| | Members William G. Kistner (Chair)
Phillip R. Cabrera
Steven M. Rull Meetings in 2021
14 | | | The Audit Committee’s duties and responsibilities include the following: •
| Appoints, evaluates and determines the compensation of our independent auditors. • |
Reviews and approves the scope of the annual audit and quarterly reviews, the audit and quarterly review fees, any additional services provided by the independent auditors and the related fees, the financial statements, significant accounting policy changes, material weaknesses identified by outside auditors or the internal audit function and risk management issues. assists•
Prepares the Audit Committee report for inclusion in our proxy statement for our annual meeting, and reviews regulatory reports before they are filed with the SEC. •
Reviews disclosure controls and procedures, internal controls, internal audit function and corporate policies with respect to financial information. •
Assists the Board of Directors in monitoring our compliance with applicable legal and regulatory requirements;requirements. •
Oversees investigations into complaints concerning financial matters, if any. •
Reviews other risks that may have a significant impact on our financial statements. •
Annually reviews the Audit Committee charter and the committee’s performance. | |
oversees investigations into complaints concerning financial matters, if any;
reviews other risks that may have a significant impact on our financial statements; and
annually reviews the Audit Committee charter and the committee’s performance.
The Audit Committee works closely with management as well as our independent auditors. The Audit Committee has the authority to obtain advice and assistance from, and receive appropriate funding to engage outside legal, accounting or other advisors as the Audit Committee deems necessary to carry out its duties. The Audit Committee has adopted a written charter that among other things, specifies the scope of its rights and responsibilities. A copy of the committee’s charter is available on our website at www.bylinebancorp.com under the “Governance Documents” tab. The Audit Committee is composed solely of members who satisfy the applicable independence, financial literacy and other requirements of the NYSE for audit committees, and at least one of its members is an “audit committee financial expert” as defined by the rules of the SEC, which is Mr. Kistner. Messrs. Rull, Kistner Cabrera and CabreraRull also meet the heightened independence requirements of Rule 10A-3 of the Exchange Act, as did all former membersAct. Effective on June 7, 2022, following the retirement of Mr. Rull from the Board, Mr. Kent will become a member of the Audit Committee who served on the Audit Committee during 2018. The Audit Committee held 17 meetings in 2018.Committee. 14 Byline Bancorp, Inc. 2022 Proxy Statement
Compensation Committee. The Compensation Committee sets and administers the policies that govern our executive compensation programs and is responsible for discharging the Board’s responsibilities relating to compensation of our executive officers and directors. Among other things, the Compensation Committee: | | Members Antonio del Valle Perochena (Chair)
Phillip R. Cabrera
Steven P. Kent Meetings in 2021
7 | | | The Compensation Committee’s duties and responsibilities include the following: •
Reviews and approves the Company’s executive compensation structure, including salary, bonus, incentive and equity compensation. •
Reviews and approves objectives relevant to the compensation of the Executive Chairman and Chief Executive Officer and other executive officers. •
Evaluates performance against the objectives established for the Executive Chairman and Chief Executive Officer and determines and approves, or recommends to the Board for approval, the compensation of the Executive Chairman and Chief Executive Officer based on its evaluation. •
Makes recommendations to the Board with respect to the Company’s compensation plans that are subject to Board approval, discharges any responsibilities imposed on the Committee by any of these plans, and approves and recommends to the Board any new equity compensation plan or any material change to an existing equity compensation plan. •
Reviews, approves and makes recommendations to the Board concerning the compensation of the non-employee directors of the Company. •
Oversees and reviews periodically, as it deems appropriate, the administration of the Company’s employee benefits plans and any material amendments to such plans. •
Review and monitor matters related to human capital management, including Company culture, talent development, diversity, equity and inclusion (DEI) programs and initiatives and other environmental, social and governance (ESG) matters. •
Evaluates performance in relation to the Compensation Committee charter. | |
reviews and approves the Company’s executive compensation structure, including salary, bonus, incentive and equity compensation;
reviews and approves objectives relevant to the compensation of the Chief Executive Officer and other executive officers;
evaluates performance against the objectives established for the Chief Executive Officer and determines and approves, or recommends to the Board for approval, the compensation of the Chief Executive Officer based on its evaluation;
makes recommendations to the Board with respect to the Company’s compensation plans that are subject to Board approval, discharges any responsibilities imposed on the Committee by any of these plans, and approves and recommends to the Board any new equity compensation plan or any material change to an existing equity compensation plan;
reviews, approves and makes recommendations to the Board concerning the compensation of the non-employee directors of the Company;
oversees and reviews periodically, as it deems appropriate, the administration of the Company’s employee benefits plans and any material amendments to such plans; and
evaluates performance in relation to the Compensation Committee charter.
Under the Compensation Committee’s charter, the Compensation Committee may, at its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the Compensation Committee. In addition, it may delegate authority to the Executive Chairman and Chief Executive Officer to approve compensation applicable to non-executive level Company employees, provided that the Compensation Committee reviews and approves the Company’s compensation structures applicable to non-executive level employees on an annual basis. In 2018,2021, the Compensation Committee retained Pearl Meyer & Partners, LLC (“Pearl Meyer”) primarily to assist the Compensation Committee in determining and structuring executive compensation and to assess the market competivenesscompetitiveness of the Company’s executive compensation program. The Compensation Committee has annually engaged Pearl Meyer for these and related services since 2014. With respect to any advice provided to the Committee by Pearl Meyer, the Compensation Committee received a letter from Pearl Meyer addressing factors relevant to SEC and NYSE rules regarding independence and conflicts of interest. After considering the information provided by Pearl Meyer and other factors, no conflicts of interest with respect to Pearl Meyer were identified by the Compensation Committee, and the Compensation Committee concluded that Pearl Meyer was an independent consultant. The Compensation Committee has adopted a written charter that among other things, specifies the scope of its rights and responsibilities. A copy of the committee’s charter is available on our website at www.bylinebancorp.com under the “Governance Documents” tab. The Compensation Committee is composed solely of members who satisfy the applicable independence requirements of the NYSE as they apply to members of compensation committees. The Compensation Committee held four meetings in 2018.Byline Bancorp, Inc. 2022 Proxy Statement 15
Governance and Nominating Committee. The Governance and Nominating Committee is responsible for making recommendations to our Board of Directors regarding candidates for directorships and the size and composition of our Board of Directors. In addition, the Governance and Nominating Committee is responsible for overseeing our corporate governance guidelines and reporting and making recommendations to our Board of Directors concerning governance matters. Among other things, the Governance and Nominating Committee: | | Members Antonio del Valle Perochena (Chair)
Phillip R. Cabrera
Steven P. Kent Meetings in 2021
3 | | | The Governance and Nominating Committee’s duties and responsibilities include the following: •
Identifies individuals qualified to be directors consistent with the criteria approved by the Board of Directors, subject to any waivers granted by the Board, and recommends director nominees to the full Board of Directors. •
Ensures that the Audit and Compensation Committees have the benefit of qualified “independent” directors. •
Oversees management continuity planning. •
Leads the Board of Directors in its annual performance review. •
Takes a leadership role in shaping the corporate governance of our organization. | |
identifies individuals qualified to be directors consistent with the criteria approved by the Board of Directors, subject to any waivers granted by the Board, and recommends director nominees to the full Board of Directors;
ensures that the Audit and Compensation Committees have the benefit of qualified “independent” directors;
oversees management continuity planning;
leads the Board of Directors in its annual performance review; and
takes a leadership role in shaping the corporate governance of our organization.
The Governance and Nominating Committee has adopted a written charter that among other things, specifies the scope of its rights and responsibilities. A copy of the Committee’s charter, as well as a copy of the corporate governance guidelines is available on our website at www.bylinebancorp.com under the “Governance Documents” tab. The Governance and Nominating Committee is composed solely of members who satisfy the applicable independence requirements of the NYSE for governance and nominating committees. The Governance and Nominating Committee held four meetings in 2018.
Risk Committee. The Risk Committee is responsible for overseeing our enterprise risk management policies, commensurate with our capital structure, risk profile, complexity, size and other risk related factors:factors. | | Members Steven P. Kent (Chair)
Roberto R. Herencia
Mary Jo Herseth
William G. Kistner
Steven M. Rull Meetings in 2021
10 | | | The Risk Committee’s duties and responsibilities include the following: •
Monitor management’s assessment of the Company’s aggregate enterprise-wide risk profile. •
Review and recommend to the Board the articulation and establishment of the Company’s risk tolerance and risk appetite. •
Oversee risk management infrastructure, profile, and critical risk management policies, including the charter of the Risk Management Committee. •
Evaluate management’s activities with respect to capital planning, including stress testing and compliance with risk-based capital standards. •
Provide input regarding the Chief Risk Officer’s performance and the adequacy of the Bank’s risks management functions. | |
monitor our overall risk profile and review risk management policies;
monitor our process to identify, assess and manage risks that could prevent us from achieving our business objectives;
oversee actions relating to interest rate risk and liquidity risks;
oversee actions relating to the activities of our enterprise risk management oversight groups; and
facilitate communication among management, the Board of Directors and our enterprise risk management oversight groups.
The Risk Committee has adopted a written charter that specifies among other things, the scope of its rights and responsibilities. The Risk Committee held seven meetings in 2018. A copy of the committee’s charter is available on our website at www.bylinebancorp.com under “Governance Documents” tab. In addition to the committees described above, the Board of Directors of Byline Bank also has an Executive Credit Committee, a Trust Committee and aTrustan ALCO Committee. The Executive Credit Committee provides oversight of our credit risk management function. This committee oversees the risk appetite, the development of policies, practices and systems for measuring credit risk and monitors the performance and quality of our credit portfolio. Mr. CabreraMs. Herseth is Chairman of the Executive Credit Committee, and the committee’s other members include Messrs. Herencia, Paracchini, Kent and Ruiz Sacristán.Cabrera. The Trust Committee provides oversight in implementing policies for the Bank’s Wealth 16 Byline Bancorp, Inc. 2022 Proxy Statement
Management and Trust department, as well as practices and controls sufficient to promote high quality fiduciary administration. Mr. Rull is the Chairman of the Trust Committee, and the committee’s other members include Messrs. Cabrera, Herencia Ruiz Sacristán and Yohanan.Ms. Herseth. The ALCO Committee provides oversight of the Asset and Liability Management function. Mr. Rull is the Chairman of the ALCO Committee, and the committee’s other members include Messrs. Cabrera Herencia, Kent, Paracchini and Ms. Herseth. Effective on June 7, 2022, following the retirement of Mr. Rull from the Board, Mr. Kent will become the Chairman of the Trust Committee, and Mr. Cabrera will become the Chairman of the ALCO Committee. Board Oversight of Risk Management Our Board of Directors believes that effective risk management and control processes are critical to our safety and soundness, our ability to predict and manage the challenges that we face and, ultimately, our long termlong-term corporate success. Our Board of Directors, both directly and through its committees, including the Risk Committee, is responsible for overseeing our risk management processes, with each of the committees of our Board of Directors assuming a different and important role in overseeing the management of the risks we face.
The Risk Committee of our Board of Directors oversees our enterprise wideenterprise-wide risk management framework, which establishes our overall risk appetite and risk management strategy and enables our management to understand, manage and report on the risks we face. Our Risk Committee also reviews and oversees policies and practices established by management to identify, assess, measure and manage key risks we face, including the risk appetite metrics developed by management and approved by our Board of Directors. The Audit Committee of our Board of Directors is responsible for overseeing risks associated with financial matters (particularly financial reporting, accounting practices and policies, disclosure controls and procedures and internal control over financial reporting) and engaging as appropriate with our Risk Committee to assess our enterprise wideenterprise-wide risk framework. The Compensation Committee of our Board of Directors has primary responsibility for risks and exposures associated with our compensation policies, plans and practices, regarding both executive compensation and the general compensation structure generally.structure. In particular, our Compensation Committee, in conjunction with our President and Chief Executive Officer, and Director ofPresident, Chief Human Resources Officer and other members of our
management as appropriate, reviews our incentive compensation arrangements to ensure these programs are consistent with applicable laws and regulations, including safety and soundness requirements, and do not encourage imprudent or excessive risk taking by our employees. The Governance and Nominating Committee of our Board of Directors oversees risks associated with the independence of our Board of Directors and potential conflicts of interest. Our senior management is responsible for implementing and reporting to our Board of Directors regarding our risk management processes, including by assessing and managing the risks we face, including strategic, operational, regulatory, investment and execution risks, on a day to day basis. Our senior management is also responsible for creating and recommending to our Board of Directors for approval appropriate risk appetite metrics reflecting the aggregate levels and types of risk we are willing to accept in connection with the operation of our business and pursuit of our business objectives. The role of our Board of Directors in our risk oversight is consistent with our leadership structure, with our President and Chief Executive Officer, President, Chief Financial Officer, Chief Risk Officer and the other members of senior management having responsibility for assessing and managing our risk exposure, and our Board of Directors and its committees providing oversight in connection with those efforts. We believe this division of risk management responsibilities presents a consistent, systemic and effective approach for identifying, managing and mitigating risks throughout our operations. Stockholder Engagement and Communicating with Our Board We believe in proactive and transparent communication and engagement with our stockholders to promote an understanding of the values we maintain, our governance framework, the decisions we make and how me make them, our business strategy and our financial performance, and we welcome receiving communications from our stockholders regarding these matters. Generally, the Board relies on the Executive Chairman of the Board theand Chief Executive Officer, and other executive officers to speak for the Company, and management is generally responsible for managing our corporate communications and investor relations activities. Throughout the year, our Executive Chairman and Chief Executive Officer, President and Chief Financial Officer regularly interact with significant stockholders regarding our performance, business strategy and other corporate matters. From time to time, it may be Byline Bancorp, Inc. 2022 Proxy Statement 17
appropriate for one or more of our non-executive directors to speak or meet with stockholders. Any such communication would occur under the direction and oversight of the Chairman.Executive Chairman and Chief Executive Officer. Stockholders may contact the Board or any committee of the Board about governance-related and executive compensation matters, or other matters specific to the Board’s and/or its committees’ oversight responsibilities. Written correspondence may be directed to the Board of Directors at Byline Bancorp, Inc., Attention: Corporate Secretary, 180 North LaSalle Street, Suite 300, Chicago, Illinois 60601. Inquiries from stockholders directed to the Board will be received and processed by the Corporate Secretary before being forwarded to the Board, the appropriate Committee or a particular director as designated in the communication. Director Attendance at Our Annual Meeting and Board Meetings While we do not have a formal policy regarding our directors’ attendance at the Company’s annual orand special meetings, our Board expects each director to attend, either in person or remotely via conference call, the Company’s Annual Meeting of Stockholders each year, absent extenuating circumstances. All of our seven directors serving on the Board in 20182021 at that time attended our 20182021 annual meeting. We currently anticipate that all our directors will attend the Annual Meeting, either in person or remotely.Meeting. During 2018,2021, each of our directors attended at least 75%90% of the meetings of the Board and Board committees on which they served.
Nominee Recommendations by Stockholders Stockholders wishing to recommend persons for consideration by the Governance and Nominating Committee as nominees for election to the Board of Directors can do so by writing to the Governance and Nominating Committee at Byline Bancorp, Inc., Attention: Corporate Secretary, 180 North LaSalle Street, Suite 300, Chicago, Illinois 60601. Recommendations must include the proposed nominee’s name, biographical data and qualifications as well as a written statement from the proposed nominee consenting to be named as a nominee and, if nominated and elected, to serve as a director. If all necessary information is provided, the Governance and Nominating Committee will then consider the candidate and the candidate'scandidate’s qualifications in the same manner as prospective nominees that are identified by the committee. The Governance and Nominating Committee may contact the stockholder making the nomination to discuss the qualifications of the candidate and the reasons for making the nomination. Any stockholder seeking to nominate persons for election to our Board of Directors must comply with our procedures for stockholder nominations described under the heading “Stockholder Proposals.“Stockholder Proposals.”
Compensation Committee Interlocks and Insider Participation None of the members of our Compensation Committee is currently or was previously an officer or employee of Byline or Byline Bank. In addition, none of our executive officers serves or has served as a member of the Boardboard of Directors, Compensation Committeedirectors, compensation committee or other Boardboard committee performing equivalent functions of any company or other entity that has one or more executive officers serving as one of our directors or on our Compensation Committee.
