UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
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 §240.14a-12 | ||||
__________________________________
FIRSTSUN CAPITAL BANCORP
(Name of Registrant as Specified in its Charter)
__________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that Apply):
| ☒ | 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 | ||||
FIRSTSUN CAPITAL BANCORP
1400 16
th
Street, Suite 250
Denver, Colorado 80202
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 7, 2025
TO OUR STOCKHOLDERS:
The annual meeting of stockholders of FirstSun Capital Bancorp (the “Company”), will be held on Wednesday, May 7, 2025, at 8:30 a.m. Central Time. This year’s meeting will be a completely virtual meeting of stockholders. You can attend the meeting via the Internet at www.virtualshareholdermeeting.com/FSUN2025 by using the 16-digit control number which appears on the Notice of Internet Availability of Proxy Materials sent to you and the instructions in these proxy materials. This meeting will be held for the following purposes:
1.
to elect the three Class II director nominees named in the proxy statement to each serve a three-year term ending in 2028;
2.
to approve an amended and restated certificate of incorporation to declassify the board of directors;
3.
to approve an amended and restated certificate of incorporation to eliminate supermajority voting requirements for certain amendments to the Company’s certificate of incorporation;
4.
to approve an amended and restated certificate of incorporation to permit the Company’s stockholders to amend the Company’s bylaws by a majority approval;
5.
to approve amended and restated bylaws with changes to conform to the proposed amended and restated certificate of incorporation;
6.
to approve amended and restated bylaws with changes to eliminate supermajority and majority board approval requirements for certain enumerated actions;
7.
to ratify the appointment of Crowe LLP as our independent registered public accounting firm for the year ending December 31, 2025; and
8.
to consider and act upon other matters that may properly come before the meeting or any adjournment thereof.
The board of directors is not aware of any other business to come before the meeting. Stockholders of record at the close of business on March 10, 2025 are the stockholders entitled to vote at the meeting and any and all adjournments or postponements of the meeting.
Whether or not you plan to virtually attend the annual meeting, we urge you to vote now to make sure there will be a quorum for the meeting.
Voting by the Internet is fast and convenient, and your vote is immediately confirmed and tabulated. You may also vote by telephone or by mail by completing, signing, dating and returning a proxy card. If you attend the meeting virtually over the Internet, you may continue to have your shares of common stock voted as instructed in a previously delivered proxy or you may vote your shares of common stock via the Internet during the meeting.
Important Notice Regarding Availability of Proxy Materials for the Annual Meeting:
Our 2025 proxy statement, proxy card and 2024 Annual Report to Stockholders are available free of charge online at www.ir.firstsuncb.com under “Governance Documents / Annual Reports.”
By order of the board of directors
Kelly C. Rackley
Corporate Secretary
Denver, Colorado
March 21, 2025
TABLE OF CONTENTS
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PROPOSAL 1: ELECTION OF DIRECTORS
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EXECUTIVE COMPENSATION
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PROPOSAL 2 TO APPROVE AN AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO DECLASSIFY THE BOARD OF DIRECTORS
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| PROPOSAL 3: TO APPROVE AN AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO ELIMINATE SUPERMAJORITY VOTING REQUIREMENTS FOR CERTAIN AMENDMENTS TO THE COMPANY’S CERTIFICATE OF INCORPORATION | |||||
| PROPOSAL 4: TO APPROVE AN AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO PERMIT THE COMPANY’S STOCKHOLDERS TO AMEND THE COMPANY’S BYLAWS BY A MAJORITY APPROVAL | |||||
| PROPOSAL 5: TO APPROVE AMENDED AND RESTATED BYLAWS WITH CHANGES TO CONFORM THE COMPANY’S BYLAWS TO THE PROPOSED AMENDED AND RESTATED CERTIFICATE OF INCORPORATION | |||||
| PROPOSAL 6: TO APPROVE AMENDED AND RESTATED BYLAWS WITH CHANGES TO ELIMINATE SUPERMAJORITY AND MAJORITY BOARD APPROVAL REQUIREMENTS FOR CERTAIN ENUMERATED ACTIONS | |||||
| APPENDICES | |||||
| APPENDIX A - AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF FIRSTSUN CAPITAL BANCORP | |||||
| APPENDIX B - BYLAWS OF FIRSTSUN CAPITAL BANCORP | |||||
FIRSTSUN CAPITAL BANCORP
1400 16
th
Street, Suite 250
Denver, Colorado 80202
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation by the board of directors of FirstSun Capital Bancorp, a Delaware corporation, of proxies to be voted at the annual meeting of stockholders. The annual meeting is to be held virtually over the Internet, on May 7, 2025 at 8:30 a.m. Central Time, or at any postponements or adjournments of the meeting. Instructions for attending the meeting are included below. FirstSun Capital Bancorp conducts a full-service community banking and trust business through its wholly owned subsidiary, Sunflower Bank, National Association. Our principal executive offices are located at 1400 16th Street, Suite 250, Denver, Colorado 80202.
A copy of our annual report for the year ended December 31, 2024, which includes audited financial statements, is available on our website at www.ir.firstsuncb.com. The Notice of Internet Availability of Proxy Materials was first mailed and this proxy statement was first made available to our stockholders on or about March 21, 2025. As used in this proxy statement, the terms “FirstSun,” “the Company,” “we,” “our” and “us” all refer to FirstSun Capital Bancorp, and its subsidiaries. Additionally, references to the “Bank” and “Sunflower Bank” refer to Sunflower Bank, National Association.
GENERAL INFORMATION ABOUT THE MEETING AND VOTING
Why did I receive a notice regarding the availability of proxy materials on the Internet instead of a full set of proxy materials?
You received a notice of the annual meeting of the Company’s stockholders and notice regarding the availability of proxy materials on the Internet because on March 10, 2025, the record date for the annual meeting, you owned shares of our common stock. Pursuant to the rules adopted by the Securities and Exchange Commission (the “SEC”), we have elected to provide access to our proxy materials over the Internet. Accordingly, we have sent you a Notice of Internet Availability of Proxy Materials (the “Notice”) because our board of directors is soliciting your proxy to vote at the annual meeting to be held on May 7, 2025 at 8:30 a.m. Central Time.
All stockholders will have the ability to access the proxy materials on the website referred to in the Notice or request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice.
We intend to mail the Notice of Internet Availability of Proxy Materials on or about March 21, 2025 to all stockholders of record entitled to vote at the annual meeting.
Will I receive any other proxy materials by mail?
No, you will not receive any other proxy materials by mail unless you request a paper copy of proxy materials. To request that a full set of proxy materials be sent to your specified postal address, please
go to http://www.proxyvote.com, call (800) 579-1639, or send an email to sendmaterial@proxyvote.com. Please have your Notice in hand when you access the website or call, and follow the instructions provided therein. You will need your unique 16-digit control number from your Notice of Internet Availability of Proxy Materials or your proxy card. If you are requesting materials by email, please include in the subject line your unique 16-digit control number from your Notice or proxy card.
What matters will be voted on at the meeting?
You are being asked to vote on the following seven matters:
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the election of the three Class II director nominees named in the proxy statement to each serve a three-year term ending in 2028;
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to approve an amended and restated certificate of incorporation to declassify the board of directors;
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to approve an amended and restated certificate of incorporation to eliminate supermajority voting requirements for certain amendments to the Company’s certificate of incorporation;
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to approve an amended and restated certificate of incorporation to permit the Company’s stockholders to amend the Company’s bylaws by a majority approval;
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to approve amended and restated bylaws with changes to conform to the proposed amended and restated certificate of incorporation;
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to approve amended and restated bylaws with changes to eliminate supermajority and majority board approval requirements for certain enumerated actions; and
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to ratify the appointment of Crowe LLP as our independent registered public accounting firm for the year ending December 31, 2025.
How does the board of directors recommend that I vote?
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“FOR” the election of each of the three Class II director nominees;
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“FOR” the proposal to approve an amended and restated certificate of incorporation to declassify the board of directors;
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“FOR” the proposal to approve an amended and restated certificate of incorporation to eliminate supermajority voting requirements for certain amendments to the Company’s certificate of incorporation;
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“FOR” the proposal to approve an amended and restated certificate of incorporation to permit the Company’s stockholders to amend the Company’s bylaws by a majority approval;
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“FOR” the proposal to approve amended and restated bylaws with changes to conform to the proposed amended and restated certificate of incorporation;
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“FOR” the proposal to approve amended and restated bylaws with changes to eliminate supermajority and majority board approval requirements for certain enumerated actions; and
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“FOR” the ratification of the appointment of Crowe LLP as our independent registered public accounting firm for the year ending December 31, 2025.
How can I attend the annual meeting?
The annual meeting will be held virtually over the Internet. We designed the format of this virtual annual meeting to ensure that our stockholders who attend our annual meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting. Our board members and executive officers will attend the meeting and be available for questions.
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Access to the Audio Webcast of the Meeting
: The live audio webcast of the meeting will begin promptly at 8:30 a.m. Central Time. Online access to the audio webcast will open approximately 15 minutes prior to the start of the meeting to allow time for you to log in and test the computer audio system. We encourage our stockholders to access the meeting prior to the start time to allow ample time to complete the online check-in process.
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Log-in Instructions
: To attend the virtual meeting, login at www.virtualshareholdermeeting.com/FSUN2025. Stockholders will need their unique 16-digit control number which appears on their Notice and the instructions included in these proxy materials.
A complete list of the stockholders entitled to vote at the annual meeting will be made available for inspection by clicking the designated stockholder list link that will appear on your screen. The stockholder list may be accessed at any time during the meeting or any adjournment.
Can I attend the annual meeting as a guest?
Yes. If you are not a stockholder or do not have a control number, you may still access the meeting as a guest, but you will not be able to participate.
How can I ask questions during the meeting?
Stockholders may submit questions in real time during the meeting at www.virtualshareholdermeeting.com/FSUN2025 and entering the 16-digit control number located on your Notice. We intend to respond to all questions submitted during the meeting in accordance with the annual meeting’s Rules of Conduct which are pertinent to the Company and the meeting matters, as time permits. The Rules of Conduct will be posted at the virtual annual meeting forum at
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www.virtualshareholdermeeting.com/FSUN2025. Questions and responses will be grouped by topic and substantially similar questions will be grouped and responded to once.
What can I do if I need technical assistance during the meeting?
If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual annual meeting log-in page.
If I am a stockholder of record, how do I vote?
If you are a stockholder of record, you may:
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Vote via the Internet Before the Meeting:
You may vote via the Internet 24 hours a day, seven days a week, by visiting www.proxyvote.com before the day of the annual meeting.
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Vote by Mail
: If you received one or more proxy cards by mail, mark, sign and date your proxy card and return it in the postage-paid envelope provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717
•
Vote by Telephone
: Call the toll-free number 1-800-690-6903, also located on the proxy card that you received if you requested printed copies of the proxy materials.
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Vote via the Internet During the Meeting
: You may choose to vote electronically via the Internet at www.virtualshareholdermeeting.com/FSUN2025 during the virtual annual meeting. Stockholders will need their unique control number which appears on the Notice (printed in the box and marked by the arrow) and the instructions that accompanied the proxy materials.
Regardless of whether you plan to participate in the audio webcast of the meeting, you are urged to either vote via the Internet before the meeting or sign, date, and return a printed proxy card by mail. If you participate in the audio webcast, you may continue to have your shares of common stock voted as you instructed in a previously delivered proxy.
When you sign and return the enclosed proxy card, or vote via the Internet, you appoint the proxy holder as your representative at the meeting. The proxy holder will vote your shares as you have instructed, ensuring that your shares will be voted whether or not you attend the meeting. Even if you plan to attend the annual meeting, we urge you to complete, sign and return a proxy card, or vote via the Internet, in advance of the annual meeting in case your plans change.
What does it mean if I receive more than one Notice?
It means that you have multiple holdings reflected in our stock transfer records and/or in accounts with stockbrokers. To ensure all of your shares are voted, please respond to each set of voting materials that you receive.
If I hold shares in “street name” through a bank, broker or other nominee, how do I vote?
If you hold your shares in street name and you received the Notice or other proxy materials from your bank, broker or other nominee (collectively, a “broker”), your broker will provide you with instructions for voting your shares. The availability of online voting during the meeting may depend on the voting procedures of the broker that holds your shares. If you have any questions about voting or your control number, please contact the broker that holds your shares.
What if I change my mind after I submit or otherwise return my proxy?
If you are a stockholder of record, you may revoke your proxy and change your vote at any time before the polls close at the annual meeting. You may do this by:
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You may revoke your proxy and change your vote at any time before the final vote at the meeting. If you are a stockholder of record, you may do this by signing and submitting a new proxy card with a later date or by voting by phone or online, either of which must be completed by 11:59 p.m. Eastern Time on May 6, 2025; or by attending the meeting and voting electronically by ballot.
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Attending the meeting alone will not revoke your proxy unless you specifically request your proxy to be revoked.
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If you hold your shares in street name and desire to revoke your proxy, you will need to contact your bank, broker or other nominee to revoke your proxy or change your vote.
What is a broker non-vote?
If you hold your shares in street name, your brokerage firm may vote your shares under certain circumstances. Brokerage firms have authority under stock exchange rules to vote their customers’ unvoted shares on certain “routine” matters. We expect that brokers will be allowed to exercise discretionary authority for beneficial owners who have not provided voting instructions ONLY with respect to Proposal 7, the ratification of Crowe LLP as our independent registered public accounting firm for the year ending December 31, 2025, but not with respect to any of the other proposals to be voted on at the annual meeting. If you hold your shares in street name, please provide voting instructions to your bank, broker or other nominee so that your shares may be voted on all other proposals.
When a brokerage firm votes its customers’ unvoted shares on routine matters, these shares are counted for purposes of establishing a quorum to conduct business at the meeting. If a brokerage firm indicates on a proxy that it does not have discretionary authority to vote certain shares on a particular matter, then those shares will be treated as “broker non-votes.”
What is the quorum requirement for the annual meeting?
We will have a quorum and will be able to conduct the business of the annual meeting if the holders of a majority of our issued and outstanding shares entitled to vote are present in person or by proxy at the annual meeting. On March 10, 2025, the record date, we had
27,753,918
shares of common stock issued and outstanding. Abstentions and broker non-votes are counted as shares present at the meeting for purposes of determining a quorum. Shares will be counted for quorum purposes if they are represented at the meeting for any purpose other than solely to object to holding the meeting or transacting business at the meeting.
How many votes may I cast?
You are entitled to cast one vote for each share of stock you owned on the record date with respect to each of the proposals. Stockholders do not have cumulative voting rights. The Notice indicates the number of shares owned by an account attributable to you.
What happens if any nominee is unable to stand for re-election?
If, prior to the annual meeting, any of the Class II director nominees becomes unable or unwilling to serve as a director, the proxy holders will vote the proxies received by them for the election of any substitute nominee selected by our board of directors. Our board may also elect not to designate a substitute nominee and, instead, provide for a lesser number of directors. The board has no reason to believe any nominee will be unable or unwilling to stand for re-election.
What is the required vote for each proposal?
Assuming a quorum is present, the required vote for each proposal is as follows:
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Proposal 1
: Each director will be elected by a plurality of the votes of the shares present in person or represented by proxy;
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Proposal 2
: The proposal to approve an amended and restated certificate of incorporation to declassify the board of directors requires the affirmative vote of holders of at least two-thirds of the shares having voting power present in person or by proxy at the annual meeting;
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Proposal 3
: The proposal to approve an amended and restated certificate of incorporation to eliminate supermajority voting requirements for certain amendments to the Company’s certificate of incorporation requires the affirmative vote of holders of at least two-thirds of the shares having voting power present in person or by proxy at the annual meeting;
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Proposal 4
: The proposal to approve an amended and restated certificate of incorporation to permit the Company’s stockholders to amend the bylaws by a majority approval requires the affirmative vote of holders of at least two-thirds of the shares having voting power present in person or by proxy at the annual meeting;
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Proposal 5
: The proposal to approve amended and restated bylaws with changes to conform to the proposed amended and restated certificate of incorporation requires the consent of holders of at least two-thirds of the outstanding shares of capital stock of the Company as of the record date;
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Proposal 6
: The proposal to approve amended and restated bylaws with changes to eliminate supermajority and majority board approval requirements for certain enumerated actions requires the consent of holders of at least eighty percent of the outstanding shares of capital stock of the Company as of the record date; and
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Proposal 7
: The ratification of Crowe LLP as our independent registered public accounting firm for the year ending December 31, 2025 requires the affirmative vote of stockholders, represented in person or by proxy, representing a majority of the votes actually cast on this proposal.
Abstentions and broker non-votes will not affect the outcome of voting with respect to the election of directors or Proposal 7, ratification of Crowe LLP as the Company’s independent registered public accounting firm for 2025. Abstentions and broker non-votes will have the effect of a vote against Proposal 2, Proposal 3, Proposal 4, Proposal 5, and Proposal 6.
All valid proxies that we receive will be voted in accordance with the instructions indicated in such proxies. As noted above, if you hold your shares in street name through a broker and you do not give voting instructions, your broker is not permitted to vote your shares on any proposal other than Proposal 7, which is the only routine proposal on the agenda. If no instructions are indicated in an otherwise properly executed proxy, it will be voted “FOR” each of the proposals described in this proxy statement. If any other matters are presented at the annual meeting, the persons named as proxies on the enclosed proxy will have discretionary authority to vote for you on those matters.
Where do I find the voting results for the annual meeting?
If available, we will announce preliminary voting results at the meeting. The voting results will also be disclosed in a Form 8-K filed with the SEC within four business days of the meeting.
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PROPOSAL 1:
ELECTION OF DIRECTORS
Our board of directors is currently comprised of nine directors who are divided into three classes designated as Class I, Class II, and Class III with approximately equal in number, serving staggered three-year terms. One class of directors is elected by our stockholders at each annual meeting to serve from the time of their election until the third annual meeting of stockholders following their election. As a result, the terms of only approximately one-third of our board members expire at each annual meeting. However, Proposal 2, if approved by our stockholders at this annual meeting, would amend our certificate of incorporation to declassify the board by the 2028 annual meeting of our stockholders, at which time all directors would be elected annually to serve until the next annual meeting of our stockholders. See Proposal 2 for additional details.
Each of the nominees for election to Class II is currently a director of the Company. Following a review and recommendation of nomination from our Nominating and Governance Committee and pursuant to the director designation rights of certain stockholders, our board has renominated each of our Class II directors, Neal E. Arnold, David W. Levy, and Kevin T. Hammond, to serve as Class II directors for a three year-term expiring at our 2028 annual meeting and until their respective successors are duly elected and qualified.
Class II Director Nominees
| Name | Age | Served as Director Since | ||||||||||||
| Neal E. Arnold | 65 | 2017 | ||||||||||||
| David W. Levy | 68 | 2017 | ||||||||||||
| Kevin T. Hammond | 44 | 2022 | ||||||||||||
The Class II directors will be elected by a plurality of the votes of the holders of shares present in person or represented by proxy at the annual meeting and entitled to vote on the election of directors. The three nominees receiving the highest number of affirmative votes will be elected. There is no cumulative voting with respect to the election of directors. Proxies cannot be voted for a greater number of persons than the number of nominees named in this proxy statement.
The board of directors recommends that you vote “FOR” each of the above Class II director nominees.
Set forth below is information concerning our other directors, whose term of office will continue after the annual meeting, including their age and year first elected or appointed as a director.
Continuing Directors
| Name | Age | Served as Director Since | ||||||||||||
| Class III (term expires 2026) | ||||||||||||||
| Diane L Merdian | 65 | 2017 | ||||||||||||
| Paul A. Larkins | 64 | 2019 | ||||||||||||
| John S. Fleshood | 62 | 2025 | ||||||||||||
| Class I (term expires 2027) | ||||||||||||||
| Mollie H. Carter | 62 | 2017 | ||||||||||||
| Beverly O. Elving | 71 | 2021 | ||||||||||||
| Isabella Cunningham | 82 | 2022 | ||||||||||||
As a result of Chris C. Casciato’s resignation from the board, effective as of December 19, 2024, the board had a vacancy in Class III. Following a review and recommendation from the Nominating and Governance Committee, on March 5, 2025 the board appointed John S. Fleshood to fill the vacancy and serve as a Class III director to serve the remaining Class III director term ending in 2026.
In addition, under the Company’s Stockholders’ Agreement (which has now been terminated), Southwest Banking Partners, L.P. (“SWBP”) was entitled to nominate one Class III director for election to the board; however, SWBP elected not to exercise its right to nominate a director. Accordingly, the board had an additional vacancy in Class III.
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All directors will hold office for the terms indicated, or until their earlier death, resignation, removal or disqualification and until their respective successors are duly elected and qualified. No nominee, member of the board of directors or executive officer is related to any other nominee, member of the board of directors or executive officer.
