DEF 14A
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
SCHEDULE 14A
(RULE
14a-101)
 
 
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
 
Filed by the Registrant ☒        Filed by a Party other than the Registrant ☐
Check the appropriate box:
 
  Preliminary Proxy Statement
 
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material Pursuant to
Section 240.14a-12
TRIUMPH FINANCIAL, INC.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
  No fee required.
  Fee paid previously with preliminary materials.
  Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules
14a-6(i)(1)
and
0-11.
 
 
 


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LOGO


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LOGO

TRIUMPH FINANCIAL, INC.

12700 Park Central Drive, Suite 1700

Dallas, Texas 75251

(214) 365-6900

March 14, 2024

Dear Triumph Financial, Inc. Stockholders,

You are cordially invited to attend the Annual Meeting of Stockholders of Triumph Financial, Inc. (the “Company”). The meeting will be held on Tuesday, April 23, 2024. The Annual Meeting will begin promptly at 8:30 a.m., local time, at 3 Park Central, 12700 Park Central Drive, 15th Floor, Dallas, Texas 75251.

A Notice of Annual Meeting of Stockholders and the Proxy Statement for the meeting are attached. To ensure your representation at the Annual Meeting, you are urged to vote by proxy via the Internet or telephone pursuant to the instructions provided in the enclosed proxy card; or by completing, dating, signing and returning the enclosed proxy card.

The Notice of Annual Meeting and Proxy Statement on the following pages contain information about the official business of the Annual Meeting. Whether or not you expect to attend, please vote your shares now. Of course, if you decide to attend the Annual Meeting, you will have the opportunity to revoke your proxy and vote your shares in person. This Proxy Statement is also available at www.proxydocs.com/TFIN.

Sincerely,

 

LOGO

Aaron P. Graft

President and Chief Executive Officer


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LOGO

Notice of Annual Meeting of Stockholders

To be held April 23, 2024

 

 

Meeting Information

 

Date:    April 23, 2024
Time:    8:30 a.m. Central Time
Location:   

3 Park Central, 12700 Park Central Drive, 15th Floor

Dallas, Texas 75251

Record Date:    Close of business, February 26, 2024

Voting Items

 

  1.

To elect the eleven directors named in the accompanying proxy statement to our Board of Directors to serve until the next annual meeting of stockholders or until their respective successors have been elected and qualified;

 

  2.

To vote on a non-binding advisory resolution to approve the compensation of the Company’s named executive officers as disclosed in the accompanying proxy statement (the “Say on Pay Proposal”);

 

  3.

To ratify the appointment of Crowe LLP as our independent registered public accounting firm for the current fiscal year; and

 

  4.

To transact any business as may properly come before the Annual Meeting or any adjournments or postponements.

We are furnishing our 2023 Annual Report and proxy materials to our stockholders primarily through the Internet this year in accordance with rules adopted by the Securities and Exchange Commission. Stockholders of record have been mailed a Notice of Internet Availability of Proxy Materials on or around March 14, 2024, which provides them with instructions on how to vote and how to access the 2023 Annual Report and proxy materials on the Internet. It also provides instructions on how to request paper copies of these materials.

Stockholders of record who previously enrolled in a program to receive electronic versions of the 2023 Annual Report and proxy materials will receive an email notice with details on how to access those materials and how to vote.

 

  
LOGO    2024 Proxy Statement


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How to Vote

Stockholders of record may vote:

 

     LOGO      By Internet: go to www.proxypush.com/TFIN
     LOGO      By phone: call 866-206-5381
     LOGO      By mail: complete and return the enclosed proxy card in the postage prepaid envelope provided.

If your shares are held in the name of a broker, bank or other stockholder of record, please follow the voting instructions that you receive from the broker, bank or other stockholder of record entitled to vote your shares.

The Board of Directors has fixed the close of business on February 26, 2024 as the record date for the determination of stockholders entitled to notice of, and to vote at, the Annual Meeting.

 

  

By Order of the Board of Directors,

 

March 14, 2024   

 

LOGO

Dallas, Texas    Aaron P. Graft
   President and Chief Executive Officer

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders

to be Held on April 23, 2024.

The Proxy Statement for the 2024 Annual Meeting, the Notice of the 2024 Annual Meeting, the form of proxy and the Company’s 2023 Annual Report are available at www.proxydocs.com/TFIN.

 

2024 Proxy Statement    LOGO
  


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TABLE OF CONTENTS

 

 

 

       Page  

Information Concerning Solicitation and Voting

     1

Proposal 1: Election of Directors

     5

Corporate Governance

   15

Compensation Discussion and Analysis

   20

Section 16(a) Beneficial Ownership Reporting Compliance

   52

Certain Relationships and Related Party Transactions

   53

Security Ownership of Certain Beneficial Owners and Management

   55

Proposal 2: Management Proposal Regarding Advisory Approval of the Company’s Executive Compensation

   57

Proposal 3: Ratification of Selection of Independent Registered Public Accounting Firm

   58

Report of the Audit Committee

   60

Stockholder Proposals

   62

Householding

   63

Annex A

   A-1

 

  
LOGO    2024 Proxy Statement


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Proxy Summary

 

 

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all the information you should consider in voting your shares. Please read the complete proxy statement and our annual report carefully before voting.

 

Meeting Information

 

Date:

   April 23, 2024

Time:

   8:30 a.m. Central Time

Location:

  

3 Park Central, 12700 Park Central Drive, 15th Floor

Dallas, Texas 75251

Record Date:

   Close of business, February 26, 2024

 

How to Vote

Your vote is important. You may vote your shares via the Internet, by telephone, by mail or in person at the Annual Stockholder Meeting. Please refer to the section “Information Concerning Solicitation and Voting” on page 1 for detailed voting instructions. If you vote via the Internet, by telephone or in person at the Annual Stockholder Meeting, you do not need to mail in a proxy card.

 

INTERNET   TELEPHONE   MAIL   IN PERSON
     

LOGO

 

 

LOGO

 

 

LOGO

 

 

LOGO

 

Visit www.proxypush.com/TFIN. You will need the control number

printed on your notice, proxy card

or voting instruction form.

 

Dial toll-free (866-206-5381)

or the telephone number on

your voting instruction form. You

will need the control number

printed on your notice, proxy

card or voting instruction form.

 

If you received a paper copy of

the proxy materials, send your

completed and signed proxy

card or voting instruction form

using the enclosed postage-

paid envelope.

 

By attending the meeting

and following the instructions

for voting.

 

Matters to be Voted Upon

 

Proposals

 

Required

Approval

 

Board

Recommendation

 

Page

Reference

1.

  Election of Directors   Majority of

Votes Cast

 

FOR each

Nominee

    5

2

  Management Proposal Regarding Advisory Approval of the Company’s Executive Compensation   Majority of

Votes Cast

  FOR   57

3.

  Ratification of Selection of Independent Registered Public Accounting Firm   Majority of

Votes Cast

  FOR   58

 

  
LOGO    2024 Proxy Statement


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LOGO

TRIUMPH FINANCIAL, INC.

12700 Park Central Drive, Suite 1700

Dallas, Texas 75251

(214) 365-6900

PROXY STATEMENT

FOR THE ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON

April 23, 2024

INFORMATION CONCERNING SOLICITATION AND VOTING

Introduction

We are furnishing this Proxy Statement on behalf of the Board of Directors (the “Board of Directors”) of Triumph Financial, Inc. (“Triumph”), a Texas corporation, for use at our 2024 Annual Meeting of Stockholders, or at any adjournments or postponements of the meeting (the “Annual Meeting”), for the purposes set forth below and in the accompanying Notice of Annual Meeting. The Annual Meeting will be held at 3 Park Central, 12700 Park Central Drive, 15th Floor, Dallas, Texas 75251, at 8:30 a.m. local time, on April 23, 2024.

In accordance with rules and regulations adopted by the Securities and Exchange Commission (“SEC”), instead of mailing a printed copy of our proxy materials to each stockholder of record, we are furnishing proxy materials to our stockholders on the Internet. You will not receive a printed copy of the proxy materials, unless specifically requested. The Notice of Internet Availability of Proxy Materials will instruct you as to how you may access and review all of the important information contained in the proxy materials. The Notice of Internet Availability of Proxy Materials also instructs you as to how you may submit your proxy on the Internet.

As used in this Proxy Statement, the terms “us”, “we”, “our”, the “Company” and “Triumph” refer to Triumph Financial, Inc., and, where appropriate, Triumph Financial, Inc., and its subsidiaries. The term “Common Stock” means shares of our Common Stock, par value, $0.01 per share.

Stockholders Entitled to Notice and to Vote; Quorum

Only holders of record of our Common Stock at the close of business on February 26, 2024, which the Board of Directors has set as the record date, are entitled to notice of, and to vote at, the Annual Meeting. As of February 26, 2024 we had 23,334,997 shares of Common Stock outstanding and entitled to vote at the Annual Meeting, and our shares of Common Stock were held by approximately 229 stockholders of record. Each stockholder of record of Common Stock on the record date will be entitled to one vote for each share held on all matters to be voted upon at the Annual Meeting. There are no cumulative voting rights in the election of directors.

The presence, in person or by proxy, of a majority of the votes entitled to be cast on a matter to be voted on at the Annual Meeting constitutes a quorum for action on that matter. The shares of Common Stock represented by properly executed proxy cards or properly authenticated voting instructions recorded electronically through the Internet or by telephone, will be counted for purposes of determining the presence of a quorum at the Annual Meeting. Abstentions and broker non-votes will be counted toward fulfillment of quorum requirements. A broker non-vote occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that proposal and has not received instructions from the beneficial owner.

 

  
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Distinction Between Holding Shares as a Stockholder of Record and as a Beneficial Owner

Some of our stockholders hold their shares through a broker, trustee, or other nominee rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those shares owned beneficially.

 

   

Stockholder of Record. If your shares are registered directly in your name with our transfer agent, EQ Shareowner Services, then you are considered, with respect to those shares, the “stockholder of record.” As the stockholder of record, you have the right to grant your voting proxy directly to us or to a third party, or to vote in person at the Annual Meeting.

 

   

Beneficial Owner. If your shares are held in a brokerage account, by a trustee or, by another nominee, then you are considered the “beneficial owner” of those shares. As the beneficial owner of those shares, you have the right to direct your broker, trustee, or nominee how to vote and you also are invited to attend the Annual Meeting. However, because a beneficial owner is not the stockholder of record, you may not vote these shares in person at the Annual Meeting unless you obtain a “legal proxy” from the broker, trustee or nominee that holds your shares, giving you the right to vote the shares at the Annual Meeting.

If you are not a stockholder of record, please understand that we do not know that you are a stockholder, or how many shares you own.

Voting Deadline

If you are a stockholder of record on the record date, then your proxy must be received no later than 11:59 p.m., central time on April 22, 2024 to be counted. If you are the beneficial owner of your shares held through a broker, trustee, or other nominee, please follow the instructions of your broker, trustee, or other nominee in determining the deadline for submitting your proxy.

Voting without Attending the Annual Meeting

Whether you hold shares directly as a stockholder of record or through a broker, trustee, or other nominee, you may direct how your shares are voted without attending the Annual Meeting. You may give voting instructions by the Internet, by telephone, or by mail. Instructions are on the proxy card. The proxy holders will vote all properly executed proxies that are delivered in response to this solicitation, and not later revoked, in accordance with the instructions given by you.

Voting in Person

Shares held in your name as the stockholder of record on the record date may be voted in person at the Annual Meeting. Shares for which you are the beneficial owner but not the stockholder of record may be voted in person at the Annual Meeting only if you obtain a legal proxy from the broker, trustee, or other nominee that holds your shares giving you the right to vote the shares. Even if you plan to attend the Annual Meeting, we recommend that you vote by proxy as described below so that your vote will be counted if you later decide not to attend the Annual Meeting.

The vote you cast in person will supersede any previous votes that you may have submitted, whether by Internet, telephone, or mail.

Required Votes

At the Annual Meeting, stockholders will consider and act upon (1) the election of eleven directors to our Board of Directors to serve until the next annual meeting of stockholders or until their respective successors

 

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have been elected and qualified, (2) the Say on Pay Proposal, (3) the ratification of the appointment of our independent registered public accounting firm, and (4) such other business as may properly come before the Annual Meeting.

 

   

Election of Directors (Proposal 1). We have implemented majority voting in uncontested director elections. As a result, each director standing for election at the Annual Meeting will be elected by a majority of the votes cast by the outstanding shares present in person or by proxy and entitled to vote at the Annual Meeting, meaning that each director nominee must receive a greater number of such shares voted “for” such director than the number of such shares voted “against” such director. In a contested election, the director nominees receiving a plurality of the votes cast shall be elected directors.

 

   

All Other Proposals (Proposals 2 and 3). For all of the other proposals described in this Proxy Statement, the affirmative vote of a majority of the votes cast by the outstanding shares present in person or represented by proxy and entitled to vote at the Annual Meeting is required to approve each such proposal.

Abstentions and Broker Non-Votes

Under certain circumstances, including the election of directors, matters involving executive compensation and other matters considered non-routine, banks and brokers are prohibited from exercising discretionary authority for beneficial owners who have not provided voting instructions to the bank or broker. This is generally referred to as a “broker non-vote.” In these cases, as long as a routine matter is also being voted on, and in cases where the stockholder does not vote on such routine matter, those shares will be counted for the purpose of determining if a quorum is present, but will not be included as votes cast with respect to those matters. Whether a bank or broker has authority to vote its shares on uninstructed matters is determined by stock exchange rules. We expect that brokers will be allowed to exercise discretionary authority for beneficial owners who have not provided voting instructions only with respect to the proposal to ratify the selection of Crowe LLP as our independent registered public accounting firm but not with respect to any of the other proposals to be voted on at the Annual Meeting.

Abstentions and broker non-votes will not be treated as votes cast for any of the proposals at the Annual Meeting and will have no effect on the results of such proposals.

Treatment of Voting Instructions

If you provide specific voting instructions, your shares will be voted as instructed.

If you hold shares as the stockholder of record and sign and return a proxy card or vote by Internet or telephone without giving specific voting instructions, then your shares will be voted in accordance with the recommendations of our Board of Directors. Our Board of Directors recommends (1) a vote for the election of each of the director nominees to our Board of Directors, (2) a vote for approval, on a non-binding advisory basis, of the compensation of our named executive officers as disclosed in this Proxy Statement, and (3) a vote for the ratification of the appointment of Crowe LLP as our independent registered public accounting firm.

You may have granted to your broker, trustee, or other nominee discretionary voting authority over your account. Your broker, trustee, or other nominee may be able to vote your shares depending on the terms of the agreement you have with your broker, trustee, or other nominee.

The persons identified as having the authority to vote the proxies granted by the proxy card will also have discretionary authority to vote, in their discretion, to the extent permitted by applicable law, on such other business as may properly come before the Annual Meeting and any postponement or adjournment. The Board of Directors is not aware of any other matters that are likely to be brought before the Annual Meeting. If any other matter is properly presented for action at the Annual Meeting, including a proposal to

 

  
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adjourn or postpone the Annual Meeting to permit us to solicit additional proxies in favor of any proposal, the persons named in the proxy card will vote on such matter in their own discretion.

