Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On August 1, 2022, Prime Meridian Holding Company ("PMHG") and Prime Meridian
Bank (the "Bank") (collectively, the "Company") entered into employment
agreements with each of their executive officers and indemnification agreements
with each executive officer who was not previously a party to one.
Employment Agreements
PMHG and Bank Vice Chairman, Chief Executive Officer and President Sammie D.
Dixon, Jr.
The Company has entered into a Second Amended and Restated Employment Agreement
with Mr. Dixon. His agreement amends and restates in its entirety his Amended
and Restated Employment Agreement, dated July 19, 2018. Mr. Dixon's agreement is
included in this Form 8-K as Exhibit 10.1.
Pursuant to the agreement, Mr. Dixon is retained as Chief Executive Officer and
President of PMHG and the Bank for a period of three years, subject to an
automatic extension for an additional year on each anniversary of the original
expiration date of the agreement. In addition, the term of the agreement will be
extended for an additional three years upon a Change in Control of the Company
(as defined in the agreement). Following an extension of the term of the
agreement incident to a Change in Control of the Company, the term of the
agreement will be automatically extended for an additional year on each
anniversary of the date of the Change in Control. Notwithstanding the foregoing,
either the Company or Mr. Dixon may cause the term of the agreement to cease at
the end of the then current term by giving the other written notice of not less
than 60 days prior to the expiration of the then current term of the agreement.
Termination of Mr. Dixon's employment for any reason shall constitute his
resignation of his positions on the Boards of Directors of PMHG, the Bank, and
either of their subsidiaries.
The agreement provides for Mr. Dixon to receive a base salary and automobile
allowance, to be eligible to receive an annual cash bonus of not less than 25%
of his base salary, the amount of which shall be based the achievement of goals
set by PMHG's Compensation Committee and approved by its Board, and to
participate in the Company's benefit plans. Mr. Dixon is also eligible to
receive an annual equity incentive award of at least 25% of his base salary. The
form of the equity award will be at the discretion of PMHG. The Bank will also
establish a nonqualified account balance deferred compensation plan for the
benefit of Mr. Dixon and purchase bank owned life insurance for the benefit of
Mr. Dixon's designated beneficiaries.
If his employment is terminated because of death, Mr. Dixon's estate is entitled
to receive accrued and earned payments or benefits due and a prorated portion of
the bonus he received in his final year of employment. If Mr. Dixon's employment
is terminated because of disability, then he is entitled to receive accrued and
earned payments or benefits due and health and other insurance benefits for a
period of twelve months following the date of termination.
If employment is terminated by the Company for reasons other than Cause (as
defined in the agreement) or disability, or if Mr. Dixon terminates the
agreement for Good Reason (as defined in the agreement), Mr. Dixon is entitled
to receive his base salary through the date of termination, a prorated portion
of the bonus he received in his final year of employment, 18 months of health,
disability, and life insurance premiums, all other accrued and earned payments
or benefits due, and a cash payment equal to two times his base salary plus the
average of his annual bonuses over the three calendar years preceding the year
of termination.
However, if such a termination occurs during the period beginning three months
prior to and ending 18 months after a Change in Control, such payment shall
equal 2.99 times the sum of Mr. Dixon's then current base salary and the average
bonus earned by Mr. Dixon during each of the three calendar years preceding the
date of termination. In addition, the Company will provide 36 months of health
insurance coverage and 18 months of life and disability coverage. If Mr. Dixon's
employment is terminated due to his death or disability, his estate or Mr. Dixon
will be entitled to any accrued salary and a prorated portion of his last bonus.
In the event of his disability, the Company will also continue to pay the
insurance premiums and coverages described above.
The agreement includes confidentiality provisions to protect the Company's
proprietary and confidential information. The agreement also prohibits Mr. Dixon
from competing with the Company during the term of the agreement and during the
two-year period following termination by the Company for reasons other than
Cause or disability, or termination by Mr. Dixon for Good Reason. During such
period, Mr. Dixon will be prohibited from engaging in the business of banking in
Gadsden, Jefferson, Leon, and Wakulla Counties, Florida and anywhere within 20
miles of a Bank branch office that is operational on the date of termination of
the agreement. The agreement also restricts Mr. Dixon from soliciting certain
existing and prospective customers of the Bank for a period of two years
following termination of employment. In addition, during the two-year period
following termination of employment, the agreement restricts Mr. Dixon from
inducing any Bank employee to terminate his or her employment with the Bank or
to accept employment with any other employer. The foregoing non-competition,
non-solicitation, and non-recruitment provisions do not apply if Mr. Dixon's
employment is terminated because of the expiration of the agreement or the
nonrenewal of the term of the agreement.