Certain directors have been nominated for election and serve on our board of directors pursuant to the provisions of a Stockholders’ Agreement between FirstSun and certain of our stockholders which was terminated in its entirety by the parties to the agreement as of February 21, 2025. While no stockholder has any rights remaining under the Stockholders’ Agreement, certain members of our board of directors were previously nominated for election in accordance with a stockholder’s rights provided by the Stockholders’ Agreement. The following board nominees and ongoing directors were nominated to the board by a stockholder pursuant to the Stockholders’ Agreement, each of whom own 5% or more of the shares of our common stock:
Director Nominees:
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Neal E. Arnold, Class II director nominee, was nominated by the Dana Hale Nelson Trusts;
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Kevin T. Hammond, Class II director nominee, was nominated by JLL FCH Holdings I, LLC; and
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David W. Levy, Class II director nominee, was nominated by the John J. Hale Trust.
Continuing Directors, previously nominated:
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Mollie H. Carter, Class I director, nominated by the Mollie Hale Carter Trusts;
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Beverly O. Elving, Class I director, nominated by the Karen Hale Young Trusts;
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Paul A. Larkins, Class III director nominated by Aquiline SGB Holdings LLC; and
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Diane L. Merdian, Class III director, nominated by the Max Alan Hale Trusts.
See “Corporate Governance and the Board of Directors - Certain Relationships and Related Party Transactions – Other Relationships– Stockholders’ Agreement.”
Director Experience
Biographical information regarding each of our director nominees and continuing directors is set forth below, including the particular experience, qualifications, attributes or skills that led the board to conclude that each member is qualified to serve on the board and any committee he or she serves.
Class II Director Nominees
Neal E. Arnold
is the current President and Chief Executive Officer of the Company and Sunflower Bank and also serves as the Chief Operating Officer of the Company. He was appointed as President and Chief Executive Officer of the Company on April 1, 2022, and has held the positions of President and Chief Executive Officer of Sunflower Bank and Chief Operating Officer of the Company since 2018. Mr. Arnold served as Executive Vice President of Fifth Third Bancorp and Fifth Third Bank from 1998 to 2005, and as Chief Financial Officer of Fifth Third Bancorp and Fifth Third Bank from 1997 to 2005. Before that, he served as Treasurer of Fifth Third Bancorp and Fifth Third Bank, and as Senior Vice President of Fifth Third Bank. Prior to joining Fifth Third, he served as Chief Financial Officer and Chief Operating Officer of Midwestern Community Bank from 1980 to 1989. Mr. Arnold’s qualifications to serve as a director include his substantial C-suite leadership experience and as a chief financial officer of a large public company. Mr. Arnold has over 30 years of experience completing numerous regulatory compliance consulting engagements for bank boards.
David W. Levy
is the former Managing Director at Pickwick Capital Partners, a position he held from 2012 to 2025. He serves as a director of Old Dominion National Bank since 2013, and as a director of the holding company ODNB Financial Corp since 2022. He has served as Vice Chairman of Investment Banking and Co-Head of the Financial Institutions Group at Cowen Company from 2009 to 2010 and served as Senior Managing Director at Bear Stearns from 2005 to 2008. Mr. Levy spent over 23 years at Citigroup Global Markets as a Managing Director and Head of the Bank and Financial Services Group, and Salomon Brothers Inc. as a Managing Director and Co-Head of the Financial Institutions Department. Mr. Levy's qualifications to serve as a director include his leadership experience, managing director positions with globally recognized investment banking firms, and prior service as a member of the Audit and Compensation and Succession Committees of another financial institution.
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Kevin T. Hammond
previously served as a director of Pioneer Bancshares, Inc. from 2016 until April 2022, prior to when he joined the Company board. Mr. Hammond joined JLL Partners in 2004 and is a Managing Director, where he focuses on new private equity investments and managing the firm’s portfolio of companies. He serves on JLL Partners’ management and investment committees. Prior to joining JLL, he worked in merger advisory and private equity at Greenhill Co. In addition, he previously served as a director of FC Holdings, Inc. and First Community Bank, N.A. Mr. Hammond’s qualifications to serve as a director include his experience in managing financial transactions and extensive past and current director service on corporate boards.
Continuing Directors
Mollie H. Carter
is the current Executive Chair of the Company and Bank, a position she has held since April 1, 2022. Prior to being named Executive Chair, she served as Chair of both the Company and Bank boards since 1996. Ms. Carter served as President and Chief Executive Officer of the Company from 2005 until April 1, 2022, and served as President and Chief Executive Officer of Sunflower Bank from 2005 until 2018. She served as a director of Evergy, Inc. and its predecessor, Westar Energy, a publicly traded company, from 2003 to 2022, including as Chair of the Compensation and Succession Committee. She previously served as a director of Archer-Daniels-Midland Company, a publicly traded company, from 1996 to 2017. Ms. Carter is also a Director of Lockton Companies and serves on its Nominating Governance Committee and the Audit Committee. Ms. Carter's nonprofit service includes the NPR Foundation Board of Trustees since 2020, and the Rocky Mountain Public Media Board of Directors since 2023. Ms. Carter’s qualifications to serve as our Executive Chair include her substantial leadership experience as a chief executive officer, her financial expertise and her significant experience serving as a director of a large public company. Ms. Carter also has extensive experience with corporate governance, compensation matters, and with complicated financial regulatory and banking compliance environments.
Isabella Cunningham
joined the Company’s board as a result of the merger with Pioneer effective April 1, 2022. Dr. Cunningham served as a director of Pioneer and Pioneer Bank from 2013 until April 2022. She served as a Director of Viad Corp. and as a member of its Corporate Governance Nominating Committee and its Human Resources Committee, from 2006 until 2019. Dr. Cunningham holds the Stan Richards Chair in Advertising and Public Relations at the University of Texas at Austin. She retired form her position as the Director of the Stan Richards School in 2014 and is now also the Academic Director of the Tower Fellows Program at The University. Dr. Cunningham still serves on a number of academic committees and is a member of the School Budget Council. She also served as a member of the college Administrative Council, the University Curricular Task Force, the UT Presidential Enrollment Task Force and is a member of the Executive Council of the Latin American Studies School. Dr. Cunningham has served as director on public and private company boards, and on a number of non-profit boards and non-profit institutions including St. Edward’s Board of Trustees, the National Museum of Natural History (Smithsonian) and the Susan G. Komen Breast Cancer Foundation. Dr. Cunningham is a nationally recognized expert in advertising and intellectual property. Dr. Cunningham’s qualifications to serve as a director include her leadership and prior extensive board service, with over 30 years of experience and a variety of board engagements.
Beverly O. Elving
is the former Director of Corporate Accounting, Vice President Controller, and Sr. Vice President of Finance at Applebee’s International from 1998 to 2012. She served as the Chief Financial Officer of Integrated Medical Resources from 1996 to 1998, and additionally, Ms. Elving served as Vice President Finance Accounting for the FDIC/Resolution Trust Corporation from 1990 to 1996. Between 1981 and 1996, Ms. Elving gained senior accounting, auditor, and Certified Public Accountant experience at Jackson County, Missouri, and Arthur Andersen Co. Ms. Elving’s experience includes her service as a director of several non-profit boards including St. Luke’s Health System-Bishop Spencer Place since 2019 and as board president since 2022, as well as Heart of America Shakespeare Festival as a director since 2019 and as board co-president 2021 to 2023. Ms. Elving’s qualifications to serve as a director include her accounting, finance and C-suite leadership experience including oversight of public companies and government entities.
John S. Fleshood
has served as Executive Vice President and Chief Operating Officer of TriCo Bancshares since 2016, a position from which he plans to retire in December of 2025. Previously, Mr. Fleshood served in a variety of management positions at Wintrust Financial Corporation, a financial holding company based in Rosemont, IL from 2005 to 2016, including most recently as Executive Vice President and Chief Risk Officer. Mr. Fleshood also served as Senior Vice President and Chief Financial Officer of the Chicago affiliate of Fifth Third Bank from 2001 to 2005, and as Vice President and Manager of the Treasury Division from 1992 to 2001. His qualifications to serve as a director include C-suite leadership, enterprise risk, bank level and public financial holding company atmospheres, as well as extensive MA and organic growth experiences.
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Paul A. Larkins
is a Senior Advisor with Aquiline Capital Partners, a position he has held since 2018. He also serves as a board member of Amur Equipment Finance, since 2019. He previously served as board chair of LERETA, LLC, and as an advisor to Tarsadia Investments, both from 2019 to 2021. Mr. Larkins served as President and director of SquareTwo Financial Corporation, positions he held from 2009 to 2016. SquareTwo Financial Corporation filed for bankruptcy under Chapter 11 in March 2017. From 1998 to 2009, he served as the Chief Executive Officer and President of Key National Finance in Superior, Colorado. His experience includes service as a Senior Executive Vice President of Key Bank USA and KeyCorp Leasing Ltd., and regional and national roles with USL Capital and IBM. Mr. Larkins' qualifications to serve as a director include his extensive external board and leadership experience with bank, specialty finance (leasing, marine, recreational vehicles, education, home equity, and auto dealer finance), as well as private equity institutions.
Diane L. Merdian
is the former Chief Financial Officer of Redwood Trust, Inc, a position she held from 2010 to 2012, having previously served on Redwood’s board of directors from 2008 to 2009. From 1984 to 2008, Ms. Merdian was an equity analyst covering financial companies, working at Investment Banking firms and Institutional Investment firms. She primarily analyzed banks, focusing on valuation, strategy, and economics vs. accounting. As a Senior Vice President and Managing Director at Keefe, Bruyette Woods from 2003 to 2008, Ms. Merdian led Bank Strategy and was head of Large-cap banks. She led the bank research effort at Morgan Stanley from 2000 through 2001 and led the bank research team at Montgomery Securities from 1995 to 2000. Ms. Merdian has also held equity analyst positions at Salomon Brothers, Kemper, Wellington Management, and Salomon Smith Barney. She began her financial career as an Economic Research Associate at the Federal Reserve Bank of Kansas City, focused on monetary policy. Ms. Merdian’s qualifications to serve as a director include her C-suite leadership and over 20 years of experience as an equity analyst in the financial industry. Her strengths include her insight into strategy, valuation, management, and economics vs. accounting, with additional experience in Audit and Compensation matters.
Biographical Information for Executive Officers
| Name | Title | |||||||
| Neal E. Arnold | Chief Executive Officer and President of FirstSun and Sunflower Bank and Chief Operating Officer of FirstSun | |||||||
| Robert A. Cafera, Jr. | Sr. Executive Vice President, Chief Financial Officer of FirstSun and Sunflower Bank | |||||||
| Jennifer L. Norris | Executive Vice President, Chief Credit Officer, and Chief Operating Officer of Sunflower Bank | |||||||
| Laura J. Frazier | Executive Vice President, Chief Administrative Officer of FirstSun and Sunflower Bank | |||||||
| Mollie H. Carter | Executive Chair of the FirstSun and Sunflower Bank Boards | |||||||
Because Mr. Arnold and Ms. Carter also serve on our board of directors, we have provided their biographical information above. Biographical information for each of Mr. Cafera, Ms. Norris, and Ms. Frazier is provided below:
Robert A. Cafera, Jr.
currently serves as Senior Executive Vice President and Chief Financial Officer of the Company and the Bank, positions he has held since 2012. Prior to joining the Company and Bank, he served in different roles at Fifth Third Bank, including as Senior Vice President and Chief Financial Officer of the Commercial Bank, and before that as its Assistant Controller. Before joining Fifth Third Bank, he was a Senior Manager with Arthur Andersen Co. for about ten years.
Laura J. Frazier
currently serves as Executive Vice President and Chief Administrative Officer of the Company and the Bank, positions she has held since 2020. Ms. Frazier joined the Bank in 2013 and served as its Human Resources Director until 2016, when she then served as its Chief Human Resources Officer until assuming her current role in 2020. From 2010 to 2013, Ms. Frazier served as the Deputy Director of Human Resources for the Ohio Department of Developmental Disabilities. Her experience also includes eight years from 2002-2010, as the Director of Labor Relations for the Ohio Department of Developmental Disabilities.
Jennifer L. Norris
currently serves as the Executive Vice President and Chief Credit Officer of the Company and the Bank, a position she has held since 2020, as well as Chief Operating Officer of the Bank, since November 2024. She held various credit management and leadership roles at Wells Fargo Bank and its predecessor Wachovia Bank from 1997 to 2020. She also maintains the Chartered Financial Analyst designation.
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CORPORATE GOVERNANCE AND THE BOARD OF DIRECTORS
General
Currently, the board of directors is made up of nine directors, approximately one-third of whom are elected by the holders of our common stock every three years to serve staggered terms. In accordance with our corporate governance procedures, the board does not involve itself in our day-to-day operations, which are monitored by our executive officers and management. Our directors fulfill their duties and responsibilities by attending regular meetings of the board and through committee membership, which is discussed below.
Director Attendance
The Company’s board of directors held 12 meetings during 2024 Each of our directors attended at least 75% of these meetings and the meetings of the committees on which they served. We typically schedule a board meeting in conjunction with our annual meeting and expect that our directors will attend our annual meeting. Last year, all of our then serving directors attended our annual meeting. We expect each director to attend our annual meeting of stockholders, although we recognize that conflicts may occasionally arise that will prevent a director from attending an annual meeting.
Code of Business Conduct and Ethics
The board of directors believes that it is important to encourage the highest level of corporate ethics and responsibility. Among other things, the board adopted a Code of Business Conduct and Ethics, which applies to all of our directors, officers and employees, as well as a procedure for allowing employees to anonymously report any problems they may detect with respect to our financial reporting. The Code of Business Conduct and Ethics, as well as other information pertaining to our committees, corporate governance and reporting with the Securities and Exchange Commission, can be found on our website at www.ir.firstsuncb.com We will post on our website any amendments to, or waiver from, the Code of Business Conduct and Ethics as it applies to any director or officer to the extent required to be disclosed by applicable NASDAQ or SEC requirements.
Director Independence
The board of directors has standing Audit, Nominating and Governance, and Compensation and Succession Committees, each of which is made up solely of directors who are deemed to be “independent” under the rules of NASDAQ. NASDAQ’s independence rules include certain instances that will preclude a director from being deemed independent and the board reviews those requirements each year to determine a director’s status as an independent director. The board has determined that all of the directors and nominees are “independent” as defined by the NASDAQ Stock Market, with the exception of Mr. Arnold and Ms. Carter, each of whom is an executive officer, as noted below.
Committees of the Board of Directors
Our board of directors has established standing committees in connection with the discharge of its responsibilities. These committees include the Audit Committee, the Compensation and Succession Committee, the Nominating and Governance Committee, the Risk Committee, and the Executive Committee. The board of directors of Sunflower Bank, the Company’s wholly-owned bank subsidiary, has also established a Trust and Fiduciary Committee. Actions taken by each committee of the board are reported to the full board, usually at its next meeting. The principal responsibilities of each of the Audit Committee, the Compensation and Succession Committee, and the Nominating and Governance Committee are described below. Our board committees are currently composed as follows (M — member; C — chair):
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Current Board Committee Assignments
|
Audit
|
Compensation and Succession
|
Nominating and Governance
|
Risk
|
Trust and Fiduciary*
|
Executive
|
|||||||||||||||||||||||||||||||||
| Mollie H. Carter |
|
|
M |
M
|
C
|
|||||||||||||||||||||||||||||||||
| Neal E. Arnold |
|
|
M
|
|||||||||||||||||||||||||||||||||||
| Isabella Cunningham |
M
|
M
|
M
|
C
|
M
|
|||||||||||||||||||||||||||||||||
| Beverly O. Elving |
C
|
|
M
|
|
M
|
|||||||||||||||||||||||||||||||||
| Kevin T. Hammond |
|
|
|
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||||||||||||||||||||||||||||||||||
| Paul A. Larkins |
|
|
|
|
|
|||||||||||||||||||||||||||||||||
| David W. Levy |
M
|
M
|
C
|
|
M
|
M
|
||||||||||||||||||||||||||||||||
| Diane L. Merdian |
M
|
C
|
M
|
|
|
M
|
||||||||||||||||||||||||||||||||
| John S. Fleshood | C | M | ||||||||||||||||||||||||||||||||||||
|
* Bank-level committee
|
||||||||||||||||||||||||||||||||||||||
Assuming the election or re-election of the individuals nominated for election by our stockholders at the annual meeting, the board committees will be composed as follows:
Anticipated Board Committee Assignments After Annual Meeting
|
Audit
|
Compensation and Succession
|
Nominating and Governance
|
Risk
|
Trust and Fiduciary*
|
Executive
|
|||||||||||||||||||||||||||||||||
| Mollie H. Carter |
|
|
M |
M
|
C
|
|||||||||||||||||||||||||||||||||
| Neal E. Arnold |
|
|
M
|
|||||||||||||||||||||||||||||||||||
| Isabella Cunningham |
M
|
M
|
M
|
C
|
M
|
|||||||||||||||||||||||||||||||||
| Beverly O. Elving |
C
|
|
M
|
|
M
|
|||||||||||||||||||||||||||||||||
| Kevin T. Hammond |
|
|
|
|
||||||||||||||||||||||||||||||||||
| Paul A. Larkins |
|
|
|
|
|
|||||||||||||||||||||||||||||||||
| David W. Levy |
M
|
M
|
C
|
|
M
|
M
|
||||||||||||||||||||||||||||||||
| Diane L. Merdian |
M
|
C
|
M
|
|
|
M
|
||||||||||||||||||||||||||||||||
| John S Fleshood | C | M | ||||||||||||||||||||||||||||||||||||
|
* Bank-level committee
|
||||||||||||||||||||||||||||||||||||||
Audit Committee
Our board of directors has established a standing Audit Committee as required by the rules of the NASDAQ Stock Market. The Audit Committee assists the board in carrying out its oversight responsibilities for our financial reporting process, audit process and internal controls. The Audit Committee is solely responsible for the pre-approval of all required audit and non-audit services to be provided by our independent registered public accounting firm and exercises its authority to do so in accordance with a policy that it has adopted. The committee’s duties, responsibilities and functions are further described in its charter, which is available on our website at www.ir.firstsuncb.com, in the “Governance Documents” section. You can request a copy of the committee’s charter by sending a written request to the Corporate Secretary via e-mail to corporate.secretary@firstsuncb.com.
The members of our Audit Committee during 2024 and as of the date of this proxy statement were Ms. Elving (who serves as Chair), Mr. Levy, and Ms. Merdian each of whom is deemed to be an independent director under SEC Rule 10A-3 and NASDAQ’s listing requirements. The Audit Committee met 10 times in 2024.
The board has determined that Ms. Elving has (i) an understanding of generally accepted accounting principles and financial statements; (ii) the ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves; (iii) experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by our financial statements, or experience actively supervising one or more persons engaged in such activities; (iv) an understanding of internal control over financial reporting; and (v) an understanding of audit committee functions. Therefore, our board of directors has determined that
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Ms. Elving is an “audit committee financial expert,” as such term is defined by the applicable regulations of the SEC and is “financially sophisticated” as defined by the applicable rules and regulations of the NASDAQ Stock Market. The designation of a person as an audit committee financial expert does not result in the person being deemed an expert for any purpose, including under Section 11 of the Securities Act of 1933, as amended. The designation does not impose on the person any duties, obligations or liability greater than those imposed on any other audit committee member or any other director and does not affect the duties, obligations or liability of any other member of the Audit Committee or board of directors.
The board believes that each of the other members of the Audit Committee possesses knowledge and experience sufficient to understand the complexities of our financial statements. Ms. Elving and other audit committee members met on a quarterly basis during 2024 with our independent registered public accounting firm.
To review our annual Audit Committee report, please see
“Audit Committee Report.”
Compensation and Succession Committee
Our board of directors has established a standing Compensation and Succession Committee, which consists entirely of independent directors as defined by the applicable rules and regulations of the NASDAQ Stock Market. The Compensation and Succession Committee reviews the performance of our executive officers and establishes their compensation levels. The committee also has the authority, among other things, to:
•
Review and approve the compensation of all executive officers and recommend the compensation of the Chief Executive Officer and Executive Chair to the independent directors of the board for review and approval by such independent directors;
•
Approve performance goals and objectives relevant to the chief executive officer and evaluate, at least annually, the performance of the chief executive officer; review and approve (and administer) supplemental retirement benefit plans, employment agreements, and any severance arrangements or plans, including any benefits provided in connection with a change in control for our executive officers;
•
Administer our incentive compensation plans and equity-based plans;
•
In consultation with our chief executive officer, review our management succession planning; and
•
Review and evaluate the risks arising from our compensation policies and practices to determine whether our incentive compensation policies and practices are likely to have a material adverse effect on the Company.
The committee’s duties, responsibilities and functions are described more fully in its charter, which is available on our website at www.ir.firstsuncb.com in the “Governance Documents” section. You can request a copy of the committee’s charter by sending a written request to the Corporate Secretary via e-mail to corporate.secretary@firstsuncb.com.
The members of our Compensation and Succession Committee during 2024 and as of the date of this proxy statement were Ms. Merdian (Chair), Ms. Cunningham, and Mr. Levy. The board determined that each member of the committee was an independent director under NASDAQ’s listing requirements. The Compensation and Succession Committee met 12 times in 2024.
