Simmons First National Corp. DEF 14A
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a)
of
the
Securities Exchange Act of 1934
(Amendment
No. )
Filed
by
the Registrant [X]
Filed
by a
Party other than Registrant [ ]
Check
the
appropriate box:
[
]
Preliminary Proxy Statement
[
]
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X]
Definitive Proxy Statement
[
]
Definitive Additional Materials
[
]
Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
SIMMONS
FIRST NATIONAL CORPORATION
(Name
of
Registrant as Specified in Its Charter)
-------------------------------------------------------------------------------
(Name
of
Person(s) Filing Proxy Statement if other than the Registrant)
Payment
of
Filing Fee (Check the appropriate box):
[X]
No fee
required.
[
]
Fee computed on table below per Exchange Act Rules 14- 6(i)(1) and
0-11.
1)
Title
of each class of securities to which transaction applies:
-------------------------------------------------------------------------------
2)
Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------------
3)
Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
-------------------------------------------------------------------------------
4)
Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------------
5)
Total
fee paid:
-------------------------------------------------------------------------------
[
] Fee
paid previously with preliminary materials.
[
] Check
box if any part of the fee if offset as provided by the Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or
the Form or Schedule and the date of its filing.
1)
Amount
previously paid:
-------------------------------------------------------------------------------
2)
Form,
Schedule or Registration No.:
-------------------------------------------------------------------------------
3)
Filing
Party:
-------------------------------------------------------------------------------
4)
Date
Filed:
-------------------------------------------------------------------------------
REVISED
NOTICE OF
ANNUAL
MEETING OF SHAREHOLDERS
TO
THE
SHAREHOLDERS OF SIMMONS FIRST NATIONAL CORPORATION:
NOTICE
IS
HEREBY GIVEN that the annual meeting of the shareholders of Simmons First
National Corporation will be held at the Banquet Hall of the Pine Bluff
Convention Center, Pine Bluff, Arkansas, at 7:30 P.M., on Tuesday, April
10,
2007 for the following purposes:
|
1. |
To
fix at 9 the number of directors to be elected at the
meeting;
|
|
2. |
To
elect 9 persons as directors to serve until the next annual shareholders'
meeting and until their successors have been duly elected and
qualified;
|
|
3.
|
To
amend the Articles of Incorporation to increase the number of authorized
shares of Class A, $0.01 par value, Common Stock of the Company
from
30,000,000 to 60,000,000; and
|
|
4.
|
To
transact such other business as may properly come before the meeting
or
any adjournment or adjournments
thereof.
|
Only
shareholders of record at the close of business on February 2, 2007, will
be
entitled to vote at the meeting.
BY
ORDER
OF THE BOARD OF DIRECTORS:
John
L.
Rush, Secretary
Pine
Bluff, Arkansas
March
9,
2007
ANNUAL
MEETING OF SHAREHOLDERS
SIMMONS
FIRST NATIONAL CORPORATION
P.
O. Box 7009
Pine
Bluff, Arkansas 71611
PROXY
STATEMENT
Meeting
to be held on April 10, 2007
Proxy
and Proxy Statement furnished on or about March 9, 2007
The
enclosed proxy is solicited on behalf of the Board of Directors of Simmons
First
National Corporation (the "Company") for use at the annual meeting of the
shareholders of the Company to be held on Tuesday, April 10, 2007, at 7:30
p.m.,
at the Banquet Hall of the Pine Bluff Convention Center, Pine Bluff, Arkansas,
or at any adjournment or adjournments thereof. When
such
proxy is properly executed and returned, the shares represented by it will
be
voted at the meeting in accordance with any directions noted thereon, or
if no
direction is indicated, will be voted in favor of the proposals set forth
in the
notice.
REVOCABILITY
OF PROXY
Any
shareholder giving a proxy has the power to revoke it at any time before
it is
voted.
COSTS
AND METHOD OF SOLICITATION
The
costs
of soliciting proxies will be borne by the Company. In addition to the use
of
the mails, solicitation may be made by employees of the Company by telephone,
telegraph and personal interview. These persons will receive no compensation
other than their regular salaries, but they will be reimbursed by the Company
for their actual expenses incurred in such solicitations.
OUTSTANDING
SECURITIES AND VOTING RIGHTS
At
the
meeting, holders of the $0.01 par value Class A common stock (the "Common
Stock") of the Company, the only class of stock of the Company outstanding,
will
be entitled to one vote, in person or by proxy, for each share of the Common
Stock owned of record, as of the close of business on February 2, 2007. On
that
date, the Company had outstanding 14,193,644 shares of the Common Stock;
1,814,875 of such shares were held by Simmons First Trust Company ("SFTC"),
in a
fiduciary capacity, of which 120,290 shares will not be voted at the meeting.
Hence, 14,073,354 shares will be deemed outstanding and entitled to vote
at the
meeting.
All
actions requiring a vote of the shareholders must be taken at a meeting in
which
a quorum is present in person or by proxy. A quorum consists of a majority
of
the outstanding shares entitled to vote upon a matter. With respect to each
proposal subject to a shareholder vote, other than the election of directors,
approval requires that the votes cast for the proposal exceed the votes cast
against it. The election of directors will be approved, if each director
nominee
receives a plurality of the votes cast. All proxies submitted will be tabulated
by SFTC.
With
respect to the election of directors, a shareholder may withhold authority
to
vote for all nominees by checking the box "withhold authority for all nominees"
on the enclosed proxy or may withhold authority to vote for any nominee
or
nominees by checking the box "withhold authority for certain nominees"
and
lining through the name of such nominee or nominees for whom the authority
to
vote is withheld as it appears on the enclosed proxy. The enclosed proxy
also
provides a method for shareholders to abstain from voting on each other
matter
presented. By abstaining, shares will not be voted either for or against
the
subject proposals, but will be counted for quorum purposes. While there
may be
instances in which a shareholder may wish to abstain from voting on any
particular matter, the Board of Directors encourages all shareholders to
vote
their shares in their best judgment and to participate in the voting process
to
the fullest extent possible.
An
abstention or a broker non-vote, (i.e., when a shareholder does not grant
his or
her broker authority to vote his or her shares on non-routine matters)
will have
no effect on any item to be voted upon by the shareholders.
In
the
event a shareholder executes the proxy but does not mark the ballot to vote
(or
abstain) on any one or more of the proposals, the proxy solicited hereby
confers
discretionary authority to the named proxies to vote in their sole discretion
with respect to such proposals. Further, if any matter, other than the matters
shown on the proxy, is properly presented at the meeting which may be acted
upon
without special notice under Arkansas law, the proxy solicited hereby confers
discretionary authority to the named proxies to vote in their sole discretion
with respect to such matters, as well as other matters incident to the conduct
of the meeting. On the date of the mailing of this Proxy Statement, the Board
of
Directors has no knowledge of any such other matter which will come before
the
meeting.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The
following table sets forth all persons known to management who own, beneficially
or of record, more than 5% of the outstanding Common Stock, the number of
shares
owned by the named Executive Officers in the Summary Compensation Table and
by
all Directors and Executive Officers as a group.
Name
and Address of Beneficial Owner
|
|
Shares
Owned Beneficially [a]
|
|
Percent
of Class
|
|
Simmons
First National Corporation
|
|
|
|
|
|
Employee
Stock Ownership Trust [b]
|
|
|
1,156,367
|
|
|
8.15%
|
|
501
Main Street
|
|
|
|
|
|
|
|
Pine
Bluff, AR 71601
|
|
|
|
|
|
|
|
J.
Thomas May [c]
|
|
|
267,500
|
|
|
1.89%
|
|
Robert
A. Fehlman [d]
|
|
|
24,640
|
|
|
*
|
|
David
L. Bartlett [e]
|
|
|
34,826
|
|
|
*
|
|
Marty
D. Casteel [f]
|
|
|
20,186
|
|
|
*
|
|
Tommie
K. Jones [g]
|
|
|
25,487
|
|
|
*
|
|
All
directors and officers as a group (13 persons)
|
|
|
494,794
|
|
|
3.49%
|
|
*
The
shares beneficially owned represent less than 1% of the outstanding common
shares.
|
[a]
Under the applicable rules, "beneficial ownership" of a security
means,
directly or indirectly, through any contract, relationship, arrangement,
undertaking or otherwise, having or sharing voting power, which includes
the power to vote or to direct the voting of such security, or investment
power, which includes the power to dispose of or to direct the disposition
of such security. Unless otherwise indicated, each beneficial owner
named
has sole voting and investment power with respect to the shares
identified.
|
|
[b]
The Simmons First National Corporation Employee Stock Ownership Plan
("ESOP") purchases, holds and disposes of shares of the Company's
stock.
The Nominating, Compensation and Corporate Governance Committee and
the
Chief Executive Officer pursuant to delegation of authority from
the
Committee directs the trustees of the ESOP trust concerning when,
how many
and upon what terms to purchase or dispose of such shares, other
than by
distribution under the ESOP. Shares held by the ESOP may be voted
only in
accordance with the written instructions of the plan participants,
who are
all employees or former employees of the Company and its
subsidiaries.
|
|
[c]
Mr. May owned of record 134,383 shares; 18,506 shares were held in
his IRA
accounts; 1,192 shares were owned by his wife; 3,759 shares were
owned by
his stepchildren; 14,660 shares were held in his fully vested account
in
the ESOP; and 95,000 shares were deemed held through exercisable
stock
options.
|
|
[d]
Mr. Fehlman owned of record 4,569 shares; 3,895 shares were held
in his
fully vested account in the ESOP and 16,176 shares were deemed held
through exercisable incentive stock
options.
|
[e]
Mr.
Bartlett owned of record 3,280 shares; 23,900 shares were owned in the Bartlett
Family Trust; 220 shares were held in his fully vested account in the ESOP
and
7,426 shares were deemed held through exercisable stock options.
|
[f]
Mr. Casteel owned of record 214 shares; 2,744 were owned jointly
with his
wife; 6,708 shares were held in his fully vested account in the
ESOP and
9,720 shares were deemed held through exercisable incentive stock
options.
|
|
[g]
Ms. Jones owned of record 5,725 shares; 37 shares jointly with
her spouse;
6,985 shares in her fully vested account in the ESOP and 12,980
shares
were deemed held through exercisable incentive stock
options.
|
ELECTION
OF DIRECTORS
The
Board
of Directors of the Company recommends that the number of directors to be
elected at the meeting be fixed at nine (9) and that the persons named below
be
elected as such directors, to serve until the next annual meeting of the
shareholders and until their successors are duly elected and qualified. Each
of
the persons named below is presently serving as a director of the Company
for a
term which ends on April 10, 2007, or such other date upon which a successor
is
duly elected and qualified. The Board has determined that each of the nominees
for director, except J. Thomas May and Robert L. Shoptaw, satisfy the
requirements to be an independent director as set forth in the listing standards
of NASDAQ.
The
proxies hereby solicited will be voted for the election of the nominees shown
below, unless otherwise designated in the proxy. If at the time of the meeting
any of the nominees should be unable or unwilling to serve, the discretionary
authority granted in the proxy will be exercised to vote for the election
of a
substitute or substitutes. Management has no reason to believe that any
substitute nominee or nominees will be required.
The
table
below sets forth the name, age, principal occupation or employment during
the
last five years, prior service as a director of the Company, the number of
shares and percentage of the outstanding Common Stock beneficially owned,
with
respect to each director and nominee proposed, as reported by each
nominee:
Name
|
Age
|
|
|
|
|
William
E. Clark
|
63
|
Chairman
and Chief Executive
Officer,
CDI Contractors, LLC
(Construction)
|
2001
|
2,600
[c]
|
*
|
|
|
|
|
|
|
Steven
A. Cosse'
|
59
|
Executive
Vice President
and
General Counsel,
|
2004
|
3,040
[d]
|
*
|
|
|
|
|
|
|
George
A. Makris, Jr.
|
50
|
President,
M. K.
Distributors,
Inc.
(Beverage
Distributor)
|
1997
|
30,250
[e]
|
*
|
|
|
|
|
|
|
J.
Thomas May
|
59
|
Chairman
and Chief Executive
Officer
of the Company;
Chairman
and Chief Executive
Officer
of Simmons First
|
1987
|
267,500
[f]
|
1.89%
|
|
|
|
|
|
|
W.
Scott McGeorge
|
63
|
President,
Pine Bluff
|
2005
|
42,833[g]
|
*
|
|
|
|
|
|
|
Stanley
E. Reed
|
55
|
President,
Farm Bureau Mutual
|
2007
|
500
|
*
|
|
|
|
|
|
|
Harry
L. Ryburn
|
71
|
Orthodontist
(retired)
|
1976
|
4,583
[h]
|
*
|
|
|
|
|
|
|
Robert
L. Shoptaw
|
60
|
Chief
Executive Officer,
Arkansas
Blue Cross
and
Blue Shield
|
2006
|
600
[i]
|
*
|
|
|
|
|
|
|
Henry
F. Trotter, Jr.
|
69
|
President,
Trotter
Ford,
Inc. and President,
|
1995
[j]
|
38,409
[k]
|
*
|
*
The
shares beneficially owned represent less than 1% of the outstanding common
shares.
|
[a]
All persons have been engaged in the occupation listed for at least
five
years.
|
|
[b]
"Beneficial ownership" of a security means, directly or indirectly,
through any contract, relationship, arrangement, undertaking or
otherwise,
having or sharing voting power, which includes the power to vote
or to
direct the voting of such security, or investment power, which
includes
the power to dispose or to direct the disposition of such security.
Unless
otherwise indicated, each beneficial owner named has sole voting
and
investment power with respect to the shares
identified.
|
|
[c]
Mr. Clark is the general partner in a family limited partnership
which
owns 1,600 shares which are attributable to him and 1,000 shares
are
deemed held through exercisable stock
options.
|
|
[d]
Mr. Cosse' owns 2,040 shares jointly with his spouse and 1,000
shares are
deemed held through exercisable stock
options.
|
|
[e]
Mr. Makris owned of record 11,000 shares; 2,200 shares are held
in his
IRA; 11,350 shares are held as custodian for his children; 2,700
shares
are held in his wife’s IRA; 2,000 shares are held in the M-K Distributors'
Profit Sharing Trust of which Mr. Makris is a trustee with shared
dispositive and voting power and 1,000 shares are deemed held through
exercisable stock options.
|
|
[f]
Mr. May owned of record 134,383 shares; 18,506 shares were held
in his IRA
accounts; 1,192 shares were owned by his wife; 3,759 shares are
owned by
his stepchildren; 14,660 shares are held in his fully vested account
in
the ESOP; and 95,000 shares are deemed held through exercisable
stock
options.
|
|
[g]
Mr. McGeorge owned of record 36,354 shares; 212 shares were owned
by his
spouse; 15,800 shares are held in the Wallace P. McGeorge, Jr.
