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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No.  )
 
 
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
Equity Bancshares, Inc.
(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 the appropriate box):
 
  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.
 
 
 


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LOGO

7701 East Kellogg Drive, Suite 850

Wichita, Kansas 67207

March 14, 2024

NOTICE OF 2024 ANNUAL MEETING OF STOCKHOLDERS

To the Stockholders of Equity Bancshares, Inc.:

Notice is hereby given that the 2024 Annual Meeting of Stockholders (the “Annual Meeting”) of Equity Bancshares, Inc. (the “Company”) will be held on April 23, 2024 at 4:00 p.m., Central Time, at Wichita Country Club, 8501 E. 13th Street North, Wichita, Kansas 67206. The Annual Meeting is being held for the following purposes:

 

1.

to elect four Class II members to the Company’s Board of Directors to serve until the Company’s 2027 Annual Meeting of Stockholders each until their successor is duly elected and qualified or until their earlier death, resignation or removal;

 

2.

to vote on a non-binding, advisory resolution to approve the compensation paid to our named executive officers for the fiscal year ended December 31, 2023, as described within this Proxy Statement (commonly referred to as a “say on pay” vote);

 

3.

to approve the First Amendment to the Equity Bancshares, Inc. 2022 Omnibus Equity Incentive Plan to increase the number of shares available for issuance under such plan;

 

4.

to ratify the appointment of Crowe LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2024; and

 

5.

to transact such other business as may properly come before the meeting and any adjournment(s) or postponement(s) thereof.

These proposals are described in the accompanying proxy statement. The Board of Directors has fixed the close of business on March 1, 2024, as the record date (the “Record Date”) for the determination of stockholders entitled to notice of and to vote at the Annual Meeting or any adjournment(s) or postponement(s) thereof. Only stockholders of record at the close of business on the Record Date are entitled to notice of and to vote at the Annual Meeting. The stock transfer books will not be closed. A list of stockholders entitled to vote at the Annual Meeting will be available for examination at the Company’s principal executive offices for ten days prior to the Annual Meeting and during the Annual Meeting.

You are cordially invited to attend the Annual Meeting; however, whether or not you expect to attend in person, you are urged to submit your proxy so that your shares of stock may be represented and voted in accordance with your preferences and in order to help establish the presence of a quorum at the Annual Meeting.

We have adopted rules promulgated by the Securities and Exchange Commission that allow companies to furnish proxy materials to their stockholders over the Internet. On or about March 14, 2024, we mailed a Notice of Internet Availability of Proxy Materials to all stockholders of record at the close of business on the Record Date, containing instructions on how to access our proxy materials and how to vote your shares, as well as instructions on how to request a paper copy of our proxy materials.

Important Notice Regarding the Availability of Proxy Materials for the 2024 Annual Meeting of Stockholders to be Held on April 23, 2024. Our proxy materials, including our proxy statement and Annual Report on Form 10-K for the year ended December 31, 2023, are available at investor.equitybank.com.

By Order of the Board of Directors,

 

 

LOGO

Brad S. Elliott

Chairman and Chief Executive Officer

YOUR VOTE IS IMPORTANT

Whether or not you plan to attend the Annual Meeting, please read this proxy statement and the voting instructions in the Notice of Internet Availability of Proxy Materials. Then please vote over the Internet or, if you received or requested a paper proxy card in the mail, by completing, signing, dating and mailing the completed proxy card to us. The instructions in the Notice of Internet Availability of Proxy Materials or your proxy card describe how to use these convenient services.


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TABLE OF CONTENTS

 

ABOUT THE ANNUAL MEETING      2  
ITEM 1. ELECTION OF DIRECTORS      8  

Classification of the Company’s Directors

     8  

Election Procedures; Term of Office

     8  

Nominees for Election

     8  

Vote Required

     10  

Recommendation of the Board

     10  
DIRECTORS AND EXECUTIVE OFFICERS      11  

Directors Continuing in Office Until the 2025 Annual Meeting

     11  

Directors Continuing in Office Until the 2026 Annual Meeting

     12  

Non-Director Executive Officers

     13  
CORPORATE GOVERNANCE      17  

Risk Management and Oversight

     17  

Hedging and Pledging Policies

     17  

Meetings of the Board

     17  

Leadership Structure

     17  

Committees of the Board

     18  

Director Nominations

     19  

Stockholder Communications with Our Board

     21  

Director Attendance at the Annual Meeting

     21  

Code of Business Conduct and Ethics

     21  

Director Independence

     21  
DIRECTOR COMPENSATION      23  
ITEM 2. ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS      24  
EXECUTIVE COMPENSATION AND OTHER INFORMATION      25  

Compensation Discussion and Analysis

     25  

Compensation Committee Report on Executive Compensation

     41  

Compensation Tables

     42  
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS      52  
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT      53  
DELINQUENT SECTION 16(A) REPORTS      55  
ITEM 3. VOTE TO APPROVE THE FIRST AMENDMENT TO THE EQUITY BANCSHARES, INC. 2022 OMNIBUS EQUITY INCENTIVE PLAN      56  
ITEM 4. RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM      64  
AUDIT MATTERS      65  

Audit Committee Report

     65  

Audit Committee Pre-Approval Policy

     65  

Fees and Services of Independent Registered Public Accounting Firm

     66  
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS FOR 2024 ANNUAL MEETING      67  
ANNUAL REPORT ON FORM 10-K      67  
OTHER MATTERS      67  
APPENDIX A: FIRST AMENDMENT TO EQUITY BANCSHARES, INC. 2022 OMNIBUS EQUITY INCENTIVE PLAN      A-1  


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7701 East Kellogg Drive, Suite 850

Wichita, Kansas 67207

PROXY STATEMENT

2024 ANNUAL MEETING OF STOCKHOLDERS

This Proxy Statement (this “Proxy Statement”) is being furnished to you in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Equity Bancshares, Inc. for use at the Equity Bancshares, Inc. 2024 Annual Meeting of Stockholders (the “Annual Meeting”). In this Proxy Statement, references to “Equity,” the “Company,” “we,” “us,” “our” and similar expressions refer to Equity Bancshares, Inc., unless the context or a particular reference provides otherwise. In addition, unless the context otherwise requires, references to “stockholders” are to the holders of our voting securities, which consist of our Class A Common Stock, par value $0.01 per share (the “Class A Common Stock”).

The Board requests your proxy for the Annual Meeting that will be held on April 23, 2024, at 4:00 p.m., Central Time, at Wichita Country Club, 8501 E. 13th Street North, Wichita, Kansas 67206, for the purposes set forth in the accompanying notice (the “Notice”) and described in this Proxy Statement. By granting a proxy, you authorize the persons named in the proxy to represent you and vote your shares at the Annual Meeting or any adjournment(s) or postponement(s) thereof.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2024 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 23, 2024. OUR PROXY MATERIALS, INCLUDING OUR PROXY STATEMENT AND ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2023, ARE AVAILABLE AT INVESTOR.EQUITYBANK.COM.

Pursuant to rules promulgated by the Securities and Exchange Commission (the “SEC”), we have elected to provide access to our proxy materials, including this Proxy Statement and our Annual Report on Form 10-K for the year ended December 31, 2023, over the Internet. Accordingly, we are providing our stockholders with a Notice of Internet Availability of Proxy Materials instead of a paper copy of our proxy materials. The Notice of Internet Availability of Proxy Materials contains instructions on how to access our proxy materials and how to vote your shares, as well as instructions on how to request a paper or e-mail copy of our proxy materials. We believe this electronic distribution process expedites stockholders’ receipt of proxy materials and reduces the environmental impact and cost of printing and distribution. We mailed the Notice of Internet Availability of Proxy Materials on or about March 14, 2024, to all stockholders of record entitled to vote at the Annual Meeting. You should read our entire proxy statement carefully before voting.

If you attend the Annual Meeting, you may vote in person. If you are not present at the Annual Meeting, your shares may be voted only by a person to whom you have given a proper proxy.

Brokers are not permitted to vote your shares for non-discretionary matters, which include Items 1, 2 and 3 without your instructions as to how to vote. Please return your proxy card or vote via the Internet so that your vote can be counted.

 

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ABOUT THE ANNUAL MEETING

When and where will the meeting be held?

The Annual Meeting will be held on April 23, 2024 at 4:00 p.m., Central Time, at Wichita Country Club, 8501 E. 13th Street North, Wichita, Kansas 67206.

What is a proxy?

A proxy is another person that you legally designate to vote your stock. If you designate someone as your proxy in a written or electronic document, that document is also called a “proxy” or a “proxy card.”

What is a proxy statement?

A proxy statement is a document that describes the matters to be voted upon at the Annual Meeting and provides additional information about the Company. Pursuant to regulations of the SEC, we are required to provide you with a proxy statement containing certain information when we ask you to sign a proxy card to vote your stock at a meeting of the Company’s stockholders.

What is the purpose of the Annual Meeting?

At the Annual Meeting, stockholders will act upon the matters outlined in the Notice, including the following:

 

1.

to elect four Class II members to the Company’s Board of Directors to serve until the Company’s 2027 Annual Meeting of Stockholders each until their successor is duly elected and qualified or until their earlier death, resignation or removal;

 

2.

to vote on a non-binding, advisory resolution to approve the compensation paid to our named executive officers for the fiscal year ended December 31, 2023, as described within this Proxy Statement (commonly referred to as a “say on pay” vote);

 

3.

to approve the First Amendment to the Equity Bancshares, Inc. 2022 Omnibus Equity Incentive Plan to increase the number of shares available for issuance under such plan;

 

4.

to ratify the appointment of Crowe LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2024; and

 

5.

to transact such other business as may properly come before the meeting and any adjournment(s) or postponement(s) thereof.

What is a record date and what does it mean?

The record date to determine the stockholders entitled to notice of and to vote at the Annual Meeting is the close of business on March 1, 2024 (the “Record Date”). The Record Date was established by the Board as required by the Company’s Second Amended and Restated Articles of Incorporation (the “Articles”), Amended and Restated Bylaws (the “Bylaws”) and Kansas law. On the Record Date, 15,463,035 shares of Class A Common Stock were outstanding.

Why was I mailed a Notice of Internet Availability of Proxy Materials instead of a full set of printed proxy materials?

In accordance with rules promulgated by the SEC, instead of mailing a printed copy of our proxy materials to all of our stockholders, we have elected to provide access to such materials over the Internet. Accordingly, on or about March 14, 2024, we mailed a Notice of Internet Availability of Proxy Materials (the “Notice”) to all stockholders of record on the Record Date entitled to vote at the Annual Meeting. Stockholders will have the ability to access our proxy materials on the website referred to in the Notice. The Notice also contains instructions on how to vote your shares, as well as instructions on how to request a paper or electronic copy of our proxy materials. We encourage you to take advantage of the availability of the proxy materials over the Internet to help reduce the environmental impact and cost of printing and distributing our proxy materials.

How can I access the proxy materials on the internet?

The Notice provides you with instructions regarding how to:

 

   

view our proxy materials for the Annual Meeting over the Internet;

 

   

vote your shares after you have viewed our proxy materials (including any control/identification numbers that you need to access your form of proxy);

 

   

obtain directions to attend the Annual Meeting and vote in person;

 

   

request a printed copy or e-mail copy with links to the proxy materials, including the date by which the request should be made to facilitate timely delivery; and

 

   

instruct us to send our future proxy materials to you by mail or electronically by e-mail.

 

2


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Will I receive any other proxy materials by mail (besides the Notice)?

If you request paper copies of our proxy materials by following the instructions in the Notice, we will send you our proxy materials, including a proxy card, in the mail.

What should I do if I receive more than one set of voting materials?

You may receive more than one set of voting materials, including multiple copies of the Notice, this Proxy Statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate Notice and voting instruction card for each brokerage account in which you hold shares. Similarly, if you are a stockholder of record and hold shares in a brokerage account, you will receive a proxy card for shares held in your name and a voting instruction card for shares held in “street name.” Please complete, sign, date and return each proxy card and voting instruction card that you receive to ensure that all your shares are voted.

Who is entitled to vote at the annual meeting?

Holders of Class A Common Stock as of the close of business on the Record Date may vote at the Annual Meeting.

What are the voting rights of the stockholders?

Each holder of Class A Common Stock is entitled to one vote for each share of Class A Common Stock registered on the Record Date in such holder’s name on the books of the Company on all matters to be acted upon at the Annual Meeting. The Company’s Articles prohibit cumulative voting in the election of directors by the common stock of the Company.

The holders of at least one-half of the outstanding shares of Class A Common Stock must be represented at the Annual Meeting, in person or by proxy, in order to constitute a quorum for the transaction of business. At any meeting of the Company’s stockholders, whether or not a quorum is present, the chairman of the meeting or the holders of a majority of the Class A Common Stock, present in person or represented by proxy and entitled to vote at the meeting, may adjourn the meeting from time to time without notice or other announcement.

What is the difference between a stockholder of record and a “street name” holder?

If your shares are registered directly in your name with Continental Stock Transfer and Trust Company (“Continental”), the Company’s stock transfer agent, you are considered the stockholder of record with respect to those shares. The Notice and, if requested, any printed copies of the proxy materials, including any proxy cards or voting instructions, have been sent directly to you by Continental at the Company’s request. On the Record Date, the Company had 241 holders of record.

If your shares are held in a brokerage account or by a bank or other nominee, the nominee is considered the record holder of those shares. You are considered the beneficial owner, and your shares are held in “street name.” The Notice and, if applicable, any printed copies of the proxy materials, including any proxy cards or voting instructions, are being forwarded to you by your nominee. As the beneficial owner, you have the right to direct your nominee concerning how to vote your shares by using the voting instructions your nominee included in the mailing or by following its instructions for voting.

What is householding?

Some banks, brokers and other nominee record holders may be “householding” our proxy materials, including this Proxy Statement, our annual report and related materials. Householding means that only one copy of these documents may have been sent to multiple stockholders in one household. If you would like to receive your own set of Equity’s proxy statement, annual report and related materials, or if you share an address with another Equity stockholder and together both of you would like to receive only a single set of these documents, please contact your bank, broker or other nominee.

What is a broker non-vote?

A broker non-vote occurs when a broker holding shares for a beneficial owner does not vote on a particular proposal because the broker does not have discretionary voting power with respect to that item and has not received voting instructions from the beneficial owner. Your broker has discretionary authority to vote your shares with respect to Item 4. In the absence of specific instructions from you, your broker does not have discretionary authority to vote your shares with respect to Items 1, 2 or 3.

 

3


Table of Contents

How do I vote my shares?

If you are a record holder, you may vote your Class A Common Stock at the Annual Meeting in person or by proxy. To vote in person, you must attend the Annual Meeting and obtain and submit a ballot. The ballot will be provided at the Annual Meeting. To vote by proxy, you have two ways to vote:

 

   

Via the Internet: You may vote your proxy over the Internet by visiting the website www.cstproxyvote.com. Have the Notice or, if applicable, the proxy card that may have been provided to you in hand when you access the website and follow the instructions for Internet voting on that website. You may also access the website using your mobile phone and the instructions on the Notice; or

 

   

Via Mail: If you receive or request a paper copy of the proxy materials by mail, you may vote by indicating on the proxy card(s) applicable to your common stock how you want to vote and signing, dating and mailing your proxy card(s) in the enclosed pre-addressed postage-paid envelope as soon as possible to ensure that it will be received in advance of the Annual Meeting.

Please refer to the specific instructions set forth in your Notice or proxy card for additional information on how to vote. When you vote via the Internet or mail, you will direct the designated persons (known as “proxies”) to vote your Class A Common Stock at the Annual Meeting in accordance with your instructions. The Board has appointed Brad S. Elliott and Chris M. Navratil to serve as the proxies for the Annual Meeting.

Your proxy card will be valid only if you sign, date and return it before the Annual Meeting. Please note that Internet voting will close at 10:59 p.m., Central Time, on April 22, 2024. If you complete all of the proxy card except for one or more of the voting instructions, then the designated proxies will vote your shares consistently with the Board recommendation under “What are the Board’s recommendations on how I should vote my shares?” below for each proposal for which you provide no voting instructions.

If any other matters properly come before the Annual Meeting, then the designated proxies will vote your shares in accordance with applicable law and their judgment. We do not anticipate any other matters will come up at this time.

If you hold your shares in “street name,” your bank, broker or other nominee should provide to you a voting instruction card along with the Company’s proxy solicitation materials. By completing the voting instruction card, you may direct your nominee how to vote your shares. If you complete the voting instruction card except for one or more of the voting instructions, then your broker will be unable to vote your shares with respect to the proposal as to which you provide no voting instructions, except that the broker has the discretionary authority to vote your shares with respect to Item 4—the ratification of the appointment of Crowe LLP.

If your shares of common stock are held in “street name,” your ability to vote over the Internet depends on your broker’s voting process. You should follow the instructions on your proxy card or voting instruction card.

Alternatively, if you hold your shares in “street name” and you want to vote your shares in person at the Annual Meeting, you must contact your nominee directly in order to obtain a proxy issued to you by your nominee holder. Note that a broker letter that identifies you as a stockholder is not the same as a nominee-issued proxy. If you fail to bring a nominee-issued proxy to the Annual Meeting, you will not be able to vote your nominee-held shares in person at the Annual Meeting.

Who counts the votes?

All votes will be tabulated by the inspectors of election appointed for the Annual Meeting. Votes for each proposal will be tabulated separately.

Can I vote my shares in person at the Annual Meeting?

Yes. If you are a stockholder of record, you may vote your shares by completing a ballot at the Annual Meeting.

If you hold your shares in “street name,” you may vote your shares at the Annual Meeting only if you obtain a proxy issued by your bank, broker or other nominee giving you the right to vote the shares as discussed above.

Even if you currently plan to attend the Annual Meeting, we recommend that you also vote via the Internet or return your proxy card or voting instructions as described above so that your votes will be counted if you later decide not to attend the Annual Meeting or are unable to attend.

What are my choices when voting?

With respect to the election of directors, you may vote for the election of the nominee, against the election of the nominee, or abstain from voting on the nominee. With respect to each of the other proposals you may vote for the proposal, against the proposal or abstain from voting on the proposal.

 

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What are the Board’s recommendations on how I should vote my shares?

The Board recommends that you vote your shares as follows:

 

Item

1—FOR the election of each nominee for director;

 

Item

2—FOR the approval of the advisory resolution regarding executive compensation; and

 

Item

3—FOR the approval of the First Amendment to the Equity Bancshares, Inc. 2022 Omnibus Equity Incentive Plan

 

Item

4—FOR the ratification of the appointment of Crowe LLP

What if I do not specify how I want my shares voted?

