TRISTATE CAPITAL HOLDINGS, INC. (NASDAQ:TSC) Files An 8-K Other Events
Item 8.01 Other Events
TRISTATE CAPITAL HOLDINGS, INC. (NASDAQ:TSC) Files An 8-K 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.
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.
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.
About TRISTATE CAPITAL HOLDINGS, INC. (NASDAQ:TSC)
TriState Capital Holdings, Inc. is a bank holding company. The Company’s subsidiaries include TriState Capital Bank (the Bank), a Pennsylvania chartered bank; Chartwell Investment Partners, Inc. (Chartwell), an investment advisor, and Chartwell TSC Securities Corp. (CTSC Securities). The Company operates through two segments: Bank and Investment Management. The Bank segment provides commercial banking and private banking services through the Bank. The Investment Management segment provides advisory and sub-advisory investment management services to primarily institutional plan sponsors through Chartwell, and also provides distribution and marketing services for Chartwell’s investment products through CTSC Securities. The Company’s cash management services include online balance reporting, online bill payment, remote deposit, liquidity services, wire and Automated Clearing House (ACH) services, foreign exchange and controlled disbursement.