UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): October 30, 2024
Esquire Financial Holdings, Inc.
(Exact name of the registrant as specified in its charter)
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Maryland
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001-38131
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27-5107901
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(State or other jurisdiction of
incorporation or organization)
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(Commission File Number)
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(IRS Employer
Identification No.)
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100 Jericho Quadrangle, Suite 100
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Jericho, New York
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11753
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(Address of principal executive offices)
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(Zip Code)
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(516) 535-2002
(Registrant’s telephone number)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (See General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c)
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading
Symbol(s)
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Name of each exchange on which registered
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Common Stock, $0.01 par value
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ESQ
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The Nasdaq Stock Market LLC
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule
12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
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(e) Adoption of Annual Incentive Plan. The Board of
Directors of Esquire Financial Holdings, Inc. (the “Company”) adopted the Esquire Financial Holdings, Inc. Annual Incentive Plan (the “Plan”), effective January 1, 2025, to assist the Company in its ability to motivate, attract and retain qualified
employees. The Plan provides eligible employees (“Participants”) with the ability to earn incentive payments based upon the extent to which specified performance goals have been achieved or exceeded for a performance period.
The Plan is in effect January 1, 2025 through December 31, 2025, and will continue to renew for successive one-year periods (each calendar
year being a “Plan Year”) unless otherwise terminated or modified by the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of the Company.
Officers of the Company and other key employees as recommended by the Chief Executive Officer and approved by the Committee are eligible to
participate in the Plan. Each Participant will have an incentive award target, calculated as a percentage of base wages at the end of a Plan Year. Award opportunities are approved by the Committee at the beginning of each Plan Year. Performance
measures may be financial or non-financial. In no event shall a Participant receive payment under the Plan that exceeds a specified percentage of the Participant’s incentive target for the Plan Year, as approved by the Committee.
The Plan uses a “scorecard” structure consisting of financial and non-financial metrics as determined by the Committee from year to year,
each of which metric may be weighted as determined by the Committee. Each Plan Year, the Committee will establish performance targets for each category within each metric. The threshold and maximum performance metrics will be a percentage and
multiple of the target, respectively. The Committee may, in its discretion, based on the recommendation of the CEO (for Participants other than the CEO) or in absence of such recommendation, increase or decrease any payments to which a Participant
would otherwise be entitled.
Awards will be paid in cash no later than March 15th following the end of the Plan year, which is December 31 of each year. In
the event of a Participant’s termination of employment during the Plan Year, no award will be paid. However, if a Participant’s termination is due to death, disability or retirement, the Participant, or the Participant’s beneficiary, will be paid a
pro-rated award. All awards made under the Plan are subject to a clawback in the event the Company is required to restate its financial statements, and will be subject to any clawback policy adopted from time to time by the Company or as required by
statute.
The foregoing description of the Annual Incentive Plan is qualified in its entirety by reference to the copy of the Plan that is included
as Exhibit 10.1 to this Current Report and incorporated by reference into this Item 5.02.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
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Exhibit No.
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Description
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104
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Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, hereunto duly authorized.
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ESQUIRE FINANCIAL HOLDINGS, INC.
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Dated: November 5, 2024
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By:
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/s/ Andrew C. Sagliocca
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Andrew C. Sagliocca
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Vice Chairman, Chief Executive Officer and President
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Esquire Financial Holdings, Inc.
Annual Incentive Plan
This document outlines the Esquire Financial Holdings, Inc. Annual Incentive Plan (the “Plan”) for eligible employees (each a “Participant” and collectively “Participants”) of Esquire Financial Holdings, Inc. and Esquire Bank, National Association (collectively, the “Company”).
The purpose of the Plan is to retain and motivate the officers and other employees of the Company who have been designated by the Committee to participate in
the Plan for a specified performance period by providing them with the opportunity to earn incentive payments based upon the extent to which specified performance goals have been achieved or exceeded for the performance period. The Plan is further
intended to assist the Company in its ability to motivate, attract and retain qualified employees.
The Plan is in effect January 1, 2025 through December 31, 2025, and will continue to renew for successive one-year periods (each calendar year being a “Plan Year”) unless otherwise terminated or modified in accordance with the Plan and specifically approved by the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of the Company.
Officers of the Company and other key employees as recommended by the Chief Executive Officer (“CEO”) and approved by the Committee shall be eligible to
participate in the Plan. Participants selected from the eligible participant group will be selected and approved for each Plan Year by the Committee. An award for a person
who becomes a Participant after the commencement of a Plan Year will be prorated unless otherwise determined by the Committee.
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4.