Trust, of
which 5,267 were attributable to Mr. McGeorge and 1,000 shares
are deemed
held through exercisable stock
options.
|
|
[h]
Dr. Ryburn and his wife are general partners in a family limited
partnership which owns 123,624 shares pursuant to which 2,472 shares
held
by the partnership are attributable to Dr. Ryburn; 111shares are
held by
Greenback Investment Club which are attributable to Dr. Ryburn
and 2,000
shares are deemed held through exercisable stock
options.
|
|
[i]
Mr. Shoptaw owned 600 shares in his
IRA.
|
|
[j]
Prior to his election in 1995, Mr. Trotter had served as a director
from
1973 through 1992.
|
|
[k]
Mr. Trotter owned of record 28,664 shares and 8,745 shares are
owned by
Bluff City Leasing, Inc., of which Mr. Trotter is President and
1,000
shares are deemed held through exercisable stock
options.
|
Committees
and Related Matters
During
2006, the Board of Directors of the Company maintained and utilized the
following committees: Executive Committee, Audit & Security Committee, and
Nominating, Compensation and Corporate Governance Committee.
During
2006, the Audit & Security Committee was composed of George A. Makris, Jr.,
William E. Clark Harry L. Ryburn and W. Scott McGeorge. This committee provides
assistance to the Board in fulfilling its responsibilities concerning accounting
and reporting practices, by regularly reviewing the adequacy of the internal
and
external auditors, the disclosure of the financial affairs of the Company
and
its subsidiaries, the control systems of management and internal accounting
controls. During 2006, this Committee met 12 times.
The
Nominating, Compensation and Corporate Governance Committee composed of Harry
L.
Ryburn (Chairman), Steven A. Cosse', William E. Clark, George A. Makris,
Jr., W.
Scott McGeorge and Henry F. Trotter, Jr. During 2006, the Nominating,
Compensation and Corporate Governance Committee met 6 times.
The
Company encourages all board members to attend the annual meeting. Historically,
the directors of the Company and its subsidiaries are introduced and
acknowledged at the annual meeting. All of the directors attended the Company's
2006 annual meeting
The
Board
of Directors of the Company met 8 times during 2006, including regular and
special meetings. No director attended fewer than 75% of the aggregate of
all
meetings of the Board of Directors and of all committees on which such director
served.
Transactions
with Related Persons
From
time
to time, Simmons First National Bank, Simmons First Bank of Russellville,
Simmons First Bank of South Arkansas, Simmons First Bank of Jonesboro, Simmons
First Bank of Searcy, Simmons First Bank of Northwest Arkansas, Simmons First
Bank of El Dorado, N.A. and Simmons First Bank of Hot Springs, banking
subsidiaries of the Company, have made loans and other extensions of credit
to
directors, officers, employees and members of their immediate families, and
from
time to time directors, officers and employees and members of their immediate
families have placed deposits with these banks. These loans, extensions of
credit and deposits were made in the ordinary course of business on
substantially the same terms (including interest rates and collateral) as
those
prevailing at the time for comparable transactions with other persons and
did
not involve more than the normal risk of collectibility or present other
unfavorable features. The Company generally considers banking relationships
with
directors and their affiliates to be immaterial and as not affecting the
director's independence so long as the terms of the credit relationship are
similar to those with other comparable borrowers.
In
assessing the impact of a credit relationship on a director's independence,
the
Company deems any extension of credit which complies with Federal Reserve
Regulation O to be consistent with director independence. The Company believes
that normal, arms'-length banking relationships entered into in the ordinary
course of business do not negate a director's independence.
Regulation
O requires such loans to be made on substantially the same terms, including
interest rates and collateral, and following credit-underwriting procedures
that
are no less stringent than those prevailing at the time for comparable
transactions by the subsidiary banks of the Company with other persons. Such
loans also may not involve more than the normal risk of repayment or present
other unfavorable features. Additionally, no event of default may have occurred
nor may any such loans be classified or disclosed as non-accrual, past due,
restructured, or a potential problem loan. The Company's Board of Directors
will
review any credit to a director or his affiliates that is criticized by internal
loan review or a bank regulatory agency in order to determine the impact
that
such classification may have on the director's independence.
Policies
and Procedures for Approval of Related Party Transactions
Related
party transactions may present potential or actual conflicts of interest
and
create the appearance that Company decisions are based on considerations
other
than the best interests of the Company and its shareholders.
Management
carefully reviews all proposed related party transactions, other than routine
banking transactions, to determine if the transaction is on terms comparable
to
terms that could be obtained in an arms'-length transaction with an unrelated
third party. Management reports to the Executive Committee and then to the
Board
of Directors on all proposed material related party transactions. Upon the
presentation of a proposed related party transaction to the Executive Committee
or the Board, the related party is excused from participation in discussion
and
voting on the matter.
Communication
with Directors
Shareholders
may communicate directly with the Board of Directors of the Company by sending
correspondence to the address shown below. If the shareholder desires to
communicate with a specific director, the correspondence should be addressed
to
such director. Any such correspondence addressed to the Board of Directors
will
be forwarded to the Chairman of the Board for review. The receipt of the
correspondence and the nature of its content will be reported at the next
Board
meeting and appropriate action, if any, will be taken. Correspondence addressed
to a specific director will be delivered to such director promptly after
receipt
by the Company. Each such director shall review the correspondence received
and,
if appropriate, report the receipt of the correspondence and the nature of
its
content to the Board of Directors at its next meeting, so that the appropriate
action, if any, may be taken.
Correspondence
should be addressed to:
Simmons
First National Corporation
Board
of
Directors
Attention:
(Chairman or Specific Director)
P.
O. Box
7009
Pine
Bluff, Arkansas 71611
NOMINATING,
COMPENSATION AND CORPORATE GOVERNANCE COMMITTEE
During
2006, the Nominating, Compensation and Corporate Governance Committee ("NCCGC")
was composed of Harry L. Ryburn (Chairman), Steven A. Cosse', William E.
Clark,
George A. Makris, Jr., W. Scott McGeorge and Henry F. Trotter, Jr., all of
whom
are independent in accordance with the NASDAQ listing standards. The primary
function of the NCCGC regarding nominations is to identify and recommend
individuals to be presented for election or re-election as
Directors.
Director
Nominations and Qualifications
The
Board
of Directors has not adopted a charter for the NCCGC, but has adopted by
resolution certain corporate governance principles and procedures regarding
nominations and criteria for proposing or recommending proposed nominees
for
election and re-election to the Board of Directors. The Board of Directors
is
responsible for recommending nominees for directors to the shareholders for
election at the annual meeting. The Board has delegated the identification
and
evaluation of proposed nominees to the NCCGC, a committee of independent
directors. The identification and evaluation of potential directors is a
continuing responsibility of the committee. The committee has not retained
any
third party to assist it in identifying candidates. A proposed director may
be
recommended to the Board at any time, however, a proposed nominee for director
to be elected at the annual meeting must be presented to the Board of Directors
for consideration no later than December 31 of the year immediately preceding
such annual meeting.
The
NCCGC
has not set any minimum qualifications for a proposed nominee to be eligible
for
recommendation to be elected as a director. The corporate governance principles
provide that the NCCGC shall consider the following criteria in evaluating
proposed nominees for director:
|
*
Location of residence and business interests
|
*
Type of business interests
|
|
*
Age
|
*
Knowledge of financial services
|
|
*
Community involvement
|
*
High leadership profile
|
|
*
Ability to fit with the Company's corporate culture
|
*
Equity ownership in the
Company
|
There
is
no specified order or weighting of the foregoing criteria. The NCCGC has
been
encouraged to seek geographic diversity of residence of the future nominees
so
that no more than 50% of the Directors are residents of Pine Bluff, Arkansas.
Nominations
from Shareholders
The
NCCGC
will consider nominees for the Board of Directors recommended by shareholders
with respect to elections to be held at an annual meeting. In order for the
NCCGC to consider recommending a shareholder proposed nominee for election
at
the annual meeting, the shareholder proposing the nomination must provide
notice
of the intention to nominate a director in sufficient time for the consideration
and action by the NCCGC. While no specific deadline has been set for notice
of
such nominations, notice provided to the NCCGC by a shareholder on or before
the
deadline for submission of shareholder proposals for the next annual meeting
(November 9, 2007 for the 2008 meeting) should provide adequate time for
consideration and action by the NCCGC prior to the December 31 deadline for
reporting proposed nominations to the Board of Directors. Proposed nominations
submitted after such date will be considered by the NCCGC, but no assurance
can
be made that such consideration will be completed and committee action taken
by
the NCCGC in time for inclusion of the proposed director in the proxy
solicitation for the next annual meeting.
The
notice
of a shareholder's intention to nominate a director must include:
|
·
|
information
regarding the shareholder making the nomination, including name,
address,
and number of shares of SFNC that are beneficially owned by the
shareholder;
|
|
·
|
a
representation that the shareholder is entitled to vote at the
meeting at
which directors will be elected, and that the shareholder intends
to
appear in person or by proxy at the meeting to nominate the person
or
persons specified in the notice;
|
|
·
|
the
name and address of the person or persons being nominated and
such other
information regarding each nominated person that would be required
in a
proxy statement filed pursuant to the SEC's proxy rules if the
person had
been nominated for election by the Board of Directors;
|
|
·
|
a
description of any arrangements or understandings between the
shareholder
and such nominee and any other persons (including their names),
pursuant
to which the nomination is made; and
|
|
·
|
the
consent of each such nominee to serve as a director, if elected.
|
The
Chairman of the Board, other directors and executive officers may also
recommend
director nominees to the NCCGC. The committee will evaluate nominees recommended
by shareholders against the same criteria, described above, used to evaluate
other nominees.
Compensation
Committee Interlocks and Insider Participation
During
2006, the NCCGC was composed of Harry L. Ryburn (Chairman), Steven A. Cosse',
William E. Clark, George A. Makris, Jr., W. Scott McGeorge and Henry F.
Trotter,
Jr. None of the committee members were employed as officers or employees
of the
Company during 2006.
During
2006, J. Thomas May served on the Compensation Committee of the Board of
Directors of Arkansas Blue Cross and Blue Shield, a mutual insurance company.
Mr. Robert L. Shoptaw, the chief executive officer of Arkansas Blue Cross
and
Blue Shield was elected to the Board of Directors of the Company during
2006.
Mr. May has since resigned from the Arkansas Blue Cross and Blue Shield
Compensation Committee, but continues to serve on the Board of Directors
of
Arkansas Blue Cross and Blue Shield.
NCCGC
Processes and Procedures
Decisions
regarding the compensation of the executives are made by the NCCGC.
Specifically, the NCCGC has strategic and administrative responsibility for
a
broad range of issues, including the Company's compensation program to
compensate key management employees effectively and in a manner consistent
with
the Company's stated compensation strategy and the requirements of the
appropriate regulatory bodies. The Board appoints each member of the NCCGC
and
has determined that each is an independent director.
The
NCCGC
oversees the administration of executive compensation plans, including the
design, performance measures and award opportunities for the executive incentive
programs, and certain employee benefits, subject to final action by the Board
of
Directors in certain cases.
At
the
NCCGC's first meeting each year, which is typically held in January, the
NCCGC
makes a specific review which focusing on performance and awards for the
most
recently completed fiscal year and the completion of the process of setting
the
performance goals for the incentive compensation programs for the current
year.
To
assist
in its efforts to meet the objectives outlined above, the Company has retained
Watson Wyatt Worldwide, a nationally known compensation and benefits consulting
firm, to advise the NCCGC on a regular basis on the compensation and benefit
programs. The Company engaged the consultant to provide general compensation
consulting services, including executive compensation, to respond to any
questions from the NCCGC and to management's need for advice and counsel.
In
addition, the consultant performs special executive compensation projects
and
consulting services from time to time as directed by the NCCGC.
The
Board
of Directors upon approval and recommendation from the NCCGC, determines
and
approves all compensation and awards to the CEO and other executives. The
NCCGC
reviews the performance and compensation of the CEO. The CEO reviews the
performance and compensation of the other executive officers, including the
other named executive officers and reports any significant issues or
deficiencies to the NCCGC. The CEO and members of the Company's Human Resources
Group assist in such reviews. The CEO and the Human Resources Group, at least
annually, review the unified compensation classification program of the Company
which determines the compensation of all salaried employees of the Company
and
its affiliates, including other executives. The Company's compensation program
is based in part on market data provided by the compensation consultant.
The
NCCGC and the Board also acts upon the proposed grants of stock based
compensation prepared by the CEO for other executives. Presently, the
consultant's role is to support such reviews by providing data regarding
market
practices and making specific recommendations for changes to plan designs
and
policies consistent with the Company's stated philosophies and
objectives.
In
determining the amount of named executive officer compensation each year,
the
NCCGC reviews competitive market data from the banking industry as a whole
and
the peer group specifically. It makes specific compensation decisions and
grants
based on such data, Company performance, and individual performance and
circumstances. With regard to formula-based incentives, the NCCGC sets
performance targets using management's internal business plan, industry and
market conditions, and other factors.
EXECUTIVE
COMPENSATION
COMPENSATION
DISCUSSION AND ANALYSIS
Introduction
This
section is a discussion of certain aspects of the Company's compensation
program
as it pertains to the principal executive officer, the principal financial
officer, and the three other most highly-compensated executive officers during
2006. These five persons are referred throughout as the "named executive
officers." This discussion focuses on compensation and practices relating
to the
Company's most recently completed fiscal year.
The
Company believes that the performance of each of the named executive officers
has the potential to impact the profitability of the Company, in both the
short-term and long-term. Therefore, the Company places significant emphasis
on
the design and administration of its executive compensation program.
Executive
Compensation Philosophy
The
Company seeks to provide an executive compensation package that is significantly
connected to the Company's overall financial performance, the increase in
shareholder value, the success of the business entity directly affected by
the
executive's performance, and the performance of the individual executive.
The
main principles of this strategy include the following:
|
·
|
Salaries
for associates and executives should be comparable to peer banking
organizations.
|
|
·
|
Compensation
programs should provide an incentive to increase individual
performance.
|
|
·
|
Increased
compensation is earned through an individual’s increased contribution.
|
|
·
|
Total
compensation opportunity should be comparable to that available
at peer
banking organizations when Company performance is good.
|
Objectives
of Executive Compensation
The
objectives of the executive compensation program are to:
|
(1) |
attract
and retain highly efficient and competent executive leadership,
|
|
(2) |
encourage
a high level of performance from the individual executive,
|
|
(3)
|
align
compensation incentives with the performance of the business entity
and
Company most directly impacted by the executive’s leadership and
performance,
|
|
(4) |
enhance
shareholder value, and
|
|
(5) |
improve
the overall performance of the Company.
|
The
Nominating, Compensation and Corporate Governance Committee ("NCCGC") strives
to
meet these objectives while maintaining market competitive compensation levels
and ensuring that the Company makes efficient use of shares and has predictable
expense recognition.
Peer
Comparison
In
determining the amount of named executive officer compensation each year,
the
NCCGC reviews competitive market data from the banking industry as a whole
and a
specific peer group of comparably sized banking organizations. The NCCGC
uses a
peer group of banking organizations for comparison in setting executive
compensation practices and levels of base salary, incentives and benefits.
Historically, the Company used banking organizations in the south central
United
States with assets of $2 to $5 billion. In the NCCGC's view, this peer group
competes directly with the Company for executive talent and many of which
are of
roughly similar size and have roughly similar numbers of employees, product
offerings, and geographic scope. However, in recent years due to the
consolidation in the banking industry, the number of organizations in this
peer
group has significantly declined. Recently, the Company's compensation
consultant recommended that the Company select banking organizations in the
United States with assets of $2 to $10 billion as its peer group. Further,
the
consultant recommended that since the asset size of the Company was near
the
bottom of the asset range of this peer group that a downward adjustment of
median compensation levels within the peer group by 25% was appropriate.
