a5921028.htm
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)
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(Name of
Person(s) Filing Proxy Statement if other than the Registrant)
Payment of
Filing Fee (Check the appropriate box):
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Fee
computed on table below per Exchange Act Rules 14- 6(i)(1) and
0-11.
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Title
of each class of securities to which transaction
applies:
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2)
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Aggregate
number of securities to which transaction
applies:
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3)
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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):
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4)
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Proposed
maximum aggregate value of
transaction:
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[ ]
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Fee
paid previously with preliminary
materials.
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[ ]
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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
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Schedule or Registration No.:
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SIMMONS
FIRST NATIONAL CORPORATION
March 20,
2009
Dear
Shareholder:
It is our
pleasure to enclose the 2008 annual report for your corporation.
Our annual
shareholders’ meeting will be held on the evening of Tuesday, April 21st, 2009
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 21st.
Sincerely,
/s/ J. Thomas
May
J. Thomas
May
Chairman
and Chief Executive Officer
JTM/re
P.
O. BOX 7009
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501
MAIN STREET PINE
BLUFF, AR 71611-7009 (870)
541-1000
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www.simmonsfirst.com
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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 21,
2009 for the following purposes:
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1.
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To
fix at 9 the number of directors to be elected at the
meeting;
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2.
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To
elect 9 persons as directors to serve until the next annual shareholders'
meeting and until their successors have been duly elected and
qualified;
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3.
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To
provide advisory approval of the Simmons First National Corporation's
executive compensation
program;
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4.
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To
ratify the Audit Committee's selection of the accounting firm of BKD, LLP
as independent auditors of Simmons First National Corporation and its
subsidiaries for the year ending December 31,
2009;
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5.
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To
transact such other business as may properly come before the meeting or
any adjournment or adjournments
thereof.
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Only
shareholders of record at the close of business on February 23, 2009, will be
entitled to vote at the meeting.
BY ORDER
OF THE BOARD OF DIRECTORS:
/s/
John L. Rush
John L.
Rush, Secretary
Pine
Bluff, Arkansas
March 20,
2009
ANNUAL
MEETING OF SHAREHOLDERS
SIMMONS
FIRST NATIONAL CORPORATION
P.
O. Box 7009
Pine
Bluff, Arkansas 71611
PROXY
STATEMENT
Meeting
to be held on April 21, 2009
Proxy
and Proxy Statement furnished on or about March 20, 2009
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 21, 2009, 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 23, 2009. On that
date, the Company had outstanding 13,985,474 shares of the Common Stock;
1,718,274 of such shares were held by Simmons First Trust Company ("SFTC"), in a
fiduciary capacity, of which 99,225 shares will not be voted at the
meeting. Hence, 13,886,249 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 will be voted "For" 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]
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Percent of Class
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Simmons
First National Corporation
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Employee
Stock Ownership Trust [b]
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1,051,022
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7.57%
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501
Main Street
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Pine
Bluff, AR 71601
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J.
Thomas May [c]
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194,010
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1.40%
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Robert
A. Fehlman [d]
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25,672
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*
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David
L. Bartlett [e]
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27,565
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*
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Marty
D. Casteel [f]
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24,534
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*
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Robert
C. Dill [g]
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64,538
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*
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All
directors and officers as a group (13 persons)
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429,551
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3.09%
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* The
shares beneficially owned represent less than 1% of the outstanding common
shares.
[a]
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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.
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[b]
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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
("NCCGC") and the Chief Executive Officer, pursuant to delegation of
authority from the NCCGC, directs the trustees of the ESOP 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.
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[c]
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Mr.
May owned of record 161,679 shares; 19,506 shares were held in his IRA
accounts; 1,255 shares were owned by his wife; 3,183 shares are owned by
his stepson; 8,387 shares are held in his fully vested account in the
ESOP.
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[d]
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Mr.
Fehlman owned of record 6,714 shares; 4,486 shares were held in his fully
vested account in the ESOP; and 14,472 shares were deemed held through
exercisable stock options.
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[e]
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Mr.
Bartlett owned of record 5,789 shares; 13,040 shares were owned in the
Bartlett Family Trust; 648 shares were held in his fully vested account in
the ESOP and 8,088 shares were deemed held through exercisable stock
options.
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[f]
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Mr.
Casteel owned of record 3,958 shares; 3,414 shares were owned jointly with
his wife; 7,402 shares were held in his fully vested account in the ESOP;
and 9,760 shares were deemed held through exercisable stock
options.
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[g]
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Mr.
Dill owned of record 22,267 shares; 102 shares were owned jointly with his
spouse; 4,368 in his IRA; 24,171 shares in his fully vested account in the
ESOP and 13,630 shares were deemed held through exercisable stock
options.
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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 21, 2009, 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, 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
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Age
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Principal
Occupation [a]
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Director
Since
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Shares
Owned [b]
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Percent
of Class
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William
E. Clark, II
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39
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Chairman
and CEO,
Clark
Contractors, LLC
(Construction)
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2008
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325
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*
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Steven
A. Cosse'
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61
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Executive
Vice President
and
General Counsel,
Murphy
Oil Corporation
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2004
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5,365
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[c] |
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*
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Edward
Drilling
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53
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Arkansas
President, AT&T Corp.
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2008
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325
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*
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George
A. Makris, Jr.
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52
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President,
M. K.
Distributors,
Inc.
(Beverage
Distributor)
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1997
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28,700
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[d] |
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*
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J.
Thomas May
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62
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Chairman
and Chief Executive
Officer
of the Company;
Chairman
and Chief Executive
Officer
of Simmons First
National
Bank
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1987
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194,070
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[e] |
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1.40%
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W.
Scott McGeorge
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65
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President,
Pine Bluff
Sand
and Gravel Company
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2005
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40,870
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[f] |
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*
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Stanley
E. Reed
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57
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Farmer
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2007
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6,825
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[g] |
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*
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Harry
L. Ryburn
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73
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Orthodontist
(retired)
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1976
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7,097
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[h] |
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*
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Robert
L. Shoptaw
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62
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Retired
Executive, Arkansas
Blue
Cross and Blue Shield
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2006
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3,725
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[i] |
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*
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* The
shares beneficially owned represent less than 1% of the outstanding common
shares.
[a]
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All
persons have been engaged in the occupation listed for at least five
years.
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[b]
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"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.
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[c]
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Mr.
Cosse' owned 3,365 shares jointly with his spouse and 2,000 shares are
deemed held through exercisable stock
options.
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[d]
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Mr.
Makris owned 8,400 shares jointly with his wife; 16,300 shares are held by
his children; 2,000 shares are held in trusts for which Mr. Makris is the
trustee and 2,000 shares are deemed held through exercisable stock
options.
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[e]
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Mr.
May owned of record 161,679 shares; 19,506 shares were held in his IRA
accounts; 1,255 shares were owned by his wife; 3,183 shares are owned by
his stepson; 8,387 shares are held in his fully vested account in the
ESOP.
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[f]
|
Mr.
McGeorge owned of record 38,446 shares; 424 shares were owned by his
spouse; and 2,000 shares are deemed held through exercisable stock
options.
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[g]
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Mr.
Reed owned of record 325 shares; 500 shares were held jointly with his
wife; 5,000 shares are held in his IRA; and 1,000 shares are deemed held
through exercisable stock options.
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[h]
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Dr.
Ryburn and his wife are general partners in a family limited partnership
which owns 123,624 shares of which 2,472 shares held by the partnership
are attributable to Dr. Ryburn; 500 shares are held jointly by Dr. Ryburn
and his wife; 125 shares are held by Greenback Investment Club which are
attributable to Dr. Ryburn and 4,000 shares are deemed held through
exercisable stock options.
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[i]
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Mr.
Shoptaw owned of record 325 shares; 2,400 shares were held in his IRA and
1,000 shares are deemed held through exercisable stock
options.
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Committees
and Related Matters
During
2008, 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
2008, the Audit & Security Committee was composed of William E. Clark, II,
George A. Makris, Jr., Stanley E. Reed, 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 2008, this committee met 16 times.
The
Nominating, Compensation and Corporate Governance Committee was composed of
Harry L. Ryburn (Chairman), William E. Clark, II, Steven A. Cosse', Edward
Drilling, George A. Makris, Jr., W. Scott McGeorge and Stanley E.
Reed. During 2008, the Nominating, Compensation and Corporate
Governance Committee met 7 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 who stood for election at the 2008 annual meeting, attended the
Company's 2008 annual meeting.
The Board
of Directors of the Company met 9 times during 2008, 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, except William E. Clark, II, who attended 63% of
such meetings.
