UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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Soliciting Material Pursuant to §240.14a-12 |
Commerce Union Bancshares,
Reliant Bancorp, Inc.
(Name of Registrant as Specified In Itsin its Charter)
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1736 Carothers Parkway, Suite 100
Brentwood, Tennessee 37027
May 14, 2015
April 10, 2018
Dear fellow shareholder:
You are cordially invited to attend the annual meeting of shareholders of Commerce Union Bancshares,Reliant Bancorp, Inc. (the “Company”). This letter serves as your official notice that we will hold the annual meeting on June 18, 2015,Thursday, May 17, 2018, at 5:00 p.m., local time, at the Tennessee Bankers Association, located at 211 Athens Way, Nashville, Tennessee 37228, forto take action the following purposes:following:
● | Election of Directors: Elect five nominees to serve as Class I directors, |
● | Ratification of the |
● | Articles of Amendment to the |
● | Employee Stock Purchase Plan. To |
If you were a shareholder of record of Company common stock as of the close of business on April 9, 2018, you are entitled to receive this notice and vote at the annual meeting, and any adjournments or postponements thereof. This proxy statement and accompanying proxy card are being sent or made available on or about April 10, 2018.
For instructions on voting, please refer to the enclosed proxy card. You may vote by mail, as well as by telephone and on the internet. Your vote is important. Whether or not you planexpect to attend the annual meeting, we hope you will vote as soon as possible. You may vote over the internet, as well as by telephone, or by mailing a proxy card. Detailed voting instructions are included on your proxy card. However, ifit is important that your shares are held in “street name,” you will need to obtain a proxy form frombe represented and voted at the institution that holds your shares in order to vote at our annual meeting.
By order of the board of directors,
DeVan D. Ard, Jr. |
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| Chairman, President and Chief Executive Officer |
COMMERCE UNION BANCSHARES,RELIANT BANCORP, INC.
1736 Carothers Parkway, Suite 100
Brentwood, Tennessee 37027
May 14, 2015
April 10, 2018
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 18, 2015To Be Held May 17, 2018
General
Our board of directors is soliciting proxies for the 2018 annual meeting of shareholders. This proxy statement is being furnishedcontains important information for you to consider when deciding how to vote on the shareholders of Commerce Union Bancshares, Inc.matters brought before the annual meeting. We encourage you to read it carefully. We are distributing this proxy statement on or about April 10, 2018. In this proxy statement, the terms “we,” “our,” “ours,” “us,” “Commerce UnionReliant Bancorp” and the “Company” refer to Commerce Union Bancshares,Reliant Bancorp, Inc. The terms “Reliant” and “Reliant Bank” refer to our wholly owned subsidiary, Reliant Bank, a Tennessee banking corporation.
The accompanying proxy is solicited on behalf of
About the board of directors of Commerce Union Bancshares, Inc. for use at our 2015Annual Meeting
The annual meeting of shareholders. The annual meetingshareholders of Reliant Bancorp will be held on Thursday, June 18, 2015,May 17, 2018, at 5:00 p.m., local time, at the Tennessee Bankers Association, located at 211 Athens Way, Nashville, Tennessee 37228. The meeting is
Proposals at the Annual Meeting
You are being held to:asked to vote on the following proposals:
1. | A proposal to |
2. | A proposal to ratify the |
3. | A proposal to approve an amendment to our charter to declassify our board of directors and |
4. | A proposal to approve the Reliant Bancorp, Inc. 2018 Employee Stock Purchase Plan (which we refer to as |
We do not know of any business that will be presented for consideration at the Meeting other than the matters described in this proxy statement. This proxy statement is dated May 14, 2015, and is being mailed or otherwise made available to the shareholders of Commerce Union on or about May 20, 2015, along with the form of proxy.
Voting Information
The board set May 13, 2015April 9, 2018 as the record date for the annual meeting. Shareholders owning shares of our common stock at the close of business on that date are entitled to attend and vote at the annual meeting, with each share entitled to one vote. There were 7,062,508approximately [11,479,587] shares of common stock outstanding on the record date. A majority of the outstanding shares of common stock entitled to vote at the annual meeting will constitute a quorum. We will count abstentions and broker non-votes, which are described below, in determining whether a quorum exists.
Many of our shareholders hold their shares through a stockbroker, bank, or other nominee rather than directly in their own name. If you hold our shares in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in street name, and your broker or nominee, who is considered the shareholder of record with respect to those shares, is forwarding these materials to you. As the beneficial owner, you have the right to direct your broker, bank, or other nominee how to vote and are also invited to attend the annual meeting. However, since you are not the shareholder of record, you may not vote these shares in person at the annual meeting unless you obtain a signed proxy from the shareholder of record giving you the right to vote the shares. Your broker, bank, or other nominee has enclosed or provided a voting instruction card for you to use to direct your broker, bank, or other nominee how to vote these shares.
If a share is represented for any purpose at the annual meeting by the presence of the registered owner or a person holding a valid proxy for the registered owner, it is deemed to be present for the purpose of establishing a quorum. Therefore, valid proxies which are marked “Abstain” or “Withhold”“Abstain” or as to which no vote is marked, including broker non-votes (which are described below), will be included in determining the number of votes present or represented at the annual meeting.
When you sign the proxy card or submit your vote via the internet, you appoint DeVan D. Ard, Jr. and William R.(Ron) DeBerryJ. Dan Dellinger as your representatives at the annual meeting. Messrs. Ard and DeBerryDellinger will vote your proxy as you have instructed them on the proxy card. If you submit a proxy but do not specify how you would like it to be voted, Messrs. Ard and DeBerryDellinger will
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vote your proxy for the election to the board of directors of all nominees listed below under “Election of Directors,” for the approval of the equity compensation plan andDirectors”, for the ratification of the appointment of our independent registered public accountants for the year ending December 31, 2015.2018, for the charter amendment proposal, and for the employee stock purchase plan proposal. We are not aware of any other matters to be considered at the annual meeting. However, if any other matters come before the annual meeting, Messrs. DeBerryArd and ArdDellinger will vote your proxy on such matters in accordance with their judgment.
Broker non-votes
A broker non-vote occurs when a broker submits a proxy card with respect to shares held in a fiduciary capacity (typically referred to as being held in “street“street name”) but declines to vote on a particular matter because the broker has not received voting instructions from the beneficial owner. Under the rules that govern brokers who are voting with respect to shares held in street name, brokers have the discretion to vote such shares on routine matters, but not on non-routine matters. The ratification of auditors is a routine matter. The other matters to be addressed at the annual meeting, including the election of directors, the charter amendment proposal, and the approval of the equity compensationemployee stock purchase plan proposal are non-routinenot routine matters.
Voting and quorum requirements at the annual meeting
In order to have a meeting, it is necessary that a quorum be present. A quorum will be present if a majority of the shares of common stock are represented at the annual meeting in person or by proxy. Abstentions and broker non-votes will be counted for purposes of determining the presence or absence of a quorum. Abstentions and broker non-votes will not be counted as having voted either for or against a proposal.
Assuming
ANNUAL MEETING BUSINESS | ||||||||
Item | Proposal | Vote Required for Approval | Effect of Abstentions | Broker Discretionary Voting Allowed? | Effect of Broker Non-Votes | |||
| 1 | Election of Directors | Plurality* | No effect; not treated as a vote cast, except for quorum purposes | No | No Effect | |||
| 2 | Ratification of Independent Registered Public Accounting Firm | Votes cast “For” exceed “Against” votes | No effect; not treated as a vote cast, except for quorum purposes | Yes | Not Applicable | |||
| 3 | Charter Amendment Proposal | Majority of common stock outstanding | No effect; not treated as a vote cast, except for quorum purposes | No | No Effect | |||
| 4 | Employee Stock Purchase Plan Proposal | Votes cast “For” exceed “Against” votes | No effect; not treated as a vote cast, except for quorum purposes | No | Not Applicable | |||
* Our Corporate Governance Guidelines require that a quorum is present:nominees to the board of directors who receive more votes cast against their election than for their election to tender their resignation to the board following the annual meeting.
As to any other matter that may be properly brought before the annual meeting, your proxy will be voted as our board of directors may recommend. If our board of directors makes no recommendation, your proxy will be voted as the proxy holders named in your proxy card deem advisable. As of the date of this proxy statement, our board of directors does not know of any other matter that is expected to be presented for consideration at the annual meeting.
You may revoke your proxy and change your vote at any time before the polls close at theannual meeting. If you are the record holder of the shares, you may do this by (a) signing and delivering another proxy with a later date, or (b) by voting in person at the meeting, or (c) by voting again over the internet or by telephone prior to 5:00 p.m. local time on June 18, 2015.
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Solicitation of proxies
Solicitations of proxies may be made in person or by mail, telephone, or other means. We are paying for the costs of preparing and mailing the proxy materials and of reimbursing brokers and others for their expenses of forwarding copies of the proxy materials to our shareholders. Our directors, officers, and employees may assist in soliciting proxies but will not receive additional compensation for doing so.
On request, we will provide, without charge, a copy of our Annual Report on Form 10-K for the year ended December 31, 2014,2017, as filed with the SEC (including a list briefly describing the exhibits thereto), to any shareholder.Please contact us at (615) 384-3357,221-2020, or write to J. Daniel Dellinger, our Chief Financial Officer, at 1736 Carothers Parkway, Suite 100, Brentwood, Tennessee 37027,for any such request.
About the Merger of
Recent Mergers
Commerce Union /Legacy Reliant Bank and ReliantMerger
Effective
On April 1, 2015, Commerce Unionthe Company completed the mergeracquisition of legacy Reliant Bank, a Tennessee banking corporation (“Legacy Reliant Bank”). The Legacy Reliant Bank merger was accounted for as a reverse merger using the acquisition method of accounting, in accordance with andthe provisions of FASB ASC Topic 805-10 Business Combinations. As such, for accounting purposes, Legacy Reliant Bank was considered to be acquiring Reliant Bancorp in this transaction. As a result, the financial statements of the Company prior to the Legacy Reliant Bank merger are the historical financial statements of Legacy Reliant Bank. In periods following the Legacy Reliant Bank merger, the comparative historical financial statements of the Company are those of Legacy Reliant Bank prior to the merger. These consolidated financial statements include the results attributable to the operations of the Company beginning on April 1, 2015.
Community First, Inc. Merger
On August 22, 2017, Reliant Bancorp entered into Commerce Union’s subsidiary bank, Commerce Union Bank, pursuant to an Agreement and Plan of Merger dated aswith Community First, Inc. (“Community First”), Pioneer Merger Sub, Inc., a wholly owned subsidiary of April 25, 2014, as amended by the First Amendment to the Agreement and Plan of Merger, dated as of December 31, 2014, by and among Commerce Union, Commerce UnionReliant Bancorp, Reliant Bank, and ReliantCommunity First Bank (the “& Trust, a Tennessee-chartered commercial bank and wholly owned subsidiary of Community First (“merger agreementCommunity First Bank”). At closingOn January 1, 2018, Reliant Bancorp completed the acquisition of the merger, Reliant Bank merged withCommunity First and into Commerce Union Bank, with Commerce Union Bank surviving the merger as the surviving corporation.Community First Bank.
PROPOSAL
ITEM ONE
ELECTION OF DIRECTORS
Nominees and Vote Required to Elect Nominees
The board of directors currently has 1114 members divided into three classes with staggered terms, so that the terms of only approximately one-third of the board membersmembers’ terms expire at each annual meeting. The current terms of the Class I directors will expire at the 20152018 annual meeting of shareholders. The Class I directors will stand for election again at the annual meeting of shareholders in 2021. The terms of the Class II directors will expire at the 20162019 annual meeting of shareholders, and the terms of the Class III directors will expire at the 20172020 annual meeting of shareholders.
Effective January 1, 2018, in connection with the consummation of the merger between Reliant Bancorp and Community First, Inc. (“Community First”), our board of directors approved an increase to the size of the board of directors from 11 to 14 members, and the board of directors approve the appointment of three legacy Community First directors, Robert E. (Brown) Daniel, Louis E. Holloway, and Ruskin (Rusty) A. Vest, to fill the resulting vacancies. Mr. Vest was appointed to serve as a Class I director, and Messrs. Daniel and Holloway were appointed to serve as Class II directors. If elected by the shareholders at the annual meeting, Mr. Vest will be elected for a three-year term, serving until the annual meeting of shareholders in 2021. If elected by the shareholders at the annual meeting, Messrs. Daniel and Holloway will be elected for a one-year term, serving until the annual meeting of shareholders in 2019.
If the shareholders approve the proposed charter amendment at the annual meeting, we will begin to phase out the staggered terms for our board of directors. If the charter amendment is adopted, at the annual meeting of shareholders in 2019, Class II directors will be elected to one-year terms, and at the annual meeting of shareholders of 2020, Class III directors will be elected to one-year terms. Beginning with the annual meeting of shareholders in 2021, all directors will be elected for a one-year term.
Our current directors and their classes are:
Name | Board class | |
Homayoun Aminmadani | Class II Director | |
DeVan D. Ard, Jr. | Class I | |
Charles Trimble (Trim) Beasley | Class II Director | |
John Lewis (Buddy) Bourne | Class III Director | |
Robert E. (Brown) Daniel | Class II Director* | |
William Ronald (Ron) DeBerry | Class I | |
Sharon H. Edwards | Class I | |
Farzin Ferdowsi | Class I | |
Darrell S. Freeman, Sr. | Class III Director | |
James Gilbert Hodges | Class III Director | |
Louis E. Holloway | Class II Director* | |
James R. Kelley | Class III Director | |
Don Richard Sloan | Class II Director | |
Ruskin (Rusty) A. Vest | Class I Director* |
* Standing for election by the shareholders |
Under the terms of the merger agreement, at the effective time of the merger, the number of directors on the board of directors of Commerce Union was set at 11, of which five were previous members of the Reliant Bank board of directors, five were previous members of the Commerce Union board of directors, and one is an agreed-upon individual who is independent from the combined company under the listing rules of NASDAQ. Of the previous Reliant Bank board members, Mr. Ard and Mr. Ferdowsi were appointed as Class I directors and are standing for election at the annual meeting. Of the
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former Commerce Union board members, Mr. DeBerry was appointed as a Class I director and is standing for election at the annual meeting. Additionally, in connection with the consummation of the merger, the board appointed Sharon H. Edwards to serve as a Class I director and as the agreed-upon individual who is independent from the combined company.
The board of directors recommends that you elect Mr.Ms. Edwards and Messrs. Ard, Mr. DeBerry, Mr. Ferdowsi, and Ms. EdwardsVest as Class I directors, and Messrs. Daniel and Holloway as Class II directors. If a quorum is present, the directors will be elected by a plurality of the votes cast at the annual meeting. This means that the four nominees receiving the highest number of votes will be elected directors. Abstentions, broker non-votes, and the failure to return a signed proxy will have no effect on the outcome of the vote on this matter. If you submit a proxy but do not specify how you would like it to be voted, Messrs. Ard and DeBerryDellinger will vote your proxy to elect Mr. Ard, Mr. DeBerry, Mr. Ferdowsi and Ms. Edwards.the individuals nominated by the board. If any of these nominees is unable or fails to accept nomination or election (which we do not anticipate), Messrs. Ard and DeBerryDellinger will vote instead for a replacement to be recommended by the board of directors, unless you specifically instruct otherwise in the proxy.
Information About theabout Directors
The following table shows for each director of Commerce UnionReliant Bancorp as of May 1, 2015:March 26, 2018: (1) his or her name; (2) his or her age as of May 1, 2015;age; (3) how long he or she has been a director of Commerce Union;Reliant Bancorp or Reliant Bank; (4) his or her position(s) with Commerce UnionReliant Bancorp or Commerce UnionReliant Bank, other than as a director; and (5) his or her principal occupation and business experience for the past five years. Except as otherwise indicated, each director has been engaged in his or her present principal occupation for more than five years.
Name (Age) | Director Since
| Positions and Business Experience | ||||
Homayoun Aminmadani |
| Homayoun Aminmadani is a veteran restaurateur with more than 40 years of experience in the YUM! Brands, Inc. as a franchisee of various brands. During these years, Mr. Aminmadani has developed over 150 Pizza Hut restaurants and,
Mr. Aminmadani was a director of Reliant Bank from 2006 to 2015 and was appointed to the | ||||
DeVan D. Ard, Jr. | 2015 | DeVan Ard, Jr. is the
Playing an active role in the business and nonprofit community, Mr.
Mr. Ard holds a |
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Charles Trimble Beasley | 2006 | Trim Beasley is currently the president of Center Star, Inc., a research and development firm specializing in thermal reflective material properties. He graduated from Vanderbilt University with a Bachelor of Engineering degree in 1970 and went on to earn a Master of Business Administration degree from the University of Tennessee in 1975. Mr. Beasley began his business career with Everett Beasley, Inc., serving as company president for 17 years before selling his business interest in 1997. Since that time, he has been involved in numerous small business ventures, | ||
John Lewis Bourne | 2006 | Buddy Bourne is a veteran agricultural professional with over 31 years of experience in the tobacco industry. He graduated from Austin Peay State University with a Bachelor of Science degree in Agriculture. Since retiring from his position at Altria Client Services, his most recent employer, Mr. Bourne has continued to pursue his second career as a farmer, producing dark tobacco as well as grain crops. Over the course of his career, Mr. Bourne has been an active member in a variety of professional and community organizations, including the Middle Regional Advisory Council for the University of Tennessee Institute of Agriculture, the Alpha Gamma Rho fraternity, and the Delta Tau Alpha agricultural honor society. Mr. Bourne brings an extensive knowledge of agribusiness as well as a thorough understanding of local farming conditions to the board of directors of | ||
Robert E. Daniel (49) | 2018 | Brown Daniel is founder and president for Compass Capital, LLC, an investment company located in Franklin, Tennessee, a position he Mr. Daniel is an active member in the Williamson County community, serving as the secretary of the Williamson County Medical Center Board of Trustees. He previously served as chairman of the Boys and Girls Clubs of Franklin, and as chairman of the Thompson Station, Tennessee Planning Commission. Mr. Daniel was appointed to the board of directors of Reliant Bancorp following the merger with Community First, Inc. on January 1, 2018. He is a member of the audit committee of the board of directors. | ||
William Ronald DeBerry | 2006 | Ron DeBerry is Mr. DeBerry is an active member of the industry and the communities in which he works. He is a past director of the Tennessee Bankers Association. He serves as a board member and an executive committee member of the Middle Tennessee Council of Boy Scouts of America. He is a graduate of Leadership Nashville. He is a former president of PENCIL Foundation and past director of the Robertson County Chamber of Commerce. | ||
Sharon H. Edwards | 2015 | Ms. Edwards is the Finance Director of Willis Towers Watson North America, Finance Director of Willis Towers Watson Corporate Risk & Broking and the Chief Financial Officer of Willis North America, Ms. Edwards serves on the Willis Foundation Board of Directors. In addition to her duties at Willis Towers Watson, Ms. Edwards has served on the Board of Trustees for Pope John Paul II High School. In 2011, Ms. Edwards was selected as one of Business Insurance magazine’s 2011 “Women to Watch.” Additionally, Ms. Edwards was selected as a finalist for the Nashville Business Journal’s 2013 “Women of Influence” and a 2016 CABLE Board Walk of Fame honoree. She is a member of Women Corporate Directors, the AICPA, and Tennessee Society of CPA’s. Ms. Edwards serves as the board’s Lead Independent Director, and she chairs the board’s audit committee. | ||
Farzin Ferdowsi | 2015 | Farzin Ferdowsi has a long history of building successful franchises and serving in leadership roles in the banking and finance community in Middle Tennessee. He is chief executive officer of Brentwood, Tennessee-based Management Resources Company. Formed in 1971, MRCO manages | ||
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Mr.
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Darrell S. Freeman, Sr. | 2015 | Darrell S. Freeman Sr. is theformer chairman of Zycron, Inc., an information technology services and solutions firm he founded in 1991 in Nashville, Tenn. Zycron employs more than
Mr. Mr. Freeman | ||
James Gilbert Hodges | 2008 | Jim Hodges is the president of Hodges Group, Inc., a construction company he started in 1990. He currently directs the overall construction management, organization, and operations of all projects and related construction activities for the corporation. Over the course of nearly 25 years, Mr. Hodges has succeeded in expanding his | ||
Louis E. Holloway (65) | 2018 | Louis Holloway is Chief Operating Officer of Reliant Bancorp and Reliant Bank, and he has over 30 years of experience in the banking industry. Prior to joining Reliant Bancorp and Reliant Bank, Mr. Holloway was the chief executive officer of Community First and Community First Bank, a position he held since 2012. Before has CEO, Mr. Holloway served Community First Bank in various positions, including president, chief credit officer, and chief retail officer. Prior to joining Community First Bank in 2008, Mr. Holloway served in market development for Bank of America as senior vice president/market president in Macon, Georgia from 1997 to 2007. He also held various positions in lending and consumer business. Mr. Holloway was appointed to the board of directors of Reliant Bancorp following the merger with Community First, Inc. on January 1, 2018. | ||
James R. Kelley | 2015 | Jim Kelley is a member of Neal & Harwell, PLC. His practice is focused primarily in the areas of commercial law, bankruptcy, taxation and general corporate matters. He earned his degree from Vanderbilt University and graduated from Emory Law School with distinction receiving a JD and an LLM in Taxation. He has received many professional accolades including recognition as one of |
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Mr. Kelley is active in many civic and charitable
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Don Richard Sloan | 2006 | Don Sloan is an independent pharmacist who has owned and operated South Side Drug Company in Springfield, | ||
Ruskin A. Vest, Jr. (63) | 2018 | Rusty Vest is a successful entrepreneur and owner of several businesses in Maury County and surrounding areas. He is president and part-owner of Southeastern Shirt Corporation, a position he has held since 1986, and president and part-owner of Southeastern Pant, LLC, a position he has held since 1996. He is the former executive vice president of Service Partners Industrial Products Co., LLC, a wholly-owned subsidiary of Masco Corporation that is a building materials distributor, a position he held from 1984 to 2015. Mr. Vest is also an active member of the Maury County community and serves on the Executive Committee of the Board of Trustees of the Webb School in Bell Buckle, Tennessee. Mr. Vest’s wide variety of business experience, including manufacturing and real estate development, allows him to bring to the board of directors a broad understanding of a number of industries in which many of the Company’s clients operate. His active involvement in a number of community activities in the Company’s Maury County market allows him to contribute valuable insight to the board of directors on key developments in the Middle Tennessee market. Mr. Vest was appointed to the board of directors of Reliant Bancorp following the merger with Community First, Inc. on January 1, 2018. He is a member of the nominating and governance committee of the board of directors. | ||
Information about Executive Officers
Set forth below is information about our executive officers, other than Mr. DeBerry, our chief executive officer, and Mr. Ard, our President and Chief Executive Officer, who are also directors and areis discussed above.
