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  x  
   
Filed by a Party other than the Registrant  o  
   
Check the appropriate box:  
   
o Preliminary Proxy Statement  
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x Definitive Proxy Statement  
o Definitive Additional Materials  
o Soliciting Material Pursuant to §240.14a-12

Origin Bancorp, 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):
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PROXY STATEMENT AND NOTICE OF

 

(LOGO) 

 

___ANNUAL MEETING OF STOCKHOLDERS

 

 

 

 

 

 

 

 

 

 
 
    (LOGO)        

 

 

Notice of
Annual Meeting of
Stockholders

 

Date:
April 22, 2020

 

Time:
12:00 p.m.,

Central Time

 

Location:
Squire Creek Country Club
289 Squire Creek Parkway
Choudrant, Louisiana 71227

 

TO THE STOCKHOLDERS OF ORIGIN BANCORP, INC.:

 

The 2020 Annual Meeting of Stockholders (the “Annual Meeting”) of Origin Bancorp, Inc., a Louisiana corporation (the “Company”), will be held on Wednesday, April 22, 2020, at 12:00 p.m., Central Time, at Squire Creek Country Club, 289 Squire Creek Parkway, Choudrant, Louisiana 71227, for the following purposes, as more fully described in the accompanying Proxy Statement. At the meeting you will be asked to:

 

1.Elect four directors to serve until the annual meeting of stockholders for the year in which his or her term expires and until their successors are elected and qualified;
2.Approve, on a non-binding advisory basis, the compensation of our named executive officers (“NEOs”) for 2019 (the “Say-on-Pay Proposal”);
3.Approve, on a non-binding advisory basis, whether a stockholder advisory vote on the compensation of our NEOs should occur every one, two or three years (the “Say-on-Frequency Proposal”);
4.Ratify the appointment of BKD, LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020;
5.Approve proposed amendments to our Restated Articles of Incorporation (the “Charter”) to declassify our Board of Directors (the “Board”) and to provide for the directors to be elected annually (the “Declassification Proposal”);
6.Approve proposed amendments to our Charter to permit stockholders to remove directors with or without cause (the “Director Removal Proposal”);
7.Approve proposed amendments to our Charter to implement majority voting of stockholders to amend or repeal certain provisions of our Charter (the “Majority Vote Proposal”);
8.Approve proposed amendments to our Charter to remove provisions requiring our Bylaws to be amended by not less than two-thirds of directors then holding office, subject to a two-thirds vote of the stockholders to change or repeal our Bylaws, including any amendments made by our Board (the “Bylaws Proposal” and, together with the Declassification Proposal, the Director Removal Proposal and the Majority Vote Proposal, the “Amendment Proposals”);
9.Approval of the amendment and restatement of our Charter to provide for immaterial modifications (the “Amendment and Restatement Proposal” and, together with the Amendment Proposals, the “Corporate Governance Proposals”); and
10.To transact such other business as may properly come before the Annual Meeting or any postponement or adjournment of the Annual Meeting.
 
 
    (LOGO)        

 

Our Board has fixed the close of business on March 4, 2020, as the record date for the Annual Meeting. We have adopted rules promulgated by the SEC that allow companies to furnish proxy materials to their stockholders over the Internet. On or about March 11, 2020, we mailed a Notice of Internet Availability of Proxy Materials to all stockholders of record at the close of business on March 4, 2020, 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. A list of stockholders entitled to vote at the Annual Meeting will be available for inspection by any stockholder at our principal office during ordinary business hours beginning two business days after the Notice of Internet Availability of Proxy Materials is mailed through the completion of the Annual Meeting, including any adjournment or postponement thereof. This list also will be available to stockholders at the Annual Meeting. The mailing address for our principal office is 500 South Service Road East, Ruston, Louisiana 71270.

 

Important Notice Regarding the Availability of Proxy Materials for the 2020 Annual Meeting of Stockholders to be Held on April 22, 2020 at Squire Creek Country Club, 289 Squire Creek Parkway, Choudrant, Louisiana 71227. This proxy statement and our annual report to stockholders are available at www.obnkannualmeeting.com.

 

We appreciate your continued support of the Company.

 

By Order of the Board of Directors

-s- Drake Mills 

Drake Mills
Chairman of the Board, President and Chief Executive Officer

Ruston, Louisiana

March 10, 2020

 
 
    TABLE OF CONTENTS        

 

     
1

PROXY STATEMENT

     
2 ABOUT THE ANNUAL MEETING
     
11 PROPOSAL 1: ELECTION OF DIRECTORS
(LOGO) 11 Director Nominees
  13 Director Nominee Qualifications and Experience
  15 Continuing Directors
  18 Board Leadership Structure
  19 Director Independence
  20 Director Education and Self-Assessment
  20 Board Meetings and Committees
  30 Stockholder Nominees and Proposals for 2021 Annual Meeting
  31 Certain Relationships and Related Transactions
  33 Director Compensation
     
36 COMPENSATION DISCUSSION AND ANALYSIS
(LOGO) 36 Overview
  36 2019 Named Executive Officers
  36 Financial and Strategic Highlights
  37 Executive Compensation Philosophy
  37 Role of the Compensation Committee
  38 Role of the Compensation Consultant
  38 Role of Management
  38 Role of Stockholders
  38 Risk Assessment
  39 Competitive Benchmarking and Compensation Peer Group
  40 Discussion of Executive Compensation Components
  45 Other Compensation Policies and Information
  45   Clawbacks for Any Restatement; Executive Compensation Recovery Policy
  45 Trading Restrictions regarding Hedging or Pledging of Common Stock
  46 Report of Compensation Committee
  47 Current Executive Officers
  49   Executive Compensation Tables
  52 Outstanding Equity Awards at Fiscal Year-End
  53 Option Exercises and Stock Vested
  53 2012 Stock Incentive Plan
  53 Non-Qualified Stock Option Agreements
  54 Supplemental Executive Retirement Plan and Executive Supplemental Income Agreement
  56 Life Insurance Plans
  58 Employment Arrangements, Change in Control agreements, and Potential Payments Upon Termination or Change In Control
  66   Chief Executive Officer Pay Ratio
     
67 PROPOSAL 2: ADVISORY VOTE ON THE SAY-ON-PAY PROPOSAL
     
69 PROPOSAL 3: ADVISORY VOTE ON THE SAY- ON-FREQUENCY  PROPOSAL
     
71 PROPOSAL 4: RATIFICATION OF AUDITORS
     
73 PROPOSAL 5: APPROVAL OF THE DECLASSIFICATION PROPOSAL
     
76 PROPOSAL 6: APPROVAL OF THE DIRECTOR REMOVAL PROPOSAL
     
77 PROPOSAL 7: APPROVAL OF THE MAJORITY VOTE PROPOSAL
     
79 PROPOSAL 8: APPROVAL OF THE BYLAWS PROPOSAL
     
80 PROPOSAL 9: APPROVAL OF THE AMENDMENT  AND  RESTATEMENT PROPOSAL
     
82 OTHER INFORMATION
(LOGO) 82 Stock Ownership of Principal Stockholders, Directors and Management
   
84 ANNUAL REPORT ON FORM 10-K
     
85 HOUSEHOLDING OF PROXY MATERIALS

 
 

    PROXY STATEMENT        

 

YOUR VOTE IS IMPORTANT

 

Whether or not you plan to attend the Annual Meeting, please read this proxy statement, the voting instructions in the Notice of Internet Availability of Proxy Materials and vote. You may vote over the Internet, via telephone 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. You may revoke your proxy in the manner described in this proxy statement at any time before it is exercised. See “Voting Information and Questions You May Have—May I Change My Vote After I Have Submitted a Proxy?” for more information on how to vote your shares or revoke your proxy.

 

(LOGO)

 

PROXY STATEMENT FOR

2020 Annual Meeting of Stockholders

to be held on April 22, 2020

 

Unless the context otherwise requires, references in this proxy statement to “we,” “us,” “our,” “our company,” “the Company” or “Origin” refer to Origin Bancorp, Inc., a Louisiana corporation, and its consolidated subsidiaries. All references to “Origin Bank” or “the Bank” refer to Origin Bank, our wholly owned bank subsidiary. In addition, unless the context otherwise requires, references to “stockholders” are to the holders of our common stock, par value $5.00 per share.

 

This proxy statement is being furnished in connection with the solicitation of proxies by our Board for use at the Annual Meeting of the Company to be held on Wednesday, April 22, 2020, at 12:00 p.m., Central Time, at Squire Creek Country Club, 289 Squire Creek Parkway, Choudrant, Louisiana 71227, and any adjournments or postponements thereof for the purposes set forth in this proxy statement and the related notice of the Annual Meeting. The mailing address of the Company’s principal executive office is 500 South Service Road East, Ruston, Louisiana 71270.

 

Important Notice Regarding the Availability of Proxy Materials for the 2020 Annual Meeting of Stockholders to be Held on April 22, 2020

 

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 to stockholders for the fiscal year ended December 31, 2019, over the Internet. Accordingly, we are providing our stockholders with a Notice of Internet Availability of Proxy Materials (the “Notice”) instead of a paper copy of our proxy materials. The Notice 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 distributing our proxy materials. We mailed the Notice on or about March 11, 2020, to all stockholders of record entitled to vote at the Annual Meeting at the close of business on March 4, 2020. You should read our entire proxy statement carefully before voting.

 

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    ABOUT THE ANNUAL MEETING        

 

ABOUT THE ANNUAL MEETING

 

VOTING INFORMATION AND QUESTIONS YOU MAY HAVE

 

The information provided in the “question and answer” format below is for your convenience only and is merely a summary of the information contained in this proxy statement. You should read this entire proxy statement carefully.

 

What is the Purpose of the Annual Meeting?

 

Matters to be Considered and Vote Recommendation

 

We are asking stockholders to vote on the following matters at the Annual Meeting:

 

Matters for Stockholder Consideration

Our Board’s
Recommendation

 

Proposal 1: Election of Directors (page 11)

To elect four directors to serve for a term as described in this proxy statement. Our Board believes that the four director nominees possess the necessary qualifications to provide effective oversight of the Company’s business and quality counsel to our management.

 

FOR each
Director
Nominee

 

Proposal 2: Advisory Vote on the Say-on-Pay Proposal (page 67)

We are seeking a non-binding advisory vote from our stockholders to approve the compensation paid to our NEOs in 2019, as described in the Compensation Discussion and Analysis section and the executive compensation tables that follow, beginning on page 49 of this proxy statement. Our Board values our stockholders’ opinions and the Compensation Committee will take into account the outcome of the advisory vote when considering future executive compensation decisions.

 

FOR

 

Proposal 3: Advisory Vote on the Say-on-Frequency Proposal (page 69)

We are seeking a non-binding advisory vote from our stockholders to approve the preferred frequency of stockholder advisory votes on the compensation of our NEOs. Our Board and Compensation Committee value the opinions of our stockholders in this matter and, to the extent there is any significant vote in favor of one frequency over the other options, even if less than a majority, our Board will consider the outcome of the advisory vote and evaluate any appropriate next steps.

 

FOR a frequency
of 1 YEAR

 

Proposal 4: Ratification of Auditors (page 71)

The Audit Committee and the Board believe that the continued retention of BKD, LLP to serve as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2020, is in the best interests of the Company and its stockholders. As a matter of good corporate governance, our stockholders are being asked to ratify the selection of BKD, LLP to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020.

 

FOR

 

Proposal 5: Approval of the Declassification Proposal (page 73)

Our Board believes that declassifying the Board is in the best interests of the Company and its stockholders. Accordingly, our Board has approved, and recommends that our stockholders approve, amendments to our Charter to declassify the Board and provide for the annual election of directors.

 

FOR

 

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    ABOUT THE ANNUAL MEETING        

 

Matters for Stockholder Consideration

Our Board’s
Recommendation

 

Proposal 6: Approval of the Director Removal Proposal (page 76)

After careful consideration, our Board has approved and has decided to recommend for approval by our stockholders, the removal of the restriction that our directors can only be removed for cause and permit the removal of directors without cause.

 

FOR

 

Proposal 7: Approval of the Majority Voting Proposal (page 77)

After consideration of emerging trends among publicly traded companies and the benefits to the Company and its stockholders of adopting a majority voting standard to amend or repeal any provision of our charter, our Board has decided to recommend for approval by our stockholders the removal of these supermajority voting requirements from the Charter.

 

FOR

 

Proposal 8: Approval of the Bylaws Proposal (page 79)

After careful consideration, our Board has determined that it would be in the best interests of the Company and our stockholders to amend our Charter to amend the voting standard to remove provisions requiring our Bylaws to be amended by not less than two-thirds of our directors then holding office, subject to a two-thirds vote of our stockholders.

 

FOR

 

Proposal 9: Approval of the Amendment and Restatement Proposal (page 80)

After careful consideration, our Board has determined that it would be in the best interests of the Company and our stockholders to amend and restate our Charter to provide for immaterial modifications.

 

FOR

 

Stockholders will also transact any other business that may properly come before the Annual Meeting or any adjournment or postponement thereof.

 

When and Where Will the Annual Meeting Be Held?

 

The Annual Meeting is scheduled to take place at 12:00 p.m., Central Time, on Wednesday, April 22, 2020, at Squire Creek Country Club, 289 Squire Creek Parkway, Choudrant, Louisiana, 71227.

 

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    ABOUT THE ANNUAL MEETING        

 

Who Are the Nominees for Directors?

 

The following table provides summary information about each director nominee as of December 31, 2019.

 

        Committees
Name Age Director Since Primary Occupation A C F N R
James D’Agostino, Jr.*
(LD)
73 2013 Managing Director of
Encore Interests LLC;
Chairman of the Board of
Houston Trust Company
ü  

ü

Chair

ü ü

Michael Jones*

64

1991

Sole Practitioner

ü

ü

ü

      Licensed Certified Public       Chair  
      Accountant & Certified          
      Fraud Examiner          

Farrell Malone* (FE)

67

2013

Licensed Certified Public
Accountant & retired
partner of KPMG, LLP

ü
Chair

ü

ü

ü

F. Ronnie Myrick

76

2008

Vice-Chairman of the

ü

ü

      Board of Origin Bank          

 

A = Audit; C = Compensation; F = Finance; N = Nominating and Corporate Governance; R = Risk.

 

* = Independent Director; LD = Lead Independent Director; FE = Audit Committee Financial Expert.

 

Who is Entitled to Vote?

 

Holders of record of our common stock as of the close of business on March 4, 2020, (the “Record Date”), may vote at the Annual Meeting. As of the Record Date, we had 23,510,945 shares of common stock outstanding. In deciding all matters at the Annual Meeting, each stockholder will be entitled to one vote for each share of common stock held on the Record Date. We do not have cumulative voting rights for the election of directors.

 

What Constitutes a Quorum for the Annual Meeting?

 

The holders of at least a majority of the outstanding shares of common stock entitled to vote on the Record Date must be represented at the Annual Meeting, in person or by proxy, in order to constitute a quorum for the transaction of business.

 

What is the Difference Between a Stockholder of Record and a “Street Name” Holder?

 

If your shares are registered directly in your name with EQ Shareowner Services, 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, are being sent directly to you by EQ Shareowner Services at the Company’s request.

 

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    ABOUT THE ANNUAL MEETING        

 

If your shares are held in a brokerage account or by a bank, broker or other nominee, the nominee is considered the stockholder of record of those shares. You are considered the beneficial owner of these shares, 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 on how to vote your shares.

 

How do I Vote?

 

You may vote your shares of common stock either in person at the Annual Meeting or by proxy. The process for voting your shares depends on how your shares are held, as described below.

 

Shares Registered in Your Name

 

If you are a stockholder of record on the Record Date for the Annual Meeting, you may vote by proxy or you may attend the Annual Meeting and vote in person. If you are a stockholder of record and want to vote your shares by proxy, you have three ways to vote:

 

·Via the Internet: You may vote your proxy over the Internet by visiting the website www.proxypush.com/obnk. 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.

 

·Via Telephone: To vote over the telephone, dial toll-free 1-866-883-3382 using a touch-tone phone and follow the recorded instructions. You will be asked to provide the control number from the Notice.

 

·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. Voting your shares by proxy will enable your shares of common stock to be represented and voted at the Annual Meeting if you do not attend the Annual Meeting and vote your shares in person.

 

Please note that Internet and telephone voting will close at 11:59 p.m., Central Time, on April 21, 2020. If voting via mail, the Company must receive your proxy via mail no later than April 21, 2020, to be counted at the Annual Meeting. If voting shares of common stock held in our Employee Retirement Plan, you must vote via Internet, telephone or mail no later than 11:59 p.m., Central Time, on April 19, 2020.

 

Shares Registered in the Name of a Broker or Bank

 

If your shares of common stock are held in “street name,” your ability to vote depends on your bank, broker or other nominee’s voting process. Your bank, broker or other nominee should provide you with voting instructions and materials to vote your shares. By following those voting instructions, you may direct your nominee on how to vote your shares. Without instructions from you, a bank, broker or nominee will be permitted to exercise its own voting discretion with respect to the ratification of the appointment of BKD, LLP (Proposal 4), but will not be permitted to exercise voting discretion with respect to any of the other proposals.

 

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    ABOUT THE ANNUAL MEETING        

 

To vote the shares that you hold in “street name” in person at the Annual Meeting, since your bank, broker or other nominee is the stockholder of record, you must bring a legal proxy from your broker, bank or other nominee (i) confirming that you were the beneficial owner of those shares as of the close of business on the Record Date, (ii) stating the number of shares of which you were the beneficial owner that were held for your benefit on the Record Date by that broker, bank or other nominee and (iii) appointing you as the stockholder of record’s proxy to vote the shares covered by that proxy at the Annual Meeting. 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.

 

What is a Broker Non-Vote?

 

A broker non-vote occurs when a broker, bank or other nominee holding shares for a beneficial owner does not vote on a particular proposal because such nominee does not have discretionary voting power with respect to that proposal and has not received voting instructions from the beneficial owner.

 

Your broker has discretionary authority to vote your shares with respect to the ratification of the appointment of BKD, LLP as our independent registered public accounting firm (Proposal 4). In the absence of specific instructions from you, your broker does not have discretionary authority to vote your shares with respect to any other proposal.

 

May I Change My Vote After I Have Submitted a Proxy?

 

Yes. Regardless of the method used to cast a vote, if you are a stockholder of record, you may change your vote or revoke your proxy by:

 

·casting a new vote over the Internet by visiting the website www.proxypush.com/obnk and following the instructions in your Notice or the proxy card that may have been provided to you before the Internet voting deadline;

 

·casting a new vote by telephone by calling 1-866-883-3382 using a touch-tone phone and following the recorded instructions before the telephone voting deadline;

 

·completing, signing and returning a new proxy card with a later date than your original proxy card, if applicable, no later than the deadline, and any earlier proxy will be revoked automatically; or

 

·attending the Annual Meeting and voting in person, which would revoke any earlier proxy. However, attending the Annual Meeting in person will not automatically revoke your proxy unless you vote again in person at the Annual Meeting.

