Item 5.02(e). Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
In connection with the unprecedented economic disruption resulting from the COVID-19 pandemic, Enterprise Bancorp, Inc. (the “Company”) and its wholly owned banking subsidiary, Enterprise Bank and Trust Company (the “Bank”), reviewed its incentive compensation programs to determine whether such programs appropriately align compensation opportunities with the Company’s current goals.
Following this review, on November 10, 2020, the Board of Directors of the Bank approved changes to the Enterprise Bank 2020 Variable Compensation Incentive Plan (the “2020 Incentive Plan”). The 2020 Incentive Plan applies to employees, including the Company’s named executive officers, who do not otherwise participate in any form of individual-based incentive plan maintained by the Bank. The changes approved with respect to the “Bank wide” incentive group with multiplier, in which each of our named executive officers participate, are as follows:
•The minimum level of net income necessary for a payout under any of the performance factors outlined in the 2020 Incentive Plan was reduced from $27.652M to $23.652M; and
•An additional performance level at which a 25% payout for the performance factor will be made was added with respect to each of the following performance factors: (i) net income – $25.652M; (ii) YTD Average Low Cost Deposits – $1.417B; (iii) Loan Growth – $51M; (iv) Loan Quality – $6.825M; and (v) Non-Interest Fee Revenue – $13.491M.
In addition, on November 10, 2020, the Board of Directors of the Company, on the recommendation of the Compensation Committee of the Company’s Board of Directors, approved the following change to the Enterprise Bank Supplemental Executive Retirement and Deferred Compensation Plan (the “SERP”) 2020 Addendum (the “2020 SERP Addendum”) affecting certain of our named executive officers as follows:
•With respect to the performance-based contributions to the SERP for 2020, an additional performance level at which 25% of the target performance-based contribution ($6,250 for Mr. Clancy, the Company’s Chief Executive Officer, and $1,750 for each of Mr. Irish, the Company’s Managing Director of Wealth Management and Chief Operating Officer, and Mr. Lussier, the Company’s Chief Financial Officer and Treasurer) was added, which corresponds with achievement of a net income level of $25.652M.
Other than as disclosed above, the material terms of the 2020 Incentive Plan and the 2020 SERP Addendum, which were filed as Exhibits 10.1 and 10.3 to the Current Report on Form 8-K on March 20, 2020, respectively, remain unmodified.