Name (Age) | Officer Since | Positions and Business Experience | ||
J. Dan Dellinger Chief Financial Officer | 2015 | Dan Dellinger is the Chief Financial Officer of
Prior to his career in banking, Mr. Dellinger spent 11 years in public accounting. He is a
Mr. Dellinger has participated on several CFO panels for the AICPA and the Tennessee Bankers Association. Mr. Dellinger has also served as an instructor for The Southeastern School of Banking. He served as a director for the Independent Division of the Tennessee Bankers Association for 3 years. He currently serves as a member of the Tennessee Bankers
Mr. Dellinger is a member of the Executive Board for the Middle Tennessee Council of the Boy Scouts of America. He also serves on the Finance |
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| Mr. Dellinger received his | ||||
Terry M. Todd (59) Executive Vice President and Chattanooga Market President | 2017 | Prior to joining Reliant Bank in 2017, Terry Todd was regional president for FSG Bank in Chattanooga, where he was responsible for 12 branches with $270 million in loans and $175 million in deposits. He previously served as business banking manager for SunTrust Bank’s Chattanooga Region that included 40 plus branches over a three-state area. He started his banking career in 1981 at the former Commerce Union Bank, later Bank of America. Mr. Todd is a graduate of the University of Tennessee at Martin. He is also a graduate of the Banking School of the South at Louisiana State University, the Tennessee Bank Commercial Lending School and the Tennessee Bank Consumer Lending School. He is actively involved in the Chattanooga community on non-profit and other community boards. | ||
John R. Wilson (60) Chief Lending Officer and Davidson/Williamson County Market President | 2006 | John Wilson has over 20 years of community and regional banking experience. Prior to joining Reliant Bank, he launched Cumberland Bank’s entry into the Spring Hill market where he served as community president. Mr. Wilson also held positions at Tennessee National Bank and First National Bank of Lewisburg, which was later acquired by Nations Bank. Mr. Wilson serves on the board of directors for the Boys & Girls Club of Franklin and Williamson County where he was formerly the Club’s Treasurer and now currently serves as the Club’s Chairman. Mr. Wilson is a graduate of the Tennessee School of Banking and the Graduate School of Banking of The South, Baton Rouge, Louisiana. He also holds a bachelor’s degree from the University of Tennessee. |
Family Relationships
Mr. DeBerry, our chairman and chief executive officer, is married to Paula DeBerry, our Executive Vice-President, Chief Retail Officer and Sumner County Market Vice President.
Certain Other Related Transactions
Commerce Union
Reliant Bank has had, and expects to have in the future, loans and other banking transactions in the ordinary course of business with its directors (including independent directors) and executive officers of Reliant Bancorp and Reliant Bank, including members of their families or corporations, partnerships or other organizations in which such officers or directors have a controlling interest. These loans are made on substantially the same terms (including interest rates and collateral) as those available at the time for comparable transactions with persons not related to Commerce UnionReliant Bank and diddo not involve more than the normal risk of collectability or present other unfavorable features.
In addition, Commerce UnionReliant Bank is subject to the provisions of Section 23A of the Federal Reserve Act, which places limits on the amount of loans or extensions of credit to, or investments in, or certain other transactions with, affiliates and on the amount of advances to third parties collateralized by the securities or obligations of affiliates. Commerce UnionReliant Bank is also subject to the provisions of Section 23B of the Federal Reserve Act which, among other things, prohibits an institution from engaging in certain transactions with certain affiliates unless the transactions are on terms substantially the same, or at least as favorable to such institution or its subsidiaries, as those prevailing at the time for comparable transactions with nonaffiliated companies.
The aggregate principaldollar amount of loans outstanding to Commerce Union’s directors and executive officers of Reliant Bank and their respective affiliatesReliant Bancorp was approximately $10.5$8.6 million at April 30, 2015.December 31, 2017.
Reliant Mortgage Ventures, LLC (“Reliant Mortgage Ventures”) is a former subsidiary of Reliant Bank and currently a subsidiary of Commerce Union Bank, which provides mortgage banking services to bank customers. Roger Williams is the president of Reliant Mortgage Ventures, LLC, and Mr. Dellinger is the secretary. This entity was formed as a Tennessee limited liability company in 2011 and has two members, Commerce UnionReliant Bank and VHC Fund 1, LLC, a Tennessee limited liability company. Commerce UnionReliant Bank holds 51% of the governance rights and 30% of the financial rights.rights of Reliant Mortgage Ventures. VHC Fund 1, LLC holds 49% of the governance rights and 70% of the financial rights.rights Reliant Mortgage Ventures. VHC Fund 1, LLC is controlled by an immediate family member of Mr. Ferdowsi.
Policies on Related Party Transactions
Related party transactions are governed by our Code of Ethics, which applies to all officers, directors and employees. This code covers a wide range of potential activities, including, among others, conflicts of interest, self-dealing, and related party transactions. Waiver of the policies set forth in this code will only be permitted when circumstances warrant. Such waivers for directors and executive officers, or that provide a benefit to a director or executive officer may be made only by the board of directors, as a whole, or the audit committee of the board of directors and must be promptly disclosed as required by applicable law or regulation. Absent such a review and approval process in conformity with the applicable guidelines relating to the particular transaction under consideration, such arrangements are not permitted.
Involvement in Certain Legal Proceedings
In 2008, Messrs. Ferdowsi and Aminmadani each owned a 45% equity interest in (i) American Hospitality Corporation, (ii) Restaurant Management of Carolina, L.P., and (iii) East West Enterprises, LLC. These three entities owned and operated approximately 80 franchised restaurants in the southeastern U.S.United States. In November 2008, one of three lenders to those entities declared a non-monetary default under a credit agreement and subsequently filed a complaint in the U.S. District Court for the Middle District of Tennessee in Nashville seeking the appointment of a receiver for the entities. Messrs. Ferdowsi and Aminmadani, along with the other owners of the entities, all of whom were guarantors of the credit obligations, were also named as defendants in the receivership proceedings. The three entities, in turn, filed petitions for relief under Chapter 11 of the U.S. bankruptcy code in the U.S. Bankruptcy Court for the Middle District of Tennessee in Nashville. In 2009, the three entities and the owners negotiated a consensual Chapter 11 plan of reorganization with the creditors that provided for payment in full of all claims over time. The plan was effective on October 7, 2009. Under the terms of the Chapter 11 plan, Messrs. Ferdowsi and Aminmadani, along with the other owners, reaffirmed their guaranties. In 2010, all of the creditors received payment in cash in full payment of the claims.
Recommendation of our Board of Directors
OUR BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR”“FOR” THE NOMINEES NAMED ABOVE.
8Security Ownership of Certain Beneficial Owners and Management
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information known to the companyCompany with respect to beneficial ownership of the company’sCompany’s common stock as of May 1, 2015March 15, 2018 for (i) each director and nominee, (ii) each holder of 5.0% or greater of the company’s common stock, (iii) the company’sCompany’s named executive officers, and (iv) all named executive officers and directors as a group. Unless otherwise indicated, the mailing address for each beneficial owner is care of Commerce Union Bancshares,Reliant Bancorp, Inc., 1736 Carothers Parkway, Suite 100, Brentwood, Tennessee 37027.
Name | Number of Commerce Union Shares Owned | Right to Acquire (1) | % of Beneficial Ownership As of May 1, 2015 (2) | Number of Reliant Bancorp Shares Owned | Right to Acquire (1) | % of Beneficial Ownership As of March 15, 2018 (2) | |||||||||||||||
Directors and Named Executive Officers | |||||||||||||||||||||
Homayoun Aminmadani (3) | 250,073 | 25,637 | 3.89 | % | |||||||||||||||||
DeVan D. Ard, Jr. (4) | 32,170 | 49,043 | 1.14 | % | |||||||||||||||||
Homayoun Aminmadani | 276,209 | 0 | 2.41% | ||||||||||||||||||
DeVan D. Ard, Jr. (3) | 69,606 | 7,607 | * | ||||||||||||||||||
Charles Trimble (Trim) Beasley | 28,875 | 26,250 | * | 27,256 | 0 | * | |||||||||||||||
John Lewis (Buddy) Bourne | 12,600 | 10,500 | * | 17,150 | 0 | * | |||||||||||||||
Robert E. (Brown) Daniel (4) | 176,776 | 0 | 1.54% | ||||||||||||||||||
William Ronald (Ron) DeBerry | 47,625 | 78,750 | 1.77 | % | 125,837 | 11,500 | 1.20% | ||||||||||||||
J. Daniel Dellinger | 17,163 | 27,064 | * | 44,348 | 7,085 | * | |||||||||||||||
Sharon Edwards | 0 | 0 | * | 8,500 | 0 | * | |||||||||||||||
Farzin Ferdowsi | 229,345 | 29,127 | 3.64 | % | 260,972 | 0 | 2.27% | ||||||||||||||
Darrell S. Freeman, Sr. | 53,690 | 16,361 | * | 70,551 | 0 | * | |||||||||||||||
James Gilbert Hodges | 5,344.60 | 0 | * | 5,845 | 0 | * | |||||||||||||||
Louis E. Holloway | 32,090 | 0 | * | ||||||||||||||||||
James R. Kelley | 34,801 | 4,342 | * | 39,643 | 0 | * | |||||||||||||||
Don Richard Sloan | 14,700 | 10,500 | * | 25,700 | 0 | * | |||||||||||||||
Terry Todd | 10,000 | 0 | * | ||||||||||||||||||
Ruskin A. Vest | 261,111 | 0 | 2.28% | ||||||||||||||||||
John Wilson | 20,681 | 4,053 | * | ||||||||||||||||||
All current directors and named executive officers as a group (12 persons) | 726,387 | 277,574 | 13.68 | % | |||||||||||||||||
All current directors and named executive officers as a group (17 persons) | 13.09% | ||||||||||||||||||||
5% Shareholders | |||||||||||||||||||||
RMB Capital Management, LLC (8) | 682,796 | 0 | 5.95% | ||||||||||||||||||
*Less than 1%
(1) | Includes shares that may be acquired within the next 60 days as of |
(2) | For each individual, this percentage is determined by assuming the named person exercises all options which he or she has the right to acquire within 60 days, but that no other persons exercise any options or warrants. For the directors and executive officers as a group and the |
(3) | 32,000 of these shares are pledged as security for a loan. |
(4) | Includes 16,015 shares held by Mr. Daniel’s spouse. |
(5) | Includes 24,800 shares and 4,000 options held by Mr. DeBerry’s spouse. 52,000 shares are pledged as security for a loan. |
(6) | Includes 13,136 shares and 2,532 options held by Mr. Dellinger’s spouse, and 537 shares held by Mr. Dellinger’s children. |
(7) | 229,345 of these shares are pledged as security for |
(8) | This information is derived from the Schedule 13G filed with the SEC on February 13, 2018 by RMB Capital Management, LLC. RMB Capital Management, LLC is the investment manager of |
THE COMPANY’S QUALIFIED RETIREMENT PLAN AND LONG-TERM EQUITY PLANS
401(k) Plan and Other Benefits
Reliant Bank has established the Reliant Bank 401(k) Plan pursuant to which it makes matching and discretionary contributions on behalf of each of the executive officers. Reliant Bank also maintains and pays premiums on behalf of each executive officer under a life insurance plan and provides partial payment of premiums for medical benefits if the executive officer so elects.
2011 Stock Option Plan
Background and Purpose. On April 28, 2011, Reliant Bancorp (f/k/a Commerce Union Bancshares, Inc.) adopted the Commerce Union Bancshares, Inc. Stock Option Plan for directors and management employees of Reliant Bancorp and Commerce Union Bank, and on March 10, 2015, the shareholders of Reliant Bancorp approved the Commerce Union Bancshares, Inc. Amended and Restated Stock Option Plan (as amended, the “2011 Stock Option Plan”). The 2011 Stock Option Plan permits the grant of awards of up to 1,250,000 shares of Reliant Bancorp common stock in the form of stock options. The 2011 Stock Option Plan was established to advance the interests of Reliant Bancorp shareholders by offering management and employees of Reliant Bancorp and Reliant Bank a flexible means of compensation and motivation for outstanding performance and by offering directors and organizers with a grant of equity for furthering the growth and profitability of each entity. The 2011 Stock Option Plan will continue to remain in effect until March 23, 2021; however, it is the intention of the Company that no new grants will be made under the 2011 Stock Option Plan going forward.
Eligibility. Any employee or director of Reliant Bancorp or Reliant Bank who is selected by the board of directors of Reliant Bancorp is eligible to receive grants under the 2011 Stock Option Plan. Only employees can receive grants of incentive stock options.
Administration. The 2011 Stock Option Plan is administered by the board of directors of Reliant Bancorp. The board of directors has the power to interpret the 2011 Stock Option Plan and to determine the type and amount of grants, the terms and conditions of the grants and the terms of agreements that will be entered into with the personnel receiving grants. Additionally, the board of directors has the power to amend any outstanding awards of options to the extent it deems appropriate, provided that the individual grantee’s consent is required if the amendment is adverse to the grantee’s interest. The board of directors has the power to make rules and guidelines for carrying out the 2011 Stock Option Plan and any interpretation by the board of directors of the terms and provisions regarding 2011 Stock Option Plan are final and binding.
Types of Awards. Stock options are rights to purchase a specified number of shares of common stock at a price fixed by the board of directors. Each option must be represented by an award agreement identifying the option as either an “incentive stock option,” within the meaning of Section 422 of the Code, or a “non-qualified stock option,” which does not satisfy the conditions of Section 422 of the Code. The award agreement also must specify the number of shares of common stock that may be issued upon exercise of the options, and set forth the exercise price of the options. The exercise price for options that qualify as incentive stock options may not be less than 100% of the fair market value of the common stock as of the date of grant. The option exercise price may be satisfied in cash or check payable to the order of Reliant Bancorp. Options have a maximum term of 10 years from the date of grant. The board of directors has broad discretion to determine the terms and conditions upon which options may be exercised, and the board of directors may determine to include additional terms in the award agreements.
Transferability. No options under the 2011 Stock Option Plan are transferable other than by a will or the laws of descent and distribution, as applicable.
Amendment and Termination. The board of directors may amend, alter, suspend or terminate the 2011 Stock Option Plan at any time. Any amendment to the plan must be approved by the stockholders to the extent such approval is required by the terms of the 2011 Stock Option Plan, the rules and regulations of the Securities and Exchange Commission, or the rules and regulations of any exchange upon which Reliant Bancorp’s stock is listed. However, no amendment, alteration, suspension or termination of the plan may impair the rights of any participant, unless mutually agreed in writing by the participant and the Committee.
Adjustments upon Change in Capitalization.In the event of a reorganization, recapitalization, stock split, stock dividend, issuance of securities convertible into stock, combination of shares, merger, consolidation or any other change in the corporate structure of Reliant Bancorp affecting any shares of stock, or a sale by Reliant Bancorp of all or substantially all of its assets, or any distribution to shareholders other than a normal cash dividend, or any assumption or conversion of outstanding grants as a result of an acquisition, the board of directors will make appropriate adjustments in the period of time in which non-qualified stock options may be exercised, the number and kind of shares authorized, and any adjustments in outstanding grants of options as deemed appropriate to maintain equivalent value providing that the incentive stock options will continue to meet the requirements of Code Sections 422 and 424.
Change in Control. If an event constituting a “change in control” (as defined in the 2011 Stock Option Plan) occurs, the outstanding options under the 2011 Stock Option Plan will continue to vest in accordance with the vesting schedule set forth in the option holder’s stock option agreement and continue to be exercised in accordance with terms set forth in the option holder’s stock option agreement.
2015 Equity Incentive Plan
General.On April 23, 2015, the board of directors adopted, and the Reliant Bancorp shareholders later approved at the 2015 annual meeting, the Commerce Union Bancshares, Inc. 2015 Equity Incentive Plan (the “2015 Plan”). The purpose of the 2015 Plan is to promote the Company’s interests by attracting and retaining employees through performance-related incentives to achieve long-range performance goals, enabling employees to participate in the financial success of the company, encouraging ownership of Company stock by employees, and linking employees’ compensation to the long-term interests of the Company and its shareholders. Additionally, the 2015 Plan provides for compensation for directors of Reliant Bancorp and its subsidiaries for their service as members of the various boards of directors through grants of non-qualified options and/or restricted stock. The 2015 Plan provides for compensation through incentive stock options, non-qualified stock options, restricted stock grants, and performance-based cash and equity awards.
Plan Term. The 2015 Plan’s term commenced upon shareholder approval at the 2015 annual shareholders meeting held on June 18, 2015, and will terminate on June 18, 2025 (subject to early termination as described herein).
Administration. The 2015 Plan is administered by a committee of the board, which the board has designated as the compensation committee. Subject to the express provisions of the 2015 Plan, the compensation committee is authorized to construe and interpret the 2015 Plan, and make all the determinations necessary or advisable for administration of the 2015 Plan.
Eligible Participants. The 2015 Plan provides that all directors and employees of Reliant Bancorp, its affiliated companies, and subsidiaries are eligible to receive grants of stock options, restricted stock, and performance-based cash and equity awards. Subject to the certain limitations, the compensation committee is empowered to determine which eligible participants, if any, should receive options, the number of shares subject to each option, and the terms and provisions of the option agreements.
Shares Subject to the 2015 Plan. The 2015 Plan provides for the issuance of options to purchase and awards of up to 900,000 shares of Reliant Bancorp’s common stock. Options will be granted at no less than the fair market value of the common stock as of the date of grant.
Incentive and Non-Qualified Stock Options. The 2015 Plan provides for the grant of both incentive stock options and non-qualified options. Incentive stock options are available only to persons who are employees of Reliant Bancorp or its subsidiaries, and are subject to limitations imposed by applicable sections of the Internal Revenue Code of 1986, as amended (the “Code”), including a $100,000 limit on the aggregate fair market value of shares of common stock with respect to which incentive stock options are exercisable for the first time by an optionee during any calendar year (under the 2015 Plan and all other “incentive stock option” plans of Reliant Bancorp). Any options granted under the 2015 Plan which do not meet the limitations for incentive stock options, or which are otherwise not deemed to be incentive stock options, shall be deemed “non-qualified”. Subject to the foregoing and other limitations set forth in the 2015 Plan, the exercise price, permissible time or times of exercise, and the remaining terms pertaining to any option are determined by the compensation committee; however, the per share exercise price under any option may not be less than 100% of the fair market value of the common stock on the date of grant of the option.
Restricted Stock Grants. The 2015 Plan provides that the compensation committee may grant restricted stock to employees or directors. Restricted stock grants shall consist of shares of common stock granted to a participant, subject to certain restrictions against disposition and certain obligations to forfeit such shares to the company.
Performance Based Awards. The compensation committee may set one or more performance goals, award amounts, and performance periods. The performance goals measure performance of our company or any subsidiary or business unit of our company within the performance period based on one or more of the following: (1) earnings or book value per share; (2) earnings, (3) return on equity, assets, capital or investment, (4) operating income or profit; (5) operating efficiencies; (6) the ratio of criticized/classified assets to capital; (7) allowance for loan and lease losses; (8) the ratio of non-performing assets to total assets; (9) the ratio of past due loans greater than 90 days and non-accruals to total loans; (10) the ratio of net charge-offs to average loans; (11) after-tax operating income; (12) cash flows; (13) total revenues or revenues per employee; (14) stock price or total shareholder return; (15) growth in loans, margins and/or deposits; (16) dividends; or (17) meeting specified revenue or expense targets; business, market and branch network expansion goals; and goals related to acquisition or divestitures. With respect to any covered officer, the maximum number of shares that may be granted as performance awards in each year of the performance period is 90,000 and the maximum amount of any cash award shall not exceed $200,000 in each year of the performance period.