The
NCCGC adopted the recommendation of its consultant.
The
executive salary and benefits program are targeted to the adjusted peer group
median in order to be competitive in the market. The Company's incentive
programs are analyzed with similar programs of the peer group, but no peer
group
target level for incentives has been set. The incentive programs are designed
for the emphasis of performance-based compensation within the Company's specific
business operations.
The
NCCGC
attempts to make compensation decisions consistent with the foregoing objectives
and considerations including, in particular, market levels of compensation
necessary to attract, retain, and motivate the executive officers. Therefore,
the aggregate wealth accumulated or realizable by an executive from past
compensation grants is not considered in setting compensation or making
additional grants.
Decisions
Regarding Composition of Total Direct Compensation
The
Company's executive compensation program provides a mix of separate components
that seek to align the executive's incentives with increasing shareholder
value.
The Company's executive incentive compensation program includes both equity
and
non-equity incentive compensation. The Company has established target
allocations of equity incentive and non-equity incentive compensation for
executive officers. For the CEO, the NCCGC has set a target allocation of
potential non-equity incentive compensation at 75% of salary. The CEO and
NCCGC
have determined that additional equity incentive compensation for the CEO
is not
desirable at this time. For the executive officers other than the CEO, the
NCCGC
has set targets for potential non-equity incentive compensation based upon
the
executive's salary classification ranging from 20% to 35% of salary.
Additionally, the NCCGC has set a target for annual grants of equity incentives
for executive officers other than the CEO. The target for annual grants of
equity incentive compensation is for a number of shares equal to the executive's
salary times the participation factor divided by the stock price. The
participation factor is based upon the executive's salary classification
and
ranges from 20% to 35%. For subsidiary bank chief executive officers and
Company
executives designated as executive vice presidents or above, the annual grants
for equity incentive compensation will be 50% in restricted stock awards
and 50%
in stock options and, for all other participants, the annual grants will
be 100%
stock options. The NCCGC set the foregoing targets above the historic levels
of
equity and non-equity incentive compensation and anticipates increasing the
incentive compensation to these levels over a two to three year transition
period.
For
2006,
the compensation of the named executive officers, was allocated as follows:
Base
Salaries: ranges from approximately 58% to 82% of total direct compensation
Non-equity
incentives: ranges from approximately 12% to 27% of total direct compensation
Equity
incentives: ranges from approximately 0% to 27% of total direct compensation
"Total
direct compensation" means base salaries plus bonus plus non-equity and equity
incentive compensation. The foregoing percentages are based on the full grant
date fair value of annual compensation (calculated in accordance with FAS
123(R)). These amounts differ from the amounts included in the Summary
Compensation Table under the columns "Stock Awards," "Option Awards," and
"Total," which were calculated in accordance with SEC regulations and which
include expenses related to awards for prior years. Please refer to the
discussion of FAS 123(R) which precedes the 2006 Summary Compensation Table,
below.
The
Company emphasizes market practices in the design and administration of its
executive compensation program. The NCCGC's philosophy is that incentive
pay
should constitute a significant component of total direct compensation. The
executive compensation program utilizes stock options and restricted stock
but
the NCCGC has historically chosen to emphasize stock options more than
restricted stock in the equity incentive program for the named executive
officers. Stock options require stock price appreciation for the executive
to
realize a compensation benefit. Equity incentive performance measures should
promote shareholder return and earnings growth, and the plan design should
be
based upon a direct connection between performance measures, the participant's
ability to influence such measures and the award levels.
Corporate
and Individual Performance Measures
The
Company uses the Executive Incentive Plan, which is referred to as EIP, to
reward both the achievement of corporate performance measures, such as the
attainment of corporate financial goals, as well as individual performance
measures. Additionally, the Company implemented the Long Term Executive
Incentive Program to reward Mr. May for the achievement of specified corporate
performance factors over a three year period.
Executive
Compensation Program Overview
The
four
primary components of the executive compensation program are:
A
brief
description of these four components and related programs follows.
1.
Base Salary and Bonus
Base
salary is designed to provide competitive levels of compensation to executives
based upon their experience, duties and scope of responsibility. The Company
pays base salaries because it provides a basic level of compensation and
is
necessary to recruit and retain executives. The Company may use annual base
salary adjustments to reflect an individual's performance or changed
responsibilities. Base
salary levels are also used as a benchmark for the amount of incentive
compensation granted to an executive. For example, participation in the EIP
is
set within a range based upon the executive's salary grade.
As
discussed above, the Company's executive compensation program emphasizes
targeting the total amount of compensation to peer group practices and with
a
mix of compensation including a significant component of incentive compensation.
At lower executive levels, base salaries represent a larger proportion of
total
compensation but at senior executive levels total compensation contains a
larger
component of incentive compensation opportunities.
The
NCCGC
has approved bonuses for executive officers for special circumstances but
does
not generally utilize discretionary bonuses as a significant part of the
executive compensation program.
2.
Non-Equity Incentives
The
Company uses the EIP as a short-term incentive to encourage achievement of
its
annual performance goals. The EIP consists of two separate components, Base
Profit Sharing Incentive, which is referred to as Base Incentive, and the
Bonus
Profit Sharing Incentive, which is referred to as Bonus Incentive. The Base
Incentive focuses on the achievement of annual financial goals and awards.
The
Base Incentive is designed to:
|
·
|
support
strategic business objectives,
|
|
·
|
promote
the attainment of specific financial goals for the Company and
the
executive,
|
|
·
|
reward
achievement of specific performance objectives, and
|
Base
Incentive awards are designed to provide executives with market competitive
compensation based upon their experience and scope of responsibility. The
size
of an executive's Base Incentive award is influenced by these factors, market
practices, Company performance and individual performance. The NCCGC generally
sets the annual Base Incentive award for an executive to provide an incentive
at
the market median for expected levels of performance, subject to reduction
for
failure to meet the individual performance measures. All of the named executive
officers participate in the Base Incentive. Awards earned under the Base
Incentive are contingent upon employment with the Company through the end
of the
fiscal year, except for payments made in the event of death, retirement or
disability.
The
ultimate amount paid to an executive under the Base Incentive is a function
of
five variables:
|
·
|
the
executive's level of participation;
|
|
·
|
the
Base Incentive goals set for the
Company
|
|
·
|
the
Base Incentive goals established for the executive;
|
|
·
|
the
payout amounts established by the NCCGC which correspond to threshold,
target, and maximum levels of performance; and
|
|
·
|
the
NCCGC's determination of the extent to which the goals were met.
|
The
Company grants participation under the Base Incentive though the assignment
of
incentive points. The incentive points have a maximum value of $100 per point.
That sum represents the final Base Incentive payout to the executive assuming
all Base Incentive goals are achieved at the target level of performance.
For
2006,
the Company based the Base Incentive corporate performance measure exclusively
on earnings per share. For 2007, the Base Incentive corporate performance
measure will again be based solely on earnings per share. The performance
goals
for 2008 and later years may be expanded by the NCCGC to include other financial
measures.
No
Base
Incentive payments are earned unless the Company's earnings per share are
at
least equal to the prior year's earnings per share. The ultimate value of
a
point, if any, is based upon the achievement of the performance goals during
the
calendar year and may range from 37.5% to 100% of target. For 2007, if the
Company's earnings per share at least equal its earnings per share in 2006,
Base
Incentive payouts may range from 37.5% to 100% of target depending on
performance.
Next,
the
NCCGC establishes financial and/or non-financial performance measures for
each
participant. For the named executive officers, Base Incentive performance
measures for 2006 consist of 100% corporate performance, subject to reduction
of
up to 12.5% for failure of the executive to meet his or her individual
performance measures.
The
NCCGC
sets these target performance measures in January of each year based largely
on
management's confidential business plan and budget for the coming year, which
typically includes planned revenue growth, cost reductions, and profit
improvement. The NCCGC also sets threshold and maximum performance benchmarks.
Maximum award targets reflect ambitious goals which can only be attained
when
business results are exceptional and which have been met only once in the
last
five years, thus justifying the higher award payments. Similarly, minimum
award
or performance measure targets are set at the prior year's earnings per share.
Target performance is set at the maximum performance level. For 2006, the
NCCGC
determined that the Company achieved the Company's Base Incentive performance
measure at approximately 69% of target.
Actual
payouts under the Base Incentive depend on the level at which the performance
measures (both Company and individual measures) are achieved. Achievement
at
target for each performance measure results in a final award payment equal
to
the target incentive award payment. In the case of the Company performance
measure, actual performance at only the threshold (minimum) performance level
results in a final award payment equal to a maximum of 50% of the target
award
amount, and performance below the threshold performance level results in
no
final award payment. In the case of the individual performance measures,
actual
performance below the threshold will reduce the final award payment, by up
to
12.5% of the target award amount. Actual performance above the target
performance benchmark will not produce an award greater than the target award.
Straight-line interpolation is used to calculate payout values between minimum,
target, and maximum levels.
Finally,
the NCCGC assesses actual performance relative to pre-set goals and, in doing
so, determines the amount of any final award payment. In determining final
awards and in evaluating personal performance, the NCCGC considers adjustments
to GAAP net income and other corporate performance measures for unplanned,
unusual or non-recurring items of gain or expense.
The
Bonus
Incentive is designed to recognize outstanding performance by subsidiary
banks
by rewarding an additional incentive to the participating subsidiary bank
executives and the Company executives. At the beginning of each year, the
NCCGC
establishes a bonus percentage applicable to all of the subsidiary banks.
An
amount equal to the bonus percentage multiplied by each subsidiary bank's
income
in excess of its current year's targeted income, is allocated to the subsidiary
bank's Bonus Incentive pool. If a subsidiary bank exceeds its targeted income
for the year and satisfies the applicable threshold for return on equity
and net
income growth, the Bonus Incentive pool is payable to the participating
executives of the subsidiary bank and the Company. The participating Company
executives are allocated a percentage of Bonus Incentive pool equal to the
number of incentive points granted to the participating executives of the
Company divided by the aggregate number of incentive points to all participants
in the EIP. This amount is then allocated among the participating Company
executives pro rata based upon their incentive points. The balance of the
Bonus
Incentive pool is allocated among the executives of the subsidiary bank
participating in the EIP on the basis of the incentive points granted to
each
executive. For 2006, only one subsidiary bank qualified to participate in
the
Bonus Incentive, in the amount of $35,720, of which approximately 28% was
allocated to participating Company executives and approximately 72% was
allocated to participating executives of the subsidiary bank.
In
addition to the EIP, in 2005 the Company adopted a Long Term Executive Incentive
Plan, which is referred to as the LTEIP. Mr. May was the only executive who
was
eligible to participate in the LTEIP. A bonus pool in the amount of $350,000
was
established. Mr. May's entitlement to receive part or all of the bonus pool
is
dependent upon the Company satisfying any one or more of three criteria:
(i) the
Return on Average Tangible Equity of the Company computed for the year ended
December 31, 2007 equals or exceeds 17%; (ii) the Return on Average Tangible
Assets of the Company computed for the year ended December 31, 2007 equals
or
exceeds 1.25%; and (iii) the five year Compounded Average Growth Rate of
the
Company's Diluted Operating Earnings per Share, commencing on January 1,
2003
and ending on December 31, 2007 equals or exceeds 9.00%. Each of the foregoing
criteria are evaluated separately and satisfaction of each criterion will
entitle Mr. May to receive one third of the bonus pool, or $116,667. Any
sums
earned are payable on February 15, 2008.
The
performance measures for the Return on Average Tangible Equity and Return
on
Average Tangible Assets were set to 99% of the peer group averages for publicly
traded bank holding companies with assets between $2 billion and $5 billion.
Due
to the concentration of Company's business in the slower growth Arkansas
market,
the threshold for the five year Compounded Average Growth Rate was set to
80% of
the peer group average. Following the end of 2006, after the expiration of
two
years of the three year plan term, management has reviewed the Company's
performance in regard to the stated performance thresholds and has determined
that the satisfaction of one criteria would require an increase of 16% in
2007
earnings per share over 2006 earnings per share and that the satisfaction
of all
three criteria would require an increase of 21% in 2007 earnings per share
over
2006 earnings per share. The NCCGC has determined that it is unlikely that
any
of the stated performance thresholds under the LTEIP will be satisfied on
December 31, 2007.
3.
Equity Incentives
The
Company makes stock option awards to senior executives of the Company and
its
subsidiary banks. These awards are generally granted once a year, although
in
special circumstances additional grants may be made to one or more executives.
These awards are used to create a common economic interest between the interests
of executives and shareholders and to recruit and retain qualified executives.
The Company's stock options generally have an exercise price equal to the
closing price of the Company's stock on the day prior to the date of grant,
a
ten year term and vest in equal installments over five years after the date
of
grant. Accordingly, the actual value an executive will realize is tied to
appreciation in the stock price and, therefore, is aligned with increased
corporate performance and shareholder returns.
During
2006, stock option grants were made under the Simmons First National Corporation
Executive Stock Incentive Plan - 2001 and the Simmons First National Corporation
Executive Stock Incentive Plan - 2006, both of which are administered by
the
NCCGC. The Company grants incentive stock options, non-qualified stock options
and stock appreciation rights. In most instances, the NCCGC utilizes incentive
stock options for most executives. On several occasions, the NCCGC has chosen
to
grant non-qualified stock options when under the specific circumstances the
desired grants would not qualify as incentive stock options or the NCCGC
determined that stock appreciation rights should be granted in conjunction
with
the options.
Please
refer to the section below, "Other Guidelines and Procedures Affecting Executive
Compensation" for additional information regarding the Company's practices
when
granting stock options.
The
Company also utilizes restricted stock awards to executive officers. From
time
to time, the Company has made routine grants of restricted stock to its
executives and also has utilized restricted stock grants in connection with
the
hiring, promotion or retention of executives. The restricted stock granted
last
year as well as the outstanding unvested grants from prior years are reflected
in the tables below.
4.
Benefits
|
A. |
Profit
Sharing and Employee Stock Ownership
Plan
|
The
Company offers a combination profit sharing and employee stock ownership
plan.
This plan is open to substantially all of the employees of the Company including
the executive officers. The plan and the contributions to the plan provide
for
retirement benefits to employees and allow the employees of the Company to
participate in the ownership of stock in the Company.
The
plan
is funded solely by Company contributions which are divided between the profit
sharing plan component and the employee stock ownership plan component.
Contributions in the profit sharing plan are invested by the Simmons First
Trust
Company, N.A., an affiliate of the Company, in marketable securities, while
contributions to the employee stock ownership plan component are invested
in the
stock of the Company. The Company targets a contribution of approximately
5.5%
of eligible participant earnings to this plan and annually specifies the
allocation of the contribution between the profit sharing plan component
and the
employee stock ownership plan component.
The
Company offers a qualified 401(k) Plan in which it makes matching contributions
to encourage employees to save money for their retirement. This plan, and
the
contributions to it, enhance the range of benefits offered to executives
and
enhance the Company's ability to attract and retain employees.
