UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K/A
 Amendment No. 1
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2008
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 333-140879
 
 FIRST PRIORITY FINANCIAL CORP.
  Pennsylvania
(State or other jurisdiction of 
incorporation or organization)
    
    20-8420347
(I.R.S. Employer Identification No.)
 2 West Liberty Boulevard, Suite 104
Malvern, Pennsylvania 19355
 (610) 280-7100
 
 Securities registered pursuant to Section 12(b) of the Act:
 Title of each class
    
    Name of each exchange on which registeredNone
    
    None
 Securities registered pursuant to Section 12(g) of the Act:
 
 Yes
o No
þ
 þ o
 þ o
 o
 12b-2
 Large accelerated file o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ
   Class
    
    Number of SharesCommon Stock, $1.00 par value
    
    3,122,929
 DOCUMENTS INCORPORATED BY REFERENCE




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##### 



EXPLANATORY NOTE
     2




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##### 



PART III
 Item 10. Directors, Executive Officers and Corporate Governance
    Class I
    
    Class II
    
    Class III(to serve until 2009)
    
    (to serve until 2010)
    
    (to serve until 2011)Howard R. Berlin
    
    Lawrence E. Donato
    
    Robert J. FairbaughJohn K. Desmond, Jr.
    
    Alan P. Novak
    
    Vincent P. Small, Jr.Mary Ann Messmer
    
    Mel A. Shaftel
    
    David E. SparksPatrick M. Smith
    
    Christopher E. Spinieo
    
    William L. WettyRichard M. Wesselt
    
    Michael G. Wade
    
    Samuel J. Worthington, Jr.
  Nominees and Continuing Directors
   3




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##### 



Nominees for Election as Class I Directors  Term Expires in 2012
 Directorship inDirector
    
    Other ReportingName and Principal Occupation (1)
    
    Age
    
    Since (2)
    
    CompaniesHoward R. Berlin
    
    73
    
    2008
    
    NonePrivate Investor; retired partner of Neuberger Berman, LLCJohn K. Desmond, Jr.
    
    84
    
    2007
    
    NoneOwner and Operator of The Desmond Great Valley Hotel in
Malvern, Pennsylvania and The Desmond Hotel in Albany,
New YorkMary Ann Messmer
    
    54
    
    2007
    
    NonePresident, First Priority BankPatrick M. Smith
    
    53
    
    2009
    
    NoneCertified Public AccountantRichard M. Wesselt
    
    42
    
    2007
    
    NoneOwner and President, Wesselt Capital Group
 
 (1)
    
    Mr. Berlin is a Chartered Financial Analyst and retired partner, managing director and
portfolio manager of Neuberger Berman, LLC. Mr. Desmond was a member of the board of
directors of Millennium Bank from 1999 until 2004. Mr. Desmond is the Chairman of the
Nominating Committee of First Prioritys board of directors. Ms. Messmer has served as the
President of First Priority Bank since November 2005. Before
that, Ms. Messmer was a Vice President with Nova Savings Bank from June 2004 to January 2005
and Senior Vice President and Head of Private Banking with Millennium Bank from 1999 until
2004. Mr. Wesselt has been the owner and President of Wesselt Capital Group in Norristown,
Pennsylvania since 1996. Mr. Smith has been a partner in the certified public accounting
firm of Rosenberg, Smith, Cooney and Migliore, P.C. since 1981.(2)
    
    Mr. Desmond, Ms. Messmer, and Mr. Wesselt have been directors since First Prioritys
inception in 2007 and directors of First Priority Bank since its inception in November 2005.  4




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##### 



Continuing Class II Directors  Term Expires in 2010
 Directorship inDirector
    
    
    Other ReportingName and Principal Occupation (1)
    
    Age
    
    
    Since (2)
    
    
    CompaniesLawrence E. Donato
    
    
    60
    
    
    
    2007
    
    
    NoneChief Financial Officer, First
Priority Financial Corp., and
Chief Operating Officer, First
Priority BankAlan P. Novak
    
    
    59
    
    
    
    2007
    
    
    NoneAttorney, Conrad, OBrien, Gellman
and Rohn and President, Novak
Strategic AdvisorsMel A. Shaftel
    
    
    65
    
    
    
    2007
    
    
    NonePrivate InvestorChristopher E. Spinieo
    
    
    38
    
    
    
    2008
    
    
    NoneOwner, Spinieo, Inc.Michael G. Wade
    
    
    41
    
    
    
    2009
    
    
    NoneOwner, Knights Abstract, Inc.
 