Adjustment Provision. In the event that the Company issues dividends of cash or stock, recapitalizes, splits its stock, reorganizes, merges, consolidates, issues of warrants or other rights to purchase company stock, or engages in certain other corporate transactions, then the 2015 Plan gives the compensation committee the ability to adjust the number of shares with respect to which awards may be granted under the 2015 Plan, the number of shares subject to outstanding awards under the 2015 Plan, and to make certain other adjustments to awards under the 2015 Plan.
Award Agreements. At the time any award is made, the company and the participants will enter into an option agreement or restricted stock agreement (each, an “award agreement”) setting forth the terms of the award and such other matters as the compensation committee may determine to be appropriate. The terms and provisions of the award agreements need not be identical, and the compensation committee may, in its sole discretion, amend an outstanding award agreement at any time in any manner that is not inconsistent with the provisions of the 2015 Plan. The maximum number of shares that may be subject to awards granted to any one participant may not exceed 100% of the aggregate number of shares of common stock that may be issued under the 2015 Plan (as adjusted from time to time in accordance with the provisions of the Plan).
Equity Compensation Plan Information as of December 31, 2017
Plan category | Number of securities to be issued upon exercise of outstanding options | Weighted average exercise price of outstanding options | Number of securities remaining available for future issuance | |||||||
Equity compensation plans approved by security holders | 170,761 | $ | 14.48 | 1,140,236(1) | ||||||
Equity compensation plans not approved by security holders | - | - | - | |||||||
Total | 170,761 | $ | 14.48 | 1,140,236(1) | ||||||
(1) | This number includes 434,186 securities available to be issued under the 2011 Stock Option Plan. Although this plan will remain in effect until March 23, 2021, the Company has no intentions to issue new awards under the plan. Future awards are intended to be issued under the 2015 Plan for which the number of |
CORPORATE GOVERNANCE AND THE BOARD OF DIRECTORS
Our
The Company’s business is managed by its employees under the direction and oversight of the board of directors. Board members are kept informed of Commerce Union’sthe Company’s business through discussions with management, materials provided to them by management and their participation in board and board committee meetings.
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Board Composition and Director Independence
As of AprilJanuary 1, 2015,2018, the board is comprised of eleven14 directors. The board has determined that a majority of its members are independent as defined by the listing standards of the NASDAQNasdaq Stock Market. Specifically, our board of directors has determined that the following directors are independent: Homayoun Aminmadani, Charles Trimble (Trim) Beasley,Darrell Freeman, Jim Kelley (except by independence standards specific to the audit committee), Don Sloan, Jim Hodges, John Lewis (Buddy) Bourne, Trim Beasley, Sharon H. Edwards Darrell S. Freeman, Sr.(lead independent director), James Gilbert Hodges, James R. Kelley,Brown Daniel, and Don Richard Sloan.Rusty Vest.
The board of directors has four standing committees: the executive committee,Executive/Loan Committee, the audit committee,Audit Committee, the compensation committee,Human Resources/Compensation Committee, and the nominating and governanceNominating/Board Governance committee. The board limits membership on the audit committee, the compensation committee and the nominating and corporate governance committee to independent directors as defined by the NASDAQNasdaq listing standards and the rules and regulations of the SEC.Securities and Exchange Commission (“SEC”). The standing committees advise the board of directors on policy origination and plan administrative strategy and assure policy compliance through management reporting from areas under their supervision.
Board Leadership Structure
Currently, the chairman of the board, William Ronald DeBerry, also serves as our chief executive officer, and
DeVan D. Ard, Jr. serves as the company’s president.our Chairman, President, and Chief Executive Officer. Sharon H. Edwards has been appointed by the board to serveserves as the lead independent director. The lead independent director provides leadership to and reports to the board of directors focused on enhancing effective corporate governance, provides a source of board leadership complementary to, collaborative with and independent of the leadership of the chairman and chief executive officer, and promotes best practices and high standards of corporate governance.
We believe this leadership structure is most appropriate for us because we believe having the chief executive officer serve as chairman fosters an alignment of various company leadership duties. Additionally, the company believes that having the person most familiar with all aspects of the day to dayday-to-day operations lead the board of directors enhances accountability and effectiveness. Commerce UnionReliant Bancorp does not have a formal policy with respect to the separation or combination of the offices of chairman of the board and chief executive officer. Rather, the board has the discretion to combine or separate these roles as it deems appropriate from time to time, which provides the board with necessary flexibility to adjust to changed circumstances.
Risk Oversight
Oversight of risk management is a central focus of the board and its committees. The full board regularly receives reports both from committees and from management with respect to the various risks facing the company, and oversees planning and responding to them as appropriate. The audit committee currently has primary responsibility for oversight of financial risk and for oversight of the company’scompany’s risk management processes, including those relating to litigation and regulatory compliance. Under its charter, the audit committee is required to discuss the company’s risk assessment and risk management policies and to inquire about any significant risks and exposures and the steps taken to monitor and minimize such risks. The compensation committee is chiefly responsible for compensation-related risks. Under its charter, the compensation committee must discuss and review the key business and other risks the company faces and the relationship of those risks to certain compensation arrangements. Each of these committees receives regular reports from management concerning areas of risk for which the committee has oversight responsibility.
Code of ConductEthics
The Company has adopted a Code of Conduct,Ethics, which contains provisions consistent with the SEC’s description of a code of ethics, which applies to its directors, officers and employees, including its principal executive officers, principal financial officer, principal accounting officer, controller and persons performing similar functions. The purpose of the Code of ConductEthics is, among other things, to provide written standards that are reasonably designed to deter wrongdoing and to: (1) promote honest and ethical conduct; (2) provide full, fair, accurate, timely and understandable disclosure in reports and documents that Commerce UnionReliant Bancorp files with the SEC and other public communications by Commerce Union;Reliant Bancorp; (3) assure compliance with applicable governmental laws, rules and regulations; (4) require prompt reporting of any violations of the Code of Conduct;Ethics; and (5) establish accountability for adherence to the Code of Conduct. Each director is required to read and certify annually that he or she has read, understands and will comply with the Code of Conduct.Ethics. The Company’s Code of ConductEthics is available on Commerce Union’sReliant Bank’s website atwww.commerceunionbank.com www.reliantbank.com in the Investor Relations area.
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Meetings of the Boards of Directors
In 2014, all
All of the directors of Commerce Union BancsharesReliant Bancorp also served as directors of Commerce UnionReliant Bank. The Commerce UnionReliant Bank board held nine10 meetings during 2014,2017, and the Commerce Union BancsharesReliant Bancorp board held four8 meetings in 2014.2017. Alldirectors attended at least 85%75% of the aggregate total number of bank and holding company board meetings, and meetings of the bank and holding company board committees on which they served (to the extent held during the period for which the director had been a member of the board(s) or a member of such board committees). Messrs. Daniel, Holloway, and Vest were appointed to the board of directors effective January 1, 2018, and accordingly, attended no board or committee meetings during 2017. The company does not have a policy for director attendance at annual meetings. EachAll but one of our directors was present at the 20142017 annual shareholders’ meeting.
Audit Committee
The audit committee selects and engages Commerce Union’sReliant Bancorp’s independent registered public accounting firm each year. In accordance with its charter, the audit committee, among other things, reviews Commerce Union’sReliant Bancorp’s financial statements, the results of internal auditing, financial reporting procedures, and reports of regulatory authorities, and it regularly reports to the board of directors with respect to all significant matters presented at meetings of the audit committee.
The charter of the audit committee is available on our website atwww.commerceunionbank.com in the Investor Relations area. Effective April 1, 2015, the audit committee is comprised of foursix non-employee directors: Sharon H. Edwards, who serves as chair of the committee, Homayoun (Homey) Aminmadani, Charles Trimble (Trim) Beasley, John Lewis (Buddy) Bourne, Robert E. (Brown) Daniel, and Darrell S. Freeman, Sr., and Homayoun (Homey) Aminmadani, each of whom is “independent” as defined by the NASDAQNasdaq listing standards and the rules and regulations of the SEC. The board of directors has determined that Ms. Edwards, the committee chair, meets the SEC’s criteria for an “audit committee financial expert.” During 20142017, the audit committee met threesix times.
Audit Committee Report
Committee Charter
The audit committee and the board have approved and adopted a charter for the audit committee. In accordance with the charter, the audit committee assists the board in fulfilling its responsibility for overseeing the accounting, auditing and financial reporting processes of the Company. The responsibilities of the audit committee are described in greater detail in its charter. The charter of the audit committee is available on Reliant Bank’s website at www.reliantbank.com in the Investor Relations area.
Auditor Independence
The audit committee received from Maggart & Associates P.C. (“Maggart & Associates”) written disclosures and a letter regarding its independence as required by Public Company Accounting Oversight Board Rule 3526, “Communication with Audit Committees Concerning Independence,” describing all relationships between the independent registered public accounting firm and the Company that might bear on the registered public accounting firm’s independence, and discussed this information with Maggart & Associates. The audit committee also reviewed with Maggart & Associates and financial management of the Company the audit plans, audit scope and audit procedures. The discussions with Maggart & Associates also included the matters required by the Public Accounting Oversight Board Auditing Standard No. 16. The audit committee has also considered, and concluded, that the provision of services by Maggart & Associates described under the caption “Audit and Non-Audit Fees” are compatible with maintaining the independence of Maggart & Associates.
Review of Audited Financial Statements
The audit committee has reviewed the audited financial statements of the Company as of and for the fiscal year ended December 31, 2017, and has discussed the audited financial statements with management and with Maggart & Associates. Based on all of the foregoing reviews and discussions with management and Maggart & Associates, the audit committee recommended to the board of directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, to be filed with the SEC.
The foregoing report is submitted by the following members of the audit committee:
Sharon Edwards
Homayoun (Homey) Aminmadani
Charles (Trim) Beasley
John Lewis (Buddy) Bourne
Robert E. (Brown) Daniel
Darrell S. Freeman
Nominating and Corporate Governance Committee
The nominating and corporate governance committee is responsible for: assisting, advising and making recommendations to the board of directors on corporate governance matters, including the identification, selection, and recommendation of qualified individuals to become board members; selecting and recommending that the board approve the director nominees for the annual meeting of shareholders; developing and recommending to the board a set of corporate governance guidelines; developing and recommending a board committee structure and recommending the membership and chairs of committees; overseeing the evaluations of the board; and overseeing the succession planning for the chief executive officer. The charter for the nominating and corporate governance committee can be viewed on our website atwww.commerceunionbank.com in the Investor Relations area.
The nominating and corporate governance committee identifies nominees for the board of directors by first evaluating the current board members willing to continue serving as directors. Current board members with skills and experience that are relevant to our business and who are willing to continue their service are first considered for re-nomination, balancing the value of continuity of service by existing members of the board with that of obtaining new skills, backgrounds and perspective, in light of our developing needs. If a vacancy exists, the committee solicits suggestions for director candidates from a number of sources, which can include other board members, management, and individuals personally known to members of the board.
Pursuant to our guidelines for selecting potential new board members, in selecting and evaluating persons to recommend to the board as nominees for director, the nominating and corporate governance committee strives to select persons who have high integrity and relevant experience and who bring a diverse set of appropriate skills and backgrounds to the board. In this regard, the nominating and corporate governance committee also gives consideration to matching the geographic base of candidates with the geographic coverage of the company, and to diversity on the board that reflects the community that we serve. The nominating and corporate governance committee will also take into account whether a candidate satisfies the criteria for “independence”“independence” under NASDAQ’sNasdaq’s listing standards. These factors are subject to change from time to time.
The nominating and corporate governance committee also evaluates candidates for nomination to the board of directors who are recommended by shareholders. Shareholders who wish to recommend individuals for consideration by the nominating and corporate governance committee to become nominees for election to the board may do so by submitting a written recommendation to Commerce Union’sReliant Bancorp’s Secretary at its executive offices. Submissions must include certain information relating to such person that would indicate such person’s qualification to serve on the board of directors, including that information set forth in Section 3.9 of our bylaws and such other information relating to such person that is required to be
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disclosed in connection with solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934. The nominating and corporate governance committee will consider recommendations received by a date not later than 120 days before the anniversary date of the mailing of our proxy materials in connection with the prior year’s annual meeting of stockholders for nomination at the next annual meeting. The nominating and corporate governance committee will consider nominations received beyond that date at the annual meeting subsequent to the next annual meeting.
There is no difference in the manner in which the nominating and corporate governance committee evaluates candidates for membership on the board based on whether such candidate is recommended by a shareholder, the nominating and corporate governance committee, a director or by any other source. No submission for board nominees by a shareholder was received by the company with respect to the annual meeting.
Effective April 1, 2015,
The charter of the nominating and corporategovernance committee is available on Reliant Bank’s website at www.reliantbank.com in the Investor Relations area. The nominating and governance committee is comprised of James R. Kelley, the chairman, Homayoun (Homey) Aminmadani, John Lewis (Buddy) Bourne, Don Richard Sloan, and John Lewis (Buddy) Bourne.Ruskin (Rusty) A. Vest. Each member of the committee is independent, as determined under the definition of independence set forth in NASDAQ’sNasdaq’s rules and listing standards. During 2014,2017, the nominating and corporate governance committee’s responsibilities were overseen by the entire board, whichcommittee met nine times.once.
Compensation Committee
The compensation committee assists, advises, and makes recommendations to the board of directors on executive and director compensation matters, including evaluating and recommending to the board compensation and benefit plans for executives and directors of Commerce Union,Reliant Bancorp, as well as evaluating the performance of Commerce Union’sReliant Bancorp’s executives. The compensation committee also has been delegated responsibility for making certain compensation decisions relating to Commerce Union’s executives and under Commerce Union’s equity compensation plans. The compensation committee solicits the recommendation of our chairman, and chief executive officer, and our president, and the independent consultant of the compensation committee with respect to compensation determinations concerning the other executive officers of Commerce Union,Reliant Bancorp, but does not delegate its authority with respect to compensation matters to any other person.
The compensation committee engaged an independent consultant, Matthews, Young and Associates, Inc. (“Matthews Young”) to review and provide recommendations regarding components of our executive compensation program throughout the year ended December 31, 2017. The compensation committee also may request others, including compensation consultants and legal counsel, to attend meetings or to provide relevant information to assist the committee in its work. In this connection,regard, the compensation committee has the authority to retain compensation and benefits consultants and legal counsel used to assist the committee in fulfilling its responsibilities.
In retaining Matthews Young as the committee’s advisor, the compensation committee reviewed the factors described in the Dodd-Frank Act in evaluating the consultant’s independence status. The compensation committee’s review and findings include:
Review of services provided to the Company, determining that all consulting services were provided directly to the committee or with the committee’s advance review and approval.
Review and determination that the consultant’s total fees for services to the Company were not a material percentage of Matthews Young’s total consulting revenues.
Discussion of the policies and procedures employed by Matthews Young to prevent conflicts of interest.
Determination that the consultant has no business or personal relationship with any member of the committee or with any member of executive management.
Determination that the consultant owns no common stock in the Company.
The charter forof the compensation committee can be viewedis available on ourReliant Bank’s website atwww.commerceunionbank.com www.reliantbank.com in the Investor Relations area.
As of April 1, 2015, the The compensation committee is comprised of James (Jim) Gilbert Hodges, chairman, James (Jim) R. Kelley, Charles Trimble (Trim) Beasley, and Darrell S. Freeman, Sr. Each member of the committee is independent, as determined under the definition of independence set forth NASDAQ’sNasdaq’s rules and listing standards. During 2014,2017, the compensation committee met four4 times.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Committee Effectiveness Review
The charters of the audit, nominating and governance, and compensation committees require an annual review of committee effectiveness by the members of each committee. During 2017, consultants from Matthews Young administered a confidential survey for each committee covering a range of factors including structure; number, duration, and effectiveness of meetings; and engagement and effectiveness of members. All members of each committee participated in the process. Consultants prepared reports of survey results that were reviewed committee chairs who, in turn, reviewed with their respective committee members.
Compensation Practices Review
On an annual basis the compensation committee reviews its compensation policies, plans and practices as required by the SEC. The focus of this review is to identify any risks arising from compensation policies, plans, or practices that are “reasonably likely to have a material adverse effect” on Reliant Bancorp or its subsidiaries. In turn, the committee takes action as necessary to eliminate or mitigate such risks. This review covers executive officers as well as all employees.
Between December 2017 and January 2018, the compensation committee conducted the risk assessment of compensation and reviewed a comprehensive report on all variable compensation plans that offer cash or stock as bonus/incentive compensation. The committee found that Reliant Bancorp’s compensation policies, plans, and practices do not encourage unnecessary or unreasonable risk-taking and do not give rise to risks that are reasonably likely to have a material adverse effect on Reliant Bancorp or its subsidiaries. Compensation plans are designed to balance the various elements of compensation (salaries, short-term bonus/incentives, and long-term incentives) and, in turn, create a balanced focus on operating results, long-term performance, and the creation of shareholder value. Key plans related to executive officer cash incentives and all stock-based grants are administered by the compensation committee and the board of directors.
Compensation Philosophy
Reliant Bancorp’s overall executive compensation philosophy is to align its compensation program with optimizing shareholder value. To that end, the program is designed to recognize superior operating performance and to attract, retain and motivate the executive talent essential to the Company’s financial success. Consistent with this philosophy, the compensation committee is guided by the following objectives when administering the Company’s overall compensation program:
● | Attract and retain highly qualified executives who portray the Company’s culture and values; |
● | Motivate executives to provide excellent leadership and achieve the Company’s goals; |
● | Provide substantial performance-related incentive compensation that is aligned with the Company’s strategies and directly tied to meeting specific Company and market objectives; |
● | Strongly link the interests of the executives to the value derived by the Company’s shareholders from owning the Company’s common stock; and |
● | Be fair, ethical, transparent, and accountable in setting and disclosing executive compensation. |
In furtherance of these objectives, the following considerations underlie the compensation committee’s determination with respect to the following principal elements of compensation for the named executive officers:
Base Salary | Individual salary determinations are based upon the officer’s job assignment, qualifications, behaviors, cultural adherence and performance. |
Annual Cash Incentives | Executives have a portion of their total cash compensation at risk and contingent upon meeting key Company and market objectives. |
Cash Bonuses | Executives are eligible for additional cash compensation in the form of bonuses (distinct from annual incentives) which recognize significant achievements and contributions to the Company’s success that are not captured under our annual incentive plan. |
Long-Term Equity-BasedAwards | Executives who are critical to the Company’s long-term success participate in long-term incentive opportunities that link a portion of their total compensation to increasing shareholder value. |
Retirement Plans and Other Benefits | Executives participate in the Company’s benefit programs, such as health insurance, 401(k) plan, vacation, and life insurance, at a level consistent with policy, prevailing law and current regulation. |
Total compensation is intended to correlate to the Company’s ability to grow earning assets, which in turn enhances the Company’s growth in shareholder value. The compensation committee did not use competitive salary surveys to determine or measure the total compensation of the named executive officers. However, the Company’s compensation consultant has provided the committee with a report on market salary levels for the review of executive and officer salaries. A portion of each named executive officer’s total compensation consists of cash payments, including base salary and/or annual cash incentive awards.
Compensation of Directors and Executive Officers
Summary Compensation Table and NarrativeNarrative for Fiscal Year 20142017
The following table shows
Under rules established by the SEC, Reliant Bancorp is required to provide certain data and information regarding the compensation Commerce Unionand benefits awarded to, earned by or paid for the years ended December 31, 2013 and 2014 to its president and chiefall persons who served as principal executive officer and ourprincipal financial officer of the Company during 2017 and the three other most highly compensated other executive officers who earned over $100,000 for the year ended 2014 (collectively, the(the “named executive officers”). Additionally,The disclosure requirements include the use of tables and narrative discussion of any material factors necessary to an understanding of the information disclosed in the tables. The summary compensation table below presents historicalsets forth certain elements of compensation information for Reliant’s most highly-compensatedthe named executive officers for the years ended December 31, 2013 and 2014.periods indicated.
