UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
_________
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 20, 2020
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TRISTATE CAPITAL HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
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Pennsylvania | 001-35913 | 20-4929029 | ||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
One Oxford Centre |
301 Grant Street, Suite 2700 |
Pittsburgh, Pennsylvania 15219 |
(Address of principal executive offices) |
(Zip Code) |
(412) 304-0304 |
(Registrant's telephone number, including area code) |
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock, no par value | TSC | Nasdaq Global Select Market | ||
Depositary Shares, Each Representing a 1/40th Interest in a Share of 6.75% Fixed-to-Floating Rate Series A Non-Cumulative Perpetual Preferred Stock | TSCAP | Nasdaq Global Select Market | ||
Depositary Shares, Each Representing a 1/40th Interest in a Share of 6.375% Fixed-to-Floating Rate Series B Non-Cumulative Perpetual Preferred Stock | TSCBP | Nasdaq Global Select Market | ||
Indicate by check mark whether the registrant is emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Exchange Act of 1934 (§ 240.12b-2 of this chapter). Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
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Item 8.01 Other Events
At the TriState Capital Holdings, Inc. Annual Meeting of Shareholders on May 29, 2020, the Company’s Board of Directors recommends voting FOR Proposal 4 (“the Proposal”), which seeks approval to amend the Company’s Omnibus Incentive Plan (the “Plan”) to increase the number of authorized shares of common stock issuable under the Plan. The proposed amendment to the Plan consists of an increase to the maximum number of shares authorized for issuance under the Plan by 1,500,000 to 5,500,000 shares.
Today, the Company is providing the following supplemental information to help shareholders evaluate the Proposal and to provide additional, clarifying information to assist proxy advisory firm, Institutional Shareholder Services Inc. (“ISS”) in applying its programmatic factors to evaluate the Plan.
First, the Company is providing additional clarifying information regarding the large portion of its equity allocations in the years 2017 through April 30, 2020 that have been made on a value-neutral basis in lieu of cash incentive payments that were otherwise earned. For this purpose, Figure 1 below separates out cash-settled awards and stock-in-lieu of cash compensation (value neutral/value for value), which was originally reported in the Company’s proxy as part of a combined figure along with grants of equity. ISS excludes stock-in-lieu of cash plans and issuance if made on a value neutral basis from its Shareholder Value Transfer (“SVT”) analysis and treats cash-settled awards and stock-in-lieu of cash compensation (value neutral/value for value) as a carve-out in the Burn Rate.
Second, the Company is affirming that as of April 30, 2020, the Company had 5,252 shares available for grant remaining in the Plan. This accounts for shares issued in 2020, predominantly in connection with the 2019 annual incentive plan settlement and related issuance of restricted shares both in lieu of cash payments, as well as other grants. This remaining number of shares is significantly lower than the shares available for grant remaining as of December 31, 2019, which was prior to the Company’s annual incentive plan settlement and related issuance of restricted shares related to 2019. Ultimately, this reduced number of shares available results in a lower SVT calculation, cost of plan assessment, and Burn Rate than ISS had initially calculated.
As additional information to update as of April 30, 2020, for the outstanding stock options of 378,620, the weighted average exercise price is $10.53 and the weighted average remaining contractual life is 2.98 years. At April 30, 2020, for the outstanding restricted shares of 1,626,458, the weighted average remaining amortization period is 2.77 years.
Figure 1 below provides the year by year Full Value Awards by specifically showing and subtracting the number of shares that were issued in lieu of cash in the applicable period, as well as the applicable Burn Rate.
Figure 1. Stock-in-Lieu of Cash | Jan. 1, 2017 - April 30, 2020 | Jan. 1, 2020 - April 30, 2020 | 2019 | 2018 | 2017 | |||||
Total restricted shares awarded | 1,996,811 | 597,070 | 580,453 | 423,113 | 396,175 | |||||
Less restricted stock-in-lieu of cash | 878,611 | 303,879 | 313,796 | 187,613 | 73,323 | |||||
Full value awards | 1,118,200 | 293,191 | 266,657 | 235,500 | 322,852 | |||||
Full value awards/total restricted shares awarded (%) | 56.00 | % | 49.10 | % | 45.94 | % | 55.66 | % | 81.49 | % |
Weighted average diluted common shares outstanding | 27,864,933 | 27,583,519 | 27,550,833 | |||||||
Unadjusted burn rate | 0.96 | % | 0.85 | % | 1.17 | % | ||||
Three year average | 0.99 | % | ||||||||
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Using this updated current number of shares available for grant and clarified information about the portion of the equity allocation that has historically been comprised of value neutral stock-in-lieu of cash, Figure 2 below illustrates the adjustments to the calculation of new + existing shares available for grant and on the calculation of net granted unexercised/unvested shares, as well as basic and full dilution.
Figure 2. Omnibus Incentive Plan | Share Count | Basic Dilution | Full Dilution | ||||||
4/30/2020 | 4/30/2020 | 4/30/2020 | |||||||
Shares outstanding | 29,841,310 | ||||||||
New shares requested under plan amendment | 1,500,000 | 5.03 | % | 4.62 | % | ||||
Existing shares available for grant | 5,252 | 0.02 | % | 0.02 | % | ||||
New + existing shares available for grant | 1,505,252 | 5.04 | % | 4.64 | % | ||||
Outstanding and unexercised stock options | 378,620 | ||||||||
Outstanding and unvested restricted shares | 1,626,458 | ||||||||
Gross granted unexercised/unvested shares | 2,005,078 | ||||||||
Less stock issued in lieu of cash (1/1/2017 - 4/30/2020) | 878,611 | ||||||||
Granted unexercised/unvested shares | 1,126,467 | 3.77 | % | 3.47 | % | ||||
Total share allocation | 2,631,719 | 8.82 | % | 8.10 | % | ||||
Fully diluted shares | 32,473,029 | ||||||||
The Company established the size of the increase to the Plan equity pool by assuming that shares would continue to be used for value neutral stock-in-lieu of cash issuance, consistent with prior years. The Company has not made any adjustments to the 1,500,000 share request in the ISS calculations to reflect this assumption, but using this assumption, the SVT and Burn Rate associated with the additional shares would decline by 33%, as well.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
TRISTATE CAPITAL HOLDINGS, INC. | |
By | /s/ James F. Getz |
James F. Getz | |
Chairman, President and Chief Executive Officer | |
Date: May 20, 2020
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