Base salary. Pursuant to the 2018 Employment Agreement, Mr. Myers base
salary was set at $900,000 for the initial year of the term, with an annual merit increase opportunity in base salary in the range of 2% to 4%, based on the Compensation Committees evaluation of Mr. Myers and the Companys
performance. Mr. Myers base salary was increased by 3% to an annualized rate of $927,000, effective as of the anniversary date of his contract on September 12, 2019.
Annual incentive opportunity. Under the 2018 Employment Agreement, Mr. Myers was provided with a target annual incentive
opportunity of 100% of base salary and a maximum incentive opportunity of 150% for 2019, which was the last full year of his contract, based on his base salary in effect on March 1, 2019. Mr. Myers will not earn any annual incentive for
the stub period of 2020 during which he continued to serve as our CEO.
Long-term equity incentives. Under the original terms
of his 2018 Employment Agreement, Mr. Myers was granted 100,000 stock options, (the Options), 105,000 time-based RSUs (the Time RSUs), and 105,000 performance-based RSUs (the Performance RSUs).
The Options were originally scheduled to vest in three equal annual installments, and the first tranche of 33,333 Options vested as scheduled on
September 12, 2019. However, the remaining two installments, which totaled 66,667 Options, have been canceled because Mr. Myers has retired and thus will not be employed at the Company for the remaining two annual vesting dates in 2020 and
The Time RSUs were originally set to vest as to 15,000 shares on September 12, 2019, 45,000 shares on September 12, 2020, and
45,000 shares on September 12, 2021, and the first tranche of 15,000 Time RSUs vested as scheduled on September 12, 2019. Under the Employment Agreement Amendment, the vesting of the second tranche of 45,000 Time RSUs was accelerated to
Mr. Myers retirement date of March 15, 2020, as consideration for his agreement to continue to serve as our President and CEO through that date, and the third tranche of 45,000 Time RSUs was canceled.
The Performance RSUs were likewise originally scheduled to vest in installments over three years, on the same vesting dates, in installments at targeted
levels of 15,000, 45,000 and 45,000 shares, respectively, based on the financial performance of the Company during three performance periods that were designed to be one, two and three years in length (each a Performance Period).
However, in view of Mr. Myers retirement on March 15, 2020, the only relevant Performance Period under the 2018 Employment Agreement, as amended, was the 2019 Performance Period which was the 12-month period ended June 30, 2019 and which covered the initial installment of 15,000 Performance RSUs.
Under the 2018 Employment Agreement, the Performance RSUs carried two performance targets, each of which was weighted equally: (i) the
Companys average return on tangible common stockholders equity compared to that of the other banks in the KBW NASDAQ Regional Banking Index (Average Relative ROE) and (ii) the Companys average return on assets
compared to that of the other banks in the KBW NASDAQ Regional Banking Index (Average Relative ROA). For the 2019 Performance Period, the target number of shares (15,000) would be awarded on September 12, 2019 if the Company
achieved the 50th percentile performance on both the Average Relative ROE and Average Relative ROA measures. In addition, the 2018 Employment Agreement provided that the number of target shares earned would be subject to adjustment on a linear
basis, plus or minus a maximum of 25%, for (x) performance above the 50th percentile up to the 75th percentile (with no additional shares being awarded for performance above the 75th percentile) and (y) performance below the 50th
percentile down to the 25th percentile (with no shares being awarded for performance below the 25th percentile).
For the 2019 Performance Period,
the Company achieved Average Relative ROE at the 65th percentile and Average Relative ROA at the 88th percentile, which measures in turn resulted in an aggregate award of 18,000 Performance RSUs for Mr. Myers on September 12, 2019.
Under the Employment Agreement Amendment, the second installment of 45,000 Performance RSUs was revised to be time-based and to vest on
March 15, 2020, as further consideration for Mr. Myers