COMMERCE UNION | ||||||||||||||||||||||||||||||||||||
Name and principal position | Year | Salary ($) | Bonus (1)($) | Stock awards ($) | Option awards ($) | Non-equity incentive plan compensation ($) | Non-qualified deferred compensation earnings ($) | All other compensation (1)(2)(3)(4)($) | Total ($) | |||||||||||||||||||||||||||
Ron DeBerry, | 2014 | 244,535.72 | 39,375.00 | — | — | — | — | 27,955.72 | 311,866.44 | |||||||||||||||||||||||||||
President and Chief Executive Officer | 2013 | 235,000.07 | — | — | — | — | — | 26,300.50 | 261,300.57 | |||||||||||||||||||||||||||
Rick Murray, | 2014 | 155,689.68 | 21,825.00 | — | — | — | — | 26,872.52 | 204,387.20 | |||||||||||||||||||||||||||
Chief Financial Officer | 2013 | 147,375.00 | 11,750.00 | — | — | — | — | 39,045.72 | 198,170.72 | |||||||||||||||||||||||||||
Scott Bagwell, | 2014 | 170,738.56 | 13,685.00 | — | — | — | — | 28,294.25 | 212,717.81 | |||||||||||||||||||||||||||
Chief Lending Officer | 2013 | 164,696.66 | 14,000.00 | — | — | — | — | 39,821.99 | 218,518.65 | |||||||||||||||||||||||||||
Paula DeBerry, | 2014 | �� | 169,960.76 | 31,122.00 | — | — | — | — | 27,937.51 | 229,020.27 | ||||||||||||||||||||||||||
Chief Retail Officer | 2013 | 137,185.00 | 14,000.00 | — | — | — | — | 26,342.81 | 177,527.81 | |||||||||||||||||||||||||||
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| RELIANT BANK | ||||||||||||||||||||||||||||||||||||
Name and principal position | Year | Salary ($) | Bonus (5)($) | Stock awards ($) | Option awards ($) | Non-equity incentive plan compensation($) | Non-qualified deferred compensation earnings ($) | All other compensation (5)(6)($) | Total ($) | |||||||||||||||||||||||||||
DeVan D. Ard, Jr., | 2014 | 307,500 | 50,000 | — | — | — | — | 57,035 | 414,535 | |||||||||||||||||||||||||||
President and Chief Executive Officer | 2013 | 300,000 | 215,000 | — | — | — | — | 44,512 | 559,512 | |||||||||||||||||||||||||||
J. Daniel Dellinger, | 2014 | 215,000 | 30,000 | — | — | — | — | 30,000 | 273,561 | |||||||||||||||||||||||||||
Executive Vice President and Chief Operating Officer | 2013 | 210,000 | 42,000 | — | — | — | — | 29,341 | 281,341 | |||||||||||||||||||||||||||
Name and principal position | Year | Salary | Bonus(1) | Stock | Option | Non-equity | Non-qualified deferred compensation earnings | All other (3) | Total | |||||||||||||||||||||
DeVan D. Ard, Jr. | 2017 | $ | 367,500 | $ | 16,179 | $ | 73,470 | $ | 21,840 | $ | 75,696 | $ | 37,329 | $ | 592,014 | |||||||||||||||
| President and Chief | 2016 | 320,000 | 38,100 | 9,775 | 91,226 | 44,522 | 503,623 | |||||||||||||||||||||||
| Executive Officer | 2015 | 320,000 | 68,250 | 11,900 | 82,140 | 38,198 | 520,488 | |||||||||||||||||||||||
J. Daniel Dellinger | 2017 | 235,000 | 8,276 | 24,490 | 7,280 | 38,724 | 29,090 | 342,860 | ||||||||||||||||||||||
| Chief Financial Officer | 2016 | 229,000 | 15,240 | 7,820 | 52,084 | 33,856 | 338,000 | |||||||||||||||||||||||
2015 | 222,000 | 27,300 | 9,520 | 45,588 | 23,981 | 328,389 | ||||||||||||||||||||||||
W. Ronald (Ron) DeBerry | 2017 | 205,000 | 7,704 | 36,046 | 62,500 | 311,250 | ||||||||||||||||||||||||
| Chief Executive Officer | 2016 | 320,000 | 1,500 | 38,100 | 9,775 | 90,976 | 24,717 | 485,068 | ||||||||||||||||||||||
| (retired June 30, 2017)(4) | 2015 | 306,230 | 68,250 | 11,900 | 82,140 | 26,608 | 495,128 | |||||||||||||||||||||||
Terry M. Todd Chattanooga Market President | 2017 | 208,917 | 25,473 | 219,900 | 48,150 | 16,455 | 518,895 | |||||||||||||||||||||||
Gene Whittle Chief Credit Officer (retired Dec. 31, 2017) | 2017 | 235,000 | 8,276 | 48,980 | 14,560 | 38,724 | 16,931 | 362,471 | ||||||||||||||||||||||
John Wilson Chief Lending Officer and Davidson/Williamson County Market President | 2017 | 235,000 | 8,276 | 73,470 | 7,280 | 38,724 | 42,072 | 404,822 | ||||||||||||||||||||||
(1) | In addition to |
(2) | Fair value of stock and option awards issued during the year(s) shown. The assumptions made in calculating these values are disclosed in Note 12 to our Consolidated Financial Statements in our 2017 annual report on |
| The table below itemizes the amounts shown in the column labeled “All Other Compensation” for |
2017 | 401(k) match | Automobile | Supplemental disability | Supplemental long term care | Cell phone | Club dues | Dividends on unvested restricted stock | |||||||||||||||||||||
Ard | $ | 10,800 | $ | 14,347 | $ | 3,982 | $ | 3,290 | $ | 900 | $ | 830 | $ | 3,180 | ||||||||||||||
Dellinger | $ | 10,800 | $ | 12,000 | $ | 3,229 | $ | 1,801 | $ | 0 | $ | 0 | $ | 1,260 | ||||||||||||||
DeBerry | $ | 10,600 | $ | 50,800 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 1,100 | ||||||||||||||
Todd | $ | 2,204 | $ | 10,900 | $ | 0 | $ | 0 | $ | 0 | $ | 1,551 | $ | 1,800 | ||||||||||||||
Whittle | $ | 10,800 | $ | 0 | $ | 1,391 | $ | 2,632 | $ | 1,248 | $ | 0 | $ | 860 | ||||||||||||||
Wilson | $ | 10,800 | $ | 18,000 | $ | 8,382 | $ | 2,310 | $ | 1,200 | $ | 0 | $ | 1,380 | ||||||||||||||
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(4) | In 2017, Mr. DeBerry received $175,000 in salary and $30,000 as compensation for |
Outstanding Equity Awards at Fiscal Year-End
The following table shows the number of shares covered by both exercisable and non-exercisable options owned by the individuals who were executives of Commerce Union in 2014 and named in the Summary Compensation Table as of December 31, 2014,2017, as well as the related exercise prices and expiration dates. Options are granted pursuant to Commerce Union’s stock option plan.the Company’s 2011 Stock Option Plan or 2015 Equity Plan.
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||||||||||||||||||||||||||
Ron DeBerry | 78,750 | — | — | $ | 9.52 | 8/23/2016 | — | — | — | — | ||||||||||||||||||||||||||
Rick Murray | 21,000 | $ | 11.67 | 2/28/2018 | — | — | — | — | ||||||||||||||||||||||||||||
Scott Bagwell | 21,000 | — | — | $ | 9.52 | 8/23/2016 | — | — | — | — | ||||||||||||||||||||||||||
Paula DeBerry | 21,000 | — | — | $ | 11.43 | 3/1/2017 | — | — | — | — | ||||||||||||||||||||||||||
| Option Awards | Stock Awards | |||||||||||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Equity Plan | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested(1) | Equity of Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested | |||||||||||||||||||
| 4,085 | -- | -- | 14.69 | 02/20/2018 | 10,500 | $ | 269,220 | -- | -- | |||||||||||||||||||
| DeVan D. | 5,107 | -- | -- | 14.69 | 06/22/2019 | -- | -- | -- | -- | |||||||||||||||||||
| Ard, Jr. | 2,000 | 3,000 | -- | 13.65 | 07/23/2025 | -- | -- | -- | -- | |||||||||||||||||||
| 833 | 1,667 | -- | 15.24 | 07/26/2026 | -- | -- | -- | -- | ||||||||||||||||||||
| -- | 3,000 | -- | 24.49 | 07/31/2027 | -- | -- | -- | -- | |||||||||||||||||||
| 2,554 | -- | -- | 14.69 | 02/20/2018 | 4,000 | $ | 102,560 | -- | -- | |||||||||||||||||||
| 3,064 | -- | -- | 14.69 | 06/22/2019 | -- | -- | -- | -- | ||||||||||||||||||||
J. Daniel | 2,600 | 3,900 | -- | 13.65 | 07/23/2025 | -- | -- | -- | -- | |||||||||||||||||||
| Dellinger | 1,021 | -- | -- | 7.34 | 02/14/2022 | -- | -- | -- | -- | |||||||||||||||||||
| 400 | 1,600 | -- | 15.24 | 07/26/2026 | -- | -- | -- | -- | ||||||||||||||||||||
| -- | 1,000 | -- | 24.49 | 07/31/2027 | -- | -- | -- | -- | ||||||||||||||||||||
William Ronald | 9,000 | -- | -- | 13.65 | 07/23/2025 | 250 | $ | 6,410 | -- | -- | ||||||||||||||||||
(Ron) DeBerry | 2,500 | -- | -- | 15.24 | 07/26/2026 | -- | -- | -- | -- | |||||||||||||||||||
| Terry M. Todd | -- | -- | -- | -- | -- | 10,000 | $ | 256,400 | -- | -- | ||||||||||||||||||
| -- | 2,400 | -- | 13.65 | 07/23/2025 | 3,666 | 93,996 | -- | -- | ||||||||||||||||||||
| Gene | -- | 1,600 | -- | 15.24 | 07/26/2026 | -- | -- | -- | -- | |||||||||||||||||||
| Whittle | -- | 2,000 | -- | 24.49 | 07/31/2027 | -- | -- | -- | -- | |||||||||||||||||||
| 2,043 | -- | -- | 14.69 | 02/20/2018 | 6,000 | 153,840 | -- | -- | ||||||||||||||||||||
| John | 2,553 | -- | -- | 14.69 | 06/22/2019 | -- | -- | -- | -- | |||||||||||||||||||
| Wilson | 1,600 | 2,400 | -- | 13.65 | 07/23/2025 | -- | -- | -- | -- | |||||||||||||||||||
| 400 | 1,600 | -- | 15.24 | 07/26/2026 | -- | -- | -- | -- | ||||||||||||||||||||
| -- | 1,000 | -- | 24.49 | 07/31/2027 | -- | -- | -- | -- | |||||||||||||||||||
(1) | Based on closing price of $ 25.64 on 12/29/2017, which was the last trading day of the fiscal year. |
New Employment Agreements.
Effective April 1, 2015, upon the consummation of the merger between Commerce Union Bank
Messrs. Ard, Dellinger, and Reliant, Mr. DeBerry, Ms. DeBerry, Mr. Bagwell, Mr. Murray, Mr. Ard and Mr. DellingerTodd have entered into new employment agreements with Commerce UnionReliant Bancorp and/or Commerce Union Bank. EachReliant Bank, each of the new employment agreements containswhich contain the following provisions, among others:
Severance on Termination by Employer without Cause or by Employee with Good Reason. For termination of each named executive officer by Commerce UnionReliant Bancorp without cause Commerce Unionor by the named executive officer with good reason (as defined in the employment agreement), Reliant Bancorp and/or Commerce UnionReliant Bank, as applicable, shallwill be required to pay a severance benefit equal to one times each such named executive officer’s annual base salary, payable over 12 months, and reimburse such executive officer for the reasonable cost of premium payments paid by the executive officer to continue then-existing health insurance coverage for 12 months.
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Severance on Termination by Executive Officer with Cause. For termination for cause by an executive officer resulting from a (A) material reduction in duties or responsibilities, (B) a material reduction in such named executive officer’s salary, or (C) a change in the location of employment outside of a 75 mile radius from such named executive officer primary office, Commerce Union or Commerce Union Bank, as applicable, shall be required to pay a severance benefit equal to one times the executive officer’s annual base salary, payable over 12 months, and reimburse the executive officer for the reasonable cost of premium payments paid by the executive officer to continue then-existing health insurance coverage for 12 months.
Severance on Change of Control. If within 12 months following any change of control such named executive officer is terminated by Commerce UnionReliant Bancorp and/or Commerce UnionReliant Bank (or their successor(s)), as applicable, without cause or the executive officer terminates for cause resulting from a (A) material reduction in duties or responsibilities, (B) a material reduction in the executive officer’s salary, or (C) a change in the location of employment outside of a 75-mile radius from the executive officer’s primary office, the executive officer shall receive as liquidated damages a severance payment equal to one times the executive officer’s annual base salary in one lump sum payment. Additionally, Commerce UnionReliant Bancorp shall reimburse such named executive officer for the reasonable cost of premium payments paid by such named executive officer to continue then-existing health insurance coverage for 12 months.
DIRECTOR COMPENSATION
During
Non-employee members of the year ended December 31, 2014, each director of Commerce UnionReliant Bancorp and Reliant Bank received a retainer in the amount of $6,000 and fees of $150 for attendance at each board meeting and $300 for attendance at each committee meeting. The chairman of Commerce Union Bank’s boardboards of directors and the chairman of the board’s audit committee received additional retainers in the amount of $1,500. Mr. DeBerry, as an employee of Commerce Union, did noteach receive any board fee. He is not listed in the table below because his compensation as a named executive officer is described above. The following is a summary of the compensation paid to directors for 2014.
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||
Charles Trimble Beasley | 17,525 | — | — | — | — | — | 17,525 | |||||||||||||||||||||
Jane Ellis Bellar * | 12,150 | — | — | — | — | — | 12,150 | |||||||||||||||||||||
John Lewis Bourne | 12,975 | — | — | — | — | — | 12,975 | |||||||||||||||||||||
James Gilbert Hodges | 15,375 | — | — | — | — | — | 15,375 | |||||||||||||||||||||
Gwendolous Verdella Martin * | 9,200 | — | — | — | — | — | 9,200 | |||||||||||||||||||||
Nancy Jo Martin * | 9,675 | — | — | — | — | — | 9,675 | |||||||||||||||||||||
Leland Gray Scott, Jr.* | 10,925 | — | — | — | — | — | 10,925 | |||||||||||||||||||||
Don Richard Sloan | 13,350 | — | — | — | — | — | 13,350 | |||||||||||||||||||||
Marvin Leroy Smith* | 10,650 | — | — | — | — | — | 10,650 | |||||||||||||||||||||
William Robert McKinney, Jr.* | 13,875 | — | — | — | — | — | 13,875 | |||||||||||||||||||||
2015 Director Compensation
On April 23, 2015, the board of directors adopted a new compensation structure for the board of directors of the post-merger organization. Under the new compensation structure, non-employee board members will receive ancombined annual retainer of $12,000 and$20,000 for his or her service to the boards. In addition, non-employee members receive $1,000 for every Reliant Bancorp board meeting attended in excess of six meetings per year. During 2017, each non-employee member of the Reliant Bancorp board was granted 250 shares of restricted stock vesting 12 months from the date of grant. Additionally, each voting memberthe chair of the nominating and corporate governance committee will receivereceives an annual retainer of $4,000, each voting memberthe chair of the
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audit committee will receivereceives an annual retainer of $12,000, and each voting memberthe chair of the compensation committee will receivereceives an annual retainer of $4,000$4,000. Each of the other voting members of the nominating and governance committee receives an annual retainer of $3,000. Each of the other voting members of the audit committee receives an annual retainer of $6,000, and each of the other voting members of the compensation committee receives an annual retainer of $3,000 for his or her committee service. Non-employee members of the executive committee will receive $500 for each meeting attended. Executive officers serving on the boards or committees thereof are not compensated for board or committee service.
Other Compensation Arrangements
AsThe table below includes fees payable to Reliant Bancorp board members who also serve on the Reliant Bank board and committees. The chair of Reliant Bank receives an annual retainer of $10,000, and all non-employee members of the effective timeReliant Bank board receive $500 for every board meeting attended in excess of 12 meetings per year. Additionally, the non-employee voting members of Reliant Bank’s loan committee receive an annual retainer of $4,000. The non-employee voting members of Reliant Bank’s ALCO committee receive an annual retainer of $1,600. The non-employee voting members of the merger between Commerce Union Bank and Reliant Bank Jane Ellis Bellar, Gwendolous Verdella Martin, Nancy Jo Martin, William Robert McKinney, Jr., Leland Gray Scott, and Marvin Leroy Smith, III resigned fromcompliance committee receive an annual retainer of $1,600.
The following is a summary of the compensation payable by Reliant Bancorp to its directors for the fiscal year ended 2017.
Name(1) | Fees Earned or Paid in Cash | Stock Awards(2) | Option Awards | Non-Equity Incentive Plan Compensation | Nonqualified Deferred Compensation Earnings | All Other Compensation | Total | |||||||||||||||||||||
Charles Trimble Beasley | $ | 39,000 | $ | 6,122 | -- | -- | -- | -- | $ | 45,122 | ||||||||||||||||||
John Lewis Bourne | 31,000 | 6,122 | -- | -- | -- | -- | 37,122 | |||||||||||||||||||||
James Gilbert Hodges | 30,000 | 6,122 | -- | -- | -- | -- | 36,122 | |||||||||||||||||||||
Don Richard Sloan | 24,000 | 6,122 | -- | -- | -- | -- | 30,122 | |||||||||||||||||||||
Homayoun Aminmadani | 35,400 | 6,122 | -- | -- | -- | -- | 41,522 | |||||||||||||||||||||
Sharon Edwards | 37,500 | 6,122 | -- | -- | -- | -- | 43,622 | |||||||||||||||||||||
Farzin Ferdowsi | 40,000 | 6,122 | -- | -- | -- | -- | 46,122 | |||||||||||||||||||||
Darrell S. Freeman, Sr. | 30,000 | 6,122 | -- | -- | -- | -- | 36,122 | |||||||||||||||||||||
James R. Kelley | 28,600 | 6,122 | -- | -- | -- | -- | 34,722 | |||||||||||||||||||||
William R. DeBerry (3) | 14,300 | 6,122 | 20,422 | |||||||||||||||||||||||||
(1) | Directors Daniel, Holloway and Vest were appointed to the board of directors effective January 1, 2018, and accordingly, received no compensation during 2017. |
(2) | All non-employee members of the Reliant Bancorp board of directors received a restricted stock award of 250 shares on July 31, 2017. The compensation figure presented reflects a grant date fair value of $24.49 per share. |
(3) | Mr. DeBerry retired as the Reliant Bancorp Chief Executive Officer effective June 30, 2017, and began receiving fees as a non-employee member of the board of directors after his retirement. |
2018 Director Compensation
The board of directors of Commerce Union. Additionally,will receive the same compensation in 2018 under the compensation plan that was approved subsequent to the merger, subject to adjustment as the board sees fit in conjunction with the advice of the effective time of the merger, Mmes. Bellar, G. Martin,compensation committee and N. Martin and Mr. Scott will also resign from the board of directors of Commerce Union Bank. In connection with their resignations from the board of directors of both Commerce Union and Commerce Union Bank, each of Mmes. Bellar, G. Martin, and N. Martin and Mr. Scott entered into an agreement with Commerce Union and Commerce Union Bank. Each such agreement provides that Commerce Union or Commerce Union Bank will pay the resigning director a severance payment of $10,000. Additionally, pursuant to such agreements, these individuals have agreed that, for a period of 24 months, they shall refrain from, among other things, joining the board of directors or being employed by any other regulated financial institution, working with any individual or group of individuals in connection with organizing another financial institution that would compete with Commerce Union Bank, soliciting any employees of Commerce Union Bank to leave Commerce Union Bank, encouraging customers of Commerce Union Bank to move their business to any other financial institution, disclosing any confidential or proprietary information of or regarding Commerce Union or Commerce Union Bank. Pursuant to such agreements, each director also releases Commerce Union and Commerce Union Bank from any and all claims that the director has or any time had against Commerce Union or Commerce Union Bank.its independent consultant.
Certain Relationships and Related Transactions
We make loans and enter into other transactions in the ordinary course of business with our directors and officers and their affiliates. It is our policy that these loans and other transactions substantially be on the same terms (including price or interest rates and collateral) as those prevailing at the time for comparable transactions with unrelated parties. We do not expect these transactions to involve more than the normal risk of collectability nor present other unfavorable features to us. Loans to individual directors and officers must also comply with our lending policies and statutory lending limits, and directors with a personal interest in any loan application are excluded from the consideration of the loan application. Our policy is that all of our transactions with our affiliates will be on terms no less favorable to us than could be obtained from an unaffiliated third party and will be approved by a majority of disinterested directors or by our audit committee.
Section 16(a) Beneficial Ownership Reporting Compliance
On May 13, 2015, we filed a Form 8-A to register our common stock under Section 12(b) of the Securities Exchange Act of 1934, in connection with our application to list on the NASDAQ Capital Market. At that time, our directors and executive officers became subject to
Section 16(a) of the Securities Exchange Act of 1934 to report periodically their ownershiprequires that our executive officers and directors and persons who beneficially own more than 10% of our common stock file with the SEC certain reports, and any changes infurnish copies thereof to us, with respect to each such person’s beneficial ownership of our equity securities. Based solely upon a review of the copies of the reports furnished to the SEC. We believe that all such reports forus and certain representations of these persons, were filed in aall of these persons timely fashion since that time.complied with the applicable reporting requirements.
PROPOSAL
ITEM TWO
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
The audit committee of our board of directors has selected Maggart & Associates, P.C. as independent registered public accountants to audit our consolidated financial statements for the fiscal year ending December 31, 2015.2018. Maggart & Associates, P.C. has served as our independent registered public accountants since their appointment in 2006. A representative of Maggart & Associates, P.C. is expected to be present at the annual meeting, with the opportunity to make a statement if the representative desires to do so, and is expected to be available to respond to appropriate questions.
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Audit and Non-Audit Fees
The following table presents the aggregate fees billed to Commerce UnionReliant Bancorp for professional services rendered by Maggart & Associates for the fiscal years ended December 31, 20132016 and December 31, 2014:2017.
Services | 2013 | 2014 | ||||||
Audit Fees | $ | 43,175 | $ | 43,430 | ||||
Audit Related Fees | — | — | ||||||
Tax Fees (1) | 4,975 | 5,923 | ||||||
All Other Fees (2) | — | $ | 253,858 | |||||
| Services | 2016 | 2017 | ||||||
Audit Fees(1) | $ | 163,650 | $ | 165,565 | ||||
Audit Related Fees(2) | $ | -- | $ | 5,000 | ||||
(1) | Audit fees are for |
(2) | $5,000 for merger-related services. |
The charter of the audit committee provides that the duties and responsibilities of the audit committee include the pre-approval of all services that may be provided to Commerce UnionReliant Bancorp by the independent accountants whether or not related to the audit. In fiscal years 20132017 and 2014,2016, these fees described above were approved by the audit committee.
