Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 23, 2020, Merchants Bancorp (the "Company") issued a press release
announcing that effective immediately Michael J. Dunlap has been promoted to
Chief Executive Officer of the Company's subsidiary, Merchants Bank of Indiana
("Merchants Bank"), and Chairman of the Company's subsidiary, Merchants Capital
Corp. ("Merchants Capital"), and Michael R. Dury has been promoted to Chief
Executive Officer of Merchants Capital. Mr. Dunlap and Mr. Dury will succeed
Michael F. Petrie in such positions.
Mr. Petrie currently serves as and will remain Chairman and Chief Executive
Officer of the Company. Mr. Dunlap currently serves as and will remain a
Director and the President and Chief Operating Officer of the Company. Mr. Dury
currently serves as and will remain President of Merchants Capital.
In consideration of the above promotions and changes in responsibilities, on
January 22, 2020 the Company's Compensation Committee approved the following
change to Mr. Petrie's compensation and the Compensation Committee recommended
to and the Company's Board of Directors approved the following changes to
Messrs. Dunlap and Dury's compensation, in each case effective for 2020:
· Mr. Petrie's base salary will be $750,000 and he will be eligible to receive an
award of restricted stock units under the Company's 2017 Equity Incentive Plan
(the "Plan") based on the Company's achievement of performance measures
permissible under the Plan and established by the Compensation Committee (the
"Performance Measures"). Mr. Petrie's target restricted stock units award is
equal to 70% of base salary.
· Mr. Dunlap's base salary will be $600,000 and he will be eligible to receive a
cash bonus award and an award of restricted stock units under the Plan, with
each award based on the Company's achievement of the Performance Measures. Mr.
Dunlap's target cash bonus award is equal to 20% of base salary and the target
restricted stock units award is equal to 70% of base salary.
· Mr. Dury's base salary will be $130,000 and he will be eligible to receive an
award of restricted stock units under the Plan based on the Company's
achievement of the Performance Measures. Mr. Dury's target restricted stock
units award is equal to 70% of base salary. Additionally, Mr. Dury will
continue to receive commissions pursuant to that Employment Agreement dated
December 29, 2010, as amended effective January 1, 2017.
For each fiscal year, in addition to establishing the Performance Measures for
each of Messrs. Petrie, Dunlap, and Dury, the Compensation Committee will
establish the weighting and payout ranges of each Performance Measure. Thus, the
exact payout of Messrs. Petrie, Dunlap, and Dury's aforementioned awards (i.e.,
for Mr. Petrie his restricted stock units award, for Mr. Dunlap his cash bonus
award and restricted stock units award, and for Mr. Dury his restricted stock
units award) will vary depending on the Company's actual results with respect to
the Performance Measures, as determined by the Compensation Committee following
the close of the Company's fiscal year. However, if the Company fails to meet
the threshold for all Performance Measures none of Messrs. Petrie, Dunlap, or
Dury will receive a payout. For 2020, the Compensation Committee has established
total revenue growth, earnings per common share, and return on average total
equity as the Performance Measures for each of Messrs. Petrie, Dunlap, and Dury,
with each Performance Measure equally weighted and having a payout range of 75%
(threshold) to 125% (maximum).
Along with the above changes in compensation, on January 22, 2020 the Company's
Board of Directors approved of offering and each of Messrs. Dunlap and Dury and
the Company's Chief Financial Officer, John F. Macke, entered into a change in
control agreement with the Company. Each of the change in control agreements
contain identical terms and in particular (a) provide for payment of an amount
equal to two times base salary plus two times the target cash bonus award most
recently approved by the Company in the event both (1) there is a change in
control event and (2) employment is terminated by (i) the Company for any reason
other than cause or (ii) Messrs. Dunlap, Dury, or Macke, as applicable, with
good reason, within a period between 120 days prior to an announcement of the
change in control event and 18 months after the change in control event becomes
effective; and (b) contains customary restrictive covenants regarding
confidentiality, non-competition, and non-solicitation of customers and
employees of the Company and its affiliates as well as a clawback provision
should any benefit thereunder be subject to recapture under any policy of the
Company or applicable law. A copy of the form of change in control agreement
entered into with each of Messrs. Dunlap, Dury, and Macke is filed as Exhibit
10.1 hereto and incorporated herein by reference. The foregoing summary of each
change in control agreement is qualified in its entirety by the full text
thereof.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
10.1 Form of Change in Control Agreement entered into with each of Michael
J. Dunlap, Michael R. Dury, and John F. Macke, each dated January 22,
2020.
99.1 Press Release dated January 23, 2020 issued by Merchants Bancorp
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