If you are a record holder who returns a completed proxy card that does not specify how you want to vote your shares on one or more proposals, the proxies will vote your shares for each proposal as to which you provide no voting instructions, and such shares will be voted in the following manner:

 

Item

1—FOR the election of each nominee for director;

 

Item

2—FOR the approval of the advisory resolution regarding executive compensation; and

 

Item

3—FOR the approval of the First Amendment to the Equity Bancshares, Inc. 2022 Omnibus Equity Incentive Plan

 

Item

4—FOR the ratification of the appointment of Crowe LLP

If you are a “street name” holder and do not provide voting instructions on one or more proposals, your bank, broker or other nominee will be unable to vote those shares in relation to Items 1, 2 or 3. The nominee will have discretion to vote on Item 4.

May I change my vote after submission?

Yes. Regardless of the method used to cast a vote, if a stockholder is a holder of record, they may change their vote or revoke their proxy by:

 

   

delivering to the Company at any time before the Annual Meeting is called to order, by our Corporate Secretary, a written notice of revocation addressed to Equity Bancshares, Inc., 7701 East Kellogg Drive, Suite 850, Wichita, Kansas 67207, Attention: Corporate Secretary;

 

   

casting a new vote over the Internet by visiting the website www.cstproxyvote.com and following the instructions in your Notice of Internet Availability of Proxy Materials or, if applicable, the proxy card that may have been provided to you before the Internet voting deadline of 10:59 p.m., Central Time, on April 22, 2024;

 

   

completing, signing and returning a new proxy card with a later date than your original proxy card, if applicable, no later than the time the Annual Meeting is called to order, and any earlier proxy will be revoked automatically; or

 

   

attending the Annual Meeting and voting in person, and any earlier proxy will be revoked. Your attendance alone at the Annual Meeting will not revoke your proxy unless you give written notice of revocation to the Corporate Secretary of the Company before the Annual Meeting is called to order.

If your shares are held in “street name” and you desire to change any voting instructions you have previously given to the record holder of the shares of which you are the beneficial owner, you should contact the broker, bank or other nominee holding your shares in “street name” in order to direct a change in the manner your shares will be voted.

What percentage of the vote is required to approve each proposal?

Each holder of Class A Common Stock is entitled to one vote for each share of Class A Common Stock registered, on the Record Date, in such holder’s name on the books of the Company on all matters to be acted upon at the Annual Meeting.

Item 1: The election of each nominee for director will require the affirmative vote of the holders of a majority of the Class A Common Stock present in person or represented by proxy at the Annual Meeting.

Item 2: The approval of the advisory vote on the compensation of the named executive officers disclosed in this proxy statement requires the affirmative vote of the holders of a majority of the Class A Common Stock present in person or represented by proxy at the Annual Meeting.

Item 3: The approval of the First Amendment to the Equity Bancshares, Inc. 2022 Omnibus Equity Incentive Plan requires the affirmative vote of the holders of a majority of the Class A Common Stock present in person or represented by proxy at the Annual Meeting.

 

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Item 4: The ratification of Crowe LLP’s appointment as the Company’s independent registered public accounting firm will require the affirmative vote of the holders of a majority of the Class A Common Stock present in person or represented by proxy at the Annual Meeting.

What is a quorum?

Generally, a quorum is defined as the number of shares that are required to be present at the Annual Meeting so that the results of voting on a particular proposal at the Annual Meeting will be deemed to be the act of the stockholders as a whole. With respect to the Company, a quorum is determined by counting the relevant number of shares of Class A Common Stock represented in person or by proxy at the Annual Meeting. If you submit a properly executed proxy card (via mail or the Internet), you will be considered part of the quorum even if you do not attend the Annual Meeting. The presence in person or by proxy of one-half of the Class A Common Stock outstanding on the Record Date will constitute a quorum.

How are broker non-votes and abstentions treated?

Brokers, as holders of record, are permitted to vote on certain routine matters, but not on non-routine matters. A broker non-vote occurs when a broker does not have discretionary authority to vote the shares and has not received voting instructions from the beneficial owner of the shares. The only routine matter to be presented at the Annual Meeting is Item 4—the ratification of the appointment of the independent registered public accounting firm. If you hold shares in “street name” and do not provide voting instructions to your broker, those shares will be counted as broker non-votes for all non-routine matters. Broker non-votes will be counted for purposes of calculating whether a quorum is present at the Annual Meeting with respect to all of the proposals to be considered at the Annual Meeting. However, broker non-votes will not be counted for purposes of determining the number of shares of stock having voting power present in person or represented by proxy.

For matters requiring the affirmative vote of the majority of stock having voting power present in person or represented by proxy, abstentions are included in the denominator as shares “present” or “represented” and have the same practical effect as a vote “against” a proposal.

Item 1: An abstention with respect to one or more nominees for director will have the effect of a vote against such nominee or nominees. A broker non-vote will not affect the outcome of this proposal.

Item 2: An abstention with respect to advisory approval of named executive officer compensation will have the effect of a vote against the proposal. A broker non-vote will not affect the outcome of this proposal.

Item 3: An abstention with respect to the vote to approve the First Amendment to the Equity Bancshares, Inc. 2022 Omnibus Equity Incentive Plan will have the effect of a vote against the proposal. A broker non-vote will not affect the outcome of this proposal.

Item 4: Any abstentions will have the effect of a vote against the proposal to ratify the appointment of Crowe LLP as the Company’s independent registered public accounting firm. Since the ratification of the appointment of the 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 to occur in connection with this proposal.

Do I have any dissenters’ or appraisal rights with respect to any of the matters to be voted on at the Annual Meeting?

No. None of our stockholders has any dissenters’ or appraisal rights with respect to the matters to be voted on at the Annual Meeting.

What are the solicitation expenses and who pays the cost of this proxy solicitation?

Our Board is asking for your proxy and the Company will pay all of the costs of soliciting stockholder proxies. We may use officers and employees of the Company to ask for proxies, as described below.

Is this Proxy Statement the only way that proxies are being solicited?

No. In addition to the solicitation of proxies by use of electronic and mail distribution, if deemed advisable, directors, officers and employees of the Company may solicit proxies personally or by telephone or other means of communication, without being paid additional compensation for such services. This proxy solicitation is made by the Board and the cost of this solicitation is being borne by the Company. The Company will reimburse banks, brokerage houses and other custodians, nominees and fiduciaries for their reasonable expense in forwarding the proxy materials to beneficial owners of the Company’s Class A Common Stock. We also may engage a proxy solicitation firm to assist us with the solicitation of proxies and, if so, would expect to pay that firm approximately $20,000 for its services, plus out-of-pocket expenses.

 

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Are there any other matters to be acted upon at the Annual Meeting?

Management does not intend to present any business at the Annual Meeting for a vote other than the matters set forth in the Notice and has no information that others will do so. The proxy also confers on the proxies the discretionary authority to vote with respect to any matter presented at the Annual Meeting for which advance notice was not received by the Company in accordance with our Bylaws. If other matters requiring a vote of the stockholders properly come before the Annual Meeting, it is the intention of the persons named in the accompanying form of proxy to vote the shares represented by the proxies held by them in accordance with applicable law and their judgment on such matters.

Where can I find voting results?

The Company intends to publish the voting results in a Current Report on Form 8-K, which it expects to file with the SEC within four business days following the Annual Meeting.

Who can help answer my questions?

The information provided above in this “Question and Answer” format is for your convenience only and is merely a summary of the information contained in this Proxy Statement. We urge you to carefully read this entire Proxy Statement and the documents we refer to in this Proxy Statement. If you have any questions, or need additional material, please write to Equity Bancshares, Inc., 7701 East Kellogg Drive, Suite 500, Wichita, Kansas 67207, Attention: Brian Katzfey, Vice President and Director of Corporate Development and Investors Relations or call (316) 858-3128 and ask for Brian Katzfey.

 

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ITEM 1: ELECTION OF DIRECTORS

CLASSIFICATION OF THE COMPANYS DIRECTORS

 

 

In accordance with the terms of our Articles, our Board is divided into three classes, Class I, Class II and Class III, with each class serving staggered three-year terms, and prior to our 2024 Annual Meeting is comprised as follows:

 

   

The Class I directors are R. Renee Koger, James S. Loving, Jerry P. Maland and Shawn D. Penner. Their term will expire at the Annual Meeting of Stockholders held in 2025;

 

   

The Class II directors are Kevin E. Cook, Brad S. Elliott, Junetta M. Everett and Gregory H. Kossover. Their term will expire at this year’s Annual Meeting of Stockholders.

 

   

The Class III directors are Leon H. Borck, Gregory L. Gaeddert and Benjamen M. Hutton. Their term will expire at the Annual Meeting of Stockholders to be held in 2026.

ELECTION PROCEDURES; TERM OF OFFICE

 

 

At each annual meeting of stockholders, or special meeting in lieu thereof, upon the expiration of the term of a class of directors, the successors to such directors will be elected to serve from the time of election and qualification until the third annual meeting following his or her election and the election and qualification of his or her successor or until such director’s earlier death, resignation or removal. Any additional directorships resulting from an increase in the number of directors will be distributed by the Board among the three classes so that, as nearly as possible, each class will consist of approximately one-third of the directors.

The Corporate Governance and Nominating Committee has recommended, and the independent members of the Board have approved the nomination of Kevin E. Cook, Brad S. Elliott, Junetta M. Everett and Gregory H. Kossover to serve as Class II directors. If elected, each of the nominees will serve through the 2027 Annual Meeting of Stockholders.

Each nominee receiving the affirmative vote of the holders of a majority of the Class A Common Stock present in person or represented by proxy at the Annual Meeting will be elected. Unless instructed to abstain or vote against one or more of the nominees, all shares of Class A Common Stock represented by proxy will be voted FOR the election of the nominees. If instructed to abstain or vote against one or more but not all of the nominees, all shares of Class A Common Stock represented by any such proxy will be voted FOR the election of the nominee or nominees, as the case may be, for whom no instruction to abstain or vote against has been given.

If a nominee becomes unavailable to serve as a director for any reason before the election, the shares represented by proxy will be voted for such other person, if any, as may be designated by the Board. The Board has no reason to believe that any nominee will be unavailable to serve as a director. All of the nominees have consented to being named herein and to serve if elected.

Any director vacancy occurring after the election may be filled by the affirmative vote of the majority of the directors then in office, even if the remaining directors constitute less than a quorum of the full Board. In accordance with our Articles, the term of a director elected to fill a vacancy shall expire upon the expiration of the term of office of the class of directors in which such vacancy occurred.

NOMINEES FOR ELECTION

 

 

The following table sets forth the name, age, position with the Company and director class for each nominee for election as a director of the Company:

 

Name    Age    Current Position with Equity    Class 

Kevin E. Cook

  59   Director   II

Brad S. Elliott

  57   Director, Chairman and Chief Executive Officer   II

Junetta M. Everett

  68   Director   II

Gregory H. Kossover

  61   Director   II

 

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The biography of each of the director nominees set forth below contains information regarding the person’s service as a director and/or executive officer, business experience, director positions held currently or at any time during the last five years, information regarding involvement in certain legal or administrative proceedings, if applicable, and the experiences, qualifications, attributes or skills that caused the Corporate Governance and Nominating Committee and the Board to determine that the person should serve as a director.

  
   

KEVIN E. COOK

 

LOGO

 

DIRECTOR SINCE: 2021

 

AGE: 59

  

Mr. Cook was a Partner and business leader at Forvis, LLP a national CPA and advisory firm until his retirement in September 2019. He brings to the Company his insights and expertise from his exceptional 33-year career in public accounting providing solutions to financial services companies. His skills focused on developing and leading Forvis, LLP financial services practice into the marketplace through quality, reputation, networking, brand, and high-level advisement. Various leadership positions during his career included national tax leader financial services practice, national leader outsourcing services practice, and regional leader for Kansas City, Iowa and Wisconsin financial services practice. During his time at Forvis, LLP, Mr. Cook worked with some the firm’s largest financial services clients which gives him unique insights into financial reporting, taxation, mergers and acquisitions, strategic planning and corporate governance matters. Mr. Cook also currently serves as Board Chair and as a member of the Board of Governors of Nebraska Wesleyan University. He has also served as a director for numerous non-profit, civic, and charitable organizations. Mr. Cook is a graduate of Nebraska Wesleyan University with a Bachelor of Science degree in Accounting.

 

QUALIFICATIONS:

 

Mr. Cook’s experience and qualifications provide sound leadership to the Board of Directors. In addition, as a former practicing public accountant servicing the financial institution space, Mr. Cook brings extensive accounting, management, strategic planning and financial skills important to the oversight of our financial reporting, enterprise and operational risk management.

  
   

BRAD S. ELLIOTT

 

LOGO

 

DIRECTOR SINCE: 2002

 

AGE: 57

  

Mr. Elliott is our founder, Chairman and Chief Executive Officer. He also serves as Chairman and Chief Executive Officer of Equity Bank. Mr. Elliott began his banking career and was employed in various capacities by Home State Bank and Trust for six years following graduation from McPherson College with a Bachelor of Science degree in Finance and Management. He then joined Sunflower Bank as a Market President for two years before joining American Traffic Systems as its director of operations in Scottsdale, Arizona. Mr. Elliott then returned to Wichita to serve as Director of Marketing at Koch Industries, Inc., a privately held multinational corporation. He then rejoined Sunflower Bank as its Regional President. Mr. Elliott founded Equity Bancshares in 2002. He is a graduate of the Stonier Graduate School of Banking and has served on the Board of Directors for the Wichita Area Chamber of Commerce, as Trustee and Chair of the finance committee for the Board of Directors of McPherson College, and as the President of the Wichita State University Shocker Athletic Scholarship Organization. He has also served on the PCS Advisory Board, Via Christi Health Board of Directors and as Treasurer, and the Kansas Bankers Association. Mr. Elliott currently serves on Pentegra’s Defined Contribution Plan Board of Directors.

 

QUALIFICATIONS:

 

Mr. Elliott adds financial services experience, especially lending and asset and liability management to the Board, as well as a deep understanding of the Company’s business and operations. Mr. Elliott also brings risk and operations management and strategic planning expertise to the Board, skills that are important as the Company continues to implement its business strategy to acquire and integrate growth opportunities.

 

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JUNETTA M. EVERETT

 

LOGO

 

DIRECTOR SINCE: 2020

 

AGE: 68

  

Ms. Everett, RDH, joined Delta Dental of Kansas (DDKS), a dental benefits administrator in 1987 and served as Vice President Provider Relations for 26 years and the same position for Surency Life and Health, a DDKS subsidiary that administered ancillary products in 5 states. A key contributor and participant in the corporation’s strategic planning, budgeting, and programs, she reported to the CEO and was responsible for directing and controlling all functions of the provider network for state and national business including training, contracting, compliance, audits, and building relationships. Everett serves on multiple boards and committees, including the Wichita Regional Chamber of Commerce as 2020 Board Chair and Vice Chair of Diversity, Equity and Inclusion, and the Kansas Health Foundation as Board Chair having previously served as Finance Chair and a member of the audit and governance committees. Other services include the Sedgwick County District 2 Advisory board, Wichita State University (WSU) Foundation Board, National Advisory Council and was appointed by the Governor of Kansas to the WSU Board of Trustees in 2021. Ms. Everett hold both a Bachelors of Art and Science from Wichita State University.

 

QUALIFICATIONS:

 

Ms. Everett brings to the Board significant leadership and business experience, knowledge of healthcare, insurance, governance and compliance while also providing valuable insight into promoting intentional inclusion in the workplace. Her background includes serving on the Board of a community developed credit union and its supervisory committee. This coupled with her business acumen including, the review and approvals of financials, decision making, and independent diversified thinking qualifies her to serve on this board. Her diversity of experience, style, and deep business contacts contributes to the overall success of the board and ultimately the bank.

  
   

GREGORY H. KOSSOVER

 

LOGO

 

DIRECTOR SINCE: 2011

 

AGE: 61

  

Mr. Kossover served as Executive Vice President and Chief Financial Officer of the Company from October 2013 through April 2020, at which point he transitioned to the role of Executive Vice President and Chief Operating Officer, prior to his retirement from banking in May of 2023. He has served as a member of our Board since December 2011. Mr. Kossover is currently the President and Chief Financial Officer of Vantage Point Properties. Prior to joining the Company, Mr. Kossover served as President of Physicians Development Group, a builder and manager of senior living facilities in the Wichita, Kansas metropolitan area, from 2012 to 2013. From 2004 to 2011 he served as Chief Executive Officer of Value Place, LLC, one of the largest economy extended stay lodging franchises in the United States. Mr. Kossover previously served as Treasurer of Western Financial Corporation, a publicly-held thrift holding company. Mr. Kossover graduated from Emporia State University with a Bachelor of Science degree in Accounting and has successfully completed the Uniform Certified Public Accountants exam.

 

QUALIFICATIONS:

 

Mr. Kossover’s leadership and financial experience provide important oversight of our financial reporting and enterprise and operational risk management to the Board.

VOTE REQUIRED

 

 

The election of each nominee for director will require the affirmative vote of the holders of a majority of the Class A Common Stock present in person or represented by proxy at the Annual Meeting. An abstention with respect to one or more nominees for director will have the effect of a vote against such nominee or nominees. A broker non-vote will not affect the outcome of this proposal.

RECOMMENDATION OF THE BOARD

 

 

 

LOGO    THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES.

 

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DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information with respect to directors, nominees and the executive officers of the Company:

 

Name    Age    Position(s) with the Company    Class    Director’s Term
Expires

Nominees:

       

Kevin C. Cook

  59   Director   II   2024

Brad S. Elliott

  57   Director, Chairman and Chief Executive Officer   II   2024

Junetta M. Everett

  68   Director   II   2024

Gregory H. Kossover

  61   Director   II   2024

Directors Continuing until 2025:

       

R. Renee Koger

  62   Director   I   2025

James S. Loving

  68   Director   I   2025

Jerry P. Maland

  73   Director   I   2025

Shawn D. Penner

  53   Director   I   2025

Directors Continuing until 2026:

       

Leon H. Brock

  77   Director   III   2026

Gregory L. Gaeddert

  62   Director   III   2026

Benjamin J. Hutton

  43   Director   III   2026

Non-Director Executive Officers:

       

Julie A. Huber

  53   Executive Vice President, Strategic Initiatives    

Ann M. Knutson

  54   Chief Human Resources Officer    

Chris M. Navratil

  37   Chief Financial Officer    

David E. Pass

  55   Chief Information Officer    

Brett A. Reber

  64   General Counsel    

Richard A. Sems

  52   President of Equity Bank    

Krzysztof P. Slupkowski

  37   Chief Credit Officer        

Set forth below is the background, business experience, attributes, qualifications and skills of the Company’s continuing directors and executive officers. Executive officers serve at the discretion of the Board.