 (1)
    
    Mr. Donato has been a director and the Chief Operating Officer of First Priority Bank
since it was formed in November 2005. Mr. Donato was Chief Executive Officer of Fiserv
Securities, Inc. from 1998 until 2003. Mr. Novak has been an attorney with the law firm of
Conrad, OBrien, Gellman and Rohn since 1994. Mr. Novak has also served as President of
Novak Strategic Advisors since 2001. Mr. Novak was Chairman of the Republican State
Committee of Pennsylvania from 1996 to 2005. Mr. Shaftel has been a private investor since
2004. He was Managing Director of Rosetta Group, an investment management and financial
advisory firm, from 1998 through 2003 and a member of the board of directors of Millennium
Bank from 1998 until 2004. Mr. Shaftel is also a retired Vice Chairman of Lehman Brothers.
Mr. Shaftel is Chairman of First Prioritys Compensation Committee. Mr. Spinieo is the
owner of Spinieo, Inc., a construction and real estate company since 1990. Mr. Wade founded
and has operated Knights Abstract, Inc., a title insurance company, since 1995.(2)
    
    Mr. Donato and Mr. Shaftel have been directors since First Prioritys inception in 2007
and directors of First Priority Bank since its inception in November 2005. Mr. Novak has
been a director since First Prioritys inception in 2007 and a director of First Priority
Bank since 2006.  5




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##### 



Continuing Class III Directors  Term Expires in 2011
 Directorship inDirector
    
    Other ReportingName and Principal Occupation (1)
    
    Age
    
    Since (2)
    
    CompaniesRobert J. Fairbaugh
    
    48
    
    2008
    
    NoneCertified Public AccountantVincent P. Small, Jr.
    
    65
    
    2007
    
    NonePrivate Investor, Certified Public Accountant
and Business ConsultantDavid E. Sparks
    
    64
    
    2007
    
    NoneChairman, President and Chief Executive Officer,
First Priority Financial Corp., and Chairman
and Chief Executive Officer, First Priority
BankWilliam L. Wetty
    
    64
    
    2007
    
    NonePrivate Investor, Founder of A&L Handles, Inc.Samuel J. Worthington, Jr.
    
    52
    
    2008
    
    NoneBusinessman in Newtown, PA
 
 (1)
    
    Mr. Fairbaugh is a Certified Public Accountant and since 1982 has been an owner of Dunlap
& Associates, PC in Chalfont, Pennsylvania. Mr. Small retired as a partner from
PricewaterhouseCoopers in 1999. He served as a member of the board of directors of
Millennium Bank from 2002 to 2004, and a member of the board of directors of Harleysville
National Corporation from 2004 to 2005. Mr. Small is Chairman of First Prioritys Audit
Committee. Mr. Sparks has served as Chairman and Chief Executive Officer of First Priority
Bank since its inception in 2005. Prior to that, Mr. Sparks was Chairman and Chief
Executive Officer of Millennium Bank from 1998 to 2004. Mr. Wetty founded A&L Handles, Inc.
in Pottstown, Pennsylvania and served as the companys owner, President and Chief Executive
Officer until its sale and his retirement in 2002. Mr. Worthington is an owner of the
Newtown Athletic Club in Newtown, Pennsylvania, a facility specializing in providing health
and recreation services to its members. In 2001, the Newtown Athletic Club became a partner
in Healthquest of Flemington, New Jersey, which specializes in providing health and
recreation services.(2)
    