The Compensation and Succession Committee has the authority under its charter to select, or receive advice from, advisors (including compensation consultants). In 2024, the committee continued its engagement of Meridian Compensation Consultants (“Meridian”), as independent advisors working for the committee to coordinate with management as directed by the committee to provide a critical review of management’s proposals, while providing both content and process knowledge, expertise and objectively determined insights. In addition, Meridian provides the committee with pay for performance analysis for executives, peer group review and development, program design and financial modeling, along with technical, competitive market, regulatory and industry updates. The Company paid $134,647 in fees to Meridian in 2024. The Compensation and Succession Committee assessed the independence of Meridian taking into consideration all factors specified in NASDAQ listing standards. Based on this assessment, the Compensation and Succession Committee determined the engagement of Meridian did not raise any conflict of interest.
The charter of the Compensation and Succession Committee authorizes the Compensation and Succession Committee, subject to applicable law, rules, and regulations, to form and delegate authority to subcommittees as deemed appropriate by the committee, including, but not limited to, a subcommittee composed of one or more members of the board or officers of the Company to grant stock awards under the Company’s equity incentive plans.
15
Compensation Committee Interlocks and Insider Participation
None of the members of our Compensation and Succession Committee is or was an officer or employee of the Company. In addition, none of our executive officers serves or has served as director or as a member of the 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 and Succession Committee.
Nominating and Governance Committee
Our board of directors has established a standing Nominating and Governance Committee, which consists entirely of independent directors as defined by the applicable rules and regulations of the NASDAQ Stock Market. The Nominating and Governance Committee continued its engagement of Meridian Compensation Consultants, as independent advisors to assist the committee in determining and evaluating director compensation. The Nominating and Governance Committee reviews the qualifications of, and recommends to the board for nomination, candidates to stand for election at each annual meeting or to fill vacancies on the board as they may occur during the year. The committee also reviews on at least an annual basis whether each director is “independent” under NASDAQ listing requirements. Additionally, the Nominating and Corporate Governance Committee is responsible for reviewing our policies, procedures and structure as they relate to corporate governance. The committee’s duties, responsibilities and functions are further described in its charter, which is available on our website at www.ir.firstsuncb.com, in the “Governance Documents” section. You can request a copy of the committee’s charter by sending a written request to the Corporate Secretary at 1400 16th Street, Suite 250, Denver, Colorado 80202, or by sending a request via e-mail to corporate.secretary@firstsuncb.com.
Pursuant to its charter, the Nominating and Governance Committee determines and establishes, and submits to the board for approval, certain criteria to be considered in selecting nominees for directors of the Company. Pursuant to this established criteria, directors of the Company must, at a minimum, possess the following qualities:
•
the highest levels of personal and professional ethics, integrity and values;
•
a strong personal and professional reputation;
•
professional experience that adds to the mix of the board as a whole;
•
the ability to exercise sound, independent business judgment;
•
freedom from conflicts of interest that would interfere with their ability to discharge their duties or that would violate any applicable laws or regulations;
•
demonstrated leadership skills
•
the willingness and ability to devote the time necessary to perform the duties and responsibilities of a director; and
•
relevant expertise and experience, and the ability to offer advice and guidance to executive management based on that expertise and experience.
In evaluating director candidates, the Nominating and Governance Committee considers an appropriate balance of experience, skills and background and considers:
•
whether the candidate possesses the qualities described above;
•
whether the candidate qualifies as an Independent Director;
•
the candidate’s educational and professional background, including relevant past and current employment affiliations and board affiliations;
•
the candidate’s management experience in complex organizations and experience in dealing with complex business problems;
•
the candidate’s other commitments, such as employment and other board positions;
•
the likelihood of obtaining regulatory approval of the candidate, if required;
16
•
whether the candidate would qualify under the Company’s guidelines for membership on the Audit Committee, the Compensation and Succession Committee or the Nominating and Governance Committee; and
•
if an incumbent director, whether the director attended at least 75% of the board meetings during the past year and attended at least 75% of the committee meetings of which he or she is a member during the past year, subject to the committee’s ability to make exceptions to the attendance requirement as individual circumstances warrant.
While we do not have a separate diversity policy, the Nominating and Governance Committee does consider the diversity of its directors and nominees in terms of knowledge, experience, skills, expertise and other demographics which may contribute to the board.
All of the nominees for election as directors at the 2025 annual meeting were recommended for nomination by the Nominating and Governance Committee The committee did not receive any formal nominations for directors from our common stockholders.
The members of the Nominating and Governance Committee in 2024 were Mr. Levy (Chair), Ms. Cunningham, and Ms. Merdian. The board determined that each member of the committee was an independent director under NASDAQ’s listing requirements. The Nominating and Governance Committee met 9 times in 2024.
Board and Committee Evaluation Process
Under its charter, our Nominating and Governance Committee annually reviews and assesses the performance of our board of directors, including each committee of the board, and makes recommendations for areas of improvement as it deems appropriate. Each of the key committees of the board of directors (Audit, Compensation and Succession, and Nominating and Governance) also performs an annual assessment of its performance and charter.
Common Stock Ownership and Retention Guidelines for Non-Employee Directors
In order to align the interests of board members and stockholders, we require each non-employee director to develop an equity stake in the company. The Nominating and Governance Committee is responsible for monitoring compliance with these stock ownership and retention guidelines.
As of December 31, 2024, non-employee directors were expected to acquire, and hold during their service as board members, shares of our common stock equal in value to at least three times the annual cash retainer for non-employee directors (total of Company and Bank), not including fees for committee service. Individuals who acquire shares of common stock under our equity-based incentive plans must hold at least 100% of all net after-tax acquired shares until these stock ownership guidelines are satisfied. In March of 2025, the Nominating and Governance Committee increased the stock ownership and retention guidelines to at least five times the annual cash retainer for non-employee directors (total of Company and Bank), not including fees for committee service.
The following share types are included under these guidelines: shares directly owned, family-owned shares, retirement plan shares, unvested time-based restricted stock, and affiliated funds. Stock options that are unexercised, regardless of their vesting status and in-the-money value, are not counted toward satisfaction of these guidelines. Unvested performance-based restricted stock is also not counted toward stock ownership. Shares held in a margin account or pledged as collateral for a loan as of the date of the adoption of these stock ownership guidelines will not count toward satisfaction of these guidelines.
As of December 31, 2024, all of our non-employee directors were in compliance with these guidelines. We anticipate our directors will be in compliance with the increased guidelines as they continue service.
Board Leadership Structure
The roles of Executive Chair of the board and Chief Executive Officer are separate positions within our Company, both of which are under compensation agreements with our Company. We believe certain synergies are gained through the roles of the Executive Chair and Chief Executive Officer by facilitating efficient and effective flow of information between management and the board of directors. Further, the board believes the roles of the Executive Chair, Chief Executive Officer, in concert with the Lead Independent Director appointed by the board, serves the interests of stockholders by striking a balance between the development of corporate strategies and independent oversight of management. As discussed more fully below, we have appointed Ms. Merdian as our Lead Independent Director.
17
The “Lead Independent Director,” assists the board of directors in assuring effective corporate governance and serves as chairman when the board of directors meets in independent director sessions. Our board of directors designated Ms. Merdian to serve as Lead Independent Director. In this role, she may call and preside over executive sessions of the independent directors, without management present, as she deems necessary, serves as a liaison between the executive chair or the chief executive officer and the independent directors on certain matters, and has power to provide formal input on the agenda for meetings of the board. The Nominating and Governance Committee reviews this appointment annually and the full board has the opportunity to ratify the committee’s selection.
Our board of directors believes this structure is appropriate for our Company because our Chief Executive Officer has the best knowledge of the day-to-day operations of the Company and can make recommendations to the board based on his ongoing experience and “hands on” running of the Company. In addition, the Lead Independent Director, who is an independent member of our board, provides independent leadership within our board that strengthens its effectiveness and oversight of our business.
Board’s Role in Risk Oversight
General
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 general economic risks, credit risks, market risks, regulatory risks, strategic risks, cyber security risk, reputational risks, and others, such as the impact of competition. Management is responsible for the day-to-day management of the risks we face, while the board, as a whole and through its committees, 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.
Our Enterprise Risk Management program has been established to assess, measure and monitor credit risk, market risk, liquidity and funding risk, capital adequacy, strategic risk, legal and compliance risk, reputation risk and operational risks. While the full board of directors is charged with ultimate oversight responsibility for risk management, various committees of the board and members of management also have responsibilities with respect to our risk oversight. In particular, the Risk Committee’s responsibilities include periodically reviewing and approving our Enterprise Risk Management program and Risk Appetite framework; identifying emerging risks and ensuring there are plans to mitigate risks identified; reviewing stress testing activities surrounding credit, liquidity, and capital, ensuring compliance with our Risk Appetite framework; and reviewing results of examinations by regulatory agencies and tracking remediation of reported findings. The board’s Compensation and Succession Committee monitors and assesses the various risks associated with compensation policies and individual incentive plans and oversees incentives to ensure the level of risk-taking is consistent with our overall strategy.
We believe that establishing the right “tone at the top” and providing for full and open communication between management and the board of directors are essential for effective risk management and oversight. Our executive management meets regularly with our other senior officers to discuss strategy and risks facing the Company. Senior officers contribute to Enterprise Risk reporting to the board and attend many of the board meetings, or, if not in attendance, are available to address any questions or concerns raised by the board on risk management-related and any other matters. Additionally, each of our board-level committees provides regular reports to the full board and apprises the board of our comprehensive risk profile and any areas of concern.
Cybersecurity and Information Security Risk Oversight
Our board recognizes the importance of maintaining the trust and confidence of our customers and devotes time and attention to oversight of cybersecurity and information security risk. In particular, our board and senior management each receives regular reporting on cybersecurity and information security risk, as well as presentations throughout the year on cybersecurity and information security topics. Our Risk Committee reviews and approves our Cybersecurity Policy. Our board received regular updates on cybersecurity and information security risk in 2024 and discussed cybersecurity and information security risks with the Bank’s management team.
Certain Relationships and Related Party Transactions
Statement of Policy Regarding Transactions with Related Persons
Transactions by us with related parties are subject to regulatory requirements and restrictions. These requirements and restrictions include Sections 23A and 23B of the Federal Reserve Act (which govern certain transactions by us with our affiliates) and the Federal Reserve’s Regulation O (which governs certain loans by us to our executive officers, directors and principal stockholders). We have also adopted policies to comply with
18
these regulatory requirements and restrictions, including policies governing the approval of related party transactions. Our Audit Committee reviews and approves all related person transactions between the Company and related parties in accordance with NASDAQ’s rules and regulations. For purposes of this review, related person transactions are those transactions required to be disclosed under applicable SEC regulations.
Banking Relationships
Certain of our executive officers and directors have, from time to time, engaged in banking transactions with Sunflower Bank, and are expected to continue such relationships in the future. All loans or other extensions of credit made by Sunflower Bank to such individuals were made in the ordinary course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unaffiliated third parties and did not involve more than the normal risk of collectability or present other unfavorable features.
Other Relationships
Stockholders’ Agreement
FirstSun was a party to a Stockholders’ Agreement, dated as of June 19, 2017, as amended by Amendments No. 1 through 5 to the Stockholders’ Agreement (the “Stockholders’ Agreement”) that, among other things, provided certain FirstSun stockholders, defined as “Significant Stockholders” under the agreement, with additional rights and obligations, including representation on our board of directors; certain corporate governance provisions; restrictions on transfer; tag-along rights, rights of first refusal and preemptive rights; and certain information rights.
Other than provisions providing nine stockholders with board representation rights, the provisions of the Stockholders’ Agreement terminated on July 11, 2024, effective upon the Company’s listing of its common stock on The Nasdaq Stock Market LLC. The Stockholders’ Agreement was terminated in its entirety as of February 21, 2025, pursuant to Amendment No. 6 to the Stockholders’ Agreement. As a result, none of our stockholders have any continuing rights or obligations under the Stockholders’ Agreement; however, certain current and continuing members of our board of directors were nominated by a Significant Stockholder in accordance with their rights provided by the Stockholders’ Agreement at the time of such director’s nomination to our board of directors. The following board nominees and ongoing directors were nominated to the board pursuant to the rights of a Significant Stockholder under the Stockholders’ Agreement, each of whom own 5% or more of the shares of our common stock:
Director Nominees:
•
Neal E. Arnold, Class II director nominee, was nominated by the Dana Hale Nelson Trusts;
•
Kevin T. Hammond, Class II director nominee, was nominated by JLL FCH Holdings I, LLC; and
•
David W. Levy, Class II director nominee, was nominated by the John J. Hale Trust.
Continuing Directors, previously nominated:
•
Mollie H. Carter, Class I director (term expiring 2027), was nominated by the Mollie Hale Carter Trusts;
•
Beverly O. Elving, Class I director, (term expiring 2027), was nominated by the Karen Hale Young Trusts;
•
Paul A. Larkins, Class III director (term expiring 2026) was nominated by Aquiline SGB Holdings LLC; and
•
Diane L. Merdian, Class III director (term expiring 2026), was nominated by the Max Alan Hale Trusts.
Board Representation Letter Agreements
In connection with the termination of the Stockholders’ Agreement on February 21, 2025, FirstSun entered into a Board Representation Letter Agreement with Aquiline SGB Holdings LLC, JLL/FCH Holdings I, LLC, the Karen Hale Young Trust Stockholder Group, and the Mollie Hale Carter Trust Stockholder Group, each of whom own 5% or more of the shares of FirstSun common stock. See “Security Ownership of Certain Beneficial Owners and Management of FirstSun.”
Aquiline SGB Holdings LLC
(“Aquiline”) was a Significant Stockholder pursuant to the terms of the Stockholders’ Agreement. In connection with the termination of the Stockholders’ Agreement, the Company entered into a Board Representation Letter Agreement with Aquiline (the “Aquiline Board Representation Letter”) providing,
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among other things, that for so long as Aquiline, together with any affiliates, continues to own at least 40% of the shares of capital stock of the Company owned by Aquiline as of February 21, 2025 (the “Aquiline Minimum Ownership Interest”), then, Aquiline will be entitled to nominate an individual to serve as a Class III director on the FirstSun board of directors, subject to such individual qualifying to serve on the board. In the event that our board is declassified, then Aquiline will continue to have a nomination right and such nomination right will correspond to the expiration of its board nominee’s applicable term of service. The Aquiline Board Representation Letter also provides that if Aquiline holds the Aquiline Minimum Ownership Interest and Aquiline does not have a nominee serving on the board, then Aquiline is entitled to appoint an individual to attend meetings of the board in a nonvoting, nonparticipating observer capacity.
At such time that Aquiline no longer holds the Aquiline Minimum Ownership Interest, then Aquiline’s right to appoint a nominee to the board or appoint a board observer will terminate and, if requested by our board, Aquiline has agreed to use commercially reasonable efforts to cause its nominee then serving on the board, if any, to resign from the board. The Aquiline Board Representation Letter also contains, among other things, customary indemnification and confidentiality provisions.
As of February 21, 2025, Aquiline owned 1,443,066 shares of Company common stock. As a result, to meet the Aquiline Minimum Ownership Interest, Aquiline, together with any affiliates, must continue to hold at least 577,226 shares of Company common stock. As of March 10, 2025, the record date, Aquiline owned 1,443,066 shares of our common stock.
JLL/FCH Holdings I, LLC
(“JLL”) was a Significant Stockholder pursuant to the terms of the Stockholders’ Agreement. In connection with the termination of the Stockholders’ Agreement, the Company entered into a Board Representation Letter Agreement with JLL (the “JLL Board Representation Letter”) providing, among other things, that for so long as JLL, together with any affiliates, continues to own at least 40% of the shares of capital stock of the Company owned by JLL as of February 21, 2025 (the “JLL Minimum Ownership Interest”), then, JLL will be entitled to nominate an individual to serve as a Class II director on the FirstSun board of directors, subject to such individual qualifying to serve on the board. In the event that our board is declassified, then JLL will continue to have a nomination right and such nomination right will correspond to the expiration of its board nominee’s applicable term of service. The JLL Board Representation Letter also provides that if JLL holds the JLL Minimum Ownership Interest and JLL does not have a nominee serving on the board, then JLL is entitled to appoint an individual to attend meetings of the board in a nonvoting, nonparticipating observer capacity.
At such time that JLL no longer holds the JLL Minimum Ownership Interest, then JLL’s right to appoint a nominee to the board or appoint a board observer will terminate and, if requested by our board, JLL has agreed to use commercially reasonable efforts to cause its nominee then serving on the board, if any, to resign from the board. The JLL Board Representation Letter also contains, among other things, customary indemnification and confidentiality provisions.
As of February 21, 2025, JLL owned 3,484,376 shares of Company common stock. As a result, to meet the JLL Minimum Ownership Interest, JLL, together with any affiliates, must continue to hold at least 1,393,750 shares of Company common stock. As of March 10, 2025, the record date, JLL owned 3,484,376 shares of our common stock.
The Karen Hale Young Trust Stockholder Group
(the “Karen Hale Young Group”) consists of a group of stockholders who were a Significant Stockholder pursuant to the terms of the Stockholders’ Agreement. In connection with the termination of the Stockholders’ Agreement, the Company entered into a Board Representation Letter Agreement with the Karen Hale Young Group (the “Karen Hale Young Group Board Representation Letter”) providing, among other things, that for so long as the Karen Hale Young Group, together with any affiliates, continues to own at least 40% of the shares of capital stock of the Company owned by the Karen Hale Young Group as of February 21, 2025 (the “Karen Hale Young Group Minimum Ownership Interest”), then, the Karen Hale Young Group will be entitled to nominate an individual to serve as a Class I director on the FirstSun board of directors, subject to such individual qualifying to serve on the board. In the event that our board is declassified, then the Karen Hale Young Group will continue to have a nomination right and such nomination right will correspond to the expiration of its board nominee’s applicable term of service. The Karen Hale Young Group Board Representation Letter also provides that if the Karen Hale Young Group holds the Karen Hale Young Group Minimum Ownership Interest and the Karen Hale Young Group does not have a nominee serving on the board, then the Karen Hale Young Group is entitled to appoint an individual to attend meetings of the board in a nonvoting, nonparticipating observer capacity.
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At such time that the Karen Hale Young Group no longer holds the Karen Hale Young Group Minimum Ownership Interest, then the Karen Hale Young Group’s right to appoint a nominee to the board or appoint a board observer will terminate and, if requested by our board, the Karen Hale Young Group has agreed to use commercially reasonable efforts to cause its nominee then serving on the board, if any, to resign from the board. The Karen Hale Young Group Board Representation Letter also contains, among other things, customary indemnification and confidentiality provisions.
As of February 21, 2025, the Karen Hale Young Group owned 1,970,100 shares of Company common stock. As a result, to meet the Karen Hale Young Group Minimum Ownership Interest, the Karen Hale Young Group, together with any affiliates, must continue to hold at least 788,040 shares of Company common stock. As of March 10, 2025, the record date, the Karen Hale Young Group owned 1,970,100 shares of our common stock.
The Mollie Hale Carter Trust Stockholder Group
(the “Mollie Hale Carter Group”) consists of a group of stockholders who were a Significant Stockholder pursuant to the terms of the Stockholders’ Agreement. In connection with the termination of the Stockholders’ Agreement, the Company entered into a Board Representation Letter Agreement with the Mollie Hale Carter Group (the “Mollie Hale Carter Group Board Representation Letter”) providing, among other things, that for so long as the Mollie Hale Carter Group, together with any affiliates, continues to own at least 40% of the shares of capital stock of the Company owned by the Mollie Hale Carter Group as of February 21, 2025 (the “Mollie Hale Carter Group Minimum Ownership Interest”), then, the Mollie Hale Carter Group will be entitled to nominate an individual to serve as a Class III director on the FirstSun board of directors, subject to such individual qualifying to serve on the board. In the event that our board is declassified, then the Mollie Hale Carter Group will continue to have a nomination right and such nomination right will correspond to the expiration of its board nominee’s applicable term of service. The Mollie Hale Carter Group Board Representation Letter also provides that if the Mollie Hale Carter Group holds the Mollie Hale Carter Group Minimum Ownership Interest and the Mollie Hale Carter Group does not have a nominee serving on the board, then the Mollie Hale Carter Group is entitled to appoint an individual to attend meetings of the board in a nonvoting, nonparticipating observer capacity.
At such time that the Mollie Hale Carter Group no longer holds the Mollie Hale Carter Group Minimum Ownership Interest, then the Mollie Hale Carter Group’s right to appoint a nominee to the board or appoint a board observer will terminate and, if requested by our board, the Mollie Hale Carter Group has agreed to use commercially reasonable efforts to cause its nominee then serving on the board, if any, to resign from the board. The Mollie Hale Carter Group Board Representation Letter also contains, among other things, customary indemnification and confidentiality provisions.
As of February 21, 2025, the Mollie Hale Carter Group owned 2,554,475 shares of Company common stock. As a result, to meet the Mollie Hale Carter Group Minimum Ownership Interest, the Mollie Hale Carter Group, together with any affiliates, must continue to hold at least 1,021,790 shares of Company common stock. As of March 10, 2025, the record date, the Mollie Hale Carter Group owned 2,554,475 shares of our common stock.
Registration Rights Agreement (2017)
Under its merger agreement with Strategic Growth Bancorp (“SGB”), on June 19, 2017, FirstSun entered into a Registration Rights Agreement with its stockholders, including the Significant Stockholders referenced above (which Significant Stockholders are referred to as “Significant Investors” in the Registration Rights Agreement). Under the Registration Rights Agreement, FirstSun is obligated to register the sale of shares of FirstSun common stock owned by the stockholders party to the agreement under certain circumstances, as described below.