Revocability of Proxies

A stockholder of record who has been given a proxy may revoke it at any time prior to its exercise at the Annual Meeting by either (i) giving written notice of revocation to our Corporate Secretary, (ii) properly submitting a duly executed proxy bearing a later date, or (iii) appearing in person at the Annual Meeting and voting in person.

If you are the beneficial owner of shares held through a broker, trustee, or other nominee, you must follow the specific instructions provided to you by your broker, trustee, or other nominee to change or revoke any instructions you have already provided to your broker, trustee, or other nominee.

Costs of Proxy Solicitation

Proxies will be solicited from our stockholders by mail and through the Internet. We will pay all expenses in connection with the solicitation, including postage, printing and handling, and the expenses incurred by brokers, custodians, nominees and fiduciaries in forwarding proxy material to beneficial owners. It is possible that our directors, officers and other employees may make further solicitations personally or by telephone, facsimile or mail. Our directors, officers and other employees will receive no additional compensation for any such further solicitations.

 

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PROPOSAL 1: ELECTION OF DIRECTORS

Introduction

Upon the recommendation of the Nominating and Corporate Governance Committee, the Board of Directors has nominated each of the directors noted below (whom we refer to as the “nominees”) to stand for election for a one (1) year term expiring at the 2025 annual meeting of stockholders or until their respective successors have been elected and qualified. Each director nominee must receive the affirmative vote of a majority of the votes cast to be elected (i.e., the number of shares voted “for” a director nominee must exceed the number of votes cast “against” that nominee). Unless contrary instructions are given, the shares represented by your proxy will be voted FOR the election of all director nominees.

 

Name

       Position

Carlos M. Sepulveda, Jr.

       Director and Chairman of the Board

Aaron P. Graft

       Director, Vice Chairman and Chief Executive Officer

Charles A. Anderson

       Director

Harrison B. Barnes

       Director

Debra A. Bradford

       Director

Richard L. Davis

       Director

Davis Deadman

       Director

Laura K. Easley

       Director

Maribess L. Miller

       Director

Michael P. Rafferty

       Director

C. Todd Sparks

       Director

All of the nominees listed above have consented to being named in this proxy statement and to serve if elected. However, if any nominee becomes unable to serve, proxy holders will have discretion and authority to vote for another nominee proposed by our Board. Alternatively, our Board may reduce the number of directors to be elected at the Annual Meeting.

 

LOGO   The Board of Directors unanimously recommends a vote FOR the election of each of the nominees.

 

 

  
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Information Concerning the Nominees and Directors

Biographical information for each director and nominee appears below. The information is based entirely upon information provided by the respective directors and nominees.

 

       

Director

Since

          Committee Membership

Name

 

Age

 

Position

 

Independent

 

AC

 

CC

 

NCG

 

RCC

               

Charles A. Anderson

 

63

 

2010

 

  Director

 

   

C

 

 
               

Harrison B. Barnes

 

31

 

2021

 

  Director

 

   

   
               

Debra A. Bradford

 

65

 

2020

 

  Director

 

 

     

               

Richard L. Davis

 

70

 

2010

 

  Director

 

   

 

 
               

Davis Deadman

 

60

 

2023

 

  Director

         

               

Laura K. Easley

 

59

 

2020

 

  Director

 

     

 

C

               

Aaron P. Graft

 

46

 

2010

 

  Director, Vice Chairman, Chief Executive   Officer & President

         
               

Maribess L. Miller

 

71

 

2014

 

  Director

 

 

   

C

 
               

Michael P. Rafferty

 

69

 

2014

 

  Director

 

 

C

     

               

Carlos M. Sepulveda, Jr.

 

66

 

2010

 

  Director & Chairman

 

   

   
               

C. Todd Sparks

 

56

 

2010

 

  Director

 

 

           

 

C

Committee Chair

Member

AC

Audit Committee

CC

Compensation Committee

NCG

Nominating and Corporate Governance Committee

RCC

Risk and Compliance Committee

 

 

We believe our Board represents a broad mix of tenure, gender, ethnic, and cultural diversity with robust independence. Our Nominating and Corporate Governance Committee evaluates candidates for future directorships in light of these foregoing characteristics. In particular, the Board and the Nominating and Corporate Governance Committee believes it is appropriate to evaluate director diversity holistically by considering gender, ethnicity, as well as a range of other characteristics that inform diverse perspectives on our Board. Our Board does not manage to specific percentages or quotas for a particular type of diversity. In 2023, Davis Deadman was nominated and elected as director of the Company as part of the consolidation of the directorships of the Company and its subsidiary bank board. Director Deadman was nominated and elected to serve on the Company’s Board due to his prior experience with the Company as well as its subsidiary bank, and, in particular, due to his unique credit expertise and oversight thereto for the enterprise. Upon the election of Director Deadman in 2023, the Nominating and Corporate Governance Committee decided to not recommend any further changes to the composition of the Board (other than the election of Director Deadman and the corresponding increase in the size of the Board) as it believed the Board’s overall diversity (including the re-nomination of each incumbent director, which retained all existing diverse viewpoints on the Board notwithstanding any incremental reductions in percentage representation resulting from the increase in Board size) reflected then and continues to reflect now a commitment to diverse attributes and viewpoints on the Board. The Committee and the Board has determined such composition remains appropriate in 2024 and has noted that diversity will remain a key consideration when filling any future Board vacancy.

 

Director Tenure   Diversity   Independence
   
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Director Qualifications and Attributes

We endeavor to have a Board that represents a broad range of qualities, skills and depth of experience in areas that are relevant to and contribute to the Board’s oversight of the Company’s activities. Among others, the Board has considered these key experiences, qualifications, skills and attributes in evaluating the composition of the Board and in considering nominees for new directors.

 

EXPERIENCE / QUALIFICATIONS / SKILLS / ATTRIBUTES

Banking Experience

  

•  We seek directors who have knowledge and experience in the banking industry, which is useful in understanding the operations, challenges and regulatory environment impacting our operations as a regulated financial institution.

Financial Experience

  

•  As a public company, we are committed to strong financial discipline and accurate and transparent reporting and disclosure practices. We believe directors with public accounting backgrounds or senior financial leadership experience at other organizations are instrumental in providing oversight and guidance in these areas.

Senior Leadership Experience

  

•  We believe it is important for our directors to have served in senior leadership roles in other organizations, including as senior executives, entrepreneurs and founders of businesses, which demonstrates a strong ability to motivate and manage others, to identify and develop leadership qualities in others and to manage organizations.

Diversity

  

•  We value the representation of gender, ethnic, geographic, cultural and other perspectives that expand the Board’s understanding of the needs and viewpoints of our customers, team members, regulators and other stakeholders.

Public Company Board Experience

  

•  Directors who have served on other public company boards can offer advice and perspective with respect to board dynamics and operations, relations between the board and executive management and other matters, including executive compensation, corporate governance and relations with stockholders.

Transportation and Payments

Experience

  

•  Given the large percentage of our business that touches the transportation industry, including our factoring, TriumphPay and equipment finance products, and TriumphPay’s emerging presence as a payments solution in the transportation sector, we believe directors with knowledge and experience in these industries provide useful perspective in understanding and providing guidance with respect to the trends, strategic challenges and opportunities in these sectors.

 

  
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The table below summarizes the key experience, qualifications and attributes for each member of our Board and highlights the balanced mix of experience, qualifications and attributes of the Board as a whole. This high-level summary is not intended to be an exhaustive list of each director’s skills or contributions to the Board.

 

Name

 

Banking

Experience

 

Financial

Experience

 

Senior

Leadership

Experience

  Diversity  

Public

Company

Board

Experience

 

Transportation

and Payments

Experience

           

Charles A. Anderson

      X     X  
           

Harrison B. Barnes

  X       X    
           

Debra A. Bradford

    X   X   X   X   X
           

Richard L. Davis

      X      
           

Davis Deadman

  X   X   X      
           

Laura K. Easley

      X   X     X
           

Aaron P. Graft

  X     X       X
           

Maribess L. Miller

    X   X   X   X  
           

Michael P. Rafferty

  X   X   X     X  
           

Carlos M. Sepulveda, Jr.

    X   X   X   X  
           

C. Todd Sparks

  X   X   X            

As of March 14, 2024 we are in compliance with Nasdaq Rule 5605(f) regarding Board diversity and we will remain in compliance with such rule following our Annual Meeting giving effect to the directors standing for election at the meeting. The following diversity statistics are presented in accordance with the standardized disclosure matrix set forth in such Rule:

 

Total Number of Directors

              

11

     Female   Male   Non-Binary   

Did Not

Disclose

Gender

       

Part I: Gender Identity

        
       

Directors

  3   8     
       

Part II: Demographic Background

        
       

African American or Black

    1     
       

Alaskan Native or Native American

        
       

Asian

        
       

Hispanic or Latinx

    1     
       

Native Hawaiian or Pacific Islander

        
       

White

  3   6     
       

Two or More Races or Ethnicities

        
       

LGBTQ+

        
       

Did Not Disclose Demographic Background

        

 

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Directors Standing for Election at the 2024 Annual Meeting

 

     

 

LOGO

 

  

Carlos M. Sepulveda, Jr.

 

Retired President and Chief Executive Officer

Interstate Batteries, Inc.

 

 

Carlos M. Sepulveda, Jr. has served as Chairman of our Board of Directors since 2010. He also serves as Chairman of TBK Bank, SSB. Since March 2014, Mr. Sepulveda has served on the Board of

  

Chairman of the Board

 

Independent Director

 

Director Since 2010

 

Age 66

 

Board Committees:

  Compensation

 

Key Qualifications and Expertise:

  Senior Leadership Experience

  Financial Experience

  Diversity

 

Other Current Public Boards:

  Cinemark Holdings, Inc.

Directors of Savoya, a chauffeured ground transportation service provider. In 2007, he joined the Board of Directors of Cinemark Holdings, Inc. (NYSE: CNK) where he has been Lead Director since 2016 and Chairman since 2022. In addition, he serves as a member of the Audit Committee and Compensation Committee of Cinemark Holdings, Inc. From 2013 to January 2017, Mr. Sepulveda served on the Board of Matador Resources Company (NYSE:MTDR), as Director, Chairman of the Audit Committee, Chairman of the Financial Committee, and a member of both the Nominations Committee and Executive Committee. Mr. Sepulveda joined Interstate Battery System International, Inc. in 1990, and served as its President and Chief Executive Officer from 2004 until 2013, and continues to serve on its Board of Directors as he has since 1995. Prior to joining Interstate Battery, Mr. Sepulveda was a partner at KPMG with more than 10 years of audit experience, including a concentration in financial services companies and banks. Mr. Sepulveda received a Bachelor of Business Administration with highest honors from the University of Texas at Austin. He is a certified public accountant (CPA) and is a member of the American Institute of CPAs and Texas Society of CPAs.
           

 

LOGO

 

  

Aaron P. Graft

 

Founder, Vice Chairman and Chief Executive Officer

of the Company

 

 

Aaron P. Graft is the Founder, Vice Chairman and Chief Executive Officer of the Company. He also serves as the Vice Chairman and Chief Executive Officer of TBK Bank, SSB and is the Chairman of

  

Director

 

Director Since 2010

 

Age 46

 

Key Qualifications and Expertise:

  Banking Experience

  Senior Leadership Experience

  Transportation and Payments Experience

Triumph Financial Services LLC and Vice Chairman of Triumph Insurance Group, Inc. Mr. Graft also serves as a Director and as Vice Chairman of The Bank of the West of Thomas, Oklahoma. Prior to establishing Triumph Financial, Inc., Mr. Graft served as the Founder and President of Triumph Land and Capital Management, LLC, where he oversaw the management of several multi-family and commercial real estate projects in receivership and led the acquisition of multiple pools of distressed debt secured by multi-family projects. Prior to Triumph, Mr. Graft worked for Fulbright & Jaworski, LLP (now Norton Rose Fulbright LLP) where he focused on distressed loan workouts. Mr. Graft received a Bachelor of Arts, cum laude, and a Juris Doctorate, cum laude, from Baylor University. He is a member of Young Presidents’ Organization. In 2017, Mr. Graft received the EY Entrepreneur Of The Year® Award in the Business & Financial Services category in the Southwest Region and the Baylor University 2017 Young Alumnus of the Year. In 2014, he was recognized by the Dallas Business Journal with the “40 Under 40” award.

 

  
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LOGO

  

Charles A. Anderson

 

Co-Founder

Bandera Ventures, Ltd.

 

 

Charles A. Anderson cofounded Bandera Ventures, Ltd., a firm focused on industrial development and acquisitions, distressed office acquisitions and long-term lease opportunities. Prior to

  

Independent Director

 

Director Since 2010

 

Age 63

 

Board Committees:

  Compensation (Chair)

  Nominating Corporate Governance

 

Key Qualifications and Expertise:

  Senior Leadership Experience

 

Other Current Public Boards:

  Highwoods Properties, Inc.

 

that, Mr. Anderson was associated with the Trammell Crow Company where he served as Senior Executive Director, responsible for the Development and Investment Group for the Western half of the United States. Since 2014, Mr. Anderson has served on the Board of Directors and as a member of the Investment Committee of Highwoods Properties, Inc. (NYSE:HIW), a publicly traded real estate investment trust. He earned his Bachelor of Business Administration and Master of Business Administration from Southern Methodist University, where he graduated summa cum laude.
           

 

LOGO

 

  

Harrison B. Barnes

 

Professional Athlete

National Basketball Association

 

 

Harrison B. Barnes, through his family office, is a community bank supporter and investor. He previously served on the Board of Directors of First National Bank (Ames, IA), the largest bank

  

Independent Director

 

Director Since 2021

 

Age 31

 

Board Committees:

  Compensation

 

Key Qualifications and Expertise:

  Banking Experience

  Diversity

subsidiary of Ames National Corporation (NASDAQ: ATLO). Mr. Barnes has been a professional athlete since 2012, representing the United States in the 2016 Olympics. He was voted to, and currently serves on the board of directors of USA Basketball, as Treasurer and Executive Committee member of the National Basketball Players Association, and as one of two inaugural Player Representatives on the board of directors of the NBA Foundation. Since 2012, Mr. Barnes has overseen all functions of his family’s business affairs, including analysis of representation and business proposals, venture capital transactions, and investments in publicly traded companies. Mr. Barnes’ community projects includes When We All Vote (Ambassador), Boys & Girls Club of Oakland (Board of Trustees), Learn Fresh (Champion and Advisor for NBA Math Hoops program), and Harrison Barnes Reading Academy (Founder, promoting literacy skills).
           

 

LOGO

 

  

Debra A. Bradford

 

President and Chief Financial Officer

First American Payment Systems

 

 

Debra A. Bradford is President and Chief Financial Officer of First American Payment Systems, an industry leader and global solutions provider in merchant account services. Ms. Bradford joined First

  

Independent Director

 

Director Since 2020

 

Age 65

 

Board Committees:

  Audit

  Risk and Compliance

 

Key Qualifications and Expertise:

  Financial Experience

  Senior Leadership Experience

  Diversity

  Transportation and Payments Experience

 

Other Current Public Boards:

  Intermex International Money Express, Inc.