    Mr. Small, Mr. Sparks and Mr. Wetty have been directors since First Prioritys inception
in 2007 and directors of First Priority Bank since its inception in November 2005. Board and Committees
   6




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##### 



Executive Officers
  OfficerName and Position (1)
    
    Age
    
    SinceDavid E. Sparks,
    
    64
    
    2005Chairman, President and Chief Executive Officer of First
Priority & Chairman and Chief Executive Officer of First
Priority BankLawrence E. Donato,
    
    60
    
    2005Chief Financial Officer of First Priority & Chief
Operating Officer of First Priority BankMary Ann Messmer,
    
    54
    
    2005President of First Priority BankThomas M. Miller (2)
    
    50
    
    2008Chief Lending Officer of First Priority BankMark J. Myers (3)
    
    47
    
    2007Controller and Chief Accounting Officer of First Priority
& Chief Financial Officer of First Priority Bank
 (1)
    
    First Priority Financial Corp. was formed on February 13, 2007 to serve as the holding
company for First Priority Bank. Accordingly, Messrs. Sparks and Donato have only held the
positions listed for the holding company since that date. The Bank was formed in
November 2005.(2)
    
    Mr. Miller joined First Priority Bank as its Chief Lending Officer on January 28, 2008.(3)
    
    Mr. Myers joined First Priority and First Priority Bank on June 4, 2007 and has held the
positions listed since that time.  7




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##### 



Item 11. Executive Compensation
 Compensation Committee Interlocks And Insider Participation
    Compensation Discussion and Analysis
 Our Compensation Philosophy.
  
    
    Meeting the Demands of the Market  Our goal is to compensate our employees at
competitive levels that position us as an employer of choice among our peers who
provide similar financial services in the markets we serve.
 
    
    Aligning with Shareholders  We intend to use incentive components in the form
of equity compensation as a key component of our compensation mix to develop a
culture of ownership among our key personnel and to align their individual
financial interests with the interest of our shareholders.
 
    
    Driving Performance  We will base compensation in part on the attainment of
company-wide, business unit and individual targets that return positive results to
our bottom line.
 
    
    Reflecting our Business Philosophy  Our approach to compensation reflects our
values and the way we do business in the communities we serve.
  8




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##### 



Compensation Objectives.
   
    
    we operate in a highly regulated industry. We value experience in the financial
services industry that promotes the safe and sound operation of First Priority and the
Bank;
 
    
    we value executives with sufficient experience in our markets to meet the needs of
our customers in various phases of the economic cycle;
 
    
    we value executives with sufficient experience with different products and
investments in various phases of the economic cycle;
 
    
    we operate in interest rate and credit markets that are often volatile. We value
experience and disciplined decision-making that respects our business plan but adapts
quickly to change; and
 
    
    we value the retention and development of incumbent executives who meet or exceed
performance objectives. Recruiting executives can be expensive, unpredictable, and
have a disruptive effect on our operations.
 Components of Compensation.
   9




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##### 




    
    a defined contribution 401(k) retirement plan;
 
    
    discretionary profit-sharing plan;
 
    
    medical coverage (all employees share 17.5% of the cost of their elections); and
 
    
    pre-tax health and dependent care spending accounts.
  Analyzing The Components of Compensation.
      10




---



##### 



Exceptions
to Procedures.
  Annual
Compensation  Chairman & Chief Executive Officer.
    11




---



##### 



Annual Compensation-Other Executive Officers.
 Compensation Committee Report
  
  12




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##### 



Summary Compensation Table
  SecuritiesAnnual
    
    
    
    
    
    
    Underlying
    
    
    OtherName & Position(1)
    
    Year
    
    
    Compensation
    
    
    Annual Bonus
    
    
    Stock Options(2)
    
    
    Compensation(3)David E. Sparks,
    
    
    2008
    
    
    $
    175,000
    
    
    
    
    
    
    
    1,000
    
    
    $
    11,639Chairman, President and Chief
    
    
    2007
    
    
    $
    175,000
    
    
    
    
    
    
    
    
    
    
    $
    11,221Executive Officer of First Priority
    
    
    2006
    
    
    $
    100,000
    
    
    
