which the candidate would be a desirable addition to the Board of Directors and to any of the committees of the Board of Directors. The Nominating Committee will evaluate nominees for directors submitted by shareholders in the same manner in which it evaluates other director nominees. No shareholder has properly nominated anyone for election as a director at the Annual Meeting.
 
Stockholders may communicate directly to the Board of Directors by sending a letter to the Board at: Enterprise Financial Services Corp Board of Directors, 150 North Meramec, Clayton, Missouri 63105. All communications directed to the Board of Directors will be received and processed by the Secretary of the Company and will be transmitted to the Chairman of the Nominating and Corporate Governance Committee without any editing or screening.
 
The Nominating and Corporate Governance Committee is responsible for risks relating to management and Board succession planning, corporate governance and ethics.
 
COMPENSATION COMMITTEE
 
The Compensation Committee consists of Directors DeCola (Committee Chairman), Downey, Mullins and Murphy. The Compensation Committee met eight times in 2010. The Compensation Committee is comprised solely of non-employee directors, all of whom the Board has determined are independent pursuant to the NASDAQ rules. The responsibilities of the Committee are set forth in its charter, which is available on the Company’s website at www.enterprisebank.com, and includes the responsibility for establishing, implementing and continually monitoring compliance with the Company’s compensation philosophy. Members of the Committee are outside directors within the meaning of Section 162(m) of the Internal Revenue Code of 1986. During fiscal year 2010, no Member was an executive officer of another entity on whose compensation committee or board of directors an executive officer of the Company served.
 
The Compensation Committee is responsible for risks relating to employment policies and the Company’s compensation and benefits systems. To assist it in satisfying these oversight responsibilities, the Committee has retained its own compensation consultant and meets regularly with management and with outside counsel to understand the financial, human resources and shareholder implications of compensation decisions being made.
 
The Compensation Committee Report appears on page 18 of this Proxy Statement.
 
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COMPENSATION DISCUSSION AND ANALYSIS
 
This section provides information regarding the compensation programs, including our overall compensation philosophy, components of compensation that we provide, the objectives and intended incentives of these components, and a discussion of the compensation decisions we have made regarding the following named executive officers of the Company (our “NEOs”):
 
Name Title Age
Peter F. Benoist President and Chief Executive Officer 63
Frank H. Sanfilippo Executive Vice President and Chief Financial Officer 48
Stephen P. Marsh Executive Vice President; Chairman and Chief Executive Officer – Enterprise Bank & Trust 55
Linda M. Hanson President, Kansas City Region, Enterprise Bank & Trust 50
John G. Barry President, Arizona Region, Enterprise Bank & Trust 54

Compensation Philosophy
Despite the challenges in our industry in recent years, we remain committed to our vision of being one of the highest performing growth companies in the financial services industry. To achieve that vision, we must provide exceptional leadership to develop talented and focused associates to deliver outstanding client service and provide value to our stockholders.
 
Our compensation philosophy is based on providing incentives for performance and management of risk. We develop and administer compensation programs consistent with the following principles:
Overview of the Compensation Program
The Compensation Committee of the Board of Directors determines and administers compensation operating under the authority of its Charter. The Committee has responsibility for establishing, implementing and continually monitoring compliance with the Company’s compensation philosophy.
 
The Committee has overall responsibility relating to compensation for the directors and officers and other associates and delegates certain of those functions to management. In the case of NEOs, the Committee establishes and reviews all aspects of base salaries, short-term incentives, and long-term incentives, including the establishment or approval of measurement metrics. With respect to executives below this level, the Committee reviews management’s recommendations for the aspects named above. In the case of the remaining associate population, the Committee reviews, approves, and monitors compensation budgets and proposed methods of generally administering compensation practices. In administering compensation and reviewing management's administration of compensation programs, the Committee makes a determination that the compensation policies of the Company do not encourage inappropriate risk to the Company. The Committee has delegated to management the determination and administration of associate benefits while retaining oversight.
 
As discussed in more detail below, we are subject to laws and regulations concerning the executive compensation paid by financial institutions, such as the Company, which have participated in the Capital Purchase Program (the “Capital Purchase Program” or the “CPP”) sponsored by the United States Treasury. The Committee regularly reviews all components of the Company’s compensation program to assure compliance with these requirements.
 
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Committee Agendas, Scheduling, and Keeping of the Minutes. Our Senior Vice President of Human Resources, with approval from the Committee Chairman, proposes the agenda and scheduling calendar for the year. Outside counsel of the Committee took minutes until July 15, 2010 and the Corporate Secretary, took minutes the remainder of the year. The Committee reviews and approves all minutes.
 
Compensation Consultant. Two consultants, Klemm & Associates and Pay Governance, were used in 2010. The consultants do not own any securities of the Company, nor do the consultants have any other business relationships with the Company or other individual associates.
 
The Committee decides the nature and scope of the compensation consultant’s assignments, and the Chairman of the Committee, with the Senior Vice President of Human Resources, approves the budget and invoices relating to the consultant. The consultant’s work for the Committee includes:
In 2010, the consultants did not provide services to the Company other than with respect to executive compensation.
 
Performance Reviews. Each of our executive officers performs an annual self-evaluation of previous year performance. Our CEO conducts performance evaluations or has final approval over performance evaluations for the other NEOs. The Executive Committee conducted the annual performance evaluation of our CEO and reported the results of the evaluation to the Compensation Committee. The performance review of our CEO is based on the financial performance of the Company, the increase in stockholder value, growth in the human capital of the organization, the continued reinvestment and improvement of the Company’s product offerings, input from the outside members of the Board of Directors and the Company’s overall management of risk. The Compensation Committee also approved the leadership rating, which was part of his short term incentive compensation. The Committee discusses the CEO evaluation without the CEO being present and a Committee member presents the Committee’s recommendations for executive officer compensation to the full Board of Directors.
 
Benchmarking of Compensation. The Committee uses competitive data to benchmark the following elements of compensation for NEOs:
In addition to benchmarking, and in the interest of taking internal equity into account, the Committee examines the relationship of one NEO’s total compensation and sub-elements to other NEO’s.
 
Klemm & Associates provides the Committee with compensation data from a database that derives data directly from publicly reported information called Salary.com CompAnalyst Executive. The database contains essentially all publicly-held U.S. companies including all publicly-held reporting banks. The Committee believes publicly-held reporting banks are the most appropriate group to benchmark ourselves against because we compete with that group for executive associates and for business.
 
The peer group is composed of 128 banks and bank holding companies with assets of $900 million to $5.0 billion. The Committee believes that using this single criterion of assets (and not others such as by geographic region or certain named banks) adds a strong element of fairness and impartiality to comparisons. The Committee uses the data not only for compensation comparisons, but also for financial performance measurement, and in particular, determining award levels for the Long-Term Incentive Plan described below.
 
In 2010, our benchmark group consisted of the following component companies:
 
1ST SOURCE CORP (SRCE) INDEPENDENT BANK CORP/MA (INDB)
ACNB CORP (ACNB) INDEPENDENT BANK CORP/MI (IBCP)
ALLIANCE FINANCIAL CORP/NY (ALNC) INTEGRA BANK CORP (IBNK)
AMCORE FINANCIAL INC (AMFIQ) LAKELAND BANCORP INC (LBAI)
AMERIS BANCORP (ABCB) LAKELAND FINANCIAL CORP (LKFN)
AMERISERV FINANCIAL INC/PA (ASRV) LNB BANCORP INC (LNBB)
AMES NATIONAL CORP (ATLO) MAINSOURCE FINL GROUP INC (MSFG)
ARROW FINANCIAL CORP (AROW) MBT FINANCIAL CORP (MBTF)
 