American Payment Systems by Deluxe in 2001 and has served as President and Chief Financial Officer since 2008. Prior to the acquisition of First American by Deluxe Corporation, she also served on the Board of Directors and Audit Committee of First American. Prior to joining First American, Ms. Bradford served as Senior Vice President and Chief Financial Officer of ACE Cash Express, Inc., a financial services retailer, and in various roles, including Chief Operating Officer, with IPS Card Solutions (formerly NTS, Inc.), a division of Frist Data Corporation. Ms. Bradford serves on the Board of Directors and on both the compensation and nominating and governance committees of Intermex International Money Express, Inc. (NASDAQ: IMXI). Ms. Bradford graduated from the University of Texas in Austin. She is a Certified Public Accountant and a member of the Texas Society of Certified Public Accountants.

 

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LOGO

  

Richard L. Davis

 

Retired Founder

DAVACO, Inc.

 

 

Richard L. Davis is the Founder of Dallas-based DAVACO, Inc., a leading provider of retail, restaurant and hospitality service solutions. In 2000 and 2006, Mr. Davis was a finalist for the Ernst &

  

Independent Director

 

Director Since 2010

 

Age 70

 

Board Committees:

  Compensation

  Nominating Corporate Governance

 

Key Qualifications and Expertise:

  Senior Leadership Experience

Young Entrepreneur of the Year award. In 2006, Mr. Davis was inducted into the Retail Construction Hall of Fame. Mr. Davis currently serves on The Salvation Army’s Dallas/ Fort Worth Metroplex Advisory Board and The Foundation Board of Baylor Scott & White.
           

 

LOGO

  

Davis Deadman

 

Retired Chief Executive Officer and President

NexBank Capital, Inc.

 

 

Davis Deadman has served on the board of the North Texas Certified Development Corporation, an SBA chartered entity focused on providing debt capital to the small business community in Texas. From

  

Director Since 2023

 

Age 60

 

Board Committees:

  Risk and Compliance

 

Key Qualifications and Expertise:

  Banking Experience

  Financial Experience

  Senior Leadership Experience

2004 to 2010, he served on multiple boards, including the bank and the holding company within the NexBank Capital, Inc. platform. From 2004 to 2010, Mr. Deadman served as Chief Executive Officer and President of NexBank, a financial services organization that included a broker-dealer and an investment banking and corporate advisory firm. From 1998 to 2009, Mr. Deadman served as a Senior Portfolio Manager and, ultimately, as a partner with Highland Capital Management L.P. In this role, he managed a team of investment professionals responsible for a several billion-dollar portfolio of credit investments. Before 1998, he served as an investment officer at Mutual Benefit Life, managing a $200 million commercial real estate-backed loan portfolio. Mr. Deadman served in various roles with the Company and TBK Bank, SSB from 2011-2022, including as TBK Bank’s Chief Lending Officer from 2011 to 2014. Such service in an employment capacity terminated in 2022. Mr. Deadman received a Bachelor of Business Administration from Texas A&M University and a Master of Business Administration in Finance, Cum Laude, from Southern Methodist University – Cox School of Business. He is a Chartered Financial Analyst (CFA) Charter holder.
           

 

LOGO

 

  

Laura K. Easley

 

Retired Chief Operating Officer

Transportation Insight

 

 

Laura K. Easley was the Chief Operating Officer of Transportation Insight, a leading enterprise solutions provider in the logistics and transportation industry, from 2012 until her retirement in 2019. She

  

Independent Director

 

Director Since 2020

 

Age 59

 

Board Committees:

  Nominating Corporate Governance

  Risk and Compliance (Chair)

 

Key Qualifications and Expertise:

  Senior Leadership Experience

  Diversity

  Transportation and Payments Experience

served in various other capacities at Transportation Insight from 2005 to 2019, including Chief Business Development Officer and Chief Solutions Officer. Prior to Transportation Insight, Ms. Easley served in various capacities with Menlo Worldwide, The Complete Logistics Company and ABF Freight Systems. Ms. Easley received a Bachelor of Science Degree in Industrial Engineering and Management from Oklahoma State University. She served on the Board of Directors for the OSU Cowboy Academy of Industrial Engineering and Management.

 

  
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LOGO

 

  

Maribess L. Miller

 

Retired Partner

PricewaterhouseCoopers LLP

 

 

Maribess L. Miller was a member of the public accounting firm PricewaterhouseCoopers LLP from 1975 until 2009, including serving as the North Texas Market Managing Partner from 2001

  

Independent Director

 

Director Since 2014

 

Age 71

 

Board Committees:

  Nominating Corporate Governance (Chair)

  Audit

 

Key Qualifications and Expertise:

  Financial Experience

  Senior Leadership Experience

  Diversity

 

Other Current Public Boards:

  DR Horton, Inc.

until 2009; as Southwest Region Consumer, Industrial Products and Services Leader from 1998 until 2001; and as Managing Partner of the firm’s U.S. Healthcare Audit Practice from 1995-1998. Ms. Miller joined the board of DR Horton, Inc. (NYSE: DHI) in November, 2019 and serves as chair of the Audit Committee and member of the Compensation Committee. Ms. Miller served as a member of the Board of Directors and Chair of the Audit Committee and member of the Compensation Committee for Zix Corporation (NASDAQ:ZIXI) from 2010-2021. Ms. Miller is also a member of the Board of Directors and Chair of the Audit Committee for Midmark Corp., a privately-held medical supply company. She was on the Texas State Board of Public Accountancy from 2009-2015, past Board Chair for the Texas Health Institute and is past Chair of the Board of the North Texas Chapter of the National Association of Corporate Directors. She graduated cum laude with a Bachelor’s degree in Accounting from Texas Christian University. Ms. Miller is a retired certified public accountant.
           

 

LOGO

  

Michael P. Rafferty

 

Retired Partner,

Ernst & Young LLP

 

 

Michael P. Rafferty was a member of the public accounting firm Ernst & Young LLP from 1975 until his retirement in 2013, was admitted as Partner of the Firm in 1988, and served as the Audit

  

Independent Director

 

Director Since 2014

 

Age 69

 

Board Committees:

  Audit (Chair)

  Risk and Compliance

 

Key Qualifications and Expertise:

  Financial Experience

  Senior Leadership Experience

  Banking Experience

Practice Leader for the Southwest Region from 2004 to 2013. During his career with Ernst & Young, he primarily served clients in the financial services and healthcare industries. Mr. Rafferty graduated with a Bachelor of Science degree in Accounting from the University of New Orleans. Mr. Rafferty is a certified public accountant and is licensed in Texas. Mr. Rafferty also served as a member of the Board of Directors, as Chair of the Audit Committee and as a member of the Compliance and Ethics Committee of MoneyGram International, Inc. (NASDAQ:MGI), from March 2016 through October 2023.
           

 

LOGO

  

C. Todd Sparks

 

Vice President and Chief Financial Officer

Discovery Operating Inc.

 

 

C. Todd Sparks has served on the Board of Directors of the Triumph Financial, Inc. (NASDAQ: TFIN) and TBK Bank, SSB since their inception in 2010. He serves as Vice President and Chief

  

Independent Director

 

Director Since 2010

 

Age 56

 

Board Committees:

  Audit

 

Key Qualifications and Expertise:

  Banking Experience

  Financial Experience

  Senior Leadership Experience

Financial Officer of Discovery Operating Inc., an oil and gas exploration and production company located in Midland, Texas. He is also currently serving on the Board of Directors of Midland Classical Academy. Mr. Sparks has formerly served on the Board of Directors for FirstCapital Bank of Texas, High Sky Children’s Ranch and Young Life Midland. Mr. Sparks has been an active investor, both inside and outside of oil and gas, for the last 30 years. He has actively participated in many areas of interest including real estate, banking, oil and gas service companies and a variety of start-ups during his career. Mr. Sparks received a Bachelor of Business Administration degree from Baylor University in 1989 and a Master of Business Administration degree from Texas A&M University in 1992.

 

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Information Regarding Executive Officers

Our executive officers are as follows:

 

Name

   Age       Position

Aaron P. Graft

   46      

Vice Chairman, Chief Executive Officer and President of the Company

Vice Chairman, Chief Executive Officer of TBK Bank, SSB

W. Bradley Voss

   48       Executive Vice President and Chief Financial Officer of the Company and TBK Bank, SSB

Ed Schreyer

   57       Executive Vice President, Chief Operating Officer of the Company and TBK Bank, SSB

Gail Lehmann

   66       Executive Vice President, Chief Regulatory and Corporate Governance Officer, and Secretary of the Company and TBK Bank, SSB

Todd Ritterbusch

   55       President, TBK Bank, SSB

Adam D. Nelson

   46       Executive Vice President, General Counsel and Assistant Secretary of the Company and TBK Bank, SSB

Melissa Forman-Barenblit

   46       Executive Vice President, TBK Bank, SSB, and President – TriumphPay

A brief description of the background of each of our executive officers who is not also a director is set forth below.

W. Bradley Voss has served as our Executive Vice President, Chief Financial Officer since 2021. He also serves as Executive Vice President and Chief Financial Officer of TBK Bank, SSB. Mr. Voss joined the Company in a consulting engagement in 2011 and has served in various finance roles since joining the Company full-time in 2012. He was appointed as Chief Financial Officer in 2021. Prior to his current role, he led balance sheet strategy, capital issuance, investments, liquidity, and funding as the Company’s Senior Vice President and Treasurer from 2015 to 2019, and Executive Vice President and Treasurer from 2019 to 2021. Mr. Voss joined Triumph from CSG Investments (an affiliate of Beal Bank), where he led the sourcing, analysis and execution of investments in distressed securities as Senior Vice President and Portfolio Manager. Before joining CSG Investments, Mr. Voss served as a Portfolio Manager for Highland Capital Management, L.P. Earlier in his career, he worked in institutional equity sales and research at Donaldson, Lufkin & Jenrette and then Bear Stearns. Mr. Voss earned a Bachelor of Business Administration in accounting and finance from Texas Christian University and a Master of Business Administration from the University of Texas at Austin. He is a Chartered Financial Analyst (CFA) charter holder.

Ed Schreyer has served as Executive Vice President, Chief Operating Officer since 2022. He also serves as Executive Vice President and Chief Operating Officer of TBK Bank, SSB. Mr. Schreyer joined the Company in 2021 as President and Chief Operating Officer of TriumphPay. Mr. Schreyer joined the Company after 30 years of experience with CBRE Group, Inc. (NYSE: CBRE) where he was most recently Chief Operating Officer for the Americas Advisory business. During his years at CBRE, he led the Industrial and Logistics business serving top freight carriers and 3PL providers and he had executive oversight of the Security and Crisis Management Team. Mr. Schreyer holds a Bachelor of Science degree in Urban Studies/Affairs from Indiana University Bloomington.

Gail Lehmann has served as our Executive Vice President and Secretary since 2010. She also serves as Chief Regulatory and Governance Officer as well as Secretary of TBK Bank, SSB. Ms. Lehmann also served as the Chief Operating Officer of the Company and TBK Bank, SSB from 2010-2022. Previously, Ms. Lehmann served as Corporate Compliance Officer and Senior Vice President of Risk Management for

 

  
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Bluebonnet Savings Bank, FSB, a $3 billion wholesale thrift. Ms. Lehmann has been in the banking industry for more than 30 years and has experience in all facets of banking operations with particular emphasis on regulatory compliance, risk management, information technology and venture capital environments. She also has expertise in the area of property and subsidiary management. Ms. Lehmann received a Bachelor of Science, with a Major in Public Administration/Political Science and a Minor in Criminal Justice, from the University of Illinois.

Todd Ritterbusch has served as the President of TBK Bank, SSB since 2022. Mr. Ritterbusch also served as the Executive Vice President and Chief Lending Officer of TBK Bank, SSB from 2019-2022. Prior to joining the Company, from 2002 to April of 2019, Mr. Ritterbusch served in various capacities with JPMorgan Chase Bank, including as the Managing Director, Market Executive for the Commercial Bank covering the Ft. Worth and West Texas markets. During his tenure with JPMorgan Chase Bank, Mr. Ritterbusch led a commercial banking team serving businesses with revenues between $20 million and $500 million across his market area. Mr. Ritterbusch holds a Bachelor of Science in Engineering from Purdue University and a Master of Business Administration from the Kellogg School of Management and a Master of Engineering Management from the McCormick School of Engineering at Northwestern University. He served on the boards of Cook Children’s Healthcare Foundation, Cook Children’s Health Plan and Leadership ISD.

Adam D. Nelson has served as our Executive Vice President, General Counsel and Assistant Secretary since 2013. He also serves as Executive Vice President, General Counsel and Assistant Secretary of TBK Bank, SSB. Mr. Nelson previously served as Vice President and Chief Compliance Officer of Trinitas Capital Management, LLC, a registered investment adviser. In addition, Mr. Nelson previously served as Vice President and Deputy General Counsel of ACE Cash Express, Inc., a financial services retailer. Prior to that, Mr. Nelson was an attorney with the firm of Weil Gotshal & Manges, LLP, where he focused on mergers and acquisitions, management led buyouts and private equity transactions. Mr. Nelson received a Bachelor of Arts in Economics, magna cum laude, from Baylor University and a Juris Doctorate, cum laude, from Harvard Law School.

Melissa Forman-Barenblit has served as President of TriumphPay since 2022. She joined TriumphPay as Senior Vice President and Chief Operations Officer in 2019. Ms. Forman-Barenblit has over 25 years of experience across multiple freight technologies companies. Before joining TriumphPay she spent nearly a decade leading sales and strategic partnerships for eCapital, LLC, a leading transportation factor. Ms. Forman-Barenblit holds a Masters of Business Administration from California State University, Dominquez Hills and a Bachelor of Science in Business Management from the University of Phoenix.

 

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CORPORATE GOVERNANCE

Board of Directors Meetings

During 2023, the Board of Directors held 4 meetings and committees of the Board held a total of 21 meetings. Each of our directors attended at least 75% of the total meetings of the Board and committees on which he or she served during 2023.

Director Independence

The Board of Directors has determined that with the exception of Aaron P. Graft and Davis Deadman, each of our current directors is an independent director as defined for purposes of the rules of the Securities and Exchange Commission (“SEC”) and the listing standards of The Nasdaq Stock Market (“Nasdaq”). For a director to be considered independent, the Board must determine that the director does not have a relationship with the Company that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making this determination, the Board will consider all relevant facts and circumstances, including any transactions or relationships between the director and the Company or its subsidiaries.

Board Committees

Our Board of Directors has established standing committees in connection with the discharge of its responsibilities. These committees include the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee and the Risk and Compliance Committee. Our Board of Directors also may establish such other committees as it deems appropriate, in accordance with applicable law and regulations and our corporate governance documents.

Audit Committee. Our Audit Committee is composed of Michael P. Rafferty (Chair), Maribess L. Miller, Debra A. Bradford and C. Todd Sparks. The Audit Committee assists the Board of Directors in fulfilling its responsibilities for general oversight of the integrity of our financial statements, compliance with legal and regulatory requirements, the independent auditors’ qualifications and independence, and the performance of our internal audit function and independent auditors. Among other things, the Audit Committee:

 

   

annually reviews the Audit Committee charter and the committee’s performance;

 

   

appoints, evaluates and determines the compensation of our independent auditors;

 

   

reviews and approves the scope of the annual audit, the audit fee and the financial statements;

 

   

reviews disclosure controls and procedures, internal controls, internal audit function and corporate policies with respect to financial information;

 

   

discuss, review and approve the audit committee report to be included in our proxy statement or annual report filed with the SEC;

 

   

oversees investigations into complaints concerning financial matters or violations of the Company’s Code of Business Conduct and Ethics, including any matters submitted through the Company’s whistleblower hotline, if any;

 

   

reviews other risks that may have a significant impact on our financial statements; and

 

   

conducts or authorizes investigations into any matters within the Committee’s scope of responsibility.