    
    
    
    
    59,000
    
    
    $
    6,000& Chairman and Chief Executive
Officer of First Priority BankLawrence E. Donato,
    
    
    2008
    
    
    $
    162,000
    
    
    
    
    
    
    
    1,000
    
    
    $
    10,428Chief Financial Officer of First
    
    
    2007
    
    
    $
    157,000
    
    
    
    
    
    
    
    
    
    
    $
    10,460Priority & Chief Operating Officer
    
    
    2006
    
    
    $
    150,000
    
    
    
    
    
    
    
    44,000
    
    
    $
    6,000of First Priority BankMary Ann Messmer,
    
    
    2008
    
    
    $
    165,000
    
    
    $
    503
    
    
    
    1,000
    
    
    $
    12,249President of First Priority Bank
    
    
    2007
    
    
    $
    157,000
    
    
    $
    21,334
    
    
    
    
    
    
    $
    11,7572006
    
    
    $
    150,000
    
    
    
    
    
    
    
    44,000
    
    
    $
    7,800Thomas M. Miller (4)
    
    
    2008
    
    
    $
    147,692
    
    
    $
    20,000
    
    
    
    25,000
    
    
    $
    11,847Chief Lending Officer of First
    
    
    2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Priority Bank
    
    
    2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mark J. Myers (5)
    
    
    2008
    
    
    $
    147,500
    
    
    
    
    
    
    
    
    
    
    $
    10,989Controller and Chief Accounting
    
    
    2007
    
    
    $
    76,607
    
    
    
    
    
    
    
    15,000
    
    
    $
    5,609Officer of First Priority & Chief
    
    
    2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Financial Officer of First Priority
Bank
 
 (1)
    
    First Priority Financial Corp. was formed on February 13, 2007 to serve as the holding
company for First Priority Bank. Accordingly, Messrs. Sparks and Donato have only held the
positions listed for the holding company since that date. The Bank was formed in November
2005.(2)
    
    Includes the stock options granted to Mr. Sparks, Mr. Donato and Ms. Messmer under the first
tranche of the 2005 Program. Stock option grants vest in four years from the date of grant
(December 22, 2009) and terminate in ten years (December 22, 2015) from the date of grant.
Options granted may be exercised for one share of First Priority common stock at an exercise
price of $10.00 per share. The 2008 option grants for Mr. Sparks, Mr. Donato and Ms. Messmer
were granted on December 11, 2008, at an exercise price of $10.25 per share to replace options
that each individual voluntarily relinquished in 2006. Mr. Miller was granted 25,000 options
on March 12, 2008, at an exercise price of $10.25. Mr. Myers was granted 15,000 options on
July 26, 2007, at an exercise price of $10.00.(3)
    
    Includes for Messrs. Sparks and Donato a car allowance of $6,000 for the three years for
business use of their vehicles. Included in other compensation for Ms. Messmer is a car
allowance for business use of her vehicle of $7,800 for all three years; a production bonus,
based on previously approved loan targets, of $503 in 2008 and $21,334 in 2007. The Banks
401(k) matching contribution amounts for Messrs. Sparks and Donato and Ms. Messmer in 2008
were $5,639, $4,428 and $4,449, respectively, and in 2007 were $5,221, $4,460 and $3,917,
respectively.(4)
    
    Mr. Miller joined First Priority Bank as its Chief Lending Officer on January 28, 2008. Mr.
Millers annual salary is $160,000, he received a sign-on bonus of $20,000 and a car
allowance of $7,200. In 2008, First Priority Banks 401(k) matching contribution for Mr.
Miller amounted to $4,647.(5)
    
    Mr. Myers joined First Priority and First Priority Bank on June 4, 2007 and has held the
positions listed since that time. Included in other compensation for Mr. Myers for 2008 is
an annual car allowance of $6,000 for business use of his vehicle and the Banks 401(k)
matching contribution of $4,739 and $2,359 for 2008 and 2007, respectively.  13




