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Section 1: 8-K (8-K)

gwb-20200206
0001613665false00016136652020-02-062020-02-06

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): February 6, 2020

GREAT WESTERN BANCORP, INC.
(Exact Name of Registrant as Specified in Its Charter)

Delaware
(State or Other Jurisdiction of Incorporation)
001-3668847-1308512
(Commission File Number)(IRS Employer
Identification Number)
225 South Main Avenue57104
Sioux Falls,South Dakota
(Address of principal executive offices)(Zip Code)
(605) 334-2548
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(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:
 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per share
GWBNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).    Emerging growth company  
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 5.02.  Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On February 11, 2020, Great Western Bancorp, Inc., (the “Company”) announced that as part of its succession planning, Mr. Mark Borrecco, age 48, has been named to succeed Mr. Karels as President and CEO of the Company and its wholly owned subsidiary Great Western Bank (the “Bank”) effective March 9, 2020, (the "Employment Commencement Date"). Mr. Borrecco will also join the Boards and Executive Committees of the Company and the Bank at that time. As a result of the addition of Mr. Borrecco to the Board, the Board size will be increased to nine directors.
As previously reported by the Company in Current Reports on Form 8-K filed with the Securities and Exchange Commission on November 26, 2019 and February 5, 2020, Mr. Karels announced that he will transition from the Company’s President and CEO into a non-executive employee role as Special Advisor to assist in the transition of duties to the new CEO until October 2, 2020, Mr. Karels’ retirement date. Mr. Karels will also continue to serve on as Chairperson of the Board until his retirement. Thereafter, Mr. Karels will continue to consult with the Company until October 2, 2021.
Mark Borrecco has over 20 years of banking experience with most recently serving as the CEO of Rabobank, NA, based in Roseville, CA from November 2015 through the sale of Rabobank to Mechanics Bank in 2019. Mr. Borrecco also served on the Board of Directors for Rabobank, NA from November 2014 through August 2019. Prior to his CEO role he was the Executive Vice President and Chief Retail Banking Officer for Rabobank, NA from 2011 to 2015. Mr. Borrecco had served on the Pacific Coast Banking School Board and the Greater Sacramento Economic Council and chaired the Food and Ag Innovation Committee. Mr. Borrecco has a Bachelor of Science in Economics from California State University.
In connection with the appointment, the Company and Mr. Borrecco entered into an agreement on February 6, 2020, (the “Agreement”). A brief description of the terms and conditions of the Agreement is set forth below. Unless defined herein, capitalized terms have the meaning given them in the Agreement, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by this reference. The following description of the Agreement is qualified in its entirety by reference to the Agreement.
The Agreement is for an unspecified duration and constitutes “at will” employment. Mr. Borrecco will be paid a base salary of $700,000 per year, (“Base Salary”). The Base Salary will be reviewed at least annually and may be increased at any time for any reason by the Compensation Committee of the Board, as applicable.
Beginning with the fiscal year ending September 30, 2020, Mr. Borrecco will be entitled to receive an annual cash incentive bonus (“Bonus”) which Bonus will range from zero percent (0%) to two hundred percent (200%) of each his target Bonus opportunity based on actual performance against performance metrics established by the Compensation Committee. Mr. Borrecco’s target Bonus opportunity will be eighty-five percent (85%) of his Base Salary. Mr. Borrecco’s Bonus for fiscal year ended 2020 will be prorated based on upon his Employment Commencement Date. Thereafter, the Compensation Committee of the Board, as applicable, may establish different performance metrics for future fiscal years.
Consistent with the Agreement, Mr. Borrecco will be granted an annual long-term incentive compensation award (“LTI Award”) for fiscal year 2020, fifty percent (50%) in the form of time-based restricted stock units, which vest in three equal annual installments and fifty percent (50%) in the form of performance-based restricted stock units which vest based on performance over a three (3)-year performance period. Mr. Borrecco’s LTI Award will have an initial value of $800,000. For any fiscal year ending during Mr. Borrecco’s employment following the 2020 fiscal year, Mr. Borrecco will be eligible to receive an LTI Award in form and amount determined in the sole discretion of the Compensation Committee of the Board, as applicable. LTI Awards, including the LTI Award for the 2020 fiscal year, will be subject to the terms of the Company equity plan under which it is granted and to the terms of any applicable award agreement.
Within thirty days of the commencement of his employment date, Mr. Borrecco will be granted an additional one-time long-term incentive award with a value of $700,000. Fifty percent (50%) of the award will be in the form of time-based restricted stock units which will vest in two equal annual installments on each of the first two anniversaries of the grant date. The other fifty percent (50%) will be in the form of performance-based restricted stock units which will vest on the same dates and on the same performance metrics that were issued to the Company’s executive officers on November 29, 2019.
The Agreement provides that if Mr. Borrecco is terminated for Cause, he is entitled to receive amounts earned during the term of employment. Such amounts include unpaid Base Salary through the date of termination; accrued but unused paid time off (“PTO”) and reimbursements of properly submitted business expenses.
The Agreement also provides that in the event of death, disability or retirement, Mr. Borrecco will be entitled to receive unpaid Base Salary through the date of termination; accrued but unused paid time off; reimbursements of properly submitted business expenses and Earned Bonus and Prorated Bonus as defined in the Agreement. Such payments will be made no later than 60



