Business Context and Reporting Period
Company: Sound Financial Bancorp, Inc. (and its wholly owned subsidiary, Sound Community Bank)
Filing Type: Form 8-K (Current Report)
Date of Report: June 21, 2016
Event: Execution of an amended and restated change in control agreement with an executive officer.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on executive compensation arrangements.
Material Changes
On June 21, 2016, the Company amended the change in control agreement originally entered into on October 30, 2013, with Matthew P. Deines (Executive Vice President, Chief Financial Officer, and Corporate Secretary). The Amended Agreement remains in effect until canceled by either party with at least 12 months' prior written notice.
Guidance, Outlook, and Management Commentary
Compensation Terms: Under the Amended Agreement, if Mr. Deines is involuntarily terminated concurrently with or within 12 months following a change in control, he is entitled to:
- A cash payment equal to two times his then-current annual base salary.
- Maintenance of group health, insurance, and retirement benefits for a period ending at the earlier of 18 months after termination or the date he secures full-time employment with substantially similar benefits.
Regulatory Constraints: All payments are subject to reduction if deemed "parachute payments" under Section 280G of the Internal Revenue Code.
Other Officers: The Company and the Bank have entered into similar change in control agreements with two other officers.
Investor Verification Checklist
- Review the full text of the Amended and Restated Change in Control Agreement attached as Exhibit 10.1.
- Verify the current annual base salary of Matthew P. Deines to calculate potential severance exposure.
- Confirm the specific definitions of "involuntary termination" and "change in control" within the agreement.
- Identify the two other officers with similar agreements to assess total executive compensation liability.