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##### 



Grants of Plan-Based Awards  2008
 AllOther
    
    
    AllStock
    
    
    Other
    
    
    
    
    
    
    GrantAwards:
    
    
    Option
    
    
    Exercise
    
    
    DateNumber
    
    
    Awards:
    
    
    or
    
    
    Fairof
    
    
    Number
    
    
    Base
    
    
    ValueShares
    
    
    of
    
    
    Price
    
    
    ofEstimated Future Payouts Under
    
    
    Estimated Future Payouts Under
    
    
    of
    
    
    Securities
    
    
    of
    
    
    StockGrant
    
    
    Non-Equity Incentive Plan Awards
    
    
    Equity Incentive Plan Awards
    
    
    Stock
    
    
    Underlying
    
    
    Option
    
    
    andDate
    
    
    Threshold
    
    
    Target
    
    
    Maximum
    
    
    Threshold
    
    
    Target
    
    
    Maximum
    
    
    or Units
    
    
    Options
    
    
    Awards
    
    
    OptionName
    
    (1)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    (#)
    
    
    (#)
    
    
    ($/Sh)
    
    
    Awards(a)
    
    (b)
    
    
    (c)
    
    
    (d)
    
    
    (e)
    
    
    (f)
    
    
    (g)
    
    
    (h)
    
    
    (i)
    
    
    (j)
    
    
    (k)
    
    
    (l)David E. Sparks
    
    
    12/11/08
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    
    
    
    
    1,000
    
    
    $
    10.25
    
    
    $
    10.25Lawrence E. Donato
    
    
    12/11/08
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    
    
    
    
    1,000
    
    
    $
    10.25
    
    
    $
    10.25Mary Ann Messmer
    
    
    12/11/08
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    
    
    
    
    1,000
    
    
    $
    10.25
    
    
    $
    10.25Thomas M. Miller
    
    
    3/12/08
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    
    
    
    
    25,000
    
    
    $
    10.25
    
    
    $
    10.25Mark J. Myers
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    
    
    
    
    
    
    
    
    N/A
    
    
    
    N/A
  14




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Outstanding Equity Awards at Fiscal Year End  2008
  Option Awards

    
    Stock AwardsEquityIncentivePlanAwards:Equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Market
    
    
    Number of
    
    
    Equity IncentiveIncentive
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Value of
    
    
    Unearned
    
    
    Plan Awards:Plan
    
    
    
    
    
    
    
    
    
    
    Number of
    
    
    Shares
    
    
    Shares,
    
    
    Market orNumber of
    
    
    Number of
    
    
    Awards:
    
    
    
    
    
    
    
    
    
    
    Shares or
    
    
    or Units
    
    
    Units or
    
    
    Payout Value ofSecurities
    
    
    Securities
    
    
    Number of
    
    
    
    
    
    
    
    
    
    
    Units of
    
    
    of Stock
    
    
    Other
    
    
    UnearnedUnderlying
    
    
    Underlying
    
    
    Securities
    
    
    
    
    
    
    
    
    
    
    Stock
    
    
    That
    
    
    Rights
    
    
    Shares, Units orUnexercised
    
    
    Unexercised
    
    
    Underlying
    
    
    
    
    
    
    
    
    
    
    That Have
    
    
    Have
    
    
    That Have
    
    
    Other RightsOptions
    
    
    Options
    
    
    Unexercised
    
    
    Option
    
    
    Option
    
    
    Not
    
    
    Not
    
    
    Not
    
    
    That Have Not(#)
    
    
    (#)
    
    
    Unearned
    
    
    Exercise
    
    
    Expiration
    
    
    Vested
    
    
    Vested
    
    
    Vested
    
    
    VestedName
    
    Exercisable
    
    
    Unexercisable
    
    
    Options
    
    
    Price
    
    
    Date
    
    
    (#)
    
    
    ($)
    
    
    (#)
    
    
    ($)David E. Sparks
    
    
    0
    
    
    
    59,000
    
    
    
    0
    
    
    $
    10.00
    
    
    