OUR BOARD
our Board of Directors recommends that the shareholders vote “FOR” the ratification of Maggart & Associates, P.C. as our independent registered public accountants for our fiscal year ending December 31, 2018.
ITEM THREE
ARTICLES OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” THE RATIFICATION OF MAGGART & ASSOCIATES, P.C. AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS FOR OUR FISCAL YEAR ENDING DECEMBER 31, 2015.AMENDMENT
PROPOSAL THREE
APPROVAL OF THE COMMERCE UNION BANCSHARES, INC. 2015 EQUITY INCENTIVE PLANSummary
General
On April 23, 2015,The Reliant Bancorp board of directors is proposing an amendment to the Company’s charter which, if approved by our shareholders, will (i) declassify the board of directors adopted, subjectand (ii) establish a majority vote standard for uncontested director elections. If our shareholders approve the proposed amendment to approval by Commerce Union’sthe charter, all directors elected after the annual meeting will be elected for one-year terms, and a nominee for director in an uncontested election will be elected if the number of votes cast “for” the nominee at the meeting of shareholders exceeds the Commerce Union Bancshares, Inc. 2015 Equity Incentive Plan (the “2015 Plan”). number of votes cast “against” the nominee.
The purposecomplete text of the 2015 Plan isproposed Articles of Amendment to promote the company’s interests by attracting and retaining employees through performance-related incentives to achieve long-range performance goals, enabling employees to participate in the financial success of the company, encouraging ownership of company stock by employees, and linking employees’ compensation to the long-term interests of the company and its shareholders. Additionally, the 2015 Plan provides for compensation for directors of Commerce Union and its subsidiaries for their service as members of the various boards of directors through grants of non-qualified options and/or restricted stock. The 2015 Plan provides for compensation through incentive stock options, non-qualified stock options, restricted stock grants, and performance-based cash and equity awards.
The 2015 Plan provides for the issuance of options to purchase and awards of up to 900,000 shares of Commerce Union’s common stock. To date, no new grants have been made under the 2015 Plan. The Commerce Union Bancshares,Reliant Bancorp, Inc. Amended and Restated Stock Option Plan (the “stock option plan”Charter of Incorporation (which we refer to as the “amendment”) is included at Appendix A to this proxy statement. The following summary of the amendment is qualified in its entirety by reference to the text of the amendment. You are urged to read the amendment in its entirety.
Declassification of the Board of Directors
Our charter currently divides members of the board of directors into three classes, with each director serving until the date of the third annual meeting following the annual meeting at which the director was elected and until the director’s successor is duly elected and qualified. As a result, approximately one-third of the board of directors stands for election each year – an arrangement commonly known as a “classified” or “staggered” board.
Based on the board of director’s evaluation of the Company’s corporate governance practices and after due consideration of the interests of the Company and its shareholders, the board of directors has approved the proposed amendment, which will declassify the board of directors and establish annual terms for directors elected after the 2018 annual meeting.
The board of directors carefully considered the advantages of both classified and declassified board structures. A classified board of directors can promote continuity and enhance the stability of the board, encourage a long-term perspective on the part of directors and reduce a company’s vulnerability to coercive takeover tactics. The board of directors recognized these advantages but concluded that they were outweighed by the advantages of the shareholders’ ability to evaluate all directors annually. Consequently, the board of directors concluded that an amendment to the Company’s charter to declassify the board of directors is in the best interests of the Company and its shareholders.
If the Company’s shareholders approve the proposed amendment to the charter, the elimination of the classified structure of the board of directors will be phased in beginning with the 2019 annual meeting of shareholders, and all nominees for election as directors will be elected to serve for one-year terms beginning in 2019. During the phase-in period, the nominees for election as Class II directors at the 2019 annual meeting of shareholders will each be elected to serve for a one-year term expiring at the 2020 annual meeting, and the nominees for election as Class III directors at the 2020 annual meeting will be elected to serve for one-year terms expiring at the 2021 annual meeting. Beginning with the 2021 annual meeting, the board of directors will no longer be classified, and all director nominees will be elected for one-year terms. No term of an existing director will be shortened or otherwise modified as a result of adoption of the amendment.
If our shareholders do not approve the amendment, the board of directors will remain classified and directors will continue to be elected for three-year terms.
Majority Voting Standard for Board Elections
Under Tennessee law, directors are normally elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present. A voting standard other than a plurality may only be used if it is specified in a corporation’s charter. In addition to declassifying the board as described above, the proposed amendment will also amend the Company’s charter so that a nominee for director in an uncontested election will be elected if the number of votes cast “for” the nominee exceeds the number of votes cast “against” the nominee. An “abstain” vote will have no effect on the outcome of the election, but will be counted for purposes of determining whether a quorum is present at a meeting of shareholders. For contested elections in which there are more director candidates than director positions to be elected, the voting standard will continue to be a plurality of votes cast.
Under Tennessee law, an incumbent director nominee who is not re-elected at a meeting of shareholders continues to serve on the board of directors until his or her successor is elected and qualified or until there is a decrease in the number of directors. The board of directors believes that it needs an orderly process to address the ongoing composition of the board of directors if one or more directors receive a majority of votes cast “against” their reelection. Accordingly, if the proposed amendment is adopted, the board of directors intends to maintain the Company’s existing majority voting/director resignation policy in the Corporate Governance Guidelines. The current policy requires any incumbent director nominee who receives more “against” or withheld votes than “for” votes in an uncontested director election to tender his or her resignation.
If the proposed amendment is approved, the majority vote standard would be applicable to the election of directors at the 2019 annual meeting of shareholders. In the event the shareholders do not approve this proposal, the charter will remain unchanged and director nominees in effect until March 23, 2021. uncontested elections will continue to be elected by a plurality of the votes cast, but will be subject to the majority voting/director resignation policy in the Corporate Governance Guidelines.
Vote Required and Board Recommendation
The stock option plan permitsproposed amendment to declassify the grantboard of awardsdirectors and adopt a majority vote standard in director elections has been unanimously approved by the board of up to 1,250,000directors. The proposed amendment requires the affirmative vote of the holders of a majority of the outstanding shares of Commerce Unionour common stockstock. Contingent on the requisite number of shares voting in favor of this proposal, the formboard of stock options. The stock option plan seeksdirectors has approved an amendment to advance the interestsCompany’s bylaws to similarly provide for the elimination of Commerce Uniona classified board structure and to reflect the majority vote standard for director elections. If this proposal is not approved by the requisite vote of the Company’s shareholders, the amendment to the Company’s charter will not become effective, the board of directors will not be declassified, and directors will continue to be elected by offering management and employeesa plurality of Commerce Union and Commerce Union Bank a flexible means of compensation and motivation for outstanding performance and by offering directors and organizers with a grant of equity for furthering the growth and profitability of each entity.votes.
The board believes it is advisable forof directors recommends a vote “FOR” approval of the charter amendment proposal.
ITEM FOUR
RELIANT BANCORP, INC. 2018 EMPLOYEE STOCK PURCHASE PLAN
We are asking our shareholders to approve the adoption of the 2015Reliant Bancorp Inc. 2018 Employee Stock Purchase Plan to continue to have options available to encourage directors, officers and key(the “employee stock purchase plan” or the “plan”).
The board believes that an employee stock purchase plan encourages the Company’s employees to remainacquire shares of common stock, thereby fostering broad alignment of employees’ interests with Commerce Unionthe interests of our shareholders. Additionally, the board has determined that a stock purchase plan fosters good employee relations, and Commerce Union Bankprovides the Company with an improved ability to recruit, retain, and reward employees in an extremely competitive environment. To provide this valuable element of the Company’s compensation program, the board recommends that the shareholders approve the employee stock purchase plan.
The board of directors adopted the employee stock purchase plan on March 27, 2018, subject to and effective as of receipt of shareholder approval of the employee stock purchase plan proposal at the annual meeting. The board believes that approval of the employee stock purchase plan is in the best interests of the Company and its shareholders.
If the shareholders approve the employee stock purchase plan proposal, the plan will become effective as of the date of the annual meeting, with the first offering period under the plan to commence on January 1, 2019 and to attract new, qualified officers, employees and directors in today’s competitive market.
17Key Features of the Employee Stock Purchase Plan
As described further below, the employee stock purchase plan generally:
● | Reserves 200,000 shares of common stock for issuance pursuant to the employee stock purchase plan; |
● | Unless otherwise determined by the Administrator, permits a participant to contribute a whole percentage up to 15% of his or her eligible compensation each pay period through after-tax payroll deductions; |
● | Unless otherwise determined by the Administrator, establishes six-month offering periods commencing on the first trading day of January and July of each calendar year and ending on the last trading day of June and December, respectively; |
● | Permits participants to purchase shares of common stock at up to a 15% discount; and |
● | Limits the value of shares that a participant may accrue in a calendar year to $25,000 and, unless otherwise determined by the Administrator, the number of shares that a participant may purchase in an offering period to 2,500 shares of common stock. |
Summary of the 2015Material Provisions of Employee Stock Purchase Plan
The following description
A summary of the 2015 Plan is intended to highlight and summarize the principalmaterial terms of the 2015 Plan, andemployee stock purchase plan is set forth below. This summary is qualified in its entirety by the text of the 2015 Plan. The full text of the 2015 Plan is available asAppendix A provided herewith.
Plan Term. The 2015 Plan’s term will commence effective upon the approval by a majority of the shares of common stock represented and voting at the annual meeting. Assuming that the 2015 Plan is approved by Commerce Union’s shareholders on June 18, 2015, the term will commence on June 18, 2015, and will terminate on June 18, 2025 (subject to early termination as described herein).
Administration. The 2015 Plan will be administered by a committee of the board, which the board has designated to the compensation committee. Subject to the expressdetailed provisions of the 2015 Plan,employee stock purchase plan, a copy of which is attached as Appendix B to this proxy statement and which is incorporated by reference into this plan description. We encourage shareholders to read and refer to the compensation committee is authorized to construe and interpret the 2015 Plan, and make all the determinations necessary or advisablecomplete plan document in Appendix B for administrationa more complete description of the 2015 Plan.plan.
Eligible Participants.Interpretation. The 2015 Plan provides that all directors and employees of Commerce Union, its affiliated companies, and subsidiaries are eligible to receive grants ofemployee stock options, restricted stock, and performance-based cash and equity awards. Subject to the certain limitations, the compensation committee is empowered to determine which eligible participants, if any, should receive options, the number of shares subject to each option,purchase plan and the terms and provisions ofoptions granted under the option agreements.
Shares Subjectemployee stock purchase plan are intended to satisfy the 2015 Plan. 900,000 shares of commonrequirements for an “employee stock are covered by the 2015 Plan, which constitutes 12.74% of the shares outstanding as of May 1, 2015. Options will be granted at no less than the fair market value of the common stock as of the date of grant.
Incentive and Non-Qualified Stock Options. The 2015 Plan provides for the grant of both incentive stock options and non-qualified options. Incentive stock options are available only to persons who are employees of Commerce Union or its subsidiaries, and are subject to limitations imposed by applicable sectionspurchase plan” under Section 423 of the Internal Revenue Code of 1986 as amended (the “Code”), including a $100,000 limit on. Notwithstanding the aggregate fair market valueforegoing, the Company is not obligated to, and is not promising that it will, maintain the qualified status of shares of commonthe employee stock with respect to which incentive stock options are exercisable for the first time by an optionee duringpurchase plan or any calendar year (under the 2015 Plan and all other “incentive stock option” plans of Commerce Union). Any options granted under the 2015 Plan whichthereunder. Options that do not meetsatisfy the limitationsrequirements for incentivean “employee stock options, or which are otherwise not deemed to be incentive stock options, shall be deemed “non-qualified”. Subject to the foregoing and other limitations set forth in the 2015 Plan, the exercise price, permissible time or times of exercise, and the remaining terms pertaining to any option are determined by the compensation committee; however, the per share exercise pricepurchase plan” under any option may not be less than 100%Section 423 of the fair market value of the common stock on the date of grant of the option.
Restricted Stock Grants. The 2015 Plan provides that the compensation committee may grant restricted stock to employees or directors. Restricted stock grants shall consist of shares of common stock granted to a participant, subject to certain restrictions against disposition and certain obligations to forfeit such shares to the company.
Performance Based Awards. The compensation committee may set one or more performance goals, award amounts and performance periods. The performance goals measure performance of our company or any subsidiary or business unit of our company within the performance period based on one or more of the following: (1) earnings or book value per share; (2) earnings, (3) return on equity, assets, capital or investment, (4) operating income or profit; (5) operating efficiencies; (6) the ratio of criticized/classified assets to capital; (7) allowance for loan and lease losses; (8) the ratio of non-performing assets to total assets; (9) the ratio of past due loans greater than 90 days and non-accruals to total loans; (10) the ratio of net charge-offs to average loans; (11) after-tax operating income; (12) cash flows; (13) total revenues or revenues per employee; (14) stock price or total shareholder return; (15) growth in loans, margins and/or deposits; (16) dividends; or (17) meeting specified revenue or expense targets; business, market and branch network expansion goals; and goals related to acquisition or divestitures. With respect to any covered officer, the maximum number of shares that may be granted as performance awards in each year of the performance period is 90,000 and the maximum amount of any cash award shall not exceed $200,000 in each year of the performance period.
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Adjustment Provision. In the event that the Company issues dividends of cash or stock, recapitalizes, splits its stock, reorganizes, merges, consolidates, issues of warrants or other rights to purchase company stock, or engages in certain other corporate transactions, then the 2015 Plan gives the compensation committee the ability to adjust the number of shares with respect to which awardsCode may be granted under the 2015 Plan,employee stock purchase plan pursuant to the number of shares subjectrules, procedures, or sub-plans adopted by the Administrator for certain eligible employees.
Share Reserve. Subject to outstanding awards underadjustment in connection with certain corporate transactions, the 2015 Plan, and to make certain other adjustments to awards under the 2015 Plan.
Award Agreements. At the time any award is made, the company and the participants will enter into an option agreement or restricted stock agreement (each, an “award agreement”) setting forth the terms of the award and such other matters as the compensation committee may determine to be appropriate. The terms and provisions of the award agreements need not be identical, and the compensation committee may, in its sole discretion, amend an outstanding award agreement at any time in any manner that is not inconsistent with the provisions of the 2015 Plan. The maximum number of shares that may be subject to awards granted to any one participant may not exceed 100% of the aggregate number of shares of common stock that may be issuedpurchased under the 2015 Plan (as adjustedemployee stock purchase plan, consisting of authorized but unissued shares, will be 200,000 shares of common stock.
Administration. The employee stock purchase plan will be administered, at the Company’s expense, under the direction of the board of directors, the compensation committee, or any other committee designated by the board from time to time in accordance with(any such entity, the provisions“Administrator”). The Administrator will have the authority to take any actions it deems necessary or advisable for the administration of the Plan).
Tax Effects of Participationemployee stock purchase plan, including, without limitation, (i) interpreting and construing the employee stock purchase plan and options granted thereunder, (ii) prescribing, adopting, amending, waiving, and rescinding rules and regulations it deems appropriate to implement the employee stock purchase plan, (iii) correcting any defect or supplying any omission or reconciling any inconsistency in the Plan
Stock Options. There are no federal income tax consequences toemployee stock purchase plan or options granted thereunder, (iv) establishing the participanttiming and length of offering periods, (v) establishing minimum and maximum contribution rates, and (vi) establishing new or to the companychanging existing limits on the granting of options. The federal tax consequences upon exercise will vary depending on whether the option is an incentive stock option or a nonqualified stock option.
Incentive Stock Options.When a participant exercises an incentive stock option, the participant will not at that time realize any income, and the company will not be entitled to a deduction. However, the difference between the fair market value of the shares on the exercise date and the exercise price will be a preference item for purposes of the alternative minimum tax. The participant will recognize capital gain or loss at the time of disposition of the shares acquired through the exercise of an incentive stock option if the shares have been held for at least two years after the option was granted and one year after it was exercised. The company will not be entitled to a tax deduction if the participant satisfies these holding period requirements. The net federal income tax effect to the holder of the incentive stock options is to defer, until the acquired shares are sold, taxation on any increase in the shares’ value from the time of grant of the option to the time of its exercise, and to tax such gain, at the time of sale, at capital gain rates rather than at ordinary income rates.
If the holding period requirements are not met, then upon sale of the shares the participant generally recognizes as ordinary income the excess of the fair market value of the shares at the date of exercise over the exercise price stated in the award agreement. Any increase in the value of the shares subsequent to exercise is long or short-term capital gain to the participant depending on the participant’s holding period for the shares. However, if the sale is for a price less than the value of the shares on the date of exercise, the participant might recognize ordinary income only to the extent the sales price exceeded the option price. In either case, the company is entitled to a deduction to the extent of ordinary income recognized by the participant.
Nonqualified Stock Options. Generally, when a participant exercises a nonqualified stock option, the participant recognizes income in the amount of the aggregate market price of the shares received upon exercise less the aggregate amount paid for those shares, and the company may deduct as an expense the amount of income so recognized by the participant. The holding period of the acquired shares begins upon the exercise of the option, and the participant’s basis in the shares is equal to the market price of the acquired shares on the date of exercise.
Restricted Stock. Under the Code, a participant generally will not recognize any income for federal income tax purposes at the time an award of restricted stock is made, nor will the company be entitled to a tax deduction at that time, unless the participant elects to recognize income at the time that award of restricted stock is made. If the participant does not make such election, the value of the common stock will be taxable to the participant as ordinary income in the year in which the Forfeiture Restrictions lapse with respect to such shares of stock. We have the right to deduct, in connection with all awards, any taxes required by law to be withheld and to require any payments required to enable it to satisfy our withholding obligations. We will generally be allowed an income tax deduction equal to the ordinary income recognized by the participant at the time of such recognition.
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Additional Tax Matters. We may not deduct compensation of more than $1,000,000 that is paid in a taxable year to certain “covered employees” as defined in Section 162(m) of the Code. The deduction limit, however, does not apply to certain types of compensation, including qualified performance-based compensation. We anticipate that some awards under the Plan will constitute qualified performance-based compensation for purposes of Section 162(m) of the Code.
Plan Benefits
Because no awards have been granted under the 2015 Plan as of the date of this proxy statement and all awards will be granted at the discretion of the compensation committee, it is not possible for us to determine and disclose the amounts of awards that may be granted to the named executive officers and the executive officers as a whole, if the 2015 Plan is approved.
Reasons for Authorization and Vote Required
The 2015 Plan is being submitted to the shareholders for approval pursuant to Section 162(m) of the Code. If a quorum is present, the proposal will be approved if the number of shares of common stock voted in favora participant may elect to purchase with respect to any offering period. The Administrator’s determinations will be final and binding upon all persons.
Eligibility. Generally, natural persons who are employees of the matterCompany or any subsidiary of the Company designated by the Administrator from time to time may be eligible to participate in the plan. But, the following employees are ineligible to participate in the employee stock purchase plan: (i) employees whose customary employment is 20 hours or less per week; (ii) employees whose customary employment is for not more than five months in any calendar year; and (iii) employees who, after exercising their options to purchase common stock under the employee stock purchase plan, would own, directly or indirectly, shares of common stock (including shares that may be acquired under any outstanding options under the employee stock purchase plan) representing five percent or more of the total combined voting power of all classes of the Company’s stock.
Notwithstanding the foregoing, for purposes of an offering under the employee stock purchase plan that is not intended to satisfy the requirements of Section 423 of the Code, the Administrator will have the authority to establish a different definition of eligible employee as it may deem advisable or necessary. In addition, the Administrator may determine that highly compensated employees (within the meaning of Section 414(q) of the Code) will not be eligible to participate in an offering period.
Participation Election. An eligible employee may become a participant for an offering period under the plan by completing and submitting an enrollment form to the Company or its designee, in the format and pursuant to the process as prescribed by the Administrator, during the enrollment period prior to the offering period to which it relates. Such enrollment form will authorize the Company to make after-tax payroll deductions up to 15% of the participant’s eligible compensation on each pay period following enrollment in the offering period under the employee stock purchase plan. The Administrator will credit the deductions or contributions to the participant’s account under the employee stock purchase plan.
Subject to certain exceptions, a participant may cease his or her contributions during an offering period by properly completing and timely submitting a new enrollment form at any time prior to the last day of such offering period. A participant may increase or decrease his or her contributions to take effect for the next offering period, by properly completing and timely submitting a new enrollment form.
Once an eligible employee becomes a participant in the employee stock purchase plan, the participant will automatically be re-enrolled in the next offering period until such time as the participant ceases his or her employment relationship with the Company or its affiliate for any reason or is no longer eligible to participate in the employee stock purchase plan or a specific offering period under the employee stock purchase plan.
Offering Periods. The Administrator will determine the length and duration of the periods during which contributions will accumulate to purchase shares of common stock, which period will not exceed 27 months. Each of these periods is known as an “offering period.” Unless otherwise established by the Administrator prior to the start of an Offering Period, the employee stock purchase plan will have two six-month offering periods commencing on the first trading day of January and July of each calendar year and ending on the last trading day of June and December, respectively.
