8-KLeadership Changes

FIRST CITIZENS BANCSHARES INC /DE/ 8-K Report, Executive Changes (Sep 21, 2007)

Filed September 21, 2007For Securities:FCNCAFCNCPFCNCBFCNCOFCNCN

Summary

This 8-K filing from First Citizens Bancshares, Inc. (FCNCA) on September 21, 2007, primarily concerns the execution of new separation benefit agreements with certain key officers of its wholly-owned banking subsidiaries, First-Citizens Bank & Trust Company and IronStone Bank. These new agreements supersede previous arrangements and include updated payment terms and other provisions. The core purpose of these agreements is to provide financial benefits to these officers, or their beneficiaries, upon separation from service at an agreed-upon age or in the event of death, in exchange for limited consulting services and a non-compete commitment. The reporting of these agreements is significant for investors as it outlines compensation-related arrangements for senior leadership that will impact future payouts. While the agreements ensure a level of financial security for these executives, they also include stipulations for continued engagement through consulting and non-compete clauses, aiming to protect the company's interests. The filing details the monthly payment amounts for several named executive officers, providing transparency into the potential future financial obligations of the company associated with these arrangements.

Key Highlights

  • 1New separation benefit agreements have been entered into by First-Citizens Bank & Trust Company and IronStone Bank with certain officers, including executive officers of FCNCA.
  • 2These agreements provide for monthly payments to officers for ten years following separation from service at an agreed-upon age or upon death.
  • 3In exchange for these payments, officers must provide limited consulting services and agree not to compete with the banks during the payment period.
  • 4The new agreements supersede and replace prior similar agreements, reflecting updated payment amounts and terms.
  • 5The filing specifies the monthly payment amounts for several key executive officers, including Lewis R. Holding, James B. Hyler, Jr., and Kenneth A. Black.
  • 6Lewis R. Holding's separation from service is noted as January 1, 2011, with flexibility for him to elect a later date.
  • 7The agreements were approved by the banks' Boards of Directors, following review and recommendation by the joint Compensation Committee.

Frequently Asked Questions

The primary purpose of these agreements is to provide financial benefits, in the form of monthly payments over ten years, to certain officers upon their separation from service at an agreed-upon age or upon their death. In return, the officers agree to provide limited consulting services and to abide by non-compete clauses.

These agreements represent potential future financial obligations for the company, as they detail the monthly payment amounts to be disbursed to officers after their separation from service. The filing clearly outlines these amounts for several key executives, providing transparency into these future compensation-related outflows.

Officers are eligible to receive payments if they separate from service at an agreed-upon age or if they pass away. The payments cease if the officer's employment is terminated for any reason other than separation from service at an agreed-upon age or death. Additionally, the banks retain the right to terminate an officer's agreement without obligation prior to separation from service or death.

The new separation benefit agreements were approved by the Boards of Directors of the banking subsidiaries (First-Citizens Bank & Trust Company and IronStone Bank), after receiving a review and favorable recommendation from the joint Compensation Committee of both the company and its banks' Boards of Directors.