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Basis of Incentive Compensation
Award
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The Plan’s incentive compensation is paid in cash. The Participant’s potential incentive compensation award under the Plan is based on the attainment of
certain financial and non-financial performance metrics as approved at the beginning of the Plan Year by the Committee (or its delegee) in its discretion. The potential incentive compensation award is expressed as a percentage of the Participant’s
base wages at the end of the Plan Year. In no event shall a Participant receive payment under the Plan that exceeds a specified percentage of the Participant’s incentive target for the Plan Year, as approved by the Committee. The amount of any
incentive compensation award to be paid to each Participant approved by the Committee along with an aggregate award incentive payout amount for other Participants, as recommended by the CEO (for Participants other than himself or herself).
The Plan uses a “scorecard” structure consisting of financial and non-financial metrics as determined by the Committee from year to year, each of which metric
may be weighted as determined by the Committee. Each Plan Year, the Committee will establish performance targets for each category within each metric. The threshold and maximum performance metrics will be a percentage and multiple of the target,
respectively.
Within 60 days following the end of the Plan Year, the Committee will review performance against the scorecards and certify in writing the extent to which the
applicable performance goals were satisfied, and determine the amount of the incentive compensation award, if any, to be paid to each Participant under the Plan. Notwithstanding any provision of the Plan to the contrary, in making this determination,
the Committee may, in its discretion, based on the recommendation of the CEO (for Participants other than himself or herself) or in absence of such recommendation, increase or decrease any payments to which a Participant would otherwise be entitled.
In calculating performance results, the Committee may provide for exclusion of the impact of an event or occurrence which the Committee determines should
appropriately be excluded or may approve an adjustment to one or more performance measure or goals applicable to an award in order to reflect events if deemed appropriate, including, without limitation, unusual or infrequent events, realized
investment gains or losses, acquisitions or dispositions, asset write downs, litigation or claim judgments or settlements, discontinued operations, business interruption events, reserve changes, catastrophes, tax law or accounting changes and
restructuring expenses occurring during the performance period. Performance measures based on financial metrics may be established on a GAAP or adjusted GAAP basis. Performance measures may be established on an absolute or relative basis and may be
established on a corporate-wide basis or with respect to one or more business units, divisions, subsidiaries or business segments. Relative performance may be measured against a group of peer companies, a financial market index or other acceptable
objective and quantifiable indices.
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6.
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Administrative Matters
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A. Administration of the Plan
The Committee is responsible for the oversight, supervision and existence of the Plan. The Committee shall monitor for accuracy the
CEO’s performance reporting and determine the award opportunity and amount of the CEO’s awards under the Plan. The CEO shall monitor for accuracy the performance reporting of the other Participants and make recommendations to the Committee
concerning award opportunities and the amount of the Participants’ awards under the Plan. The CEO has been delegated discretion to interpret the terms of the Plan, to determine eligibility for benefits, and to calculate the incentive compensation
awards under the Plan, with the exception of matters concerning his or her own eligibility or awards under the Plan. The Committee will make decisions concerning all matters of the CEO’s award, approve all opportunities, goals and award payments
and approve the aggregate value of opportunities and award payout under the Plan. The Committee, in its discretion, will make all final determinations including those not herein specifically authorized which may be necessary or desirable for the
effective administration of the Plan.
The Committee may withhold or adjust any incentive compensation award in its sole discretion as it deems appropriate and will have the CEO
notify the Participant of its decision to withhold or adjust an incentive compensation award (with the Committee notifying the CEO with respect to any such action impacting the CEO’s award).
Any decision or interpretation of any provision of the Plan adopted by the Committee (or by the CEO pursuant to delegated authority) shall
be final and conclusive.
B. Active Participation Required
In the event, during the Plan Year, of the Participant’s death, permanent disability (as determined by the Committee in its discretion) or
retirement (each, an “Early Termination Event”), any incentive compensation award shall be based on performance for the Plan Year, but prorated through the end
of the most recent month prior to the Early Termination Event and shall be paid at the same time as would be otherwise due but in no event later than March 15th following the end of the Plan Year.
Any incentive compensation award to a Participant who is eligible for a partial year will be prorated through the end of the most recent
month prior to the event and will be paid at the same time as would otherwise be due but in no event later than March 15th following the end of the Plan Year.
Unless otherwise determined by the Committee, any incentive compensation award to a Participant who transfers out of an eligible position
prior to the end of the Plan Year, for any reason, will be prorated through the end of the most recent month prior to the event and will be paid at the same time as would otherwise be due but in no event later than March 15th following the end of the
Plan Year.
In the event the Participant’s employment ceases prior to the Payment Date (as defined below) for any reason other than an Early
Termination Event, including, without limitation, a voluntary termination of employment by the Participant or an involuntary termination with or without cause, as determined in accordance with the personnel policies of the Company, the Participant
shall not be entitled to, and shall not have earned, any incentive compensation award under the Plan, unless provided for otherwise in a Participant’s employment agreement with the Company.
Awards under the Plan will be calculated and paid in cash on an annual basis. Payment of awards, less deferrals and applicable federal, state and local taxes,
will be made as soon as practicable following the end of the Plan Year (the “Payment Date”), but in no event before certification of the Committee or later
than March 15th following the end of the Plan Year.
