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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )

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General Information

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This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors (the “Board of Directors” or the “Board”) of National Bank Holdings Corporation, a Delaware corporation (the “Company”, “NBHC”, “we”, “us” or “our”), to be used during our 2022 Annual Meeting of Shareholders (the “Meeting”) and at any postponements or adjournments thereof. The Meeting will be held at the offices of Community Banks Mortgage, a division of NBH Bank located at 7800 E. Orchard Road, Suite 100, Greenwood Village, Colorado 80111, at 8:30 a.m. Mountain Time on Tuesday, May 3, 2022.

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In this proxy statement, we refer to our employees as “associates.” In this proxy statement, we also refer to the Notice of Annual Meeting of Shareholders, this proxy statement, our 2021 Annual Report to Shareholders and the accompanying proxy as our “Proxy Materials.”

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Holders of record of shares of Class A common stock at the close of business on March 11, 2022 (the record date) are entitled to notice of, and to vote at, the Meeting. As of such date, there were 30,008,781 shares of Class A common stock outstanding and entitled to vote. In addition, as of such date, there were 143,710 shares of unvested restricted stock (Class A common stock) entitled to vote. Each share of our Class A common stock is entitled to one vote on all matters (in the case of Proposal 1, with respect to the election of each director).

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Please read the Proxy Materials carefully. You should consider the information contained in this proxy statement when deciding how to vote your shares. You have a choice of voting by proxy over the Internet, by using a toll-free telephone number or by completing a proxy card and mailing it in the postage-paid envelope provided. If your shares are held in the name of a bank, broker or other holder of record, please refer to your proxy card or the voting information provided by your bank, broker or other holder of record to see which voting options are available to you. Voting via the Internet, by telephone or by mail will not prevent you from voting your shares during the Meeting. However, if you hold shares through a bank, broker or other holder of record, you must obtain a proxy, executed in your favor, from the holder of record to be able to vote during the Meeting. Otherwise, your shares will be voted in the manner in which you instructed the record holder of your shares.

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When you vote by proxy, your shares will be voted according to your instructions. If you are a shareholder of record, you may revoke your proxy at any time prior to the close of the polls during the Meeting by submitting a later dated proxy or delivering a written notice of revocation to our Secretary, Angela Petrucci, at National Bank Holdings Corporation, 7800 E. Orchard Road, Suite 300, Greenwood Village, CO 80111. If you hold shares through a bank, broker or other holder of record, you must contact the holder of record to revoke any prior voting instructions.

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We pay the cost of soliciting proxies. Members of our Board and other associates may solicit proxies by mail, telephone, fax, email or electronically. We will not pay directors or other associates any extra amounts for soliciting proxies. We may, upon request, reimburse brokerage firms, banks or similar nominees representing street name holders for their expenses in forwarding Proxy Materials to their customers who are street name holders and obtaining their voting instructions.

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Any shareholder entitled to vote at the Meeting may attend the Meeting. If you hold shares through a bank, broker or other holder of record and would like to attend the Meeting, you will need to bring an account statement or other acceptable evidence of ownership of our Class A common stock as of the record date. Each shareholder who attends may be asked to present valid picture identification, such as a driver’s license or passport. Please note that the use of cell phones, tablets, recording and photographic equipment, computers and/or other similar devices is not permitted in the meeting room at the Meeting.

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Our principal executive offices are located at 7800 E. Orchard Road, Suite 300, Greenwood Village, CO 80111.

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Vote Required for Approval

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The presence, by proxy or at the meeting, of the holders of a majority of the outstanding shares of our Class A common stock entitled to vote during the Meeting shall constitute a quorum. Withheld votes, abstentions and broker “non-votes” (shares held by a broker or nominee that has not received voting instructions from its client and does not have discretionary authority to vote on a particular matter) are counted as present for purposes of establishing a quorum. If you are a beneficial shareholder and your broker holds your shares in its name, the rules of the New York Stock Exchange (“NYSE”) permit your broker to vote your shares on the ratification of the appointment of our independent registered certified public accounting firm (Proposal 2), even if the broker does not receive voting instructions from you. However, under the NYSE rules, your broker cannot vote your shares on the other proposals if you do not timely provide instructions for voting your shares.

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For Proposal 1 (election of directors), the nine nominees for director receiving a plurality of the votes cast during the Meeting in person or by proxy will be elected. This means that the director nominee with the most votes for a particular slot is elected for that slot. Only votes “for” affect the outcome. Broker “non-votes” will have no effect on the voting results for this proposal.

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Proposal 2 (ratification of the appointment of our independent registered certified public accounting firm) will be passed if a majority of the shares of our Class A common stock present during the Meeting and entitled to vote cast their votes “for” this proposal. Abstentions will be counted as votes present and entitled to vote and will have the same effect as votes “against” this proposal. No broker “non-votes” are expected to exist in connection with this proposal.

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Proposal 3 (the advisory proposal on the compensation of our named executive officers) will be approved if a majority of the shares of our Class A common stock present during the Meeting and entitled to vote cast their votes “for” this proposal. Abstentions will be counted as votes present and entitled to vote and will have the same effect as votes “against” this proposal. Broker “non-votes” are not considered to be entitled to vote and therefore will have no effect on the voting results for this proposal. The advisory vote on executive compensation (Proposal 3) is non-binding. Our Board and our Compensation Committee, however, will review the results of the vote and, consistent with our commitment to shareholder engagement, will take it into account in making a determination concerning the advisory vote on executive compensation.

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Approval of any other business that may properly come before the Meeting will require the affirmative vote of a majority of the shares present or represented by proxy during the Meeting and entitled to vote thereon.

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Voting for Registered and Beneficial Shareholders

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You may vote your shares during the Annual Meeting or by proxy. There are three ways to vote by proxy:

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Via Internet: You may vote your shares over the internet by going to www.proxyvote.com. You will need to enter your 16-digit control number (found at the top right hand side of the form of proxy or voting instruction form that you received in the mail) to identify yourself as a shareholder on the voting website.

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By Telephone: Vote by telephone by calling 1-800-690-6903. You will need to enter your 16-digit control number (found at the top right hand side of the form of proxy or voting instruction form that you received in the mail) to identify yourself as a shareholder.

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By Mail: Mark, sign and date your proxy card and return it in the postage paid envelope we have provided or return it to Vote Processing c/o Broadridge, 51 Mercedes Way, Edgewood, NY, 11717.

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Your voting instructions must be received by the proxy voting deadline which is Monday, May 2, 2022. The internet (other than during the meeting) and telephone voting facilities will close at 11:59 p.m. Eastern time on May 2, 2022.

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Even if you plan to attend the Annual Meeting, we encourage you to vote your shares by proxy using one of the methods described above. Shareholders of record who attend the meeting may vote their shares online, even though they have sent in proxies.

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If you have any questions or require voting assistance, please contact us at IR@nationalbankholdings.com.

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Stock Ownership of Certain Beneficial Owners and Management

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The following table sets forth, as of March 11, 2022, information regarding the beneficial ownership of our Class A common stock by (i) each person known by us to own beneficially more than five percent of the shares of our Class A common stock (our only class of voting securities outstanding); (ii) each of our Chief Executive Officer (“CEO”), Chief Financial Officer and the three other highest paid executive officers for 2021 (those five executive officers are listed in the table captioned “Summary Compensation Table” elsewhere in this proxy statement and are collectively referred to as the “Named Executive Officers” or “NEOs”); (iii) each director; and (iv) all current directors and executive officers as a group.