 

Please note that Internet and telephone voting will close at 11:59 p.m., Central Time, on April 21, 2020. If voting via mail, the Company must receive your proxy via mail no later than April 21, 2020, to be counted at the Annual Meeting. If voting shares of common stock held in our Employee Retirement Plan, you must vote via Internet, telephone or mail no later than 11:59 p.m., Central Time, on April 19, 2020.

 

If your shares are held in “street name” and you desire to change any voting instructions you have previously given to the stockholder of record 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.

 

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    ABOUT THE ANNUAL MEETING        

 

How Will My Shares Be Voted if I Return a Signed and Dated Proxy Card, but Do Not Specify How My Shares Will Be Voted?

 

If you are a stockholder of record 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:

 

 

Proposal 1

 

FOR the election of all of the nominees for director;

 

Proposal 2

 

FOR, on an advisory basis, the Say-on-Pay Proposal;

 

Proposal 3

 

FOR ONE YEAR on a non-binding advisory basis, as the preferred frequency for holding a stockholder advisory vote on the compensation of our NEOs;

 

Proposal 4

 

FOR the ratification of the appointment of BKD, LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2020;

 

Proposal 5

 

FOR the Declassification Proposal;

 

Proposal 6

 

FOR the Director Removal Proposal;

 

Proposal 7

 

FOR the Majority Vote Proposal;

 

Proposal 8

 

FOR the Bylaws Proposal; and

 

Proposal 9

 

FOR the Amendment and Restatement Proposal;

   

 

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 on any of the proposals except to vote on the ratification of the appointment of BKD, LLP (Proposal 4).

 

What Are My Choices When Voting?

 

With respect to all proposals except the Say-on-Frequency Proposal (Proposal 3), you may vote “For” or “Against” or you may “Abstain” from voting. With respect to the Say-on-Frequency Proposal (Proposal 3), regarding the non-binding advisory vote for the preferred frequency of stockholder advisory votes on the compensation of our NEOs, you may vote “1 Year,” “2 Years,” “3 Years” and “Abstain.”

 

What Percentage of the Vote is Required to Approve Each Proposal?

 

The affirmative vote of a majority of the votes cast by the holders of shares entitled to vote at the Annual Meeting is required for (i) the election of the director nominees (Proposal 1), (ii) approval, on a non-binding basis, of our Say-on-Pay Proposal (Proposal 2), (iii) approval, on a non-binding basis, of our Say-on-Frequency Proposal (Proposal 3) and (iv) the ratification of BKD, LLP’s appointment as the Company’s independent registered public accounting firm (Proposal 4). A majority of the votes cast shall mean that the number of shares that voted “For” the election of a director or the proposal, as applicable, exceeds the number of shares voted “Against” that director or proposal, as applicable, and abstentions and broker non-votes shall not be counted as votes cast either “For” or “Against” the election of any director or any proposal. With respect to Proposal 3 to approve the frequency of

 

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    ABOUT THE ANNUAL MEETING        

 

future advisory votes on executive compensation, if none of the alternatives receives the majority of votes cast, the Company will consider the alternative that receives the highest number of votes cast by stockholders to be the frequency selected by stockholders.

 

The affirmative vote of at least a majority of the votes entitled to be cast at the Annual Meeting is required for the Declassification Proposal (Proposal 5) and the Director Removal Proposal (Proposal 6). A majority of the votes entitled to be cast means that the number of shares that voted “For” each proposal is at least a majority of the outstanding shares entitled to vote at the Annual Meeting, and abstentions and broker non-votes shall have the same effect as votes cast “Against” such proposal.

 

The affirmative vote of at least two-thirds of the total voting power of the Company is required for the approval of each of the Majority Vote Proposal (Proposal 7), the Bylaws Proposal (Proposal 8) and the Amendment and Restatement Proposal (Proposal 9). Two-thirds of the total voting power of the Company shall mean that the number of shares that voted “For” the proposal exceeds two-thirds of the outstanding shares entitled to vote at the Annual Meeting, and abstentions and broker non-votes shall have the same effect as votes cast “Against” such proposal.

 

How Are Broker Non-Votes and Abstentions Treated?

 

Broker non-votes and abstentions are counted for purposes of determining the presence or absence of a quorum. A broker non-vote or an abstention with respect to (i) the election of the director nominees (Proposal 1), (ii) approval, on a non-binding basis, of our Say-on-Pay Proposal (Proposal 2), (iii) approval, on a non-binding basis, of our Say-on-Frequency Proposal (Proposal 3) and (iv) the ratification of BKD, LLP’s appointment as the Company’s independent registered public accounting firm (Proposal 4), will not be counted as a vote cast either “For” or “Against” such proposals. A broker non-vote or an abstention with respect to the Declassification Proposal (Proposal 5), the Director Removal Proposal (Proposal 6), the Majority Vote Proposal (Proposal 7), the Bylaws Proposal (Proposal 8) and the Amendment and Restatement Proposal (Proposal 9) will have the same effect as votes cast “Against” such proposals.

 

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 management 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 properly presented at the Annual Meeting. If other matters requiring a vote of our 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?

 

We will publish the voting results in a current report on Form 8-K, which will be filed with the SEC within four business days following the Annual Meeting. If final voting results are not available to us in time to file a Form 8-K within four business days after the Annual Meeting, we intend to file a Form 8-K to publish preliminary results and, within four business days after the final results are known to us, file an additional Form 8-K to publish the final results.

 

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    ABOUT 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 we will pay all of the costs of soliciting proxies from our stockholders. In addition to the solicitation of proxies via mail, our officers, directors and employees may solicit proxies personally or through other means of communication, such as electronic mail, without being paid additional compensation for such services. The Company will reimburse banks, brokerage houses and other custodians, nominees and fiduciaries for their reasonable expenses incurred in forwarding the proxy materials to beneficial owners of the Company’s common stock.

 

How Can I Communicate with the Board?

 

Our Board welcomes suggestions and comments from stockholders and has adopted a formal process by which stockholders may communicate with our Board or any of its directors. Stockholders who wish to communicate with our Board may do so by sending written communications addressed to Origin Bancorp, Inc., 500 South Service Road East, Ruston, Louisiana 71270, Attn: Corporate Secretary, or via e-mail at corpsecretary@origin.bank. Stockholder communications will be sent directly to the specific director or directors of the Company indicated in the communication or to all members of our Board if not specified. All communications (other than commercial communications soliciting the sale of goods or services to, or employment with, the Company or directors of the Company) will be directed to the appropriate committee, the Chairman of the Board, the Lead Independent Director, or to any individual director specified in the communication, as applicable. In addition, all stockholders are encouraged to attend the Annual Meeting where senior management and representatives from our independent registered public accounting firm, as well as members of our Board, will be available to answer questions.

 

Why did I Receive a One-Page Notice in the Mail Regarding the Internet Availability of Proxy Materials Instead 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 to our stockholders over the Internet. Accordingly, on or about March 11, 2020, we mailed a Notice of Internet Availability of Proxy Materials 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 e-mail 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 Get Electronic Access to the Proxy Materials?

 

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);

 

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    ABOUT THE ANNUAL MEETING        

 

·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.

 

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 or other proxy materials, including multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you may receive separate voting instructions 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 may receive a proxy card for shares held in your name and voting instructions for shares held in “street name.” To ensure that all of your shares are voted, we encourage you to respond to each set of voting materials that you receive.

 

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    PROPOSAL 1. ELECTION
OF DIRECTORS
       

 

PROPOSAL 1: ELECTION OF DIRECTORS

 

Proposal Snapshot

 

What am I voting on?

 

Stockholders are being asked to elect four director nominees for a term as outlined below. This section includes information about the Board and each director nominee.

 

Voting recommendation:

 

FOR the election of each director nominee. We believe the combination of the various qualifications, skills and experiences of the director nominees will contribute to an effective and well-functioning Board. The director nominees possess the necessary qualifications to provide effective oversight of our business and quality advice and counsel to our management.

 

Director Nominees

 

Our Board, based on the recommendation of the Nominating and Corporate Governance Committee, has nominated James D’Agostino, Jr., Michael Jones, Farrell Malone and F. Ronnie Myrick to stand for election as directors at this year’s Annual Meeting. Messrs. D’Agostino, Jr., Jones, Malone and Myrick presently serve in the class of directors (Class C) whose term expires at the Annual Meeting.

 

Our Board currently consists of 12 directors divided into three classes, with each class being elected to a three-year term. Currently, at each annual meeting, only one class of directors stands for election. As more fully described under “Proposal 5—Declassification Proposal” we are seeking stockholder approval at the Annual Meeting to amend our Charter to declassify our Board and to provide for directors to be elected annually. If our stockholders approve the Declassification Proposal, all of our directors will stand for election at the 2021 annual meeting of stockholders to be elected to one-year terms on a go-forward basis. If our stockholders do not approve the Declassification Proposal, then the Board will remain classified, and directors will continue to serve for staggered three-year terms, and our director nominees at this Annual Meeting will be elected to a three year term.

 

Depending on the outcome of the Declassification Proposal (Proposal 5) vote, each director nominee, if re-elected at the Annual Meeting, will hold office for a term expiring as follows and until his successor has been duly elected and qualified or until his earlier death, retirement, resignation or removal:

 

 

 

 

Director Nominee

 

Expiration of Term if the
Declassification Proposal is
Approved

 

Expiration of Term if the
Declassification Proposal is Not
Approved

James D’Agostino, Jr.

2021 Annual Meeting

2023 Annual Meeting

 

Michael Jones

 

2021 Annual Meeting

 

2023 Annual Meeting

 

Farrell Malone

 

2021 Annual Meeting

 

2023 Annual Meeting

 

F. Ronnie Myrick

 

2021 Annual Meeting

 

2023 Annual Meeting

 

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    PROPOSAL 1. ELECTION
OF DIRECTORS
       

 

We seek directors with strong reputations and experience in areas relevant to the strategy, growth and operations of our businesses. Each of the nominees for director has experience that meets this objective. In their current and prior positions, each of the directors has gained experience in core management skills, such as strategic and financial planning, corporate governance, risk management, and leadership development. We also believe that each of the nominees has other key attributes that are important to an effective Board, including: integrity and high ethical standards; sound judgment; analytical skills; the ability to engage management and each other in a constructive and collaborative fashion; diversity of background, experience, and thought; and the commitment to devote significant time and energy to service on our Board and committees.

 

The following table presents certain information with respect to the Board’s nominees for director. All director nominees of the Company are also directors of the Bank, the Company’s principal subsidiary.

 

 

Director Nominees

 

Age

 

Director Since

 

Committee Memberships

 

Current Term Expires

James D’Agostino, Jr. * (LD) 73 2013 A, F (Chair), N, R 2020

 

Michael Jones *

 

64

 

1991

 

A, C, N (Chair)

 

2020

 

Farrell Malone * (FE)

 

67

 

2013

 

A (Chair), F, N, R

 

2020

 

F. Ronnie Myrick

 

76

 

2008

 

F, R

 

2020

 

A = Audit; C = Compensation; N = Nominating/Corporate Governance; R = Risk; F = Finance.

 

* = Independent Director; LD = Lead Independent Director; FE = Audit Committee Financial Expert.

 

None of the director nominees were selected pursuant to any arrangement or understanding with any person. There are no family relationships among directors or executive officers of the Company. Each of the director nominees currently serving on the Board was elected by our stockholders at a previous annual meeting of stockholders. As of the date of this proxy statement, there were no directorships held by any director nominees with a company which has a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (“Exchange Act”) or subject to the requirements of Section 15(d) of the Exchange Act, or any company registered as an investment company under the Investment Company Act of 1940.

 

Each nominee has agreed to serve if elected, and we have no reason to believe that any of the director nominees will be unable or unwilling to serve if elected. However, if any nominee should become unable or unwilling to serve, proxies may be voted for another person nominated as a substitute by the Board, or the Board may reduce the number of directors.

 

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    PROPOSAL 1. ELECTION
OF DIRECTORS
       

 

Director Nominee Qualifications and Experience

 

Included in each director nominee’s biography below is an assessment of the specific qualifications, attributes, skills and experience of the nominee based on the qualifications described above.

 

Director Qualifications and Experience

Independent

 

Managing Director of Encore Interests LLC

 

Chairman of the board of directors of Houston Trust Company

 

Director Since 2013

 

Board Committees:

·    Audit Committee

·    Finance Committee (Chair)

·    Nominating and Corporate
    Governance

·    Risk Committee

James D’Agostino, Jr. Mr. D’Agostino, Jr. has served as a director of our Company and Origin Bank since 2013. He is the Lead Independent Director of the Company and Origin Bank. He has over 50 years of experience in numerous capacities in the banking and financial services industries. Mr. D’Agostino, Jr. founded Encore Bancshares, Inc. in 2000 and served as its Chairman of the Board and CEO from 2000 until the organization was sold in 2012. Currently, Mr. D’Agostino, Jr. is the Managing Director of Encore Interests LLC, which is focused on banking, investments and investment management. In 2013, Mr. D’Agostino, Jr. became chairman of the board of Houston Trust Company, a privately- owned trust company headquartered in Houston, Texas with approximately $7.2 billion of assets under management. Mr. D’Agostino, Jr. served on the board of directors of Basic Energy Services, Inc. between 2004 and 2016. Mr. D’Agostino, Jr. holds a B.S. in Economics from Villanova University and a J.D. from Seton Hall University School of Law, and has completed the Advanced Management Program at Harvard Business School. Mr. D’Agostino, Jr.’s extensive banking experience and his knowledge of the law and the financial services industry enable him to make valuable contributions to our Board.

 

Independent

 

Certified Public Accountant

 

Certified Fraud Examiner

 

Director Since 1991

 

Board Committees:

·    Audit Committee

·    Compensation Committee

·    Nominating and Corporate
    Governance (Chair)

 

Michael Jones. Mr. Jones has served as a director of the Company since 1991 and Origin Bank since 1990. He is a sole practitioner licensed Certified Public Accountant with an office in Ruston, Louisiana and is a Certified Fraud Examiner. He is a member of the American Institute of Certified Public Accountants, the Society of Louisiana Certified Public Accountants and the Association of Certified Fraud Examiners. Mr. Jones’ ties within the local community, business experience and accounting knowledge qualify him to serve on our Board.

 

Independent

 

Certified Public Accountant

 

Audit Committee Financial Expert

 

Director Since 2013

 

Board Committees:

·    Audit Committee (Chair)

·    Finance Committee

·    Nominating and Corporate
    Governance Committee

·    Risk Committee

 

Farrell Malone. Mr. Malone has served as a director of the Company since 2013 and Origin Bank since 2016. Mr. Malone is a licensed Certified Public Accountant and retired partner of KPMG, LLP, where he served on its board of directors from 2005 to 2010, including as lead director from 2008 to 2010. Mr. Malone is an “audit committee financial expert,” as defined under applicable SEC rules. He currently serves as the Chair of our Audit Committee. Mr. Malone brings to our Board extensive accounting, management, strategic planning and financial skills, which are important to the oversight of our financial reporting, enterprise and operational risk management operations.

 

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    PROPOSAL 1. ELECTION
OF DIRECTORS
       

 

 

Vice-Chairman of the Board of Origin Bank

 

Director Since 2008

 

Board Committees:

·    Finance Committee

·    Risk Committee

 

F. Ronnie Myrick. Mr. Myrick currently serves as Vice Chairman of the board of directors of Origin Bank. He has served as a director of the Company since 2008 and served as Chairman of the board of directors of the Bank from 2008 until January of 2020. Mr. Myrick was an employee of Origin Bank from 2002 until December 2019, and served as Director of Mergers and Acquisitions (“DM&A”) from August 2018 until his retirement in December 2019. Mr. Myrick served as Chief Administration Officer from 2009 to 2017, and as Chief Banking Officer from 2017 to July 2018. Prior to working for Origin Bank, he served as Northeast Louisiana President of Deposit Guaranty National Bank, a wholly owned subsidiary of Deposit Guaranty Corporation, and prior to that he was President of Capital Bank of Delhi, Louisiana. Mr. Myrick has over 50 years of experience in the banking industry which enables him to make valuable contributions to our Board.

 

Stockholder Approval

 

The affirmative vote of a majority of the votes cast by the holders of shares entitled to vote at the Annual Meeting is required for the election of the four director nominees, provided that if the number of director nominees exceeds the number of directors to be elected at such a meeting, the directors will be elected by a plurality of the votes cast by the holders of shares entitled to vote at such a meeting at which a quorum is present. The four director nominees will be elected if the number of shares that vote “For” the election of a director exceeds the number of shares voted “Against” that director, and abstentions and broker non-votes shall not be counted as votes cast either “For” or “Against” the election of any director. Stockholders shall not have cumulative voting in the election of directors.

 

Recommendation of the Board of Directors

 

 

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
FOR” THE ELECTION OF ALL OF THE NOMINEES LISTED ABOVE FOR ELECTION TO THE
BOARD.

 

 

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    PROPOSAL 1. ELECTION
OF DIRECTORS
       

 

CONTINUING DIRECTORS

 

The following is a brief biography of directors that are not standing for re-election at our Annual Meeting.

 

JAMES DAVISON, JR.

 

Age: 53

 

Mr. Davison, Jr., has served as a director of the Company since 1999. Since 2007, he has served as a director for Genesis Energy, L.P. (NYSE: GEL), and currently serves on its Governance, Compensation and Business Development committee. From 1996 until 2007, he served in executive leadership positions of several related entities acquired by, or oversaw substantial assets of which were acquired by, Genesis Energy, L.P. Mr. Davison, Jr.’s management experience in the energy and transportation industries and as a director of a publicly traded enterprise enables him to make valuable contributions to our Board.

 

RICHARD GALLOT, JR.

 

Age: 53

 

Mr. Gallot, Jr. has served as a director of the Company since May 2019. Since 2016, Mr. Gallot, Jr. has served as President of Grambling State University where he has led the University in its initiative to increase enrollment and alumni engagement. He is also an attorney in Ruston, Louisiana, where he has practiced law since 1990. Prior to his role as President of Grambling State University, Mr. Gallot, Jr. served a term as a member of the Louisiana State Senate between 2012 and 2016. Prior to serving in the Louisiana State Senate, he served three terms in the Louisiana House of Representatives between 2000 and 2012. Since 2016, Mr. Gallot, Jr. has also served on the board of directors of Cleco Corporation, an electric utility company headquartered in Pineville, Louisiana. He holds a B.A. in History from Grambling State University and a J.D. from Southern University Law School. Mr. Gallot, Jr.’s experience in professional and political leadership positions and his legal acumen enables him to be a valuable contributor to our Board.

 

STACEY GOFF

 

Age: 54

 

Mr. Goff has served as a director of the Company and of Origin Bank since January 2020. Mr. Goff currently serves as Executive Vice President, General Counsel and Chief Administrative Officer for CenturyLink, Inc. (NYSE: CTL) (“CenturyLink”) where he is responsible for CenturyLink’s legal, corporate strategy, business development, mergers and acquisitions, internal and external communications and public policy functions. He has played a key role in negotiating and closing numerous acquisitions and dispositions that CenturyLink has completed during the past 20 years. Mr. Goff also directs the negotiation of CenturyLink’s complex agreements and large dispute resolutions with third parties and leads CenturyLink’s legal affairs. Mr. Goff’s experience in public company corporate governance and compensation, in addition to his legal expertise, will provide great value to our Board.