Code of Business Conduct and Ethics Our Board of Directors has adopted a code of business conduct and ethics (the “Code of Ethics”) that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer and persons performing similar functions. Our Board has also adopted a Code of Ethics for Financial Officers. A copy of each code is available upon written request to Corporate Secretary, Byline Bancorp, Inc., 180 North LaSalle Street, Suite 300, Chicago, Illinois 60601 and on our website at www.bylinebancorp.com under the “Governance Documents” tab. If we amend or grant any waiver from a provision of our Code of Ethics that applies to our executive officers, we will publicly disclose such amendment or waiver on our website and as required by applicable law, including by filing a Current Report on Form 8-K. 18 Byline Bancorp, Inc. 2022 Proxy Statement
Human Capital and Social Responsibility We believe in being the bank our customers deserve, which, as embodied in our name, means taking ownership, initiative, action, and responsibility for what we do. In order to achieve our vision to be the bank our customers deserve, we focus on: •
Consistently delivering an extraordinary customer experience; •
Helping our customers bank the way they want to bank; •
Cultivating a positive culture and great place to work by finding, growing, and retaining talented employees; and •
Contributing to the local communities in which we work and live to grow and thrive—today and into the future. To do this, we’ve outlined the Things That Matter (TTM) at Byline—values that guide our business, mission, and team culture: Our people. Our greatest asset. We speak, act and treat one another with respect — every day, everywhere and every time. Obsess about our customers. Every single experience and interaction matters. Go to extraordinary lengths to convert customers into fans. Insist on Excellence. And the highest ethical standards in everything we do. Embrace change. Change is constant. Without change, we cannot grow. Think like an owner. Be frugal. Take ownership of issues until they are resolved. Present new ideas. Know the Numbers. Facts matter. We don’t know our business if we don’t know our numbers. Fast is better than slow. Speed matters in business. Get it done. Deliver results. Inspire. Respect, challenge and collaborate with each other every day. Teamwork is our greatest strength. Environmental, Social and Governance (ESG) Mission Statement At Byline, we are focused on generating consistent and long-term sustainable value for all our stakeholders, including stockholders, customers, employees, and communities. Our approach to ESG is shaped by a shared vision: we put our name behind everything we do. We know that our reputation is on the line with every action we take and so, we are dedicated to improving our communities where we live and work. Byline Bancorp, Inc. 2022 Proxy Statement 19
Human Capital and Social Responsibility
Human Capital Attracting, developing, and retaining the best people is crucial to our long-term strategy. Our business is about people—our customers and our employees. For additional information, please see the section captioned “Item 1. Business-Human Capital” in our 2021 Annual Report in form 10-K Employee Profile and Diversity We embrace diversity within our teams and define diversity by both gender and people of color. Our key human capital diversity metrics are as follows: *
Workforce statistics include information as of December 31, 2021. Executive Leadership and Board of Directors statistics include information as of April 25, 2022. Talent Attraction, Development and Retention To facilitate talent attraction, development and retention across our franchise, we strive to make Byline a diverse, inclusive, safe and healthy workplace, with opportunities for our employees to grow and develop in their careers, supported by strong compensation, benefits, health and welfare programs. We believe the management and development of our employees is key to our strategic growth plan and longer-term succession planning. We seek to encourage and empower our team members to take initiative, make decisions, own their careers and build customer relationships through our programs and employee-led efforts and initiatives throughout Byline Bank. We have developed initiatives that support physical, emotional, financial, and social wellbeing, including: •
Competitive, performance-based compensation, including incentives tied to business and individual results; •
Comprehensive health and welfare benefits offerings; •
Savings and retirement planning resources through our 401(k) Plan and Employee Stock Purchase Plan; •
Tuition reimbursement benefits and student loan repayment programs; •
Access to employee assistance plans to help with financial planning and personal, family and life issues; •
Paid parental leave programs; •
Adoption assistance; •
Remote work arrangements and; •
Paid time off policies. 20 Byline Bancorp, Inc. 2022 Proxy Statement
Human Capital and Social Responsibility
We recognize the critical importance of providing career development and advancement opportunities for all employees. Accordingly, we provide a variety of formal and informal development opportunities to help employees grow in their current roles and build new skills. During 2021, we continued our focus on having more frequent career development conversations with all employees, providing regular coaching and feedback, and highlighting opportunities across the Bank to move into new roles and take on new assignments. We increased our investment in both leader and manager development in 2021 with new programs and will continue to invest in these programs in 2022 and beyond. We strive to optimally deploy existing talent across Byline by focusing on where our employees excel and helping them find the best roles for them. One of the hallmarks of our success in this area is demonstrated by our ability to fill vacancies from within. We encourage our team members to pursue educational opportunities that will help improve job performance and professional development. To further this goal, we launched tuition reimbursement benefits in 2021. We also support employees in obtaining professional certifications and taking approved educational courses to support their job role and expansion of skills. We believe that talent development is a critical part of our succession planning of our executive management team. Our Board of Directors oversees the succession planning for executive management on an annual basis, including a focus on outlining key development needs for employees on succession plans for these key roles. Employee recognition and engagement is important for us. We conduct an annual employee engagement survey with over 90% participation and have continued to see strong improvements in employee engagement year over year. In order to drive engagement, we focus on the following areas: •
Increasing communication with employees and managers through monthly manager forums, quarterly all employee calls and business unit town hall meetings. •
We provide everyday recognition that celebrates employees living our core values, or “Things That Matter”. •
Our annual CEO Circle Awards highlight our employees who have demonstrated extraordinary performance during the year and exemplify our values. Diversity, Equity and Inclusion At Byline, we believe in supporting a culture of respect and inclusion. Our DEI Council is led by our executive team in partnership with an appointed team made up of three senior executives and 13 employees with representation across all business units. The DEI Council is the foundation and catalyst for honoring our employees, engaging our customers and community, creating a great place to work, and ultimately driving business success. We pledge to create an environment where every employee can bring their authentic self to work and know that their unique background, ethnicity, experiences, perspective, and contributions serve to strengthen us and where growth opportunities exist at all levels. For our customers and community, we seek to demonstrate through our actions our commitment to being better together through community development loans and investments, community service, grants, donations, and sponsorships. We seek to leverage our current diverse workforce and prominent community outreach efforts to further define and enhance our DEI focus in four key areas: Workforce—Promoting representation at all levels and in all areas and business lines of the bank, with attention on recruiting and developing diverse talent and focusing on engagement and employee recognition. Workplace—Creating a culture where everyone brings their authentic self to work and knows that their unique background, ethnicity, experiences, perspective, and contribution serve to strengthen the bank. Community—Building meaningful, productive relationships in the communities we work. Marketplace—Providing our customers with products and services that meet their diverse needs, including support through digital strategies that align to the market. Our Employee Resource Groups (“ERG”) were formed to support development, engagement and inclusion across the organization. These ERGs include Women Empowered by Byline, Latinx, Black, Asian, and LGBTQ+. During 2021 the ERGs organized 34 events that were attended by over 850 employees. Byline Bancorp, Inc. 2022 Proxy Statement 21
Human Capital and Social Responsibility
Community Impact We are proud to be a community bank. We are committed to helping the local communities in which we live and work to grow and thrive, today and into the future. One way we do this is by providing employees paid time off to participate in community-based volunteer programs. Throughout the year, employees make a positive impact in their local communities and have found a multitude of special ways to continue volunteering during the pandemic. During 2021, Byline made and/or supported: *
Information as of December 31, 2021. 22 Byline Bancorp, Inc. 2022 Proxy Statement
Director Compensation The following table lists the individuals who served on our Board of Directors in 20182021 and the compensation received in 20182021 for their service as directors, other than with respect to Mr. Paracchini,Herencia, our PresidentExecutive Chairman and Chief Executive Officer, and Mr. Paracchini, our President, whose compensation as an officerofficers of the Company is detailed in the Summary Compensation Table in the “Executive Compensation” section of this Proxy Statement. All compensation paid to directors is for their service on both the Byline Board of Directors and the Byline Bank Board of Directors. | Name | | | Fees Earned
or
Paid in Cash(1) | | | Fees Paid
in Shares(2) | | | All Other
Compensation | | | Total | | | Phillip R. Cabrera | | | | $ | 114,167 | | | | | | | | | | | | | | — | | | | | | $ | 114,167 | | | | | Antonio del Valle Perochena | | | | $ | 140,515 | | | | | | | | | | | | | | — | | | | | | $ | 140,515 | | | | | Mary Jo S. Herseth | | | | $ | 97,083 | | | | | | $ | 6,250 | | | | | | | — | | | | | | $ | 103,333 | | | | | Steven P. Kent | | | | $ | 100,417 | | | | | | | | | | | | | | — | | | | | | $ | 100,417 | | | | | William G. Kistner | | | | $ | 100,417 | | | | | | $ | 5,000 | | | | | | | — | | | | | | $ | 105,417 | | | | | Steven M. Rull | | | | $ | 101,875 | | | | | | | | | | | | | | — | | | | | | $ | 101,875 | | | | | Robert R. Yohanan(3) | | | | $ | 689,583 | | | | | | | | | | | | | | — | | | | | | $ | 689,583 | | | | | |
(1)
| | | | | | | | | | Omnibus | | | | | | | | | | | | Fees Earned | | | | | | | Incentive | | | | | | | | | | | | or | | | Option | | | Plan | | | All Other | | | | | | Name | | Paid in Cash(1) | | | Awards | | | Awards (3) | | | Compensation(4) | | | Total | | Roberto R. Herencia(2) | | $ | 800,000 | | | $ | - | | | $ | - | | | $ | 22,484 | | | $ | 822,484 | | L. Gene Beube | | | 100,000 | | (5) | | — | | | | — | | | | — | | | | 100,000 | | Phillip R. Cabrera | | | 116,250 | | | | — | | | | — | | | | — | | | | 116,250 | | William G. Kistner | | | 54,583 | | (6) | | — | | | | — | | | | — | | | | 54,583 | | Antonio del Valle Perochena | | | 101,250 | | | | — | | | | — | | | | — | | | | 101,250 | | Steven M. Rull | | | 77,500 | | | | — | | | | — | | | | — | | | | 77,500 | | Jaime Ruiz Sacristán | | | 106,250 | | | | — | | | | — | | | | — | | | | 106,250 | | Robert R. Yohanan | | | 218,750 | | (7) | | — | | | | — | | | | 63,863 | | | | 282,613 | |
(1)
| Mr. Herencia received $400,000 in annual director fees for his service on the Byline Board of Directors and its committees. In addition, Mr. Herencia received an additional payment of $400,000 to compensate him for the extensive duties and responsibilities he has assumed as Chairman of the Board following the Company’s recapitalization transaction in 2013. His responsibilities include meeting with Byline’s executive officers and other members of management on a regular basis to ensure appropriate oversight of Byline’s business and meeting on a regular basis with regulators. The payment was paid in two equal installments in each of March 2018 and September 2018 to serve as an incentive for Mr. Herencia to maintain his roles at Byline. In addition, Mr. Beube received $12,500 for his service as Chair of the Executive Credit Committee (for a portion of the year) and $4,167 for his service as a member of the Audit Committee; Mr. Cabrera received $3,750 for his service as Chair of the Risk Committee, $5,000 for his service as a member of the Audit Committee and $7,500 for his service as Chair (for a portion of the year) and a member of the Executive Credit Committee; Mr. Del Valle Perochena received $1,250 for his service as Chair of the Compensation Committee; Mr. Rull received $1,250 for his service as a member of the Audit Committee and $1,250 for his service as Chair of the Risk Committee; Mr. Ruiz Sacristan received $5,000 for his service as a member of the Executive Credit Committee and $1,250 for his service as Chair of the Governance Committee; and Mr. Kistner received $4,583 for his service as a member and Chair of the Audit Committee (for a portion of the year).
|
Mr. Cabrera received $6,250 for his service as Chair of Byline Bank’s Executive Credit Committee and $7,917 for his service as a member of the Audit Committee and the Byline Bank Executive Credit Committee for a portion of the year; Ms. Herseth received $8,750 for her service as Chair of Byline Bank’s Executive Credit Committee for a portion of the year, and $5,000 for her service as a member of the Risk Committee; Mr. Kent received $5,833 for his service as Chair of the Risk Committee, and $5,000 for his service as a member of the Byline Bank Executive Credit Committee for a portion of the year; Mr. Kistner received $12,917 for his service as Chair of the Audit Committee, and $2,917 for his service as a member of the Risk Committee for a portion of the year; Mr. Del Valle Perochena received $12,917 for his service as Chair of the Compensation Committee and Chair of the Governance and Nominating Committee for the full year; Mr. Rull received $4,375 for his service as Chair of the Byline Bank Trust Committee, and Chair of the Byline Bank ALCO Committee for the full year, and $7,917 for his service as a member of the Audit Committee and the Risk Committee for the full year.(2)
| Mr. Herencia has 428,988 options outstanding as of December 31, 2018, all of which are vested and exercisable.
|
(3)
| There were no Omnibus Incentive Plan awards granted to non-employee directors during 2018 or outstanding as of December 31, 2018.
|
(2)(4)
| Reflects reimbursement for health insurance premiums and amounts paid for cell phone expenses for Mr. Herencia, and health insurance premiums, cell phone expenses, country club dues and automobile lease payments for Mr. Yohanan.
|
Effective June 8, 2021, the Compensation Committee approved a provision to the director compensation program to allow non-employee directors to be paid a portion of the annual board retainer in the form of restricted shares of common stock. These shares are to be issued on the date of the 2022 Annual Stockholders' Meeting. Mrs. Herseth and Mr. Kistner elected to be paid a portion of the remaining outstanding 2021 fee in shares, 25% and 20% respectively.(5)
| Mr. Beube retired from the Board in October, 2018.
|
(6)
| Mr. Kistner was appointed as a Board member and Audit Committee member in April, 2018, and as the Audit Committee Chair in October, 2018.
|
(3)(7)
| See “Appointment of Robert R. Yohanan to Byline’s and Byline Bank’s Board of Directors”.
|
Mr. Yohanan served three one-year terms as a member of the boards of directors of Byline and Byline Bank under a services and covenant agreement executed by and between Mr. Yohanan and Byline as a result of the merger of First Evanston Bancorp, Inc. into Byline. Mr. Yohanan retired from his positions on the Board and Committees of Byline and Byline Bank effective on June 8, 2021.
Byline Bancorp, Inc. Director Compensation Program Our director compensation program provides the following compensation for non-employee members of our Board of Directors: •
An annual cash retainer of $100,000 for directors who were serving on June 1, 2016 and $75,000 for all other directors; An additional annual cash retainer of $5,000$15,000 for the Chair of the RiskAudit Committee; An additional annual cash retainer of $7,500 for the Chair of the Compensation Committee; •
An additional annual cash retainer of $7,500 for the Chair of the Governance and Nominating Committee; •
An additional annual cash retainer of $10,000 for the Chair of the AuditRisk Committee; An additional annual cash retainermembership fee of $5,000 for the Chaireach member of the CompensationAudit Committee, the Risk Committee and/or the Bank’s Executive Credit Committee; An additional annual cash retainer of $5,000 for the Chair of the Governance and Nominating Committee;
•
| •
| An additional annual membership fee of $5,000 for each member of the Audit Committee and/or the Bank’s Executive Credit Committee;
|
An additional annual cash retainer of $15,000 for the Chair of the Bank’s Executive Credit Committee; and An aggregateadditional annual cash retainer of $400,000$3,750 for the ChairmanChair of the Bank’s Trust Committee; •
An additional annual cash retainer of $3,750 for the Chair of the Bank’s ALCO Committee; and •
A retainer of $20,000 for the Lead Director. Byline Bancorp, Inc. 2022 Proxy Statement 23
Under our director compensation plan, the annual cash retainer fees for directors, committee chairs and committee members are paid in twelve (12) equal monthly installments on the last day of each month, and newly-appointed directors and/or committee members, committee chairs or Lead Director of the Board will be paid on a pro rata basis in relation to the time served during their first month of service. Directors which includes theare allowed to elect to receive up to 100% of their annual board retainer and all committee membership and committee chair retainers thatin shares of our common stock to be issued pursuant to the Chairman would otherwise be entitled to receive.Byline Bancorp, Inc. 2017 Omnibus Incentive Compensation Plan. The Chairman of the Board of Directors will also receive an additional payment of $400,000, payable in two equal installments in March and September of each year subject to continued service through such dates, to compensate the Chairman for the extensive duties and responsibilities assumed following the Company’s recapitalization transaction in 2013. The Chairman’s responsibilities include meeting with Byline’s executive officers and other members of management on a regular basis to ensure appropriate oversight of Byline’s business and meeting on a regular basis with regulators. The annual payment also serves as an incentive for the Chairman to maintain his role at Byline.
We also reimburse all directors for reasonable and substantiated out-of-pocket expenses incurred in connection with the performance of their duties as directors. Additionally,We provide insurance policies for directors and officers and will indemnify directors to the Chairmanfullest extent provided under Byline’s Certificate of the Board is reimbursed for cell phone services, two business-related club membershipsIncorporation and certain medical and health insurance expenses.By-laws as in effect from time to time. Directors agree, in connection with their service as directors, that they will not, without the prior consent of Byline, directly or indirectly, provide any material services to any other banking entity which competes in any material respect with Byline and its subsidiaries as long as they serve as a director of Byline (other than services disclosed in writing prior to the adoption of the director compensation program)writing). Notwithstanding the above, any director who is an officer of Byline willshall not receive any director compensation.
Agreement with Mr. Herencia
Proposal 2:
RatificationIn January of Independent Registered Public Accounting FirmUnder its charter,2021, the Audit Committee hasBoard conducted a deep evaluation of our then Chairman, Mr. Herencia, and his significant ongoing involvement with the sole authorityCompany’s management and his ability to appointhave a substantial and positive impact on the execution of the Company’s strategy. The Board announced the appointment of Mr. Herencia as Executive Chairman and Chief Executive Officer of Byline Bancorp, Inc., effective as of February 12, 2021. In connection with the assumption of this expanded role, we entered into a new employment agreement with Mr. Herencia (the “Employment Agreement”), which is summarized as follows.
The Employment Agreement is for an initial term of three years and includes an automatic one-year extension at the end of each term following the initial term unless notice of termination is provided not less than 120 days prior to the end of such term. In addition, the Employment Agreement will terminate on the termination of Mr. Herencia’s employment. Upon the occurrence of a Change in Control (as such term is defined in the Employment Agreement), the term of the Employment Agreement will renew for the period expiring on the second anniversary of such Change in Control and will automatically renew for one year on each subsequent anniversary of such date thereafter, unless at any time not less than 120 days prior to the end of such term either Byline or replace our independent registered public accounting firm,Mr. Herencia notifies the other in writing of the intention not to further extend the term. During the term of the Employment Agreement, Mr. Herencia serves as Executive Chairman and Chief Executive Officer of the Byline, reporting to the Board, and Executive Chairman of the Board of Directors of the Bank. The Employment Agreement provides for an annual base salary of $825,000 (which may be increased but not decreased), eligibility to participate in (1) Byline’s Executive Incentive Plan, with an annual target cash bonus of 75% of his annual base salary (or such other percentage as the Board may determine), and (2) Byline’s long-term incentive awards annually under the 2017 Omnibus Incentive Compensation Plan (the “2017 Plan”), with an annual long-term incentive award target equal to 85% of his annual base salary. In connection with entering into the Employment Agreement, Mr. Herencia was awarded a restricted stock award of 109,475 shares of Byline’s common stock under the 2017 Plan, vesting in equal installments at the end of 2021, 2022 and 2023. The Employment Agreement also includes severance benefits that are subject to stockholder approval, signing a release. If we terminate Mr. Herencia without “cause” (and has direct responsibilitynot due to Disability (as such term is defined in the Employment Agreement) or Mr. Herencia resigns for “good reason” (provided that the compensation and oversightexpiration of the term of the Employment Agreement following the delivery by Byline of a notice of non-renewal of such firm. Our independent registered public accounting firmterm shall be deemed to be a termination of Mr. Herencia’s employment by Byline without “cause”), other than on or following the occurrence of a Change in Control, he will be entitled to (each capitalized term as defined in the Employment Agreement): (1) the Accrued Amounts and any Unpaid EIP; (2) a Pro Rata Bonus; and (3) a cash amount equal to the sum of (a) the Severance Amount plus (b) the Applicable COBRA Amount, payable in substantially equal installments over 24 months following termination of employment. In the event Mr. Herencia is terminated without “cause” (and not due to Disability) or he resigns for “good reason” within two years following a Change in Control, he will be entitled to: (1) the Accrued Amounts and any Unpaid EIP; (2) a Pro Rata Bonus; and (3) a cash amount equal to the sum of (a) the CIC Severance Amount (as such term is defined in the Employment Agreement) plus (b) the Applicable COBRA Amount, payable in lump sum within 15 days after the release becomes effective.