Purchase Price. The Administrator will determine from time to time the purchase price per share of common stock under the employee stock purchase plan for an offering period. Unless otherwise determined by the Administrator before the start of an offering period, the purchase price per share of common stock under the employee stock purchase plan will be (and may not be less than) 85% of the lesser of the closing price of our common stock on (i) the first trading day of the relevant offering period or (ii) the last trading day of the relevant offering period.
Purchase of Shares. On the last trading day of the offering period, unless a participant’s participation in the employee stock purchase plan has otherwise been terminated, a participant is deemed to automatically exercise his or her option to purchase the maximum number of whole shares of common stock that may be purchased at the purchase price with the participant’s account balance at that time, adjusted as necessary in accordance with the terms of the employee stock purchase plan. The Administrator will cause the amount credited to each participant’s account to be applied to such purchase, and the amount applied to purchase shares of common stock pursuant to an option will be deducted from the applicable participant’s account.
Purchase Limitations. No participant may be granted an option to purchase shares of common stock under the employee stock purchase plan and under all other “employee stock purchase plans” of the Company and its subsidiaries which permits the participant’s right to purchase shares to accrue at a rate in excess of $25,000 for each calendar year in which the options are outstanding, determined as of the first trading day of the offering period. In addition, no participant may purchase more than 2,500 shares of common stock in any one offering period; provided, however, that prior to the start of an offering period, the Administrator may impose a different limit on the number of shares of common stock voted againsta participant may purchase during the matter. Abstentions, broker non-votes,offering period. The fair market value for this purpose will be equal to the closing price per share as reported on the Nasdaq Capital Market
If the Administrator determines that the total number of shares of common stock remaining available under the employee stock purchase plan is insufficient to permit all participants to exercise their options to purchase shares, the Administrator will make a participation adjustment and proportionately and uniformly reduce the number of shares purchasable by all participants. After such adjustment, the Administrator will refund in cash all affected participants’ account balances for such offering period as soon as practicable thereafter.
Termination of Participation. If a participant’s employment relationship terminates for any reason other than death prior to the last trading day of the offering period, then participant’s outstanding options to purchase shares of common stock will automatically terminate, and the failureAdministrator will refund in cash the participant’s account balance as soon as practicable thereafter.
If a participant is no longer eligible to returnparticipate in the employee stock purchase plan for any reason, the Administrator will refund in cash the affected participant’s account balance as soon as practicable thereafter. Once terminated, participation may not be reinstated for the then-current offering period, but, if otherwise eligible, the eligible employee may elect to participate in a signed proxysubsequent offering period.
Shareholder Rights. A participant will not be a shareholder or have no effectany rights as a shareholder with respect to shares of common stock subject to the participant’s options under the employee stock purchase plan until the shares of common stock are purchased pursuant to the options and such shares of common stock are transferred into the participant’s name on the outcomeCompany’s books and records. No adjustment will be made for dividends or other rights for which the record date is prior to such time. Following purchase and transfer of shares of common stock into the participant’s name on the Company’s books and records, a participant will become a shareholder with respect to the shares of common stock purchased and will thereupon have all dividend, voting, and other ownership rights incident thereto.
Transferability. A participant’s options to purchase shares of common stock under the employee stock purchase plan may not be pledged, assigned, or transferred in any manner, whether voluntarily, by operation of law, or otherwise. If a participant pledges, assigns, or transfers his or her options to purchase shares of common stock in violation of the vote on this matter.employee stock purchase plan, such options will immediately terminate and the participant will immediately receive a refund of the amount then credited to the participant’s account. Any payment of cash or issuance of shares of common stock under the employee stock purchase plan may be made only to the participant (or, in the event of the participant’s death, to the participant’s estate or beneficiary or beneficiaries most recently designated by the participant prior to his or her death). During a participant’s lifetime, only such participant may exercise his or her options to purchase shares of common stock under the employee stock purchase plan.
OUR BOARD OF DIRECTORS RECOMMENDS YOU VOTETerm. If approved by the Company’s shareholders at the annual meeting, the employee stock purchase plan will become effective as of the date of the annual meeting. The employee stock purchase plan will terminate on the earliest of (i) the day before the 10th anniversary of the date of adoption of the employee stock purchase plan by the Board, (ii) the date on which all shares of common stock reserved for issuance under the employee stock purchase plan have been issued, (iii) the date the employee stock purchase plan is terminated in connection with certain corporate transactions set forth above, and (iv) the date the Administrator terminates the employee stock purchase plan.
Amendment, Suspension, or Termination. The Administrator may, at any time and from time to time, amend, suspend, or terminate the employee stock purchase plan or an offering period under the employee stock purchase plan; provided, however, that no amendment, suspension, or termination will, without the consent of the participant, materially impair any then-vested rights of a participant. The effectiveness of any amendment to the employee stock purchase plan shall be contingent on approval of such amendment by the Company’s shareholders to the extent provided by the Board or required by applicable law.
The board of directors recommends a vote “FOR” THE APPROVAL OF THE COMMERCE UNION BANCSHARES, INC. 2015 EQUITY INCENTIVE PLAN.approval of employee stock purchase plan proposal.
OTHER MATTERS
We know of no other matters to be submitted to the shareholders at the annual meeting. If any other matters properly come before the annual meeting, it is the intention of the persons named in the enclosed proxy to vote the shares they represent as our board of directors may recommend, or, in the absence of a recommendation, as such persons deem advisable. Discretionary authority with respect to such matters is granted by execution of the enclosed proxy.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
FOR 20162018 ANNUAL MEETING
Shareholders who, in accordance with SEC Rule 14a-8, wish to present proposals for inclusion in our proxy statement and form of proxy for our next annual meeting must submit their proposals so that they are received by us at our principal executive offices, addressed to our Corporate Secretary, no later than December 11, 2018.
Although information received after such date will not be included in the proxy materials sent to shareholders, a shareholder proposal may still be presented at the annual meeting if such proposal complies with the Company’s bylaws. In accordance with our bylaws, shareholder proposals may be brought before an annual meeting only if such proposal is made pursuant to written notice timely given to the Company’s Corporate Secretary accompanied by certain information required by our bylaws. To be timely, a shareholders’ written notice must be received by the Company no earlier than 120 days and no later than 90 days prior to the first anniversary of the preceding year’s annual meeting, provided, however, that in the event that the date of the annual meeting is advanced more than 30 2015. Shareholder proposals not submitted for inclusion in next year’s proxy statement and form of proxy, but instead soughtdays prior to such anniversary date or delayed more than 70 days after such anniversary date, then to be presented directly at our nexttimely such notice must be received by the Company no earlier than 120 days prior to such annual meeting and no later than the later of 90 days prior to the date of the meeting. For shareholder proposals for the 2019 annual meeting of shareholders, maywritten notice must be brought before the annual meeting so long as we receive notice of the proposal, addressed to the Corporate Secretary, at our principal executive offices, no later thanreceived between January 29, 2016. If received after such date, such proposals will be considered untimely. Unless we receive notice in the manner17, 2019 and by the dates specified above, the proxy holders shall have discretionary authority to vote for or against any such proposal presented at our next annual meeting of shareholders.February 16, 2019.
ANNUAL REPORT
A copy of our annual report for our fiscal year ended December 31, 20142017 has been mailed concurrently with this proxy statement to all shareholders entitled to notice of and to vote at the annual meeting. The annual report is not incorporated into this proxy statement and is not considered proxy solicitation material.
FORM 10-K
We filed an annual report on Form 10-K with the SEC on March 31, 2015.16, 2018. Shareholders may obtain a copy of our annual report, including any amendments thereto, without charge, by writing to our Corporate Secretary at our principal executive offices, located at 1736 Carothers Parkway, Suite 100, Brentwood, Tennessee 37027.
Appendix A
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APPENDIX A
Commerce Union Bancshares, Inc. 2015 Equity Incentive Plan
Appendix A[see attached]
2015 Equity Incentive PlanARTICLES OF AMENDMENT
TO
AMENDED AND RESTATED CHARTER
OF
RELIANT BANCORP, INC.
Pursuant to and in accordance with applicable provisions of the Tennessee Business Corporation Act, Tennessee Code Annotated § 48-11-101 et seq., the undersigned corporation adopts the following articles of amendment to its amended and restated charter, as previously amended:
1. The name of the corporation is Reliant Bancorp, Inc.
2. The amended and restated charter of the corporation, as previously amended, is hereby amended by deleting current Section 7 thereof in its entirety and replacing it with the following:
Section 7. Terms of Directors; Voting for Directors.
(a) The classification of the Board of Directors of the Company into three classes shall be phased out beginning at the 2018 annual meeting of Company shareholders in accordance with the terms of this Section 7(a). Prior to the 2018 annual meeting of Company shareholders, the terms of the directors of the Company shall be staggered by dividing the total number of directors into three classes, designated as Class I, Class II, and Class III, with the number of directors in each class to be as equal in number as possible. Each director elected prior to the 2018 annual meeting of Company shareholders shall serve for the full term for which such director was elected and until the election and qualification of his or her successor, subject, however, to his or her earlier death, retirement, resignation, or removal from office. At the 2018 annual meeting of Company shareholders, (i) Class I directors (including any Class I directors elected by the Board of Directors since the 2017 annual meeting of Company shareholders to fill a vacancy who are up for election at the 2018 annual meeting of Company shareholders) shall be elected for a term expiring at the next annual meeting of shareholders of the Company, (ii) any Class II directors elected by the Board of Directors since the 2017 annual meeting of Company shareholders to fill a vacancy who are up for election at the 2018 annual meeting of Company shareholders shall be elected for a term expiring at the 2019 annual meeting of Company shareholders, and (iii) any Class III directors elected by the Board of Directors since the 2017 annual meeting of Company shareholders to fill a vacancy who are up for election at the 2018 annual meeting of Company shareholders shall be elected for a term expiring at the 2020 annual meeting of Company shareholders, provided in each case that the term of each such director shall continue until the election and qualification of his or her successor and shall be subject to such director’s earlier death, retirement, resignation, or removal from office. At each annual meeting of Company shareholders following the 2018 annual meeting, directors shall be elected for terms expiring at the next annual meeting of shareholders of the Company, provided that the term of each such director shall continue until the election and qualification of his or her successor and shall be subject to the director’s earlier death, retirement, resignation, or removal from office. Commencing with the 2020 annual meeting of Company shareholders, the classification of the Company’s Board of Directors into three classes will be fully phased out and all directors shall be elected at each annual meeting of Company shareholders for terms expiring at the annual meeting of Company shareholders next following their election.
(b) Prior to the 2019 annual meeting of Company shareholders, directors shall be elected by a plurality of the votes cast by shares entitled to vote in the election at a meeting at which a quorum is present. Commencing at the 2019 annual meeting of Company shareholders, and thereafter, a nominee for director shall be elected to the Board of Directors only if a majority of the votes cast with respect to the nominee are in favor of the nominee’s election, except that, if the number of nominees for director exceeds the number of directors to be elected, directors shall instead be elected by a plurality of the votes cast by shares entitled to vote in the election at a meeting at which a quorum is present.
3. The foregoing amendment(s) to the amended and restated charter of the corporation, as previously amended, were duly adopted by the board of directors of the corporation on March 26, 2018, and by the shareholders of the corporation on May 17, 2018.
4. These articles of amendment shall be effective on the date and at the time filed by the Tennessee Secretary of State.
Dated this 17th day of May, 2018.
RELIANT BANCORP, INC. | |||
By: | |||
DeVan D. Ard, Jr. | |||
President and Chief Executive Officer | |||
This plan shall be known as the “Commerce Union Bancshares,
Appendix B
Reliant Bancorp, Inc. 2015 Equity Incentive Plan” (the “Employee Stock Purchase Plan
[see attached]
RELIANT BANCORP, INC.
2018 EMPLOYEE STOCK PURCHASE PLAN
1. PlanPurpose”). The purpose of the Plan is to promote the interests of Commerce Union Bancshares, Inc., a Tennessee corporation (the “Company”) and its shareholders by (i) attracting and retaining Associatesprovide employees of the Company and its Subsidiaries with an opportunity to purchase Common Stock through accumulated Contributions. The Company intends for the Plan to qualify as an “employee stock purchase plan” under Section 423 of the Code. Accordingly, the Plan will be construed so as to extend and Affiliates;limit Plan participation in a uniform and nondiscriminatory basis consistent with the requirements of Section 423 of the Code.
2. Definitions.
(a) “Administrator”means the Board or any Committee designated by the Board to administer the Plan pursuant to Section 19.
(b) “Applicable Laws” means the requirements relating to the administration of equity-based awards and the related issuance of shares of Common Stock under U.S. state corporate laws, U.S. federal and state securities laws, the Code, and any stock exchange or quotation system on which the Common Stock is listed or quoted.
(c) “Board” means the Board of Directors of the Company.
(d) “Code” means the U.S. Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code or U.S. Treasury Regulation thereunder will include such section or regulation, any valid regulation or other official applicable guidance promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.
(e) “Committee” means the Compensation Committee of the Board, or such other committee of the Board as the Board may designate from time to time.
(f) “Common Stock” means the common stock, par value $1.00 per share, of the Company.
(g) “Company” means Reliant Bancorp, Inc., a Tennessee corporation, or any successor thereto.
(h) “Compensation” means, for any Eligible Employee, for any Offering Period, the Participant’s total cash compensation received during the respective period, including salary and commissions where applicable, and bonuses or cash incentive awards that pay out during the Offering Period; provided, however, that Compensation does not include (i) any cash payments in settlement of units granted under the Equity Incentive Plans, or (ii) motivating these individualsitems such as non-cash compensation, reimbursement of moving, travel, trade or business expenses, or cash payments in lieu of vacation, sick or personal days.
(i) “Contributions” means the payroll deductions and other additional payments that the Company may permit to be made by a Participant to fund the exercise of options granted pursuant to the Plan.
(j) “Corporate Transaction” means a merger, consolidation, acquisition of performance-related incentivesproperty or stock, separation, reorganization or other corporate event described in Section 424 of the Code.
(k) “Designated Company” means any Subsidiary that has been designated by the Administrator from time to achieve long-range performance goals; (iii) enabling these individualstime in its sole discretion as eligible to participate in the long-term growth and financial successPlan. As of the Company; (iv) encouraging ownership of stock in the Company by Associates; and (v) linking their compensation to the long-term interests ofEffective Date, the Company and its shareholders. In addition,Reliant Bank are Designated Companies.
(l) “Designated Percent” means the percentage of Fair Market Value determined by the Administrator for purposes of determining the Purchase Price.
(m) “Effective Date” means the date as of which this Plan is adopted by the Board, subject to the Plan obtaining shareholder approval in accordance with Section 20(k) hereof.
(l) “Eligible Employee” means any individual who is an employee providing services to the Company or a secondary purposeDesignated Company and is customarily employed for at least 20 hours per week and more than five months in any calendar year by the Employer. For purposes of the Plan, the employment relationship will be treated as continuing intact while the individual is on sick leave or other leave of absence that the Employer approves or is legally protected under Applicable Laws. Where the period of leave exceeds three months and the individual’s right to compensate directorsreemployment is not guaranteed either by statute or by contract, the employment relationship will be deemed to have terminated three months and one day following the commencement of the Company and its Subsidiaries and Affiliates for their service as members of the various boards of directors through grants of non-qualified options and/or restricted stock as more fully set out herein.
As used in the Plan, the following terms shall have the meanings set forth below:
Appendix A - 1
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Appendix A - 2
Appendix A - 3
3.1Authority of Committee.such leave. The Plan shall be administered by the Committee which shall be appointed by and serve at the pleasure of the Board. Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorization conferred on the Committee by the Plan, the Committee shall have full power and authorityAdministrator, in its discretion, to: (i) designate Participants; (ii) determine the type or types of Awardsfrom time to time may, prior to an Offering Date for all options to be granted toon such Offering Date in an Offering, determine (on a Participant;uniform and nondiscriminatory basis or as otherwise permitted by TreasuryRegulation Section 1.423-2) that the definition of Eligible Employee will or will not include an individual if he or she: (i) has not completed at least two years of service since his or her last hire date (or such lesser period of time as may be determined by the Administrator in its discretion), (ii) customarily works not more than 20 hours per week (or such lesser period of time as may be determined by the Administrator in its discretion), (iii) determinecustomarily works not more than five months per calendar year (or such lesser period of time as may be determined by the numberAdministrator in its discretion), or (iv) is a highly compensated employee within the meaning of Shares to be covered by, orSection 414(q) of the Code, provided the exclusion is applied with respect to which payments, rights or other matterseach Offering in an identical manner to all highly compensated individuals of the Employer whose employees are toparticipating in that Offering. Each exclusion shall be calculated in connection with Awards; (iv) determine the timing, terms and conditions of any Awards; (v) determine whether, to what extent, and under what circumstances Awards may be settled in cash, Shares, other Awards or other property, or canceled, forfeited or suspended and the method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended; (vi) determine whether, to what extent and under what circumstances cash, Shares, other securities, other Awards, other property and other amounts payableapplied with respect to an Award shallOffering in a manner complying with U.S. Treasury Regulation Section 1.423-2(e)(2)(ii).
(m) “Employer” means the employer of the applicable Eligible Employee(s).
(n) “Enrollment Form” means an agreement pursuant to which an Eligible Employee may elect to enroll in the Plan, to authorize a new level of payroll deductions, or to stop payroll deductions and withdraw from an Offering Period.
(o) “Equity Incentive Plans” means: (i) Commerce Union Bancshares, Inc. Amended and Restated Stock Option Plan, (ii) Commerce Union Bancshares, Inc. 2015 Equity Incentive Plan; and (iii) such other equity compensation plans as may be deferred either automatically adopted by the Board and/or shareholders of the Company during the term of the Plan.
(p) “ESPP Share Account” means an account into which Common Stock purchased with Contributions at the electionend of an Offering Period are held on behalf of a Participant.
(q) “Exchange Act” means the holder thereof orU.S. Securities Exchange Act of 1934, as amended, including the Committee; (vii) interpret and administer the Plan and any instrument or agreement relating to, or Award made under the Plan; (viii) except to the extent prohibited bySection 6.2 hereof, amend or modify the terms of any Award at or after grant with the consent of the holder of the Award; (ix) establish, amend, suspend or waive such rules and regulations promulgated thereunder.
(r) “Fair Market Value” means, as of any date and appoint such agents as it shall deem appropriateunless the Administrator determines otherwise, the closing sales price for the proper administrationCommon Stock as quoted on the Nasdaq Stock Market LLC on the date of determination (or the Plan; (x) amendclosing bid, if no sales were reported), as reported in The Wall Street Journal or such other source as the PlanAdministrator deems reliable. Notwithstanding the foregoing, if the determination date for the Fair Market Value occurs on a weekend or holiday, the Fair Market Value will be the price as determined in any respectaccordance with the Committee deems necessary or advisable in order to bring any Awards grantedabove on the immediately preceding business day, unless otherwise determined by the Administrator.
(s) “Offering” means an offer under the Plan into compliance withof an option that may be exercised during an Offering Period as further described in Section 409A4.
(t) “Offering Date” means the first Trading Day of each Offering Period.
(u) “Offering Period” or “Offering Periods” means the approximately six-month period or periods beginning on the first Trading Day on or after January 1 and July 1 of each year. The duration and timing of Offering Periods may be changed pursuant to Section 4.
(v) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.
(w) “Participant” means an Eligible Employee who is actively participating in the Plan.
(x) “Plan” means this Reliant Bancorp, Inc. Employee Stock Purchase Plan.
(y) “Purchase Date” means the last Trading Day of the Offering Period.
(z) “Purchase Price” means the Designated Percent of the Fair Market Value of a share of Common Stock on the Offering Date or on the Purchase Date, whichever is lower. Unless otherwise determined by the Administrator, the Designated Percent for purposes of the foregoing sentence is 85%. The Administrator may change the Designated Percent for any Offering Period but in no event shall the Designated Percent be less than 85%.
(aa) “Securities Act” means the Securities Act of 1933, as amended from time to time.
(bb) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code.
(cc) “Trading Day” means a day on which the Nasdaq Stock Market, LLC is open for trading.
(dd) “U.S. Treasury Regulations” means the Treasury regulations of the Code. Reference to a specific Treasury Regulation or Section of the Code shall include such Treasury Regulation or Section, any valid regulation promulgated under such Section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such Section or regulation.
3. Eligibility. Unless otherwise determined by the Committee in a manner that is consistent with Section 423 of the Code, any individual who is an Eligible Employee as of the first day of the enrollment period designated by the Committee for a particular Offering Period shall be eligible to otherwise ensure thatparticipate in such Awards are exempt fromOffering Period, subject to the requirements of Section 409A423 of the Code; and (xi) makeCode.
Notwithstanding any other determination and take any other action that the Committee deems necessary or desirable for the administrationprovision of the Plan or as otherwise set forth in this Plan, subject to the authoritycontrary, no Eligible Employee shall be granted an option under the Plan if (i) immediately after the grant of the Boardoption, such Eligible Employee (or any other person whose stock would be attributed to such Eligible Employee pursuant to Section 424(d) of the Code) would own capital stock of the Company or hold outstanding options to purchase stock possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or any Subsidiary or (ii) such option would permit his or her rights to purchase stock under all employee stock purchase plans (described in Section 13 hereunder423 of the Code) of the Company and/or any Subsidiary to otherwise amendaccrue at a rate that exceeds $25,000 of the Fair Market Value of such stock (determined at the time the option is granted) for each calendar year in which such option is outstanding at any time.