 

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    PROPOSAL 1. ELECTION
OF DIRECTORS
       

 

GARY LUFFEY

 

Age: 65

 

Dr. Luffey has served as a director of the Company since 2017 and of Origin Bank since 2002. An eye surgeon for over 35 years, Dr. Luffey is a partner at the Green Clinic and is a member of the Green Clinic’s Financial Committee. Dr. Luffey has been a member of the Ruston-Lincoln Industrial Development Committee and served in a leadership role with the Ruston-Lincoln Chamber of Commerce. Over the past 40 years, Dr. Luffey has been involved in the ownership and management of nursing homes, hospitals and medical supply companies. He was also a consultant with Alcon Laboratories, a subsidiary of Novartis, from 1996 to 2016. These experiences afford Dr. Luffey a unique vantage point with respect to our clients that are in healthcare, an increasingly important and growing segment in our markets. Dr. Luffey’s extensive experience with the healthcare industry and his community ties in our Louisiana markets are valuable to our Company and our Board.

 

DRAKE MILLS

 

Age: 59

 

Mr. Mills is our Chairman, President and Chief Executive Officer (“CEO”). Mr. Mills has over 35 years of banking experience and started out as a check file clerk with Origin Bank. Having worked his way up through the organization, Mr. Mills has served in various capacities, including in-house system night operator, branch manager, consumer loan officer, commercial lender and Chief Financial Officer. He became President and Chief Operations Officer in 1996 and was named CEO of Origin Bank in 2003. He has served our Company as President since 1998 and CEO since 2008, and as Chairman of our Board since 2012. Under his leadership as President and CEO, Origin Bank has experienced significant asset growth, primarily through organic growth. Mr. Mills served on the Community Depository Institutions Advisory Council to the Federal Reserve Bank of Dallas from 2011 to 2014. He represented the Federal Reserve Bank of Dallas on the Community Depository Institutions Advisory Council to the Federal Reserve System in Washington, D.C., and was appointed as the Council’s President for a one year term in 2013. He is also a past Chairman of the Louisiana Bankers Association. Mr. Mills graduated from Louisiana Tech University with a B.S. degree in Finance. He also graduated from the Graduate School of Banking of the South in Baton Rouge, Louisiana, and the Graduate School of Banking of the South’s Professional Master of Banking Program in Austin, Texas. Mr. Mills oversees our executive management team as well as the development and execution of our strategic plan. His vision and leadership are instrumental in our growth and success.

 

GEORGE SNELLINGS, IV

 

Age: 54

 

Mr. Snellings, IV has served as a director of the Company since 2012, and as a director of Origin Bank since 2007. He is a practicing attorney with the law office of Nelson, Zentner, Sartor & Snellings, LLC, where he has been a member since the firm’s inception in 2001, and in 2017 received an AV rating by his peers at Martindale-Hubbell, a significant rating accomplishment that only lawyers with high ethical standards and professional ability receive. Prior to that time, he was a member of the law firm Theus,

 

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    PROPOSAL 1. ELECTION
OF DIRECTORS
       

 

Grisham, Davis & Leigh L.L.C. from 1993 to 2001 and worked in the audit department at Ernst & Young from 1989 until 1990. Mr. Snellings, IV has served as president and finance chairman of the Bayou Desiard Country Club, and is currently serving on the trustees committee for St. Paul’s United Methodist Church. Mr. Snellings, IV’s legal knowledge and experience qualifies him to serve on our Board.

 

ELIZABETH SOLENDER

 

Age: 68

 

Ms. Solender has served as a director of the Company since 2016, and of Origin Bank since 2008. She is the President of Solender/Hall, Inc., a commercial real estate and consulting company that specializes in assisting businesses and nonprofit organizations buy, sell, lease, manage and finance commercial real estate in the Dallas/Fort Worth area. She is considered an expert on nonprofit commercial real estate issues. Prior to her career in commercial real estate, she was the human resources manager for the Exploration Division of Sun Company. In 2015, Dallas Business Journal named her one of the top 25 Women in Business in the Dallas/Fort Worth area. Ms. Solender is a past national president of Commercial Real Estate Women Network and past chair of the National Association of Corporate Directors (“NACD”) North Texas Chapter. She has earned the NACD Governance Fellow status, which requires continuing education in corporate governance. Ms. Solender’s real estate acumen, human resources knowledge and nonprofit experience make her a valuable addition to our Board.

 

STEVEN TAYLOR

 

Age: 66

 

Mr. Taylor has served as a director of the Company since 2016, and Origin Bank since 2007. Mr. Taylor has been President of Car Town of Monroe, Inc. (“Car Town”) since 1987 and oversees its day-to- day operations. Car Town is one of the largest Independent Automotive Dealers in Louisiana and has been previously recognized as the State Quality Dealer of the Year and one of the top 10 in the nation by the National Independent Auto Dealers Association. Mr. Taylor has other business interests and has served as the President and Operating Manager of West Monroe Land Development Co., Inc., a corporation focused on real estate development, since 1983, as a Partner in Ride Time Auto Credit, LLC, an automobile finance company, since 2006, and as a Partner in Twin City Investments, LLC, a real estate investment company, since 2004. Mr. Taylor is also actively involved with the Boys & Girls Club of Northeast Louisiana. He is the past president of the Bayou DeSiard Country Club, serves on the St. Francis Hospital Foundation, and is a board member of the Monroe Downtown Economic Development District. His business experience in various companies and unique viewpoints obtained in his successful enterprises make him a valued member of our Board.

 

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    CORPORATE GOVERNANCE        

 

CORPORATE GOVERNANCE

 

Board Leadership Structure

 

The Company has a policy that does not mandate the separation of the roles of CEO or President and the Chairman of the Board. Our Board believes it is in the best interest of the Company to instead make a determination regarding the separate roles of CEO, President and Chairman of the Board on a regular basis based on the position and direction of the Company and the membership composition of the Board. Our Board has determined that having our President and CEO, Mr. Mills, serve as Chairman of the Board is in the best interests of our stockholders at this time. This structure makes best use of the CEO’s extensive knowledge of our organization and the banking industry. Our Board views this arrangement as also providing an efficient nexus between our management 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.

 

Unless the Company has an independent non-executive Chairman of the Board, the Company’s governance structure provides for a strong Lead Independent Director role. The Lead Independent Director must be independent under the Nasdaq rules and elected by the independent Board members. Our Board has elected James D’Agostino, Jr. to serve as the Lead Independent Director.

 

Our Board believes that it is able to have a thorough exchange of views, or address any issues independent of the Chairman. Among other things, the Lead Independent Director is required to:

 

·Preside at Board meetings when the Chairman of the Board is not present;
·Establish the agenda for, and preside at, executive sessions of the non-management and independent directors;
·Receive topic suggestions from other directors to be discussed at upcoming executive sessions and facilitate discussion on key issues outside of meetings;
·Act as a liaison and facilitate communication between the Chairman of the Board and the independent directors (provided that each director shall also be afforded direct and complete access to the Chairman of the Board at any time as such director deems necessary or appropriate);
·Facilitate teamwork and communication among the independent directors;
·Approve information sent to the Board;
·Approve meeting agendas for the Board, in consultation with the Chairman of the Board;
·Coordinate the activities of non-management and independent directors, including the authority to call meetings of non-management and independent directors;
·If requested by any stockholder, ensure that he or she is available for consultation and direct communication;
·Communicate, as appropriate, with the Company’s regulators;
·Regularly communicate with the Chairman of the Board on a variety of issues including business strategy and succession planning;
·Maintain close contact with the Chairs of each standing committee of the Board, and serve as an ex-officio member of each committee where he or she is not a member;

 

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    CORPORATE GOVERNANCE        

 

·Assist the committee Chairs in the establishment of committee agendas and schedules;
·Provide input, as needed, into the assessment of the Board committees effectiveness, structure, organization and charters, and the evaluation of the need for changes; and
·Coordinate the annual evaluation of the Board and committees self-evaluation and the evaluation of the Chairman of the Board and the CEO with the Nominating and Corporate Governance Committee.

 

Director Independence

 

Our common stock is listed on the Nasdaq Global Select Market (“Nasdaq”). Under Nasdaq listing standards, independent directors must comprise a majority of a listed company’s board of directors. The rules of Nasdaq, as well as those of the SEC, also impose several other requirements with respect to the independence of our directors. In addition, Nasdaq listing standards require that, subject to specified exceptions, each member of a listed company’s audit, compensation, and nominating and corporate governance committees must be independent.

 

Our Board presently has 12 directors. Our Board has undertaken a review of the independence of each director and director nominee in accordance with the SEC rules and Nasdaq listing standards. Based on this review, our Board has determined that nine of our anticipated 12 directors, or Messrs. D’Agostino, Jr., Gallot, Jr., Goff, Jones, Luffey, Malone, Snellings, IV, and Taylor and Ms. Solender, are independent as that term is defined under the SEC rules and Nasdaq listing standards. In making this determination, our Board considered the relationships that each non-employee director has with us and all other facts and circumstances that the Board deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director and the transactions described under the heading “Certain Relationships and Related Person Transactions” and below in “—Board Committees—Compensation Committee—Compensation Committee Interlocks and Insider Participation.

 

Governance Documents

 

We have a Code of Ethics in place that applies to all of our directors, officers and employees. The Code of Ethics sets forth specific standards of conduct and ethics that we expect all of our directors, officers and employees to follow, including our principal executive officer, principal financial officer and principal accounting officer or controller. Any amendments to the Code of Ethics, or any waivers of requirements thereof, will be disclosed on our website within four days of such amendment or waiver.

 

We have also adopted Governance Principles that set forth the framework within which our Board, assisted by its committees, directs the affairs of our organization. The Governance Principles address, among other things, the composition and functions of our Board and its committees, director independence, compensation of directors and succession planning. The Corporate Governance Principles, our Code of Ethics, and information about other governance matters of interest to investors, are available through our website at www.origin.bank by clicking on Investor Relations—Governance— Governance Overview.

 

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    CORPORATE GOVERNANCE        

 

Director Education and Self-Assessment

 

Our Board believes that director education is important to enable it to most effectively perform its role of oversight of the management and affairs of the Company. Accordingly, it is our policy that new non-employee directors receive an orientation from appropriate executives regarding the Company’s business and affairs at the time that the director joins our Board. In addition, within three months of election or appointment to our Board, each new non-employee director is supposed to spend a day at corporate headquarters for a personal briefing by executive management on the Company’s strategic plans, its financial statements, and its key policies and practices.

 

Directors are also provided with continuing education on subjects that would assist them in discharging their duties, including: regular programs on the Company’s financial planning and analysis, compliance and corporate governance developments; business-specific learning opportunities through site visits and board meetings; and briefing sessions on topics that present special risks and opportunities to the Company. Additionally, the Company has a director education program to assist board members in further developing their skills and knowledge to better perform their duties, including presentations made via our board portal. Each director is asked to view the presentation and given an opportunity during Board meetings to ask questions. For example, in 2019, presentations on the Current Expected Credit Loss model, cybersecurity, and cultivating talent were reviewed and discussed. In addition, in- person training was conducted by qualified employees regarding the Bank Secrecy Act, anti-money laundering laws, Office of Foreign Assets Control compliance, fair lending practices, and managing operational risk, among others. In addition to presentations, our Board subscribes to BankDirector.com as well as the NACD. One of our directors, Ms. Solender, has earned NACD Governance Fellow status, which requires continuing education in corporate governance.

 

Board Meetings and Committees

         
(GRAPHIC) (GRAPHIC) (GRAPHIC) (GRAPHIC) (GRAPHIC)
         

Our Board met 10 times during the 2019 fiscal year (including regularly scheduled and special meetings).

During the 2019 fiscal year, each director participated in 75% or more of the total number of meetings of the Board (held during the period for which he or she was a director).

We expect all our directors will attend the upcoming Annual Meeting.

All but one of our directors attended the 2019 annual meeting of stockholders.

It is our policy to invite all directors and nominees for director to attend the Annual Meeting.

         

The business of our Board is conducted through its meetings, as well as through meetings of its committees. Our Board has five standing committees: an Audit Committee, a Compensation Committee, a Finance Committee, a Nominating and Corporate Governance Committee, and a Risk Committee, each of which has the composition and responsibilities described below. There were 30 meetings of Board committees during 2019 and each director participated in 75% or more of the total number of committee meetings on each committee in which he or she was a member. Members serve on our committees until their resignation or until otherwise determined by our Board. The standing committees report on their deliberations and actions at each full Board meeting. Each of the committees has the authority to engage outside experts, advisors and counsel to the extent it considers appropriate to

 

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assist the committee in its work. In the future, our Board may establish such additional committees as it deems appropriate, in accordance with applicable laws and regulations and the Company’s Charter and Bylaws.

 

Risk Management and Oversight

 

Our Board is responsible for oversight of management and the business and affairs of the Company, including those relating to management of risk. Our 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 the entire Board maintains the ultimate oversight responsibility for the risk management process, the Risk Committee was formed by our Board to assist in its oversight and the Board’s other committees assist in oversight of risk in specific areas. In particular, the Audit Committee assists the Board in monitoring the effectiveness of the Company’s identification and management of risk, including financial and other business risks. 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. The Nominating and Corporate Governance Committee monitors the risks associated with the independence of our Board. The Finance Committee is responsible for, among other things, overseeing the administration and effectiveness of market and similar 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.

 

Audit Committee

 

The current members of our Audit Committee are Messrs. Malone (Chair), D’Agostino, Jr., Jones and Snellings, IV. Mr. Buske served as a member of the Audit Committee until the 2019 annual meeting of stockholders. Our Board has evaluated the independence of the members of the Audit Committee and has determined that (i) each of the members is independent under the applicable rules of Nasdaq, (ii) each of the members satisfies the additional independence standards under the SEC rules for Audit Committee service and (iii) each of the members has the ability to read and understand fundamental financial statements. The Board also reviewed whether any members of the Audit Committee meet the criteria to be considered a financial expert as defined by the SEC rules. Based on its review, the Board determined that Mr. Malone qualifies as an “audit committee financial expert,” as defined under the applicable rules of the SEC, by reason of his prior job experience. The Audit Committee held nine meetings during the fiscal year ended December 31, 2019.

 

Our Audit Committee oversees our accounting and financial reporting process and the audit of our financial statements, and assists our Board in monitoring our financial systems and our legal and regulatory compliance. Our Audit Committee is responsible for, among other things:

 

·selecting, engaging and overseeing the Company’s independent registered public accounting firm, including preapproving all services and the fees and terms of engagement;

 

·overseeing the integrity of our financial statements, including the annual audit, the annual audited financial statements and financial information included in our periodic reports that will be filed with the SEC;

 

·overseeing our financial reporting internal controls;

 

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·overseeing our internal audit functions;

 

·overseeing our compliance with applicable laws and regulations;

 

·overseeing our risk management function related to financial reporting;

 

·overseeing our process for receipt, retention and treatment of complaints; and

 

·overseeing our Ethics & Compliance Reporting (Whistleblower) Policy.

 

Our Board has adopted a written charter for the Audit Committee, which is available on our website at

www.origin.bank under “Investor Relations—Governance—Governance Overview.

 

Independent Registered Public Accounting Firm

 

The Audit Committee has appointed BKD, LLP as the independent registered public accounting firm to audit the consolidated financial statements of the Company for the 2020 fiscal year. BKD, LLP served as the Company’s independent registered public accounting firm for the 2019 fiscal year and reported on the Company’s consolidated financial statements for that year.

 

Representatives of BKD, LLP are expected to be in attendance at the Annual Meeting and will be afforded the opportunity to make a statement. The representatives will also be available to respond to questions.

 

Audit Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services

 

The Audit Committee has adopted a policy and established related procedures for the pre-approval of audit and non-audit services rendered by the Company’s independent registered public accounting firm. The policy generally pre-approves specified services in the defined categories of audit services, audit-related services and tax services up to specified amounts. Pre-approval may also be given as part of the Audit Committee’s approval of the scope of the engagement of the independent registered public accounting firm or on an individual, explicit, case-by-case basis before the independent registered public accounting firm is engaged to provide each service. The pre-approval of services may be delegated to one or more of the Audit Committee’s members, but the decision must be reported to the full Audit Committee at its next scheduled meeting. The Audit Committee has determined that the rendering of services other than audit services by BKD, LLP is compatible with maintaining the principal registered public accounting firm’s independence.

 

Typically, each year, prior to engaging our independent registered public accounting firm, management submits to the Audit Committee for approval a list of services expected to be provided during that fiscal year within each of the categories of services described in the fee table below, as well as related estimated fees, which are generally based on time and materials. As appropriate, the Audit Committee then pre-approves the services and the related estimated fees. The Audit Committee requires our independent registered public accounting firm and management to report actual fees versus the estimated fees periodically throughout the year by category of service. During the year, circumstances may arise when it becomes necessary to engage our independent registered public accounting firm for additional services not contemplated in the initial annual proposal. In those instances, the Audit Committee pre-approves the additional services and related fees before engaging our independent registered public accounting firm to provide the additional services.

 

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Representatives of BKD, LLP are expected to be in attendance at the Annual Meeting and will be afforded the opportunity to make a statement. The representatives will also be available to respond to questions.

 

Fees Paid to Independent Registered Public Accounting Firm

 

The following is a description of the fees earned by BKD, LLP for services rendered to the Company for the years ended December 31, 2019 and 2018, for purposes of considering whether such fees are compatible with maintaining the independence of BKD, LLP, and concluded that such fees did not impair the independence of BKD, LLP. The Audit Committee has pre-approved all of the services provided by BKD, LLP and all of the fees described below.

 

  Years Ended December 31,
(Dollars in thousands) 2019 2018
Audit Fees(1) $ 552 $ 548
Audit-Related Fees(2) 138 248
Tax Fees
All Other Fees
  $ 690 $ 796

(1)Audit Fees reflect the aggregate fees billed for services related to the review of our quarterly reports filed on Form 10-Q (for such periods for which we filed such quarterly reports), the audit of our consolidated financial statements and the preparation of our financial statements in accordance with PCAOB standards, audit of internal controls to meet the reporting requirements of Section 112 of the Federal Deposit Insurance Corporation Act and other SEC filings.

(2)Audit-Related Fees include aggregate fees billed for professional services rendered related to the audits of retirement and employee benefit plans, review and consent procedures for our registration statement filed on Form S-8 and audit procedures related to our registration statement on Form S-1.

 

During the fiscal year ended December 31, 2019, none of the total hours expended on the Company’s financial audit by BKD, LLP were provided by persons other than BKD, LLP’s full-time permanent employees.

