Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Establishment of 2022 Cash Incentive Program
On January 24, 2022, the Compensation Committee of the Board of Directors (the
"Compensation Committee") of First US Bancshares, Inc. (the "Company")
established an annual cash incentive program for the Company's fiscal year
ending December 31, 2022 for certain executive officers and key employees of the
Company and its subsidiaries, including the Company's named executive officers -
James F. House, President and Chief Executive Officer of the Company and First
US Bank (the "Bank"); Thomas S. Elley, Chief Financial Officer of the Company
and the Bank; and William C. Mitchell, Senior Executive Vice President, Consumer
Banking, of the Bank (the "2022 Cash Incentive Program"). Under the 2022 Cash
Incentive Program, certain executive officers and key employees of the Company
have a short-term incentive cash bonus opportunity based on certain corporate
and individual performance objectives established by the Compensation Committee.
With respect to the Company's named executive officers, the cash bonus
opportunity is based on the achievement of certain specified levels of financial
performance, specifically the Company's (i) consolidated pre-tax income for 2022
(25% of the total cash bonus opportunity); (ii) consolidated pre-tax return on
average assets ("ROAA") for 2022 (30% of the total cash bonus opportunity for
Messrs. House and Elley; 25% of the total cash bonus opportunity for Mr.
Mitchell); (iii) consolidated pre-tax return on average tangible equity
("ROATE") for 2022 (25% of the total cash bonus opportunity for Messrs. House
and Elley only); and (iv) net loan growth in indirect lending for 2022 ("Loan
Growth") (30% of the total cash bonus opportunity for Mr. Mitchell only). For
each of the named executive officers, the cash bonus opportunity also contains a
discretionary component (the "Discretionary Component") (20% of the total cash
bonus opportunity), to be determined by the Compensation Committee. Factors to
be considered in determining the Discretionary Component may include, but are
not limited to, contribution to the long-term profitability and growth of the
Company, achievement of strategic projects or initiatives, commitment to
integrity and the values of the Company, improvement in total shareholder
return, successful expansion efforts, balance sheet management, gains on peer
group comparisons, successful implementation of reorganization strategies and
successful implementation of cost control strategies. The cash bonus opportunity
is subject to reduction (up to 35% of the total cash bonus opportunity) based on
deterioration of the Company's regulatory ratings or other negative regulatory
findings. The individual target bonus opportunity for the three named executive
officers participating in the 2022 Cash Incentive Program is 45% of 2022 base
salary for Mr. House; 35% of 2022 base salary for Mr. Elley; and 35% of 2022
base salary for Mr. Mitchell.
Under the 2022 Cash Incentive Program, the Company's named executive officers
will receive 100% of their target bonus opportunity if the Company's final
consolidated pre-tax income, ROAA, ROATE (for Messrs. House and Elley) and Loan
Growth (for Mr. Mitchell) for 2022 are 100% of the Company's budgeted
consolidated pre-tax income, ROAA, ROATE and Loan Growth for the year, and if
the named executive officers receive 100% of the Discretionary Component. The
named executive officers will receive 50% of their target bonus opportunity if
the Company achieves a threshold level of performance (approximately 80% of the
Company's budgeted consolidated pre-tax income, 80% of the Company's budgeted
ROAA, 80% of the Company's budgeted ROATE (for Messrs. House and Elley), and 80%
of the Company's budgeted Loan Growth (for Mr. Mitchell)), and if the named
executive officers receive 80% of the Discretionary Component. The named
executive officers will receive 150% of their target bonus opportunity if the
Company achieves a maximum level of performance (approximately 120% of the
Company's budgeted consolidated pre-tax income, 120% of the Company's budgeted
ROAA, 120% of the Company's budgeted ROATE (for Messrs. House and Elley) and
120% of the Company's budgeted Loan Growth (for Mr. Mitchell)), and if the named
executive officers receive 120% of the Discretionary Component. Payouts between
the threshold and maximum amounts will be calculated by the Compensation
Committee using straight-line interpolation, as described in the 2022 Cash
Incentive Program.
The Compensation Committee may make adjustments to the terms and conditions of,
and the criteria included in, awards under the 2022 Cash Incentive Program in
recognition of extraordinary, unusual or nonrecurring events affecting a
participant or the Company or the financial statements of the Company, or in
certain other instances specified in the 2022 Cash Incentive Program. The
Compensation Committee, in its sole discretion, may take into account the impact
of such extraordinary, unusual or nonrecurring events (positive or negative) in
determining a participant's relative achievement of the performance
objectives. The 2022 Cash Incentive Program provides for recoupment of cash
bonus payments based on (i) achievement of financial results that are
subsequently the subject of a restatement due to material noncompliance with any
financial reporting requirement under either GAAP or the federal securities
laws, other than as a result of changes to accounting rules and regulations, or
(ii) a subsequent finding that the financial information or performance
objectives used by the Compensation Committee to determine the amount of any
cash bonus payments were materially inaccurate. Additionally, cash bonus
payments are subject to recoupment based on a participant's conduct that is not
in good faith and that materially disrupts, damages, impairs or interferes with
the business of the Company.
A copy of the 2022 Cash Incentive Program is attached as Exhibit 10.1 to this
Current Report on Form 8-K and is incorporated by reference herein. The
foregoing description of the 2022 Cash Incentive Program does not purport to be
a complete description and is qualified in its entirety by reference to Exhibit
10.1.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number Exhibit
10.1 2022 Cash Incentive Program
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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