Table of Contents

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Notice of 2024 Annual Meeting

and Proxy Statement


Table of Contents

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ANNUAL MEETING OF STOCKHOLDERS

March 26, 2024

Dear Fellow Stockholder,

You are invited to attend the CrossFirst Bankshares, Inc. 2024 Annual Meeting of Stockholders to be held virtually on May 14, 2024, at 10:00 a.m. (Central Time) via live audio webcast and online platform that will allow stockholders to participate. We believe the virtual annual meeting format increases our ability to engage with all stockholders, regardless of size, resources or physical location. You will be able to attend the 2024 Annual Meeting of Stockholders online, vote your shares and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/CFB2024. Be sure to have your control number available to log into the meeting.

All common stockholders of record as of the close of business on March 15, 2024, will be entitled to vote at the 2024 Annual Meeting of Stockholders.

Your vote is important. Whether or not you plan to attend the 2024 Annual Meeting of Stockholders, please read the enclosed Proxy Statement and vote as soon as possible via the Internet, by telephone, or by completing, signing, dating and returning your proxy card or voting instruction form. Voting in advance of the meeting will not prevent you from voting your shares during the meeting if you are a stockholder of record and wish to do so.

Details of the business to be conducted at the 2024 Annual Meeting of Stockholders are provided in the attached Notice of Annual Meeting of Stockholders and Proxy Statement.

On behalf of the entire Board of Directors, thank you for your continued support of CrossFirst Bankshares, Inc.


Chairman of the Board

 

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Very truly yours,

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Rodney “Rod” K. Brenneman
Chairman of the Board


Table of Contents

Table of Contents

Notice of Annual Meeting of Stockholders

Proxy Summary and Highlights

i

Board and Governance Matters

1

PROPOSAL 1 – Election of Directors

1

Corporate Governance

10

Director Nominations, Skills and Qualifications

10

Board and Committee Structure and Operations

14

Committee Matters

17

Board Role in Risk Oversight

18

Other Matters

19

Director Compensation

20

Director Compensation and Role of the Compensation Committee

20

2023 Non-Employee Director Compensation Table

21

Executive Compensation

23

Overview

23

Components of Compensation

29

Executive Compensation Tables

38

2023 Summary Compensation Table

38

Outstanding Equity Awards at 2023 Fiscal Year-End

39

Potential Payments upon a Termination or Change in Control

40

Audit Matters

42

PROPOSAL 2 – Ratification of Appointment of Independent Registered Public Accounting Firm

42

Independent Registered Public Accounting Firm Fees

42

Policy Regarding Pre-Approval of Independent Registered Public Accounting Firm Services

43

Audit Committee Report

44

Beneficial Ownership of Company Stock

45

Related Person Transactions

48

Policies and Procedures Regarding Related Person Transactions

48

Certain Transactions

49

Annual Meeting Matters

50

Information About the Meeting

50

General Information

56

Annex I – Reconciliation of GAAP Results to Non-GAAP Results


Table of Contents

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

The 2024 Annual Meeting of Stockholders of CrossFirst Bankshares, Inc. will be held virtually via live audio webcast and online platform that will allow stockholders to participate as provided in this notice of meeting. You are cordially invited to attend the Annual Meeting; however, whether or not you expect to attend, you are urged to vote in advance of the meeting. Your prompt action will aid us in reducing the expense of proxy solicitation.

 

 

 

 

 

 

Date and Time

Location

 

 

May 14, 2024

www.virtualshareholdermeeting.com/CFB2024

 

 

10:00 a.m., Central Time

Be sure to have your 16-Digit Control Number to join the meeting.

 

 

 

 

Record Date

 

 

 

You are entitled to notice of and to vote at the meeting and at any adjournment or postponement of the meeting if you were a common stockholder of record as of the close of business on March 15, 2024 (the “Record Date”).

 

Items of Business

 

Board
Recommendation

 

1

To elect four members of the Board of Directors as Class I directors, each for a term of three years

FOR

each director nominee

 

2

To ratify the appointment of FORVIS, LLP as our independent registered public accounting firm for 2024

FOR

 

3

Any other business as may properly come before the meeting or any adjournment or postponement thereof

 

It is important that your shares be represented and voted at the Annual Meeting even if you plan to attend. You can submit your proxy in advance by telephone or the Internet or, if you have requested a paper copy of these materials, by marking, signing, dating and promptly mailing the proxy card or voting instruction form in the enclosed postage prepaid envelope.

 

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Internet Go to www.proxyvote.com

 

 

 

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Telephone Call toll free 800-690-6903 or the number specified on your proxy card or voting instruction form

 

 

 

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Mail Follow the instructions on your proxy card or voting instruction form

All stockholders as of the close of business on the Record Date, or their duly appointed proxies, may attend the virtual Annual Meeting. Please note that if you hold your shares in “street name” through a broker, bank or other nominee, you will need a legal proxy from your broker, bank or other nominee (the stockholder of record) to attend. If you are a beneficial owner of our shares of common stock held in “street name,” you may vote at the Annual Meeting if you obtain a proxy from your bank, broker or other nominee that holds your shares. This booklet contains our Notice of Annual Meeting and 2024 Proxy Statement (the “Proxy Statement”).

 

By order of the Board of Directors,

 

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Amy C. Abrams

 

General Counsel and Corporate Secretary

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on May 14, 2024: A copy of our 2024 Proxy Statement and 2023 Annual Report to Stockholders, which includes audited consolidated financial statements, are available at www.proxyvote.com.


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11440 TOMAHAWK CREEK PARKWAY

LEAWOOD, KANSAS 66211

PROXY STATEMENT

2024 ANNUAL MEETING OF STOCKHOLDERS

MAY 14, 2024

This Proxy Statement, the accompanying proxy card and our 2023 Annual Report to Stockholders are being furnished to you in connection with the solicitation of proxies by the Board of Directors (the “Board”) of CrossFirst Bankshares, Inc. (“we”, “us” or the “Company”), for use at the 2024 Annual Meeting of Stockholders (the “Annual Meeting”) or any adjournment or postponement thereof. The meeting will be held virtually at www.virtualshareholdermeeting.com/CFB2024 on Tuesday, May 14, 2024, at 10:00 a.m. (Central Time) via live audio webcast and online platform that will allow stockholders to participate. These materials were first sent or made available to common stockholders on or about March 26, 2024.

The Company is a Kansas corporation and registered bank holding company and is the holding company for CrossFirst Bank (the “Bank”). The only voting securities of the Company with respect to the matters to be considered by stockholders at the Annual Meeting are shares of our common stock, $0.01 par value per share (the “Common Stock”), which are listed on The Nasdaq Global Select Stock Market under the ticker “CFB.”

Proxy Summary and Highlights

This summary highlights selected information about the matters to be voted on at the Annual Meeting. You should read the entire Proxy Statement before voting. For more complete information regarding the Company’s 2023 performance, please review the Company’s 2023 Annual Report to Stockholders.

Please see the “Annual Meeting Matters” and “Information About the Meeting” sections beginning on page 50 for important information about the proxy materials, voting, and the Annual Meeting.

Voting Roadmap

    

PROPOSAL 1
Election of Directors

Our Board recommends a vote FOR each director nominee

See
page 1

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Director Nominees

 

 

 

Committees

 

Name

Age (1)

Director
Since

AC

CC

NOM

RC

Skills and Expertise

RONALD C. GEIST Independent

55

2012

 

 

Banking, Financial/Accounting/Investment, CEO/Business Head, M&A, Real Estate, Public Company, Marketing, Business Development for the Bank

KEVIN S. RAUCKMAN Independent

62

2016

·

 

 

 

Banking, Financial/Accounting/Investment, M&A, Risk Management, Public Company, Business Development for the Bank

GREY STOGNER Independent

63

2018

 

 

 

Banking, CEO/Business Head, Real Estate, Public Company, Business Development for the Bank

STEVEN W. CAPLE Independent

58

2018

 

 

Banking, Financial/Accounting/Investment, CEO/Business Head, Legal or Regulatory, M&A, Real Estate, Energy, Public Company, Business Development for the Bank

(1)

As of the date of the Annual Meeting

AC

Audit Committee

·

Chairperson of the Committee

CC

Compensation Committee

Member of the Committee

NOM

Corporate Governance & Nominating Committee

 

 

RC

Risk Committee

 

 

All directors exhibit:

Director Snapshot (as of Annual Meeting):

 

 

·  Character, Competence, Commitment, Connection

Diversity · ·

·  A broad and relevant spectrum of experience and expertise

·  Personal and professional integrity

Age:

·  Experience in positions with a high degree of responsibility

< 60 years · · · · · · · ·

·  Commitment to representing the interests of stockholders

60-70 years · · · · ·

·  Strong networks within their local markets

> 70 years ·

 

 

 

 

 

 

 

PROPOSAL 2

 

 

 

Ratify the Appointment of FORVIS, LLP as the Company’s Independent Registered Public Accounting Firm for 2024

See page 42

 

 

 

Our Board recommends a vote FOR this Proposal

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Business Highlights

Strategic Growth

We successfully executed on our strategy during 2023, including both organic and in-organic growth initiatives. During the first quarter of 2023, we completed the system integration in connection with the acquisition of Farmers & Stockmens Bank.  We also completed the acquisition of Canyon Bancorporation, Inc. and Canyon Community Bank, N.A.  (collectively, “Canyon”) on August 1, 2023 (the “Tucson acquisition”) and the system integration in the fourth quarter of 2023.  The Tucson acquisition added liquidity and talent while deepening our Arizona franchise. In total, the acquisitions integrated during 2023 added $830 million in assets at an attractive price, and the resulting operations have met or exceed our financial projections.  We also continued our strong track record of organic growth both in our established markets as well as expanding our footprint within the dynamic Texas, Arizona and Colorado markets. In addition, we expanded several business verticals with strong contributions from our Restaurant Finance, Sponsor Finance and Small Business (“SBA”) verticals, in particular. We also continued to invest in our people and received the Don Clifton strengths-based leadership award during 2023.  

Banking Industry Events  

The banking industry faced significant upheaval due to the collapse of several banks in March 2023 related to failings in their liquidity management and their significant concentration in certain industries, including exposure to the technology sector and cryptocurrency.  Competition for deposits was exacerbated by a renewed focus on deposits in excess of FDIC insurance limits following the failures, in addition to increased focus on liquidity and interest rate management at all banks.  These challenges, combined with uncertainties around continued cost pressures from inflation, FDIC special assessments and potential for higher provisioning for expected credit losses all led to a highly volatile market for banks. We managed through these pressures by, among other things, expanding our liquidity availability, conducting proactive client outreach to clients to communicate the strength, stability and relationship focus of the Bank, improving liquidity in our securities portfolio, and identifying and executing strategies to realize non-interest expense savings.

2023 Business Results

Despite the headwinds experienced by the banking industry in 2023, we delivered strong financial and operational performance. Some highlights include:

Improved profitability as operating revenue and diluted earnings per common share increased compared to the prior year.
Total assets were $7.4 billion primarily made up of $6.1 billion in loans and $767 million in securities.
Loans grew $755 million for the year or 14%; excluding the Tucson acquisition, loans grew 12% for the year.
Deposits grew $840 million for the year or 15%; excluding the Tucson acquisition, deposits grew 12% for the year.
Non-performing assets were 0.34% of total assets at year-end; net charge-offs for the full year were 0.09% of average loans.
Issued $7.8 million of Series A Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share (the "Series A Preferred Stock"), further bolstering our capital position.
Book value per share grew to $14.35 on December 31, 2023, compared to $12.56 in the prior year. Tangible book value per share(1) increased to $13.56 compared to $11.96 in the prior year primarily due to earnings and a decrease in the unrealized losses on our investment portfolio.
Built capital in a tough operating environment with total risk-based capital increasing to 11.2% and common equity Tier 1 capital increasing to 10.0% as of December 31, 2023.

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(1)Represents a non-GAAP financial measure. See “Non-GAAP Financial Measures” in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our annual report on Form 10-K for the year ended December 31, 2023 and in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Annual Report to Stockholders, for a reconciliation of this measure and other relevant information.

Corporate Governance Highlights

The Board believes strong corporate governance is critical to achieving the Company’s long-term goals and maintaining the trust and confidence of investors, employees, customers, regulatory agencies, and other stakeholders. The following are highlights of our corporate governance practices:

Best Practices:

 

 

·

The roles of Chairman of the Board and Chief Executive Officer (“CEO”) are separate.

·

All of our directors, except for our CEO, are independent.

·

The Board has a separate Risk Committee focused on oversight of enterprise-wide risk management.

·

None of our directors are over boarded.

·

We have a director retirement policy.

·

We have regular executive sessions in Board and committee meetings.

·

Only independent directors are committee members and committee chairs.

 

·

All of our Section 16 officers and directors are subject to an anti-hedging and anti-pledging policy.

·

We have annual Board and committee self-evaluations.

·

Our directors have a diverse mix of skills, experience and backgrounds.

·

We do not have a stockholder rights plan or poison pill.

·

We have a whistleblower hotline.

·

Our Board has oversight of political spending.

·

We have a comprehensive cybersecurity program, including monitoring, controls and recurring training.

Executive Compensation Highlights

Our Compensation Committee designed our 2023 executive compensation program to align with stockholder interests and the long-term interests of the Company, appropriately balance risk and reward, and attract and retain a talented executive team. To accomplish these goals, our executive compensation program was designed on the following principles:

Pay for Performance

Balanced Compensation Structure

Market-Competitive Pay Opportunity

 

 

 

Our compensation should reflect Company, business line, and individual performance.

We seek to deliver a mix of fixed and variable compensation that is aligned with stockholder interests and the long-term interests of the Company and that appropriately balances risk and reward.

Our compensation should be competitive relative to our peers in order to attract, motivate and retain a talented executive team.

 

 

 

(At Risk)

 

 

 

 

 

 

Element

Base Salary

Time-based
Restricted Stock Units (“RSU”)

Annual
Incentive

 

Performance-based
Restricted Stock Units (“PSU”)

 

 

 

 

 

 

Highlights

Fixed compensation
based on scope of
responsibility, impact
on the organization,
expertise, experience,
and individual
performance

Award of RSUs that vest ratably over three years

Annual cash bonus
opportunity based on
adjusted Pre-Tax,
Pre-Provision
Contribution Margin

 

Annual award of
PSUs that vest based on
achievement of 3-
year performance
goals

Graphic Proxy Statement Page iv


Highlights of our compensation program include:

What We Do

What We Do Not Do

·

We utilize contractual stock ownership guidelines that require the retention of equity awards made to our executives and non-employee directors.

·

Our Section 16 officers and directors are prohibited from entering into hedging transactions or holding Company stock in a margin account or otherwise pledging Company stock as collateral.

·

Our performance-based compensation (both cash and equity) awarded to our named executive officers (“NEOs”) during 2023 is subject to clawback.