The Registration Rights Agreement remained in effect following the SGB merger. Under FirstSun’s merger agreement with Pioneer Bancshares, Inc. (“Pioneer”), the Registration Rights Agreement was amended, effective as of the closing date of the Pioneer merger, to among other things, add JLL, Pioneer’s largest stockholder, as a “Significant Investor” to the agreement. Other than JLL, no other Pioneer stockholder became a party to the Registration Rights Agreement as a result of the Pioneer merger. Resale registration statements with respect to the registrable shares held by parties to the Registration Rights Amendments are currently on file and effective with the SEC.
Demand Rights
At any time beginning on or after June 19, 2019, each Significant Investor, subject to the limitations set forth in the Registration Rights Agreement, will have the right to require FirstSun by written notice to prepare and file a
21
registration statement registering the offer and sale of a number of their shares of FirstSun common stock. Each Significant Investor has the right to up to five demand notices.
FirstSun will not be obligated to effect any demand registration unless (a) the aggregate number of shares joining in the demand is at least 20% of the total number of issued and outstanding shares of FirstSun common stock (if the demand is before an initial public offering of FirstSun), or 10% of the total number of issued and outstanding shares of FirstSun common stock (if the demand is after the initial public offering of FirstSun), and (b) either (i) the aggregate offering price of securities to be included in the registration, net of underwriting discounts and commissions, equals or exceeds $25.0 million, or (ii) the aggregate number of shares of FirstSun common stock to be included in the registration equals or exceeds 10% of the total number of issued and outstanding shares of FirstSun common stock. In addition, FirstSun will not be obligated to file a registration statement within a period of 180 days after the effective date of any other demand registration statement.
FirstSun will also be permitted to postpone filing a registration statement or facilitating an offering relating to a demand registration request if the registration process would, among other things, materially and adversely affect a pending or proposed material financing or material acquisition, merger, recapitalization, consolidation, reorganization or similar transaction.
Piggyback Rights
If FirstSun proposes to register an offering of FirstSun common stock (subject to certain exceptions) for its own account or for the account of any third-party (including a demand registration), then it must give written notice to the holders under the Registration Rights Agreement and allow them to include their shares in that registration statement. There is no limitation on the number of such piggyback registrations that FirstSun is required to effect.
Conditions and Limitations
These registration rights are subject to certain conditions and limitations, including the right of the underwriters to limit the number of shares to be included in a registration and FirstSun’s right to delay an offering or registration statement or withdraw a registration statement under certain circumstances.
Expenses and Indemnification
FirstSun will generally pay all registration expenses in connection with its obligations under the Registration Rights Agreement, regardless of whether a registration statement becomes effective or the offering is consummated, including legal expenses of one counsel for the holders party to the agreement. However, the holders must pay all underwriting discounts and commissions in connection with sales by them of any of their shares of FirstSun common stock.
The Registration Rights Agreement also contains customary indemnification provisions pursuant to which FirstSun will be required to indemnify each holder and its affiliates against certain liabilities that may arise, including those under the Securities Act.
Investment-Related Agreements 2024
Upfront Securities Purchase Agreement
In connection with its entry into a merger agreement with HomeStreet, Inc. (which agreement was subsequently terminated on November 18, 2024), FirstSun entered into an upfront securities purchase agreement (the “Upfront Securities Purchase Agreement”), dated January 16, 2024, with certain funds managed by Wellington Management Company, LLP (collectively, the “Wellington Funds”), pursuant to which, on the terms and subject to the conditions set forth therein, FirstSun sold, and the Wellington Funds purchased, for $32.50 per share and an aggregate purchase price of $80 million, approximately 2.46 million shares of FirstSun Common Stock. This transaction closed on January 17, 2024. Under the terms of the Upfront Securities Purchase Agreement, FirstSun committed to listing FirstSun’s common stock on a national securities exchange within 120 days of closing, subject to a right to extend upon mutual consent for an additional 60 days, regardless of whether the merger is consummated.
FirstSun completed its uplisting of FirstSun’s common stock to the NASDAQ Global Select Stock Market
on July 11, 2024. The Upfront Securities Purchase Agreement contains customary representations, warranties and agreements of each party.
Upfront Registration Rights Agreement
22
In connection with the Upfront Securities Purchase Agreement, FirstSun and the Wellington Funds also entered into a Registration Rights Agreement (the “Upfront Registration Rights Agreement”), dated January 16, 2024, pursuant to which FirstSun agreed to provide customary resale registration rights with respect to the shares of FirstSun common stock obtained by the Wellington Funds pursuant to the Upfront Securities Purchase Agreement. Under the Upfront Registration Rights Agreement, the Wellington Funds will be entitled to resale registration rights and rights to request a certain number of underwritten shelf takedowns, in each case, subject to certain limitations as set forth in the Upfront Registration Rights Agreement. Failure to meet the resale registration statement filings or effectiveness deadlines, and certain other events, set forth in the Upfront Registration Rights Agreement may result in FirstSun’s payment to the Wellington Funds of liquidated damages in the amount of 1% of the purchase price per month pending effective registration. A resale registration statement with respect to the registrable shares held by the Wellington Funds is currently on file and effective with the SEC.
Stockholder Communications with Our Directors
Our stockholders may contact any member of the board of directors (including our Executive Chair or Lead Independent Director), or the board as a whole, through our Corporate Secretary, by mail at 1400 16th Street, Suite 250, Denver, Colorado 80202, or by e-mail at corporate.secretary@firstsuncb.com. Any such communication should indicate whether the sender is a FirstSun stockholder. Any communication will be forwarded promptly to the board as a group or to the attention of the specified director per your request. Communications that are personal grievances, commercial solicitations, customer complaints, incoherent, or obscene will not be communicated to our board or any director or committee of our board.
Stockholder Proposals and Director Nominations
Stockholder Nominations of Directors
. Under our bylaws a stockholder may nominate a candidate for election at a stockholder meeting by giving timely written notice, even if such matter is already the subject of any notice to the stockholders or Public Disclosure from the board, delivered to or mailed, to our Corporate Secretary, by mail at 1400 16th Street, Suite 250, Denver, Colorado 80202 or by email corporate.secretary@firstsuncb.com. Such notice shall be received (x) not later than the close of business on the 90th day, nor earlier than the close of business on the 120th day, in advance of the anniversary of the previous year’s annual meeting if such meeting is to be held on a day which is not more than 30 days in advance of the anniversary of the previous year’s annual meeting or not later than 60 days after the anniversary of the previous year’s annual meeting; and (y) with respect to any other annual meeting of stockholders, including in the event that no annual meeting was held in the previous year, not earlier than the close of business on the 120th day prior to the annual meeting and not later than the close of business on the later of: (1) the 90th day prior to the annual meeting and (2) the close of business on the tenth day following the first date of Public Disclosure of the date of such meeting. In no event shall the Public Disclosure of an adjournment or postponement of an annual meeting commence a new notice time period (or extend any notice time period).
Our bylaws require the stockholder’s notice to the Company regarding the nomination of a director include, among other things, (a) the nominee’s name, age, address, and principal occupation; (b) information about the nominee’s stock ownership in the Company; (c) a written questionnaire with respect to the background and qualification of the nominee; (d) the stockholder’s name and address; and (e) information about the stockholder’s stock ownership in the Company and certain interests and relationships.
Stockholder Proposal at the Meeting.
A stockholder seeking to present any business at an annual meeting must submit a notice in writing to our Corporate Secretary, by mail at 1400 16
th
Street, Suite 250, Denver, Colorado 80202, (x) not later than the close of business on the 90th day, nor earlier than the close of business on the 120th day, in advance of the anniversary of the previous year’s annual meeting if such meeting is to be held on a day which is not more than 30 days in advance of the anniversary of the previous year’s annual meeting or not later than 60 days after the anniversary of the previous year’s annual meeting; and (y) with respect to any other annual meeting of stockholders, including in the event that no annual meeting was held in the previous year, not earlier than the close of business on the 120th day prior to the annual meeting and not later than the close of business on the later of: (1) the 90th day prior to the annual meeting and (2) the close of business on the tenth day following the first date of Public Disclosure of the date of such meeting. In no event shall the Public Disclosure of an adjournment or postponement of an annual meeting commence a new notice time period (or extend any notice time period).
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Our bylaws require the stockholder’s notice to the Company with respect to a stockholder proposal for an annual meeting of stockholders, to include, among other things, (a) the stockholder’s name and address; (b) information about the stockholder’s stock ownership in the Company and certain interests and relationships; and c) a description of the business the stockholder desires to bring before the meeting.
Proposals in Our Proxy Statement
. Under SEC rules, for a stockholder’s proposal to be included in our proxy statement and proxy card for the 2025 Annual Meeting of Stockholders, you must file a written notice of the proposal with our Corporate Secretary, at 1400 16th Street, Suite 250, Denver, Colorado 80202, not less than 120 calendar days before the date of our proxy statement released to stockholders in connection with the previous year’s annual meeting, or November 29, 2024, and must otherwise comply with the rules and regulations set forth by the SEC. However, if the date of next year’s annual meeting is changed by more than 30 days from the date of this year’s meeting, then the deadline is a reasonable time before we begin to print and send our proxy materials.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the beneficial ownership of our common stock as of March 10, 2025, by each director or nominee for director, each named executive officer, by all of our directors, director nominees and executive officers as a group, and each stockholder known by us to be the beneficial owner of more than 5% of our outstanding common stock.
Unless otherwise noted below, the address of each beneficial owner listed in the table is c/o FirstSun Capital Bancorp, 1400 16th Street, Suite 250, Denver, Colorado 80202. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the tables below have sole voting and investment power with respect to all shares of our common stock that they beneficially own, subject to applicable community property laws. We have based our calculation of the percentage of beneficial ownership on 27,753,918 shares of common stock outstanding as of March 10, 2025. Beneficial ownership has been determined for this purpose in accordance with Rule 13d-3 under the Exchange Act, under which a person is deemed to be the beneficial owner of securities if he or she has or shares voting power or investment power with respect to such securities or has the right to acquire beneficial ownership of securities within 60 days of March 10, 2025.
|
Amount of
Shares Owned |
Right to
Acquire
1
|
Total |
Percent
of Class |
||||||||||||||||||||
| Directors and Named Executive Officers | |||||||||||||||||||||||
|
Mollie H. Carter
2
|
2,554,475 | — | 2,554,475 | 9.20 | % | ||||||||||||||||||
| Neal E. Arnold | 232,348 | 187,590 | 419,938 | 1.50 | % | ||||||||||||||||||
| Robert A. Cafera, Jr. | 125,267 | 135,952 | 261,219 | * | |||||||||||||||||||
| Laura Frazier | 900 | 55,514 | 56,414 | * | |||||||||||||||||||
| Jennifer Norris | — | 67,140 | 67,140 | * | |||||||||||||||||||
| Isabella Cunningham | 63,112 | — | 63,112 | * | |||||||||||||||||||
| Beverly O. Elving | 5,886 | 12,585 | 18,471 | * | |||||||||||||||||||
|
Paul A. Larkins
3
|
3,395 | 16,531 | 19,926 | * | |||||||||||||||||||
| David W. Levy | 5,356 | 45,752 | 51,108 | * | |||||||||||||||||||
| Diane L. Merdian | 23,489 | 6,250 | 29,739 | * | |||||||||||||||||||
| John S. Fleshood | — | — | — | * | |||||||||||||||||||
| Kevin T. Hammond | — | — | — | * | |||||||||||||||||||
|
All directors and executive officers as a group
(12 persons) |
3,014,228 | 527,314 | 3,541,542 | 12.52 | % | ||||||||||||||||||
| 5% Stockholders | |||||||||||||||||||||||
| JLL / FCH Holdings I LLC | 3,484,376 | 45,685 | 3,530,061 | 12.70 | % | ||||||||||||||||||
|
Wellington Management
4
|
2,418,393 | — | 2,418,393 | 8.71 | % | ||||||||||||||||||
|
John J. Hale Trusts
5
|
1,816,100 | — | 1,816,100 | 6.54 | % | ||||||||||||||||||
|
Karen Hale Young Trusts
6
|
1,970,100 | — | 1,970,100 | 7.10 | % | ||||||||||||||||||
|
Max Alan Hale Trusts
7
|
1,816,100 | — | 1,816,100 | 6.54 | % | ||||||||||||||||||
|
Dana Hale Nelson Trusts
8
|
1,685,200 | — | 1,685,200 | 6.07 | % | ||||||||||||||||||
|
Entities Affiliated with Lightyear Capital LLC
9
|
1,456,027 | 12,582 | 1,468,609 | 5.29 | % | ||||||||||||||||||
|
Aquiline SGB Holdings LLC
10
|
1,443,066 | — | 1,443,066 | 5.20 | % | ||||||||||||||||||
|
* Indicates ownership of less than 1%.
|
|||||||||||||||||||||||
|
1
The shares in this column represent stock options of FirstSun held by that person or entity that are currently exercisable or exercisable within 60 days of March 10, 2025.
|
|||||||||||||||||||||||
|
2
Mollie H. Carter may be deemed to have voting, investment, and dispositive power with respect to all 2,554,475 of the listed shares, which are held by trusts for which she serves as trustee or co-trustee.
|
|||||||||||||||||||||||
|
3
Mr. Larkins serves as the director designee for Aquiline SGB Holdings LLC. Mr. Larkins has no voting or investment power over any shares held by Aquiline SGB Holdings LLC and disclaims any beneficial ownership of such shares.
|
|||||||||||||||||||||||
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|
4
The address for the Wellington Group is c/o Wellington Management Company LLP 280 Congress Street, Boston, MA 02210. This information is based on Schedule 13G filed by (1) Wellington Management Group LLP, (2) Wellington Group Holdings LLP, (3) Wellington Investment Advisors Holdings LLP, and (4) Wellington Management Company LLP (collectively, the “Wellington Group”) on November 14, 2024. The Wellington Group reported shared voting and shared dispositive power with respect to these shares.
|
|||||||||||||||||||||||
|
5
This information is based on the Schedule 13G filed by a trust for which John J. Hale serves as trustee on November 14, 2024. John J. Hale may be deemed to have voting, investment, and dispositive power with respect to these shares held by a trust for which he serves as trustee.
|
|||||||||||||||||||||||
|
6
This information is based on the Schedule 13G filed by trusts for which Karen Hale Young serves as trustee on November 14, 2024. Karen Hale Young may be deemed to have voting, investment, and dispositive power with respect to these shares held by trusts for which she serves as trustee.
|
|||||||||||||||||||||||
|
7
This information is based on the Schedule 13G filed by trusts for which Max Alan Hale serves as trustee on November 14, 2024. Max Alan Hale may be deemed to have voting, investment, and dispositive power with respect to these shares held by trusts for which he serves as trustee.
|
|||||||||||||||||||||||
|
8
This information is based on the Schedule 13G filed by trusts for which Dana Hale Nelson serves as trustee on November 14, 2024. Dana Hale Nelson may be deemed to have voting, investment, and dispositive power with respect to these shares held by trusts for which she serves as trustee.
|
|||||||||||||||||||||||
|
9
The address for Lightyear Capital and its affiliates is 9 West 57th Street, 31st Floor, New York, New York 10019. This information is based on Schedule 13G filed by (1) Lightyear Fund III, L.P., a Delaware limited partnership (“Lightyear Fund III”); (2) Lightyear Co-Invest Partnership III, L.P., a Delaware limited partnership (“Co-Invest”); (3) Lightyear Fund III GP, L.P., a Delaware limited partnership (“Lightyear Fund III GP”); (4) Lightyear Fund III GP Holdings, LLC, a Delaware limited liability company (“Lightyear Fund III GP Holdings”); (5) LY Holdings, LLC, a Delaware limited liability company (“LY Holdings”); (6) Lightyear Capital III, LLC (“Lightyear Capital III”); (7) Lightyear Capital LLC; (8) Lightyear Capital Management LP; (9) Lightyear Capital GP LLC; and (10) Mr. Mark F. Vassallo, an individual, with the SEC on November 13, 2024, reporting that 1,436,728 shares of Common Stock of the Issuer are directly held by Lightyear Fund III, 3,978 shares of Common Stock of the Issuer are directly held by Co-Invest and 3,395 shares of Common Stock of the Issuer are directly held by Lightyear Capital III. As the general partner of Lightyear Fund III, Lightyear Fund III GP may be deemed to have voting and/or dispositive power over such securities. As the general partner of Lightyear Fund III GP and Co-Invest, Lightyear Fund III GP Holdings may also be deemed to have voting and/or dispositive power over such securities. However, each of Lightyear Fund III GP and Lightyear Fund III GP Holdings disclaims beneficial ownership of the shares held by Lightyear Fund III and Co-Invest, as applicable. LY Holdings, as the managing member of Lightyear Fund III GP Holdings, and Mr. Mark F. Vassallo, as the managing member of LY Holdings, may also be deemed to have voting and/or dispositive power over such securities. However, each of LY Holdings and Mr. Vassallo disclaims beneficial ownership of the shares held by Lightyear Fund III and Co-Invest. As the sole member of Lightyear Capital III, Lightyear Capital LLC may be deemed to have voting and/or dispositive power over the securities held by Lightyear Capital III. As the sole member of Lightyear Capital LLC, Lightyear Capital Management LP may also be deemed to have voting and/or dispositive power over such securities. As the general partner of Lightyear Capital Management LP, Lightyear Capital GP LLC may also be deemed to have voting and/or dispositive power over such securities. As the manager of Lightyear Capital GP LLC, Mr. Vassallo may also be deemed to have voting and/or dispositive power over such securities. However, each of Lightyear Capital LLC, Lightyear Capital Management LP, Lightyear Capital GP LLC and Mr. Vassallo disclaims beneficial ownership of the shares held by Lightyear Capital III. The table above also reflects an exercise of options by Lightyear Capital III on March 6, 2025.
|
|||||||||||||||||||||||
|
10
The address for Aquiline SGB Holdings LLC is 535 Madison Ave, New York, New York 10022. This information is based on Schedule 13G filed by (1) Mr. Ignace van Waesberghe, (2) Mr. Vincenzo La Ruffa, (3) Avenir Offshore, LLC, a Cayman Islands limited liability company, (4) Aquiline Holdings (Offshore) II L.P., a Cayman Islands exempted limited partnership, (5) Aquiline Financial Services Continuation Fund GP (Offshore) Ltd., a Cayman Islands limited company, (6) Aquiline Financial Services Continuation Fund GP (Offshore) L.P., a Cayman Islands exempted limited partnership, (7) Aquiline Financial Services Continuation Fund L.P., a Cayman Islands exempted limited partnership, (8) Aquiline Capital Partners II GP (Offshore) Ltd., a Cayman Islands limited company, (9) AFSF II Status Quo (Offshore) L.P., a Cayman Islands exempted limited partnership, and (10) Aquiline SGB Holdings LLC, a Delaware limited liability company (collectively, the “Aquiline Group”) on November 13, 2024. The Aquiline Group reported shared voting and shared dispositive power with respect to these shares.
|
|||||||||||||||||||||||
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DELINQUENT SECTION 16(a) REPORTS
Section 16(a) of the Exchange Act requires our directors, executive officers and beneficial owners of more than 10% of common stock to file with the SEC reports regarding their ownership and changes in ownership of our securities. To our knowledge, these insiders complied with all Section 16(a) filing requirements during 2024, except a late Form 3 report for JLL / FCH Holdings I LLC was filed for on July 15, 2024, as a result of obtaining EDGAR filing codes after the due date of the initial Form 3, which resulted in the Company’s administrator failing to timely provide the information necessary to report such transactions.
EXECUTIVE COMPENSATION
We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. These include, but are not limited to reduced disclosure obligations regarding executive compensation, including the requirement to include a specific form of Compensation Discussion and Analysis. We have elected to comply with the scaled disclosure requirements applicable to emerging growth companies.
Compensation of Executive Officers
In the following section, we refer to the individuals who served as our principal executive officer, our two other most highly compensated executive officers and Ms. Carter, as the “named executive officers.” Our named executive officers as of December 31, 2024 were:
•
Mollie H. Carter, Executive Chair of the FirstSun and Sunflower Bank Boards;
•
Neal E. Arnold, Chief Executive Officer and President of FirstSun and Sunflower Bank and Chief Operating Officer of FirstSun; and
•
Robert A. Cafera, Jr., Senior Executive Vice President and Chief Financial Officer of FirstSun and Sunflower Bank.
•
Laura J. Frazier, Executive Vice President and Chief Administrative Officer of FirstSun and Sunflower Bank.
27
2024 Summary Compensation Table
The following table sets forth information concerning all compensation awarded to, earned by or paid to our named executive officers for all services rendered in all capacities to us and our subsidiaries for the fiscal years ended December 31, 2024 and 2023.
|
Name and
Principal Position |
Year | Salary |
Bonus
1
|
Stock
Awards
2
|
Non-Equity
Incentive
Plan
Compensation
3
|
Nonqualified
Deferred
Compensation
Earnings
4
|
All other Compensation
5
|
Total | ||||||||||||||||||||||||||||||||||||||||||
| Mollie H. Carter | 2024 | $ | 500,000 | $ | — | $ | — | $ | — | $ | — | $ | 21,300 | $ | 521,300 | |||||||||||||||||||||||||||||||||||
| Executive Chair | 2023 | 500,000 | — | — | — | — | 24,361 | 524,361 | ||||||||||||||||||||||||||||||||||||||||||
| Neal E. Arnold | 2024 | 800,000 | 928,500 | 5,550,010 | 1,021,000 | — | 21,300 | 8,320,810 | ||||||||||||||||||||||||||||||||||||||||||
| Chief Executive Officer and President of Company and Bank, and Chief Operating Officer of Company | 2023 | 800,000 | 761,600 | 1,400,000 | 1,128,961 | — | 20,400 | 4,110,961 | ||||||||||||||||||||||||||||||||||||||||||
| Robert A. Cafera, Jr. | 2024 | 454,000 | 493,266 | 2,300,005 | 408,400 | — | 21,300 | 3,676,971 | ||||||||||||||||||||||||||||||||||||||||||
| Senior Executive Vice President and Chief Financial Officer of Company and Bank | 2023 | 425,000 | 392,224 | 239,988 | 451,584 | — | 20,400 | 1,529,196 | ||||||||||||||||||||||||||||||||||||||||||
| Laura J. Frazier | 2024 | 382,424 | 338,903 | 1,210,020 | 306,300 | — | 21,300 | 2,258,947 | ||||||||||||||||||||||||||||||||||||||||||
| Executive Vice President and Chief Administrative Officer of Company and Bank | 2023 | 365,000 | 338,688 | 180,012 | 338,688 | — | 20,400 | 1,242,788 | ||||||||||||||||||||||||||||||||||||||||||
|
1
See discussion under “Narrative to Summary Compensation Table—Annual Bonus Payment” below.
|
||||||||||||||||||||||||||||||||||||||||||||||||||
|
2
The amounts reported represent the aggregate grant date fair values of restricted stock units awarded in each fiscal year for which compensation is required to be reported in the table for each named executive officer, in each case computed in accordance with FASB ASC Topic 718. See Note 1 of our annual consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 7, 2025, for a discussion of valuation assumptions. The performance-based awards in the above table are subject to performance conditions and the reported grant date fair value is based on the probable outcome of those conditions as of the grant date, which was assumed to be the target level of the awards. The stock awards in this column include restricted stock awards granted in 2024 with a grant date fair value of $4,000,010 for Mr. Arnold, $2,000,005 for Mr. Cafera and $1,000,020 for Ms. Frazier. These awards were contingent upon the closing of the proposed merger with HomeStreet, Inc. Upon termination of the HomeStreet, Inc. merger agreement, these awards were cancelled and no shares vested in or were awarded to either Mr. Arnold, Mr. Cafera or Ms. Frazier.
|
||||||||||||||||||||||||||||||||||||||||||||||||||
|
3
The amounts in the Non-Equity Incentive Plan Compensation column are the cash awards earned by the named executive officer under the 2021 Long-Term Incentive Plan (see discussion under “Narrative to Summary Compensation Table—2021 Long-Term Incentive Plan” below).
|
||||||||||||||||||||||||||||||||||||||||||||||||||
|
4
There were not above-market or preferential earnings on our nonqualified deferred compensation plan.
|
||||||||||||||||||||||||||||||||||||||||||||||||||
|
5
For 2024, the amounts set forth in this column include the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||
| Ms. Carter | Mr. Arnold | Mr. Cafera | Ms. Frazier | ||||||||||||||||||||
| 401(k) match | $ | 20,700 | $ | 20,700 | $ | 20,700 | $ | 20,700 | |||||||||||||||
| Cell phone | 600 | 600 | 600 | 600 | |||||||||||||||||||
| Total | $ | 21,300 | $ | 21,300 | $ | 21,300 | $ | 21,300 | |||||||||||||||
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Narrative to Summary Compensation Table
Agreement and General Release with Ms. Carter and Employment Agreements with Mr. Arnold and Mr. Cafera
During 2023 and 2024, we had an agreement and general release in place with Ms. Carter and employment agreements with each of Mr. Arnold and Mr. Cafera. The material terms of each of these agreements are described below.
Agreement and General Release with Ms. Carter
In connection with the management realignment as a result of the merger with Pioneer, and Ms. Carter’s transition to her current role as Executive Chairman, FirstSun entered into an Agreement and General Release with Ms. Carter dated March 24, 2022 pursuant to which she serves as Executive Chairman of the board of FirstSun and Sunflower Bank. Under the Agreement and General Release Ms. Carter is entitled to a base salary of $500,000 and she is eligible to participate in our various employee benefit and incentive programs. The Agreement and General Release also includes provisions related to key-man insurance, confidentiality, observation of security measures, covenants to protect our business and the return of materials.
Neal E Arnold Employment Agreement
FirstSun entered into an employment agreement with Mr. Arnold, originally effective January 16, 2018, as amended effective February 21, 2019, which was amended and restated effective March 24, 2022, and further amended March 14, 2023, pursuant to which Mr. Arnold serves as President and Chief Executive Officer of FirstSun and the Bank, and Chief Operating Officer of FirstSun. The employment agreement originally had an initial term of two years and now automatically renews each year on January 16 for a successive one-year period, unless either party provides written notice to the other of non-renewal at least 90-days before the renewal date.
Under the employment agreement, Mr. Arnold is entitled to an annual base salary of $800,000, which may be increased, but not decreased at the discretion of the board, and is subject to annual review. His base salary for 2024 and 2023 was $800,000, respectively. Pursuant to the terms of the employment agreement, Mr. Arnold is also eligible to earn an annual bonus with a target incentive opportunity of 100% of his base salary, as determined by the FirstSun board of directors, with 20% of any earned bonus to be credited to his deferral account under our Deferred Compensation Plan. He is also eligible to participate in the equity and/or other long-term compensation plans established by the FirstSun board of directors and as determined by the FirstSun compensation committee. We also provide reimbursements to Mr. Arnold for reasonable expenses incurred in connection with his employment, and he is eligible to receive benefits under any employee benefit plans made available by us generally to executive officers
Under the terms of his employment agreement, Mr. Arnold is subject to provisions related to non-competition and non-solicitation that generally preclude him, for a period of 24 months following his voluntary or involuntary termination, from, among other things, (a) competing with FirstSun or the Bank or otherwise being employed directly or indirectly in any capacity, including as a consultant, for any entity that offers any products or services that are substantially similar to those of FirstSun or the Bank, generally within any city, county or state in which FirstSun or the Bank has an office; (b) soliciting any business relation to purchase or sell any competing products or services; (c) soliciting for employment any person employed by FirstSun or the Bank within the 12 months preceding any employment, engagement or solicitation by him; or (d) urging any person or entity to reduce its business with FirstSun or the Bank.
Upon certain qualifying terminations of employment, any unvested portion of Mr. Arnold’s outstanding options or other incentive compensation or equity-based awards (including but not limited to phantom equity, or cash or stock payouts under the LTIPs) will immediately fully vest as of the date of termination. Additionally, awards issued pursuant to the LTIPs (or any successor plan) shall vest at such dollar value (for cash-based awards) or at such number of performance share units (for equity-based awards) as determined by FirstSun’s compensation committee (or its delegate), in its sole and good faith discretion, based on the level of achievement of any Bank Performance Measures (as defined in the LTIPs) as of the date of such qualifying termination and subject to adjustments (e.g., accounting for transaction expenses) to such Bank Performance Measures as the compensation committee (or its delegate) determines are necessary to carry out their original intent and in a manner that does not materially adversely affect the executive; provided that with respect to any LTIP award for which achievement of the applicable Bank Performance Measures for the full performance period cannot be objectively measured as of immediately prior to any such qualifying termination, such LTIP award will be earned as of such termination at the greater of 100% of target level and the level achieved based on actual performance determined through the last practicable date prior to such termination, as determined by the compensation committee.
The terms of Mr. Arnold’s employment agreement also entitle him to certain severance benefits upon certain termination events, as described below under “Potential Payments Upon Termination or Change in Control.”
29
Robert A. Cafera, Jr. Employment Agreement
FirstSun and Sunflower Bank entered into an employment agreement with Mr. Cafera, originally effective June 19, 2017, as amended on February 21, 2019, March 24, 2022, and further amended March 14, 2023, pursuant to which he serves as Chief Financial Officer of FirstSun and Sunflower Bank. The employment agreement, as amended, automatically renews each year on June 19 for a successive one year period, unless either party provides written notice to the other of non-renewal at least 90-days before the renewal date.
Under the employment agreement, Mr. Cafera is entitled to an annual base salary of $300,000, which may be increased, but not decreased at the discretion of the board, and is subject to annual review. His base salary for 2024 and 2023 was $454,000 and $425,000, respectively. Pursuant to the terms of the employment agreement, Mr. Cafera is also eligible to earn an annual bonus with a target incentive opportunity of 100% of his base salary, as determined by the FirstSun board of directors, with 20% of any earned bonus to be credited to his deferral account under our Deferred Compensation Plan. He is also eligible to participate in the equity and/or other long-term compensation plans established by the FirstSun board of directors and as determined by the FirstSun compensation committee. We also provide reimbursements to Mr. Cafera for reasonable expenses incurred in connection with his employment, and he is eligible to receive benefits under any employee benefit plans made available by us generally to executive officers.
Under the terms of his employment agreement, Mr. Cafera is subject to provisions related to non-competition and non-solicitation that generally preclude him, for a period of 24 months following his voluntary or involuntary termination, from, among other things, (a) competing with FirstSun or the Bank or otherwise being employed directly or indirectly in any capacity, including as a consultant, for any entity that offers any products or services that are substantially similar to those of FirstSun or the Bank, generally within any city, county or state in which FirstSun or the Bank has an office; (b) soliciting any business relation to purchase or sell any competing products or services; (c) soliciting for employment any person employed by FirstSun or the Bank within the 12 months preceding any employment, engagement or solicitation by him; or (d) urging any person or entity to reduce its business with FirstSun or the Bank.
Upon certain qualifying terminations of employment, any unvested portion of Mr. Cafera’s outstanding options or other incentive compensation or equity-based awards (including but not limited to phantom equity, or cash or stock payouts under the LTIPs) will immediately fully vest as of the date of termination. Additionally, awards issued pursuant to the LTIPs (or any successor plan) shall vest at such dollar value (for cash-based awards) or at such number of performance share units (for equity-based awards) as determined by FirstSun’s compensation committee (or its delegate), in its sole and good faith discretion, based on the level of achievement of any Bank Performance Measures (as defined in the LTIPs) as of the date of such qualifying termination and subject to adjustments (e.g., accounting for transaction expenses) to such Bank Performance Measures as the compensation committee (or its delegate) determines are necessary to carry out their original intent and in a manner that does not materially adversely affect the executive; provided that with respect to any LTIP award for which achievement of the applicable Bank Performance Measures for the full performance period cannot be objectively measured as of immediately prior to any such qualifying termination, such LTIP award will be earned as of such termination at the greater of 100% of target level and the level achieved based on actual performance determined through the last practicable date prior to such termination, as determined by the compensation committee.
The terms of Mr. Cafera’s employment agreement also entitle him to certain severance benefits upon certain termination events, as described below under “Potential Payments Upon Termination or Change in Control.”
Annual Bonus Payments
Annual bonus compensation is an integral component of our total compensation program that links executive decision-making and performance with our annual strategic objectives. Mr. Arnold, Mr. Cafera, and Ms. Frazier participated in our annual bonus program in 2023 and 2024.
In 2023 and 2024, the board of directors, in consultation with our Chief Executive Officer, determined that the potential management incentive pool would be funded based on our achievement of the following corporate performance metrics: noninterest income, net income, total deposits, return on assets, and return on tangible equity.
Once the funding for the potential management incentive pool was established, each executive’s individual performance was measured and their incentive payment was determined based on the executive’s achievement of the following individual performance metrics, as determined by our compensation committee: upholding our company culture (15%); success in talent management (35%); and achievement of individual goals (50%). In addition, the board determined that any executive that received a bonus payment equal to 25% of their targeted bonus amount or above would automatically have 20% of their bonus payment deferred into our Deferred Compensation Plan, which amount remains subject to claw
30
back for two years (inclusive of the year in which the bonus was derived) and is subject to forfeiture upon termination of employment.
In 2023, based on the board’s assessment of the Company’s performance and their individual performance, each of Mr. Arnold, Mr. Cafera, and Ms. Frazier received an annual bonus equal to approximately 93% of their respective base salary. In 2024, based on the board’s assessment of the Company’s performance and their individual performance, each of Mr. Arnold and Mr. Cafera received an annual bonus equal to approximately 116% of their respective base salary and Ms. Frazier received an annual bonus equal to approximately 89% of her base salary.
Equity and Long-Term Incentive Plans
We use equity and long-term incentive plans (“LTIP Plans”) to attract and retain highly-qualified key management employees and align the interests of those employees with the financial success of FirstSun. Mr. Arnold, Mr. Cafera, and Ms. Frazier each participate in our LTIP Plans and have compensation from such participation reflected in the Summary Compensation Table. Awards issued to Mr. Arnold, Mr. Cafera, and Ms. Frazier are subject to a three-year performance period and, as a result, Mr. Arnold, Mr. Cafera, and Ms. Frazier received compensation related to their participation in the 2021 Long-Term Incentive Plan in Fiscal Year 2024 and received compensation related to their participation in the 2020 Long-Term Incentive Plan in Fiscal Year 2023.
2024 Special Restricted Stock Grants
In 2024, the compensation committee granted Mr. Arnold, Mr. Cafera, and Ms. Frazier special restricted stock awards (the “HomeStreet Awards”), the vesting of which were conditioned upon closing of our merger with HomeStreet, Inc. When the merger agreement was terminated in 2024, the HomeSteet Awards were cancelled, with no awards being made to either Mr. Cafera, Mr. Arnold or Ms. Frazier. The cancellation of the HomeStreet Awards would have resulted in the total compensation reported in the Summary Compensation Table for Mr. Arnold, Mr. Cafera, and Ms. Frazier to be reduced $4,000,010 for Mr. Arnold, $2,000,005 for Mr. Cafera, and $1,000,020 for Ms. Frazier.
2024 Long-Term Incentive Plan Awards
For 2024, the compensation committee granted Mr. Cafera and Ms. Frazier two 2024 LTIP awards under the FirstSun Capital Bancorp Long-Term Incentive Plan (the “2022 LTIP”), consisting of a cash award and performance share units entitling the executive to receive a number of shares of FirstSun common stock (PSUs), with the amount of cash or number of shares that becomes payable at the end of the applicable Performance Period (“Realized Value”) to be based on the level of achievement of specified company performance measures (each, a “Bank Performance Measure” and collectively, the “Bank Performance Measures”). For 2024, the compensation committee granted Mr. Arnold a single 2024 LTIP award under the 2022 LTIP consisting solely of PSUs with the number of shares that becomes payable at the end of the applicable Performance Period (“Realized Value”) to be based on the level of achievement of specified Bank Performance Measures. For the 2024 PSU awards, the Realized Value is based on the following formula: for threshold performance, Realized Value will be 50% of the “Target Units” (listed in the table below as “Threshold Units”); for target performance, the Realized Value will be 100% of Target Units; and for stretch performance, the Realized Value will be 150% of Target Units (listed in the table below as “Stretch Units”). For 2024 cash awards, the Realized Value is based on the following formula: for threshold performance, Realized Value will be 50% of the “Target Value” (listed in the table below as “Threshold Value”); for target performance, the Realized Value will be 100% of the Target Value; and for stretch performance, the Realized Value will be 150% of the Target Value (listed as “Stretch Value” in the table below).
For 2024, the Threshold Units, Target Units and Stretch Units of Mr. Arnold’s, Mr. Cafera’s, and Ms. Frazier’s Unit-based 2024 LTIP awards were as follows:
| Name |
Threshold
Units |
Target
Units |
Stretch
Units |
|||||||||||||||||
| Neal E. Arnold | 21,831 | 43,662 | 65,493 | |||||||||||||||||
| Robert A. Cafera, Jr. | 4,225 | 8,451 | 12,676 | |||||||||||||||||
| Laura J. Frazier | 2,958 | 5,915 | 8,873 | |||||||||||||||||
For 2024, the Threshold Value, Target Value, and Stretch Value of Mr. Cafera’s and Ms. Frazier’s 2024 cash award were as follows:
31
| Name |
Threshold
Value |
Target
Value |
Stretch
Value |
|||||||||||||||||
| Robert A. Cafera, Jr. | $ | 100,000 | $ | 200,000 | $ | 300,000 | ||||||||||||||
| Laura J. Frazier | $ | 70,000 | $ | 140,000 | $ | 210,000 | ||||||||||||||
Because the 2024 LTIP cash awards have a three year Performance Period, no amounts were earned for Mr. Cafera or Ms. Frazier in 2023 or 2024, and, therefore, no amounts are reflected under the column “Non-Equity Incentive Plan Compensation” in the Summary Compensation Table for 2023 or 2024. For 2024, the amounts in the Stock Awards column are the aggregate grant date fair values of the 2024 PSU awards computed in accordance with FASB ASC Topic 718. The Realized Value of each executive’s 2024 LTIP awards may be more than the Threshold Units or Threshold Value (as applicable), more or less than the Target Units or Target Value (as applicable), or less than the Stretch Units or Stretch Value (as applicable) and will depend on the level at which we achieve the Bank Performance Measures, each as measured at the end of the Performance Period.
The 2024 PSU awards will be paid in shares of FirstSun common stock within 45 days following the end of the three-year Performance Period, and the 2024 cash awards will be paid in a lump sum cash payment within 45 days following the end of the three-year Performance Period, in each case provided that the executive remains an employee in good standing of FirstSun or Sunflower Bank through the payment date, subject to certain exceptions.
The Bank Performance Measures designated by the board in 2024 are included in the table below. The board established threshold, target and stretch performance goals for each of the metrics, with threshold representing the minimum level of performance for which the executive officer will earn the applicable 2024 LTIP award. If performance is below the threshold level for one of the Bank Performance Measures, the executive officer will not earn an award for that metric; however, the executive officer will earn an award for the other metric if the threshold performance level is achieved. If performance exceeds the stretch level for any Bank Performance Measure, the executive officer will not earn a further award above the stretch incentive for such metric. Actual performance between threshold, target and stretch performance levels is interpolated between the two levels of achievement.
|
Bank
Performance Metric |
Weighting | Explanation | ||||||||||||
| Annual Growth in Revenues Per Share | 50% | Revenues means net interest income plus total noninterest income as reported by FirstSun, on a fully diluted share equivalent calculation. | ||||||||||||
| Annual Growth in Tangible Book Value Per Share | 50% | Tangible Book Value means total stockholders’ equity (excluding accumulated other comprehensive income) less goodwill and intangible assets. Intangible assets does not include mortgage servicing rights. Any impact to total stockholders’ equity from cash dividends to stockholders is also excluded. | ||||||||||||
The board has the ability to reduce the Bank Performance Measures by up to 50% if our credit risk profile deteriorates, as measured against a group of peer institutions. In addition, if during the Performance Period, we engage in a merger or other corporate restructuring that impacts our performance, the board may make such equitable adjustments following the closing of the transaction as necessary to preserve the original intent of the award and avoid material dilution or enlargement.
2023 Long-Term Incentive Plan Awards
In 2023, the compensation committee granted Mr. Cafera and Ms. Frazier two 2023 LTIP awards under the 2022 LTIP, consisting of a cash award and performance share units entitling the executive to receive a number of shares of FirstSun common stock (PSUs), with the amount of cash or number of shares that becomes payable at the end of the applicable Performance Period (“Realized Value”) to be based on the level of achievement of specified company performance measures (each, a “Bank Performance Measure” and collectively, the “Bank Performance Measures”). In 2023, the compensation committee granted Mr. Arnold a single 2023 LTIP award under the 2022 LTIP consisting solely of PSUs with the number of shares that becomes payable at the end of the applicable Performance Period (“Realized Value”) to be based on the level of achievement of specified Bank Performance Measures. For the 2023 PSU awards, the Realized Value is based on the following formula: for threshold performance, Realized Value will be 50% of the “Target Units” (listed in the table below as “Threshold Units”); for target performance, the Realized Value will be 100% of Target Units; and for stretch performance, the Realized Value will be 150% of Target Units (listed in the table below as “Stretch Units”). For 2023 cash awards, the Realized Value is based on the following formula: for threshold performance, Realized Value will be 50% of the “Target Value” (listed in the table below as “Threshold Value”); for target performance, the Realized Value
32
will be 100% of the Target Value; and for stretch performance, the Realized Value will be 150% of the Target Value (listed as “Stretch Value” in the table below).