DIRECTORS CONTINUING IN OFFICE UNTIL THE 2025 ANNUAL MEETING

 

 

  
   

R. RENEE KOGER

 

LOGO

 

DIRECTOR SINCE: 2003

 

AGE: 62

  

Ms. Koger has served as a member of our Board since 2003. Ms. Koger is currently a partner, leading the Estate Planning and Tax Planning practice groups, with the law firm of Wise & Reber, L.C. where she has practiced since 1991. Ms. Koger has served on local boards and volunteer organizations, including various philanthropic end endeavors. She has served as past president of the McPherson Chamber of Commerce and chair of the United Way Fund. Ms. Koger graduated from Oklahoma State University with degrees in Agricultural Economics and Accounting, and from the University of Tulsa with her Juris Doctorate. She passed the CPA exam in 1987. Ms. Koger has been on the board of the Company since its inception.

 

QUALIFICATIONS:

 

Ms. Koger brings legal, accounting and tax experience to the Board, providing oversight to our financial reporting, enterprise and operational risk management.

  
   

JAMES S. LOVING

 

LOGO

 

DIRECTOR SINCE: 2022

 

AGE: 68

  

Mr. Loving is a veteran executive of the downstream petroleum industry, with 35 years of experience in the energy sector. Mr. Loving served as President of the National Cooperative Refinery Association (“NCRA”) for 20 years prior to retirement following the successful integration of NCRA into an acquiring organization. In this role, he oversaw finance, human resources, operations, and stakeholder management while navigating the cyclical challenges and dramatic changes within the energy industry over that time. In addition to his role with NCRA, Mr. Loving has served on several company and public service boards. He holds a bachelor’s degree in Civil Engineering from the University of Wisconsin, as well as a MBA from the University of Utah.

 

QUALIFICATIONS:

 

Mr. Loving’s experience and qualifications provide sound leadership to the Board. He brings deep energy sector knowledge, in addition to company management, board development, and leadership expertise to the Board.

 

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JERRY P. MALAND

 

LOGO

 

DIRECTOR SINCE: 2016

 

AGE: 73

  

 

Mr. Maland was appointed to the Company’s Board upon the closing of the merger of the Company and Community First Bancshares, Inc. in 2016. Mr. Maland served as a director of Community First Bancshares, Inc. following its formation in 1997, and served as Chairman of the board for both Community First Bank and Community First Bancshares, Inc. Mr. Maland is the former owner of McDonald’s restaurants in Harrison, Berryville, and Eureka Springs. He previously served on the Board of Directors of Security Bank and First Commercial Corporation from 1984 until forming Community First Bank in 1997. Mr. Maland is a graduate of Luther College in Decorah, Iowa

 

QUALIFICATIONS:

 

Mr. Maland brings extensive bank management and oversight experience, as well as local knowledge of our markets to the Board.

  
   

SHAWN D. PENNER

 

LOGO

 

DIRECTOR SINCE: 2003

 

AGE: 53

  

Mr. Penner has served as a member of our Board since 2003. Mr. Penner is the owner of Shamrock Development, LLC, a real estate development firm, which he founded in 1997. He also serves as a director of First Federal of Olathe Bancorp, Inc., First Federal Savings and Loan Bank, and GPV, Inc. Mr. Penner previously worked as a national bank examiner for the Office of the Comptroller of the Currency. Mr. Penner graduated from Wichita State University with a Bachelors of Business Administration and a Master of Business Administration degrees. He currently serves as a member of the Wichita State University Foundation Board of Directors as well as Chair of the Foundation’s Investment Committee.

 

QUALIFICATIONS:

 

Mr. Penner brings experience as an executive and local knowledge of our markets as well as bank regulatory and investment experience to the Board.

DIRECTORS CONTINUING IN OFFICE UNTIL THE 2026 ANNUAL MEETING

 

 

 

   
   

LEON H. BORCK

 

LOGO

 

DIRECTOR SINCE: 2021

 

AGE: 77

  

Mr. Borck is the Chairman of Innovative Livestock Services, Inc. and Ward Feed Yard where he has served since 1980. Mr. Borck joined the Company’s Board following our merger with American State Bancshares, Inc. in 2021 where he served as Chairman of the Board from 2001 through the date of the merger. He earned his degree in Agricultural Economics at Kansas State University. Mr. Borck has served on the boards of various companies and philanthropic organizations.

 

QUALIFICATIONS:

 

Mr. Borck’s senior level management, board, bank oversight and extensive agricultural experience in the markets in which the Company operates provides him with a unique perspective which is beneficial to the Board.

  
   

GREGORY L. GAEDDERT

 

LOGO

 

DIRECTOR SINCE: 2007

 

AGE: 62

  

Mr. Gaeddert has served as a member of our Board since 2007. Mr. Gaeddert has served as Managing Partner of B12 Capital Partners, LLC since 2006. Prior to co-founding B12 Capital Partners, LLC in 2006, Mr. Gaeddert was employed in various capacities by Commerce Bancshares, Inc. and its affiliates, including serving as Kansas City officer manager for its private equity arm, Capital For Business, Inc. He also served in various management roles for Commerce Bank in Wichita and Kansas City, including serving as Executive Vice President and Commercial Group Manager, Executive Committee and Senior Loan Committee member for the Wichita Bank. Mr. Gaeddert currently serves on the Board of Directors for several of B12 Capital Partners’ portfolio companies. He is also a member of the board of the Mennonite Economic Development Committee (“MEDA”) and serves on the MEDA Mauritius Foundation and as a member of the investment committee of the MEDA Risk Capital Fund. Mr. Gaeddert graduated from Bethel College with a degree in Economics and Business Administration and he earned a Master of Business Administration degree from the University of Kansas.

 

QUALIFICATIONS:

 

Mr. Gaeddert experience and qualifications provide sound leadership to the Board. In addition, Mr. Gaeddert brings strong investment, accounting and financial skills important to the oversight of our financial reporting, enterprise and operational risk management.

 

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BENJAMEN M. HUTTON

 

LOGO

 

DIRECTOR SINCE: 2020

 

AGE: 43

  

 

Mr. Hutton has served as a member of our Board since 2020. Mr. Hutton is the Chief Executive Officer of Hutton Corporation, a regional design and construction firm, where he has been employed since 2006. Mr. Hutton has served on the boards of various civic and nonprofit organizations including, among others, Associated General Contractors of Kansas, Kansas Big Brothers Big Sisters, Trinity Academy and the Wichita Chamber of Commerce of which he is a past chair. He is also actively involved with The Greater Wichita Partnership and Visit Wichita. Mr. Hutton holds a Bachelors of Science in Construction from Kansas State University as well as a Masters of Business Administration from Friends University.

 

QUALIFICATIONS:

 

Mr. Hutton’s senior level management, board, and construction experience in addition to his community involvement in the markets in which the company operates provides him with a unique perspective which is beneficial to the Board.

NON-DIRECTOR EXECUTIVE OFFICERS

 

 

     

JULIA A. HUBER

 

LOGO

 

EXECUTIVE VICE PRESIDENT

 

AGE: 53

   Ms. Huber serves as Executive Vice President, Strategic Initiatives. Ms. Huber joined Equity Bank in 2003 and has served in a variety of leadership roles over a period of nineteen years, including overseeing our operations, human resources, compliance, sales and training, strategy implementation, and has managed the integration process for each community bank we have acquired. Ms. Huber served as President of Signature Bank following our acquisition of Signature Bank in 2007. Ms. Huber graduated from McPherson College with a Bachelor of Science degree in Business Administration and History, received her Master of Business Administration from Baker University in 2014 and is a graduate of the Stonier Graduate School of Banking and the Bank Leaders of Kansas. Ms. Huber has been recognized as one of the Wichita Business Journal’s Women in Business in 2013 and Women Who Lead in 2019. Ms. Huber was also inducted to the Wichita Business Journals 40 Under 40 Hall of Fame in 2020 and was named a Wichita Business Journal Executive of the Year in 2021. Ms. Huber currently serves as Board Trustee for McPherson College and is a Board Member of the Kansas Bankers Association.
  
   

ANN M. KNUTSON

 

LOGO

 

CHIEF HUMAN RESOURCES OFFICER

 

AGE: 54

   Ms. Knutson joined the Company in June 2023 as Chief Human Resources Officer. Ms. Knutson brings 25 years of human resources experience to the team. Prior to the Company, she was a Senior Vice President of Summit Credit Union in her native Wisconsin. The Milwaukee BizTimes recognized Ms. Knutson as a “Notable Woman in Human Resources” in 2021. She was an Adjunct Instructor at the Graduate School of Banking in Madison, WI from 2017 to 2022. Ms. Knutson also served as Senior Vice President of Human Resources at Bank Five Nine. She received her Master of Science degree in Management from Cardinal Stritch University.
  
   

CHRIS M. NAVRATIL

 

LOGO

 

CHIEF FINANCIAL OFFICER

 

AGE: 37

   Mr. Navratil serves as the Chief Financial Officer of Equity Bancshares. Mr. Navratil joined Equity as a Senior Vice President within Finance in February 2019. Prior to his promotion to Company CFO, Mr. Navratil served as Equity Bank CFO, overseeing financial and balance sheet strategy, liquidity, financial planning and analysis, investor outreach and more. Before Equity Bank, he spent seven years, including two as a Senior Manager within the Financial Institution Audit Practice, with Crowe LLP a public accounting firm in Chicago, Illinois. Mr. Navratil received his master’s degree in accountancy from Northern Illinois University in 2011.

 

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DAVID E. PASS

 

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CHIEF INFORMATION OFFICER

 

AGE: 55

   Mr. Pass joined Equity Bank in July 2023 and serves as Executive Vice President, Chief Information Officer. Mr. Pass brings more than 23 years in financial services information technology with him to Equity Bank, including serving as either Chief Information Security Officer or Chief Information Officer at two publicly traded companies. Most recently, Mr. Pass served as an EVP on the technology team at UMB Bank, overseeing transformation, enterprise architecture, applications, and enterprise fraud teams. Before UMB, Mr. Pass spent 17 years as the CIO of CoBiz Financial, which was acquired by BOK Financial in 2018. He is a 1992 graduate of the University of Northern Colorado receiving a Bachelor of Science in Business & Finance.
  
   

BRETT A. REBER

 

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GENERAL COUNSEL

 

AGE: 64

   Mr. Reber serves as Executive Vice President and General Counsel. Prior to joining the Company, he practiced for 30 years with Wise & Reber, L.C., a full-service commercial and civil law firm in McPherson Kansas, as the firm’s managing member. He graduated from the University of Kansas with a Bachelors in General Studies Degree and earned his Juris Doctor degree from the University of Tulsa College of Law. Following law school, Mr. Reber served as a law clerk to the United States District Court Judge Thomas R. Brett in the Northern District of Oklahoma. He has been active in bar association activities and has served as the President of the Kansas Bar Association Young Lawyers Section. He is a Fellow of the Kansas Bar Foundation and American Bar Foundation, and is a member of the American, Kansas, and Oklahoma bar associations, and the Kansas Association of Defense Counsel. Mr. Reber is active in state and local community affairs. He is a trustee of the Julia J. Mingenback Foundation and a Director of the McPherson Industrial Development Company.
  
   

RICHARD M. SEMS

 

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PRESIDENT OF EQUITY BANK

 

AGE: 52

   Mr. Sems joined Equity Bank as President in May 2023. Before that, Mr. Sems was the Chief Banking Officer for First Bank in St. Louis, MO. Mr. Sems served as President and CEO of Reliance Bank from 2013 to 2016 and Regional President of PNC Financial Services from 2009-2013. He worked as the President and CEO of Missouri Banking and served as EVP and Managing Director of Corporate Planning of National City Corporation from 2000-2009. Mr. Sems also spent time with PWC, working as a manager from 1993 to 1998 and is an Inactive CPA. He has a B.S in Accounting from Grove City College in Pennsylvania and an MBA – Corporate Strategy from the University of Michigan Ross Business School. He serves on the board of trustees for Grove City College.
  
   

KRZYSZTOF P. SLUPKOWSKI

 

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CREDIT OFFICER

 

AGE: 37

   Mr. Slupkowski has been Equity Bank’s Chief Credit Officer since September 2023. Krzysztof joined Equity in 2018 and has worked with its largest borrowers as Metro Market Chief Credit Officer guiding credit decisions for Equity’s locations in Wichita, Kansas City, and Tulsa. Prior to joining Equity, Mr. Slupkowski worked in various credit functions for Commerce Bancshares. Krzysztof earned his Master of Business Administration from Wichita State University.

 

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DIVERSITY OF SKILLS AND EXPERIENCES REPRESENTED ON OUR BOARD

 

 

The Board believes that its director nominees bring the following skills, experiences and expertise, among others, to the Board as a result of their experience and perspectives:

 

   

accounting and preparation of financial statements

 

   

active involvement in educational, charitable and community organizations in the communities we serve

 

   

business ethics

 

   

complex regulated industries

 

   

compliance

 

   

community development

 

   

corporate governance

 

   

credit evaluation

 

   

demonstrated management ability

 

   

extensive experience in the public, private, or non-for-profit sector

 

   

human capital management

 

   

knowledge of growth markets

 

   

leadership and expertise in their respective fields

 

   

operations

 

   

public company board

 

   

reputational considerations

 

   

risk management

 

   

strategic thinking

 

   

technology and cyber security

The Company has a commitment to enhancing the skillset, gender and racial diversity of its workforce, leadership team and Board of Directors.

ENVIRONMENTAL AND SOCIAL PRACTICES

 

 

The Company remained focused on addressing environmental and social issues in 2023. We strengthened the foundation for these efforts by more intentionally embedding Environmental, Social, and Governance (“ESG”) considerations within our strategic planning and risk management processes. To reinforce our execution of key ESG initiatives at the management level, we have in place a cross-functional ESG Committee.

 

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We continued to make meaningful progress in our efforts to address the potential risks and opportunities associated with climate change. Specific initiatives furthered throughout 2023 included:

 

Environmental Initiatives

Locally

  Reduction in the Company’s reliance on paper, including furthering our utilization of electronic signature investments and electronic data warehousing.
    Energy efficient appliance utilization within any new or updated construction projects.
    Emphasizing efficient lighting options, including LED, solar, and motion activation to reduce unnecessary utilization.
    Recycling and E-cycling to limit our impact based on material inputs or technological obsolescence.
    Emphasizing electronic processing options for our customer based, including paperless statements, online bill payment, online account processing, etc.
    Investing in solar powered infrastructure at banking locations within our footprint.
    Investing in electric vehicles as a more energy efficient means of operating in our geographic footprint.

Nationally

  Impact Investments made by the Company in solar energy production facilities throughout the United States. These investments address climate change head on, as they generate the capacity to produce sustainable, emissions-free energy while enhancing the infrastructure domestically to further these initiatives and move closer to a net-zero economy.

In addition to the above, we made a three-year commitment to a national conservation organization to implement a Wildlife Habitat and Conservation Education Program in our four state region to partner with local habitat and wildlife projects. These initiatives will include support for public land projects supporting quail and other species in the Pea Ridge Arkansas National Battlefield park; Corners for Wildlife, Biodiversity Credit pilot program, and butterfly pollinator plantings in Kansas; Habitat Challenge grants and Recreational Access Programs in Missouri; and support of the Oklahoma Land and Access Program.

The project will include participation by our branches and employees in local education and outreach programs to engage people of all ages and demographics on upland conservation. The programs will focus on habitat education and conservation leadership programs to increase awareness and participation in the uplands.

Our external initiatives sought ways to continue assisting our customers and communities in achieving their financial success. We continue to emphasize our WeCare initiative, encouraging team members throughout our footprint to commit to volunteering and giving back to the communities we serve. As part of the WeCare initiative, our employees partnered with financial literacy organizations to provide financial training to students at local schools, ranging from elementary to high school. During 2023 specific social initiatives of the Company included:

 

Social Initiatives

Community Development

   The Company committed more than $2.5 million in funds to our communities, supporting organizations that assist with local inequalities and work to improve the quality of life for the people and families in the communities we serve.

Financial Literacy

   Our employees partnered with financial literacy programs to utilize the financial acumen and experience of our dedicated team members to assist in developing a higher level of financial understanding in the communities we serve. Team members were on-site teaching foundational principles of financial management to elementary through high school aged students at local schools.

Volunteering

   Our employees committed more than 6,264 hours volunteering in our local communities. We encourage participation through paid time to take part in activities, matching donations, and specific sponsorships of events that meet the needs of our communities.

Community Boards

   Our team members contributed to more than 148 boards in our local communities, including advocacy groups, school boards, advisory and finance board for local commerce and higher education, and many others.

 

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CORPORATE GOVERNANCE

GENERAL

 

 

We are committed to effective corporate governance practices and our Board has adopted Corporate Governance Guidelines to assist the Board in the exercise of its duties and responsibilities and to serve the best interests of the Company and its stockholders. The Corporate Governance Guidelines govern, among other things, board responsibilities, director qualifications, independence requirements, executive sessions of the board and other matters. The full text of our Corporate Governance Guidelines is available on our corporate website at investor.equitybank.com. The Corporate Governance Guidelines may be accessed by selecting “Investor Relations” and then “Governance” and then “Governance Documents” from the menus on our website.

RISK MANAGEMENT AND OVERSIGHT

 

 

Our Board is responsible for oversight of management and the business affairs of the Company, including those relating to management of risk. Our full Board determines the appropriate risk for us generally, assesses the specific risks faced by us, and reviews the steps taken by management to manage those risks. While our full Board maintains the ultimate oversight responsibility for the risk management process, its committees oversee risk in certain specified areas. The Risk Committee provides the Board’s primary risk monitoring mechanism, including overseeing the Company’s risk monitoring framework and related testing, findings and issue resolution including operational, compliance and cybersecurity risks in addition to others. The Audit Committee is responsible for overseeing financial reporting risk, including review of scope of testing and assessment of sufficiency of the Company’s key controls over financial reporting. The Compensation Committee is responsible for overseeing the management of risks relating to our executive and employee compensation plans and arrangements, and periodically reviews these arrangements to evaluate whether incentive or other forms of compensation encourage unnecessary or excessive risk taking by the Company. Our Corporate Governance and Nominating Committee monitors the risks associated with the independence of our Board and Equity Bank’s Credit Committee oversees our general credit risk management policies and other credit related risks. Management regularly reports on applicable risks to the relevant committee or the full Board, as appropriate, with additional review or reporting on risks conducted as needed or as requested by our Board and its committees.