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BANCORP INC (TBBK) MERCANTILE BANK CORP (MBWM)
BANCTRUST FINANCIAL GRP INC (BTFG) MERCHANTS BANCSHARES INC/VT (MBVT)
BANK KY FINANCIAL CORP (BKYF) METROCORP BANCSHARES INC (MCBI)
BANK OF MARIN BANCORP (BMRC) MIDDLEBURG FINANCIAL CORP (MBRG)
BANK OF THE OZARKS INC (OZRK) MIDSOUTH BANCORP INC (MSL)
BANNER CORP (BANR) MIDWEST BANC HOLDINGS INC (MBHI)
BAR HARBOR BANKSHARES (BHB) NATIONAL BANKSHARES INC (NKSH)
BRYN MAWR BANK CORP (BMTC) NEWBRIDGE BANCORP (NBBC)
CAMDEN NATIONAL CORP (CAC) NORTHRIM BANCORP INC (NRIM)
CANANDAIGUA NATIONAL CORP (CNND.OB) OLD POINT FINANCIAL CORP (OPOF)
CAPE BANCORP INC (CBNJ) OLD SECOND BANCORP INC/IL (OSBC)
CAPITAL CITY BK GROUP INC (CCBG) ORRSTOWN FINANCIAL SVCS INC (ORRF)
CARDINAL FINANCIAL CORP (CFNL) PACIFIC CONTINENTAL CORP (PCBK)
CASCADE BANCORP (CACB) PEAPACK-GLADSTONE FINL CORP (PGC)
CENTERSTATE BANKS INC (CSFL) PEOPLES BANCORP INC/OH (PEBO)
CENTRA FINANCIAL HOLDINGS INC PEOPLES BANCORP NC INC (PEBK)
CENTRAL PACIFIC FINANCIAL CP (CPF) PREMIERWEST BANCORP (PRWT)
CENTRUE FINANCIAL CORP (TRUE) PRINCETON NATL BANCORP INC (PNBC)
CHEMICAL FINANCIAL CORP (CHFC) QCR HOLDINGS INC (QCRH)
CITIZENS & NORTHERN CORP (CZNC) RENASANT CORP (RNST)
CITY HOLDING COMPANY (CHCO) REPUBLIC BANCORP INC/KY (RBCAA)
CNB FINANCIAL CORP/PA (CCNE) REPUBLIC FIRST BANCORP INC (FRBK)
COBIZ FINANCIAL INC (COBZ) ROYAL BANCSHARES/PA -CL A (RBPAA)
COLUMBIA BANKING SYSTEM INC (COLB) S & T BANCORP INC (STBA)
COMMUNITY TRUST BANCORP INC (CTBI) S Y BANCORP INC (SYBT)
EAGLE BANCORP INC/MD (EGBN) SANDY SPRING BANCORP INC (SASR)
EASTERN VIRGINIA BANKSHARES INC (EVBS) SAVANNAH BANCORP INC (SAVB)
ENTERPRISE BANCORP INC/MA (EBTC) SCBT FINANCIAL CORP (SCBT)
FARMERS CAPITAL BANK CORP (FFKT) SHORE BANCSHARES INC (SHBI)
FARMERS NATIONAL BANC CORP /OH/ (FMNB.OB) SIMMONS FIRST NATL CP -CL A (SFNC)
FIDELITY SOUTHERN CORP (LION) SMITHTOWN BANCORP INC (SMTB)
FINANCIAL INSTITUTIONS INC (FISI) SOUTHEASTERN BANK FINL CORP (SBFC.OB)
FIRST BANCORP INC/ME (Maine) (FNLC) SOUTHERN CMNTY FINL CORP (SCMF)
FIRST BANCORP/NC (North) (FBNC) SOUTHSIDE BANCSHARES INC (SBSI)
FIRST BUSINESS FINANCIAL SERVICES, INC. (FBIZ) SOUTHWEST BANCORP INC (OKSB)
FIRST CITIZENS BANC CORP (FCZA) STATE BANCORP INC (STBC)
FIRST CMNTY BANCSHARES INC (FCBC) STELLARONE CORP (STEL)
FIRST FINANCIAL CORP/IN (THFF) STERLING BANCORP/NY (STL)
FIRST FINL BANKSHARES INC (FFIN) STERLING BANCSHRS/TX (SBIB)
FIRST LONG ISLAND CORP (FLIC) SUFFOLK BANCORP (SUBK)
FIRST M&F CORP/MS (FMFC) SUPERIOR BANCORP (SUPR)
FIRST MARINER BANCORP (FMAR) TAYLOR CAPITAL GROUP INC (TAYC)
FIRST MERCHANTS CORP (FRME) TOMPKINS FINANCIAL CORP (TMP)
FIRST NATL CMNTY BANCORP INC (FNCB.PK) TRICO BANCSHARES (TCBK)
FIRST UNITED CORP (FUNC) UNION FIRST MARKET BANKSHARS (UBSH)
FIRSTBANK CORP (FBMI) UNITED BANCORP INC/MI (UBMI)
FRANKLIN FINANCIAL SVCS CORP (FRAF) UNITY BANCORP INC (UNTY)
GERMAN AMERICAN BANCORP INC (GABC) UNIVEST CORP OF PENNSYLVANIA (UVSP)
GREAT SOUTHERN BANCORP (GSBC) VIRGINIA COMM BANCORP INC (VCBI)
GREEN BANKSHARES INC (GRNB) WASHINGTON BANKING CO (WBCO)
GUARANTY BANCORP (GBNK) WASHINGTON TR BANCORP INC (WASH)
HAWTHORN BANCSHARES INC (HWBK) WEST BANCORPORATION INC (WTBA)
HEARTLAND FINANCIAL USA INC (HTLF) WEST COAST BANCORP/OR (WCBO)
HERITAGE FINANCIAL CORP (HFWA) WESTAMERICA BANCORPORATION (WABC)
HOME BANCSHARES INC (HOMB) WILBER CORP (GIW)
HORIZON BANCORP/IN (HBNC) YADKIN VALLEY FINANCIAL CORP (YAVY)

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Compensation Restrictions Under the United States Treasury Capital Purchase Program
On December 19, 2008, the Company received an investment of approximately $35.0 million from the United States Treasury under the Capital Purchase Program. Under the executive compensation standards adopted by the Treasury in connection with the CPP, during the period that the Treasury holds any of our securities under the CPP, we are subject to the following limitations on compensation:
Our executive compensation practices and policies are subject to these executive compensation restrictions. The discussion of our executive compensation practices and policies which follows should be read with these restrictions in mind.
 
Compensation Components
Our executive compensation consists of three components: base salary, short-term annual incentive awards, and long-term equity incentive compensation. We also provide modest levels of perquisites, described later, to NEOs. NEOs may elect to participate in a Deferred Compensation Plan that is available to certain other executives as well. We do not provide any executive benefits in the form of supplemental executive retirement plans, top hat plans, or special health care plans. NEOs also participate in other associate benefit programs that are provided or available to the general associate population such as health care, disability, life insurance and a defined contribution plan. These programs are described later. The Summary Compensation Table on page 23 provides additional information.
 
Base Salaries. We use base salary to recognize and take into account requisite competencies, experience, and knowledge that we believe our NEOs must possess. In setting base salaries, the Committee considers the NEO’s experience, the difficulty that might be encountered in replacing the NEO, and how limited the pool of qualified people might be.
 
We set base salary range midpoints at what would be slightly above the midpoint of the benchmarks for general peer group data. We set midpoint salary above the median because performance goals are set at levels well beyond median performance for the peer group and we strive to recruit and retain talent that would be highly sought after by our peers.
 
With recommendations from the CEO and the Senior Vice President of Human Resources, the Committee annually reviews NEO base salaries based on individual and Company performance, the individual’s level of responsibility, peer group competitive data, internal equity considerations, compensation history, and terms and conditions of each NEO’s employment agreement.
 
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Except for Mr. Benoist, as described below, in 2010, there were no increases in the rate of base salary for any of our NEOs. None of our NEOs were paid or earned any cash bonus other than a $50 bonus paid to all associates for the Company achieving certain quarterly goals. This amount is included as “Other Compensation” in the Summary Compensation table on page 23.
 
Mr. Benoist.
For 2010, Mr. Benoist was paid a base salary of $460,000. This included $425,000 of cash payments and $35,000 of fully vested restricted stock. The shares of restricted stock were granted in connection with an increase in Mr. Benoist’s salary of $120,000 approved by the Compensation Committee effective January 1, 2010. The increase was granted by the Compensation Committee to permit Mr. Benoist to be eligible to receive targeted levels of short and long term incentives for 2010 in accordance with CPP executive compensation rules. The restricted shares were issued in pro-rated installments on the date that Mr. Benoist’s salary was payable in accordance with the Company’s payroll practices. The number of shares of salary stock issued to Mr. Benoist in each installment was equal to the dollar value of such installment divided by the closing price of the Company’s stock on the Nasdaq Global Select Market on the date of the installment, net of applicable withholding. Effective April 29, 2010, Mr. Benoist voluntarily discontinued the stock grants when it became apparent that the Company’s performance would not result in targeted or exceptional levels of short term incentives. Following such reduction, Mr. Benoist’s annual rate of base salary returned to $425,000. Mr. Benoist was issued 3,696 restricted shares of Company stock, including shares that were subsequently withheld to pay for taxes.
 
In the future, we may elect to pay base salary to other NEOs or employees with similar grants of restricted stock.
 
Short-Term Annual Incentives. We use short-term incentive programs to drive an executive’s performance in a given year by focusing on up to five key goals. Our short-term incentive program sets a threshold, target and exceptional level of short-term incentive awards that an NEO is eligible to earn. In the first quarter of each year, our CEO and the Senior Vice President of Human Resources, with the input of other members of management where appropriate, present proposed NEO performance grids to the Committee for review and approval. For each of these NEOs, the CEOs of the Company and the Bank review the goals and set the potential incentive amounts for each goal and performance level. The relative importance of each goal to all goals is determined. The relative weighting determines potential incentive payments for each goal.
 
For each goal, the threshold level of payout for achievement is usually set at 70% of target level and the exceptional level of payout is usually set at 130% of target level. For performance below threshold level of any goal, there is no payment. Payout for performance falling between the threshold, target and exceptional criteria is determined using straight-line interpolation.
 
We have historically used short-term annual incentive programs which paid cash bonuses to our NEOs. Beginning in 2009, the Company decided not to pay cash bonuses and created a new short-term incentive plan which gave NEOs the opportunity to earn awards in the form of restricted stock. The restricted stock available to NEOs under the short-term incentive plan in 2010 satisfies the requirements of “long term restricted stock” under the CPP executive compensation standards. Under CPP rules, (i) the total value of all restricted stock awarded by the Company in any fiscal year to an employee subject to the CPP bonus restrictions (excluding awards of fully vested “salary stock”) may not exceed 1/3 of the employee’s total compensation, (ii) the restricted stock awards are subject to a two year continuous service vesting schedule and (iii) the shares of restricted stock become transferrable on a pro rata basis to the extent that we repay funds we obtained through the CPP, subject to limited exceptions for sales to cover taxes as the shares of restricted stock vest. We determine the number of shares of restricted stock included in the award by dividing the award dollar amounts by the price of our common stock as of the close of trading on the date of the award.
 
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The goals determining the short-term incentive awards and the threshold, target and exceptional level payouts related to each goal for each of our NEOs for 2010 are set forth in the table below. Due to the Company’s expected performance in 2010, management recommended and the Committee approved a reduction in the threshold, target and exceptional level payout of all annual short-term incentives by 50% from the 2008 threshold, target and exceptional levels. While the target amount of short-term annual incentives for Mr. Benoist are set in his employment agreement, Mr. Benoist agreed in 2010 to a 50% reduction in the target amount of his short-term incentives, consistent with the reduction for other NEOs.
 
          % Weight   Goals (1)    
                  At Target       Threshold       Target       Exceptional       Actual
Peter F. Benoist                        
1.       Earnings per share       40%   $0.45   $0.51   $0.61   $0.45
2. Asset Quality Rating (2)       40%   2.0   3.0   4.0   1.0
3. Leadership Rating (3)       20%   2.0   3.0   4.0   3.5
      Value   100%   $78,167   $111,667   $145,167   $56,950
                      % of Target   51.0%
                      Restricted shares   4,931
Frank H. Sanfilippo                        
1. Earnings per share       40%   $0.45   $0.51   $0.61   $0.45
2. Finance Rating (3)       40%   2.0   3.0   4.0   3.5
3. Leadership Rating (3)       20%   2.0   3.0   4.0   3.5
      Value   100%   $31,500   $45,000   $58,500   $43,650
                      % of Target   97.0%
                      Restricted shares   3,779
Stephen P. Marsh                        
1. Earnings per share       40%   $0.45   $0.51   $0.61   $0.45
2. Asset Quality Rating (2)       40%   2.0   3.0   4.0   1.0
3. Leadership Rating (3)       20%   2.0   3.0   4.0   2.5
      Value   100%   $43,750   $62,500   $81,250   $28,125
                      % of Target   45.0%
                      Restricted shares   2,435
Linda M. Hanson                        
1. Earnings per share       30%   $0.45   $0.51   $0.61   $0.45
2. Kansas City Region Net Operating Income (4)   50%   14,100   15,477   17,800   15,053
3. Leadership Rating (3)       20%   2.0   3.0   4.0   2.5
      Value   100%   $38,500   $55,000   $71,500   $45,055
                      % of Target   81.9%
                      Restricted shares   3,901
John G. Barry                        
1. Earnings per share       30%   $0.45   $0.51   $0.61   $0.45
2. Arizona Region Net Operating Income (4)   50%   865   951   1,095   12,818
3. Leadership Rating (3)       20%   2.0   3.0   4.0   3.5
      Value   100%   $43,750   $62,500   $81,250   $68,125
                      % of Target   109.0%
                      Restricted shares   5,898

(1)       As discussed above, because of the Company’s below average performance in fiscal year 2010, all threshold, target and exceptional level payouts were reduced by 50% from original levels.
     