Under
the
terms of the qualified 401(k) Plan, employees may defer a portion of their
eligible pay, up to the maximum allowed by I.R.S. regulation, and the Company
matches 25% of the first 6% of compensation for a total match of 1.5% of
eligible pay for each participant who defers 6% or more of his or her eligible
pay.
|
C. |
Perquisites
and Other Benefits
|
Perquisites
and other benefits represent a small part of the overall compensation package,
and are offered only after consideration of business need. The NCCGC annually
reviews the perquisites and other personal benefits that are provided to
senior
management. The primary perquisites are automobile allowances, personal use
of
company automobiles, club memberships, and certain relocation and moving
expenses. The NCCGC believes that allowing the reasonable personal use of
a
company owned automobile provided for an executive is incidental to the
performance of his or her duties and causes minimal additional cost to the
Company. Likewise, the granting of an automobile allowance to an executive
provides a means of transportation for the executive in performing his executive
duties and benefits the Company. The Company sponsors membership in golf
or
social clubs for certain senior executives who have responsibility for the
entertainment of clients and prospective clients. Finally, the Company
encourages its executives to properly monitor the state of their health by
reimbursing the cost of an annual routine physical examination.
|
D. |
Post-Termination
Compensation
|
Deferred
Compensation Arrangements
The
Company maintains two non-qualified deferred compensation arrangements that
are
designed to provide supplemental retirement pay from the Company to two
executives, Mr. May and Mr. Bartlett. The Company bears the entire cost of
benefits under these plans.
The
Deferred Compensation Agreement for Mr. May ("May Plan") and the Executive
Salary Continuation Agreement for Mr. Bartlett ("Bartlett Plan") are
non-qualified defined benefit type plans. These plans are intended to work
together with the Company's other retirement plans to provide an overall
targeted level of benefits.
The
Bartlett Plan was assumed in the merger with Alliance Bancorporation, Inc.
in
2004. This plan is frozen and of the named executive officers, only Mr. Bartlett
has a benefit payable from this plan. His benefit is fully vested and based
on
his service prior to 2004.
The
Company provides retirement benefits in order to attract and retain executives.
The amounts payable to Mr. May under the May Plan and to Mr. Bartlett under
the
Bartlett Plan is determined by each plan’s benefit formula, which is described
in the section below "Pension Benefits Table."
Change
in Control Agreements
The
Company has entered into Change in Control Agreements ("CIC Agreements")
with
members of senior management of the Company and its subsidiary banks, including
each of the named executive officers. Except for these CIC Agreements, and
a
general severance policy, none of the named executive officers has an employment
agreement which requires the Company to pay their salary for any period of
time.
The Company entered into the CIC Agreements because the banking industry
has
been consolidating for a number of years and it does not want its executives
distracted by a rumored or actual change in control. Further, if a change
in
control should occur, the Company wants its executives to be focused on the
business of the organization and the interests of shareholders. In addition,
it
is important that the executives can react neutrally to a potential change
in
control and not be influenced by personal financial concerns. The Company
believes the CIC Agreements are consistent with market practice and assist
the
Company in retaining its executive talent. The level of benefits for the
named
executive officers ranges from one and one half to two times certain elements
of
their compensation which the NCCGC believes is competitive with the banking
industry as a whole and specifically with the designated peer
group.
Upon
a
change in control, followed by a termination of the executive's employment
by
the Company without "Cause" or by the executive after a "Trigger Event",
the CIC
Agreements require the Company to pay or provide the following to the executive:
|
·
|
a
lump sum payment equal to one and one half or two times the sum
of the
executive's base salary (the highest amount in effect anytime during
the
twelve months preceding the executive’s termination date) and the
executive's incentive compensation (calculated as the higher of
the target
EIP for the year of termination or the average of the executive's
last two
years of EIP awards);
|
|
·
|
up
to three years of additional coverage under the Company's health,
dental,
life and long term disability plans; and
|
|
·
|
a
payment to reimburse the executive, in the case of Messrs. May,
Fehlman,
Bartlett and Casteel, for any excise taxes on severance benefits
that are
considered excess parachute payments under Sections 280G and 4999
of the
Internal Revenue Code plus income and employment taxes on such
tax gross
up as well as interest and penalties imposed by the IRS.
|
In
addition, upon a change in control, all outstanding stock options vest
immediately and all restrictions on restricted stock lapse.
Further,
upon a change in control, the requirement under the May Plan that Mr. May
remain
employed until age 65 is deleted and the benefit is immediately vested. A
change
in control does not affect Mr. Bartlett's benefit under the Bartlett Plan,
since
he is currently fully vested.
The
Company believes that CIC Agreements should encourage retention of the
executives during the negotiation and following a change in control transaction,
compensate executives who are displaced by a change in control and not serve
as
an incentive to increase an executive's personal wealth. Therefore, the CIC
Agreements, except in the case of Mr. May, require that there be both a change
in control and an involuntary termination without "Cause" or a voluntary
termination within six months after a "Trigger Event" which is often referred
to
as a "double-trigger." The double-trigger ensures that the Company will become
obligated to make payments under the CIC Agreements only if the executive
is
actually or constructively discharged as a result of the change in control.
However, the NCCGC has determined that in the case of Mr. May, a single trigger
CIC agreement is appropriate. Within twelve months following a change in
control, Mr. May is permitted to request payment of his termination compensation
under his CIC without either an involuntary termination or a termination
following a Trigger Event.
The
NCCGC
reviews the general elements and salary structure of the Company's compensation
plan annually and makes adjustments to ensure that it is consistent with
its
compensation philosophies, company and personal performance, current market
practices, assigned duties and responsibilities and inflation.
Other
Guidelines and Procedures Affecting Executive Compensation
Stock-Based
Compensation Procedures Regarding NCCGC and Board Approval
The Board
of Directors approves all grants of stock-based compensation to the executives.
Any proposed grants to the CEO are originated and approved by the NCCGC and
then
submitted to the Board of Directors for approval. Grants to the CEO may or
may
not occur simultaneous with grants to other executives. Prospective grants
of
stock based compensation to other executives are proposed to the NCCGC by
the
CEO. The NCCGC considers, modifies, if necessary, and acts upon the proposed
grants. If approved, the proposed grants are then submitted to the Board
of
Directors for consideration and approval.
Stock-Based
Compensation Procedures Regarding Timing and Pricing of Awards
The
Company's policy is to make grants of equity-based compensation only at current
market prices. The exercise price of stock options are set at the closing
stock
price on the day prior to the date of grant. The Company has elected to use
the
prior day's closing price to provide certainty in the designation of the
option
price upon the date the Board approves the grant. The Company does not grant
"in-the-money" options or options with exercise prices below market value
on the
day prior to date of grant. The Company's policy is to approve grants only
at
regularly scheduled meetings of the full Board of Directors and such grants
are
either effective on such date or a specified future date. Further, the Company
makes the majority of such grants on the date of the May meeting of the Board
of
Directors. The Company may make grants at other times throughout the year
on the
date of regularly scheduled meetings of the full Board of Directors in
connection with grants to the CEO or to other executives in exceptional
circumstances, such as the hiring, promotion or retention of an executive
officer or in connection with an acquisition transaction.
The
Company attempts to schedule restricted stock award and stock option grants
at
times when the market is not influenced by scheduled releases of information.
The Company does not time or plan the release of material, non-public
information for the purpose of affecting the value of executive
compensation.
Historically,
the Company chose the May meeting of its Board of Directors because it was
the
first meeting of the Board of Directors after the annual meeting of shareholders
at which the stock compensation plans were approved. The Company has generally
continued to follow this schedule regardless of whether stock compensation
plans
are being presented for approval at the annual shareholders meeting.
Additionally, this schedule allows the market to respond and stabilize after
financial results for the completed fiscal year have been publicly announced,
and allows the Company sufficient time to complete performance reviews following
the determination of corporate financial performance for the previous fiscal
year. The grants are made at a time when the Company's financial results
have
already become public, and there is little potential for abuse of material
non-public information in connection with stock or option grants. The influence
of the Company's disclosures of non-public information on the exercise price
of
these stock based incentives is minimized by utilizing Board of Directors
meeting dates as grant dates and by setting the vesting period at one year
or
longer. The Company follows the same procedures regarding the timing of grants
to its executive officers as it does for all other participants.
Role
of
Executive Officers in Determining Executive Compensation
The NCCGC
oversees the administration of executive compensation plans, including the
design, performance measures and award opportunities for the executive incentive
programs, and certain employee benefits, subject to final action by the Board
of
Directors in certain cases. The Board of Directors, upon approval and
recommendation from the NCCGC, determines and approves all compensation and
awards, to the CEO and other executives. The NCCGC reviews the performance
and
compensation of the CEO. The CEO reviews the performance and compensation
of the
other executive officers, including the other named executive officers, and
reports any significant issues or deficiencies to the NCCGC. The members
of the
Company's Human Resources Group assist in such reviews. The CEO and the Human
Resources Group, at least annually, review the unified compensation
classification program of the Company which determines the compensation of
all
salaried employees of the Company and its affiliates, including other
executives. The Company's compensation program is based in part on market
data
provided by the compensation consultant. The NCCGC and the Board also acts
upon
the proposed grants of stock based compensation prepared by the CEO for other
executives. Executive officers do not otherwise determine or make
recommendations regarding the amount or form of executive or director
compensation.
Adjustments
to Incentive Compensation as a Result of Financial Statement
Restatements
The
NCCGC's policy is to consider adjusting future awards or recovering past
awards
in the event of a material restatement of the Company's financial results.
If,
in the exercise of its business judgment, the NCCGC believes that it is in
the
best interests of the Company and its shareholders to do so, it will seek
recovery or cancellation of any bonus or incentive payments made to an executive
on the basis of having met or exceeded performance targets during a period
of
fraudulent activity or a material misstatement of financial results where
the
NCCGC determines that such recovery or cancellation is appropriate due to
intentional misconduct by the executive officer that resulted in such
performance targets being achieved which would not have been achieved absent
such misconduct.
Share
Ownership Guidelines
The
Company encourages directors and executive officers to be shareholders. The
Company believes that share ownership by directors and executives is a
contributing factor to enhanced long-term corporate performance. Although
the
directors and executive officers already have a significant equity stake
in the
Company (as reflected in the beneficial ownership information contained in
this
Proxy Statement), the Company has adopted a share ownership policy for
directors.
Management
members of the Board of Directors are required to own at least 200 shares
of the
Company's common stock. Directors are allowed a reasonable period of time
in
which to meet this requirement, measured from the date of their election
to the
Board. Additionally, all executive officers are encouraged to retain as a
long
term investment a substantial portion of the shares acquired through the
Company's stock based incentive plans.
Tax
Considerations
It
has
been and continues to be the NCCGC's intent that all non-equity incentive
payments be deductible unless maintaining such deductibility would undermine
the
Company's ability to meet its primary compensation objectives or is otherwise
not in its best interest. At this time, essentially all compensation (except
certain equity incentives) paid to the named executive officers is deductible
under Section 162(m) of the Internal Revenue Code. The Company also regularly
analyzes the tax effects of various forms of compensation and the potential
for
excise taxes to be imposed on the executive officers which might have the
effect
of frustrating the purpose(s) of such compensation. There are various provisions
of the Internal Revenue Code which are considered.
Section
162(m)
Section
162(m) of the Internal Revenue Code of 1986, as amended, provides that
compensation in excess of $1 million paid for any year to a corporation's
chief
executive officer and the four other highest paid executive officers at the
end
of such year will not be deductible for federal income tax purposes unless:
(1)
the compensation qualifies as "performance-based compensation," and (2) the
Company advised its shareholders of, and the shareholders have approved,
the
material terms of the performance goals under which such compensation is
paid.
Sections
280G and 4999
The
Company provides the named executive officers with change in control agreements.
Certain of the change in control agreements provide for tax protection in
the
form of a gross up payment to reimburse the executive for any excise tax
under
Internal Revenue Code Section 4999 as well as any additional income and
employment taxes resulting from such reimbursement. Code Section 4999 imposes
a
20% non-deductible excise tax on the recipient of an "excess parachute payment"
and Code Section 280G disallows the tax deduction to the payor of any amount
of
an excess parachute payment that is contingent on a change in control. A
payment
as a result of a change in control must exceed three times the executive's
base
amount in order to be considered an excess parachute payment, and then the
excise tax is imposed on the parachute payments that exceed the executive's
base
amount. The intent of the tax gross-up is to provide a benefit without a
tax
penalty to the executives who are displaced in the event of a change in control.
The Company believes the provision of tax protection for excess parachute
payments for certain of its executive officers is consistent with the market
practice within the banking industry, is a valuable incentive in retaining
executives, and is consistent with the objectives of the Company's overall
executive compensation program.
Section
409A
Amounts
deferred under the non-qualified deferred compensation programs after December
31, 2004 are subject to Internal Revenue Code Section 409A, which governs
when
elections for deferrals of compensation may be made, the form and timing
permitted for payment of such deferred amounts, and the ability to change
the
form and timing of payments initially established. Section 409A imposes
sanctions for failure to comply, including accelerated income inclusion,
a 20%
penalty and an interest penalty. The Company has made preliminary amendments
to
its non-qualified deferred compensation plans to comply with Section 409A
and
continues to operate the plans in good faith compliance with Section 409A
as
permitted by the proposed regulations issued by the Internal Revenue Service.
When final Section 409A regulations are issued, the Company will further
amend
the plans as necessary to fully comply with Code Section 409A requirements.
Summary
In
summary, the Company believes this mix of salary, formula based cash incentives
for both short-term and long-term performance, and the stock based compensation
motivates the Company's management team to produce strong returns for
shareholders. Further, in the view of the NCCGC, the overall compensation
program appropriately balances the interests and needs of the Company in
operating its business with appropriate employee rewards based on enhancing
shareholder value.
Report
of the NCCGC on the Compensation Discussion and Analysis.
The
NCCGC
reviewed and discussed the Compensation Discussion and Analysis included
in this
Proxy Statement with management. Based on such review and discussion, the
NCCGC
recommended to the Board of Directors that the Compensation Discussion and
Analysis be included in this Proxy Statement for filing with the Securities
and
Exchange Commission.
Submitted
by the Nominating, Compensation and Corporate Governance Committee of the
Company’s Board of Directors.
Harry
L. Ryburn, Chairman
|
Steven
A. Cosse'
|
William
E. Clark
|
George
A. Makris, Jr.
|
W.
Scott McGeorge
|
Henry
F. Trotter, Jr.
|
SUMMARY
OF COMPENSATION AND OTHER PAYMENTS TO THE NAMED EXECUTIVE OFFICERS
Overview.
The following sections provide a summary of cash and certain other amounts
paid
for the year ended December 31, 2006 to the named executive officers. Except
where noted, the information in the Summary Compensation Table generally
pertains to compensation to the named executive officers for the year ended
December 31, 2006. The compensation disclosed below is presented in accordance
with SEC regulations. According to those regulations, the Company is required
in
some cases to include:
|
·
|
amounts
paid in previous years;
|
|
·
|
amounts
that may be paid in future years, including amounts that will be
paid only
upon the occurrence of certain events, such as a change in control
of the
Company;
|
|
·
|
amounts
paid to the named executive officers which might not be considered
"compensation" (for example, distributions of deferred compensation
earned
in prior years, and at-market earnings, dividends, or interest
on such
amounts).
|
|
·
|
an
assumed value for share-based compensation equal to the fair value
of the
grant as presumed under accounting regulations, even though such
value
presumes the option will not be forfeited or exercised before the
end of
its 10-year life, and even though the actual realization of cash
from the
award depends on whether the stock price appreciates above its
price on
the date of grant, whether the executive will continue his employment
with
the Company, and when the executive chooses to exercise the option.
|
|
·
|
the
increase in present value of future pension payments, even though
such
increase is not cash compensation paid this year and even though
the
actual pension benefits will depend upon a number of factors, including
when the executive retires, his compensation at retirement, and
in some
cases the number of years the executive lives following his retirement.
|
Therefore,
you are encouraged to read the following tables closely. The narratives
preceding the tables and the footnotes accompanying each table are important
parts of each table. Also, you are encouraged to read this section in
conjunction with the Compensation Discussion and Analysis, above.