 

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Report by Audit Committee

 

The Audit Committee has reviewed and discussed the audited financial statements for the fiscal year ended December 31, 2019, with management of the Company. The Audit Committee has discussed with the Company’s independent registered public accounting firm the matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board (“PCAOB”). The Audit Committee has also received the written disclosures and the letter from the Company’s independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and has discussed with the Company’s independent registered public accounting firm such accounting firm’s independence. Based on the foregoing, the Audit Committee has recommended to our Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

 

  THE AUDIT COMMITTEE
  Farrell Malone (Chair)
  James D’Agostino, Jr.
  Michael Jones
  George Snellings, IV

 

The material in this report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

 

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Compensation Committee

 

The current members of our Compensation Committee are Ms. Solender (Chair) and Messrs. Gallot, Jr., Goff, Jones, Luffey, and Taylor. From the beginning of 2019, until the end of their respective terms as directors in April 2019, Messrs. Buske (Chair) and Pietrzak served on the Compensation Committee with Messrs. Davison, Jr., Jones and Luffey. Mr. Buske retired from the Board in April 2019 and Mr. Pietrzak did not stand for re-election at the 2019 annual meeting of stockholders. Mr. Davison resigned from his seat on the Compensation Committee in February 2019 after our Board determined that Mr. Davison no longer qualified as an independent director under applicable Nasdaq rules.

 

The Compensation Committee is responsible for overseeing the management of risk related to our executive and non-executive compensation plans. Our Board has determined that each of the members of our Compensation Committee is independent within the meaning of the independent director requirements of Nasdaq and the SEC. Our Board has also determined that the composition of our Compensation Committee meets the requirements for independence under, and the functioning of our Compensation Committee complies with, the applicable requirements of Nasdaq and SEC rules and regulations. The members of the Compensation Committee also qualify as “non-employee directors” within the meaning of Rule 16b-3 under the Exchange Act. The Compensation Committee held seven meetings during the fiscal year ended December 31, 2019.

 

The Compensation Committee oversees the executive compensation policies and plans of the Company. Our Compensation Committee is responsible for, among other things:

 

·annually reviewing and approving the compensation of our CEO, including determination of salary, bonus, incentive opportunities and other compensation, approving goals and objectives relevant to the compensation of the CEO and evaluating the CEO’s performance in light of such goals and objectives;

 

·together with the CEO, annually reviewing and approving compensation of our other executive officers;

 

·overseeing and evaluating our organizational compensation structure, policies and programs, and assessing whether these establish appropriate incentives and leadership development opportunities for management and other employees;

 

·retaining, or obtaining the advice of, such compensation consultants, legal counsel or other advisors as the Compensation Committee deems necessary or appropriate for it to carry out its duties, with direct responsibility for the appointment, compensation and oversight of the work of such consultants, counsel or advisors;

 

·reviewing and approving employment agreements, severance or termination arrangements, change in control agreements, retirement agreements and similar matters;

 

·reviewing, approving and administering our equity compensation plans and recommending changes to such plans as needed; and

 

·with the assistance of the Executive Risk Officer, regularly monitoring and evaluating the risk management elements of the Company’s incentive compensation arrangements and appropriately balancing risk and financial results in a manner that does not encourage imprudent risks and is consistent with safety and soundness.

 

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Compensation Committee Interlocks and Insider Participation

 

During 2019, Messrs. Buske, Davison, Jr., Jones, Luffey and Pietrzak served as members of the Compensation Committee. Mr. Davison, Jr. resigned from the Compensation Committee in February 2019, Mr. Buske retired from the Board in April 2019, and Mr. Pietrzak did not stand for re-election at the 2019 annual meeting of stockholders. No members serving on the Compensation Committee during 2019 were officers or employees of the Company or any of its subsidiaries.

 

Certain Commercial Relationships

 

Air Transportation

 

Ruston Aviation, Inc. is engaged by us from time to time to provide private air transportation to our management team. The sole owner of Ruston Aviation, Inc., James Davison, Sr., is the father of our director James Davison, Jr.

 

In February 2019, Origin Bank and Ruston Aviation, LLC jointly purchased an airplane from a third party, with each party having an equal 50% ownership stake. Forty-nine percent of Ruston Aviation, LLC is owned by James Davison, Sr., the father of our director James Davison, Jr., 49% is owned by Steven Davison, the brother of our director James Davison, Jr., and 2% is owned by Ruston Aviation, Inc. The aggregate purchase price of the aircraft was $5,162,040. Half of the purchase price was paid by the Bank and half was paid by Ruston Aviation, LLC. Ruston Aviation, LLC and the Bank intend to allocate operating costs in accordance with their respective use of the aircraft. We made payments of approximately $94,000 to Ruston Aviation, Inc. for the fiscal year ended December 31, 2019, including the Bank’s portion of shared operating costs in connection with its joint ownership of the aircraft.

 

Hospitality and Country Club Membership

 

The Squire Creek Country Club in Choudrant, Louisiana is owned by Squire Creek Country Club and Development LLC, which itself is jointly owned in equal 50% stakes by James Davison, Sr. and Steven Davison, father and brother, respectively, of our director James Davison, Jr. From time to time, we use the country club for corporate functions, employee and vendor lodging and similar activities. During the fiscal year ended December 31, 2019, we paid approximately $174,000 to Squire Creek Country Club and Development LLC for these services and we do not believe we pay more than standard rates.

 

Banking Location Leases

 

We are party to a lease with respect to our Northside Banking Center location with James Davison, Sr., the father of our director James Davison, Jr., with an initial term ending on December 31, 2037, and a renewal option to extend the lease for an additional 60 months. Under the lease, in addition to a monthly base rent of $7,083, we are also responsible for utilities, real property taxes, maintenance and repairs. We made payments of approximately $85,000 for the fiscal year ended December 31, 2019, in connection with this lease. We are also party to a lease with respect to our Forsythe Banking Center location with Jedco Properties, LLC. Jedco Properties, LLC is wholly owned by James Davison, Sr., the father of our director James Davison, Jr. The current term of the lease expires on February 28, 2029, with an option to renew for an additional 10 years. The lease provides for a monthly base rent of $11,333 and is subject to certain adjustments. We are also responsible for utilities, certain real property

 

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taxes, maintenance (except with respect to common areas), repairs and alterations. We made payments of approximately $136,000 for the fiscal year ended December 31, 2019, in connection with this lease.

 

Compensation Committee Processes and Procedures

 

Typically, the Compensation Committee meets at least quarterly and with greater frequency if necessary. The agenda for each meeting is usually developed by the Chair of the Compensation Committee, in consultation with the other members of the Compensation Committee. The Compensation Committee meets regularly in executive session. Our Chief People and Diversity Officer regularly attends meetings of the Compensation Committee and, from time to time, various other members of management or other employees, as well as outside advisors or consultants, may be invited by the Compensation Committee to make presentations, to provide background information or to otherwise participate in meetings. The CEO and Chief People and Diversity Officer also interface with the Compensation Committee in connection with the Committee’s executive compensation. The Compensation Committee periodically meets with the CEO to assess progress toward meeting objectives set by the Board for both annual and long-term compensation. The CEO may not participate in, or be present during, any deliberations or determinations of the Compensation Committee regarding his compensation.

 

The Compensation Committee may form and delegate authority to subcommittees to the extent it deems necessary or appropriate. Under its charter, the Compensation Committee has the authority to select, retain and approve the fees and other retention terms of counsel, accountants or other experts or advisors, including compensation consultants, at the expense of the Company, that the Compensation Committee considers appropriate in the performance of its duties. The Compensation Committee also has direct responsibility for the oversight of the work of any consultants or advisors it engages. Under its charter, the Compensation Committee may select or receive advice from a consultant only after taking into consideration certain factors set forth in Nasdaq rules relating to the consultant’s independence. Although the Compensation Committee is required to consider such factors, it is free to select or receive advice from a consultant that is not independent.

 

Independent Compensation Consultant

 

McLagan, a part of Aon plc (“McLagan”), an independent compensation consulting firm, has been engaged by, and has reported directly to, the Compensation Committee periodically since 2012 while working on various compensation initiatives. The Compensation Committee uses its compensation consultant to:

 

·Assist and advise the Compensation Committee during its meetings;

 

·Provide information based on third-party data and analysis of compensation programs at comparable financial institutions for the design and implementation of our executive and non-employee director compensation programs;

 

·Compile and analyze compensation data for financial services companies;

 

·Assist the Compensation Committee in forming a peer group; and

 

·Provide independent information as to the reasonableness and appropriateness of the compensation levels and compensation programs of the Company relative to comparable financial services companies.

 

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During 2019, the Compensation Committee engaged McLagan to develop the custom Compensation Peer Group and to provide related data and reports, including McLagan’s report on Commercial Incentive Market Practices for Regional and Community Banks, in connection with, and reviews of, (i) executive officer and director compensation; (ii) annual executive incentive plans; and (iii) proxy statement disclosure. The results of these analyses were used as one of the factors to establish executive compensation for 2019.

 

The Compensation Committee considered the independence of McLagan in light of SEC rules and Nasdaq listing standards. The Compensation Committee requested and received a report from McLagan addressing McLagan’s independence and the independence of the senior advisors involved in the engagement which included (i) other services provided to us by McLagan; (ii) fees paid by us as a percentage of McLagan’s total revenue; (iii) policies or procedures maintained by McLagan that are designed to prevent a conflict of interest; (iv) any business or personal relationships between the senior advisors and any member(s) of the Compensation Committee; (v) any Company stock owned by the senior advisors; and (vi) any business or personal relationships between our executive officers and the senior advisors. The Compensation Committee discussed these considerations and concluded that the work performed by McLagan and McLagan’s senior advisors involved in the engagement did not raise any conflict of interest.

 

Our Board has adopted a written charter for the Compensation Committee, which is available on our website at www.origin.bank under “Investor Relations—Governance—Governance Overview.

 

Nominating and Corporate Governance Committee

 

The current members of our Nominating and Corporate Governance Committee are Messrs. Jones (Chair), D’Agostino, Jr., Gallot, Jr., Goff, Malone and Ms. Solender. Mr. Buske served as a member of the Nominating and Corporate Governance Committee until the 2019 annual meeting of stockholders. Our Board has determined that each of the members of our Nominating and Corporate Governance Committee is independent within the meaning of the independent director requirements of Nasdaq. The Nominating and Corporate Governance Committee held six meetings during the fiscal year ended December 31, 2019. Mr. Davison, Jr. previously served on our Nominating and Corporate Governance Committee until February 2019 following our Board’s determination in 2019 that Mr. Davison, Jr. no longer qualified as an independent director under applicable Nasdaq rules.

 

The Nominating and Corporate Governance Committee nominates persons for election as directors and reviews corporate governance matters. Among other things, the Nominating and Corporate Governance Committee members are responsible for:

 

·evaluating and making recommendations to our Board regarding our Board’s number and composition, committee structure and assignments, and director responsibilities;

 

·assisting our Board in identifying prospective director nominees and recommending nominees for each annual meeting of stockholders;

 

·reviewing the background, qualifications and independence of individuals being considered as director candidates, including persons proposed by stockholders or others;

 

·recommending to our Board a slate of director nominees;

 

·reviewing and overseeing the management succession program;

 

·evaluating and recommending governance principles applicable to our Board composition and operation;

 

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·developing and reviewing the Company’s related party transactions policy and reviewing or approving related party transactions; and

 

·reviewing and investigating matters pertaining to the adherence to the Code of Ethics or other standards of business conduct by any director or executive officer of the Company, except as such are related to our financial statements and reporting.

 

Our Board has adopted a written charter for our Nominating and Corporate Governance Committee, which is available on our website at www.origin.bank under “Investor Relations—Governance—Governance Overview.

 

Finance Committee

 

The current members of our Finance Committee, a joint committee of the boards of directors of the Company and Origin Bank, are Messrs. D’Agostino, Jr. (Chair), Davison, Jr., Malone, Myrick and Taylor. The Finance Committee met four times in 2019. The Finance Committee has responsibility for, among other things:

 

·reviewing, approving and recommending for implementation our market risk functional framework, liquidity risk and oversight policy;

 

·overseeing the administration and effectiveness of, and compliance with, our market risk functional framework and oversight policy and other significant investment and related policies;

 

·reviewing and overseeing the operation of our Capital Management Policy as well as our capital adequacy assessments, forecasting and stress testing processes and activities; and

 

·reviewing capital levels and making recommendations to our Board regarding our dividend policy, repurchases of securities, financing activities and significant capital expenditures.

 

Our Board has adopted a written charter for our Finance Committee, which is available on our website at www.origin.bank under “Investor Relations—Governance—Governance Overview.”

 

Risk Committee

 

The current members of the Risk Committee are Messrs. Davison, Jr., (Chair), D’Agostino, Jr., Luffey, Malone, Myrick and Snellings, IV. Mr. Pietrzak served on the Risk Committee prior to his retirement from the Board at the 2019 annual meeting of stockholders. Ms. Solender served as a member of the Risk Committee until January 2020. The Risk Committee held four meetings during the fiscal year ended December 31, 2019.

 

The Risk Committee has been appointed by our Board to assist our Board in its oversight of (i) the Company’s enterprise risk management framework, (ii) the Company’s risk appetite statement, including risk limits and tolerances, and (iii) the performance of the Company’s Executive Risk Officer. Our Board believes an effective enterprise risk management system is necessary to ensure the successful, safe and sound management of the Bank. Among other things, our Risk Committee has responsibility for:

 

·overseeing the Company’s enterprise risk management framework and risk appetite statement;
·periodically reviewing and evaluating the major risk exposures of the Company and its business units against established risk measurement methodologies and tolerances;

 

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·overseeing the Company’s risk identification framework;

 

·receiving reports from the Executive Risk Officer and Chief Financial Officer at least quarterly;

 

·reviewing and recommending for our Board’s approval the Company’s risk appetite statement and the Company’s other significant risk management and risk assessment guidelines and policies;

 

·overseeing the Company’s process and significant policies for determining risk tolerance and reviewing management’s measurement and comparison of overall risk tolerance to established limits;

 

·regularly reporting to our Board on the adequacy and quality of the Company’s methods for identifying, measuring, monitoring, controlling and reporting risks;

 

·reviewing the Company’s insurance program and the policies in place to address insurable risks;

 

·oversee management’s compliance with all regulatory obligations arising under laws, rules and regulations;

 

·reviewing and approving the Company’s internal annual compliance training schedule;

 

·reviewing and approving the appointment and, as appropriate, replacement of the Executive Risk Officer; and

 

·coordinating with management, including the Executive Risk Officer and the Audit Committee, to help ensure that the committees have received the information necessary to permit them to fulfill their duties and responsibilities with respect to oversight of risk management and risk assessment guidelines and policies.

 

Our Board has adopted a written charter for our Risk Committee, which is available on our website at

www.origin.bank under “Investor Relations—Governance—Governance Overview.

 

Stockholder Nominees and Proposals for 2021 Annual Meeting

 

If a stockholder desires to submit a stockholder proposal pursuant to Rule 14a-8 under the Exchange Act for inclusion in the proxy statement for the 2021 annual meeting of stockholders, such proposal and supporting statements, if any, must be received by us at our principal executive offices, located at 500 South Service Road East, Ruston, Louisiana 71270, no later than November 11, 2020. However, if the date of the 2021 annual meeting of stockholders is changed by more than 30 days from April 22, 2021, then the deadline will be a reasonable time before we begin to send proxy materials. Any such proposal must comply with the requirements of Rule 14a-8.

 

Stockholder proposals to be presented at the 2021 annual meeting of stockholders, other than stockholder proposals submitted pursuant to Rule 14a-8 under the Exchange Act, for inclusion in the proxy statement (including a director nomination) for the 2021 annual meeting of stockholders must, in addition to other requirements, be in proper form and received in writing at the Company’s principal executive offices no earlier than December 23, 2020, and no later than January 22, 2021. If the 2021 annual meeting is not called for a date that is within 30 days of April 22, 2021, notice must be delivered not later than the close of business on the tenth day following the date on which such notice of the date of the meeting was mailed or public disclosure of the date of the meeting was made, whichever occurs first. Please consult our Bylaws before sending in a notice as we may disregard proposals or nominations not made in accordance with the requirements in our Bylaws.

 

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Director Nominees

 

Our Bylaws provide that nominations of persons for election to the Board may be made by or at the direction of our Board or by any stockholder entitled to vote for the election of directors at the Annual Meeting who complies with certain procedures in our Bylaws as described above. The Nominating and Corporate Governance Committee is responsible for identifying and recommending candidates to our Board as vacancies occur.

 

The Nominating and Corporate Governance Committee is responsible for monitoring the mix of skills and experience of the directors in order to assess whether our Board has the necessary tools to perform its oversight function effectively. Director candidates are evaluated using certain established criteria, including familiarity with the financial services industry, their personal financial stability, their willingness to serve on our Board and our Corporate Governance Principles. In addition, our Corporate Governance Principles indicate directors should possess the highest personal and professional ethics, integrity and values, and be committed to representing the long-term interests of the stockholders. They must also have an inquisitive and objective perspective, practical wisdom and mature judgment. Although we do not have a separate diversity policy, the Nominating and Corporate Governance Committee considers the diversity of our directors and nominees in terms of knowledge, experience, skills, expertise and other characteristics that may contribute to our Board. In addition, the Company’s strategic plan includes a focus on attracting Board members who represent a broad mix of skills, backgrounds and perspectives that will more closely reflect the diversity of our customer base, stockholders and communities we serve.

 

The Nominating and Corporate Governance Committee utilizes a variety of methods for identifying and evaluating nominees for director and regularly assesses the appropriate size of our Board, and whether any vacancies on our Board are expected due to retirement or otherwise. In the event that vacancies are anticipated, or otherwise arise, the Committee considers various potential candidates for director.

 

Candidates may come to the attention of the Committee through current Board members, professional search firms, stockholders or other persons. These candidates are evaluated at regular or special meetings of the Nominating and Corporate Governance Committee, and may be considered at any point during the year. The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders in the same manner as it considers candidates recommended by others, provided that such candidates are nominated in accordance with the applicable provisions of our Bylaws. Because of this, there is no specific policy regarding stockholder nominations of potential directors. At present, our Board does not engage any third parties to identify and evaluate potential director candidates.

 

Certain Relationships and Related Transactions

 

Transactions by Origin Bank or us with related parties are subject to a formal written policy, as well as regulatory requirements and restrictions. These requirements and restrictions include Sections 23A and 23B of the Federal Reserve Act (which govern certain transactions by Origin Bank with its affiliates) and the Federal Reserve’s Regulation O (which governs certain loans by Origin Bank to its executive officers, directors and principal stockholders). We and our wholly owned subsidiary, Origin Bank, have adopted policies designed to ensure compliance with these regulatory requirements and restrictions. In addition, our Code of Ethics provides guidance for addressing actual or potential conflicts of

 

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interests, including those that may arise from transactions and relationships between the Company and its executive officers or directors.

 

We have also adopted a written Related Party Transaction Policy. Related party transactions are transactions, arrangements or relationships in which we are or will be a participant, the amount involved exceeds $120,000 and a related party has or will have a direct or indirect material interest. Related parties include our directors (including nominees for election as directors), our executive officers, beneficial owners of more than 5% of our capital stock and the immediate family members of any of the foregoing persons.

 

Transactions subject to the policy are referred to the Nominating and Corporate Governance Committee for evaluation and approval. In determining whether to approve a related party transaction, the Nominating and Corporate Governance Committee will consider, among other factors:

 

·whether the transaction was undertaken in the ordinary course of the Company’s and the Related Party’s business;

 

·whether the transaction was initiated by the Company or the Related Party;

 

·the purpose of the transaction and its potential risks and benefits to the Company;

 

·in the event the Related Party is a director, an Immediate Family Member of a director or an entity in which a director is a partner, stockholder or executive officer, the impact on the director’s independence and, if the director serves on the Compensation Committee, such director’s status as a “non-employee director” under Rule 16b-3 under the Exchange Act;

 

·the availability of other sources for comparable products or services;

 

·the approximate dollar value of the transaction and the amount and nature of the Related Party’s interest in the transaction; and

 

·the terms of the transaction and whether the proposed transaction is proposed to be entered into on terms no less favorable than the terms available to unrelated third parties or to employees generally.