(2)   The Asset Quality Rating which is a part of Mr. Benoist’s and Mr. Marsh’s short-term incentive goals is a rating of between zero and four points based on an equal weighted review of the Company’s net charge offs and non-performing assets during the fiscal year. The target level Asset Quality Rating of three points would be achieved if (i) net charge offs during the year are less than or equal to 1.70% of the average loan balance for 2010 and (ii) the ratio of the Company’s non-performing assets to total assets for the fiscal year is less than or equal to 2.38%. The Committee assigns a score of between zero and three points for performance below these target goals and a score of between three and four points for performance exceeding these target goals, with discretion to deviate from straight line interpolation if the Committee feels that circumstances merit such deviation. The Committee did not deviate from straight line interpolation in 2010.
  
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(3)       The leadership rating goal consists of a rating of between zero and four points. Each performance review consists of separate subjective criteria based on the position and responsibilities of the NEO, including leadership. A portion of Mr. Sanfilippo’s subjective performance evaluation is based on an assessment by the Chairperson of the Audit Committee and the CEO of the effectiveness of the Company’s overall risk management procedures and processes. In determining this rating, the Chairperson of the Audit Committee and the CEO consider factors such as the Company’s risk assessment process, internal controls over financial reporting, including the existence of any significant deficiencies or material weaknesses in such controls, and disclosure controls and procedures.
     
(4)   The payout for achieving above target-level performance for this goal is subject to a reduction of 10% for each of five different credit quality measures, including rate of loan losses amount of nonperforming assets, past due loans, loan review results, and loan documentation deficiencies. Loan losses in the Kansas City region exceeded the loan loss threshold of 1.70%, therefore, Ms. Hanson’s payout with respect to this goal was reduced by 10%. Mr. Barry had no credit quality deductions.

Long-Term Incentive Compensation. Our objectives for long-term incentive compensation for our NEOs include:
Since 2004, our long-term incentive compensation plan has used primarily restricted stock units (“RSUs”), while reserving the ability to grant stock options or stock settled appreciation rights (“SSARs”) in certain circumstances. The executive compensation standards of the CPP limit our long-term incentive program to either long-term restricted stock or RSUs for as long as the U.S. Department of Treasury holds an investment in the Company. Target amounts of long-term incentives are primarily determined based on the benchmarking analysis discussed above.
 
We designed the plan of annual equity grants and potential awards so that it would provide our NEOs, managers, and other key associates continued, long-term motivation. We believe the plan provides incentives for long term performance and prudent risk-management because:
Compensation under the Long-Term Incentive Plan involves three steps:
Each year management makes a recommendation to the Committee for RSU Grants in the form of an updated list of NEOs and proposed grant levels in groupings. Once the Committee reviews and approves the listing and pool level, we grant participating associates a dollar denominated amount, which entitles them to a potential Award of RSUs if the performance standard is met, against the previously described peer group from Klemm & Associates of 128 banks.
 
Because the Company’s average earnings per share growth rate for the 3 year period ending December 31, 2009 compared to our peers was below threshold, there were no equity Awards under the Long-Term Incentive Plan in 2010.
 
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A Grant was made in 2010 which relates to performance for 2010, 2011 and 2012 with a potential Award in 2013. Grants for NEOs are reflected in the Summary Compensation Table on page 23 and the Grants of Plan-Based Awards table on page 25.
 
The 2010 Grants consisted of the following.
 
Goal       Weight               Threshold       Target       Exceptional
EPS   40%   Goal   60th percentile   70th percentile   80th percentile
Net Interest Income   30%   Goal   70th percentile   75th percentile   80th percentile
Efficiency Ratio Average   30%   Goal   85th percentile   90th percentile   95th percentile
    100%                

NEO Perquisites. We provide perquisites and other personal benefits to NEOs that we believe are reasonable and consistent with our overall compensation program. See the All Other Compensation – Supplemental Table on page 24 for more information on these items. In 2010, no executives received perquisites whose total value for such executive exceeded $25,000.
 
Retirement Plans. We expect executives to plan for and fund their own retirement through a defined contribution 401(k) plan and a Deferred Compensation Plan that permits certain executives to defer a limited portion of salary and bonus into any of several investment alternatives. The Company has historically provided an annual Company match to the 401(k) plan. There are no Company contributions to the Deferred Compensation Plan. We do not maintain defined benefit retirement or executive retirement plans or provide for post-retirement benefits.
 
2010 Compensation for Named Executive Officers
Below is a summary of the compensation by category earned by our NEOs for 2010.
 
        Short-term            
        Annual   Long-term        
        Incentive   Incentive        
    Base Salary   Compensation   Compensation   NEO    
Name       (1)       (2)       (3)       Perquisites (4)       Total
Peter F. Benoist   86%   11%   0%   3%   100%
Frank H. Sanfilippo   79%   16%   0%   5%   100%
Stephen P. Marsh   85%   9%   0%   6%   100%
Linda M. Hanson   81%   14%   0%   5%   100%
John G. Barry   59%   36%   0%   5%   100%

(1)        Base salary percentages are based on the amounts disclosed in the “Summary Compensation Table” for NEOS. For more information, see the heading “Base Salaries” above.
           
(2)   Short-term annual incentive compensation percentages are based on the amounts disclosed as “Stock Awards” in the “Summary Compensation Table” for NEOs. For more information, see the heading “Short-term Annual Incentive Compensation” above.
        
(3)   For more information, see the heading “Long-term Incentive Compensation” above.
        
(4)   NEO Perquisites percentages a re based on the amounts disclosed as “All Other Compensation” in the “Summary Compensation Table” for NEOs. For more information, see the heading “NEO Perquisites” above.

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Stock Ownership Guidelines
Effective January 2010, our Board of Directors approved stock ownership guidelines for our NEOs and non-employee directors with the goal of further aligning the interests of our management with our stockholders.
 
The stock ownership guidelines provide that non-employee directors and different levels of executives are expected to own a specific amount of our common stock within the later of five years of adopting the program or five years after the date the executive becomes an NEO or director as applicable. NEOs and non-employee directors are expected to make continuing progress towards compliance with the guidelines during the five-year period. Non-employee directors are expected to own, or to acquire within the later of January 1, 2015 or five years after the date of becoming a director, at least $250,000 worth of the Company’s common stock. For purposes of determining whether an executive or non-employee director is in compliance, or making progress towards compliance, stock is valued at its purchase price or, in the case of stock awarded under the Company’s compensation plan, at its value at the time of the Award. The table below shows the guidelines for NEO’s by executive level.
 
       TITLE       STOCK OWNERSHIP GOAL
  CEO / President   Greater of 50,000 shares or 5 x Base Salary
  All Other NEOs   Greater of 25,000 shares or 2.5 x Base Salary

COMPENSATION COMMITTEE REPORT
 
Compensation Discussion and Analysis
 
The Compensation Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K under the Securities Exchange Act of 1934 and, based on such review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
 
Disclosures Required Pursuant to Capital Purchase Program Regulations
 
The Company offers the following plans in which our NEOs participate, subject, however, to the limitations and restrictions under the Capital Purchase Program:
We reviewed each of the above plans and agreements and determined that none of them encourage the named executive officers to take unnecessary and excessive risks that threaten the value of the Company or Enterprise Bank & Trust, our banking subsidiary.
 
The employment agreements with our named executive officers provide for severance payments if a termination of employment occurs under certain circumstances, including a change of control of the Company. As discussed below under “Severance and Change in Control Compensation,” the standards for executive compensation adopted by the U.S. Department of the Treasury under the Capital Purchase Program prohibit us from paying severance to any of our NEOs or the next five most highly compensated employees for as long as the Treasury holds its investment in the Company.
 
The 2002 Stock Incentive Plan and the amendments thereto have been approved by the stockholders of the Company and provide for the granting of stock options, restricted stock awards, RSUs and stock settled stock appreciation rights (“SSARs”), however, as discussed above under “Compensation Discussion and Analysis,” the Company is prohibited from granting any new stock options to the five most highly compensated employees due to the executive compensation standards of the Capital Purchase Program. For 2010, Mssrs. Benoist, Marsh and Barry and Ms. Hanson were subject to this restriction. Mr. Sanfilippo was not subject to this restriction, but received a grant of qualified long term restricted stock regardless of his eligibility to receive cash or other compensation. As described in the Compensation Discussion and Analysis, the Compensation Committee believes that the Company’s equity incentive plans align the interests of our NEOs and other employees with the long term interests of our stockholders. Grants under our equity plans are subject to performance based criteria and vesting over five years. The use of RSUs in awarding long term incentive compensation to our NEOs ties the economic value of the award to the long term risk and reward structure of the Company. In light of these factors, the Compensation Committee believes that these equity awards do not encourage the named executive officers to take unnecessary and excessive risks that threaten the value of the Company or the Bank.
 
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The deferred compensation plan allows NEOs and certain other executives to defer a limited portion of salary and up to 100% of any bonus into any of several investment alternatives. The deferred compensation plan is unfunded and the Company historically does not make any credits to the deferred compensation plan and did not do so in 2010. Because the deferred compensation plan only allows for the deferral of compensation that is already earned, the Compensation Committee believes that this plan does not encourage our NEOs to take unnecessary and excessive risks that threaten the value of the Company or the Bank or the manipulation of reported earnings to enhance the compensation of any employee.
 