The Audit Committee works closely with management as well as our independent auditors. The Audit Committee has the authority to obtain advice and assistance from and receive appropriate funding to engage outside legal, accounting or other advisors as the Audit Committee deems necessary to carry out its duties.

 

  
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The Audit Committee is composed solely of members who satisfy the applicable independence and other requirements of the SEC and the Nasdaq for Audit Committees and each of whom meet the additional criteria for independence of audit committee members set forth in Rule 10A-3(b)(1) under the Exchange Act. In addition, at least one member of the Audit Committee shall be a member of the Company’s Risk and Compliance Committee. Each of Mr. Rafferty and Ms. Miller is an “audit committee financial expert” as defined by the SEC. The Audit Committee has adopted a written charter that, among other things, specifies the scope of its rights and responsibilities. The charter is available on our website under the link entitled “Investor Relations – Corporate Governance” at www.tfin.com. Our Audit Committee met nine times during 2023.

Compensation Committee. Our Compensation Committee is composed of, Charles A. Anderson (Chair), Harrison B. Barnes, Richard L. Davis, and Carlos M. Sepulveda, Jr. The Compensation Committee is responsible for discharging the Board of Directors’ responsibilities relating to compensation of our executives and team members.

Among other things, the Compensation Committee:

 

   

evaluates human resources and compensation strategies;

 

   

reviews and approves objectives relevant to executive officer compensation;

 

   

evaluates performance and determines the compensation of the Chief Executive Officer and our other executive officers in accordance with those objectives;

 

   

approves any changes to non-equity based benefit plans involving a material financial commitment;

 

   

prepares the compensation committee report to be included in our annual report; and

 

   

evaluates performance in relation to the Compensation Committee charter.

The Compensation Committee is composed solely of members who satisfy the applicable independence requirements of the SEC and the Nasdaq. The Compensation Committee has adopted a written charter that, among other things, specifies the scope of its rights and responsibilities. The charter is available on our website under the link entitled “Investor Relations – Corporate Governance” at www.tfin.com. Our Compensation Committee met four times during 2023.

Nominating and Corporate Governance Committee. Our Nominating and Corporate Governance Committee is composed of Maribess L. Miller (Chair), Charles A. Anderson, Laura K. Easley and Richard L. Davis. The Nominating and Corporate Governance Committee is responsible for making recommendations to our Board of Directors regarding candidates for directorships and the size and composition of our Board of Directors. In addition, the Nominating and Corporate Governance Committee is responsible for overseeing our corporate governance guidelines and reporting and making recommendations to our Board of Directors concerning governance matters.

Among other things, the Nominating and Corporate Governance Committee:

 

   

identifies individuals qualified to be directors consistent with the criteria approved by the Board of Directors and recommends director nominees to the full Board of Directors;

 

   

ensures that the Audit and Compensation Committees have the benefit of qualified “independent” directors;

 

   

reviews and approves any related party transactions in accordance with our related party transaction policy;

 

   

makes recommendations to the Board of Directors regarding the compensation of directors of the Company;

 

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provides oversight as to environmental, social and governance (“ESG”) matters impacting the Company and related reporting requirements;

 

   

oversees management continuity planning;

 

   

leads the Board of Directors in its annual performance review; and

 

   

takes a leadership role in shaping the corporate governance of our organization.

The Nominating and Corporate Governance Committee is composed solely of members who satisfy the applicable independence requirements of the SEC and the NASDAQ. The written charter for our Nominating and Corporate Governance Committee is available on our website under the link entitled “Investor Relations – Corporate Governance” at www.tfin.com. Our Nominating and Corporate Governance Committee met four times during 2023.

Risk and Compliance Committee. Our Risk and Compliance Committee is composed of Laura Easley (Chair), Debra A. Bradford, Davis Deadman, and Michael P. Rafferty. The Risk Management Committee is responsible for assisting the Board of Directors in the assessment of risk across the Company and its subsidiaries.

Among other things, the Risk and Compliance Committee:

 

   

reviews and implements the Company’s enterprise risk assessment program as set forth in its enterprise risk management policy as adopted by our Board of Directors;

 

   

reviews and recommends changes to the Company’s enterprise risk management policy to our Board of Directors;

 

   

provides oversight of the Company’s information technology infrastructure and security including cybersecurity;

 

   

provides oversight of the Company’s regulatory compliance; and

 

   

provides updates to our Board of Directors regarding its review of the risks facing the Company and its subsidiaries and its discussions with management on such risks and the steps being taken to mitigate such risks.

The Risk and Compliance Committee is composed of a majority of members who satisfy the applicable independence requirements of the SEC and the Nasdaq. In addition, at least one member of the Risk and Compliance Committee shall be a member of the Company’s Audit Committee. The written charter for our Risk and Compliance Committee is available on our website under the link entitled “Investor Relations – Corporate Governance” at www.tfin.com. Our Risk Management Committee met four times during 2023.

Code of Business Conduct and Ethics and Code of Ethics for Senior Financial Officers

Our Board of Directors has adopted a code of business conduct and ethics (our “Code of Ethics”) that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions. The Code of Ethics and supplemental code of ethics for CEO and senior financial officers is available upon written request to the Corporate Secretary, Triumph Financial, Inc., 12700 Park Central Drive, Suite 1700, Dallas, Texas 75251. If we amend or grant any waiver of a provision of our Code of Ethics that applies to our executive officers, we will publicly disclose such amendment or waiver on our website and as required by applicable law, including by filing a Current Report on Form 8-K.

Board Leadership Structure and Risk Oversight

Different individuals serve as our Chief Executive Officer and Chairman because our Board of Directors has determined that the separation of these offices enhances our Board of Directors’ independence and

 

  
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oversight. Moreover, the separation of these roles allows our Chief Executive Officer to better focus on his growing responsibilities of running the Company, enhancing stockholder value and expanding and strengthening the Company’s franchise while allowing the Chairman to lead our Board of Directors in its fundamental role of providing advice to and independent oversight of management. Consistent with this determination, Carlos M. Sepulveda, Jr., serves as Chairman of our Board of Directors, and Aaron P. Graft serves as our Chief Executive Officer and President.

Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including credit, interest rate, liquidity, operational, strategic and reputation risks. Management is responsible for the day-to-day management of risks the Company faces, while the Board of Directors, as a whole and through its committees, including its Risk and Compliance Committee, has responsibility for the oversight of risk management. In its risk oversight role, the Board of Directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed. The Chairman of the Board of Directors and independent members of the Board of Directors work together to provide strong, independent oversight of the Company’s management and affairs through its standing committees and, when necessary, special meetings of independent directors.

Compensation Committee Interlocks and Insider Participation

No members of our Compensation Committee are or have been an officer or employee of Triumph or any of our subsidiaries with the exception of our Chairman, Carlos M. Sepulveda, Jr. who previously served as Executive Chairman of the Company (service in such role ending in 2015) and who has subsequently been determined by our Board to be an independent director under the rules of the SEC and listing standards of Nasdaq. None of our executive officers serves or has served as a member of the Board of Directors, Compensation Committee or other board committee performing equivalent functions of any entity that has one or more executive officers serving as one of our directors or on our Compensation Committee.

Nomination of Directors

With respect to directors not nominated by Triumph, the Board of Directors identifies nominees by first evaluating the current members of the Board of Directors willing to continue in service. Current members of the Board of Directors with skills and experience that are relevant to our business and who are willing to continue in service are considered for re-nomination. If any member of the Board of Directors does not wish to continue in service or if the Board of Directors decides not to re-nominate a member for re-election, the Board of Directors then identifies the desired skills and experience of a new nominee in light of the criteria below. Current members of the Board of Directors are polled for suggestions as to individuals meeting the criteria below. The Board of Directors may also engage in research to identify qualified individuals. In evaluating a director nominee, the Board of Directors considers the following factors:

 

   

the appropriate size of our Board of Directors;

 

   

our needs with respect to the particular talents and experience of our directors;

 

   

the nominee’s knowledge, skills and experience, including experience in finance, administration or public service, in light of prevailing business conditions and the knowledge, skills and experience already possessed by other members of the Board of Directors;

 

   

whether the nominee is independent, as that term is defined under the Nasdaq listing standards;

 

   

the familiarity of the nominee with our industry;

 

   

the nominee’s experience with accounting rules and practices; and

 

   

the desire to balance the benefit of continuity with the periodic injection of the fresh perspective provided by new Board of Directors members.

 

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Our goal is to assemble a Board of Directors that brings together a variety of perspectives and skills derived from high quality business and professional experience. In doing so, the Board of Directors will also consider candidates with appropriate non-business backgrounds.

Other than the foregoing, there are no stated minimum criteria for director nominees. The Board of Directors may also consider such other factors as it may deem in our best interests and the best interests of our stockholders. We also believe it may be appropriate for key members of our management to participate as members of the Board of Directors.

Stockholders may nominate directors for election to the Board of Directors. In order to nominate a director for election to the Board of Directors, stockholders must follow the procedures set forth in our Bylaws, including timely receipt by the Secretary of Triumph of notice of the nomination and certain required disclosures with respect both to the nominating stockholder and the recommended director nominee.

Directors may currently be elected by a majority of votes cast (in uncontested elections) or a plurality of votes (in contested elections) at any meeting called for the election of directors at which a quorum is present. The presence of a majority of the holders of our Common Stock, whether in person or by proxy, constitutes a quorum. The Board of Directors did not receive any recommendations from stockholders requesting that the Board of Directors consider a candidate for inclusion among the nominees in our Proxy Statement for this Annual Meeting. The absence of such a recommendation does not mean, however, that a recommendation would not have been considered had one been received.

Stockholder Communications with the Board of Directors

Every effort is made to ensure that the Board of Directors or individual directors, as applicable, hear the views of stockholders and that appropriate responses are provided to stockholders in a timely manner. Any matter intended for the Board of Directors, or for any individual member or members of the Board of Directors, should be directed to Adam D. Nelson, our General Counsel, with a request to forward the matter to the intended recipient. All such communications will be forwarded unopened.

Director Attendance at Annual Meeting of Stockholders

We encourage all incumbent directors, as well as all nominees for election as director, to attend the Annual Meeting of Stockholders, although we recognize that conflicts may occasionally arise that will prevent a director from attending an annual meeting. Ten of our eleven then serving directors attended our 2023 annual meeting.

Hedging Policy and Pledging Restrictions

We do not permit our directors or executive officers to engage in transactions that hedge such director’s or executive officer’s economic risk of owning shares of our Common Stock. Thus, our directors and executive officers may not engage in hedging transactions in the Company’s shares such as puts, calls, prepaid variable forwards, equity swaps, collars and other derivative securities on an exchange or in any other organized market. Our directors and executive officers also may not engage in short sales of the Company’s shares, meaning sales of shares that are not owned at the time of sale. In addition, the Company does not permit shares pledged by senior executive officers and directors to be applied toward stock ownership guidelines, and limits pledging to pre-approved exceptions where the executive officer or director can clearly demonstrate the financial ability to repay the loan without resorting to the pledged securities.

 

  
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COMPENSATION DISCUSSION AND ANALYSIS

In this section we discuss and analyze the compensation of our named executive officers (“NEOs”) including our Chief Executive Officer, the Chief Financial Officer and the next three most highly compensated executive officers. This discussion and analysis also includes a description of our compensation practices and philosophy, our decision making process for compensation matters, and the material factors impacting our compensation decisions for 2023 compensation.

Executive Summary

2023 Financial Performance

During 2023, the Company made significant advancements on key strategic initiatives while successfully navigating significant stress and uncertainty in the banking sector, a protracted recession in the transportation and freight industry, and an elevated interest rate environment that continued to put pressure on the Company’s clients and borrowers. These trends, which began in 2022 and continued throughout 2023, significantly impacted all of the economic sectors in which the Company operates, including banking, transportation, technology and payments. Notwithstanding these challenges, in particular the impact of the freight recession on near term earnings, the Company’s underlying business and long-term prospects continued to thrive, including significant achievements and high performance with respect to key operational and segment-level metrics during the year.

As a result of the headwinds discussed above, the Company determined during the course of 2023 to focus on: (i) moderating expense growth, (ii) controlling core deposit attrition in its banking franchise while maintaining a low overall cost of funds, (iii) continuing to organically grow and expand both transactional volumes and revenues at TriumphPay, and (iv) driving operational improvements in its factoring segment, positioning this business to take advantage of the eventual rebound in this market. The Company earned net income to common stockholders for 2023 of $37.9 million, or $1.61 per share, with the conditions outlined above placing pressure on near term earnings. However, as a result of successful execution of the initiatives above, the Company delivered key financial and strategic achievements across its business lines.

Banking

The banking segment successfully controlled deposit attrition and maintained a top tier overall cost of funds in the face of the elevated interest rate environment. The Company’s total cost of funds for the year ended December 31, 2023 was 1.21%, which compared favorably to other institutions across the U.S. banking sector.

 

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*

Representative financial institutions (indicated by stock ticker symbol) selected to represent a broad cross section of banks including large money center banks, regional banks and smaller institutions indicative of our banking peer group.

These efforts, combined with higher loan yields resulting from increased interest rates on floating rate loans, saw the segment increase its overall pre-tax net income compared to 2022. Pre-tax net income in the banking segment for the year ended December 31, 2023 was $136.2 million, compared to $121.2 million for the year ended December 31, 2022. The segment was also able to maintain overall credit quality despite a more difficult year for borrowers experiencing cash flow challenges caused by floating interest rates and overall economic stress, particularly in transportation and commercial real estate.

Payments

The payments segment continued to grow clients and revenues, with increased transaction volumes and fee generation offsetting the effects of falling transportation invoice prices. Throughout the year, TriumphPay continued to add additional freight brokers, shippers and factors to the payments network, and increased the total number of processed transactions constituting “network transactions” (i.e. those transactions processed between a freight broker payor client and a factor payee client on a fully integrated and structured basis). For the fiscal year ended December 31, 2023, TriumphPay:

 

   

generated revenue of $42.3 million, compared to $30.01 million for the year ended December 31, 2022;

 

1 

Annual revenue the fiscal year ended December 31, 2022 excludes a $7.0 million net gain on minority mark-to-market investment in the second quarter of 2022.

 

  
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processed total payment volume of $21.5 billion and total invoice volume of 19.5 million, compared to $23.3 billion and 17.7 million for the year ended December 31, 2022;

 

   

processed total network payment volume of $1.8 billion and total network invoice volume of 1.1 million, compared to $972.7 million and 472 thousand for the year ended December 31, 2022;

These efforts, together with the increased benefit of deposits generated at TriumphPay (i.e. the value of payments volumes processed by TriumphPay for the period they are received and held pending release to the payee) due to the elevated interest rate environment, saw the payments segment improve its EBITDA2 margins over the course of the year, achieving positive EBITDA for the first time in the fourth quarter of 2023, ahead of the Company’s anticipated timeline.