    12/22/15
    
    
    
    59,000
    
    
    
    
    (1)
    
    
    0
    
    
    
    01,000
    
    
    
    
    
    
    $
    10.25
    
    
    
    12/11/18
    
    
    
    1,000Lawrence E. Donato
    
    
    0
    
    
    
    44,000
    
    
    
    0
    
    
    $
    10.00
    
    
    
    12/22/15
    
    
    
    44,000
    
    
    
    
    (1)
    
    
    0
    
    
    
    01,000
    
    
    
    
    
    
    $
    10.25
    
    
    
    12/11/18
    
    
    
    1,000Mary Ann Messmer
    
    
    0
    
    
    
    44,000
    
    
    
    0
    
    
    $
    10.00
    
    
    
    12/22/15
    
    
    
    44,000
    
    
    
    
    (1)
    
    
    0
    
    
    
    01,000
    
    
    
    
    
    
    $
    10.25
    
    
    
    12/11/18
    
    
    
    1,000Thomas M. Miller
    
    
    0
    
    
    
    25,000
    
    
    
    0
    
    
    $
    10.25
    
    
    
    3/12/18
    
    
    
    25,000
    
    
    
    
    (1)
    
    
    0
    
    
    
    0Mark J. Myers
    
    
    0
    
    
    
    15,000
    
    
    
    0
    
    
    $
    10.00
    
    
    
    7/26/17
    
    
    
    15,000
    
    
    
    
    (1)
    
    
    0
    
    
    
    0
 
 (1)
    
    No active market exists for the common stock of First Priority. Pension Benefits
  Nonqualified Defined Contribution and Other Deferred Compensation Plans
   15




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##### 



Potential Payments Upon Termination or Change in Control
    16




---



##### 



Compensation of Directors
  Fees Earned Or
    
    
    
    
    
    
    
    
    
    
    All OtherPaid In Cash
    
    
    Stock Awards
    
    
    Option Awards
    
    
    Compensation
    
    
    TotalName
    
    ($)
    
    
    ($)
    
    
    ($)(2)
    
    
    ($)
    
    
    ($)John K. Desmond, Jr.
    
    $
    0
    
    
    
    
    
    
    $
    1,340
    
    
    $
    0
    
    
    $
    1,340Alan P. Novak
    
    $
    0
    
    
    
    
    
    
    $
    1,340
    
    
    $
    0
    
    
    $
    1,340Mel A. Shaftel
    
    $
    0
    
    
    
    
    
    
    $
    1,340
    
    
    $
    0
    
    
    $
    1,340Vincent P. Small, Jr.
    
    $
    0
    
    
    
    
    
    
    $
    1,340
    
    
    $
    0
    
    
    $
    1,340Scott J. Tarte (1)
    
    $
    0
    
    
    
    
    
    
    $
    1,340
    
    
    $
    0
    
    
    $
    1,340Richard M. Wesselt
    
    $
    0
    
    
    
    
    
    
    $
    1,340
    
    
    $
    0
    
    
    $
    1,340William L. Wetty
    
    $
    0
    
    
    
    
    
    
    $
    1,340
    
    
    $
    0
    
    
    $
    1,340
 
 (1)
    
    Mr. Tarte resigned from First Prioritys board of directors on February 12, 2009.(2)
    
    The stock option awards reflected in the above table were made pursuant to the 2005 Stock
Compensation Program. The above directors were each granted 1,000 options on December 11,
2008 with an exercise price of $10.25, to replace the options that these directors
relinquished in 2006.  17




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##### 



Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
 Security Ownership of Management
  SharesBeneficially
    
    
    PercentName of Beneficial Owner
    
    Owned(1)
    
    
    OwnershipHoward R. Berlin
    
    
    135,000
    (5)
    
    
    4.27
    %John K. Desmond, Jr.
    