As described in the Compensation Discussion and Analysis, above, our short-term annual incentive plan is intended to focus our executives’ efforts on key goals, which the Committee believes are drivers of shareholder value. A portion of each NEOs short-term incentive award targets are based on risk management criteria, such as asset quality and evaluation of risk management processes under the control of the NEO. The Compensation Committee believes that this plan does not encourage our NEOs to take unnecessary and excessive risks that threaten the value of the Company or the Bank or the manipulation of reported earnings to enhance the compensation of any employee.
 
The Incentive Savings Plan is a broad based plan that allows our employees, including NEOs, who satisfy eligibility requirements to contribute a portion of their salary and bonus to a 401(k) plan with investment options which include investments in the Company’s common stock. We also make matching contributions to employee’s 401(k) accounts under the Incentive Savings Plan. The Compensation Committee believes that this plan does not encourage our NEOs to take unnecessary and excessive risks that threaten the value of the Company or the Bank or the manipulation of reported earnings to enhance the compensation of any employee.
 
The Company has several incentive or variable compensation programs for non-executive employees. Each arrangement is available to different classes of employees. The largest of these programs are our incentive programs for unit presidents and relationship managers. Similar to the short-term incentive plan for our NEOs, unit presidents and relationship managers are awarded annual incentive compensation based on achievement of between four and six goals. These goals include performance in Company-wide areas such as earnings per share, overall asset quality, deposit growth and other factors. There are also employee-specific goals, such as deposit origination, asset quality of originated loans and others. We also have a relatively small division of loan officers focused on mortgage lending. These mortgage loan officers are compensated based on commissions determined by loan origination volume, however mortgage originations, like all other loans, remain subject to a separate underwriting approval process. The Compensation Committee has reviewed the structure and implementation of these arrangements and discussed the risks that face the Company and determined that the arrangements do not encourage unnecessary and excessive risks that threaten the value of the Company or the Bank or the manipulation of reported earnings to enhance the compensation of any employee.
 
Certifications Required Pursuant to Capital Purchase Program Regulations
 
The Compensation Committee certifies that:
 
       (1)       It has reviewed with senior risk officers the senior executive officer compensation plans and has made all reasonable efforts to ensure that these plans do not encourage SEOs to take unnecessary and excessive risks that threaten the value of the Company;
             
  (2) It has reviewed with senior risk officers the employee compensation plans and has made all reasonable efforts to limit any unnecessary risks these plans pose to the Company; and
             
  (3) It has reviewed the employee compensation plans to eliminate any features of these plans that would encourage the manipulation of reported earnings of the Company to enhance the compensation of any employee.
 
Respectfully submitted by the Compensation Committee,
 
       Michael A. DeCola, Chairman              William H. Downey        Birch M. Mullins        James J. Murphy, Jr.

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SEVERANCE AND CHANGE IN CONTROL BENEFITS
 
We have entered into agreements with our NEOs granting them “double trigger” change in control benefits (i.e. the benefit is triggered if the executive is terminated or not offered continued employment upon a change in control of the Company.). The Committee believes these agreements serve the best interests of the Company and its stockholders by ensuring that, in considering any proposed change in control, the NEOs would be able to advise the Board about the potential objectively, without being unduly influenced by personal concerns such as the loss of employment following a change in control. These arrangements are intended to promote stability and continuity of senior management. In addition, our agreements with our NEOs generally provide for severance payments upon a termination without cause of between one and two years compensation. These severance and change in control arrangements are subject to the restrictions of the CPP executive compensation guidance.
 
Information on applicable payments under such agreements for NEOs is contained under the heading “Potential Payments Upon Termination or Change in Control” on page 28. These change in control benefits are subject to the CPP executive compensation standards and all of our NEOs have waived their rights to such payments to the extent prohibited by such standards.
 
Section 162(m) of the Internal Revenue Code – Compensation Deductibility Limits
Other than for qualified performance-based compensation, Section 162(m) generally denies a deduction for federal revenue tax wages by any publicly held corporation for compensation paid in a taxable year to the Company’s chief executive officer and four other highest compensated officers to the extent that the officer’s compensation exceeds $1.0 million. In 2006, our stockholders approved an incentive plan that provides for performance-based compensation in compliance with Section 162(m). The plan is intended to permit the deductibility of compensation in excess of $1.0 million per year, if any, when paid in accordance with the plan. There may be circumstances in which the Committee may approve compensation that is not deductible to ensure competitive levels of compensation for its executive officers. As a result of the Company’s participation in the CPP, the Company is subject to amendments to Section 162(m) which limit the deductibility of all compensation, including performance based compensation, to $500,000 per executive with respect to any taxable year during which the U.S. Treasury retains its CPP investment in the Company.
 
EXECUTIVE EMPLOYMENT AGREEMENTS
 
All of the Executive Employment Agreements described below are subject to the executive compensation standards under the CPP regulations discussed above, which, among other things, limit or prohibit severance compensation and bonuses, and require recovery by the Company of variable compensation which is based on statements of earnings, revenues, gains or other criteria that are later found to be materially inaccurate. See “Potential Payments Upon Termination or Change in Control” below for information concerning the amounts which may be payable to our NEOs upon a termination of employment or a change in control.
 
Executive Employment Agreement with Mr. Benoist
Effective May 1, 2008, the Company entered into an Executive Employment Agreement with Mr. Benoist. The agreement, as amended, specifies that Mr. Benoist will serve as President and Chief Executive Officer. The initial term ends on December 31, 2013, and shall be automatically extended for one year terms beginning January 1 and ending December 31 unless either the Company or executive provide written notice to the other party at least 90 days prior to expiration of the initial term or renewal term. The term may be extended by mutual written agreement of Mr. Benoist and the Company.
 
Mr. Benoist’s agreement provides him with severance compensation in the event of his termination under certain circumstances. The agreement also has confidentiality and non-compete provisions for his period of employment and for a period of one year after termination of his employment.
 
The reason for termination determines the amount of severance compensation, if any, due to Mr. Benoist. Generally, he is entitled to payment of accrued base salary, bonus to the extent earned and payable, and accrued benefits through his date of termination. If the Company terminates Mr. Benoist “other than for cause”, he will also be paid as severance compensation the amount of one year base salary and one year target level bonus, subject to the execution of a release and waiver of all claims. If he is terminated in a “change in control,” he will be paid as severance compensation 24 months of base salary and target level bonus, paid in a discounted lump sum, and all unvested equity awards will become vested. Upon “voluntary” termination, termination “for cause”, disability or death, neither Mr. Benoist nor his estate will be entitled to any severance compensation.
 
Executive Employment Agreement with Mr. Sanfilippo
Effective as of December 1, 2004, the Company entered into a Key Executive Employment Agreement with Mr. Sanfilippo. Mr. Sanfilippo’s agreement, as amended, provides for a continuous term until the agreement is terminated in accordance with its provisions. The agreement provides Mr. Sanfilippo with severance compensation in the event of his termination under certain circumstances. The agreement also has confidentiality and non-compete provisions for his period of employment and for a period of one year after termination of his employment.
 
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The method of termination determines the amount of severance compensation, if any, due to Mr. Sanfilippo. Generally, he is entitled to payment of accrued base salary, bonus to the extent earned and payable, and accrued benefits through his date of termination.
 
If Mr. Sanfilippo is terminated in a “change in control,” or terminated “other than for cause” while the Company is engaged in bona fide discussions regarding a potential “change in control”, he will be paid as severance compensation two years of base salary and target level bonus, paid in a discounted lump sum, and all unvested equity awards will become vested. Upon any other termination, disability or death, neither Mr. Sanfilippo nor his estate will be entitled to any severance compensation.
 
Executive Employment Agreement with Mr. Marsh
Effective as of July 1, 2008, the Company entered into a Key Executive Employment Agreement with Mr. Marsh. The agreement, as amended, provides for a continuous term until terminated in accordance with its provisions.
 
The agreement provides Mr. Marsh with severance compensation in the event of his termination under certain circumstances. The agreement also has confidentiality and non-compete provisions for his period of employment and for a period of one year after termination of his employment. The reason for termination determines the amount of severance compensation, if any, due to Mr. Marsh. Generally, he is entitled to payment of accrued base salary, bonus to the extent earned and payable, and accrued benefits through his date of termination. If the Company terminates Mr. Marsh “other than for cause,” he will also be paid as severance compensation the amount of twelve months base salary in a discounted lump sum. If he is terminated in a “change in control,” he will be paid as severance compensation 24 months of base salary and two years of target level bonus, paid in a discounted lump sum, and all unvested equity awards will become vested. Upon any other termination, disability or death, neither Mr. Marsh nor his estate will be entitled to any severance compensation.
 
Executive Employment Agreement with Ms. Hanson
Effective as of November 1, 2004, the Company entered into a Key Executive Employment Agreement with Ms. Hanson. Ms. Hanson’s employment agreement, as amended, provides for her continuous employment until the agreement is terminated in accordance with its provisions. The agreement provides Ms. Hanson with severance compensation in the event of her termination under certain circumstances. The agreement also has confidentiality and non-compete provisions for her period of employment and for a period of one year after termination of her employment.
 
The reason for termination determines the amount of severance compensation, if any, due to Ms. Hanson. Generally, she is entitled to payment of accrued base salary, bonus to the extent earned and payable, and accrued benefits through her date of termination. If Ms. Hanson is terminated in a “change in control,” she will be paid as severance compensation one year of base salary, paid in a discounted lump sum, and one year of target level bonus, and all unvested equity awards will become vested. This payment coincides with the one year non-compete covenant in her agreement, which provides that she will not, for the period of employment and twelve months afterward, solicit customers of the Company or seek to solicit associates to leave employment of the Company. If upon termination other than for cause after a “change in control”, the Company does not pay the one year severance compensation, then Ms. Hanson will not be held to the non-compete and non-solicitation provisions of her agreement.
 
Upon any other termination, disability or death, neither Ms. Hanson nor her estate will be entitled to any severance compensation.
 
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Executive Employment Agreement with Mr. Barry
Effective as of February 17, 2010, the Company entered into an Amended and Restated Executive Employment Agreement with Mr. Barry. The agreement, as amended and restated, provides for his continuous employment until the agreement is terminated in accordance with its provisions. The agreement provides Mr. Barry with severance compensation in the event of his termination under certain circumstances. The agreement also has confidentiality and non-compete provisions for his period of employment and for a period of one year after termination of his employment.
 