 

Our Related Party Transactions Policy is available on our website at www.origin.bank under “Investor Relations—Governance—Governance Overview.

 

General

 

In addition to the relationships, transactions and the director and executive officer compensation arrangements discussed under “Narrative Discussion of Summary Compensation Table” and “Compensation Committee Interlocks and Insider Participation,” the following is a description of transactions since January 1, 2019, including currently proposed transactions, to which we have been or will be a party in which the amount involved exceeded or will exceed $120,000, and in which any of our directors (including nominees), executive officers or beneficial holders of more than 5% of our capital stock, or their immediate family members or entities affiliated with them, had or will have a direct or indirect material interest. We believe the terms and conditions set forth in such agreements are reasonable and customary for similar transactions.

 

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    CORPORATE GOVERNANCE        

 

Agreements with Certain Institutional Investors

 

In December 2012, we completed a private placement of our common stock and our Series D preferred stock in which we raised gross proceeds of approximately $85.0 million. As a result of this private placement, a significant portion of our outstanding equity was held by six funds affiliated with three institutional investors, including Pine Brook Capital Partners, L.P. (together with its affiliates, “Pine Brook”), Castle Creek Capital Partners IV, LP (together with its affiliates, “Castle Creek”), Banc Fund VII L.P. and Banc Fund VIII L.P. (collectively, the “institutional investors”). In connection with our 2012 private placement, we entered into Securities Purchase Agreements and Registration Rights Agreements, each dated as of November 9, 2012, with each of the institutional investors.

 

Under these agreements, we agreed to comply with certain continuing obligations with respect to certain of the institutional investors. One of the obligations was to nominate one person designated by each of Castle Creek and Pine Brook to our Board and the board of directors of Origin Bank and one board observer for each of Castle Creek and Pine Brook, subject to certain conditions, for so long as such institutional investor continued to hold 4.9% or more of our issued and outstanding common stock on an as-converted basis. In 2019, both Castle Creek and Pine Brook reached an ownership percentage where they were no longer entitled to those rights. John Pietrzak served on our Board as the representative of Castle Creek prior to his resignation which was effective on April 24, 2019, and Mr. Goldstein served on our Board as the representative of Pine Brook prior to his resignation which was effective on February 1, 2019.

 

Ordinary Banking Relationships

 

Certain of our officers, directors and principal stockholders, as well as their immediate family members and affiliates, are customers of, or have or have had transactions with, Origin Bank, us or our affiliates in the ordinary course of business. These transactions include deposits, loans, mortgages and other financial services transactions. Related party transactions are made in the ordinary course of business, on substantially the same terms, including interest rates and collateral (where applicable), as those prevailing at the time for comparable transactions with persons not related to us, and do not involve more than normal risks of collectability or present other features disproportionately unfavorable to us.

 

As of December 31, 2019, we had approximately $1.1 million of loans outstanding to our directors and officers, their immediate family members and their affiliates, as well as those of Origin Bank, and we had approximately $2.2 million in unfunded loan commitments to these persons. As of December 31, 2019, no related party loans were categorized as nonaccrual, past due, restructured or potential problem loans. We expect to continue to enter into transactions in the ordinary course of business on similar terms with our officers, directors and principal stockholders, as well as their immediate family members and affiliates.

 

Director Compensation

 

The Compensation Committee is responsible for reviewing and making recommendations to our Board with respect to the compensation of directors. Employees of the Company and its subsidiaries are not compensated for service as a director of the Company or its subsidiaries and are excluded from the table below.

 

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    CORPORATE GOVERNANCE        

 

Director compensation is reviewed periodically by the Compensation Committee of our Board and adjustments are considered, as needed. The Committee engages an outside independent consultant to review director compensation amounts and structure using the same group of peer banks that was used by the Compensation Committee to review the compensation of senior management. In 2019, the Compensation Committee engaged McLagan as its independent compensation consultant for this purpose.

 

The following table summarizes the compensation paid by the Company to non-employee directors for the fiscal year ended December 31, 2019:

 

2019 Non-Employee Director Compensation Table

 

Name    Fees Earned or
Paid in Cash
    Stock Awards(1)    All Other
Compensation(2)
    Total
John Buske(3)   $ 15,699     $ 36,025     $     $ 51,724  
James D’Agostino, Jr.     59,031       36,025       3,000       98,056  
James Davison, Jr.           35,698                    36,025                    3,000                     74,723      
Richard Gallot, Jr.(4)     20,667       36,025       3,000       59,692  
Oliver Goldstein(5)     2,167                   2,167  
Michael Jones     38,365       36,025       3,000       77,390  
Gary Luffey     30,701       36,025       3,000       69,726  
Farrell Malone     49,698       36,025       3,000       88,723  
John Pietrzak(6)     10,668                   10,668  
George Snellings, IV     33,365       36,025       3,000       72,390  
Elizabeth Solender     36,365       36,025       3,000       75,390  
Steven Taylor     30,033       36,025       3,000       69,058  

 

(1)The amounts shown in this column reflect restricted stock awards granted to the directors during 2019 and are disclosed as the aggregate grant date fair value of the awards, computed in accordance with ASC Topic 718, based on the closing market price of our common stock on the grant date. For additional information on our calculation of stock-based compensation, please refer to the notes to our audited financial statements for the fiscal year ended December 31, 2019, included in our Annual Report on Form 10-K.

 

(2)Directors serving in December receive a cash year-end bonus for their contribution, oversight, and impact on the accomplishments of the Company.

 

(3)Mr. Buske retired from our Board effective April 24, 2019.

 

(4)Mr. Gallot, Jr. joined the Board effective April 24, 2019.

 

(5)Mr. Goldstein retired from his position as a director of the Company effective February 1, 2019. Prior to his resignation from our Board, Mr. Goldstein served on our Board as a representative of his investment firm, Pine Brook. Fees earned for service on our Board by Mr. Goldstein were paid directly to Pine Brook.

 

(6)Mr. Pietrzak served on our Board as a representative of his investment firm, Castle Creek. Mr. Pietrzak determined not to stand for re-election at our 2019 annual meeting of stockholders on April 24, 2019. Fees earned for service on our Board by Mr. Pietrzak were paid directly to Castle Creek.

 

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    CORPORATE GOVERNANCE        

 

We pay our non-employee directors an annual Board retainer and an additional retainer based on the directors’ memberships on certain committees. As of December 31, 2019, non-employee directors were entitled to receive an annual retainer of $24,000 and annual committee fees of $4,000 for each of the Audit Committee and the Compensation Committee, $2,000 for each of the Finance Committee, and the Risk Committee and $3,000 for the Nominating and Corporate Governance Committee. Our Lead Independent Director received an additional $16,000 for his services during 2019. The Chairs of the Audit Committee and Compensation Committee each received additional annual compensation totaling $12,000 and $8,000, respectively during 2019. The Chairs of the Nominating and Corporate Governance, Finance and Risk Committees each received additional annual compensation of $4,000 during 2019. During 2019, our directors received approximately $36,000 in equity-based awards. Directors active through December are also paid a cash bonus of $3,000 in December each year for their significant role in the Company’s accomplishments. Directors who are also employees receive no additional compensation for their service as directors.

 

Directors have been and will continue to be reimbursed for travel, food, lodging and other expenses directly related to their activities as directors. Directors are also entitled to the protection provided by the indemnification provisions in our Charter and Bylaws, as well as the articles of incorporation and bylaws of Origin Bank, as applicable.

 

Equity awards for 2019, as set forth in the Director Compensation Table above, were made to non- employee directors in May 2019 under Origin’s 2012 Stock Incentive Plan. Annual equity awards, valued at approximately $36,000, are part of director annual compensation and are granted in May of each year following our annual stockholder meeting.

 

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    COMPENSATION DISCUSSION
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COMPENSATION DISCUSSION AND ANALYSIS

 

Overview

 

The following discussion provides an overview and analysis of our Compensation Committee’s philosophy and objectives in designing Origin’s compensation programs, the alignment between our business results and executive compensation through our compensation program, and the compensation determinations and the rationale for those decisions relating to our Named Executive Officers (“NEOs”).

 

This discussion should be read together with the compensation tables for our NEOs, which can be found following this discussion. Unless otherwise indicated, any references to a particular year in this discussion means the fiscal year ended December 31 of such year.

 

2019 Named Executive Officers

 

The following section describes the compensation that we pay our NEOs. “Officer” is defined in Rule 16a-1 of the Exchange Act to include those who perform a policy-making function, and “named executive officers” are defined by Item 402 of Regulation S-K to be the principal executive officer, the principal financial officer, and the other three most highly compensated executive officers, each of whose total compensation for the last fiscal year exceeded $100,000.

 

Our NEOs for the fiscal year ended December 31, 2019, were:

 

·Drake Mills Chairman, President, and Chief Executive Officer

 

·Stephen Brolly Senior Executive Officer and Chief Financial Officer

 

·M. Lance Hall President and Chief Executive Officer of Origin Bank

 

·F. Ronnie Myrick Vice-Chairman of the Board of Origin Bank

 

·Cary Davis Senior Executive Officer and Executive Risk Officer

 

Financial and Strategic Highlights

 

·Diluted earnings per share were $2.28 for the fiscal year ended December 31, 2019, an increase of $0.08 per share or 3.6%.

 

·Total loans held for investment were $4.14 billion, an increase of $354.1 million, or 9.3%, from December 31, 2018.

 

·Grew noninterest income $5.2 million or 12.7% year over year.

 

·Grew interest income $39.0 million or 20.7% year over year.

 

·Total deposits were $4.23 billion and increased by $445.5 million, or 11.8%, from December 31, 2018.

 

·Reduced our annual efficiency ratio from 67.41% in 2018 to 65.43% in 2019.

 

·For the seventh consecutive year, Origin Bank was named one of the best banks to work for in the U.S. by American Banker and Best Companies Group, which identifies U.S. banks for outstanding

employee satisfaction.

 

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·Opened two new Community Reinvestment Act banking locations, one in Oak Cliff, TX and one in Jackson, MS and moved two banking locations in TX.

 

·Authorized a $40.0 million Stock Buyback Program and repurchased $10.1 million in 2019.

 

·Issued $5.9 million in common stock dividends to stockholders.

 

Executive Compensation Philosophy

 

The quality and loyalty of our employees, including our executive team, is critical to executing our community banking philosophy, which emphasizes personalized service combined with the full resources of a larger banking organization. To meet the primary goal of our executive compensation philosophy of attracting, retaining and incenting highly qualified and loyal executives and employees within the context of our corporate culture, our compensation programs are designed with the following principles in mind:

 

·We are committed to providing effective compensation and benefit programs that are competitive within our industry and with other relevant organizations with which the Company, the Bank, and our insurance division competes for employees.

 

·Our programs are designed to encourage and reward behaviors that ultimately contribute to the achievement of organizational goals.

 

·Our executive officer compensation has a meaningful portion of total compensation opportunity linked to the achievement of our strategic goals and delivering stockholder value.

 

·Pay programs and practices reinforce our commitment to providing a work culture that promotes respect, integrity, teamwork, initiative, and individual growth opportunities.

 

Consistent with this overall philosophy, we have designed our executive compensation programs to align pay and performance, be competitive in the employment market, and effectively attract, retain and motivate highly qualified executive talent. Our philosophy is to tie a significant percentage of an executive’s compensation to the achievement of Company financial and performance goals. Accordingly, we strive to set base salaries at competitive levels, with an opportunity for each executive to be rewarded through the annual cash incentive bonus.

 

Decisions made by the Compensation Committee and our Board relative to compensation take all current applicable rules, regulations and guidance into consideration and are made with the goal of being compliant with all such requirements.

 

Role of the Compensation Committee

 

The Compensation Committee is primarily responsible for designing, implementing and administering our overall compensation program and makes decisions regarding individual executive compensation components that take into account the overall package of compensation benefits provided to each executive. The compensation philosophy is reviewed and approved annually by the Compensation Committee. When appropriate, the Compensation Committee makes recommendations to our Board on items that require Board approval. For example, in 2019, the Compensation Committee:

 

·Monitored incentive programs, with the assistance of the Executive Risk Officer, with a view to avoid creating incentives that could subject the Company to excessive risk;

 

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·Reviewed the CEO’s 2018 goals and achievements and recommended incentive goals for 2019 to our Board;

 

·Reviewed 2018 goals and accomplishments and recommended incentive goals for 2019 for all executives to our Board;

 

·Reviewed and approved the 2019 compensation peer group (“Compensation Peer Group”); and

 

·Reviewed and approved the 2019 annual cash incentive program opportunities and goals.

 

Role of the Compensation Consultant

 

During 2019, McLagan assisted the Compensation Committee to develop the custom Compensation Peer Group and provided related data and reports, including McLagan’s report on Commercial Incentive Market Practices for Regional and Community Banks, and reviews of the Company’s (i) executive officer and director compensation, (ii) annual executive incentive plans, and (iii) proxy statement disclosure. The results of these analyses were used as one of the factors to establish executive compensation for 2019.

 

Role of Management

 

Our CEO performs an annual performance review of executive officers of the Company and provides a recommendation to the Compensation Committee regarding base salary and incentive bonus payouts related to the performance of each executive under his or her Executive Incentive Plan. The Compensation Committee has discretion to approve or modify the incentive bonus payouts to be more or less than what is provided under each Executive Incentive Plan. The CEO is present for the Compensation Committee’s deliberations and decisions with respect to the other executive officer’s individual compensation.

 

The Compensation Committee meets separately on an annual basis with our CEO to discuss his compensation and performance based on the CEO’s annual incentive plan objectives. The Compensation Committee meets in executive session to approve the final incentive payout recommendation for the CEO and presents their recommendation to our Board for final approval.

 

Role of Stockholders

 

We welcome feedback from our stockholders. Our compensation policies and practices will continue to evolve as we receive additional input from our stockholders, review correspondence submitted by stockholders to our Board and the Compensation Committee, review market practice, review reports issued by proxy advisory firms and the results of our advisory votes on the Say-on-Pay Proposal (Proposal 2) and the Say-on-Frequency Proposal (Proposal 3).

 

Risk Assessment

 

The Compensation Committee is responsible for overseeing the management of risk related to our executive and nonexecutive compensation plans. In connection with the Compensation Committee’s evaluation and review of our policies and practices of compensating our employees, including executives and non-executive employees, as such policies and practices relate to risk management practices and risk-taking, the Compensation Committee has determined that our compensation plans and practices are not likely to have any material adverse effect on us. The plans are subject to review and

 

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modification by the Compensation Committee on an annual basis and the Compensation Committee retains discretion with regard to any executive bonus award decisions. In addition, the Risk Committee helps coordinate with the CEO and the Compensation Committee in relation to Executive Risk Officer compensation consideration of the risk assessment undertaken annually by the Executive Risk Officer and risk management matters as they relate to compensation, including ensuring compensation practices do not encourage excessive risk taking.

 

During the Compensation Committee’s August 2019 meeting, the Executive Risk Officer reviewed and discussed a compensation incentive plan review he prepared. The Executive Risk Officer’s conclusion was that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on our business or operations. This risk assessment review included an analysis of the design and operation of the Company’s incentive compensation programs, identifying and evaluating situations or compensation elements that may raise material risks, and an evaluation of other controls and processes designed to identify and manage risk.

 

Competitive Benchmarking and Compensation Peer Group

 

The Compensation Peer Group is periodically updated by the Compensation Committee and consists of companies that the Compensation Committee believes are comparable in size, performance and business model to the Company and companies with which we may compete. In 2019, McLagan conducted an analysis of the Compensation Peer Group with an emphasis on factors previously utilized by the Compensation Committee to determine appropriate companies for inclusion, with an emphasis on asset size, location, business model and performance as the measures of comparability.

 

The Compensation Peer Group has been updated periodically since 2012, in each instance with the assistance of McLagan. In 2019, McLagan worked with the Compensation Committee to create an updated Compensation Peer Group for the purpose of evaluating executive compensation. Based upon its analysis and the information provided by McLagan, the Compensation Committee approved a list of companies constituting the following 2019 Compensation Peer Group, which was used to evaluate executive compensation for 2019:

 

Allegiance Bancshares Inc. First Bancshares Inc. Seacoast Banking Corp. of Florida
Atlantic Capital Bancshares Inc. First Financial Bankshares ServisFirst Bancshares Inc.
BancFirst Corp. Franklin Financial Network Inc. SmartFinancial Inc.
Capital City Bank Group Inc. Great Southern Bancorp Inc. Southside Bancshares Inc.
CBTX Inc. Guaranty Bancshares Inc. Stock Yards Bancorp Inc.
Enterprise Financial Services HomeTrust Bancshares Inc. Triumph Bancorp Inc.
FB Financial Corp. Republic Bancorp Inc. Veritex Holdings, Inc.
First Bancorp

 

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    COMPENSATION DISCUSSION
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Discussion of Executive Compensation Components

 

Our goal is to provide executives with a total compensation package that is competitive with the market, aligns pay and performance, encourages executives to remain with the organization and helps to drive the Company to desired levels of performance. The following table outlines the major elements of 2019 total compensation for our NEOs:

 

 

 

 

Compensation Element

 

 

 

Purpose

 

 

 

Link to Performance

 

Fixed/
Performance-
Based

 

 

Short/
Long-Term

 

Base Salary

 

Helps attract and retain executives through market-competitive base pay

 

Based on individual performance and market practices

 

Fixed

 

Short-Term

 

Annual Cash Incentive Awards

 

Encourages achievement of financial performance metrics that create near-term stockholder value

 

Based on achievement of predefined corporate, departmental, and individual performance objectives

 

Performance- Based

 

Short-Term

 

Supplemental Executive Retirement Plan

 

Provides income security into retirement and

a competitive total compensation package

 

Competitive practice; Benefits are tied to the length of service

 

Fixed

 

Long-Term

 

Benefits and Perquisites

 

Provides health and welfare benefits on the same basis as to our general employee

population; also provides limited perquisites

 

Competitive practice

 

Fixed

 

Short-Term

 

Base Salary

 

Base salary for the CEO is established by the Compensation Committee based on the CEO’s performance, experience, effective execution of strategic objectives, and level of responsibilities. The CEO determines base salaries for the other NEOs based on the same criteria and reviews any recommended changes with the Compensation Committee. Base salaries for other executive officers are established by the CEO and other NEOs based on each executive’s performance, experience, execution of strategic objectives and level of responsibilities. No changes were made to NEOs’ base salaries in 2019.

