Item
5.02. | Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
On February 14, 2023, the
Talent and Compensation Committee of the Board of Directors (the “Committee”) of United Community Banks, Inc.
(the “Company”) approved and adopted a form of change in control continuity agreement (the “Change in Control
Continuity Agreement”), which will provide severance payments and benefits to key executives who the Company has determined
are most likely to be impacted in the event a change in control of the Company occurs. The Committee approved, and the Company entered
into, a Change in Control Continuity Agreement with each of H. Lynn Harton, Jefferson L. Harralson, Richard W. Bradshaw, Robert A. Edwards,
and Melinda Davis Lux. (collectively, the “Executives”). The Executives were previously party to change in
control agreements with the Company, which were terminated by the Committee on November 1, 2022. In addition, on February 14, 2023,
in order to ensure the continued services and commitment of H. Lynn Harton, the Committee approved, and the Company entered into, an
employment agreement with Mr. Harton, dated February 14, 2023 (the “Employment Agreement”).
Change in Control Continuity
Agreements
After a review process, the Committee has adopted the form of
Change in Control Continuity Agreement, which provides for an initial three-year term that will renew automatically for an
additional year commencing on the first anniversary of the effective date and each annual anniversary thereafter so as to terminate
three years from such renewal date, unless notice of nonrenewal is provided. The payments and benefits provided under the
Change in Control Continuity Agreements are “double trigger” and are not payable upon a termination of an
Executive’s employment for “cause” or a resignation by an Executive without “good reason” or any
termination of an Executive’s employment prior to a “change in control” of the Company. Defined terms
referenced in this description of the Change in Control Continuity Agreements have the meaning given to them in such agreements.
The severance protections
under the Change in Control Continuity Agreements become effective on a change in control of the Company and remain in effect for a two-year
protected period thereafter. Pursuant to the agreements, during such two-year period, the Executive would generally be entitled
to compensation and benefits consistent with that applicable prior to the change in control. If, during such two-year period, the
Executive’s employment is terminated by the Company without cause (other than by reason of his or her death or “disability”)
or the Executive terminates his or her employment with good reason, the Executive would be entitled to receive the following amounts
and benefits, subject to the Executive’s execution and non-revocation of a release of claims against the Company and its affiliates:
(i) an amount equal to the product of (a) the severance multiple (three for Mr. Harton and two for all other Executives), and (b) the
sum of the Executive’s annual base salary and average annual bonus in respect of the three years prior to the change in control
(or, if higher, the applicable target annual bonus opportunity); (ii) a pro rata bonus amount for the year in which the date of termination
occurs, based on the Executive’s target annual bonus opportunity (or if higher, the annual bonus earned based on the level of performance
determined in connection with the change in control or thereafter for such year) (the “Prorated Bonus”); (iii)
an amount equal to the severance multiple and the employer contributions under the Company’s qualified and non-qualified defined
contribution plans, assuming the Executive is fully vested and his or her compensation is that applicable under the Change in Control
Continuity Agreement; (iv) an amount equal to the product of the number of months corresponding to the severance multiple (36 for Mr.
Harton and 24 for each other Executive) and the sum of the monthly COBRA premium for the group health care plans and the monthly premium
for life insurance coverage on a conversion basis, based on the plans and at the levels of coverage applicable to the Executive prior
to the date of termination) or if more favorable, the change in control; (v) an amount equal to the product of the severance multiple
and the sum of annual club dues and car allowance (if any) provided to the Executive prior to the change in control or thereafter; and
(vi) outplacement services at a cost of up to 10% of the Executive’s base salary. If the Executive’s employment is terminated
during the protected period following a change in control due to death or disability, the Executive would not be entitled to the benefits
described above, but would be entitled to receive the Prorated Bonus and death or disability benefits, as applicable, equal to those
provided prior to the change in control (or, if more favorable, in effect on the date of death or disability). The payments and
benefits under the Change in Control Continuity Agreements will be reduced to the extent that they would be subject to an excise tax
under Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended, unless the Executive would be better off on an after-tax
basis receiving all such payments and benefits and paying his or her own excise tax. The Change in Control Continuity Agreements
do not provide for an excise tax gross up.
The Change
in Control Continuity Agreements contain restrictive covenants, which provide for perpetual confidentiality and restrictions on
interfering with customers and employees of the Company and competing with the Company’s business, while employed and for one
year thereafter. Following a Change in Control, the covenants in the Change in Control Continuity Agreements will be the sole
covenants applicable to the Executives and, with respect to any equity award agreements between the Company and the Executive, the
restrictive covenants provided under the Change in Control Continuity Agreements will replace and supercede the restrictive
covenants in the equity award agreements.
Employment Agreement
Under the terms of the Employment Agreement, Mr. Harton
will continue to serve as the Company’s Chief Executive Officer, President and Chairman of the Board of Directors as well as
Chief Executive Officer and Chairman of the Board of United Community Bank. The Employment Agreement is effective as of
February 14, 2023 for a three-year term that extends automatically for an additional year commencing on the first anniversary of the
effective date and each annual anniversary thereafter so as to terminate three years from such extension date, unless notice of
nonrenewal is provided. Upon a Change in Control of the Company, Mr. Harton’s Change in Control Continuity Agreement
will supersede the Employment Agreement.
Under the terms of the Employment
Agreement, Mr. Harton’s base salary is $1,050,000, annual cash incentive opportunity at target is not less than 100% of base
salary (the “Target Incentive Award Opportunity”) and annual long-term incentive award opportunity will have a grant
date fair value of not less than 200% of base salary, with the annual incentive award and long-term incentive awards to be determined
by the Committee pursuant to the terms of the applicable plans and on a basis and with terms consistent with other executive officers
of the Company, although Mr. Harton’s future long-term incentive awards will include vesting or continued vesting provisions that
would apply upon his retirement on or after age 67.
Upon a termination of Mr. Harton’s employment by the Company
without “cause” (other than by reason of his death or “disability”) or by Mr. Harton for “good reason”
(as such terms are defined in the Employment Agreement), Mr. Harton would be entitled to receive the following amounts and benefits,
subject to the his execution and non-revocation of a release of claims against the Company and its affiliates: (i) a pro rata annual
cash incentive award for the year in which the termination occurs based on the level of achievement of the applicable performance goals;
(ii) an amount equal to the product of 2.5 and the sum of Mr. Harton’s base salary and Target Incentive Award Opportunity and (iii)
an amount equal to the product of 30 and the sum of the monthly COBRA premium for the group health care plans based on the coverage applicable
to Mr. Harton prior to the date of termination. If Mr. Harton’s employment is terminated due to death or disability, Mr.
Harton (or his estate) would be entitled to receive the amount in clause (i), plus, in the case of disability only, the amount in clause
(iii).
The Employment Agreement contains restrictive covenants, which provide for perpetual confidentiality and mutual nondisparagement;
restrictions on interfering with customers and employees while employed and for one year and two years thereafter, respectively, and
restrictions on competing with the Company’s business while employed and for one year thereafter.
The foregoing descriptions
of the Change in Control Continuity Agreements and Employment Agreement are qualified in their entirety by reference to the text of the
forms of Change in Control Continuity Agreement and Employment Agreement attached to this Current Report on Form 8-K as Exhibits 10.1,
10.2 and 10.3 and incorporated herein by reference.