 

 

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Factoring

The factoring segment was directly and acutely impacted in 2023 by the ongoing freight recession and low invoice prices, with total volumes, revenues and client numbers all down compared to 2022 levels. However, the business made significant improvements in key areas of operational focus, including reductions in invoice ageing (i.e. reducing the percentage of factored invoices more than 15 days past due for payment) and the development of operational efficiencies using artificial intelligence and machine learning. These efforts both helped to offset the impact of the freight environment and positioned the business well to benefit from a rebound in the transportation industry.

The Company’s performance with respect to these key strategic initiatives helped drive overall returns for its stockholders despite the near term earnings pressure caused by the macroeconomic environment. Set forth below is a calculation and line graph presentation comparing the one, two and three year

 

2 

Earnings (losses) before interest, taxes, depreciation and amortization (“EBITDA”) is a non-GAAP financial measure used as a supplemental measure to evaluate performance of our Payments segment. Reconciliations of non-GAAP financial measures are provided in Annex A of this proxy statement.

 

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cumulative total shareholder return on the Company’s common stock, on a dividend reinvested basis, against the cumulative return of the NASDAQ Bank Index, the KBW Bank Index, the SPDR S&P Regional Banking EFT and the NASDAQ Global Select Indices for the period from December 31, 2020 to December 31, 2023. Our total stockholder return over this period outperformed each of the indices.

 

   

Cumulative Total

Shareholder Return from
December 31, 2020

 
    2021     2022     2023  

Triumph Financial, Inc.

    213.20     28.54     110.89

NASDAQ Bank Index (CBNK)

    24.84     1.92     (4.88 )% 

KBW Bank Index (BKX)

    16.64     (11.04 )%      (15.30 )% 

SPDR S&P Regional Banking ETF (KRE)

    28.95     9.50     1.17

NASDAQ Global Select Market (NQGS)

    76.11     18.67     72.13

 

 

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Named Executive Officers

Our NEOs as of December 31, 2023 are as set forth below.

 

Name

   Age       Position

Aaron P. Graft

   46      

Vice Chairman, Chief Executive Officer and President of the Company

Vice Chairman and Chief Executive Officer of TBK Bank, SSB

W. Bradley Voss

   48       Executive Vice President and Chief Financial Officer of the Company and TBK Bank, SSB

Edward J. Schreyer

   57       Executive Vice President, Chief Operating Officer of the Company and TBK Bank, SSB

Melissa Forman-Barenblit

   46       Executive Vice President, TBK Bank, SSB and President of TriumphPay Division

Gail Lehmann

   66       Executive Vice President, Chief Regulatory and Governance Officer and Secretary of the Company and TBK Bank, SSB

 

  
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Compensation Design Principles and Governance Best Practices

Our compensation programs incorporate best practices, including the following:

 

    WHAT WE DO       

WHAT WE DON’T DO

   

 

»  Align pay and performance

 

 

»  Design incentive programs to mitigate undue risks

 

 

 

»  Include caps on all incentives

 

»  Maintain a clawback policy for incentive compensation

 

 

»  Require ownership through Stock Ownership Guidelines

 

 

»  Include “Double Trigger” change in control provisions in NEO employment agreements and equity award agreements

 

 

 

»  Retain an independent compensation consultant

 

»  Annually conduct a competitive benchmarking analysis of executive compensation

      

 

 

»  No tax gross-ups related to change in control

»  No hedging of Company securities by Executive Officers or Directors

 

 

»  No excessive perquisites

»  No stock option repricing without stockholder approval

Say on Pay/Say on Frequency

The Company has determined to hold stockholder advisory votes on our executive compensation (i.e. the “say on pay” vote) on an annual basis, as we believe holding this vote annually provides an effective way to obtain current information on stockholder sentiment about the Company’s executive compensation program. Additionally, while the say on pay vote is a formal means for soliciting stockholder feedback, the Company welcomes the opportunity to engage with stockholders at any time. The Company notes it has received historically high approval rates on its say on pay votes, receiving approximately 98% of all votes cast (excluding broker non-votes) in favor of its say on pay proposal at its 2023 annual meeting.

Executive Compensation Objectives and Policies

Below we summarize our compensation philosophy and guiding principles as well as our decision process and the outcomes of that process. Our executive compensation programs are designed to enable the Company to attract, motivate and retain talent needed for the Company’s success, reward executives for performance, align executive interests with those of our stockholders, provide competitive compensation and ensure a balanced approach that promotes sound risk management practices.

 

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We plan to achieve these objectives through the following guiding principles.

 

 Compensation Principles    How we achieve these principles

 Market Competitive

  

»  Competitive base pay ranges are designed to target market competitive ranges with flexibility to recognize individual performance, experience and contribution.

 

»  Total compensation is targeted to market competitive ranges for achieving median performance. Actual total compensation varies as appropriate to reflect individual and Company performance.

 

»  Market is defined using a combination of published industry survey sources (representing similar size and scope) and proxy peer groups of both (i) publicly-traded banks similar in size and asset types and (ii) fintech peers in industries that align with the Company’s growing presence as a payments network for the transportation industry, which are reviewed annually.

 Performance-Based

  

»  Annual cash incentive opportunities under our Annual Incentive Program (“AIP”) tied to performance under financial metrics that align with key strategic objectives including overall financial returns (Invoice Price Adjusted Earnings Per Share), progress on key strategic and segment-level initiatives, including (i) Banking Segment Pre-Tax Net Income, (ii) Payments Segment Q4 EBITDA Margin %, and (iii) Factoring Segment invoice ageing goals, as well as execution for each executive on individual performance objectives.

 

»  Equity compensation awards to our NEO’s under our long-term incentive program (“LTIP”) consisting of 50% performance-based restricted stock units based on the Company’s relative and absolute total stockholder return against two peer groups (one banking and fintech), 25% time vested restricted stock units and 25% time vested stock options.

 Culture of Ownership

  

»  Stock ownership guidelines encourage significant ownership by directors and executive officers.

 Long-Term Focus

  

»  Long-term equity compensation and vesting requirements align rewards with time horizon of potential risk.

 

  
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The table below summarizes the purpose/objective of each compensation component used in our 2023 program.

 

 Compensation Component    Purpose/Objective

 Base Salary

  

»  Provides a competitive level of fixed income based on role; targets market median.

 Annual Incentive Program

  

»  Motivates and rewards executives for performance of key objectives in support of our overall strategic plan;

 

»  Includes both enterprise level financial goals and goals tied to performance in each of the Company’s business segments; and

 

»  Rewards vary based on performance (higher performance will result in above market median pay; lower performance will result in below market median pay).

 Equity Awards/

 Long-Term Incentive Program

  

»  Aligns executive interests with stockholders through equity based compensation;

 

»  Rewards long-term stockholder value creation; and

 

»  Multiple year vesting encourages retention.

 Other Benefits

  

»  Provides a base level of competitive benefits consistent with similarly situated executive talent.

 Employment Agreements

  

»  Provides employment security to key executives; and

 

»  Focuses executives on transactions in best interest of stockholders, regardless of impact such transactions may have on the executive’s employment.

Role of Compensation Committee Management and the Compensation Consultant

Role of the Compensation Committee

The Compensation Committee is responsible for discharging the Board’s duties in executive compensation matters and for administering the Company’s annual incentive and equity-based plans. This includes oversight of the total compensation programs of the Company’s CEO and other executive officers, including our NEOs. The Compensation Committee reviews all compensation components and performance for the Company’s Chief Executive Officer and other executive officers, including base salary, annual short-term incentives, long-term incentives (equity), benefits and other perquisites. In addition to reviewing competitive market values, the Compensation Committee examines the total compensation mix, pay-for-performance relationship and alignment with our compensation philosophy. The Committee also reviews the employment agreements for our NEOs. As the Committee makes decisions regarding the Chief Executive Officer and other executive officers’ compensation, input and data from management and outside advisors are provided for external reference and perspective. While the Chief Executive Officer makes recommendations on other executive officers’ compensation, the Committee is ultimately responsible for approving compensation for all executive officers. The Committee meets regularly in executive session without management.

Role of the Compensation Consultant

The Compensation Committee has the sole authority to retain and dismiss its own outside compensation consultants and any other advisors it deems necessary. In 2023, the Compensation Committee engaged Meridian Compensation Partners LLC (“Meridian”) as its outside compensation consultant. The role of a compensation consultant is to assist the Compensation Committee in analyzing executive compensation packages and to provide the Compensation Committee with information regarding market compensation levels, general compensation trends and best practices. The consultant also provides advice regarding the competitiveness of specific pay decisions and actions for our NEOs, as well as the appropriateness of the design of the Company’s executive compensation programs. Meridian also advised the Compensation Committee on the implementation of the Company’s annual incentive program and

 

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long-term incentive program for 2023. Meridian attended meetings of the Compensation Committee, including executive sessions, upon invitation. Meridian did not provide any other services to the Company. The Compensation Committee has assessed the independence of Meridian pursuant to the rules of the SEC and concluded that Meridian’s work for the Compensation Committee did not raise any conflicts of interest.

Role of Management

The Compensation Committee made all 2023 compensation decisions for our NEOs. As part of its decision making process, the Committee seeks information as appropriate from management (e.g. the Company’s CEO, CFO, legal and human resources departments). The Chief Executive Officer annually reviews the performance of each of the Company’s and its subsidiaries’ executive officers (other than himself). The conclusions reached and the compensation recommendations based on these reviews, including with respect to salary adjustments and bonuses, were presented to the Compensation Committee. The Compensation Committee exercised its discretion in modifying any recommended adjustment or award. The Chief Executive Officer’s performance is reviewed by the Compensation Committee and the Compensation Committee makes compensation decisions with respect to the Chief Executive Officer taking into account such review.

Peer Group and Competitive Benchmarking

The Committee made its determinations as to the compensation for its NEOs in 2023, including base salary level and annual and long-term incentive targets as a percentage of base salary, by analyzing the Company’s practices in comparison to approved banking and fintech peer groups. The Committee believes that the use of the two peer groups best represents both the Company’s banking operations as well as its growing transportation payments platform. The Committee did not set a specific weighting for the use of either group but reviewed both data sets against the responsibility of the applicable executive.

Banking Peer Group

In identifying and constructing a competitive banking peer group, the Committee, based on recommendations from Meridian, took into consideration asset size as the primary selection criteria. In order to reflect our unique business model, the peer group was further filtered to include companies with the highest percentage of Commercial and Industrial (“C&I”) loans to arrive at a reasonable size (i.e. 20 banks). This compensation peer group consisted of banks with assets between $5.1 billion and $13.7 billion as of the date of adoption of the peer group by the Company in 2022, compared to $6.1 billion for the Company at such time.

 

Banking Peer Group

1st Source Corporation

   Veritex Holdings, Inc.

Enterprise Financial Services Corp

   Preferred Bank

Live Oak Bancshares, Inc.

   National Bank Holdings Corporation

First Financial Corporation

   Stock Yards Bancorp, Inc.

Lakeland Financial Corporation

   CrossFirst Bankshares, Inc.

Old Second Bancorp, Inc

   Mercantile Bank Corporation

Heritage Commerce Corp

   Peoples Bancorp Inc.

QCR Holdings, Inc.

   First Financial Bankshares, Inc.

BancFirst Corporation

   Byline Bancorp, Inc.

Origin Bancorp, Inc.

   Brookline Bancorp, Inc.

 

  
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FinTech Peer Group

The Compensation Committee also requested that Meridian prepare a peer group of fintech companies. This fintech peer group is intended to provide further context regarding the Company’s compensation decisions and to be evaluated together with the banking peer group, given the Company’s growing technology presence in transportation payments. The fintech peer group consisted of fintech companies with revenues between $29 million and $590 million.

 

FinTech Peer Group

Repay Holdings Corporation

   International Money Express, Inc.

Q2 Holdings, Inc.

   Cass Information Systems, Inc.

Flywire Corporation

   PaySign, Inc.

EVERTEC, Inc.

   Mogo Inc.

Usio, Inc.

   Cantaloupe, Inc.

i3 Verticals, Inc.

   Priority Technology Holdings, Inc.

Coupa Software Incorporated

   EVO Payments, Inc.

Paya Holdings, Inc,

    

In general, the Committee’s review of the practices of its peer groups on a consolidated basis suggested that a greater focus on equity-based compensation (both in amount and as a percentage of overall compensation) may be appropriate for the Company compared to its banking peers in order to remain competitive with market practice for the Company’s fintech peers.

2023 Executive Compensation Program and Pay Decisions

The Company’s executive compensation program for 2023 consisted of the following components: base salary, short-term cash incentives paid under our AIP, long-term equity awards under our LTIP, limited perquisites and employee benefit plans.

Base Salary

The Compensation Committee annually reviews each NEO’s base salary. In determining whether to adjust an NEO’s base salary, the Compensation Committee considers the following factors: competitive peer group and industry survey benchmark data, individual performance and the Company’s prospects for future growth and performance. The table below shows our NEOs base salaries for fiscal years 2022 and 2023 and the year over year percentage change in salaries.

 

Executive

  2022 Base Salary     2023 Base Salary     Increase  

Aaron P. Graft

  $ 700,000     $ 725,000       3.57

W. Bradley Voss

  $ 375,000     $ 400,000       6.67

Edward J. Schreyer

  $ 500,000     $ 500,000        

Melissa Forman-Barenblit

  $ 375,000     $ 400,000       6.67

Gail Lehmann

  $ 400,000     $ 400,000      

Applicable NEO base salaries were adjusted in 2023 primarily to remain competitive with market pay levels and to reflect individual performance.

 

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At the January 2024 meeting of the Compensation Committee, based on updated market data, the Compensation Committee approved the following base salaries for our NEOs effective March 1, 2024:

 

Executive

  2024 Base Salary  

Aaron P. Graft

  $ 725,000  

W. Bradley Voss

  $ 400,000  

Edward J. Schreyer

  $ 500,000  

Melissa Forman-Barenblit

  $ 425,000  

Gail Lehmann

  $ 400,000  

Applicable NEO base salaries were adjusted in 2024 primarily to remain competitive with market pay levels across both the Company’s banking and fintech peers and to reflect individual performance.

Annual Incentive Program

Under the AIP, the Company pays cash incentive payments to our NEOs based on achieved performance against pre-determined annual performance goals. Our AIP is designed to motivate and reward our NEO’s for achieving these performance goals, which are linked to our annual business plan.

NEOs 2023 Target Bonus. Target bonuses are established by the Compensation Committee considering competitive market data, individual performance and internal equity with other executives. For the 2023 AIP, the Compensation Committee approved the following target bonuses (expressed as a percentage of base salary) for our NEOs: 60% for Mr. Graft and Mr. Schreyer and 40% for each of Mr. Voss, Ms. Forman-Barenblit and Ms. Lehmann. Each NEO was eligible to receive an actual bonus payout of between 0% and 150% of his or her respective target bonus, with the applicable percentage based on achievement of pre-established performance goals. In addition, at its discretion, the Compensation Committee may increase or decrease such calculated annual incentive payout by up to 30% for any NEO based on Company performance as well as individual or other relevant factors.