 

Name  2018 Base
Salary(1)

$
  2019 Base
Salary
$
  Percentage
Change
%
Drake Mills            835,800                      835,800                                
Stephen Brolly   450,000    450,000     
M. Lance Hall   500,000    500,000     
F. Ronnie Myrick   345,384    345,384     
Cary Davis   329,394    329,394     

 

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(1)The amount of base salary for Messrs. Brolly, Hall, Myrick and Davis reflected in the 2018 column show each person’s base salary as of the end of 2018 and do not match numbers provided in the Summary Compensation Table because the base salary increases for Mr. Myrick and Mr. Davis occurred on March 1, 2018, and on July 1, 2018, for Mr. Hall. The amount reflected as salary in the Summary Compensation Table is the actual total of base salary wages paid in the year.

 

The CEO and Compensation Committee did not increase base salaries for 2019 in light of several factors. The CEO and the Compensation Committee considered the 2019 McLagan compensation report, which indicated that the total compensation of such persons was competitive to the Compensation Peer Group median.

 

In addition, the CEO and Compensation Committee also considered how recently the NEOs experienced changes to their base salaries. Mr. Brolly was hired in January of 2018 and the Compensation Committee did not believe a base salary increase was appropriate in 2019. In addition, many of the other NEOs had recently received an increase in their base pay. Mr. Hall’s base salary increased from $400,000 to $500,000 in July 2018 when he was promoted to Origin Bank President. Mr. Myrick’s salary increased 4% in March 2018 from $332,100 to $345,384, and Mr. Davis’ salary increased 4% in March 2018 from $316,725 to $329,394.

 

In its determination, the Compensation Committee also considered the positioning of base salary against the market, growth of the Company, the last time each NEO had received a salary increase, responsibilities of each NEO and the impact of salary on total compensation positioning when compared to the Compensation Peer Group.

 

Annual Cash Incentive Bonus

 

The Short-Term Incentive program (“STIP”) for 2019, under which certain executives have an Executive Incentive Plan is designed (i) to motivate executives to attain superior annual performance in key areas we believe create long-term value to Origin and its stockholders and (ii) to provide incentive compensation opportunities competitive with Origin’s peers.

 

The STIP and its goals are reviewed annually by the Compensation Committee. The 2019 incentive target for Mr. Mills, President and CEO Origin Bancorp, Inc., was increased from 40% to 50% of his base salary. Mr. Mills’ base salary had not been increased since 2012 and the Compensation Committee increased his incentive potential in recognition of his many contributions to the Company, our successful initial public offering and increased responsibilities as CEO of a publicly traded institution. In determining what Mr. Mills’ incentive target should be, the Compensation Committee considered the fact that the 50% of base salary incentive target was consistent with CEO incentives in the Company’s Compensation Peer Group. The incentive target for Mr. Hall, President and CEO of Origin Bank, was increased from 35% to 40% of his base salary due to his increased responsibilities in the overall management of the Bank and his exceptional performance. These increases to the incentive potential, rather than base salary, follow our incentive compensation principle that a senior executive’s incentive should be based on meeting specific Company and individual performance goals.

 

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    COMPENSATION DISCUSSION
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The 2019 STIP cash incentive opportunities as a percentage of salary for each of the NEOs and 2019 results are shown below. Amounts paid out as bonuses are subject to our Clawback Policy if certain triggering events occur.

 

   Annual Cash Incentive Program Opportunity Levels as a % of
Base Salary
  Actual
Name/Position  Threshold  Target  Maximum  Earned(1)
Drake Mills, CEO         25%                 50%                 75%                 

51

%       
Stephen Brolly, CFO   

17.5

%   

35

%   

52.5

%   

28

%
M. Lance Hall, President   

20

%   

40

%   

60

%   

50

%
F. Ronnie Myrick, DM&A   

17.5

%   

35

%   

52.5

%   

26

%
Cary Davis, ERO   

17.5

%   

35

%   

52.5

%   

33

%

 

(1)Executive incentives numbers were finalized and approved at the February Compensation Committee meeting. CEO incentive was approved by the Board in February.

 

Annual Incentive Goals are reviewed and approved annually by the Compensation Committee with input from management. Part of our NEOs’ cash incentive bonuses are tied to Company performance metrics to reflect the Company’s focus on profitability, credit quality, and growth. For 2019, the Compensation Committee selected the Company target a Return on Average Assets (“ROAA”) goal of 1.16% with the threshold payout at 0.928% ROAA, which is 80% of target. ROAA was selected as a key measure of Company performance because it is a standard industry gage and we believe it accurately reflects Company performance and growth. No incentive payouts are made to executives, with the exception of risk and credit executives including Mr. Davis, unless the Company attains a minimum of 80% of our annual target ROAA goal. In 2019, the Company attained an ROAA of 1.06% which was 91% of our target.

 

Executive incentive payouts are calculated based on multiple incentive components as defined in each individual’s 2019 Executive Incentive Plan. Each executive’s, with the exception of the risk, credit, and compliance executives, including Mr. Davis, total bonus pool is determined based on the Company’s performance to plan in respect to meeting our annual ROAA target. All executive incentive plans include components of the incentive payouts that are based on certain ratios related to risk management and the executive’s individual annual goals.

 

The risk and credit executive incentives are not tied to Company profitability to encourage overall safety and soundness without the incurrence of unnecessary risk that may jeopardize the financial integrity of the Company. Departmental performance and specific credit metrics are used to determine the level of incentives that will be utilized for awards in the risk and credit executive incentive plans.

 

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The goals were selected in light of our strategic plan, key initiatives, and the need to balance risks in executive compensation arrangements. The 2019 goals represent metrics addressing key areas of the Company’s performance including profitability, credit and asset quality, and growth in assets and the customer base. The goals were established based on the expectation that 2019 performance results would reflect an increase over 2018 results. The table below shows the components and goal percentages used to determine the incentive bonus payout to our NEOs in 2019:

 

Name/Position ROAA(1)
%
Results
Achieved

%
Executive
Annual
Goals(2)
%
Results
Achieved
%
Risk
Mgmt &
Credit
Quality(3)

%
Results
Achieved
%
Discretion(4)
%
Discretion
%
Awarded
Departmental
Results(5)
Results
Achieved
%
Drake Mills 30 91% 30

98%

25 100% 15

27%

N/A N/A
Stephen Brolly 25 91% 35

100%

25 100% 15

6%

N/A N/A
M. Lance Hall 30 91% 30

98%

25 100% 15

41%

N/A N/A
F. Ronnie Myrick 25 91% 35

79%

25 100% 15

6%

N/A N/A
Cary Davis N/A N/A 30

91%

30 100% 15

16%

25

100%

 

(1)Payout is determined by Company performance to 2019 targeted goal of 1.16% ROAA. The Company achieved 1.06% ROAA, therefore payout on this component will be 91% of target.

 

(2)NEOs set between five to ten strategic weighted goals annually at the beginning of the year. Achievements are measured in February of the following year on the weighted percentage of goals attained.

 

(3)Credit quality is a Bank-wide incentive focus. Achievement in this component is based on maintaining appropriate ratios of Non-performing Assets to Total Loans and Other Real Estate Owned beneath 1.5%, maintaining a ratio of Net Charge Offs to Total Loans of less than .30%, and remaining in good Community Reinvestment Act standing.

 

(4)Discretion is provided to address significant accomplishments that were not included in the executives’ annual goals. Justifications for adjustments were submitted to the Compensation Committee for approval.

 

(5)Department performance for the Risk Management and Compliance Quality component is based on achieving the 2019 objectives that were established for each area such as developing Allowance for Loan and Lease Loss methodology in compliance with Current Expected Credit Losses; enhancing loan portfolio concentration monitoring; managing of operational risks, including the management of the Bank’s insurance program; ongoing review, monitoring, and management of various credit metrics including past dues, non-accruals, and criticized assets; and ongoing management of regulatory requirements.

 

The Compensation Committee reviewed Company performance to target, each individual NEO’s 2019 goals that were set in the beginning of the year, and the percentage of each individual’s goals that were accomplished, and the payout calculations prior to approving 2019 incentive payouts. Significant NEO accomplishments in 2019 that were considered in determining bonus awards tied to the achievement of Executive Annual Goals or Discretionary awards are summarized below.

 

The 2019 accomplishments of Drake Mills, CEO, included improving liquidity; creating our long-term growth strategy; implementing structural changes to our mortgage division; enhancing Company focus on efficiency and expense management; implementing changes to our executive management structure; expanding investor and analyst relations; focusing on building internal culture and employee engagement; and enhancing board selection and training processes to strengthen and to create board diversity.

 

The 2019 accomplishments of Stephen Brolly, CFO, included enhancing liquidity measures; partnering with risk management on the implementation of a new Current Expected Credit Losses accounting standard; and reorganizing and goal setting of our finance and accounting teams to create greater efficiency, stronger expense management processes and more effective team leadership.

 

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    COMPENSATION DISCUSSION
AND ANALYSIS
       

 

The 2019 accomplishments of M. Lance Hall, President and CEO of Origin Bank, included implementing focused deposit measures for increased liquidity; exceeding loan, deposit, and deposit mix growth goals, completion of mortgage servicing analysis and decision and restructure of our mortgage banking model; leading management succession development and talent acquisition objectives resulting in executive leadership changes and the creation of formalized internal leadership programs; successfully implementing focused digital and technology strategy measures that continue to enhance the customer experience and our system capabilities to drive greater efficiency; rolling out multiple culture initiatives to improve bank-wide communications, employee input and employee engagement; and participating in multiple investor relations conferences and meetings.

 

The 2019 accomplishments of F. Ronnie Myrick included focusing efforts to successfully increase core deposit growth; heightening expense management focus; providing strategic oversight to identify opportunistic M&A prospects within our markets; supporting continued emphasis on strong enterprise risk management; and actively supporting internal efforts to strengthen our culture and increase employee engagement.

 

The 2019 accomplishments of Cary Davis, Executive Risk Officer, included evaluating and improving processes and efficiencies within Credit and Risk divisions; supporting loan growth while maintaining credit quality; maintaining stated asset quality; maintaining a strong compliance system; completing the annual incentive compensation review and ensuring the Company maintains an effective enterprise risk management program.

 

Supplemental Retirement and Income Benefits

 

The Company has entered into an individual Supplemental Executive Retirement Plan (“SERP”) with several of our NEOs. Eligibility to participate in a SERP is limited to senior officers and determined by the Board. Currently our CEO, CFO, President of Origin Bank, and our Executive Risk Officer participate in a SERP. The SERPs are unfunded and designed to be a nonqualified deferred compensation retirement plan in compliance with Section 409A of the Internal Revenue Code. In October 2019, the Company also entered into an Executive Supplemental Income Agreement (“ESIA”) with Mr. Hall.

 

The Company believes SERPs and the ESIA provide an effective long-term retention measure in keeping with an overall competitive compensation strategy aimed at retaining high performing executives. The plans are defined benefit style programs in which the participant is promised a benefit according to a set formula; such benefit is paid to the participant (or his or her beneficiary) in equal annual installments over a specified period of time as outlined in each individual’s agreement. Vesting requirements are also outlined in each individual agreement and are tied to the number of years of service of the executive which encourages our executives to remain with the Company for an extended period or until retirement. Additional tables provided on page 54 provide more details regarding these plans.

 

Benefits and Perquisites

 

Executive officers are eligible to participate in all employee benefit plans that are available to eligible employees generally, including health, life, and disability insurance and the Origin Bancorp, Inc. Employee Retirement Plan which currently provides an employer match of 50 cents on each dollar of employee contributions up to 6% of eligible compensation subject to ERISA limits. We also provide our NEOs with certain perquisites, including the use of Company cars, the payment of life insurance premiums, reimbursement for country club dues and certain other expenses which we believe make us competitive in the employment market and encourage retention.

 

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    COMPENSATION DISCUSSION
AND ANALYSIS
       

 

Change-in-Control and Severance Benefits

 

Our NEOs are generally entitled to certain limited change-in-control and severance protections. We believe that appropriate change-in-control and severance protections accomplish two objectives. First, they create an environment where key executives are able to take actions in the best interest of the Company without incurring undue personal risk. Second, they foster management stability during periods of potential uncertainty. The change-in-control and severance benefits payable to our NEOs are discussed under the heading “Employment Arrangements, Change in Control agreements, and Potential Payments Upon Termination or Change In Control” below.

 

Equity Grants

 

Equity grants have been made to executives from time to time as the result of meeting key performance objectives such as the successful initial public offering launch in 2018, but the Company does not currently have a long-term incentive program (“LTIP”) or a written policy as to when equity awards are granted. However, now that our stock is publicly traded, the Compensation Committee intends to design a LTIP to reward executives for performance results relative to Company objectives while aligning the interests of our executives with those of our stockholders. The LTIP will provide executives the opportunity to increase their ownership in the Company while at the same time creating a retention vehicle through the use of a multi-year vesting period.

 

Other Compensation Policies and Information

 

In addition to adhering to the processes described in the preceding sections, the Compensation Committee maintains a strong corporate governance culture with respect to executive compensation. Over the years it has adopted policies, including those described below, to further align executive compensation with performance and what the Company believes is the best interest of our stockholders.

 

Clawbacks for Any Restatement; Executive Compensation Recovery Policy

 

In 2019, the Compensation Committee and Board approved a Clawback Policy that covers incentive-based compensation for our NEOs. Under this policy, incentive based compensation may be subject to clawback if both (i) the Company is required to prepare an accounting restatement and (ii) our Board determines that a fraudulent or intentional act or omission of a current or former executive officer contributed to the circumstances requiring the restatement.

 

Trading Restrictions regarding Hedging or Pledging of Common Stock

 

Hedging Transactions. Our Insider Trading Policy requires Covered Persons, including our directors and officers, to pre-clear any proposed hedging or monetization transactions with our Compliance Officer at least two weeks before the proposed execution of a transaction. Such executive or director may not engage in a transaction without first obtaining pre-clearance of the transaction from the Compliance Officer. The Compliance Officer is under no obligation to approve a transaction submitted for pre-clearance and may determine not to permit the transaction.

 

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    COMPENSATION DISCUSSION
AND ANALYSIS
       

 

Margin Accounts. Persons covered by our Insider Trading Policy are not permitted to hold our securities in a margin account.

 

Pledged Securities. Our Insider Trading Policy requires Covered Persons, including our directors and officers, to pre-clear any proposed pledging of our securities as collateral for a loan (not including margin debt) to receive approval from our Compliance Officer at least ten business days prior to the proposed execution of documents evidencing the proposed pledge. The person must clearly demonstrate the financial capacity to repay the loan without resorting to the pledged securities to meet repayment obligations when seeking approval from the Compliance Officer. The Compliance Officer is under no obligation to approve the pledging of our securities.

 

Report of Compensation Committee

 

The Compensation Committee has reviewed and discussed with management the disclosures contained in the Compensation Discussion and Analysis. Based upon this review and our discussions, the Origin Bancorp, Inc. Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and be incorporated by reference in its Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

 

  THE COMPENSATION COMMITTEE
   
  Elizabeth Solender (Chair)
  Richard Gallot, Jr.
  Stacey Goff
  Michael Jones
  Gary Luffey
  Steven Taylor

 

The material in this report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

 

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    CURRENT EXECUTIVE OFFICERS        

 

CURRENT EXECUTIVE OFFICERS

 

The following table sets forth the name, age and position with the Company of each of our non- director executive officers as of March 5, 2020. The business address for all of these individuals is 500 South Service Road East, Ruston, Louisiana 71270.

 

Name Age                                               Title
Drake Mills 59 Chairman, President, and Chief Executive Officer
Stephen Brolly 57 Senior Executive Officer and Chief Financial Officer
M. Lance Hall 46 President and Chief Executive Officer of Origin Bank
Cary Davis 69 Senior Executive Officer and Executive Risk Officer

 

The following is a brief discussion of the business and banking background and experience of our executive officers if not already included above. For information regarding Mr. Mills, see “Continuing Directors.” All of our executive officers are appointed by our Board and serve at the discretion of our Board.

 

M. LANCE HALL

 

Mr. Hall was promoted to President and CEO of Origin Bank in January 2020 after previously being promoted to President of Origin Bank in July 2018. As President and CEO of the Bank, Mr. Hall oversees the Bank’s regional presidents, lending, information technology, retail banking, operations, marketing, strategic planning, brand teams and mortgage operations. Prior to his promotion to Origin Bank President, Mr. Hall served as Louisiana State President from March 2013 until July 2018. While serving as Louisiana State President, Mr. Hall also became Chief Strategy Officer in March 2016, and became Chief Operating Officer of the Bank in February 2017. Mr. Hall has served our organization for over 19 years through various roles of increasing responsibility. Prior to joining Origin Bank, Mr. Hall spent four years at Regions Bank as a Credit Analyst and Commercial Relationship Manager.

 

STEPHEN BROLLY

 

Mr. Brolly is our Chief Financial Officer. Mr. Brolly has approximately 19 years of banking experience and, before joining us in January 2018, most recently served as Chief Financial Officer of Fidelity Southern Corporation and its wholly owned subsidiary, Fidelity Bank, for approximately 10 years from 2006 to 2017. At Fidelity Southern, Mr. Brolly was responsible for equity and debt raising activities, strategic planning, budgeting and forecasting, and managing various financial, operational and strategic activities relating to acquisitions. Prior to his tenure at Fidelity Southern, he served as Senior Vice President and Controller of Sun Bancorp, Inc. and its wholly owned subsidiary, Sun National Bank, for seven years, during which time he managed financial reporting and accounting operations, including Sarbanes-Oxley and internal control compliance frameworks. Mr. Brolly began his professional career in public accounting and spent 13 years at Deloitte & Touche.

 

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    CURRENT EXECUTIVE OFFICERS        

 

CARY DAVIS

 

Mr. Davis became our Executive Risk Officer in October 2019 in order to drive the strategic direction of Origin as it relates to credit and enterprise risk management. Prior to this change, Mr. Davis served as our Chief Risk Officer since 1998 and was responsible for overseeing our centralized loan underwriting team, credit administration, internal audit and enterprise risk management. Mr. Davis has over 45 years of experience in the banking industry, more than 20 of which have been with the Bank. Before joining the Bank, he served in numerous executive officer capacities, including Executive Vice President and Chief Credit Officer for Central Bank, a subsidiary of First Commerce Corporation, which was the second largest bank holding company in Louisiana at the time of its acquisition in 1998 by Banc One Corporation. Mr. Davis also spent four years with the Office of the Comptroller of the Currency as a bank examiner.

 

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    EXECUTIVE COMPENSATION
TABLES
       

 

EXECUTIVE COMPENSATION TABLES

 

Summary Compensation Table

 

The following table sets forth information regarding the compensation paid to each of our NEOs for the fiscal years ended December 31, 2019, 2018 and 2017. Except as set forth in the notes to the table, all cash compensation for each of our NEOs was paid by the Bank.

