UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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the Securities Exchange Act of 1934
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e)
On December 10, 2019, ConnectOne Bank (the “Bank”), which is a wholly owned subsidiary of the Registrant, entered into: (i) a Supplemental Executive Retirement Plan Agreement, and (ii) a Split Dollar Life Insurance Agreement, in each case with each of the following named executive officers (collectively, the “Participants”):
Executive’s Name | Position with Bank | |
Frank Sorrentino III | Chairman, President & Chief Executive Officer | |
William S. Burns | Executive Vice President & Chief Financial Officer | |
Elizabeth Magennis | Executive Vice President & Chief Lending Officer | |
Christopher Ewing | Executive Vice President & Chief Operations Officer | |
Michael McGrover | Executive Vice President & Chief Credit Officer |
Supplemental Executive Retirement Plan
Subject to its terms and conditions, each Supplemental Executive Retirement Plan agreement is an unfunded promise intended to provide each of the Participants with certain supplemental benefits upon retirement, or if earlier, upon his or her separation from service for certain qualifying terminations of employment. The amount and timing of payment of the supplemental retirement benefits vary based on a number of factors, including, among others, the participant’s age, the reason for any separation from service, and whether the participant has met the vesting requirements set forth in the agreement at the time of any payment triggering event.
The benefit amount payable to each Participant is a certain percentage of the Executive’s final salary, as defined in the Plan, exclusive of bonus, incentive compensation, and benefits as of the date of the termination of employment), as follows (in each case, the “Final Salary Percentage”):
Executive’s Name | Final Salary Percentage | |
Frank Sorrentino III | 25% | |
William S. Burns | 20% | |
Elizabeth Magennis | 20% | |
Christopher Ewing | 20% | |
Michael McGrover | 10% |
Set forth below is a table summarizing the benefit amount and timing of such payment that would be due to the officer upon certain events resulting in a separation from service of the Participant from the employ of the Bank:
Triggering Event | Benefit Amount1 | Timing of Benefit | Acceleration of | |||
Payment2 | Benefit Vesting | |||||
Termination of employment on or after reaching normal retirement age of 65 | The Executive's Final Salary Percentage | For 10 years, beginning on the first day of the second month after the Executive attains age 70 | No |
1 The benefit amount is subject to reduction in the event that the applicable payments would constitute “parachute payments” (within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”)). The benefit amount would be reduced so that no payments to be made or benefit to be provided to the officer would be subject to the excise tax imposed under Code Section 4999.
2 Payment may be delayed as required by Code Section 409A if officer is a “specified employee” (as defined in Section 409A).
Triggering Event | Benefit Amount1 | Timing of Benefit | Acceleration of | |||
Payment2 | Benefit Vesting | |||||
Termination of employment prior to reaching normal retirement age of 65 | Vested annual benefit amount on date of termination of employment | For 10 years, beginning on the first day of the second month after the Executive attains age 70 | No | |||
Termination of employment within two years following the effective date of a Change of Control | The Executive's Final Salary Percentage | For 10 years, beginning on the first day of the second month after the Executive attains age 70 | Yes | |||
Termination of employment due to executive's death while still employed | The amount accrued by the Bank pursuant to generally accepted accounting principles for the executive's employment pursuant to the agreement, less the death benefit, if any, payable by the Split Dollar Life Insurance Agreement described below | As soon as administratively possible | No | |||
Death of executive after termination of employment | The Executive's Final Salary Percentage shall be payable to Executive's beneficiary | For 10 years, beginning on the first day of the second month after the Executive attained (or would have attained) age 70 | No |
Each agreement provides that the applicable participant would not be entitled to any benefit under the agreement if the participant’s separation from service is due to a termination with cause (as defined in the agreement).
Subject to earlier acceleration as shown in the table above, the participant’s benefit becomes vested, assuming continued employment, ratably over the number of months equal to the difference between Participant’s age on January 1, 2019 and the date in which he or she attains the age of 65; crediting Participant for the number of full or partial months of service completed prior to the termination. By way of example, if
● | Participant attained the age of 61 on January 1, 2019, and accordingly has exactly 48 months prior to attaining the age of 65, and |
● | retired on January 1, 2021, having been employed by the Bank for 24 of the 48 month until attaining age 65 (or 50%), |
then his or her benefit will be 50% of what he or she would have been entitled to had he or she remained employed until attaining age 65.
The foregoing description of the Supplemental Executive Retirement Plan agreements is a summary and does not purport to be complete and is qualified in its entirety by reference to the full text of the form of agreement, which is filed as Exhibit 10.1 to this current report and are incorporated into this item by reference.
Split Dollar Life Insurance Agreement
Pursuant to each of the Split Dollar Life Insurance Agreements, each of participant’s designated beneficiary will be entitled to share in the death proceeds payable under a life insurance policy owned by the Bank in the event of the participant’s death while the Agreement remains in effect. The amounts payable to the participants’ beneficiaries vary among the participants, and the age at which a participant dies, in the range set forth below:
Participant | Minimum | Maximum | ||
Frank Sorrentino III | $1,629,480 | $2,608,851 | ||
William S. Burns | $684,382 | $1,013,052 | ||
Elizabeth Magennis | $651,792 | $1,428,157 | ||
Christopher Ewing | $586,613 | $903,064 | ||
Michael McGrover | $248,496 | $367,834 |
The agreements will terminate upon (1) the bankruptcy, receivership or dissolution of the Bank; or (2) termination of Participant’s employment.
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the form of Agreement attached hereto as Exhibit 10.2.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
10.1 | Form of Supplemental Executive Retirement Plan by and between the Bank and each of Frank Sorrentino III, William S. Burns, Elizabeth Magennis, Christopher Ewing and Michael McGrover |
10.2 | Form of Split Dollar Life Insurance Agreement by and between the Bank and each of Frank Sorrentino III, William S. Burns, Elizabeth Magennis, Christopher Ewing and Michael McGrover |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
CONNECTONE BANCORP, INC. | |||
(Registrant) | |||
Dated: December 16, 2019 | By: | /s/ William S. Burns | |
WILLIAM S. BURNS | |||
Executive Vice President and | |||
Chief Financial Officer | |||
EXHIBIT INDEX
Exhibit No. | Description | |
10.1 | Form of Supplemental Executive Retirement Plan by and between the Bank and each of Frank Sorrentino III, William S. Burns, Elizabeth Magennis, Christopher Ewing and Michael McGrover | |
10.2 | Form of Split Dollar Life Insurance Agreement by and between the Bank and each of Frank Sorrentino III, William S. Burns, Elizabeth Magennis, Christopher Ewing and Michael McGrover | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |