UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
_________________
SCHEDULE 14A
_________________
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
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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 (“Company”) will be held in the auditorium of the Company’s Little Rock, Arkansas, corporate offices (601 E. 3
rd Street, Little Rock, Arkansas, 72201) at 8:00 A.M. Central Time, on Tuesday, April1.
2.2.
3.3.
4.4.
5.6.
6.7.
Only shareholders of record at the close of business on February 21, 2023,20, 2024, will be entitled to vote at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS:
George A. Makris III, Secretary |
ANNUAL MEETING OF SHAREHOLDERS
SIMMONS FIRST NATIONAL CORPORATION
P. O. Box 7009
Pine Bluff, Arkansas 71611
PROXY STATEMENT
Meeting to be held on April 18, 202323, 2024
Proxy and Proxy Statement furnished on or about March 14, 202320, 2024
The enclosed proxy is solicited on behalf of the Board of Directors (“Board”) of Simmons First National Corporation (“Company”) for use at the annual meeting of the shareholders of the Company to be held on Tuesday, April 18, 2023,23, 2024, at 8:00 a.m. Central Time, in the auditorium of the Company’s Little Rock, Arkansas, corporate offices (601 E. 3rd Street, Little Rock, Arkansas 72201) or at any postponements or adjournments thereof.When such proxy is properly executed and submitted, 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 “For” all of the director nominees in Proposal 2 and “For” Proposals1,3, 5,4, and 6, and for the “1 Year” alternative with respect to Proposal 4.
Important Notice Regarding the Availability of Proxy Materials
for the Shareholder Meeting To Be Held on April 18, 2023:23, 2024:
The Notice, Proxy Statement, and Annual Report on Form 10-K
are available at www.edocumentview.com/sfnc.
REVOCABILITY OF PROXY
Any shareholder giving a proxy has the power to change or 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, electronic communications, 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 Class A Common Stock, par value $0.01 per share, of the Company (the “Common Stock”) will be entitled to one vote, in person or by proxy, for each share of Common Stock owned of record as of the close of business on February 21, 2023.20, 2024. On that date, the Company had 127,153,828 125,327,180shares of Common Stock outstanding and entitled to vote at the meeting. 4,234,7104,428,038 of such shares were held by the trust division of Simmons Bank (“Bank”) in a fiduciary capacity, of which 135,104 155,586shares cannot be voted by the Bank at the meeting.
All actions requiring a vote of the shareholders must be taken at a meeting at 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 of Proposals1,3,4, and5, and 6, approval requires that the votes cast “for” the proposal exceed the votes cast “against” it.
With respect to Proposal 2, the Company’s articles of incorporation and by-lawsby-laws provide that, in an “uncontested election,” which is an election in which the number of nominees for director is less than or equal to the number of directors to be elected, a nominee for director shall be elected by a majority of the votes cast by the shares present in person or represented by proxy at the meeting and entitled to vote thereon. This means that the votes cast “for” a director nominee must exceed the votes cast “against” such nominee. If an incumbent nominee does not receive the required votes for election at the meeting, the Company’s by-lawsby-laws require that the director immediately tender his or her resignation to the Board. The Board, through a process
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To be elected in a “contested election,” which is an election in which the number of nominees for director is greater than the number of directors to be elected, a nominee for director must receive a plurality of the votes cast by the shares present in person or represented by proxy at the meeting and entitled to vote thereon.
All proxies submitted will be tabulated by Computershare, the transfer agent for the Common Stock.
The enclosed proxy card also provides a method for shareholders to abstain from voting on each matter presented. By abstaining with respect to any of Proposals 1 through 6,5, shares will not be voted either “for” or “against” the subject proposal but will be counted for quorum purposes. Abstentions, therefore, will not affect the outcome of the vote on any of Proposals 1 through 6.5. While there may be instances in which a shareholder may wish to abstain from voting on any particular matter,
If your shares are held in a brokerage account or by another nominee, you are considered the “beneficial owner” of shares held in “street name,” and these proxy materials have been forwarded to you by your broker or other nominee (the “record holder”) along with a voting instruction form. As the beneficial owner, you have the right to direct your record holder how to vote your shares, and the record holder is required to vote your shares in accordance with your instructions. A “broker non-vote”non-vote” occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee has not received a voting instruction from the beneficial owner and does not have discretionary voting power with respect to that item. Due to various regulatory requirements, brokers or other nominees may not exercise discretionary voting power on the election of directors, executive compensation or other non-routinenon-routine matters. While brokers or other nominees might still be permitted to exercise discretionary voting power for Proposal 54 (the ratification of FORVIS, LLP as our independent auditor), brokers and other nominees may not exercise discretionary voting power for Proposals 1 through 43 (number of directors, election of directors, and approval of executive compensation, and frequency of vote on executive compensation), and the Company believes that brokers and other nominees may not exercise discretionary voting power for Proposal 65 (approval of the 2023Simmons First National Corporation Second Amended and Restated 2015 Employee Stock and IncentivePurchase Plan). As a result, if you do not provide specific voting instructions to your record holder, the record holder may not vote theyour shares on Proposals 1 through 43 or Proposal 6.5. Accordingly, it is particularly important that you provide voting instructions to your broker or other nominee so that your shares may be voted on the matters presented at the meeting.
If your shares are treated as a broker non-vote,non-vote, your shares will be counted in the number of shares represented for purposes of determining whether a quorum is present. However, broker non-votesnon-votes will not be included in vote totals (neither “for” nor “against”). Therefore, with respect to Proposals 1 through 6,5, broker non-votesnon-votes will not affect the outcome of the vote.