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, 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 collectability or
present other unfavorable features. The Company generally considers
banking relationships with directors and their affiliates to be immaterial and
as not affecting a 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
2008, the Nominating, Compensation and Corporate Governance
Committee ("NCCGC") was composed of Harry L. Ryburn (Chairman),
William E. Clark, II, Steven A. Cosse', Edward Drilling, George A. Makris, Jr.,
W. Scott McGeorge and Stanley E. Reed, 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:
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●
Location of residence and business
interests
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●
Type of business
interests
|
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●
Age
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●
Knowledge of financial
services
|
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●
Community
involvement
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●
High leadership
profile
|
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●
Ability to fit with the Company's corporate
culture
|
●
Equity ownership in the
Company
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|
There is
no specified order or weighting of the foregoing criteria. The NCCGC
will attempt to seek geographic diversity of residence of the future
nominees.
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 13, 2009 for the 2010 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;
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●
|
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
|
●
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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
2008, the NCCGC was composed of Harry L. Ryburn (Chairman), William E. Clark,
II, Steven A. Cosse', Edward Drilling, George A. Makris, Jr.,
W. Scott McGeorge and Stanley E. Reed. None of the
committee members were employed as officers or employees of the Company during
2008.
During
2006, J. Thomas May served on the Compensation Committee of the Board of
Directors of Arkansas Blue Cross and Blue Shield ("ABCBS"), a mutual insurance
company. Mr. Robert L. Shoptaw, who then served as the chief
executive officer of ABCBS, 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 ABCBS. Mr. Shoptaw retired from ABCBS on December 31,
2008, but still serves on the ABCBS Board of Directors.
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.
During the
first quarter of each calendar year, the NCCGC makes a specific review 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 meeting the objectives outlined above, the Company has retained Amalfi
Consulting, LLC, 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. In addition, the
consultant performs special executive compensation projects and consulting
services from time to time as requested 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 named executives. The Company's compensation program
is based in part on market data provided by the compensation
consultant. The NCCGC and the Board also act 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
2008. 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 and changes to
such compensation and practices going forward.
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 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 its 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. In 2007, NCCGC adopted the Company's compensation
consultant's recommendation that the Company select a peer group of banking
organizations with assets of $2 to $4 billion which are located in states
contiguous to Arkansas or in states contiguous to states contiguous to Arkansas
as its peer group for compensation. In 2008, the members of the peer
group remained the same (except for one institution that was acquired) but the
asset range has now changed to $1 to $5
billion. This geographic area allows a peer group consisting of
20 banking organizations. In the NCCGC's view, this peer group
competes directly with the Company for executive talent and are
of similar size and have 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 which
would satisfy the criteria for inclusion in the peer group has significantly
declined.
The
executive salary and benefits program are targeted to the peer group median for
each compensation category in order to be competitive in the
market. The Company's incentive programs are analyzed with similar
programs of the peer group. 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. 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 45% 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 5% to 45%. For
subsidiary bank chief executive officers and Company executives designated as
executive vice presidents or above, such executives receive 25% of the target
for annual grants regardless of performance. When performance goals
are achieved at the threshold level or above, the annual grants for equity
incentive compensation to such executives will be 50% of target, consisting of
restricted stock awards and/or stock options as specified by the
NCCGC. 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 one to two year transition
period. In light of the current turmoil in the banking industry and
the market for stock of banking organizations, the NCCGC is considering changing
the allocation of these awards between restricted stock and stock options to
reduce the number of options granted and increase the number of restricted
shares. In the current market conditions, options which rely solely
upon stock appreciation for value, may not be as effective as an incentive as
when market conditions are more stable.
For 2008,
the compensation of the named executive officers was allocated as
follows:
Base
Salaries: ranges from approximately 74% to 85% of total direct
compensation
Non-equity
incentives: ranges from approximately 3% to 4% of total direct
compensation
Equity
incentives: ranges from approximately 13% to 22% 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 2008 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. Historically, the NCCGC has chosen to
emphasize stock options more than restricted stock in the equity incentive
program for the named executive officers; however, going forward, the NCCGC will
rely on stock options and restricted stock in equal amounts unless threshold
performance goals are not met, in which case any equity incentives granted will
be in the form of stock options. 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. In 2008, the Company adopted the Simmons First National
Corporation Long Term Incentive Program to reward senior executive officers
chosen by the NCCGC for the achievement of specified corporate performance
factors over a three year period that started on January 1, 2008.
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 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. Prior to 2008, the EIP consisted of two
separate components, Base Profit Sharing Incentive, referred to as Base
Incentive, and the Bonus Profit Sharing Incentive, referred to as Bonus
Incentive. The Company’s compensation consultant recommended that the
EIP be simplified by eliminating the two components of EIP and the NCCGC has
implemented this recommendation effective for 2008. The EIP now
consists of only one component. The EIP focuses on the achievement of
annual financial goals and awards. The EIP is designed
to:
●
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support
strategic business objectives,
|
●
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promote
the attainment of specific financial goals for the Company and the
executive,
|
●
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reward
achievement of specific performance objectives,
and
|
The EIP is
designed to provide executives with market competitive compensation based upon
their experience and scope of responsibility. The size of an
executive's EIP award is influenced by these factors, market practices, Company
performance and individual performance. The NCCGC generally sets the
annual EIP award for an executive to provide an incentive at the market median
for expected levels of performance. All of the named executive
officers participate in the EIP. Awards earned under the EIP 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 EIP is a function of four
variables:
●
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the
executive's level of participation;
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●
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the
goals set for the Company;
|
●
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the
payout amounts established by the NCCGC which correspond to threshold,
target and maximum levels of performance;
and
|
●
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the
NCCGC's determination of the extent to which the goals were
met.
|
For 2008,
the Company based the EIP corporate performance on earnings per share (90%) and
corporate strategic factors (10%). The NCCGC determined that for 2008
the Company did not achieve the Company's earnings per share threshold
measure. Even though that portion of the award (90%) based upon
earnings per share is not payable, the participant may still earn a
substantially reduced EIP award based upon the satisfaction of only the
corporate strategic factors. For 2009, the Company will base EIP
awards on the Company's earnings per share (40%), the performance of the
Company's affiliates (35%) and the Company's other strategic initiatives
(25%).
The NCCGC
sets these target performance measures in the first quarter 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 performance
benchmarks. Target and maximum award thresholds reflect ambitious
goals which can only be attained when business results are
exceptional. Minimum award or performance measure targets are set at
the prior year's earnings per share.
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.
In
addition to the EIP, in 2008 the Company adopted the Simmons First National
Corporation Long Term Incentive Plan, which is referred to as the
LTIP. Pursuant to the LTIP, the Company may grant awards of cash and
stock to participants in the LTIP having a value not to exceed 65% of the
participant's base salary. Awards granted under the LTIP are divided
equally between cash and stock. The NCCGC administers the LTIP and
granted awards under the LTIP to Mr. May, Mr. Fehlman, Mr. Bartlett and Mr.
Casteel in 2008. Pursuant to these awards, each executive will
receive up to 65% of the amount of his base salary for 2008 in equal parts cash
and stock if the awards become fully vested. Awards granted under the
LTIP will vest based on the Company's performance compared to a peer group
consisting of publically traded banking organizations with assets between $2
billion and $4 billion which are located in states contiguous to Arkansas or in
states contiguous to states contiguous to Arkansas. The performance
period is the three year period starting on January 1, 2008. The
performance criteria to be used to determine whether the awards vest are "Core
Deposit Growth," "Total Revenue Growth" and "Earnings per Share
Growth." Each award is divided into three equal sub-grants that are
matched to the three performance criteria. If the threshold level for
any one of the performance criteria is not met at the end of the performance
period, no vesting will occur with respect to the sub-grant or sub-grants
identified with such performance criteria and the participant will forfeit all
compensation set forth in such sub-grant or sub-grants.
Vesting of
each sub-grant can occur at four possible levels: threshold, target, target
plus, and maximum. If the Company's performance compared to peer
meets the threshold level for a given performance criteria, participants will
receive 30% of the cash and stock awarded pursuant to the related
sub-grant. If target level is attained, participants will receive
53.33% of the cash and stock awarded pursuant the sub-grant. If
target plus level is attained, participants will receive 76.67% of the cash and
stock awarded pursuant the sub-grant. If maximum level is attained,
participants will receive 100% of the cash and stock awarded pursuant the
sub-grant. Target and maximum vesting thresholds reflect ambitious
goals which can only be attained when business results are exceptional and
aspirational, respectively.
On
February 23, 2009, the NCCGC and the Board terminated the LTIP
plan. In light of the restrictions on incentive based compensation in
recently adopted statutes and regulatory pronouncements, the Company has
determined that the elimination of the incentive based compensation
under the LTIP is an appropriate change. Further, the Company and the
participants under the LTIP have agreed to cancel and terminate the 2008 grants
effective February 23, 2009. Accordingly, the LTIP plan and all
grants under the LTIP plan have been terminated.
3. Equity
Incentives
The
Company makes stock option awards to 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. 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.
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.
During
2008, restricted stock and stock option grants were made under the Simmons First
National Corporation Executive Stock Incentive Plan - 2006, which is
administered by the NCCGC. The Company grants incentive stock
options, non-qualified stock options, stock appreciation rights and restricted
stock. Historically, the NCCGC has utilized incentive stock options
for most executives, but due to recent changes in the accounting rules regarding
stock based compensation, the Company has decided to de-emphasize incentive
stock options and increase the use of non-qualified options and restricted stock
in making future grants. On several occasions in the past, 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 with the
options.
Upon the
advice of the Company's compensation consultant, the NCCGC has decided to grant
equity incentives to executives based on the Company's prior year performance
beginning in 2009. For subsidiary bank chief executive officers and
Company executives designated as executive vice presidents or above, such
executives receive 25% of the target for annual grants regardless of
performance. When performance goals are achieved at the threshold
level or above, the annual grants for equity incentive compensation to such
executives will be 50% of target, consisting of restricted stock awards and/or
stock options as specified by the NCCGC. By granting performance
based equity incentives, the Company will use equity incentives both as a
short-term incentive to encourage achievement of its annual performance goals
and to create a common economic interest between the interests of executives and
shareholders.
The level
of equity incentive compensation that an executive will receive is a function of
four variables:
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the
executive's level of participation;
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●
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the
goals set for the Company;
|
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the
payout amounts established by the NCCGC which correspond to threshold,
target and maximum levels of performance;
and
|
●
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the
NCCGC's determination of the extent to which the goals were
met.
|
For equity
incentives granted in 2009 based on the Company's 2008 performance, criteria are
as follows: the return on tangible assets (30%), revenue growth (35%) and core
deposit growth (35%).
The NCCGC
sets these target performance measures in the first quarter 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 performance
benchmarks. Target and maximum award thresholds reflect ambitious
goals which can only be attained when business results are
exceptional.
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 and restricted stock.
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 the eligible earnings of the
participants in this plan and annually specifies the allocation of the
contribution between the profit sharing plan and the employee stock ownership
plan components.
B. 401(k)
Plan
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 are 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 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. The Company entered into
technical amendments to the CIC Agreements with members of senior management in
2008 to comply with Section 409A of the Internal Revenue Code. The
benefits provided under of the CIC Agreements did not change as a result of the
amendments.
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:
●
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a
lump sum payment equal to one 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);
|
●
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up
to three years of additional coverage under the Company's health, dental,
life and long term disability plans;
and
|
●
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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 Agreement 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
consider grants at scheduled meetings of the NCCGC and refer recommended grants
to the Board of Directors for approval and such grants are either effective on
the Board approval date or a specified future date. Further,
historically the Company has made the majority of such grants on the date of the
May meeting of the Board of Directors. Beginning with the 2009 grants
which are based upon the Company's results for 2008 under specified performance
measures, the NCCGC recommended and the Board approved such grants in February,
2009. The Company may make grants at other times throughout the year, upon due
approval of the NCCGC and the Board, 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. Prior to 2009,
the Company had generally continued to follow this schedule regardless of
whether stock compensation plans are being presented for approval at the annual
shareholders meeting. With the introduction of performance based
grants in 2009, the Company has moved the date of the grants to the first
quarter of the year. Since the performance grants are based upon a
formula related to the prior year performance, the determination of the amount
of the proposed grants can be completed when the financial results
for the prior year are completed. Accordingly, the Company has
determined that the approval and issuance of the grants for the current year
based upon last years performance should be addressed in the first quarter,
during the period when the performance goals for the current year are being
set. 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 NCCGC and/or Board 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. 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.
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.
Participation in the
Troubled Asset Relief Program. The Board of Directors is
considering participating in the Troubled Asset Relief Program Capital Purchase
Program (the "Program") established by the United States Department of Treasury
(the "Treasury") pursuant to the terms of the Emergency Economic Stabilization
Act of 2008. The Treasury has approved an investment in the Company
of up to approximately $60 million. If the Board decides to accept an
investment from the Treasury, the Company will be subject to certain executive
compensation and corporate governance limitations. The Company will
need to modify or terminate all benefit plans or compensation arrangements to
eliminate any provisions that would not be in compliance with the Emergency
Economic Stabilization Act of 2008 and the American Recovery and Reinvestment
Act of 2009 ("Acts"). In general, the Company would need to (i)
ensure that the compensation programs covering senior executive officers do not
encourage unnecessary and excessive risks, (ii) add "clawback" provisions to the
incentive compensation programs for senior executive officers whose awards are
based on criteria, such as net income, that are later proven to be materially
inaccurate, (iii) terminate or modify certain golden parachute arrangements with
its senior executive officers and certain other highly paid officers and (iv)
terminate or modify bonus or incentive compensation payable to certain highly
paid officers.
In
addition, any federal income tax deductions for compensation paid to each senior
executive officer in excess of $500,000 would be disallowed. For
purposes of the Program, the Company's "senior executive officers" are the named
executive officers. The Company's compensation consultant is evaluating the
Company's compensation program and will advise the Company of any
necessary changes to its compensation plans to comply with the
Acts. If the Company chooses to participate in the Program, the
senior executive officers and the affected highly paid officers of the Company
will enter into agreements with the Company waiving or forfeiting any
compensation which is not permitted under the Acts and providing for "clawback"
provisions to reimburse compensation paid based on financial data which is later
proven to be materially inaccurate. The executive compensation
limitations under the Program will impact the named executive officers,
particularly Mr. May, the NCCGC does not believe that participation in the
Program would have an adverse effect on the satisfaction of the Company's
executive compensation objectives or retention of its personnel.
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. 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 goals of such compensation. The following provisions
of the Internal Revenue Code of 1986 ("Code") have been considered.
Section
162(m). Section 162(m) of the Code, 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. Further, the Emergency Economic Stabilization
Act of 2008 added Section 162(m)(5) to the Code which provides that compensation
deductibility limit for institutions which sell assets over $300,000,000 under
the Troubled Asset Relief Program reduced from $1,000,000 to $500,000 and the
"performance-based compensation" exception is disallowed for these
institutions. The terms of the Program require institutions
participating in the Program to agree to comply with Section
162(m)(5).
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 payments to
reimburse the executive for any excise tax under 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 historic 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 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 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 and the regulations thereunder.
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'
|
George
A. Makris, Jr.
|
|
W.
Scott McGeorge
|
Stanley
E. Reed
|
Edward
Drilling
|
|
William
E. Clark, II
|
|
Robert
L. Shoptaw
|
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, 2008 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,
2008. 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;
and
|
●
|
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 discussion above at "Compensation Discussion and
Analysis."
2008
SUMMARY COMPENSATION TABLE
The
following table provides information concerning the compensation of the named
executive officers for 2006, 2007 and 2008, the most recently completed fiscal
year.
The column
"Salary" discloses the amount of base salary paid to the named executive officer
during each year. 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
10 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 2008 Summary Compensation Table
also include a ratable portion of each grant made in prior years to the extent
the vesting period fell in 2008 (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. 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.
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 effect during the indicated years; and (2) any above-market or
preferential earnings on nonqualified deferred compensation, including on
nonqualified defined contribution plans. The annual increase 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
$10,000;
|
●
|
all
"gross-ups" or other amounts reimbursed during the fiscal year for the
payment of taxes;
|
●
|
amounts
paid or which became due related to termination, severance or a change in
control, if any;
|
●
|
the
contributions to vested and unvested defined contribution plans;
and
|
●
|
any
life insurance premiums paid during the year for the benefit of a named
executive officer.
|
SUMMARY
COMPENSATION TABLE
|
|
|
|
Name
And
Principal
Position
|
Year
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
($)
|
|
|
Option
Awards
($)
|
|
|
Non-
Equity
Incentive
Plan
Compensation
($)
|
Change
in
Pension
Value
and
Nonqualified
Deferred
Compen-
sation
Earnings
($)
|
|
|
All
Other
Compensation
($)
[a]
|
Total
($)
|
|
J.
Thomas May,
|
2008
|
|
$
|
474,285
|
|
|
$
|
49,768 |
|
|
$
|
184,560 |
|
|
$
|
0 |
|
|
$
|
28,993 |
|
|
$
|
0 |
|
|
$
|
28,286 |
|
|
$
|
765,892 |
|
Chief
Executive
|
2007
|
|
$
|
450,110 |
|
|
$
|
50,214 |
|
|
$
|
164,880 |
|
|
$
|
0 |
|
|
$
|
257,358 |
|
|
$
|
302,000 |
|
|
$
|
35,931 |
|
|
$
|
1,260,493 |
|
Officer
|
2006
|
|
$
|
437,000 |
|
|
$
|
44,596 |
|
|
$
|
169,500 |
|
|
$
|
0 |
|
|
$
|
179,254 |
|
|
$
|
373,022 |
|
|
$
|
37,519 |
|
|
$
|
1,240,891 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
A. Fehlman,
|
2008
|
|
$
|
200,000 |
|
|
$
|
0 |
|
|
$
|
14,568 |
|
|
$
|
3,549 |
|
|
$
|
8,775 |
|
|
$
|
0 |
|
|
$
|
31,024 |
|
|
$
|
257,916 |
|
Chief
Financial
|
2007
|
|
$
|
175,374 |
|
|
$
|
0 |
|
|
$
|
5,618 |
|
|
$
|
1,963 |
|
|
$
|
40,355 |
|
|
$
|
0 |
|
|
$
|
28,248 |
|
|
$
|
251,558 |
|
Officer
|
2006
|
|
$
|
160,950 |
|
|
$
|
0 |
|
|
$
|
2,602 |
|
|
$
|
1,565 |
|
|
$
|
28,566 |
|
|
$
|
0 |
|
|
$
|
62,011 |
|
|
$
|
255,694 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
L. Bartlett,
|
2008
|
|
$
|
282,288 |
|
|
$
|
3,214 |
|
|
$
|
24,217 |
|
|
$
|
14,775 |
|
|
$
|
14,862 |
|
|
$
|
36,672 |
|
|
$
|
23,711 |
|
|
$
|
399,739 |
|
President
and Chief
|
2007
|
|
$
|
275,000 |
|
|
$
|
0 |
|
|
$
|
11,388 |
|
|
$
|
12,237 |
|
|
$
|
76,605 |
|
|
$
|
33,701 |
|
|
$
|
23,528 |
|
|
$
|
432,459 |
|
Operating
Officer
|
2006
|
|
$
|
250,000 |
|
|
$
|
0 |
|
|
$
|
7,250 |
|
|
$
|
11,798 |
|
|
$
|
62,489 |
|
|
$
|
30,938 |
|
|
$
|
121,024 |
|
|
$
|
483,499 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marty
D. Casteel,
|
2008
|
|
$
|
200,000 |
|
|
$
|
0 |
|
|
$
|
12,520 |
|
|
$
|
2,588 |
|
|
$
|
8,775 |
|
|
$
|
0 |
|
|
$
|
27,831 |
|
|
$
|
251,714 |
|
Executive
Vice
|
2007
|
|
$
|
175,374 |
|
|
$
|
0 |
|
|
$
|
4,102 |
|
|
$
|
1,002 |
|
|
$
|
40,355 |
|
|
$
|
0 |
|
|
$
|
26,433 |
|
|
$
|
247,266 |
|
President,
|
2006
|
|
$
|
160,950 |
|
|
$
|
0 |
|
|
$
|
1,197 |
|
|
$
|
604 |
|
|
$
|
23,706 |
|
|
$
|
0 |
|
|
$
|
23,480 |
|
|
$
|
209,937 |
|
Administration
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
C. Dill,
|
2008
|
|
$
|
163,072 |
|
|
$
|
0 |
|
|
$
|
5,015 |
|
|
$
|
2,092 |
|
|
$
|
5,247 |
|
|
$
|
0 |
|
|
$
|
24,127 |
|
|
$
|
199,553 |
|
Executive
Vice
|
2007
|
|
$
|
143,743 |
|
|
$
|
0 |
|
|
$
|
2,922 |
|
|
$
|
902 |
|
|
$
|
20,993 |
|
|
$
|
0 |
|
|
$
|
24,974 |
|
|
$
|
193,013 |
|
President
|
2006
|
|
$
|
139,723 |
|
|
$
|
0 |
|
|
$
|
1,145 |
|
|
$
|
0 |
|
|
$
|
31,200 |
|
|
$
|
0 |
|
|
$
|
25,505 |
|
|
$
|
197,245 |
|
[a]
|
This
category includes perquisites and other benefits: For 2008 - for Mr. May, contribution to
the ESOP, $12,745, the Company's matching contribution to the '401(k)
Plan, $3,450, use of Company automobile, $ 1,208, life insurance premiums,
$510, country club dues, $2,725 and dividends paid on unvested restricted
shares, $7,648; for Mr.
Fehlman, contribution to the ESOP, $12,745, the Company's matching
contribution to the '401(k)
Plan, $3,450, country club dues, $6,383, automobile allowance, $6,000,
life insurance premiums, $306 and dividends paid on unvested restricted
shares, $2,140; for Mr.
Bartlett, contribution to the ESOP, $12,745, country club dues,
$5,526, personal use of company automobile, $830, life insurance premiums,
$298 and dividends paid on unvested restricted shares, $4,312; for Mr. Casteel,
contribution to the ESOP, $12,745, the Company's matching contribution to
the '401(k)
Plan, $3,576, automobile allowance, $6,000, country club dues, $3,240,
life insurance premiums, $306 and dividends paid on unvested restricted
shares, $1,964; for Mr.
Dill, contribution to the ESOP, $11,450, the Company's
matching contribution to the '401(k)
Plan, $3,100, automobile allowance, $6,000, country club dues, $2,210,
life insurance premiums, $303 and dividends paid on unvested restricted
shares, $1,064. For 2007 - for Mr. May, contribution to
the ESOP, $12,692, the Company's matching contribution to the '401(k)
Plan, $3,375, use of Company automobile, $2,746, life insurance premiums,
$5,604, country club dues, $3,234, and dividends paid on unvested
restricted shares, $8,280; for Mr. Fehlman,
contribution to the ESOP, $11,964, the Company's matching contribution to
the '401(k)
Plan, $3,181, country club dues, $5,896, automobile allowance, $6,000,
life insurance premiums, $141 and dividends paid on unvested restricted
shares, $1,066; for Mr.
Bartlett, contribution to the ESOP, $12,692, country club dues,
$5,574, personal use of company automobile, $795, life insurance premiums,
$1,698 and dividends paid on unvested restricted shares, $2,769; for Mr. Casteel,
contribution to the ESOP, $11,644, the Company's matching contribution to
the '401(k)
Plan, $3,102, automobile allowance, $6,000, country club dues, $3,234,
medical cost for annual physical, $331, life insurance premiums, $1,197
and dividends paid on unvested restricted shares, $905; for Mr. Dill,
contribution to the ESOP, $9,957, the Company's
matching contribution to the '401(k)
Plan, $2,648, automobile allowance, $6,000, country club dues, $5,504, and
life insurance premiums, $344 and dividends paid on unvested restricted
shares, $521. For 2006 - 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 Mr. Dill,
contribution to the ESOP, $10,094, the Company's
matching contribution to the '401(k)
Plan, $2,715, automobile allowance, $6,000, country club dues, $5,998, and
life insurance premiums, $370 and dividends paid on unvested restricted
shares, $328.
|
2008
GRANTS OF PLAN-BASED AWARDS
This table
discloses information concerning each grant of an award made to a named
executive officer in 2008. This includes EIP, stock option awards and restricted
stock awards under the Simmons First National Corporation Executive Stock
Incentive Plan - 2006 and the Simmons First National Corporation Long Term
Incentive Plan, each of which are discussed in greater detail in this Proxy
Statement under the caption "Compensation Discussion and Analysis." The
threshold, target and maximum columns reflect the range of estimated payouts
under the EIP and the LTIP. In the 7th and 8th columns, the number of shares of
common stock underlying options granted in the fiscal year and corresponding
per-share exercise prices are reported. In all cases, the exercise price was
equal to the closing market price of the common stock on the day prior to date
of grant. Finally, in the 9th column, the aggregate FAS 123(R) value of all
awards made in 2008 is reported; in contrast to how the amounts in the Summary
Compensation Table are presented, the amounts reported here are the aggregate
values without apportioning such amounts over the service or vesting
period.
GRANTS OF PLAN-BASED AWARDS
|
|
Name
|
|
Grant
Date
|
|
|
Estimated
Future Payouts
Under
Non-Equity Incentive
Plan Awards
|
|
|
Estimated
Future Payouts
Under
Equity Incentive
Plan
Awards
|
|
|
All
Other
Stock
|
|
|
All
Other
Option
|
|
|
Exercise
or
Base
Price
of
|
|
|
Grant
Date
Fair
|
|
|
|
|
|
|
Threshold
($)
|
|
|
Target
($)
|
|
|
Maximum
($)
|
|
|
Threshold
(#)
|
|
|
Target
(#)
|
|
|
Maximum
(#)
|
|
|
Awards:
Number
of
Shares
of
Stock
or
Units
(#)
[a] |
|
|
Awards:
Number
of
Securities
Underlying
Options
(#)
[a]
|
|
|
Option
Awards
($/Sh)
|
|
|
Value
of
Stock
and
Option
Awards
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J.
