8-K: Horizon Bancorp Appoints John R. Stewart as New Chief Financial Officer

Horizon Bancorp has named John R. Stewart as its new Executive Vice President and Chief Financial Officer, effective May 20, 2024.

Summary

• Horizon Bancorp has appointed John R. Stewart as the new Executive Vice President and Chief Financial Officer, effective May 20, 2024.
• Mr. Stewart has 22 years of experience in financial services, including banking, investment management, and corporate finance.
• He previously served as Deputy Chief Financial Officer at a $30 billion publicly traded bank.
• Mark E. Secor, the current CFO, will transition to the role of Executive Vice President and Chief Administration Officer.
• Mr. Stewart's employment agreement includes an annual base salary of $440,000, a $200,000 signing bonus, and up to $100,000 for relocation expenses.
• He will also receive 79,590 shares of restricted stock vesting over 3 years.
• Mr. Secor's employment agreement was amended to extend his term to May 19, 2024, and his 2024 bonus was increased to $53,254.88.
• Both Mr. Stewart and Mr. Secor have change in control agreements with specific severance benefits.

Sentiment

Score: 8

Explanation: The document conveys a positive sentiment due to the appointment of a highly experienced CFO and the strategic transition of the current CFO. The language used is professional and forward-looking, indicating confidence in the company's future.

Positives

• John R. Stewart brings 22 years of financial services experience to Horizon Bancorp.
• Mr. Stewart has held leadership roles in both public and private financial institutions.
• He has experience in strategic planning, corporate development, and investor relations.
• The transition of Mark E. Secor to Chief Administration Officer allows the company to retain his 16 years of experience.
• Mr. Secor's new role will focus on investor relations, legal, benefits administration, and corporate facilities.

Negatives

• The company will incur costs associated with the $200,000 signing bonus and up to $100,000 in relocation expenses for Mr. Stewart.
• There is a potential for repayment of the signing bonus and relocation reimbursement if Mr. Stewart's employment is terminated under certain conditions within one year.

Risks

• There is a risk of potential golden parachute payments to Mr. Stewart and Mr. Secor if a change in control occurs.
• The company is subject to FDIC restrictions on golden parachutes and indemnification.
• There is a risk of potential non-deductibility of payments under Section 280G of the Internal Revenue Code.
• Mr. Stewart's employment agreement includes restrictive covenants related to non-disclosure, non-solicitation, and non-competition.

Future Outlook

The company expects John R. Stewart to play a key role in advancing its financial performance and strategic plan, driving growth and success. Mark E. Secor will assist in the transition and continue to contribute in his new role.

Management Comments

• Thomas Prame, Horizon's Chief Executive Officer and President, stated that John has a proven and successful track record of leadership experience within larger organizations across many financial disciplines.
• Thomas Prame also thanked Mark Secor for his many accomplishments over the last 16 years leading the finance team and helping Horizon grow from $893 million to $7.8 billion.

Industry Context

The appointment of a new CFO with experience at a larger publicly traded bank suggests Horizon Bancorp is aiming for continued growth and improved financial performance. The transition of the current CFO to a new role is a common practice to retain valuable experience while bringing in new perspectives.

Comparison to Industry Standards

• The compensation package for John R. Stewart, including a $440,000 base salary, $200,000 signing bonus, and relocation expenses, is competitive with industry standards for executive-level positions in regional banks.
• The change in control agreements for both Mr. Stewart and Mr. Secor are also standard practice in the banking industry to protect executives during potential mergers or acquisitions.
• The vesting schedule for the restricted stock grant is typical for executive compensation packages.
• The transition of Mark E. Secor to Chief Administration Officer is a strategic move to leverage his experience in a different capacity, similar to what is seen in other financial institutions.

Management Changes

Stakeholder Impact

• Shareholders may view the appointment of a new CFO with extensive experience as a positive development.
• Employees may experience changes in leadership and reporting structures.
• Customers are unlikely to be directly impacted by these changes.
• Suppliers and creditors are unlikely to be directly impacted by these changes.

Next Steps

• John R. Stewart will assume the responsibilities of CFO on May 20, 2024.
• Mark E. Secor will transition to the role of Executive Vice President and Chief Administration Officer on May 20, 2024.
• The company will continue to execute its strategic plan with the new leadership team in place.

Key Dates

Keywords

Chief Financial Officer, CFO, Executive Vice President, Horizon Bancorp, John R. Stewart, Mark E. Secor, Employment Agreement, Change in Control, Financial Services, Banking