24 Byline Bancorp, Inc. 2022 Proxy Statement
“Cause” generally means: (1) a willful and continued failure to perform substantially one’s duties; (2) willfully engaging in illegal conduct, an act of dishonesty or gross misconduct related to the performance of one’s duties and responsibilities; (3) being charged with a crime involving moral turpitude, dishonesty, fraud, theft or financial impropriety; (4) willful violation of a material requirement of any applicable code of ethics or standards of conduct of Byline, or violation of a fiduciary duty to Byline; or (5) a breach of Byline’s Agreement Protecting Company Interests. “Good reason” generally means: (1) any material reduction in Mr. Herencia’s base salary; (2) any material adverse change in Mr. Herencia’s title, position, authority or reporting relationships, including, without limitation, ceasing to be the Executive Chairman and Chief Executive Officer of a publicly-traded company; (3) the requirement to relocate Mr. Herencia’s principal place of employment to a location in excess of 50 miles from the his principal work location on the date of the Employment Agreement; or (4) the failure to nominate Mr. Herencia to, or his removal from, the Board of Directors of Byline or the Bank. The Employment Agreement also provides that in the event his employment terminates due to death or Disability, Mr. Herencia or his estate would be entitled to receive, in addition to any accrued but unpaid compensation or benefits, any Unpaid EIP earned with respect to any fiscal year ending on or preceding the date of termination and a pro rata portion of his bonus for the fiscal year endedin which the termination occurs, payable at the time that such bonuses are paid to other senior executives for such year. In addition, in the event of his death, Mr. Herencia’s beneficiary would be entitled to a lump sum cash amount equal to $750,000. As a condition to the Employment Agreement, Mr. Herencia has entered into an Agreement Protecting Company Interests with Byline, which contains (1) a confidentiality provision regarding the use and disclosure of confidential information during the term of employment and after, (2) a customer and employee non-solicit during employment and for 18 months following termination of employment, and (3) assignment of inventions and non-disparagement provisions. Byline Bancorp, Inc. 2022 Proxy Statement 25
| | Proposal 2 | | | The board recommends a vote FOR this proposal | | | | To approve an amendment to the Company’s Employee Stock Purchase Plan to increase the number of shares of common stock that may be offered under the plan | | | | In 2017, our board of directors adopted the Byline Bancorp, Inc. Employee Stock Purchase Plan (the “ESPP”) in connection with our initial public offering. The ESPP allows our employees to purchase shares of our common stock at a discount from the market price through automatic payroll deductions. A total of 200,000 shares of our common stock were reserved and available for sale under the ESPP. As of April 1, 2022, only 74,348 shares of common stock remain available under the ESPP. On April 18, 2022, the Board approved an amendment to the ESPP to increase the number of shares available under the ESPP by 200,000 shares of common stock, subject to our stockholders’ approval. | |
Description of Amendment At the Annual Meeting, stockholders will be requested to approve an increase by 200,000 in the number of shares available for issuance under the ESPP. At current participation levels and the Company’s current stock price, we estimate that, in the absence of approval of increase in the number of shares of common stock that may be offered under the ESPP, all such shares could be substantially exhausted before the end of 2023. If the amendment is approved by stockholders, the number of shares available under the ESPP will be increased to 400,000. We believe that this increase in the number of shares available under the ESPP will enable eligible persons to participate under the ESPP until approximately December 31, 2018 was Moss Adams LLP (“Moss Adams”)2027, based on current participation levels and the Auditcurrent price of our common stock. Summary of the ESPP The following is a description of the material terms of the ESPP, as proposed to be amended. This description is qualified in its entirely by reference to the plan document, as proposed to be amended, a copy of which is attached to this Proxy Statement as Annex A and incorporated herein by reference. Administration The ESPP is administered by the Compensation Committee of our Board of Directors, who may delegate its administrative authority to a person or committee who shall serve as the “Plan Administrator.” The Compensation Committee has engaged Moss Adamsdelegated such authority to our senior human resources officer. The Plan Administrator has the authority to make and adopt rules and regulations not inconsistent with the provisions of the ESPP or the Internal Revenue Code of 1986, as amended (the “Code”). In addition, the Plan Administrator corrects any defect or supplies any omission or reconciles any inconsistency in the ESPP. The interpretations and decisions of the Plan Administrator in respect to the ESPP will be final and binding. Eligible Employees All of our employees or employees of participating subsidiaries, as defined in the ESPP, whose customary term of employment is for more than 20 hours per week, are eligible to participate in the ESPP. In addition, no employee may purchase shares of our common stock under the ESPP that would result in the employee owning 5% or more of the total combined voting power or value of our stock or the stock of any of our subsidiaries. Offerings From time-to-time, the Company offers employees the opportunity to buy stock in the Company through the ESPP. Unless determined otherwise by the Compensation Committee, offerings begin on January 1 and July 1 of each year 26 Byline Bancorp, Inc. 2022 Proxy Statement
Proposal 2: To approve an amendment to the Company’s Employee Stock Purchase Plan to increase the number of shares of common stock that may be offered under the plan and last for a period of six months. The Compensation Committee will establish an enrollment period, a period of time prior to the beginning of an offering during which eligible participants may subscribe to an offering in such manner as the Compensation Committee may prescribe (which may include enrollment by submitting forms, by voice response, internet access or other electronic means). Eligible employees elect whether to participate in the ESPP (i.e., have deductions made from their after-tax compensation for the fiscal year ending December 31, 2019.Accordingly,purpose of buying shares) during the enrollment period.
Each eligible employee who is a participant as of the date an offering commences is deemed to be granted an option to participate in the ESPP for that offering. The Compensation Committee may also establish a waiting period of up to two years after an employee is first employed before the employee may participate or permit employees who are hired during an offering period to participate in the offering. On the last day of each offering period, the accumulated balance in each participant’s account will be used to purchase shares at the purchase price described below. The Compensation Committee may also provide for periodic purchase dates during an offering period. A participant can change his or her level of withholding or withdraw his or her subscription at any time (but not retroactively), during an offering, subject to rules and limitations established by the Plan Administrator. A participant whose employment is terminated during an offering period is deemed to have withdrawn his or her subscription. Upon the withdrawal (or deemed withdrawal) of a participant, the balance in his or her account will either be refunded or used to purchase shares on the next purchased date, as determined by the Compensation Committee. Purchase Price The purchase price paid by participants for the shares purchased under the ESPP is set by the Compensation Committee and will, in any case, be no less than 85% of the lower of the fair market value of a share of our common stock on the first day of the applicable offering period or on the purchase date. Unless provided otherwise, the default purchase price per share provided for in the ESPP will be 85% of the fair market value of a share of our common stock on the last day of the applicable offering period or earlier purchase date. Limitations on Purchase As required by the Code, no eligible employee may purchase stock under the ESPP at a rate which, when aggregated with his or her other rights to purchase our common stock, exceeds $25,000 in fair market value per year. Unless the Plan Administrator determines otherwise, employees are also limited in making elections under the ESPP to contributing no more than 15% of their after-tax compensation to the ESPP. Mandatory Retention or Sale of Stock To facilitate compliance with applicable law, the Compensation Committee may require participants to (a) retain any shares purchased under the ESPP for a designated period of time or may establish other procedures to restrict transfer of such shares or (b) sell shares immediately upon purchase or within a specified period following a termination of employment. Adjustments In the event of a stock split, stock dividend, reverse stock split, extraordinary cash dividend, recapitalization, reorganization, reclassification or combination of shares, merger, consolidation, distribution, split-up, spin-off, exchange of shares, sale of assets or similar corporate transaction or event, the Compensation Committee, in the manner it deems equitable, will adjust (a) the number and class of shares or other securities reserved for issuance under the ESPP, (b) the number and class of shares or other securities that are subject to outstanding options, and (c) the appropriate market value and other price determinations applicable to options (including the purchase price). Termination and Amendment of the ESPP Our Compensation Committee generally may, at any time, terminate or amend the ESPP in any respect, except that, without approval of our stockholders, no amendment may increase the maximum number of our shares reserved under the ESPP or modify the requirements as to eligibility for participation in the ESPP. No termination or amendment of the ESPP may terminate or materially and adversely affect a participant’s rights under the ESPP without such participant’s consent. Unless earlier terminated by the Compensation Committee, the ESPP will terminate when no remaining shares are available for issuance under the ESPP. Byline Bancorp, Inc. 2022 Proxy Statement 27
Proposal 2: To approve an amendment to the Company’s Employee Stock Purchase Plan to increase the number of shares of common stock that may be offered under the plan Required Vote The approval of the amendment to the ESPP requires the affirmative vote of the holders of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the proposal. Abstentions will have the same effect as a vote against the proposal. Broker non-votes will not be counted as shares entitled to vote on the proposal. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE AMENDMENT TO THE COMPANY’S EMPLOYEE STOCK PURCHASE PLAN TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK THAT MAY BE OFFERED UNDER THE PLAN 28 Byline Bancorp, Inc. 2022 Proxy Statement
| | Proposal 3 | | | The board recommends a vote FOR this proposal | | | | Ratification of Independent Registered Public Accounting Firm | | | | Under its charter, the Audit Committee has the sole authority to appoint or replace our independent registered public accounting firm, subject to stockholder approval, and has direct responsibility for the compensation and oversight of such firm. Our independent registered public accounting firm for the fiscal year ended December 31, 2021, was Moss Adams LLP (“Moss Adams”) and the Audit Committee has engaged Moss Adams for the fiscal year ending December 31, 2022. | |
The Board is submitting for ratification by our stockholders at the Annual Meeting the appointment of Moss Adams as our independent registered public accounting firm for the fiscal year ending December 31, 2019.2022. Moss Adams has served as our independent auditor since 2013. In considering the reappointment of Moss Adams for 2019,2022, the Audit Committee reviewed, among other considerations, the quality of services provided, both historically and onin connection with the most recent audit; Moss Adams’ capability and expertise, particularly with respect to the financial services industry and its resources; the communication and interaction by Moss Adams’ audit team with the Audit Committee and management; the firm’s independence, objectivity and professional skepticism; and the appropriateness of Moss Adams’ fees. The Board has invited representatives of Moss Adams to be present at the Annual Meeting and expects that they will attend. If present, these representatives will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions from stockholders.
Fees Paid to Moss Adams LLP The following is a summary and description of the aggregate fees for professional services provided by Moss Adams LLP to the CompanyByline and its subsidiaries for the fiscal years ended December 31, 20182021, and 2017,2020, as well as all out-of-pocket costs incurred in connection with these services that were billed to the Company.us. | | | | | 2021 | | | 2020 | | | | Audit Fees | | | | $ | 819,000 | | | | | | $ | 835,000 | | | | | | Audit-Related Fees | | | | $ | 19,000 | | | | | | $ | 18,500 | | | | | | Total | | | | $ | 838,000 | | | | | | $ | 853,500 | | | |
| | 2018 | | | 2017 | | Audit Fees | | $ | 614,000 | | | $ | 1,101,500 | | Audit-Related Fees | | | 29,500 | | | | 22,000 | | Tax Fees | | — | | | | 14,500 | | All Other Fees | | — | | | — | | Total | | $ | 643,500 | | | $ | 1,138,000 | |
________________
Audit Fees.Fees. Audit fees consist primarily of fees and expenses for the audits of the Company’sour annual consolidated financial statements as well as the review of interim condensed consolidated financial information included in the Company’s reports we filed with the SEC. Also included are fees for services normally provided by an independent auditor in connection with statutory and regulatory filings. For 2017, fees include services associated with the filing our Registration Statement on Form S-1 and related comfort letter procedures in connection with our IPO. Audit-Related Fees.Fees. Audit-related fees consist primarily of fees related to the audit or review of our financial statements, including internal control reviews, as well as for the audit of the financial statements of our 401(k) plan.Plan. Byline Bancorp, Inc. 2022 Proxy Statement 29
Proposal 3: Ratification of fees related to corporate tax compliance. For 2018 and 2017, tax fees reflect fees billed in 2018 and 2017 for income tax return services provided in 2017 and 2016.Independent Registered Public Accounting Firm
Audit Committee Preapproval Policies and Procedures All of the fees and services described above under “audit fees,” “audit-related fees,” “tax fees” and “all other“audit-related fees” were pre-approved by the Audit Committee. Pursuant to the Audit Committeeits charter, the Audit Committee pre-approves all audit and permissible non-audit services provided by the independent public accounting firm. These services may include audit services, audit-related services, tax services and other services. In connection with the pre-approval of any permissible tax services or services related to internal control over financial reporting, the Audit Committee charter provides that the Audit Committee will discuss with the independent public accounting firm the potential impact on the firm’s independence in providing such services. Any pre-approval is subject to receipt of details as to the service or category of services to be provided and the provision of supporting documentation at the time of approval. The Audit Committee may delegate pre-approval authority to one or more of its members. Such member must report any decisions to the Audit Committee at the next scheduled meeting. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR”“FOR” THE RATIFICATION OF THE APPOINTMENT OF MOSS ADAMS llpLLP AS THE COMPANY’S INDEPENDENtINDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE 20192022 FISCAL YEAR 30 Byline Bancorp, Inc. 2022 Proxy Statement
Report of the Audit Committee The Audit Committee of the Board of Directors is responsible for providing independent, objective oversight of the Company’s accounting functions and internal controls and is composed of directors that are “independent” as defined under the NYSE corporate governance listing standards and Rule 10A-3 of the Exchange Act. The Audit Committee operates under a written charter approved by the Board of Directors and held seventeen14 meetings during fiscal year 2018.2021. A copy of the charter is available on the Company’sour website at www.bylinebancorp.com under the “Governance Documents” tab. Management is responsible for the Company’s internal control over financial reporting, disclosure controls and procedures and the financial reporting process. The independent registered public accounting firm is responsible for performing an independent audit of the Company’sour consolidated financial statements in accordance with Public Company Accounting Oversight Board (PCAOB) standards and to issue reports thereon. The Audit Committee’s responsibility is to monitor and oversee these processes, including the activities of the Company’s internal audit function. The Audit Committee has established a mechanism to receive, retain and process complaints on auditing, accounting and internal control issues, including the confidential, anonymous submission by employees and others of concerns on questionable accounting and auditing matters. In connection with these responsibilities, the Audit Committee met with management and the independent registered public accounting firm to review and discuss the 20182021 audited consolidated financial statements. The Audit Committee also discussed with the independent registered public accounting firm the matters required by PCAOB Auditing Standard No. 1301, Communications with Audit Committees. In addition, the Audit Committee received the written disclosures and letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, and the Audit Committee has discussed with the independent registered public accounting firm its independence from the Company and its management.
Based upon the Audit Committee’s discussions with management and the independent registered public accounting firm, and the Audit Committee’s review of the representations of management and the independent registered public accounting firm, the Audit Committee recommended that the Board of Directors include the Company’s 2018Byline’s 2021 audited consolidated financial statements in the Company’sour Annual Report on Form 10-K for fiscal 20182021 filed with the SEC. This report is submitted on behalf of the current members of the Audit Committee:
William G. Kistner (Chair)
Phillip R. Cabrera
Steven M. Rull
| | | | | William G. Kistner (Chair)
Phillip R. Cabrera
Steven M. Rull | |
This report shall not be deemed to be incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, and shall not otherwise be deemed filed under such acts. Byline Bancorp, Inc. 2022 Proxy Statement 31
We are an "emerging“emerging growth company, "” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. These include, but are not limited to, reduced disclosure obligations regarding executive compensation in our proxy statements, including the requirement to include a specific form of Compensation Discussion and Analysis, as well as exemptions from the requirement to hold a non-binding advisory vote on executive compensation. We have elected to comply with the scaled disclosure requirements applicable to emerging growth companies. The objective of our executive compensation program is to attract, retain, and motivate leaders who are committed to executing on our business strategy and creating long-term value for our stakeholders. To help us achieve these objectives, the Compensation Committee has designed an executive compensation program that consists of fixed, and variable pay elements in the form of base salaries, annual cash and long-term equity incentives. The program is built on a foundation of best-in-class compensation governance practices and policies: | | | | | We link a significant portion of compensation to performance using short-term (cash) and long-term (equity) compensation. | | | | | | | We employ a variety of performance metrics to deter excessive risk-taking by eliminating any incentive focus on a single performance goal. | | | | | | | We have built in appropriate levels of discretion to adjust incentive payouts if results are not aligned with credit quality, regulatory compliance, or leading indicators of future financial results. | | | | | | | We maintain stock ownership and retention guidelines for our executives and directors. | | | | | | | We grant equity awards that have “double-trigger” equity vesting provisions upon a change in control. | | | | | | | We do not provide significant perquisites. | | | | | | | We engage an independent compensation consultant. | | | | | | | We have a clawback policy. | | | | | | | We prohibit hedging and pledging of our stock by our directors and executive officers. | |
We link a significant portion of
32 Byline Bancorp, Inc. 2022 Proxy Statement
In addition to the above, the table below summarizes what the Company does and does not do with respect to its compensation to performance using short-term (cash)governance practices and long-term (equity) compensationdemonstrates that the Company’s practices are designed to encourage both proactivity andactions that are in the long-term sustainability.interests of its stockholders. | | ![[MISSING IMAGE: tm2025328d14-icon_bluticpn.gif]](https://capedge.com/proxy/DEF 14A/0001104659-22-049642/tm2025328d14-icon_bluticpn.gif) What We Do | | | | | | | | | ![[MISSING IMAGE: tm2025328d14-icon_crossbw.gif]](https://capedge.com/proxy/DEF 14A/0001104659-22-049642/tm2025328d14-icon_crossbw.gif) What We Don’t Do | | | | Pay for Performance •
We base our annual incentive compensation programs on the achievement of corporate and individual performance measures that are tied directly to our business strategy. •
We link a significant portion of compensation to performance using short-term (cash) and long-term (equity) compensation. Emphasize Long-term Performance •
Equity programs reward performance over a three-year time horizon. Equity Awards •
We grant equity awards that have “double-trigger” equity vesting provisions upon a change in control. Stock Ownership Commitment •
Our stock ownership guideline policy ensures that our executive officers and directors own an appropriate amount of our common stock, which aligns their interests with our stockholders. Clawbacks •
Our policy requires the recoupment of any excess incentive compensation paid to our executive officers if we are required to restate our financial statements due to material noncompliance with any financial reporting requirement under applicable securities laws. Risk Management •
Our compensation plans are evaluated annually by our risk management professionals and our Compensation Committee, as part of its effort to ensure our compensation plans do not encourage imprudent risk taking. •
We employ a variety of performance metrics to deter excessive risk-taking by elimination any incentive focus on a single performance goal. •
We have built in appropriate levels of discretion to adjust incentive payouts if results are not aligned with credit quality, regulatory compliance, or leading indicators of future financial results. Compensation Benchmarking •
We use a defined peer group for benchmarking, and the Compensation Committee periodically reviews the peer group to ensure the peer companies remain relevant and appropriate. Engage Independent Advisor •
The Compensation Committee uses the services of an independent compensation consultant. | | | | | | | | | No Hedging or Pledging of Company Stock •
We have a policy that prohibits all executive officers and directors from entering into any transaction designed to hedge or offset changes in the market value of our stock. The policy also prohibits holding our stock in a brokerage margin account or pledging our stock as collateral for a loan. No Extensive Use of Employment Agreements •
We limit the use of employment agreements to our Executive Chairman and CEO, President, CFO, and the President of our Small Business Capital business unit. No Significant Perquisites •
We do not provide significant perquisites to our executive officers. No Golden Parachute Tax Gross-ups •
We do not allow for tax gross-ups under employment agreements or other severance plans. No Multi-year Compensation Guarantees. •
Our employment agreements and compensation plans generally do not provide for any multi-year compensation guarantees. No Unearned Dividends Paid •
We accrue dividends on performance-based restricted stock awards during performance periods, but the dividends are not paid until the award vests. | |
We employ a variety of performance metrics to deter excessive risk-taking by eliminating any incentive focus on a single performance goal.
