Item 5.02 Departure of Directors or Certain
Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On April 24, 2017, the Board of
Directors (the Board) of Banc of California, Inc. (the
Company
) appointed Douglas Bowers, age 59, as (i) the Companys President and Chief Executive Officer effective May 8, 2017 (the Effective
Date) and (ii) as a Class II director of the Board. In his capacity as a director, he has been named to the Enterprise Risk Committee and the Community Development Committee of the Board. Mr. Bowers has also been appointed as
President and Chief Executive Officer of the Companys subsidiary, Banc of California, N.A. (the Bank), and as a member of its board of directors. A copy of a press release announcing Mr. Bowers as the Companys President
and CEO and as a director of the Board is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Mr. Bowers is a veteran banking
executive with over 35 years of banking experience, including his most recent role as Chief Executive Officer of Square 1 Bank from 2011 until its sale to PacWest Bancorp in 2015. Previously he held roles at Lone Star/ Hudson Advisors, a leading
private equity firm, and at Bank of America, where he spent nearly thirty years leading divisions including Commercial Banking, Corporate Banking, Leasing and Specialized Products.
In connection with his appointment, Mr. Bowers, the Company and the Bank entered into an Employment Agreement dated April 24, 2017 (the
Employment Agreement). Pursuant to the Employment Agreement, Mr. Bowers will receive an initial annual base salary of $700,000. In addition, Mr. Bowers will be eligible to receive an annual bonus with an annual target bonus
opportunity equal to 100% of the rate of annual base salary in effect. The actual annual bonus earned may be between 0% and 150% of the target bonus, depending on the level of achievement of applicable goals. For fiscal year 2017, the annual bonus
will be prorated but no less than $425,000.
Pursuant to the Employment Agreement, Mr. Bowers will be granted 70,000 restricted stock units under the
Companys 2013 Omnibus Stock Incentive Plan, 35,000 of which will be subject solely to service-based vesting conditions (the Time-Based Award) and 35,000 of which will be subject to performance-based and service-based vesting
conditions (the Performance-Based Award). Subject to Mr. Bowers continued employment,
one-third
(1/3) of the Time-Based Award will vest on each anniversary of the Effective Date and
(ii) the Performance-Based Award will vest on the last day of a three-year performance period ending December 31, 2019, if and to the extent applicable performance-based vesting conditions are achieved.
In the event of the termination of Mr. Bowers employment for any reason, he will be entitled to any accrued payments and benefits.
In addition, in the event that, during the term of the Employment Agreement, the Company and the Bank terminate Mr. Bowers employment without
cause or Mr. Bowers resigns with good reason, as such terms are defined in the Employment Agreement, then, subject to certain conditions, Mr. Bowers will be entitled to: (i) severance pay in the sum of (A) 100%
of his annual base salary then in effect and (B) 50% of his target annual bonus opportunity then in effect; and (ii) for 12 months, monthly payments equal to Mr. Bowers monthly COBRA premiums minus the amount he paid for his monthly
health-care premiums prior to the date of termination; provided that if the termination occurs within the
two-year
period following a change of control, in lieu of the above severance amounts Mr. Bowers
would be entitled to severance pay equal to 200% of his annual base salary and target annual bonus opportunity and the monthly payments equal to Mr. Bowers monthly COBRA premiums minus the amount he paid for his monthly health-care
premiums prior to the date of termination would continue for 24 months. In addition, if such termination occurs during the
two-year
period following a change of control, or if Mr. Bowers employment
is terminated due to death or disability, as defined in the Employment Agreement, Mr. Bowers outstanding equity-based awards will vest and become free of restrictions immediately (with any performance-based equity awards
vesting at target performance levels, unless the applicable performance goals are determinable as of the date of termination and actual performance exceeds target performance levels, in which case the performance-based awards
will vest based on the actual level of achievement determined as of the date of termination).
Finally, in the event that any of Mr. Bowers
payments or benefits under the Employment Agreement or otherwise would become subject to excise taxes imposed by Section 4999 of the Internal Revenue Code (the Excise Taxes), such payments or benefits would be (i) delivered in
full, or (ii) reduced such that no portion of the payments or benefits would be subject to the Excise Taxes, whichever is more favorable on an after tax basis to Mr. Bowers.
The foregoing description of the Employment Agreement is qualified in its entirety by reference to the full text of the Employment Agreement, which
is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Mr. Bowers is also expected to enter into the same form of indemnification agreement with the Company as the
Companys other directors and certain of the Companys officers, which agreement supplements the indemnification provisions of the Companys charter by contractually obligating the Company to indemnify, and to advance expenses to,
such persons to the fullest extent permitted by applicable law.
Mr. Bowers has no direct or indirect material interest in any transaction required
to be disclosed pursuant to Item 404(a) of
Regulation S-K,
has no arrangement or understanding between him and any other person required to be disclosed pursuant to Item 401(b) of Regulation
S-K
and has no family relationships required to be disclosed pursuant to Item 401(d) of Regulation
S-K.
Hugh F. Boyle, who has served as Interim CEO since January 23, 2017, will step down from that role effective May 8, 2017, but will continue with the
Company in his capacity as Chief Risk Officer. J. Francisco A. Turner, who has served as Interim President since January 23, 2017, will step down from that role effective May 8, 2017, but will continue with the Company in his capacity as
Chief Strategy Officer and Interim Chief Financial Officer.