4. Offering Periods. The Plan will be implemented by consecutive Offering Periods with a new Offering Period commencing on the first Trading Day on or terminateafter January 1 and July 1 of each year, or on such other date as the Plan. Notwithstanding the provisions ofSection 6.2 hereof and except as permitted by the provisions ofSection 4.2 andSection 13 hereof, the Committee shall notAdministrator will determine. The Administrator will have the power to (i) amendchange the termsduration of previously granted OptionsOffering Periods (including the commencement dates thereof) with respect to reducefuture Offering Periods without shareholder approval. Any such change shall be announced prior to the Option Pricescheduled beginning of such Options; (ii) cancel such Options and grant substitute Options with a lower Option Price than the cancelled Options; (iii) grant Options at an Option Price less than the Stock Price at date of grant; or (iv) grant Options which are automatic replacements of exercised Options.
3.2Committee Discretion Binding. Unless otherwise expressly providedfirst Offering Period to be affected thereafter. Notwithstanding anything in the Plan all designations, determinations, interpretations and other decisions under or with respect to the contrary, no Offering Period may last more than 27 months.
5. Participation.
(a) Enrollment; Payroll Deductions. An Eligible Employee may elect to participate in the Plan by properly completing an Enrollment Form, which may be electronic, and submitting it to the Company, in accordance with the enrollment procedures established by the Administrator. Participation in the Plan is entirely voluntary. By submitting an Enrollment Form, the Eligible Employee authorizes payroll deductions from his or any Award shall be within the sole discretionher pay check in an amount equal to at least 1%, but not more than 15% of his or her Compensation on each pay day occurring during an Offering Period (or such other maximum percentage as the Committee may be made atestablish from time to time before an Offering Period begins). Payroll deductions shall commence on the first payroll date following the Offering Date and end on the last payroll date on or before the Purchase Date. The Company shall maintain records of all payroll deductions but shall have no obligation to pay interest on payroll deductions or to hold such amounts in a trust or in any time and shall be final, conclusive, and binding upon all Persons, including the Company, and Subsidiary or Affiliate, any Participant and any holder or beneficiary of any Award.
3.3Actionsegregated account. Unless expressly permitted by the CommitteeAdministrator, a Participant may not make any separate contributions or payments to the Plan.
(b) Election Changes. The Committee shall select oneDuring an Offering Period, a Participant may decrease (but not increase) his or her rate of its memberspayroll deductions applicable to such Offering Period. To make such a change, the Participant must submit a new Enrollment Form authorizing the new rate of payroll deductions at least fifteen days before the Purchase Date, or such other date as its chairperson and shall hold it meetings at such times and places and in such manner as itthe Administrator may determine. A majorityParticipant may decrease or increase his or her rate of its members shall constitutepayroll deductions for future Offering Periods by submitting a quorum. All determinationsnew Enrollment Form authorizing the new rate of payroll deductions at least fifteen days before the start of the Committeenext Offering Period.
(c) Automatic Re-enrollment. The deduction rate selected in the Enrollment Form shall remain in effect for subsequent Offering Periods unless the Participant (i) submits a new Enrollment Form authorizing a new level of payroll deductions in accordance with Section 5(b), (ii) withdraws from the Plan in accordance with Section 10, or (iii) terminates employment or otherwise becomes ineligible to participate in the Plan.
7. Grant of Option. On each Offering Date, each Participant in the applicable Offering Period shall be madegranted an option to purchase, on the Purchase Date, a number of shares of Common Stock determined by not lessdividing the Participant’s accumulated payroll deductions by the applicable Purchase Price; provided, however, that in no event shall any Participant purchase more than a majority2,500 shares of its members. Any decision or determination reducedCommon Stock during an Offering Period (subject to writingadjustment in accordance with Section 18 and signed by allthe limitations set forth in Section 13 of the membersPlan).
8. Exercise of Option/Purchase of Shares. A Participant’s option to purchase shares of Common Stock will be exercised automatically on the Purchase Date of each Offering Period. The Participant’s accumulated payroll deductions will be used to purchase the maximum number of whole shares that can be purchased with the amounts in the Participant’s notional account. No fractional shares may be purchased but notional fractional shares of Common Stock will be allocated to the Participant’s ESPP Share Account to be aggregated with other notional fractional shares of Common Stock on future Purchase Dates, subject to earlier withdrawal by the Participant in accordance with Section 10 or termination of employment in accordance with Section 11.
9. Delivery; Holding Period. As soon as reasonably practicable after each Purchase Date on which a purchase of shares of Common Stock occurs, the Company will arrange the delivery to each Participant of the Committee shall be fully effective as if it had been made by a majority vote at a meeting duly called and held. TheCommon Stock purchased upon exercise of an Optionhis or receipt of an Award shallher option in a form determined by the Administrator (in its sole discretion) and pursuant to rules established by the Administrator. The Company may permit or require that shares be effective only if an Award Agreement shall have been duly executed and delivered on behalf ofdeposited directly with a broker designated by the Company following the grant of the Option or other Award. The Committee may appointto a secretary and may make such rules and regulations for the conduct of its business as it shall deem advisable.
3.4No Liability. No member of the Board or Committee shall be liable for any action taken or determination made in good faith with respect to the Plan or any Award granted hereunder.
Appendix A - 4
4.1Shares Available. Subject to the provisions ofSection 4.2 hereof, the stock to be subject to Awards under the Plan shall be the Sharesdesignated agent of the Company, and the Company may utilize electronic or automated methods of share transfer. The Company may require that shares be retained with such broker or agent for a designated period of time and/or may establish other procedures to permit tracking of disqualifying dispositions of such shares. No Participant will have any voting, dividend, or other rights as a shareholder with respect to shares of Common Stock subject to any option granted under the Plan until such shares have been purchased and delivered to the Participant as provided in this Section 9.
10.Withdrawal.
(a) Withdrawal Procedure. A Participant may withdraw all but not less than all the Contributions credited to his or her notional account and not yet used to exercise his or her option under the Plan at any time by (i) submitting to the Company’s stock administration office (or its designee) a written notice of withdrawal in the form determined by the Administrator for such purpose, or (ii) following an electronic or other withdrawal procedure determined by the Administrator. All of the Participant’s Contributions credited to his or her notional account will be paid to such Participant promptly after receipt of notice of withdrawal and such Participant’s option for the Offering Period will be automatically terminated, and no further Contributions for the purchase of shares will be made for such Offering Period. If a Participant withdraws from an Offering Period, Contributions will not resume at the beginning of the succeeding Offering Period, unless the Participant re-enrolls in the Plan in accordance with the provisions of Section 5.
(b) Effect on Succeeding Offering Periods. A Participant’s withdrawal from an Offering Period will not have any effect upon his or her eligibility to participate in any similar plan that may hereafter be adopted by the Company or in succeeding Offering Periods that commence after the termination of the Offering Period from which the Participant withdraws.
11.Termination of Employment. Upon termination of a Participant’s employment for any reason, including death, disability or retirement, or a change in the Participant’s employment status following which the Participant is no longer an Eligible Employee, which in either case occurs at least 30 days before the Purchase Date, he or she will be deemed to have elected to withdraw from the Plan and the Contributions credited to such Participant’s account during the Offering Period but not yet used to purchase shares of Common Stock under the Plan will be returned to such Participant or, in the case of his or her death, to the person or persons entitled thereto under Section 17, and such Participant’s option will be automatically terminated. Unless determined otherwise by the Administrator in a manner that is permitted by, and compliant with, Section 423 of the Code, a Participant whose employment transfers between entities through a termination with an immediate rehire (with no break in service) by the Company or a Designated Company shall not be treated as terminated under the Plan.
12.Interest. No interest will accrue on the Contributions of a participant in the Plan.
13.Common Stock Reserved for Plan.
(a) Number of Shares. Subject to adjustment upon changes in capitalization of the Company as provided in Section 18 hereof, the maximum number of Shares with respect toshares of Common Stock that will be made available for sale under the Plan will be 200,000 shares of Common Stock.
(b) Over-subscribed Offerings. The number of shares of Common Stock which Awardsa Participant may purchase in an Offering under the Plan may be reduced if the Offering is over-subscribed. No option granted under the Plan shall be900,000,permit a Participant to purchase shares of Common Stock which, if added together with the aggregate maximumtotal number of Sharesshares of Common Stock purchased by all other Participants in such Offering would exceed the total number of shares of Common Stock remaining available under the Plan. If the Committee determines that, mayon a particular Purchase Date, the number of shares of Common Stock with respect to which options are to be issued pursuantexercised exceeds the number of shares of Common Stock then available under the Plan, the Company shall make a pro rata allocation of the shares of Common Stock remaining available for purchase in as uniform a manner as practicable and as the Committee determines to be equitable.
14.Transferability. No payroll deductions credited to a Participant, nor any rights with respect to the exercise of Incentivean option or any rights to receive Common Stock Optionshereunder may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution, or as provided in Section 17 hereof) by the Participant. Any attempt to assign, transfer, pledge or otherwise dispose of such rights or amounts shall be without effect.
15.900,000, allApplication of whichFunds. All Contributions received or held by the Company under the Plan may relatebe used by the Company for any corporate purpose to the exercise of Incentive Stock Options. If, afterextent permitted by Applicable Laws, and the effective date ofCompany shall not be required to segregate such Contributions.
16.Statements. Participants will be provided with statements at least annually which shall set forth the Contributions made by the Participant to the Plan, the Purchase Price of any Shares covered by an Award granted under this Plan, or to which such Award relates, are forfeited, or if such an Award is settled for cash or otherwise terminates, expires unexercised or is canceled without the deliveryshares of Shares, then the Shares covered by such Award, or to which such Award relates, orCommon Stock purchased, the number of Shares otherwise counted againstshares of Common Stock purchased, and any Contributions remaining in the aggregate numberParticipant’s notional account.
17.Designation of Shares withBeneficiary. A Participant may file, on forms supplied by the Administrator, a written designation of beneficiary who is to receive any shares of Common Stock and cash in respect to which Awards may be granted, to the extent of any such settlement, forfeiture, termination, expiration or cancellation, shall again become Shares with respect to which Awards may be granted. Infractional shares of Common Stock, if any, from the event that any Option or other Award granted hereunder is exercised through the delivery of Shares or in the event that withholding tax liabilities arising from such Award are satisfied by the withholding of Shares by the Company, the number of Shares available for Awards under the Plan shall be increased by the number of Shares so surrendered or withheld. Notwithstanding the foregoing and subject to adjustment as provided inSection 4.2 hereof, no Participant may receive Options or other AwardsParticipant’s ESPP Share Account under the Plan in the event of such Participant’s death. In addition, a Participant may file a written designation of beneficiary who is to receive any calendar year that relatecash withheld through payroll deductions and credited to more than90,000 Shares.the Participant’s notional account in the event of the Participant’s death prior to the Purchase Date of an Offering Period.
4.2
18.Adjustments Upon Changes in Capitalization; Dissolution or Liquidation; Corporate Transactions.
(a) Adjustments. In the event that the Committee determines that any dividend or other distribution (whether in the form of cash, Shares, other securitiesCommon Stock, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase SharesCommon Stock or other securities of the Company, or other similar corporate transaction or event affects the Shares such that an adjustment is determined by the Committee, in its sole discretion, to be appropriate, then the Committee shall, in such manner as it may deem equitable (and, with respect to Incentive Stock Options, in such manner as is consistent with Section 422 of the Code and the regulations thereunder): (i) adjust any or all of (1) the aggregate number of Shares or other securities of the Company (or number and kind of other securities or property) with respect to which Awards may be granted under the Plan; (2) the number of Shares or other securities of the Company (or number and kind of other securities or property) subject to outstanding Awards under the Plan; and (3) the grant or exercise price with respect to any Award shall always be a whole number; (ii) if deemed appropriate, provide for an equivalent award in respect of securities of the surviving entity of any merger, consolidation or other transaction or event having a similar effect; or (iii) if deemed appropriate, make provision for a cash payment to the holder of the outstanding Award. Notwithstanding the foregoing, in no event shall any adjustment described above be made if the effect of such adjustment would be to cause the Plan in any respect to be a plan providing for the deferral of compensation with the meaning of the Treasury Regulations under Section 409A.
4.3Substitute Awards. Any Shares issued by the Company as Substitute Awards in connection with the assumption or substitution of outstanding grants from any acquired corporation shall not reduce the Shares available for Awards under the Plan.
4.4Sources of Shares Deliverable under Awards. Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or of issued Shares which have been reacquired by the Company.
Any Associate and any Director shall be eligible to be designated a Participant.
6.1Grant. Subject to the provisions of the Plan, the Committee shall have sole and complete authority to determine the Participants to whom Options shall be granted, the number of Shares, if any, subject to each Award, and the conditions and limitations applicable to the exercise of each Option. The Committee shall have the authority to grant Incentive Stock Options or to grant Non-Qualified Stock Options, or to grant both types of Options. In the case of Incentive Stock Options, the terms and conditions of such grants shall be subject to and comply with such rules as may be prescribed by Section 422 of the Code, as from time to time amended, and any regulations implementing such statute. All Options shall be separately
Appendix A - 5
designated Incentive Stock Options or Non-Qualified Stock Options. If an Option is not specifically designated as an Incentive Stock Option, then the option shall be a Non-Qualified Stock Option. Incentive Stock Options may be granted only to employees of the Company or a parent corporation or subsidiary corporation thereof (as such terms are defined in Sections 424(e) and (f) of the Code). Non-Qualified Stock Options may only be granted if the Shares underlying such Option are treated as “service recipient stock” under Section 409A of the Code. Further, Non-Qualified Stock Options may be granted to Associates and directors, provided, however, that Non-Qualified Stock Options may not be granted to Associates or directors who are providing continuous services only to any “parent” of the Company as such term is defined in Rule 405 promulgated under the Securities Act, unless the Shares underlying such Option are treated as “service recipient stock” under Section 409A of the Code. A Person who has been granted an Option under this Plan may be granted additional Options under the Plan if the Committee shall so determine;provided, however, that to extent the aggregate Fair Market Value (determined at the time the Incentive Stock Option related thereto is granted) of the Shares with respect to which all Incentive Stock Options are exercisable for the first time by an Employee during any calendar year (under all plans described in subsection (d) of Section 422 of Code of the Employee’s employer corporation and its parent and Subsidiaries) exceeds $100,000, such Options shall be treated as Non-Qualified Stock Options.
6.2Price. The Committee in its sole discretion shall establish the Option Price at the time each Option is granted which price shall be set forth in an Award Agreement. Exceptchange in the case of a Substitute Award granted in a manner consistent with the provisions of Sections 409A and, if applicable, 424(a) of the Code, the Option Price of an Option may not be less than 100% of the Fair Market Value of the Shares with respect to which the Option is granted on the date of grant of such Option.
6.3.Term. Subject to the Committee’s authority underSection 3.1 hereof and the provisions ofSection 6.5 hereof, each Option and all rights and obligations thereunder shall expire on the date determined by the Committee and specified in the Award Agreement. The Committee shall be under no obligation to provide terms of like duration for Options granted under the Plan. Notwithstanding the foregoing, no Option shall be exercisable after the expiration of ten (10) years from the date such Option was granted.
6.4Exercise.
6.5Ten Percent Stock Rule. Notwithstanding any other provisions of the Plan, if at any time an Option is otherwise to be granted pursuant to the Plan, the optionee owns directly or indirectly (within the meaning of Section 422(d) of the Code) Shares of the Company possessing more than ten percent (10%) of the total combined voting power of all classes of Stock of the Company or its parent or any Subsidiary or affiliate (within the meaning of Section 422(b)(6) of the Code), then any Incentive Stock Option to be granted to such optionee pursuant to the Plan shall satisfy the requirement of Section 422(c)(5) of the Code, and the Option Price shall not be less than 110% of the Fair Market Value of the Shares of the Company, and such Option by its terms shall not be exercisable after the expiration of five (5) years form the date such Option is granted.
Appendix A - 6
7.1Grant.
7.2.Delivery of Shares and Transfer Restrictions. At the time of a Restricted Share Award, a certificate representing the number of Shares awarded thereunder shall be registered in the name of the grantee. Such certificate shall be held by the Company or any custodian appointed by the Company for the account of the grantee subject to the terms and condition of the Plan, and shall bear such a legend setting for the restrictions imposed thereon as the Committee, in its discretion, may determine. The grantee shall have all rights of a shareholder with respect to the Restricted Shares, including the right to receive dividends and the right to vote such Shares, subject to the following restrictions: (i) the grantee shall not be entitled to delivery of the stock certificate until the expiration of the restricted period and the fulfillment of any other restrictive conditions set forth in the Award Agreement with respect to such Shares; (ii) none of the Shares may be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of during such restricted period or until after the fulfillment of any such other restrictive conditions; and (iii) except as otherwise determined by the Committee at or after grant, all of the Shares shall be forfeited and all rights of the grantee to such Shares shall terminate, without further obligation on the part of the Company, upon a Termination of Service and unless any other restrictive conditions relating to the Restricted Share Awards are met. Any Shares, any other securities of the Company and any other property (except for cash dividends) distributed with respect to the Shares subject to Restricted Share Awards shall be subject to the same restrictions, terms and conditions as such Restricted Shares.
7.3Termination of Restrictions. At the end of the restricted period and provided that any other restrictive conditions of the Restricted Share Award are met, or at such time as otherwise determined by the Committee, all restrictions set forth in the Award Agreement related to the Restricted Share Award or in the Plan shall lapse as to the Restricted Shares subject thereto, and a stock certificate for the appropriate number of Shares, free of the restrictions and restricted stock legend, shall be delivered to the Participant or the Participant’s beneficiary or estate as the case may be.
Appendix A - 7
8.1Grant. The Committee shall have the sole and complete authority to determine the Participants who shall receive a Performance Award, which shall consist of a right that is (i) denominated in cash or Shares; (ii) valued, as determined by the Committee, in accordance with the achievement of such performance goals during such performance periods as the Committee shall establish; and (iii) payable at such time and in such form as the Committee shall determine. Performance Awards shall include, but are not limited to, Performance Shares. All Performance Awards shall be subject to the terms and provisions ofSection 10 hereof.
8.2Terms and Conditions. Subject to the terms of the Plan and applicable Award Agreement, the Committee shall determine the performance goals to be achieved during any performance period, the length of any performance period, the amount of any Performance Award, and the amount and kind of any payment or transfer to be made pursuant to any Performance Award, and may amend specific provisions of the Performance Award; provided, however, that such amendment may not adversely affect existing Performance Awards made within a performance period commencing prior to implementation of the amendment.
8.3Payment of Performance Awards. Performance Awards may be paid in a lump sum or in installments following the close of the performance period or, in accordance with the procedures established by the Committee on a deferred basis. A Participant’s rights to any Performance Award may not be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of in any manner, except by will or the laws of descent and distribution, and/or except as the Committee may determine at or after grant.
8.4Performance Shares.
The Committee shall have the authority to determine the Participants who shall receive an Other Stock-Based Award, which shall consist of any right that is (i) not an Award described inSections 6, 7 and 8 above and (ii) an Award of Shares of an Award denominated or payable in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares), as determined by the Committee to be consistent with the purposes of the Plan. Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine the terms and conditions of any such Other Stock-Based Award.
10.1 Notwithstanding anything in the Plan to the contrary, Performance Awards shall be subject to the terms and conditions of thisSection 10.
10.2 The Committee may grant Performance Awards to Covered Officers based solely upon the attainment of performance targets related to one or more performance goals selected by the Committee from among the goals specified below. For the purposes of thisSection 10, performance goals shall be limited to one or more of the following Company, Subsidiary, Affiliate, operating unit or division financial performance measures:
Appendix A - 8
or any combination thereof. Each goal may be expressed on an absolute and/or relative basis, may be based on or otherwise employ comparisons based on internal targets, the past performance of the Company or any Subsidiary, Affiliates, operating unit or division of the Company, and/or the past or current performance of other companies and in the case of earnings-based measures, may use or employ comparisons relating to capital, shareholders’ equity and/or Shares outstanding, or to assets or net assets. The Committee may, in its discretion, waive all or any part of the restrictions applicable to any or all outstanding Performance Awards, including Performance Share Awards.
10.3 With respect to any Covered Officer, the maximum number of Shares in respect of which all Performance Awards may be granted underSection 8 hereof in each year of the performance period is90,000 Shares and the maximum amount of any Award settled in cash shall not exceed$200,000 in each year of the performance period.
10.4 To the extent necessary to comply with Section 162(m) of the Code, with respect to grants of Performance Awards, including Performance Share Awards, no later than 90 days following the commencement of each performance period (or such other time as may be required or permitted by Section 162(m) of the Code), the Committee shall, in writing, (i) select the performance goals or goals applicable to the performance period; (ii) establish the various targets and bonus amount which may be earned for such performance period; and (iii) specify the relationship between performance goal and targets and the amounts to be earned by each Covered Officer for such performance period. Following the completion of each performance period, the Committee shall certify in writing whether the applicable performance targets have been achieved and the amounts, if any, payable to Covered Officers for such performance period. In determining the amount earned by a Covered Officer for a given performance period, subject to any applicable Award Agreement, the Committee shall have the right to reduce (but not increase) the amount payable at a given level of performance to take into account additional factors that the Committee may deem relevant to the assessment of individual or corporate performance for the performance period.