Thomas May
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EIP
|
|
01-01-08 |
|
|
$ |
173,264 |
|
|
$ |
346,529 |
|
|
$ |
462,038 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTIP
[b][c]
|
|
03-24-08 |
|
|
$ |
45,049 |
|
|
$ |
80,086 |
|
|
$ |
150,163 |
|
|
|
1,553 |
|
|
|
2,762 |
|
|
|
5,178 |
|
|
|
|
|
|
|
|
|
|
|
$ |
150,163
|
|
Option
Plan
|
|
05-29-08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,750
[d |
] |
|
|
|
|
$ |
113,663 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
A. Fehlman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EIP
|
|
01-01-08 |
|
|
$ |
37,500 |
|
|
$ |
75,000 |
|
|
$ |
150,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTIP
[b][c]
|
|
03-24-08 |
|
|
$ |
19,500 |
|
|
$ |
34,666 |
|
|
$ |
65,000 |
|
|
|
672 |
|
|
|
1,195 |
|
|
|
2,241 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
65,000 |
|
Option
Plan
|
|
05-29-08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
860
[e |
][f] |
|
|
4,380
[g |
] |
|
$ |
30.31 |
|
|
$ |
56,244 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
L. Bartlett
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EIP
|
|
01-01-08 |
|
|
$ |
63,515 |
|
|
$ |
127,030 |
|
|
$ |
254,059 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTIP
[b][c]
|
|
03-24-08 |
|
|
$ |
27,523 |
|
|
$ |
48,930 |
|
|
$ |
91,744 |
|
|
|
949 |
|
|
|
1,687 |
|
|
|
3,164 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
91,744 |
|
Option
Plan
|
|
05-29-08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,260
[e |
][f] |
|
|
6,420
[h |
] |
|
$ |
30.31 |
|
|
$ |
82,425 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marty
D. Casteel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EIP
|
|
01-01-08 |
|
|
$ |
37,500 |
|
|
$ |
75,000 |
|
|
$ |
150,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTIP
[b][c]
|
|
03-24-08 |
|
|
$ |
19,500 |
|
|
$ |
34,666 |
|
|
$ |
65,000 |
|
|
|
672 |
|
|
|
1,195 |
|
|
|
2,241 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
65,000 |
|
Option
Plan
|
|
05-29-08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
830
[e |
][f] |
|
|
4,210
[i |
] |
|
$ |
30.31 |
|
|
$ |
51,164 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
C. Dill
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EIP
|
|
01-01-08 |
|
|
$ |
22,422 |
|
|
$ |
44,845 |
|
|
$ |
89,680 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
Plan
|
|
05-29-08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
810
[e |
][f] |
|
|
|
|
|
$ |
30.31 |
|
|
$ |
24,551 |
|
[a]
|
The
stock awards in these columns represent the indicated percentage of the
total stock awards made by the Company during 2008: Mr.
May 25.6%, Mr. Fehlman 5.9%, Mr. Bartlett 8.6%, Mr.
Casteel 5.7% and Mr.
Dill 5.5%.
|
[b]
|
The
Long Term Incentive Plan grant provides for a total potential benefit of
65% of base salary of the participant. The grant is equally divided
between cash and shares of the Company's stock. The
vesting of the grant is based upon the Company's performance compared to
its peer group for three specified criteria, core deposit growth, total
revenue growth and earnings per share growth. The
minimum vesting level of thirty 30% requires the Company to perform at the
50th percentile of its designated peer group during 2008, 2009 and 2010
for the specified criteria. Performance in excess of the 50th percentile
allows for a pro rata increase in the vesting percentage up 100% vesting
if the Company performs at or above the 80th percentile of the peer group
for the specified criteria. The maximum benefit which could be
earned by the participants is: Mr. May, $300,325; Mr. Fehlman,
$130,000; Mr. Bartlett, $183,487; and Mr. Casteel,
$130,000.
|
[c]
|
In
connection with the termination of the LTIP, the Company and the
participants in the LTIP agreed to cancel and terminate the 2008 LTIP
grants. While the entries in the table under in the columns "Estimated
Future Payouts Under Non-Equity Incentive Plan Awards"
and "Estimated Future Payments under Equity
Incentive Plan Awards" for the LTIP were made on March 24,
2008, this plan and all awards made under the plan were
terminated and cancelled on February 23,
2009.
|
[d]
|
1,875
of these restricted shares vest on May 29, 2009 and the balance vests on
May 29, 2010.
|
[e]
|
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.
|
[f]
|
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.
|
[g]
|
These
restricted shares vest in annual installments of 876 shares on May 29 in
each of the years 2009-2013.
|
[h]
|
These
restricted shares vest in annual installments of 1,284 shares on May 29 in
each of the years 2009-2013.
|
[i]
|
These
restricted shares vest in annual installments of 842 shares on May 29 in
each of the years 2009-2013.
|
OPTION
EXERCISES AND STOCK VESTED IN 2008
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, which were granted in
prior years but were exercised or vested during 2008 for each of the named
executive officers on an aggregated basis. The table reports the number of
securities for which options were exercised; the aggregate dollar value realized
upon exercise of options; the number of shares of stock that vested; and the
aggregate dollar value realized upon vesting of stock.
OPTION
EXERCISES AND STOCK VESTED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
Stock Awards
|
Name
|
|
Number
of
Shares
Acquired
On
Exercise
(#)
|
Value
Realized
on
Exercise
[a]
($)
|
Number
of
Shares
Acquired
on
Vesting
(#)
|
Value
Realized
on
Vesting
[b]
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J.
Thomas May
|
|
|
85,000 |
|
|
$
|
1,455,325 |
|
|
|
6,000 |
|
|
$
|
184,560 |
|
Robert
A. Fehlman
|
|
|
2,520 |
|
|
$
|
60,165 |
|
|
|
486 |
|
|
$
|
14,568 |
|
David
L. Bartlett
|
|
|
0 |
|
|
$
|
0 |
|
|
|
849 |
|
|
$
|
24,217 |
|
Marty
D. Casteel
|
|
|
200 |
|
|
$
|
3,727 |
|
|
|
418 |
|
|
$
|
12,520 |
|
Robert
C. Dill
|
|
|
500 |
|
|
$
|
8,128 |
|
|
|
164 |
|
|
$
|
5,015 |
|
[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 2008
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 2008. 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 2008 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
(#)
Un-
exercisable
|
Option
Exercise
Price
($)
|
|
|
Option
Expiration
Date
|
|
|
|
Number
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
(#)
|
|
|
|
Market
Value of Shares or Units of Stock That Have Not Vested
($)
|
|
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares
Units
or
other
Rights
That
Have
Not
Vested
(#)
|
|
|
Equity
Plan
Awards:
Market
or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have
Not
Vested
($)
|
|
J.
Thomas May
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,500
[a |
] |
|
$
|
44,205 |
|
|
|
|
|
|
|
J.
Thomas May
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,000
[b |
] |
|
$
|
58,940 |
|
|
|
|
|
|
|
J.
Thomas May
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,750
[c |
] |
|
$
|
110,513 |
|
|
|
|
|
|
|
J.
Thomas May
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,750
[d |
] |
|
$
|
110,513 |
|
|
|
|
|
|
|
J.