In the event a shareholder executes the proxy but does not mark the proxy to vote (or abstain) on any one or more of the proposals, the proxy will be voted “For” all of the director nominees in Proposal 2 and “For” Proposals1,3,4, and5, and 6, and for the “1 Year” alternative with respect to Proposal 4.as applicable. 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 has no knowledge of any such other matter which will come before the meeting. To obtain directions to attend the annual meeting of shareholders and vote in person, please contact Ed Bilek, Director of Investor and Media Relations, at investorrelations@simmonsbank.com or 501-263-7483.501-263-7483.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth (except as otherwise indicated, as of January 25, 2023)31, 2024) (1) all persons known to management who own, beneficially or of record, more than 5% of the outstanding Common Stock, (2) the number of shares of Common Stock owned by the named executive officers in the Summary Compensation Table, (3) the number of shares of Common Stock owned by each current director and director nominee (as reported by each director and nominee), and (4) the number of shares of Common Stock owned by all current directors and current executive officers as a group.
Name and Address of Beneficial Owner | | | Shares Owned Beneficially(a) | | | Percent of Class(b) | | ||||||
BlackRock, Inc.(c) 55 East 52nd Street New York, New York 10055 | | | | | 18,946,661 | | | | | | 14.90% | | |
The Vanguard Group(d) 100 Vanguard Blvd. Malvern, PA 19355 | | | | | 15,437,161 | | | | | | 12.14% | | |
Dimensional Fund Advisors LP(e) Building One 6300 Bee Cave Road Austin, TX 78746 | | | | | 7,004,119 | | | | | | 5.51% | | |
George A. Makris Jr.(g) | | | | | 767,833 | | | | | | * | | |
Robert A. Fehlman(h) | | | | | 206,576 | | | | | | * | | |
Matthew S. Reddin(i) | | | | | 59,779 | | | | | | * | | |
Stephen C. Massanelli(j) | | | | | 94,120 | | | | | | * | | |
James M. Brogdon | | | | | 3,835 | | | | | | * | | |
Dean Bass(k) | | | | | 167,475 | | | | | | * | | |
Jay Burchfield(l) | | | | | 89,488 | | | | | | * | | |
Marty D. Casteel(m) | | | | | 190,211 | | | | | | * | | |
William E. Clark, II(n) | | | | | 25,255 | | | | | | * | | |
Steven A. Cossé(o) | | | | | 80,917 | | | | | | * | | |
Mark C. Doramus(p) | | | | | 32,316 | | | | | | * | | |
Edward Drilling | | | | | 20,961 | | | | | | * | | |
Eugene Hunt(q) | | | | | 23,558 | | | | | | * | | |
Jerry Hunter | | | | | 12,615 | | | | | | * | | |
Susan Lanigan | | | | | 17,078 | | | | | | * | | |
W. Scott McGeorge | | | | | 104,176 | | | | | | * | | |
Tom Purvis | | | | | 27,895 | | | | | | * | | |
Robert L. Shoptaw(r) | | | | | 69,671 | | | | | | * | | |
Julie Stackhouse | | | | | 4,428 | | | | | | * | | |
Russell W. Teubner(s) | | | | | 106,821 | | | | | | * | | |
Mindy West | | | | | 13,289 | | | | | | * | | |
All directors and officers as a group (27 persons) | | | | | 2,326,992 | | | | | | 1.83% | | |
Name and Address of Beneficial Owner | Shares Owned | Percent of | ||||||
BlackRock, Inc.[c] |
| 18,043,806 | 14.40% | |||||
The Vanguard Group[d] |
| 15,207,448 | 12.13% | |||||
Dimensional Fund Advisors LP[e] | 6,566,353 | 5.24% | ||||||
George A. Makris Jr.[f] | 802,192 | * | ||||||
Robert A. Fehlman[g] | 229,042 | * | ||||||
James M. Brogdon[h] | 27,285 | * | ||||||
C. Daniel Hobbs[i] | 0 | * | ||||||
George A. Makris III[j] | 53,336 | * | ||||||
Stephen C. Massanelli[k] | 116,122 | * | ||||||
Matthew S. Reddin[l] | 39,693 | * | ||||||
Chad Rawls[m] | 6,452 | * | ||||||
Dean Bass[n] | 106,280 | * | ||||||
Jay Burchfield[o] | 80,093 | * | ||||||
Marty D. Casteel[p] | 198,290 | * | ||||||
William E. Clark, II[q] | 29,060 | * | ||||||
Steven A. Cossé[r] | 84,722 | * | ||||||
Mark C. Doramus[s] | 40,332 | * | ||||||
Edward Drilling | 30,766 | * | ||||||
Eugene Hunt[t] | 29,593 | * | ||||||
Jerry Hunter | 16,420 | * | ||||||
Susan Lanigan | 21,327 | * | ||||||
W. Scott McGeorge | 111,749 | * | ||||||
Tom Purvis | 31,700 | * | ||||||
Robert L. Shoptaw[u] | 83,476 | * | ||||||
Julie Stackhouse | 8,233 | * | ||||||
Russell W. Teubner[v] | 110,626 | * | ||||||
Mindy West | 17,094 | * | ||||||
All directors and officers as a group (26 persons) | 2,394,094 | 1.91% |
________________________
**
[a](a)
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[b](b)
[c](c)
[d](d)
[e](e)
[f](g)
[g](h)
[h](i)
[i]Mr. Hobbs joined the Company’s 401(k) PlanCompany on December 4, 2023.