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We have determined beneficial ownership in accordance with the rules of the Securities Exchange Commission (“SEC”). Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the tables below have sole voting and investment power with respect to all shares of common stock that they beneficially own, subject to applicable community property laws. We have based our calculation of the percentage of beneficial ownership on 30,152,491 shares, which number is comprised of 30,008,781 shares of Class A common stock outstanding and 143,710 shares of unvested restricted stock (which shares of restricted stock are entitled to voting rights), in each case as of March 11, 2022.

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In computing the number of shares of Class A common stock beneficially owned by a person and the percentage ownership of that person, we deemed outstanding shares of Class A common stock subject to options held by that person that are currently exercisable or exercisable within sixty days of March 11, 2022.

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We, however, did not deem these shares outstanding for the purpose of computing the percentage ownership of any other person. Beneficial ownership representing less than 1% is denoted with an asterisk (*).

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Governance

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The Board is committed to sound and effective governance principles and practices. The Board has adopted Governance Guidelines to provide the framework for the governance of the Board and the Company. These guidelines set forth, among other matters, qualifications for Board membership, director independence standards, director responsibilities, information about the structure of the Board and its committees, director compensation, management succession and Board self-evaluation. Each director serves for a one-year term. We do not have a staggered or classified Board.

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The Board has adopted a Code of Business Conduct and Ethics that applies to all of our associates as well as our directors. Additionally, the Board has adopted a Supplemental Code of Ethics for CEO and Senior Financial Officers (together, with the Code of Business Conduct and Ethics, the “Codes of Ethics”). We expect all of our associates to adhere to the highest standards of ethics and business conduct with other associates, clients, shareholders, and the communities we serve and to comply with all laws, rules, and regulations that govern our business.

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Shareholders and other interested persons may view our Governance Guidelines, our Codes of Ethics and other key information about our corporate governance on our website at www.nationalbankholdings.com.

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Board and Committee Meetings; Annual Meeting Attendance

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Directors are expected to attend all Board meetings and meetings of committees on which they serve.

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The Board held 11 meetings during 2021 and each director attended at least 75% of the total number of meetings of the Board and committees on which he or she served. The Board and each standing committee regularly meet in executive session. During 2021, the Board met in executive sessions without the CEO and other members of management present four times. During 2021, the independent Lead Director chaired each of the executive sessions of the Board, and the chairs of each committee chaired the executive sessions of the committees.

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All directors are expected to attend each annual meeting of shareholders of the Company. In 2021, all directors attended the Company’s annual meeting of shareholders.

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Committees of the Board

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The Board has established three standing committees: Audit & Risk Committee, Compensation Committee and Nominating & Governance Committee. The Board’s committees act on behalf of the Board and report on their activities to the entire Board. The Board appoints the members and chair of each committee based on the recommendation of the Nominating & Governance Committee.

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The following table provides membership information for each of the Board’s standing committees as of the date of this proxy statement.

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With respect to each committee, the Board has adopted a charter that addresses its purpose, authority and responsibilities and contains other provisions relating to, among other matters, membership and meetings. In its discretion, each committee may form and delegate all or a portion of its authority to subcommittees of one or more of its members. As required by its charter, each committee periodically reviews and assesses its charter’s adequacy and reviews its performance, and also is responsible for overseeing risk related to the responsibilities described in its charter. Shareholders and other interested persons may view each committee’s charter on the Investor Relations section of our website at www.nationalbankholdings.com.

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Audit & Risk Committee

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Purpose and Responsibilities. The Audit & Risk Committee is responsible for, among other things:

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Membership and Meetings. Under its charter, the Audit & Risk Committee must have a minimum of three members. No Audit & Risk Committee member may serve on the audit committee of more than two other public companies. Each member of the Audit & Risk Committee is independent, as independence for audit committee members is defined by NYSE and SEC rules, as discussed below under “Director Independence.” The Board has determined, in its business judgment, that each current member of the Audit & Risk Committee is financially literate as required by NYSE rules, and that Mr. Clermont, the committee’s chair, qualifies as an “audit committee financial expert” as defined by SEC regulations.

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The Audit & Risk Committee meets as often as necessary to carry out its responsibilities, but no less than quarterly. In 2021, the Audit & Risk Committee met four times.

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Compensation Committee

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Purpose and Responsibilities. The Compensation Committee is responsible for, among other things:

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The Compensation Committee’s process and procedures for establishing compensation for our Named Executive Officers is discussed in the “Compensation Discussion and Analysis” section elsewhere in this proxy statement.

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Membership and Meetings. Under its charter, the Compensation Committee must have a minimum of three members, two of which must meet the definition of a “non-employee director” under Rule 16b-3 of the Securities Exchange Act of 1934 (the “Exchange Act”) and qualify as an “outside director” under Internal Revenue Code Section 162(m). All Compensation Committee members must be independent under NYSE rules. The Board has determined that each current Compensation Committee member meets these qualifications, as further discussed below under “Director Independence.” The Compensation Committee meets as often as necessary to carry out its responsibilities, but no less than quarterly. In 2021, the Compensation Committee met five times.

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Nominating & Governance Committee

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Purpose and Responsibilities. The Nominating & Governance Committee is responsible for, among other things:

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Information about the Nominating & Governance Committee’s process and procedures for establishing director compensation appears below under the “Director Compensation” section.

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Membership and Meetings. Under its charter, the Nominating & Governance Committee must have a minimum of three members, each of whom must be independent under NYSE rules. The Board has determined that each member meets this standard, as discussed below under “Director Independence.” The Nominating & Governance Committee meets as often as necessary to carry out its responsibilities, but no less than quarterly. In 2021, the Nominating & Governance Committee met four times.

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Director Nomination Process, Director Qualifications and Board Diversity

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Director Selection Process and Qualifications. The Nominating & Governance Committee is responsible for identifying and reviewing the qualifications and skills of Board candidates and for recommending candidates for membership on our Board of Directors. The Board has continually sought directors with backgrounds and skills important to the priorities of the Company, which continue to change in connection with our strategic objectives, including our digital strategy. Significant banking regulatory skills were added when Mr. Joseph joined our Board in 2014. In 2016, high-level technology and cybersecurity skills were added with the appointment of Mr. Zeile as a director. The 2021 additions of Ms. Gupta and Mr. Sobers not only added diversity to our Board, but Ms. Gupta brings a breadth of digital payments skills and Mr. Sobers brings his significant years of consumer banking experience, both of which reflect the continual evolution of our Board.

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The breadth of experience and skills of the current Board is exemplified by the Board Skills Matrix chart below:

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Director Diversity and Director Appointments. The Nominating & Governance Committee considers diversity in its assessment of potential nominees for Board membership, pursuant to our Governance Guidelines. In early 2021, our full Board set the goal of adding two new diverse Board members in the second half of 2021. It established an ad hoc Director Search Committee chaired by director Micho Spring to head the effort, which resulted in the addition of Patrick Sobers to the Board in August 2021 and Alka Gupta in November 2021. In addition to increasing the diversity of our Board, adding these two new directors reduced the average age and tenure of our directors.

