Fulton Financial Corporation filed SEC Form 8-K: Leadership Update, Financial Statements and Exhibits
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Major Banks
Finance
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On July 23, 2024, Fulton Financial Corporation ("Fulton") issued a press release (the "Press Release") announcing the appointment of Richard Kraemer as Senior Executive Vice President and Chief Financial Officer Designee effective September 3, 2024 and the retirement of Beth Ann L. Chivinski, Fulton's Interim Chief Financial Officer, on December 31, 2024. Mr. Kraemer will serve as Chief Financial Officer Designee until he assumes the role of Chief Financial Officer from Ms. Chivinski in the fourth quarter of 2024. Upon assuming the Chief Financial Officer role, Mr. Kraemer will oversee Fulton's accounting, treasury, corporate development, tax, financial planning and forecasting, and investor relations functions. A copy of the Press Release has been attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
Mr. Kraemer, age 46, most recently served as Chief Banking Officer of Valley National Bank, the principal subsidiary of Valley National Bancorp ("Valley"), overseeing commercial banking in Valley's northern markets from January 2024 to July 2024. Mr. Kraemer previously served as Valley's Executive Vice President, Deputy Chief Financial Officer and Treasurer leading Valley's corporate treasury and corporate finance functions from February 2023 to December 2023, Valley's Executive Vice President, Chief Financial Services Officer from January 2020 to January 2023 and First Senior Vice President – Head of Corporate Finance, Corporate Development and Investor Relations Officer from December 2017 to December 2019. Prior to joining Valley, Mr. Kraemer held portfolio management and analyst positions in institutional investment management, focusing on the credit, banking, mortgage and housing sectors. Mr. Kraemer began his career as a sell-side equity research analyst, focusing on the banking sector.
Fulton entered into an Executive Employment Agreement with Mr. Kraemer, effective September 3, 2024 (the "Employment Agreement"). The Employment Agreement provides for an annual base salary of $550,000.00 to be reviewed annually and eligibility to participate in Fulton's annual cash and equity-based long-term incentive plans. In addition, in connection with his appointment, Mr. Kraemer will receive a cash bonus of not less than $385,000.00 payable in April 2025 for his performance in 2024 and a grant of restricted stock units ("RSUs") equivalent to $750,000.00 as of the grant date, which will vest in three equal annual installments beginning on the first anniversary of the grant date. Payment of the cash bonus and the vesting of the RSUs are conditioned upon Mr. Kraemer being continuously employed by Fulton through the date of payment or vesting.
Pursuant to the Employment Agreement, Mr. Kraemer is also entitled to participate in Fulton's broad-based employee retirement plans, welfare benefit plans, life insurance programs and other benefit programs. The Employment Agreement provides that Mr. Kraemer will also receive such other general executive perquisites as approved from time to time by the Human Resources Committee of Fulton, such as Fulton-paid club memberships and an automobile allowance.
The term of the Employment Agreement will continue until the earliest of: (a) the voluntary termination of, or retirement from, Mr. Kraemer's employment other than for Good Reason (as defined in the Employment Agreement), (b) the termination of Mr. Kraemer's employment for Good Reason, (c) the termination of Mr. Kraemer's employment by Fulton for any reason other than Cause (as defined in the Employment Agreement), (d) the termination of Mr. Kraemer's employment by Fulton for Cause, (e) the termination of Mr. Kraemer's employment with Fulton due to Disability (as defined in the Employment Agreement), or (f) Mr. Kraemer's death. The Employment Agreement will expire, if not terminated earlier under the Employment Agreement, on December 31 of the year in which Mr. Kraemer attains the age of sixty-five (65), and Mr. Kraemer will thereafter only be entitled to post-termination benefits that commenced prior to the expiration of the Employment Agreement.
In the event Mr. Kraemer's employment is terminated during the term of the Employment Agreement by him for Good Reason or by Fulton for any reason other than Cause, death or Disability, then, subject to Mr. Kraemer's execution and non-revocation of a general release of claims in favor of Fulton, Mr. Kraemer shall receive the following severance payments and benefits: (a) his annual base salary in effect immediately prior to the termination for a period of twelve (12) months, (b) any vested but unpaid bonus as of the date of termination, (c) a cash bonus for the fiscal year in which the termination date occurs equal to the payout at the target level established for such fiscal year, pro-rated to the date of termination, and (d) continued eligibility to participate in, or an amount equal to the cost of participating in, Fulton's health and welfare employee benefit plans for twelve (12) months after termination. If Mr. Kraemer receives severance payments under the CIC Agreement (as defined below) at termination of employment, Mr. Kraemer will not be entitled to receive the foregoing severance payments and benefits under the Employment Agreement.