[j]Mr. Makris III owns of record 51,556shares, and 22,640 1,780shares were deemedare held through exercisable stock options.
[k](j)
[l](k)
[m] Mr. Rawls owns of record 6,349shares, and 103shares were held in his account in the SFNC Employee Stock Purchase Plan.
[n]Mr. Bass owns of record 2,460 6,265shares, and 165,015 100,015shares are owned jointly with his spouse.
[o](l)
[p](m)
[q](n)
[r](o)
[s](q)
[t]Mr. Hunt owns of record 21,726 26,761shares; 1,000 2,000shares are owned jointly with his daughter; and 832shares are held in his IRA.
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[u](r)
[v](s)
PROPOSAL 1 — FIX THE NUMBER OF DIRECTORS
At the 20222023 annual shareholders’ meeting, the number of directors was set at sixteen (16), and the sixteen (16) nominees were elected. The Board subsequently increased the number of directors to seventeen (17), and the seventeen (17) nominees were elected. On December 28, 2023, W. Scott McGeorge notified the Company that he had decided not to stand for re-election at the Company’s 2024 annual shareholders’ meeting; on February 28, 2024, Jay D. Burchfield notified the Company that he had decided not to stand for re-election at the Company’s 2024 annual shareholders’ meeting; and on March13, 2024, Dean Bass was appointednotified the Company that he had decided not to stand for re-election at the Board to fill the vacancy.Company’s 2024 annual shareholders’ meeting. The Board has considered the number of directors that should serve on the Board for the ensuing year and has set the number of directors to be elected at the 20232024 annual shareholders’ meeting at seventeen (17)fourteen (14). The Board is presenting its decision to set the number of directors to be elected to the Board at the annual shareholders’ meeting at seventeen (17)fourteen (14) to the shareholders for ratification.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE
FOR PROPOSAL 1 TO RATIFY THE ACTION OF THE BOARD TO FIX THE NUMBER OF DIRECTORS ATPROPOSAL 2 — ELECTION OF DIRECTORS
Each of the persons named below is presently serving as a director of the Company for a term which ends on April 18, 2023,23, 2024, or such other date upon which a successor is duly elected and qualified. In connection with the Company’s acquisition of Spirit of Texas Bancshares, Inc., the Board elected Dean Bass as a director of the Company, effective April 27, 2022. Mr. Bass was initially recommended to the NCGC as a potential director by the chairman of the Board. The Board has evaluated the independence of each director serving on the Board and its audit, compensation, and nominating and corporate governance committees under applicable law and regulations and the NASDAQ listing standards. The table below summarizes the findings of the Board (and reflects the present composition of each of the named committees):
Name | Board of | Audit | Compensation | Nominating | |||||||||
Dean Bass | Independent | * | * | * | |||||||||
Jay D. Burchfield | Independent | Independent | Independent | * | |||||||||
Marty D. Casteel | Independent | * | * | * | |||||||||
William E. Clark, II | Independent | * | * | * | |||||||||
Steven A. Cossé | Independent | Independent | Independent | Independent | |||||||||
Mark C. Doramus | Independent | * | * | * | |||||||||
Edward Drilling | Independent | * | * | Independent | |||||||||
Eugene Hunt | Independent | * | * | * | |||||||||
Jerry Hunter | Independent | Independent | Independent | * | |||||||||
Susan Lanigan | Independent | Independent | Independent | Independent | |||||||||
George A. Makris, Jr. | Not Independent | * | * | * | |||||||||
W. Scott McGeorge | Independent | Independent | * | * | |||||||||
Tom Purvis | Independent | * | * | Independent | |||||||||
Robert L. Shoptaw | Independent | Independent | Independent | Independent | |||||||||
Julie Stackhouse | Independent | * | * | * | |||||||||
Russell W. Teubner | Independent | * | * | * | |||||||||
Mindy West | Independent | Independent | Independent | * |
________________________
**
In the evaluation of Mr. Doramus’s independence, the Board considered investment banking and brokerage services provided to the Company and its subsidiaries by Stephens Inc., as well as insurance services provided to the Company and its subsidiaries by insurance agency affiliates of Stephens Inc. (Mr. Doramus is the Chief
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Financial Officer of Stephens Inc.). In each of these cases, the fees paid were below the independence thresholds of the NASDAQ listing standards, and the Board determined that the relationship did not interfere with the director’s ability to exercise independent judgment as a director of the Company.
The proxies hereby solicited will be voted for the election of the nominees shown below, as directors, to serve until the next annual meeting of the shareholders and until their successors are duly elected and qualified, 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 may be exercised to vote for the election of a substitute or substitutes selected by the Board. Management has no reason to believe that any substitute nominee or nominees will be required.
The nominees possess a wide range of qualifications and perspectives that contribute to strong oversight. The tables below highlight each nominee’s skills, experience, and background, as well as certain demographic, diversity, and tenure information.
The information shown below in our Board Diversity Matrix is based on voluntary self-identifications made by each director serving on the Board as of the listed dates. Each category listed in the Board Diversity Matrix has the meaning used in Nasdaq Listing Rule 5605(f).