The reason for termination determines the amount of severance compensation, if any, due to Mr. Barry. Generally, he is entitled to payment of accrued base salary, bonus to the extent earned and payable, and accrued benefits through his date of termination. If the Company terminates Mr. Barry “other than for cause,” he will also be paid as severance compensation twelve months of base salary and one year target level bonus, subject to the execution of a release and waiver of all claims. If he is terminated in a “change in control,” he will be paid as severance compensation 24 months of base salary and two years of target level bonus, and all unvested equity awards will become vested. Upon “voluntary” termination, the Company may choose to pay as severance compensation one year base salary and one year target level bonus, which will cause Mr. Barry to be held to the non-compete provision of his agreement.
 
Upon any other termination, disability or death, neither Mr. Barry nor his estate will be entitled to any severance compensation.
 
Grant of Restricted Shares to Mr. Barry. In connection with the execution and delivery of the Amended and Restated Executive Employment Agreement, Mr. Barry and the Company entered into a restricted stock award agreement pursuant to which Mr. Barry received a one time award of 10,000 shares of restricted stock. The restricted stock is subject to a five-year vesting schedule and complies with the requirements of the CPP.
 
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SUMMARY COMPENSATION TABLE
 
The following table shows the compensation paid to the Company’s NEOs for years ended December 31, 2010, 2009 and 2008.
 
                    Non-Equity        
                    Incentive Plan   All Other    
            Stock Awards   Option Awards   Compensation   Compensation ($)    
Name and Principal Position       Year       Salary ($) (1)       ($) (2) (3) (4)       ($) (5)       ($) (6)       (7)       Total ($)
Peter F. Benoist   2010   460,000   56,950   -   -   17,197   534,147
President and Chief Executive   2009   425,000   57,750   -   -   12,725   495,475
Officer   2008   406,368   -   870,372   -   11,800   1,288,540
                             
Frank H. Sanfilippo   2010   214,400   43,650   -   -   12,840   270,890
Executive Vice President and   2009   214,400   30,780   -   -   15,955   261,135
Chief Financial Officer   2008   212,733   49,605   377,810   27,000   15,300   682,448
                             
Stephen P. Marsh   2010   275,000   28,125   -   -   22,171   325,296
Executive Vice President;   2009   275,000   23,625   -   -   21,190   319,815
Chairman and Chief Executive   2008   275,000   134,392   232,920   -   20,140   662,452
Officer - Enterprise Bank & Trust                            
                             
Linda M. Hanson   2010   261,050   45,055   -   -   15,290   321,395
Regional President, KC   2009   261,050   33,846   -   -   22,339   317,235
Enterprise Bank & Trust   2008   261,050   -   330,972   -   27,263   619,285
                             
John G. Barry   2010   260,392   159,125   -   -   18,292   437,809
Executive Vice President   2009   260,392   38,599   -   -   19,530   318,521
Enterprise Bank & Trust   2008   260,392   60,006   -   98,750   21,012   440,160
 
(1)        The 2010 salary amount shown for Mr. Benoist includes $425,000 of cash payments and $35,000 of dollar denominated restricted stock. Mr. Benoist was issued 3,696 restricted shares of Company stock, some of which were subsequently withheld to pay for taxes. For more information, see the heading “Base Salaries” and the Grants of Plan-Based Awards table.
           
(2)   The amounts shown in this column for 2010 and 2009 represent the grant date fair value, computed in accordance with Financial Accounting Standards Board Codification Topic 718, Compensation - Stock Compensation (“FASB ASC 718”), disregarding estimates of forfeiture, of dollar denominated performance contingent grants of restricted stock. These grants of restricted stock were made under the 2002 Stock Incentive Plan and are also subject to a two or five year continuous service vesting schedule. The 2010 and 2009 grants were settled with an award of restricted stock on January 21, 2011 and February 17, 2010, respectively. For more information, see the heading “Short-Term Annual Incentives” and the Grants of Plan-Based Awards table.
        
(3)   The amounts shown in this column for 2008 represent the grant date fair value, computed in accordance with FASB ASC 718, disregarding estimates of forfeiture, of dollar denominated awards of restricted stock units on the applicable award date. The awards are the result of satisfaction of performance contingent grants in prior years. All awards of restricted stock units were made under the 2002 Stock Incentive Plan and are subject to a five year continuous service vesting schedule. The restricted stock units are settled in stock. Dividends are not paid on unvested shares. These awards are discussed in further detail under the heading “Long-Term Incentive Compensation.”
        
(4)   The aggregate grant date fair value for 2008, 2009 and 2010 performance contingent grants pursuant to the Long-term Incentive Compensation plan computed in accordance with FASB ASC 718, based upon the probable outcome of the performance conditions is $0. The performance condition for these grants is based on the Company's results relative to peers for a three-year period and therefore, the probable outcome is not yet determinable. The maximum value of such awards assuming the highest level of performance would be achieved is as follows: Mr. Benoist - $403,200 (2010, 2009 and 2008), Mr. Sanfilippo - $100,800 (2010, 2009, and 2008); Mr. Marsh - $144,900 (2010, 2009, and 2008); Ms. Hanson - $107,100 (2010, 2009, and 2008) and Mr. Barry - $60,000 (2010, 2009, and 2008). These grants are discussed in further detail under the heading “Long-Term Incentive Compensation.”
        
(5)   The amounts shown in this column represent the grant date fair value, computed in accordance with FASB ASC 718, disregarding estimates of forfeiture, of dollar denominated awards of stock settled stock appreciation rights. The awards are the result of satisfaction of performance contingent grants in prior years. All awards of restricted stock units were made under the 2002 Stock Incentive Plan and are subject to a five year continuous service vesting schedule. For more information, please refer to Note 16 - Compensation Plans included in the Company's 2010 Consolidated Financial Statements included on Form 10-K filed with the Securities and Exchange Commission on or around March 11, 2011.
        
(6)   The amounts shown in this column constitute the Short-Term Cash Incentive earned by each Named Executive Officer based on the Board’s evaluation of each Officer’s performance. These awards are discussed in further detail under the heading “Short-Term Annual Incentives.”
        
(7)   This column indicates amounts for various benefits provided to the NEO’s as shown in the following supplemental table.

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ALL OTHER COMPENSATION – SUPPLEMENTAL TABLE
 
            Car Allowance           Town Hall Cash    
Name and Principal Position       Year       401(k) Match       (1)       Club Dues       Life Insurance       Bonus       Total
Peter F. Benoist   2010   6,125   7,200   -   3,822   50   17,197
President and Chief Executive   2009   6,125   6,600   -   -   -   12,725
Officer   2008   5,750   6,000   -   -   50   11,800
                             
Frank H. Sanfilippo   2010   4,590   7,200   -   1,000   50   12,840
Executive Vice President and   2009   5,355   3,600   7,000   -   -   15,955
Chief Financial Officer   2008   5,750   -   9,500   -   50   15,300
                             
Stephen P. Marsh   2010   6,125   7,200   7,200   1,596   50   22,171
Executive Vice President;   2009   6,125   6,600   8,465   -   -   21,190
Chairman and Chief Executive   2008   5,750   6,000   8,340   -   50   20,140
Officer - Enterprise Bank & Trust                            
                             
Linda M. Hanson   2010   6,125   -   7,200   1,915   50   15,290
Regional President, KC   2009   6,125   6,000   9,299   915   -   22,339
Enterprise Bank & Trust   2008   5,750   12,000   8,548   915   50   27,263
                             
John G. Barry   2010   6,125   2,391   7,200   2,526   50   18,292
Executive Vice President   2009   6,125   3,088   9,387   930   -   19,530
Enterprise Bank & Trust   2008   5,750   3,088   11,194   930   50   21,012
 
(1)        Executives and key management are typically provided a car allowance, which may be used toward the cost of car ownership, including leases/loans, insurance, and maintenance. In some instances, certain executives are allowed usage of a Company leased vehicle in lieu of receiving a car allowance.

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GRANTS OF PLAN-BASED AWARDS
 
The following table sets forth the individual Plan-Based Awards for each of the NEOs during 2010.
 
          All Other  
          Stock  
          Awards: Grant Date
          Number of Fair Value of
    Estimated Future Payouts Under Shares of Stock and
    Equity Incentive Plan Awards Stock or Option
    (2) Units (1) Awards
      Target Maximum    
Name Grant Date Threshold ($) ($) ($) (#) ($)
Peter F. Benoist        1/15/2010 (1) - - - 542 5,000
         1/29/2010 (1) - - - 535 5,000
         2/12/2010 (1) - - - 598 5,000
         2/17/2010 (2) (3) 78,167 111,667 145,167 - -
         2/26/2010 (1) - - - 583 5,000
         3/15/2010 (1) - - - 534 5,000
         3/31/2010 (1) - - - 452 5,000
         4/15/2010 (1) - - - 452 5,000
         6/11/2010 (4) 268,800 336,000 403,200 - -
Frank H. Sanfilippo        2/17/2010 (2) (3) 31,500 45,000 58,500 - -
         6/11/2010 (4) 67,200 84,000 100,800 - -
Stephen P. Marsh        2/17/2010 (2) (3) 43,750 62,500 81,250 - -
         6/11/2010 (4) 96,600 120,750 144,900 - -
Linda M. Hanson        2/17/2010 (2) (3) 38,500 55,000 71,500 - -
         6/11/2010 (4) 71,400 89,250 107,100 - -
John G. Barry        2/17/2010 (2) (3) 43,750 62,500 81,250 - -
         2/17/2010 (5) - - - 10,000 91,000
         6/11/2010 (4) 40,000 50,000 60,000 - -
 
(1)        Restricted stock was granted to Mr. Benoist in conjunction with an increase in his base salary. See under the heading “Base Salary” for more information. Some shares were subsequently withheld to pay for taxes.
           
(2)   The grants were denominated in dollars and are settled in restricted stock.
        
(3)   On January 21, 2011 the Company made the following awards in the form of restricted shares in settlement of these performance contingent grants: Mr. Benoist, 4,931 shares valued at $56,950; Mr. Sanfilippo, 3,779 shares valued at $43,650; Mr. Marsh, 2,435 shares valued at $28,125; Mr. Barry, 5,898 shares valued at $68,125; Ms. Hanson, 3,901 shares valued at $45,055. All shares were valued using the EFSC common stock closing price on January 21, 2011 of $11.55. For more information on these awards, see under the heading “Short-Term Annual Incentives”, above.
        