Thomas May
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,178[e |
] |
|
$
|
152,596 |
|
Robert
A. Fehlman
|
|
|
10,080 |
|
|
|
0 |
|
|
$
|
12.1250 |
|
|
|
05-06-11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
A. Fehlman
|
|
|
3,000 |
|
|
|
0 |
|
|
$
|
23.7800 |
|
|
|
07-25-14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
A. Fehlman
|
|
|
752 |
|
|
|
188 |
|
|
$
|
24.5000 |
|
|
|
05-22-15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
A. Fehlman
|
|
|
400 |
|
|
|
600 |
|
|
$
|
26.1900 |
|
|
|
05-21-16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
A. Fehlman
|
|
|
240 |
|
|
|
960 |
|
|
$
|
28.4200 |
|
|
|
05-30-17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
A. Fehlman
|
|
|
0 |
|
|
|
4,380 |
|
|
$
|
30.3100 |
|
|
|
05-29-18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
A. Fehlman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200
[f |
] |
|
$
|
5,894 |
|
|
|
|
|
|
|
|
|
Robert
A. Fehlman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300
[g |
] |
|
$
|
8,841
|
|
|
|
|
|
|
|
|
|
Robert
A. Fehlman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
560
[h |
] |
|
$
|
16,503
|
|
|
|
|
|
|
|
|
|
Robert
A. Fehlman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
580
[i |
] |
|
$
|
17,093 |
|
|
|
|
|
|
|
|
|
Robert
A. Fehlman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
860
[j |
] |
|
$
|
25,344 |
|
|
|
|
|
|
|
|
|
Robert
A. Fehlman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,241
[e |
] |
|
$
|
66,042 |
|
David
L. Bartlett
|
|
|
2,000 |
|
|
|
0 |
|
|
$
|
26.2000 |
|
|
|
03-21-14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
L. Bartlett
|
|
|
3,000 |
|
|
|
0 |
|
|
$
|
23.7800 |
|
|
|
07-25-14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
L. Bartlett
|
|
|
888 |
|
|
|
222 |
|
|
$
|
24.5000 |
|
|
|
05-22-15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
L. Bartlett
|
|
|
2,000 |
|
|
|
8,000 |
|
|
$
|
26.1900 |
|
|
|
05-21-16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
L. Bartlett
|
|
|
720 |
|
|
|
1,080 |
|
|
$
|
26.1900 |
|
|
|
05-21-16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
L. Bartlett
|
|
|
480 |
|
|
|
2,400 |
|
|
$
|
28.4200 |
|
|
|
05-30-17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
L. Bartlett
|
|
|
0 |
|
|
|
6,420 |
|
|
$
|
30.3100 |
|
|
|
05-29-18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
L. Bartlett
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
112
[k |
] |
|
$
|
3,301 |
|
|
|
|
|
|
|
|
|
David
L. Bartlett
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,750
[l |
] |
|
$
|
51,573 |
|
|
|
|
|
|
|
|
|
David
L. Bartlett
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300
[g |
] |
|
$
|
8,841 |
|
|
|
|
|
|
|
|
|
David
L. Bartlett
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
800
[m |
] |
|
$
|
23,576 |
|
|
|
|
|
|
|
|
|
David
L. Bartlett
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
968
[n |
] |
|
$
|
28,527 |
|
|
|
|
|
|
|
|
|
David
L. Bartlett
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,260
[o |
] |
|
$
|
37,132 |
|
|
|
|
|
|
|
|
|
David
L. Bartlett
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,164
[e |
] |
|
$
|
93,243 |
|
Marty
D. Casteel
|
|
|
200 |
|
|
|
0 |
|
|
$
|
10.5625 |
|
|
|
07-27-10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marty
D. Casteel
|
|
|
6,000 |
|
|
|
0 |
|
|
$
|
12.1250 |
|
|
|
05-06-11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marty
D. Casteel
|
|
|
2,000 |
|
|
|
0 |
|
|
$
|
23.7800 |
|
|
|
07-25-14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marty
D. Casteel
|
|
|
920 |
|
|
|
0 |
|
|
$
|
24.5000 |
|
|
|
05-22-15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marty
D. Casteel
|
|
|
400 |
|
|
|
800 |
|
|
$
|
26.1900 |
|
|
|
05-21-16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marty
D. Casteel
|
|
|
240 |
|
|
|
960 |
|
|
$
|
28.4200 |
|
|
|
05-30-17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marty
D. Casteel
|
|
|
0 |
|
|
|
4,210 |
|
|
$
|
30.3100 |
|
|
|
05-29-18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marty
D. Casteel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
92
[p |
] |
|
$
|
2,711 |
|
|
|
|
|
|
|
|
|
Marty
D. Casteel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300
[g |
] |
|
$
|
8,841 |
|
|
|
|
|
|
|
|
|
Marty
D. Casteel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
560
[h |
] |
|
$
|
16,503 |
|
|
|
|
|
|
|
|
|
Marty
D. Casteel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
527
[q |
] |
|
$
|
15,531 |
|
|
|
|
|
|
|
|
|
Marty
D. Casteel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
830
[r |
] |
|
$
|
24,460 |
|
|
|
|
|
|
|
|
|
Marty
D. Casteel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,241
[e |
] |
|
$
|
66,042 |
|
Robert
C. Dill
|
|
|
10,000 |
|
|
|
0 |
|
|
$
|
12.1250 |
|
|
|
05-06-11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
C. Dill
|
|
|
2,000 |
|
|
|
0 |
|
|
$
|
23.7800 |
|
|
|
07-25-14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
C. Dill
|
|
|
890 |
|
|
|
0 |
|
|
$
|
24.5000 |
|
|
|
05-22-15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
C. Dill
|
|
|
360 |
|
|
|
540 |
|
|
$
|
26.1900 |
|
|
|
05-21-16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
C. Dill
|
|
|
180 |
|
|
|
720 |
|
|
$
|
28.4200 |
|
|
|
05-30-17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
C. Dill
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
88
[s |
] |
|
$
|
2,593 |
|
|
|
|
|
|
|
|
|
Robert
C. Dill
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
180
[t |
] |
|
$
|
5,305 |
|
|
|
|
|
|
|
|
|
Robert
C. Dill
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
240
[u |
] |
|
$
|
7,073 |
|
|
|
|
|
|
|
|
|
Robert
C. Dill
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
810
[v |
] |
|
$
|
23,871 |
|
|
|
|
|
|
|
|
|
[a]
|
These
restricted shares vest on May 7, 2009.
|
[b]
|
These
shares vest on May 31, 2009.
|
[c]
|
2,000
of these restricted shares vest on November 26, 2009 and the balance vest
on November 26, 2010.
|
[d]
|
1,875
of these restricted shares vest on May 29, 2009 and the balance vest on
May 29, 2010.
|
[e]
|
These
shares were granted under the Long Term Incentive Plan and would have
vested on December 31, 2010 if and to the extent the plan's
performance criteria was satisfied. On February 23, 2009,
the Company and the participants agreed to cancel and terminate the grants
of these shares.
|
[f]
|
These
restricted shares vest in annual installments of 100 shares on May 23 in
each of the years 2009-2011.
|
[g]
|
These
restricted shares vest in annual installments of 100 shares on May 22 in
each of the years 2009-2011.
|
[h]
|
These
restricted shares vest in annual installments of 140 shares on May 31 in
each of the years 2009-2012.
|
[i]
|
These
restricted shares vest in annual installments of 145 shares on November 26
in each of the years 2009-2012.
|
[j]
|
These
restricted shares vest in annual installments of 172 shares on May 29 in
each of the years 2009-2013.
|
[k]
|
These
restricted shares vest in annual installments of 56 shares on May 23 in
each of the years 2009-2010.
|
[l]
|
These
restricted shares vest in an installment of 250 shares on March 1, 2009
and the balance vest on March 1, 2010.
|
[m]
|
These
restricted shares vest in annual installments of 200 shares on May 31 in
each of the years 2009-2012.
|
[n]
|
These
restricted shares vest in annual installments of 242 shares on November 26
in each of the years 2009-2012.
|
[o]
|
These
restricted shares vest in annual installments of 252 shares on May 29 in
each of the years 2009-2013.
|
[p]
|
These
restricted shares vest in annual installments of 46 shares on May 23 in
each of the years 2009-2010.
|
[q]
|
These
restricted shares vest in annual installments of 132 shares on November 26
in each of the years 2009-2011 and the balance, 131 shares, vest on
November 26, 2012.
|
[r]
|
These
restricted shares vest in annual installments of 166 shares on May 29 in
each of the years 2009-2013.
|
[s]
|
These
restricted shares vest in annual installments of 44 shares on May 23 in
each of the years 2009-2010.
|
[t]
|
These
restricted shares vest in annual installments of 60 shares on May 23 in
each of the years 2009-2011.
|
[u]
|
These
restricted shares vest in annual installments of 60 shares on May 31 in
each of the years 2009-2012.
|
[v]
|
These
restricted shares vest in annual installments of 162 shares on May 29 in
each of the years
2009-2013.
|
2008 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, 2008. 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.
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 Mr. May 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 his 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.
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 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 $438,878 for death in 2008. Mr. Bartlett is fully vested in
both the retirement and death benefits under the plan. The benefits
under the plan are designed in conjunction with a life insurance policy acquired
at the time the plan was established, barring extraordinary circumstances, the
earnings of the policy and the proceeds of the policy upon the death of Mr.
Bartlett should be sufficient to fully fund the obligations of the Company under
the Bartlett Plan.
PENSION BENEFITS
|
|
Name
|
Plan
|
|
Number
of
|
|
|
Present
Value
|
Payments
|
|
|
Name
|
|
Years
Credited
|
|
|
of
Accumulated
|
During
Last
|
|
|
|
|
Service
|
|
|
Benefit
|
Fiscal
Year
|
|
|
|
|
(#) |
|
|
($)
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J.
Thomas May
|
May
Plan
|
|
[a] |
|
|
$
|
1,892,798 |
|
|
$
|
0 |
|
Robert
A. Fehlman
|
|
|
|
|
|
|
$
|
0 |
|
|
$
|
0 |
|
David
L. Bartlett
|
Bartlett
Plan
|
|
[a] |
|
|
$
|
655,752 |
|
|
$
|
0 |
|
Marty
D. Casteel
|
|
|
|
|
|
|
$
|
0 |
|
|
$
|
0 |
|
Robert
C. Dill
|
|
|
|
|
|
|
$
|
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
Plan.
|
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 the price per share of the common stock is the closing market price as of
that date C
$29.47.
Severance. None
of the named executive officers presently has an employment agreement which
guarantees him 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 Change in Control Agreement ("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 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 times in the case of Mr. Dill) 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 Executive
Incentive Plan ("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 year 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, in 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") and the
EIP. 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 vest 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 2008 and the exercise price of the options. Please refer to
the discussions above at "Compensation Discussion and Analysis" for more
information about stock options.
Equity Incentives -
Restricted Stock. Unvested restricted stock vests upon the
named executive officer's death or disability or upon a change in
control. Further, unvested restricted stock vests 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 2008. 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, 2008, 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.
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.
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary
or
|
|
|
|
|
|
|
Involuntary
|
|
|
|
|
Executive
Benefits and
|
|
|
Voluntary
|
|
Not
for Cause
|
|
For
Cause
|
Termination
|
Payments
upon Termination
|
|
|
Termination
|
|
Termination
|
|
Termination
|
(CIC)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J.