Board Diversity Matrix (As of March 6, 2024) | ||||
Total Number of Directors | 17 | |||
Female | Male | Non-Binary | Did Not | |
Part I: Gender Identity | ||||
Directors | 3 | 14 | ||
Part II: Demographic Background | ||||
African American or Black | 2 | |||
Alaskan Native or Native American | ||||
Asian | ||||
Hispanic or Latinx | ||||
Native Hawaiian or Pacific Islander | ||||
White | 3 | 12 | ||
Two or More Races or Ethnicities | ||||
LGBTQ+ | 0 | |||
Did Not Disclose Demographic Background | 2 |
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| | Board Diversity Matrix (As of March 14, 2023) | | | ||||||||||||||||||||||
| | Total Number of Directors | | | | 17 | | | ||||||||||||||||||
| | | | | | Female | | | | Male | | | | Non-Binary | | | | Did Not Disclose Gender | | | ||||||
| | Part I: Gender Identity | | | | | | | | | | | | | | | | | | | | | | | | |
| | Directors | | | | | | 3 | | | | | | | 14 | | | | | | | | | | | |
| | Part II: Demographic Background | | | | | | | | | | | | | | | | | | | | | | | | |
| | African American or Black | | | | | | | | | | | | | 2 | | | | | | | | | | | |
| | Alaskan Native or Native American | | | | | | | | | | | | | | | | | | | | | | | | |
| | Asian | | | | | | | | | | | | | | | | | | | | | | | | |
| | Hispanic or Latinx | | | | | | | | | | | | | | | | | | | | | | | | |
| | Native Hawaiian or Pacific Islander | | | | | | | | | | | | | | | | | | | | | | | | |
| | White | | | | | | 3 | | | | | | | 12 | | | | | | | | | | | |
| | Two or More Races or Ethnicities | | | | | | | | | | | | | | | | | | | | | | | | |
| | LGBTQ+ | | | | 0 | | | ||||||||||||||||||
| | Did Not Disclose Demographic Background | | | | 1 | | |
| | Board Diversity Matrix (As of August 1, 2022) | | | |||||||||||||||||||||||||
| | Total Number of Directors | | | | 17 | | | |||||||||||||||||||||
| | | | | | Female | | | | Male | | | | Non-Binary | | | | Did Not Disclose Gender | | | |||||||||
| | Part I: Gender Identity | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Directors | | | | | | 3 | | | | | | | 13 | | | | | | | | | | | 1 | | | |
| | Part II: Demographic Background | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | African American or Black | | | | | | | | | | | | | 2 | | | | | | | | | | | | | | |
| | Alaskan Native or Native American | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Asian | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Hispanic or Latinx | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Native Hawaiian or Pacific Islander | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | White | | | | | | 3 | | | | | | | 11 | | | | | | | | | | | | | | |
| | Two or More Races or Ethnicities | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | LGBTQ+ | | | | 0 | | | |||||||||||||||||||||
| | Did Not Disclose Demographic Background | | | | 1 | | |
Board Diversity Matrix (As of March 14, 2023) | ||||
Total Number of Directors | 17 | |||
Female | Male | Non-Binary | Did Not | |
Part I: Gender Identity | ||||
Directors | 3 | 14 | ||
Part II: Demographic Background | ||||
African American or Black | 2 | |||
Alaskan Native or Native American | ||||
Asian | ||||
Hispanic or Latinx | ||||
Native Hawaiian or Pacific Islander | ||||
White | 3 | 12 | ||
Two or More Races or Ethnicities | ||||
LGBTQ+ | 0 | |||
Did Not Disclose Demographic Background | 1 |
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE
FOR ALL OF THEMarty D. Casteel
Mr. Casteel, 72,73, was elected to the Board in 2020. Until his retirement in 2020, Mr. Casteel was employed by the Company’s lead subsidiary, Simmons Bank, for over 30 years. During that time, he held various leadership roles, including serving as Simmons Bank’s chairman, president, and chief executive officer from 2013 to 2020. In addition, Mr. Casteel was a senior executive vice president of the Company from 2013 to 2020. Mr. Casteel received a B.S.B.A. degree in Marketing from University of Arkansas in 1974. Mr. Casteel also served in the U.S. Army from 1974 to 1978.
Mr. Casteel has served on numerous boards during his career. He is currently a member of the boards of directors of Jefferson Regional Medical Center and the Arkansas Research Alliance, and he is a past member of the board of directors of the Economic Development Alliance of Jefferson County. He is also a past president of the Mortgage Bankers Association of Arkansas.
The Board believes that Mr. Casteel’s deep understanding of current and historical bank operations, as well as his experience as the chairman, president, and chief executive officer of Simmons Bank, provide needed skills and insight into the banking and financial services business conducted by the Company and its subsidiaries, including the assessment of lending and deposit activities, the management of financial regulatory affairs, the evaluation of bank policies and practices, and the mitigation of enterprise risks.
William E. Clark, II
Mr. Clark, 53,54, was elected to the Board in 2008. He is the Chief Executive Officer of Clark Contractors, LLC, a general contractor involved in commercial construction throughout the United States. Prior to the formation of Clark Contractors, LLC in 2009, he was employed by CDI Contractors from 1994 through 2009, where he served in various capacities culminating in his serving as Chief Executive Officer from 2007 to 2009. Mr. Clark received a B.S.B.A. degree in Business Management from the University of Arkansas in 1991.
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He is a member of Fifty for the Future, a board member of CARTI, a past chairman of the UAMS Foundation Fund Board of Directors, a past president/chairman for the UAMS Consortium, Arkansas Children’s Hospital Committee for the Future, and St. Vincent Foundation, a former member of the Young Presidents Organization, and a member of the Dean’s Executive Advisory Board for the Walton College of Business at the University of Arkansas and the Arkansas Executive Forum.