    
    65,171
    (2)(4)
    
    
    2.08
    %Lawrence E. Donato
    
    
    96,371
    (3)(4)
    
    
    3.07
    %Robert J. Fairbaugh
    
    
    10,682
    (4)(5)
    
    
    *Mary Ann Messmer
    
    
    15,517
    (3)(4)
    
    
    *Thomas M. Miller
    
    
    6,000
    (3)
    
    
    *Mark J. Myers
    
    
    1,034
    (3)(4)
    
    
    *Alan P. Novak
    
    
    7,032
    (4)
    
    
    *Mel A. Shaftel
    
    
    78,371
    (2)(4)
    
    
    2.50
    %Vincent P. Small, Jr.
    
    
    41,337
    (2)
    
    
    1.32
    %Patrick M. Smith
    
    
    11,500
    (5)
    
    
    *David E. Sparks
    
    
    186,371
    (3)(4)
    
    
    5.91
    %Christopher E. Spinieo
    
    
    46,364
    (4)(5)
    
    
    1.48
    %Michael G. Wade
    
    
    14,500
    (5)
    
    
    *Richard M. Wesselt
    
    
    60,000
    (2)
    
    
    1.92
    %William L. Wetty
    
    
    78,371
    (2)(4)
    
    
    2.50
    %Samuel J. Worthington, Jr.
    
    
    141,000
    (5)
    
    
    4.46
    %All directors and executive officers as a
group (17 persons)
    
    
    994,621
    (4)(5)
    
    
    28.92
    %
 
 *
    
    Less than 1%(1)
    
    Shares are deemed to be beneficially owned by a person if he or she directly or indirectly
has or shares the power to vote or dispose of the shares, whether or not he or she has any
economic interest in the shares. Unless otherwise indicated, the named beneficial owner has
sole voting and investment power with respect to the shares. Also includes shares the holder
has the right to acquire within sixty (60) days and therefore amounts shown include
immediately exercisable warrants and vested options to acquire First Priority common stock.
As of the date of this proxy statement, the number of shares represented by warrants and
vested options which have been granted to all directors, executive officers and management as
a group totaled 149,924 and 47,500 shares, respectively.(2)
    
    Excludes a total of 9,000 options granted during 2005 to each non-employee director (except
Mr. Novak) under First Prioritys 2005 Stock Compensation Program (the 2005 Program). All
options granted under the 2005 Stock Program were granted at an exercise price of $10.00 per
share, vest in four years and terminate ten years from the date of grant. Mr. Novak was
granted 9,000 options from the second tranche at an exercise price of $10.00 per share on
March 23, 2006. Options issued to Mr. Novak vest in four years (March 23, 2010) from the date
of grant and terminate ten years from the date of grant (March 23, 2016). In addition,
excludes a total of 1,000 options granted to each non-employee director on December 11, 2008
at an exercise price of $10.25 to replace the options these directors voluntarily relinquished
in 2006. The options vest in
four years from the date of grant and terminate ten years from the date of grant.  18




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##### 



(3)
    
    Excludes the following number of options granted at an exercise price of $10.00 per share on
December 22, 2005, to each executive officer under the 2005 Program: Mr. Sparks  59,000
stock options; Ms. Messmer  44,000 stock options; Mr. Donato  44,000 stock options.
Excludes 1,000 stock options granted to each of Mr. Sparks, Ms. Messmer and Mr. Donato on
December 11, 2008 at an exercise price of $10.25 per share. Also excludes 25,000 stock
options granted to Mr. Miller on March 12, 2008, at an exercise price of $10.25 per share and
15,000 options granted to Mr. Myers on July 26, 2007, at an exercise price of $10.00 per
share. Options granted vest on the fourth anniversary of the grant date and terminate ten
years from the date of grant.(4)
    