Thomas May
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
$
|
0 |
|
|
$
|
145,934
|
[a] |
|
$
|
0 |
|
$
|
1,641,628 |
[b]
|
|
Accelerated
Vesting of Incentives [c]
|
|
|
$
|
0 |
|
|
$
|
0 |
|
|
$
|
0 |
|
$
|
377,993
|
[d]
|
|
Retirement
Plan
|
|
|
$
|
0 |
|
|
$
|
0 |
|
|
$
|
0 |
|
$
|
1,808,245
|
[e]
|
|
Other
Benefits and Tax Gross-Up [f]
|
|
|
$
|
0 |
|
|
$
|
0 |
|
|
$
|
0 |
|
$
|
981,887 |
[g]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
A. Fehlman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
$
|
0 |
|
|
$
|
46,154 |
[a] |
|
$
|
0 |
|
$
|
550,000
|
[b]
|
|
Accelerated
Vesting of Incentives [c]
|
|
|
$
|
0 |
|
|
$
|
0 |
|
|
$
|
0 |
|
$
|
100,881
|
[h]
|
|
Retirement
Plans
|
|
|
$
|
0 |
|
|
$
|
0 |
|
|
$
|
0 |
|
$
|
0 |
|
|
Other
Benefits [f]
|
|
|
$
|
0 |
|
|
$
|
0 |
|
|
$
|
0 |
|
$
|
249,291 |
[i]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
L. Bartlett
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
$
|
0 |
|
|
$
|
43,429 |
[a] |
|
$
|
0 |
|
$
|
818,636
|
[b]
|
|
Accelerated
Vesting of Incentives [c]
|
|
|
$
|
0 |
|
|
$
|
0 |
|
|
$
|
0 |
|
$
|
218,737
|
[j]
|
|
Retirement
Plans [k]
|
|
|
$
|
655,752 |
|
|
$
|
655,752 |
|
|
$
|
0 |
|
$
|
655,752 |
|
|
Other
Benefits and Tax Gross-Up [l]
|
|
|
$
|
0 |
|
|
$
|
0 |
|
|
$
|
0 |
|
$
|
405,292
|
[m] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marty
D. Casteel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance |
|
|
$
|
0 |
|
|
$
|
46,154
|
[a] |
|
$
|
0 |
|
$
|
550,000
|
[b]
|
|
Accelerated
Vesting of Incentives [c] |
|
|
$
|
0 |
|
|
$
|
0 |
|
|
$
|
0 |
|
$
|
94,318 |
[n]
|
|
Retirement
Plans |
|
|
$
|
0 |
|
|
$
|
0 |
|
|
$
|
0 |
|
$
|
0 |
|
|
Other
Benefits and Tax Gross-Up [f] |
|
|
$
|
0 |
|
|
$
|
0 |
|
|
$
|
0 |
|
$
|
241,112
|
[o]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
C. Dill
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance |
|
|
$
|
0 |
|
|
$
|
50,176
|
[a] |
|
$
|
0 |
|
$
|
207,917 |
[b]
|
|
Accelerated
Vesting of Incentives [c] |
|
|
$
|
0 |
|
|
$
|
0 |
|
|
$
|
0 |
|
$
|
41,368
|
[p]
|
|
Retirement
Plans |
|
|
$
|
0 |
|
|
$
|
0 |
|
|
$
|
0 |
|
$
|
0 |
|
|
Other
Benefits [l] |
|
|
$
|
0 |
|
|
$
|
0 |
|
|
$
|
0 |
|
$
|
15,480
|
[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
and Dill are entitled to 16 weeks of base salary, Messrs. Fehlman and
Casteel are entitled to 12 weeks of base salary and Mr. Bartlett is
entitled to 8 weeks of base salary. Payments under the severance plan for
the named executive officer are 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 one or 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 prior two years.
|
[c]
|
The
payment due the named executive officer due to certain termination
triggers, related to the Company's incentive programs (EIP, LTIP, 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
$377,993. This value represents gains of $324,170 for unvested
restricted stock, as of December 31, 2008 and $53,823 due to the partial
vesting of the LTIP grant upon a
CIC.
|
[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
Benefits 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 $430 for the next 36
months for purposes of continued health and welfare benefits, and a tax
gross-up payment of $966,407.
|
[h]
|
Due
to the assumed separation, Mr. Fehlman is entitled to an incremental value
of $100,881. This value represents gains of $73,675 for unvested
restricted stock and $3,910 for unvested stock options, both as of
December 31, 2008 and $23,296 due to the partial vesting of the LTIP grant
upon a CIC.
|
[i]
|
Upon
a CIC, Mr. Fehlman would receive a monthly benefit of $430 for the next 36
months for purposes of continued health and welfare benefits, and a tax
gross-up payment of $233,811.
|
[j]
|
Due
to the assumed separation, Mr. Bartlett is entitled to an incremental
value of $218,737. This value represents gains of $152,949 for unvested
restricted stock and $32,902 for unvested stock options, both as of
December 31, 2008 and $32,886 due to the partial vesting of the LTIP grant
upon a CIC.
|
[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 2007. The
amounts related to the retirement plans have been previously disclosed in
the Pension Benefits 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 $430 for the next
36 months for purposes of continued health and welfare benefits and a tax
gross-up payment of $389,812.
|
[n]
|
Due
to the assumed separation, Mr. Casteel is entitled to an incremental value
of $94,318. This value represents gains realized of $68,046 for unvested
restricted stock and $2,976 for unvested stock options, both as of
December 31, 2008 and $23,296 due to the partial vesting of the LTIP grant
upon a CIC.
|
[o]
|
Upon
a CIC, Mr. Casteel would receive a monthly benefit of $430 for the next 36
months for purposes of continued health and welfare benefits and a tax
gross-up payment of $241,112.
|
[p]
|
Due
to the assumed separation, Mr. Dill is entitled to an incremental value of
$41,368. This value represents gains realized of $38,841 for unvested
restricted stock and $2,527 for unvested stock options, both as of
December 31, 2008.
|
[q]
|
Upon
a CIC, Mr. Dill would receive a monthly benefit of $430 for the next 36
months for purposes of continued health and welfare
benefits.
|
The
following table provides information with respect to the compensation of
Directors of the Company during 2008, the most recently completed fiscal
year.
All
Directors receive an annual retainer of $12,000, except the lead
director, Harry L. Ryburn, who receives an annual retainer of $15,000. All
Directors receive $750 for each meeting of the Board attended. In
addition, each Director who serves as a committee chairman receives $600 for
each committee meeting attended and other Directors receive $400 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. At the
2007 annual meeting, the shareholders approved the modification of the stock
option plan to also allow the outright grant of shares of the Company's stock to
the Directors under the plan. During 2008, outright grants of 325
shares of the Company's stock were made to each director, except the lead
director, who received a grant for 500 shares and the chairman of the Audit
& Security Committee, who received a grant for 400 shares. The
grants were made on May 29, 2008. These shares are immediately
vested. In accordance with SEC regulations, outright grants of stock
are valued in accordance with FAS 123(R) at the closing price of the stock on
the date of grant. The Company discloses such expense ratably over the vesting
period, however, since the stock is fully vested upon grant, all of the expense
related to the stock grants 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 $25,000. The policy triples the death benefit in the case of
accidental death. In addition, each Director is reimbursed for out of
pocket expenses, including travel.
DIRECTOR
COMPENSATION
|
|
|
|
Name
|
|
Fees
Earned or
|
|
Stock
|
|
All
Other
|
|
Total
|
|
|
|
Paid
in Cash
|
|
Awards
|
|
Compensation
[b]
|
|
($)
|
|
|
|
($)
|
|
($) [a]
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William
E. Clark, II
|
|
$
|
9,625 |
|
|
$
|
10,263 |
|
|
$
|
209 |
|
|
$
|
20,097 |
|
Steven
A. Cosse'
|
|
$
|
20,475 |
|
|
$
|
10,263 |
|
|
$
|
228 |
|
|
$
|
30,966 |
|
Edward
Drilling
|
|
$
|
8,100 |
|
|
$
|
10,263 |
|
|
$
|
209 |
|
|
$
|
18,572 |
|
George
A. Makris, Jr. [c]
|
|
$
|
32,250 |
|
|
$
|
12,340 |
|
|
$
|
4,686 |
|
|
$
|
49,276 |
|
J.
Thomas May [d]
|
|
$
|
0 |
|
|
$
|
0 |
|
|
$
|
0 |
|
|
$
|
0 |
|
W.
