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Posted 03 October, 2022

CBTX, Inc. appointed Robert R. Franklin, Jr. as new CEO

Nasdaq:CBTX appointed new Chief Executive Officer Robert R. Franklin, Jr. in a 8-K filed on 03 October, 2022.


  At the Effective Time, Robert R. Franklin, Jr., the current Chairman, President and Chief Executive Officer of the Company, was appointed as a director and the Chief Executive Officer of the Company and Executive Chairman of the Combined Bank.  

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Overview of CBTX, Inc.
Financial Services • Banking
Stellar Bancorp, Inc. operates a holding company that provides commercial banking services such as personal and commercial banking, real estate loans, and investment services, as well as offers deposits, debit and credit cards, cash management, treasury, and online banking services primarily to small and medium-sized businesses, professionals, and individual customers. The company was founded in 2007 and is headquartered in Houston, TX.
Market Cap
$1.30B
View Company Details
Relevant filing section
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.


Executive Officers


At the Effective Time, Robert R. Franklin, Jr., the current Chairman, President and Chief Executive Officer of the Company, was appointed as a director and the Chief Executive Officer of the Company and Executive Chairman of the Combined Bank. He also ceased to serve as the Chairman and President of the Company at the Effective Time. As previously disclosed, Mr. Franklin entered into a new employment agreement with the Company and CommunityBank on March 17, 2022, which sets forth his terms of employment following the consummation of the Merger. For a description of Mr. Franklin's employment agreement, see the Current Report on Form 8-K filed by the Company with the Commission on March 18, 2022. Such description is incorporated by reference into this Current Report on Form 8-K.


In connection with the closing of the Merger, the Company's Compensation Committee (the "Compensation Committee") approved payment to Mr. Franklin of $425,333.03 (the "SERP Amount") to fully fund his expected future benefit under his 2017 Salary Continuation Agreement (the "SERP"). The SERP was intended to provide Mr. Franklin the amount of $200,000 per year for 10 years commencing at age 70. Under the terms of the SERP and his employment agreement dated March 17, 2022, however, upon closing of the Merger: (a) the SERP automatically terminated and (b) Mr. Franklin became entitled to receive only his "Accrued Amount" (as defined in the SERP). The "Accrued Amount" under the SERP was $1,089,246.26 as of the closing date of the Merger. The SERP Amount, when added to the Accrued Amount, fully funds (on a present-value basis assuming a 4.0% discount rate) Mr. Franklin's expected future benefit under the SERP.


At the Effective Time, (a) Steven F. Retzloff, the current Chief Executive Officer of Allegiance, was appointed as a director of the Company and the Executive Chairman of the Company and Senior Executive Chairman of the Combined Bank, (b) Ramon A. Vitulli, III was appointed President of the Company and Chief Executive Officer of the Combined Bank, and (c) Paul P. Egge was appointed Senior Executive Vice President and Chief Financial Officer of the Company and the Combined Bank. As previously described in the Joint Proxy Statement/Prospectus, Mr. Retzloff, Mr. Vitulli and Mr. Egge each entered into an employment agreement with Allegiance and Allegiance Bank setting forth the terms of his respective employment following the consummation of the Merger. For a description of such officers' employment agreements and additional information about the arrangements and transactions with respect to such officers, see the section in the Joint Proxy Statement/Prospectus entitled "The Merger - Interests of Allegiance's Directors and Executive Officers in the Merger - New Employment Agreements with Executive Officers." Such description is incorporated by reference into this Current Report on Form 8-K.


At the Effective Time, J. Pat Parsons, ceased to serve as the Company's former Vice Chairman and a director, and was appointed as the Vice Chairman and a director of the Combined Bank. Mr. Parsons entered into a new employment agreement with the Company and CommunityBank on August 26, 2022, which sets forth his terms of employment following the consummation of the Merger. For a description of Mr. Parson's employment agreement, see the Current Report on Form 8-K filed by the Company with the Commission on August 26, 2022. Such description is incorporated by reference into this Current Report on Form 8-K.


At the Effective Time, Robert T. Pigott, Jr., ceased to serve as the Company's Chief Financial Officer and Senior Executive Vice President, and was appointed Senior Vice President of the Combined Bank. Mr. Pigott entered into a change in control severance agreement with the Company on March 17, 2022, which sets forth his terms of employment following the consummation of the Merger. For a description of Mr. Pigott's change in control severance agreement, see the Current Report on Form 8-K filed by the Company with the Commission on March 18, 2022. Such description is incorporated by reference into this Current Report on Form 8-K.


Biographical and other information related to Mr. Retzloff, Mr. Vitulli and Mr. Egge can be found in the proxy statement filed by Allegiance with the Commission on March 10, 2022, in connection with its 2022 annual meeting of shareholders, which is incorporated into this Item 5.02 by reference. There are no transactions in which Mr. Retzloff, Mr. Vitulli or Mr. Egge has an interest requiring disclosure under Item 404(a) of Regulation S-K.


The foregoing summaries and referenced descriptions of the employment agreements and change in control severance agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the employment agreements and change in control severance agreement, copies of which are included as Exhibits 10.1, 10.2 and 10.3 for Mr. Franklin, Mr. Parsons and Mr. Pigott, respectively, and Exhibit 10.4 with respect to Mr. Retzloff, Mr. Vitulli and Mr. Egge, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.