    Mr. Desmonds beneficial ownership includes 10,000 shares of common stock and 2,000 warrants
held by Mr. Desmonds son with respect to which Mr. Desmond does not exercise voting or
investment power. Ms. Messmers beneficial ownership includes 5,000 shares of common stock
and 1,000 warrants held jointly with her husband and 5,000 shares and 1,000 warrants held in
the name of her husband. Mr. Donatos beneficial ownership includes 80,171 shares of common
stock and 15,000 warrants owned jointly with his wife and 1,000 shares of common stock and 200
warrants owned by his children with respect to which Mr. Donato does not exercise voting and
investment power. Mr. Myers beneficial ownership includes 1,034 shares held jointly with his
wife. Mr. Novaks beneficial ownership includes 5,000 shares of common stock and 1,000
warrants owned by a limited partnership with respect to which Mr. Novak is a limited partner
and does not exercise voting and investment power. Mr. Shaftels beneficial ownership
includes 5,000 shares of common stock and 1,000 warrants owned by a trust in which Mr. Shaftel
shares voting and investment power. Mr. Sparks beneficial ownership includes 75,000 shares
of common stock and 15,000 warrants owned by his wife and 2,000 shares of common stock and 400
warrants owned by his children with respect to which Mr. Sparks does not exercise voting and
investment power. Mr. Wettys beneficial ownership includes 66,171 shares of common stock and
12,200 warrants owned jointly with his wife. Mr. Fairbaughs beneficial ownership includes
1,818 shares of common stock and 364 warrants owned by his wife with respect to which Mr.
Fairbaugh does not exercise voting and investment power. Mr. Spinieos beneficial ownership
includes 2,662 shares of common stock and 532 warrants owned by his wife with respect to which
Mr. Spinieo does not exercise voting and investment power.(5)
    
    The number of shares beneficially owned by each director includes immediately exercisable
options issued to former directors of Prestige Community Bank as a grant for their
contribution to Prestige Community Banks at-risk organizing capital. Mr. Worthington and Mr.
Berlin each were issued 15,000 options, Mr. Spinieo was issued 10,000 options and Messrs.
Fairbaugh, Smith and Wade each were issued 2,500 options.  19




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##### 



Principal Shareholders
  Amount ofBeneficial
    
    
    Percent ofName and Address of Beneficial Owner
    
    Ownership
    
    
    Common StockDavid E. Sparks
    
    
    186,371
    
    
    
    5.91
    %2 West Liberty Boulevard, Suite 104
Malvern, PA 19355Starboard Fund for New Bancs, LP
    
    
    249,600
    
    
    
    7.89
    %Martin Fiascone, General Partner
200 West Adams Street, Suite 105
Chicago, IL 60606Conwell Limited Partnership(1)
    
    
    144,000
    
    
    
    4.58
    %Jerome S. Goodman, General Partner
131-A-Gaither Drive
Mount Laurel, NJ 08054Wellington Limited Partnership(1)
    
    
    66,000
    
    
    
    2.11
    %Jerome S. Goodman, General Partner
131-A-Gaither Drive
Mount Laurel, NJ 08054
 
 (1)
    
    Jerome S. Goodman, as a General Partner of each of these entities, is deemed to be a
beneficial owner of the shares held by these partnerships, which combined represent 6.69% of our
outstanding shares of common stock. Item 13. Certain Relationships and Related Transactions and Director Independence
   20




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##### 



Item 14. Principal Accountant Fees and Services
  Communication with Audit Committees Concerning Independence
 Fees of Independent Auditors
  December 31, 2008Audit Fees
    
    $
    92,941Audit-Related Fees
    
    $
    Tax Fees
    
    $
    12,004All Other Fees
    
    $
    
 December 31, 2007Audit Fees
    
    $
    63,026Audit-Related Fees
    
    $
    49,227Tax Fees
    
    $
    8,406All Other Fees
    
    $
    
   21




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##### 



PART IV
 Item 15. Exhibits, Financial Statement Schedules
 3.
    
    Exhibits
   22




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##### 



SIGNATURES
  FIRST PRIORITY FINANCIAL CORP.
(Registrant)/s/   David E. Sparks,Chairman, President and Chief Executive Officer  23




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##### 



EXHIBIT INDEX
 ExhibitNumber
    
    Description31.1
    
    
    Certification of Chief Executive Officer in accordance with
Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    
    Certification of Chief Financial Officer in accordance with
Section 302 of the Sarbanes-Oxley Act of 2002
  24