PINNACLE FINANCIAL PARTNERS, INC. Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
(e)
2022 Equity Awards. EffectiveJanuary 20, 2022 , theHuman Resources and Compensation Committee (the "Committee") of the Board of Directors ofPinnacle Financial Partners, Inc. (the "Company") granted time-based restricted share units ("Restricted Share Units") and performance-based restricted share units ("Performance Units") under the Company's Amended and Restated 2018 Omnibus Equity Incentive Plan (the "Plan") to those employees that are expected to be identified as the Company's "Named Executive Officers" in the Company's proxy statement for its 2022 annual meeting of shareholders (the "Named Executive Officers"), which will entitle the Named Executive Officers to earn the following number of shares of the Company's common stock, par value$1.00 per share ("Common Stock"), at target and maximum levels of performance over a three-year performance period in the case of the Performance Units and a three-year pro rata vesting period in the case of the Restricted Share Units: Restricted Share Units - Performance Units - Performance Units - Employee Number of Shares Target Number of Shares Maximum Number of Shares* M. Terry Turner 8,421 19,649 47,156 Robert A. McCabe, Jr. 8,015 18,701 44,883 Richard D. Callicutt, II 2,860 6,672 16,013 Hugh M. Queener 2,188 5,104 12,250 Harold R. Carpenter 2,259 5,271 12,650
* Includes a full 20% upward adjustment for the Relative TSR Modifier (as defined below).
2022 Restricted Share Unit Awards. EffectiveJanuary 20, 2022 , the Committee adopted and approved the form of Restricted Share Unit Award Agreement (the "RSU Award Agreement"), pursuant to which the Restricted Share Units disclosed above were granted to the Named Executive Officers. The Restricted Share Units vest ratably over three (3) years fromJanuary 20, 2022 (each such date, a "RSU Vesting Date"), and will be settled when vested in a like number of shares of Common Stock. In the event that a Named Executive Officer's employment terminates by reason of retirement, with the prior approval of the Committee, or its designee, the Named Executive Officer will be entitled to receive a pro rata portion of the Restricted Share Units that were scheduled to vest on the next RSU Vesting Date immediately following the retirement based on the number of days worked since the most recent RSU Vesting Date or the date of grant if no RSU Vesting Date had yet occurred. In the event that a Named Executive Officer's employment terminates by reason of death or disability, all then unvested and outstanding Restricted Share Units shall be deemed vested. In the event that a Named Executive Officer's employment is terminated other than for death, disability or retirement, unless otherwise determined by the Committee, the Named Executive Officer shall forfeit all Restricted Share Units for which the forfeiture restrictions have not lapsed prior to the date of such termination. No Named Executive Officer shall have voting rights with respect to the Restricted Share Units prior to such units' settlement, if any, into shares of Common Stock. The Restricted Share Units may not be assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of prior to the date the forfeiture restrictions with respect to such units have lapsed, if at all. Any dividends paid by the Company on shares of Common Stock while the Restricted Share Units remain unvested shall accrue for the benefit of the Named Executive Officers but shall not be paid to the Named Executive Officers until such time as the shares of Common Stock issuable in settlement of such Restricted Share Units, if any, shall be issued (and then only to the extent that the dividends are attributable to such shares). In the event that a Change in Control (as defined in the Plan) occurs, all then unvested and outstanding Restricted Share Units shall vest immediately prior to the consummation of such Change in Control. Such Restricted Share Units shall be settled in a like number of shares of Common Stock that shall not be subject to any further forfeiture restrictions. The foregoing summary of the RSU Award Agreements is qualified in its entirety by reference to the form of RSU Award Agreement, a copy of which is filed herewith as Exhibit 10.1 and is incorporated herein by reference, and to the Plan, which is attached as an appendix to the proxy statement for the Company's most recent Annual Meeting of Shareholders. -------------------------------------------------------------------------------- 2022 Performance Unit Awards. EffectiveJanuary 20, 2022 , the Committee adopted and approved the form of Named Executive Officer Performance Unit Award Agreement (the "2022 PSU Award Agreement"), pursuant to which the Performance Units disclosed above were granted to the Named Executive Officers. Pursuant to the terms of the 2022 PSU Award Agreements, the Performance Units will be earned, if at all, based on the Company's performance over the three year performance period endingDecember 31, 2024 (the "Performance Period") for average return on average tangible common equity for each of the fiscal years in the Performance Period ("ROATCE") and tangible book value per share plus dividends accretion for the Performance Period ("TBV Accretion") (in each case, which may exclude the impact of items described in more detail in the 2022 PSU Award Agreement) measured against ROATCE ("Relative ROATCE") and TBV Accretion ("Relative TBV Accretion") for a group of peer companies over the same Performance Period, and as such earned units may be adjusted positively or negatively by up to 20% based on the Company's Total Shareholder Return performance against the KBW Regional Bank Index over the period fromJanuary 20, 2022 throughJanuary 23, 2025 (the "Relative TSR Modifier"). Such Performance Units will be settled, if earned, in a like number of shares of Common Stock following certification of the Company's results compared to the peer companies in the peer group and determination by the Committee subsequent to the Performance Period that the average ratio of Pinnacle Bank's nonperforming assets to its loans plus other real estate owned ("NPA Ratio") as of each of the three years endedDecember 31, 2022 , 2023 and 2024 is less than or equal to the targeted NPA Ratio established by the Committee and described in the 2022 PSU Award Agreement. All Performance Units that are earned under the 2022 PSU Award Agreements will be settled in a like number of shares of Common Stock as soon as practicable following the Committee's certification of the Company's results compared to the peer companies in the peer group. In the event that a Named Executive Officer's employment terminates by reason of retirement prior toDecember 31, 2024 , the Named Executive Officer shall be entitled to receive the number of Performance Units that the Named Executive Officer would have earned has his employment not so terminated based on a pro rata calculation of