HEDGING AND PLEDGING POLICIES

 

 

The provisions of our insider trading policy applicable to our directors, executive officers and certain other designated employees prohibits such persons from hedging or pledging our securities, subject to limited exceptions and pre-approval under the terms of our insider trading policy. Such persons are also prohibited from engaging in various trading practices including short sales of the Company’s securities, trading in puts, calls or other derivative securities of the Company, and from holding our securities in a margin account. Additionally, no stock option repricing is permitted. The Compensation Committee may not (i) amend a stock option to reduce its exercise price, (ii) cancel a stock option and re-grant a stock option with a lower exercise price than the original exercise price of the cancelled stock option, or (iii) take any other action (whether in the form of an amendment, cancellation or replacement grant) that has the effect of “re-pricing” a stock option.

MEETINGS OF THE BOARD AND EXECUTIVE SESSIONS

 

 

The Board held eight regular meetings and two special meetings during 2023. All of the Company’s directors attended at least 75% of the aggregate of the (i) total number of meetings of the Board and (ii) total number of meetings held by committees on which he or she served.

In 2023, the Board met in eight executive sessions without management in accordance with the Company’s Corporate Governance Guidelines. In addition, the independent directors of the Board met eight times in executive session. Mr. Penner, as the Chairman of the Corporate Governance, is the presiding director at each executive session of the Board.

LEADERSHIP STRUCTURE

 

 

Our Board meets at least eight times a year, and the board of directors of Equity Bank also meets at least eight times a year. Our Board does not have a policy regarding the separation of the roles of Chief Executive Officer and Chairman of the Board, as the Board believes that it is in the best interests of our organization to make that determination from time to time based on the position and direction of our organization and the membership of the Board. The Board has determined that having our Chief Executive Officer serve as Chairman of the Board is in the best interests of our stockholders at this time. This structure makes best use of the Chief Executive Officer’s extensive knowledge of our organization and the banking industry. The Board views this arrangement as also providing an efficient nexus between our organization and the Board, enabling the Board to obtain information pertaining to operational matters expeditiously and enabling our Chairman to bring areas of concern before the Board in a timely manner.

 

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COMMITTEES OF THE BOARD

 

 

Our Board has established standing committees in connection with the discharge of its responsibilities. These committees include the Audit Committee, Compensation Committee, Corporate Governance and Nominating Committee, and Risk committee. Our Board also may establish such other committees as it deems appropriate, in accordance with applicable law and regulations and our corporate governance documents. The composition and responsibilities of each committee are described below. Members will serve on these committees until their resignation or until otherwise determined by our Board.

 

Director

   Audit Committee  

Compensation

Committee

  

Nominating and

Governance Committee

    Risk Committee 

Leon H. Borck

              

Kevin E. Cook

   Chair            

Brad S. Elliott

                

Junetta M. Everett

                

Gregory L. Gaeddert

             Chair

Benjamen M. Hutton

                  

R. Renee Koger

                

Gregory H. Kossover

                

James S. Loving

     Chair          

Jerry P. Maland

                

Shawn D. Penner

            Chair     

2023 Meetings

   13 (1)   3    6    5

 

(1)

Audit Committee met eight (8) times during the year for the sole purpose of approving external disclosures, such as the Company’s 8-Ks and 10-Qs related to quarterly financial results.

Audit Committee

Our Audit Committee has responsibility for, among other things:

 

   

selecting and hiring our independent registered public accounting firm, and approving the audit and non-audit services to be performed by our independent registered public accounting firm;

 

   

evaluating the qualifications, performance and independence of our independent registered public accounting firm;

 

   

monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to financial statements or accounting matters;

 

   

reviewing the adequacy and effectiveness of our internal control policies and procedures;

 

   

discussing the scope and results of the audit with the independent registered public accounting firm and reviewing with management and the independent registered public accounting firm our interim and year-end operating results; and

 

   

preparing the Audit Committee report required by the SEC to be included in our annual proxy statement.

Rule 10A-3 promulgated by the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and applicable New York Stock Exchange (“NYSE”) rules require our Audit Committee to be composed entirely of independent directors. Our Board has affirmatively determined that each of the members of our Audit Committee meet the definition of “independent directors” under the rules of the NYSE and for purposes of serving on an Audit Committee under applicable SEC rules. Our Board also has determined that each member of the audit committee is financially literate and Mr. Cook qualifies as an “audit committee financial expert” as defined by the SEC.

Our Board has adopted a written charter for our Audit Committee, which is available on our corporate website at investor.equitybank.com.

Compensation Committee

The Compensation Committee is responsible for, among other things:

 

   

reviewing and approving compensation of our executive officers including annual base salary, annual incentive bonuses, specific goals, equity compensation, employment agreements, severance and change in control arrangements, and any other benefits, compensation or arrangements;

 

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reviewing and recommending compensation goals, bonus and stock compensation criteria for our employees;

 

   

evaluating the compensation of our directors;

 

   

reviewing and discussing annually with management our executive compensation disclosure required by SEC rules; and

 

   

administrating, reviewing and making recommendations with respect to our equity compensation plans.

Our Board has evaluated the independence of the members of our Compensation Committee and has determined that each of the members of our Compensation Committee is an “independent director” under the NYSE standards. The members of the Compensation Committee also satisfy the independence requirements and additional independence criteria under Rule 10C-1 under the Exchange Act, qualify as “non-employee directors” within the meaning of Rule 16b-3 under the Exchange Act.

The Compensation Committee has sole and exclusive authority to retain compensation consultants, legal counsel or other advisers, including the authority to provide appropriate funding, as determined by the Compensation Committee, for the payment of reasonable compensation to such compensation consultants, legal counsel and other advisers. When determining whether to engage any compensation consultant, legal counsel or other adviser, the Compensation Committee is required to consider all factors relevant to that person’s independence from management and compliance with applicable law and regulations. In 2023, the Compensation Committee engaged Blanchard Consulting Group (“Blanchard”) to provide compensation consulting services. Please see the discussion of the consulting services provided to the Compensation Committee by Blanchard under the section titled “Executive Compensation and Other Matters—Role of Independent Compensation Consultant.”

Our Board has adopted a written charter for our Compensation Committee, which is available on our corporate website at investor.equitybank.com.

Risk committee

The Risk committee is responsible for, among other things:

 

   

overseeing the Company’s risk management framework, including policies and practices relating to the identification, measurement, monitoring and controlling of the Company’s principal business risks;

 

   

ensuring that the Company’s risk management framework is commensurate with its structure, risk profile, complexity, activities and size; and

 

   

providing an open forum for communications between management, third parties and our Board to discuss risk and risk management.

Our Board has adopted a written charter for our Risk committee, which is available on our corporate website at investor.equitybank.com.

Corporate Governance and Nominating Committee

The Corporate Governance and Nominating Committee is responsible for, among other things:

 

   

assisting our Board in identifying prospective director nominees and recommending nominees for each annual meeting of stockholders to the Board for the approval of such recommendation by a majority of the independent directors;

 

   

reviewing periodically the corporate governance principles adopted by the Board and developing and recommending governance principles applicable to our Board;

 

   

overseeing the evaluation of our Board; and

 

   

recommending members for each board committee of our Board.

Our Board has evaluated the independence of the members of our Corporate Governance and Nominating Committee and has determined that each of the members of our Corporate Governance and Nominating Committee is “independent” under the NYSE standards.

Our Board has adopted a written charter for our Corporate Governance and Nominating Committee, which is available on our corporate website at investor.equitybank.com.

DIRECTOR NOMINATIONS

 

 

Pursuant to its charter, the Corporate Governance and Nominating Committee is responsible for the process relating to director nominations, including identifying, recruiting, interviewing and selecting individuals who may be nominated for election to the Board. The Corporate Governance and Nominating Committee considers nominees to serve as directors of the Company and recommends such persons to the Board. The majority of the directors then approve nominees for presentation and election by the Company’s stockholders.

 

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The Corporate Governance and Nominating Committee also considers director candidates recommended by stockholders who appear to be qualified to serve on our Board and meet the criteria for nominees considered by the committee. The committee may choose not to consider an unsolicited recommendation if no vacancy exists on the Board and it does not perceive a need to increase the size of the Board. In order to avoid the unnecessary use of the Corporate Governance and Nominating Committee’s resources, the committee will consider only those director candidates recommended in accordance with the procedures set forth below in the section titled “Procedures to be Followed by Stockholders.”

Criteria for Director Nominees

The Corporate Governance and Nominating Committee seeks to identify and select director nominees who will contribute to the Company’s overall corporate goals including: responsibility to its stockholders, industry leadership, customer success, positive working environment and integrity in financial reporting and business conduct. The committee assesses nominees based upon (i) independence, experience, areas of expertise and other factors relative to the overall composition of the Board and (ii) the appropriateness of Board membership of the nominee based on current responsibilities of Board members. Our Board is also committed to promoting diversity and inclusion in the governance and operations of the Company. These values are reflected in identifying candidates for Board service and in the overall makeup of the Board, so that the Board is inclusive of members who reflect diversity of viewpoints, background, experience, age, gender, race, ethnicity and culture. The committee also considers the following qualifications in assessing nominees for election or re-election to the Board:

 

   

demonstrated ability and sound judgment that usually will be based upon broad experience;

 

   

personal qualities and characteristics, accomplishments and reputation in the business community, professional integrity, educational background, business experience and related experience;

 

   

willingness to objectively appraise management performance;

 

   

giving due consideration to potential conflicts of interest, current knowledge and contacts in the communities in which the Company does business and in the Company’s industry or other industries relevant to the Company’s business;

 

   

ability and willingness to commit adequate time to Board and committee matters, including attendance at Board meetings, committee meetings and annual stockholders meetings;

 

   

commitment to serve on the Board over a period of several years to develop knowledge about the Company’s principal operations;

 

   

fit of the individual’s skills and personality with those of other directors and potential directors in building a Board that is effective, collegial and responsive to the needs of the Company and the interests of its stockholders;

 

   

diversity of viewpoints, background, experience, age, gender, race, ethnicity and culture; and

 

   

other factors deemed relevant and appropriate by the Corporate Governance and Nominating Committee.

The Corporate Governance and Nominating Committee reviews, from time to time, the experience and characteristics appropriate for Board members and director candidates in light of the Board’s composition at the time and the skills and expertise needed for effective operation of the Board and its committees.

Procedures to be Followed by Stockholders

Under Article VI of our Articles, a stockholder may make a nomination or nominations for director of the Company at an annual meeting of stockholders; provided, that the requirements set forth in the Articles have been satisfied. If such requirements have not been satisfied, any nomination sought to be made by such stockholder for consideration and action by the stockholders at such annual meeting of stockholders shall be deemed not properly brought before the meeting, shall be ruled by the Chairman of the meeting to be out of order, and shall not be presented or acted upon at the meeting.

Accordingly, a stockholder must satisfy the requirements summarized below to nominate a director to the Board:

 

   

The stockholder nominating a director must be a stockholder of record on the record date for such annual meeting, must continue to be a stockholder of record at the time of such meeting, and must be entitled to vote on such matter so presented.

 

   

The stockholder nominating a director must deliver or cause to be delivered a written notice to the Secretary of the Company. Such notice must be received by the Secretary no less than one hundred twenty (120) days prior to the day corresponding to the date on which the Company released its proxy statement in connection with the previous year’s annual meeting; provided, however, that if the date of the annual meeting has been changed by more than thirty (30) days from the date of the previous year’s annual meeting, such notice must be received by the Secretary a reasonable time prior to the time at which notice of such meeting is delivered to the stockholders. The notice shall specify: (a) the name and address of the stockholder as they appear on the books of the Company; (b) the class and number of shares of the Company which are beneficially owned by the stockholder; (c) any material interest of the stockholder in the proposed business described in the notice; (d) each nomination sought to be made, together with the reasons for each nomination, a description of the qualifications and business or professional experience of each proposed nominee and a statement signed by each nominee indicating his or her willingness to

 

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serve if elected, and disclosing the information about such stockholder that would be required by the Exchange Act, and the rules and regulations promulgated thereunder, to be disclosed in the proxy materials for the meeting involved if such stockholder were a nominee of the Company for election as one of its directors; and (e) if requested by the Company, all other information that would be required to be filed with the SEC if, with respect to the business proposed to be brought before the meeting, the person proposing such business was a participant in a solicitation subject to Section 14 of the Exchange Act.

 

   

Notwithstanding satisfaction of the provisions of the requirements set forth above, the proposal described in the notice may be deemed not to be properly brought before the meeting if, pursuant to state law or any rule or regulation of the SEC, it was offered as a stockholder proposal and was omitted, or had it been so offered, it could have been omitted, from the notice of, and proxy material for, the meeting (or any supplement thereto) authorized by the Board.

 

   

In the event such notice is timely given in accordance with the requirements set forth in the Articles and the business described therein is not otherwise disqualified pursuant to the Articles, such business may be presented by, and only by, the stockholder who shall have given the notice required by the Articles or a representative of such stockholder.

The above summary does not purport to be a complete statement of all the terms and conditions that a stockholder must satisfy to make a proposal or nominate a director. Any stockholder desiring to take any of these actions should consult, without limitation, the Articles, our Bylaws, applicable Kansas law, SEC rules and regulations and their own legal counsel.

COMMUNICATIONS WITH OUR BOARD

 

 

Interested parties may communicate by writing to Brian Katzfey, Vice President and Director of Corporate Development and Investor Relations, at our principal executive offices, 7701 East Kellogg Drive, Suite 850, Wichita, Kansas 67207. Stockholders may submit their communications to the Board, any committee of the Board, the non-management directors, independent directors or individual directors on a confidential or anonymous basis by sending the communication in a sealed envelope marked “Communication with Directors” and clearly identifying the intended recipient(s) of the communication.

The Company will review each communication and will forward the communication, as expeditiously as reasonably practicable, to the addressees if: (1) the communication complies with the requirements of any applicable policy adopted by the Board relating to the subject matter of the communication; and (2) the communication falls within the scope of matters generally considered by the Board. To the extent the subject matter of a communication relates to matters that have been delegated by the Board to a committee or to an executive officer of the Company, then the Company may forward the communication to the executive officer or chairman of the committee to which the matter has been delegated. The acceptance and forwarding of communications to the members of the Board or an executive officer does not imply or create any fiduciary duty of the Board members or executive officer to the person submitting the communications.

Information may be submitted confidentially and anonymously, although the Company may be obligated by law to disclose the information or identity of the person providing the information in connection with government or private legal actions and in other circumstances. The Company’s policy is not to take any adverse action, and not to tolerate any retaliation, against any person for asking questions or making good faith reports of possible violations of law, the Company’s policies or its Corporate Code of Business Conduct and Ethics.

DIRECTOR ATTENDANCE AT THE ANNUAL MEETING

 

 

The Board encourages directors to attend the Annual Meeting and have historically achieved nearly full attendance. All of the Company’s directors were in attendance at the Company’s 2023 Annual Meeting of Stockholders held on April 25, 2023.

CODE OF BUSINESS CONDUCT AND ETHICS

 

 

Our Board has adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors. The full text of our Code of Business Conduct and Ethics is available on our corporate website at investor.equitybank.com. The Code of Business Conduct and Ethics may be accessed by selecting “Investor Relations” then “Governance” then “Governance Documents” from the menus on our website.

DIRECTOR INDEPENDENCE

 

 

Under the rules of the NYSE, independent directors must comprise a majority of our Board. The rules of the NYSE, as well as those of the SEC, also impose several other requirements with respect to the independence of our directors. Our Board has evaluated the independence of its members and our director nominees and applying these standards, our Board has affirmatively determined that, with the exceptions of Brad S. Elliott, Benjamen M. Hutton and Gregory H. Kossover, each of our directors is an independent director, as defined under the applicable rules.

 

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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

 

 

As of the date of this Proxy Statement, no members of our Compensation Committee are or have been an officer or employee of us or any of our subsidiaries. In addition, none of our executive officers serves or has served as a member of the board of directors, 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 Committee.

 

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DIRECTOR COMPENSATION

The Board’s philosophy for director compensation is to provide the Company with the best opportunity to compete for, attract, and retain qualified board members, compensate board members fairly and in alignment with stockholder’s interests, and be fiscally responsible for the long-term success and viability of the Company.

The Compensation Committee evaluates the competitiveness of director compensation on an ongoing basis and makes pay recommendations to the full Board for approval at least annually, utilizing data from compensation studies, surveys, and proxy disclosures of public peer companies, among other information. The Compensation Committee retained Blanchard Consulting Group to conduct a comprehensive Board of Directors compensation study in 2023, which provided us with director compensation data from our peer group and survey data sources. The evaluation found that the Company’s director compensation for the average director was between the 50th and 75th percentile values of our peer group. No changes were made to retainer compensation in 2023 as compared to 2022. Since the directors of the Company are representing the stockholders, the Company feels these directors should also be stockholders of the Company. Including equity as part of the annual director compensation package increases the share ownership of directors and increases their interest in the Company.

For the 2023 service year, we paid each of our non-employee directors a cash retainer of $32,000 and issued each common stock with a value of $33,000 for their service as a director. In addition, we paid the non-employee members of our Compensation, Corporate Governance and Nominating, Trust, and Risk committees $3,500 for services on such committees during the same period. The chairman of each of these committees earned $9,500 for serving in such role. Each member of our Audit Committee received a retainer of $4,500 for serving on the committee during the period. The chairman of our Audit Committee received a retainer of $14,000 for serving in such role. We paid our non-employee directors that serve on Equity Bank’s Credit Committee a retainer of $40,000 for serving on the committee.

Pursuant to our director compensation policy we prepay our directors’ fees on May 1 of each year and the fees are earned over a one-year period. We also reimburse all non-employee directors for their reasonable out-of-pocket travel expenses incurred in attending meetings of our Board or any committees of the Board. Common stock issuance to non-employee directors is made in the form of one-year vesting restricted stock awards which vest at the end of the service period. If the director were to leave during the service period the shares would not vest and prepaid director fees would be subject to the Company’s clawback policy. In May 2019, the Company adopted stock ownership guidelines for outside directors. The guidelines require Board members to obtain and maintain beneficial ownership (by Company grant and through individual purchase) of $500,000 of value in the Company’s stock within five years of adopting the guidelines or initial election to the Board. We believe that stock ownership of our directors aligns their interests with those of our long-term stockholders.

All of our directors also serve as directors of Equity Bank. During 2023, our directors did not receive any additional compensation for service on the board of Equity Bank. Mr. Elliott did not receive any additional compensation for service on either board.