For 2023, the Threshold Units, Target Units and Stretch Units of Mr. Arnold’s, Mr. Cafera’s, and Ms. Frazier’s Unit-based 2023 LTIP awards were as follows:
| Name |
Threshold
Units |
Target
Units |
Stretch
Units |
|||||||||||||||||
| Neal E. Arnold | 25,000 | 50,000 | 75,000 | |||||||||||||||||
| Robert A. Cafera, Jr. | 4,286 | 8,571 | 12,857 | |||||||||||||||||
| Laura J. Frazier | 3,214 | 6,429 | 9,643 | |||||||||||||||||
For 2023, the Threshold Value, Target Value, and Stretch Value of Mr. Cafera’s and Ms. Frazier’s 2023 cash award were as follows:
| Name |
Threshold
Value |
Target
Value |
Stretch
Value |
|||||||||||||||||
| Robert A. Cafera, Jr. | $ | 80,000 | $ | 160,000 | $ | 240,000 | ||||||||||||||
| Laura J. Frazier | $ | 60,000 | $ | 120,000 | $ | 180,000 | ||||||||||||||
Because the 2023 LTIP cash awards have a three year Performance Period, no amounts were earned for Mr. Cafera and Ms. Frazier in 2023 or 2024, and, therefore, no amounts are reflected under the column “Non-Equity Incentive Plan Compensation” in the Summary Compensation Table for 2023 or 2024. For 2023, the amounts in the Stock Awards column are the aggregate grant date fair values of the 2023 PSU awards computed in accordance with FASB ASC Topic 718. The Realized Value of each executive’s 2023 LTIP awards may be more than the Threshold Units or Threshold Value (as applicable), more or less than the Target Units or Target Value (as applicable), or less than the Stretch Units or Stretch Value (as applicable) and will depend on the level at which we achieve the Bank Performance Measures, each as measured at the end of the Performance Period.
The 2023 PSU awards will be paid in shares of FirstSun common stock within 45 days following the end of the three-year Performance Period, and the 2023 cash awards will be paid in a lump sum cash payment within 45 days following the end of the three-year Performance Period, in each case provided that the executive remains an employee in good standing of FirstSun or Sunflower Bank through the payment date, subject to certain exceptions.
The Bank Performance Measures designated by the board in 2023 are included in the table below. The board established threshold, target and stretch performance goals for each of the metrics, with threshold representing the minimum level of performance for which the executive officer will earn the applicable 2023 LTIP award. If performance is below the threshold level for one of the Bank Performance Measures, the executive officer will not earn an award for that metric; however, the executive officer will earn an award for the other metric if the threshold performance level is achieved. If performance exceeds the stretch level for any Bank Performance Measure, the executive officer will not earn a further award above the stretch incentive for such metric. Actual performance between threshold, target and stretch performance levels is interpolated between the two levels of achievement.
|
Bank
Performance Metric |
Weighting | Explanation | ||||||||||||
| Annual Growth in Revenues Per Share | 50% | Revenues means net interest income plus total noninterest income as reported by FirstSun, on a fully diluted share equivalent calculation. | ||||||||||||
| Annual Growth in Tangible Book Value Per Share | 50% | Tangible Book Value means total stockholders’ equity (excluding accumulated other comprehensive income) less goodwill and intangible assets. Intangible assets does not include mortgage servicing rights. Any impact to total stockholders’ equity from cash dividends to stockholders is also excluded. | ||||||||||||
The board has the ability to reduce the Bank Performance Measures by up to 50% if our credit risk profile deteriorates, as measured against a group of peer institutions. In addition, if during the Performance Period, we engage in a merger or other corporate restructuring that impacts our performance, the board may make such equitable adjustments following the
33
closing of the transaction as necessary to preserve the original intent of the award and avoid material dilution or enlargement.
2022 Long-Term Incentive Plan
Our 2022 Long-Term Incentive Plan, which we refer to as the “2022 LTIP,” was adopted by the FirstSun board of directors effective April 1, 2022, and is intended to serve as an ongoing plan for future years. The 2022 LTIP permits the compensation committee, with input from our Chief Executive Officer, to make awards in the form of cash and/or equity to be issued under our equity incentive plans, to become payable upon achievement over a three-year performance period (the “Performance Period”) of such company and individual performance measures as the compensation committee shall designate. For 2022, the compensation committee granted Mr. Cafera and Ms. Frazier two 2022 LTIP awards, consisting of a cash award and performance share units entitling the executive to receive a number of shares of FirstSun common stock (PSUs), with the amount of cash or number of shares that becomes payable at the end of the applicable Performance Period (“Realized Value”) to be based on the level of achievement of specified company performance measures (each, a “Bank Performance Measure” and collectively, the “Bank Performance Measures”). For 2022, the compensation committee granted Mr. Arnold a single 2022 LTIP award consisting solely of PSUs with the number of shares that becomes payable at the end of the applicable Performance Period (“Realized Value”) to be based on the level of achievement of specified Bank Performance Measures. For the 2022 PSU awards, the Realized Value is based on the following formula: for threshold performance, Realized Value will be 50% of the “Target Units” (listed in the table below as “Threshold Units”); for target performance, the Realized Value will be 100% of Target Units; and for stretch performance, the Realized Value will be 150% of Target Units (listed in the table below as “Stretch Units”). For 2022 cash awards, the Realized Value is based on the following formula: for threshold performance, Realized Value will be 50% of the “Target Value” (listed in the table below as “Threshold Value”); for target performance, the Realized Value will be 100% of the Target Value; and for stretch performance, the Realized Value will be 150% of the Target Value (listed as “Stretch Value” in the table below).
For 2022, the Threshold Units, Target Units and Stretch Units of Mr. Arnold’s, Mr. Cafera’s, and Ms. Frazier’s Unit-based 2022 LTIP awards were as follows:
| Name |
Threshold
Units |
Target
Units |
Stretch
Units |
|||||||||||||||||
| Neal E. Arnold | 20,896 | 41,791 | 62,687 | |||||||||||||||||
| Robert A. Cafera, Jr. | 3,582 | 7,164 | 10,746 | |||||||||||||||||
| Laura J. Frazier | 2,686 | 5,373 | 8,059 | |||||||||||||||||
For 2022, the Threshold Value, Target Value, and Stretch Value of Mr. Cafera’s and Ms. Frazier’s 2022 cash award were as follows:
| Name |
Threshold
Value |
Target
Value |
Stretch
Value |
|||||||||||||||||
| Robert A. Cafera, Jr. | $ | 80,000 | $ | 160,000 | $ | 240,000 | ||||||||||||||
| Laura J. Frazier | $ | 60,000 | $ | 120,000 | $ | 180,000 | ||||||||||||||
Because the 2022 LTIP awards have a three year Performance Period, no amounts were earned in 2023 or 2024, and, therefore, no amounts are reflected under the column “Non-Equity Incentive Plan Compensation” in the Summary Compensation Table for 2023 or 2024. The Realized Value of each executive’s 2022 LTIP awards may be more than the Threshold Units or Threshold Value (as applicable), more or less than the Target Units or Target Value (as applicable), or less than the Stretch Units or Stretch Value (as applicable) and will depend on the level at which we achieve the Bank Performance Measures, each as measured at the end of the Performance Period.
The 2022 PSU awards will be paid in shares of FirstSun common stock within 45 days following the end of the three-year Performance Period, and the 2022 cash awards will be paid in a lump sum cash payment within 45 days following the end of the three-year Performance Period, in each case provided that the executive remains an employee in good standing of FirstSun or Sunflower Bank through the payment date, subject to certain exceptions.
The Bank Performance Measures designated by the board in 2022 are included in the table below. The board established threshold, target and stretch performance goals for each of the metrics, with threshold representing the minimum level of performance for which the executive officer will earn the applicable 2022 LTIP award. If performance is below the
34
threshold level for one of the Bank Performance Measures, the executive officer will not earn an award for that metric; however, the executive officer will earn an award for the other metric if the threshold performance level is achieved. If performance exceeds the stretch level for any Bank Performance Measure, the executive officer will not earn a further award above the stretch incentive for such metric. Actual performance between threshold, target and stretch performance levels is interpolated between the two levels of achievement. For 2022, the performance required to achieve threshold, target or stretch settlements is based on performance of FirstSun, adjusted on a pro forma basis to include the acquisition of Pioneer as if it were part of FirstSun starting January 1, 2021 (this acquisition was effective April 1, 2022).
|
Bank
Performance Metric |
Weighting | Explanation | ||||||||||||
| Annual Growth in Revenues Per Share | 50% | Revenues means net interest income plus total noninterest income as reported by FirstSun, on a fully diluted share equivalent calculation. | ||||||||||||
| Annual Growth in Tangible Book Value Per Share | 50% | Tangible Book Value means total stockholders’ equity (excluding accumulated other comprehensive income) less goodwill and intangible assets. Intangible assets does not include mortgage servicing rights. Any impact to total stockholders’ equity from cash dividends to stockholders is also excluded. | ||||||||||||
The board has the ability to reduce the Bank Performance Measures by up to 50% if our credit risk profile deteriorates, as measured against a group of peer institutions. In addition, if during the Performance Period, we engage in a merger or other corporate restructuring that impacts our performance, the board may make such equitable adjustments following the closing of the transaction as necessary to preserve the original intent of the award and avoid material dilution or enlargement.
2021 Long-Term Incentive Plan
Our 2021 Long-Term Incentive Plan (the “2021 LTIP”) was adopted by the FirstSun board effective April 1, 2021. The 2021 LTIP awards are unfunded, unsecured promises by FirstSun or Sunflower Bank to provide the participants with a cash payment equal to the “Realized Value” of their applicable award determined at the end of the three year performance period based on the following formula: (Target Value x Bank Performance Metrics) x (Individual Performance + Team Factor (0.50)).
The 2021 LTIP award agreements set forth the “Target Value” of each participant’s award, which is the expected future value of the award if the Bank Performance Metrics, as established by the board, are achieved at the target levels. The Target Value of Mr. Arnold and Mr. Cafera’s 2021 LTIP awards were $1.0 million and $400,000, respectively, and the Target Value of Ms. Frazier’s 2021 LTIP award was $300,000.
The Bank Performance Metrics designated by the board in 2021 are described in the table below. The board established threshold, target and stretch performance goals for each of the metrics, with threshold representing the minimum level of performance for which the executive officer will earn a payment. If performance is below the threshold level for one of the Bank Performance Metrics, the executive officer will not earn a payment for that metric; however, the executive officer will earn a payment for the other metric if the threshold performance level is achieved. Payments for achievement of the threshold, target and stretch performance levels are 50%, 100% and 150% of the Target Value, respectively. If performance exceeds the stretch level for any Bank Performance Metric, the executive officer will not earn a further incentive above the stretch incentive for such metric. Actual performance between threshold, target and stretch performance levels is interpolated between the two levels of achievement.
35
|
Bank
Performance Metric |
Weighting | Explanation | ||||||||||||
| Cumulative Revenue | 35% |
Cumulative net interest income plus adjusted noninterest income over the Performance Period.
1
|
||||||||||||
| Fee Income / Revenue | 25% |
Cumulative adjusted noninterest income over the Performance Period divided by Cumulative Revenue.
1
|
||||||||||||
| Return on Assets | 25% | Average of each fiscal year’s net income divided by average assets for the Performance Period. | ||||||||||||
| Compound Tangible Book Value Growth | 15% | Tangible book value (not per share) growth from the beginning of the Performance Period to the end using an annual rate of return calculation. | ||||||||||||
|
1
Adjusted noninterest income will exclude extraordinary items, such as gains and losses on securities and other real estate owned.
|
||||||||||||||
Individual Performance under the 2021 LTIP means the value, which shall be no less than zero, determined by the Chief Executive Officer in his or her sole discretion, which reflects the participant’s contribution to the Company’s overall performance and efforts in building a sustainable growth company over the Performance Period. The “Team Factor” under the 2021 LTIP means the percentage used to calculate the Realized Value, which for the 2021 LTIP is 50% (0.50) for purposes of calculation.
The performance period for the 2021 LTIP ended on March 31, 2024 with the associated compensation paid in the second quarter of 2024. Receipt of compensation was conditioned upon the participant remaining an employee in good standing of FirstSun or Sunflower Bank, which each of Mr. Arnold, Mr. Cafera, or Ms. Frazier satisfied. Using the metrics described above, Mr. Arnold received $1,021,000, Mr. Cafera received $408,400 and Ms. Frazier received $306,300 in connection with their participation in the 2021 LTIP. These amounts are reflected under the column “Non-Equity Incentive Plan Compensation” in the Summary Compensation Table for 2024.
2020 Long-Term Incentive Plan
Our 2020 Long-Term Incentive Plan, which we refer to as the “2020 LTIP,” was adopted by the FirstSun board effective April 1, 2020. Awards under the 2020 LTIP consisted of “LTIP Units” which are unfunded, unsecured promises by FirstSun or Sunflower Bank to provide a participant with a cash payment equal to the tangible book value of one share of FirstSun common stock, subject to the terms of the 2020 LTIP and the participant’s award agreement. All awards under the 2020 LTIP have an assigned future value, which we refer to as the “Target Value.” The Target Value is used to determine the number of LTIP Units awarded to the participant based upon the expected tangible book value of our common stock on the date that the participant becomes 100% vested in his or her award. The final value of the LTIP Units will be based on our tangible book value per share determined on the last day of each plan year. In April 2020, Mr. Arnold and Mr. Cafera were granted LTIP Units with a Target Value of $1.0 million and $400,000 respectively, and Ms. Frazier was granted an LTIP with a Target Value of $300,000. These awards will have a minimum value on the vesting date of no less than 80% of the Target Value and a maximum value of no more than 120% of the Target Value, as reflected in the following table.
The 2020 LTIP awards granted to Mr. Arnold and Mr. Cafera were each subject to a three-year performance period which ended on March 31, 2023 with associated compensation paid in the second quarter of 2023. Receipt of compensation was conditioned upon the participant remaining an employee in good standing of FirstSun or Sunflower Bank, which both Mr. Arnold and Mr. Cafera satisfied. Mr. Arnold received $1,128,961, Mr. Cafera received $451,584 and Ms. Frazier received $338,688 in connection with their participation in the 2020 LTIP. These amounts are reflected under the column “Non-Equity Incentive Plan Compensation” in the Summary Compensation Table for 2023.
Deferred Compensation Plan
Our named executive officers have the opportunity to participate in our Deferred Compensation Plan which allows them to defer a portion of their taxable earnings (including annual salaries, commissions, LTIP and annual bonus, and other taxable amounts) until a later specified date. In addition, FirstSun can, in its sole discretion, with respect to any plan year, make contributions on behalf of any or all participants of the plan. Each participant may elect that his or her account be adjusted for gains and losses as if invested in one or more investment options made available by FirstSun in its discretion. Participants who fail to make an investment election are deemed to have elected to have their account adjusted to reflect the gains and losses of a Vanguard Target Date Retirement Fund with the target date nearest to the date the participant will attain age 65.
36
A participant may elect to receive a distribution of his or her plan account in a lump sum or installments in the event of a change in control of FirstSun, termination of employment, retirement, death, disability or a specified date as elected in the participant’s enrollment form, or earlier upon a severe financial hardship. Payments to our named executive officers may be delayed for a period of six months pursuant to the “specified employee delay’ rules under Section 409A of the Code. Amounts deferred within the two years prior to the participant’s termination of employment for any reason are subject to clawback and forfeiture.
Outstanding Equity Awards at 2024 Fiscal Year-End
The following table provides a summary of unexercised stock option awards outstanding and Performance Stock Units (“PSUs”) which have not vested and other equity incentive plan awards outstanding as of December 31, 2024 for the named executive officers. The vesting provisions applicable to each outstanding option and performance based stock award is described in the footnotes to the following table.
| Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||||||||||
|
Number of Securities Underlying
Options Exercisable |
Number of Securities Underlying Options Unexercisable |
Option Exercise
Price |
Option
Expiration Date |
Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested |
Equity Incentive Plan Awards: Number of Unearned Shares or Units That Have Not Vested
1, 2, 3
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares or Units That Have Not Vested | ||||||||||||||||||||||||||||||||||||||||
|
Mollie H. Carter
4
|
— | — | $ | — | — | — | $ | — | — | $ | — | ||||||||||||||||||||||||||||||||||||
| Neal E. Arnold | 187,590 | — | $ | 20.49 | 2/14/2028 | — | $ | — | 135,453 | $ | 5,424,893 | ||||||||||||||||||||||||||||||||||||
| Robert A. Cafera, Jr. | 135,952 | — | $ | 19.72 | 7/20/2027 | — | $ | — | 24,186 | $ | 968,649 | ||||||||||||||||||||||||||||||||||||
| Laura J. Frazier | 55,514 | — | $ | 19.72 | 7/20/2027 | — | $ | — | 17,717 | $ | 709,566 | ||||||||||||||||||||||||||||||||||||
|
1
Awards of 41,791 (Arnold), 7,164 (Cafera) and 5,373 (Frazier) vest on the third anniversary of the grant date, April 29, 2025.
2
Awards of 50,000 (Arnold), 8,571 (Cafera) and 6,429 (Frazier) vest on the third anniversary of the grant date, March 31, 2026.
3
Awards of 43,662 (Arnold), 8,451 (Cafera) and 5,915 (Frazier) vest on the third anniversary of the grant date, March 31, 2027.
4
In 2024, Ms. Carter exercised 196,375 options and acquired 196,375 shares on exercise. The value realized on exercise was $2,998,646.
|
|||||||||||||||||||||||||||||||||||||||||||||||
Potential Payments Upon Termination or Change in Control
Named Executive Officer Employment Agreements
Mr. Arnold’s and Mr. Cafera’s employment agreement each includes provisions entitling him to certain severance payments upon termination of employment, including in certain circumstances following a change in control. If Mr. Arnold’s or Mr. Cafera’s employment is terminated without “Cause” or at his election for “Good Reason,” each as defined in his employment agreement, each is entitled to receive:
•
the amount of his target annual bonus (100% of base salary) for the fiscal year that includes his termination, payable in a lump sum within 30 days;
•
subject to his execution of a general release:
◦
a lump sum within 65 days equal to (a) 24 months of base salary and target annual bonus, plus (b) 18 months of COBRA premiums;
◦
full vesting of his account under our Deferred Compensation Plan; and
◦
except where termination for Good Reason is triggered by his decision not to renew his employment agreement,
▪
full vesting of any outstanding options or other incentive compensation or equity-based awards, and
▪
the right to elect to cancel any outstanding options granted to him under his initial option grant in return for a payment of their spread value (i.e., the difference between the aggregate fair
37
market value and the aggregate exercise price) as of the date of his election. The “initial option grant” refers to the option grant of 187,590 options made to Mr. Arnold on January 31, 2018 and the option grant of 135,952 options made to Mr. Cafera on July 20, 2017. If the executive fails to timely make an election to cancel such options, the options will remain outstanding and exercisable until 18 months following such termination or, if earlier, the end of the initial option grant’s original term (i.e., January 31, 2028 for Mr. Arnold and July 20, 2027 for Mr. Cafera).
Mr. Arnold’s and Mr. Cafera’s employment agreements further clarify that the “other incentive compensation or equity-based awards” that become vested (as described above) include the cash and performance-based stock awards made under our LTIP Plans, with vesting of performance-based stock awards to be determined by the compensation committee of the FirstSun board based on the level of achievement of Bank Performance Measures as of the date of the executive’s termination, subject to adjustments, such as to account for transaction expenses, as the compensation committee determines are necessary to carry out the original intent of the award and in a manner that does not materially adversely affect the executive. If the compensation committee determines that the level of achievement of Bank Performance Measures cannot be objectively measured as of the executive’s termination date, then vesting will occur at the greater of target or the level achieved based on actual performance through the last practicable date prior to the executive’s termination.
If the total amounts due to Mr. Arnold or Mr. Cafera in connection with a change in control exceed the parachute payment limits imposed under Code Section 280G, such amounts are subject to reduction if a reduction would result in a better net benefit to the executive than if he were to incur an excise tax on his parachute payments.
Ms. Frazier Change In Control Severance Agreement
Ms. Frazier is a party to a Change In Control Severance Agreement (the “CIC Agreement”) that entitles her to certain severance payments upon termination of employment following a change in control. If Ms. Frazier’s employment is terminated without “Cause” or at her election for “Good Reason,” each as defined in her CIC Agreement within one year following a change in control, she is entitled to receive:
•
all unpaid compensation (other than bonuses) that has accrued through her termination date and any unused and accrued vacation/paid time off, in a lump sum payment no later than 30 days following the termination date;
•
any benefits she may be entitled pursuant to the Company’s benefit plans;
•
any unpaid cash bonus payments earned and payable with respect to any bonus period ending prior to the termination date;
•
severance compensation in a total amount equal to 24 months of base salary and annual bonus (at her then-current base salary rate and targeted annual bonus for the year of termination, plus 18 months of COBRA premiums in effect as of the termination date, which total amount will be paid in a lump sum within 65 days after the date of such termination, subject to Ms. Frazier entering into a release and compliance with 409A; and
•
full vesting of any unvested portion of the outstanding options or other equity-based awards in accordance with the terms of the applicable award agreement.
If the total amounts due to Ms. Frazier in connection with a change in control exceed the parachute payment limits imposed under Code Section 280G, such amounts are subject to reduction if a reduction would result in a better net benefit to the executive than if she were to incur an excise tax on his parachute payments.
Long-Term Incentive Plans
Under our LTIP Plans, if a named executive officer terminates his or her employment prior to the third anniversary of the grant date due to his or her retirement, death, disability, or involuntary termination without cause, the award will vest on a pro-rata schedule based on the number of full plan years following the grant date that the executive remained an employee.