(4)   The amounts shown reflect the threshold, target and maximum incentive grants for 2010 under the Long-Term Incentive Compensation plan. These awards are denominated in dollars, but are settled in restricted share units of the Company's stock. The aggregate grant date fair value pursuant to the Long-term Incentive Compensation plan computed in accordance with FASB ASC 718, based upon the probable outcome of the performance conditions is $0. The performance condition for this grant is based on the Company's results relative to peers for a three-year period and therefore, the probable outcome is not yet determinable. These grants are discussed in further detail under the heading "Long-Term Incentive Compensation."
     
(5)   On February 17, 2010, pursuant to a Restricted Stock Award Agreement, Mr. Barry was awarded 10,000 shares of restricted stock. The shares are subject to continued employment and vest on February 17 each year based on the following schedule: 2011–0%, 2012–40%, 2013–20%, 2014-20% and 2015-20%.

For more information, please refer to Note 16 - Compensation Plans included in the Company's 2010 Consolidated Financial Statements on Form 10-K filed with the Securities and Exchange Commission on or around March 11, 2011.
 
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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
 
The following table sets forth the outstanding, unvested equity awards as of December 31, 2010, for each NEO.
 
    Option Awards     Stock Awards  
                Equity
                Incentive Plan
              Equity Awards:
              Incentive Plan Market or
  Number of       Number of   Awards: Value Payout Value of
  Securities       Shares or Market Value of Unearned Unearned
  Underlying Number of Securities     Units of of Shares or Shares, Units or Shares, Units or
  Unexercised Underlying     Stock That Units of Stock Other Rights Other Rights
  Options Unexercised Options Option Option Have Not That Have Not That Have Not That Have Not
  (#) (#) Exercise Price Expiration Vested Vested Vested Vested
Name Exercisable (1) Unexercisable (1) ($) Date (#) ($) ($) (2) ($) (2)
Peter F. Benoist 50,000 - 10.25 10/1/2012        
  37,313 - 13.40 5/13/2013        
  3,850 - 22.73 1/5/2016        
  2,900 - 30.17 1/5/2017        
  3,970 - 22.90 1/5/2018        
  13,204 3,304 25.63 6/15/2017        
  25,905 17,273 20.63 6/13/2018        
  33,333 16,667 21.49 9/24/2018        
Total 170,475 37,244 17.65   1,322 13,828 1,008,000 1,008,000
                 
Frank H. Sanfilippo 15,000 - 11.75 7/1/2011        
  5,100 - 10.25 9/24/2012        
  11,194 - 13.40 5/13/2013        
  7,072 1,771 25.63 6/15/2017        
  3,000 2,000 20.63 6/13/2018        
  14,400 21,600 21.49 9/24/2018        
Total 55,766 25,371 18.26   929 9,717 252,000 252,000
                 
Stephen P. Marsh 14,400 21,600 15.95 7/7/2018        
Total 14,400 21,600 15.95   3,552 37,154 362,250 362,250
                 
Linda M. Hanson 7,544 1,889 25.63 6/15/2017        
  6,897 4,598 20.63 6/13/2018        
  14,400 21,600 15.95 7/7/2018        
Total 28,841 28,087 18.50   - - 267,750 267,750
                 
John G. Barry                
Total - -     1,124 11,757 150,000 150,000
 
(1)        All amounts represent incentive stock options and/or nonqualified stock options, except for SSAR's granted as follows: June 15, 2007, expires June 15, 2017; June 13, 2008, expires June 13, 2018; July 7, 2008, expires July 7, 2018; and September 24, 2008, expires September 24, 2018.
           
(2)   The amounts shown reflect target incentive grants for the years 2008, 2009 and 2010 under the Long-Term Incentive Compensation plan. These grants are denominated in dollars, but are settled in restricted share units of the Company's stock. The settlements for these grants are contingent on the Company's results relative to peers for a three-year period and therefore, the grant date fair value is not yet determinable. These grants are discussed in further detail under the heading "Long-Term Incentive Compensation."
 
26
 
 

OPTION EXERCISES AND STOCK VESTED
 
The following table sets forth information concerning any option exercises or vested stock awards for each NEO during 2010.
 
    Option Awards   Stock Awards
    Number of       Number of    
    Shares   Value   Shares   Value
    Acquired on   Realized on   Acquired on   Realized on
    Exercise (1)   Exercise   Vesting (1)   Vesting
Name       (#)       ($)         (#)       ($)
Peter F. Benoist   -   -   3,521   37,639
Frank H. Sanfilippo   -   -   1,074   11,481
Stephen P. Marsh   -   -   3,192   34,122
Linda M. Hanson   -   -   657   7,023
John G. Barry   -   -   560   5,986
                 
(1) Includes shares acquired that were subsequently withheld to pay for taxes.

NONQUALIFIED DEFERRED COMPENSATION PLANS
 
The following table sets forth information on Nonqualified Deferred Compensation Plans for each NEO during 2010.
 
    Executive   Aggregate       Aggregate
    Contributions   Earnings in   Aggregate   Balance at
    in Last Fiscal   Last Fiscal   Withdrawals/   Last Fiscal
Name       Year        Year       Distributions       Year End
Peter F. Benoist   -   31,089   -   288,086
Frank H. Sanfilippo   20,400   38,677   -   319,133
Stephen P. Marsh   22,000   53,289   -   464,153
Linda M. Hanson   -   -   -   -
John G. Barry   -   4,017   -   28,250

27
 
 

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
 
As we indicate above, historically our NEOs have been entitled to severance and change in control compensation under certain termination of employment events. Severance compensation is generally prohibited under the CPP, and each NEO has waived any change of control compensation to the extent disallowed by the compensation standards of the CPP. The following table quantifies the amount of such compensation which would have been received if the terminations had occurred as of December 31, 2010. In the case of acceleration of unvested equity awards, the amount shown is based upon the closing price of $10.46 per share for our common stock as of December 31, 2010, and reflects the value of RSUs and the net cash equivalent due the holder offset by any exercise or "strike" price for stock options and SSARs.
 
                                    Total      
                                    Compensation   Total
                  Severance Upon   Acceleration         Upon   Compensation
        Disability/   Severance Upon   Change In   of Unvested         Involuntary   Upon Change in
    Voluntarily   Death/For   Involuntary w/o   Control   Equity   Sick Days   Termination w/o   Control
    Termination   Cause   Cause   Termination   Awards   Payout   Cause   Termination
Name       (a)       (b)       (c)       (d)       (e) (1)       (f) (2)       (c+f)       (d+e+f)
Peter F. Benoist   none   none   $ 536,667   $ 1,073,334   $ 24,328   $ 3,497   $ 540,164   $ 1,101,159
Frank H. Sanfilippo   none   none     none     498,000     10,788     19,399     19,399     528,187
Stephen P. Marsh   none   none     275,000     675,000     37,154     9,254     284,254     721,408
Linda M. Hanson   none   none     none     305,000     -     3,846     3,846     308,846
John G. Barry (3)   none   none     312,500     625,000     11,757     none     312,500     636,757

All amounts in the foregoing table would be subject to the executive compensation standards of the Capital Purchase Program described in the Compensation Discussion and Analysis above.
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
The members of the Company’s Compensation Committee are set forth above. None of the members of the Compensation Committee was an officer or employee of the Company or any of its subsidiaries in 2010 nor was any member formerly an officer or employee of the Company or any of its subsidiaries.
 
During 2010, no executive officer of the Company served as (i) a member of a 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, one of whose executive officers served on the Compensation Committee of the Company, (ii) a director of another entity, one of whose executive officers served on the Compensation Committee, or (iii) 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, one of whose executive officers served as a director of the Company.
 
28
 
 

RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM - (Proposal A)

The Company engaged Deloitte & Touche LLP to audit the Company’s financial statements for the fiscal year ended December 31, 2010. Representatives of Deloitte & Touche LLP are expected to be present at the Annual Meeting of Shareholders. They will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions.
 
The Audit Committee has selected Deloitte & Touche LLP to be the independent registered public accounting firm for fiscal year 2011 and recommends that the shareholders ratify the appointment of the accounting firm. Although shareholder approval is not required by law and is not binding on the Audit Committee, the appointment is submitted by the Audit Committee of the Board of Directors in order to give the shareholders a voice in the designation of auditors. If the shareholders do not ratify the selection of Deloitte & Touche LLP, the engagement of Deloitte & Touche LLP, will not be affected for fiscal year 2010. However, the Audit Committee will review the selection of the independent registered public accounting firm for the next fiscal year. Even if the resolution is approved, the Audit Committee in its discretion may direct the appointment of different independent auditors at any time during the year if it determines that a change would be in the best interest of the Company and its shareholders.
 
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION OF
DELOITTE & TOUCHE LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM.

29
 
 

ADVISORY (NON-BINDING) APPROVAL OF EXECUTIVE COMPENSATION — (Proposal B)

As required by the executive compensation standards for participants in the Capital Purchase Program, we are providing our stockholders the opportunity to vote on an advisory (nonbinding) resolution to approve our executive compensation as described in the section captioned “Compensation Discussion and Analysis,” the tabular disclosure regarding compensation of our NEOs and the narrative disclosure accompanying those tables, all as set forth in pages 10 through 28 of this proxy statement.
 
The following resolution is submitted for stockholder approval:
 
Resolved, that the stockholders approve the compensation of the Company’s named executive officers, as disclosed in the Company’s proxy statement for the 2011 Annual Meeting of Stockholders, including the Compensation Discussion and Analysis, the tabular disclosure regarding compensation of our Named Executive Officers and the narrative disclosure accompanying those tables.
 
Because your vote is advisory, it will not be binding upon the Board, however the Board will take the outcome of this vote into consideration in making future executive compensation decisions.
 
For the reasons set forth in this Proxy Statement, including the Compensation Discussion and Analysis, and the Report of the Compensation Committee, we believe our compensation polices and procedures are centered on a pay-for-performance culture, are competitive in our marketplace, are strongly aligned with the long-term interests of our stockholders, and the compensation paid to our executives is consistent with such policies and procedures.
 
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THIS RESOLUTION.
 
30
 
 

INFORMATION REGARDING BENEFICIAL OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
 
Except as noted below, the following tables show, as of March 1, 2011, certain information about ownership of Common Stock by: (i) those persons or entities known by management to beneficially own more than 5% of our common stock (ii) each director, the NEOs, and (iii) all directors and executive officers as a group. As of March 1, 2011, there were 14,928,324 shares of common stock outstanding. For purposes of the information in the following tables, “ownership” includes (i) shares of stock directly or indirectly owned as that date and (ii) shares which the named entity or individual has the right to acquire (by contract conversion or vesting) if such right is exercisable as of the date or will become exercisable within 60 days thereafter. Percentages shown below reflect such possible exercises but only as to the individual, entity or group whose percentage is being calculated.
 