2023 Performance Measures, Weighting and Goals. For 2023, the Compensation Committee approved AIP goals related to the following five measures:

 

   

Invoice Price Adjusted Earnings Per Share;

 

   

Banking Segment Pre-Tax Net Income;

 

   

Payments Segment Q4 2023 EBITDA Margin Percentage;

 

   

Factoring Segment Invoice Ageing; and

 

   

Individual Performance Assessments by Executive.

Each goal was assigned a 20% weighting. These measures were updated from 2022 to identify a key performance measure in each of the Company’s operating segments as well as an enterprise level measure. The selected performance measures were directly linked to our 2023 business plan and were deemed to be most reflective of our annual performance against strategic objectives, as more fully described below.

Earnings Per Share (“EPS”) was used as the Company’s overall enterprise objective, as the Compensation Committee believes this measure to be a key indicator of overall performance. In making the determination to use an Invoice Price Adjusted EPS calculation (as described in greater detail in the footnotes to the table below) the Compensation Committee sought to reduce the impact on EPS resulting from changes in actual average transportation invoice price (up or down) compared to the assumed price used in determining the performance target for this metric when calculating performance against the goal.

 

  
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Transportation invoice prices are highly correlated to the profitability of both our Factoring and Payments segments, and are generally driven by macroeconomic forces outside the control of management. The Compensation Committee determined to partially (as opposed to fully) adjust for the impact of transportation invoice prices in calculating Invoice Price Adjusted EPS in order to incentivize management to appropriately adjust its strategies over the course of the year to take into account a changing economic environment.

Banking Segment Pre-Tax Net Income was viewed by the Compensation Committee as the objective most reflective of the Banking Segment’s contribution to the overall strategic objectives of the Company, as such indicator would be positively impacted by success in key areas such as: (i) controlling core deposit attrition and maintaining a low overall cost of funds, (ii) managing the Company’s loan portfolio to generate revenue to support the enterprise and its investment in key strategic initiatives such as TriumphPay out of retained earnings, (iii) limiting non-interest expense growth and (iv) maintaining loan losses and specific reserves at acceptable levels. In making the determination to add a potential downward adjustment to the calculation of Banking Segment Pre-Tax Net Income (as described in greater detail in the footnotes to the table below), the Compensation Committee took into account the importance of maintaining credit quality in allowing the Company to achieve its strategic objectives and sought to place additional emphasis on this item.

In determining to use Payments Segment Q4 EBITDA Margin Percentage as the AIP objective for the Payments Segment, the Compensation Committee viewed such measure as the most important metric by which to gauge success of the segment, noting that establishing a path to EBITDA profitability was a long-term objective of the Company that had been communicated to and was being tracked by the Company’s investors. The Compensation Committee determined that using fourth quarter EBITDA margin percentage was the most appropriate measure of success against this objective as such measure would demonstrate the point in time improvement in such measure against a EBITDA Margin Percentage of (114)% for the fourth quarter of 2022.

For the Factoring Segment, invoice ageing improvement was deemed to be a key area of operational focus, as the collection and posting of invoices in a timely manner impacts the Company’s cash flow, overall customer satisfaction, and requires all operational areas across the segment to be functioning in an integrated and efficient manner. The 45 day target for collection and posting of an invoice was selected as this would indicate completion of such items within 15 days of the due date for a 30 day payment term invoice.

Personal performance priorities judge each executive and the executive team against achievement of objectives tied to departmental and Company growth and strategic vision, and would take into account feedback from the CEO (as to NEOs other than the CEO) and the Compensation Committee (as to the CEO and the other NEOs) as part of the annual review process for the executive team.

Performance goals for each measure were set at threshold, target and stretch levels, which correspond to a range of potential payouts (50% of target bonus for threshold performance, 100% of target bonus for target performance and 150% of target bonus for stretch performance for each metric). Awards are interpolated in between these levels to provide for incremental rewards.

 

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The table below shows that for 2023 the Company performed below threshold for the Invoice Price Adjusted EPS objective, just above target for the Banking Segment Pre-Tax Net Income objective, and above stretch for the Payments Segment Q4 EBITDA Margin Percentage and Factoring Segment Invoice Ageing objectives. In addition, each NEO was determined to have achieved his or her personal performance goal at 123% of target.

 

Performance Measure

  Weighting     Threshold     Target     Stretch     Actual    

Earned

%

 

Invoice Price Adjusted Earnings Per Share (1)

    20   $ 1.99     $ 2.85     $ 3.70     $ 1.82      

Banking Segment Pre-Tax Net Income (2)

    20   $ 110.0     $ 135.0     $ 160.0     $ 136.2       102

Triumph Pay Q4 2023 EBITDA Margin %

    20     (60 )%      (50 )%      (40 )%          150

Triumph Factoring Segment Invoice Ageing

    20     91     93     95     98.5     150

Individual and Business Unit Objectives

    20     50     100     150     123     123

Weighted Percentage of Target Bonus

Earned

                                            105

 

  (1) 

Earnings Per Share (“EPS”) targets above were calculated assuming an average transportation invoice price for the year of $1,955. Invoice Price Adjusted EPS is calculated by increasing or decreasing GAAP EPS by 75% of the amount actual average transportation invoices for the year impacted GAAP EPS compared to such baseline. For 2023, the actual average transportation invoice price was $1,810 as compared to $1,955. Such difference was calculated to impact GAAP EPS by ($0.27) per share, with 75% of such amount, or $0.21 per share, added back to GAAP EPS to calculate the Invoice Price Adjusted EPS of $1.82.

 

  (2) 

In billions. Banking Segment Pre-Tax Net Income is subject to a possible credit quality adjustment to place additional emphasis on maintaining excellent credit quality. If (a) banking segment net charge-offs plus the net increase in banking segment specific reserves remain below 75bps of banking segment average loan balances and (b) banking segment non-performing loans (NPLs) increase in 2023 compared to 2022 by less than 1% of banking segment average loans, banking segment pre-tax net income will not be adjusted to determine the Banking Segment objective payout. Otherwise, banking segment pre-tax profit will be reduced by 25% before determining the payout. For 2023, the banking segment experienced 0.24% in charge offs plus specific reserves as a percentage of banking segment average loans, and an increase of 0.74% of banking segment NPLs to average loans. As such, Banking Segment Pre-Tax Net Income was not adjusted.

The Company’s performance below the threshold target for the Invoice Price Adjusted EPS objective was driven primarily by the impact of macroeconomic environment, as the ongoing freight recession was longer and more acute than anticipated at the beginning of 2023, which impacted not only average transportation invoice prices, but also utilization levels and volumes in the Factoring Segment as clients continued to leave the market. Such environment also impacted revenues and volume levels in the Payments Segment. This was offset by continued growth in new clients and revenue in the Payments Segment, but such growth was lower than would have been experienced in a better freight environment. In addition, the elevated interest rate environment continued to place stress on borrowers, resulting in elevated credit costs compared to 2022. Such impacts outweighed the incremental earnings generated in the Banking Segment from higher yields resulting from the elevated interest rate environment. Management was able to moderate the economic impacts described above by reducing non-interest expense growth compared to 2022, while still continuing to make progress on its strategic initiatives (in particular continued growth at TriumphPay). Non-interest expense grew 3.7% from 2022 to 2023, compared to 18.5% from 2021 to 2022. However, the overall effects of the foregoing resulted in GAAP EPS of $1.61 per share ($1.82 per share after the invoice price adjustment), which was below the threshold measure for the objective.

Notwithstanding the macroeconomic and freight headwinds impacting overall EPS, the Company executed on key segment level objections tied to its strategic plan, which resulted in performance at or above target for its segment level objectives. Performance at 102% of target for the Banking Segment Pre-Tax Net Income objective was the result of management’s success in moderating growth in total costs of funds and core deposit attrition in the elevated interest rate environment. The impact of this moderated cost of funds growth, together with the benefit in loan yields resulting from higher interest rates on floating rate loans, helped drive a 21.2% increase in net interest income for the segment in 2023 compared to 2022.

 

  
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This growth was offset in part by increased credit costs compared to 2022 as the Company’s borrowers continued to experience stress from the elevated interest rate environment and freight recession. Overall, however, credit costs remained controlled and within the credit adjustment thresholds approved by the Compensation Committee as part of the segment objective.

A key goal for the Company as part of its long-term strategic plan as communicated to investors has been to achieve EBITDA positive results for its Payments Segment by the end of 2024. For 2023, the Company sought to make meaningful progress toward this objective, with a target goal of improving its EBITDA margin from (114%) in the fourth quarter of 2022 to (50%) in the fourth quarter of 2023. Despite the headwinds caused by the falling freight market, the Company was able achieve positive EBITDA in the fourth quarter of 2023, one year ahead of its stated objective. These results were achieved by adding new clients onto the TriumphPay network, finding new sources of revenue from existing client relationships, and realizing the benefit of the rising interest environment as it grew the deposit balances associated with the payments received from network payors pending their release. Such achievement exceeded the stretch target for this goal and represented a significant accomplishment for the Company.

The Company exceeded the stretch target for its Factoring Segment Invoice Ageing objective, as it successfully improved internal processes related to the collection and posting of invoices. The percentage of transportation invoices collected and posted within 45 days was 98.5% for the year ended December 31, 2023. As previously noted, the Company believes these improvements position its factoring segment well to take advantage of a rebound in the freight market and increases in average invoice prices.

In determining performance for each executive at 123% of the target payout for performance against individual priorities, the Compensation Committee considered, among other items (i) its review of the performance of each NEO for the year, (ii) the Company’s overall success in delivering successful financial results and furthering key strategic initiatives over the year despite economic challenges as discussed above, and (iii) each NEO’s progress in furtherance of individual development goals.

The following table shows, for each of our NEOs, the target incentive payment under our AIP and the total calculated payout under the AIP for the Company’s 2023 fiscal year. Payouts were based exclusively on the level of achievement of pre-established Company performance goals and personal performance targets, as described above, and the Compensation Committee did not exercise its discretionary authority to adjust such amounts as provided for in the Company’s AIP.

 

Executive

 

2023

Incentive

Target

   

2023

Incentive

Actual

   

% of

Target

Incentive

 

Aaron P. Graft

  $ 435,000     $ 456,750       105

W. Bradley Voss

  $ 160,000     $ 168,000       105

Edward J. Schreyer

  $ 300,000     $ 315,000       105

Melissa Forman-Barenblit

  $ 160,000     $ 168,000       105

Gail Lehmann

  $ 160,000     $ 168,000       105

Long-Term Incentive Program

Each year, the Company grants equity awards to our NEOs under our LTIP. The purpose of these grants is to align our NEOs with stockholder interests, reward our NEOs for long-term stockholder value creation and encourage retention of our NEOs. In addition, these equity grants align with our pay for performance philosophy as 50% of the equity awards issued under our LTIP are performance based restricted stock units. In addition, the value of all equity grants are directly linked to our share performance (and, in the case of stock option grants, have no value unless the share price appreciates after the grant date).

 

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Target equity awards for each individual are established by the Compensation Committee considering competitive market data, individual performance and internal equity with other executives. For 2023, the Compensation Committee approved the following annual targets (expressed as a percentage of base salary) of equity awards under our LTIP granted to our NEOs: 220% for Mr. Graft, 160% for Mr. Schreyer, 100% for Mr. Voss and Ms. Forman-Barenblit, and 75% for Ms. Lehmann.

In addition, at its discretion, the Compensation Committee may increase or decrease by up to 30% an NEO’s target LTIP award based Company performance, individual performance or other relevant factors. For 2023, each NEO’s LTIP award was approved at target. Other than Mr. Schreyer (as discussed below) each NEO’s LTIP award was issued 50% as performance based restricted stock units based on the Company’s relative and absolute total stockholder return (“TSR”) as more fully described below, 25% time-vested restricted stock units, and 25% nonqualified stock options. Prior to Mr. Schreyer’s promotion to Chief Operating Officer of the Company in 2022, Mr. Schreyer had been receiving equity awards consisting entirely of time-vested restricted stock awards. In connection with Mr. Schreyer’s promotion to Chief Operating Officer in 2022, the Company began transitioning Mr. Schreyer to the Company’s standard LTIP award structure over a two year period. In 2023, 50% of Mr. Schreyer’s LTIP award was issued pursuant to the Company’s standard award structure as described above, with the other 50% issued as time vested restricted stock units. In 2024 the Company anticipates issuing 100% of Mr. Schreyer’s award pursuant to the standard award structure.

The targeted grant value of each award type for each of our NEOs under our LTIP is as follows:

 

    Performance Shares     Restricted
Stock Units
    Options     Total LTIP  

Named Executive Officer

 

Target Grant

Value

   

Target Grant

Value

   

Target Grant

Value

   

Target Grant

Value

 

Aaron P. Graft

  $ 797,500     $ 398,750     $ 398,750     $ 1,595,000  

W. Bradley Voss

  $ 200,000     $ 100,000     $ 100,000     $ 400,000  

Edward J. Schreyer

  $ 200,000     $ 400,000     $ 200,000     $ 800,000  

Melissa Forman-Barenblit

  $ 200,000     $ 100,000     $ 100,000     $ 400,000  

Gail Lehmann

  $ 150,000     $ 75,000     $ 75,000     $ 300,000  

The performance based restricted stock unit awards provide for delivery of Common Stock to participants based on the Company’s relative and absolute TSR compared to two reference groups. In 2023, half of such restricted stock unit awards were issued based on TSR compared to a reference group of publicly traded banks with assets between $2.5 and $30 billion and half of such restricted stock unit awards were issued based on TSR compared to the Russell 3000 Data Processing and Outsourced Services index. Each of the awards first evaluates relative TSR over a three year performance period. Between 50% and 175% of the target number of shares subject to the award shall vest based on relative TSR as follows (with linear interpolation between the 25th and 75th percentiles and between the 75th and 90th percentiles, as applicable):

 

Relative TSR Percentile

  Applicable Relative TSR Vesting Percentage 

Below 25th percentile

    0%

25th percentile

   50%

50th percentile

  100%

75th percentile

  150%

90th percentile or above

  175%

 

  
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Following determination of the applicable relative TSR vesting percentage, the vested shares shall be subject to adjustment pursuant to a modifier based on absolute TSR over the same three year performance period. For absolute TSR at or below 30%, no modifier shall be applied and 100% of the vested shares based on the applicable relative TSR vesting percentage shall be earned and delivered. If the Company’s common stock achieves absolute TSR of 100% or more, 200% of the vested shares based on the applicable relative TSR vesting percentage shall be earned and delivered (with linear interpolation between absolute TSR of 30% and 100%).

As a result, the total shares that may be issued pursuant to our performance based restricted stock unit awards range from 0% to 350% of the target number of shares. In the event that the Company has negative absolute TSR during the performance period, the total number of shares that shall be earned and delivered pursuant to the award is capped at 100% of the target number of shares regardless of the Company’s relative TSR percentile. In addition, if the value of the total number of shares that would be earned and delivered pursuant to the award (computed as the product of the number of the vested shares multiplied by the closing price of the Company’s common stock on the Nasdaq Global Select Market on the applicable vesting date) exceeds 8 times the grate date value of the target number of shares for the award (computed as the product of the target number of shares multiplied by the closing price of the Company’s common stock on the Nasdaq Global Select Market on the grant date) the number of shares to be actually earned and delivered pursuant to the award will be capped at a number of shares that has a value as of the vesting date (computed as set forth above) equal to 8 times the grant date value of the target number of shares (computed as set forth above).