Byline Bancorp, Inc. 2022 Proxy Statement 33
We have built in appropriate levels of discretion to adjust incentive payouts if results are not aligned with credit quality, regulatory compliance or leading indicators of future financial results.
We maintain stock ownership and retention guidelines for our executives and directors.
We grant equity awards that have “double-trigger” equity vesting provisions upon a change in control.
We do not provide significant perquisites.
We engage an independent compensation consultant.
We have a clawback policy.
We prohibit hedging and pledging of our stock by our directors and executive officers
As we continue to grow, the Compensation Committee will continue to review and adjust (when appropriate) the design of the executive compensation program to ensure it remains aligned with our business objectives, talent strategy and market practices.
Succession Planning
Our Board of Directors oversees both emergency and long-term succession planning for our Executive Chairman and CEO, President, CFO, and other key management roles within Byline. The succession plan is reviewed annually to ensure a smooth transition in the event of a planned or unplanned vacancy in these positions. Succession planning for our executive officers is reviewed by the Board annually to identify potential successors and oversee their development planning. Summary Compensation Table The named executive officers of Byline Bancorp, Inc. as of December 31, 2018,2021, are Alberto J. Paracchini, our President •
Roberto R. Herencia, Executive Chairman and Chief Executive Officer •
Alberto J. Paracchini, President, •
Lindsay Corby, our Executive Vice President and Chief Financial Officer, and Bruce Lammers, Executive Vice •
Thomas Abraham, President President,of Byline Small Business Capital. The following summary compensation table presents compensation awarded in the fiscal years ended December 31, 2016, 20172019, 2020 and 20182021 to our named executive officers or paid to or accrued for those executive officers for services rendered during fiscal years 2016, 20172019, 2020 and 2018. All share2021, as applicable. | Name and Principal Position | | | Year | | | Salary | | | Bonus(2) | | | Omnibus
Incentive Plan
Awards(3) | | | All Other
Compensation(4) | | | Total | | Roberto R. Herencia(1)
Executive Chairman and
Chief Executive Officer | | | | | 2021 | | | | | | $ | 825,000 | | | | | | $ | 928,125 | | | | | | $ | 2,062,509 | | | | | | $ | 34,349 | | | | | | $ | 3,849,983 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Alberto J. Paracchini
President | | | | | 2021 | | | | | | $ | 615,000 | | | | | | $ | 507,375 | | | | | | $ | 369,037 | | | | | | $ | 29,395 | | | | | | $ | 1,520,807 | | | | | | | | 2020 | | | | | | | 608,750 | | | | | | | 253,688 | | | | | | | 282,520 | | | | | | | 12,609 | | | | | | | 1,157,566 | | | | | | | | 2019 | | | | | | | 556,875 | | | | | | | 254,250 | | | | | | | 216,674 | | | | | | | 12,409 | | | | | | | 1,040,208 | | | | Lindsay Corby
EVP and Chief Financial Officer | | | | | 2021 | | | | | | $ | 381,875 | | | | | | $ | 231,000 | | | | | | $ | 187,230 | | | | | | $ | 13,275 | | | | | | $ | 813,380 | | | | | | | | 2020 | | | | | | | 356,250 | | | | | | | 108,000 | | | | | | | 132,020 | | | | | | $ | 13,275 | | | | | | $ | 609,545 | | | | | | | | 2019 | | | | | | | 326,875 | | | | | | | 126,127 | | | | | | | 122,022 | | | | | | | 11,356 | | | | | | | 586,380 | | | | Thomas Abraham
President Small Business Capital | | | | | 2021 | | | | | | $ | 400,000 | | | | | | $ | 144,000 | | | | | | $ | 120,017 | | | | | | $ | 21,712 | | | | | | $ | 685,729 | | | | | | | | 2020 | | | | | | | 400,000 | | | | | | | 84,000 | | | | | | | 120,015 | | | | | | $ | 11,592 | | | | | | $ | 615,607 | | | | | | | | 2019 | | | | | | | 400,000 | | | | | | | 108,000 | | | | | | | 150,007 | | | | | | $ | 33,150 | | | | | | $ | 691,157 | | | |
(1)
As previously disclosed, prior to his appointment as Executive Chairman and option informationChief Executive Officer, Mr. Herencia was compensated as Chairman of the Board as follows: For 2019, he received an aggregate amount of 817,935. For 2020, he received an aggregate amount of 815,571. (2)
The amounts in this section reflects our reincorporationcolumn represent earned annual cash incentive awards under the Byline Executive Incentive Plan. (3)
Represents the dollar value of shares of restricted stock that were awarded in 2019, 2020 and 2021. For Mr. Paracchini and for Ms. Corby, 50% of these shares are subject to time vesting, equally over three years from Illinoisthe grant date; the remaining 50% are performance-based, based on the achievement of performance goals over a three year period beginning on January 1st of the year granted . Any earned performance shares vest in full on the third anniversary of the grant date. For Mr. Herencia, the shares will vest one-third on each of the following dates: December 31, 2021, December 30, 2022, and December 29, 2023. For Mr. Abraham, the shares are subject to Delaware in connection with our initial public offering in 2017, andtime vesting, equally over three years from the resulting exchange of one share of grant date. (4)
The items comprising “All Other Compensation” for 2021 are as follows: | Name | | | Perquisites and
Other Benefits(a) | | | Contributions
to Defined
Contribution
Plans(b) | | | Insurance
Premiums(c) | | | Total | | | Roberto R. Herencia | | | | $ | 20,693 | | | | | | $ | 10,875 | | | | | | $ | 2,780 | | | | | | $ | 34,349 | | | | | Alberto J. Paracchini | | | | $ | 16,560 | | | | | | | 11,600 | | | | | | | 1,234 | | | | | | $ | 29,395 | | | | | Lindsay Corby | | | | $ | 900 | | | | | | | 11,600 | | | | | | | 775 | | | | | | $ | 13,275 | | | | | Thomas Abraham | | | | $ | 9,900 | | | | | | | 11,600 | | | | | | | 212 | | | | | | | 21,712 | | | |
34 Byline Bancorp, Inc. Delaware common stock 2022 Proxy Statement
(a)
Includes auto allowance for every five shares ofMessrs. Herencia and Abraham as well as club dues for Messrs. Herencia and Paracchini, and cell phone credits/reimbursements for all. (b)
Reflects Company contributions under the Byline Bancorp Inc. Illinois common stock. | | | | | | | | | | | | | | | | Omnibus | | | | | | | | | | | | | | | | | | | | | | Option | | | Incentive Plan | | | All Other | | | | | | Name and Principal Position | | Year | | Salary | | | Bonus(1) | | | Awards(2) | | | Awards(3) | | | Compensation(4) | | | Total | | Alberto J. Paracchini | | 2018 | | $ | 491,667 | | | $ | 216,654 | | | $ | - | | | $ | 222,151 | | | $ | 11,227 | | | $ | 941,699 | | President and Chief | | 2017 | | | 450,000 | | | | 225,000 | | | | — | | | | 201,800 | | | | 35,288 | | | | 912,088 | | Executive Officer | | 2016 | | | 375,000 | | | | 281,250 | | | | — | | | | — | | | | 20,806 | | | | 677,056 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Lindsay Corby | | 2018 | | | 301,667 | | | | 119,842 | | | | — | | | | 114,012 | | | | 11,139 | | | | 546,660 | | Chief Financial Officer | | 2017 | | | 285,000 | | | | 114,000 | | | | — | | | | 151,350 | | | | 28,386 | | | | 578,736 | | | | 2016 | | | 265,000 | | | | 136,475 | | | | — | | | | — | | | | 13,834 | | | | 415,309 | | | | | | | | | | | | | | | — | | | | — | | | | | | | | | | Bruce Lammers | | 2018 | | | 450,000 | | | | 56,250 | | | | — | | | | — | | | | 31,981 | | | | 538,231 | | President of Small Business Capital | | 2017 | | | 450,000 | | | | 84,375 | | | | — | | | | — | | | | 52,287 | | | | 586,662 | | | | 2016(5) | | | 90,289 | | | | 33,057 | | | | 697,376 | | | | — | | | | 3,496 | | | | 824,218 | |
(1)
| The amounts in this column represent earned annual cash incentive awards under the Byline Executive Incentive Plan.
|
401(k) Plan consistent with company policies for all Byline employees.(2)
| The amounts in this column represent the grant date fair value, as determined in accordance with FASB ASC Topic 718 using the valuation methodology for stock options set forth in Note 19 to the Company’s consolidated financial statements as of and for the years ended December 31, 2018, 2017 and 2016 of awards of stock options granted pursuant to the Byline Bancorp Equity Incentive Plan. At the time of grant, 50% of the options were subject to performance based vesting conditions and 50% were subject to time based vesting conditions, as described below under “Stock Options Awarded under the Byline Bancorp Equity Incentive Plan.”
|
(3)
| Represents the dollar value of shares of restricted stock that were awarded under the Byline Bancorp, Inc. 2017 Omnibus Incentive Compensation Plan. Shares awarded in 2018 were based on executives’ performance during 2017. 50% of the shares vest one-third on each of the first, second and third anniversaries of the Grant Date. The remaining 50% of the shares granted are subject to the achievement of the Performance Goals during the Performance Period beginning on January 1, 2018, and ending on December 31, 2020. The number of shares which may be earned under the award is dependent upon Byline’s return on average assets over the three-year period ending December 31, 2020. The restricted shares awarded in 2017 were in connection with our initial public offering. These shares cliff vest on the third anniversary of the date of grant, subject to continued employment.
|
(4)
| The items comprising “All Other Compensation” for 2018 are as follows:
|
| | | | | | Contributions | | | | | | | | | | | | | | | | to Defined | | | | | | | | | | | | Perquisites and | | | Contribution | | | Insurance | | | | | | Name | | Other Benefits | | | Plans(a) | | | Premiums(b) | | | Total | | Alberto J. Paracchini | | $ | — | | | $ | 11,000 | | | $ | 227 | | | $ | 11,227 | | Lindsay Corby | | | — | | | | 11,000 | | | | 139 | | | | 11,139 | | Bruce Lammers | | | 23,698 | | | | 8,076 | | | | 207 | | | | 31,981 | |
| (a)
| Reflects company contributions under the Byline Bancorp, Inc. 401(k) Plan consistent with company policy for all Byline employees.
|
(c)
| (b)
| Reflects life insurance premiums paid for the benefit of each of our named executive officers that result in imputed income attributable to the officer consistent with company policy for all Byline employees.
|
Reflects life insurance premiums paid for the benefit of each of our named executive officers consistent with company policy for all Byline employees. Includes premiums paid by the Byline Bank for additional executive life insurance policies for Messrs. Herencia and Paracchini and Ms. Corby.(5)
| Mr. Lammers became an executive officer of Byline in October 2016 in connection with the Company’s acquisition of Ridgestone Financial Services, Inc.
|
(d)
Reflects club membership dues. (e)
Reflects credit for mobile phone services. Narrative Disclosure to Summary Compensation Table Each named executive officer’s base salary is a fixed component of compensation for each year for performing specific job duties and functions. The total base salaries earned by our named executive officers in fiscal years 2016, 20172019, 2020 and 20182021 are disclosed in the Summary Compensation Table above. Base salaries for our named executive officers are reviewed annually by the Compensation Committee. Messrs. Paracchini’sCommittee and Lammers’ base salaries were initiallyare established pursuant to their employment agreementsagreement with Byline Bank, as described under “Employment“Employment agreements with Messrs.Mr. Herencia, Mr. Paracchini, Ms. Corby and Lammers”Mr. Abraham” below, and “Agreement with Mr. Herencia” above, but are subject to review and approval of the Compensation Committee. Our named executive officers participate in Byline’s Executive Incentive Plan, which was adopted by the Company in 2014 and is an annual incentive plan under which earned awards are determined following the end of each year based on corporate and individual achievement during the year. Results are assessed against performance goals and targets that are established for the fiscal year; foryear, as described further below. | Named Executive Officer | | | 2021 Goals Weight | | | Roberto R. Herencia | | | Corporate Goals: 70% | | | | Individual Performance Goals: 30% | | | Alberto J. Paracchini | | | Corporate Goals: 70% | | | | Individual Performance Goals: 30% | | | Lindsay Corby | | | Corporate Goals: 70% | | | | Individual Performance Goals: 30% | | | Thomas Abraham | | | Corporate Goals: 100%(1) | |
(1)
For Mr. Paracchini and Ms. Corby, for each of 2016, 2017 and 2018, corporate goals were weighted 70% and individual performance goals were weighted 30%. NamedAbraham the goal is calculated based on the Small Business Capital unit score card. For 2021, named executive officers can earn up to a maximum of 150% of their target annual incentive awards and annual incentive awards may be as low as 0% if the Company’s performance target is not met. The Compensation Committee has discretion to enhance theadjust awards for our named executive officers above the amounts earned based on corporate and individual performance, as well as to adjust incentive payouts if results are not aligned within light of credit quality, regulatory compliance or leading indicators of futureand financial results.result deemed relevant. Executives must be employed on the date of payment in order to receive payment of an earned award. For 2022, named executive officers can earn up to a maximum of 200% of their target annual incentive awards, and annual incentive awards may be as low as 0% if the Company’s performance target is not met. The Compensation Committee has discretion to adjust awards in light of credit quality, regulatory compliance and financial result deemed relevant. Executives must be employed on the date of payment in order to receive payment of an earned award. The scorecard will reflect changes in some metrics for 2022. The corporate scorecard measures include the following four categories of metrics. In 2018,addition, the Company must meet a threshold of equal to or greater than 75% of budgeted net income to trigger an award payout under the Executive Incentive Plan. Byline Bancorp, Inc. 2022 Proxy Statement 35
| Categories | | | Loan Quality/
Operational Soundness | | | Growth | | | Profitability | | | Weight | | | 20% | | | 20% | | | 60% | | | Metrics | | | Classified Asset Ratio: 10% | | | Net Loan Growth: 10%(1) | | | ROA: 40% | | | | Non-Performing Assets/
Assets: 10% | | | Total Core Deposit: 10% | | | Efficiency Ratio: 10% | | | | | | | | | | Fee Income/Average Assets Ratio: 10% | |
(1)
Excludes loans from the Paycheck Protection Program. In 2021, target annual cash incentives under the Executive Incentive Plan for each of our named executive officers waswere a percentage of the named executive officer’s base salary. The target for Mr. Paracchini was 50%,following table presents each named executive officer’s annual incentive opportunity, percentage of goal achievement and award payout under the target for Ms. Corby was 40%, andExecutive Incentive Plan. | Named Executive Officer | | | Target Bonus
% of
Base Salary | | | Target
Bonus
Amount | | | Payout for
Corporate
Achievement | | | Payout for
Individual
Performance | | | Total
Incentive
Payout | | | Total
Incentive
Payout
% of Target | | | Roberto R. Herencia | | | | | 75 | % | | | | | $ | 618,750 | | | | | | $ | 697,331 | | | | | | $ | 185,625 | | | | | | $ | 928,125 | | | | | | | 150 | % | | | | Alberto J. Paracchini | | | | | 55 | % | | | | | $ | 338,000 | | | | | | $ | 381,208 | | | | | | $ | 126,167 | | | | | | $ | 507,375 | | | | | | | 150 | % | | | | Lindsay Corby | | | | | 40 | % | | | | | $ | 154,000 | | | | | | $ | 173,558 | | | | | | $ | 57,442 | | | | | | $ | 231,000 | | | | | | | 150 | % | | | | Thomas Abraham | | | | | 30 | % | | | | | $ | 120,000 | | | | | | $ | 144,000(1) | | | | | | | — | | | | | | $ | 144,000 | | | | | | | 120 | % | | |
(1)
Based on the target for Mr. Lammers was 25% of base salary. The annual cash incentives awarded for 2018 performance were: $216,654 for Mr. Paracchini (representing achievement at 87%); $119,842 for Ms. Corby (representing achievement at 98%); and $56,250 for Mr. Lammers (representing achievement at 50%).Small Business Capital unit scorecard performance. Long-term incentive Starting in 2018, the
The named executive officers participate in a newly-designed Long-term Incentive Program (“LTIP”) that provides a variable pay opportunity through a combination of performance shares and restricted stock.shares. The program is designed to reinforce the long-term alignment of the Company’s executives with the interests of our stockholders. Performance shares are intended to strengthen our pay-for-performance philosophy while time-vested restricted stock isshares are granted to promote share ownership and executive retention. The target for Mr. Paracchini is 50%, the target for Ms. Corby is 40%, and the target for Mr. Lammers is 25% of base salary.
All awards under the LTIP are granted through the Byline Bancorp, Inc. 2017 Omnibus Incentive Compensation Plan. The following table presents each named executive officer’s annual long-term incentive target for 2021: Named Executive Officer(2) | | | Target as a %
of Base Salary | | | Target $
Performance-Vesting
Restricted Shares(1) | | | Target $
Time-Vesting Restricted
Shares(1) | | | Roberto R. Herencia | | | | | 85 | % | | | | | $ | 350,625 | | | | | | $ | 350,625 | | | | | Alberto J. Paracchini | | | | | 60 | % | | | | | $ | 184,500 | | | | | | $ | 184,500 | | | | | Lindsay Corby | | | | | 60 | % | | | | | $ | 115,500 | | | | | | $ | 115,500 | | | | | Thomas Abraham | | | | | 30 | % | | | | | | — | | | | | | $ | 120,000 | | | |
(1)
| •
| Time-based Restricted Stock – 50% of the shares are awarded with a service-based vesting schedule. Awards vest equally over three years on the anniversaries of the grant date. Awards vest automatically upon 1) death, 2) termination of employment due to disability and 3) termination upon the completion of a change-in-control.
| |
| •
| Performance Shares – 50% of the shares are awarded with performance-based vesting criteria. Vesting is dependent on the achievement of specified goals and is generally measured at the end of a three-year performance period (“Performance Period”). However, the goal measurement for the 2018 – 2020 Performance Period is slightly different and is described below. At the end of the Performance Period, the Committee will determine the level of goal obtainment and determine theThe number of shares granted is determined by the closing share price on the date of the grant.