The Committee shall have the full power and authority to determine the terms and conditions that shall apply to any Award upon a Termination of Service, and may provide such terms and conditions in the Award Agreement or in such rules and regulations as it may prescribe.
Upon a Change in Control, the Committee shall take one or more of the following actions with respect to Awards as the Committee may determine in its sole discretion:
Appendix A - 9
The Committee need not take the same action or actions with respect to all Awards or portions thereof or with respect to all Participants.
13.1Amendments to the Plan. Except as otherwise set forth inSection 3.1,Section 14.17, or elsewhere in this Plan, the Board may amend, alter, suspend, discontinue or terminate the Plan or any portion thereof at any time, provided that no such amendment, alteration, suspension, discontinuation or termination shall be made without shareholder approval if such approval is necessary to comply with any tax or regulatory requirement for which or with which the Board deems it necessary or desirable to comply, which tax or regulatory requirement requires Shareholder approval.
13.2Amendments to Awards. Subject to the restrictions ofSections 3.1, 6.2 and 14.17 hereof, the Committee may waive any conditions or rights under, amend any terms of or alter, suspend, discontinue, cancel or terminate, any Award theretofore granted, prospectively or retroactively; provided that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would adversely affect the rights of any Participant or any holder or beneficiary of any Award theretofore granted shall not to that extent be effective without the consent of the affected Participant, holder or beneficiary.
13.3Adjustments of Awards upon the Occurrence of Certain Unusual or Nonrecurring Events. The Committee is hereby authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, without limitation, the events described inSection 4.2 hereof)Company’s structure affecting the Company, any Subsidiary or Affiliate, or the financial statements of the Company or any Subsidiary or Affiliate, or of changes in applicable laws, regulations or accounting principles, whenever the Committee determines that such adjustments are appropriateCommon Stock occurs, then in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.
14.1Limited Transferability of Awards. ExceptPlan, the Administrator will, in such manner as otherwise provided init deems equitable, adjust the Plan, no Award shall be assigned, alienated, pledge, attached, sold or otherwise transferred or encumbered by a Participant, except (i) by will or the laws of descent and distribution; (ii) to a Permitted Transferee; and/or (iii) as may be provided by the Committee in its discretion, at or after grant in the Award Agreement; provided, however, that an Incentive Stock Option shall not be assigned, alienated, pledge, attached, sold or otherwise transferred or encumbered by a Participant except by will or the laws of descent and distribution. In the event than an Incentive Stock Option is subject to involuntary transfer, as a result of a domestic relations order or otherwise, such Option shall immediately be deemed to be a Non-Qualified Stock Option as a result of such transfer. No transfer of an Award by will or by the laws of descent and distribution shall be effective to bind the Company unless the Company shall have been furnished with written notice thereof and an authenticated copy of the will and/or such other evidence as the Committee may deem necessary or appropriate to establish the validity of the transfer. A Permitted
Appendix A - 10
Transferee may not transfer an Award other than by will or the laws of descent and distribution. For purposes of this Plan “Permitted Transferee” means the Participant’s Immediate Family, a Permitted Trust or a partnership of which the only partners are members of the Participant’s Immediate Family. For purposes of this Plan, “Immediate Family” means the Participant’s children and grandchildren, including adopted children and grandchildren, stepchildren, parents, stepparents, grandparent, spouse, siblings (including half-brothers and half-sisters), father-in-law, mother-in-law, daughters-in-law, and sons-in-law. For purposes of this Plan, a “Permitted Trust” means a trust solely for the benefit of the Participant or Participant’s Immediate Family.
14.2.Dividend Equivalents. In the sole discretion of the Committee, an Award may provide the Participant with dividends or dividend equivalent, payable in cash, Shares, other securities or other property on a current or deferred basis. All dividends or dividend equivalents which are not paid currently may, in the Committee’s discretion, accrue interest, be reinvested into additional Shares, or in the case of dividends or dividend equivalents credited in connection with Performance Awards, be credited as additional Performance Awards and paid to the Participant if and when, and to the extent that, payment is made pursuant to such Award. The total number of Shares available for grant underSection 4 hereof shall notshares and class of Common Stock that may be reduced to reflect any dividends or dividend equivalents that are reinvested into additional Shares or credited as Performance Awards.
14.3No Rights to Awards. No Person shall have any claim to be granted any Award, and there is no obligation for uniformity of treatment of Participants or holders or beneficiaries of Awards. The terms and conditions of Awards need not be the same with respect to each Participant.
14.4.Share Certificates. All certificates for Shares or other securities of the Company or any Subsidiary or Affiliate delivered under the Plan, pursuant to any Award or the exercise thereof shall be subject to such stop transfer ordersPurchase Price per share and other restrictions as the Committee may deem advisablenumber of shares of Common Stock covered by each outstanding option under the Plan, and the numerical limits of Section 7 and Section 13.
(b) Dissolution or Liquidation. Unless otherwise determined by the rules, regulations and other requirementsAdministrator, in the event of a proposed dissolution or liquidation of the SEC orCompany, any state securities commission or regulatory authority, any stock exchange or other market upon which such Shares or other securities areOffering Period then listed, and any applicable Federal or state laws,in progress will be shortened by setting a new Purchase Date and the Committee may cause a legendOffering Period will end immediately prior to the proposed dissolution or legends toliquidation. The new Purchase Date will be put on any such certificates to make appropriate reference to such restrictions; provided, however, that inbefore the date of the Company’s discretion, there shall be no requirement to issue physical certificates ifproposed dissolution or liquidation. Before the Company’s stock is maintained in a book-entry system by a transfer agent.
14.5.Withholding. Anew Purchase Date, the Committee will provide each Participant with written notice, which may be requiredelectronic, of the new Purchase Date and that the Participant’s option will be exercised automatically on such date, unless before such time, the Participant has withdrawn from the Offering in accordance with Section 10.
(c) Corporate Transaction. In the event of a Corporate Transaction, each outstanding option will be assumed or an equivalent option substituted by the successor corporation or a parent or Subsidiary of such successor corporation. If the successor corporation refuses to payassume or substitute the option, the Offering Period with respect to which the option relates will be shortened by setting a new Purchase Date on which the Offering Period will end. The new Purchase Date will occur before the date of the Corporate Transaction. Prior to the Company or any Subsidiary or Affiliate,new Purchase Date, the Committee will provide each Participant with written notice, which may be electronic, of the new Purchase Date and that the Company or any Subsidiary or AffiliateParticipant’s option will be exercised automatically on such date, unless before such time, the Participant has withdrawn from the Offering in accordance with Section 10.
19. Administration. Unless otherwise designated by the Board, the Committee shall serve as the Administrator. The Administrator will have full and exclusive discretionary authority to construe, interpret, and apply the right, and is hereby authorizedterms of the Plan, to withhold from any award, from any payment due or transfer made under any Award ordesignate separate Offerings under the Plan, or from any compensation or other amount owing to a Participantdesignate Subsidiaries as participating in the amount (in cash, Shares, other securities, other Awards or other property) of any applicable withholding or other taxes in respectPlan, to an Award, its exercise, or any payment or transfer under an Award ordetermine eligibility, to adjudicate all disputed claims filed under the Plan and to takeestablish such other action as may beprocedures that it deems necessary infor the opinionadministration of the CompanyPlan. Without limiting the generality of the foregoing, the Administrator is specifically authorized to satisfy all obligations foradopt rules and procedures regarding eligibility to participate, the definition of Compensation, handling of Contributions, making of Contributions to the Plan (including, without limitation, in forms other than payroll deductions), establishment of bank or trust accounts to hold Contributions, payment of such taxes.interest, obligations to pay payroll tax, determination of beneficiary designation requirements, withholding procedures and handling of stock certificates that vary with applicable local requirements. The Committee may provide for additional cash payments to holderscorrect any defect or supply any omission or reconcile any inconsistency or ambiguity in the Plan. All expenses of Options to defray or offset any tax arising fromadministering the grant, vesting, exercise or payment of any Award;provided however, the Participant may elect to satisfy any such withholding in either cash or shares of Company common stock.
14.6.Award Agreements. Each Award hereunderPlan shall be evidencedborne by an Award Agreement that shall be deliveredthe Company. Every finding, decision and determination made by the Administrator will, to the Participantfull extent permitted by law, be final and may specify the termsbinding upon all parties.
20. General Provisions.
(a) Equal Rights and conditions of the award andPrivileges. Notwithstanding any rules applicable thereto. In the event of a conflict between the termsprovision of the Plan to the contrary and any Award Agreement,in accordance with Section 423 of the terms ofCode, all Eligible Employees who are granted options under the Plan shall prevail.have the same rights and privileges.
14.7No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Company or any Subsidiary or Affiliate from adopting or continuing in effect other compensation arrangements, which may, but need not, provide for the grant of Options, stock appreciate rights, Restricted Shares, restricted share units, Performance Shares, performance units, Other Stock-Based Awards, or other types of Awards provided for hereunder.
14.8(b) No Right to Continued Employment. The grant of an Award shall not be construed as giving aNeither the Plan nor any compensation paid hereunder will confer on any Participant the right to be retainedcontinue as an Employee or in any other capacity.
(c) Rights as Shareholder. A Participant will become a shareholder with respect to the employmentshares of the Company or any Subsidiary or Affiliate. Further, the Company or a Subsidiary or Affiliate may at any time dismiss a Participant from employment, free from any liability or any claimCommon Stock that are purchased pursuant to options granted under the Plan unless otherwise expressly provided in an Award Agreement.
14.9No Right to Serve as Director. The grant of an Award shall not be construed as giving a Participantwhen the right to be retained as a Director of the Company, a Subsidiary or Affiliate unless otherwise expressly provided in an Award Agreement.
Appendix A - 11
14.10No Rights as Shareholder. Subjectshares are transferred to the provisions of the Plan and applicable Award Agreement,Participant’s ESPP Share Account. A Participant will have no Participant or holder or beneficiary of any Award shall have any rightrights as a shareholder with respect to any Sharesshares of Common Stock for which an election to participate in an Offering Period has been made until such Participant becomes a shareholder as provided above.
(d) Successors and Assigns. The Plan shall be distributedbinding on the Company and its successors and assigns.
(e) Entire Plan. This Plan constitutes the entire plan with respect to the subject matter hereof and supersedes all prior plans with respect to the subject matter hereof.
(f) Compliance with Law. The obligations of the Company with respect to payments under the Plan until such Person has become a holder of such Shares. Notwithstanding the foregoing, in connectionare subject to compliance with each grant of Restricted Shares hereunder, the applicable Award Agreement shall specify if and to what extent the Participantall Applicable Laws. Common Stock shall not be entitledissued with respect to an option granted under the Plan unless the exercise of such option and the issuance and delivery of the shares of Common Stock pursuant thereto shall comply with all applicable provisions of law, including, without limitation, the Securities Act, the Exchange Act, and the requirements of any stock exchange upon which the shares may then be listed.
(g) Notice of Disqualifying Dispositions. Each Participant shall give the Company prompt written notice of any disposition or other transfer of shares of Common Stock acquired pursuant to the rightsexercise of a shareholder in respectan option acquired under the Plan, if such disposition or transfer is made within two years after the Offering Date or within one year after the Purchase Date.
(h) Term of such Restricted Share.
14.11Governing LawPlan. The validity, constructionPlan shall become effective on the Effective Date and, effectunless terminated earlier pursuant to Section 20(i), shall have a term of 10 years.
(i) Amendment or Termination. The Administrator may, in its sole discretion, amend, suspend or terminate the Plan at any time and for any reason. If the Plan is terminated, the Administrator may elect to terminate all outstanding Offering Periods either immediately or once shares of Common Stock have been purchased on the next Purchase Date (which may, in the discretion of the Plan and any rules and regulations relatingCommittee, be accelerated) or permit Offering Periods to the Plan and any Award Agreements shall be determinedexpire in accordance with the statutorytheir terms (and subject to any adjustment in accordance with Section 18). If any Offering Period is terminated before its scheduled expiration, all amounts that have not been used to purchase shares of Common Stock will be returned to Participants (without interest, except as otherwise required by law) as soon as administratively practicable
(j) Applicable Law. The laws and procedural provisions of the State of Tennessee shall govern all questions concerning the construction, validity and interpretation of the Plan, without giving effectregard to conflictssuch state’s conflict of laws principles.law rules.
14.12
(k) Shareholder Approval. The Plan shall be subject to approval by the shareholders of the Company within 12 months before or after the date the Plan is adopted by the Board.
(l) Section 423. The Plan is intended to qualify as an “employee stock purchase plan” under Section 423 of the Code. Any provision of the Plan that is inconsistent with Section 423 of the Code shall be reformed to comply with Section 423 of the Code.
(m) Withholding. To the extent required by applicable federal, state, or local law, a Participant must make arrangements satisfactory to the Company for the payment of any withholding or similar tax obligations that arise in connection with the Plan.
(n) Severability. If any provision of the Plan orshall for any Award is, or becomes, or is deemedreason be held to be invalid illegal or unenforceable, insuch invalidity or unenforceability shall not affect any jurisdiction or as to any Person or Award, or would disqualifyother provision hereof, and the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed as if such invalid or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, suchunenforceable provision shall be stricken as to such jurisdiction, Person or Award and the remainder o he Plan and any such Award shall remain in full force and effect.
14.13Other Laws. The Committee may refuse to issue or transfer any Shares or other consideration under an Award if, acting in its sole discretion, it determines that the issuance or transfer of such Shares or such other consideration might violate any applicable law or regulation (including applicable non-U.S. laws or regulations) or entitle the Company to recover the same under Exchange Act Section 16(b), and any payment tendered to the Company by a Participant, other holder or beneficiary in connection with the exercise of such Award shall be promptly refunded to the relevant Participant, holder or beneficiary.
14.14No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company, any Subsidiary or Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Subsidiary or Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any Subsidiary or Affiliate.
14.15No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, other securities or other property shall be paid or transferred in lieu of any fractional Shares whether such fractional Shares or any rights thereto shall be cancelled, terminated, or otherwise eliminated.
14.16Headings. Headings are given to the sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision hereof.
14.17Compliance with 409A. To the extent that the Committee determines that any Award granted hereunder is subject to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code. To the extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Section 409A of the Code. To the extent that the Committee determines that a Participant would be subject to the additional 20% tax imposed on certain non-qualified deferred compensation plans pursuant to Section 409A of the Code as a result of any provision of any Award granted under this Plan, such provision shall be deemed amended to the minimum extent necessary, to avoid application of such additional tax. The nature of such amendment shall be determined by the Committee. Notwithstanding anything to the contrary in this Plan (and unless the Award Agreement specifically provides otherwise), if the Shares are publicly traded and a Participant holding an Award that constitutes “deferred compensation” under Section 409A of the Code is a “specified employee” for purposes of Section 409A of the Code, no distribution or payment of any amount shall be made upon a “separation from service” (as defined in Section 409A of the Code without regard to alternative definitions thereunder) before a date that is six (6) months following the date of such separation from service, or, if earlier, the date of the Participant’s death. Although the Company intends to administer the Plan so that Awards will be exempt from, or will comply with, the requirements of Section 409A of the Code, the Company does not warrant that any Award under the Plan will qualify for favorable tax treatment under Section 409A of the Code or any other provision of federal, state, local or foreign law. The Company shall not be liable to any Participant for any tax, interest or penalties such Participant might owe as a result of the grant, holding, vesting, expansion or payment of any Award under the Plan.
Appendix A - 12
14.18(o) Investment AssurancesHeadings. The Company may require a Participant, as a conditionheadings of exercising or acquiring an Award, (i) to give written assurances satisfactory to the Company as to the Participant’s knowledgesections herein are included solely for convenience and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of the Award; and (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring an Award for the Participant’s own account and not with any present intention of selling or otherwise distributing the Award. The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if (A) the issuance of the Shares upon the exercise or acquisition of an Award have been registered under a then currently effective registration statement under the Exchange Act, or (B) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Shares.
14.19Sections 280G and 162(m) of The Code. Notwithstanding any other provision of this Plan or of any other agreement, contract, or understanding heretofore or hereafter entered into by a Participant with the Company or any Affiliate, except an agreement, contract or understanding hereafter entered into that expressly modifies or excludes application of this paragraph (an “Other Agreement”), and notwithstanding any formal or informal plan or other arrangement for the direct or indirect provision of compensation to the Participant (including groups or classes of participants or beneficiaries of which the Participant is a member), whether or not such compensation is deferred, is in cash, or is in the form of a benefit to or for the Participant (a “Benefit Arrangement”), if the Participant is a “disqualified individual,” as defined in Section 280G(c) of the Code, any Award held by that Participant and any right to receive any payment or other benefit under this Plan shall not become exercisable or vested (i) to the extent that such right to exercise, vesting, payment, or benefit, taking into account all other rights, payments, or benefits to or for the Participant under this Plan, all Other Agreements, and all Benefit Arrangements, would cause any payment or benefit to the Participant under this Plan to be considered a “parachute payment” withinaffect the meaning of Section 280G(b)(2)any of the Code as then in effect (a “Parachute Payment”) and (ii) if, as a result of receiving a Parachute Payment, the aggregate after-tax amounts received by the Participant from the Company under this Plan, all Other Agreements, and all Benefit Arrangements would be less than the maximum after-tax amount that could be received by the Participant without causing any such payment or benefit to be considered a Parachute Payment. In the event that the receipt of any such right to exercise, vesting, payment, or benefit under this Plan, in conjunction with all other rights, payments, or benefits to or for the Participant under any Other Agreement or any Benefit Arrangement would cause the Participant to be considered to have received a Parachute Payment under this Plan that would have the effect of decreasing the after-tax amount received by the Participant as described in clause (ii)provisions of the preceding sentence, then the Participant shall have the right, in the Participant’s sole discretion, to designate those rights, payments, or benefits under this Plan, any Other Agreements, and any Benefit Arrangements that should be reduced or eliminated so as to avoid having the payment or benefit to the Participant under this Plan be deemed to be a Parachute Payment; provided, however, that in order to comply with Section 409A of the Code, the reduction or elimination will be performed in the order in which each dollar of value subject to an Award reduces the Parachute Payment to the greatest extent. Further, notwithstanding any other provision of this Plan, no Awards may be issued to any covered employee (as defined in Section 162(m) of the Code) at any time at which Section 162(m) of the Code is applicable to the Company if the effect of such Award would be to cause any portion of the Award or any amounts payable to such covered employee under such Other Agreement or Benefit Arrangements to be nondeductible by the Company as a result of the application of Section 162(m) of the Code.
14.20Regulatory Restrictions. Notwithstanding any other provision of this Plan or of any other agreement, contract, or understanding heretofore or hereafter entered into by a Participant with the Company or any Affiliate, all Awards granted hereunder shall be subject to and conditioned upon their compliance with 12 U.S.C. Section 1828(k) and 12 C.F.R. Part 359, as such laws and regulations may be amended from time to time, and the obligations of the Company and Participants under the Plan are generally subject to such conditions, restrictions, and limitations as may be imposed from time to time by applicable state and/or federal banking laws, rules, regulations and orders.
15.1Effective Date. The Plan shall be effective as of June 18, 2015, provided it has been approved by the Board and by the Company’s shareholders.
Appendix A - 13
15.2Expiration Date. No new Awards shall be granted under the Plan after the tenth (10th) anniversary of the Effective Date. Unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award granted hereunder may, and the authority of the Board or the Committee to alter, amend, adjust, suspend, discontinue or terminate any such Award or to waive any conditions or rights under any such Award shall, continue after the tenth (10th) anniversary of the Effective Date.(p)
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Appendix A - 14
0 ¢
COMMERCE UNION BANCSHARES, INC.
Proxy for Annual Meeting of Shareholders
to be held June 18, 2015
This proxy is being solicited on behalf of the board of directors
By signing on the reverse side, you appoint DeVan D. Ard, Jr. and William R. DeBerry to be your proxies. This appointment applies to each of them separately and allows them to appoint substitutes as needed. You are empowering them to vote all of your shares of common stock of Commerce Union Bancshares, Inc. at the annual meeting of the company’s shareholders, which will be held on June 18, 2015, beginning at 5:00 p.m. local time, and at any adjournment or postponement of the meeting.
(Continued and to be signed on the reverse side.)
ANNUAL MEETING OF SHAREHOLDERS OF
COMMERCE UNION BANCSHARES, INC.
June 18, 2015
GO GREEN
e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy
material, statements and other eligible documents online, while reducing costs, clutter and
paper waste. Enroll today via www.amstock.com to enjoy online access.
Please sign, date and mail
your proxy card in the
envelope provided as soon
as possible.
i Please detach along perforated line and mail in the envelope provided.i
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ANNUAL MEETING OF SHAREHOLDERS OF
COMMERCE UNION BANCSHARES, INC.
June 18, 2015
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INTERNET- Access “www.voteproxy.com” and follow the on-screen instructions or scan the QR code with your smartphone. Have your proxy card available when you access the web page.
TELEPHONE- Call toll-free1-800-PROXIES (1-800-776-9437) in the United States or1-718-921-8500 from foreign countries from any touch-tone telephone and follow the instructions. Have your proxy card available when you call.
Vote online/phone until 11:59 PM EST the day before the meeting.
MAIL -Sign, date and mail your proxy card in the envelope provided as soon as possible.
IN PERSON -You may vote your shares in person by attending the Annual Meeting.
GO GREEN - e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.amstock.com to enjoy online access.
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