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Our Board currently has two female directors and plans to seek a third female director to join the Board in 2023. The focus of that director search will be on candidates who have significant financial and audit experience in the banking industry and who would qualify as an “audit committee financial expert” as defined by SEC regulations.

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Shareholder Nominations. Shareholders are welcome to recommend candidates for membership on the Board. The Nominating & Governance Committee, in accordance with its charter, will evaluate candidates in the same manner that it evaluates other potential nominees. Our Bylaws require timely notice of shareholder nominations to our Secretary, as further discussed in the section “2022 Annual Meeting of Shareholders - Shareholder Proposals” elsewhere in this proxy statement. In order to make a nomination, a shareholder must be a shareholder at the time the Company gives notice of its annual meeting and at the time of the annual meeting, must be entitled to vote at the annual meeting, and must comply with the procedures of our Bylaws. The Bylaws require certain information regarding shareholders who wish to nominate candidates for Board membership. This includes (i) the name and address of such shareholder, as they appear on the Company’s books, of such beneficial owner, if any, and of their respective affiliates or associates or others acting in concert therewith, (collectively, the “Nominating Party”), (ii) information regarding the shares owned by the Nominating Party, (iii) information regarding derivative and other instruments regarding the Company’s stock that the Nominating Party owns, (iv) contracts, arrangements, understandings or relationships the Nominating Party has entered into concerning the Company’s stock and (v) other information relating to the Nominating Party that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. For complete description of the requirements and procedures for shareholder nominations, please refer to our Bylaws.

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(iii) presiding at all meetings of the Board at which the Chairman of the Board is not present; (iv) approving meeting schedules and agendas proposed by the Chairman and Chief Executive Officer, and consulting with the Chairman and Chief Executive Officer regarding the information to be provided to the directors in conjunction with such meetings; (v) serving as an advisor to the Board committees, chairs of the Board committees and other directors; (vi) serving as a member ex officio of each of the Board’s standing committees, with full voting rights on each such committee; (vii) if requested by major shareholders, ensuring that he or she is available for consultation and direct communication; (viii) calling meetings of the Board if deemed advisable by the independent Lead Director; and (ix) such other duties and responsibilities as assigned from time-to-time by the independent directors. As part of his duties as independent Lead Director, Mr. Clermont speaks regularly with Mr. Laney and other executives throughout the year.

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Our current Board leadership structure supports the independence of directors. The directors meet in executive session without the Chairman & CEO or anyone from management a minimum of four times a year and each of the standing committees is comprised solely of and led by independent directors. Our independent Lead Director presides at each executive session of the independent directors of the Board and the independent committee chairs preside over the executive sessions of their respective committees. Moreover, both the Chairman and the independent Lead Director, as well as Ms. Spring and Messrs. Joseph and Sobers, serve as members of the Board of Directors of the Company’s wholly-owned subsidiary, NBH Bank (the “Bank Board”), which further contributes to the oversight of our business, management and policies.

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The Board’s Role in Risk Oversight

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Our Board of Directors oversees risk management throughout the Company. The Board accomplishes this primarily through its three standing committees, each of which is active in risk management.

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The Audit & Risk Committee is responsible for oversight of the Company’s market, credit, liquidity, fraud, legal, compliance and other financial, operational (including cybersecurity) and reputational risks. The Audit & Risk Committee is further responsible for reviewing and approving guidelines, policies and processes for managing these risks. The Audit & Risk Committee monitors the Company’s risk exposure in all risk categories through regular reports prepared by members of management, including the Company’s Chief Risk Management Officer. The Audit & Risk Committee determines the risk appetite of the Company. Additionally, the Audit & Risk Committee meets with representatives from the Company’s internal audit function and the Company’s independent registered public accountant, including in executive sessions without management present.

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The Company devotes considerable resources to protect the confidentiality, integrity, and availability of NBH Bank’s systems and data, including associate and client information. Through coordinated efforts across our information technology, risk management, and third parties, we continuously enhance our suite of cyber-defense and information security capabilities. Further, the Audit & Risk Committee is updated quarterly on Information Security and Cybersecurity trends and current efforts, and receives an annual report on the Company’s Information Security Risk Assessment efforts. Mr. Zeile, one of our directors who has extensive experience in information technology and cybersecurity matters, regularly discusses the Company’s technology initiatives with senior management responsible for these areas. In addition, Ms. Gupta has added deep experience in digital transformation and digital payment systems to our Audit & Risk Committee as a newly appointed member.

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The Compensation Committee oversees risks related to compensation and human capital management, including risks that may arise from the Company’s incentive compensation practices. The Compensation Committee oversees and evaluates the design, administration and risk management of all of the Company’s material incentive compensation arrangements to ensure consistency with the safety and soundness of the Company and to appropriately balance risk and reward. The Compensation Committee also oversees the annual compensation risk assessment to identify any compensation practices that may present an unacceptable level of risk to the Company. In addition, the Compensation Committee oversees risks associated with human capital management in its oversight of the Company’s talent management and succession planning process.

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The Nominating & Governance Committee oversees the Company’s governance program. This includes the Company’s Code of Ethics, Insider Trading Policy, disclosure policies, management of potential conflicts of interest, including related party transactions, and director independence.

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Board’s Oversight during the Pandemic

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The risk landscape associated with the COVID-19 pandemic and management’s strategic handling of such risks have been, and continue to be, regularly discussed with the full Board as well as each of the Board committees, as appropriate. Over the course of 2021, management regularly updated the directors on the pandemic’s impact to the Company’s business and the strategic, operational and financial risks associated with the pandemic. During 2021, the pandemic continued to impact many aspects of the Company’s business and discussions with the Board and its committees have covered a wide array of topics, including business continuity, associate and client health and safety, technology and cybersecurity, specific impacts of the pandemic in the geographic markets we serve, our loan portfolio and demand for our products. Management continues to monitor the risks and potential impact to the Company’s business and strategies and continues to discuss these impacts with the full Board on a regular basis.

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Communications with Directors

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Shareholders and other interested parties who wish to communicate with the Board, the independent directors as a group, or one or more individual directors may do so by contacting the Board’s Secretary by mail at National Bank Holdings Corporation, 7800 E. Orchard Road, Suite 300, Greenwood Village, CO 80111. Under our Governance Guidelines, the Secretary is responsible for referring such communication to the Board.

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Environmental, Social and Governance (ESG) Matters

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Beginning with our Board and through our associate base, we are committed to ESG and sustainability efforts with respect to our people, our clients, and with a focus on strengthening the communities and markets in which we operate our business. The following summary sets forth the activities undertaken by the Company that reflect its leadership with regards to its environmental, social and governance commitment to society.

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Environmental

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We are committed to safeguarding the environment through minimizing our impact by using environmentally friendly office products and materials and optimizing our use of office and banking center space. In addition, we continue to focus and invest in our mobile and digital platforms, resulting in a reduction in paper and fuel emissions. We have provided financing for green and sustainable businesses and are actively exploring more opportunities to invest in these industries.

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Social

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Our corporate culture is driven by our core values of Integrity, Meritocracy, Teamwork and Citizenship. The Company was founded in 2009 during the great recession, and the strong fundamentals and conservative principles that we put in place at our inception have consistently shaped how we operate our business, including how we have prudently addressed the challenges caused by the COVID-19 pandemic.