The Board believes that Mr. Clark’s experience within the commercial construction industry provides needed skills in the assessment of the construction industry utilized by the Company in setting policies involving the allocation of credit and lending priorities.
Steven A. Cossé
Mr. Cossé, 75,76, was elected to the Board in 2004. In 2013, he retired as president and CEO of Murphy Oil Corporation, a Fortune 500 company listed on the New York Stock Exchange (“NYSE”). Mr. Cossé has also previously served as the Executive Vice President and General Counsel for Murphy Oil Corporation. He had served as General Counsel since 1991 and had also previously served as Senior Vice President, Vice President and Principal Financial Officer. Prior to joining Murphy Oil Corporation as General Counsel, he served for eight years as General Counsel for Ocean Drilling & Exploration Company in New Orleans, Louisiana, a NYSE-listed, majority-ownedNYSE-listed, majority-owned subsidiary of Murphy Oil Corporation. Mr. Cossé received a B.A. degree in Government from Southeastern Louisiana University in 1969 and a Juris Doctorate degree from Loyola University in 1974.
Mr. Cossé also currently serves on the boards of Murphy Oil CorporationSouth Arkansas Regional Hospital and SHARE Foundation. He is a former member of the board of directors of Murphy Oil Corporation, the Board of Trustees of Loyola University New Orleans, and he is past chairman of the South Arkansas Chapter of the American Red Cross. Mr. Cossé is a member of the Louisiana Bar Association, Arkansas Bar Association and Union County Bar Association.
The Board believes that Mr. Cossé’s experience as an executive officer, general counsel and principal financial officer provides needed skills in the assessment of the oil industry utilized by the Company in setting policies involving the allocation of credit and lending priorities and in the legal, financial and general business issues facing publicly traded companies.
Mark C. Doramus
Mr. Doramus, 64,65, was elected to the Board in 2015. He serves as Chief Financial Officer of Stephens Inc. (“Stephens”), an independent financial services firm headquartered in Little Rock, Arkansas. He has served in several capacities at Stephens, including in the corporate finance department from 1988 to 1994, Assistant to the President from 1994 to 1996 and Chief Financial Officer since 1996.
He began his career in 1980 with Arthur Andersen & Co. in Dallas, Texas, where he worked as a Certified Public Accountant. He joined the Dallas, Texas, office of Trammell Crow Company in 1983, where he worked until he joined Stephens in 1988.
Mr. Doramus was a member of the CHI St. Vincent Infirmary Board of Directors from 2007 to 2016, serving as chairman from 2012 to 2014. Mr. Doramus was a member of the University of Arkansas at Little Rock Board of Visitors from 2004 to 2016. Mr. Doramus served on the Winthrop Rockefeller Foundation board from 2004 to 2009, serving as Chairman in 2009.
Mr. Doramus graduated from Rhodes College in Memphis, Tennessee, with a B.A. degree in Economics and Business in 1980 and received his M.A. degree in Real Estate and Regional Science from Southern Methodist University in Dallas, Texas, in 1982.
The Board believes that Mr. Doramus’s experience in accounting and the financial services industry provides needed skills for assisting in the management of the Company’s business, including risk management, internal controls and capital management.
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Edward Drilling
Mr. Drilling, 67,68, was elected to the Board in 2008. He joined AT&T (then Southwestern Bell Telephone Company) in 1979 and served in various operations positions including customer service, sales and marketing, and the external affairs organization. He was named President of AT&T’s Arkansas Division in 2002. Mr. Drilling then served as AT&T’s Senior Vice President of External and Regulatory Affairs for all fifty states, a position to which he was appointed in 2017. He retired from AT&T in 2020. Mr. Drilling received a B.S. degree in Marketing from the Walton College at the University of Arkansas in 1978 and graduated from the Emory University Advanced Management Program in 1991. In 2022, he completed the Berkeley Law executive education program “ESG: Navigating the Board’s Role”.
Mr. Drilling has served on numerous boards over the last 3040 years, including as past chairman of the Arkansas State Chamber of Commerce, Arkansas Children’s Hospital Board of Trustees, University of Arkansas Board of Advisors, former president of the Little Rock Chamber of Commerce Board of Directors, UAMS Arkansas BioVentures Advisory Board, founding member of the Arkansas Research Alliance, and former president of Fifty for the Future and former vice chairman of the Arkansas Economic Development Commission.
The Board believes that Mr. Drilling’s experience as an executive within the telecommunication and information technology industry (having participated in various industry transitions, mergers and technology changes) provides needed skills in the assessment of the technology risks of the Company, the security measures to address these risks and valuable insights involving the executive management of a large, highly-regulatedenterprise.
Eugene Hunt
Mr. Hunt, 77,78, was elected to the Board in 2009. He is an attorney in private practice in Pine Bluff, Arkansas. Mr. Hunt began his practice in 1972 and has thereafter been involved in the active practice of law within Arkansas, primarily in southeast Arkansas. He served as Judge on the Arkansas Court of Appeals from August through December 2008 and has also previously served as a Special Circuit Judge and Special Justice on the Arkansas Supreme Court. Additionally, he served as Director of the Child Support Enforcement Unit, Jefferson County, Arkansas from 1990 to 2001. Mr. Hunt received a B.A. degree in History and Government from Arkansas AM&N College in 1969 and a Juris Doctorate degree from the University of Arkansas Law School in 1971.