·

We do not pay excise tax gross ups on severance payments.

·

We have a balanced change in control severance policy that has a double trigger.

·

We do not have excessive perquisites.

·

Our Compensation Committee engages an independent compensation consultant, which utilizes a peer group for evaluating Company pay practices.

·

We do not have executive pension benefits.

·

A significant portion of NEO compensation is equity-based, with half of equity awards being performance-based and all equity awards being denominated and settled in shares.

·

We utilize multiple performance metrics in our performance-based compensation to mitigate risk and create alignment with stockholder long-term interests.

·

We regularly evaluate risk performance in incentive compensation design and decisions for our NEOs.

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Board and Governance Matters

Board and Governance Matters

PROPOSAL 1 – Election of Directors

The Board of Directors recommends that you vote “FOR” the election of each Class I director nominee. Proxies solicited by our Board will be voted “FOR” the election of each Class I director nominee unless otherwise instructed.

The Board believes strong corporate governance is critical to achieving the Company’s long-term goals and maintaining the trust and confidence of investors, employees, customers, regulatory agencies, and other stakeholders. The Board oversees the Company’s business and directs its management. The non-employee directors of the Board are not involved in day-to-day operations. Instead, the Board meets periodically with management to review the Company’s operating plans, multi-year strategic plan, risks, and business strategies. Directors also consult with management about the Company’s performance outside of formal meetings, which include opportunities for directors to have in-depth conversations with management about particular areas of the business.

Our Board is currently comprised of 14 directors and is divided into three classes having three-year terms that expire in successive years. As previously disclosed, the Board intends to decrease its size to 13 directors (decreasing the size of Class I from five to four) immediately prior to the 2024 Annual Meeting upon the retirement of George E. Hansen III at the expiration of his current term. Four candidates have been nominated for election as Class I directors at the 2024 Annual Meeting. If elected each such director will serve for a term of three years (expiring in 2027) and will hold office until his successor has been duly elected and qualified or the director’s earlier resignation, death or removal.

The Board believes that an effective board consists of a diverse group of individuals who bring a variety of complementary skills and experiences. The Corporate Governance and Nominating Committee (the “Nominating Committee”) and the Board consider the skills and experiences of the directors in the broader context of the Board’s overall composition, with a view toward constituting a board that has the best skill set and experience to oversee the Company’s business. Our directors have a diversity of experience. They collectively have substantive knowledge and skills applicable to our business, including in the areas of accounting and financial reporting, finance, risk management, public company operations, business development, technology and cybersecurity, marketing, operations, strategic planning, management development and succession, compensation, corporate governance, and banking. The Nominating Committee regularly reviews the composition of the Board and its assessment of the Board’s performance in light of our evolving business requirements to maintain a Board with the appropriate mix of skills and experiences needed for the broad set of challenges that the Company confronts.

Our Corporate Governance Guidelines provide that any director who has reached age 75 at or before the time of his or her election by the stockholders will not be eligible for election and will not be nominated by the Board, unless the Board determines that the value of such director’s contribution makes it advisable that he or she continue to serve as a director.

Upon recommendation of the Nominating Committee, the Board has nominated Ronald C. Geist, Kevin S. Rauckman, Grey Stogner and Steven W. Caple for re-election as Class I directors.  Each nominee is a current director of the Company, and each such nominee has indicated that they will serve if elected. We do not anticipate that any nominee will be unable or unwilling to stand for election, but if that happens, your proxy will be voted for another person nominated by the Board. The Board may also choose to reduce the number of directors to be elected, as permitted by our Bylaws.

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Board and Governance Matters

Biographical information about each of the nominees and continuing directors follows. A discussion of the qualifications, attributes and skills of each nominee that led the Board and the Nominating Committee to the conclusion that they should continue to serve as a director also follows. If you are a stockholder of record and you sign your proxy card or vote by telephone or over the Internet but do not give instructions with respect to the voting on the election of directors, your shares will be voted “FOR” the re-election of Messrs. Geist, Rauckman, Stogner and Caple. If you are a beneficial owner holding your shares in “street name” and you do not give voting instructions to your broker, bank or other nominee, that organization will leave your shares unvoted on this matter.

Information Regarding the Board and Director Nominees

Background and Qualifications

The names of the proposed director nominees and our continuing directors, their respective ages and other biographical information as of March 26, 2024 (unless otherwise noted), are set forth in the following sections.

    

    

    

Term

    

Director

    

Comp.

    

Nominating

    

Audit

    

Risk

Nominee

Age(1)

Independent

Expires

Since

Committee

Committee

Committee

Committee

Steven W. Caple

 

58

 

Yes

 

2024

 

2018

 

 

ü

Ronald C. Geist

 

55

 

Yes

 

2024

 

2018

 

ü

ü

Kevin S. Rauckman

 

62

 

Yes

 

2024

 

2016

 

CHAIR

Grey Stogner

 

63

 

Yes

 

2024

 

2018

 

ü

Continuing Directors

 

Class II directors’ terms expire in 2025 and Class III directors’ terms expire in 2026

Rodney K. Brenneman

 

59

 

Yes

 

2026

 

2012

 

CHAIR

ü

George C. Bruce

 

69

 

Yes

 

2026

 

2009

 

 

ü

Jennifer M. Grigsby

 

55

 

Yes

 

2026

 

2013

 

ü

Lance A. Humphreys

 

55

 

Yes

 

2025

 

2018

 

ü

 

CHAIR

Mason D. King

48

Yes

2026

2018

ü

James W. Kuykendall

 

59

 

Yes

 

2026

 

2018

 

ü

Michael J. Maddox

 

54

 

No

 

2025

 

2009

Michael K. Robinson

 

70

 

Yes

 

2025

 

2018

 

CHAIR

Stephen K. Swinson

 

66

 

Yes

 

2025

 

2013

 

ü

(1)As of the date of the Annual Meeting.

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Board and Governance Matters

Nominee Biographical Information

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Steven W. Caple

Mr. Caple has held the position of President of Unity Hunt, Inc. (“UHI”), the company through which the family of Lamar Hunt oversees its holdings, since January 2011. Additionally, Mr. Caple serves in various roles for many of the Hunt family’s trusts and portfolio companies. Mr. Caple is also the co-owner of TRL Management, LLC, Farmersville Holdings, LLC and Hickory Creek Real Estate, LLC. Prior to joining UHI, Mr. Caple served as President of VFT Capital, LP (“VFT”). Before VFT, Mr. Caple served as President of Novo Networks, Inc., and he previously held legal or management positions with GTE Corporation (now Verizon Communications, Inc., NYSE: VZ), Chancellor Media Corporation (now iHeart Media Inc., Nasdaq: IHRT), and Marcus Cable, LP (now Charter Communications, Inc., Nasdaq:  CHTR). Mr. Caple also practiced law with the firm of Patton, Haltom, Roberts, McWilliams & Greer, LLP. Mr. Caple received his bachelor’s degree from the University of Texas at Dallas and a law degree, with honors, from the University of Arkansas, where he served as the Managing Editor of the Arkansas Law Review. Mr. Caple currently serves as Chairman of Hunt Midwest Enterprises, Inc. and Hunt Southwest Real Estate Development, LLC, and he is presently serving on the Board of Directors or Managers, respectively, for each of UHI, Hunt Sports, LLC, Placid Holding Company, Inc., and Trinity Hunt Management GP, LLC. Mr. Caple has also been involved with several industry associations and non-profit organizations, including service on the Board of Directors of the Texas Alternative Investments Association, the Host Committee of the Great Investors’ Best Ideas Foundation Investment Symposium, the Board of Directors of the National Archives Foundation, the Law Committee of Campaign Arkansas, and the Centennial Committee of the University of Arkansas School of Law.

Skills and Qualifications - In addition to the skills identified below under “Corporate Governance – Skills and Experience,” Mr. Caple was selected to serve on our Board of Directors because of his professional background and significant management experience across many industries, his CrossFirst board experience, his board attendance and participation, and his extensive understanding of corporate financial statements.

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Ronald C. Geist

Mr. Geist has served since June 2014 as President of RAGE Administrative and Marketing Services (“RAMS”), a large franchisee of restaurants. Prior to being appointed President, Mr. Geist served as Real Estate Director at RAMS. Additionally, Mr. Geist has served as Managing Partner of Starwood Investments, L.P. (“Starwood”) since February 2012. Starwood has holdings in securities, real estate, and other investments. Prior to joining RAMS and Starwood, Mr. Geist served as President of Blue Ribbon Technologies, a provider of document imaging and storage, as well as customizable web design. Before joining Blue Ribbon, Mr. Geist was Managing Partner and owner of Zland of Denver, a company that provides integrated web-based applications for the marketing, commerce and operations of business. Mr. Geist has also held various positions for Beauty First, a provider of hair care services and products throughout its chain of stores. Mr. Geist is a partner in Flint Oak Ranch, which is a private hunting resort. Mr. Geist received his B.S. degree from the University of Kansas. He has served on the board of CrossFirst Bank since 2013.

Graphic Proxy Statement Page 3


Board and Governance Matters

Skills and Qualifications - In addition to the skills identified below under “Corporate Governance – Skills and Experience,” Mr. Geist was selected to serve on our Board of Directors because of his professional business background and significant experience in restaurant franchising, his corporate governance, leadership, operational and strategic planning skills, his CrossFirst board experience, and his board attendance and participation.

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Kevin S. Rauckman

Mr. Rauckman is the owner of, and financial consultant for, Rauckman Advisors, LLC, where he has worked since November 2017. Mr. Rauckman was previously a financial advisor for MoBank (formerly Bank of Kansas City), a subsidiary of BOK Financial Corporation, from February 2015 through May 2016. Prior to joining Bank of Kansas City, Mr. Rauckman served as the Chief Financial Officer and Treasurer of Garmin Ltd. from January 1999 until December 2014. He was named CFO of the Year by the Kansas City Business Journal in 2008. Mr. Rauckman received a B.S. in Business Administration and an MBA degree in Finance from the University of Kansas. Mr. Rauckman serves as a board member and the audit committee chairman of JE Dunn Construction Group; a board member and the nomination/governance committee chairman of MGP Ingredients, Inc. (Nasdaq: MGPI); and a member of the board of CrossFirst Bank since 2018.

Skills and Qualifications - In addition to the skills identified below under “Corporate Governance  – Skills and Experience,” Mr. Rauckman was selected to serve on our Board of Directors because of his public company experience, his significant financial and investment experience, his corporate governance, leadership, operational and strategic planning skills, his CrossFirst board experience,

his board attendance and participation, and his extensive understanding of risk management and corporate financial statements.

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Grey Stogner

Mr. Stogner is the President and Owner of Crestview Real Estate, LLC (“Crestview”), which is a full-service commercial real estate company based in Dallas, Texas. Crestview specializes in the development, leasing, property management, and asset management of commercial real estate. Mr. Stogner is also a principal in The Cogent Group, LLC, which is an investment company that specializes in net leased investments. Mr. Stogner has served as President of Crestview and as a principal in The Cogent Group, LLC since April 2008. During his career, which has spanned over 35 years in commercial real estate, he has been involved in the development of over seven million square feet of commercial space primarily in the retail shopping center sector. This has included food-anchored retail centers, specialty centers and single tenant assets. Mr. Stogner graduated from Baylor University with a B.B.A. in Management, Marketing, and Real Estate and was a football letterman.

Skills and Qualifications - In addition to the skills identified below under “Corporate Governance – Skills and Experience,” Mr. Stogner was selected to serve on our Board of Directors because of his management and general business experience, his significant knowledge and experience in commercial real estate investing, his CrossFirst board experience, and his board attendance and participation.

The Board recommends a vote FOR the election of
Steven W. Caple, Ronald C. Geist, Kevin S. Rauckman and Grey Stogner.

Graphic Proxy Statement Page 4


Board and Governance Matters

Continuing Director Biographical Information

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Rodney K. Brenneman, Chairman of the Board

Since August 2014, Mr. Brenneman has been a board member, independent business consultant and advisor. From 2011 until August 2014, Mr. Brenneman served as the President and Chief Executive Officer of Butterball LLC, the largest integrated turkey processing company in the United States and a joint venture of Seaboard Corporation and Maxwell Foods, LLC. Prior to serving as President and Chief Executive Officer of Butterball, LLC, Mr. Brenneman served in various financial and management capacities at Seaboard Corporation (NYSE: SEB), a global agribusiness and transportation company, from 1989 until 2011. Mr. Brenneman served as President and Chief Executive Officer of Seaboard Foods from 2001 until 2011, as Senior Vice- President and Chief Financial Officer of Seaboard Foods from 1999 to 2001, as Senior Vice President, Live Production for Seaboard Foods from 1996 until 1999 and Vice President – Finance and Administration of Seaboard Foods from 1994 to 1996. Prior to joining Seaboard, Mr. Brenneman was an accountant for several years with Arthur Andersen. Mr. Brenneman is a CPA and graduated from Wichita State University. Mr. Brenneman has served on several boards, both for-profit and not-for-profit, and is involved in private equity. Mr. Brenneman previously served on the board of CrossFirst Bank from 2009 until 2012. Currently, he serves on the boards of directors of Clemens Family Corporation, McKee Foods, Great Lakes Cheese Co., Inc., P&P Optica Inc., Lifesong for Orphans, Inc. and Made to Flourish, Inc.

Skills and Qualifications - In addition to the skills identified below under “Corporate Governance – Skills and Experience,” Mr. Brenneman was selected to serve on our Board of Directors because of his professional background and experience in senior executive leadership positions, CrossFirst board experience, board attendance and participation, his extensive understanding of strategic planning, tactical business decision-making, risk management and corporate financial statements.

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George C. Bruce

Mr. Bruce has served as the CEO of Aladdin Petroleum Corporation, an oil and gas exploration and production company since 1993. Mr. Bruce has also served as general counsel for Aladdin Middle-East, Ltd., a private petroleum exploration, production and drilling company, primarily active in the Republic of Turkey since 1980 and serves as its Vice Chairman and Executive Vice President. In his legal career, Mr. Bruce was a law partner of Hall, Pike & Bruce from 1980-1988 and Martin, Pringle, Oliver, Wallace & Bauer, LLP from 1988 until his retirement in January 2022, where he was a former managing partner and senior commercial attorney. Mr. Bruce served as corporate counsel for Union Bankshares, Inc., the holding company for Union National Bank of Wichita, for 10 years from 1985 through its acquisition by Commerce Bank in 1995. Mr. Bruce also provided legal advice to numerous banks in the areas of commercial and regulatory activities, obtaining de novo charters, and mergers and acquisitions. Mr. Bruce received a B.A. degree in History from the University of Kansas and his law degree from Washburn University School of Law. He has served on the boards of directors of the Bank since 2021, Aladdin Petroleum Corporation since 1993, Aladdin Middle-East, Ltd. since 1990, and Heartland Community Church since 1993.  He is a former member of the board of directors of Trinity Academy of Wichita.