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Responsible and Client-Focused Business Practices

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Our commitment to deliver common sense banking through building relationships with our clients that are based on the principles of fairness and simplicity continues to guide our business practices. We recognize that if our clients succeed, we succeed.

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Our banking subsidiary, NBH Bank, is a community bank that understands that small businesses are critical for job creation, innovation and keeping money in the local communities we serve. NBH Bank is an approved lender in the Small Business Administration’s (SBA) Preferred Lender Program. We offer a range of SBA loans and products to support our small business clients seeking to grow and expand their businesses and

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were a significant participant in the SBA’s Paycheck Protection Program to support businesses affected by the COVID-19 pandemic.

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Knowledge is power and we provide resources on our bank websites to keep our clients informed on a number of important topics, including cyber security, financial planning, selling a small business, and more.

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Supporting our Communities

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The Company has a long-standing commitment to corporate social responsibility. We recognize our role in building and contributing to the health and safety of our surrounding community and workforce. We believe that our Company’s long-term success is deeply tied to the welfare of the communities we serve. We support a number of causes that underscore our focus on corporate social responsibility with a focus on helping people: (1) find work (2) find affordable housing, and (3) become financially empowered.

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We strive to make a positive impact in the communities we serve through consistent engagement, as well as maintaining strong partnerships with a wide range of charitable organizations and causes. All of our associates are granted eight paid hours each year to donate their time to non-profit organizations that align with our Community Reinvestment Act (CRA) initiatives. In addition to volunteering their time, our associates hold board and committee positions in various organizations throughout the communities we serve.

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In 2021, for the sixth consecutive year, we completed our annual Do More Charity Challenge^®, and we continue to contribute directly to a wide range of nonprofits in our communities. Our NBH Charitable Foundation provided much needed funding to non-profits including Habitat for Humanity in Utah, Impact Ventures in Texas, People of All Colors Succeed in Kansas City and a special contribution to the Boulder Wildfire Fund to help those impacted by the devastating Marshall fire that hit our Colorado community on December 30, 2021. In addition, we purchased loans from Habitat for Humanity in Fort Collins, Colorado to enable them to continue building much needed affordable housing for families in need.

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Human Capital

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Our core values also represent our belief that our Company’s long-term success is deeply tied to having a dedicated and engaged workforce and a commitment to the communities we serve. We are committed to building and contributing to a healthy workplace environment for our associates by investing in competitive compensation and benefit packages, promoting inclusion of diverse viewpoints and backgrounds, providing training and career development opportunities and promoting qualified associates within our organization. In addition to our focus on equity, diversity and inclusion with respect to our Board of Directors, we have extended that focus to our Bank Board, which is diverse in experience as well as age, racial and gender diversity. For additional information regarding our Bank Board, please visit www.nbhbank.com.

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Equity, Diversity and Inclusion

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We are committed to attracting, developing, and retaining associates who reflect the communities in which we serve. Additionally, equity, diversity and inclusion helps us to connect and build better relationships within our Company and communities. This is reflected in the following data:

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The Company oversees its equity, diversity and inclusion efforts through our broader ESG Committee that is comprised of a multi-disciplinary group of associates throughout NBH Bank with oversight by the executive

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management team. Additionally, Patrick Sobers, one of our directors, acts as co-chair of the ESG Committee and as the liaison to our Board of Directors, providing guidance and updating the Board on ESG activities. To further our diversity goals for our workforce, the Company has also implemented programs to foster equality and leadership opportunities for the entire associate base, including events with keynote speakers, panels and forums to gather associate feedback. Our management team also plays an integral part in championing women in business by hosting networking events, serving on panels and sponsoring relevant events that foster understanding and engagement, such as the ATHENA leadership awards. Our independent director Ms. Spring also plays a role in mentoring women in leadership positions within our Company.

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Associate Compensation and Benefits

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Our Company offers comprehensive benefits packages to our associates, including medical and prescription drug insurance, dental insurance and vision insurance as well as several voluntary benefit options. Our compensation structure recognizes the individual performance of our associates through merit-based salary increases with a focus on variable pay and paying for performance.

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We also encourage our associates to think about their long-term financial stability. Our associates have the opportunity to participate in our 401(k) plan, which includes contribution matches from the Company. Additionally, we offer a stock purchase plan (ASPP) to our associates which allows those who work 20 hours or more per week to purchase shares in our Company through payroll deductions at a 10% discount.

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Safety and Respect in the Workplace

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We are committed to providing a safe and secure work environment in accordance with applicable labor, safety, health, anti-discrimination and other workplace laws. We strive for all of our associates to feel safe and empowered at work. To that end, we maintain a whistleblower hotline that allows associates and others to anonymously voice concerns. We prohibit retaliation against an individual who reported a concern or assisted with an inquiry or investigation.

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Our Company has taken workplace safety very seriously during the COVID-19 pandemic. Throughout 2021, we adhered to applicable health and governmental guidelines with respect to wearing masks and quarantines. We maintained our drive-thru services, and, when circumstances warranted, we requested our clients access our banking center lobbies by appointment only. In addition, we waived medical plan cost-sharing and co-pays for COVID-19 testing and treatment throughout the year.

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Governance

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As a financial holding company, with a bank subsidiary, we are subject to an array of laws, many of which are aligned with the goals of ESG, including the Community Reinvestment Act, the Bank Secrecy Act, fair lending laws and privacy laws. Our compliance program is designed to ensure that we are in compliance with these laws and regulations. Our program includes, among other things, tailored policies and processes that are reviewed on a regular basis, periodic training on such policies, periodic audits by our compliance team and/or our internal audit team, regular updates to the Audit & Risk Committee and our whistleblower hotline. In addition, our bank subsidiary goes through robust safety and soundness and compliance exams conducted by state and federal bank regulators. Apart from our compliance program, staying true to our core value of integrity, our fundamental belief is to operate our business in a transparent manner.

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Our Board extensively discusses governance matters throughout its meetings. In addition, the Audit & Risk Committee receives quarterly written and oral reports on a number of ESG-related topics, including risk management, credit risk, cyber and information security and regulatory compliance, etc. The Nominating & Governance Committee monitors corporate governance trends on an annual basis, including trends relating to ESG, and our Compensation Committee receives periodic updates on our human capital strategy, both from a compensation and benefits perspective. Beginning in 2021, the Board also received regular updates on the Company’s ESG strategy.

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The Compensation for our directors (other than Mr. Laney) during 2021 was as follows:

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A “Related Person Transaction” is any transaction, arrangement or relationship (or series of similar transactions, arrangements or relationships) in which the Company (or any of its subsidiaries) is, was or will be a participant and the amount involved exceeds $120,000, and in which the Related Person had, has or will have a direct or indirect material interest, other than:

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The Nominating & Governance Committee is responsible for approving, ratifying or disapproving of all Related Person Transactions. Prior to the consummation of any Related Person Transaction, Company management is responsible for providing the Nominating & Governance Committee with all material information regarding the potential Related Person Transaction and the interest of any Related Persons in such transactions. The Nominating & Governance Committee shall only approve or ratify a Related Person Transaction if it determines that the transaction is in, or not inconsistent with, the best interests of the Company and its shareholders. No member of the Nominating & Governance Committee shall participate in the review, consideration or approval of any Related Person Transaction with respect to which such member or any member of his or her immediate family is a Related Person.

