Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
On May 13, 2019, Huntington Bancshares Incorporated (“Huntington”), with its
wholly owned banking subsidiary, The Huntington National Bank, entered into a Transition Agreement (the “Transition Agreement”) with Howell D. McCullough III (“Executive”), setting forth the terms of his retirement from his
positions of Senior Executive Vice President and Chief Financial Officer of Huntington and the transition services he will provide upon the commencement of employment of his successor. Executive’s employment with Huntington will cease on
December 31, 2019, subject to the terms of the Transition Agreement.
Pursuant to the Transition Agreement, while employed through December 31,
2019, Executive will continue to receive his base salary and participate in the Huntington employee benefit plans for which he is eligible in accordance with the terms of the plans. Subject to Executive’s continued employment with Huntington
through December 31, 2019 and compliance with the Transition Agreement, he will receive a payment in respect of Huntington’s 2019 performance equal to his target annual bonus amount for 2019 ($747,500) multiplied by the “2019
Performance Factor” (as defined in the Transition Agreement) reflecting the level of achievement of the performance goals applicable to Huntington’s executive officers, as determined by the Compensation Committee of the Board of Directors
of Huntington (if the 2019 Performance Factor is greater than 100%, any amount in excess of $747,500 will be awarded in restricted stock units). In addition, in connection with Executive’s retirement on December 31, 2019, subject to
satisfaction of the foregoing conditions, Huntington will enter into a consulting agreement with Executive (the “Consulting Agreement”), pursuant to which he will perform consulting services for Huntington from January 1, 2020 through
December 31, 2022. While serving as a consultant and subject to compliance with all applicable restrictive covenants, including the
non-competition
restrictions, Executive will receive the following
compensation:
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an aggregate sum of $330,000 per year, to be paid on an installment basis each month;
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grants of equity awards on each of December 1, 2020, 2021 and 2022, each with a grant date value equal to
$370,000 (75% in the form of deferred stock units in respect of Huntington common stock (“DSUs”) that will each vest in three equal annual installments following the grant date and 25% in the form of stock options to acquire Huntington
common stock (“Stock Options”) that will each vest in four equal annual installments following the grant date, with any such vesting to be subject to compliance with the Consulting Agreement and all applicable restrictive covenants); and
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grants of equity awards, on each of February 28, 2021 and 2022, each with a grant date value equal to the
lesser of (i) $695,000 multiplied by the “2020 Performance Factor” (as defined in the Consulting Agreement) in the case of the February 28, 2021 award, or the “2021 Performance Factor” (as defined in the Consulting
Agreement) in the case of the February 28, 2022 award, and (ii) $695,000 (75% in the form of DSUs and 25% in the form of Stock Options, with such awards to vest as described above for the December grants).
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The Transition Agreement and the Consulting Agreement also include, among other provisions,
non-competition,
non-solicitation,
non-disparagement
and confidentiality provisions.
The
foregoing descriptions of the Transition Agreement and the Consulting Agreement, which is attached to the Transition Agreement as Exhibit A, are not complete and are qualified in their entirety by reference to the text of the Transition Agreement
and the Consulting Agreement, copies of which are attached as Exhibit 10.1 to this Current Report on Form
8-K
and incorporated herein by reference.
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