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Board and Governance Matters

Skills and Qualifications - In addition to the skills identified below under “Corporate Governance – Skills and Experience,” Mr. Bruce was selected to serve on our Board of Directors because of his significant legal, banking and business experience, particularly in the energy sector.

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Jennifer M. Grigsby

Ms. Grigsby has over 30 years of senior management experience in accounting, treasury, risk management, corporate governance, and corporate finance, primarily in the oil and gas exploration and production industry. Most recently, Ms. Grigsby served as Secretary of Economic Administration for the State of Oklahoma from March 2021 through November 2022. In this role, Ms. Grigsby oversaw more than 20 state agencies including the Oklahoma Employment Security Commission, the Office of the State Treasurer, the Oklahoma Tax Commission, the Lottery Commission and the State’s Pension and Retirement Systems. Prior to this role, Ms. Grigsby served as Executive Vice President and Chief Financial Officer of Ascent Resources, LLC (‘Ascent”), an oil and gas exploration and production company located in Oklahoma City, Oklahoma, from July 2015 until May 2020. On February 6, 2018, three affiliated entities of Ascent, Ascent Resources Marcellus Holdings, LLC, Ascent Resources – Marcellus, LLC, and Ascent Resources Marcellus Minerals, LLC (collectively, the "Marcellus Affiliates"), filed a joint plan of reorganization pursuant to chapter 11 of the United States Bankruptcy Code (such plan, as amended, the "Reorganization Plan"). Ms. Grigsby was Executive Vice President and Chief Financial Officer of each of the Marcellus Affiliates at the time of the filing, On March 30, 2018, the Reorganization Plan was confirmed by the United States Bankruptcy Court for the District of Delaware and on May 8, 2018, the chapter 11 bankruptcy cases of the Marcellus Affiliates were closed. Prior to Ascent, Ms. Grigsby served as Chief Financial Officer of American Energy –Woodford, LLC and Chief Executive Officer and Chief Financial Officer of American Energy Minerals, LLC from February 2015 to July 2015. Prior to her roles at American Energy, Ms. Grigsby spent almost 19 years with Chesapeake Energy Corporation (NYSE: CHK) and served in various executive roles, including Senior Vice President, Treasurer and Corporate Secretary, and Senior Vice President – Corporate and Strategic Planning. Ms. Grigsby is also a principal and co-founder of Amethyst Investments, LLC, a passive financial investment company in Oklahoma City, Oklahoma. Ms. Grigsby currently serves on the board of directors of Silverbow Resources, Inc. (NYSE: SBOW); on the board of directors, health, safety and environment committee and audit committee of Superior Plus Corp. (TSX: SBP); and on the board of directors and investment committee of CompSource Mutual Insurance Company. Ms. Grigsby is a Certified Public Accountant and Chartered Global Management Accountant and is a member of the Oklahoma Society of Certified Public Accountants and the American Institute of Certified Public Accountants. Ms. Grigsby is also National Association of Corporate Directors (NACD) Directorship CertifiedTM.

Skills and Qualifications - In addition to the skills identified below under “Corporate Governance – Skills and Experience,” Mrs. Grigsby was selected to serve on our Board of Directors because of her significant financial and general business experience, particularly in the energy sector.

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Board and Governance Matters

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Lance A. Humphreys

Mr. Humphreys has served as Manager and Lead Investor of 410 Investments, LLC (“410”) since May 2007. 410 is focused on commercial real estate and private equity. He also serves as a Managing Partner of 640 Legacy Partners, LLC, which owns and manages commercial real estate and other alternative assets. Mr. Humphreys previously served as Manager of Covenant Hospitality, LLC from February 2011 through May 2016. Mr. Humphreys graduated from the University of Oklahoma, where he studied Marketing. Mr. Humphreys also studied at Denver Seminary and spent eight years as the senior leader of Bridgeway Church in Oklahoma City. Mr. Humphreys served on the board of CrossFirst Bank from 2012 until 2018. He is a current board member for 640 Legacy Partners, LLC, Martin Bionics Kize, and Humphreys Real Estate Income Fund.

Skills and Qualifications - In addition to the skills identified below under “Corporate Governance – Skills and Experience,” Mr. Humphreys was selected to serve on our Board of Directors because of his significant management and general business experience.

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Mason D. King

Mr. King is a principal at Luther King Capital Management (“LKCM”), an investment management company. He joined the firm in 2004 and serves as Director of Public Equity Investment Strategies and as a portfolio manager. Prior to joining LKCM, Mr. King was an equity analyst at Hester Capital Management and a private equity investment analyst at Pacesetter Capital Group and Crates Thompson Capital. Mr. King graduated with a Bachelor of Arts in English Literature from Princeton University and a Master of Business Administration from the University of Texas at Austin. He also completed the TCU Ranch Management Program. Mr. King holds board positions with St. Mark’s School of Texas, Caesar Kleberg Wildlife Research Institute, Texas and Southwestern Cattle Raisers Foundation, LKCM Center for Financial Studies at TCU and the University of Texas MBA Investment Fund. He has served on the board of CrossFirst Bank since 2018.

Skills and Qualifications - In addition to the skills identified below under “Corporate Governance – Skills and Experience,” Mr. King was selected to serve on our Board of Directors because of his significant banking, financial and investment experience.

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James W. Kuykendall

Mr. Kuykendall owns and is President of Equipment World, Inc., a construction equipment dealership located in Tulsa, Oklahoma. The business sells equipment across the country and serves a regional area providing rentals, parts and services. Mr. Kuykendall joined the company in 1987 upon his graduation from Oklahoma State University and has spent over 35 years working to build the business. Mr. Kuykendall is involved in various industry associations and serves on the board of the Association of Oklahoma General Contractors. He has served on the board of CrossFirst Bank since 2017.

Skills and Qualifications - In addition to the skills identified below under “Corporate Governance – Skills and Experience,” Mr. Kuykendall was selected to serve on our Board of Directors because of his significant business experience.

 

 

  

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Board and Governance Matters

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Michael J. Maddox

Mr. Maddox has served as President and CEO of the Company since June 1, 2020, and CEO of the Bank since November 28, 2008. He also served as President of the Bank from November 28, 2008 until July 1, 2022 when the roles of CEO and President of the Bank were split. Prior to joining the Bank, he was a Regional President for Intrust Bank. In this role, he managed Intrust Bank’s operations in Northeast Kansas. Mr. Maddox has over 20 years of banking experience. Mr. Maddox attended the University of Kansas from which he received a business degree and a law degree. While at KU, Mr. Maddox was a four-year basketball letterman and a member of the KU team that won the National Championship in 1988. Mr Maddox completed the Graduate School of Banking at the University of Wisconsin – Madison in 2003.  Mr. Maddox is a member of the Economic Development Board of Johnson County, Kansas and serves on the Kansas City Civic Council. He has served on the board of CrossFirst Bank since 2008 and currently serves as Chairman of the Board of CrossFirst Bank. Mr. Maddox’s employment agreement grants him the right to be appointed as a director of the Company and the Bank.

Skills and Qualifications - In addition to the skills identified below under “Corporate Governance – Skills and Experience,” Mr. Maddox was selected to serve on our Board of Directors because of his appointment as President and CEO of the Company and his significant banking leadership experience.

 

 

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Michael K. Robinson

Mr. Robinson has over 34 years of leadership experience in telecom infrastructure operations and engineering, technology innovation, corporate security and fraud detection, banking and business risk management. Since March 2006, Mr. Robinson has owned and served as President and CEO of Leadergy Catalyst LLC, a senior leadership and consulting company specializing in emerging technologies, business process development, risk management, and operational scalability. Mr. Robinson has also served in a variety of other senior leadership positions, including Chief Operating Officer of CommLink Technology, President and Chief Operating Officer of Motricity Corp., Division President at TNS, and Senior Vice President, Product Development for Sprint Corporation. He has served on the board of CrossFirst Bank since its inception in 2007.

Skills and Qualifications - In addition to the skills identified below under “Corporate Governance – Skills and Experience,” Mr. Robinson was selected to serve on our Board of Directors because of his significant technology expertise, software development and implementation, cybersecurity management, risk management and general business experience.

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Board and Governance Matters

 

 

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Stephen K. Swinson

Mr. Swinson was the CEO of CenTrio Energy, North America’s leading pure-play district energy platform from 2021 until his retirement in October 2023. He led the company’s growth in current and new markets and its transformation to a sustainable energy-centered district energy platform that empowers customers to pursue carbon-reducing district energy operations across North America. Previously, he held the position of President and CEO of Thermal Energy Corporation (TECO), which owns and operates the district energy system supplying thermal utilities to the Texas Medical Center campus, from 2005 to 2021. The company was named International District Energy Association’s 2019 System of the Year under his leadership. Prior to his affiliation with TECO, Mr. Swinson served as president of Cleveland Brothers Construction Company, LLC, a commercial and residential contractor and developer in the Southeast United States.  He also served as the chief financial officer for Cleveland Brothers Inc., the parent company for several businesses that included development, real estate, construction, manufacturing, a golf course and a restaurant.  Prior to his affiliation with Cleveland Brothers, Mr. Swinson was a Principal for Index Capital, the investment banking division of Index Powered Financial Services, LLC, specializing in the valuation and negotiation for divestiture or acquisition of small- to mid-cap companies.  Mr. Swinson served on the Board of Directors of Torotel, Inc. (formerly OTCPK: TTLO) from 2003 until 2020.  He is a member of the Alabama Engineering Hall of Fame (2022), the TMC Advisory Board of directors and the TMC Venture Fund Advisory Board of Directors. He has also been a member of the International District Energy Association (IDEA) since 1983 and is the recipient of the Norman R. Taylor Person of the Year Award (2015). He holds a bachelor’s degree in mechanical engineering from Auburn University and a master’s degree in business administration from the Kellogg Graduate School of Management at Northwestern University. He is a licensed professional engineer and is a frequent presenter and publisher on emerging issues in the energy field.

Skills and Qualifications - In addition to the skills identified below under “Corporate Governance – Skills and Experience,” Mr. Swinson was selected to serve on our Board because of his significant senior management and general business experience, particularly in energy and construction, and his past experience in middle market investment banking.

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Corporate Governance

Corporate Governance

Director Nominations, Skills and Qualifications

Nomination of Directors

The Nominating Committee is responsible for identifying, evaluating, and recommending candidates to the Board. The Nominating Committee may consider director candidates from a wide range of sources, including referrals from stockholders, officers, and directors. The Board is responsible for nominating directors for election by the stockholders and filling any vacancies on the Board that may occur. The Nominating Committee will continue to evaluate the composition of the Board, including the mix of skills and experiences of existing directors, as well as the potential benefits from new and different perspectives and skill sets.

Our director nomination process is designed to consider diversity among the many factors that the Board considers in evaluating prospective nominees. Diversity, as considered by the Nominating Committee, can encompass many attributes, from business experience to substantive expertise, education, background, gender, race and ethnicity. The goal of this process is to assemble a group of Board members with deep, varied experience, sound judgment and commitment to our success. We have disclosed the self-identified race, ethnicity, gender and LGBTQ+ status of those of our directors and director nominees who have consented to such disclosure in this Proxy Statement under “Board Diversity.” As of December 31, 2023, 7% of our directors and 57% of our executive leadership team self-identifies as female. We continue to look for ways to diversify and broaden our talent pool. We will also continue to evaluate opportunities to provide more transparency regarding our race/ethnicity data to increase awareness, accountability, and more diversity in our leadership.

Stockholder Recommendations for Director Candidates

Fulfilling its responsibility to identify, evaluate, and recommend director candidates, the Nominating Committee accepts stockholder recommendations of director candidates and evaluates such candidates in the same manner as other candidates. The Nominating Committee determines the need for additional or replacement Board members, then identifies and evaluates the director candidate under the Director Qualifications described below based on the information the Nominating Committee receives with the recommendation or which it otherwise possesses, which may be supplemented by certain inquiries. If the Nominating Committee determines, in consultation with other directors, that a more comprehensive evaluation is warranted, the Nominating Committee may then obtain additional information about the director candidate’s background and experience, including by means of interviews. The Nominating Committee will then evaluate the director candidate further, again using the qualification criteria described herein. The Nominating Committee receives input on such director candidates from other directors and recommends director candidates to the full Board for nomination. The Nominating Committee may engage a third party to assist in identifying director candidates or to assist in gathering information regarding a director candidate’s background and experience. If the Nominating Committee engages a third party, the Company pays for these services.

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Corporate Governance

Stockholders who wish to recommend a candidate for the Nominating Committee’s consideration must submit the recommendation in writing to CrossFirst Bankshares, Inc., 11440 Tomahawk Creek Parkway, Leawood, Kansas, 66211, Attn: General Counsel and Corporate Secretary. The written notice must demonstrate that it is being submitted by a stockholder of record of the Company and include information about each proposed director candidate, including name, age, business address, principal occupation, principal qualifications, and other relevant biographical information. In addition, the stockholder must confirm the candidate’s consent to serve as a director. Stockholders may make recommendations at any time and any nominations by stockholders will be evaluated in the same way as nominees identified by the Nominating Committee.

In addition, stockholders may nominate director candidates by complying with the advance notice bylaw provisions discussed at the end of this Proxy Statement under “General Information – Stockholder Proposals or Nominations Not Submitted Pursuant to Rule 14a-8.”

Director Qualifications

Our Corporate Governance Guidelines describe the minimum qualifications for our directors. The Board seeks members who combine a broad and relevant spectrum of experience and expertise with a reputation for integrity. The Board looks for directors who can best perpetuate the Company’s success and represent stockholder interests through the exercise of sound judgment, using their diversity of experience. Directors should be selected based upon their potential contributions to the Board and management and their ability to represent the interests of stockholders. Also, the Board will consider the diversity of a candidate’s perspectives, background, and other demographics. When considering potential director candidates, the Board also considers: (i) whether the individual meets various independence requirements; (ii) the individual’s understanding of banking, the varied disciplines relevant to the success of a publicly traded company in the current business environment and the Company’s business and markets; (iii) the professional expertise, business and financial experience and educational background of the individual; (iv) the individual’s understanding of, and commitment to, high standards of regulatory compliance; (v) the personal and professional integrity of the individual; and (vi) other factors that promote diversity of views and experience, including self-identified racial, ethnic and gender diversity. The Nominating Committee is committed to identifying potential candidates to increase gender and/or demographic diversity on the Board.

Generally, no director is permitted to serve on more than four public company boards (including the Company’s Board). Management directors may only serve on one other public company board. Our Chairman of the Board may serve on no more than two other public company boards (this is limited to one other board if they are serving as lead director or chairman of another public company board).

Director Retirement Policy

The Corporate Governance Guidelines include a retirement policy for directors. In general, under this policy, any director who has reached the age of 75 at or before the time for his or her election by stockholders or appointment to the Board will not be eligible for election or designation to the Board, and the Board will not nominate for election or designate any such person as a director; provided, that, the Board may waive the application of this policy if the Board determines that the value of a particular director’s contribution makes it advisable to do so.