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In the event management determines it is impractical or undesirable to wait until the next meeting of the Nominating & Governance Committee to approve a Related Person Transaction, the Chair of the Nominating & Governance Committee may review and approve the Related Person Transaction, in accordance with the criteria set forth herein. The Chair of the Nominating & Governance Committee will report any such approval to the Nominating & Governance Committee at its next regularly scheduled meeting.

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Ordinary Course Transactions

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During 2020 and 2021, certain of the executive officers and directors of the Company or of NBH Bank, our wholly-owned bank subsidiary, and affiliates of such persons have, from time to time, engaged in banking transactions with NBH Bank and are expected to continue such relationships in the future. All loans or other extensions of credit made by NBH Bank to such individuals were made in the ordinary course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unaffiliated third parties and did not involve more than the normal risk of collectability or present other unfavorable features.

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Additional Transactions

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The Company is an investor in Finstro Global Holdings, Inc., (Finstro) a provider of trade credit and payment solutions. In connection with the Company’s initial investment in 2021, the Company received certain governance rights in Finstro and Finstro granted performance-vesting restricted shares to various Company executives in consideration of their services to Finstro, including Messrs. Laney, Birkans, Newfield and Ms. Petrucci. The grant date fair market value of the awards was $391,121, $65,162, $52,122 and $52,122, respectively. The awards vest only upon the achievement of certain internal performance measures of Finstro. In addition, certain of the Company’s directors and members of management have made personal investments in Finstro at the same price at which the Company invested in Finstro. The aggregate value of these investments totaled $260,000 and no individual investment exceeded $120,000.

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Audit & Risk Committee Pre-Approval Policies and Procedures

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The Audit & Risk Committee selects and oversees our independent registered public accounting firm. The Audit & Risk Committee’s charter requires that the committee pre-approve all audit, audit-related, tax and other services performed by the independent registered public accounting firm, subject to de minimis exceptions for certain non-audit services, so long as such services are approved by the committee prior to the completion of the audit. In approving any non-audit services, the Audit & Risk Committee considers whether the provision of the services would impair the independent registered public accountant’s independence.

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The Audit & Risk Committee may delegate pre-approval authority and responsibility to individuals or to designated subcommittees consisting of one or more members of the committee, provided that any such pre-approvals are presented to the committee at its next scheduled meeting. The Audit & Risk Committee has delegated such pre-approval authority to its Chair.

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In 2021 and 2020, the Audit & Risk Committee pre-approved all of the audit services provided by KPMG.

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Executive Officers

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The age, business experience and current position of each person who currently serves as an executive officer are as follows:

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National Bank Holdings Corporation Executives (the “HoldCo Executives”)

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G. Timothy Laney, Age 61

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Biographical information for Mr. Laney is provided in the section “Proposal 1 - Election of Directors” elsewhere in this proxy statement.

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Aldis Birkans, Age 48

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Mr. Birkans has served as the Company’s Chief Financial Officer since August 2018 and has served as the Company’s Treasurer from 2011 through February 2021. He has also served as a member of NBH Bank’s board of directors since August 2018. As of January 2021, Mr. Birkans is a board member of the USDF Consortium, of which NBHC is a founding member. Prior to joining the Company in 2011, Mr. Birkans was a Vice President, Assistant Treasurer of M&I Bank for five years, where he was responsible for capital management, investments, corporate liquidity and risk management related to the bank’s financial activities. In addition, Mr. Birkans worked at Citigroup as a Senior Vice President, Corporate and Investment Bank Treasury. Mr. Birkans holds a Master of Business Administration from Southern Methodist University, where he also received his Bachelor’s degree in economics and finance.

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Richard U. Newfield, Jr., Age 60

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Mr. Newfield has served as the Company’s Chief Risk Management Officer since 2011 and currently holds the same position at NBH Bank. He has also served as a member of NBH Bank’s board of directors since 2016. Mr. Newfield is the former Head of Business Services Credit at Regions Bank. He joined Regions in 2008 after a 23-year career at Bank of America. Mr. Newfield held various senior positions at Bank of America, including roles in risk management, credit, commercial banking, global bank debt and corporate marketing. He brings significant experience in development and implementation of business models and integration of businesses during mergers. In addition, Mr. Newfield has led credit process reengineering initiatives, including risk and credit policy design, and other corporate governance initiatives.

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Angela N. Petrucci, Age 45

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Ms. Petrucci has served as the Company’s Chief Administrative Officer & General Counsel since July 2020, and currently oversees our legal, compliance, BSA/AML, marketing, and human resources functions. She is also a member of NBH Bank’s board of directors and currently serves as the Chief Administrative Officer & General Counsel of NBH Bank. She joined the Company in 2015 as Associate General Counsel and has served as the General Counsel of NBH Bank since 2017. Ms. Petrucci brings significant experience in banking, corporate transactional, securities and corporate governance matters over the span of her 20-plus-year career. Prior to joining the Company, Ms. Petrucci was in-house counsel at Accenture, overseeing corporate governance and securities matters. Prior to that, she was an associate at the law firm of Chapman and Cutler LLP in Chicago, IL. Before attending law school, Ms. Petrucci was a commercial banker at First Chicago Bank (now JP Morgan Chase). Ms. Petrucci currently serves as a board member of the Young Americans Education Foundation and Young Americans Bank. She is also a member of the Colorado Bankers Association Government Affairs Committee.

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NBH Bank Executives (the “Bank Executives”)

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Christopher S. Randall, Age 55

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Mr. Randall has served as NBH Bank’s Executive Vice President and Head of Commercial and Specialty Banking since 2015 and, prior to that, he was Senior Managing Director, Specialty Banking since 2013. He has also served as a member of NBH Bank’s board of directors since 2017. Mr. Randall has over 29 years of leadership experience building a successful commercial banking and specialty finance business, providing debt and equity capital to lower middle market business across the U.S. Prior to joining NBH Bank, Mr. Randall was the director and founder of CoBiz Structured Finance, based in Denver, Colorado, since 2011. Previously, he was an executive of the Marquette Financial Companies as Senior Managing Director, COO and board member of MFC Capital Funding, a Chicago, Illinois-based national specialty finance and investing business that was started in 2005. Mr. Randall is a Trustee of the University of Colorado Foundation, supporting all campuses of the University of Colorado System.

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Ruth Stevenson, Age 72

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Ms. Stevenson has served as NBH Bank’s Chief Client Executive and Deposit Operations Executive since the merger of Peoples, Inc. and the Company on January 1, 2018. She has also served as a member of NBH Bank’s board of directors since January 2019. Prior to the merger, Ms. Stevenson served in a number of roles with Peoples Bank over an 18-year period, including, most recently as President and Chief Operating Officer and as a member of its board of directors. Ms. Stevenson has worked in a variety of roles in financial services for more than 45 years, including President of a community bank, Director of Retail, Director of a mortgage division, Operations Manager for a mortgage division, and nearly every other capacity in banking and mortgage. Ms. Stevenson also currently serves as a board member of the Office of the State Banking Commissioner for the State of Kansas.