    Number of   Percentage of
Name & Address of Beneficial Owner       Shares       Ownership
Wellington Management Company, LLP   1,151,410 (1)   8.2%
75 State Street        
Boston, MA 02109        
 
(1) Holdings reported on Form 13G filed on February 17, 2009
         
Banc Fund VI, VII & VIII (jointly)   894,813 (2)   6.0%
20 North Wacker Drive        
Suite 3300        
Chicago, IL 60606        
         
(2) Holdings reported on Form 13G filed on December 31, 2010

    Number of   Percentage of
Beneficial Owner       Shares (1) (2)       Ownership
Henry D. Warshaw (3) (9)   379,265   2.5%
Peter F. Benoist (3) (4) (6)   347,652   2.3%
Robert E. Guest, Jr. (7)   209,390   1.4%
James J. Murphy, Jr.   189,841   1.3%
Linda M. Hanson (3) (4) (5) (8)   133,287   *
Lewis Levey (10)   102,300   *
Stephen P. Marsh (3) (4)   96,563   *
Birch M. Mullins   87,718   *
Frank H. Sanfilippo (3) (4) (5)   83,497   *
Sandra VanTrease   37,451   *
William H. Downey   29,627   *
John S. Eulich   19,610   *
John G. Barry (5) (12)   19,066   *
Michael A. DeCola (11)   18,393   *
John M. Tracy   8,846   *
Brenda D. Newberry   3,713   *
All Directors and Executive Officers as a        
Group (16 total)   1,766,219   11.6%
         
* Less than 1%
        

31
 
 

(1)       Pursuant to the rules of the Securities and Exchange Commission, certain shares of Common Stock which a person has the right to acquire within 60 days pursuant to the exercise of stock options and warrants reflected in the number of shares in this table and are deemed to be outstanding for the purpose of computing beneficial ownership and the percentages of ownership of that person, but are not deemed outstanding for the purposes of computing the percentage ownership of any other person. All directors and executive officers as a group hold options to purchase an aggregate of 263,919 shares of Common Stock.
 
(2)   Unless otherwise indicated, the named person has sole voting and investment power for all shares shown.
 
(3)   Includes options outstanding and exercisable as of December 31, 2010, or within 60 days thereafter, including those beneficially owned by the named person, as follows: Mr. Benoist, 170,475 shares; Ms. Hanson, 28,841 shares; Mr. Marsh, 14,400 shares; Mr. Warshaw, 1,937 shares; Mr. Sanfilippo, 48,266 shares; all directors and named executive officers as a group, 263,919 shares.
 
(4)   Includes shares indirectly held in the EFSC Incentive Savings Plan beneficially owned by the named person, as follows: Mr. Benoist, 1,377 shares; Ms. Hanson, 2,612 shares; Mr. Marsh, 625 shares; and Mr. Sanfilippo, 2,268 shares.
 
(5)   Includes shares held by a bank as collateral, these shares are included in the table and footnotes as follows: Mr. Barry, 4,707 shares; Ms. Hanson 7,608 shares; Mr. Sanfilippo, 6,261 shares.
 
(6)   Includes 140,460 shares held jointly by Mr. Benoist and his spouse as to which Mr. Benoist has shared voting and investment power and 35,340 shares held in the name of Mr. Benoist in which he has sole voting and investment power.
 
(7)   Includes 22,492 shares held in the name of Mr. Guest in which he has sole voting and investment power. Includes 113,047 shares held jointly by Mr. Guest and his spouse as to which Mr. Guest has shared voting and investment power; 8,220 shares held in an Individual Retirement Account for the benefit of Mr. Guest’s spouse as to which Mr. Guest has shared voting and investment power; 41,511 shares held in a trust for the benefit of Mr. Guest’s children as to which Mr. Guest is a co-trustee and has shared voting and investment power; includes 24,120 shares held in an account for the benefit of Mr. Guest’s children of which the spouse of Mr. Guest is the trustee.
 
(8)   Includes 25,133 shares held in an Individual Retirement Account for the benefit of Ms. Hanson, in which Ms. Hanson has sole voting and investment power; 19,314 shares held in the name of Ms. Hanson, in which she has sole voting and investment power; 43,472 shares held jointly by Ms. Hanson and her spouse as to which Ms. Hanson has shared voting and investment power; 13,915 shares held for the benefit of Ms. Hanson’s children as to which Ms. Hanson has sole voting and investment power.
 
(9)   Includes 25,740 shares held in an Individual Retirement Account for the benefit of Mr. Warshaw, in which Mr. Warshaw has sole voting and investment power; 25,980 shares held in an Individual Retirement Account for the benefit of the spouse of Mr. Warshaw, as to which Mr. Warshaw has shared voting and investment power; 37,756 shares in the name of Mr. Warshaw in which Mr. Warshaw has sole voting and investment power and the right to acquire 287,852 shares upon conversion of trust preferred securities issued by a statutory trust subsidiary of the Company.
 
(10)   Includes 39,543 shares held in a trust, in which Mr. Levey has sole voting and investment power. Includes 62,757 shares held in a trust for the benefit of Mr. Levey's children as to which Mr. Levey is trustee and has sole voting and investment power.
 
(11)   Includes 10,000 shares held jointly by Mr. DeCola and his spouse as to which Mr. DeCola has shared voting and investment power and 8,393 shares held in the name of Mr. DeCola in which he has sole voting and investment power.
 
(12)   Includes 4,707 shares held jointly by Mr. Barry and his spouse as to which Mr. Barry has shared voting and investment power and 14,359 shares held in the name of Mr. Barry in which he has sole voting and investment power
 
32
 
 

RELATED PERSON TRANSACTIONS

Loans to Related Persons
Some of the directors, including members of the Compensation Committee, and officers of the Company and the Bank, and members of their immediate families and firms and corporations with which they are associated, have had transactions with the Bank, including borrowings and investments. All such loans and investments have been made in the ordinary course of business, have been made on substantially the same terms, including interest rate paid or charged and collateral required, as those prevailing at the time for comparable transactions with unaffiliated persons, and did not involve more than the normal risk of collectability or present other unfavorable features.
 
Issuance of Trust Preferred Securities to Virtual Realty Enterprises, LLC
On December 12, 2008, Virtual Realty Enterprises, LLC, a Missouri limited liability company (“VRE”), purchased $5,000,000 of trust convertible preferred securities (the “TRUPs”) issued by EFSC Capital Trust VIII, a Delaware statutory trust (the “Trust”), an affiliate of the Company. Director Warshaw manages VRE and holds a 0.5441% ownership in VRE and may receive additional ownership in VRE or compensation from VRE based upon the performance of VRE’s investment portfolio. In addition, each of Directors Mullins, Van Trease and DeCola are passive investors in VRE holding an aggregate 0.56% interest in VRE.
 
The TRUPs are convertible into shares of the Company’s Common Stock at a conversion price of $17.37, which represents 110% of the average closing price for the Company’s Common Stock for the five trading days following the Company's third quarter earnings press release on October 23, 2008. VRE will be entitled to exchange its Trust Preferred Securities for 287,852 shares of the Company’s Common Stock.
 
During 2010, VRE was paid approximately $450,000 in distributions on the trust preferred securities, which amount was paid by the Trust solely from interest payments by the Company on the Junior Debentures.
 
Review, Approval or Ratification with Related Persons
Our Code of Ethics requires that every employee and officers avoid situations where loyalties may be divided between our interests and the employee’s own interests. Employees, officers and directors must avoid conflicts of interests that interfere with the performance of their duties or are not in our best interests.
 
Pursuant to its written charter, the Audit Committee reviews all related-party transactions as such term is used by ASC 850, Related Party Disclosures, or as otherwise required to be disclosed in our financial statements or periodic filings with the Securities and Exchange Commission, other than (a) grants of stock options made by the Board or any committee thereof or pursuant to an automatic grant plan, or (b) payment of compensation authorized by the Board or any committee thereof. Related party transactions include transactions between us, our executive officers and directors, beneficial owners of five percent or greater of our securities, and all other related persons specified under Item 404 of Regulation S-K promulgated by the Securities and Exchange Commission. The Audit Committee considers each proposed transaction in light of the specific facts and circumstances presented, including but not limited to the risks, costs and benefits to us.
 
Section 16 (a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires directors, certain officers and all persons who beneficially own more than 10 percent of our Common Stock file reports with the Securities and Exchange Commission with respect to beneficial ownership of our Securities. We have adopted procedures to assist our directors and executive officers in complying with the Section 16(a) filings.
 
Based solely upon our review of the copies of the filings that we received with respect to the fiscal year ended December 31, 2010, or written representations from certain reporting persons, we believe that all reporting persons except Mr. Eulich and Ms. Hanson made all filings required by Section 16(a) in a timely manner. In fiscal year 2010, Mr. Eulich filed one late Form 4 reporting one transaction related to the Company’s shares. In 2011, prior to the date of this report, Ms. Hanson filed one late Form 4 reporting one transaction related to the Company’s shares.
 
33
 
 

AUDIT COMMITTEE REPORT

The Audit Committee submits the following report:
 
The Audit Committee operates under a written charter approved by the Board of Directors.
 
Management is responsible for the Company’s internal controls and financial reporting process. The independent auditors are responsible for performing an independent audit of the Company’s consolidated financial statements and internal control over financial reporting in accordance with generally accepted auditing standards and to issue reports thereon. The Audit Committee’s responsibility is to monitor and oversee these processes.
 
The Audit Committee has reviewed and discussed the Company’s audited financial statements and internal control report with management and the independent auditors. The Audit Committee discussed with the independent auditors the matters required by Statement on Auditing Standards No. 114, The Auditor’s Communication With Those Charged With Governance. The Audit Committee received written disclosures from the independent auditors as required by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees, and discussed with the auditors their independence. The Audit Committee has concluded that the independent auditors are independent from the Company and its management.
 
Based on the reports and discussions described above, the Audit Committee recommended to the Board of Directors that the Company’s audited financial statements be included in its Annual Report on Form 10-K for the year ended December 31, 2010 for filing with the Securities and Exchange Commission.
 