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Corporate Governance

The Corporate Governance Guidelines also include a policy regarding a change of director’s circumstances. In general, under this policy, any director who retires, or makes a significant change to his or her principal employment or experiences a significant change in his or her personal circumstances that may reasonably have an adverse effect on the director’s service on the Board, including his or her independence or the Company’s business or reputation, must offer his or her resignation to the Board. The Nominating Committee then will review the appropriateness of that director’s continued service on the Board considering the new circumstances and will make a recommendation to the Board as to whether the resignation should be accepted.

Board Diversity

We continue to assess our overall board composition and build a diverse board to increase diversity of thought and to align board capability with our strategic focus. The following diversity statistics regarding our Board are reported in the standardized disclosure matrix required under applicable Nasdaq rules.

Board Diversity Matrix (As of March 26, 2024)

Total Number of Directors

14

Female

Male

Non-Binary

Did Not Disclose

Gender

Part I: Gender Identity

Directors

1

13

Part II: Demographic Background

African American or Black

Alaskan Native or Native American

1

Asian

Hispanic or Latinx

Native Hawaiian or Pacific Islander

White

1

12

Two or More Races or Ethnicities

LGBTQ+

Did Not Disclose Demographic Background

The Company’s Board Diversity Matrix for 2023 is publicly available in the Company’s definitive proxy statement filed with the Securities and Exchange Commission (“SEC”) for the 2023 Annual Meeting of Stockholders.

Skills and Experience

The Nominating Committee works with the full Board to regularly evaluate Board composition to assess the skills and capabilities that are relevant to the Board’s work and the Company’s strategy and the number of directors needed to fulfill the Board’s responsibilities under our Corporate Governance Guidelines and Committee charters. The table below summarizes the key qualifications, skills, and attributes that each director and nominee bring to the Board. Each director and nominee possesses numerous other skills and competencies not identified below. A mark indicates a specific area of focus or expertise which the Board considers the person to contribute significantly to the overall Board skill set. A director or nominee may possess a qualification or skill even if a mark is absent from the table. Director and nominee biographies above under “Information Regarding the Board and Director Nominees” describe each person’s background and relevant experience in more detail.

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Corporate Governance

Brenneman

Bruce

Caple

Geist

Grigsby

Hansen

Humphreys

King

Kuykendall

Maddox

Rauckman

Robinson

Stogner

Swinson

Independence

X

X

X

X

X

X

X

X

X

 

X

X

X

X

Knowledge, Skills and Experience

Banking

X

X

X

X

X

X

X

X

X

X

X

X

X

X

Financial/ Accounting/ Investment

X

 

X

X

X

 

X

X

 

X

X

 

 

X

CEO / Business Head

X

X

X

X

X

X

X

X

X

X

 

X

X

X

Legal or Regulatory

 

X

X

 

 

 

 

 

 

X

 

 

 

 

M&A

X

X

X

X

X

X

 

X

 

X

X

X

 

X

Real Estate

X

X

X

X

 

 

X

 

X

X

 

 

X

X

Energy

 

X

X

 

X

 

 

X

 

X

 

 

 

X

Risk Management

X

X

 

 

X

 

 

X

 

X

X

X

 

X

IT/ Cybersecurity

 

 

 

 

 

 

 

 

 

 

 

X

 

 

Public Company

X

X

X

X

X

X

X

X

X

X

X

X

X

X

Marketing

 

 

 

X

 

X

X

 

 

X

 

 

 

 

Demographics

Race/Ethnicity

Alaskan Native or Native American

 

 

 

 

 

 

 

 

 

 

 

 

 

X

White/ Caucasian

X

X

X

X

X

X

X

X

X

X

X

X

X

 

Gender

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Female

 

 

 

 

X

 

 

 

 

 

 

 

 

 

Male

X

X

X

X

 

X

X

X

X

X

X

X

X

X

Director Independence

As required under Nasdaq Stock Market, LLC (“Nasdaq”) rules, a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by the board of directors. Our Corporate Governance Guidelines, which are available on our website (investors.crossfirstbankshares.com), mirror this requirement. Our committee charters also require that each of the Audit Committee, Compensation Committee, Nominating Committee and Risk Committee be comprised of independent directors.

The Board reviewed the independence of all of our directors who served at any time since January 1, 2023. During this review, the Board considered transactions and relationships between each director or any member of his or her immediate family (or any entity of which a director or an immediate family member is an executive officer, general partner or significant equity holder) and the Company and its subsidiaries and affiliates. The Board also considered whether there were any transactions or relationships between directors or any member of their immediate family and members of the Company’s senior management or the Company’s independent registered public accounting firm. The purpose of this review was to determine whether any such relationships or transactions existed that were inconsistent with a determination that the director is independent.

As a result of this review, the Board affirmatively determined that each of Messrs. Brenneman, Bruce, Caple, Geist, Hansen, Humphreys, King, Kuykendall, Rauckman, Robinson, Stogner, and Swinson and Ms. Grigsby are independent under applicable Nasdaq and SEC rules.

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Corporate Governance

In determining that each of the directors other than Mr. Maddox is independent, the Board considered, among other things, certain relationships that were not prohibited under Nasdaq rules. The Board considered that the Company and its subsidiaries in the ordinary course of business have, during the last three years, leased office space to Mr. Brenneman in a Company-owned office building; sold products and services to some of our directors and their immediate family members as described below under “Certain Transactions”; and purchased services from a law firm at which Mr. Hansen’s son-in-law was a partner during 2023. In each case, the Board concluded that the transactions were either insignificant, in the ordinary course of business or the involved directors did not have a direct or indirect material interest in the transactions referred to above.

Board and Committee Structure and Operations

Board and Committee Meetings

Our Board held nine meetings during 2023. Each director attended at least 75% of the total number of meetings of the Board and the committees on which such director served that were held while the director was a member of such committee. Our Board has established the following standing committees: Audit Committee, Compensation Committee, Corporate Governance & Nominating Committee and Risk Committee. The current membership and function of each committee and the number of meetings held by each committee during 2023 is described below.

AUDIT COMMITTEE

Current Members

 

Kevin S. Rauckman (Chair)

8 Meetings in 2023

Steven W. Caple

 

Jennifer M. Grigsby

 Primary Responsibilities:

Stephen K. Swinson

Oversee our accounting and financial reporting processes, internal controls and audits of our financial statements, our risk management relating to our accounting and financial reporting process, and the qualifications and independence of our independent registered public accounting firm
Oversee the internal audit function, including the performance of our internal audits
Sole authority and responsibility to select, determine compensation for, evaluate the performance of, and, if appropriate, replace our independent registered public accounting firm
Review and approve the scope and expense of audit and permitted non-audit services provided by our independent registered public accounting firm
Establish procedures for the receipt, retention and treatment of complaints relating to accounting, internal controls or auditing matters and the anonymous submission of concerns regarding questionable accounting or auditing matters
Administer and oversee enforcement of the Company’s Code of Business Conduct and Ethics
Review and oversee related person transactions

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Corporate Governance

COMPENSATION COMMITTEE

Current Members

 

Rodney K. Brenneman (Chair)

5 Meetings in 2023

Ronald C. Geist

 

James W. Kuykendall

 Primary Responsibilities:

Lance A. Humphreys

With input from the Company’s CEO and chief human resources officer (“CHRO”), develop, review periodically and approve the Company's compensation philosophy, policies, plans and programs relating to the compensation of the Company's Section 16 officers (within the meaning of SEC Rule 16a-1(f), which includes executive officers as defined by the rules of Nasdaq) (“Section 16 officers”) and employees generally
Determine the structure and objectives of each element of executive officer compensation
Review and approve the base salaries, incentive award opportunity levels, and all other components of compensation for Section 16 officers
Set incentive compensation goals
Approve awards under equity and incentive compensation programs, and exercise administrative authority under our benefit plans
Oversee the Company’s human capital management strategy, including with respect to employee recruiting and retention, motivating and rewarding employees, employee health and safety, employee training and development, workplace environment and culture, and diversity, equity and inclusion
Review, evaluate the performance of, and, based on this evaluation, approve the compensation of the Chief Executive Officer
Recommend to the Board the structure of non-employee director compensation
Assist the Board in overseeing compensation risk, including determinations regarding the risk of employee compensation practices and policies
Approve certain compensation disclosures
Retain independent compensation consultants, legal counsel and other advisors
Adopt, terminate, administer and enforce the CrossFirst Bankshares, Inc. Incentive Compensation Clawback Policy (the “Clawback Policy”), including interpreting the terms thereof, designating additional persons to be subject to the Clawback Policy and recouping or causing to be forfeited certain incentive compensation from Covered Executives (as defined in the Clawback Policy)

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Corporate Governance

CORPORATE GOVERNANCE & NOMINATING COMMITTEE

Current Members

 

 

Lance A. Humphreys (Chair)

5 Meetings in 2023

George C. Bruce

 

 

Rodney K. Brenneman

 Primary Responsibilities:

Ronald C. Geist

Identify and recommend candidates for election to our Board and each Board committee
Consider matters of corporate governance and make recommendations or take action relating to such matters
Oversee the Board’s annual self-evaluation process
Oversee succession planning for senior executives
Oversee the Company’s practices and reporting with respect to environmental, social and governance matters that are of significance to the Company and its stakeholders
Oversee the Company’s strategy, policies and practices relating to the Company’s response to current and emerging political, corporate citizenship and public policy issues that may affect the business operations, performance or public image of the Company

RISK COMMITTEE

Current Members

 

 

Michael K. Robinson (Chair)

4 Meetings in 2023

George E. Hansen III

 

 

Mason D. King

 Primary Responsibilities:

Grey Stogner

Oversee the enterprise-wide risk management framework, profile and policies
Make recommendations to the Board on risk management policies and the Company’s risk appetite and tolerance
Oversee risk management governance and policies and perform other functions pursuant to the state and federal banking regulations
Oversee various risk domains including credit, interest rate, cybersecurity, price, liquidity, operational, compliance, strategic, reputational and other risks

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Corporate Governance

Committee Matters

Our Board has adopted a written charter for each of the Audit, Compensation, Nominating, and Risk Committees setting forth the roles and responsibilities of each committee. The committee charters are available on the investor relations page of our internet site (investors.crossfirstbankshares.com).

All members of the Audit, Compensation, Nominating, and Risk Committees satisfy the standards of independence applicable to members of such committees under applicable Nasdaq rules. In addition, the Board has determined that the composition of the Audit Committee, the attributes of its members and the responsibilities of the Audit Committee, as reflected in its charter, are in accordance with applicable Nasdaq and SEC rules for audit committees. All Audit Committee members possess the required level of financial literacy, and at least two members of the Audit Committee meet the current standard of requisite banking or financial management expertise required under applicable FDIC rules. The Board has determined that Mr. Rauckman and Ms. Grigsby are “audit committee financial experts” as such term is defined in Item 407(d) of Regulation S-K.

Board Leadership Structure

The Company’s Bylaws, as well as our Corporate Governance Guidelines, provide that the roles of Chairman of the Board and the CEO may be, but need not be, held by the same person. The Board of Directors has separated the roles of Chairman of the Board and CEO in recognition of the differences between the two roles and to eliminate any inherent conflict of interest that may arise when the roles are combined. The CEO is responsible for setting our strategic direction and day-to-day leadership and performance. The Chairman of the Board provides guidance to the CEO, sets the agenda for board meetings, presides over meetings of the full Board of Directors (including executive sessions), and facilitates communication among the independent directors and between the independent directors and the CEO.

The Company has a strong independent Board, with all directors except for Mr. Maddox having been determined to be independent under Nasdaq rules. Further, as previously noted, all standing committees of the Board are composed solely of independent directors. The Board believes that having an Independent Chairman, separate from the CEO role, is the most appropriate leadership structure at this time. Although the Board believes that structure best serves the interests of the Company and its stockholders, the Board retains the flexibility to combine the roles in the future. The Board recognizes its responsibility for the establishment and maintenance of the most effective leadership structure for the Company, taking into account all relevant facts and circumstances. In our Corporate Governance Guidelines, the Board has indicated that it will appoint a Lead Director if the position of Chairman of the Board is not held by an independent director.

Executive Sessions

In accordance with our Corporate Governance Guidelines, the non-employee directors meet regularly in executive session without management present. The Chairman of the Board presides over full Board executive sessions and independent director only executive sessions. Additionally, each Board committee regularly meets in executive session, and the Chair of such committee will preside over executive sessions of the committees.

Board Attendance at Annual Stockholder Meeting

Members of our Board of Directors are invited and encouraged to attend each annual meeting of stockholders. All of our directors attended our 2023 Annual Meeting of Stockholders.

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Corporate Governance

Board and Committee Evaluations

To monitor and improve its effectiveness, and to solicit and act upon feedback, the Board and its committees annually engage in a formal self-evaluation process. The Nominating Committee facilitates the process, which includes a written self-evaluation questionnaire from each director, a self-evaluation by each committee and individual interviews with each director. The results are then reported to and evaluated by the full Board.

Board Role in Risk Oversight

Our Board of Directors has ultimate authority and responsibility for overseeing our risk management. Our Board of Directors monitors, reviews and reacts to material enterprise risks identified by management. Our Board of Directors receives specific reports from executive management on credit, interest rate, liquidity, cybersecurity, operational, compliance, strategic, and reputational risks and the degree of exposure to those risks. Our Board of Directors helps ensure that management is properly focused on risk by, among other things, reviewing and discussing the performance of senior management and business line leaders. Committees of our Board of Directors have responsibility for risk oversight in specific areas. The Audit Committee oversees financial, accounting and internal control risk management policies. The Compensation Committee assesses and monitors risks in our compensation program. The Risk Committee assists our Board of Directors in its oversight of the enterprise-wide risk management of the Company, including but not limited to, risks associated with credit activities, regulatory compliance, technology, cybersecurity, investments, balance sheet management, and Company operations. The Risk Committee receives quarterly reporting on the Company’s risk profile from management and engages in extensive discussion on risk domains exceeding the Company’s risk appetite or an increasing direction. The Company’s risk indicators are evaluated annually. The potential impacts of emerging risks are considered and mitigation efforts discussed.

Our Chief Risk Officer is responsible for identifying, analyzing, and reporting internal and external risks over the short-term, intermediate-term, and long-term. She works in concert with other members of our management team, including our Managing Director, Compliance (who reports to her), Chief Credit Officer, Chief Accounting Officer and Director, Internal Audit (who reports to the Audit Committee), to ensure that existing and emerging risks are identified and mitigated. Our Disclosure Controls Committee, which is comprised of a cross-functional group of our senior management team, meets at least quarterly to ensure appropriate risks are identified and analyzed, and considered for timely disclosure.