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Brendan W. Zahl, Age 46

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Mr. Zahl has served as NBH Bank’s Executive Vice President, Personal, Private and Residential Banking since June 2021, and has served as the President of Community Banks of Colorado since 2021. Since joining the Company in 2018, Mr. Zahl has served in various capacities including, as Executive Vice President, Head of Residential Banking as well as the Executive Vice President, Head of Premier, Private and Residential Banking. He has also served as a member of NBH Bank’s board of directors since the merger of Peoples Inc. on January 1, 2018. Prior to the merger, Mr. Zahl served as President and CEO of Peoples National Bank. Mr. Zahl began his banking career at FirstBank in Colorado Springs, Colorado. After a decade at FirstBank, he moved to Peoples National Bank in 2007 to take over Retail and Lending Management and was promoted to President and CEO of Peoples National Bank in 2012. Mr. Zahl currently serves on the Property Committee of Partners in Housing and is the Chair of the FCA Southern Colorado Region Advisory Board. He previously served as Chairman of the Board of the Colorado Bankers Association. Mr. Zahl has held several board, advisory, and volunteer roles with many other community organizations including Partners in Housing, Junior Achievement, United Way, Rotary International, and Habitat for Humanity. Mr. Zahl attended the University of Nebraska, where he was a member of two national championship football teams and graduated with honors with a Business Administration degree. He is also a graduate of the Graduate School of Banking, Madison, Wisconsin.

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The results of our efforts have helped secure our status as a leading regional bank franchise. As we look ahead, we will remain focused on our core bank franchise but also to further enhance our capabilities through our 2Unifi^SM vision and to our financial investments in our digital strategy.

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We have seen consistent earnings growth over the past five years which has resulted in our ability to increase the dividend to our shareholders during that time. As a result of a well-defined strategy and disciplined execution, we have seen improved and stronger performance each year over the past five years:

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CEO Compensation

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Our philosophy for our CEO compensation is heavily weighted towards measures that directly align with shareholder value creation and is reviewed annually in consultation with the Compensation Committee’s independent compensation consultant, F.W. Cook.

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For the last five years, our CEO’s base salary has remained at the same level at $750,000. In addition, the total amount of our CEO’s at-risk pay (Short-Term Incentive and Long-Term Incentive) and overall total compensation for 2019, 2020 and 2021 were as follows:

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Shareholder Engagement & 2021 Say-on-Pay Advisory Vote

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At our 2021 Annual Meeting of Shareholders, we were pleased to receive a 97.1% vote in favor of our executive compensation (Say-on-Pay) as compared to 84.2% in the prior year. Our record of shareholder engagement is strong, beginning with the regular meetings that our CEO and CFO hold with our investors at various conferences and meetings throughout the year. In addition, the Company conducts an annual post-meeting shareholder engagement process with the corporate governance teams of our shareholders to understand any concerns or other feedback regarding our executive compensation program and governance practices. As part of the process we contacted shareholders representing more than 66% of our shares outstanding.

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Our engagement meetings discussed our practices and their views regarding compensation, sustainability and governance matters. We also discussed our digital strategy, including our vision for 2UniFi^SM and related thereto, our investments in Finstro and Figure Technologies. In our discussions, shareholders provided feedback on our public disclosures and provided their perspective on executive compensation. The shareholders that we met with did not express concerns regarding our existing compensation program.

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Summary

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The Board and the executive team remain committed to moving your Company forward with a clear priority of: delivering superior growth and performance for you, our shareholders. The Board and the Compensation Committee have the utmost confidence in the talent and determination of the executive team as we work to continue to execute on our long-term strategy and deliver value to our shareholders.

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The Board and the Compensation Committee are also committed to ensuring the link between executive compensation and shareholder value creation is strong. As always, we will continue to evaluate our current compensation practices and monitor emerging best practices.

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Sincerely,

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National Bank Holdings Corporation Compensation Committee

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Compensation Discussion and Analysis

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Introduction

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In this section, which we refer to as the “CD&A”, we explain how we compensate the executive officers named in the “Summary Compensation Table” below (our “Named Executive Officers” or “NEOs”). Our NEOs for 2021 were:

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Our approach to executive compensation is to pay for performance and to align compensation programs with effective risk management. We believe this approach to compensation will create sustainable shareholder value over the long term.

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Philosophy, Objectives, Components and Highlights of Our Executive Compensation Program

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Philosophy

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We are at our best when we are providing our clients with banking advice and services that help them be successful. When we do this in accordance with our core values, it is a win-win for clients and the community. Because a key expectation of management is to build an effective organizational structure, it is particularly important that our executive compensation program be designed to attract, develop and retain the talent needed for the organization’s continued success in building a competitive franchise and executing our strategic plan. We intend this program to be aligned with performance goals that motivate executives to achieve our strategic goals prudently and within acceptable risk parameters. Our executive compensation program is designed to reward individual contributions and to create long-term shareholder value.

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Objectives

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Our executive compensation philosophy is designed to meet five key objectives:

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Compensation Components

The total compensation of our NEOs consists primarily of the following components:

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Compensation Best Practices

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Best practices we have implemented with respect to our executive compensation program include the following:

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Setting Compensation for our Named Executive Officers

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Executive compensation is set by the Compensation Committee, in collaboration with the compensation consultant and management.

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Role of Compensation Committee

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The Compensation Committee determines executive compensation. The Compensation Committee, comprised entirely of independent directors, sets compensation policy and administers our executive compensation program. The Compensation Committee acts independently, but works closely with our Board of Directors and members of management. The Compensation Committee has responsibility for setting the components of the CEO’s compensation and uses the assistance of F.W. Cook, its independent compensation consultant, in determining executive compensation. The Chairman of our Compensation Committee takes an active role in meeting with F.W. Cook. Our CEO, with the assistance of F.W. Cook and our Chief Administrative Officer, develops initial recommendations for the other NEOs for the Compensation Committee’s consideration.

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Role of Independent Compensation Consultant

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The Compensation Committee engages its own advisors to assist in carrying out its responsibilities. The Compensation Committee has engaged F.W. Cook to advise and support the Compensation Committee on compensation decisions. At the direction of the Compensation Committee, F.W. Cook assists in collecting and analyzing market data on compensation and provides expert knowledge of competitive practices and trends as well as developments in regulatory and technical matters. F.W. Cook has no other relationships with the Company (other than advising the Nominating & Governance Committee on matters related to director compensation). As part of the engagement of F.W. Cook in 2021, the Compensation Committee considered the independence factors required under the NYSE corporate governance standards, including the applicable SEC rules, and determined that F.W. Cook was independent.

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Role of Management

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Our CEO and Chief Administrative Officer assist the Compensation Committee in designing and managing our executive compensation program. Our CEO attends meetings and makes recommendations to the Compensation Committee on the compensation of other NEOs. Our Chief Risk Management Officer advises the Compensation Committee on risk mitigation and assessment of compensation risk. None of our NEOs provides recommendations with respect to their own compensation.

Market Data Review

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Market pay levels and practices, including those of a self-selected peer group, are one of many factors the Compensation Committee considers in making executive compensation decisions. Market information provides an external frame of reference on the range and reasonableness of compensation levels and practices, and is used as a data point in decision-making and not as a primary factor. Internal considerations, competitive factors and the Company’s evolution are other factors the Compensation Committee considers in setting executive compensation.