days following the termination date. In the case of termination due to permanent disability, the Company will continue to pay 100% of Mr. Borrecco's then-current base salary for a period of 90 days following such termination. In the case of death, Mr. Borrecco will immediately vest in all outstanding awards under the Company's incentive plans. In the case of disability or retirement, outstanding LTI Awards will continue vesting on the vesting date(s) specified in the applicable award agreement, as if employment had not terminated and subject to continued compliance with the restrictive covenants within the Agreement.
The Agreement further provides that in the event of termination without Cause or for Good Reason, he is entitled to the payment of the following amounts:
the payment of unpaid base salary; accrued but unused paid time off; reimbursements of business expenses will be made within 30 days of termination; and all other accrued and vested benefits;
the payment of Earned Bonus and Prorated Bonus will be made at the time that such bonus would have otherwise been paid had employment not been terminated;
the cash severance payment equal to two times current salary and current target STI Plan bonus opportunity will be paid in 52 equal biweekly payments following termination date, and such payments to be made in accordance with the Company’s payroll practices; and
the continued vesting of outstanding awards under the LTI Plan and the performance stock awards will vest on the date(s) specified in the applicable award agreement, as if employment had not terminated and subject to continued compliance with the restrictive covenants within the Agreement.
In the event of termination without Cause or for Good Reason within 24 months of a change-in-control, such Mr. Borrecco shall be entitled to the same payments and items described above under "Payment Obligations for Termination Without Cause or for Good Reason" and will be paid on a date that is no later than 60 days following the termination date. Additionally:
the severance payment will be paid in a lump-sum (instead of in installments) and equal to two times the sum of current base salary plus current target STI Plan bonus opportunity; and
in lieu of the continuation of benefits under the Company's group health insurance, vision and dental plans, a lump-sum cash payment will be paid equal to 24 times the monthly COBRA costs of continued health and medical coverage for Mr. Borrecco, and, as applicable, covered spouse and/or dependents at the level provided immediately prior to termination, with such payment grossed up for applicable taxes.
The Agreement contains certain restrictive covenants prohibiting Mr. Borrecco from competing against the Company and the Bank or soliciting the Company’s or the Bank’s customers for a period of time following termination of employment, all as more particularly set forth in the Agreement.
With the appointment of Mr. Borrecco, the Company’s Board approved a one-time grant of restricted shares with a value of $500,000 to Peter Chapman, the Company’s Executive Vice President and Chief Financial Officer. This award vests on the second anniversary of the grant and is intended to incentivize Mr. Chapman for his services, contributions and the leadership he provides.
Item 8.01. Other Events.
On February 11, 2020, the Company issued a press release announcing the appointment of Mr. Borrecco as President and Chief Executive Officer and transition of Ken Karels to a Special Advisor role. A copy of the press release is filed as Exhibit 99.1 hereto and is incorporated herein by reference.
Item 9.01.  Financial Statements and Exhibits.
(d)  Exhibits.

Exhibit No.Description
10.1  Employment Agreement by and between Great Western Bancorp., Inc., and Mark Borrecco, dated February 6, 2020
99.1  Press release dated February 11, 2020




Signature

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.