The Bank also has a separate board of directors, which consists of certain members of the Company’s Board and executive team. Its members include Messrs. Bruce, Geist, King, Kuykendall, Hansen, Maddox, Rauckman, Rapp and Robinson. The board of directors of the Bank meets on a regular basis and has constituted certain management committees - Internal Risk Committee, Credit Risk Management Committee, Asset/Liability Committee (ALCO) and Technology, Operations and Compliance Committee - that also take an active role in risk management oversight of the Bank. Each of these committees meets regularly and is comprised of executives responsible for major categories of risk. The Internal Risk Committee reviews the Company’s risk appetite statement and enterprise risk management policy on an annual basis, which are ultimately approved by the Company’s or the Bank’s board, as appropriate, and establishes various risk tolerances focused on quantitative and qualitative key risk indicators. The Board of Directors of the Bank regularly shares its materials with the Company’s Board and reports on matters related to credit, interest rate, liquidity, operational, compliance, strategic, and reputational risks.

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Corporate Governance

Other Matters

Delinquent Section 16(a) Reports

Under U.S. securities laws, directors, certain officers and persons holding more than 10% of our Common Stock must report their initial ownership of our Common Stock and Series A Preferred Stock and any changes in their ownership to the SEC. The SEC has designated specific due dates for these reports, and we must identify in this Proxy Statement those persons who did not file these reports when due. Based solely on our review of copies of the reports filed with the SEC and the written representations of our directors and Section 16 officers, we believe that one transaction which was required to be reported under Section 16(a) was not timely filed during 2023. One Form 4 relating to the vesting of a prior grant of 5,000 restricted stock units by Mr. Rapp was not timely filed following the May 11, 2023 vesting, but was filed on December 8, 2023.

Code of Business Conduct and Ethics

The Company maintains a Code of Business Conduct and Ethics (“Code of Conduct”), which is applicable to all of our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer and other senior financial officers. The Code of Conduct is publicly available without charge on our website at investors.crossfirstbankshares.com, or by writing to: CrossFirst Bankshares, Inc., 11440 Tomahawk Creek Parkway, Leawood, Kansas, 66211, Attn: General Counsel and Corporate Secretary. If we make any material amendment to our Code of Conduct, or if we grant any waiver from a provision of the Code of Conduct for any executive officer or director, we will disclose the nature of the amendment or waiver on our website. We may also elect to disclose the amendment or waiver in a current report on Form 8-K filed with the SEC.

Compensation Committee Interlocks and Insider Participation

During 2023, no member of the Compensation Committee was an officer or employee or former officer of the Company or any of our subsidiaries. Additionally, none of our executive officers served as a member of (i) the board of directors or compensation committee of another entity in which one of the executive officers of such entity served on our Compensation Committee, or (ii) the compensation committee of another entity in which one of the executive officers of such entity served as a member of our Board.  Messrs. Kuykendall, Geist or their affiliated entities purchased 2,000 and 1,600 shares, respectively, of Series A Preferred Stock from the Company for $1,000 per share in connection with a private offering of the Series A Preferred Stock to accredited investors disclosed pursuant to the Company’s current report on Form 8-K filed with the SEC on March 31, 2023.  The purchases of shares in the offering by directors and their affiliated entities were on the same terms as purchases by outside investors in the offering.

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Director Compensation

Director Compensation

Director Compensation and Role of the Compensation Committee

The compensation paid to our non-employee directors further advances the interests of the Company and our stockholders by encouraging increased share ownership to promote long-term stockholder value.

The Compensation Committee is responsible for reviewing the effectiveness of the non-employee director compensation program in supporting the Company’s ability to attract qualified directors and align their interests with stockholders. The Compensation Committee reviews director compensation regularly and considers a variety of factors, including our financial performance, general market conditions, director compensation at companies within our peer group, director responsibilities, and trends in director compensation practices. Any recommendations for changes in director compensation are made to our Board.

Our non-employee directors are paid a cash retainer commensurate with the period of service during the Board year in quarterly installments. In addition, each non-employee director also receives a grant of restricted Common Stock with a fixed grant date value during each year of service on the Board. The compensation payable under our directors’ compensation program is described below.

Compensation Program

    

Annual Compensation Amount

    

Annual Compensation Amount

Description

(May 2022-May 2023 Board Year)*

(May 2023-May 2024 Board Year)*

Annual Director Fees

$35,000 in cash and target of $35,000 (as valued on grant date) in restricted stock

$35,000 in cash and target of $35,000 (as valued on grant date) in restricted stock

Independent Chairman Fee

$

35,000

$

35,000

Audit Committee Chair

$

20,000

$

20,000

Compensation Committee Chair

$

20,000

$

20,000

Nominating Committee Chair

$

20,000

$

20,000

Risk Committee Chair

$

20,000

$

20,000

Audit Committee Members

$

5,000

$

5,000

Other Committee Members

$

3,500

$

3,500

*Each director may elect to receive the cash portion of such director’s fees in restricted stock.

Meridian Compensation Partners, LLC (“Meridian”), the Compensation Committee’s independent compensation consultant, periodically provides the Compensation Committee with a review of our current Board compensation package relative to our peer group. See discussion under “Executive Compensation – Overview – Peer Group” for more information on the peer group used by Meridian to benchmark board compensation. No changes were made to the non-employee director compensation program for the May 2023- May 2024 Board term from the prior term.

Compensation recommendations are made to our Compensation Committee and Board with respect to the non-employee directors based on Meridian’s benchmarking review. The Compensation Committee then makes the ultimate decision as to the total compensation and compensation components of our non-employee directors. No non-employee director may receive equity awards with a fair market value on the date of grant that exceeds $200,000 in any calendar year.

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Director Compensation

Following a review of the Company’s Board compensation practices, and based on Meridian’s recommendations, changes to align target compensation for non-employee directors with the median for our peer group will be implemented in May 2024 for the 2024-2025 Board term. Changes will include an increase of $5,000 to the annual cash retainer for all non-employee directors; an increase of $15,000 for the target annual restricted stock award for all non-employee directors; an increase of $1,500 to each of the Compensation Committee, Nominating Committee and Risk Committee member fees; and an increase of $2,500 for the Audit Committee member retainer.

Each non-employee director is required to maintain a direct or indirect Common Stock ownership requirement of $150,000, which may be accumulated over a three-year period. As of December 31, 2023, all non-employee directors who were directors on such date were in compliance with these guidelines.

Directors who also serve on the Bank’s board of directors do not receive any additional compensation for such service.

Reimbursements

We reimburse our non-employee directors for reasonable expenses incurred for continuing education training and in attending Board, committee and stockholder meetings, including reasonable expenses for travel, meals and lodging. As applicable, we also reimburse our non-employee directors for similar travel, lodging and other expenses for a guest to accompany them to a limited number of Board meetings held as retreats to which we invite spouses for business purposes. No Board retreats were held in 2023.

Directors Deferred Fee Plan

We have a voluntary Directors’ Deferred Fee Plan (the “Directors’ Deferred Fee Plan”) that permits electing directors to receive deferred shares of our Common Stock in lieu of the cash or equity component of directors’ fees. If a director elects to defer any of his or her compensation under the Directors’ Deferred Fee Plan, the payment of the deferred shares is deferred for tax purposes until a director’s service on our Board of Directors ends. Before any deferred shares are delivered to a participating director, the director does not have any right to vote any of his or her deferred shares nor to receive any cash dividends on the deferred shares to the extent dividends are payable on shares of our Common Stock. If and when we pay a cash dividend on our shares, additional deferred shares would be credited to a participating director’s account. The additional shares credited would have a value equal to the dividends that otherwise would have been payable to a plan account if the hypothetical shares then credited were actual shares of our Common Stock. All credited whole deferred shares will be settled in actual shares of our Common Stock and such shares will be issued to a director upon the director’s termination from service on our Board of Directors. Any fractional deferred share will be rounded up to a whole share. The Directors’ Deferred Fee Plan applies only to eligible director compensation earned after 2018.

2023 Non-Employee Director Compensation Table

The following table sets forth compensation earned, awarded or paid during 2023 to each director who served on our Board of Directors in 2023, other than Mr. Maddox, who was an employee of the Company and did not receive any additional compensation for his service as a director. The compensation of Mr. Maddox is described in the “Summary Compensation Table” below. The table below also includes other compensation earned by each such director from us or the Bank.

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Director Compensation

Fees Earned

    

    

    

or Paid in

All other

Cash

Stock Awards

Compensation

Total

(1) ($)

(2) (5) ($)

($)

($)

Rodney K. Brenneman

$

93,500

$

35,008

 

$

128,508

George C. Bruce

$

38,500

$

35,008

 

$

73,508

Steven W. Caple (4)

$

40,000

$

35,008

 

$

75,008

Ronald C. Geist

$

42,000

$

35,008

 

$

77,008

Jennifer M. Grigsby

$

40,000

$

35,008

 

$

75,008

George E. Hansen III (3)

$

38,500

$

35,008

 

$

73,508

Lance A. Humphreys

$

58,500

$

35,008

 

$

93,508

Mason D. King (3)

$

38,500

$

35,008

 

$

73,508

James W. Kuykendall

$

38,500

$

35,008

 

$

73,508

Kevin S. Rauckman

$

55,000

$

35,008

 

$

90,008

Michael K. Robinson

$

55,000

$

35,008

 

$

90,008

Grey Stogner (3)

$

38,500

$

35,008

 

$

73,508

Stephen K. Swinson (3)

$

40,000

$

35,008

 

$

75,008

(1)Cash. The amounts in this column include: (i) the non-employee director’s cash retainer fees; and (ii) the value of restricted stock or deferred shares received in lieu of the non-employee director’s cash retainer fees, calculated based on the fair market value of the underlying shares on the dates the cash retainer fees would have otherwise been paid. The following directors elected to receive a portion of their cash retainer fees as restricted stock or deferred shares in the following amounts: Caple (3,872), Geist (339), Hansen (3,727), King (3,727), Kuykendall (3,727), Rauckman (968), Robinson (5,324), Stogner (169), and Swinson (3,872).

(2)2023 Restricted Stock Awards. Vesting is subject to continued service on the Board of Directors through the vesting date. The amounts in this column reflect the aggregate grant date fair value of restricted stock awards granted to the non-employee directors during fiscal 2023, whether deferred or not, computed in accordance with FASB ASC Topic 718. The assumptions used in calculating the valuation are set forth in Note 17 of the notes to the audited consolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2023. All restricted stock awards were issued to our directors under the CrossFirst Bankshares, Inc. 2018 Omnibus Equity Incentive Plan (as amended, the “Omnibus Plan”).

(3)Deferred Shares. Directors Hansen, King, Stogner, and Swinson elected to defer their 2023 equity compensation until such directors separate their service from the Board.

(4)Other Arrangements. Under the terms of Mr. Caple’s arrangement with LHFI III, LLC, a stockholder of the Company and an affiliate of an entity that employs Mr. Caple, and its affiliates, all such fees and restricted stock awards for service on our Board of Directors were paid directly to or assigned to LHFI III, LLC.

(5)Deferred and Restricted Stock at Year End. The following table sets forth each non-employee director’s outstanding deferred shares and restricted stock at fiscal year-end:

    

Total Deferred Shares

    

    

Restricted Stock

    

Director who elected

Name

as of

Restricted Stock

outstanding at

to have 2023 restricted

December 31, 2023

Awarded in 2023

December 31, 2023

grants deferred

Rodney K. Brenneman

 

1,935

 

3,389

3,389

George C. Bruce

 

22,903

 

3,389

3,389

Steven W. Caple

 

 

7,261

7,261

Ronald C. Geist

 

 

3,728

3,728

Jennifer M. Grigsby

 

17,830

 

3,389

3,389

George E. Hansen III

 

31,861

 

7,116

Lance A. Humphreys

 

 

3,389

3,389

Mason D. King

 

30,163

 

7,116

James W. Kuykendall

 

 

7,116

7,116

Kevin S. Rauckman

 

 

4,357

4,357

Michael K. Robinson

 

 

8,713

8,713

Grey Stogner

 

15,081

 

3,558

Stephen K. Swinson

 

30,904

 

7,261

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Executive Compensation

Executive Compensation

Overview

As an Emerging Growth Company under the JOBS Act, we have opted to comply with the executive compensation disclosure rules applicable to “smaller reporting companies” as defined in the rules promulgated under the Securities Act. These rules permit us to limit reporting of compensation disclosure to all persons serving as our principal executive officer during our last completed fiscal year and our two other most highly compensated executive officers, which are referred to as our “named executive officers” or “NEOs.”

Our NEOs for 2023, are:

Michael J. Maddox, President and CEO of the Company and CEO of the Bank;
Benjamin R. Clouse, Chief Financial Officer (“CFO”) of the Company and the Bank; and
W. Randall Rapp, President of the Bank

We compensate our NEOs through a combination of base salary, annual cash incentives, long-term equity incentives and limited other benefits, including perquisites. Our Board of Directors believes the executive compensation packages that we provide to our executives, including the NEOs, should reward performance and attract and retain top talent. Each element of compensation is designed to achieve a specific purpose and to contribute to a total package that is competitive with similar packages provided by other institutions that compete for the services of individuals like our NEOs.

Compensation Program and Objectives

The Company’s 2023 executive compensation program and compensation decisions were based on the following principles:

Pay for Performance

Balanced Compensation Structure

Market-Competitive Pay Opportunity

 

 

 

Our compensation should reflect Company, business line, and individual performance.

We seek to deliver a mix of fixed and variable compensation that is aligned with stockholder interests and the long-term interests of the Company and that appropriately balances risk and reward.

Our compensation should be competitive relative to our peers to attract, motivate and retain a talented executive team.

Pay for Performance

Our compensation program is grounded on a pay for performance philosophy and is designed to reward achievement of the Company’s financial and strategic goals included in our business plans established before each performance cycle. In determining executive compensation, the Compensation Committee considers financial performance and strategic performance factors, risk performance, internal pay equity and individual NEO performance. The targeted compensation for our NEOs is in the form of fixed and variable compensation, a large portion of which is paid in performance-based restricted stock units (“PSUs”) tied to the long-term performance of the Company and designed to be aligned with stockholder interests. Financial performance factors considered by the Compensation Committee in setting and determining executive annual and long-term compensation include the following:

Adjusted Earnings Per Common Share (“Adjusted EPS”);
Relative Total Shareholder Return (“TSR”); and
Adjusted Pre-Tax, Pre-Provision Contribution Margin (“Adjusted PPCM”).