The following table sets forth the compensation earned during for the fiscal year ended December 31, 2023 by each non-employee director who served on our Board in 2023:

 

Name

   Fees Earned or
Paid in Cash ($) (1)
     Stock Awards ($) (2)      All Other
Compensation ($)
     Total ($)  

Gary C. Allerheiligen(3)

     17,667        11,000               28,667

Leon H. Borck

     37,833        33,000               70,833

Kevin E. Cook

     45,167        33,000               78,167

Junetta M. Everett

     35,500        33,000               68,500

Gregory L. Gaeddert

     49,500        33,000               82,500

Benjamen M. Hutton

     36,667        33,000               69,667

R. Renee Koger

     39,000        33,000               72,000

Gregory H. Kossover (4)

     61,000        22,000        180,011        263,011  

James S. Loving

     43,667        33,000               76,667

Jerry P. Maland

     37,500        33,000               70,500

Shawn D. Penner

     81,500        33,000               114,500

 

(1)

For the 2022 and 2023 service years, director retainer and committee fees were prepaid on May 1 and earned over the service period ending April 30 of the proceeding year.

(2)

In addition to retainer and committee fees, for the 2022 and 2023 service years, each director of the Company also received a one-year vesting restricted stock issuance with a grant date fair value equal to $33,000 which was issued in the form of 1,070 and 1,540 shares, respectively. These shares vest at the anniversary of their issuance.

(3)

Mr. Allerheiligen retired from the Company’s board effective April 30, 2023. The amounts reflected in the table above are fees and stock awards earned in 2023 related to the 2022 service year.

(4)

Mr. Kossover served as the Chief Operating Officer of the company prior to his retirement from banking in April of 2023. All Other Compensation in the table reflects payment earned for service in that role. Mr. Kossover did not receive stock awards for his service on the Board prior to the 2023 service year.

 

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ITEM 2: ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

We believe that our compensation programs are designed to align the interests of our executive officers with those of our stockholders. Our compensation philosophy is to provide market-competitive programs that ensure we attract and retain high- performing talent and properly incentivize executives to continually improve company performance and increase stockholder value over time. We are providing our stockholders the opportunity to vote to approve, on an advisory basis, the compensation of our named executive officers as disclosed in this proxy statement. This proposal, commonly known as a “Say on Pay” proposal, gives you as a stockholder the opportunity to endorse the compensation of our named executive officers. We encourage you to review the tables and our narrative discussion included in this proxy statement.

Our executive officers, including our named executive officers (“NEOs”), as identified in “Executive Compensation—Compensation Discussion and Analysis”, are critical to our success. We design our executive compensation program to drive performance relative to our short-term operational objectives and long-term strategic goals; align our executives’ interests with those of our stockholders by placing a substantial portion of total compensation at risk; and attract and retain highly-qualified executives.

This vote is not intended to address any specific item of compensation, but the overall compensation of our NEOs and the philosophy, program elements and process described in this proxy statement. Accordingly, we recommend that you vote “FOR” the following resolution at the Annual Meeting:

“RESOLVED, that on an advisory basis, the 2023 compensation paid to the Company’s named executive officers, as disclosed pursuant to the compensation rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables and related disclosures in this proxy statement for its 2024 Annual Meeting of Stockholders is hereby approved.”

This Say on Pay vote is advisory and therefore will not be binding on the Company, the Compensation Committee or our Board of Directors. However, our Board of Directors and our Compensation Committee value the opinions of our stockholders. To the extent there is any significant vote against the NEOs’ compensation as disclosed in this proxy statement, we will consider our stockholders’ concerns and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.

VOTE REQUIRED

 

 

The approval of the non-binding, advisory vote on the compensation of the named executive officers disclosed in this proxy statement requires the affirmative vote of the holders of a majority of the Class A Common Stock present in person or represented by proxy at the Annual Meeting. An abstention with respect to advisory approval of named executive compensation will have the effect of a vote against the proposal. A broker non-vote will not affect the outcome of this proposal.

RECOMMENDATION OF THE BOARD

 

 

 

LOGO   THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” ADVISORY APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.

 

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion & Analysis (“CD&A”) provides a description of the material elements of our 2023 executive compensation programs as well as perspective and context for the 2023 compensation decisions for our executive officers named in the Summary Compensation Table referred to in this CD&A and in subsequent tables as our named executive officers (“NEOs”). The following officers are our NEOs for 2023:

 

Name

   Title

Brad S. Elliott

   Chief Executive Officer and Chairman of the Board

Chris M. Navratil (1)

   Executive Vice President, Chief Financial Officer

Julie A. Huber

   Executive Vice President, Strategic Initiatives

Brett A. Reber

   Executive Vice President, General Counsel

Richard A. Sems (2)

   Executive Vice President, President of Equity Bank

Eric R. Newell (3)

   Executive Vice President, Chief Financial Officer (Former)

 

(1)

Mr. Navratil was promoted to Chief Financial Officer of the Company effective August 10, 2023. Prior to his promotion, Mr. Navratil served as the Chief Financial Officer of Equity Bank.

(2)

Mr. Sems joined the Company as Executive Vice President, President of Equity Bank on May 2, 2023.

(3)

Mr. Newell resigned from his position as Chief Financial Officer effective August 10, 2023 prior to his departure from the Company on September 22, 2023.

The CD&A is organized into the following sections:

 

1.

Executive Summary

2.

Compensation Philosophy and Best Practices

3.

Program Elements and Pay Decisions

4.

Compensation Process

5.

Other Factors Affecting Executive Compensation

Executive Summary

Business Performance

The Company delivered for our stockholders in 2023. Equity maintained net interest income in a challenging environment, while building tangible capital and maintaining reserves to position the Company for continued success. Excluding brokered funding, both loan and deposit balances grew organically during 2023 as the Company continued to execute its mission to be the preferred banking partner in our footprint. Non-performing assets and charge-offs continued at historically low rates for the Company.

 

   

Net income of $7.8 million, or $0.50 diluted earnings per share, for the year ended December 31, 2023. Adjusted to exclude the loss on re-positioning of the investment portfolio, net income was $48.9 million, or $3.13 diluted earnings per share.

 

   

Net interest income was materially consistent year-over-year, while market deposit rates saw the steepest increase in recent history.

 

   

Realized loan losses remained low, resulting in limited provisioning while maintaining a historically high reserve rate to prepare for any losses which may be realized associated with economic uncertainty.

 

   

Organically grew both loan and non-brokered deposit balances year-over-year. Closing out 2023 with $3.3 billion in loans and $4.1 billion in deposits.

 

   

Successfully reduced classified assets as a percentage of regulatory capital from 9.98% at the end of 2022 to 7.09% at the end of 2023. Current problem asset ratios are amongst the lowest the Company has seen in its history.

 

   

Increased the quarterly dividend by 20% from $0.10 per share to $0.12 per share, while also re-purchasing 669 thousand shares of the Company’s stock at a weighted average price of $26.54. Tangible book value improved from $21.57 per common share at the end of 2022 to $25.37 at the end of 2023, or a 17.6% growth rate.

 

   

Announced the 10th whole-bank acquisition since the Company’s initial public offering, with our merger with Rockhold BanCorp. The transaction was announced on December 6, 2023 and closed on February 9, 2024, adding approximately $340 million in deposits, eight banking locations and a new territory to the Equity Bank footprint.

The compensation decisions made by the Compensation Committee and the Board during 2023 reflected their continuing focus on serving our customers, creating long-term sustainable stockholder value, and prudently managing risk.

 

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Adjusted diluted earnings per share, tangible book value and associated metrics are financial measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). See “Reconciliation of GAAP and Non-GAAP Financial Measures” in Form 10-K filed by the Company on March 7, 2024.

2023 Executive Compensation Program Highlights

The Company targets executive compensation to be in a competitive range with our peer group while considering other factors and minimizing risk. For 2023, the components of our NEO compensation included:

 

Compensation Component

   Purpose and Objectives    Key Features and Performance Metrics

Base Salary

   Salaries provide market competitive pay commensurate to job responsibilities.   

•  Annual adjustments based on achievement of individual performance goals, market competitive considerations, and changes in responsibilities, when applicable.

Executive Incentive Plan (“EIP”)

   Motivates and rewards NEOs for achievement of strategic and tactical goals over the performance period, generally in relation to the Board approved budget.   

•  NEO must be employed on the date the incentive award is paid.

•  Business performance metrics for 2023: (a) adjusted pre-tax income relative to budget; (b) net over-head ratio relative to budget; and (c) individual performance objectives.

•  Corporate performance accounts for 85% of EIP opportunity.

•  This award is paid in cash.

•  Payouts are subject to satisfactory regulatory ratings.

Long Term Incentive Plan (“LTI”) – Time Vested RSUs (“TRSUs”)

   Promotes retention of talent; aligns NEO interests with long-term value creation as well as stockholder interests.   

•  50% of total long-term incentive.

•  TRSUs vest ratably over three years from the date of grant.

•  NEO must be employed on the date of vesting, with exceptions.

•  NEO performance must be in good standing for the measurement period.

Long Term Incentive Plan (“LTI”) – Performance RSUs (“PRSUs”)

   Promotes retention of talent; aligns NEO interests with long-term value creation as well as stockholder interests.   

•  50% of total long-term incentive earned at target.

•  PRSUs cliff vest at end of three-year measurement period.

•  50% of performance criteria weighted to relative total stock return.

•  50% of performance criteria weighted to relative core EPS growth.

•  100% of the award is subject to forfeiture if below 35th percentile of applicable index.

•  NEO must be employed on the date of vesting, with exceptions.

•  NEO performance must be in good standing for the measurement period.

Compensation Philosophy and Best Practices

Compensation Philosophy

We believe that executive compensation should be directly linked to our Company’s performance while remaining competitive relative to the compensation levels and practices of our peers. Our compensation philosophy describes the framework for our

 

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decision making and includes industry “best practice” compensation features. The Compensation Committee annually reviews our executive compensation philosophy and practices, with the input and support of our independent compensation consultant. This process enables us to implement an executive compensation program that (a) promotes our short-and long-term business strategies and objectives, (b) is market competitive, and (c) aligns with the interests of our stockholders.

Key attributes of our executive compensation programs:

 

   

Drive performance relative to clearly defined goals, balancing short-term operational objectives with long-term strategic goals;

 

   

Align executives’ long-term interests with stockholders by placing a substantial portion of total compensation at risk, contingent on Company performance and the executive’s ongoing employment;

 

   

Ensure compensation programs have a positively correlated relationship with changes in Company performance and the executive’s individual performance;

 

   

Encourage our executives to take actions that are aligned with the interests of long-term stockholders through the use of stock- based compensation;

 

   

Attract and retain highly talented and qualified executives to achieve our financial goals and maintain stability in our executive management team through market competitive compensation that aligns executive’s interests with those of our long-term stockholders;

 

   

Adequately assess and limit risks in our compensation plans through plan design and clawback provisions; and

 

   

Use independent consultants and advisors to ensure practices are competitive to the market and the Company’s peers.

Best Practices

The Compensation Committee continued to utilize and deploy sound governance and risk management practices that align with our compensation philosophy:

 

What We Do

Pay for performance.

   Annual advisory say on pay vote.

Above target and maximum long-term incentive payouts only when we outperform our peer benchmarks.

   Stock ownership guidelines and stock holding requirements for the Board, Executive Vice Presidents and CEO.

Incentive plan directly linked to strategic and objective financial goals.

   Total direct target compensation that is market competitive with actual pay that varies based on performance.

A significant portion of long-term incentives earned based on relative TSR performance. Our long-term incentive plans have multi-year vesting periods.

   A Compensation Committee composed entirely of independent directors overseeing the Company’s executive compensation policies.

Robust clawback policy allowing for recoup of any excess compensation paid to the NEOs if the Company restates its financial results upon which an award is based or if the NEO engages in misconduct.

   Annual risk assessments performed.

Annual peer group review.

   Independent compensation consultant.

Caps/maximums in place for our incentive plans.

   A “double-trigger” is required (both a change-in-control and qualifying termination event must occur) in order to issue any change-in-control severance payments to our NEOs.

 

What We Do Not Do

No tax-gross ups in our change in control arrangements.

No repricing of stock options without stockholder approval.

No excessive perquisites.

No incentive plans which encourage inappropriate risk taking.

Say-on-Pay Vote

At our annual meeting of stockholders held in 2023, the non-binding, advisory proposal to approve the compensation of our NEOs received the approval of approximately 74.4% of the shares having voting power and present at the meeting. The Compensation Committee pays careful attention to communications received from stockholders regarding executive compensation, including the nonbinding, advisory vote and believe that the vote reflects our stockholders’ support of our compensation philosophy and the manner in which we compensate our NEOs. As the Compensation Committee evaluated our compensation practices for fiscal

 

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2023, it was mindful of the support our stockholders expressed for our executive compensation programs and ultimately decided to retain the overall design of our executive compensation for fiscal 2023, while adding an element in the form of a Supplemental Executive Retirement Program (SERP).

Program Elements and Pay Decisions

We compensate our named executive officers through a mix of:

 

   

base salary;

 

   

performance-based annual cash incentives;

 

   

long-term equity incentive compensation (awarded in the form of Restricted Stock Units with three-year ratable vesting periods and Performance Share Units with three-year cliff vesting periods); and

 

   

other benefits, which include certain perquisites.

We believe the current mix and value of these compensation elements provide our NEOs with total annual compensation that is both reasonable and competitive within our markets, appropriately reflects our performance and each NEO’s particular contributions to that performance, and takes into account applicable regulatory guidelines and requirements. We intend for our compensation program to be performance-based, where the opportunity to earn higher compensation (via our short- and long-term incentive plans) is provided if performance warrants. As illustrated below, the majority of our CEO’s and NEO’s total direct compensation opportunity is variable (“at-risk”). The chart below depicts the mix of total target direct compensation (salary, target annual incentives, TRSUs, and PRSUs at grant date fair value) set for our CEO and NEOs for 2023.

 

Name

  Base
Salary (1)
  Bonus   Target Short-
term Annual
Incentive
Compensation
(2)
  Target Long-term
Incentive
Compensation (3)
  NEO
Perquisites
(4)
  Total   At-Risk

Brad S. Elliott

  35%   0%   26%   22%   17%   100%   58%

Chris M. Navratil

  49%   0%   24%   24%   3%   100%   48%

Julie A. Huber

  43%   0%   21%   21%   15%   100%   55%

Brett A. Reber

  42%   0%   19%   21%   18%   100%   52%

Richard A. Sems

  44%   0%   28%   24%   4%   100%   52%

 

(1)

Base salary is based on the amounts disclosed in the under the heading “Base Salaries” below.

(2)

For more information, see the heading “Annual Executive Incentive Plan” below.

(3)

For more information, see the heading “Long-Term Incentive Plan” below.

(4)

Named Executive Officer Perquisites percentages are based on the amounts disclosed as “All Other Compensation” in the “Summary Compensation Table” for Named Executive Officers. For more information, see the discussion under the heading “Additional Benefits” below.

Base Salary

The base salaries of our NEOs are reviewed and set annually by the Board working with our Compensation Committee as part of the Company’s performance review process as well as upon the promotion of an executive officer to a new position or other change in job responsibility. In establishing base salaries for our NEOs, the Compensation Committee has relied on external market data obtained from outside sources including banking industry trade groups and peer group compensation data developed by our independent compensation consultant. In addition to considering the information obtained from such sources, the Compensation Committee has considered:

 

   

each NEO’s scope of responsibility;

 

   

each NEO’s years of experience;

 

   

the types and amount of the elements of compensation to be paid to each NEO;

 

   

our overall financial performance and performance with respect to other aspects of our operations, such as our growth, asset quality, profitability and other matters, including the status of our relationship with the banking regulatory agencies; and

 

   

each NEO’s individual performance and contributions to our company-wide performance, including leadership, team work and community service.

 

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Below, we detail the salary increases from 2022 to 2023 for the NEOs. Our Compensation Committee considers market practices, external competitiveness, stockholder interests and advice from our independent compensation consultant in establishing base salaries. The Compensation Committee determined each NEO’s base salary for fiscal year 2023 at the beginning of 2023.

 

NEO

  2022 Base Salary   2023 Base Salary (1)   % increase

Brad S. Elliott

  $761,261   $781,260   2.6%

Chris M. Navratil (1)

    $275,000  

Julie A. Huber

  $300,005   $310,005   3.3%

Brett A. Reber

  $290,009   $307,500   6.0%

Richard A. Sems (2)

    $600,000  

 

(1)

Mr. Navratil was not a NEO prior to 2023. The base salary depicted here became effective on August 10, 2023, when he was promoted to CFO.

(2)

Mr. Sems joined the Company on May 2, 2023. His base salary was determined as part of the arm’s-length negotiation of the terms of his employment.

Annual Executive Incentive Plan (“EIP”)

We typically pay an annual cash incentive award to our NEOs. Annual incentive awards are intended to recognize and reward those NEOs who contribute meaningfully to our performance for the year. The Compensation Committee determines whether such bonuses will be paid for any year and the amount of any bonus paid is based upon an annually established formula and specific performance measures.

The Company’s design of the performance-based cash incentive plan (Annual Executive Incentive Plan (“EIP”)) exists to align executive pay with performance, drive the Company’s strategic goals, and drive superior financial results. The EIP is designed to achieve the following goals and objectives:

 

   

recognize and reward achievement of the Company’s annual business goals critical to driving our long-term strategy:

 

   

motivate and reward superior performance;

 

   

attract and retain talent needed for the Company’s success;

 

   

be competitive with market;

 

   

encourage teamwork and collaboration through shared goals; and

 

   

promote sound risk management practices.

Incentive Opportunity

All executive officers participate in the EIP, which is administered by the Compensation Committee. The EIP is an annual incentive plan designed to encourage participants to focus on key performance goals during the performance period, which in 2023, was January 1, 2023 through December 31, 2023. The EIP provides participants with an opportunity to earn variable rewards that are contingent on a combination of Company and Individual performance. For Company goals interpolation is used to determine the incentive payouts when performance goals are between threshold and target, and target and maximum. If performance is below a stated threshold, then no payment is made for the applicable component. Individual goals are paid at 100% if identified goals are achieved. Payouts are subject to satisfactory regulatory ratings. Any EIP payouts are also subject to the Company’s Clawback Policy and can be adjusted by the Compensation Committee based on extraordinary events.

 

2023 EIP Award Opportunity as a Percent of Salary (Interpolated between performance levels)

      Threshold (80% of goals)    Target (100% of goals)    Maximum (130% of goals)

NEO

   Threshold (50% payout) (1)    Target (100% payout) (1)    Maximum (150% payout) (1)

Brad S. Elliott

   43%    75%    107%

Chris M. Navratil

   29%    50%    71%

Julie A. Huber

   29%    50%    71%

Brett A. Reber

   26%    45%    64%

Richard A. Sems

   37%    65%    93%

 

(1)

The individual component of each executive’s incentive opportunity is assumed to be paid at 100% in each of the scenarios.