Mr. Hunt also serves on the boards of The Economic Development Corporation of Jefferson County, Arkansas; Jefferson Hospital; and Youth Partners. HisHe has also been involved with the Arkansas Ethics Commission, Jefferson County United Way, and the Arkansas Criminal Code Revision Commission. He is a Life Member of the NAACP and has served as an NAACP Legal Defense Fund Affiliate Attorney since 1978.
The Board believes that Mr. Hunt’s experience as an attorney and his long-termlong-term familiarity with the business and social environment in southeastern Arkansas provide needed skills in, and insight ininto, the small business and consumer needs of the Company’s banking customers in one of its major markets, southeastern Arkansas.
Jerry Hunter
Mr. Hunter, 70,71, was elected to the Board in 2017. He is Senior Counsel in the Commercial Litigation and Labor & Employment Law Client Service Groups of the international law firm Bryan Cave Leighton Paisner LLP, where he previously was a partner from 1994 until 2020. Mr. Hunter previously served as Labor Counsel for the Kellwood Company, Director of the Missouri Department of Labor and Industrial Relations, and General Counsel of the National Labor Relations Board. Mr. Hunter received a bachelor’s degree in History and Government with a Minorminor in Mathematics from the University of Arkansas at Pine Bluff in 1974 and a Juris Doctor degree from Washington University School of Law in St. Louis, Missouri in 1977. Mr. Hunter also attended the Program for Senior Executives in State and Local Government at the John F. Kennedy School of Government, Harvard University in 1987.
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On November 14, 2022, Mr. Hunter was elected to the Board of Directors of Missouri-AmericanMissouri-American Water Company. Mr. Hunter has served on the boards of the Kellwood Company, Boys Hope Girls Hope International, Associated Industries of Missouri, St. Louis Regional Convention and Sports Complex Authority, U.S. Congress Office of Compliance, American Arbitration Association, Maryville University, the U.S. Senate Small Business Committee Advisory Council, and Washington University Law School Board of Advisors.
The Board believes that Mr. Hunter’s experience as an attorney in senior-levelsenior-level governmental and private-sectorprivate-sector roles, as well as his deep knowledge of labor and employment matters, provide needed skills and insight into the legal and regulatory environment in which the Company operates.
Susan Lanigan
Ms. Lanigan, 60,61, was elected to the Board in 2017. She is on the board of directors of Kirkland’s Inc. (a Nasdaq-listedNasdaq-listed company), where she chairs the Compensation Committee. She previously served on the board of directors of Vi-Jon,Vi-Jon, Inc., where she chaired the Nominating Committee until December 31, 2022.
Ms. Lanigan previously served as Executive Vice President and General Counsel of Chico’s FAS, Inc. (a NYSE-listed(then a NYSE-listed company) from May 2016 until her retirement in July 2018. She also served as Chair of the Tennessee Education Lottery Commission, a position to which she was appointed by the Governor of the State of Tennessee and approved by the State Legislature, from 2014 to 2021. Prior to that, she was Executive Vice President and General Counsel of Dollar General Corporation (a NYSE-listedNYSE-listed company) (“Dollar General”), a Fortune 200 company, where she worked from July 2002 until May 2013. Prior to joining Dollar General, Ms. Lanigan served as Senior Vice President and General Counsel of Zale Corporation. She started her career as a litigation attorney for Troutman Sanders, LLP (now Troutman Pepper Hamilton Sanders LLP) in Atlanta, GA.
The Board believes that Ms. Lanigan’s experienceexperiences as a senior executive officer and general counsel, and as a board member, of large corporations providesprovide needed skills and insight in addressing legal, governance and general business issues facing publicly traded companies.
George A. Makris, Jr.
Mr. Makris, 66,Jr.,67, was elected to the Board in 1997. He currently serves as executive chairman and chairman of the board of the Company, as well as the executive chairman and chairman of the board of the Company’s lead subsidiary, Simmons Bank. Mr. Makris, Jr. previously served as the chairman and chief executive officer of the Company, as well as the chairman and chief executive officer of Simmons Bank until December 31, 2022. Prior to his employment by the Company on January 2, 2013, Mr. Makris, Jr. had been employed by M. K. Distributors, Inc. since 1980 and had served as its President since 1985. Mr. Makris, Jr. previously served as a member of the board of directors of Worthen National Bank — Pine Bluff and its successors from 1985 to 1996 and served as Chairman of the Board from 1994 to 1996. Mr. Makris, Jr. received a B.A. degree in Business Administration from Rhodes College in 1978 and an M.B.A. from the University of Arkansas in 1980.
Mr. Makris, Jr. also serves as a member of the board of trustees of Jefferson Regional Medical Center. He was recently appointed to representIn 2023, he represented the Eighth District of the Federal Reserve District on the Federal Advisory Council to the Federal Reserve Board. He is a past Chairman of the board of directors of The Economic Development Corporation of Jefferson County, Arkansas. He has previously served as Chairman of the board of trustees of the Arts and Science Center for Southeast Arkansas, Chairman of the Board of Directors of the Economic Development Alliance for Jefferson County, Chairman of the board of directors of the Greater Pine Bluff Chamber of Commerce, Chairman of the King Cotton Classic Basketball Tournament, Chairman of the board of trustees of Trinity Episcopal School, a director of Simmons First National Bank, a director of the Wholesale Beer Distributors of Arkansas, a director of the National Beer Wholesalers Association, a director
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The Board believes that Mr. Makris’sMakris, Jr.’s experience as the Executive Chairman and former Chief Executive Officer of the Company and his experience as a business executive and long-termlong-term resident of central and southeastern Arkansas provide needed skills and insight into the banking and financial services business conducted by the Company as well as the executive management of a successful business enterprise.
