Item 5.02.
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
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EXECUTIVE OFFICERS
Vice
Chairwoman of the Board. At the Effective Time, pursuant to the terms of the Merger Agreement, Ellen R. Alemany, the former Chairwoman and Chief Executive
Officer of CIT, was appointed as the Vice Chairwoman of First Citizens and FCB. As previously described in the Joint Proxy Statement/Prospectus, Ms. Alemany entered into a letter agreement with First Citizens setting forth the terms of her
employment with First Citizens following the consummation of the Transaction. For a description of Ms. Alemany’s letter agreement and additional information about the arrangements and transactions with respect to Ms. Alemany, please see the section
in the Joint Proxy Statement/Prospectus entitled “Interests of CIT’s Directors and Executive Officers in the Mergers”. Such description is incorporated herein by reference. As of the date of this Current Report, Ms. Alemany owned 18,807 shares of First Citizens Common Stock, 30,000 shares of First Citizens Series C Preferred Stock and held restricted stock units (“RSUs”)
representing the right to receive a total of 20,080 shares of First Citizens Common Stock, as described below. For more information regarding these RSUs, see Item 8.01 of that certain CIT Current Report on Form 8-K dated the date hereof, and which is
incorporated herein by reference.
Immediately prior to the Effective Time of the
First-Step Merger, Ms. Alemany held RSUs representing the right to receive a total of 274,351 shares of CIT Common Stock, of which 52,927 shares were scheduled to vest on March 1, 2022, 36,597 shares were scheduled to vest on March 1, 2023, 76,858
shares were scheduled to vest on March 1, 2024 and 107,968 shares were scheduled to vest on the earlier of (1) December 17, 2024 and (2) the second anniversary of the closing of the Mergers, subject to a performance-based vesting hurdle and Ms.
Alemany’s continued employment with CIT up to and including each vesting date. At the Effective Time, the RSUs converted into the right to receive 17,012 shares of First Citizens Common Stock using the same Exchange Ratio applied to shares of CIT in the First-Step Merger (rounded up to the nearest whole share). The terms and conditions that apply to vesting, settlement, rights to
dividend equivalents, etc. will continue to apply; provided, however, that if she experiences an eligible termination of employment or retirement her RSUs will vest in full.
Immediately prior to the Effective Time of the
First-Step Merger, Ms. Alemany also held performance share units (“PSUs”) representing the right to receive a target of 49,476 shares if CIT achieves certain applicable performance targets for the 2020-2022 performance period, subject to Ms.
Alemany’s continued employment with CIT up to and including the conclusion of the applicable performance period. Pursuant to the terms of the underlying award agreements, performance targets are considered to have been achieved at 100% of target
in the event of a change in control of CIT. Therefore, at the Effective Time, the PSUs converted into RSUs representing the right to receive 3,068 shares of First Citizens Common Stock using the same Exchange Ratio being applied to shares of CIT in the First-Step Merger (rounding up to the nearest whole share). The terms and conditions that apply to vesting, settlement, rights to
dividend equivalents, etc. will continue to apply; provided, however, that if she experiences an eligible termination of employment or retirement these RSUs will vest in full.
The terms of the underlying award agreements provide that, in the discretion of the committee that administers the plan under
which the awards were granted, in lieu of the delivery of shares, the awards and any dividend equivalents payable in shares may be settled in cash.
Chief Credit
Officer. At the Effective Time, Marisa J. Harney, the former Chief Credit Officer of CIT, was appointed as the Chief Credit Officer of FCB. In connection
with entering into the Merger Agreement, FCB entered into a letter agreement with Ms. Harney with respect to the terms of Ms. Harney’s employment with and service to FCB following the consummation of the Transaction. Ms. Harney will receive an
annual base salary no less than that in effect immediately prior to the consummation of the Mergers (currently $500,000). In addition, Ms.