The Compensation Committee made the determination to include the absolute TSR modifier in its performance based restricted stock unit awards as part of a plan to attract and retain key strategic talent across the organization (including, but not limited to, its executive officers and NEOs). In connection therewith, it considered the continued separation between the compensation practices of its fintech peers (which typically offer larger total equity compensation opportunities) and its banking peers, as well as the possibility of significant stock price appreciation during the performance period given opportunities in Company’s strategic plan, and its desire to further align management and investors in executing such plan. The caps on total shares that may be delivered pursuant to the awards were deemed by the Compensation Committee to be appropriate in order to limit the total expense of the awards to the Company and to further align payouts on such awards to the returns experienced by investors.

In the event of termination of employment under certain circumstances, a prorated portion of the award for the period of service of the participant during the performance period would be earned and shares issued following the completion of the performance period and determination of the Company’s relative and absolute TSR.

The time vested restricted stock units and stock option grants each vest one-fourth on each of the first four anniversaries of the grant date, generally subject to the NEO’s continued employment through each such anniversary. Stock options are granted with an exercise price equal to the closing stock price of our Common Stock on the NASDAQ Global Select Market as of the date of grant.

Further detail regarding the treatment of such outstanding equity awards upon termination of employment of our NEO’s in various circumstances is described in this Proxy Statement in the table included in “Executive Compensation – Potential Payments as a Result of Termination or Change in Control (CIC).”

Achievement of May 1, 2020 PSU Awards

As previously disclosed in the proxy statement for the Company’s 2021 Annual Stockholders Meeting, on May 1, 2020, the Company issued to its NEOs performance based restricted stock unit awards (the “2020 TSR PSUs”). The 2020 TSR PSUs provide for delivery of Common Stock to participants ranging

 

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between 0% and 175% of the target 2020 TSR PSUs based on the Company’s relative TSR compared to a reference group of publicly traded banks with assets between $2.5 and $30 billion over a three year performance period. On April 30, 2023, the three year performance period for the 2020 TSR PSUs ended with the Company achieving a relative TSR in the 95th percentile of the applicable peer group, which resulted in an applicable vesting percentage of 175% of the target 2020 TSR PSUs granted. The vesting of such awards resulted the delivery of shares of Common Stock to our NEOs as follows: 11,530 shares to Mr. Graft and 6,209 shares to Ms. Lehmann. Mr. Voss, Mr. Schreyer and Ms. Forman-Barenblit did not receive the 2020 TSR PSU award.

Benefits and Other Compensation

The Company provides limited perquisites to our NEOs that we believe are reasonable, competitive and consistent with the Company’s overall compensation philosophy and market practice. In 2023, these perquisites consisted of a car allowance and country club dues for Mr. Graft. In addition, our NEOs are eligible for reimbursement for participation in a medical wellness program available to the Company’s directors and executive officers and certain other medical reimbursements.

Our NEOs participate in our group health and welfare programs and 401(k) plan on the same basis as our other employees. Under the 401(k) plan, our NEOs are eligible to receive an employer match contribution on the same terms as all other employees of the Company.

Additional Information about our Compensation Practices

Employment Agreements

We have entered into substantially identical employment agreements with each of our NEOs. The employment agreements are for one (1) year terms which terminate on December 31 of each year, subject to automatic renewal for successive one (1) year terms unless either party delivers 60 days’ prior written notice of non-renewal (and, in the event that a change in control occurs during the then-current term, such term shall be extended to end no earlier than the second anniversary of the change in control). Each employment agreement provides for an annual base salary, which may be increased or decreased during the term, and specifies that the executive is eligible to participate in the annual and long-term incentive programs maintained by the Company to the same extent as other executives of the Company.

Either the Company or the executive may terminate the executive’s employment prior to the expiration of the then-current term in accordance with the terms and conditions of the employment agreement, and if such termination of employment is by the Company without “cause” (as defined in the agreement) or by the executive for “good reason” (as defined in the agreement) (a “qualifying termination”), then the executive shall be entitled to receive, subject to execution and non-revocation of a release of claims in favor of the Company, cash severance in the amount of 1.5 times base salary for Mr. Graft and 1.0 times base salary for each of Mr. Voss, Mr. Schreyer, Ms. Forman-Barenblit and Ms. Lehmann, as well as, in each case, healthcare coverage continuation for a period of 18 months for Mr. Graft and Ms. Lehmann and 12 months for Mr. Voss, Mr. Schreyer and Ms. Forman-Barenblit. However, if the qualifying termination occurs within 24 months following a change in control, then the cash severance amount is increased to a multiple of base salary plus the trailing 3-year average bonus (3.0 times for Mr. Graft and 2.0 times for each of Mr. Voss, Mr. Schreyer, Ms. Forman-Barenblit and Ms. Lehmann) and the healthcare coverage continuation period is increased to 36 months for Mr. Graft and 24 months for Mr. Voss, Mr. Schreyer, Ms. Forman-Barenblit and Ms. Lehmann.

The employment agreements contain a better net after-tax cutback provision in respect of the excise tax imposed under Sections 280G and 4999 of the tax code, pursuant to which the executive’s change in control-related payments and benefits will be reduced to the extent necessary to prevent any portion of such payments and benefits from becoming subject to the excise tax, but only if, by reason of that reduction, the net after-tax benefit received by the executive exceeds the net after-tax benefit that the executive would receive if no reduction was made.

 

  
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The employment agreements also contain certain restrictive covenants, including a perpetual confidentiality covenant, and non-compete, employee, client, and investor non-solicit, and business non-interference covenants that apply during employment and for the one (1) year period immediately following termination of employment for any reason.

Compensation Recovery

The Company has adopted a Compensation Recovery Policy, which would be triggered by a material restatement of the Company’s financial statements. The Compensation Recovery Policy, which is intended to comply with Section 10D of the Securities and Exchange Act of 1934 and Nasdaq Listing Rule 5608 (the “Compensation Recovery Rule”), covers performance-based incentive and equity compensation awards erroneously received during the applicable recovery period if the vesting, settlement or payment of such awards is contingent upon the achievement of a specified performance metric (“erroneously received compensation”). Such erroneously received compensation, calculated in accordance with the Compensation Recovery Rule and generally determined to be the amount of compensation that would not have been paid to the executive officer if the financial statements were correct at the time of the payment, will be subject to recoupment in accordance with the terms of the Compensation Recovery Rule.

Hedging Policy and Pledging Restrictions

We do not permit our directors or executive officers to engage in transactions that hedge such director’s or executive officer’s economic risk of owning shares of our common stock. Thus, our directors and executive officers may not engage in hedging transactions in the Company’s shares such as puts, calls, prepaid variable forwards, equity swaps, collars and other derivative securities on an exchange or in any other organized market. Our directors and executive officers also may not engage in short sales of the Company’s shares, meaning sales of shares that are not owned at the time of sale. In addition, the Company does not permit shares pledged by directors and executive officers to be applied toward stock ownership guidelines, and limits pledging to pre-approved exceptions where the executive officer or director can clearly demonstrate the financial ability to repay the loan without resorting to the pledged securities.

Stock Ownership Guidelines

The Company has adopted stock ownership guidelines for our non-employee directors and executive officers as part of our commitment to corporate governance and to strengthen the alignment of our non-employee directors and executive officers with the interests of our stockholders. Under the guidelines, our directors, our Chief Executive Officer and our other executive officers are expected to accumulate shares of our common stock with a value equal to or exceeding the applicable ownership level prior to the fifth anniversary of adoption of the guidelines, or the fifth anniversary of their election or appointment, whichever is later (the “Measurement Date”) and thereafter maintain ownership of shares consistent with such guidelines.

For purposes of the guidelines, “shares” include shares owned outright, directly or indirectly, shares owned jointly or separately by the individual’s spouse, shares held in trust for the benefit of the individual, the individual’s spouse and/or children, restricted stock or restricted stock units, shares acquirable upon the net exercise of vested stock options, or deferred shares or deferred stock units. Unvested stock options and unearned performance-based restricted stock units do not count toward meeting the applicable guidelines.

Our applicable target stock ownership guidelines are as follows:

 

Title

  Multiple of Base Salary

Chief Executive Officer

  3x base salary

Other Executive Officers

  1.5x base salary

Non-Employee Directors

  5x annual cash retainer

 

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Our Nominating and Corporate Governance Committee will periodically review each director’s or executive officer’s progress toward achieving the applicable guidelines. Each of our directors and executive officers is either within compliance with the guidelines or expected to achieve such compliance prior to his or her applicable Measurement Date.

Risk Assessment Review

The Company adheres to a conservative and balanced approach to risk. Management and the Board conduct regular reviews of the business to ensure it remains within appropriate regulatory guidelines and practice. The Company’s maintains an Incentive Compensation Risk Review Committee that risk reviews current incentive plans, material changes to existing plans and new incentive plans. Key findings from such risk reviews are reviewed and discussed with the Compensation Committee and the Compensation Committee includes risk review in its consideration of all new plans (or material changes to existing plans) presented to it for approval. Based on such review and analysis, the Compensation Committee has concluded that the Company’s incentive compensation programs provide appropriate balance across many performance measures and do not create risks that are reasonably likely to have a material adverse effect on the Company.

Accounting and Tax Treatment of Compensation

The Compensation Committee considers the effects of tax and accounting treatments when it determines executive compensation. Under Section 162(m) of the Internal Revenue Code (the “Code”) compensation paid to a covered executive officer of a publicly traded company in excess of $1 million in one (1) year is not deductible for federal income tax purposes. In structuring the Company’s compensation programs and in determining executive compensation, the Compensation Committee takes into consideration the deductibility limit for compensation. However, the Compensation Committee reserves the right, in the exercise of its business judgment, to establish appropriate compensation levels for executive officers that may exceed the limits on tax deductibility established under Section 162(m) of the Code. The employment contracts for the NEOs contain change of control limitation provisions pursuant to the Code Section 280G. If a change of control payment exceeds the limit for deductible payments under Section 280G of the Code, the higher of (i) safe harbor amounts; or (ii) full payments after tax (i.e., “best of after-tax benefit”) will be paid to the NEO. For the full payments, the NEO is responsible for paying the excise tax. The Compensation Committee takes into consideration the accounting effects of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 in determining vesting periods for stock options and restricted stock awards under our 2014 Omnibus Incentive Plan.

 

  
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COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee has reviewed and discussed with Management the “Compensation Discussion and Analysis” disclosure appearing above in this Proxy Statement. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors of the Company that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, which incorporates by reference the disclosure contained in this Proxy Statement.

March 14, 2024

The Compensation Committee:

Charles A. Anderson, Chairman

Carlos M. Sepulveda, Jr.

Harrison B. Barnes

Richard L. Davis

 

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2023 Summary Compensation Table

The following summary compensation table provides information regarding the compensation of our NEOs for our fiscal years ended December 31, 2023, 2022 and 2021.

 

Name and Principal Position

  Year    

Salary

($) (1)

   

Bonus

($)

   

Stock

Awards

($) (2)

   

Option

Awards

($) (2)

   

Non-Equity

Incentive Plan

Compensation

($)

   

All Other

Compensation

($) (3)

   

Total 

($) 

 

AARON P. GRAFT

    2023       720,831             1,614,661       398,740          456,750           69,653       3,260,635   

Director, Vice Chairman,

    2022       691,654             1,198,915       349,985       478,538       54,566       2,773,658   

CEO & President

    2021       650,000             939,477       292,475       514,020       48,197       2,444,169   

W. BRADLEY VOSS

    2023       395,832             404,911       99,994       168,000       18,300       1,087,037   

Executive Vice President,

    2022       370,825       263,225       240,735       70,312       170,905       17,778       1,133,780   

CFO

    2021       286,000       295,383       101,925                   11,600         694,908   

EDWARD J. SCHREYER

    2023       500,000             804,917       99,994       315,000       13,200       1,733,111   

Executive Vice President,

    2022       500,000              749,952             341,820       12,200       1,603,972   

COO

                                                               

MELISSA FORMAN-BARENBLIT

    2023       395,833             404,911       99,994       168,000       13,200       1,081,938   

EVP, TBK Bank, SSB

               

President - TriumphPay

                                                               

GAIL LEHMANN

    2023       400,001             303,631       74,995       168,000       20,766       967,393   

Executive Vice President,

    2022       393,334             256,910       74,974       182,304       20,278       927,800   

& Secretary

    2021       358,334             216,747       67,486       189,792       18,982       851,341   
  (1)

Reflects actual base compensation paid during the applicable fiscal year.

  (2)

Reflects the full grant date value of performance shares, restricted stock, restricted stock units or stock option awards granted to each of our NEOs computed in accordance with ASC 718. Generally, the full grant date fair value is the amount we will expense in our financial statements over an award’s vesting period as further described in Note 20 to our Annual Report on Form 10-K for the Fiscal Year ended December 31, 2023, filed with the SEC on February 13, 2024. The grant value of performance share awards are based on a Monte Carlo valuation of $74.34 per target share for the bank peer group award (i.e. the award tied to the reference group of publicly traded banks with assets between $2.5 and $30 billion) and $81.95 per target share for the fintech peer group award (i.e. the award tied to the Russell 3000 Data Processing and Outsourced Services index) as of the May 1, 2023 grant date. The grant value of restricted stock unit awards are based on a fair market value of $51.25 per share of our common stock as of the May 1, 2023 grant date, which was the closing price of our common stock on the NASDAQ Global Select Market as of such date. The grant value of option awards are based on a Black-Scholes valuation of $25.20 per option share for grants made on May 1, 2023, with an exercise price of $51.25, which was the closing price of our common stock on the NASDAQ Global Select Market as of such date. Assuming the highest level of performance under the performance share awards shown in the “Stock Awards” column above, the total value of such performance share awards using a fair market value of $51.25 per share of our common stock on the May 1, 2023 grant date would have been $2,791,075 for Mr. Graft, $699,921 for Mr. Voss, Mr. Schreyer, and Ms. Forman-Barenblit, and $524,851 for Ms. Lehmann.

  (3)

Includes the amounts set forth below under “2022 All Other Compensation Table” paid to or on behalf of the NEOs during the applicable fiscal year.