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Executive Compensation

Practices and Policies Supporting Strong Corporate Governance and Compensation Programs

We continue to maintain our disciplined approach to executive compensation with a focus on pay for performance, strong governance, risk management, and simplicity as evidenced by the following practices:

Pay for Performance: The majority of the targeted compensation for our NEOs is in the form of variable compensation linked to the long-term financial and strategic goals of the Company. Incentive compensation metrics are based on Adjusted EPS, TSR and Adjusted PPCM, and our NEOs’ goals are designed to be aligned to the Board-approved budget.
Stockholder alignment: Our compensation program is designed to be aligned with our long-term interests and those of our stockholders with deferred long-term incentives (“LTI”) in the form of both RSUs and PSUs linked to stockholder value appreciation.
Independent oversight: Our Compensation Committee includes only directors who are independent under applicable Nasdaq standards and the Committee is advised by an independent compensation consultant.
Incentive award limits: NEOs’ incentive awards have a maximum payout cap.
Clawback of incentive compensation: Our CrossFirst Bankshares, Inc. Incentive Compensation Clawback Policy (“Clawback Policy”) provides for clawback of cash and equity compensation in the event of an accounting restatement subject to the Clawback Policy or intentional misconduct by the executive which results in significant financial or reputational harm to the Company.
Risk management: We regularly evaluate the risk impact of the design of our incentive compensation program.
Balanced change in control protection: Severance payable upon a change in control is subject to a double trigger and does not provide excise tax gross ups for any employees.
Restrictive covenants: LTI awards to NEOs are subject to restrictive covenants, including non-solicitation provisions.
Stock ownership requirements: We have contractual stock ownership requirements for our NEOs.
Prohibition on Hedging and Pledging: Our Insider Trading Policy prohibits our directors, officers and employees from engaging in hedging transactions, including the use of financial instruments such as prepaid variable forward contracts, equity swaps, collars and exchange funds, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our securities. It also prohibits our Section 16 officers and directors from holding Company securities in a margin account or otherwise pledging Company securities as collateral for a loan.

Balanced Compensation Structure

The Compensation Committee determines compensation targets (sum of base salary, target cash incentive award opportunity under the Company’s Annual Incentive Plan (“AIP”) and LTI opportunities) for the NEOs at the beginning of the year, based on each executive’s role, market practice and our desired pay mix. We intend for our compensation program to provide our NEOs with target compensation that, on average, approximates the median for our peer group. Individual components of compensation may be greater or lesser than the median based on Company and individual performance. Target AIP and LTI opportunities are established for, and communicated to, the NEOs at the beginning of the year or, if later, at the time of any subsequent increase in AIP or LTI opportunity. The actual year-end AIP awards paid and LTI awards made to the NEOs are determined by the Compensation Committee based on its evaluation of financial performance, risk performance, individual performance and other performance factors. The Compensation Committee also considers compensation levels of other executives in similar roles both within the Company and at peer companies when making compensation decisions.  The Compensation Committee uses discretion to exercise its judgment instead of solely relying on formulaic structure which it believes provides the right level of transparency while maintaining the flexibility necessary to pay amounts deemed appropriate for performance.  

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Executive Compensation

The Compensation Committee has determined that the balance of the following pay components provides an effective combination of risk and reward:

 

 

 

 

(At Risk)

 

 

 

 

 

 

 

 

 

 

Element

     

Base Salary

     

Time-based Restricted Stock Units

     

     

Annual Incentive

     

Performance-based Restricted Stock Units

Highlights

 

Fixed compensation based on scope of responsibility, impact on the organization, expertise, experience, and individual performance

 

Award of RSUs that vest in 1/3 increments over three years

 

 

Annual cash bonus opportunity based on Company financial performance, including Adjusted PPCM, as well as individual performance

 

Annual award of PSUs that vest based on achievement of our three-year performance goals

Rationale

 

Recognize performance of job responsibilities and attract and retain top talent

 

Provide a strong retention element and align executive and stockholder interests

 

 

Motivate the Company’s eligible senior executives to enhance stockholder value by linking a portion of their cash compensation to the Company’s financial performance, reward participants for superior individual performance and help attract and retain key employees

 

Align compensation with our business strategy and long-term stockholder value while providing a strong retention element

Review of Compensation Policies and Practices Related to Risk Management

Our executive compensation program reinforces effective risk management through risk-balancing features that discourage and mitigate excessive risk-taking, and an accountability framework that, under defined conditions, enables the forfeiture or recovery of compensation in the event executives’ actions, or inactions, result in specified types of negative outcomes for our Company. The Compensation Committee believes that the 2023 compensation decisions for our NEOs were reasonable and appropriate and consistent with our compensation principles.

Risk-Balancing Features

To discourage imprudent risk-taking, the Company embedded risk-balancing features throughout our program for 2023, which include:

Pay Element

     

     

Risk-Balancing Feature

Base Salary

 

Salaries are a form of fixed compensation

 

Promotes retention by providing a basic level of compensation

Short-Term Incentive (Cash Bonus)

 

2023 target award opportunity of 75% of base salary (maximum 112.50% of base salary) for Mr. Maddox with lower opportunities for other executives

 

Design of annual incentive program provides for the taking of a reasonable amount of risk to provide upside incentive compensation opportunity, while a payout cap on the incentives reduces risk by limiting the amount of short-term compensation that may be earned

Award level based on achievement of pre-established performance objectives
Incentive goals tied to Board-approved annual budget

 

Subject to recovery under the Company’s Clawback Policy

Long-Term Incentive (Equity)

 

Significant portion of variable compensation in long-term equity

 

Retirement does not trigger acceleration of payment from the original payment schedule for RSUs or PSUs

 

Executive officers have contractually agreed to robust stock holding requirements

LTI awards are subject to restrictive covenants, including non-solicitation provisions

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Executive Compensation

Executive officers are prohibited from pledging Company stock in connection with a margin or similar loan and from entering into derivative/hedging transactions involving Company stock

Subject to forfeiture or recovery as described under the Company’s Clawback Policy

PSUs

Long-term, three-year performance period, with cliff vesting

Award level based on achievement of pre-established performance objectives

2023 target LTI opportunity of 80% of base salary for Mr. Maddox, with lower opportunities for other executives

Upside compensation capped with maximum award payout at 150% of target opportunities for other executives

Subject to downward adjustment by Compensation Committee under a wide variety of circumstances

RSUs

Promotes retention by providing shares subject to ratable vesting over three years

Compensation Risk Assessment

The Compensation Committee oversees an annual risk assessment of the Company’s employee compensation practices to evaluate compensation-based risks. Senior leaders may be asked to compile and analyze information about the Company’s incentive compensation practices and payment history to understand how evaluation of business risk events affect certain AIP and LTI performance measures and compensation decisions. After evaluation of the data and based on management’s evaluation of compensation risks, the Company’s CHRO prepares a report of the risk assessment, which includes any recommendations for risk adjustments to incentive compensation in connection with risk events. Such report is then shared with the Compensation Committee.

Recoupment of Incentive Compensation

The Board has adopted a Clawback Policy that provides for the recoupment and/or cancellation by the Company of incentive compensation payable to our executive officers and certain other executives if the Company (i) restates any of its financial statements due to the material noncompliance by the Company with any financial reporting requirement under applicable securities laws, or (ii) suffers significant financial or reputational harm resulting from any intentional theft, embezzlement, fraud, violation of law, gross dishonesty or other gross misconduct of the employee. The policy was updated in October 2023 to comply with the new SEC and Nasdaq requirements implementing a mandatory clawback for erroneously-awarded incentive compensation in the event of a financial restatement subject to the requirements.  The repayment obligation or forfeiture right applies to the extent repayment is required by applicable law, or to the extent the executive’s incentive compensation is determined to be in excess of the amount that would have been payable taking into account any such restatement. For financial restatements, the reimbursement or forfeiture obligation will apply to any erroneously-awarded compensation received or deemed received by the employee in the three completed fiscal years of the Company immediately preceding the date the restatement is determined to be necessary and any transition period (that results from a change in the Company’s fiscal year) within or immediately following those three completed fiscal years. The Compensation Committee has the sole discretion to determine the method for recouping erroneously awarded compensation under the Clawback Policy, which may include, without limitation, requiring reimbursement of cash incentive compensation previously paid; seeking recovery of any gain realized on any equity-based awards; offsetting the recouped amount from any compensation otherwise owed or dividends payable by the Company and its subsidiaries; cancelling outstanding vested or unvested equity awards; or forfeiture of awards or incentive compensation.  No executive officer may be indemnified against the loss of any erroneously awarded compensation or any claims relating to the enforcement of the Company’s Clawback Policy.

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Executive Compensation

Prohibition on Hedging and Pledging

All Company directors, officers and employees are prohibited from purchasing any financial instrument that is designed to hedge or offset any decrease in the market value of Company securities, and from participating in derivative or speculative transactions with respect to Company securities, including but not limited to prepaid variable forward contracts, collars, equity swaps, exchange funds, puts, calls and other derivative instruments. All directors and Section 16 officers are also prohibited from participating in short sales of the Company’s securities and from holding Company securities in a margin account or otherwise pledging Company securities as collateral for a loan.

Stock Ownership Guidelines

We utilize contractual stock ownership guidelines that require the retention of equity awards made to our executives and non-employee directors to further align their interests with the long-term interests of stockholders. See “Employment Agreements” below. As of December 31, 2023, each of our NEOs was in compliance with their specific contractual ownership holding requirement.

Peer Group

The independent compensation consultant retained by the Compensation Committee works with our management team to review and propose a peer group to analyze potential peer companies based on industry, markets, business models and a range of financial measures. Based on this analysis, an appropriate peer group is proposed. The Compensation Committee reviews and approves the peer group for the upcoming year based on the analysis provided and in consultation with the CHRO.

The companies included in our peer group for compensation benchmark purposes for 2023 were selected based on industry and scope relevance, including alignment with the Company based on, among other things, banks of similar asset size (positioning the Company at median) and similar business model. The peer group included 17 regional banks between $4.4 billion and $13.7 billion in assets, with positive cumulative earnings, relevant geography and business profile. The changes from our 2022 peer group included the removal of BancFirst Corporation, Inc., Merchants Bancorp. and West Bancorporation, Inc.; and the addition of First Foundation, Inc. and Origin Bancorp, Inc.

The peer group used to set 2023 compensation consisted of the following companies:

·

Veritex Holdings, Inc.

 

·

Origin Bancorp, Inc.

 

·

Mercantile Bank Corporation

·

1st Source Corporation

 

·

QCR Holdings, Inc.

 

·

Stock Yards Bancorp, Inc.

·

First Busey Corporation

 

·

Nicolet Bankshares, Inc.

 

·

Stellar Bancorp, Inc.

·

First Financial Corporation

 

·

Triumph Bancorp, Inc.

 

·

First Foundation, Inc.

·

Byline Bancorp, Inc.

 

·

Equity Bancshares, Inc.

 

·

Old Second Bancorp, Inc.

·

Enterprise Financial Services Corp.

 

·

National Bank Holdings Corporation

 

 

 

We recently reviewed our peer group for 2024 compensation benchmark purposes and made no changes to our 2023 peer group listed above.

Market-Competitive Pay Opportunity

The Compensation Committee reviewed and considered competitive market data from the following sources when approving NEO compensation: proxy data from an established peer group of companies (discussed above) and other market survey data from companies within the financial services industry.

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Executive Compensation

Role of the Compensation Committee

The Compensation Committee is responsible for the review and approval of all aspects of the Company’s executive compensation program and makes all decisions regarding the compensation of the Company’s NEOs. Specifically, the Committee has responsibility to, among other things:

With input from the CEO and CHRO, develop, review and approve the Company's compensation philosophy, policies, plans and programs relating to the compensation of the Company's directors, Section 16 officers (which includes the executive officers) and employees generally;
Review, approve, and administer all compensation programs affecting Section 16 officers and evaluate whether such plans are aligned with the Company’s compensation structure and philosophies;
Annually review and approve:
oPerformance criteria, goals, and award vehicles used in our Section 16 officer compensation plans, and
oPerformance of and compensation delivered to our CEO and other Section 16 officers;
Monitor and review the Company’s compensation practices to evaluate whether such practices create risks that are reasonably likely to encourage imprudent risk-taking;
Review and approve any contracts, policies, or programs related to compensation, contractual arrangements, or severance plans affecting NEOs. As described below, the Compensation Committee consults with management with respect to the compensation of the NEOs, other than the CEO; and
Adopt, terminate, administer and enforce the Clawback Policy, interpret the terms thereof, designate additional persons to be subject to the Clawback Policy and otherwise recoup or have forfeited certain incentive compensation from Covered Executives (as defined in the Clawback Policy).

Role of Executive Officers in Compensation Decisions

Our CEO, CHRO, and CFO provide information to the Compensation Committee at its request. Examples of information that management provides the Compensation Committee include business strategy, financial performance, risk assessments, and accounting and legal considerations. Management representatives also provide the Compensation Committee with preliminary reviews of Company performance and individual executive performance for its determination of compensation pay decisions. The CEO provides feedback and recommendations on executives’ overall contribution to Company performance, individual responsibility, and/or strategic goals. For 2023 compensation decisions, the CEO provided his recommendations to the Compensation Committee. No NEO was involved in his or her own pay recommendations or decisions, and the Compensation Committee meets in executive session to determine CEO compensation. The decisions of the Compensation Committee for 2023 performance are reflected below under “Components of Compensation.”

Use of an Independent Compensation Consultant

The Compensation Committee has authority to secure the services of advisors both internal and external to the Company, including the retention of outside consultants to review executive compensation and non-employee director compensation and to perform any other analysis the Compensation Committee deems appropriate. Historically, the Compensation Committee has worked with our internal resources, such as our CHRO, along with an independent compensation consultant to fulfill its responsibilities.

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Executive Compensation

After considering the independence of Meridian by applying the factors required by applicable Nasdaq and SEC rules, the Compensation Committee has retained Meridian to provide independent counsel on the design and market competitiveness of the Company’s executive compensation program. Periodically, Meridian conducts benchmarking studies of executive and non-employee director compensation. Additionally, Meridian is consulted and provides input on peer group selection, updates on trends in executive and director compensation, performance metric plan design, stock ownership requirements, updates and market alignment of our clawback practices and compensation disclosures included in our proxy statement.

Components of Compensation

Base Salary

We provide each of our current NEOs with a competitive fixed annual base salary. The base salaries for our NEOs are reviewed annually by the Compensation Committee, considering the results achieved by each executive, their future potential, scope of responsibilities, experience, and competitive pay practices. For the fiscal year ended December 31, 2023, and in an effort to more closely align with the median of our peer group, our NEOs received annualized base salaries as follows: (i) $725,000 for Mr. Maddox; (ii) $450,000 for Mr. Clouse; and (iii) $430,000 for Mr. Rapp. In February 2024, the Compensation Committee set base salaries for our NEOs as follows: (i) $785,000 for Mr. Maddox; (ii) $460,000 for Mr. Clouse; and (iii) $450,000 for Mr. Rapp.

Annual Incentive Program

Each of our current NEOs is entitled to participate in our AIP, which provides for an annual cash award determined by the Compensation Committee based on attainment of certain performance criteria. Our AIP is designed to motivate and reward superior performance, attract and retain talent, encourage teamwork and collaboration, and ensure incentives are appropriately risk balanced.

