Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As discussed further below, C&F Financial Corporation (the Corporation) held its annual meeting of shareholders on April 19, 2022 (the 2022 Annual Meeting), at which four proposals were submitted to the Corporation’s shareholders.
At the 2022 Annual Meeting, the Corporation’s shareholders approved the C&F Financial Corporation 2022 Stock and Incentive Compensation Plan (the 2022 Plan), which became effective on April 19, 2022. The Corporation’s Board of Directors (the Board) approved the 2022 Plan on February 15, 2022, subject to shareholder approval, based on the recommendation of the Compensation Committee of the Board (the Committee).
The 2022 Plan replaces the C&F Financial Corporation 2013 Stock and Incentive Compensation Plan (the 2013 Plan). No new awards will be granted under the 2013 Plan but awards previously granted under the 2013 Plan will remain outstanding in accordance with their terms.
The principal purposes of the 2022 Plan are (i) to promote the long-term growth and profitability of the Corporation and its subsidiaries, (ii) to provide key employees, non-employee directors and consultants with an incentive to achieve corporate objectives, (iii) to attract and retain individuals of outstanding competence, and (iv) to provide key employees, non-employee directors and consultants with incentives that are closely linked to the interests of all shareholders of the Corporation, in each case without exposing the Corporation or its subsidiaries to imprudent risks.
The 2022 Plan authorizes the granting of stock options, restricted stock awards, restricted stock unit awards, and other stock-based awards. Any of the award types may be granted as a performance-based compensation award, which vests based on the satisfaction or achievement of performance goals established by the Committee, which has been appointed to administer the 2022 Plan. Awards under the 2022 Plan may be granted to key employees, non-employee directors (including members of C&F Bank’s regional advisory board), and consultants of the Corporation and its subsidiaries, as determined by the Committee.
Unless the 2022 Plan is terminated sooner by the Board, no award will be granted under the 2022 Plan after April 18, 2032. Any awards granted under the 2022 Plan that are outstanding on April 18, 2032 will remain outstanding in accordance with their terms.
Subject to adjustment in the event of certain changes in the Corporation’s capital structure, the maximum number of shares of the Corporation’s common stock that may be issued under the 2022 Plan is 200,000. In the event of any change in the outstanding shares of the Corporation’s common stock by reason of any stock dividend, stock split, reverse stock split, recapitalization, merger, consolidation, reorganization, reclassification, combination, exchange of shares or similar event or change in the Corporation’s capital stock, the aggregate number and kind of shares reserved under the 2022 Plan and subject to outstanding awards under the 2022 Plan, the exercise price of options, and other relevant provisions will be proportionately, equitably and appropriately adjusted by the Committee in its discretion.
The Committee has the authority under the 2022 Plan to select plan participants, to grant awards and to determine the terms and conditions of awards and the extent to which performance goals are satisfied or achieved, as the Committee considers appropriate. In addition, subject to the terms of the 2022 Plan, the Committee has the authority, among other things, to construe and interpret the 2022 Plan, to establish, amend or waive rules or regulations for the Plan’s administration, to accelerate the exercisability of any award, the end of any performance period or the termination of any restrictions applicable to any award, and to make all other determinations for administration of the Plan. The Committee may delegate authority under the 2022 Plan to the Corporation’s Chief Executive Officer or the Chief Financial Officer, except in the case of awards to the Corporation’s officers or directors subject to Section 16 of the Exchange Act.
All awards granted under the 2022 Plan, whether vested or unvested, are subject to clawback as required under the Corporation’s clawback policy in effect from time to time or by applicable federal or other law, rule, regulation or applicable stock exchange listing standard. Such recovery could require repayment or forfeiture of awards or any shares of common stock or other cash or property received with respect to the awards, including any value received from a disposition of the shares acquired upon payment of the awards.