Scott McGeorge
|
|
$
|
26,450 |
|
|
$
|
10,263 |
|
|
$
|
228 |
|
|
$
|
36,941 |
|
Stanley
E. Reed [e]
|
|
$
|
25,900 |
|
|
$
|
10,263 |
|
|
$
|
1,159 |
|
|
$
|
37,322 |
|
Harry
L. Ryburn
|
|
$
|
43,200 |
|
|
$
|
15,425 |
|
|
$
|
0 |
|
|
$
|
58,625 |
|
Robert
L. Shoptaw
|
|
$
|
20,875 |
|
|
$
|
10,263 |
|
|
$
|
228 |
|
|
$
|
31,366 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[a]
|
The
computation is based upon the closing market price of $30.85 on the grant
date (May 29, 2008). The ratable portion of the value of grants
made in 2008 and prior years, calculated in accordance with FAS 123(R), to
the extent the vesting period fell in 2008 are reported in this column.
Please refer to footnote 10 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. Makris and Reed earnings on their deferred directors
fees under the directors deferred compensation plan in the amounts of
$4,458 and $931, respectively.
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[c]
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For
2008, Mr. Makris elected to participate in the deferred compensation plan
and deferred $32,150 into the plan.
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[d]
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J.
Thomas May, the Chief Executive Officer of the Company, does not receive
directors fees or otherwise participate in the director compensation
programs set forth herein. His compensation is disclosed in the
preceding discussion concerning Executive
Compensation.
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[e]
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For
2008, Mr. Reed has elected to participate in the deferred compensation
plan and deferred $25,800 into the
plan.
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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 Robert C. Dill,
John Rush, George Makris and Scott McGeorge filed late Form
4's.
AUDIT
& SECURITY COMMITTEE
During
2008, the Audit & Security Committee was composed of William E. Clark, II,
George A. Makris, Jr., W. Scott McGeorge, Stanley E. Reed 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 16
times in 2008.
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 bank 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
2008, 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.
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The
Audit & Security Committee issued the following report concerning its
activities related to the Company for the previous
year:
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The
Audit & Security Committee has reviewed and discussed the audited
financial statements of the Company for the year ended December 31, 2008
with management.
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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;
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The
Audit & Security Committee has received the written disclosures and
the letter from independent accountants required by applicable
requirements of the Public Company Accounting Oversight Board regarding
the independent accountants' communications with the Audit & Security
Committee concerning independence, and has discussed with the independent
accountants the independent accountants' independence;
and
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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.
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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.
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AUDIT
& SECURITY COMMITTEE
William
E. Clark,
II George
A. Makris,
Jr.
W. Scott McGeorge
Harry
L.
Ryburn Stanley
E. Reed
PROPOSAL
TO PROVIDE ADVISORY APPROVAL OF THE COMPANY'S
EXECUTIVE
COMPENSATION PROGRAM
On
February 17, 2009, President Obama signed into law the American Recovery and
Reinvestment Act of 2009 ("ARRA"), which expanded the executive compensation
requirements previously imposed by the Emergency Economic Stabilization Act of
2008 and the Troubled Assets Relief Program ("TARP"). Under these new
requirements, any reporting company that has received or will receive financial
assistance under TARP must permit a separate shareholder vote to approve the
reporting company's executive compensation, as disclosed in the reporting
company's Compensation Discussion and Analysis, related compensation tables, and
other related material under the compensation disclosure rules of the SEC, in
any proxy or consent or authorization for an annual or other meeting of its
shareholders during the period in which any obligation arising from financial
assistance provided under TARP remains outstanding.
The
Company has been approved for participation in the Capital Purchase Program
under TARP. The Company's participation in this program will begin
upon the sale by the Company of its preferred stock to the U. S.
Treasury. As of March 15, 2009, the Company had not yet consummated
the sale of the preferred stock to commence participation in the program,
however the Company anticipates that such sale will be closed prior to April 21,
2009, the date of its 2009 annual shareholders meeting. Therefore,
the Company's Board of Directors is providing shareholders with the opportunity
to cast an advisory vote on its compensation program at the 2009 Annual Meeting.
As set forth in the ARRA, this vote will not be binding on or overrule any
decisions by the Company's Board of Directors, will not create or imply any
additional fiduciary duty on the part of the Board, and will not restrict or
limit the ability of the Company's shareholders to make proposals for inclusion
in proxy materials related to executive compensation. However, the NCCGC will
consider the outcome of the vote, among other considerations, when considering
future executive compensation arrangements. The Board of Directors has
determined that the best way to allow shareholders to vote on the Company's
executive pay programs and policies is through the following
resolution:
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RESOLVED,
that the shareholders approve the Company's executive compensation, as
described in the Compensation Discussion and Analysis and the tabular
disclosure regarding named executive officer compensation (together with
the accompanying narrative disclosure) in this Proxy
Statement.
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Approval
of this proposal will require the affirmative vote of a majority of the shares
of the Company's Common Stock represented in person or by proxy at the Annual
Meting.
THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THIS
PROPOSAL.
PROPOSAL
TO RATIFY SELECTION OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS
The Audit
& Security Committee of the Board of Directors selected the accounting firm
of BKD, LLP as independent auditors of Simmons First National Corporation and
its subsidiaries for the year ending December 31, 2009 and seeks ratification of
the selection by our shareholders.
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, 2008 and the reviews of the financial statements
included in the Company's Form 10-Q's for 2008 were $427,472. The
aggregate fees billed to the Company by BKD for such services in 2007 were
$397,411.
The
aggregate fees billed to the Company for professional services rendered by BKD
for the audit related fees during 2008 were $57,341. The aggregate fees billed
to the Company by BKD for such services in 2007 was $47,900. These
services are primarily for the audits of employee benefit plans for which
Simmons First Trust Company, N.A. ("SFTC") is a fiduciary and for the audit of
the common trust funds maintained by SFTC.
The
aggregate fees billed to the Company for professional services rendered by BKD
for tax services and preparation of tax returns during 2008 were $38,120. The
aggregate fees billed to the Company by BKD for such services in 2007 was
$38,594.
There were
no fees billed to the Company by BKD for services other than those set forth
above.
Shareholder
ratification of the Audit & Security Committee=s
selection of BKD as our independent auditors for the year ending December 31,
2009 is not required by our Bylaws or otherwise. Nonetheless, the Board of
Directors has elected to submit the selection of BKD to our shareholders for
ratification. If a quorum is present, approval of this proposal requires the
affirmative vote of a majority of the shares of our common stock represented at
the meeting and entitled to vote at the annual meeting. If the
selection of BKD as our independent auditors for the year ending December 31,
2009 is not ratified, the matter will be referred to the Audit & Security
Committee for further review.
Representatives
of BKD will be at the annual meeting, will have an opportunity to make a
statement if they desire and will be available to respond to appropriate
questions.
THE BOARD
OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" RATIFICATION OF THE
SELECTION OF BKD AS OUR INDEPENDENT AUDITORS FOR 2009.
A copy of
the annual report of the Company for 2008 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.
PROPOSALS
FOR 2010 ANNUAL MEETING
Shareholders
who intend to have a proposal considered for inclusion in the Company's proxy
materials for presentation at the 2010 Annual Meeting of Shareholders must
submit the proposal to the Company no later than November 13, 2009. Shareholders
who intend to present a proposal at the 2010 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 27,
2010. 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.
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:
/s/
John L. Rush
John L.
Rush, Secretary
Pine
Bluff, Arkansas
March 20,
2009
PROXY
BALLOT
SIMMONS
FIRST NATIONAL CORPORATION
April
21, 2009
PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE ANNUAL
MEETING OF STOCKHOLDERS, APRIL 21, 2009
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 ballot all of the shares of
common stock of Simmons First National Corporation held of record by the
undersigned on February 23, 2009, at the Annual Meeting of Shareholders to be
held on April 21, 2009, 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)
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To
fix the number of directors at nine:
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□ FOR
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□ AGAINST
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(2)
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ELECTION OF DIRECTORS (mark only
one box):
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□
FOR
ALL NOMINEES
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□
WITHHOLD
AUTHORITY FOR ALL NOMINEES
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□
WITHHOLD
AUTHORITY FOR CERTAIN NOMINEES below whose names
have been lined through:
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William
E. Clark, II
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George
A. Makris, Jr.
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Steven
A. Cosse'
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J.
Thomas May
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Edward
Drilling
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W.
Scott McGeorge
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(3)
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To
provide advisory approval of the Simmons First National Corporation's
executive compensation program:
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□ FOR
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□
AGAINST
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(4)
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To
Ratify the Audit & Security Committee's selection of the accounting
firm of BKD, LLP as independent auditors of Simmons First National
Corporation and its subsidiaries for the year ending December 31,
2009:
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□ FOR
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□
AGAINST
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(5)
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Upon
such other business as may properly come before the meeting or any
adjournment or adjournments thereof.
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The
undersigned acknowledges receipt of this ballot, Notice of Annual Meeting,
Proxy Statement and Annual Report.
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Signature(s)
of Shareholder(s)
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Date
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Signature(s)
of Shareholder(s)
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Date
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IMPORTANT: Please
date and sign this proxy ballot exactly as the ownership appears
below. If held in
joint ownership, all owners must sign this ballot. Please
return promptly in the envelope provided.