The 2024 LTIP, 2023 LTIP and 2022 LTIP award agreements PSUs issued to executive officers under our 2021 Equity Incentive Plan vest on the third anniversary of the grant date, subject to the achievement of the Bank Performance Measures. Under Mr. Arnold’s and Mr. Cafera’s employment agreements, if the executive officer is terminated without “cause” or the executive officer terminates his employment for “good reason” (as each such term is defined in the applicable employment agreement), except where such termination is triggered by the executive officer’s decision not to
38
renew his employment agreement, any unvested portion of these PSUs will immediately vest as of the date of such termination. Amendments were made to Mr. Arnold’s and Mr. Cafera’s employment agreements in March 2023 to clarify that vesting of performance-based equity awards (such as these PSUs) made under the LTIPs (or any successor plan) will be based on the level of achievement of any Bank Performance Measures (as defined in the LTIPs) as of the date of such termination, as determined by our compensation committee and subject to adjustments (e.g., accounting for transaction expenses) to such Bank Performance Measures as the compensation committee (or its delegate) determines are necessary to carry out their original intent and in a manner that does not materially adversely affect the executive. If, however, the compensation committee determines that achievement of the applicable Bank Performance Measures for the full performance period cannot be objectively measured as of such termination, vesting will occur at the greater of 100% of target level and the level achieved based on actual performance determined through the last practicable date prior to such termination. The foregoing full vesting supersedes the standard provisions in our form PSU awards, which provided that if the participant terminates without “cause” (as defined in the LTIP) within 12 months following a change in control and is otherwise determined to be “in good standing”, unless the award was continued or assumed on substantially the same terms by the surviving or acquiring entity, the PSUs will vest pro rata based on whole one-year periods completed following date of grant and our compensation committee’s determination of the level of achievement of the applicable Performance Measures as of the end of the most recent calendar month or quarter, as designated by the compensation committee. Under Ms. Frazier’s CIC Agreement, she is entitled to full vesting of any unvested portion of the outstanding equity-based awards in accordance with the terms of the applicable award agreement.
Equity Incentive Plan
All outstanding stock options issued to our executive officers under our Equity Incentive Plans were issued pursuant to awards providing that they vest ratably over a four year period on each anniversary of the grant date, and all such outstanding stock options are currently vested in full. Pursuant to the applicable award agreements, except where termination is for “cause” (as defined in the Equity Incentive Plan) or, in the case of Mr. Arnold or Mr. Cafera, the termination is due to the executive officer’s decision not to renew his employment agreement, these outstanding vested stock options will continue under their current terms even following the executive officer’s termination of employment and service with FirstSun and its subsidiaries, provided that they will be cancelled if not exercised within 3 months following such termination, or in the case of death or disability within 12 months following such termination, or if earlier the original expiration of their term. However, in the first calendar year in which the executive officer is no longer employed with the FirstSun or its subsidiaries due to a termination of his or her employment and service with FirstSun and its subsidiaries without “cause” or for “good reason” (as each such term is defined in the applicable employment agreement or the applicable award agreement), the executive officer may elect to cancel each such option that remains outstanding but unexercised in return for an immediate payment equal to the difference between the aggregate fair market value of a share and the aggregate exercise price. If the executive officer fails to timely make an election to cancel his or her outstanding shares, the options will continue to remain outstanding and exercisable for a period of 18-months following the termination, or if earlier, the original option term. In the event of a change in control, unless each of the executive officers’ outstanding stock option awards are assumed, continued or a similar award is substituted by the surviving or acquiring entity, our board may choose to either cancel the award in exchange for a payment to the executive officer of its value or allow the executive officer a limited period of time to exercise the option and any unexercised options will terminate.
Clawback Policy
As required under SEC and NASDAQ rules, the board of directors approved an Incentive Compensation Recovery Policy. The policy generally requires recovery of any erroneously awarded incentive-based compensation (calculated based on the error that was subsequently corrected in an accounting restatement), regardless of any misconduct or knowledge of the officer who received the compensation. But recovery is generally not required if the compensation was received before the person began serving as an officer, or the person did not serve as an officer at any time during clawback period. A clawback will be triggered by both a “Big R” restatement — one that corrects an error in previously issued financial statements that is material to the previously issued financial statement and requires a Form 8-K filing — as well as a “little r” restatement — one that corrects an error that would result in a material misstatement if the error was corrected in the current period or left uncorrected in the current period and generally does not require filing a Form 8-K. Our clawback policy also provides our board of directors discretion to clawback any incentive compensation paid to an officer if the board determines it is just, practical, equitable, and in the best interests of the Company to do so, regardless of whether the Company is required to prepare a “Big R” restatement or “little r” restatement.
39
Compensation of Directors for Fiscal Year 2024
We do not pay our “inside” employee-directors any additional compensation for their service as directors. For their service in 2024, we paid our non-employee directors the following cash fees:
•
a Company director service fee of $35,000 ($8,750 payable quarterly);
•
a Bank director service fee of $20,000 ($5,000 payable quarterly);
•
an Audit Committee Chair fee of $20,000 ($5,000 payable quarterly to Ms. Elving);
•
a Compensation and Succession Committee Chair fee of $15,000 ($3,750 payable quarterly to Ms. Merdian);
•
a Nominating and Governance Committee Chair fee of $10,000 ($2,500 payable quarterly to Mr. Levy);
•
a Risk Committee Chair fee of $15,000 ($3,750 payable quarterly to Ms. Cunningham); and
•
committee member fees of:
•
$10,000 ($2,500 quarterly) to our Audit Committee members other than the Chair,
•
$7,500 ($1,875 quarterly) to our Compensation and Succession Committee members other than the Chair,
•
$5,000 ($1,250 quarterly) to our Nominating and Governance Committee members, other than the Chair, and
•
$7,500 ($1,875 quarterly) to our Risk Committee members, other than the Chair.
Director fees are paid each quarter in advance and are paid based on service for next quarter.
We also grant our non-employee directors annual equity awards in the form of restricted stock units. These awards vest on the first anniversary of the grant date. The grant date of the 2024 equity awards was March 29, 2024, and these awards will vest on March 29, 2025.
The following table sets forth the compensation paid to each of our non-employee directors in 2024:
|
Name and
Principal Position |
Fees Earned
or Paid in
Cash
1
|
Stock
Awards
2
|
Option
Awards |
All other Compensation | Total | |||||||||||||||||||||||||||
|
Isabella Cunningham
3
|
$ | 73,125 | $ | 60,000 | $ | — | $ | — | $ | 133,125 | ||||||||||||||||||||||
|
Beverly O. Elving
3
|
79,875 | 60,000 | — | — | 139,875 | |||||||||||||||||||||||||||
|
Kevin T. Hammond
4
|
35,000 | 40,000 | — | — | 75,000 | |||||||||||||||||||||||||||
|
Paul A. Larkins
4
|
35,000 | 40,000 | — | — | 75,000 | |||||||||||||||||||||||||||
|
David W. Levy
3
|
83,250 | 60,000 | — | — | 143,250 | |||||||||||||||||||||||||||
|
Diane L. Merdian
3
|
85,000 | 60,000 | — | — | 145,000 | |||||||||||||||||||||||||||
|
John S. Fleshood
5
|
— | — | — | — | — | |||||||||||||||||||||||||||
|
1
None of our directors have elected to defer compensation.
|
||||||||||||||||||||||||||||||||
|
2
The amounts represent the grant date fair value for equity awards in accordance with ASC 718 — “Compensation-Stock Compensation.” A discussion of the assumptions used in calculating the values may be found in Note 1 of our audited financial statements included in our 2024 Annual Report on Form 10-K.
|
||||||||||||||||||||||||||||||||
|
3
Total unvested restricted stock units held by such director at December 31, 2024 was 1,677, which includes the restricted awards granted in 2024 for Company and Bank board service.
|
||||||||||||||||||||||||||||||||
|
4
Total unvested restricted stock units held by such director at December 31, 2024 was 1,118, which includes the restricted awards granted in 2024 for Company board service.
|
||||||||||||||||||||||||||||||||
|
5
Mr. Fleshood joined the Company and Bank boards on March 5, 2025; he did not receive director compensation in 2024.
|
||||||||||||||||||||||||||||||||
40
Compensation-Related Governance Policies
Common Stock Ownership and Retention Guidelines for Our Chief Executive Officer
In order to align the interests of our chief executive officer with our stockholders, we have adopted a policy that requires our chief executive officer to develop a significant equity stake in the company. The Nominating and Governance Committee is responsible for monitoring compliance with these stock ownership and retention guidelines.
Under the policy, our chief executive officer must acquire and hold shares of our common stock equal in value to at least five times his or her annual base salary. If the officer acquires share of common stock under our equity-based incentive plans he or she must hold at least 100% of all net after-tax acquired shares until these stock ownership guidelines are satisfied. The following share types are included under these guidelines: shares directly owned, family-owned shares, retirement plan shares and unvested time-based restricted stock. Stock options that are unexercised, regardless of their vesting status and in-the-money value, are not counted toward satisfaction of these guidelines. Unvested performance-based restricted stock is also not counted toward stock ownership. Currently, our chief executive officer is in compliance with these guidelines.
Prohibitions on Hedging and Pledging
We consider it improper and inappropriate for our directors, officers and employees to engage in short-term or speculative transactions in our securities or in other transactions in our securities that may lead to inadvertent violations of the insider trading laws. Accordingly, under our
Insider Trading Policy
, we prohibit:
•
trading in puts, calls or similar options on any of our securities or the sale of any of our securities “short”;
•
hedging or monetization transactions, such as zero-cost collars and forward sale contracts, which allow a director, officer or employee to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock; and
•
holding our securities in a margin account or pledging our securities as collateral for a loan.
41
PROPOSAL 2:
TO APPROVE AN AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO DECLASSIFY THE BOARD OF DIRECTORS
General
Our stockholders are being asked to approve and adopt an Amended and Restated Certificate of Incorporation (the “Amended Certificate”) that, among other things, would declassify the board. Section 6.02 of our existing Amended and Restated Certificate of Incorporation (our “Current Certificate”) currently provides that the board shall be divided into three classes, designated as Class I, Class II, and Class III, with members of each class of directors serving a three-year term. The classification of our board results in staggered elections, with a different class of directors standing for election each year.
In the past, the Company’s board of directors believed that a classified board structure served the best interests of the Company and its stockholders. Among other considerations, classified boards generally can provide for company and board continuity and stability, promote director independence that is less subject to management or outside influence, and inhibit coercive takeover tactics and special interest groups focused on short-term gain from taking rapid control of a company without giving its board the opportunity to negotiate the payment of an appropriate premium.
While the board continues to believe these are important considerations, the board also understands that the corporate governance best practices in recent years have moved away from classified boards in favor of electing all directors annually. As part of its ongoing responsibilities to monitor current developments in corporate governance and review and recommend changes to the Company’s governing documents, the board, upon the recommendation of the Nominating and Governance Committee of the board, evaluated the classified board structure and considered, among other things, that an annual election of all directors would provide our stockholders with greater opportunity to register their views at each annual meeting on the performance of the entire board over the prior year.
Declassification of the board, as provided in the Amended Certificate, would also have the effect of invalidating restrictions regarding the removal of directors by stockholders contained in our Bylaws. Under Delaware law, a provision in a Delaware corporation’s organizational documents that provides that a director may only be removed “for cause” by the stockholders is not valid if the corporation has a nonclassified board. As a result, if this Proposal 2 is approved by our stockholders and the Amended Certificate is adopted, the provision in the Company’s Bylaws providing that a director may only be removed from office by the stockholders for cause will no longer be valid and, instead, our stockholders will have the ability to remove a director from the board with or without cause by the affirmative vote of the holders of at least a majority of the voting power of the issued and outstanding capital stock of the Company entitled to vote in the election of directors. If this Proposal 2 is approved by our stockholders and the Amended Certificate is adopted, including the amendments to declassify the board, the Company intends to make certain conforming amendments to the Company’s Bylaws (see Proposal 5).
The description of the proposed Amended Certificate and the amendments to our certificate of incorporation proposed by this Proposal 2 is qualified in its entirety by reference to, and should be read in conjunction with, the full text of the Amended and Restated Certificate of Incorporation attached as
Appendix A
which is marked to show all amendments to the Current Certificate being submitted to our stockholders at the annual meeting , with deletions indicated by strike-outs and additions indicated by underlining.
The Proposal
On February 19, 2025, upon recommendation of the Nominating and Governance Committee of the board, the board unanimously approved and adopted, subject to stockholder approval, a proposed Amended and Restated Certificate of Incorporation that, among other things, eliminates the board’s classified structure. The Amended Certificate also reflects certain amendments to Article VII (Corporate Opportunities) of the Current Certificate to remove references to the Stockholders’ Agreement. The Stockholders’ Agreement was terminated in its entirety as of February 21, 2025 and, as a result, it is no longer necessary for the Company’s certificate of incorporation to include references to the Stockholders’ Agreement. The board has approved and is recommending that our stockholders approve the removal of references to the Stockholders’ Agreement in Article VII of the Current Certificate in light of the termination of the Stockholders’ Agreement.
If this Proposal 2 is approved by our stockholders and the Amended Certificate is adopted, the annual election of all directors would be phased in over a three-year period, commencing at the 2026 annual meeting of stockholders. Declassification would not result in the curtailment of any director’s term of office. Rather, all current directors, including
42
the directors elected at the annual meeting to serve for three-year terms expiring at the 2028 annual meeting of stockholders, would complete their present three-year terms. Directors whose terms expire at the 2026 and 2027 annual meetings of stockholders would be nominated for election for one-year terms. Beginning with the 2028 annual meeting of stockholders, all director nominees would be nominated for election for one-year terms.
The amendments proposed by this Proposal 2 are not conditioned upon approval of any of the other proposals to amend the Company’s certificate of incorporation in this proxy statement. As described in this proxy statement, we are submitting, and our board unanimously recommends that you vote “FOR,” three separate proposals to amend our Current Certificate (collectively, the “Certificate Amendment Proposals”): Proposal 2 to declassify the board; Proposal 3 to eliminate supermajority voting requirements for certain amendments to the Company’s Certificate of Incorporation; and Proposal 4 to permit the Company’s stockholders to amend the Company’s bylaws by a majority approval. If all three board-recommended Certificate Amendment Proposals are approved by our stockholders, all the changes contained in the Amended Certificate attached to this proxy statement as
Appendix A
will be made. However, approval of each Certificate Amendment Proposal is not contingent on approval of the others. If this Proposal 2 is approved by our stockholders but the other Certificate Amendment Proposals are not approved, then only the amendments to Article VI (Board of Directors) and Article VIII (Corporate Opportunities) of our Current Certificate as set forth in
Appendix A
will be made.
If approved by our stockholders, the Amended Certificate, reflecting all Certificate Amendment Proposals approved by our stockholders, would become effective upon the filing of such Amended Certificate with the Secretary of State of the State of Delaware.
If this Proposal 2 is not approved by our stockholders but one or more other Certificate of Amendment Proposals is approved, then the amendment to Article VI (Board of Directors) of our Current Certificate as set forth in
Appendix A
will not be made and the board will remain classified with our directors continuing to serve three-year terms. If none of the Certificate Amendment Proposals are approved by our stockholders, then our Current Certificate will remain in effect, and the board will remain classified with our directors continuing to serve three-year terms.
Stockholder Vote Required
Approval of this proposal requires the affirmative vote of holders of at least two-thirds of the shares having voting power present in person or by proxy at the annual meeting. Abstention will be counted as a vote present in person or by proxy at the annual meeting and entitled to vote on the proposal and will have the same effect as a vote “AGAINST” the proposal. Broker non-votes will also be counted as a vote “AGAINST” the proposal.
The board of directors recommends that you vote “FOR” this proposal.
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PROPOSAL 3:
TO APPROVE AN AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO ELIMINATE SUPERMAJORITY VOTING REQUIREMENTS FOR CERTAIN AMENDMENTS TO THE COMPANY’S CERTIFICATE OF INCORPORATION
General
Our stockholders are being asked to adopt the Amended Certificate that, among other things, would eliminate the supermajority voting requirement to amend certain provisions of the Company’s Certificate of Incorporation. Article IX of our Current Certificate requires amendments to Articles VI (Board of Directors), VIII (Corporate Opportunities), and X (Amendment of Bylaws) of the Company’s Certificate of Incorporation be approved by stockholders representing at least sixty-six and two thirds percent (66 2/3%) of the voting power of the then-outstanding shares of capital stock of the Company entitled to vote with respect to such amendment(s). We are seeking stockholder approval to eliminate this supermajority stockholder approval requirement from our Current Certificate and replace the supermajority voting requirement with a reduced majority voting requirement; provided, however, that amendments to Articles VII (Limitation of Liability and Indemnification) and IX (Amendment of Articles of Incorporation) will continue to require the approval of stockholders representing at least sixty-six and two thirds percent (66 2/3%) of the voting power of the then-outstanding shares of capital stock of the Company entitled to vote with respect to such amendment(s).
The description of the proposed Amended Certificate and the amendments to our certificate of incorporation proposed by this Proposal 3 is qualified in its entirety by reference to, and should be read in conjunction with, the full text of the Amended and Restated Certificate of Incorporation attached as
Appendix A
which is marked to show all amendments to the Current Certificate being submitted to our stockholders at the annual meeting , with deletions indicated by strike-outs and additions indicated by underlining.
The Proposal
Consistent with our board’s regular review of corporate governance principles and focus on promoting certain governance best practices, on February 19, 2025, the board unanimously approved and adopted, subject to stockholder approval, a proposed Amended and Restated Certificate of Incorporation that, among other things, eliminates the supermajority voting requirement to amend Articles VI (Board of Directors), VIII (Corporate Opportunities), and X (Amendment of Bylaws) of the Company’s Certificate of Incorporation. As required by our Current Certificate, by presenting this Proposal 3 for approval by our stockholders at the annual meeting, our board is seeking stockholder approval of an amendment to the Current Certificate that would amend Article IX of the Current Certificate to eliminate the requirement for a supermajority vote to amend Articles VI (Board of Directors), VIII (Corporate Opportunities), and X (Amendment of Bylaws) of the Company’s certificate of incorporation. The elimination of this supermajority voting requirement would have the effect of replacing the supermajority voting requirement to amend Articles VI, VIII, and X of the Company’s Certificate of Incorporation with a majority voting requirement.
The board recognizes that a majority voting standard for effecting changes to these provisions of the Company’s Certificate of Incorporation enhances our stockholders’ ability to participate in corporate governance and aligns the Company with recognized best practices in corporate governance.
If approved by our stockholders, the Amended Certificate reflecting the elimination of the supermajority vote requirement for stockholders to amend Articles, VI (Board of Directors), VIII (Corporate Opportunities), and X (Amendment of Bylaws) of the Company’s Certificate of Incorporation would become effective upon its filing with the Secretary of State of the State of Delaware.
The amendments proposed by this Proposal 3 is not conditioned upon approval of any of the Certificate Amendment Proposals. If all three board-recommended Certificate Amendment Proposals are approved by our stockholders, including this Proposal 3, all the changes contained in the Amended Certificate attached to this proxy statement as
Appendix A
will be made. If this Proposal 3 is approved by our stockholders but the other Certificate Amendment Proposals are not approved, then only the amendments to Article IX (Amendment of Certificate of Incorporation) and Article VIII (Corporate Opportunities) of our Current Certificate as set forth in
Appendix A
will be made. If this Proposal 3 is not approved by our stockholders but one or more other Certificate of Amendment Proposals is approved, then the amendment to Article IX (Amendment of Certificate of Incorporation) of our Current Certificate as set forth in
Appendix A
will not be made and amendments to Articles, VI (Board of Directors), VIII (Corporate Opportunities), and X (Amendment of Bylaws) of the Company’s certificate of incorporation will continue to require a supermajority vote of the stockholders. If none of the Certificate Amendment Proposals are approved by our stockholders, then our Current Certificate will remain in effect.
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Stockholder Vote Required
Approval of this proposal requires the affirmative vote of holders of at least two-thirds of the shares having voting power present in person or by proxy at the annual meeting. Abstention will be counted as a vote present in person or by proxy at the annual meeting and entitled to vote on the proposal and will have the same effect as a vote “AGAINST” the proposal. Broker non-votes will also be counted as a vote “AGAINST” the proposal.
The board of directors recommends that you vote “FOR” this proposal.
45
PROPOSAL 4:
TO APPROVE AN AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO PERMIT THE COMPANY’S STOCKHOLDERS TO AMEND THE COMPANY’S BYLAWS BY A MAJORITY APPROVAL
General
Our stockholders are being asked to adopt the Amended Certificate that, among other things, would permit the Company’s stockholders to amend the Company’s bylaws by the affirmative vote of the holders of at least a majority of the voting power of the then-outstanding shares of capital stock of the Company entitled to vote in the election of directors. Article X of our Current Certificate requires a supermajority vote of at least sixty-six and two thirds percent (66 2/3%) of the voting power of the then-outstanding shares of capital stock of the Company entitled to vote in the election of directors for our stockholders to amend the Company’s bylaws. We are seeking stockholder approval to eliminate the supermajority voting requirement for our stockholders to amend the Company’s Bylaws from our Current Certificate and replace the supermajority voting requirement with a reduced majority voting requirement.