Mr. Dixon's agreement also contains a non-disparagement clause and an obligation
of the Company to pay Mr. Dixon's legal fees in the event he takes action to
enforce his agreement.
Bank Executive Vice President and Senior Lender Chris L. Jensen, Jr.
The Company has entered into an Amended and Restated Employment Agreement with
Mr. Jensen. His agreement amends and restates in its entirety his Employment
Agreement, dated November 19, 2018. Mr. Jensen's agreement is included in this
Form 8-K as Exhibit 10.2.
Mr. Jensen's agreement is identical in all material respects to Mr. Dixon's
agreement, except that: (i) it does not provide for a discretionary equity bonus
or a minimum cash bonus target, rather any annual bonus is based upon the
achievement of performance goals established from year to year by the Company's
Chief Executive Officer and President; (ii) the payment due in connection with a
termination other than for Cause or without Good Reason will be equal to his
current salary plus a prorated portion of his average cash bonus for the
previous three years; (iii) the payment due in connection with a termination
related to a Change in Control will equal two times his base salary plus his
average bonus for the last three years; (iv) the Company is obligated to pay for
12 months of health, disability, and life insurance following a termination
without Cause or for Good Reason; (v) the Company is obligated to pay health
insurance premiums for 24 months and disability and life insurance premiums for
12 months following a termination related to a Change in Control; and (vi) his
non-competition and non-solicitation periods are one year following termination.
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Bank Executive Vice President and Chief Banking Officer Kyle D. Phelps
The Company has entered into an Employment Agreement with Mr. Phelps. His
agreement is included in this Form 8-K as Exhibit 10.3. In connection with this,
PMHG intends to grant to Mr. Phelps 5,750 shares of restricted stock. This grant
will be divided into three installments. The first will be for 2,417 shares and
will be made on August 23, 2022. The second will be for 1,667 shares and will be
made on August 23, 2023. The final installment will be for 1,666 shares and will
be made on August 1, 2024. Each such grant will be subject to a three-year
vesting schedule.
Mr. Phelps' agreement is identical in all material respects to Mr. Dixon's
agreement, except that: (i) it does not provide for a discretionary equity bonus
or a minimum cash bonus target, rather any annual bonus is based upon the
achievement of performance goals established from year to year by the Company's
Chief Executive Officer and President; (ii) the payment due in connection with a
termination other than for Cause or without Good Reason will be equal to his
current salary plus a prorated portion of his average cash bonus for the
previous three years; (iii) the payment due in connection with a termination
related to a Change in Control will equal two times his base salary plus his
average bonus for the last three years; (iv) the Company is obligated to pay for
12 months of health, disability, and life insurance following a termination
without Cause or for Good Reason; (v) the Company is obligated to pay health
insurance premiums for 24 months and disability and life insurance premiums for
12 months following a termination related to a Change in Control; and (vi) his
non-competition and non-solicitation periods are one year following termination.
Bank Executive Vice President and Chief Risk Officer Susan Payne Turner
The Company has entered into an Employment Agreement with Mrs. Turner. Her
agreement is included in this Form 8-K as Exhibit 10.4.
Mrs. Turner's agreement is identical in all material respects to Mr. Dixon's
agreement, except that: (i) it does not provide for a discretionary equity bonus
or a minimum cash bonus target, rather any annual bonus is based upon the
achievement of performance goals established from year to year by the Company's
Chief Executive Officer and President; (ii) the payment due in connection with a
termination other than for Cause or without Good Reason will be equal to her
current salary plus a prorated portion of her average cash bonus for the
previous three years; (iii) the payment due in connection with a termination
related to a Change in Control will equal one and one half times her base salary
plus her average bonus for the last three years; (iv) the Company is obligated
to pay for 12 months of health, disability, and life insurance following a
termination without Cause or for Good Reason; (v) the Company is obligated to
pay health insurance premiums for 18 months and disability and life insurance
premiums for 12 months; and (v) her non-competition and non-solicitation periods
are one year following termination.
