Business Context and Reporting Period
This Form 8-K Current Report was filed by Origin Bancorp, Inc. on October 29, 2019. The filing discloses the execution of new compensatory arrangements for key executives at Origin Bank, a wholly owned subsidiary of the Company.
Key Financial Metrics
The filing text does not provide a clear value for revenue, profit, cash flow, margins, debt, or liquidity metrics. This report focuses exclusively on executive compensation agreements rather than financial performance data.
Material Changes
On October 29, 2019, the Company entered into the following new agreements:
- Executive Supplemental Income Agreement (ESIP): Executed with Lance Hall, President of Origin Bank. This agreement provides an annual "Age Benefit" equal to 10% of Mr. Hall's annualized base salary, commencing 30 days after he reaches age 60 and continuing for six years. Vesting is based on years of service prior to age 60.
- Endorsement Split Dollar Life Insurance Agreements: Executed with both Lance Hall and Drake Mills (Chairman, President, and CEO). The Bank will pay all premiums for life insurance policies owned by the Bank. Upon the death of an Executive while employed, beneficiaries receive the lesser of the present value of specific salary continuation benefits or the policy proceeds (excluding cash surrender value or premiums paid).
Guidance, Outlook, and Risks
The filing does not contain financial guidance, outlook, or general risk factors. Specific contingencies regarding the new agreements include:
- Separation from Service: Benefits under the ESIP are reduced if Mr. Hall separates before age 60. Voluntary separation triggers a lump sum of the accrued vested benefit. Involuntary separation (other than for cause or disability) triggers 100% of the accrued liability.
- Change of Control: If a change of control occurs followed by Mr. Hall's separation within 24 months, a lump sum equal to the present value of the age benefit is payable.
- Disability and Death: Full accrued liability is payable in the event of disability. Death benefits under the ESIP are only payable if death occurs after age 60. Split Dollar benefits are void if employment is terminated voluntarily or involuntarily, or if the Executive is subject to a removal order by a federal banking agency.
Investor Verification Checklist
- Review the full text of Exhibits 10.1, 10.2, and 10.3 for complete terms of the ESIP and Split Dollar Agreements.
- Verify the impact of these agreements on the Company's future compensation expenses and potential liability upon executive departure.
- Confirm the vesting schedule and specific calculation methods for the "Age Benefit" relative to Mr. Hall's current base salary.
- Assess the risk exposure related to the Bank paying premiums on life insurance policies where the Bank retains a portion of the proceeds.