 

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2023 corporate goals in the EIP and actual results (dollars in thousands):

 

        Weighting
of
Performance
     Threshold/
Target/
   2023 EIP Performance Goals    2023 Actual
Results /

Performance Measure

     Measure      Stretch   

 

Threshold

   Target    Maximum    Pay Out %

Adjusted Pre-tax Income, relative to the Budget Adjusted Pre-tax Income (000s)

     60%      80% /
100% /
130%
   $48,260    $60,325    $78,423    $62,871 (2) /
107.0%

Net-over-head Ratio (non-interest income relative to non-interest expense) relative to Budget for Equity Bank

     25%      80% /
100% /
130%
   20.4%    25.5%    33.2%    25.7% (3) /
101.0%

 

(1)

The 2023 Plan defined adjusted net income as a percentage of budgeted amount determined using the same calculations, defined as the amount of net income of the Company as determined by GAAP and reported on our Securities and Exchange Commission (“SEC”) filings adjusted as follows: (a) increased by provision for taxes; (b) adjusted for the elimination of net securities (gains) or losses; (c) elimination of extraordinary items; (d) elimination of unbudgeted merger expenses; (e) increased by the provision for loan losses and reduced by the excess of actual net charge-offs over budgeted provision for loan losses which results in no benefit to earnings realized by the release of loan loss provision, (f) decreased by the amount of tax credit investment amortization reflected in non-interest expense; and (g) other items determined as approved by the Compensation Committee.

 

(2)

Company GAAP pre-tax income of $2,415 was adjusted as follows.

 

      2023  

Pre-Tax GAAP income (loss)

   $ 2,415  

Securities (gain) loss

     51,909  

Merger Expenses

     297  

Tax credit partnership amortization

     3,799  

Provision for credit losses

     4,451  

Adjusted pre-tax income

   $ 62,871  

 

(3)

Adjustments to Equity Bank non-interest income and non-interest expense in calculating the net-over-head ratio.

 

      2023  

Non-interest income

   $ (19,129

Securities (gain) loss

     51,909  

Adjusted non-interest income

   $ 32,780  
          

Non-interest expense

   $ 133,718  

Merger expenses

     (297

Incentive accrual

     (2,132

Tax partnership investment amortization

     (3,799

Adjusted non-interest expense

   $ 127,490  

In addition to the above Company-based metrics enumerated above, 15% of each NEO’s EIP award is based on his or her leadership rating and contributions toward the achievement of corporate goals and performance measures achieved above (see “Individual Performance” section for more detail). Each of our NEO’s achieved 100% of the earning opportunity assigned to the leadership rating, which was capped at 100%.

 

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The 2023 EIP awards are summarized below:

 

      Company Component         Individual Performance Component

Name

   Weighting   Award
Percentage
Achievement
  Company
Component
Total
   Weighting   Award
Percentage
Achievement
  Individual
Performance
Component
Total
    2023 EIP Total 

Brad S. Elliott

   85%   105.3%   $524,327    15%   100%   $87,892    $612,219

Chris M. Navratil

   85%   105.3%   $123,041    15%   100%   $20,625    $143,666

Julie A. Huber

   85%   105.3%   $138,703    15%   100%   $23,250    $161,953

Brett A. Reber

   85%   105.3%   $123,824    15%   100%   $20,756    $144,580

Richard A. Sems

   85%   105.3%   $348,988    15%   100%   $58,500    $407,488

The following table shows the total payout opportunity and the total actual payout of annual cash incentives for the performance year January 1, 2023 through December 31, 2023.

 

NEO

     2023 Incentive Target         % of Target Incentive   

Brad S. Elliott

     $ 585,945          104.5

Chris M. Navratil

     $ 137,500          104.5

Julie A. Huber

     $ 155,003          104.5

Brett A. Reber

     $ 138,375          104.5

Richard A. Sems

     $ 390,000          104.5

Individual Performance

The Compensation Committee believes individual performance of our NEOs is relevant in all compensation decisions. The Compensation Committee formally considers individual performance in determining annual merit base salary changes and for the determination of the individual performance portion of the EIP. The Compensation Committee measures individual performance for NEOs using an annual goal setting process that aligns individual goals with the annual budget, the strategic plan and key business initiatives.

Individual performance adjustments reflect the level of achievement for our NEOs against annual individual performance goals. Individual performance for all employees, including our NEOs, is assessed using an annual performance management process. Goals are established at the beginning of the year and performance is assessed against these goals at the end of the year. Performance goals align our annual business plans and long-term strategic plans, including financial and operating metrics, business development, governance and risk management, people and organization development and customer experience. For 2023, all our NEOs met or exceeded expectations relative to their individual performance goals.

 

NEO

     Performance Highlights

Brad S. Elliott

  

•  Mr. Elliott’s 2023 performance goals aligned with enhancement of stockholder value and were primarily based on business performance and organizational development;

•  Mr. Elliott successfully reset the leadership team, recruiting Rick Sems, President, Ann Knutson, CHRO, and David Pass, CIO while also internally promoting Chris Navratil, CFO and Krzysztof Slupkowski, CCO;

•  Additionally, he was responsible for the Company’s active community involvement, strong and constructive regulatory relationships and stockholder engagement; and

•  Mr. Elliott provided leadership in negotiating the twentieth merger transaction in the Company’s history in the form of our announced merger with Rockhold BanCorp.

Chris M. Navratil

  

•  Mr. Navratil successfully transitioned to the CFO role for the Company after serving in senior leadership roles within the Finance department since joining Equity in 2019.

•  Led the analysis and execution of Equity Bank’s bond portfolio repositioning during the fourth quarter 2023.

•  Led the Bank’s response to the banking turmoil that engulfed the industry landscape in March of 2023, including proactive measures to enhance liquidity, improve internal communication and prepare for any potential negative outcomes that may have impacted the bank.

•  Oversaw the transition of the Company’s stock listing from the Nasdaq to the New York Stock Exchange, adding bottom line value to the organization as well as enhanced visibility to the marketplace.

 

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NEO

     Performance Highlights

Julie A. Huber

  

•  Ms. Huber successfully led the due diligence procedures around multiple potential M&A targets during 2023, including Rockhold BanCorp which resulted in the signing of a definitive merger agreement during the fourth quarter.

•  Led the Bank’s efforts to enhance our banking footprint through the development and deployment of an ITM strategy which will allow our customers increased access to core banking functions during extended hours as compared to the legacy branch approach. Significant infrastructural strides were made in 2023, with more than 30 machines being fully placed into service by the end of the year.

•  Transitioned into a leadership role for the operations teams, including loan, deposit, treasury and service center personnel.

Brett A. Reber

  

•  Mr. Reber successfully led legal initiatives including special asset litigation, regulatory applications and personnel disputes among others.

•  Led the workout initiatives around previously acquired loans which contributed to revenue in 2023 and will continue to contribute in 2024.

•  Successfully negated potential losses related to multiple credits in 2023 through asset sale negotiations and proactive workout steps.

•  Contributed to due diligence around multiple M&A targets, including Rockhold BanCorp.

Richard A. Sems

  

•  Mr. Sems successfully transitioned into the President role for the Company, immediately contributing to the executive team.

•  Led the negotiation and on-site transition of operations and personnel for the Company’s announced merger transaction with Rockhold BanCorp.

•  Repositioned the incentive programs in place for customer facing roles to better align with the interests of the organization and our shareholders.

Long-Term Incentive Equity Plan (“LTIP”)

The Company believes that equity compensation is a critical component of a total direct compensation package which enhances the Company’s ability to recruit, retain and reward key talents needed for the Company’s success, align executives’ interests with those of our stockholders, encourage executives’ best performance and provide incentives for long-term sustained performance. Our stockholder-approved stock incentive plan allows us to execute our philosophy by providing equity compensation to our key executives and Board members.

The Compensation Committee approves equity awards to members of the executive management team, including the NEOs, pursuant to the Company’s stockholder-approved Equity Bancshares, Inc. 2022 Omnibus Equity Inventive Plan (the “Plan”). In determining the form of equity to be granted the Compensation Committee considered many factors including the ability to drive corporate performance, retention, executive officers’ current stock ownership level, tax and accounting treatment and the impact on dilution. Awards were made in consideration of market practice and alignment with the Company’s compensation philosophy.

The LTIP is designed to support the Company’s pay for performance philosophy and reward key executives for creating long-term stockholder value. More specifically, the LTIP is designed to meet the following objectives:

 

   

Performance: Reward key executives for driving long-term, sustained performance (e.g., stock price, specific performance measures).

 

   

Stockholder Alignment: Align executives with stockholder interests through performance goals and focus on stockholder value appreciation.

 

   

Ownership: Ensure executives have an ownership/equity interest.

 

   

Retention: Promote the retention of senior executives.

 

   

Sound Risk Management: Provide a balanced view of performance and align rewards with the time horizon of risk.

 

   

Market Competitive: Position executive total compensation to provide market competitive opportunities that are aligned with performance. Similar to the EIP, the long-term incentive plan is designed to only provide above target or maximum long-term incentive payouts when we outperform our peer benchmarks.

 

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Treatment of LTIP Awards Under Termination Events

The Long-Term Incentive Plan details treatment of performance-vested restricted stock units (“PRSUs”) and time-vested restricted stock units (“TRSUs”) under various employment termination events.

 

Termination Event 

  

Time-Based RSU (TRSU) and

Time-Based Stock Options (TSO)

   Performance-Based RSU (PRSU)
Death    Unvested TRSUs and TSOs will vest immediately    A pro-rata portion of PRSUs will vest immediately at target level. Pro-rata portion will be calculated based on the number of months worked during the performance period as a percentage of the total 3-year performance period (36 months).
Disability    Unvested TRSUs and TSOs will vest immediately    A pro-rata portion of PRSUs will continue to vest and payout will be determined based on the actual performance after the performance period ends. Pro-rata portion will be calculated based on the number of months worked during the performance period as a percentage of the total 3-year performance period (36 months).
Involuntary Termination without Cause (including Termination by Executive for Good Reason)    A pro-rata portion of unvested TRSUs and TSOs will vest immediately. Pro-rata portion will be calculated based on the number of months worked after last vesting month during the vesting period as a percentage of the number of months from the last vesting month to the end of the 36-month vesting period.    A pro-rata portion of PRSUs will vest immediately and payout will be determined based on the actual performance measured on the most recent completed fiscal quarter before termination. If actual performance cannot be determined, prorated PRSUs will be paid at target performance level. Pro-rata portion will be calculated based on the number of months worked during the performance period as a percentage of the total 3-year performance period (36 months).

Retirement

(as defined in the Company’s retirement plan or retirement policy)

   A pro-rata portion of unvested TRSUs and TSOs will vest immediately. Pro-rata portion will be calculated based on the number of months worked after last vesting month during the vesting period as a percentage of the number of months from the last vesting month to the end of the 36-month vesting period.    A pro-rata portion of PRSUs will vest immediately and payout will be determined based on the actual performance measured on the most recent completed fiscal quarter before termination. If actual performance cannot be determined, prorated PRSUs will be paid at target performance level. Pro-rata portion will be calculated based on the number of months worked during the performance period as a percentage of the total 3-year performance period (36 months).
Termination for Cause    Forfeiture    Forfeiture

2023 LTIP Awards

The Compensation Committee considers market practices, external competitiveness, stockholder interests and advice from our independent compensation consultant in establishing the amount and characteristics of equity award grants. The Compensation Committee determined the level of long-term incentive grants for fiscal year 2023 at the beginning of the fiscal year. Prior to making the grants, the Compensation Committee established an intended long-term incentive value for each NEO. When setting these intended values, the Compensation Committee considered competitive market data from the peer group prepared by our independent compensation consultant and target total compensation opportunities. We intend that the value of long-term incentive awards for our NEOs be market competitive when considered within the framework of the NEO’s total compensation opportunity. Individual performance or other factors may result in awards which are above or below the market median. These factors include tenure and experience, succession planning and retention, subjective evaluations of performance, historical grant levels and other recent compensation actions with respect to the individual. The actual value of equity awards realized by any individual may differ significantly (up or down) from the intended value due to changes in our stock price over the life of the awards and the extent to which performance goals are met in the case of PRSUs.

The 2023 annual equity grants were comprised of 50% PRSUs and 50% TRSUs. The Compensation Committee established the target levels of achievement to be challenging yet reasonably attainable, with threshold awards set at expected levels of achievement, and maximum awards set at an aggressive and difficult level of achievement. Levels of achievement for both goals were assessed using a combination of budget, our historical performance, peer group performance, and the Company’s subjective estimates for future performance.

 

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The Compensation Committee has discretion to adjust the performance vested awards by +/- 20% depending on extraordinary events or the Company’s performance in other areas.

 

2023 Equity Award Opportunities at Target Performance

Named Executive Officer

  

TRSU

(# of shares at Target)

  

PRSU

(# of shares at Target)

   Value at Target ($000) 

Brad S. Elliott (1)

   8,591    8,591    $495

Chris M. Navratil (2)

   1,094    1,094    $63

Julie A. Huber

   2,604    2,604    $150

Brett A. Reber

   2,518    2,518    $145

Richard A. Sems (3)

        

 

(1)

Excludes TRSUs for Mr. Elliott, which were awarded per his employment agreement provisions (see “Other Equity Awards” for more detail).

(2)

Mr. Navratil received a 2023 grant from the Company in his previous role as Chief Financial Officer of Equity Bank.

(3)

Mr. Sems was not employed by the company as of the 2023 issuance date.

PRSUs have a three-year performance period (January 1, 2023 – December 31, 2025) with performance criteria reflecting two key financial measures of equal weighting: the three year change in Total Stockholder Return (“TSR”) and the three year average core earnings per share (“EPS”) growth. These goals were selected to reflect our focus on the Company’s long-term strategic goals and objectives which include sound risk management and stockholder value enhancement over the long-term time horizon, relative to our peers.

 

3-year TSR & EPS Performance Relative to
Index (1)

   3-year Performance Relative to Peer Group   Payout Schedule

75th percentile

   Stretch   150% of target

55th percentile

   Target   100% of target

35th percentile

   Threshold   50% of target

Below the 35th percentile

   Below Threshold   0% of target

 

(1)

Will be measured based on the Company performance relative to an index of U.S. exchange traded commercial banks with assets between $3 billion and $10 billion at the time of grant. Index constituents acquired as of the end of the performance period will be removed for the entire performance period and not be replaced. In 2023, the peer index consisted of 70 banks with a median asset size of $6.6 billion.

Each measure’s performance is determined independently. A payout percentage will be interpolated between 50% and 150% dependent on the reported percentile to peers. The PRSU grants will vest as soon as practical after performance results are known and the Compensation Committee reviews and certifies the results. TRSU grants have an incremental vesting schedule which vests 33.33% per year beginning on the first anniversary of the grant date.

Below, we detail the equity award earning opportunity per executive officer as a percent of salary.

 

        2023 Grant Date Value of Equity Award Opportunity as a % of Salary on Grant Date 
                PRSUs

NEO

     TRSUs     

 

Threshold

     Target      Maximum

Brad S. Elliott (1)

     32.50%      16.25%      32.50%      48.75%

Chris M. Navratil (2)

     15.00%      7.50%      15.00%      22.50%

Julie A. Huber

     25.00%      12.50%      25.00%      37.50%

Brett A. Reber

     25.00%      12.50%      25.00%      37.50%

Richard A. Sems (3)

                   

 

(1)

Excludes time vested restricted stock units for Mr. Elliott, which were awarded per his employment agreement provisions (see “Other Equity Awards” for more detail).

(2)

Reflects grants received by Mr. Navratil in his previous role as Chief Financial Officer of the Bank.

(3)

Mr. Sems was not employed with the company as of the issuance date.

 

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2021 PRSUs

PRSUs were awarded to all NEOs who were actively employed on February 7, 2021 (the “2021 PRSUs”). The vesting was based on two relative performance metrics of equal weighting, as measured during the period beginning January 1, 2019 and ending December 31, 2023: (a) relative total stockholder return (“Relative TSR”) and (b) relative average of core earnings per share (“Relative EPS”) growth (a non-GAAP measure). For the first metric, Relative TSR, the Company’s total stockholder return during the performance period was in the 86th percentile of the reference group, which was at the top end of Target performance. For the second metric, Relative EPS, the Company’s average core earnings per share was in the 54th percentile of the reference group, which was also above the top end of the Target range. As a result, total payout associated with the 2021 PRSUs was 124.6% of Target.

 

Relative “Core EPS” Growth

   2021 RSU Payout
Percentage of Target
  Relative “TSR” Performance    2021 RSU Payout
Percentage of Target

75th Percentile and Above

   150%   75th Percentile and Above    150%

55th Percentile

   100%   55th Percentile    100%

35th Percentile

   50%   35th Percentile    50%

Below 35th Percentile

   0%   Below 35th Percentile    0%

 

     

2022-2024 Performance Cycle

Named Executive Officer

   PRSUs
Target (# of shares)
  

PRSUs Vested

(# of shares)

  

 PRSUs Vested 

(% of Target)

Brad S. Elliott

   10,672    13,297    124.6%

Chris M. Navratil

   1,132    1,410    124.6%

Julie A. Huber

   3,227    4,020    124.6%

Brett A. Reber

   2,859    3,562    124.6%

Richard A. Sems (1)

        

 

(1)

Mr. Sems was not employed by the Company on grant date.

 

LOGO

Other Equity Awards

Under his employment agreement, Mr. Elliott is eligible to be considered to receive an annual equity award having an aggregate target value not to exceed the amount equal to 25% of the combined total of his Base Salary and Incentive Payment (within the meaning of his employment agreement). The additional equity award, if granted, is split two-thirds stock options and one-third TRSUs. As such, on January 30, 2023, Mr. Elliott received an aware of 22,635 stock options and 4,342 TRSUs. The options carry a strike price of $28.80 and using a Black-Scholes pricing model each option was valued at $11.05 per share. This stock option award vest 25% at grant date with the remainder vesting ratably over three years beginning on the first anniversary of the grant date. The award carries a ten-year term. The TRSUs vest 25% on the date of grant, then 25% per year for the next three years.

Bifurcation of these additional share grants between full value equity awards and options is important to the Company, as value under the options is only realized through share price appreciation further aligning the compensation of these executives with our stockholders.

As part of Messrs. Navratil and Sems employment agreements each received an option grant upon beginning their roles with the Company. Mr. Sems, on May 15, 2023, received an option award of 56,370 shares which carry a strike price of $21.84 and using a Black-Scholes pricing model were valued at $8.87 per share. The award will vest ratably over five years beginning on the first anniversary date and have a ten-year term. Mr. Navratil, on August 10, 2023, received an option award of 13,429 shares which carry a strike price of $26.52 and using a Black-Scholes pricing model were valued at $11.17 per share. The award vested 20% at issuance with the remainder vesting ratably over four years and will have a ten-year term.