2006
SUMMARY COMPENSATION TABLE
The
following table provides information concerning the compensation of the named
executive officers for 2006, the most recently completed fiscal year.
The
column
"salary", discloses the amount of base salary paid to the named executive
officer during 2006. The column , "bonus" discloses amounts paid to named
executive officers as discretionary bonuses. In the columns "Stock Awards"
and
"Option Awards," SEC regulations require the disclosure of the award of stock
or
options measured in dollars and calculated in accordance with FAS 123(R).
For
restricted stock, the FAS 123(R) fair value per share is equal to the closing
price of the stock on the date of grant. For stock options, the FAS 123(R)
fair
value per share is based on certain assumptions which are explained in footnote
11 to the Company's financial statements which are included in the annual
report
on Form 10-K. Such expense is disclosed ratably over the vesting period but
without reduction for assumed forfeitures (as is done for financial reporting
purposes). The amounts shown in the 2006 Summary Compensation Table also
include
a ratable portion of each grant made in prior years to the extent the vesting
period fell in 2006 (except where generally accepted accounting principles
("GAAP") required the Company to recognize the full amount in a prior year).
Please also refer to the second table in this Proxy Statement, "Grants of
Plan-Based Awards."
For
certain executives, this column includes a portion of the expense attributable
to restricted stock grants made in prior years. Restricted stock awards
typically vest in equal installments over five years from the date of grant.
Awards are conditioned on the participant's continued employment with the
Company, but may have additional restrictions, including performance conditions.
Restricted stock allows the participant to vote and receive dividends prior
to
vesting.
The
column
"Non-Equity Incentive Plan Compensation" discloses the dollar value of all
earnings for services performed during the fiscal year pursuant to awards
under
non-equity incentive plans, including the EIP and LTEIP. Whether an award
is
included with respect to any particular fiscal year depends on whether the
relevant performance measure was satisfied during the fiscal year. For example,
the EIP awards are annual awards and the payments under those awards are
made
based upon the achievement of financial results measured as of December 31
of
each fiscal year; accordingly, the amount reported for EIP corresponds to
the
fiscal year for which the award was earned even though such payment was made
after the end of such fiscal year. Payments under the LTEIP awards are made
based upon the achievement of financial results over a three year period
which
has not expired; accordingly, no payments under the LTEIP for 2006 were
made.
The
column
"Change in pension value and nonqualified deferred compensation earnings,"
discloses the sum of the dollar value of (1) the aggregate change in the
actuarial present value of the named executive officers accumulated benefit
under all defined benefit and actuarial pension plans (including supplemental
plans) in 2006; and (2) any above-market or preferential earnings on
nonqualified deferred compensation, including on nonqualified defined
contribution plans. The increase for 2006 in the present value of Mr. May's
benefit under the May Plan and Mr. Bartlett's benefit under the Bartlett
Plan
are disclosed in this column.
The
column
"All other compensation" discloses the sum of the dollar value of:
|
·
|
perquisites
and other personal benefits, or property, unless the aggregate
amount of
such compensation is less than $10,000;
|
|
·
|
all
"gross-ups" or other amounts reimbursed during the fiscal year
for the
payment of taxes;
|
|
·
|
amounts
paid or which became due related to termination, severance, or
a change in
control, if any;
|
|
·
|
the contributions
to vested and unvested defined contribution plans;
and
|
|
·
|
any
life insurance premiums paid during the year for the benefit of
a named
executive officer.
|
SUMMARY
COMPENSATION TABLE
|
Name
|
|
Year
|
|
Salary
|
|
Bonus
($)
|
|
Stock
Awards
($)
|
|
Option
Awards
($)
|
|
Non-
Equity
|
|
Change
in
Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
|
|
All
|
|
|
|
J.
Thomas May,
|
|
|
2006
|
|
$
|
437,000
|
|
$
|
44,596
|
|
$
|
0
|
|
$
|
0
|
|
$
|
179,254
|
|
$
|
373,022
|
|
$
|
37,519
|
|
$
|
1,071,391
|
|
Chief
Executive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
A. Fehlman,
|
|
|
2006
|
|
$
|
160,950
|
|
$
|
0
|
|
$
|
2,602
|
|
$
|
1,565
|
|
$
|
28,566
|
|
$
|
0
|
|
$
|
62,011
|
|
$
|
255,694
|
|
Chief
Financial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
L. Bartlett,
|
|
|
2006
|
|
$
|
250,000
|
|
$
|
0
|
|
$
|
7,250
|
|
$
|
11,798
|
|
$
|
62,489
|
|
$
|
30,938
|
|
$
|
121,024
|
|
$
|
483,499
|
|
President
and Chief
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marty
D. Casteel,
|
|
|
2006
|
|
$
|
160,950
|
|
$
|
0
|
|
$
|
1,197
|
|
$
|
604
|
|
$
|
23,706
|
|
$
|
0
|
|
$
|
23,480
|
|
$
|
209,937
|
|
Executive
Vice
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administration
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tommie
Jones,
|
|
|
2006
|
|
$
|
114,753
|
|
$
|
0
|
|
$
|
0
|
|
$
|
725
|
|
$
|
19,282
|
|
$
|
0
|
|
$
|
18,990
|
|
$
|
153,750
|
|
Senior
Vice President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
&
H. R. Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[1]
This
category includes perquisites and other benefits for Mr.
May
contribution to the ESOP, $12,257, the Company's matching contribution
to the
'401(k)
Plan, $3,300, use of Company automobile, $4,507, life insurance premiums,
$3,648, country club dues, $2,977, and dividends paid on unvested restricted
shares, $10,830; for Mr.
Fehlman
contribution to the ESOP, $12,257, the Company's matching contribution
to the
'401(k)
Plan, $3,300, country club transfer fee and dues, $9,703, automobile allowance;
$6,000, relocation and moving expenses, $29,619, life insurance premiums,
$506,
and dividends paid on unvested restricted shares, $626; for Mr.
Bartlett
contribution to the ESOP, $12,257, country club initiation fee and dues,
$37,526, personal use of company automobile and automobile allowance, $1,710,
relocation and moving expenses, $65,353, life insurance premiums, $2,158
and
dividends paid on unvested restricted shares, $2,021; for Mr.
Casteel
contribution to the ESOP, $10,836, the Company's matching contribution
to the
'401(k)
Plan, $2,917, automobile allowance, $6,000, country club dues, $2,313,
medical
cost for annual physical, $159, life insurance premiums, $789, and dividends
paid on unvested restricted shares, $466; for Ms.
Jones
contribution to the ESOP, $8,436, the Company's matching contribution to
the
'401(k)
Plan, $2,271, automobile allowance, $6,000, country club dues, $1,485,
and life
insurance premiums, $798.
2006
GRANTS OF PLAN-BASED AWARDS
This
table
discloses information concerning each grant of an award made to a named
executive officer in 2006. This includes EIP (Base Incentive and Bonus
Incentive), stock option awards and restricted stock awards under the Simmons
First National Corporation Executive Stock Incentive Plan -2001 and Simmons
First National Corporation Executive Stock Incentive Plan-2006, each of which
are discussed in greater detail in this Proxy Statement under the caption,
"Compensation Discussion and Analysis." The threshold, target and maximum
columns reflect the range of estimated payouts under the EIP. In the 7th and
8th
columns, the number of shares of common stock underlying options granted in
the
fiscal year and corresponding per-share exercise prices are reported. In all
cases, the exercise price was equal to the closing market price of the common
stock on the day prior to date of grant. Finally, in the 9th column, the
aggregate FAS 123(R) value of all awards made in 2006 is reported; in contrast
to how the amounts in the Summary Compensation Table are presented, the amounts
reported here are the aggregate values without apportioning such amounts over
the service or vesting period.
GRANTS
OF PLAN-BASED AWARDS
|
Name
|
|
Grant
Date
|
|
Estimated
Future Payouts Under Non-Equity Incentive
|
|
All
Awards:
Number
of
Shares
of
Stock
or
Units
(#)
|
|
All
|
|
Exercise
or
Base
Price
of
Option
Awards
($/Sh)
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thresh-
old
|
|
Target
($)
|
|
Maxi
mum
|
|
|
|
|
|
|
|
|
|
J.
Thomas May
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exec.
Inc. Plan
|
|
|
01-01-06
|
|
$
|
125,500
|
|
$
|
251,000
|
|
$
|
251,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus
Inc. Plan
|
|
|
01-01-06
|
|
|
|
|
$
|
5,485 [b]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
A. Fehlman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exec.
Inc. Plan
|
|
|
01-01-06
|
|
$
|
20,000
|
|
$
|
40,000
|
|
$
|
40,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus
Inc. Plan
|
|
|
01-01-06
|
|
|
|
|
$
|
874 [b]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
Plan -2006
|
|
05-23-06
|
|
|
|
|
|
|
|
|
|
|
|
500 [c][d]
|
|
|
1,000
|
|
$
|
26.19
|
|
$
|
18,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
L. Bartlett
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exec.
Inc. Plan
|
|
|
01-01-06
|
|
$
|
43,750
|
|
$
|
87,500
|
|
$
|
87,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus
Inc. Plan
|
|
|
01-01-06
|
|
|
|
|
$
|
1,912
[b]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
Plan-2001
|
|
03-01-06
|
|
|
|
|
|
|
|
|
|
|
|
2,500
[d][e]
|
|
|
|
|
|
|
|
$
|
72,500
|
|
Option
Plan-2006
|
|
05-23-06
|
|
|
|
|
|
|
|
|
|
|
|
500 [c][e]
|
|
|
11,800
|
|
$
|
26.19
|
|
$
|
44,210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marty
D. Casteel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exec.
Inc. Plan
|
|
|
01-01-06
|
|
$
|
20,000
|
|
$
|
40,000
|
|
$
|
40,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
Plan-2006
|
|
05-23-06
|
|
|
|
|
|
|
|
|
|
|
|
500 [c][d]
|
|
|
1,000
|
|
$
|
26.19
|
|
$
|
18,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tommie
Jones
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exec.
Inc. Plan
|
|
|
01-01-06
|
|
$
|
13,500
|
|
$
|
27,000
|
|
$
|
27,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus
Inc. Plan
|
|
|
01-01-06
|
|
|
|
|
$
|
590 [b]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
Plan-2006
|
|
05-23-06
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
1,200
|
|
$
|
26.19
|
|
$
|
6,216
|
|
|
[a]
The
stock option awards in this column represent the following percentage
of
the total stock option grants, 57,700, made by the Company during
2006:
Mr. Fehlman 1.7%, Mr. Bartlett 20.5%, Mr. Casteel 1.7% and Ms.
Jones
2.1%.
|
|
[b]
These awards are under the Bonus Incentive component of the EIP.
The plan
allocates a discretionary amount of each affiliate bank's income
in excess
of the current year's targeted income, if any, into a bonus incentive
pool. For 2006, the allocated percentage was 10% and the total sum
in the
bonus pool was $35,720. The executive officers of each affiliate
bank
which exceeded targeted income and the executive officers of the
Company,
then share in the bonus pool based upon the incentive points allocated.
There is no minimum, target or maximum for the Bonus Incentive, since
the
allocation to the bonus pool can only be determined after year end
based
on whether one or more affiliate banks exceeds its targeted income
goal
for the fiscal year and the amount of the excess income.
|
|
[c]
These stock options have a ten year term and vest in five equal
installments on the first through the fifth anniversary of the grant
date.
|
|
[d]
This stock option has a ten year term and vests 10% upon grant, 10%
on the
first through third anniversary of the grant date and 60% on the
fourth
anniversary of the grant date.
|
|
[e]
Stock options have no express performance criteria other than continued
employment (with limited exceptions for termination of employment
due to
death, disability, retirement and change in control). However, options
have an implicit performance criterion because the options have no
value
to the executive unless and until the stock price exceeds the exercise
price.
|
OPTION
EXERCISES AND STOCK VESTED IN 2006
The
following table provides information concerning exercises of stock options,
stock appreciation rights and similar instruments, and vesting of stock,
including restricted stock and similar instruments, during 2006 for each
of the
named executive officers on an aggregated basis. The table reports the number
of
securities for which the options were exercised; the aggregate dollar value
realized upon exercise of options; the number of shares of stock that have
vested; and the aggregate dollar value realized upon vesting of stock.
OPTION
EXERCISES AND STOCK VESTED
|
|
|
Option
Awards
|
|
Stock
Awards
|
|
Name
|
|
Number
of
Shares
|
|
Value Realized
|
|
Number
of Shares
|
|
Value
|
|
|
|
|
|
|
|
|
|
|
|
J.
Thomas May
|
|
|
105,000
|
|
$
|
1,691,745
|
|
|
6,000
|
|
$
|
169,500
|
|
Robert
A. Fehlman
|
|
|
2,800
|
|
$
|
46,876
|
|
|
100
|
|
|
|
|
David
L. Bartlett
|
|
|
0
|
|
$
|
0
|
|
|
306
|
|
$
|
8,707
|
|
Marty
D. Casteel
|
|
|
200
|
|
$
|
3,560
|
|
|
46
|
|
$
|
1,197
|
|
Tommie
Jones
|
|
|
1,440
|
|
$
|
15,321
|
|
|
0
|
|
$
|
0
|
|
|
[a]
The Value Realized on Exercise is computed using the difference between
the closing market price upon the date of exercise and the option
price.
|
|
[b]
The Value Realized on Vesting is computed using the closing market
price
upon the date of vesting.
|
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END 2006
The
following table provides information concerning unexercised options and
restricted stock that has not vested for each named executive officer
outstanding as of the end of 2006. Each outstanding award is represented by
a
separate row which indicates the number of securities underlying the award,
including awards that have been transferred other than for value (if any).
For
option
awards, the table discloses the exercise price and the expiration date. For
stock awards, the table provides the total number of shares of stock that have
not vested and the aggregate market value of shares of stock that have not
vested. The market value of stock awards was computed by multiplying the closing
market price of the Company's stock at the end of 2006 by the number of
shares.
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
|
|
|
|
|
|
|
Option
Awards
|
Stock
Awards
|
Name |
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
(#)
|
|
Market
Value
of
Shares or
Units
of
Stock
That
Have
Not Stock
Vested
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J.
Thomas May
|
|
80,000
|
|
0
|
|
|
|
05-06-15
|
|
|
|
|
|
J.
Thomas May
|
|
15,000
|
|
0
|
|
|
|
05-06-11
|
|
|
|
|
|
J.