The Employment Agreement contains certain covenants by Mr. Kraemer, including a perpetual confidentiality covenant and non-competition and customer and employee non-solicitation covenants that restrict, respectively, Mr. Kraemer's ability to compete with Fulton and solicit customers and employees of Fulton, in each case until the first anniversary of the termination of his employment with Fulton; provided that the non-competition covenant will not apply upon a termination of employment by Mr. Kraemer for Good Reason or by Fulton other than for Cause.
Fulton also entered into a Change in Control Agreement with Mr. Kraemer, effective September 3, 2024 (the "CIC Agreement"). Pursuant to the CIC Agreement, if, during the period beginning ninety (90) days before a Change in Control (as defined in the CIC Agreement) or twenty-four (24) months after such Change in Control, Mr. Kraemer's employment is terminated by Fulton other than for Cause or he resigns for Good Reason (in each case as defined in the CIC Agreement), then (a) Fulton or its successor will pay Mr. Kraemer an amount equal to two times the sum of (i) his annual base salary in effect immediately before the Change in Control and (ii) the highest annual cash bonus or other cash incentive compensation awarded to him over the past three years, (b) Mr. Kraemer's equity awards will be governed by the terms of the applicable plan and award agreements evidencing such awards, provided that if such plan or agreement is silent on the subject of a change in control, Mr. Kraemer will receive accelerated vesting of all time-based equity awards but his performance-based equity awards will vest in accordance with the terms of the award agreements evidencing the awards, (c) Mr. Kraemer will be eligible to receive an amount equal to the portion of Fulton's contribution to his 401(k), profit sharing, deferred compensation or other similar individual account plan which is not vested as of the date of termination and up to $10,000 for executive outplacement services, (d) Fulton will provide, at its expense, to Mr. Kraemer for up to twenty-four (24) months following termination of employment life, medical, health, accident and disability insurance and a survivor's income benefit in a form, substance and amount which is, in each case, substantially equivalent to that provided to Mr. Kraemer immediately before his termination of employment, and (e) Fulton or its successor will pay Mr. Kraemer an amount equal to two (2) additional years of Fulton retirement plan contributions under each tax qualified or nonqualified defined contribution type of retirement plan in which Mr. Kraemer was a participant immediately prior to his termination of employment and equal to the actuarial present value of two (2) additional years of benefit accruals under each tax qualified or nonqualified defined benefit type of retirement plan in which Mr. Kraemer was a participant immediately prior to his termination of employment.
The CIC Agreement contains certain covenants by Mr. Kraemer, including a perpetual confidentiality covenant and a customer and employee non-solicitation covenant that restricts Mr. Kraemer's ability to solicit customers and employees of Fulton until the first anniversary of the termination of his employment with Fulton.
If any payment due under the CIC Agreement would result in the imposition of an excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended, such payments shall be reduced to the extent necessary to avoid such excise tax imposition.
The foregoing descriptions of the Employment Agreement and CIC Agreement are not complete and are qualified in their entirety by reference to the form of Executive Employment Agreement between Fulton and certain executive officers of Fulton (incorporated by reference to Exhibit 10.1 of the Fulton Current Report on Form 8-K filed January 4, 2018) and the form of Key Employee Change in Control Agreement, between Fulton and certain executive officers of Fulton (incorporated by reference to Exhibit 10.2 of the Fulton Current Report on Form 8-K filed January 4, 2018).
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | ||||
| Press Release dated July 23, 2024 | |||||
| 104 | Cover page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document) | ||||
SIGNATURE
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 hereunto duly authorized.
Date: July 23, 2024 | FULTON FINANCIAL CORPORATION | ||||
| By: /s/ Beth Ann L. Chivinski | |||||
| Beth Ann L. Chivinski | |||||
| Senior Executive Vice President and | |||||
| Interim Chief Financial Officer | |||||