Bank Executive Vice President and Chief Information Officer Monté L. Ward
The Company has entered into an Employment Agreement with Mr. Ward. His
agreement is included in this Form 8-K as Exhibit 10.5.
Mr. Ward's agreement is identical in all material respects to Mr. Dixon's
agreement, except that: (i) it does not provide for a discretionary equity bonus
or a minimum cash bonus target, rather any annual bonus is based upon the
achievement of performance goals established from year to year by the Company's
Chief Executive Officer and President; (ii) the payment due in connection with a
termination other than for Cause or without Good Reason will be equal to his
current salary plus a prorated portion of his average cash bonus for the
previous three years; (iii) the payment due in connection with a termination
related to a Change in Control will equal one and one half times his base salary
plus his average bonus for the last three years; (iv) the Company is obligated
to pay for 12 months of health, disability, and life insurance following a
termination without Cause or for Good Reason; (v) the Company is obligated to
pay health insurance premiums for 18 months and disability and life insurance
premiums for 12 months following a termination related to a Change in Control;
and (vi) his non-competition and non-solicitation periods are one year following
termination.
Bank Executive Vice President and Chief Financial Officer Clint F. Weber
The Company has entered into an Employment Agreement with Mr. Weber. His
agreement is included in this Form 8-K as Exhibit 10.6.
Mr. Weber's agreement is identical in all material respects to Mr. Dixon's
agreement, except that: (i) it does not provide for a discretionary equity bonus
or a minimum cash bonus target, rather any annual bonus is based upon the
achievement of performance goals established from year to year by the Company's
Chief Executive Officer and President; (ii) the payment due in connection with a
termination other than for Cause or without Good Reason will be equal to his
current salary plus a prorated portion of his average cash bonus for the
previous three years; (iii) the payment due in connection with a termination
related to a Change in Control will equal one and one half times his base salary
plus his average bonus for the last three years; (iv) the Company is obligated
to pay for 12 months of health, disability, and life insurance following a
termination without Cause or for Good Reason; (v) the Company is obligated to
pay health insurance premiums for 18 months and disability and life insurance
premiums for 12 months following a termination related to a Change in Control;
and (vi) his non-competition and non-solicitation periods are one year following
termination.
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Indemnification Agreements
PMHG has entered into Indemnification Agreements with Mr. Phelps, Mrs. Turner,
Mr. Weber, and Mr. Ward. These agreements are identical in all material respects
to the Indemnification Agreements of member of the Company's Boards of Directors
(including Mr. Dixon and Mr. Jensen). The form of such agreements is Exhibit
10.7 to this Form 8-K, incorporated by reference as Exhibit 10.15 to PMHG's Form
10-K for the year ended December 31, 2021, filed on March 22, 2022.
The foregoing summary of such agreements does not purport to be complete and is
qualified in its entirety by reference to the agreements, which are attached as
exhibits to this Form 8-K and which are incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
10.1 Second Amended and Restated Employment Agreement by and between Prime
Meridian Holding Company, Inc., Prime Meridian Bank, and Sammie D. Dixon, Jr.,
dated as of August 1, 2022.
10.2 Amended and Restated Employment Agreement by and between Prime
Meridian Holding Company, Inc., Prime Meridian Bank, and Chris L. Jensen, Jr.,
dated as of August 1, 2022.
10.3 Employment Agreement by and between Prime Meridian Holding Company,
Inc., Prime Meridian Bank, and Kyle D. Phelps dated as of August 1, 2022.
10.4 Employment Agreement by and between Prime Meridian Holding Company,
Inc., Prime Meridian Bank, and Susan Payne Turner dated as of August 1, 2022.
10.5 Employment Agreement by and between Prime Meridian Holding Company,
Inc., Prime Meridian Bank, and Monté L. Ward dated as of August 1, 2022.
10.6 Employment Agreement by and between Prime Meridian Holding Company,
Inc., Prime Meridian Bank, and Clint F. Weber dated as of August 1, 2022.
10.7 Form of Indemnification Agreement
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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