Thomas May
|
|
|
|
|
|
|
|
|
|
13,500[a]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
A. Fehlman
|
|
12,600
|
|
0
|
|
|
|
05-06-11
|
|
|
|
|
|
Robert
A. Fehlman
|
|
3,000
|
|
0
|
|
|
|
07-25-14
|
|
|
|
|
|
Robert
A. Fehlman
|
|
376
|
|
564
|
|
|
|
05-22-15
|
|
|
|
|
|
Robert
A. Fehlman
|
|
0
|
|
1,000
|
|
|
|
05-21-16
|
|
|
|
|
|
Robert
A. Fehlman
|
|
|
|
|
|
|
|
|
|
300
[b]
|
|
|
|
Robert
A. Fehlman
|
|
|
|
|
|
|
|
|
|
500
[c]
|
|
$15,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
L. Bartlett
|
|
2,000
|
|
0
|
|
|
|
05-06-11
|
|
|
|
|
|
David
L. Bartlett
|
|
2,400
|
|
|
|
|
|
|
|
|
|
|
|
David
L. Bartlett
|
|
1,220
|
|
|
|
|
|
05-22-15
|
|
|
|
|
|
David
L. Bartlett
|
|
0
|
|
10,000
|
|
|
|
05-21-16
|
|
|
|
|
|
David
L. Bartlett
|
|
0
|
|
1,800
|
|
|
|
05-21-16
|
|
|
|
|
|
David
L. Bartlett
|
|
|
|
|
|
|
|
|
|
224
[b]
|
|
|
|
David
L. Bartlett
|
|
|
|
|
|
|
|
|
|
2,250
[d]
|
|
|
|
David
L. Bartlett
|
|
|
|
|
|
|
|
|
|
500
[c]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marty
D. Casteel
|
|
600
|
|
0
|
|
|
|
07-27-10
|
|
|
|
|
|
Marty
D. Casteel
|
|
6,000
|
|
|
|
$12.1250
|
|
|
|
|
|
|
|
Marty
D. Casteel
|
|
2,000
|
|
|
|
$23.7800
|
|
|
|
|
|
|
|
Marty
D. Casteel
|
|
920
|
|
|
|
|
|
|
|
|
|
|
|
Marty
D. Casteel
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
Marty
D. Casteel
|
|
|
|
|
|
|
|
|
|
184
[b]
|
|
|
|
Marty
D. Casteel
|
|
|
|
|
|
|
|
|
|
500
[c]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tommie
Jones
|
|
120
|
|
0
|
|
|
|
03-24-08
|
|
|
|
|
|
Tommie
Jones
|
|
400
|
|
0
|
|
|
|
12-27-08
|
|
|
|
|
|
Tommie
Jones
|
|
9,000
|
|
0
|
|
|
|
05-06-11
|
|
|
|
|
|
Tommie
Jones
|
|
2,000
|
|
0
|
|
|
|
07-25-14
|
|
|
|
|
|
Tommie
Jones
|
|
1,220
|
|
0
|
|
|
|
05-22-15
|
|
|
|
|
|
Tommie
Jones
|
|
0
|
|
1,200
|
|
|
|
05-21-16
|
|
|
|
|
|
|
[a]
These restricted shares vest in annual installments of 6,000 shares
on May
7 in each of the years 2007-2008 and the remaining 1,500 restricted
shares
vest on May 7, 2009.
|
|
[b]
These restricted shares vest in annual installments of 100 shares
on May
23 in each of the years 2007-2009.
|
|
[c]
These restricted shares vest in annual installments of 100 shares
on May
22 in each of the years 2007-2011.
|
|
[d]
These restricted shares vest in annual installments of 250 shares
on March
1 in each of the years 2007-2009 and the balance, 1,500 shares,
vest on
March 1, 2010.
|
2006
PENSION BENEFITS TABLE
The
following table provides information with respect to each plan that provides
for
payments or other benefits at, following, or in connection with retirement.
This
includes tax-qualified defined benefit plans and supplemental executive
retirement plans, but does not include defined contribution plans (whether
tax
qualified or not). The May Plan and the Bartlett Plan are supplemental executive
retirement plans.
The
Present Value of the Accumulated Benefit reflects the actuarial present value
of
the named executive officer’s accumulated benefit under the plan, computed as of
December 31, 2006. In making such calculation, it was assumed that the
retirement age will be the normal retirement age as defined in the plan,
or if
not so defined, the earliest time at which a participant may retire under
the
plan without any benefit reduction due to age.
May
Plan
The
May
Plan is designed to work with the other retirement plans of the Company,
on an
aggregated basis with Social Security benefits, to provide a targeted level
of
benefits for Mr. May, the only participant. The May Plan requires Mr. May
to
remain in the employ of the Company until he attains age 65 to be eligible
to
receive benefits under the plan, provided that in the event of a change in
control the benefits are fully vested at age 60. The May Plan provides a
benefit
upon normal retirement at age 65, or upon death or disability prior to age
65, a
monthly sum equal to one twelfth (1/12) of fifty percent (50%) of the final
average compensation (the average compensation paid to him by the Company
for
the most recent five consecutive calendar years), less the accrued monthly
benefit to such individual under the deferred annuity received upon the
termination of the Company's pension plan. The benefit payments begin on
the
first day of the seventh month following retirement, death or disability
and
continue for 120 consecutive months or until the individual's death, whichever
shall occur later. Compensation for purposes of the May Plan includes salary,
bonus and short term incentive compensation programs (EIP), but excludes
equity
compensation plans (stock options and restricted shares) and long term incentive
compensation programs (LTEIP).
Bartlett
Plan
The
Company assumed the Bartlett Plan upon its acquisition of Alliance
Bancorporation, Inc. in 2004. The Bartlett Plan provides Mr. Bartlett a benefit
upon normal retirement at age 65, or upon disability prior to age 65, in
the
amount of $125,000 per year payable monthly. In the event of Mr. Bartlett's
death prior to January 1, 2023, a variable death benefit death is payable
pursuant to the plan's death benefit schedule. The death benefit ranges from
a
low of $51,911 for death in 2022 to a high of $854,132 for death in 2013,
with a
benefit payable of $298,616 for death in 2006. Mr. Bartlett is fully vested
in
both the retirement and death benefits under the plan. The benefits under
the
plan are designed in conjunction with a life insurance policy acquired at
the
time the plan was established, barring extraordinary circumstances the earnings
of the policy and the proceeds of the policy upon the death of Mr. Bartlett
should be sufficient to fully fund the obligations of the Company under the
Bartlett Plan.
PENSION
BENEFITS
|
Name
|
Plan
|
Number
|
Present
|
|
Payments
During
Last
Fiscal
Year
($)
|
|
|
|
|
|
|
J.
Thomas May
|
May
Plan
|
[a]
|
$1,631,410
|
|
$
0
|
Robert
A. Fehlman
|
|
|
$
0
|
|
$
0
|
David
Bartlett
|
Bartlett
Plan
|
[a]
|
$
585,379
|
|
$
0
|
Marty
D. Casteel
|
|
|
$
0
|
|
$
0
|
Tommie
Jones
|
|
|
$ 0
|
|
$
0
|
|
[a]
The benefits under the May Plan and the Bartlett Plan are not dependent
upon the credited years of service. Except for disability, death
or a
change in control, continuous service until the normal retirement
age (65)
is required under the May Plan. Mr. Bartlett is fully vested in the
maximum benefit under the Bartlett.
|
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The
following table summarizes the estimated payments to be made under each
contract, agreement, plan or arrangement which provides for payments to a
named
executive officer at, following, or in connection with any termination of
employment including by resignation, retirement, or a constructive termination
of a named executive officer, or a change in control or a change in the named
executive officer's responsibilities. However, in accordance with SEC
regulations, no amounts to be provided to a named executive officer under
any
arrangement which does not discriminate in scope, terms, or operation in
favor
of the executive officers and which are available generally to all salaried
employees are reported. Also, the following table does not repeat information
disclosed above under the pension benefits table, or the outstanding equity
awards at fiscal year-end table, except to the extent that the amount payable
to
the named executive officer would be enhanced by the termination
event.
For
the
purpose of the quantitative disclosure in the following table, and in accordance
with SEC regulations, the termination is assumed to have taken place on the
last
business day of the Company's most recently completed fiscal year, and that
the
price per share of the common stock is the closing market price as of that
date,
$31.40.
Severance.
None of the named executive officers presently has an employment agreement
which
guarantees them employment for any period of time. Therefore, any
post-termination payments of salary or severance to any named executive officer
would be provided only under the Company's broad-based severance plan in
the
event of a reduction-in-force or other termination by the Company without
cause
or pursuant to a CIC Agreement.
Under
the
Company's Severance Plan, which applies to all employees, the named executive
officers would receive base salary for a stated term after severance based
upon
the executive's length of service to the Company as shown below:
Length
of Service
|
Term
of Benefit
|
Less
than 2 years
|
2
weeks
|
2-3
years
|
3
weeks
|
4-6
years
|
5
weeks
|
7-10
years
|
8
weeks
|
11-20
years
|
12
weeks
|
21
years or more
|
16
weeks
|
Such
amounts are paid in anticipation of unemployment, and not as a reward
for past
service. Payment is triggered upon elimination of a position or function,
transition, merger or acquisition. Severance is paid twice monthly in
the same
manner as regular payroll.
The
Company has entered into Change in Control Agreements ("CIC Agreements")
with
certain executives of the Company and the subsidiary banks, including
each of
the named executive officers, pursuant to which the Company would pay
certain
salary benefits. The Company would make such payments only upon a change
in
control, and if the Company terminates an executive without "Cause" or
the
executive resigns within six months after a "Trigger Event." Additionally,
in
the case of the CIC Agreement for Mr. May, such payments will also be
due, if
Mr. May, within twelve months after a change in control, requests his
payments
commence. The Company will pay an amount up to two times (one and one
half times
in the case of Ms. Jones) the sum of (1) highest annual base salary for
the
previous twelve months and (2) the greater of the projected target annual
incentive to be paid under the EIP for the current year, or the average
EIP
bonus paid to the executive over the preceding two years. The termination
compensation is payable within 30 business days following the termination
and,
at the election of the executive, may be payable in either cash or common
stock
of the Company. In addition, upon such an event, all outstanding stock
options
vest immediately and all restrictions on restricted stock
lapse.
The
CIC
Agreements will also provide the executive with continuing coverage under
the
Company's medical, dental, life insurance and long term disability plans
for
three years following the change in control date. Additionally, if the executive
is over 55 years of age, the CIC Agreement allows the executive at his election
to continue medical, dental and life insurance coverage after the initial
three
period, at the executive's cost, if the executive is not then eligible to
be
covered by a similar program maintained by the current employer of the executive
or the executive's spouse. Finally, the CIC Agreements, the case of Messrs.
May,
Fehlman, Bartlett and Casteel, require the Company to make a tax "gross-up"
payment in the event any of the foregoing benefits subject the executive
to the
excise tax on excess parachute payments as determined under Sections 280G
and
4999 of the Internal Revenue Code. Please also refer to the discussion of
the
CIC Agreements above at "Compensation Discussion and Analysis."
Accelerated
Vesting of Incentives. The Company has provided and continues to provide
equity
and non-equity incentives to the named executive officers through the Company's
Executive Stock Incentive Plans ("Option Plans"), the Executive Incentive
Plan
("EIP") and the Long Term Executive Incentive Plan ("LTEIP"). Please also
refer
to the discussion of equity and non-equity incentives above at "Compensation
Discussion and Analysis."
Equity
Incentives - Stock Options. Unvested stock options vests upon the named
executive officer's death or disability or upon a change in control. Further,
unvested stock options vest upon the retirement of a named executive officer
after age 65 or after age 62 with ten years of service. Upon any other
termination, the executive forfeits his unvested stock options, unless the
Board
of Directors takes specific action to vest some or all of the unvested options.
The value of accelerated options was calculated by multiplying the number
of
shares times the difference between the closing price of the common stock
on the
last business day of 2006 and the exercise price of the options. Please refer
to
the section "Compensation Discussion and Analysis" for more information about
stock options.
Equity
Incentives - Restricted Stock. Unvested restricted stock vest upon the named
executive officer's death or disability or upon a change in control. Further,
unvested restricted options vest upon the retirement of a named executive
officer after age 65 or after age 62 with ten years of service. Upon any
other
termination, the executive forfeits his unvested restricted stock, unless
the
Board of Directors takes specific action to vest some or all of the unvested
stock. Accordingly, the table below reflects the accelerated vesting of this
stock upon the named executive officer's qualified retirement, death or
disability, or upon a change in control. An executive forfeits all undistributed
shares upon the termination of the executive’s employment for all other
reasons.
Non-Equity
Incentives - EIP. The EIP does not provide for an acceleration of entitlement
or
a satisfaction of performance measures upon a change in control. Therefore
the
plan could be terminated or modified following a change in control and the
participants would not receive any incentive compensation under the EIP for
the
year in which the change in control occurred. For purposes of the disclosure
in
the table below, SEC regulations require that such change in control be assumed
to occur on the last day of the Company's most recently completed fiscal
year.
That date coincides with the last date of the performance period under EIP
for
2006. As a result of such assumption, the Company could make a full payment
under the terms of EIP based on the achievement of EIP goals for the year
ending
December 31, 2006, and such amounts would not be increased or enhanced as
the
result the executive’s termination or the change in control. Such amounts are
reported in the Summary Compensation Table.
Non-Equity
Incentives - LTEIP. Upon a change in control, all of the performance measures
under the LTEIP are deemed to be satisfied and the full amount in the bonus
pool, $350,000, would be vested in Mr. May. However, the payment of the Bonus
is
not accelerated and would still be due on February 15, 2008. For purposes
of the
disclosure in the table below, SEC regulations require such change in control
be
assumed to occur on the last day of the most recently completed fiscal year.
That date coincides with the end of year 2 of the LTEIP's three year term.
As a
result of such assumption, Mr. May would become fully vested in the LTEIP
bonus
pool in the amount of $350,000.
Retirement
Plans - May Plan. Upon a change in control, Mr. May becomes fully vested
in the
benefits under the May Plan. Payment of the benefits would commence on
the first
day of the seventh calendar month following his termination of services
to the
Company. In the absence of a change in control, upon the death or disability
of
Mr. May or his retirement at or after age 65, his benefits under the May
Plan
become fully vested and are payable commencing on the first day of the
seventh
month after such event. In the event of the termination of Mr. May's employment
under any other conditions prior to his attaining age 65, all benefits
under the
May Plan are forfeited, For purposes of the disclosure in the table below,
SEC
regulations require that such change in control be assumed to occur on
the last
day of the most recently completed fiscal year. As a result of such assumption,
Mr. May would become fully vested in the benefits under the May
Plan.
Retirement
Plans - Bartlett Plan. Mr. Bartlett is currently fully vested in the maximum
benefit payable under the Bartlett Plan. His entitlement to the benefits
under
the plan is not affected by his death, disability, termination of service
or a
change in control of the Company. Payment of the benefits would commence
on the
first day of the seventh calendar month following his termination of services
to
the Company. For purposes of the disclosure in the table below, SEC regulations
require that such change in control be assumed to occur on the last day of
the
most recently completed fiscal year. Since Mr. Bartlett is already fully
vested
in his benefit under the Bartlett Plan, the assumed change in control would
not
increase or otherwise enhance the benefit payable to Mr. Bartlett under the
plan.
