| Item 1.02 | Termination of a Material Definitive Agreement. |
Mercantil Bank Holding Corporation (the “Company”) has been a party to a Distribution Trust Agreement, dated March 12, 2018, by and among the Company, Mercantil Servicios Financieros, C.A., a Venezuela corporation and the Company’s former parent (“MSF”) and TMI Trust Company, a Texas trust company, as trustee, as amended (the “Distribution Trust Agreement”). The Distribution Trust Agreement created the Merantil Distribution Trust (the “Distribution Trust”). MSF deposited all issued and outstanding shares of Company Class A Common Stock and Class B Common Stock (together, the “Company Shares”) into the Distribution Trust in March 2018. As a result of theSpin-off of 80.1% of all Company Shares in August 2018, and the subsequent sale of all Company Shares by MSF, the Distribution Trust holds no Company Shares. Accordingly, the Distribution Trust Agreement terminated in accordance with its terms on March 22, 2019, without penalty or charge to the Company.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On March 20, 2019, the Company and its subsidiary, Amerant Bank, N.A., a national banking association (the “Bank”), entered into employment agreements (each, an “Employment Agreement” and together, the “Employment Agreements”) with the following executive officers, who hold the following positions with both the Company and the Bank: (i) Millar Wilson, Vice Chairman and Chief Executive Officer; (ii) Alberto Peraza,Co-President and Chief Financial Officer; (iii) Alfonso Figueredo,Co-President and Chief Operating Officer; (iv) Miguel A. Palacios, Executive Vice-President and Chief Business Officer; and (v) Alberto M. Capriles, Executive Vice-President and Chief Risk Officer (each, an “Executive”).
The Employment Agreements contain substantially the same terms and conditions, except as provided below. Each Employment Agreement has a three-year term beginning March 20, 2019. Unless any Employment Agreement is sooner terminated, or not renewed, it will automatically extend upon the end of its initial term, upon the same terms and conditions, for successiveone-year periods. The Employment Agreements may be terminated earlier: (i) by the Executive with or without Good Reason (as defined in the Employment Agreements), (ii) by the Company with or without Cause (as defined in the Employment Agreements) or (iii) as a result of Executive’s death or Disability (as defined in the Employment Agreements).
Under the Employment Agreements, the Executives are entitled to receive the following compensation and benefits in connection with their services as executive officers:
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| • | | an annual base salary of $800,000, $590,000, $540,000, $500,000 and $370,000 for Messrs. Wilson, Peraza, Figueredo, Palacios and Capriles, respectively (each, a “Base Salary”). The Base Salary will be reviewed at least annually by the Compensation Committee of the Company’s Board of Directors and may be increased (but not decreased); |
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| • | | eligibility to receive a discretionary annual performance bonus (“Annual Bonus”); |
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| • | | eligibility to receive discretionary equity-based awards commensurate with the Executive’s position and responsibilities with the Bank and the Company; and |
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| • | | participation in all employee benefit plans, practices and programs maintained by the Bank or the Company (excluding, except as provided in the Employment Agreements, any severance pay program or policy of the Bank or the Company), accrual of vacation time, and reimbursement of certainout-of-pocket business, entertainment and travel expenses consistent with the Bank’s policies. |
The Employment Agreements also provide for severance benefits in the event that the Executive’s employment is terminated: (i) by the Bank or the Company without Cause or by the Executive for Good Reason prior to a Change in Control (as defined in the Employment Agreement) or (ii) by the Bank or the Company without Cause (other than on account of the executive’s death or Disability) or by the Executive for Good Reason (also referred to as a “qualifying termination”) within 24 months following a Change in Control, in each case, subject to the Executive’s timely execution andnon-revocation of a release of claims in favor of the Company, its affiliates and their respective officers and directors.
In the event of a qualifying termination prior to a Change in Control, the Executives will be entitled to receive the following compensation and benefits:
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| • | | one times (or, in the case of Mr. Wilson, 1.5 times) the sum of (i) the Base Salary and (ii) the average of the Annual Bonuses earned for the three full years preceding the year in which such qualifying termination occurs or, if less than three years, the greater of (A) the average of the Annual Bonuses earned for all full years preceding the year in which the termination occurs, or (B) if less than one year, the Executive’s target Annual Bonus in effect for the year in which the termination occurs, which sum shall be payable in substantially equal installments over a period of 12 months (or, in the case of Mr. Wilson, 18 months) in accordance with the Bank’s normal payroll practices; |