GREAT WESTERN BANCORP, INC.
Date: February 11, 2020
By:   /s/ Donald J. Straka
Name:   Donald J. Straka 
Title:   Corporate Secretary and General Counsel




INDEX TO EXHIBITS


Exhibit No.Description
Employment Agreement by and between Great Western Bancorp., Inc., and Mark Borrecco, dated February 6, 2020
Press release dated February 11, 2020


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Section 2: EX-10.1 (EX-10.1)

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Section 3: EX-99.1 (EX-99.1)

Document

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Great Western Bancorp, Inc. Announces Appointment of New CEO
Sioux Falls, SD - February 11, 2020 - Great Western Bancorp, Inc. (NYSE: GWB) , the parent company of Great Western Bank (www.greatwesternbank.com), announced today that as part of its succession planning, the Company’s Board of Directors has appointed Mr. Mark Borrecco as the organization’s President and Chief Executive Officer effective March 9, 2020. The announcement comes after an extensive, nationwide search for the President and Chief Executive Officer role.
Mark Borrecco has over 20 years of banking experience with most recently serving as the CEO of Rabobank, NA, based in Roseville, CA from November 2015 through the sale of Rabobank to Mechancis Bank in 2019. Mr. Borrecco also served on the Board of Directors for Rabobank, NA from November 2014 through August, 2019. Prior to his CEO role he was the Executive Vice President and Chief Retail Banking Officer for Rabobank, NA from 2011 to 2015. Mr. Borrecco had served on the Pacific Coast Banking School Board and the Greater Sacramento Economic Council and Chaired the Food and Ag Innovation Committee. Mr. Borrecco has a Bachelor of Science in Economics from California State University.
Mr. Karels stated "It has been a privilege to lead the organization for the past 10 years and through its initial public offering. I am proud of the organization that we have built and believe Mr. Borrecco is the right person to lead us into the future. We engaged in an extensive search for my successor and with his extensive banking background and leadership experience, Mark should contribute well to the overall growth of the organization."
As previously reported on November 26, 2019, Mr. Karels announced his intention to retire as Great Western’s President and CEO upon the appointment of a successor CEO. In accordance with his Transition Agreement, Mr. Karels will transition into his role as Special Advisor as a non-executive employee on March 9, 2020 to assist in the transition of duties to Mr. Borrecco, and will continue to serve as Chairperson of the Board until October 2, 2020, Mr. Karels’ retirement date.
Tom Henning, Great Western's Lead Independent Director noted, "This appointment is part of an orderly succession plan that we have had in place. The Board thanks Mr. Karels for his years of service to Great Western. He has contributed greatly to Great Western's success as we have achieved both record revenue and earnings through his tenure. We are also excited with the appointment of Mark and look forward to working with him to continue to grow the organization. Mark is a proven leader who brings his strong commercial banking experience and leadership to Great Western. The Board is confident that we have chosen the right strategic leader for Great Western and expect a smooth transition."
"I am truly honored to lead such an extraordinary organization as its Chief Executive Officer," said Mark Borrecco. "I look forward to continuing to work closely with our senior leadership team, Board of Directors and all employees of Great Western."
About Great Western Bancorp, Inc.
Great Western Bancorp, Inc. is the holding company for Great Western Bank, a full-service regional bank focused on relationship-based business and agribusiness banking. Great Western Bank offers small and mid-sized businesses a focused suite of financial products and a range of deposit and loan products to retail customers through several channels, including the branch network, online banking system, mobile banking applications and customer care centers. The bank services its customers through more than 170 branches in nine states: Arizona, Colorado, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota. To learn more about Great Western Bank visit www.greatwesternbank.com.
Forward-Looking Statements
The materials posted may contain forward-looking statements, including guidance, involving significant risks and uncertainties, which will be identified by words such as "believe," "expect," "anticipate," "intend," "estimate," "should," "is likely," "will," "going forward" and other expressions that indicate future events and trends and may be followed by or reference cautionary statements. A number of factors could cause actual results to differ materially from those in the forward-looking information. These factors are outlined in our most recent earnings press release and in more detail in our most current 10-Q and 10-K filings. Great Western Bancorp, Inc. disclaims any obligation to update any of the forward-looking statements that are made from time to time to reflect future events or developments or changes in expectations.
GREAT WESTERN BANCORP, INC.
Media and Investor Relations Contacts:
Peter Chapman, 605.373.3198
peter.chapman@greatwesternbank.com
Seth Artz, 605.988.9523
seth.artz@greatwesternbank.com

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