Pursuant to the terms of the AIP, participants are awarded a cash incentive based on attainment of corporate performance and individual performance goals during each calendar year. Award opportunities and performance goals are approved by the Compensation Committee at the beginning of each year. For 2023, the Company must have achieved at least a threshold level of Adjusted PPCM for any awards to be paid, and awards were subject to reduction for certain items. Adjusted PPCM reflects our drive to expand income, grow bottom line earnings and enhance operating efficiency, which we believe are important drivers of return for our stockholders.

Each participant under the AIP is assigned an incentive award opportunity with threshold, target, and maximum performance levels of achievement. If actual performance falls below the threshold level of performance, there would be no award payout. Performance at the threshold, target and maximum performance levels would result in payments equal to 50%, 100%, and 150% of the targeted incentive opportunity, respectively. Payouts for performance between the threshold and target or target and maximum performance levels would be interpolated to reward incremental achievement.

In 2023, awards for our NEOs were based 70% on achievement of Adjusted PPCM and 30% on measurable individual performance goals pertaining to each NEO’s area of responsibility. The following summarizes the goals, actual results and payout for the NEOs under the AIP for 2023:

    

Threshold

Target

Maximum

Payout

 

50% Payout

 

100% Payout

 

150% Payout

Adjusted PPCM Achievement

$

82,835,135

$

110,446,847

$

138,058,559

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Executive Compensation

The Company’s actual PPCM achievement was $98.6 million and was adjusted by the Compensation Committee in accordance with the AIP to exclude certain irregular and non-cash expenses that were not reflective of Company financial performance.  The Compensation Committee believes that the adjustments to PPCM were appropriate and better reflect the true measure of financial performance and ensure our cash incentive program incentivizes our executives to continue to drive income expansion and efficiency. These adjustments resulted in an Adjusted PPCM achievement level for 2023 of $106.3 million, which resulted in attainment of 96.22%. Based on this attainment level and the evaluation of individual performance, NEO payouts under the AIP for 2023 were calculated at a 94.68% achievement level. Cash awards under the AIP of $514,823, $213,030, and $203,562 were paid to Messrs. Maddox, Clouse, and Rapp, respectively. Calculations of performance measures for compensatory purposes may vary from year to year and be different from those used for financial reporting purposes. See Annex I for further details regarding Adjusted PPCM, including a reconciliation to its most directly comparable financial measure prepared in accordance with Generally Accepted Accounting Principles (“GAAP”).

2023 Performance-based Cash Incentive Attainment

           

NEO

Target Incentive

Amount

% of Target Annual Incentive Amount Earned (1)

Amount Earned

Michael J. Maddox

$ 543,750

 

94.68%

$ 514,823

Benjamin R. Clouse

$ 225,000

 

94.68%

$ 213,030

W. Randall Rapp

$ 215,000

 

94.68%

$ 203,562

(1)The maximum performance-based cash incentive opportunity for an NEO is 150% of the NEO’s annual incentive target amount.

For 2024, cash incentive awards for our NEOs will be based on achievement of pre-established goals for Company performance (80%) - including Adjusted PPCM (50%), non-interest income (15%) and non-interest expense/average assets (15%) - and individual performance (20%) at threshold, target and maximum performance levels, which would result in payments equal to 50%, 100% and 150% respectively, of each NEO’s incentive opportunity. If actual performance falls below threshold, there would be no award payout for 2024. Payouts for performance between the threshold and target or target and maximum performance levels will be interpolated to reward incremental achievement. For 2024, the Compensation Committee established the target incentive opportunity for Mr. Maddox at 75% of base salary, Mr. Clouse at 55% of base salary and Mr. Rapp at 55% of base salary.

Equity Awards

We grant equity awards to our employees, including our NEOs, to promote achievement of our long-term financial objectives and value creation for stockholders, provide rewards for our overall performance and tie value to our stock price performance, align our employees’ interests with those of our stockholders and promote equity ownership among our employees to cultivate an owner mentality. The Compensation Committee considers market practices, external competitiveness, stockholder interests, and advice from our independent compensation consultant in establishing the amount and characteristics of equity grant awards. We intend that the value of long-term incentive awards for our executives approximate the market median for our peer group and the total compensation opportunity for such executive officers approximate the market median level when combined with base salary and target annual bonuses. A summary of our equity compensation plans is provided below under “Equity Based Plans.”

In 2023, as part of our annual compensation cycle, we granted time-based RSUs and PSUs to Messrs. Maddox, Clouse, and Rapp. For 2023, the value of the award grants was targeted to market median levels and split with 50% of the value being granted in RSUs and 50% of the value being granted in PSUs. The Compensation Committee has discretion to adjust the size of PSU awards by +/- 20% depending on extraordinary events or the Company’s performance in other areas. Each of Messrs. Maddox, Clouse and Rapp received the following equity awards as part of their 2023 total compensation package:

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Executive Compensation

NEO

    

Type of Grant

    

Equity Grant (#)

Michael J. Maddox

 

RSU (1)

 

20,685

 

PSU (2)

 

21,441

Benjamin R. Clouse

 

RSU (1)

 

8,024

 

PSU (2)

 

8,024

W. Randall Rapp

 

RSU (1)

 

7,668

 

PSU (2)

 

8,024

(1)The RSU awards granted to Messrs. Maddox, Clouse and Rapp on March 1, 2023, will vest annually over a three-year period in one-third increments.
(2)The PSU awards granted to Messrs. Maddox, Clouse and Rapp on March 1, 2023, will cliff vest at the end of the three-year performance period based on certification of performance against the pre-established performance measures.

Each year, the Compensation Committee selects financial performance measures (“Performance Measures”) to hold NEOs accountable to drive long term business growth, profitability and return to our stockholders. Specific targets for each Performance Measure are established each year based on our financial plan and expectations for the three-year performance period. Prior to approval, the Compensation Committee reviews the performance targets proposed by management to ensure they reflect appropriate business growth and return to our stockholders.

The Compensation Committee established the Performance Measures for 2023-2025 PSU awards during the first quarter of 2023. Substantially consistent with the prior year, Company Performance Measures included Adjusted EPS (75%) and TSR (25%) relative to the KBW Regional Banking Index (KRX). At the end of the three-year period, the Compensation Committee will review and certify Company performance for Adjusted EPS and TSR. The Compensation Committee believes these Performance Measures support the achievement of our long-term strategic and financial objectives and create an incentive to deliver stockholder value. Actual vesting of the PSUs is contingent upon three-year performance goals established for each Performance Measure. The PSUs granted in March 2023 to Messrs. Maddox, Clouse and Rapp will cliff vest at the end of the performance period based on certification of performance and can vary between 50% of target for threshold performance and 150% of target for maximum performance; no shares will vest for performance below threshold on each measure. Linear interpolation will be used if achievement is between values, and the entire award will be forfeited if threshold performance is not met on both measures.

The PSU awards that were previously granted in 2021 (“2021-2023 PSUs”) were subject to performance vesting conditions tied to Adjusted EPS and TSR, in each case over the period from January 1, 2021 to December 31, 2023.  The actual performance relative to the Adjusted EPS target was $3.92, which resulted in attainment of 150% of target performance.  The actual achievement under the TSR metric was 59th percentile performance, which resulted in attainment of 118.28% of target performance.  For the 2021-2023 PSUs, the Compensation Committee reviewed the Company’s actual performance against the Adjusted EPS and TSR targets and confirmed that the awards achieved a payout of 142.07% of target.  A summary of the Company’s performance as measured against the targets, and the resulting payout under the 2021-2023 PSUs, is set forth below.

    

Adjusted EPS (75% Weight)

Relative TSR (25% Weight)

 

    

Adjusted EPS

    

Award Earned as a %

    

    

Award Earned as

 

Performance Level

Targets

of Target

TSR Percentile Rank

a % of Target

 

Threshold

$2.33

50%

25th

 

50%

Target

$3.10

100%

50th

 

100%

Maximum

$3.88

150%

75th and Above

 

150%

    

    

    

    

2023

    

    

Award 

    

Adjusted

Adjusted

Earned

PSU Opportunity

EPS Actual

TSR

as a % of 

NEO

Grant Date

Vest Date

at Target

Achievement

Achievement

Target

Michael J. Maddox

 

02/24/2021

 

03/01/2024

 

15,147

 

$3.92

59th Percentile

142.07%

W. Randall Rapp

 

02/24/2021

 

03/01/2024

 

4,383

 

$3.92

59th Percentile

142.07%

See Annex I for further details regarding Adjusted EPS, including a reconciliation to the most directly comparable financial measure prepared in accordance with GAAP.

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Executive Compensation

The Compensation Committee established Performance Measures for the 2024-2026 PSU awards in February 2024 which are substantially consistent with the prior year. Company Performance Measures are weighted 70% on Adjusted EPS and 30% on TSR relative to the KRX. The Compensation Committee believes these Performance Measures support the achievement of our long-term strategic and financial objectives and create an incentive for our NEOs to deliver long-term stockholder value. At the end of the three-year period, the Compensation Committee will review and certify Company Performance for Adjusted EPS and TSR. Performance under both measures will be used to determine the payout level, subject to weighting outlined above, which can vary between 50% of target for threshold performance and 150% of target for maximum performance. No shares will vest if Company performance is less than the threshold level of performance. Linear interpolation will be used for performance between levels.

Other Benefits and Perquisites

The NEOs participate in the Company’s broad-based employee welfare benefit plans, including medical, dental, vision, supplemental disability and term life insurance. The NEOs also participate in the Company’s 401(k) plan. The Company makes safe harbor matching contributions of 100% of employee salary deferral amounts up to 5% of an employee’s compensation (excluding any expense repayments, fringe benefits, moving expenses, deferred compensation and welfare benefits). The NEOs are provided the same welfare benefits and 401(k) plan matching contributions, and participate in the cost, at the same rate as all other employees.

We provide our NEOs with certain perquisites that we believe are reasonable and consistent with our overall compensation program to better enable us to attract and retain talent for key positions. These perquisites include mobile communications and, in some cases, an automobile allowance and country club memberships, as discussed in more detail in connection with the description below of the employment agreements of our NEOs. We also reimburse our NEOs for reasonable travel, lodging and other expenses for a guest to accompany them to a limited number of Board meetings held as retreats to which guests are invited to attend for business purposes. The Compensation Committee periodically reviews the levels of perquisites and other personal benefits provided to NEOs against available peer group information. Based on these reviews, perquisites may be adjusted on an individual basis.

NEO Compensatory Arrangements

Employment Agreement with Michael J. Maddox

Mr. Maddox is party to an employment agreement with the Company, which has an evergreen provision and automatically renews for successive one-year terms unless either party provides notice of its intent to not renew at least 30 days prior to the renewal date or is otherwise terminated in accordance with the agreement. Under his employment agreement, Mr. Maddox serves as President and CEO of the Company, CEO of the Bank and as a member of the Board and a member of the board of directors of the Bank. He is entitled to an annual base salary of not less than $500,000 and is eligible to receive periodic incentive bonuses under the Company’s AIP for each fiscal year, with the bonus opportunity being equal to not less than 60% of his base salary. Mr. Maddox is also eligible to receive employee benefits, fringe benefits and perquisites in accordance with the Company’s established policies. The fringe benefits to which Mr. Maddox is entitled include the following: (i) taking reasonable vacation time when needed; (ii) the ability to participate in, under the same terms and conditions as all other employees of the Company, all reasonable and customary fringe benefit plans made available to employees of the Company, including, but not limited to, group health insurance (medical, vision, and dental) and long and short term disability insurance; (iii) mobile communication devices for use in connection with the Company’s business from which he may derive personal benefit; (iv) an automobile allowance; and (v) the continued and existing use of club memberships in connection with the Company’s business from which Mr. Maddox may derive personal benefit.

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Executive Compensation

Pursuant to the Employment Agreement, Mr. Maddox will have the right to participate in the Company’s Omnibus Plan, as determined by the Compensation Committee, subject to vesting and other rights described in the Omnibus Plan. Under his employment agreement, Mr. Maddox is entitled to an equity incentive bonus opportunity under the Omnibus Plan of no less than 50% of his base salary.

Furthermore, his employment agreement requires that as a condition of his employment with the Company, Mr. Maddox will hold a minimum of $400,000 worth of equity in the Company. As a condition of Mr. Maddox’s continued employment with the Company, Mr. Maddox is prohibited from selling or transferring any of this equity without receiving consent in accordance with the terms of the Employment Agreement.

Mr. Maddox’s employment agreement further provides for certain payments in the event of a qualifying termination of employment. If Mr. Maddox’s employment is terminated during the term of his employment agreement due to his death or disability, Mr. Maddox will be entitled to: (i) a lump sum cash payment equal to his accrued, earned but unpaid compensation and bonuses for the period ending on his date of termination payable on the 60th day following such termination; and (ii) a lump sum cash payment equal to 12 times the Company-paid portion of the monthly COBRA continuation premiums for Mr. Maddox and his eligible dependents, if any, for COBRA continuation coverage under the Company’s health, vision and dental plans. In the case of Mr. Maddox’s termination of employment for any other reason other than for “Cause” (as defined in the Severance Plan) or due to his death or disability (each an “Ineligible Severance Event”), he will only be entitled to those severance benefits, if any, provided under the CrossFirst Bankshares, Inc. Senior Executive Severance Plan (the “Severance Plan”) as discussed below.

Certain of Mr. Maddox’s rights to severance and other compensation in the event of termination of his employment are subject to certain restrictive covenants, including with respect to non-solicitation of the Company’s employees and customers and employment by Mr. Maddox at companies that provide financial services similar to services provided by the Company or its affiliates.

Employment Agreement with Benjamin R. Clouse

Mr. Clouse is party to an employment agreement with the Company, which has an evergreen provision and automatically renews for successive one-year terms unless either party provides notice of its intent to not renew at least 30 days prior to the renewal date or is otherwise terminated in accordance with the agreement. Pursuant to his employment agreement, Mr. Clouse serves as Chief Financial Officer of the Company and the Bank. Mr. Clouse is entitled to an annual base salary of not less than $420,000 and is eligible to receive periodic incentive bonuses under the Company’s AIP for each year, with the bonus opportunity being equal to not less than 50% of his base salary. Mr. Clouse is also eligible to receive employee benefits, fringe benefits and perquisites in accordance with the Company’s established policies and to participate in equity or other long-term compensation programs at the discretion of the Company. The fringe benefits to which Mr. Clouse is entitled include: (i) taking reasonable vacation time when needed; (ii) Group Health Insurance (medical, vision and dental) and Long- and Short-Term Disability Insurance; (iii) mobile communication devices for use in connection with the Company’s business from which he may derive personal benefit; and (iv) an automobile allowance.

Mr. Clouse’s employment agreement provides that he will have the right to participate in the Company’s Omnibus Plan as determined by the Board’s Compensation Committee, subject to vesting and other rights described in the Omnibus Plan.