 

            Non-Equity Change in    
        Stock Option Incentive Plan Pension All Other  
Name and   Salary Bonus Awards Awards Compensation Value Compensation Total
Principal Position Year ($) ($)(1) ($)(2) ($) ($)(3) ($)(4) ($)(5) ($)
Drake Mills
Chairman of the
Board/CEO &
President of Origin
Bancorp, Inc.
2019 835,800

425,000

339,295   47,492

1,647,587

2018 835,800   82,472 1,002,969 347,693 323,402   75,212 2,667,548
2017 835,800 100,000 302,217 137,259 1,375,276
Stephen Brolly(6)
Chief Financial
Officer
2019 450,000

126,000

116,097   77,720   769,817
2018 436,442   88,300   247,936 161,708   54,560   58,064 1,047,010
M. Lance Hall
President and CEO
of Origin Bank 
2019 500,000

250,000

  56,278   20,679   826,957
2018 450,000   45,400   350,003 179,631   49,023   15,749 1,089,806
2017 400,000   50,000   45,097   15,109   510,206
F. Ronnie Myrick(7)
Vice-Chairman of
the Board of Origin
Bank
2019 345,384

88,500

  15,139   449,023
2018 343,170 115,607   13,747   472,524
2017 332,100   50,000   13,547   395,647
Cary Davis
Executive Risk
Officer
2019 329,605

110,000

120,547   19,155   579,307

 

(1)The amounts shown in this column reflect discretionary bonuses paid to recognize the executives for their significant contributions, including, in 2018, in connection with our successful initial public offering. For Mr. Brolly, the amount in 2018 also includes a sign-on bonus in connection with his hiring. In 2017, the Compensation Committee approved spot bonuses based on, among other things, successfully addressing challenges and projects, growing market share, increasing noninterest-bearing deposits and reducing oil and gas exploration and production lending, and operating over six months without a CFO.
(2)The amounts shown in this column reflect restricted stock awards granted to the NEOs and are disclosed as the aggregate grant date fair value of the awards, computed (i) with respect to awards granted after our initial public offering in May 2018, in accordance with ASC Topic 718, based on the closing market price of our common stock on the grant date and (ii) with respect to Mr. Brolly’s award of 3,500 shares of restricted stock in February 2018 as part of his hiring package, in accordance with our calculation of a rolling average based on the prices at which our common stock was privately sold during the three months prior to the grant date. For additional information on our calculation of stock-based compensation, please refer to the notes to our audited financial statements for the fiscal year ended December 31, 2019, included in our Annual Report on Form 10-K.
(3)The amounts shown in this column represent payouts with respect to incentives earned for performance in the year shown. 2019 incentives were finalized at the Compensation Committee Meeting in February 2020.
(4)Includes the change in the present value of the projected benefits under the Supplemental Executive Retirement Plans, which is a non-cash amount that can vary from year to year based upon the underlying assumptions. Assumptions such as discount rate, retirement age and mortality age are reviewed annually by the Company and are intended to be individually appropriate.
(5)The amounts shown in this column for 2019 are composed of the amounts described in the table below.
(6)Mr. Brolly was hired as our Chief Financial Officer in January 2018. Accordingly, no amounts were paid to him in 2017.
(7)Mr. Myrick retired from his employment with Origin Bank on December 31, 2019, but continues to serve on the Board of the Bank and the Company as Vice-Chairman of the Board of Origin Bank. He served as a Senior Executive Officer and Chairman of the Board of the Bank during the years presented.

 

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    EXECUTIVE COMPENSATION
TABLES
       

 

Our NEOs are eligible to participate in the same benefit plans designed for all of our full-time employees, including health, disability and basic group life insurance coverage. We also provide our employees, including our NEOs, with the opportunity to participate in a 401(k) plan to assist participants in planning for retirement. In addition, we provide certain perquisites and other benefits to our NEOs. In 2019, we provided our NEOs with Company cars for commuting and other personal transportation. We also paid the premiums on life insurance policies taken out on Messrs. Mills, Brolly, Hall, and Davis. We provided Messrs. Mills, Brolly, Hall and Myrick with reimbursement for country club membership dues. We also reimbursed Mr. Brolly for certain temporary housing and travel expenses incurred by him in connection with his relocation to Louisiana.

 

Amounts of perquisites and other compensation paid to our NEOs in 2019 are set forth below:

 

Description  Mills
($)
  Brolly
($)
  Hall
($)
  Myrick
($)
  Davis
($)
Personal use of Company car   5,634    13,096    6,195    3,967    8,256 
Employer Retirement Plan contributions          8,400                  8,400                  8,400                  8,400                  8,400        
Bank-owned life insurance premiums(1)   27,716    1,578    342        2,499 
Country club membership dues   5,742    5,742    5,742    2,772     
Housing expense and travel reimbursement(2)       48,904             
Total   47,492    77,720    20,679    15,139    19,155 

 

(1)Details of our insurance plans are described below under the subheading “Life Insurance Plans.

 

(2)Mr. Brolly was reimbursed for certain temporary housing and travel expenses incurred in connection with his relocation to Louisiana.

 

Narrative Discussion of Summary Compensation Table

 

Salary

 

None of our NEOs received a base salary increase in 2019. Mr. Hall received a salary increase on July 1, 2018, from $400,000 to $500,000 when he was promoted to President of Origin Bank and he assumed responsibility for all lending, mortgage and retail functions at the Bank in addition to his responsibilities for Bank-wide operations, information technology, marketing and branding. Mr. Davis’ base salary was increased by four percent on March 1, 2018, from $316,725 to $329,394 and Mr. Myrick’s base salary was increased by four percent on March 1, 2018, from $332,100 to $345,384. The salary column for the NEO in the Summary Compensation table reflects the actual base salary wages paid to the executive for the respective year; increases in 2018 were not made in January 2018. A discussion of the terms of the employment agreements of each of our NEOs is included below. See “Employment Arrangements, Change In Control agreements and Potential Payments Upon Termination or Change in Control.”

 

Bonus

 

The amounts in the “Bonus” column for 2017 represent discretionary bonuses in the amount of $100,000 paid to Mr. Mills and $50,000 each to Mr. Myrick and Mr. Hall, respectively. Our Board approved these discretionary bonuses to compensate Messrs. Mills, Myrick and Hall for successfully addressing a number of challenges and projects the Bank encountered in 2017. In addition, during 2017, Mr. Mills worked closely

 

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    EXECUTIVE COMPENSATION
TABLES
       

 

with other members of the executive management team to ensure that the duties and responsibilities of the Chief Financial Officer, who was seriously ill during 2017, were fully covered. Mr. Myrick was instrumental in his role of Chief Banking Officer in the first half of 2018 and continued to be an integral team member after being named the Director of Mergers and Acquisitions in August of 2018. Mr. Hall also held a dual role as Chief Operating Officer and Louisiana State President of the Bank before being promoted to President. For 2018, Mr. Mills received two discretionary bonuses in recognition of his extraordinary leadership and significant contributions to the Company that were outside of his annual incentive plan scorecard, including a variety of accomplishments in connection with the Company’s successful initial public offering in May 2018. Mr. Hall and Mr. Brolly also received discretionary bonuses in 2018 in recognition of their substantial efforts in connection with our initial public offering. Mr. Brolly’s discretionary bonus in 2018 also includes a sign-on bonus in connection with his hiring package.

 

Stock Awards

 

None of our NEOs received equity grants in 2019. Four of our NEOs received grants of restricted stock in November 2018 under the Origin Bancorp, Inc. 2012 Stock Incentive Plan (the “2012 Plan”). The grants were awarded based on the value of a multiple of the annual incentive award potential, with Mr. Mills receiving three times, Mr. Hall and Mr. Davis received two times, and Mr. Brolly received one time. Factors taken into consideration for awards were the responsibilities of each executive, tenure as an executive and the contribution and involvement of each executive in our initial public offering process. Mr. Mills received 27,441 shares of restricted stock, Mr. Hall received 9,576 shares of restricted stock, Mr. Davis received 6,309 shares of restricted stock and Mr. Brolly received 4,310 shares of restricted stock, each with a grant date fair value of $36.55 per share. Each of these grants is subject to a five year ratable vesting schedule, with one-fifth of the shares vesting on each anniversary of the grant on November 13, 2018. In addition, as part of his hiring package, Mr. Brolly received 3,500 shares of restricted stock subject to a three-year ratable vesting schedule, with one-third of the shares vesting on each anniversary of the grant on February 20, 2018, under the 2012 Plan, with a grant date fair value of $25.83 per share.

 

Non-Equity Incentive Plan Compensation

 

The amounts in the “Non-Equity Incentive Plan Compensation” column represent amounts earned in 2019 under our annual cash incentive plan, and were determined based on the achievement of certain Company performance goals (consolidated ROAA), specific individual goals and objectives and Company risk management goals for 2019. For more information about our annual incentive awards, see “-Annual Cash Incentive Bonus.”

 

Pension

 

The change in pension value in the Summary Compensation Table includes the change in the present value of the projected benefits under the SERPs and ESIA, which is a non-cash amount that can vary significantly from year to year based upon the underlying assumptions. Assumptions such as discount rate, retirement age, and mortality age are reviewed annually by the Company and are intended to be individually appropriate.

 

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    EXECUTIVE COMPENSATION
TABLES
       

 

All Other Compensation

 

The Compensation Committee developed Executive Incentive Plans to motivate and reward executives without the incurrence of unnecessary risks. In general, payout from an Executive Incentive Plan is based on the achievement of a combination of Corporate Goals, individual or departmental goals, risk management objectives, and a discretionary component. See “Compensation Discussion and Analysis - Discussion of Executive Compensation Components - Annual Cash Incentive Bonus.”

 

Outstanding Equity Awards at Fiscal Year-End

 

The following table provides information regarding outstanding equity awards held by each of our NEOs as of December 31, 2019. There were no outstanding equity awards held by F. Ronnie Myrick as of December 31, 2019. All of the restricted stock awards shown in the table below were granted under the 2012 Plan. All of the stock option awards were issued under stand-alone stock option award agreements prior to our adoption of the 2012 Plan and were granted with a per share exercise price equal to the fair market value of our common stock on the grant date. There were no equity incentive plan unvested shares for any of the NEOs.

 

    Option Awards   Stock Awards
Name Grant Date Number of
Securities
Underlying
Unexercised
Options
Exercisable(1)
(#)
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
Option
Exercise
Price
($)
Option
Expiration
Date
  Number
of Shares
of Stock
That
Have Not
Vested
(#)
Market
Value of
Shares
of Stocks
That
Have Not
Vested(2)
($)
Drake Mills
Chairman of the Board/CEO & President of Origin Bancorp, Inc.
1/1/2005     120,000   8.25 12/31/2024  
10/1/2011     50,000 17.50 12/31/2030  
11/13/2018(3)   21,953 830,702
Stephen Brolly
Chief Financial
Officer
2/20/2018(4)     2,334   88,319
11/13/2018(3)     3,448 130,472
M. Lance Hall
President and CEO of Origin Bank
11/13/2018(3)     7,661 289,892
Cary Davis
Executive Risk
Officer
11/13/2018(3)     5,048 191,016

 

(1)All options were fully exercisable as of December 31, 2019.

 

(2)Market value is determined by multiplying the closing market price of our common stock on December 31, 2019, by the number of shares or units that have not vested.

 

(3)Time-based restricted stock awards that vest annually in 20% increments with the final tranche vesting on November 13, 2023.

 

(4)Time-based restricted stock awards that vest annually in 33.3% increments with the final tranche vesting on February 20, 2021.

 

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    EXECUTIVE COMPENSATION
TABLES
       

 

Option Exercises and Stock Vested

 

The following table summarizes the stock awards that vested during 2019 for the NEOs. No stock awards vested during 2019 for F. Ronnie Myrick. Additionally, there were no stock options awarded or exercised during the fiscal year ended December 31, 2019, for any of the NEOs. The amounts reflected below show the number of shares acquired at the time of exercise or vesting, as applicable. The amounts reported as value realized on vesting are shown on a before-tax basis:

 

Stock Awards
Name Number of Shares
Acquired on Vesting (#)
Value Realized on Vesting
($)
Drake Mills 5,488 $191,586

Stephen Brolly

2,028

   71,963

M. Lance Hall

1,915

   66,853

Cary Davis

1,261

   44,022

 

2012 Stock Incentive Plan

 

In 2012, our Board adopted the 2012 Stock Incentive Plan, effective as of January 1, 2012. The 2012 Plan was subsequently approved by our stockholders at our 2012 annual meeting and is primarily administered by the Compensation Committee.

 

The equity grants that may be awarded under the 2012 Plan consist of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, dividend equivalent rights, performance unit awards or any combination thereof. Any of our employees, officers or directors may be eligible for an award, although incentive stock options may be granted only to participants who meet the definition of “employee” within the meaning of Section 422 of the Code.

 

A maximum of 1,400,000 shares of our common stock may be issued in connection with awards granted under the 2012 Plan, any or all of which may be issuable as incentive stock options. As of December 31, 2019, 950,152 shares of our common stock were available for issuance under the 2012 Plan, and there were 149,449 restricted stock grants and no unvested stock options that remained subject to forfeiture.

 

Non-Qualified Stock Option Agreements

 

Because we did not have a formal stock option or other long-term equity plan until the adoption of the 2012 Plan, non-qualified options were issued to various executives prior to 2012, including some of our NEOs, under individual employment or other agreements or arrangements with us. As of December 31, 2019, there were outstanding non-qualified options to purchase an aggregate of 254,000 shares of our common stock issued under stand-alone stock option agreements.

 

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    EXECUTIVE COMPENSATION
TABLES
       

 

Defined Contribution Benefit Plan

 

The Company maintains a Retirement Plan, which is a defined contribution benefit plan. The Retirement Plan covers substantially all employees, including our NEOs, who have been employed 25 days and meet certain other requirements and employment classification criteria. Under the provisions of the Retirement Plan, the Company may make discretionary matching contributions on a percentage. The Company currently provides an employer match of 50 cents on each dollar of employee contributions up to 6% of eligible compensation subject to ERISA limits. Any percentage(s) determined by the Company shall apply to all eligible persons for the entire plan year. Eligible compensation includes salaries, wages, overtime and bonuses, and excludes expense reimbursements, severance payments, any amounts related to split dollar life insurance agreements, and fringe benefits. In addition, the Company may make additional discretionary contributions out of current or accumulated net profit. Matching contributions are invested as directed by the participant. The total of the Company’s contributions may not exceed limitations set forth in the Retirement Plan document or the maximum deductible under the Code.

 

Supplemental Executive Retirement Plan and Executive Supplemental Income Agreement

 

The Executive Salary Continuation Plan (“SERP”) are limited to eligible executive employees as determined by our Board. Currently, all NEOs, except for Mr. Myrick, have a SERP. In 2019, the Company entered an Executive Supplemental Income Agreement (“ESIA”) agreement with Mr. Hall that provides, in addition to other benefits, an in-service benefit to Mr. Hall beginning at age 60 payable for 6 years. The intent of the Company is to assist NEOs with meeting retirement needs while providing an overall total compensation and benefits package that aligns pay with performance and is competitive in the market. The terms “Cause,” “Good Reason,” “Change in Control,” “Separation from Service” and “Accrued Liability Balance” are defined in the respective employment agreements with each NEO.

 

Name Plan Name Number of Years
of Credited
Service
(#)
Present Value(1)
of Accumulated
Benefit as
of
12/31/19
($)
  Payments
During Last
Fiscal Year
($)
Drake Mills(2) SERP 18 2,379,199
Stephen Brolly(3) SERP 1     170,657
M. Lance Hall(4) SERP 17     322,180
M. Lance Hall(5) ESIA         4,491
Cary Davis(6) SERP 18

1,204,700

 

(1)Please see Note 14 - Employee Retirement Plan, Other Benefit Plans in the Notes to Consolidated Financial Statements in the 2019 Annual Report for more information.

 

(2)Annual installments of $264,040, with a 1.5% COLA increase annually paid until death.

 

(3)Fifteen year annual benefit based on 25% of base salary at the age of 65. The benefit formula for Mr. Brolly’s plan is based upon a percentage of salary. For purposes of the present value calculation, the salary as of the measurement date was used.

 

(4)Annual installments of $118,939 in first year, with a 1.5% COLA increase annually paid until death.

 

(5)Six year installments based on 10% of salary at distribution age (60). The benefit formula for Mr. Hall’s Executive Supplemental Income Agreement, is based upon a percentage of salary. For purposes of the present value calculation, the salary is as of the measurement date was used.

 

(6)Original benefit under the terms of the SERP was $59,177 per year. This benefit has increased by 8% per year for each full year worked past normal retirement age of 65 and Mr. Davis, as of December 31, 2019, was 69 years old. Annual installments, currently valued at $80,510 for first year, with a 1.5% COLA increase annually, paid until death.

 

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    EXECUTIVE COMPENSATION
TABLES
       

 

Mr. Mills’ SERP, the Amended and Restated Executive Salary Continuation Plan, effective May 1, 2008, provides for certain benefits in connection with his retirement or a Change in Control. Upon attainment of his retirement date, which is the earlier of the date when he attains the age of 65 or his separation from service, Mr. Mills will receive an annual benefit of $264,040 that will increase by 1.5% each year, paid in equal annual installments until Mr. Mills’ death. Subject to the terms of the plan, if Mr. Mills dies, his designated beneficiary will receive the Accrued Liability Retirement Account balance in a lump sum. If Mr. Mills’ employment terminates voluntarily or without Cause prior to the age of 65, Mr. Mills will receive, over three annual installments, an amount equal to the balance, on the date of his termination, of the Accrued Liability Retirement Account. In the event Mr. Mills becomes disabled prior to retirement, he will receive all of his balance of the Accrued Liability Retirement Account in a lump sum thirty days following his disability. Upon a Change in Control, Mr. Mills will receive such benefit as if he had been continuously employed and retired at the age of 65 and payments will commence on the first day of the month following the date Mr. Mills turns 65. If Mr. Mills is terminated for Cause at any time, notwithstanding any other provision in the plan to the contrary, he will forfeit all benefits under the plan and the plan will terminate.

 

Mr. Brolly’s SERP, the Supplemental Executive Retirement Agreement effective July 1, 2018, provides for certain salary continuation benefits. If Mr. Brolly experiences a Separation from Service after the age of 65, he will be entitled to an annual payment for 15 years equal to 25% of his base salary when he was 65 (the “Retirement Benefit”). If Mr. Brolly dies before reaching 65, he will not receive any benefit, but if he dies after attaining the age of 65, any remaining payments for the Retirement Benefit will be paid to his beneficiary. If Mr. Brolly voluntarily terminates his employment, is involuntarily terminated without Cause or for Good Reason or becomes disabled, he will receive the vested benefit of the Accrued Liability Balance as of the effective date of termination or disability in one lump sum payable within thirty days. If a Change in Control followed within two years by Mr. Brolly’s Separation from Service, Mr. Brolly will be entitled to a lump sum payment within 30 days of termination equal to the present value of the Retirement Benefit. Mr. Brolly’s interest in such payments will vest 10% for each year of service from August 17, 2018. In certain limited circumstances, Mr. Brolly may be permitted to draw on his benefit early.

 

Mr. Hall’s Section §409A Amended & Restated Executive Salary Continuation Agreement, effective January 1, 2005, will pay, upon Mr. Hall’s retirement on or after he attains the of age 65 (“Hall Retirement Date”), an annual benefit of $118,939 that will increase by 1.5% each year, paid in equal annual installments until Mr. Hall’s death. If Mr. Hall dies while actively employed by the Bank or prior to the Hall Retirement Date, his designated beneficiary will receive the accrued liability retirement account balance in a lump sum. If Mr. Hall is terminated without Cause or resigns prior to the age of 65, Mr. Hall will receive, as severance compensation over 15 annual installments, an amount equal to the accrued balance with interest, on the date of his termination, of Mr. Hall’s liability reserve account. Upon a Change in Control, if Mr. Hall is terminated, except for Cause, he will receive the annual benefit as if he had retired at the age of 65.