The Company established the supermajority vote requirement for stockholders to amend the Company’s Bylaws at a time when the Company was subject to the Stockholders’ Agreement and implementing a supermajority approval requirement was necessary to protect the interests of the stockholders who were parties to the Stockholders’ Agreement by ensuring that fundamental changes to the Bylaws have the support of a broad consensus of all stockholders. The Stockholders’ Agreement has since been terminated, with such termination becoming effective on February 21, 2025. As a result of such termination, the board has considered whether such supermajority approval requirement remained necessary or appropriate.
The board is committed to good corporate governance and believes in maintaining policies and practices that serve the interests of all stockholders. Given the implications of the termination of the Stockholders’ Agreement and after considering the advantages and disadvantages of requiring a supermajority vote for stockholders to amend the Company’s Bylaws, including through dialogue with the Company’s stockholders and review of current governance best practices, the board has determined it is in the best interests of the Company and its stockholders to amend the Current Certificate to eliminate the supermajority voting requirement for our stockholders to amend the Company’s Bylaws from our Current Certificate and replace it with a simple majority standard. Because approval of a majority of the voting power of the Company would still be required for the Company’s stockholders to amend the Company’s Bylaws, the board believes the proposed amendment affords sufficient protection of stockholder interests while allowing greater participation by the Company’s stockholders in corporate governance matters and further aligns the Company’s corporate governance documents and practices with prevailing corporate governance practices.
The description of the proposed Amended Certificate and the amendments to our certificate of incorporation proposed by this Proposal 4 is qualified in its entirety by reference to, and should be read in conjunction with, the full text of the Amended and Restated Certificate of Incorporation attached as
Appendix A
which is marked to show all amendments to the Current Certificate being submitted to our stockholders at the annual meeting , with deletions indicated by strike-outs and additions indicated by underlining.
The Proposal
On February 19, 2025, upon recommendation of the Nominating and Governance Committee of the board, the board unanimously approved and adopted, subject to stockholder approval, a proposed Amended and Restated Certificate of Incorporation that, among other things, eliminates the supermajority voting requirement for our stockholders to amend the Company’s Bylaws from our Current Certificate and replace the supermajority voting requirement with a reduced majority voting requirement. The Amended Certificate also reflects certain amendments to Article VII (Corporate Opportunities) of the Current Certificate to remove references to the Stockholders’ Agreement. As a result of the termination of the Stockholders’ Agreement, it is no longer necessary for the Company’s certificate of incorporation to include references to the Stockholders’ Agreement. The board has approved and is recommending that our stockholders approve the removal of references to the Stockholders’ Agreement in Article VII of the Current Certificate in light of the termination of the Stockholders’ Agreement.
If approved by our stockholders, the Amended Certificate, reflecting all Certificate Amendment Proposals approved by our stockholders, including this Proposal 4, would become effective upon the filing of such Amended Certificate with the Secretary of State of the State of Delaware. The Company also intends to make certain conforming amendments to the Company’s Bylaws if this proposal is approved (see Proposal 5).
46
The amendments proposed by this Proposal 4 are not conditioned upon approval of any of the Certificate Amendment Proposals. If all three board-recommended Certificate Amendment Proposals are approved by our stockholders, including this Proposal 4, all the changes contained in the Amended Certificate attached to this proxy statement as
Appendix A
will be made. If this Proposal 4 is approved by our stockholders but the other Certificate Amendment Proposals are not approved, then only the amendments to Article X (Amendment of Bylaws) and Article VIII (Corporate Opportunities) of our Current Certificate as set forth in
Appendix A
will be made. If this Proposal 4 is not approved by our stockholders but one or more other Certificate of Amendment Proposals is approved, then the amendment to Article X (Amendment of Bylaws) of our Current Certificate as set forth in
Appendix A
will not be made and amendments to the Company’s bylaws made by our stockholders will continue to require a supermajority vote of the stockholders. If none of the Certificate Amendment Proposals are approved by our stockholders, then our Current Certificate will remain in effect.
Stockholder Vote Required
Approval of this proposal requires the affirmative vote of holders of at least two-thirds of the shares having voting power present in person or by proxy at the annual meeting. Abstention will be counted as a vote present in person or by proxy at the annual meeting and entitled to vote on the proposal and will have the same effect as a vote “AGAINST” the proposal. Broker non-votes will also be counted as a vote “AGAINST” the proposal.
The board of directors recommends that you vote “FOR” this proposal.
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PROPOSAL 5:
TO APPROVE AMENDED AND RESTATED BYLAWS WITH CHANGES TO CONFORM THE COMPANY’S BYLAWS TO THE PROPOSED AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
General
Our board, upon receiving the unanimous recommendation of the Nominating and Governance Committee, has approved, subject to approval by our stockholders, and recommends that our stockholders approve, amended and restated Bylaws. These amendments are intended to conform the Company’s Bylaws to the Company’s Amended and Restated Certificate of Incorporation that is also being submitted for stockholder approval at the annual meeting via the Certificate Amendment Proposals and to make certain other changes. The description of the proposed amendments is qualified in its entirety by reference to, and should be read in conjunction with, the full text of the amended and restated Bylaws attached as
Appendix B
which are marked to show all amendments to the Company’s Bylaws being submitted to our stockholders at the annual meeting , with deletions indicated by strike-outs and additions indicated by underlining.
The Proposal
Our stockholders are being asked to adopt amended and restated Bylaws that, among other things, would amend the Company’s existing Bylaws (the “Current Bylaws”) to conform the Company’s Bylaws to the Company’s Amended and Restated Certificate of Incorporation that is also being submitted for stockholder approval at the annual meeting via the Certificate Amendment Proposals by making the following changes:
•
eliminate provision in Article 3 classifying the board (see Proposal 2);
•
eliminate the provision in Article 3 restricting the ability of our stockholders to remove a director only for cause (see Proposal 2); and
•
eliminate the supermajority stockholder approval requirement in Article 8 to amend the Company’s Bylaws (see Proposal 4).
In addition, the proposed amendment to the Bylaws would also remove all references in the Current Bylaws to the terminated Stockholders’ Agreement, eliminate the requirement that the Company appoint a Chief Operating Officer, and make additional minor technical, typographical, and clarifying changes (collectively, the “non-material amendments”).
The board believes that each of these changes to the Company’s Bylaws are in the best interests of our stockholders and will serve to further align the Company’s corporate governance documents and practices with prevailing corporate governance practices.
The amendments to the Current Bylaws contemplated by this Proposal 5 are subject to, and conditioned upon, the approval of Proposal 2 and Proposal 4. If this Proposal 5 is approved by our stockholders but none of the Certificate Amendment Proposals are approved, our board will only implement the non-material amendments to the Bylaws.
If this Proposal 5 and Proposal 2 are approved by our stockholders but Proposal 4 is not approved, then our board will only implement the following amendments to the Company’s Bylaws reflected in
Appendix B
:
•
eliminate provision in Article 3 classifying the board;
•
eliminate the provision in Article 3 restricting the ability of our stockholders to remove a director only for cause; and
•
the non-material amendments.
If this Proposal 5 and Proposal 4 are approved by our stockholders but Proposal 2 is not approved, then our board will only implement the following amendments to the Company’s Bylaws reflected in
Appendix B
:
•
eliminate the supermajority stockholder approval requirement in Article 8 to amend the Company’s Bylaws; and
•
the non-material amendments.
48
Stockholder Vote Required
Approval of this proposal requires the consent of holders of at least two-thirds of the outstanding shares of capital stock of the Company as of the record date. Abstention will be counted as a vote present in person or by proxy at the annual meeting and entitled to vote on the proposal and will have the same effect as a vote “AGAINST” the proposal. Broker non-votes will also be counted as a vote “AGAINST” the proposal.
The board of directors recommends that you vote “FOR” this proposal.
49
PROPOSAL 6:
TO APPROVE AMENDED AND RESTATED BYLAWS WITH CHANGES TO ELIMINATE SUPERMAJORITY AND MAJORITY BOARD APPROVAL REQUIREMENTS FOR CERTAIN ENUMERATED ACTIONS
General
Our stockholders are being asked to adopt amended and restated Bylaws that, among other things, would eliminate provisions expressly requiring supermajority or majority board approval prior to the Company, or any subsidiary of the Company, taking certain enumerated actions. Section 3.03(i) of the Current Bylaws require, at all times prior to an initial public offering by the Company, that certain actions be approved by at least two-thirds (2/3) of the full board, including, among others, effecting a merger or other similar business combination transaction; the acquisition of assets for a purchase price greater than 125% of the aggregate tangible book value of the assets being acquired; liquidation or dissolution of the company; the issuance or redemption of securities by the Company; the approval of operating budgets and strategic plans; determination of executive compensation; and the adoption or modification of an employee benefit plan. Section 3.03(j) of the Current Bylaws require, at all times prior to an initial public offering by the Company, that certain actions be approved by at least a majority of the full board, including, among others, entering into new lines of business; the material sale of any property or assets; entering into a material joint venture or other arrangement; incurring more than $75 million in debt; and designate, replace, or remove any director of a subsidiary bank.
We are seeking stockholder approval to amend the Current Bylaws to eliminate both Section 3.03(i) and Section 3.03(j) from the Company’s Bylaws and to amend our Bylaws to reflect the non-material amendments. The description of the proposed amendment is qualified in its entirety by reference to, and should be read in conjunction with, the full text of the amended and restated Bylaws attached as
Appendix B
which are marked to show all amendments to the Company’s Bylaws being submitted to our stockholders at the annual meeting, with deletions indicated by strike-outs and additions indicated by underlining.
The Proposal
Our stockholders are being asked to adopt amended and restated Bylaws that, among other things, would amend the Current Bylaws to eliminate provisions expressly requiring supermajority or majority board approval prior to the Company, or any subsidiary of the Company, taking certain enumerated actions by removing Section 3.03(i) and Section 3.03(j) from the Current Bylaws and incorporate the non-material amendments that would remove all references to the terminated Stockholders’ Agreement, eliminate the requirement that the Company appoint a Chief Operating Officer, and make additional minor technical, typographical, and clarifying changes.
The provisions set forth in Sections 3.03(i) and 3.03(j) were adopted in connection with the Company’s entry into the Stockholders’ Agreement and were deemed necessary to protect the interests of the stockholders who were parties to the Stockholders’ Agreement. As a result of the termination of the Stockholders’ Agreement, the board does not feel that these provisions remain necessary. Further, as reflected in Sections 3.03(i) and 3.03(j) of our Bylaws, these enhanced board approval requirements were not intended to remain applicable to the Company following the registration of the Company’s equity securities. While not effected via a Public Offering, as defined in the Current Bylaws, the Company’s equity securities have been registered with the SEC and are listed on the NASDAQ Stock Market. As a result of the registration, despite the process utilized to effect such registration, the board believes that removal of these provisions from the Bylaws is consistent with the original intent when adopted and incorporated into the Company’s Bylaws.
Further, the board believes that the elimination of the provisions in the Current Bylaws expressly requiring supermajority or majority board approval prior to the Company, or any subsidiary of the Company, taking certain enumerated actions and the non-material amendments are in the best interests of our stockholders and will serve to further align the Company’s corporate governance documents and practices with prevailing corporate governance practices.
The amendments to the Current Bylaws contemplated by this Proposal 6 are not subject to or conditioned upon the approval of any other proposal being submitted to the stockholders at the annual meeting, including the Certificate Amendment Proposals and Proposal 5. If this Proposal 6 is approved by our stockholders but the other proposals are not approved, including Proposal 5, our board will only implement the amendments to remove Sections 3.03(i) and 3.03(j) from our Bylaws and the non-material amendments.
If this proposal does not receive the required number of votes in favor, our Current Bylaws will remain in effect, subject to any amendments that may be approved and implemented as a result of the approval of Proposal 5, and the board will remain subject to the enhanced voting requirements set forth in Sections 3.03(i) and 3.03(j) of the Current Bylaws.
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Stockholder Vote Required
Approval of this proposal requires the consent of holders of at least eighty percent (80%) of the outstanding shares of capital stock of the Company as of the record date. Abstention will be counted as a vote present in person or by proxy at the annual meeting and entitled to vote on the proposal and will have the same effect as a vote “AGAINST” the proposal. Broker non-votes will also be counted as a vote “AGAINST” the proposal.
The board of directors recommends that you vote “FOR” this proposal.
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PROPOSAL 7:
RATIFICATION OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
General
Our stockholders are also being asked to ratify the appointment of Crowe LLP as our independent registered public accounting firm for the year ending December 31, 2025. Stockholder ratification of the selection of Crowe LLP as our independent registered public accounting firm for the year ending December 31, 2025 is not required by our Bylaws, state law or otherwise. However, our board is submitting the selection of Crowe LLP to our stockholders for ratification as a matter of good corporate governance. Even if the appointment of Crowe LLP is ratified by our stockholders, the Audit Committee, in its discretion, could decide to terminate the engagement of Crowe LLP and to engage another audit firm if the Audit Committee determines such action is necessary or desirable. If the stockholders do not ratify the selection of Crowe LLP at the annual meeting, the Audit Committee will consider this information when determining whether to retain Crowe LLP for future services. Representatives of Crowe LLP are expected to be in attendance at the annual meeting and will be afforded the opportunity to make a statement. The representatives will also be available to respond to questions.
Stockholder Vote Required
Assuming a quorum is present, approval of this proposal requires the affirmative vote of stockholders, represented in person or by proxy, representing a majority of the votes actually cast on this proposal. Abstentions will be counted as present in person or by proxy at the annual meeting and entitled to vote on the proposal but will not be considered as a vote actually cast on the proposal and, as a result will have no effect on the proposal. The ratification of the selection of our independent registered public accounting firm is considered a routine matter and a broker or other nominee may generally vote on routine matters, no broker non-votes are expected with respect to this proposal.
The board of directors recommends that you vote “FOR” this proposal.
Independent Auditor Fees
The table below aggregates fees for professional services rendered in or provided for the years ended December 31, 2024 and 2023, as applicable, by Crowe LLP:
| (in thousands) | ||||||||||||||
| Type of Fees | 2024 | 2023 | ||||||||||||
|
Audit fees
1
|
$ | 1,213 | $ | 1,103 | ||||||||||
|
Audit-related fees
2
|
33 | 26 | ||||||||||||
|
Tax fees
3
|
— | — | ||||||||||||
|
All other fees
4
|
— | 7 | ||||||||||||
| Total fees | $ | 1,246 | $ | 1,136 | ||||||||||
1
Audit Fees.
Audit fees consist of the aggregate fees billed for professional services rendered for the integrated audit of our consolidated financial statements and services that are normally provided in connection with statutory and regulatory filings or engagements for those years, including review of the Company’s quarterly reports on Form 10-Q, annual report on Form 10-K, consent on Form S-4 in 2024, and consulting on financial accounting and reporting standards in 2024 and 2023. Audit fees are those billed or expected to be billed for audit services related to each fiscal year.
2
Audit Related Fees.
Audit-related fees cover other audit and attest services, services provided in connection with certain agreed-upon procedures and other attestation reports, including the issuance of consent letters for relevant SEC filings, and the employee benefit plan audit. Fees for audit-related services are those billed or expected to be billed for services rendered during each fiscal year.
3
Tax Fees.
Tax fees cover tax compliance/preparation and other tax services billed or expected to be billed for services rendered during each fiscal year.
4
All Other Fees.
Consists of fees for all other services provided other than those reported above and are comprised of non-tax related advisory and consulting services and review of other regulatory filings.
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Pre-Approval Policy
The Audit Committee’s charter establishes a policy to pre-approve all audit and permitted non-audit and tax services performed by our independent registered public accounting firm or other registered public accounting firms. All services provided by the independent registered public accounting firm are either within general pre-approved limits or specifically approved by the Audit Committee. The general pre-approval limits are detailed as to each particular service and are limited by a specific dollar amount for each type of service per project. The authority to grant pre-approvals may be delegated to one or more subcommittees of the Audit Committee. All services provided by Crowe LLP, and all fees related thereto, were approved pursuant to the pre-approval policy. The Audit Committee’s charter establishing the pre-approval policy is available on our investor relations website at www.ir.firstsuncb.com/governance.com.
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AUDIT COMMITTEE REPORT
The Audit Committee assists the board in carrying out its oversight responsibilities for our financial reporting process, audit process and internal controls. The Audit Committee also reviews the audited financial statements and recommends to the board that they be included in our annual report on Form 10-K. The committee is comprised solely of directors who are independent under the rules of the NASDAQ Stock Market.
The Audit Committee has reviewed and discussed our audited financial statements for the fiscal year ended December 31, 2024, with our management and Crowe LLP, the independent registered public accounting firm that audited our financial statements for that period. The Audit Committee has discussed with Crowe LLP the matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board, and by SAS 114 (The Auditor’s Communication With Those Charged With Governance) and received and discussed the written disclosures and the letter from Crowe LLP required by Public Company Accounting Oversight Board Rule 3526 (Communication with Audit Committees Concerning Independence). Based on the review and discussions with management and Crowe LLP, the Audit Committee has recommended to the board that the audited financial statements be included in our annual report on Form 10-K for the fiscal year ending December 31, 2024, for filing with the SEC.
Submitted by:
Ms. Beverly O. Elving (Chair)
Mr. David W. Levy
Ms. Diane L. Merdian
Members of the Audit Committee
HOUSEHOLDING
The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports, or Notices Regarding the Availability of Proxy Materials, if applicable, with respect to two or more stockholders sharing the same address by delivering a single proxy statement and annual report, or Notice Regarding the Availability of Proxy Materials, if applicable, addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies. In accordance with these rules, only one proxy statement and annual report, or Notice Regarding the Availability of Proxy Materials, if applicable, may be delivered to multiple stockholders sharing an address unless we have received contrary instructions from one or more of the stockholders. Stockholders who currently receive multiple copies of the Notice Regarding the Availability of Proxy Materials or other proxy materials at their address and would like to request “householding” of their communications should contact their broker if they are beneficial owners or direct their request to our Stockholder Relations Manager at the contact information below if they are registered holders.
If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate proxy statement and annual report, or Notice Regarding the Availability of Proxy Materials, if applicable, please notify your broker, if you are a beneficial owner or, if you are a registered holder, direct your written request to our Stockholder Relations Manager at the contact information below.
If requested, we will also promptly deliver, upon oral or written request, a separate copy of the proxy statement and annual report to any stockholder residing at an address to which only one copy was mailed. Please address such requests to our Stockholder Relations Manager at the contact information below.
Stockholder Relations Manager, Kelly Rackley
FirstSun Capital Bancorp
1400 16
th
Street, Suite 250
Denver, Colorado 80202
Telephone: 303-962-0150
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GENERAL
We will bear the cost of this proxy solicitation. Solicitation will be made primarily through the use of the mail, but our officers, directors or employees may solicit proxies personally, by telephone or through any other mode of communication, without additional remuneration to our officers, directors or employees for such activity. In addition, we will reimburse brokerage houses and other custodians, nominees or fiduciaries for their reasonable expenses in forwarding proxy materials to the beneficial owner of such shares.
As of the date of this proxy statement, we do not know of any other matters to be brought before the annual meeting. However, if any other matters should properly come before the meeting, it is the intention of the persons named in the enclosed proxy to vote thereon in accordance with their best judgment.
By order of the board of directors
Kelly C. Rackley
Corporate Secretary
Denver, Colorado
March 21, 2025
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| APPENDICES | ||
58
APPENDIX A
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF FIRSTSUN CAPITAL BANCORP
59
60
61
62
63
64
APPENDIX B
BYLAWS OF FIRSTSUN CAPITAL BANCORP
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
TABLE OF CONTENTS
GENERAL INFORMATION ABOUT THE MEETING AND VOTINGPROPOSAL 1: ELECTION OF DIRECTORSCORPORATE GOVERNANCE AND THE BOARD OF DIRECTORSSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTDELINQUENT SECTION 16(a) REPORTSEXECUTIVE COMPENSATIONPROPOSAL 2 TO APPROVE AN AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO DECLASSIFY THE BOARD OF DIRECTORSPROPOSAL 3: TO APPROVE AN AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO ELIMINATE SUPERMAJORITY VOTING REQUIREMENTS FOR CERTAIN AMENDMENTS TO THE COMPANYS CERTIFICATE OF INCORPORATIONPROPOSAL 4: TO APPROVE AN AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO PERMIT THE COMPANYS STOCKHOLDERS TO AMEND THE COMPANYS BYLAWS BY A MAJORITY APPROVALPROPOSAL 5: TO APPROVE AMENDED AND RESTATED BYLAWS WITH CHANGES TO CONFORM THE COMPANYS BYLAWS TO THE PROPOSED AMENDED AND RESTATED CERTIFICATE OF INCORPORATIONPROPOSAL 6: TO APPROVE AMENDED AND RESTATED BYLAWS WITH CHANGES TO ELIMINATE SUPERMAJORITY AND MAJORITY BOARD APPROVAL REQUIREMENTS FOR CERTAIN ENUMERATED ACTIONSPROPOSAL 7: RATIFICATION OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTANTSAUDIT COMMITTEE REPORTHOUSEHOLDINGGENERALAPPENDIX A - AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF FIRSTSUN CAPITAL BANCORPAPPENDIX B - BYLAWS OF FIRSTSUN CAPITAL BANCORP