       Respectfully submitted by the Audit Committee,
  Sandra A. Van Trease John S. Eulich Robert E. Guest, Jr.
  Chairperson    
    Lewis A. Levey Brenda Newberry

The foregoing report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates the report by reference therein.
 
INFORMATION CONCERNING PRINCIPAL ACCOUNTANT

Change in Principal Accountant
 
(a) Dismissal of independent registered accounting firm.
On May 28, 2010, KPMG LLP (“KPMG”) was dismissed as the independent registered public accounting firm of Enterprise Financial Services Corp (the “Company”).
 
KPMG’s report on the Company’s consolidated financial statements for the two years ended December 31, 2009 and 2008 did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope, or accounting principles, except that KPMG’s report on the Company’s consolidated financial statements as of and for the years ended December 31, 2009 and 2008 contained an explanatory paragraph stating that “As discussed in Note 2 to the consolidated financial statements, the 2008 and 2007 consolidated financial statements have been restated to correct a misstatement.”
 
The audit reports of KPMG on the effectiveness of internal control over financial reporting as of December 31, 2009 and 2008 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles.
 
The Audit Committee of the Board of Directors of the Company approved the termination, which was effective as of May 28, 2010.
 
During the Company’s two fiscal years ended December 31, 2009 and 2008 and the subsequent period through May 28, 2010, the Company did not have any disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K) with KPMG on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of KPMG, would have caused it to make reference to the subject matter of the disagreements in connection with its report. Also during this period, there have been no reportable events as that term is described in Item 304(a)(1)(v) of Regulation S-K, except for the material weakness as set forth in the following paragraph:
 
34
 
 

In connection with the identification of the loan participation accounting error described in Item 7, Management Discussion & Analysis and in Item 8, Note 2 of the consolidated financial statements and elsewhere in the Form 10K dated March 16, 2010, the Company also determined that a material weakness in its internal controls over financial reporting existed during the periods affected by the error, including as of December 31, 2008. The Company’s management concluded that the material weakness was the Company’s lack of a formal process to periodically review existing contracts and agreements with continuing accounting significance. To remediate this material weakness, during the fourth quarter of 2009 the Company implemented a formal process to review all contracts and agreements with continuing accounting significance on an annual basis. As a result of the review conducted in the fourth quarter, management did not identify any other errors in its previous accounting for such contracts or agreements. Management believes that this new process has remediated the material weakness in the Company’s internal control over financial reporting.
 
The Company provided KPMG with a copy of the disclosures it is making in response to Item 304(a) of Regulation S-K and requested that KPMG furnish the Company with a letter addressed to the Securities Exchange Commission stating whether it agreed with the statements made by the Company in response to Item 304(a) of Regulation S-K and, if not, stating the respects in which it did not agree.
 
(b) Engagement of new independent registered accounting firm.
As a result of a competitive request for proposal process undertaken by the Audit Committee of the Board of Directors of the Company, the Audit Committee on May 28, 2010, approved the appointment of Deloitte & Touche LLP (“Deloitte”) as the Company’s independent registered accounting firm for the year ending December 31, 2010. In deciding to select Deloitte, the Audit Committee reviewed auditor independence issues and existing commercial relationships with Deloitte and concluded that Deloitte has no commercial relationship with the Company that would impair its independence. The Company did not engage Deloitte in any prior consultations during the Company’s fiscal years ended December 31, 2009 and 2008 or its subsequent period through the date of the engagement of Deloitte regarding either: (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, and neither a written report was provided to the Company nor oral advice was provided that Deloitte concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing, or financial reporting issue; or (ii) any matter that was the subject of either a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K) or a reportable event (as defined in Item 304(a)(1)(v) of Regulation S-K).
 
The following table sets forth fees billed to the Company by KPMG LLP, the Company’s principal accounting firm for the year ended December 31, 2009 and Deloitte & Touche LLP, the Company’s principal accounting firm for the year ended December 31, 2010:
 
    December 31,
        2010 (1)       2009
Audit fees (2)   $ 555,650   $ 448,000
Tax fees (3)     33,000     -
    $ 588,650   $ 448,000
             
      (1)       2010 fees include $57,000 for KPMG LLP for the period ended May 28, 2010 and $531,650 for Deloitte & Touche LLP for May 28, 2010 through December 31, 2010.
   
  (2)   Includes professional services rendered for the audit of the Company’s consolidated annual financial statements, reports on internal control and review of financial statements in the Company’s reports on Form 10-Q and services normally provided in connection with regulatory filings including consultation on various accounting matters.
   
  (3)   Tax fees include fees for services principally related to the review of Company-prepared calculations, and preparation of federal and state tax returns.
 
Deloitte & Touche representatives are expected to attend the 2011 Annual Meeting. They will have an opportunity to make a statement if they desire to do so and will be available to respond to stockholder questions.
 
Financial Information Systems Design and Implementation Fees
Deloitte LLP did not perform any services and therefore billed no fees relating to operating or supervising the operation of the Company’s information systems or local area network or for designing or implementing the Company’s financial information management systems during 2010.
 
35
 
 

PROPOSALS OF STOCKHOLDERS

Stockholders are entitled to present proposals for action at a forthcoming Stockholders’ meeting if they comply with the requirements of the SEC proxy rules. Any proposals intended to be presented at the 2012 Annual Meeting of Stockholders of the Company must be received at the Company’s principal office at 150 North Meramec, Clayton, Missouri 63105 on or before November 18, 2011 in order to be considered for inclusion in the Company’s proxy statement and form of proxy relating to such meeting.
 
Any stockholder who intends to propose any other matter to be acted upon at the 2012 Annual Meeting of Stockholders (but not include such proposal in the Company’s Proxy Statement) must inform the Company, in the manner specified in the Company’s bylaws, no later than ninety nor more than one hundred twenty days prior to the first anniversary of the 2011 Annual Meeting. The Company’s 2011 Annual Meeting will be on April 21, 2011, thus the notice must be received by the Company no later than December 22, 2011.
 
OTHER MATTERS

As of the date of this Proxy Statement, the Board of Directors of the Company does not intend to present, nor has it been informed that other persons intend to present, any matters for action at the Annual Meeting, other than those specifically referred to herein. If, however, any other matters should properly come before the Annual Meeting, it is the intention of the persons named on the Proxy Card to vote the shares represented thereby in accordance with their judgment as to the best interests of the Company on such matters.
 
   ADDITIONAL INFORMATION

The Company’s Internet website is www.enterprisebank.com. We make available free of charge on or through our website, various reports that we file with or furnish to the Securities and Exchange Commission (“SEC”), including our annual reports, quarterly reports, current reports and proxy statements. These reports are made available as soon as reasonably practicable after they are filed with or furnished to the SEC.
 
By Order of the Board of Directors,
 

Noel J. Bortle, Secretary
36
 
 

 
 
ENTERPRISE FINANCIAL SERVICES CORP
150 NORTH MERAMEC
CLAYTON, MO 63105
 
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
 
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
 
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
 
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
 
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:   
  M31019-P06561        KEEP THIS PORTION FOR YOUR RECORDS
  DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
 
ENTERPRISE FINANCIAL SERVICES CORP
   
     The Board of Directors recommends you vote
FOR the following:
  Vote on Directors
  1.    Election of Directors
    Nominees:
     
    01)    Peter F. Benoist 07)    Lewis A. Levey
    02) James J. Murphy, Jr.       08)    Birch M. Mullins
    03) Michael A. DeCola 09) Brenda D. Newberry
    04) William H. Downey 10) John M. Tracy 
    05) John S. Eulich 11) Sandra A. Van Trease
    06) Robert E. Guest, Jr.    
For
All

 
o
  Withhold 
All

 
o
  For All 
Except

 
o
   To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.
           
           
             
 
 
 
      
 
      
 
   
  Vote on Proposals        
           
     The Board of Directors recommends you vote FOR the following proposals:         For Against Abstain
   
  2.    Proposal A, ratification of the selection of Deloitte & Touche, LLP as the Company's independent registered public accounting firm for fiscal 2011.   o o o
             
  3. Proposal B, an advisory (non-binding) vote to approve our executive compensation.   o o o
             
  NOTE: Such other business as may properly come before the meeting or any adjournment thereof.
   
     
     
        
  Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.  
        
    
           
  Signature [PLEASE SIGN WITHIN BOX] Date     Signature (Joint Owners) Date  
 
 

 
 
 
 
 
 
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
M31020-P06561
 
ENTERPRISE FINANCIAL SERVICES CORP
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
APRIL 21, 2011 – 4:00 p.m.
975 North Warson Road
St. Louis, MO 63132
 
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
 
The stockholder(s) whose signature(s) appear(s) on the reverse side of this proxy card hereby appoint(s) Peter F. Benoist and James J. Murphy, Jr., or any of them, each with full power of substitution, as proxies to vote all shares of Enterprise Financial Services Corp common stock that the stockholder(s) would be entitled to vote on all matters that properly come before the 2011 Annual Meeting and at any adjournment or postponements. The proxies are authorized to vote in accordance with the specifications indicated by the stockholder(s) on the reverse side of this proxy card. If this Proxy card is signed and returned by the stockholder(s) and no specifications are indicated, the proxies are authorized to vote “FOR” the election of all nominees as unanimously recommended by the Board of Directors of Enterprise Financial Services Corp. Absent specific instructions with respect to cumulative voting, the appointed proxies will have full discretionary authority to vote cumulatively among all, or less than all, nominees and to allocate such votes among all, or less than all, of such nominees (other than nominees with respect to whom such authority has been withheld) in the manner the Board of Directors shall recommend, or otherwise in the proxies discretion. If this proxy card is signed and returned, the proxies appointed thereby will be authorized to vote in their discretion on any other matters that may be presented for a vote at the 2011 Annual Meeting and at any adjournments or postponements.
 
SHARES HELD IN THE EFSC INCENTIVE SAVINGS PLAN
This proxy is also to be used by current or former employees of the Company or its subsidiaries who have allocated investment funds to the EFSC Common Stock Fund in the EFSC Incentive Savings Plan (the “Savings Plan”) to give voting instructions to the Savings Plan trustees. This proxy, when properly executed and delivered prior to 11:59 p.m. on April 15, 2011, will be voted by the Savings Plan trustees as directed.
 
(CONTINUED AND TO BE DATED AND SIGNED ON THE REVERSE SIDE)