Board of Directors


In accordance with the terms of the Merger Agreement and pursuant to the Certificate of Formation, as of the Effective Time, the Board of Directors of the Company (the "Board") was reconstituted to consist of a total of fourteen (14) directors, including seven (7) legacy directors of the Company and seven (7) legacy directors of Allegiance.


At the Effective Time, in accordance with the Merger Agreement, the following individuals ceased to serve directors of the Company: Tommy W. Lott, Glen W. Morgan, J. Pat Parsons and Sheila G. Umphrey (collectively, the "Non-Continuing Directors"). The Non-Continuing Directors did not cease to serve as directors as the result, in whole or in part, of any disagreement with the Company.


The seven directors, each of whom previously served as a director of the Company, designated by the Company to continue as directors of the Company pursuant to the Merger Agreement from and after the Effective Time are as follows: Robert R. Franklin, Jr., Michael A. Havard, Joe Penland, Sr., Reagan A. Reaud, Joseph B. Swinbank, John E. Williams, Jr. and William "Bill" Wilson, Jr.


The seven directors, each of whom previously served as a director of Allegiance, designated by Allegiance to be appointed as directors of the Company pursuant to the Merger Agreement from and after the Effective Time are as follows: John Beckworth, Fred S. Robertson, Jon-Al Duplantier, William S. Nichols, III, George Martinez, Steven F. Retzloff and Frances H. Jeter (collectively, the "New Directors"). Biographical and other information relating to the New Directors can be found in the proxy statement filed by Allegiance with the Commission on March 10, 2022, in connection with its 2022 annual meeting of shareholders, which is incorporated into this Item 5.02 by reference. There are no transactions in which any New Director has an interest requiring disclosure under Item 404(a) of Regulation S-K.


At the Effective Time, in accordance with the Merger Agreement, the Board established the following committees of the Board: Audit Committee, Compensation Committee, Corporate Governance & Nominating Committee and Risk Committee. As of the Effective Time, the standing committees of the Board are comprised of the following members:


Audit Committee Compensation Committee Corporate Governance & Nominating Committee Risk Committee 

 William E. Wilson, Jr. (Chair) Michael A. Havard (Chair) Frances H. Jeter (Chair) George Martinez (Chair) 

 Jon-Al Duplantier Jon-Al Duplantier John Beckworth William S. Nichols, III 

 William S. Nichols, III Fred S. Robertson John E. Williams Reagan A. Reaud 

 Michael A. Havard John E. Williams Joe E. Penland, Sr. Joseph B. Swinbank 


Each of the New Directors who is a non-employee director will be entitled to receive the compensation determined by the Board following the consummation of the Merger.


Stellar Bancorp, Inc. 2022 Omnibus Incentive Plan. The shareholders of the Company previously approved the Company's 2022 Omnibus Incentive Plan (the "Plan") at the special meeting of shareholders on May 24, 2022. The Plan became effective upon the closing of the Merger. The Company has updated the name of the Plan to reflect its name change. The foregoing description of the Plan does not purport to be complete and is qualified in its entirety by reference to the Plan, which is attached hereto as Exhibit 10.5, and the section in the Joint Proxy Statement/Prospectus entitled "CBTX Proposals-Proposal 3: CBTX Incentive Plan Proposal." Exhibit 10.5 and such description are incorporated by reference into this Current Report on Form 8-K.


Form of Indemnification Agreement. In connection with the closing of the Merger, the Company adopted a new form of indemnification agreement (the "Stellar Bancorp Form of Indemnification Agreement"). The Stellar Bancorp Form of Indemnification Agreement will apply to executive officers and directors entering into an indemnification agreement from time to time following the completion of the Merger. Each of the directors and executive officers of the Company with existing indemnification agreements with the Company or Allegiance continue to be party to such agreement, which were assumed by the Company in the Merger. The foregoing summaries and descriptions of the forms of indemnification agreements do not purport to be complete and are qualified in their entirety by reference to the full text of the Stellar Bancorp Form of Indemnification Agreement and the Allegiance Bancshares, Inc. form of indemnification agreement, copies of which are attached hereto as Exhibit 10.6 and 10.7, respectively, and are incorporated herein by reference.


Change in Control Severance Plan. In connection with the closing of the Merger, the Company assumed the Allegiance Bancshares, Inc. Change in Control Severance Plan (the "CIC Plan"). Subject to the terms and conditions of the CIC Plan, the CIC Plan provides for payments to certain executives that are participants in the CIC Plan if an involuntary termination of employment (other than for death, disability or "cause") or a resignation by the eligible employee for "good reason" occurs three months prior to the consummation of a change in control or within 18 months following such change in control. Mr. Franklin was added as a participant in the CIC Plan in connection with the closing of the Merger and in the event of a qualifying change in control and termination of employment, he would be entitled to, among other things, three times his base salary, target annual bonus and a pro rata annual bonus, in each case, determined in accordance with the terms of the CIC Plan. The foregoing summary and description of the CIC Plan does not purport to be complete and is qualified in its entirety by reference to the full text of the CIC Plan, a copy of which is attached hereto as Exhibit 10.8, and is incorporated herein by reference.