Tom Purvis
Mr. Purvis, 64,65, was elected to the Board in 2017. He is a partner in a number of real estate development entities and is a partner in L2L Development Advisors, LLC. His career has spanned over 40 years in real estate and related services. Mr. Purvis previously served as a director of First Texas BHC, Inc., which was acquired by the Company in 2017.
Mr. Purvis currently serves as a director of the Fort Worth Zoo, Fort Worth Streams and Valleys, and Fort Worth Tax Increment Financing District. He attended the Business College at the University of Texas and Texas Christian University, where he received a B.B.A. degree in 1982.
The Board believes that Mr. Purvis’s experience in real estate development and financing provides needed skills for analyzing the real estate industry and setting policies involving the allocation of credit and lending priorities within the Texas and other geographic markets of the Company.
Robert L. Shoptaw
Mr. Shoptaw, 76,77, was elected to the Board in 2006. Mr. Shoptaw retired as president of Arkansas Blue Cross Blue Shield (“ABCBS”), a mutual health insurance company, in 2008, terminating his 39 years of service to that organization. During the 1970’s and 1980’s, he served in various management and executive capacities with a primary focus in medical services management, professional relations and government programs administration (Medicare administrative operations). In 1987, Mr. Shoptaw became the Executive Vice President and Chief Operating Officer of ABCBS and was named President and CEO in 1994. After retiring as President and CEO in 2008, he served as Chairman of the Board of Directors of ABCBS from 2009 to 2016. Thereafter, he continued on the ABCBS Board of Directors and served as Chairman of the Audit Committee until March of 2022.
Mr. Shoptaw received a B.A. in Economics from Arkansas Tech University in 1968, an M.B.A. from Webster University in Business Administration and Health Services Management and completed the Advanced Management Program at Harvard University Business School in 1991.
Mr. Shoptaw currently serves as Chairman of the board of commissioners of the Little Rock Metrocentre Improvement District. In the recent past, he served as a founding board member of the Arkansas Research Alliance, chaired the Board of Visitors of the University of Arkansas College of Medicine, and completed a 20-year20-year tenure on the board of the Arkansas Center for Health Improvement.
The Board believes that Mr. Shoptaw’s experience and past performance as the president of a large mutual health insurance company provide needed skills and insight into the health care industry, health insurance industry and the financial and executive management of a large, successful business enterprise.
Julie Stackhouse
Ms. Stackhouse, 64,65, was elected to the Board in 2021. In 2020, she retired as an executive vice president at the Federal Reserve Bank of St. Louis, where she was responsible for bank regulation, including supervision of bank holding companies and state member banks, as well as discount window lending, community development, and learning innovation functions. Prior to joining the Federal Reserve Bank of St. Louis in 2002, Ms. Stackhouse held managerial roles at the Federal Reserve Banks of Kansas City and Minneapolis. Ms. Stackhouse graduated summa cum laude from Drake University in 1980 with a B.S. degree.
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Ms. Stackhouse previously served on the board of directors of Neocova Corporation, a financial technology company. She currently serves on the City of Fort Collins Planning and Zoning Commission, and onthe board of the League of Women Voters of Larimer County, the audit committee of the Colorado State University Foundation, the audit committee of Friendship Bridge, and the Conference of State Bank Supervisors’ State Banking Department Accreditation Review Team.
The Board believes that Ms. Stackhouse’s extensive financial regulatory experience, deep knowledge of financial operations and risks, and leadership roles within government organizations provide needed skills and insight to assist in the oversight of legal, regulatory, compliance, and other matters associated with a large financial institution.
Russell W. Teubner
Mr. Teubner, 66,67, was elected to the Board in 2017. He was the Co-FounderCo-Founder and CEO of HostBridge Technology, LLC, a computer software company, for 20 years. With the acquisition of HostBridge Technology, LLC by Broadcom, Inc. in 2022, Mr. Teubner now serves as a Distinguished Engineer within Broadcom’s Mainframe Software Division. Mr. Teubner previously served as a Chairman of Southwest Bancorp, Inc., which was acquired by the Company in 2017.
The Stillwater, Oklahoma, Chamber of Commerce honored Mr. Teubner as Citizen of the Year in 1992, Small Business Person of the Year in 1991 —– 92, and Small Business Exporter of the Year in 1992 —– 93. In 1997, Oklahoma State University (OSU) named Mr. Teubner as a recipient of its Distinguished Alumni award. During 1996 and 1997 he served on the Citizen’s Commission on the Future of Oklahoma Higher Education. In 1998, he was inducted into the OSU College of Business Hall of Fame. Currently, he serves on the board of directors of the OSU Research Foundation and its commercialization subsidiary, Cowboy Technology. In 2019, he was appointed by the Governor of Oklahoma to serve on the board of the Oklahoma Center for the Advancement of Science and Technology (OCAST). In 2022, he was appointed by the Governor of Oklahoma to serve on the Oklahoma Broadband Governing Board. Mr. Teubner is a past director of the Oklahoma City branch of the Federal Reserve Bank of Kansas City.