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The peer group was reviewed in 2021 by F.W. Cook, with input from the Compensation Committee and management. The directive from the Compensation Committee over the past few years has been to target a peer group with a median asset size between $6 to $8 billion in order to better align with the Company’s current size and strategy. The Company is currently $7.2 billion in total assets as of December 31, 2021. After substantial review and consideration, the Compensation Committee approved the following peer group of 20 institutions (the “Compensation Peer Group”):

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The companies in the Compensation Peer Group have a median asset size of $7.6 billion (as of July 1, 2021), ranging from approximately $4.3 billion to $15.5 billion. In addition to asset size, other factors considered in selecting peers included geography, complexity of the organization and similarity of business lines and services and products offered to those of the Company. We believe the peers selected are a diverse group of financial institutions that provide the necessary breadth to be meaningful in evaluating NEO compensation. The Compensation Peer Group is reviewed annually and may be changed to reflect M&A activity and other items deemed relevant by the Compensation Committee.

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F.W. Cook summarized and provided the Compensation Committee with market data relating to base salaries, short-term cash bonuses, long-term equity awards, and total compensation for each of the top five

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officers at these peer companies, using the data provided in the peer company’s latest available proxy statement. The Compensation Committee considered this information, together with other factors discussed in this CD&A, in determining NEO compensation.

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Executive Compensation Framework

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The Compensation Committee believes in variable compensation and paying for performance. This is demonstrated by the amount of at-risk pay with respect to the NEOs. For 2021, 75% of our CEO’s compensation was at-risk and 65% of the compensation for all other NEOs was at-risk.

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The Compensation Committee made the following determinations with respect to each of the compensation components further described below.

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Base Salary

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In 2021, the Compensation Committee determined to maintain base salaries at their 2020 levels for Mr. Laney and Mr. Newfield. The committee increased Mr. Birkans’ salary from $350,000 to $365,000 in April 2021 and then to $375,000 in August 2021 due to his expanded growth and development in the Chief Financial Officer role. The Compensation Committee increased Ms. Petrucci’s base salary from $250,000 to $265,000 in April 2021 and then to $295,000 in August 2021 due to her expanded responsibilities and growth and development in her role as Chief Administrative Officer and General Counsel. The Compensation Committee increased Mr. Zahl’s salary from $275,000 to $290,000 in March 2021 in conjunction with taking over Personal Banking in addition to his responsibilities within Residential and Premier Banking. The decision to maintain the salaries for Mr. Laney and Mr. Newfield was based upon a variety of factors, including the Company’s focus on prudent expense management, the Compensation Committee’s annual review of peer and market data provided by F.W. Cook and the desire to maintain an emphasis on variable, performance-based compensation.

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*Mr. Birkans’ salary increased to $375,000 in August 1, 2021. The Compensation Committee considered this increased salary for payout purposes under the 2021 STIP.

**Mr. Zahl’s salary was increased to $290,000 in March 2021. The Compensation Committee considered this increased salary for payout purposes under the 2021 STIP.

***Ms. Petrucci’s salary increased to $295,000 in August 2021. The Compensation Committee considered this increased salary for payout purposes under the 2021 STIP.

****In the event Mr. Zahl achieves exceptional line of business results or individual performance, the maximum payout could be as much as $307,000 or 192%, as determined by the Compensation Committee.

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2021 STIP Structure

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In its establishment of the 2021 STIP, the Compensation Committee determined that payouts should be based on the attainment of quantitative financial metrics as well as a qualitative assessment of certain objectives and individual performance. The Compensation Committee determined that with respect to Messrs. Laney, Newfield, Birkans and Ms. Petrucci, 70% of the total 2021 STIP bonus should be based on the attainment of specific quantitative financial metrics (“HoldCo Metrics”) as interpolated for performance between threshold, target and maximum levels of performance. With respect to Mr. Zahl, the Compensation Committee determined that 10% of the total 2021 STIP bonus should be based upon the same HoldCo metrics, and that 70% should be based upon the performance of the business groups that he leads. There is no payout with respect to a given metric if the threshold level of performance is not achieved.

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The financial metrics and relative targets established are a reflection of what the Compensation Committee deemed important in the beginning of 2021 to align the NEOs’ performance with the achievement of the Company’s strategic goals for 2021 as well as key long-term financial targets. Specifically, Core Net Income and Asset Quality were selected as the most important metrics in driving overall corporate performance of the HoldCo executives while line of business-specific loan and deposit growth as well as line of business contribution were each deemed important for Mr. Zahl.

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In addition, with respect to Messrs. Laney, Newfield, Birkans and Ms. Petrucci, the Compensation Committee determined that 30% of the 2021 STIP bonus should be based on a qualitative assessment, with 15% of the 2021 STIP based on Enterprise Risk Management and ESG efforts and the remaining 15% based upon an individual assessment of each officer, as further described below. With respect to Mr. Zahl, the Compensation Committee determined that 20% of the 2021 STIP bonus should be based on a qualitative assessment, with 5% of the 2021 STIP bonus based on Enterprise Risk Management and ESG efforts, and the remaining 15% based upon his individual assessment, as further described below.

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2021 STIP Goal Setting

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In establishing the performance metrics for the 2021 STIP, the Compensation Committee focused on the financial metrics that play the most significant role in driving the Company to meet its corporate objectives. Every year, the Company undertakes a rigorous financial planning process geared around establishing targets for performance that will enhance the Company’s franchise value and return for shareholders. The Compensation Committee reviews the metrics that are most aligned with the strategic objectives of the Company and which are most aligned with the interest of shareholders.

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In setting the target level of performance for each of the financial metrics, the Compensation Committee considered the Company’s annual profit plan that is developed through the aforementioned planning process, strategic objectives for the Company as well as historical peer performance with respect to each metric. Our annual profit plan for 2021 included assumptions that took into account the general economic conditions as indicated by the average of major economist forecasts available, which were applied to the Company’s prevailing income statement and balance sheet trends from late 2020.

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Review of 2021 STIP Performance Metrics Results by the Compensation Committee

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As part of its role in overseeing and approving NEO compensation, the Compensation Committee reviewed and evaluated the actual achievement levels with respect to each performance metric under the 2021 STIP.

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The following is a summary of the specific performance metrics established by the Compensation Committee for 2021 (as further described above), including the actual results for each metric with respect to Messrs. Laney, Birkans, Newfield and Ms. Petrucci:

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*The calculated payout for Ms. Petrucci was 146.3% due to her individual performance rating of 110% as further described below.

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With respect to Mr. Zahl, 30% of his 2021 STIP bonus was dependent upon the achievement of the above-listed factors with the remaining 70% of his 2021 STIP bonus based upon the performance of specific profitability and loan and deposit growth goals for the lines of business he oversees. The following is a summary of the specific performance metrics established by the Compensation Committee for 2021, including the actual results for each metric with respect to Mr. Zahl:

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*Mr. Zahl may receive a payout of up to 200% for exceptional line of business results or individual performance, as determined by the Compensation Committee for these specific metrics.

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Metric Definitions:

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* The individual performance results for each Named Executive are discussed below.

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Enterprise Risk Management and ESG. With respect to this qualitative metric, the Compensation Committee considered several factors, including:

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These considerations resulted in the achievement of this performance component at a 120% achievement level, or 150% of the target level payout.