 

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Additional Benefits

In addition to the compensation paid to NEOs as described above, NEOs received, along with and on the same terms as other employees, certain benefits pursuant to the 401(k) Plan and life insurance. Eligible employees, including NEOs, may participate in our health and welfare benefit program, including medical, dental, vision coverage, disability and life insurance. These benefits are offered to all employees as part of our total compensation program.

We provide our NEOs with perquisites that the Compensation Committee believes are reasonable and consistent with our overall compensation program and allows our NEOs to more effectively discharge their responsibilities to the Company. Certain of our NEOs were provided with Company-owned vehicles in 2023. The Company has more than 65 retail and commercial offices throughout Kansas, Missouri, Arkansas, and Oklahoma. Regular presence of our NEOs in the markets we serve is, we believe, best accomplished by providing them with the use of Company-owned transportation. We also reimburse all NEOs for membership costs for various clubs and organizations. The Compensation Committee believes these memberships provide important opportunities for business development activities and demonstrate our philosophy of community support and development in the markets we do business. The amounts attributed to each of our NEOs for personal use of company-owned transportation and membership reimbursements are included in the “All Other Compensation” column in the Summary Compensation Table.

Death Benefits for Certain Officers

The Company maintains an unfunded plan for a select group of officers whose lives have been insured by Bank Owned Life Insurance (“BOLI”) pursuant to which a multiple of the officer’s base salary at the time of death is payable over a stated time period to a beneficiary designated by the officer. The officer at the time of death must be actively employed by the Company.

Employee Stock Purchase Plan

Our NEOs are eligible to participate in our employee stock purchase plan (“ESPP”) on the same basis as all other employees. Our ESPP was approved by our stockholders at our 2019 Annual Meeting of Stockholders and the ESPP is structured as a qualified employee stock purchase plan under Section 423 of the Internal Revenue Code. The ESPP gives our employees an opportunity to purchase shares of our common stock at a discounted price subject to compliance with the terms of the ESPP. We believe that our stockholders will correspondingly benefit from the increased interest on the part of participating employees in our success.

Executive Deferred Compensation Plan

The Bank sponsors and maintains the Equity Bank Executive Deferred Compensation Plan (the “SERP”). The SERP is an unfunded nonqualified deferred compensation plan intended to provide supplemental retirement benefits to key employees of the Company (which may include any of our named executive officers). Participants in the SERP receive notional contributions to their SERP accounts at such time(s) and in such amount(s) as approved by the Compensation Committee. Amounts notionally credited to a participant’s account under the SERP will be adjusted for earnings and losses based on the participant’s investment elections (which currently mirror the investment fund options available under the Bank’s 401(k) retirement savings plan). A participant becomes vested in his or her SERP account based on the participant’s completed years of SERP participation, with vesting currently at a rate of 10% for each completed year of SERP participation. During 2023, Messrs. Elliott, Reber and Ms. Huber participated in the SERP. At the discretion of the Compensation Committee, each received a contribution equal to 30% of their salary in February of 2023. Each is in their first year of participation in the program. Refer to the ‘Summary Compensation’ tables for additional detail.

Compensation Process

The Compensation Committee

The Compensation Committee is a standing committee that operates pursuant to a charge that has been approved by the Board. Each member of the Committee is independent as defined under applicable NYSE rules. While the committee receives input from the CEO and executives on certain information and data and regularly consults with its independent compensation consultant, the Committee is fully responsible for all aspects of compensation decisions for NEOs. To fulfill its responsibilities, the Committee meets throughout the year and also takes action by written consent. The Chairman of the Committee reports on Committee actions at meetings of the Company’s Board.

The Committee operates under a written charter that establishes its responsibilities. A copy of the Compensation Committee Charter can be found on the Company’s website investor.equitybank.com. The Committee reviews the Charter annually to ensure that the scope of the Charter is consistent with the Committee’s expected role. Under the Charter, the Committee is charged with general responsibility for the oversight and administration of our executive compensation program. Annually, the Committee reviews all compensation components and incentives, long-term incentives, benefits and other perquisites. In addition to reviewing competitive market values, the Committee examines the total compensation mix, pay for performance relations and alignment with our compensation philosophy. The Committee also reviews the employment agreements for NEOs. As the Committee makes decisions regarding the CEO and other executive officers’ compensation, input and data from management and outside advisors are provided for external reference and perspective. While the CEO makes recommendations on other executive officers’ compensation, the Committee is ultimately responsible for approving compensation for all executive officers. The Committee meets regularly in executive session without management.

 

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The Compensation Committee Independent Compensation Consultant

Pursuant to its Charter, the Committee has the sole authority to retain, terminate, obtain advice from, oversee and compensate its outside advisors, including its compensation consultant. The Committee has access to the funding it needs to solicit advisory services to meet their requirements.

The Compensation Committee engaged Blanchard Consulting Group as its independent compensation consultant in 2023 to advise the Compensation Committee by providing a comprehensive executive compensation review. In 2023, Blanchard Consulting Group provided the Committee with a director compensation review. These reports allow us to evaluate our pay practices as compared to peer, banking industry survey data, and industry best practices. Blanchard Consulting Group is a national firm with an exclusive focus on the banking and financial services industry. Blanchard Consulting Group did not provide additional services other than compensation consulting to the Compensation Committee. The Compensation Committee conducted an assessment of potential conflicts of interest and independence issues for Blanchard Consulting Group and no conflicts of interest or independence issues relating to either Company’s services were identified by the Compensation Committee. The Compensation Committee and executive management utilized the Blanchard reports to assist with executive and director pay decisions during 2023 but did not solely rely on them.

The Role of Executive Officers with the Compensation Committee

The Company’s management provides information and input as requested by the Committee to facilitate decisions related to executive compensation. Annually, at the start of the year, the CEO develops proposed Company goals and objectives that are reviewed and approved by the Board. Performance measures for the incentive plan are derived from the Board approved goals.

Members of management may be asked to provide input relating to potential changes in compensation programs for review by the Committee. The Committee occasionally requests members of executive management to be present at Committee meetings where executive compensation and Company or individual performance are discussed and evaluated. Executives provide insight, suggestions or recommendations regarding executive compensation; however, only Committee members vote on decisions regarding executive compensation.

The CEO reviews executive performance with the Committee and makes recommendations relating to executive compensation decisions. The Committee meets with the CEO to discuss his own performance and compensation package, but ultimately decisions regarding the CEO’s compensation are discussed and approved during executive session, when the CEO is not present. Decisions regarding other executives’ performance and compensation are made by the Committee considering recommendations from the CEO.

The Compensation Committee Assessment of Compensation Risk

The Company adheres to a conservative and balanced approach to risk. Management and the Board conduct regular reviews of the business to ensure it remains within appropriate regulatory guidelines and practice. In addition, the Company is periodically examined by the Federal Reserve Bank of Kansas City and the Kansas Office of the State Bank Commissioner.

During 2023, management continued to conduct risk assessments of the Company’s incentive plans. These risk assessments were presented to the Compensation Committee and concluded that the compensation programs provide appropriate balance across many performance measures, have controls on the range of payouts, allow Committee discretion in making awards and ultimately do not pose material risk to the Company. Going forward, the Company will continue to monitor and evolve its programs to ensure they are aligned with emerging regulatory requirements and established best practices.

Peer Group for 2023 Compensation Decisions

Understanding the competitive landscape is a key element the Compensation Committee considers in setting program targets and making compensation decisions. The Compensation Committee considers competitive market data and advice from its independent compensation consultant, including benchmarking data (i.e 25th, 50th and 75th percentile) guidance on established and emerging best practices relating to executive compensation and general education to members of the Compensation Committee as needed throughout the year.

A primary data source used in setting competitive market-based compensation levels for the NEOs and directors is the information publicly disclosed by a custom peer group. The peer group is based on geographic location and asset size and was utilized as part of the Blanchard Consulting Group executive compensation study in 2023. In 2023, the peer group’s 2022 year-end asset size ranged from approximately $3.2 billion to $9.6 billion. The median asset size was $6.2 billion, with the Company’s assets at approximately $5.0 billion for the same time period (the same timeframe as the peer executive compensation reported and

 

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analyzed in Blanchard’s 2023 executive compensation study). Currently, the Company’s assets are approximately $5.0 billion. Our current peer group consists of the below twenty-two banks, located in Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, South Dakota, and Texas.

 

      2023 Compensation Peer Group      

Great Southern Bancorp, Inc.

   HBT Financial, Inc.    Hills Bancorporation

Southside Bancshares, Inc.

   Capital Federal Financial, Inc.    South Plains Financial, Inc.

Pathward Financial, Inc.

   CrossFirst Bankshares, Inc.    Old Second Bancorp, Inc.

Midland States Bancorp, Inc.

   QCR Holdings, Inc.    West Bancorporation, Inc.

National Bank Holdings Corporation

   MidWestOne Financial Group, Inc.    Guaranty Bancshares, Inc.

Byline Bancorp, Inc.

   First Mid Bancshares, Inc.    Bridgewater Bancshares, Inc.

Triumph Financial, Inc.

   FirstSun Capital Bancorp    Southern Missouri Bancorp, Inc.

Third Coast Bancshares, Inc.

         

Other Factors Affecting Executive Compensation

Employment Agreements

On November 5, 2021, the Company entered into new employment agreements with Messrs. Elliott, Reber and Ms. Huber. These employment agreements supersede and replace their prior employment agreements. The employment agreement with Mr. Elliott, CEO and Chairman of the Board, provides for an initial three-year term that is automatically extended for an additional three-years unless either party gives notice of non-renewal at least 90 days before the end of the then-current term. The employment agreements with Mr. Reber and Mrs. Huber have an initial three-year term that is automatically extended for successive one-year terms unless either party gives notice of non-renewal at least 90 days before the end of the then-current term.

On November 6, 2023 the Company entered into an employment agreement with Mr. Navratil. The initial term of the agreement is three years, and the term is automatically extended for successive one-year terms unless either party gives notice of non-renewal at least 90 days before the end of the then-current term.

On May 2, 2023 the Company entered into an employment agreement with Mr. Sems, the terms of which were established through arms’ length negotiation. The initial term of the agreement three years, and the term is automatically extended for successive one-year terms unless either party gives notice of non-renewal at least 90 days before the end of the then-current term.

We use multi-year employment agreements to foster retention and succession planning, to be competitive and to protect the business with restrictive covenants, such as non-competition, non-solicitation and confidentiality provisions. The employment agreements provide for severance pay in the event of the involuntary termination of the executive’s employment without cause (or, where applicable, termination for good reason), which allows these executives to remain focused on the Company’s interests and, where applicable, serves as consideration for the restrictive covenants in their employment agreements.

Employment agreement terms, at the date of agreement, for our NEOs (other than Mr. Newell) are summarized as follows:

 

Mr. Elliott

     

Term

   An initial three-year term that is automatically extended for successive additional three-year terms unless either party gives notice of non-renewal at least 90 days before the end of the then- current term.

Base Salary

   $725,000

Annual Bonus

   Under his employment agreement, Mr. Elliott has a target bonus opportunity of 75% of his base salary, subject to his achievement of performance criteria established by the Compensation Committee.

Long-Term Incentive Award

   Under his employment agreement, Mr. Elliott is entitled to receive an annual equity incentive award with a total grant value equal to 65% of his base salary.

Non-Competition Period

   During employment and for 12 months following termination of employment.

Non-Solicitation Period

   During employment and for 12 months following termination of employment.

 

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Mr. Navratil

     

Term

   An initial three-year term that is automatically extended for successive additional one-year terms unless either party gives notice of non-renewal at least 90 days before the end of the then- current term.

Base Salary

   $275,000

Annual Bonus

   Under his employment agreement, Mr. Navratil has a target bonus opportunity of 50% of his base salary, subject to his achievement of performance criteria established by the Compensation Committee.

Long-Term Incentive Award

   Under his employment agreement, Mr. Navratil is entitled to receive an annual equity incentive award with a total grant value equal to 50% of his base salary.

Non-Competition Period

   During employment and for 12 months following termination of employment.

Non-Solicitation Period

   During employment and for 12 months following termination of employment.

 

Ms. Huber

     

Term

   An initial three-year term that is automatically extended for successive additional one-year terms unless either party gives notice of non-renewal at least 90 days before the end of the then- current term.

Base Salary

   $285,000

Annual Bonus

   Under her employment agreement, Ms. Huber has a target bonus opportunity of 50% of her base salary, subject to her achievement of performance criteria established by the Compensation Committee.

Long-Term Incentive Award

   Under her employment agreement, Ms. Huber is entitled to receive an annual equity incentive award with a total grant value equal to 50% of her base salary.

Non-Competition Period

   During employment and for 12 months following termination of employment.

Non-Solicitation Period

   During employment and for 12 months following termination of employment.

 

Mr. Reber

     

Term

   An initial three-year term that

Base Salary

   $280,500

Annual Bonus

   Under his employment agreement, Mr. Reber has a target bonus opportunity of 45% of his base salary, subject to his achievement of performance criteria established by the Compensation Committee.

Long-Term Incentive Award

   Under his employment agreement, Mr. Reber is entitled to receive an annual equity incentive award with a total grant value equal to 50% of his base salary.

Non-Competition Period

   During employment and for 12 months following termination of employment.

Non-Solicitation Period

   During employment and for 12 months following termination of employment.

 

Mr. Sems

     

Term

   An initial three-year term that is automatically extended for successive additional one-year terms unless either party gives notice of non-renewal at least 90 days before the end of the then- current term.

Base Salary

   $600,000

Annual Bonus

   Under his employment agreement, Mr. Sems has a target bonus opportunity of 65% of his base salary, subject to his achievement of performance criteria established by the Compensation Committee.

Long-Term Incentive Award

   Under his employment agreement, Mr. Sems is entitled to receive an annual equity incentive award with a total grant value equal to 55% of his base salary.

Non-Competition Period

   During employment and for 12 months following termination of employment.

Non-Solicitation Period

   During employment and for 12 months following termination

 

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Compensation Recovery Policy

The Company revised its existing Clawback and Recoupment Rights Policy in November 2023 to comply with NYSE standards and adopted a Compensation Recovery Policy (the “Policy”). This policy provides for recoupment of erroneously awarded incentive compensation in connection with an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, and the recoupment of certain incentive compensation in connection with defined acts of misconduct under the Policy. The Policy would be triggered by any restatement of the financial statements, certain acts of misconduct under the Policy or violation of provisions of applicable confidentiality, noncompetition, or non-solicitation obligations as agreed upon when receiving the performance-based incentive and equity compensation. The Policy covers performance-based incentive and equity compensation awarded when vesting, settlement or payment is contingent upon the achievement of a specified performance metric. Excess compensation, determined to be the amount of compensation that would not have been paid to the Executive Officer if the financial statements were correct at the time of the payment, and/or other incentive compensation received by the Executive Officer in the case of certain defined acts of misconduct, would be subject to recoupment at the discretion of the Compensation Committee.

Equity Compensation Grant Practices

The Compensation Committee is solely responsible for the development of the schedule of equity awards made to our Chief Executive Officer and other NEOs. As a general matter, the Committee’s process is independent of any consideration of the timing of the release of material non-public information, including with respect to the determination of grant dates or stock option exercise prices. Similarly, we have never timed the release of material non-public information to affect the value of the executive compensation. In general, the release of such information reflects long-established timetables for the disclosure of material non-public information such as earnings reports or, with the respect to other events reportable under federal securities laws, the applicable requirements of such laws with respect to timing of disclosure. The Compensation Committee’s decisions are reviewed by, and must be approved by, the Company’s full Board of Directors.

Stock Ownership Requirements

In May 2019, the Company adopted stock ownership guidelines for outside directors. The guidelines require Board members to obtain and maintain beneficial ownership (by Company grant and through individual purchase) of $500,000 of value in the Company’s stock within five years of adopting the guidelines or initial election to the Board.

The Compensation Committee adopted stock ownership guidelines in 2021 requiring select senior executive officers to hold meaningful ownership in Company stock and align their interests with those of our stockholders. The guidelines require the level of ownership be reached and retained within 5 years of the establishment of the guidelines or the executives designation in such role, whichever is later.

As of the reporting date, all individuals to which these requirements apply are compliant based on either level of ownership or time in role.

 

Position

   Required Ownership

Chairman & Chief Executive Officer

   5x Annual Base Salary

Other Named Executive Officers (“NEOs”)

   2.5x Annual Base Salary

Executive Vice Presidents

   1x Annual Base Salary

Non-Employee Directors

   $500,000

 

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CEO Pay Ratio

The Company is making its disclosure of the CEO Pay Ratio, as required by Section 953(b) of the Dodd-Frank Wall Street reform and Consumer Protection Act and Item 402(u) of SEC Regulation S-K. We identified the median employee in 2023 by examining the Box 5 wages reported on the 2023 Form W-2 for all individuals, excluding the CEO, who received compensation during 2023 through December 31, 2023. This employee population included all full-time, part-time or seasonal employees as of December 31, 2023. Once we identified our median employee, we determined their annual total compensation in a manner consistent with the CEO compensation provided in the ‘Summary Compensation Table’.

For 2023, the total compensation paid to the CEO was $2,646,119. The total of all compensation paid to the median employee was $45,060. The CEO pay to median employee pay was approximately 59:1.

The pay ratio identified above is a reasonable estimate calculated in a manner consistent with SEC rules. Pay ratios that are reported by our peers may not be directly comparable to ours because of differences in the composition of each company’s workforce, as well as the assumptions and methodologies used in calculated the ratio, as permitted by SEC rules.

Tax, Accounting and Other Considerations

The Compensation Committee considers the effects of tax and accounting treatments when it determines compensation. For example, under the Tax Cuts and Jobs Act enacted on December 22, 2017, generally compensation paid to applicable executive officers of publicly traded companies, in excess of $1 million, is disallowed from receiving a tax deduction (section 162(m)) of the Internal Revenue Code of 1986, as amended (the “Code”). In structuring the Company’s compensation programs and in determining executive compensation, the Compensation Committee takes into consideration the deductibility limit for compensation. Despite the loss of deductibility, the Company continues to commit to providing a significant portion of executive pay in performance-based components, consistent with its compensation philosophy. The Compensation Committee reserves the right, however, in the exercise of its business judgment, to establish appropriate compensation levels for executive officers that may exceed the limits on tax deductibility established under Section 162(m) of the Code. NEO compensation agreements include a provision that limits change-in-control payments to executives in order to eliminate any potential excise taxes under Section 4999 of the Internal Revenue Code. In the event the calculated payment exceeds the Section 280G limit, the benefits will be reduced to an amount below the limit. For full payments, the NEO is responsible for paying the excise tax. The Compensation Committee takes into consideration the accounting effects of Financial Accounting Standard Board (FASB) Accounting Standards Codification (ASC) Topic 718 in determining vesting periods for stock options and restricted stock awards under the Equity Bancshares, Inc. 2022 Omnibus Equity Incentive Plan.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee has reviewed and discussed with Management the “Compensation Discussion and Analysis” disclosure appearing above in this Proxy Statement. Based on this review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

The Compensation Committee:

James Loving, Chairman

Randee Koger

Jerry Maland

 

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SUMMARY COMPENSATION TABLE

 

 

The following table provides information regarding the compensation of our named executive officers for the years ended December 31, 2023, 2022 and 2021. Except as set forth in the notes to the table, all cash compensation for these executive officers was paid by Equity Bank, where each serves in the same capacity.