 

Mr. Hall has an Executive Supplemental Income Agreement (“ESIA”), effective October 29, 2019, which provides for, beginning at the age of 60 an annual amount equal to ten percent of Mr. Hall’s annualized base for the calendar year in which Mr. Hall attains the age of 60. The annual payments will begin within thirty days following Mr. Hall attaining the age of 60 and continue annually for six years. If Mr. Hall dies before 60, he will not receive any benefit, but if he dies after attaining the age of 60, any remaining payments will be paid to his beneficiary. If Mr. Hall is terminated involuntarily without Cause or experiences a Separation from Service for Good Reason or becomes disabled, he will receive 100% of the Accrued Liability Balance as of the effective date of the termination or disability.

 

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    EXECUTIVE COMPENSATION
TABLES
       

 

If Mr. Hall experiences a voluntary Separation from Service, he will receive the vested benefit of the Accrued Liability Balance as of the effective date of termination. Mr. Hall’s interest, prior to turning 60, shall vest based on each fully completed year of service after the effective date of the ESIA during which he is employed full-time with the sixth year of vesting being the first year in which Mr. Hall’s interest will become partially vested. If Mr. Hall experiences an involuntary Separation from Service within 24 months following a Change in Control, other than for Cause, he will be paid the present value of the benefit provided under the plan in one lump payment within thirty days following his termination. In certain limited circumstances, Mr. Hall may be permitted to draw on his benefit early.

 

Mr. Davis’ §409A Amended & Restated Executive Salary Continuation Agreement, dated December 15, 2008, and as further amended on December 14, 2016, will pay, upon Mr. Davis’ retirement, an annual benefit of $59,177 which increases by 8% annually for each full year that Mr. Davis continues to work past the age of 65. Since Mr. Davis is older than 65 and has continued to work, his annual benefit at the end of 2019 would be $80,510. Once benefit payments begin, the amount will increase by 1.5% each year, paid in equal annual installments until Mr. Davis’ death with a fifteen year distribution period. If Mr. Davis dies before retirement, his designated beneficiary will receive the accrued liability retirement account balance in a lump sum. Upon a Change in Control, if Mr. Davis is subsequently terminated, except for Cause, he will receive the annual benefit as if he had retired.

 

Life Insurance Plans

 

The Company has purchased bank owned life insurance (“BOLI”) on the life of certain NEOs and has entered into split dollar life insurance agreements that provide a life insurance benefit to the NEO’s designated beneficiary as described in the paragraphs below. Mr. Myrick does not have a split dollar life insurance benefit.

 

Name  Agreement Effective Date   Death Benefit
Payable to Beneficiary
at December 31, 2019 ($)
Drake Mills  2/7/2001     152,941 
Drake Mills 

5/1/2008

                               

1,461,723

 
Drake Mills 

2/27/2020

    

1,500,000

(1)
Stephen Brolly 

7/13/2018

    937,777 
M. Lance Hall 

7/23/2002

    407,029 
M. Lance Hall 

10/29/2019

    

353,810

 
Cary Davis 

5/1/2008

    

537,343

 

 

(1)On February 27, 2020, the Bank entered into an Amended and Restated Endorsement Split Dollar Life Insurance Agreement that replaced that certain Endorsement Method Split Dollar Life Insurance Agreement, dated October 29, 2019. The February 27, 2020 restatement was done to correct the death benefit to a $1,500,000 death benefit payment as approved by the Board in 2019.

 

Mr. Mills has (i) an Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement, effective February 7, 2001, with the Bank (the “2001 Agreement”), and (ii) an Amended and Restated Life Insurance Endorsement Method Split Dollar Plan Agreement, effective May 1, 2008, with the Bank. Under both agreements, Origin Bank has agreed to pay the premiums under life insurance

 

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    EXECUTIVE COMPENSATION
TABLES
       

 

policies issued with respect to Mr. Mills, and his designated beneficiaries will be entitled to 65% of the net-at-risk insurance potions of the proceeds upon his death. Under the 2001 Agreement, upon a Change of Control, if Mr. Mills is subsequently terminated without Cause, his designated beneficiaries will be entitled to the benefits under the 2001 Agreement as if he had died while employed by the Bank. On February 27, 2020, the Bank entered into an Amended and Restated Endorsement Split Dollar Life Insurance Agreement with Mr. Mills (the “2020 Agreement”) that amended and restated that certain Endorsement Method Split Dollar Life Insurance Agreement, dated October 29, 2019. The 2020 Agreement provides, upon Mr Mills’ death, Mr. Mills’ beneficiary will be entitled to insurance proceeds of $1,500,000 unless (i) Mr. Mills is terminated for Cause or (ii) Mr. Mills is subject to a final removal or prohibition order issued by an appropriate federal banking agency of the Federal Deposit Insurance Act. The Bank owns the policy and will be the beneficiary of any remaining death proceeds after Mr. Mills’ interest is determined. No benefit will be paid under the 2020 Agreement if (i) Mr. Mills commits suicide or (ii) if the insurance company denies coverage in certain instances.

 

Mr. Brolly has an Endorsement Split Dollar Life Insurance Agreement, effective July 13, 2018, with the Bank. Under the agreement, upon Mr. Brolly’s death, his designated beneficiary will be entitled to the lesser of (i) the present value of Mr. Brolly’s Supplemental Executive Retirement Agreement had he worked until the age of 65 or (ii) one hundred percent of the total death proceeds of the individual insurance policy or policies adopted by the Bank for purposes of insuring Mr. Brolly’s life minus the greater of (x) the cash surrender value or (y) the aggregate premiums paid by the Bank. If Mr. Brolly is voluntarily or involuntarily terminated including termination for Cause, he will no longer be entitled to the benefits under the agreement. Mr. Brolly will also no longer be entitled to the benefits under the agreement if he were subject to a final removal or prohibition order issued by a federal banking agency or his beneficiaries are denied coverage under the terms of the life insurance policies.

 

Mr. Hall has a Life Insurance Endorsement Method Split Dollar Plan Agreement, effective July 23, 2002, as amended, with the Bank. Under the agreement, the Bank has agreed to pay the premiums under a life insurance policy issued with respect to Mr. Hall and Mr. Hall’s designated beneficiaries will be entitled to a certain portion of the insurance proceeds upon his death. In the event of Mr. Hall’s death or disability during employment with the Bank, his designated beneficiaries will be entitled to 80% of net- at-risk insurance portion of proceeds. Upon a Change in Control, if Mr. Hall is subsequently terminated without Cause, his designated beneficiaries will be entitled to the benefits under the agreement as if he had died while employed by the Bank.

 

In October 29, 2019, the Company entered into a second Endorsement Split Dollar Life Insurance Agreement with Mr. Hall that provides additional key man coverage for the Company and a life insurance benefit to Mr. Hall’s designated beneficiary of $353,810. Under this agreement, in the event of the death of Mr. Hall while being employed by the Bank, his designated beneficiaries will be entitled to receive the lesser of (i) the present value of the benefits Mr. Hall would have received under his Executive Supplemental Income Agreement or (ii) one hundred percent (100%) of the total death proceeds of the individual insurance policy or policies adopted by the Bank for purposes of insuring Mr. Hall’s life minus the greater of (x) the cash surrender value or (y) the aggregate premiums paid by the Bank. Mr. Hall’s beneficiaries will not be entitled to any payments under the Endorsement Split Dollar Life Insurance Agreement if his employment is voluntarily or involuntarily terminated or if he were subject to a final removal or prohibition order issued by a federal banking agency or his beneficiaries are denied coverage under the terms of the life insurance policies.

 

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TABLES
       

 

Mr. Davis has a Life Insurance Endorsement Method Split Dollar Plan Agreement, effective February 7, 2001, as amended, with the Bank. Under the agreement, Origin Bank has agreed to pay the premiums under life insurance policies issued with respect to Mr. Davis, and each of his designated beneficiaries will be entitled to 80% of the net-at-risk portion of the insurance proceeds upon his death.

 

Employment Arrangements, Change in Control agreements, and Potential Payments Upon Termination or Change In Control

 

Below are summaries of certain arrangements between the NEOs and the Company or Origin Bank. These summaries do not include all of the provisions of the employment or Change in Control agreements with each NEO, and this section is qualified in its entirety by reference to the full employment or Change in Control agreements which can be accessed through links in the exhibit index to the Company’s Form 10-K for the fiscal year ended December 31, 2019. The terms “Cause,” “Good Reason,” “Change in Control,” and “Change in Control Protection Period” are defined in the respective employment agreements with each NEO.

 

DRAKE MILLS

 

On February 27, 2020, the Company entered into a restated employment agreement with Drake Mills. The agreement provides for three-year terms that renew automatically for successive three-year terms unless either party provides at least 180 days’ notice of non-renewal.

 

Under his employment agreement, Mr. Mills is entitled to a base salary of $835,800, which the Board can adjust, and an annual bonus the criteria of which is determined by the Board.

 

In addition to a base salary and bonus, Mr. Mills is eligible to participate in the Company’s employee benefit plans in a comparable manner as other executives, to use a Company car and to receive reimbursement or payment of professional development dues, professional organization membership costs, country-club dues, and business-related travel expenses.

 

Mr. Mills’ employment agreement includes indefinite obligations of confidentiality and non-disparagement, and a prohibition, subject to certain geographic limitations, on soliciting Company customers or employees for two years after termination of his employment.

 

Under the restated employment agreement, upon termination of employment for any reason other than Cause, Mr. Mills will be paid a prorated bonus based on his actual performance for the year.

 

If Mr. Mills’ employment is terminated by the Company without Cause or by the executive for Good Reason, and such termination does not occur within a Change in Control Protection Period, then, subject to Mr. Mills entry into a valid release of claims in favor of the Company, Mr. Mills will be entitled receive two times the sum of (x) his then-current base salary, plus (y) the average annual bonus he received in the three calendar years immediately preceding termination, to be paid in equal monthly installments over the twenty-four months following termination. The Company will also pay the cost of the executive’s premiums for continued participation in the Company medical hospitalization insurance program under COBRA for up to twenty-four months following termination, or, if doing so would cause the plans to provide discriminatory benefits, the Company will make monthly cash payments to the executive in an amount equal to the premium payments.

 

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TABLES
       

 

If the executive’s employment is terminated by the Company without Cause or by the executive for Good Reason, and such termination occurs within the Change in Control Protection Period, then, subject to a valid release of claims in favor of the Company, the executive will be entitled to the sum of (x) three times his then-current base salary, plus (y) three times the average bonus paid to him in the three calendar years immediately preceding the Change in Control, with such total amount reduced pro-rata for each full month that has elapsed between the Change in Control and the termination. The amount will be paid in a lump sum within sixty days of termination subject to certain exceptions. The Company will also pay the cost of COBRA premium-payments for a maximum of eighteen months.

 

STEPHEN BROLLY

 

Mr. Brolly does not have a formal employment agreement with the Company however, he entered into a Change in Control Agreement with the Bank on April 2, 2018. The Change in Control Agreement has an initial term of three years and automatically renews for successive one-year terms unless notice is given 90 days prior to the end of a term. If Mr. Brolly is terminated in the two years after a Change in Control or the earlier of (i) the date negotiations commence leading to the consummation of a Change in Control and (ii) six months prior to the effective date of a Change in Control other than for Cause or for Good Reason, then Mr. Brolly will be entitled to severance benefits. Those severance benefits will consist of (a) a lump sum cash payment of two times Mr. Brolly’s then-current base salary, (b) a lump sum cash payment of two times the average of the incentive bonus paid within the three calendar years (or such fewer years as he has been employed by us) immediately preceding his termination, and (c) any equity-type award under any plan or arrangement will become fully vested and exercisable. The Change in Control benefits will be paid no later than the thirtieth day following the later of (i) the termination of service and (ii) effective date of a Change in Control. Under the terms of the Change in Control Agreement, Mr. Brolly may not, for a period of one year following a Change in Control, solicit any of our customers in the year prior to termination in certain parishes and counties in which we are doing business and he may not recruit or hire any person who was an employee in the six month period prior to termination.

 

In addition, the Company and Mr. Brolly executed an employment offer letter dated January 4, 2018, (the “Offer Letter”). Under the Offer Letter, Mr. Brolly is entitled to an annual base salary of $450,000, to be reviewed annually, a target annual incentive bonus ranging from 35% to 52.5% of his base compensation, a sign-on grant of 3,500 shares of restricted stock subject to a three year vesting schedule and a sign-on bonus of $75,000. In addition, the Offer Letter provides for certain additional benefits, including, but not limited to, reimbursement of certain travel and relocation expenses, a relocation bonus, a Company-provided vehicle and country club membership. Under the Offer Letter, if Mr. Brolly voluntarily ends his employment or if he is terminated for Cause in the first two years of his employment, he will be required to repay (i) up to $45,000 of his relocation expenses and (ii) a prorated portion of his sign-on bonus. Mr. Brolly will also be entitled to the benefits described above in “Executive Salary Continuation Plans” under his Supplemental Executive Salary Retirement Agreement, including benefits upon termination in connection with a Change in Control.

 

M. LANCE HALL

 

On February 27, 2020, the Company entered into a restated employment agreement with M. Lance Hall for three-year terms that renew automatically for successive three-year terms unless either party provides at least 180 days’ notice of non-renewal.

 

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TABLES
       

 

Under the employment agreement, Mr. Hall is entitled to a base salary of $500,000, which the Board can adjust, and an annual bonus the criteria of which is determined by the Board.

 

Mr. Hall is also eligible to participate in the Company’s employee benefit plans in a comparable manner as other executives, to use a Company car and to receive reimbursement or payment of professional development dues, professional organization membership costs, country-club dues, and business-related travel expenses.

 

Under the terms of the restated employment agreement, Mr. Hall is subject to indefinite obligations of confidentiality and non-disparagement, and is prohibited, subject to certain geographic limitations, from soliciting Company customers or employees for two years after termination of employment.

 

Upon termination of employment for any reason other than Cause, the executive will be paid a prorated bonus based on his actual performance for the year.

 

If Mr. Hall’s employment is terminated by the Company without Cause or by the executive for Good Reason, and such termination does not occur within a Change in Control Protection Period, then, subject to Mr. Hall’s entry into a valid release of claims in favor of the Company, Mr. Hall will be entitled receive two times the sum of (x) his then-current base salary, plus (y) the average annual bonus he received in the three calendar years immediately preceding termination, to be paid in equal monthly installments over the twenty-four months following termination. The Company will also pay the cost of Mr. Hall’s premiums for continued participation in the Company medical hospitalization insurance program under COBRA for up to twenty-four months following termination, or, if doing so would cause the plans to provide discriminatory benefits, the Company will make monthly cash payments to the executive in an amount equal to the premium payments.

 

If Mr. Hall’s employment is terminated by the Company without Cause or by the executive for Good Reason, and such termination occurs within the Change in Control Protection Period, then, subject to a valid release of claims in favor of the Company, Mr. Hall will be entitled to the sum of (x) three times his then-current base salary, plus (y) three times the average bonus paid to him in the three calendar years immediately preceding the Change in Control, with such total amount reduced pro-rata for each full month that has elapsed between the Change in Control and the termination. The amount will be paid in a lump sum within sixty days of termination subject to certain limited exceptions. The Company will also pay the cost of COBRA premium-payments for a maximum of eighteen months.

 

F. RONNIE MYRICK

 

Mr. Myrick retired as an employee of the Company effective December 31, 2019. While employed by the Company in 2019, Mr. Myrick did not have an employment agreement with the Company, but he had entered into a Change in Control Agreement with the Company that was effective April 5, 2017, and terminated automatically upon his retirement. Mr. Myrick’s Change in Control Agreement provided for a severance benefit if his employment was terminated other than for Cause or for Good Reason or certain changes in his position were made in connection with a Change in Control. The severance benefit would have been equal to two times Mr. Myrick’s then-current annual base salary and an additional payment equal to two times the average of the incentive bonus paid within the three calendar years (or such fewer years as Myrick has been employed by the Company) immediately preceding the date of Mr. Myrick’s termination. The Change in Control Agreement contained a two year non-solicitation clause following a Change in Control.

 

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TABLES
       

 

CARY DAVIS

 

Mr. Davis entered into an employment agreement with the Company effective October 1, 2008, as amended July 14, 2014, and as amended March 15, 2018. Following an initial term that ended in 2013, Mr. Davis’s employment agreement automatically renews for successive one-year terms unless either party provides 30 days prior notice of our intent not to renew. Under his employment agreement, Mr. Davis is entitled to a minimum base salary of $180,000 and an annual bonus to be established annually by the Company. Additional benefits provided in the agreement include professional dues and program costs for all professional organization memberships and continuing education programs deemed reasonably necessary to maintain his professional standing, use of a Company car, participation in the Company sponsored Retirement Plan, country club membership dues; payment of or reimbursement for business- related travel and expenses and sick leave, vacation, and disability benefits as granted by the Company’s policy for all employees. Mr. Davis’s employment agreement provides that if the Company terminates his employment upon mutual agreement or upon his death or disability, he would be entitled, in addition to the base salary and other benefits accrued as of his last day of employment, to a prorated amount of the bonus he received in the prior year based on the number of days of the current year during which he was employed. The Change in Control provision in Mr. Davis’s employment agreement provides that upon a Change in Control, Mr. Davis would be entitled to receive a lump sum payment within 60 days following the Change in Control equal to two years of his then base salary and two times the average bonus paid to him during the preceding three calendar years. Mr. Davis will also be entitled to the benefits described above in “Executive Salary Continuation Plans” under his §409A Amended & Restated Executive Salary Continuation Agreement including benefits upon termination in connection with a Change in Control.

 

Potential Payments Upon Termination or Change In Control

 

The table below shows the estimated amounts that could have been paid to each NEO in 2019 under his respective agreement (or agreements) and any applicable benefit plans in the event each NEO was terminated in certain instances. The following information is based on the executive’s base salary compensation at December 31, 2019, and 2019 bonuses to be paid in early 2020, and assumes the triggering event occurred on December 31, 2019. Capitalized terms used in this section have the meanings ascribed to them in the respective executive’s agreements. A table summarizing the estimated payouts Mr. Myrick could have received based on his termination is not included below because Mr. Myrick voluntarily retired on December 31, 2019, and was not entitled to any payments upon his retirement.

 

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    EXECUTIVE COMPENSATION
TABLES
       

 

Drake Mills  Termination by Company for Cause
($)
  Termination Other Than Termination for Cause
($)
  Death
($)
  Disability
($)
  Change-In-Control
($)
  Retirement
($)
Employment Agreement       2,186,728(1)   425,000(2)   425,000(2)   3,280,093(3)   425,000(2)
Benefits Payable under SERP       2,088,777(4)   2,088,777(4)   2,088,777(4)   6,105,573(5)   6,105,573(5)
Accrued PTO(6)   80,396    80,396    80,396    80,396    80,396    80,396 
Split Dollar Life Insurance eff. 02/07/2001(7)                           152,941