Business Context and Reporting Period
This Form 8-K Current Report was filed by Byline Bancorp, Inc. on April 5, 2023. The filing discloses the execution of a new employment agreement with Thomas J. Bell III, who serves as Executive Vice President, Chief Financial Officer, and Treasurer. Mr. Bell was originally designated to this role effective August 15, 2022.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity metrics. The document focuses exclusively on executive compensation arrangements.
Material Changes
The primary material change reported is the formalization of Mr. Bell's compensation package via a new three-year Employment Agreement dated April 5, 2023. Key terms include:
- Base Salary: $415,000 annually (subject to increase but not decrease).
- Annual Cash Bonus: Target of 45% of base salary, contingent on performance objectives.
- Long-Term Incentives: Target award equal to 65% of base salary under the 2017 Omnibus Incentive Compensation Plan.
- Term: Initial three-year term with automatic one-year extensions unless terminated with 120 days' notice.
Guidance, Risks, and Contingencies
The filing outlines specific severance contingencies and risks related to executive turnover:
- Severance (No Change in Control): If terminated without "cause" or resigns for "good reason," Mr. Bell is entitled to accrued amounts, a pro rata bonus, and a cash payment equal to 1.0x (Base Salary + COBRA premium differential), paid over 12 months.
- Severance (Change in Control): If terminated without "cause" or resigns for "good reason" within two years of a Change in Control, the cash payment increases to 2.0x (Base Salary + higher of two preceding years' bonuses + COBRA premium differential), paid as a lump sum.
- Death/Disability: Includes a life insurance benefit of 200% of base salary (capped at $750,000) payable upon death.
- Restrictive Covenants: Includes confidentiality, non-solicitation of customers/employees for 12 months post-employment, and non-disparagement provisions.
Investor Verification Checklist
- Verify the total potential cash outlay for severance in a Change in Control scenario, specifically the calculation of the "higher of two preceding years' earned bonuses."
- Review the full text of the Employment Agreement (Exhibit 10.1) for specific definitions of "Cause" and "Good Reason" to assess termination risks.
- Confirm the impact of the 65% long-term incentive target on the company's future equity dilution or cash compensation obligations.
- Check subsequent filings for any changes to the Executive Incentive Plan or the 2017 Omnibus Plan referenced in the agreement.