Harney is eligible for incentive compensation opportunities commensurate with those provided to other senior executives of FCB, except that her short term incentive payout for 2021 (which will be paid in 2022) will be no less than 85 percent of
target. As an incentive for her to remain employed with FCB, Ms. Harney is eligible to receive a retention bonus that will vest in full and become non-forfeitable upon the second anniversary of the closing date of the Mergers, unless prior to
that date she incurs an eligible termination or retirement, each as defined in the letter agreement. The amount of her retention bonus will be $2,336,500. The retention bonus will be paid in a lump sum upon separation from service, conditioned
upon the execution of a release of all claims. Ms. Harney is also entitled to a special bonus of $500,000, which will, subject to continued employment, be paid 50 percent on the first anniversary of the closing date of the Mergers and 50 percent
on the second anniversary of the closing date of the Mergers, unless prior to those dates she incurs an eligible termination, in which case she will immediately receive any unpaid portion of the special bonus. Ms. Harney will remain subject to
the terms of her existing restrictive covenant agreements with CIT. As of the date of this Current Report, Ms. Harney owned 475 shares of First Citizens Common Stock and held RSUs representing the right to receive a total of 1,341 shares of First
Citizens Common Stock, as described below.
Immediately prior to the Effective Time of the First-Step Merger, Ms. Harney held RSUs representing the right to receive a total
of 16,638 shares of CIT Common Stock, of which 5,293 shares were scheduled to vest on March 1, 2022, 3,660 shares were scheduled to vest on March 1, 2023, and 7,686 shares were scheduled to vest on March 1, 2024, subject to a performance-based
vesting hurdle and Ms. Harney’s continued employment with CIT up to and including each vesting date. At the Effective Time, the RSUs converted into the right to receive 1,034 shares of First Citizens Common Stock using the same Exchange Ratio applied
to shares of CIT in the First-Step Merger (rounded up to the nearest whole share). The terms and conditions that apply to vesting, settlement, rights to dividend equivalents, etc. will continue to apply; provided, however, that if she experiences an
eligible termination of employment or retirement her RSUs will vest in full.
Immediately prior to the Effective Time of the
First-Step Merger, Ms. Harney also held PSUs representing the right to receive a target of 4,948 shares if CIT achieves certain applicable performance targets for the 2020-2022 performance period, subject to Ms. Harney’s continued employment with
CIT up to and including the conclusion of the applicable performance period. Pursuant to the terms of the underlying award agreements, performance targets are considered to have been achieved at 100% of target in the event of a change in control
of CIT. Therefore, at the Effective Time, the PSUs converted into RSUs representing the right to receive 307 shares of First Citizens Common
Stock using the same Exchange Ratio being applied to shares of CIT in the First-Step Merger (rounding up to the nearest whole share). The terms and conditions that apply to vesting, settlement, rights to dividend equivalents, etc. will continue
to apply; provided, however, that if she experiences an eligible termination of employment or retirement these RSUs will vest in full.
The terms of the underlying award agreements provide that, in the discretion of the committee that administers the plan under
which the awards were granted, in lieu of the delivery of shares, the awards and any dividend equivalents payable in shares may be settled in cash.
First Citizens Executive Compensation Programs
Ms. Alemany and Ms. Harney will be eligible to participate in all of First Citizen’s executive-level compensatory programs.
Additional information concerning First Citizens’ compensatory plans and programs for executive officers is provided in the sections of First Citizens’ definitive proxy statement for the 2021 annual meeting of shareholders (the “2021 Annual Proxy
Statement”) captioned “Compensation Discussion and Analysis,” “Executive Compensation” and “Post-Employment Compensation”, which are incorporated herein by reference.
First Citizens Executive Officers after the Transaction
Following the Effective Time, the executive officers of First Citizens were as follows:
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Name
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Executive Position
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Frank B. Holding, Jr.
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Chairman and Chief Executive Officer
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Hope H. Bryant
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Vice Chairwoman
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Ellen R. Alemany
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Vice Chairwoman
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Peter M. Bristow
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President
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Craig L. Nix
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Chief Financial Officer
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Marisa J. Harney
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Chief Credit Officer
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Lorie K. Rupp
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Chief Risk Officer
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Jeffery L. Ward
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Chief Strategy Officer
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Matthew G.T. Martin
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Chief Counsel and Corporate Secretary
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DIRECTORS
Election of New Directors.