The following table shows all amounts included in the “All Other Compensation” column for each NEO in 2023:

2023 All Other Compensation Table

 

Name

 

TBK Bank, SSB

Contribution

to 401(k) Defined

Contribution

Plan

($)

   

Car

Allowance

($)

   

Club

Memberships

($)

   

Executive

Health

($)

   

Total

($)

 

Aaron P. Graft

    13,200       6,000       45,353       5,100       69,653  

W. Bradley Voss

    13,200                   5,100       18,300  

Edward J. Schreyer

    13,200                         13,200  

Melissa Forman-Barenblit

    13,200                         13,200  

Gail Lehmann

    13,200                   7,566       20,766  

 

  
LOGO    2024 Proxy Statement  39


Table of Contents

2023 Grants of Plan-Based Awards Table

 

 

Grant

Date

(b)

    Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards (1)
    Estimated Future Payouts
Under Equity Incentive
Plan Awards
   

All

Other

Stock

Awards:

Number

of

Shares

of Stock

or Units

(#)(i)

   

All Other

Option

Awards:

Number of

Securities

Underlying

Options

(#)(j)

   

Exercise

or Base

Price of

Option

Awards

($/sh)(k)

   

Grant

Date

Fair

Value of

Stock

and

Option

Awards

(l) (2)

 
 Name  

Threshold

($)(c)

   

Target

($)(d)

   

Maximum

($)(e)

   

Threshold

(#)(f)

   

Target

(#)(g)

   

Maximum

(#)(h)

 

 Aaron P. Graft

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5/1/2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,780

 

 

 

 

 

 

 

 

 

 

$

398,725

 

 

 

 

5/1/2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15,823

 

 

 

$51.25

 

 

$

398,740

 

 

 

 

5/1/2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15,560

 

 

 

54,460

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

1,215,936

 

 

 

 

 

 

 

 

$152,250

 

 

 

$435,000

 

 

 

$848,250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 W. Bradley Voss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5/1/2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,951

 

 

 

 

 

 

 

 

 

 

$

99,989

 

 

 

 

5/1/2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,968

 

 

 

$51.25

 

 

$

99,994

 

 

 

 

5/1/2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,902

 

 

 

13,656

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

304,922

 

 

 

 

 

 

 

 

$ 56,000

 

 

 

$160,000

 

 

 

$312,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Edward J. Schreyer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5/1/2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,756

 

 

 

 

 

 

 

 

 

 

$

499,995

 

 

 

 

5/1/2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,968

 

 

 

$51.25

 

 

$

99,994

 

 

 

 

5/1/2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,902

 

 

 

13,656

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

304,922

 

 

 

 

 

 

 

 

$105,000

 

 

 

$300,000

 

 

 

$585,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Melissa Forman-Barenblit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5/1/2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,951

 

 

 

 

 

 

 

 

 

 

$

99,989

 

 

 

 

5/1/2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,968

 

 

 

$51.25

 

 

$

99,994

 

 

 

 

5/1/2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,902

 

 

 

13,656

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

304,922

 

 

 

 

 

 

 

 

$ 56,000

 

 

 

$160,000

 

 

 

$312,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Gail Lehmann

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5/1/2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,463

 

 

 

 

 

 

 

 

 

 

$

74,979

 

 

 

 

5/1/2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,976

 

 

 

$51.25

 

 

$

74,995

 

 

 

 

5/1/2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,926

 

 

 

10,240

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

228,652

 

 

 

 

 

 

 

 

$ 56,000

 

 

 

$160,000

 

 

 

$312,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

The amounts reported in these columns represent the possible range of payments under the AIP incentive compensation program. For information about the amounts actually earned by each named executive officer under the AIP incentive compensation program, see “Executive Compensation Tables—2023 Summary Compensation Table.” Amounts are considered earned in fiscal year 2023 although they were not paid until 2024.

(2)

Reflects the full grant date value of performance shares, restricted stock, restricted stock unit or stock option awards granted to each of our NEO’s computed in accordance with ASC 718. Generally, the full grant date fair value is the amount we will expense in our financial statements over an award’s vesting period as further described in Note 20 to our Annual Report on Form 10-K for the Fiscal Year ended December 31, 2023, filed with the SEC on February 13, 2024. The grant value of performance share awards are based on a Monte Carlo valuation of $74.34 per target share as of the May 1, 2023 grant date for our bank peer group TSR awards (50% of total award), and $81.95 per target share as of the May 1, 2023 grant date for our fintech peer group TSR awards (50% of total award). The grant value of restricted stock unit awards are based on a fair market value of $51.25 per share of our common stock as of the May 1, 2023 grant date, which was the closing price of our common stock on the NASDAQ Global Select Market as of such date. The grant value of option awards are based on a Black-Scholes valuation of $25.20 per option share for grants made on May 1, 2023, with an exercise price of $51.25, which was the closing price of our common stock on the NASDAQ Global Select Market as of such date.

 

40  2024 Proxy Statement    LOGO
  


Table of Contents

Outstanding Equity Awards at Fiscal Year-End for 2023

The following table sets forth all unexercised stock options, and unvested restricted stock and restricted stock units awarded to our NEOs by the Company that were outstanding as of December 31, 2023.

 

    Option Awards       Performance Unit Awards       Stock Awards  
Name (a) (13)  

Number of

Securities

Underlying

Unexercised

Options

(#)

Exercisable

(b)

   

Number of

Securities

Underlying

Unexercised

Options

(#)

Unexercisable

(c) (1)

   

Equity

Incentive

Plan

Awards:

Number of

Securities

Underlying

Unexercised

Unearned

Options

(#)(d)

   

Option

Exercise

Price

($)(e)

   

Option

Expiration

Date(f)

   

Number

of

Shares or

Units of

Stock

That Have

Not

Vested

(#)(g)

   

Market

Value of

Shares

or Units

of Stock

That

Have Not

Vested

($)(h) (2)

   

Number

of

Shares or

Units of

Stock

That Have

Not

Vested

(#)(g) (1)

   

Market

Value of

Shares

or Units

of Stock

That

Have Not

Vested

($)(h) (2)

 

Aaron P. Graft

    11,883                 $ 25.80       4/1/2027                          
    9,739                 $ 38.75       5/1/2028                          
    7,103                 $ 31.00       5/1/2029                          
    7,325       2,442           $ 26.25       5/1/2030                          
    4,134       4,135           $ 88.63       5/1/2031                          
    2,721       8,165           $ 69.44       5/1/2032                          
          15,823           $ 51.25       5/1/2033                          
                                  11,550 (3)    $ 926,079              
                                  17,640 (4)    $ 1,414,376              
                                  54,460 (5)    $ 4,366,602              
                                              824     $ 66,068  
                                              1,650     $ 132,297  
                                              3,780     $ 303,080  
                                              7,780     $ 623,800  

 

 

W. Bradley Voss

    427                 $ 15.87       4/1/2026                          
    435                 $ 25.80       4/1/2027                          
    625                 $ 38.75       5/1/2028                          
    546       1,641           $ 69.44       5/1/2032                          
          3,968           $ 51.25       5/1/2033                          
                                  3,542 (4)    $ 283,998              
                                  13,658 (5)    $ 1,095,098              
                                              168     $ 13,470  
                                              575     $ 46,104  
                                              759     $ 60,857  
                                      1,951     $ 156,431  

 

 

Edward J. Schreyer

          3,968           $ 51.25       5/1/2033                          
                                  13,658 (5)    $ 1,095,098              
                                              33,077     $ 2,652,114  
                                              8,100     $ 649,458  
                                              9,756     $ 782,236  

 

 

Melissa Forman-Barenblit

    546       1,641           $ 69.44       5/1/2032                          
          3,968           $ 51.25       5/1/2033                          
                                  3,542 (4)    $ 283,998              
                                  13,658 (5)    $ 1,095,098              
                                              1,533     $ 122,916  
                                              759     $ 60,857  
                                              1,951     $ 156,431  

 

 

 

  
LOGO    2024 Proxy Statement  41


Table of Contents
    Option Awards       Performance Unit Awards       Stock Awards  
Name (a) (13)  

Number of

Securities

Underlying

Unexercised

Options

(#)

Exercisable

(b)

   

Number of

Securities

Underlying

Unexercised

Options

(#)

Unexercisable

(c) (1)

   

Equity

Incentive

Plan

Awards:

Number of

Securities

Underlying

Unexercised

Unearned

Options

(#)(d)

   

Option

Exercise

Price

($)(e)

   

Option

Expiration

Date(f)

   

Number

of

Shares or

Units of

Stock

That Have

Not

Vested

(#)(g)

   

Market

Value of

Shares

or Units

of Stock

That

Have Not

Vested

($)(h) (2)

   

Number

of

Shares or

Units of

Stock

That Have

Not

Vested

(#)(g) (1)

   

Market

Value of

Shares

or Units

of Stock

That

Have Not

Vested

($)(h) (2)

 

Gail Lehmann

    4,382                 $ 25.80       4/1/2027                          
    1,820                 $ 38.75       5/1/2028                          
    2,966                 $ 31.00       5/1/2029                          
    3,944       1,315           $ 26.25       5/1/2030                          
    954       954           $ 88.63       5/1/2031                          
    583       1,749           $ 69.44       5/1/2032                          
          2,976           $ 51.25       5/1/2033                          
                                  2,665 (3)    $ 213,680              
                                  3,780 (4)    $ 303,080              
                                  10,242 (5)    $ 821,204              
                                              444     $ 35,600  
                                              381     $ 30,549  
                                              810     $ 64,946  
                                              1,463     $ 117,303  

 

 

 

(1)

Unless separately noted, stock options restricted stock and restricted stock unit awards vest at the rate of 25% per year from the date of award. Unvested or un-exercisable portions of awards reflect the unvested portion of awards issued between 2020 and 2023. Vesting of all such awards may be accelerated upon termination of employment for death or disability, or upon a qualifying termination of employment following a change of control (as defined in our 2014 Omnibus Incentive Plan).

(2)

The market values for the outstanding stock awards presented as of December 31, 2023, are based on the closing price of our Common Stock of $80.18 per share on December 31, 2023.

(3)

Performance based restricted stock unit awards shown in row represent total stock return performance shares granted in 2021 as part of the Company’s LTIP program. Shares represented and market value of such awards assume payout at maximum. A prorated portion of such award may vest upon death, disability, qualifying termination (after the first anniversary of the grant date) or retirement (after the first anniversary of the grant date) during the performance period, and would be earned and shares issued following completion of the performance period and determination of the Company’s relative TSR. In addition, in the event of a change of control during the performance period, a portion of the award may be earned (and the resulting shares issued unless replaced with a time vested replacement award) based on relative TSR through the change in control. Vesting of any time vested replacement award may be accelerated in the event of a qualifying termination following such change in control (as defined in our 2014 Omnibus Incentive Plan).

(4)

Performance based restricted stock unit awards shown in row represent total stock return performance shares granted in 2022 as part of the Company’s LTIP program. Shares represented and market value of such awards assume payout at maximum. A prorated portion of such award may vest upon death, disability qualifying termination (after the first anniversary of the grant date) or retirement (after the first anniversary of the grant date) during the performance period, and would be earned and shares issued following completion of the performance period and determination of the Company’s relative TSR. In addition, in the event of a change of control during the performance period, a portion of the award may be earned (and the resulting shares issued unless replaced with a time vested replacement award) based on relative TSR through the change in control. Vesting of any time vested replacement award may be accelerated in the event of a qualifying termination following such change in control (as defined in our 2014 Omnibus Incentive Plan).

(5)

Performance based restricted stock unit awards shown in row represent total stock return performance shares granted in 2023 as part of the Company’s LTIP program. Shares represented and market value of such awards assume payout at maximum. A prorated portion of such award may vest upon death, disability qualifying termination (after the first anniversary of the grant date) or retirement (after the first anniversary of the grant date) during the performance period, and would be earned and shares issued following completion of the performance period and determination of the Company’s relative and absolute TSR. In addition, in the event of a change of control during the performance period, a portion of the award may be earned (and the resulting shares issued unless replaced with a time vested replacement award) based on relative and absolute TSR through the change in control. Vesting of any time vested replacement award may be accelerated in the event of a qualifying termination following such change in control (as defined in our 2014 Omnibus Incentive Plan).

 

42  2024 Proxy Statement    LOGO
  


Table of Contents

The following information sets forth the stock awards vested and stock options exercised by the NEO’s during the fiscal year ended December 31, 2023.

 

    Option Awards     Stock Awards  

Name

 

Number of

Shares

Acquired on

Exercise

   

Value

Realized

Upon

Exercise ($)

   

Number of

Shares

Acquired on

Vesting

   

Value

Realized on

Vesting

($)

 

Aaron P. Graft

        $    —       44,833     $ 2,682,966 (1) 

W. Bradley Voss

        $       16,847     $ 973,487 (2) 

Edward J. Schreyer

        $       19,239     $ 985,999 (3) 

Melissa Forman-Barenblit

        $       12,553     $ 670,861 (4) 

Gail Lehmann

        $       25,102     $ 1,515,808 (5) 

 

  (1)

Consists of 29,820 performance based restricted stock units (cumulative EPS) that vested and settled with a closing market price of $64.17 on February 16, 2023, 11,530 performance based restricted stock units (relative TSR) that vested and settled with a closing market price of $51.25 on May 1, 2023, and 3,483 restricted stock awards and units that vested upon the lapse of restrictions with a closing market price of $51.25 on the May 1, 2023 vesting date.

  (2)

Consists of 8,520 performance based restricted stock units (cumulative EPS) that vested and settled with a closing market price of $64.17 on February 16, 2023, 4,742 performance based restricted stock units (relative TSR) that vested and settled with a closing market price of $51.25 on May 1, 2023, and 3,585 restricted stock awards and units that vested upon the lapse of restrictions with a closing market price of $51.25 on the May 1, 2023 vesting date.

  (3)

Consists of 19,239 restricted stock awards and units that vested upon the lapse of restrictions with a closing market price of $51.25 on the May 1, 2023 vesting date.

  (4)

Consists of 2,130 performance based restricted stock units (cumulative EPS) that vested and settled with a closing market price of $64.17 on February 16, 2023 and 10,423 restricted stock awards and units that vested upon the lapse of restrictions with a closing market price of $51.25 on the May 1, 2023 vesting date.

  (5)

Consists of 17,750 performance based restricted stock units (cumulative EPS) that vested and settled with a closing market price of $64.17 on February 16, 2023, 6,209 performance based restricted stock units (relative TSR) that vested and settled with a closing market price of $51.25 on May 1, 2023, and 1,143 restricted stock awards and units that vested upon the lapse of restrictions with a closing market price of $51.25 on the May 1, 2023 vesting date.

Equity Compensation Plan Information

The following table provides certain information with respect to all of our equity compensation plans in effect as of December 31, 2023.

 

Plan Category

 

Number of

securities to be

issued upon

exercise of

outstanding

options,

warrants

and rights

(a)

   

Weighted-

average

exercise

price of

outstanding

options,

warrants and

rights

(b)

   

Number of

securities

remaining

available for

future issuance

under equity

compensation

plans

(excluding

securities
reflected

in column (a)
(c)

 

Equity compensation plans approved by security holders

    232,994     $ 43.40       504,236  

Equity compensation plans not approved by security holders

                 
 

 

 

   

 

 

   

 

 

 

Total

    232,994     $ 43.40       504,236  

 

  
LOGO    2024 Proxy Statement  43


Table of Contents

Potential Payments as a Result of Termination or Change in Control (CIC)

The table below describes the value of compensation and benefits payable to each NEO upon termination that would exceed the compensation or benefits generally available to salaried employees in each termination scenario. Benefits and payments are calculated assuming a December 31, 2023, employment termination date.

 

Name/Termination Scenario (5)

 

Severance

($)

   

Stock

Awards

($) (3)

   

Stock

Options

($) (4)

   

Welfare

Benefits

($)

    Total  

Aaron P. Graft

           
 

Voluntary Resignation

                             
 

Termination for Cause

                             

Qualifying Termination (no change in control)