(2)
For Mr. Abraham, the LTI target is 30% of base salary. 100% of the target award is in the form of time-based restricted share awards based on the Small Business Capital Business Unit scorecard. As a result of the scorecard he received 45% of base salary or $180,000 in time based restricted shares. For Mr. Herencia, Mr. Paracchini and Ms. Corby, 50% of the target award is in the form of time-based restricted share award and 50% of the target award is in the form of performance-based restricted share award. •
Time-based Restricted Shares Awards vest equally over three years on the anniversary date of the grant. Awards vest automatically upon 1) death, 2) termination of employment due to disability and 3) termination upon the completion of a change-in-control. •
Performance Shares Awards are awarded with performance-based vesting criteria. Vesting is dependent on the achievement of specified goals and is generally measured at the end of a three-year performance period . At 36 Byline Bancorp, Inc. 2022 Proxy Statement
the end of the Performance Period, the Compensation Committee will determine the level of goal attainment and determine the number of performance shares that actually vest. | |
Unless stated otherwise in the award agreement, upon 1) death, 2) termination of employment due to disability and 3) retirement, the Participant receives an award based on actual performance at the end of the Performance Period, prorated for the period of time in which the Participant was actively employed. Awards continue to vest upon a change-in-control if the successor entity assumes the existing awards. If a Participant is terminated within one year of the completion of a change-in-control, Performance Sharesperformance shares vest at target-level performance, without proration. Similarly, if the successor entity does not assume the existing awards, the Performance Sharesperformance shares vest at target-level performance, without proration. Return
Average return on assets (ROA), defined as net income as a percent of average assets, was approved by the Compensation Committee as the Corporate metric for the 2018 – 20202020—2022 LTIP. For this Performance Period, there are two allocations of shares to account for the effects of the First Evanston Bancorp, Inc. acquisition on ROA in 2018. One-third is based on achieving a company-specific ROA for 2018. Earnedearned awards will vest at the end of the Performance Period. Two-thirds will vestPeriod, based on relative ROAaverage return on assets using an index of banks that arepublicly traded bank holding companies ranging in asset size from 50% to 200% the size of Byline.Byline’s total assets. Performance will be measured cumulatively at the end of the Performance Period. Threshold, target and superior performance levels are set at the 25 th, 50 th and 75 th percentiles of the peer index, respectively. Our NEOsnamed executive officers may earn 25% of their target opportunity for threshold-level performance and up to 125%100% of their target opportunity, (2018 goal) and up to 150% of their target opportunity (2019 – 2020 goal) for superior-level performance. Amounts between threshold and superior are interpolated to reward incremental achievement and no amounts are paid with respect to a particular performance metric if actual results are below threshold. IPO Awards
Adjustment to Compensation Metrics The Board of Directors and the Compensation Committee are actively monitoring the effects of the COVID-19 pandemic on the economy, the equity trading markets (including, in particular, the value of equity securities of financial institutions) and our operations and future results. In connectionlight of these developments, the Compensation Committee will evaluate the actual and potential effects on our business results, financial condition and stockholder value. Performance goals and the incentives associated with our Initial Public Offering (“IPO”) in 2017,executive and management compensation and incentive plans could be modified, and the Board of Directors approvedmaintain discretion to adjust plans and award payouts to appropriately reflect performance. Any material changes will be disclosed in accordance with applicable disclosure obligations. Byline Bancorp, Inc. 2022 Proxy Statement 37
Outstanding Equity Awards at Fiscal Year End As of December 31, 2021, our named executive officers held outstanding equity-based awards of the award of a one‑time grant of 58,900 restricted shares underCompany as listed in the table below. | | | | Option Awards | | | Stock Awards | | | Name | | | Date | | | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable(1) | | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable | | | Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#) | | | Option
Exercise
Price | | | Option
Expiration
Date(2) | | | Grant
Date | | | Number
of
Shares or
Units of
Stock
that
Have
Not
Vested
(#) | | | Number
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
(#) | | | Incentive
Plan
Awards:
Market
or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have
Not
Vested
($) | | | Roberto R. Herencia | | | 6/26/2015 | | | | | 428,988 | | | | — | | | — | | | $11.18 | | | 6/26/2025 | | | 2/19/2021 | | | 72,983 | | | 1,996,085 | | | — | | | — | | | Alberto J. Paracchini | | | 6/26/2015 | | | | | 428,988 | | | | — | | | — | | | $11.18 | | | 6/26/2025 | | | 4/2/2019 | | | | | | | | | 5,684 | | | 155,457.40 | | | | | | | | | | | | | | | | | | | | | | | | | 4/2/2019 | | | 1,894 | | | 51,801 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2/28/2020 | | | | | | | | | 8,072 | | | 220,769 | | | | | | | | | | | | | | | | | | | | | | | | | 2/28/2020 | | | 5,381 | | | 147,170 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2/22/2021 | | | | | | | | | 9,526 | | | 260,536 | | | | | | | | | | | | | | | | | | | | | | | | | 2/22/2021 | | | 9,526 | | | 260,536 | | | | | | | | | Lindsay Corby | | | 6/26/2015 | | | | | 97,496 | | | | — | | | — | | | $11.18 | | | 6/26/2025 | | | 4/2/2019 | | | | | | | | | 3,201 | | | 87,547 | | | | | | | | | | | | | | | | | | | | | | | | | 4/2/2019 | | | 1,067 | | | 29,182 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2/28/2020 | | | | | | | | | 3,772 | | | 103,164 | | | | | | | | | | | | | | | | | | | | | | | | | 2/28/2020 | | | 2,514 | | | 68,758 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2/22/2021 | | | | | | | | | 4,833 | | | 132,183 | | | | | | | | | | | | | | | | | | | | | | | | | 2/22/2021 | | | 4,833 | | | 132,183 | | | | | | | | | Thomas Abraham | | | — | | | | | — | | | | — | | | — | | | — | | | — | | | 12/19/2019 | | | 2,557 | | | 69,934 | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | 2/28/2020 | | | 4,572 | | | 125,044 | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | 2/22/2021 | | | 6,196 | | | 169,461 | | | | | | | |
(1)
These options were granted pursuant to the Byline Bancorp, Inc. 2017 Omnibus Incentive Compensation Plan to certain key employees, including Mr. Paracchini and Ms. Corby, upon the completion of the IPO. Mr. Paracchini received an award of 10,000 restricted shares (valued at $201,800) and Ms. Corby received an award of 7,500 restricted shares (valued at $151,350).The award agreements for the IPO awards provide that 100% of the restricted shares will cliff vest on the third anniversary of the grant date, subject to continued employment. On a termination of employment by reason of death or disability or a change in control, the restricted shares will vest in full and all transfer restrictions will immediately lapse.
Stock options awarded prior to 2018 under the Byline Bancorp Equity Incentive Plan
In March 2015, approved by the Board of Directors approvedin 2015 and were earned based on the Byline Bancorp Equity Incentive Plan (the “Byline Equity Plan”).achievement of performance goals and, except with respect to certain qualifying terminations, the participant’s continued employment on the date of such achievement. In June 2017, the Board of Directors terminated the Byline Equity Incentive Plan in connection with our July 2017 IPO, such that no new awards may be made under the Byline Equity Incentive Plan. Awards previously granted under the Byline Equity Incentive Plan, however, remain outstanding.
(2)
The options may expire earlier than the expiration date listed in the case of termination of employment, a participant’s breach of their Agreement to Protect Company Interests or a change in control. 38 Byline Equity PlanBancorp, Inc. 2022 Proxy Statement
Employment Agreements with Named Executive Officers We have entered into employment agreements with each of Mr. Herencia, Mr. Paracchini, Ms. Corby and Mr. Abraham (“Employment Agreements”) as follows: Named Executive
Officer | | | Entity who
entered into
the
Agreement | | | Effective
Date
of the
Agreement | | | Initial Term | | | Extensions | | | Renewals | | | Position | | | Reporting to | | | Roberto R. Herencia | | | Byline Bancorp and Byline Bank | | | 02/12/2021 | | | 3 years | | | Automatic 1-year extension unless notification is provided | | | N/A | | | Executive Chairman and Chief Executive Officer | | | Board of Directors | | | Alberto J. Paracchini | | | Byline Bank | | | 01/21/2016 | | | 3 years | | | Automatic 1-year extension unless notification is provided | | | Renewed in January of 2021 | | | President of Byline Bancorp, President & CEO of Byline Bank | | | Board of Directors(1) | | | Lindsay Corby | | | Byline Bancorp. and Byline Bank | | | 07/07/2019 | | | 3-year anniversary from acceptance of Agreement | | | Automatic 1-year extension unless notification is provided | | | N/A | | | Chief Financial Officer | | | CEO of Byline Bancorp(1) | | | Thomas Abraham | | | Byline Bank | | | 12/16/2019 | | | 3-year anniversary from acceptance of Agreement | | | Automatic 1-year extension unless notification is provided | | | N/A | | | President of the Small Business Capital | | | CEO of Byline Bank(1) | |
(1)
Currently reporting to Executive Chairman and CEO of Byline Bancorp. Material terms of the Employment Agreements include: | Named Executive Officer | | | Annual
Base Salary(1) | | | Participation
in Executive
Incentive Plan
(“EIP”) | | | EIP Annual
Bonus
Opportunity(2) | | | Participation
in Long Term
Incentive
program
(“LTIP”)(2) | | | Roberto R. Herencia | | | | $ | 825,000 | | | | | Yes | | | up to 75% of annual base salary | | | Yes | | | Alberto J. Paracchini | | | | $ | 350,000 | | | | | Yes | | | up to 75% of annual base salary | | | Yes | | | Lindsay Corby | | | | $ | 330,000 | | | | | Yes | | | 40% of annual base salary | | | Yes | | | Thomas Abraham | | | | $ | 400,000 | | | | | Yes | | | 30% of annual base salary | | | Yes | |
(1)
The amount of Base Salary is administeredreviewed by the Compensation Committee. Prior to the plan’s termination, the Compensation Committee had discretion to grant stock options under the Byline Equity Plan to eligible employees, non-employee members ofat least annually. (2)
Annual targets are approved by the Board of Directors or other persons having(or a service relationship with the Company.Mr. Paracchini and Ms. Corby were granted awards of stock options under the Byline Equity Plan on June 26, 2015 (each, a “2015 Option Award”) in the following amounts: 428,988 options for Mr. Paracchini, and 97,496 options for Ms. Corby. Pursuant to their stock option award agreements, the 2015 Option Award was divided into equal amounts of (1) options with timecommittee thereof) based vesting conditions (“Time Options”) and (2) options with performance based vesting conditions (“Performance Options”). The Time Options were designed to vest based on a participant’s continued employment, with 20% vesting annually beginning on the first anniversary of June 28, 2013, the effective date of the Company’s recapitalization transaction (the “Recapitalization”). The Performance Options vest based on the achievement of four performance criteria: (1) adversely classified assets as a percent of each of Tier 1 capital and allowance for loan and lease losses (the “Adversely Classified Assets Goal”); (2) return on average assets; (3) outstanding memorandums of understanding or consent orders (the “MOU Goal”); and (4) internal rate of return for stockholders holding the Company’s common stock as of the Recapitalization. Upon the achievement of the applicable performance criteria, Performance Options are treated as Time Options and vest based on a participant’s continued employment, with 20% vesting annually beginning on the first anniversary of the Recapitalization (with credit for time vesting already completed as of the date the performance criteria are achieved). As of December 31, 2016, Byline achieved the Adversely Classified Assets Goal and the MOU Goal. Accordingly, as of December 31, 2016, 128,696 of the Time Options and 42,894 of the Performance Options granted to Mr. Paracchini were vested, and 29,249 of the Time Options and 9,748 of the Performance Options granted to Ms. Corby vested. As of December 31, 2017, Byline achieved the remaining Performance Options goals, the Return on Average Assets Goal and the Investor Rate of Return Goal. Accordingly 171,595 and 38,999 of the Time Options and 171,596 and 38,998 of the Performance Options granted to Mr. Paracchini and Ms. Corby vested, respectively.
Mr. Lammers was granted an award of 182,400 stock options under the Byline Equity Plan on October 14, 2016 (the “2016 Option Award”). Pursuant to Mr. Lammers’ stock option award agreement, the vesting of the 2016 Option Award is based on the achievement of certain performance objectives over a three year period and vests and becomes exercisable in three installments in 2017, 2018 and 2019, based on Mr. Lammers’upon achievement of applicable performance objectives as described below and Mr. Lammers’ continuous employment through December 31determined in the sole discretion of the respective year. The vesting of the 2016 Option Award is based on the following four performance criteria specific to the Small Business Capital operations: (1) net income, (2) return on allocated equity, (3) non-accrual loans to total loans, and (4) classified assets ratio. To the extent that performance during the applicable fiscal year meets the “Threshold” level, as established by Byline’s Chief Executive Officer and approved by the Board (or a Committeecommittee thereof), 16.67% of the shares covered by the 2016 Option Award vest, and to the extent that performance during the applicable fiscal year meets the “Target” level, as established by Byline’s Chief .
Byline Bancorp, Inc. 2022 Proxy Statement 39
Executive Officer and approved by the Board, 33.33% of the shares covered by the 2016 Option Award vest. As of December 31, 2017, the Small Business Capital business unit achieved Target performance for three of the four performance criteria. Accordingly, as of December 31, 2017, 45,600 shares of the 2016 Option Award granted to Mr. Lammers vested. As of December 31, 2018, the Small Business Capital business unit achieved Threshold performance for one of the four performance criteria. ThresholdCompensation
performance was not met for the remaining three criteria. Accordingly, 7,000 of the shares of the 2016 Option Award would have vested. However, the Compensation Committee exercised its discretion to deem 30,400 of the shares vested (100% of Threshold performance for all four measures) based on the Small Business Capital unit’s contribution to Byline’s results and profitability and its high level of loan originations and guaranteed loan sales during 2018.
Following a “change in control”, if an option holder’s employment is terminated without “cause” or the option holder terminates employment for “good reason”, in each case within 12 months after such “change in control”, the unvested portion of the Time Options will become immediately vested and exercisable and the Performance Options will only remain subject to the applicable performance conditions, which will be measured at the normal time. Following a “special change in control”, the Time Options will become immediately vested and exercisable and the Performance Options will only remain subject to achievement of the applicable performance goals measured at the time of the “special change in control.”
“Change in control” generally means: (1) any person other than a fiduciary holding shares under an employee benefit plan or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company is or becomes the beneficial owner of more than 50% of both the total voting power of the then outstanding shares (“Voting Stock”) and the fair market value of the outstanding shares of capital stock of the Company (“Economic Stock”); (2) the consummation of a reorganization, merger or consolidation, or the sale or other disposition of all or substantially all of the assets of the Company unless all or substantially all of the individuals and entities who were the beneficial owners of both the Voting Stock and Economic Stock beneficially own, directly or indirectly, more than 50% of either (A) the total voting power represented by the voting securities entitled to vote generally in the election of directors of the corporation resulting from the transaction or (B) the total fair market value represented by all the voting and nonvoting equity securities of the corporation resulting from the transaction in substantially the same proportions as their ownership, immediately prior to the transaction, of the Voting Stock and Economic Stock (combined); or (3) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company.
“Special change in control” generally means a “change in control”, other than by plan of complete liquidation or dissolution, where in addition, either (1) the beneficial owners of at least 25% of the Voting Stock and the Economic Stock, in the aggregate, held by the beneficial owners holding all of the Voting Stock and the Economic Stock on June 28, 2013 receive in such transaction either cash or securities that are publicly traded on a securities exchange (and not restricted for more than 30 days other than pursuant to applicable law or regulation); or (2) such transaction satisfies the definition of a “change in control” above with “70%” replacing “50%” each time it appears.
“Cause” is defined in the employment agreement for each of Messrs. Paracchini and Lammers (described below under “Employment
Employment Agreements with Messrs. Paracchini and Lammers”). For Ms. Corby, “cause” generally means: (1) willful and continued failure to substantially perform duties; (2) willfully engaging in illegal conduct, an act of dishonesty or gross misconduct related to the performance of duties and responsibilities; (3) commission of a crime involving moral turpitude, dishonesty, fraud, theft or financial impropriety; (4) willful violation of a material requirement of any applicable code of ethics or standards of conduct of Byline or Byline Bank or fiduciary duty; or (5) a breach of the Agreement Protecting Company Interests (described below under “Employment Agreements with Messrs. Paracchini and Lammers”).“Good reason” is defined in the employment agreement for each of Messrs. Paracchini and Lammers. If an option holder is not a party to an employment agreement, the option award agreement
does not provide a right to terminate employment for “good reason” following a change in control. Ms. Corby is not party to an employment agreement.
In the event that the option holder’s employment were to terminate due to his or her death, disability or retirement (as such terms are used and defined in the applicable award agreements), (i) any unvested Time Options would become 100% vested and exercisable and (ii) any unvested Performance Options would become 100% time vested and thereafter exercisable upon satisfying the respective performance goals, or would be forfeited if not becoming satisfied, in accordance with their terms.
Outstanding Equity Awards at Fiscal Year End
As of December 31, 2018, our named executive officers held outstanding equity‑based awards of the Company as listed in the table below.