the number of days the Named Executive Officer was employed during the Performance Period. In the event that a Named Executive Officer's employment is terminated by reason of death or disability prior toDecember 31, 2024 , the Named Executive Officer (or his estate or heirs) shall be entitled to receive the greater of (a) the number of Performance Units that the Committee determines, based on the Company's performance during the portion of the Performance Period ending on the last day of the fiscal quarter preceding such termination, and (b) the number of Performance Units that the Named Executive Officer would earn based on target level of performance. In the event that a Named Executive Officer's employment is terminated other than for death, disability or retirement, the Named Executive Officer, unless otherwise determined by the Committee, shall forfeit all Performance Units granted under the 2022 PSU Award Agreement. If the NPA Ratio is above the targeted ratio, the Performance Units granted under the 2022 PSU Award Agreement will be immediately forfeited and the Named Executive Officer will have no further rights with respect to such Performance Units or the underlying shares of Common Stock (including any dividends attributable thereto); provided, however, that if the Committee determines that an event has occurred which is outside the ordinary course and has impacted the NPA Ratio, the Committee will have the right to increase or decrease the vesting target to reflect such event for purposes of determining whether shares of Common Stock shall be issuable in settlement of such Performance Units otherwise earned. No Named Executive Officer shall have voting rights with respect to the Performance Units granted under the 2022 PSU Award Agreement prior to such units' settlement, if any, into shares of Common Stock. The Performance Units granted under the 2022 PSU Award Agreements may not be assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of other than by the laws of descent and distribution prior to the date the forfeiture restrictions with respect to such units have lapsed (including the achievement of the NPA Ratio), if at all. Any dividends paid by the Company on shares of Common Stock while the Performance Units granted under the 2022 PSU Award Agreements remain outstanding shall accrue for the benefit of the Named Executive Officers but shall not be paid to the Named Executive Officers until such time as the shares of Common Stock issuable in settlement of such Performance Units, if any, shall be issued (and then only to the extent that the dividends are attributable to such shares). In the event that a Change in Control (as defined in the Plan) occurs prior toDecember 31, 2024 , the Committee shall determine, based on the Company's performance during the portion of the Performance Period ending on the last day of the fiscal quarter preceding the Change in Control, the number of Performance Units that would be expected to be earned by a Named Executive Officer over the entire Performance Period and the Named Executive Officer will be vested in the greater of such number of Performance Units and the number of Performance Units that the Named Executive Officer would earn based on target level of performance. Such Performance Units shall be settled in a like number of shares of Common Stock that shall not be subject to any further forfeiture restrictions. The foregoing summary of the 2022 PSU Award Agreements is qualified in its entirety by reference to the form of 2022 PSU Award Agreement, a copy of which is filed herewith as Exhibit 10.2 and is incorporated herein by reference, and to the Plan, which is attached as an appendix to the proxy statement for the Company's most recent Annual Meeting of Shareholders. -------------------------------------------------------------------------------- Special Performance-Based Equity Award. In addition to the annual equity-based awards described above, effectiveJanuary 20, 2022 , the Committee granted performance-based restricted stock units under the Plan (the "Special Performance Units") to each of the Named Executive Officers (the "Special Performance-Based Equity Awards"), which will entitle the Named Executive Officers to earn the following number of shares of Common Stock based upon achievement of the 75th percentile of peer performance based on peer relative price to earnings and price to tangible book value per share metrics over a three-year performance period: Employee Target Number of Shares(1)M. Terry Turner 60,000Robert A. McCabe , Jr. 60,000Richard D. Callicutt , II 40,000Hugh M. Queener 30,000Harold R. Carpenter 30,000 (1) The target number of shares is also the maximum number of shares that the Named Executive Officer may receive pursuant to the Special Performance-Based Equity Awards. The Special Performance-Based Equity Awards are not part of the Named Executive Officers' regular annual compensation and will not be awarded on a regularly recurring basis. The Special Performance-Based Equity Awards were granted pursuant to the terms of a Named Executive Officer Special Performance Unit Award Agreement (the "Special PSU Award Agreement") approved by the Committee and are stock-based awards that are 100 percent performance-based. The Special Performance-Based Equity Awards include rigorous performance goals targeted at top-quartile performance among the Company's peers. The awards are also designed to incentivize the Company's Named Executive Officers, each of whom, other thanMr. Callicutt who joined the Company in connection with its merger withBNC Bancorp, Inc. in 2017, has been employed by the Company since its organization, to continue to lead the Company in the pursuit of a corporate strategy that is focused on long-term shareholder value creation through the achievement of results that exceed the results of many of the Company's peers, with particular attention on performance metrics tied to the Company's Common Stock trading price that the Company believes traditionally translate into increases in shareholder value, while also achieving asset quality soundness levels that reflect prudent risk-taking. In granting the Special Performance-Based Equity Awards, the Company also sought to preserve continuity in the Company's Named Executive Officers, all but one of whom has been responsible for directing the Company's corporate strategy since its inception, for a period of at least three years. The Special Performance-Based Equity Awards' units will be earned, if at all, based on the Company's performance over a three-year performance period ending . . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibit
10.1 Form of 2022 Restricted Share Unit Award Agreement 10.2 Form of Named Executive Officers 2022 Performance Unit Award Agreeme nt
10.3 Form of Named Executive Officers Special Performance Unit Award Agreement
10.4 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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