 

Name and Principal Position

  Year    

Salary

($)

   

Bonus

($)

    Stock
Awards (1)
($)
    Option
Awards (2)
($)
    Non-equity
Incentive Plan
Compensation
($)
    All Other
Compensation (3)
($)
   

Total

($)

 

Brad S. Elliott

    2023       779,593             619,920       250,117       612,219       384,270       2,646,119  

Chief Executive Officer and

    2022       758,240             593,693       244,893       739,410       177,111       2,513,347  

Chairman of the Board

    2021       725,010             652,530       25,000       744,326       152,635       2,299,501  

Chris M. Navratil (4,5)

    2023       242,885             63,014       150,000       143,666       16,636       616,201  

Executive Vice President and

               

Chief Financial Officer

                                                               

Julie A. Huber

    2023       309,172             149,990             161,953       110,574       731,689  

Executive Vice President,

    2022       298,755             142,507             194,263       35,364       670,889  

Strategic Initiatives

    2021       285,000             142,504             195,065       31,885       654,454  

Brett A. Reber

    2023       306,042             145,037             144,580       126,570       722,229  

Executive Vice President and

               

General Counsel

                                                               

Richard A. Sems (4,6)

    2023       377,308       250,000             500,000       407,448       54,310       1,589,066  

Executive Vice President

               

President

                                                               

Eric R. Newell (7)

    2023       294,314             220,032                   140,686       655,032  

Executive Vice President and

    2022       381,453             195,788             336,716       31,784       945,741  

Chief Financial Officer

    2021       356,000             195,805             316,758       21,735       890,298  

 

(1)

These amounts represent the aggregate grant-date fair value of time and performance based restricted stock unit awards, determined in accordance with FASB ASC Topic 718. The grant-date fair value of restricted stock units is determined by the closing price of the Company’s stock on the date of grant. See Note 17 to the consolidated financial statements for the year ended December 31, 2023.

(2)

These amounts represent the aggregate grant-date fair value of stock option awards, determined in accordance with FASB ASC Topic 718. See Note 17 to the consolidated financial statements for the year ended December 31, 2023 for a discussion of the associated assumptions used in the valuation of stock-option awards.

(3)

See table below summarizing the components of ‘All Other Compensation.’

(4)

Executive was not a NEO prior to 2023.

(5)

Upon his promotion, Mr. Navratil received an equity award.

(6)

Upon his hire, Mr. Sems received a cash sign-on bonus as well as an equity award.

(7)

Mr. Newell resigned his role as Chief Financial Officer of the Company effective August 10, 2023 prior to his departure from the Company in September of 2023.

 

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ALL OTHER COMPENSATION TABLE

 

 

The following table provides a detailed summary of the ‘All Other Compensation’ column included within the above Summary Compensation Table.

 

Name and Principal Position

   Year      Retirement
Contribution (1)
($)
    

Life

Insurance
($)

     Use of
Company
Vehicle
($)
     Use of
Company
Aircraft
($)
    

Club

Dues
($)

    

Moving

Expense
($)

     Other (2)  

Brad S. Elliott

     2023        241,578        104,971        23,478        2,523        11,720                

Chief Executive Officer and

     2022        12,200        104,971        21,170        2,087        21,274               15,409  

Chairman of the Board

     2021        10,800        101,290        21,004        7,485        12,056                

Chris M. Navratil

     2023        9,752        6,884                                     

Executive Vice President and

                       

Chief Financial Officer

                                                                       

Julie A. Huber

     2023        103,202        690        3,435               3,247                

Executive Vice President,

     2022        12,200        690        16,491               5,983                

Strategic Initiatives

     2021        10,800        690        14,922               5,473                

Brett A. Reber

     2023        99,436        1,980        13,095        5,930        6,129                

Executive Vice President and

General Counsel

                                                                       

Richard A. Sems

     2023               345        10,058               3,907        40,000         

Executive Vice President,

                       

President of Equity Bank

                                                                       

Eric R. Newell

     2023        132,648        225                      7,813                

Executive Vice President and

     2022        12,200        300                      19,284                

Chief Financial Officer, Former

     2021        9,504        175                      12,056                

 

(1)

Includes Company matching of 401-K contributions as well as contributions to the NEOs SERP. Participation in the SERP began in 2023 for participating NEOs.

(2)

Cost of security system for the NEOs personal residence.

 

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GRANTS OF PLAN-BASED AWARDS TABLE

 

 

The following table shows the plan-based awards granted during the year ended December 31, 2023 to each of our named executive officers:

 

                   Estimate Future Payouts
Under Non-Equity Incentive
Plan Awards
    Estimated Future
Payouts
Under Equity Incentive
Plan Awards
               

Name and Principal Position

  Award
Description
    Grant
Date
    Threshold
($)
    Target
($)
   

Max

($)

    Threshold
(#)
    Target
(#)
    Max
(#)
    All
Other
Stock
Awards
   

Grant Date
Fair Value

($)

 

Brad S. Elliott

    EIP         336,918       585,945       834,972            

Chief Executive Officer and

    RSU       1/30/2023                               8,591             4,342       372,470  

Chairman of the Board

    PSU  (1)      1/30/2023                         2,148       4,296       6,443             123,725  
    PSU  (2)      1/30/2023                         2,148       4,295       6,443             123,725  
      Options       1/30/2023                                           22,635       250,117  

Chris M. Navratil

    EIP         79,063       137,500       195,938            

Executive Vice President and

    RSU       1/30/2023                               1,094                   31,507  

Chief Financial Officer

    PSU  (1)      1/30/2023                         274       547       821             15,754  
    PSU  (2)      1/30/2023                         274       547       821             15,753  
      Options       8/10/2023                                           13,429       150,000  

Julie A. Huber

    EIP         89,126       155,003       220,879            

Executive Vice President,

    RSU       1/30/2023                               2,604                   74,995  

Strategic Initiatives

    PSU  (1)      1/30/2023                         651       1,302       1,953             37,497  
      PSU  (2)      1/30/2023                         651       1,302       1,953             37,498  

Brett A. Reber

    EIP         79,566       138,375       197,184            

Executive Vice President and

    RSU       1/30/2023                               2,518                   72,518  

General Counsel

    PSU  (1)      1/30/2023                         630       1,259       1,889             36,260  
      PSU  (2)      1/30/2023                         630       1,259       1,889             36,259  

Richard A. Sems

    EIP         224,250       390,000       555,750            

Executive Vice President,

    RSU                                                    

President of Equity Bank

    PSU  (1)                                                   
    PSU  (2)                                                   
      Options       5/15/2023                                           56,370       500,000  

Eric R. Newell

    EIP                                

Executive Vice President and

    RSU       1/30/2023                               3,820                   110,016  

Chief Financial Officer, Former

    PSU  (1)      1/30/2023                         955       1,910       2,865             55,008  
    PSU  (2)      1/30/2023                         955       1,910       2,865             55,008  

 

(1)

The PSUs vest on the third anniversary of the grant date subject to meeting the Adjusted Earnings Per Share performance criteria as described in detail in the Compensation Discussion and Analysis section of this document.

(2)

The PSUs vest on the third anniversary of the grant date subject to meeting the Total Stockholder Return performance criteria as described in detail in the Compensation Discussion and Analysis section of this document.

 

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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

 

The following table sets forth information relating to outstanding equity awards held by the named executive officers as of December 31, 2023:

 

      Option Awards      Stock Awards  
               

Name

   Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
     Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
    Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
     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
($) (14)

 

Brad S. Elliott

     30,665                     14.25        12/31/2024        
     32,643                     21.21        1/28/2026        
     16,853                     33.50        2/17/2027        
     34,177                     32.29        2/12/2029        
     2,775        1,338 (1)             22.08        1/29/2031        
     10,904        10,903 (2)             31.64        1/28/2032        
     5,659        16,976 (3)             28.80        1/30/2033        
                   6,293 (6)        213,333  
                   10,672 (7)        361,781  
                   6,900 (10)        233,910  
                   7,447 (11)        252,453  
                   11,847 (12)        401,613  
                                                   8,591 (13)        291,235  

Chris M. Navratil

     2,650        10,599 (4)              26.52        8/10/2033        
                   377 (6)        12,780  
                   1,132 (7)        38,375  
                   750 (8)        25,425  
                   251 (9)        8,509  
                   632 (10)        21,425  
                   948 (11)        32,137  
                   1,094 (12)        37,087  
                                                   1,094 (13)        37,087  

Julie A. Huber

     7,500                     33.15        1/30/2027        
                   1,076 (6)        36,476  
                   3,227 (7)        109,395  
                   1,501 (10)        50,884  
                   2,252 (11)        76,343  
                   2,604 (12)        88,276  
                                                   2,604 (13)        88,276  

Brett A. Reber

                   
                   953 (6)        32,307  
                   2,859 (7)        96,920  
                   1,330 (10)        45,087  
                   1,995 (11)        67,631  
                   2,518 (12)        85,360  
                                                   2,518 (13)        85,360  

Richard A. Sems

            56,370 (5)              21.84        5/15/2033        
                                                               

Eric R. Newell

                                       
                                                   )         

 

(1)

Represents time-vested options granted on January 29, 2021. A portion of the options vested at grant. The remaining options vest in three equal annual installments on the anniversary of the grant date, subject to the continued employment of the executive.

(2)

Represents time-vested options granted on January 28, 2022. A portion of the options vested at grant. The remaining options vest in three equal installments on the anniversary of the grant date, subject to the continued employment of the executive.

(3)

Represents time-vested options granted on January 30, 2023. A portion of the options vested at grant. The remaining options vest in three equal installments on the anniversary of the grant date, subject to the continued employment of the executive.

 

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(4)

Represents time-vested options granted on August 10, 2023. A portion of the options vested at grant. The remaining options vest in four equal installments on the anniversary of the grant date, subject to the continued employment of the executive.

(5)

Represents time-vested options granted on May 15, 2023. The options vest in five equal installments on the anniversary of the grant date, subject to the continued employment of the executive.

(6)

Represents TRSUs granted on January 29, 2021. The units vest in three equal annual installments beginning on January 29, 2022, subject to the continued employment of the executive.

(7)

Represents PRSUs granted on January 29, 2021. Cliff vesting of these units will occur on the later of the third anniversary date or the date at which sufficient data is available to determine vesting criteria are met. If vesting criteria are not met, the units will be forfeited.

(8)

Represents TRSUs granted on February 7, 2019. The units vest in five equal annual installments beginning on February 7, 2020, subject to the continued employment of the executive.

(9)

Represents TRSUs granted on February 7, 2020. The units vest in five equal annual installments beginning on February 7, 2021, subject to the continued employment of the executive.

(10)

Represents TRSUs granted on January 28, 2022. The units vest in three equal annual installments beginning on January 28, 2023, subject to the continued employment of the executive.

(11)

Represents PRSUs granted on January 28, 2022. Cliff vesting of these units will occur on the later of the third anniversary date or the date at which sufficient data is available to determine vesting criteria are met. If vesting criteria are not met, the units will be forfeited.

(12)

Represents TRSUs granted on January 30, 2023. The units vest in three equal annual installments beginning on January 30, 2024, subject to the continued employment of the executive.

(13)

Represents PRSUs granted on January 30, 2023. Cliff vesting of these units will occur on the later of the third anniversary date or the date at which sufficient data is available to determine vesting criteria are met. If vesting criteria are not met, the units will be forfeited.

(14)

Market values based on the Company’s closing stock price of $33.90 as of December 31, 2023.

OPTION EXERCISES AND STOCK VESTED SUMMARY TABLE

 

 

The following table provides information about shares received upon vesting of restricted shares and exercise of options during the year ended December 31, 2023:

 

Name and Principal Position

   Shares Acquired
on Exercise (#)
     Value Realized
on Exercise ($)
    

Shares Received

Upon Vesting (#)

     Value Realized 
on Vesting ($) 
 

Brad S. Elliott

                   26,046      774,284

Chris M. Navratil

                   1,569      47,615

Julie A. Huber

                   5,867      175,775

Brett A. Reber

                   5,669      169,534

Richard A. Sems

                           

Eric R. Newell

                   5,424      134,921

NON-QUALIFIED DEFERRED COMPENSATION TABLE

 

 

This table provides information about the NEOs’ earnings and balances under our SERP during the year ended December 31, 2023:

 

Name and Principal Position

   Company
Contributions in 2023 (1)
     Aggregate Earnings
in 2023 (2)
     Aggregate Balance at
December 31, 2023
 

Brad S. Elliott

   $ 228,378        $ 27,620        $ 255,998    

Chris M. Navratil (3)

     —          —          —    

Julie A. Huber

     90,002          10,216          100,218    

Brett A. Reber

     87,003          11,377          98,380    

Richard A. Sems (3)

     —          —          —    

Eric R. Newell (4)

     120,000          —          —    

 

(1)

These amounts are included in the Summary Compensation Table for fiscal year 2023.

(2)

These amounts have not been reflected in the Summary Compensation Table for fiscal year 2023.

(3)

Messrs. Navratil and Sems were not NEOs at the time the 2023 contributions were made.

(4)

Mr. Newell’s account was forfeit upon his resignation from the Company. No payouts were made.

 

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The SERP is unfunded and unsecured. Company contributions are notional and are at the discretion of the Compensation Committee. Company contributions credited to a participant’s account under the SERP are credited with hypothetical investment earnings based on participant investment elections made from among deemed investment options available under the SERP (which currently mirror the investment elections available under the Bank’s 401(k) retirement savings plan).

POTENTIAL PAYMENTS AS A RESULT OF TERMINATION OF CHANGE-IN-CONTROL

 

 

As discussed under “Other Factors Affecting Executive Compensation,” on page 38, we have entered into employment agreements, which include change of control provisions, with each of our named executive officers (collectively, the “agreements”). The agreements are designed to promote stability and continuity of our senior executive management. Each agreement includes a “double trigger” structure which provides that the executive officer will not receive a “change of control” payment unless both (i) a change in control occurs and (ii) the executive’s employment terminates involuntarily for reasons other than for cause or voluntarily for good reason within 12 or 24 months, dependent on executive, in either case following the change in control.

Under the agreements, a change of control will be deemed to have occurred if:

 

1.

Any person, entity or a “group” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of the Company or Equity Bank (“Bank”) securities possessing 50% or more of:

 

   

the then outstanding shares of the Company or the Bank;

 

   

the combined voting power of the Company’s or the Bank’s then outstanding securities; or

 

   

the fair market value of all of the Company’s or the Bank’s the outstanding securities.

Provided the person, entity or group did not previously own 50% or more of the applicable metric above.

 

2.

The majority of the members of the Board of Directors of the Company is replaced by directors whose appointment or election is not endorsed by a majority of the members of the Board of Directors of the Company prior to the date of the appointment or election

 

3.

The consummation of a merger or consolidation of the Company or the Bank with any other entity other than:

 

   

a merger or consolidation which would result in the voting securities of the Company or the Bank outstanding immediately prior to such merger or consolidation continuing to represent 50% or more of the combined voting power of the voting securities of the Company or the Bank or such surviving entity or any parent hereof outstanding immediately after such merger or consolidation; or

 

   

a Merger or consolidation effected to implement a recapitalization of the Company or the Bank in which no person, entity or group is or becomes the beneficial owner, directly or indirectly, of securities of the Company or the Bank representing 50% or more of the ownership interests summarized under ‘1’ above.

 

4.

Any sale of all, or substantially all, of the assets of the Company or the Bank.

For purposes of the employment agreements, termination for “good reason”, generally, means that the executive has terminated employment because the executive’s compensation has been reduced, or the executive’s job duties have been materially changed or the executive’s principal place of employment has changed by more than 30 miles. If the circumstances that create the “good reason” are resolved within 30 days following notice being provided, a “good reason” termination is generally not available.

The agreements generally require that the executive not disclose or use confidential information of the Company both during and after the conclusion of the executive’s employment, and not solicit employees of the Company or the Bank and/or not compete with the Company or the Bank during the term of the agreement and during the associated restricted period under the agreement.

Each of the agreements includes a continuation multiple which is used to calculate potential payments under the agreement as follows:

 

Name and Principal Position

   Continuation Multiple

Brad S. Elliott

   2.99 

Chris M. Navratil

   2.99 

Julie A. Huber

   2.99 

Brett A. Reber

   2.99 

Richard A. Sems

   2.99 

Eric R. Newell

   2.99 

In the event an executive experiences a termination that qualifies under the ‘dual trigger’ requirements within the contract after a change in control, compensation and benefits under the agreements include: (1) payment of the sum of the base salary for the most

 

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recent calendar year ending before the date of the change in control and the amount of other cash payments received during such calendar year multiplied by the continuation multiple; and (2) the immediate vesting of all stock options, restricted shares and RSUs.

The agreements also include a provision that limits change-in-control payments to executives in order to eliminate any potential excise taxes under Section 4999 of the Internal Revenue Code. In the event the calculated payment exceeds the Section 280G limit, the benefits will be reduced to an amount below the limit.

The following table includes the amount of compensation payable to each of the NEOs upon a termination of employment under certain circumstances as of December 31, 2023:

 

Name and Principal Position

  Benefit   Term
Without
Cause /
Good
Reason
    Change in
Control
    Death or Disability  

Brad S. Elliott

  Compensation Continuation   $ 779,593     $ 4,161,518     $  

Chief Executive Officer and

  Equity Award Vesting (1,2)     1,754,325       1,754,325       1,754,325  

Chairman of the Board

                           

Chris M. Navratil

  Compensation Continuation     242,885       1,155,189        

Executive Vice President and

  Equity Award Vesting (1,2)     212,824       212,824       212,824  

Chief Financial Officer

                           

Julie A. Huber

  Compensation Continuation     309,172       1,408,664        

Executive Vice President,

  Equity Award Vesting (1,2)     449,650       449,650       449,650  

Strategic Initiatives

                           

Brett A. Reber

  Compensation Continuation     306,042       1,347,360        

Executive Vice President and

  Equity Award Vesting (1,2)     412,665       412,665       412,665  

Chief Credit Officer

                           

Richard A. Sems

  Compensation Continuation     377,308       2,346,420        

Executive Vice President,

  Equity Award Vesting (1,2)