Name | | Date | | 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 (#)(1) | | | Option Exercise Price | | | Option Exercise Date(2) | | Grant Date | | | | | Number of Shares or Units of Stock that Have Not Vested (#) | | Number of Shares or Units of Stock that Have Not Vested ($) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | Alberto J. Paracchini | | 6/26/2015 | | | 428,988 | | | | — | | | | — | | | $ | 11.18 | | | 6/26/2025 | | 7/6/2017 | | | | | | 10,000 | | $ | 201,800 | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | 4/23/2018 | | | | | | 4,842 | | | 111,075 | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | 4/23/2018 | | | | | | — | | | — | | | 4,842 | | $ | 111,075 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Lindsay Corby | | 6/26/2015 | | | 97,496 | | | | — | | | | — | | | $ | 11.18 | | | 6/26/2025 | | 7/6/2017 | | | | | | 7,500 | | | 151,350 | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | 7/6/2017 | | | | | | 2,485 | | | 57,006 | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | 4/23/2018 | | | | | | — | | | — | | | 2,485 | | $ | 57,006 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Bruce Lammers | | 10/14/2016 | | | 76,000 | | | | — | | | | 60,800 | | | $ | 16.25 | | | 10/14/2026 | | | — | | | | | | — | | | — | | | — | | | — | |
(1)
| These options were granted pursuant to the Byline Equity Plan and are earned based on the achievement of performance goals, as described under “Stock Options awarded under the Byline Bancorp Equity Incentive Plan” above and, except with respect to certain qualifying terminations, the participant’s continued employment on the date of such achievement.
|
(2)
| The options may expire earlier than the expiration date listed in the case of termination of employment, a participant’s breach of their Agreement to Protect Company Interests, a change in control or the suspension or termination of the Byline Equity Plan by the Byline Board of Directors.
|
Employment agreements with Messrs. Paracchini and Lammers
Byline Bank previously entered into an employment agreement with Mr. Paracchini, which became effective on January 21, 2016. Byline Bank also entered into an employment agreement with Mr. Lammers, which became effective on October 14, 2016, in connection with our acquisition of Ridgestone. Mr. Paracchini’s agreement is for an initial term of three years and the initial term of Mr. Lammers’ agreement runs until December 31, 2019. Each agreement also includes automatic one year extensions at the end of each year following the initial term unless notice of termination is provided. Mr. Paracchini’s agreement automatically renewed for an additional year in January of 2019. During the term of their
respective agreements, Mr. Paracchini serves as President and Chief Executive Officer, reporting to the Board of Directors of Byline Bank, and Mr. Lammers serves as Executive Vice President of Byline Bank and President of the bank’s Small Business Capital unit, reporting to the Chief Executive Officer of Byline Bank. Material terms of the employment agreements include: for Mr. Paracchini, an annual base salary of $350,000 (which has since been increased and is $565,000 as of February 16, 2019), participation in the Executive Incentive Plan, with a target annual bonus of 50% of his annual base salary, and participation in the Byline Equity Plan; and for Mr. Lammers, an annual base salary of $450,000, participation in the Executive Incentive Plan with a target annual bonus of 25% of his annual base salary, and participation in Byline’s long term incentive program.
Messrs. Paracchini’s and Lammers’ employment agreements also include the following severance benefits that are, in each case, subject to signing a release. If release:
Named Executive
Officer | | | Termination without
“cause”(1) and
not due to
disability or
executive resigns
for “good reason” | | | Termination without
“cause” and not
due to disability(1)
or executive
resigns for “good
reason” following
a “change in
control”(5) | | | Payment for
“special change in
control”(7) | | | Meaning of “good
reason” | | | Termination
due to Death
or Disability(8) | | | Roberto R. Herencia | | | (1) 2 times annual base salary + the Applicable COBRA Amount(3) payable in cash over 24 month installments; and (2) prorata bonus under the EIP(2) | | | (1) the accrued amounts and any unpaid EIP bonus; (2) a pro rata bonus under the EIP; and (3) the sum of: (a) 2.99 times the then current annual base salary + (b) the target IP bonus amount with respect to a termination of employment which occurs prior to February 12, 2023, and the higher of two immediately preceding completed fiscal years earned bonuses with respect to a termination after February 12, 2023, + (c) the Applicable COBRA Amount (6) | | | N/A | | | (1) any material reduction in base salary; (2) any material adverse change in title, position, authority, reporting relationships or duties; (3) the requirement to relocate the principal place of employment to a location in excess of fifty miles from his principal work location or (4) the failure to nominate to, or removal from, the Board of Directors of Byline or Byline Bank | | | Payments to which the Executive is entitled to, in the event of death or disability(9), plus a lump sum cash amount of $750,000 in case of death which can be in the form of a life insurance policy, at the discretion of Byline. | | | Alberto J. Paracchini | | | (1) 1.5 times annual base salary + COBRA Benefits(4) payable in cash over 18 month installments; and (2) prorata bonus under the EIP(2) | | | (1) the accrued amounts and any unpaid EIP bonus; (2) a pro rata bonus under the EIP; and (3) the sum of: (a) 1.5 times the then current annual base salary + (b) the higher of the two immediately preceding completed fiscal years’ earned bonuses, + (c) the COBRA benefits(6) | | | severance payments following a “change in control” with such pro rata bonus being paid based on achievement of applicable performance goals through the date of the “special change in control” | | | (1) any material reduction in base salary; (2) any material adverse change in title, position, authority, reporting relationships or duties; (3) the requirement to relocate the principal place of employment to a location in excess of thirty five 35 miles from his principal work location or (4) the failure to nominate to, or removal from, the Board of Directors of Byline Bank | | | Payments to which the Executive is entitled to, in the event of death or disability(9), plus a lump sum cash amount equal to 200% of base salary(10) | | | Lindsay Corby | | | (1) 1 times annual base salary + COBRA Benefits(4) payable in cash over 12 month installments; and (2) prorata bonus under the EIP(2) | | | (1) the accrued amounts and any unpaid EIP bonus; (2) a pro rata bonus under the EIP; and (3) the sum of: (a) 2 times the then current annual base salary + (b) the higher of the two immediately preceding completed fiscal years’ earned bonuses, + (c) the COBRA benefits(6) | | | N/A | | | (1) any material reduction in base salary; (2) any material adverse change in title, position, authority, reporting relationships or duties; (3) the requirement to relocate the principal place of employment to a location in excess of thirty five 50 miles from his principal work location | | | Payments to which the Executive is entitled to, in the event of death or disability(9), plus a lump sum cash amount equal to 200% of base salary(10) | |
40 Byline Bank terminates the executive without “cause” (and not due to disability) or the executive resigns for “good reason”, the executive will be entitled to: Bancorp, Inc. 2022 Proxy Statement
Named Executive
Officer | | | Termination without
“cause”(1) and
not due to
disability or
executive resigns
for “good reason” | | | Termination without
“cause” and not
due to disability(1)
or executive
resigns for “good
reason” following
a “change in
control”(5) | | | Payment for
“special change in
control”(7) | | | Meaning of “good
reason” | | | Termination
due to Death
or Disability(8) | | | Thomas Abraham | | | (1) 1 times annual base salary + COBRA Benefits(4) payable in cash over 12 month installments; and (2) prorata bonus under the EIP(2) | | | (1) the accrued amounts and any unpaid EIP bonus; (2) a pro rata bonus under the EIP; and (3) the sum of: (a) 1 time the then current annual base salary + (b) the higher of the two immediately preceding completed fiscal years’ earned bonuses, + (c) the COBRA benefits(6) | | | N/A | | | (1) any material reduction in base salary; (2) any material adverse change in title, position, authority, reporting relationships or duties; (3) the requirement to relocate the principal place of employment to a location in excess of thirty five 50 miles from his principal work location | | | Payments to which the Executive is entitled to, in the event of death or disability(9) | |
(1) one and a half times (for Mr. Paracchini) or one times (for Mr. Lammers) the sum of (A) his then current annual base salary; and (B) the excess of the applicable COBRA premiums for health, dental and vision benefits on the date of termination (provided that he elects COBRA continuation coverage) over the amount of health, dental and vision premiums charged to active employees of Byline for like coverage on the date of termination, payable in cash in installments over 18 months (for Mr. Paracchini) or 12 months (for Mr. Lammers) following termination of employment, and (2) a pro rata bonus for the year of termination based on actual performance and paid following the end of the fiscal year. In the event the executive is terminated without “cause” (and not due to disability) or the executive voluntarily resigns for “good reason” within two years (for Mr. Paracchini) or one year (for Mr. Lammers) following a “change in control”, he will be entitled to each of the severance payments described above plus one and a half times (for Mr. Paracchini) or two times (for Mr. Lammers) the higher of the two immediately preceding completed fiscal years’ earned bonus (for Mr. Paracchini) or cash bonus (for Mr. Lammers), with all amounts other than the pro rata bonus payable in a lump sum following termination of employment. In the event of a “special change in control” (for Mr. Paracchini), regardless of whether employment is terminated, Mr. Paracchini is entitled to each of the severance payments described above for a qualifying termination following a “change in control” with such pro rata bonus being paid based on achievement of applicable performance goals through the date of the “special change in control” (as opposed to through the end of the fiscal year).
“Cause” generally means: (1) willful and continued failure to perform substantially your duties; (2) willfully engaging in illegal conduct, an act of dishonesty or gross misconduct related to the performance of your duties and responsibilities; (3) being charged with a crime involving moral turpitude, dishonesty, fraud, theft or financial impropriety; (4) willful violation of a material requirement of any applicable code of ethics or standards of conduct of Byline or Byline Bank, or violation of a fiduciary duty to Byline (in the case of Mr. Paracchini) or Byline Bank;duty; or (5) a breach of the Agreement Protecting Company Interests (for Mr. Paracchini) or a breach of the confidentiality, non-competition and non-solicitation, assignment of inventions or non-disparagement covenants contained in Mr. Lammers’ agreement (for Mr. Lammers).“Good reason” generally means: (1) any material reduction in base salary; Interests.
(2) any material adverse change in title, position, authority, reporting relationships or duties; (3) the requirement to relocate the principal place of employment to a location in excess of thirty five (35) miles from his principal work location (for Mr. Paracchini) or thirty five (35) miles from Byline Bank’s Small Business Capital unit location in Brookfield, Wisconsin or twenty five (25) miles from Byline Bank’s Small Business Capital unit location in Schaumburg, Illinois (for Mr. Lammers) on the date of the employment agreement; or (4) the failure to nominate to, or removal from, the Board of Directors of Byline Bank (for Mr. Paracchini).
“Change in control” and “special change in control” (for Mr. Paracchini) are defined consistent with the definitions provided under “Stock Options Awarded under the Byline Bancorp Equity Incentive Plan” above.
Each employment agreement also provides that in the event employment terminates due to death or Disability (as such term is defined in the agreements), Mr. Paracchini or Mr. Lammers, as the case may be, or their respective estates, would be entitled to receive, in
In addition to any accrued but unpaid compensation or benefits and any unpaid bonus earned under the Executive Incentive Plan with respect to any fiscal year ending on or preceding the date of termination. (3)
“Applicable COBRA Amount” means 18 times the monthly COBRA premium applicable to you to continue health, dental and vision care benefits you have in effect as of the date of termination. (4)
The excess of the applicable COBRA premiums for health, dental and vision benefits on the date of termination (provided that he or she elects COBRA continuation coverage) over the amount of health, dental and vision premiums charged to active employees of Byline for like coverage on the date of termination (the “COBRA Benefits”). (5)
“Change in Control” as defined under the Employment Agreements. Payments related to a “Change in Control” will be done within two years (for Mr. Herencia and Mr. Paracchini) or one year (for Ms. Corby and Mr. Abraham). (6)
Payable in a lump sum within 15 days after the executive’s signed release becomes effective. (7)
“Special Change in Control” as defined in Mr. Paracchini’s Employment Agreement. (8)
“Death and Disability” as defined in the Employment Agreements. (9)
Each of the Executives or their respective estates, would be entitled to receive, in addition to any accrued amounts, any unpaid bonus earned under the EIP with respect to any fiscal year ending on or preceding the date of termination and a pro rata portion of his Executive Incentive Planor her EIP bonus for the fiscal year in which the termination occurs, payable at the time that such bonuses are paid to other senior executives for such year. In addition, with respect to Mr. Paracchini, in the event of his death, his beneficiary would be entitled to a lump sum cash amount equal to 200% of his base salary but (10)
But not exceeding $750,000 which benefit may be provided through the purchase of a life insurance policy. As a condition to their respective employment agreements, Mr. Paracchinieach of the Named Executive Officers entered into an Agreement Protecting Company Interests with Byline and Byline Bank, and Mr. Lammers agreed to certain restrictive covenants in his employment agreement with Byline Bank relating to confidentiality, non-competition and non-solicitation, assignment of inventions and non-disparagement.Bank. The Agreement Protecting Company Interests (for Mr. Paracchini) and the restrictive covenants in Mr. Lammers’ agreement (for Mr. Lammers) containcontains (1) a confidentiality provision regarding the use and disclosure of confidential information during the term of employment and after, (2) a customer and employee non solicit during employment for eighteen (18) months following termination of employment (for Mr. Herencia and Mr. Paracchini) and twelve (12) months (for Ms. Corby and Mr. Lammers)Abraham), and (3) assignment of inventions and non-disparagement provisions.
Savings and Retirement Plans Byline maintains the Byline Bancorp, Inc. 401(k) Plan (the “401(k) Plan”), which is a tax qualified defined contribution savings plan for all eligible employees of Byline, including each of our named executive officers. Under the 401(k) Plan, eligible employees may contribute up to 90% of their pay (subject to Internal Revenue Service limitations) to the 401(k) Plan. Contributions are withheld by payroll deductions on a pre-tax basis. Byline matches 100% of the first 3% of the pay that an employee contributes on a pre-tax basis to the 401(k) Plan and 50% of the next 2% of the pay that an employee contributes on a pre-tax basis to the 401(k) Plan. Messrs. Paracchini and Lammers and Ms. Corby are eligible for such matching contributions. Participants are 100% vested in their pre-tax contributions and, upon completion of three years of service, the employer matching contributions. Each of our named executive officers is fully vested in their employer matching contributions.Stock Ownership and Retention Guidelines Overview
.Overview. In an effort to align the financial interests of our executive officers and directors with those of our stockholders and to promote our long-term business objectives, our directors and executive officers are subject to
Byline Bancorp, Inc. 2022 Proxy Statement 41
certain stock ownership and retention requirements pursuant to guidelines established by our Board and administered by the Compensation Committee. Under these ownership guidelines, our non-employee directors CEO and other executive officers are expected to accumulate shares of our common stock to meet the applicable ownership level within five years of their election or appointment. It is expected that they will acquire the required ownership level by retaining ownership of their equity compensation from the Company. Until the required level is achieved, the individual must retain at least 50% of his or her vested full value shares received as equity compensation.
Minimum Ownership Guidelines Applicable to Our Executive OfficersOfficers.. Under the guidelines, our Executive Chairman and CEO is expected to own a minimum number of shares of our common stock with an aggregate value equal to five times his base salary, and our President is expected to own a minimum number of shares of our common stock with an aggregate value equal to three times his base salary. Our other executive officers are required to own a minimum number of shares of our common stock with an aggregate value equal to one time their base salary salary. Minimum Ownership Guidelines Applicable to Our Directors.Directors. Our non-employee Directors are required to own a minimum number of shares of our common stock with an aggregate value equal to three times the amount of the Board cash retainer.Satisfaction of Minimum Ownership. Individuals may satisfy the ownership guidelines by owning shares ofretainer under our common stock in the following categories:
Director Compensation Program. Shares owned indirectly (e.g., by a spouse or a trust) if the individual has a pecuniary interest in such shares;
Time vested restricted stock and/or restricted stock units, or phantom stock payable in shares, granted under the Company’s incentive plans or other equity compensation arrangements; or
Unexercised stock options that are vested and in-the-money.
Unearned performance shares are not counted toward meeting the guidelines.
Directors and executive officers are expected to accumulate the minimum number of shares of our common stock to satisfy the ownership guidelines over a five-year period. Progress and compliance in achieving the minimum ownership guidelines is reviewed at the end of each calendar year and reported to the Compensation Committee during the first quarter of the following year. The value of a person’s holdings is based on the closing price of our common stock for the last trading day of the year (the “Determination Date”).
Compliance with the Guidelines. If an individual is not in compliance with the guidelines at any Determination Date, he or she must retain 50% of his or her vested full value shares of our common stock acquired through our incentive plans or other equity compensation arrangements after such Determination Date. In addition, he or she will be prohibited from selling shares of our common stock acquired after such Determination Date by exercising stock options, other than in order to pay the exercise price of the stock option and any applicable tax withholding. Non-compliance with the guidelines may result in adjustments to the amount of any incentive-based equity compensation that an individual would otherwise be entitled to under the Company’s equity incentive plans.
The Committee has the discretion to enforce the stock ownership and retention guidelines on a case-by-case basis and to make changes as it deems appropriate.
Incentive Repayment (Clawback) Policy
We have a clawback policy that, in the event of a restatement of our financial statements to correct a material non-compliance with any applicable financial reporting requirement, allows the Compensation Committee to seek recovery or forfeiture from any executive officer of the portion of incentive compensation that was received by or vested in the executive officer during the three-year period prior to the determination that a restatement was required and that would not have been earned had performance been measured on the basis of the restated results if the Compensation Committee
determines that the executive engaged in intentional fraud or gross misconduct or was otherwise directly or indirectly responsible for the restatement. Hedging and Pledging Policy Consistent with our Board’s belief that significant stock ownership by directors and executive officers strengthens the alignment of their interests with our stockholders and promotes our long-term business objectives, we do not permit our directors and executive officers to enter into hedging and monetization transactions or to engage in short sale transactions in the Company’s securities. We believe that such transactions can mitigate or eliminate the economic risk of ownership and disincentivize such individuals from seeking to improve the Company’s performance and consequently impair their alignment with our stockholders’ interests. We also do not permit our directors and executive officers to enter into pledge arrangements involving their shares of our common stock. We believe such arrangements present a risk that the individual could be pressured or forced to sell our stock to meet loan requirements, which we believe would be inconsistent with our belief in aligning their interests with long-term stockholder interests, and potentially could cause us reputational harm and violate internal policies regarding transacting in our stock when such person is aware of material nonpublic information or otherwise prohibited from trading in our stock. A copy of the hedging and pledging policy is available on our website at www.bylinebancorp.com under the “Governance Documents” tab. 42 Byline Bancorp, Inc. 2022 Proxy Statement
Certain Relationships and Related Transactions Byline or one of its subsidiaries may occasionally enter into transactions with certain “related persons”. Related persons include our executive officers, directors, 5% or more beneficial owners of our common stock, immediate family members of these persons and entities in which one of these persons has a direct or indirect material interest. We generally refer to transactions with these related persons as “related party transactions”.
Related Party Transaction Policy Our Board of Directors has adopted a written policy governing the review and approval of transactions with related parties that will or may be expected to exceed $120,000 in any fiscal year. The policy provides that related party transactions are reviewed and, if deemed appropriate, approved or ratified by our Audit Committee. Upon determination by our Audit Committee that a transaction requires review under the policy, the material facts are required to be presented to the Audit Committee. In determining whether or not to approve a related party transaction, our Audit Committee will take into account, among other relevant factors, whether the related party transaction is in our best interests, whether it involves a conflict of interest and the commercial reasonableness of the transaction. In the event that we become aware of a related party transaction that was not approved under the policy before it was entered into, our Audit Committee will review such transaction as promptly as reasonably practical and will take such course of action as may be deemed appropriate under the circumstances. In the event a member of our Audit Committee is not disinterested with respect to the related party transaction under review, that member may not participate in the review, approval or ratification of that related party transaction. Certain decisions and transactions are not subject to the related party transaction approval policy, including: (i) decisions on compensation or benefits relating to directors or executive officers and (ii) indebtedness to us in the ordinary course of business, on substantially the same terms, including interest rate and collateral, as those prevailing at the time for comparable loans with persons not related to us and not presenting more than the normal risk of collectability or other unfavorable features.