Miscellaneous
Benefits. Under the CIC Agreements, which are discussed above at "Compensation
Discussion and Analysis," the Company is obligated to pay certain other
benefits. This includes continuation of medical, dental, life and long term
disability insurance coverage for three years from the date of the change
in
control and certain tax gross-up payments. The conditions to the Company's
obligations under the CIC Agreements are discussed above. Except for these
benefits payable under the CIC Agreements, the Company has no obligation
to
continue any other perquisites after a named executive officer’s employment
terminates.
Executive
Benefits and
Payments
upon Termination
|
|
Voluntary
Termination
|
|
Involuntary
Not
for Cause
Termination
|
|
For
Cause
Termination
|
|
Involuntary
or
Trigger
Event
Termination
(CIC)
|
|
J.
Thomas May
|
|
|
|
|
|
|
|
|
|
Severance
|
|
$
|
0
|
|
$
|
100,846
[a]
|
|
$
|
0
|
|
$
|
1,376,000
[b]
|
|
Accelerated
Vesting of Incentives [c]
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
773,900 [d]
|
|
Retirement
Plan
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
1,803,063
[e]
|
|
Other
Benefits and Tax Gross-Up [f]
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
1,420,787
[g]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
A. Fehlman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
$
|
0
|
|
$
|
37,142 [a]
|
|
$
|
0
|
|
$
|
401,900 [b]
|
|
Accelerated
Vesting of Incentives [c]
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
36,320 [h]
|
|
Retirement
Plans
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
Other
Benefits and Tax Gross-Up [f]
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
165,827 [i]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
L. Bartlett
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
$
|
0
|
|
$
|
38,462 [a]
|
|
$
|
0
|
|
$
|
675,000 [b]
|
|
Accelerated
Vesting of Incentives [c]
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
150,202 [j]
|
|
Retirement
Plans [k]
|
|
$
|
585,379
|
|
$
|
585,379
|
|
$
|
0
|
|
$
|
585,379
|
|
Other
Benefits [l]
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
488 [m]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marty
D. Casteel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
$
|
0
|
|
$
|
37,142 [a]
|
|
$
|
0
|
|
$
|
401,900 [b]
|
|
Accelerated
Vesting of Incentives [c]
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
25,646 [n]
|
|
Retirement
Plans
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
Other
Benefits and Tax Gross-Up [f]
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
159,802 [o]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tommie
K. Jones
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
$
|
0
|
|
$
|
35,309 [a]
|
|
$
|
0
|
|
$
|
212,630 [b]
|
|
Accelerated
Vesting of Incentives [c]
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
5,002 [p]
|
|
Retirement
Plans
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
Other
Benefits [l]
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
277
[q]
|
|
[a]
The
Company's severance plan grants severance pay in weeks of base salary based
on
years of service to the Company. Based upon service, Messrs. May, Fehlman
and
Casteel are entitled to 12 weeks of base salary, Mr. Bartlett is entitled
to 8
weeks of base salary and Ms. Jones is entitled to 16 weeks base salary. Payments
under the severance plan for the named executive officer is not enhanced
above
what any other employee would be due as a result of the termination occurrence.
|
[b]
Under the Change in Control (CIC) Agreements between certain named
executive officers and the Company, upon the occurrence of a CIC,
severance will consist of either two times the sum of the following
items:
(1) the highest annual base salary for the previous twelve months
and (2)
the greater of the projected target annual incentive to be paid
under the
EIP for the current year, or the average EIP bonus paid to the
executive
over the preceding two years.
|
|
[c]
The payment due the named executive officer due to certain termination
triggers, related to the Company's incentive programs (EIP, LTEIP,
Stock
Options and Restricted Stock) is made based on the specific terms
and
conditions associated with each plan.
|
|
[d]
Due to the assumed separation, Mr. May is entitled to an incremental
value
of $773,900. This value represents payments under the LTEIP as
of December
31, 2006 of $350,000 and gains realized of $423,900 for unvested
restricted stock as of December 31, 2006.
|
|
[e]
Mr. May's benefit under the May Plan becomes fully vested upon
a change in
control and the monthly benefit would commence on the seventh month
after
his termination of service. The information related to the May
Plan has
been previously disclosed in the Pension Benefit Table. The value
disclosed is the present value of Mr. May's benefit.
|
|
[f]
The named executive officer is not receiving any enhanced payments
regarding their Other Benefits as a result of the termination trigger.
The
amounts related to Other Benefits include the costs associated
with
continued participation in the Company's health and welfare benefit
plans
and Tax Gross-Ups under applicable CIC agreements.
|
|
[g]
Upon a CIC, Mr. May would receive a monthly benefit of $510 for
the next
36 months for purposes of continued health and welfare benefits,
and a tax
gross-up payment of $1,420,165.
|
|
[h]
Due to the assumed separation, Mr. Fehlman is entitled to an incremental
value of $36,320. This value represents gains realized of $28,260
for
unvested restricted stock and $8,060 for unvested stock options,
both as
of December 31, 2006.
|
|
[i]
Upon a CIC, Mr. Fehlman would receive a monthly benefit of $477
for the
next 36 months for purposes of continued health and welfare benefits,
and
a tax gross-up payment of $165,271.
|
|
[j]
Due to the assumed separation, Mr. Bartlett is entitled to an incremental
value of $150,202. This value represents gains realized of $93,384
for
unvested restricted stock and $56,818 for unvested stock options,
both as
of December 31, 2006.
|
|
[k]
Mr. Bartlett is not receiving any enhanced payments regarding the
Bartlett
Plan as a result of the termination trigger. Mr. Bartlett was fully
vested
in the maximum benefit under the plan at all times during 2006.
The
amounts related to the retirement plans have been previously disclosed
in
the Pension Benefit Tables.
|
|
[l]
The named executive officer is not receiving any enhanced payments
regarding their Other Benefits as a result of the termination trigger.
The
amounts related to Other Benefits include the costs associated
with
continued participation in the Company's health and welfare benefit
plans
under the applicable CIC agreement.
|
|
[m]
Upon a CIC, Mr. Bartlett would receive a monthly benefit of $488
for the
next 36 months for purposes of continued health and welfare
benefits.
|
|
[n]
Due to the assumed separation, Mr. Casteel is entitled to an incremental
value of $25,646. This value represents gains realized of $21,478
for
unvested restricted stock and $4,168 for unvested stock options,
both as
of December 31, 2006.
|
|
[o]
Upon a CIC, Mr. Casteel would receive a monthly benefit of $477
for the
next 36 months for purposes of continued health and welfare benefits,
and
a tax gross-up payment of $159,325.
|
|
[p]
Due to the assumed separation, Ms. Jones is entitled to an incremental
value of $5,002. This value represents gains realized for unvested
stock
options, as of December 31, 2006.
|
|
[q]
Upon a CIC, Ms. Jones would receive a monthly benefit of $277 for
the next
36 months for purposes of continued health and welfare benefits.
|
DIRECTOR
COMPENSATION
The
following table provides information with respect to the compensation of
Directors of the Company during 2006, the most recently completed fiscal year
All
Directors receive an annual retainer of $10,000, except the lead director,
Harry
L. Ryburn, who receives an annual retainer of $12,000. All Directors receive
$750 for each meeting of the Board attended. In addition, each Director who
serves as a committee chairman receives $300 for each committee meeting attended
and other Directors receive $200 for each committee meeting attended.
The
Company maintains a voluntary deferred compensation plan in which non-employee
directors may defer receipt of any part or all of their respective directors
fees, including retainer fees, meeting fees and committee fees. The director
must elect to participate in the plan prior to the calendar year for which
the
deferral will be applicable. Upon election a director must elect the form of
payment (lump sum or annual installments over two to five years) and the date
of
payment (attainment of a specified age or cessation of serving as a director
of
the Company). The sums deferred under the plan are credited to an account for
the director along with earnings on the deferred sum at an interest rate equal
to the yield on the ten year U. S. Treasury Bond, computed
quarterly.
The
Company adopted a stock option plan for its outside directors in 2006. Grants
of
option for 1,000 shares were made to each director, except the lead director,
who received a grant for 2,000 shares. The grants were made on May 22, 2006
at
$26.19. These options are immediately exercisable and expire on May 21, 2016,
subject to earlier termination upon the director's cessation of active service
on the Board or the directors' death. In accordance with SEC regulations, grants
of stock options are valued at the grant date fair value computed in accordance
with Statement of Financial Accounting Standards No. 123 (Revised), "Share-Based
Payment" ("FAS 123(R)"). The Company discloses such expense ratably over the
vesting period, however, since the options were fully vested upon grant, all
of
the expense related to the options are disclosed in the table.
Each
Director under the age of 70 is provided coverage under the Company's group
term
life insurance program. Directors up to age 65 receive a death benefit of
$50,000 and directors over 65 but less than 70 years of age receive a death
benefit of $25,000. The policy triples the death benefit in the case of
accidental death. In addition, each Director is reimbursed for out of pocket
expenses, including travel.
DIRECTOR
COMPENSATION
|
|
Name
|
|
Fees
Earned or
Paid
in Cash
($)
|
|
Option
Awards
($)[a]
|
|
All
Other
Compensation
[b]
($)
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William
E. Clark [c]
|
|
$
|
18,350
|
|
$
|
4,720
|
|
$
|
2,998
|
|
$
|
26,068
|
|
Steven
A. Cosse'
|
|
$
|
17,300
|
|
$
|
4,720
|
|
$
|
186
|
|
$
|
22,206
|
|
George
A. Makris, Jr. [d]
|
|
$
|
21,600
|
|
$
|
4,720
|
|
$
|
3,481
|
|
$
|
29,801
|
|
J.
Thomas May [e]
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
W.
Scott McGeorge
|
|
$
|
19,700
|
|
$
|
4,720
|
|
$
|
186
|
|
$
|
24,606
|
|
Harry
L. Ryburn
|
|
$
|
33,250
|
|
$
|
9,440
|
|
$
|
31
|
|
$
|
42,271
|
|
Robert
L. Shoptaw
|
|
$
|
5,600
|
|
$
|
0
|
|
$
|
47
|
|
$
|
5,647
|
|
Henry
F. Trotter, Jr.
|
|
$
|
17,250
|
|
$
|
4,720
|
|
$
|
186
|
|
$
|
22,156
|
|
|
[a]
Based on closing market price of $26.19 on the day prior to the grant
date
(May 21, 2006). The ratable portion of the value of grants made in
2006
and prior years, calculated in accordance with FAS 123(R), to the
extent
the vesting period fell in 2006 are reported in this column. Please
refer
to footnote 11 to the Company's financial statements for a discussion
of
the assumptions related to the calculation of such
value.
|
|
[b]
Amounts in this column reflect life insurance premiums for the directors
and in the case of Messrs. Clark and Makris earnings on their deferred
director's fees under the directors deferred compensation plan in
the
amounts of $2,812 and $3,295,
respectively.
|
|
[c]
Mr. Clark has elected to participate in the director's deferred
compensation plan and deferred $18,250 into the plan for
2006.
|
|
[d]
Mr. Makris has elected to participate in the director's deferred
compensation plan and deferred $21,500 into the plan for
2006.
|
|
[e]
J. Thomas May, the Chief Executive Officer of the Company, does not
receive director's fees or otherwise participate in the director
compensation programs set forth herein. His compensation is disclosed
in
the preceding discussion concerning Executive Compensation.
|
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Securities and Exchange Act of 1934 and the regulations issued
thereunder require directors and certain officers of any company registered
under that Act to file statements on SEC Forms 3, 4 & 5 with the Securities
and Exchange Commission, showing their beneficial ownership in securities
issued
by such company. Based upon a review of such statements by the directors
and
officers of the Company for the preceding fiscal year, provided to the Company
by such persons, the Company has identified that Mr. J. Thomas May was late
in
filing a Form 4 related to his designation as successor trustee of the E.T.
May
Trust, upon the death of his father, E. T. May.
AUDIT
& SECURITY COMMITTEE
During
2005, the Audit & Security Committee was composed of George A. Makris, Jr.,
William E. Clark, W. Scott McGeorge and Harry L. Ryburn. Each of the listed
committee members are independent as defined in Rule 4200 of the NASDAQ listing
requirements. This committee provides assistance to the Board in fulfilling
its
responsibilities concerning accounting and reporting practices, by regularly
reviewing the adequacy of the internal and external auditors, the disclosure
of
the financial affairs of the Company and its subsidiaries, the control systems
of management and internal accounting controls. The Audit & Security
Committee has adopted a charter, which is available for review in the Investor
Relations portion of the Company's web site: www.simmonsfirst.com. This
Committee met 12 times in 2006. Attached as Annex A to this Proxy Statement
is
the Audit & Security Committee Charter adopted by the Board of Directors
establishing the duties and responsibilities of this committee.
The
Board
has determined that none of the members of the Audit & Security Committee
meet the definition of "audit committee financial expert" as defined
in Item
407(d)(5) of Regulation S-K promulgated by the Securities and Exchange
Commission. The Audit & Security Committee receives directly or has access
to extensive information from reviews and examinations by the Company's
internal
auditor, independent auditor and the various banking regulatory agencies
having
jurisdiction over the Company and its subsidiaries. The Company has not
retained
an audit committee financial expert to serve on the Board or the Audit
&
Security Committee because the Board believes that the present members
of the
committee have sufficient knowledge and experience in financial affairs
to
effectively perform their duties.
The
Company is required to obtain pre-approval by the Audit & Security Committee
for all audit and permissible non-audit services obtained from the independent
auditors. All services obtained from the independent auditors during
2006,
whether audit services or permitted non-audit services, were pre-approved
by the
Audit & Security Committee. The Audit & Security Committee has not
adopted any additional pre-approval policies and procedures, but consistent
with
its charter, it may do so in the future.
The
Audit
& Security Committee issued the following report concerning its activities
related to the Company for the previous year:
The
Audit
& Security Committee has reviewed and discussed the audited financial
statements of the Company for the year ended December 31, 2006 with
management.
The
Audit
& Security Committee has discussed with BKD, LLP ("BKD"), its independent
auditors, the matters required to be discussed by the statement on Auditing
Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1.
AU section
380), as adopted by the Public Company Accounting Oversight Board in
Rule
3200T;
The
Audit
& Security Committee has received the written disclosures and the letter
from independent accountants required by Independence Standards Board
Standard
No. 1 (Independence Standards Board Standard No. 1, Independence Discussions
with Audit Committees), as adopted by Public Company Accounting Oversight
Board
in Rule 3600T and has discussed with BKD its independence.
Based
upon
the foregoing review and discussions, the Audit & Security Committee
recommended to the Board of Directors that the audited financial statements
be
included in the Company's Annual Report on Form 10-K for the last fiscal
year
for filing with the Securities and Exchange Commission.
In
its
analysis of the independence of BKD, the Audit & Security Committee
considered whether the non-audit related professional services rendered
by BKD
to the Company, were compatible with maintaining the principal accountant's
independence.
AUDIT
& SECURITY COMMITTEE
George
A. Makris, Jr.
|
William
E. Clark
|
W.
Scott McGeorge
|
Harry
L. Ryburn
|
INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
BKD,
LLP
("BKD") served as the Company's auditors in 2006 and has been selected to serve
in 2007. Representatives of BKD are expected to be present at the shareholders
meeting with the opportunity to make a statement if they so desire and are
expected to be available to respond to appropriate questions.
Audit
Fees
The
aggregate fees billed to the Company for professional services rendered by
BKD
for the audit of the Company's annual financial statements for the year ended
December 31, 2006 and the reviews of the financial statements included in
the
Company's Form 10-Q's for 2006 were $358,979. The aggregate fees billed to
the
Company by BKD for such services in 2005 were $334,805.