At the Effective Time, as previously disclosed in the 2021 Annual Proxy Statement and in accordance with the Merger Agreement,
the following individuals, each of whom was a member of the Board of Directors of CIT immediately prior to the consummation of the Transaction, were elected to the First Citizens Board of Directors: (i) Ellen R. Alemany, (ii) Michael A. Carpenter,
and (iii) Vice Admiral John R. Ryan, USN (Ret) (collectively, the “New Directors”).
Other than the Merger Agreement, and in the case of Ms. Alemany, her letter agreement, there are no arrangements between the New
Directors and any other person pursuant to which the New Directors were selected as directors. There are no transactions in which any New Director has an interest requiring disclosure under Item 404(a) of Regulation S-K.
Biographical & Other Information.
Biographical and other information related to the New Directors and Ms. Harney is provided in the 2021 Annual Proxy Statement
under the caption “Proposed New Directors and Executive Officers”, which information is incorporated herein by reference. Based on its review and application of the independence criteria contained in the
listing requirements of The NASDAQ Stock Market (“Nasdaq”), the First Citizens’ Board of Directors has determined that each of Mr. Carpenter and Vice Admiral Ryan is independent under applicable Nasdaq listing standards.
Board Committee Assignments after the Merger.
Following the Effective Time, the major committees of the Board of Directors of First Citizens will be comprised of the following
members:
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Audit Committee: The audit committee is chaired by H. Lee Durham, Jr. and also includes John M. Alexander, Jr., Michael A. Carpenter, Daniel L. Heavner and Floyd L. Keels.
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Risk Committee: The risk committee is chaired by Robert R. Hoppe and also includes Victor E. Bell III, Robert E. Mason IV and Vice Admiral John R. Ryan, USN (Ret).
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Compensation, Nominations and Governance Committee (the “CNGC Committee”): The CNGC Committee is chaired by Robert T. Newcomb and also includes Victor E. Bell III, H. Lee Durham, Jr. and Robert E. Mason IV.
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Stock Ownership of New Directors
Michael A.
Carpenter. Immediately prior to the Effective Time of the First-Step Merger, Mr. Carpenter held RSUs representing the right to receive a total of 20,760 shares of CIT Common Stock. Pursuant to the terms of the underlying award agreements, these RSUs vested in full on the Effective Date of the
First-Step Merger. Mr. Carpenter previously elected to have settlement of these awards deferred until he is no longer a director. In addition, Mr. Carpenter previously deferred settlement of 14,983
fully-vested RSUs granted to him in 2011-2014 until he is no longer a director. Therefore, in connection with the Transaction, a total of 35,744 RSUs were converted into the right to receive First
Citizens Common Stock and settled following closing. As of the date of this Current Report, Mr. Carpenter owned 2,215 shares of First Citizens Common Stock.
Vice Admiral
John R. Ryan (USN (Ret.). Immediately prior to the Effective Time of the First-Step Merger, Vice Admiral Ryan held RSUs representing the right to receive a
total of 9,997 shares of CIT Common Stock and additional RSUs representing the right to receive the value of 1,622 shares of CIT Common Stock in cash. Pursuant to the terms of the underlying award agreements, these RSUs vested in full on the Effective Time of the First-Step Merger. The cash-settled RSUs were settled in cash equal to the value
of $813.02 per RSU following closing. Vice Admiral Ryan previously elected to have settlement of these stock-settled awards deferred
until he is no longer a director. In addition, Vice Admiral Ryan previously deferred settlement of 20,206 fully-vested RSUs granted to him in 2011-2014 until he is no longer a director. Therefore, in
connection with the Transaction, a total of 30,203 RSUs were converted into the right to receive First Citizens Common Stock and settled following closing. As
of the date of this Current Report, Vice Admiral Ryan owned 1,871 shares of First Citizens Common Stock.
Director Compensation.
Each New Director (other than Ms. Alemany who will be compensated as an executive officer) will be compensated in accordance with the 2021 standard
schedule of fees under which compensation is paid to non-employee directors included in the 2021 Annual Proxy Statement under the caption “2020 Director Compensation”, which is incorporated herein by
reference. The New Directors will be paid the annual retainer of $200,000, prorated based on the number of days remaining in their terms prior to the 2022 Annual Meeting.