A copy of the related party transaction policy is available on our website at www.bylinebancorp.com under the “Governance Documents” tab. Certain
Related Party Transactions On March 24, 2016, we issued and sold 1,541,585 shares of common stock to MBG Investors I, L.P., a 5% stockholder, and received $25,050,764 for the sale of such securities. Mr. del Valle Perochena, one of our directors, had a pecuniary interest of $4,164,689 in this transaction based on his 16.625% ownership interest in MBG Investors I, L.P. On September 30, 2016, we issued and sold 658,740 shares of common stock to MBG Investors I, L.P. and we received $10,704,532 for the sale of such securities. Mr. del Valle Perochena had a pecuniary interest of $1,779,628 in this transaction based on his 16.625% ownership interest in MBG Investors I, L.P.
On March 24, 2016, we issued and sold 217,137 shares of common stock to ECR Holdings, S.A. de C.V., a 5% stockholder, and we received $3,528,489 for the sale of such securities. On September 30, 2016, we issued and sold 92,199 shares of common stock to ECR Holdings, S.A. de C.V. and we received $1,498,235 for the sale of such securities.
On March 24, 2016, we issued and sold 8,617 shares of common stock to Roberto Herencia, one of our directors, and we received $140,000 for the sale of such securities. On September 30, 2016, we issued and sold 3,585 shares of common stock to Mr. Herencia, and we received $58,260 for the sale of such securities.
On December 31, 2016, the Joann R. Rull Irrevocable Trust purchased 250 shares of Series F preferred stock (which were exchanged for series B preferred stock of Byline Delaware in the Reincorporation), and we received $250,000 for the sale of such securities. Steven M. Rull, one of our directors, is the trustee of the trust and his immediate family members are the beneficiaries.
Other Related Party Transactions
In the ordinary course of our business, we have engaged and expect to continue engaging through our bank in ordinary banking transactions with our directors, executive officers, their immediate family members and companies in which they may have a 5% or more beneficial ownership interest, including loans to such persons. Any such loan was made on substantially the same terms, including interest rates and collateral, as those prevailing at the time such loan was made as loans made to persons who were not related to us. These loans do not involve more than the normal credit collection risk and do not present any other unfavorable features to us.
Foreign National Commitments and Passivity CommitmentsCertain of our stockholders are foreign nationals, and we and certain of these foreign national stockholders have entered into commitments with the Federal Reserve that restrict our ability to engage in certain business transactions without the consent of the Federal Reserve. In particular, subject to certain limited exceptions, we are not permitted to engage in or be a party to any business transaction or relationship with a company that is controlled by these foreign national stockholders or by their immediate families. In addition, Byline Bank is not permitted to engage in or be a party to any extension of credit, as defined in the Federal Reserve’s Regulation O, to these foreign national stockholders, their immediate families or any company controlled by these foreign national stockholders. Byline Bank is also not permitted to engage in or be a party to any covered transaction, as defined in the Federal Reserve Act and the Federal Reserve’s Regulation W, with any company that is controlled by these foreign national stockholders. Byline Bancorp, Inc. 2022 Proxy Statement 43
Certain of our stockholders have entered into passivity commitments with the Federal Reserve that generally restrict these stockholders from entering into banking or nonbanking transactions with us. These stockholders may establish and maintain deposit accounts with us provided that the aggregate balance of these deposit accounts does not exceed $500,000 and the accounts are maintained on substantially the same terms as those prevailing for comparable accounts of persons who are unaffiliated with us.TABLE OF CONTENTS The matters to be considered and brought before any annual or special meetingmeetings of Byline'sByline’s stockholders shall be limited to only those matters as shall be brought properly before such meeting in compliance with the procedures set forth in Byline's bylaws.Byline’s By-laws. For proposals to be brought by a Byline stockholder and voted upon at an annual meeting, including with respect to the nomination of a director, the stockholder must file written notice of the proposal to Byline'sByline’s secretary not less than 90 days nor more than 120 days prior to the anniversary date of the annual meeting for the preceding year. However, if the annual meeting is not scheduled to be held within a period that commences 30 days before such anniversary date and ends within 60 days after such anniversary date (an annual meeting date outside such period being referred to herein as an “Other Meeting Date”), the stockholder'sstockholder’s notice shall be given in the manner provided in Byline's bylawsByline’s By-laws by the later of the close of business on (1) the date 90 days prior to such Other Meeting Date or (2) the 10th day following the date such Other Meeting Date is first publicly announced or disclosed. In the event that the number of directors to be elected to the Board of Directors is increased and either all of the nominees for director or the size of the increased Board is not publicly announced or disclosed by Byline at least 100 days prior to the first anniversary of the preceding year'syear’s annual meeting, a stockholder'sstockholder’s notice will also be considered timely, but only with respect to nominees for any new positions created by such increase, if it is delivered to Byline'sByline’s Secretary not later than the close of business on the 10th day following the first date all of such nominees or the size of the increased Board is publicly announced or disclosed. The stockholder'sstockholder’s notice to the secretary must include, among other things set forth in Byline's bylaws:Byline’s By-laws: (a) a brief description and the text of the proposal desired to be brought before the meeting and the reasons for conducting such business at the meeting; (b) the name and address, as they appear on Byline'sByline’s books, of the stockholder proposing such business; (c) the number of shares of Byline'sByline’s common stock or other equity or debt securities beneficially owned by such stockholder on the date of such stockholder'sstockholder’s notice; and (d) any financial or other interest of such stockholder in the proposal. Stockholders should refer to the full text of our advance notice provisions contained in Section 1.12 of our Amended and Restated By-Laws. Written notice of stockholder proposals to be brought at Byline’s 20202023 Annual Meeting of Stockholders in accordance with the above procedures must be delivered to Byline’s secretary no earlier than February 5, 20207, 2023, and no later than March 7, 2020,9, 2023, unless an Other Meeting Date occurs with respect to the 20202023 Annual Meeting, in which case the notice delivery requirements will be as set forth above with respect to meetings with Other Meeting Dates. In lieu of the foregoing notice procedures, stockholders seeking to submit a proposal for inclusion in our proxy statement for the 20202023 Annual Meeting must follow the procedures and meet the other requirements outlined in Rule 14a-8 of the Exchange Act, and we must receive such proposal at our principal executive offices on or before January 11, 2020.December 26, 2022. Any proposals, notices or nominations must be sent to the Office of the Corporate Secretary, Byline Bancorp, Inc., 180 North LaSalle Street, Suite 300, Chicago, Illinois 60601. A copy of our By-laws is available upon written request to the Corporate Secretary at the address noted above. Additionally, a copy of our By-laws, which we included as an exhibit to our Form S-1 filed with the SEC on June 19, 2017, can be accessed through the SEC’s website at www.sec.gov.www.sec.gov. 44 Byline Bancorp, Inc. 2022 Proxy Statement
Delivery of Documents to Stockholders Sharing an Address The SEC’s proxy rules permit companies and intermediaries to satisfy delivery requirements for proxy statements with respect to two or more stockholders sharing an address by delivering a single proxy statement and annual report with separate proxy cards to those stockholders. This method of delivery, often referred to as “householding,” reduces the amount of duplicate information that stockholders receive and lowers printing and mailing costs for companies. We are not householding materials for our registered stockholders in connection with the Annual Meeting; however, we understand that certain intermediaries will household our proxy materials. If a brokerage, bank or other nominee holds your shares, this means that only one Proxy Statement and annual report will be delivered to multiple stockholders sharing an address. Any stockholder residing at such an address who would like to receive an individual copy of the materials, or who is receiving multiple copies of our Proxy Statement and Annual Report and would prefer to receive a single copy in the future, may contact Broadridge, Householding Department by mail at 51 Mercedes Way, Edgewood, New York 11717 or by telephone at (866) 540-7095. Be sure to include your name, the name of your brokerage firm and your account number.
Upon receipt of a written request addressed to our Corporate Secretary at Byline Bancorp, Inc., 180 North LaSalle Street, 3rd Floor,Suite 300, Chicago, Illinois 60601 from any person solicited herein, we will provide, at no cost, a copy of our 20182021 Annual Report on Form 10-K as filed with the SEC. Our Board of Directors does not know of any matter to be brought before the Annual Meeting other than the matters set forth in the Notice of Annual Meeting of Stockholders and matters incident to the conduct of the Annual Meeting. If any other matter should properly come before the Annual Meeting, the persons named in the enclosed proxy card will have discretionary authority to vote all proxies with respect thereto in accordance with their best judgment. | | | | | By Order of the Board of Directors, | | | | | | | | | | | | | | Roberto R. Herencia Executive Chairman of the Board and Chief Executive Officer | | | | April 25, 2022 | | | | |
Byline Bancorp, Inc. 2022 Proxy Statement 45
Annex A Byline Bancorp, Inc.
Employee Stock Purchase Plan
Byline Bancorp, Inc.
Employee Stock Purchase Plan TABLE OF CONTENTS | | | | Page | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
A-i Byline Bancorp, Inc. 2022 Proxy Statement
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Byline Bancorp, Inc. 2022 Proxy Statement A-ii
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A-iii Byline Bancorp, Inc. 2022 Proxy Statement
Byline Bancorp, Inc.
Employee Stock Purchase Plan ARTICLE I – PURPOSE 1.01.
Purpose The Byline Bancorp, Inc. Employee Stock Purchase Plan is intended to provide a method whereby certain employees of Byline Bancorp, Inc. (the “Company”) and its participating subsidiary corporations will have an opportunity to acquire a proprietary interest in the Company through the purchase of shares of the Common Stock of the Company (“Stock”). It is the intention of the Company to have the Plan qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”). The provisions of the Plan shall be construed so as to extend and limit participation in Offerings a manner consistent with the requirements of Code Section 423. Participating Subsidiaries as of the Effective Date are all subsidiaries organized in the United States. The Plan is being adopted by the Company in anticipation of the initial public offering of the Company’s Common Stock, and is subject to approval of the Company’s shareholders and the successful completion of the initial public offering. In the event that a new corporation is formed to serve as the issuer of Common Stock pursuant to the initial public offering, this Plan may be adopted by such corporation, with the consent of its shareholders, and such corporation shall be considered the Company for all purposes of the Plan.
ARTICLE II – DEFINITIONS 2.01.
Base Pay “Base Pay” shall mean regular straight-time earnings and overtime, including vacation pay, paid time off and other payments in lieu of such compensation, except as otherwise determined by the Committee. In the case of an employee who is compensated wholly or partially on the basis of commissions, Base Pay shall also include commission payments. 2.02.
Committee “Committee” shall mean the individuals appointed by the Company to administer the Plan as described in Article IX. 2.03.
Eligible Employee “Eligible Employee” means any employee of the Company or a participating Subsidiary whose customary term of employment is for more than 20 hours per week, as determined in accordance with Code Section 423(b)(4)(B). 2.04.
Enrollment Period “Enrollment Period” shall mean with respect to any Offering, the period designated by the Committee prior to such Offering during which Eligible Employees may authorize payroll deductions through a Subscription. 2.05.
Offering Commencement Date “Offering Commencement Date” shall mean and, unless determined otherwise by the Committee, January 1 and July 1 of each year commencing with the first such date that occurs after the Effective Date. Each Eligible Employee who is a Participant as of an Offering Commencement Date for an Offering shall be deemed to be granted an option to participate in the Plan for that Offering in accordance with the terms hereof. 2.06.
Offering “Offering” shall mean the offering of the Company’s Stock. Only Eligible Employees of participating Subsidiaries shall participate in Offerings. 2.07.
Offering End Date “Offering End Date” shall mean, with respect to each Offering, the last day of the sixth month of such Offering. The Committee may establish a different length for individual offerings, provided that the Offering End Date for any Offering may not be more than five years after the Offering Commencement Date, or twenty-seven months if the purchase price with respect to such Offering is based on the lower of the closing price of the Stock on the Offering Commencement Date or the Purchase Date pursuant to Section 4.02(ii). 2.08.
Participant “Participant” shall mean an Eligible Employee who has elected to participate in an Offering by entering a Subscription during the Enrollment Period for such Offering. 2.09.
Plan “Plan” shall mean the Byline Bancorp Inc. Employee Stock Purchase Plan, as amended from time to time. 2.10.
Purchase Date “Purchase Date” shall mean with respect to any Offering, the Offering End Date; provided, that with respect to any Offering the Committee may provide for more frequent Purchase Dates prior to the Offering End Date, and provided further, that if any such day is not a business day on which trading occurs, the Purchase Date shall be the nearest prior business date on which shares of Stock are traded. 2.11.
Subscription “Subscription” shall mean an Eligible Employee’s authorization for payroll deductions made in the form and manner specified by the Committee (which may include enrollment by submitting forms, by voice response, internet access or other electronic means). Unless withdrawn earlier in accordance with Section 6.02 or otherwise in accordance with the Plan, each Subscription shall be in effect for the duration of an Offering. A-2 Byline Bancorp, Inc. 2022 Proxy Statement
2.12.
Subsidiary “Subsidiary” shall mean any present or future corporation that would be a “subsidiary corporation” of the Company as that term is defined in Section 424 of the Code. A participating Subsidiary means any corporation that is a Subsidiary on the Effective Date. The Committee shall have the authority to determine whether corporations that become Subsidiaries after the Effective Date shall participate. Byline Bancorp, Inc. 2022 Proxy Statement A-3
ARTICLE III – ELIGIBILITY AND PARTICIPATION 3.01.
Initial Eligibility Any individual who is an Eligible Employee shall be eligible to participate in the Offering if he is employed on the Offering Commencement Date. The Committee may establish rules requiring an Eligible Employee to have completed a minimum period of service (not to exceed two years) to participate in an Offering, or permitting a person who becomes an Eligible Employee (or who completes the applicable period of service) during an Offering to participate in the Offering. 3.02.
Leave of Absence For purposes of participation in the Plan, and except as otherwise determined by the Committee, a Participant on a leave of absence shall be deemed to be an employee for a period of up to 90 days or, if longer, during the period the Participant’s right to reemployment is guaranteed by statute or contract. If the leave of absence is paid, deductions or contributions authorized under any Subscription in effect at the time the leave began will continue. If the leave of absence is unpaid, no deductions or contributions will be permitted during the leave. If such a Participant returns to active status within 90 days or the guaranteed reemployment period, as applicable, payroll deductions or contributions under the Subscription in effect at the time the leave began will automatically begin again upon the Participant’s return to active status. If the Participant does not return to active status within 90 days or the guaranteed reemployment period, as applicable, the Participant shall be treated as having terminated employment for all purposes of the Plan. If such individual later returns to active employment as an Eligible Employee, such individual will be treated as a new employee and will be eligible to participate in Offerings commencing after his or her reemployment date by filing a Subscription during the applicable Enrollment Period for such Offering. 3.03.
Restrictions on Participation Notwithstanding any provisions of the Plan to the contrary, no Eligible Employee shall be granted an option to participate in any Offering under the Plan: (a)
if, immediately after the grant, such Eligible Employee would own stock, and/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 (for purposes of this paragraph, the rules of Section 424(d) of the Code shall apply in determining stock ownership of any Eligible Employee); (b)
which permits the Eligible Employee’s right to purchase stock under all employee stock purchase plans of the Company to accrue at a rate which exceeds $25,000 in fair market value of the stock (determined at the time such option is granted) for each calendar year in which such option is outstanding; or (c)
unless the Committee provides that the purchase price with respect to such Offering is based on the lower of the closing price of the Stock on the Offering Commencement Date or the Purchase Date pursuant to Section 4.02(ii), which permits a Participant to purchase more than a number of shares of Stock determined by the Committee at the commencement of the Offering. 3.04.
Commencement of Participation An Eligible Employee may become a Participant in any Offering by entering a Subscription during the Enrollment Period for such Offering. Payroll deductions for such Offering shall commence on the applicable Offering Commencement Date and shall end on the applicable Offering End Date unless withdrawn by the Participant or sooner terminated in accordance with Article VII. Only one Subscription may be in effect with respect to any Participant at any one time. 3.05.
Participation After Rehire An Eligible Employee’s Subscription will automatically terminate on his or her termination of employment with the Company and all Subsidiaries. If the Eligible Employee terminates employment with a Subscription in effect with respect to an Offering and is rehired prior to the Offering End Date for that Offering, the Subscription will not be reinstated and the Eligible Employee will not be allowed to again make payroll deductions under such Offering. The Eligible Employee may elect to participate in Offerings commencing after his or her reemployment date by entering a Subscription during the applicable Enrollment Period for such Offering. A-4 Byline Bancorp, Inc. 2022 Proxy Statement
3.06.
Transfers If an Eligible Employee transfers from a participating to a non-participating Subsidiary, the Eligible Employee’s Subscription to any current Offering shall terminate, and such Eligible. A Participant whose participation in an Offering ends due to this Section 3.06 will be treated as having incurred a Termination of Employment to allow for the application of Section 7.02. Byline Bancorp, Inc. 2022 Proxy Statement A-5
ARTICLE IV – OFFERINGS 4.01.
Offerings The Plan will be implemented by Offerings beginning on the first January 1 or July 1 that occurs after the Effective Date and, unless determined otherwise by the Committee, on each January 1 or July 1 that occurs thereafter. Without limiting the generality of the foregoing, the Committee may establish an Offering prior to the first January 1 or July 1 that occurs after the Effective Date, which may have a period of less than six months. Participants may subscribe to any Offering for which they are eligible by entering a Subscription during the Enrollment Period for such Offering in such manner as the Committee may prescribe (which may include enrollment by submitting forms, by voice response, internet access or other electronic means). A Subscription that is in effect on an Offering End Date will automatically be deemed to be a Subscription for the Offering that commences immediately following such Offering End Date, provided that the Participant is still an Eligible Employee and has not withdrawn the Subscription, unless otherwise determined by the Committee. If a Participant purchases shares that cause the Participant to reach the limitation set forth in Section 3.03(b) or Section 3.03(c), the Participant’s Subscription will automatically be suspended for the duration of the calendar year and will resume at the beginning of the next calendar year, provided that the Participant is still an Eligible Employee and has not withdrawn the Subscription, unless otherwise determined by the Committee. Under the foregoing automatic enrollment provisions, payroll deductions or contributions will continue at the level in effect immediately prior to the new Offering Commencement Date, unless changed in advance by the Participant in accordance with Section 5.03. 4.02.
Purchase Price The purchase price per share of Stock under each Offering shall be 85% of the closing price of the Stock on the Purchase Date. Notwithstanding the foregoing, the Committee may determine with respect to any Offering either that (i) the purchase price shall be a different percentage, which shall not be less than 85%, of the closing price of the Stock on the Purchase Date, or (ii) the purchase price shall be a percentage (which shall not be less than 85%) of the lower of the closing price of the Stock on the Offering Commencement Date or the Purchase Date. If the Stock is not traded on the principal securities exchange on which the Stock is admitted to trade on any of the aforesaid dates for which closing prices of the stock are to be determined, then reference shall be made to the next preceding date on which the Stock was so traded. Such determination shall be made and communicated to Eligible Employees during the Enrollment Period for such Offering. Such purchase price may only be paid with accumulated payroll deductions in accordance with Article V. A-6 Byline Bancorp, Inc. 2022 Proxy Statement
ARTICLE V – PAYROLL DEDUCTIONS/CONTRIBUTIONS 5.01.