Audit
Related Fees
The
aggregate fees billed to the Company for professional services rendered by
BKD
for the audit related fees during 2006 were $50,550. The aggregate fees billed
to the Company by BKD for such services in 2005 was $42,250. These services
are
primarily for the audits of employee benefit plans for which SFTC is a fiduciary
and for the audit of the common trust funds maintained by SFTC.
Tax
Fees
The
aggregate fees billed to the Company for professional services rendered by
BKD
for tax services and preparation of tax returns during 2006 were $36,066.
The
aggregate fees billed to the Company by BKD for such services in 2005 was
$27,439.
All
Other Fees
There
were
no fees billed to the Company by BKD for services other than those set forth
above.
FINANCIAL
STATEMENTS
A
copy of
the annual report of the Company for 2006 on Form 10-K required to be filed
with
the Securities and Exchange Commission, including audited financial statements,
is enclosed herewith. Such report and financial statements contained therein
are
not incorporated into this Proxy Statement and are not considered a part
of the
proxy soliciting materials, since they are not deemed material for the exercise
of prudent judgment in regard to the matters to be acted upon at the
meeting.
PROPOSAL
TO INCREASE THE NUMBER OF AUTHORIZED SHARES
OF
THE CLASS A COMMON STOCK OF THE CORPORATION
The
Company's board of directors has determined that it is advisable, and has
voted
unanimously, to recommend the adoption of an amendment to the Articles of
Incorporation to increase the number of authorized shares of Class A Common
Stock ("Common Stock") of the Company from 30,000,000 to 60,000,000 shares.
This
proposal is to authorize additional shares of the Common Stock, the Company's
only outstanding class of stock. There are no preemptive rights with respect
to
the shares of Common Stock.
The
principal reason for the proposed amendment to increase the number of authorized
shares of the Common Stock is to provide sufficient shares to enable the
Company
to issue additional shares, if needed, to effect future stock dividends or
to
engage in acquisitive transactions. As of February 2, 2007, the Company has
14,193,644 shares of Common Stock issued and outstanding. In addition, the
Company has set aside the number of shares to the indicated employee benefit
plans which have not been issued:
|
Employee Benefit Plan
|
Shares
|
|
Executive
Stock Incentive Plan
|
59,000
|
|
Executive
Stock Incentive Plan - 2001
|
441,420
|
|
Executive
Stock Incentive Plan - 2006
|
250,000
|
|
Outside
Director Stock Incentive Plan - 2006
|
50,000
|
|
2006
Employee Stock Purchase Plan
|
300,000
|
|
Total
shares set aside
|
1,100,420
|
Management
believes the remaining number of authorized but unissued shares may not be
sufficient for future needs of the Company. If the proposed amendment is
approved by the shareholders, the additional authorized shares of Common
Stock
will be available for general corporate purposes, including public offerings,
stock dividends and acquisitions. The Company presently has no specific plan
for
the issuance or use of the shares sought to be authorized by this
proposal.
The
proposed amendment could, under certain circumstances, have an anti-takeover
effect on the Company. The availability for issuance of the additional
authorized shares of common stock could deter a potential acquirer from pursuing
a takeover transaction, due to the possibility of the issuance of additional
shares increasing the cost of any proposed takeover transaction. Management
and
the Board are not aware of any proposed takeover attempt of the Company and
have
no present intention of utilizing the additional authorized shares as an
anti-takeover measure.
The
Board
of Directors proposes to amend the Articles of Incorporation as set forth
above
and to restate the Articles of Incorporation of the Company with such amendment.
If authority to amend and restate the Articles is granted by the shareholders
at
the Shareholders' Meeting, management intends to file the Amended and Restated
Articles of Incorporation immediately following such approval, and the Amended
and Restated Articles of Incorporation will become effective upon filing
with
the Arkansas Secretary of State.
ADOPTION
OF THIS PROPOSAL REQUIRES THE VOTES CAST IN FAVOR OF THE PROPOSAL EXCEED
THE
VOTES CAST OPPOSING THE PROPOSAL AT A MEETING AT WHICH A MAJORITY OF THE
SHARES
OF COMMON STOCK OF THE COMPANY ARE PRESENT, IN PERSON OR BY PROXY. THE BOARD
OF
DIRECTORS BELIEVES THAT THIS PROPOSAL IS IN THE BEST INTEREST OF ALL
SHAREHOLDERS AND RECOMMENDS THAT SHAREHOLDERS VOTE FOR
ITS
ADOPTION. UNLESS INSTRUCTED TO ABSTAIN OR VOTE AGAINST THE PROPOSAL OR AUTHORITY
TO VOTE IS WITHHELD, THE PERSONS NAMED IN THE ACCOMPANYING FORM OF PROXY
WILL
VOTE THE SHARES REPRESENTED THEREBY IN FAVOR OF APPROVAL OF THE PROPOSED
AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION.
PROPOSALS
FOR 2008 ANNUAL MEETING
Shareholders
who intend to have a proposal considered for inclusion in the Company's proxy
materials for presentation at the 2008 Annual Meeting of Shareholders must
submit the proposal to the Company no later than November 9, 2007. Shareholders
who intend to present a proposal at the 2008 Annual Meeting of Shareholders
without inclusion of such proposal in the Company's proxy materials are required
to provide notice of such proposal to the Company no later than January 23,
2008. The Company reserves the right to reject, rule out of order, or take
other
appropriate action with respect to any proposal that does not comply with
these
and other applicable requirements.
OTHER
MATTERS
Management
knows of no other matters to be brought before this annual meeting. However,
if
other matters should properly come before the meeting, it is the intention
of
the persons named in the proxy to vote such proxy in accordance with their
best
judgment on such matters.
BY
ORDER OF THE BOARD OF DIRECTORS:
John
L.
Rush, Secretary
Pine
Bluff, Arkansas
March
9,
2007
ANNEX
A
SIMMONS
FIRST NATIONAL CORPORATION
AUDIT
AND SECURITY COMMITTEE CHARTER
JANUARY
2007
SIMMONS
FIRST NATIONAL CORPORATION
AUDIT
AND SECURITY COMMITTEE CHARTER
This
Charter identifies the authority, responsibility, membership requirements,
purpose and objectives of the Audit and Security Committee of Simmons First
National Corporation.
The
Audit
and Security Committee is appointed by the Board to assist the Board in
monitoring (1) the integrity and accuracy of financial reporting, (2) compliance
with legal and regulatory requirements, (3) the adequacy of internal controls
and (4) the independence and performance of internal and external auditors.
The
Audit
and Security Committee shall have the authority to retain, with funding provided
through the Internal Audit Budget, special legal, accounting or other
consultants to advise the Committee. The Committee may request any officer
or
employee of the Corporation or the Corporation’s outside counsel or independent
auditor to attend a meeting of the Committee or to meet with any members
of, or
consultants to, the Committee.
The
Audit
and Security Committee shall make regular reports to the Board.
The
Audit
and Security Committee shall:
|
1.
|
Be
composed of a minimum of three members and be comprised of independent
directors satisfying the independence standard as defined by the
applicable listing standards of the
NASDAQ.
|
|
2.
|
Strive
to have at least one director on the Committee who has past employment
experience in finance or accounting, including a current or past
position
as a chief executive or financial officer or other senior officer
with
financial oversight
responsibilities.
|
|
3.
|
Be
directly responsible for the appointment, compensation, retention
and
oversight of the work of the independent auditor, which shall report
directly to the Committee.
|
|
4.
|
Pre-approve
all services provided by the independent auditor, provided that
the
Chairman of the Committee shall be authorized to approve requests
for
services between scheduled meetings of the Committee, and such
interim
action shall be presented to the Committee at its next scheduled
meeting.
|
|
5.
|
Be
authorized to engage independent counsel and other advisors, as
it
determines to be necessary to carry out its
duties.
|
|
6.
|
Receive
funding from SFNC as the Committee deems necessary to compensate
the
independent auditor, compensate any independent advisors retained
to
assist the Committee in carrying out its
duties.
|
|
7.
|
Determine
that the independent external auditor has reviewed the audited
financial
statements with management and discussed with the Committee, any
major
issues regarding accounting and auditing principles and practices
as well
as the adequacy of internal controls that could significantly affect
the
financial statements.
|
|
8.
|
Review
major changes to the auditing and accounting principles and practices
as
suggested by the independent auditor, internal auditors or management.
|
|
9. |
Ensure
rotation of the lead audit partner every five
years.
|
|
10.
|
Evaluate
the performance of the independent auditor and, if so determined
by the
Committee, replace the independent
auditor.
|
|
11. |
Review
the appointment and replacement of the senior internal auditing
executive.
|
|
12.
|
Review
the significant reports to management prepared by the internal
auditing
department and management’s
responses.
|
|
13.
|
At
their discretion, meet with the independent auditor prior to the
audit to
review the planning and staffing of the
audit.
|
|
14.
|
Discuss
with the independent auditor the matters required to be discussed
by the
Statement on Auditing Standards No. 61 relating to the conduct
of the
audit. This will include a review of all fees paid to the independent
auditor to ensure that independence has not been
impaired.
|
|
15.
|
Review
with the independent auditor any problems or difficulties the auditor
may
have encountered and any management letter provided by the auditor
and
responses to that letter. Such review should
include:
|
|
(a)
|
Any
difficulties encountered in the course of the audit work, including
any
restrictions on the scope of activities or access to required
information.
|
|
(b) |
Any
disagreements with management regarding financial
reporting.
|
|
(c) |
Any
changes required in the planned scope of the internal
audit.
|
|
(d) |
The
internal audit department responsibilities, budget and staffing.
|
|
16.
|
Meet
at least annually with the chief financial officer, the senior
internal
auditing executive and the independent auditor in separate executive
sessions.
|
|
17.
|
Establish/document
procedures to respond to internal and external complaints received
on
accounting and auditing matters. (See Appendix
A)
|
While
the
Audit and Security Committee has the responsibility and powers set forth
in this
Charter, it is not the duty of the Committee to plan or conduct audits or
to
determine that the financial statements are complete and accurate and are
in
accordance with generally accepted accounting principles. Such duties are
the
responsibility of management and the independent auditor.
APPENDIX
A
SIMMONS
FIRST NATIONAL CORPORATION
Procedures
for the Submission of Complaints or Concerns Regarding
Financial
Statement
Disclosures, Accounting, Internal Accounting Controls or Auditing
Matters
|
1.
|
Any
complaints received regarding financial statement disclosures,
accounting,
internal accounting controls or auditing matters received by Simmons
First
National Corporation ("SFNC") or any of its subsidiaries shall
be
forwarded to the Audit & Security Committee of the SFNC Board of
Directors.
|
|
2.
|
Any
employee of SFNC or its subsidiaries may submit, on a confidential,
anonymous basis if the employee so desires, any concerns regarding
financial statement disclosures, accounting, internal accounting
controls
or auditing matters by setting forth such concerns in writing and
forwarding them to the address below in a sealed envelope to the
Chairman
of the Audit & Security Committee, or to the Corporate Secretary, such
envelope to be labeled with a legend such as: "To be opened by
the Audit
& Security Committee only." If an employee would like to discuss
any
matter with the Audit & Security Committee, the employee should
indicate this in the submission and include a telephone number
at which he
or she might be contacted if the Committee deems it appropriate.
Any such
envelopes received by the Corporate Secretary shall be promptly
forwarded
unopened to the Chairman of the Audit & Security Committee.
|
|
3.
|
At
each of its meetings, including any special meeting called by the
Chairman
of the Committee following the receipt of any information pursuant
to this
Appendix, the Audit & Security Committee shall review and consider any
such complaints or concerns that it has received and take any action
that
it deems appropriate in order to respond
thereto.
|
|
4.
|
The
Audit & Security Committee shall retain any such complaints or
concerns for a period of no less than 7 years.
|
Chairman,
Audit & Security Committee
Simmons
First National Corporation
P.
O. Box
7009
Pine
Bluff, AR 71611-7009
(To
be
opened by the Audit & Security Committee only)
Secretary,
Corporate Board
Simmons
First National Corporation
P.
O. Box
7009
Pine
Bluff, AR 71611-7009
(To
be
opened by the Audit & Security Committee only)
March
9,
2007
Dear
Shareholder:
It
is our
pleasure to enclose the 2006 annual report for your corporation.
Our
annual
shareholders’ meeting will be held on the evening of Tuesday, April 10, 2007 at
the Pine Bluff Convention Center. As is our custom, you and your spouse,
or
guest, are cordially invited to join us for dinner, which will be served
at 6:30
p.m. The business meeting will follow at approximately 7:30 p.m.
This
year,
you will find your dinner reservation card located inside the annual report.
Please fill this out and return at your earliest convenience.
We
thank
you again for your support, and we look forward to seeing you April
10.
Sincerely,
J.
Thomas
May
Chairman
and Chief Executive Officer
JTM/kj
PROXY
BALLOT
SIMMONS
FIRST NATIONAL CORPORATION
April
10, 2007
PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE
ANNUAL
MEETING OF STOCKHOLDERS, APRIL 10, 2007
The
undersigned hereby constitutes and appoints William C. Bridgforth, Robert
A.
Fehlman, and Rita A. Gronwald as Proxies, each with the power of substitution,
to represent and vote as designated on this proxy card all of the shares
of
common stock of Simmons First National Corporation held of record by the
undersigned on February 2, 2007, at the Annual Meeting of Shareholders to
be
held on April 10, 2007, and any adjournment thereof.
This
proxy, when properly executed, will be voted as directed. IF NO DIRECTION
IS
GIVEN, THIS PROXY WILL BE VOTED FOR ALL PROPOSALS.
|
(1) |
PROPOSAL
TO fix
the number of directors at nine;
|
|
|
□
FOR □ AGAINST □
ABSTAIN
|
|
(2) |
ELECTION
OF DIRECTORS
(mark only one box)
|
|
|
□ WITHHOLD
AUTHORITY FOR ALL NOMINEES
|
|
|
□ WITHHOLD
AUTHORITY FOR CERTAIN NOMINEES below
whose names have been lined
through;
|
William
E. Clark
|
J.
Thomas May
|
Dr.
Harry L. Ryburn
|
Steven
A. Cosse'
|
W.
Scott McGeorge
|
Robert
L. Shoptaw
|
George
A. Makris, Jr.
|
Stanley
E. Reed
|
Henry
F. Trotter, Jr.
|
|
(3)
|
TO
AMEND THE ARTICLES OF INCORPORATION,
to
increase the number of authorized shares of Class A, $0.01 par
value,
Common Stock of the Company from 30,000,000 to
60,000,000.
|
|
|
□
FOR
□ AGAINST □
ABSTAIN
|
|
(4)
|
Upon
such other business as may properly come before the meeting or
any
adjournment or adjournments
thereof.
|
The
undersigned acknowledges receipt of this ballot, Notice of Annual Meeting,
Proxy
Statement, and
Annual
Report.
|
|
|
|
|
|
Signature(s)
of Shareholder(s)
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
Signature(s)
of Shareholder(s)
|
|
Date
|
IMPORTANT:
Please
date and sign this proxy exactly as the ownership appears below.
If
held in joint ownership, all owners must sign this
ballot.
Please
return promptly in the envelope provided