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8.
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Modification and Termination of
Plan
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The Plan may be modified or changed at any time by the Committee in its discretion, followed by written notification to Participants as soon as reasonably
practicable; provided, however, that no
amendment may materially impair the rights of a Participant with respect to an outstanding Plan Year without the consent of the Participant. The Plan may be terminated at any time by the Committee (or the Board) in its discretion, followed by written
notification to Participants as soon as reasonably practicable. In the event of a Plan termination, the Participant shall continue to be eligible for incentive compensation awards for the Plan Year prorated through the Plan’s
termination date, unless the Committee determines, in its discretion, that no incentive compensation should be paid. Any incentive compensation awards shall
be calculated through the date of the Plan termination on such basis as the Committee deems appropriate in its discretion and will be payable as soon as practicable after the termination of the Plan but in no event later than March 15th following the
end of the Plan Year.
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Participant Rights Not
Assignable; Plan not a Contract
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Any awards made pursuant to the Plan shall not be subject to assignment, pledge or other disposition. Nothing contained in the Plan shall confer upon any
employee any right to continued employment or to receive or continue to receive any rate of pay or other compensation, nor does the Plan affect the right of the Company to terminate a Participant’s employment. Participation in the Plan does not
confer rights to participation in other Company programs or plans, including annual or long-term incentive plans, non-qualified retirement or deferred compensation plans or other executive perquisite programs.
The Company is committed to doing business in an honest and ethical manner and to complying with all applicable laws and regulations. Participant actions are
expected to comply with the policies established by the Company, including any written ethical or code of conduct statements. The Committee may determine on a case-by-case basis any reductions or eliminations of incentive payments under this Plan due
to violations of policies or noncompliance.
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11.
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Governing Law and Venue
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The parties agree that the interpretation and enforcement of the Plan shall be governed by the laws of the state of New York without reference to principals
of conflict of laws and the state and federal courts in the state of New York located in or for Nassau County, New York shall have exclusive jurisdiction over any claim, action, complaint or lawsuit brought under the terms of the Plan. The
Participant consents and waives any objection to personal jurisdiction and venue in such courts. The Plan, and any payments thereunder, shall not be subject to the Employee Retirement Income Security Act of 1974, as amended, and all benefits under the Plan are unfunded. No Participant shall have any greater right than the right of a general unsecured creditor of the Company.
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12.
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Attorney’s Fees and Costs
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The parties agree that in the event of any legal action arising out of or relating to the interpretation or enforcement of the Plan, a Participant or the
Company shall be entitled to recover their attorney’s fees and costs in the event that they are the prevailing party, to the extent permitted by applicable law.
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13.
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No Oral or Written
Representations
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The parties agree that they have relied on no oral or written representation or promises not set forth herein, and that the terms of the Plan are set forth
solely in the written Plan document and it constitutes the complete and entire agreement of the parties relating to the subject matter hereof.
Any incentive compensation award paid under this Plan will be subject to certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act
of 2010 (“Dodd-Frank”) and the Esquire Financial Holdings, Inc. Clawback Policy, as may be amended from time to time, and any other compensation clawback or recoupment policy that the Board (or Committee) adopts in the future (whether to comply with
Dodd Frank or otherwise).
In addition, the Company will, to the full extent permitted by law, have the discretion based on the particular facts and circumstances to require that a
Participant reimburse the Company for all or any portion of any incentive compensation award if and to the extent the incentive compensation award reflected the achievement of financial results that were subsequently the subject of a restatement, or
the achievement of other objectives that were subsequently found to be inaccurately measured, and a lower incentive compensation award would have occurred based upon the restated financial results or accurately measured objectives. The Company may
take such actions against a Participant, whether or not such Participant engaged in any misconduct or was otherwise at fault with respect to such restatement or inaccurate measurement.
Without limitation, the Company may, in its discretion, or shall as required by law, (i) seek repayment from the Participant; (ii) reduce the amount that
would otherwise be payable to the Participant under current or future awards; (iii) withhold future equity grants or salary increases; (iv) pursue other available legal remedies, or (v) any combination of these actions. The Company's clawback or
recoupment policy may require the Company take such recoupment actions against the Participant whether or not such Participant engaged in any misconduct or was otherwise at fault with respect to any event or circumstance giving rise to such clawback
action.
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15.
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Companying Regulatory Provision
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All incentive compensation awards under the Plan are subject to any condition, limitation or prohibition under any financial institution regulatory policy or
rule or regulation to which the Company or Bank is subject, including without limitation Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. 1828(k), and the
rules and regulations promulgated thereunder. NEOs, as defined by the Securities and Exchange Commission, may be subject to additional rules and regulations.
Approved by the Board of Directors on October 30, 2024.