Amount of Deduction/Contribution An Eligible Employee’s Subscription shall authorize payroll deductions at a rate, in whole percentages, of no less than 1% and no more than 15% of Base Pay or such other percentage as the Committee may authorize on each payday that the Subscription is in effect. 5.02.
Participant’s Account All payroll deductions made with respect to a Participant shall be credited to his or her account under the Plan. A Participant may not make any separate cash payment into such accounts. No interest will accrue or be paid on any amount withheld from a Participant’s pay under the Plan or credited to the Participant’s account. Except as otherwise provided in this Section 5.02, Section 6.01 or Section 8.01, or as provided upon termination of the Plan, all amounts in a Participant’s account will be used to purchase Stock and no cash refunds shall be made from such account. Any amounts remaining in a Participant’s account with respect to an Offering due to the limitations of Section 3.03 shall be returned to the Participant without interest and will not be used to purchase shares with respect to any other Offering under the Plan. 5.03.
Changes in Payroll Deductions/Contributions During an Offering, a Participant may change his or her level of payroll deduction or contribution with respect to such Offering within the limits described in Section 5.01 in accordance with procedures established by the Committee (including, without limitation, rules relating to the frequency of such changes or prohibiting changes under certain circumstances); provided, however, if the Participant reduces his or her payroll deductions or contributions to zero, it shall be deemed to be a withdrawal of the Subscription and the Participant may not thereafter participate in such Offering but must wait until the next Offering to resubscribe to the Plan. Any increases or decreases in the level of payroll deductions or contributions shall be effective as soon as administratively practicable thereafter. Byline Bancorp, Inc. 2022 Proxy Statement A-7
ARTICLE VI – EXERCISE OF OPTION 6.01.
Automatic Exercise A Participant’s option for the purchase of Stock with respect to any Offering will be automatically exercised on each Purchase Date for the Offering. The option will be exercised by using the accumulated payroll deductions or contributions in the Participant’s account as of each such Purchase Date to purchase the number of full and (to the extent permitted by the Committee) partial shares of Stock that may be purchased at the purchase price on such date, determined in accordance with Section 4.02 (but not in excess of the limitation set forth in Sections 3.03(b) or 3.03(c)). Any accumulated payroll deductions or contributions remaining in the Participant’s account following the purchase that could not be used to purchase shares of Stock in accordance with the foregoing provisions shall be refunded to the Participant as soon as practicable, or retained in the Participant’s account and used for the purchase of Stock in the next Offering, as determined by the Committee. 6.02.
Withdrawal From Offering A Participant may withdraw his or her Subscription at any time (but not retroactively) during an Offering. If the Participant withdraws his or her Subscription with respect to any Offering, the accumulated payroll deductions or contributions in the Participant’s account at the time the Subscription is withdrawn will be used to purchase shares of Stock at the next Purchase Date for the Offering to which the Subscription related, in accordance with Section 6.01, or refunded to the Participant, as determined by the Committee. 6.03.
Delivery of Stock Stock purchased under the Plan will be held in an account in the Participant’s name in uncertificated form until such shares are transferred to the Participant in accordance with Section 7.02 or other procedures established by the Committee. The Committee may change such accounts and the manner in which such shares are registered and held from time to time, and may establish reasonable fees for the registration and custody of shares and sell shares in a Participant’s account to pay such fees. 6.04.
Mandatory Retention or Sale of Stock To facilitate compliance with applicable law, the Committee may require Participants to: (a) retain any Stock purchased under the Plan during an Offering with a designated broker or agent for a designated period of time (and may restrict dispositions during that period) and/or may establish other procedures to restrict transfer of such Stock or (b) sell shares of Stock immediately upon purchase or within a specified period following a Participant’s termination of employment. A-8 Byline Bancorp, Inc. 2022 Proxy Statement
ARTICLE VII – WITHDRAWAL 7.01.
Effect on Subsequent Participation A Participant’s election to withdraw from any Offering will not have any effect upon the Participant’s eligibility to participate in any succeeding Offering or in any similar plan which may hereafter be adopted by the Company. 7.02.
Termination of Employment Upon termination of the Participant’s employment with the Company for any reason, any Subscription then in effect will be deemed to have been withdrawn and any payroll deductions or contributions credited to the Participant’s account will be used to purchase Stock on the next Purchase Date for the Offering with respect to which such deductions relate in accordance with Section 6.01, or refunded to the Participant, as determined by the Committee. After termination of employment, any shares of Stock purchased under the Plan that have not otherwise been certificated, sold or transferred will continue to be held in the Participant’s Plan account. The Company, in its sole discretion, shall determine whether a Participant has terminated employment for purposes of the Plan, and such determinations shall be final and binding on all parties. Byline Bancorp, Inc. 2022 Proxy Statement A-9
ARTICLE VIII – STOCK 8.01.
Maximum Shares The maximum number of shares of Stock which may be issued under the Plan, subject to adjustment upon changes in the Company’s capitalization as provided in Section 10.03, shall be 200,000 shares. If the total number of shares for which options are exercised on any Purchase Date in accordance with Article IV exceeds the maximum number of shares for the applicable Offering, the Committee shall make a pro rata allocation of the shares available for delivery and distribution in as nearly a uniform manner as shall be practicable and as it shall determine to be equitable, and the balance of payroll deductions or contributions credited to the account of each Participant under the Plan shall be returned to him or her as promptly as possible. Shares of Stock to be purchased under the Plan may constitute newly issued shares, treasury shares, or shares purchased by the Company on the open market or from any other source. 8.02.
Participant’s Interest in Option Stock The Participant will have no interest in Stock covered by an option under the Plan until such option has been exercised. 8.03.
Registration of Stock Stock to be delivered to a Participant under the Plan will be registered in the name of the Participant or, if the Participant so directs in accordance with procedures established by the Committee, in the names of the Participant and one such other person as may be designated by the Participant, as joint tenants with rights of survivorship, to the extent permitted by applicable law. 8.04.
Dividends Dividends on Stock purchased under the Plan that is held in a Participant’s account shall be credited to the Participant’s account and reinvested in Stock, except to the extent otherwise provided by the Committee. Unless the Participant has requested otherwise, dividend reinvestment will occur regardless of whether the Participant is currently participating in an Offering. At the Participant’s request, dividends will be paid directly to the Participant in cash. ARTICLE IX – ADMINISTRATION 9.01.
Appointment of Committee The Board of Directors of the Company (the “Board”) shall appoint a Committee to administer the Plan. No member of the Committee who is not an Eligible Employee shall be eligible to purchase Stock under the Plan. Unless otherwise determined by the Board, the Company’s Compensation Committee shall serve as the Committee. 9.02.
Authority of Committee Subject to the express provisions of the Plan, the Committee shall have plenary authority in its discretion to interpret and construe any and all provisions of the Plan, to adopt rules and regulations for administering the Plan, and to make all other determinations deemed necessary or advisable for administering the Plan. Such rules and regulations may alter any provision of the Plan that is ministerial or administrative in nature without a formal amendment. The Committee shall also have the authority to determine whether the employees of Subsidiaries of the Company organized or acquired after the Effective Date shall be eligible for participation in the Plan. To the extent permitted under applicable law, the Committee may delegate its power, authority and responsibilities under the Plan to one or more officers of the Company at any time, in its sole discretion. In this regard and to the extent permitted under applicable law, the Committee hereby delegates its power, authority and responsibilities under the Plan to the Company’s senior officer responsible for human resources. Decisions of the Committee and, where applicable, its delegate, shall be final and binding upon all Participants. Neither the Committee nor any delegate of the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any option granted hereunder. 9.03.
Rules Governing the Administration of the Committee The Board may from time to time appoint members of the Committee in substitution for or in addition to members previously appointed and may fill vacancies, however caused, in the Committee. The Committee may select one of its members as its Chairman and shall hold its meetings at such times and places as it shall deem advisable and may hold telephonic meetings. A majority of its members shall constitute a quorum. All determinations of the Committee shall be made by a majority of its members. The Committee may correct any defect or omission or reconcile any inconsistency in the Plan, in the manner and to the extent it shall deem desirable. Any decision or determination reduced to writing and signed by a majority of the members of the Committee shall be as fully effective as if it had been made by a majority vote at a meeting duly called and held. The Committee may appoint a secretary and shall make such rules and regulations for the conduct of its business as it shall deem advisable. A-10 Byline Bancorp, Inc. 2022 Proxy Statement
ARTICLE X – MISCELLANEOUS 10.01.
Transferability Neither payroll deductions credited to a Participant’s account nor any rights with regard to the exercise of an option or to receive Stock under the Plan may be assigned, transferred, pledged, or otherwise disposed of in any way by the Participant other than by will or the laws of descent and distribution. Any such attempted assignment, transfer, pledge or other disposition shall be without effect. During a Participant’s lifetime, options held by such Participant shall be exercisable only by that Participant. 10.02.
Use of Funds All payroll deductions received or held by the Company under this Plan may be used by the Company for any corporate purpose and the Company shall not be obligated to segregate such payroll deductions. 10.03.
Adjustment Upon Changes in Capitalization In the event of a stock split, stock dividend, reverse stock split, extraordinary cash dividend, recapitalization, reorganization, reclassification or combination of shares, merger, consolidation, distribution, split-up, spin-off, exchange of shares, sale of assets or similar corporate transaction or event, the Committee, in the manner it deems equitable, shall adjust (a) the number and class of shares or other securities that are reserved for issuance under the Plan, (b) the number and class of shares or other securities that are subject to outstanding options, and (c) the appropriate market value and other price determinations applicable to options (including the purchase price). The Committee shall make all determinations under this Section 10.03, and all such determinations shall be conclusive and binding. 10.04.
Mergers, Liquidations, and Other Company Transactions (a)
Liquidation or Dissolution. In the event of the proposed liquidation or dissolution of the Company, the Offering then in progress shall terminate immediately prior to the consummation of such proposed liquidation or dissolution, unless otherwise provided by the Committee in its sole discretion, and all outstanding options to purchase Stock shall automatically terminate and the amounts of all payroll deductions and contributions will be refunded without interest to the Participants as soon as reasonably practicable. (b)
Sale or Merger. In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger or consolidation of the Company with or into another entity, then in the sole discretion of the Committee: (a) each option shall be assumed, or an equivalent option shall be substituted, by the successor corporation or parent or subsidiary of such successor corporation; or (b) a new Purchase Date shall be established by the Committee on or before the date of consummation of such merger, consolidation or sale, and all outstanding options to purchase Stock shall be automatically exercised on such new date. 10.05.
Amendment and Termination The Committee shall have complete power and authority to terminate or amend the Plan; provided, however, that any amendment that would (i) increase the maximum number of shares which may be issued under any Offering (except pursuant to Section 10.03); or (ii) amend the requirements as to the class of employees eligible to participate in the Plan shall require action by the Board and approval of the shareholders. Unless otherwise determined by the Committee, the termination date of the Plan shall be deemed to be a Purchase Date, and all options then outstanding under the Plan shall be exercised. 10.06.
Compliance with Legal and Exchange Requirements The Company shall not be under any obligation to issue Stock upon the exercise of any option unless and until the Company has determined that: (a) it has taken all actions required to register the shares of Stock under the U.S. Securities Act of 1933, or to perfect an exemption from the registration requirements thereof; (b) any applicable listing requirement of any stock exchange on which the Stock is listed has been satisfied; and (c) all other applicable provisions of U.S. federal, state and local laws have been satisfied. 10.07.
Withholding of Taxes In the event that the Company is required to withhold any applicable taxes in respect of any compensation or other income realized by a Participant under the Plan, the Company may deduct from any benefits of any kind otherwise due to such Participant, including without limitation the proceeds of any sale of shares of Stock for the account of the Participant, the aggregate amount of such applicable taxes required to be withheld or, if such payments are insufficient Byline Bancorp, Inc. 2022 Proxy Statement A-11
to satisfy such applicable taxes, the Participant will be required to pay to the Company, or make other arrangement satisfactory to the Company regarding payment to the Company of, the aggregate amount of any such taxes. 10.08.
Effective Date This Plan shall be effective as of the later if the date on which the Company’s initial public offering becomes effective, or the date on which it is approved by the shareholders of the Company. If the Effective Date does not occur within twelve months after the date on which the Plan is adopted, the Plan shall be null and void. 10.09.
No Employment Rights The Plan does not, directly or indirectly, create any right for the benefit of any employee or class of employees to purchase any shares under the Plan, or create in any employee or class of employees any right with respect to continuation of employment by the Company, and it shall not be deemed to interfere in any way with the Company’s right to terminate, or otherwise modify, an employee’s employment at any time. Any rights or benefits provided under this Plan shall not be considered part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long service awards, pension, retirement or similar payments, except to the extent explicitly provided in the plan or policy document governing such benefits. 10.10.
Effect of Plan The provisions of the Plan shall, in accordance with its terms, be binding upon, and inure to the benefit of, all successors of each employee participating in the Plan, including, without limitation, such employee’s estate and the executors, administrators or trustees thereof, heirs and legatees, and any receiver, trustee in bankruptcy or representative of creditors of such employee. 10.11.
Governing Law The law of the State of Illinois will govern all matters relating to this Plan except to the extent it is superseded by the laws of the United States. A-12 Byline Bancorp, Inc. 2022 Proxy Statement
FIRST AMENDMENT
to the
BYLINE BANCORP, INC. EMPLOYEE STOCK PURCHASE PLAN Section 10.05 of the Byline Bancorp, Inc. Employee Stock Purchase Plan (the “Plan”) provides that the Plan may be amended to increase the maximum number of shares which may be issued under any Offering (as defined in the Plan) by action of the Board of Directors
Roberto R. Herencia
Chairman of Byline Bancorp, Inc. (the “Company”), subject to the approval of the Company’s shareholders. In accordance with the authority granted by Section 10.05 of the Plan, and subject to the approval of the Company’s shareholders, the Company’s Board
April 22, 2019
of Directors hereby amends the Plan as follows: 1.
Effective as of the date that the approval of the Company’s shareholders is obtained, Section 8.01 of the Plan is amended by replacing the reference to “200,000” therein with a reference to “400,000” (thereby increasing the maximum number of shares available under the Plan by 200,000 shares): 2.
In all other respects, the Plan remains in full force and effect. [Signature Page Follows]
IN WITNESS WHEREOF, the changes made by this First Amendment shall be effective as of the applicable date set forth above. | | | | | BYLINE BANCORP, INC. | | | | | | | By: Roberto R. Herencia | | | | | | | Title:
Executive Chairman of the Board and Chief Executive Officer | | | | | | | | |
![[MISSING IMAGE: tm223537d1-px_01proxybw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-049642/tm223537d1-px_01proxybw.jpg) BYLINE BANCORP, INC.180 NORTH LASALLE STREET, SUITE 300CHICAGO, IL 60601! ! !VOTE BY INTERNETBefore The Meeting - Go to www.proxyvote.com or scan the QR Barcode aboveUse the Internet to transmit your voting instructions and for electronic delivery ofinformation. Vote by 11:59 p.m. Eastern Time on June 6, 2022 for shares held directly and by11:59 p.m. Eastern Time on June 2, 2022 for shares held in a Plan. Have your proxy card inhand when you access the web site and follow the instructions to obtain your records and tocreate an electronic voting instruction form.During The Meeting - Go to www.virtualshareholdermeeting.com/BY2022You may attend the meeting via the Internet and vote during the meeting. Have the informationthat is printed in the box marked by the arrow available and follow the instructions.VOTE BY PHONE - 1-800-690-6903Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m.Eastern Time on June 6, 2022 for shares held directly and by 11:59 p.m. Eastern Time onJune 2, 2022 for shares held in a Plan. Have your proxy card in hand when you call andthen follow the instructions.VOTE BY MAILMark, sign and date your proxy card and return it in the postage-paid envelope wehave provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way,Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:KEEP THIS PORTION FOR YOUR RECORDSTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLYD78176-P71320 BYLINE BANCORP, INC. To withhold authority to vote for any individualnominee(s), mark "For All Except" and write theTHE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" number(s) of the nominee(s) on the line below.THE ELECTION OF ALL OF THE DIRECTOR NOMINEESLISTED IN PROPOSAL 1 AND "FOR" PROPOSALS 2 AND 3. ForAllWithholdAllFor AllExcept 2. TO APPROVE AN AMENDMENT TO THE COMPANY’S EMPLOYEE STOCK PURCHASE PLAN TO INCREASE THE NUMBER OF SHARES OF COMMON STOCKTHAT MAY BE OFFERED UNDER THE PLAN.3. RATIFICATION OF THE APPOINTMENT OF MOSS ADAMS LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THEFISCAL YEAR ENDING DECEMBER 31, 2022. For Against AbstainIn their discretion, the proxies are authorized to vote upon such other business as may properly come before the Annual Meeting. This proxy when properlyexecuted will be voted as directed herein by the undersigned stockholder. If no direction is made, this proxy will be voted FOR THE NOMINEES inProposal 1 and FOR Proposals 2 and 3.Note: Please sign exactly as your name or names appear on this Proxy. When shares are heldjointly, each holder should sign. When signing as executor, administrator, attorney, trustee orguardian, please give full title as such. If the signer is a corporation, please sign full corporatename by duly authorized officer, giving full title as such. If signer is a partnership, please signin partnership name by authorized person. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
![[MISSING IMAGE: tm223537d1-px_02proxybw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-049642/tm223537d1-px_02proxybw.jpg) Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice and Proxy Statement and Annual Report/Form 10-K are available at www.proxyvote.com. D78177-P71320 BYLINE BANCORP, INC.Proxy for Annual Meeting of Stockholders on June 7, 2022Solicited on Behalf of the Board of DirectorsThe undersigned hereby appoints Alberto J. Paracchini and Lindsay Corby, with full power of substitution and power to act alone, as proxies to vote all the shares of Common Stock which the undersigned would be entitled to vote if personally present and acting at the Annual Meeting of Stockholders of Byline Bancorp, Inc., to be held on June 7, 2022 at 8:30 a.m., Central Daylight Timevirtually at www.virtualshareholdermeeting.com/BY2022, and at any adjournments or postponements thereof, as follows:YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES. WHERE A CHOICE IS NOT SPECIFIED, THE PROXIES WILL VOTE THE SHARES IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS.(Continued and to be signed on the reverse side.)22-3537-
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