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Qualitative Individual. For this component, the Compensation Committee considered each NEO’s individual performance as follows:

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Equity Compensation

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2021 Long-Term Equity Awards and Equity Mix

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The equity awards granted in 2021 took the following forms:

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The target equity mix for the CEO and the other NEOs is 70% performance-based for the standard annual equity awards granted in 2021. As noted in the section labeled “Restricted Stock and Option Awards” Messrs. Laney, Birkans and Newfield and Ms. Petrucci received a restricted stock award in connection with the shift of their STIP cash payment awarded in 2021.

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The Compensation Committee approved the following equity award amounts granted to the NEOs in 2021:

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Three-Year Performance Stock Unit Award

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In 2021, the Compensation Committee continued with a long-term performance stock unit award (“PSU Award”) with vesting that is based on the Company’s achievement of two metrics over a three-year performance period (covering January 1, 2021 through December 31, 2023).

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PSU Awards are typically granted on April 1 each year, in accordance with our equity grant practices. The Compensation Committee determined to continue to use the same metrics as 2020 for our 2021 PSUs, including metrics tied to our relative total shareholder return metric (TSR) and our relative return on tangible assets metric (ROTA). The Compensation Committee believed that the two metrics appropriately balance operating performance with returns to shareholders, and that the use of relative measurement for both metrics ensures alignment between management and shareholders. Each metric also includes a governor that caps the potential payout on that portion at 100% of target if our own TSR (for the relative TSR metric) or our own ROTA (for the ROTA metric) are negative during the performance period. The Compensation Committee believes these governors provide important balance such that if our absolute operational performance and/or shareholder returns are not up to standards, the NEOs will not receive an above-target award.

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The PSU Award will vest on March 1, 2024 (with respect to the TSR metric), and April 1, 2024, (with respect to the ROTA metric) and the number of shares delivered will be based upon the Compensation Committee’s certification of the attainment of the results at the end of the three-year performance period. The number of shares delivered under the award will be based upon an interpolation of threshold, target and maximum performance levels. The equity payouts at threshold, target, and maximum levels are 50%, 100% and 150%, respectively. In addition, dividends accrue during the three-year performance period and are paid on any earned performance stock units on the vesting date. The two financial metrics and respective weightings for the PSU Award are as follows:

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The Company believes the PSU Award is important because it aligns a significant portion of the executive’s compensation against performance over an extended period and aligns the performance goals with the long-term corporate objectives of the Company. The Company believes linking compensation to long-term Company performance encourages prudent risk management and discourages excessive risk taking for short-term gain. Moreover, the Compensation Committee allocated 60% of the value of the award on ROTA given the importance of measuring the operating performance of the Company relative to other banks with the remaining 40% allocated to TSR to ensure the NEOs interests are closely aligned with the interests of shareholders.

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Restricted Stock and Option Awards

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The Compensation Committee also awarded equity to each of our NEOs in the form of restricted stock and options that each vest in one-third increments over three years. The Compensation Committee believes equity in this form is still an important element to ensure retention of its key executives and, with respect to stock options, to incentivize long-term performance. The Compensation Committee awarded restricted stock to Messrs. Laney, Birkans and Newfield and Ms. Petrucci in 2021 by shifting 20% of the STIP cash payment into restricted stock in connection with the 2020 STIP.

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Vesting of 2019 Performance Stock Unit Award

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The performance stock units that were previously granted in 2019 were subject to performance vesting conditions tied to the Company’s cumulative earnings per share and total shareholder return relative to a defined group of peer banks within the KRX index, in each case over the period from January 1, 2019 to December 31, 2021.

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In establishing the goals under the 2019 Performance Stock Unit Award, the Committee considered the relative importance of the Company’s total shareholder return relative to the KBW Regional Banking Index, a group of approximately 50 regional banks. In addition, in setting the three-year earnings per share (EPS) target, the Committee established a measure that was based upon 56% annualized growth (on a GAAP basis) over the three years of the performance period.

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The actual achievement under the TSR metric was 59^th percentile performance (number 17 out of 40 companies). With respect to the EPS metric, actual earnings per share growth was 63% on an annualized basis (under GAAP) over the three years of the performance period. This EPS growth represents significant growth relative to other bank peers.

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In February 2022, the Compensation Committee reviewed the Company’s actual performance against the EPS and TSR targets (as further described below) and confirmed that the awards achieved a payout of 137% of target. A summary of the Company’s performance as measured against the targets, and the resulting payout, is set forth below:

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Stock Ownership Guidelines

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We believe that ownership of our stock helps align the interests of certain of our key executives with those of shareholders and emphasizes the long-term aspects of equity-based compensation. The Board adopted

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minimum stock ownership thresholds (the “Executive Minimum Ownership Thresholds”) as part of the stock ownership guidelines applicable to our HoldCo Executives (the “Executive Stock Ownership Guidelines”) as shown in the table below.

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Under the Executive Stock Ownership Guidelines, only vested restricted shares and shares owned outright, count towards the Executive Minimum Ownership Thresholds. Unvested restricted shares and unexercised stock options do not count. In addition, HoldCo Executives who have not yet achieved the Executive Minimum Ownership Thresholds are required to retain 50% of the after-tax portion of vested stock awards and exercised options until the threshold is met.

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As of March 11, 2022, Messrs. Laney and Newfield had achieved their respective Executive Minimum Ownership Threshold. Mr. Birkans and Ms. Petrucci became subject to the guidelines in connection with their appointment as the Chief Financial Officer in August 2018, and Chief Administrative Officer and General Counsel in July 2020, respectively, and have not yet met their Executive Minimum Ownership Thresholds.

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Insider Trading Restrictions and Anti-Hedging

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To further strengthen the alignment between stock ownership and your interests as shareholders, our Insider Trading Policy prohibits every director, officer, associate (including persons employed on a temporary or contract basis or through a staffing agency), and consultant of the Company and its subsidiaries from engaging in short sales, including sales with delayed delivery and any hedging transactions with respect to the Company’s securities. Such hedging transactions include, but are not limited to, the use of prepaid variable forward contracts, equity swaps, collars and exchange funds that are intended to offset any decrease in the value of the Company’s securities. In addition, pledging or hypothecation of Company’s securities by designated persons (including the NEOs) under the Company’s Insider Trading Policy is prohibited.

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Clawback Policy

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Each HoldCo Executive’s employment agreement contains a clawback provision, which requires, if the Company is required to prepare an accounting restatement due to material noncompliance of the Company with any financial reporting requirement as a result of misconduct, the executive to reimburse the Company for all amounts received under any incentive compensation plans and any gains realized on the sale of the Company’s securities, in each case during the 12 month period following the first public issuance or filing with the SEC (whichever first occurs) of the financial document embodying such financial reporting requirement. The clawback provision also provides that if the executive is found guilty of misconduct by any judicial or administrative authority in connection with any (1) formal investigation by the SEC or (2) other federal or state regulatory investigation, the Compensation Committee may require the repayment of any gain realized on the exercise of an award under any equity compensation plan without regard to the timing of the determination of misconduct in relation to the timing of the exercise of the award. In addition, each NEO’s equity award agreements include a similar clawback provision, including a clause whereby if the executive has engaged in a serious breach of conduct, the Compensation Committee may require the executive to forfeit the unvested award and/or require the executive to repay any amounts realized upon the vesting of the award or on the subsequent sale of the shares underlying the award.

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