The employment agreement also requires that as a condition of his employment with the Company, Mr. Clouse will hold a minimum of $400,000 worth of equity in the Company. As a condition of Mr. Clouse’s continued employment with the Company, Mr. Clouse is prohibited from selling or transferring any of this equity in the Company without receiving prior consent from the Board’s Compensation Committee.

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Executive Compensation

Mr. Clouse’s employment agreement provides for certain payments in the event of a qualifying termination of employment. If Mr. Clouse’s employment is terminated during the term of the employment agreement due to his death or disability, Mr. Clouse will be entitled to: (i) a lump sum cash payment equal to his accrued, earned but unpaid compensation and bonuses for the period ending on his date of termination payable on the 60th day following such termination; and (ii) a lump sum cash payment equal to 12 times the Company-paid portion of the monthly COBRA continuation premiums for Mr. Clouse and his eligible dependents, if any, for COBRA continuation coverage under the Company’s health, vision and dental plans. In the case of Mr. Clouse’s termination of employment for any reason other than an Ineligible Severance Event, Mr. Clouse will only be entitled to receive those severance benefits, if any, provided under the Severance Plan as discussed below.

Certain of Mr. Clouse’s rights to severance and other compensation in the event of termination of his employment are subject to certain restrictive covenants, including with respect to non-solicitation of the Company’s employees and customers and employment by Mr. Clouse at companies that provide financial services similar to the services provided by the Company or its affiliates.

Employment Agreement with W. Randall Rapp

Mr. Rapp is party to an employment agreement with the Company, which has an initial term of three years with automatic annual renewals thereafter unless either party provides notice of non-renewal at least 30 days prior to the ensuing termination date or Mr. Rapp’s employment is earlier terminated in accordance with the agreement. Pursuant to his employment agreement, Mr. Rapp serves as President of the Bank.  Mr. Rapp is entitled to an annual base salary of not less than $410,000 and is eligible to receive periodic incentive bonuses for each fiscal year, with the bonus opportunity being not less than 50% of his base salary, with a maximum target opportunity up to 75% of base salary. Mr. Rapp is also eligible to receive employee benefits, fringe benefits and perquisites in accordance with the Company’s established policies and to participate in equity or other long-term compensation programs at the discretion of the Company. The fringe benefits to which Mr. Rapp is entitled include: (i) taking reasonable vacation time when needed; (ii) Group Health Insurance (medical, vision, and dental) and Long- and Short- Term Disability Insurance; (iii) mobile communication devices for use in connection with the Company’s business from which he may derive personal benefit; and (iv) an automobile allowance.

Pursuant to his employment agreement, Mr. Rapp has the right to participate in the Company’s Omnibus Plan as determined by the Board’s Compensation Committee, subject to vesting and other rights described in the Omnibus Plan.

The employment agreement also requires that as a condition of his employment with the Company, Mr. Rapp will hold a minimum of $400,000 worth of equity in the Company. He has until July 1, 2025, to reach the required stock threshold.

Mr. Rapp’s employment agreement provides for certain payments in the event of a qualifying termination of employment. If Mr. Rapp’s employment is terminated during the term of the employment agreement due to his death or disability, Mr. Rapp will be entitled to: (i) a lump sum cash payment equal to his accrued, earned but unpaid compensation and bonuses for the period ending on his date of termination payable on the 60th day following such termination; and (ii) a lump sum cash payment equal to 12 times the Company-paid portion of the monthly COBRA continuation premiums for Mr. Rapp and his eligible dependents, if any, for COBRA continuation coverage under the Company’s health, vision and dental plans. In the case of Mr. Rapp’s termination of employment for any reason other than an Ineligible Severance Event, Mr. Rapp will only be entitled to receive those severance benefits, if any, provided under the Severance Plan as discussed below.

Certain of Mr. Rapp’s rights to severance and other compensation in the event of termination of his employment are subject to certain restrictive covenants, including with respect to confidentiality and non-solicitation of the Company’s employees and customers.

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Executive Compensation

Senior Executive Severance Plan

Messrs. Maddox, Clouse and Rapp each participate in the Severance Plan. The Severance Plan is intended to be a top-hat welfare benefit plan under ERISA. The primary purpose of the Severance Plan is to attract and retain key talent by providing financial protection to certain executives of the Company, including the Company’s NEOs, in the event of unexpected job loss.

The Compensation Committee of the Board serves as the administrator (the “Administrator”) of the Severance Plan and determines those employees who will be eligible to participate in the Severance Plan (referred to as “Eligible Executives”). Messrs. Maddox, Clouse and Rapp are Eligible Executives under the Severance Plan.

Eligible Executives are entitled to certain benefits under the Severance Plan if the Eligible Executive experiences a “Qualifying Termination” or a “Qualifying CIC Termination” as such terms are defined under the Severance Plan. A Qualifying Termination occurs either when the Eligible Executive voluntarily terminates his or her employment with the Company because of a “Constructive Termination”, or the Eligible Executive is involuntarily terminated by the Company for other than an Ineligible Severance Event. A Qualifying CIC Termination is generally defined to be a Qualifying Termination occurring during the term of the plan and one year following a “Change in Control” or during the pendency of a “Potential Change in Control” as such terms are defined in the Severance Plan. No Eligible Executive is entitled to severance benefits under the Severance Plan unless the executive enters into a release agreement with the Company within the time period following his or her termination specified in the Severance Plan.

Qualifying Termination

If any of the NEOs experiences a Qualifying Termination and executes a release, the NEO is entitled to the following benefits under the Severance Plan:

Payments. Cash payments equal to the following, less all applicable tax withholdings, paid ratably over six months (unless otherwise noted) following the NEO’s termination date:
otwo times the NEO’s annual base salary as of the NEO’s termination date;
otwo times the amount of the cash bonus the NEO would have received under the AIP for the year in which the NEO’s termination date occurred, as if an “at target” level of performance was achieved for the plan year and the NEO had remained employed through the end of the plan year; and
othe aggregate premium cost of twelve months of coverage, under the Company’s health, vision, and dental plans for the NEO and the NEO’s dependents, if any, that were enrolled in such plans before the termination.
Additional Payments.  The NEO will be also be paid the pro rata portion of the amount of the cash bonus the NEO would have received under the AIP for the year in which the NEO’s termination date occurred based on achievement (if any) of the performance metrics and goals established for such award if the NEO had remained employed through the end of the plan year.  This additional payment will be payable in lump sum when the annual bonus payments are paid to other active bonus plan participants.
Outplacement Services. The Company will reimburse each NEO up to $25,000 for reasonable and well-documented expenses directly related to outplacement counselling services during the 18-month period following termination.
Equity Awards. Equity awards held by the NEO will vest, if at all, in accordance with their terms.

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Executive Compensation

Qualifying CIC Termination

If any of the NEOs experiences a Qualifying CIC Termination and executes a release, the NEO is entitled to the following benefits under the Severance Plan:

Payments. Cash payments equal to the following, less all applicable tax withholdings, paid in a lump sum within 60 days following the NEO’s termination date:
othree times the NEO’s annual base salary as of the NEO’s termination date;
othree times the amount of the cash bonus the NEO would have received under the AIP for the year in which the NEO’s termination date occurred, as if an “at target” level of performance was achieved for the plan year and the NEO had remained employed through the end of the plan year;
othe pro rata portion of the amount of the cash bonus the NEO would have received under the AIP for the year in which the NEO’s termination date occurred, as if an “at target” level of performance was achieved for the plan year and the NEO had remained employed through the end of the plan year; and
othe aggregate premium cost of 18 months of coverage under the Company’s health, vision, and dental plans for the NEO and the NEO’s dependents, if any, that were enrolled in such plans before the termination.
Outplacement Services. The Company will reimburse each NEO up to $25,000 for reasonable and well-documented expenses directly related to outplacement counselling services during the 18-month period following termination.
Equity Awards. Equity awards held by an NEO will vest, if at all, in accordance with their terms.  See below under “Potential Payments upon a Termination or Change in Control” for information regarding impact to any NEO’s equity upon a Qualifying CIC Termination.

The Severance Plan does not provide for a gross-up payment to the Eligible Executive if the Eligible Executive is subject to an excise tax under Internal Revenue Code Section 4999(a). The Severance Plan contains provisions for adjustment to the timing of payments to minimize accelerated or additional tax pursuant to Internal Revenue Code Section 409A. Claims for benefits under the Severance Plan are governed by the Severance Plan’s claims procedure. Any benefits received by an NEO pursuant to the Severance Plan will be in lieu of any general severance policy or other change in control severance plan maintained by the Company.

The Severance Plan was amended and restated effective May 1, 2022, and has an initial one-year term with respect to severance payments in connection with a Qualifying Termination and a three-year term with respect to severance payments in connection with a Qualifying CIC Termination. Unless the Company provides notice that the plan’s term will not be renewed at least 90 days before the end of the applicable term, the terms will automatically renew for successive one-year periods. The Administrator has reserved the right to amend the Severance Plan at any time and in any way it determines advisable; provided that if such an amendment would materially and adversely affect the rights of any Eligible Executive, the Company must obtain the Eligible Executive’s written consent to the amendment. The Company has not provided notice of non-renewal to the NEOs.  The Administrator also has discretionary authority to construe and interpret the terms of the Severance Plan and its decisions, actions and interpretations are final and binding on all parties.

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Table of Contents

Executive Compensation

Equity Based Plans

Equity-based incentive awards are currently made through the Company’s Omnibus Plan. The Board of Directors approved the Omnibus Plan on October 25, 2018, which was subsequently amended and restated effective July 18, 2019. Upon the approval of the Omnibus Plan, no further awards were granted under the Company’s previous equity plans: (i) the CrossFirst Bankshares, Inc. Stock Appreciation Rights Plan; (ii) the CrossFirst Holdings, LLC Equity Incentive Plan; (iii) the CrossFirst Holdings, LLC New Market Founder Equity Incentive Plan; and (iv) the CrossFirst Bankshares, Inc. Employee Equity Incentive Plan (each, a “Legacy Plan”). Outstanding equity awards granted under the Legacy Plans were assumed as awards under the Omnibus Plan as agreed upon with participants, impacting all participants who agreed to the assumption, and such assumed awards are subject to the terms of the Omnibus Plan (each, a “Legacy Award”). The Company also has an Employee Stock Purchase Plan, but employees considered partners or managing partners, which includes our executive officers, are not eligible to participate.

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Table of Contents

Executive Compensation

Executive Compensation Tables

The narrative discussed above, tables and footnotes below, describe the total compensation paid to each of our NEOs.

2023 Summary Compensation Table

The following table contains information regarding the components of total compensation of the NEOs for the Company’s years ended December 31, 2023, and to the extent required by SEC executive compensation disclosure rules, 2022. The information included in this table reflects compensation earned by the NEOs for services rendered to the Company during the respective period.

    

    

    

    

    

    

Non-Equity

    

    

Incentive

Stock

Option

Plan

All Other

Salary

Bonus

Awards

Awards

Comp.

Compensation

Total

Year

($)

($)

(1)(2) ($)

(1)(3) ($)

(4)($)

(5) ($)

($)

Michael J. Maddox

2023

712,500

593,019

514,823

103,973

1,924,315

President & CEO

 

2022

 

615,625

 

 

474,404

 

 

462,750

 

83,392

 

1,636,171

Benjamin R. Clouse

 

2023

 

447,169

 

 

225,896

 

 

213,030

 

29,071

 

915,166

Chief Financial Officer(6)

 

 

W. Randall Rapp

 

2023

 

427,500

 

 

220,905

 

 

203,562

 

40,283

 

892,250

President, CrossFirst Bank

 

2022

 

398,458

 

10,000

 

221,301

 

33,900

 

252,970

 

38,165

 

954,794

(1)The amounts set forth in the “Stock Awards” and “Option Awards” columns reflect the aggregate grant date fair value of equity awards computed in accordance with FASB ASC Topic 718. The assumptions used in calculating the aggregate grant date fair value of the equity awards are set forth in Note 17 of the notes to our audited consolidated financial statements in our annual reports on Form 10-K for the years ended December 31, 2023, and 2022. All equity awards were granted under our Omnibus Plan and related to our Common Stock.
(2)For 2023, the amounts set forth in this column include the aggregate grant date fair values of time-based RSUs granted in 2023 as follows: (i) $290,004 for Mr. Maddox; (ii) $112,497 for Mr. Clouse; and (iii) $107,506 for Mr. Rapp. The amounts set forth in this column also include the aggregate grant date fair values of PSUs granted at target in 2023 as follows: (i) $303,015, with a maximum potential value of $454,522, for Mr. Maddox; (ii) $113,399, with a maximum potential value of $170,099, for Mr. Clouse; and (iii) $113,399, with a maximum potential value of $170,099, for Mr. Rapp. For 2022, the amounts set forth in this column include the aggregate grant date fair values of time-based RSUs granted in 2022 as follows: (i) $218,757 for Mr. Maddox and (ii) $144,300 for Mr. Rapp. The amounts set forth in this column also include the aggregate grant date fair values of performance shares granted at target in 2022 as follows: (i) $255,647, with a maximum potential value $383,471, for Mr. Maddox and (ii) $77,000, with a maximum potential value of $115,500, for Mr. Rapp.
(3)The amounts set forth in this column consist of the aggregate grant date fair value of time-based stock settled appreciation rights granted to Mr. Rapp.
(4)Represents annual nonequity plan awards to be paid as a result of the attainment of specific goals under the Company’s AIP.
(5)“All Other Compensation” for the named executive officers during 2023 is summarized below.
(6)Mr. Clouse joined the Company in July 2021 and was not an NEO for 2022.

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Table of Contents

Executive Compensation

    

    

Club

    

Disability and

    

Automobile

    

    

Total “All

Company 401k

Dues

Life Insurance

Expense

Other

Other

Match

($)

($)

($)

($)

Compensation”

Name

($)

(A)

(B)

(C)

(D)

($)

Michael J. Maddox

 

16,500

 

25,554

 

27,560

 

18,000

 

16,359

 

103,973

Benjamin R. Clouse

 

16,500

 

 

5,110

 

7,200

 

261

 

29,071

W. Randall Rapp

 

16,500

 

 

14,307

 

7,200

 

2,276

 

40,283

(A)Includes annual dues for country club memberships.
(B)Includes premiums for disability and life insurance policies.
(C)Includes an automobile allowance for business use from which the executive may have derived some personal benefit.
(D)Includes the cost of a physical exam for Mr. Maddox, gifts as well as costs (including travel, meals, entertainment and related personal incidentals) of the attendance by a family member of the NEO at certain Company events.

Outstanding Equity Awards at 2023 Fiscal Year-End

The following table sets forth information relating to the unexercised or unvested equity awards held by the named executive officers as of December 31, 2023:

    

    

    

    

    

    

    

    

Equity