The Board believes that Mr. Teubner’s experience in the technology industry provides needed skills for assessing the role of information technology within the Company and its subsidiaries, as well as addressing technology-relatedtechnology-related risks within the financial industry.
Mindy West
Ms. West, 54,55, was elected to the Board in 2017. She currently serves as the Executive Vice President and Chief FinancialOperating Officer and Treasurer at Murphy USA Inc., a NYSE-listedNYSE-listed retailer of gasoline products and convenience store merchandise,merchandise. From August 2013 to February 2024, she served as the Executive Vice President, Chief Financial Officer and has held that role since August 2013. InTreasurer for Murphy USA Inc. (and, in addition to those duties, Ms. West began servingserved as Executive Vice President of Fuels for Murphy USA Inc. infrom June 2018.2018 to February 2024). Ms. West was previously employed by Murphy Oil Corporation, joining the company in 1996 and holding positions in accounting, employee benefits, planning and investor relations. She was Murphy Oil Corporation’s director of investor relations from July 2001 until December 2006 and its Vice President and Treasurer from January 2007 until August 2013, when she joined Murphy USA Inc. Ms. West holds a bachelor’s degree in Finance from the University of Arkansas and a bachelor’s degree in Accounting from Southern Arkansas University. She is a Certified Public Accountant (Inactive) and a Certified Treasury Professional. Ms. West also currently serves on the board of directors of SHARE Foundation of El Dorado, Arkansas, the board of directors of the Razorback Foundation, and its executive committee, as well as the board of directors of Ducks Unlimited Inc., where she serves on its finance committee and board governance committees.committee. Ms. West is a member of the South Arkansas University Business Advisory Council and serves on the Natural State Advisory Council.
The Board believes that Ms. West’s experience in accounting and finance, as well as her leadership roles in large, public companies, provide needed skills for assisting in the oversight of the Company’s business, including audit, risk management, internal controls and capital management.
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The table below sets forth the name, age, principal occupation or employment during the last five years, and prior service as a director of the Company with respect to each director and nominee proposed:
Name | | | Age | | | Principal Occupation | | | Director Since | |
Dean Bass | | | 72 | | | Retired Chairman and CEO of Spirit of Texas Bancshares, Inc. and Spirit of Texas Bank, SSB | | | 2022 | |
Jay Burchfield | | | 76 | | | Retired Chairman, Ozark Trust and Investment Corp. | | | 2015 | |
Marty D. Casteel | | | 72 | | | Retired SEVP of the Company; Retired Chairman, President and CEO of the Bank | | | 2020 | |
William E. Clark, II | | | 53 | | | Chairman and CEO, Clark Contractors, LLC (Construction) | | | 2008 | |
Steven A. Cossé | | | 75 | | | Retired President and CEO Murphy Oil Corporation | | | 2004 | |
Mark C. Doramus | | | 64 | | | Chief Financial Officer, Stephens Inc. | | | 2015 | |
Edward Drilling | | | 67 | | | Retired SVP of External and Regulatory Affairs, AT&T Inc. | | | 2008 | |
Eugene Hunt | | | 77 | | | Attorney, Hunt Law Firm | | | 2009 | |
Jerry Hunter | | | 70 | | | Senior Counsel, Bryan Cave Leighton Paisner LLP | | | 2017 | |
Susan Lanigan | | | 60 | | | Retired EVP & General Counsel, Chico’s FAS, Inc. | | | 2017 | |
George A. Makris, Jr. | | | 66 | | | Executive Chairman and Chairman of the Board of the Company and the Bank | | | 1997 | |
W. Scott McGeorge | | | 79 | | | Chairman, Pine Bluff Sand and Gravel Company | | | 2005 | |
Tom Purvis | | | 64 | | | Partner, L2L Development Advisors, LLC (Real Estate) | | | 2017 | |
Robert L. Shoptaw | | | 76 | | | Retired Executive, Arkansas Blue Cross and Blue Shield | | | 2006 | |
Julie Stackhouse | | | 64 | | | Retired Executive Vice President Federal Reserve Bank of St. Louis | | | 2021 | |
Russell W. Teubner | | | 66 | | | Distinguished Engineer, Broadcom, Inc. | | | 2017 | |
Mindy West | | | 54 | | | Executive Vice President, Chief Financial Officer and Treasurer Murphy USA Inc. | | | 2017 | |
Name | Age | Principal Occupation | Director | |||||||||
Marty D. Casteel | 73 | Retired SEVP of the Company; Retired Chairman, President and CEO of the Bank | 2020 | |||||||||
William E. Clark, II | 54 | Founder and CEO, Clark Contractors, LLC (Construction) | 2008 | |||||||||
Steven A. Cossé | 76 | Retired President and CEO Murphy Oil Corporation | 2004 | |||||||||
Mark C. Doramus | 65 | Chief Financial Officer, Stephens Inc. (Financial Services) | 2015 | |||||||||
Edward Drilling | 68 | Retired SVP of External and Regulatory Affairs, AT&T Inc. | 2008 | |||||||||
Eugene Hunt | 78 | Attorney, Hunt Law Firm | 2009 | |||||||||
Jerry Hunter | 71 | Senior Counsel, Bryan Cave Leighton Paisner LLP | 2017 | |||||||||
Susan Lanigan | 61 | Retired EVP & General Counsel, Chico’s FAS, Inc. | 2017 | |||||||||
George A. Makris, Jr. | 67 | Executive Chairman and Chairman of the Board of the Company and the Bank | 1997 | |||||||||
Tom Purvis | 65 | Partner, L2L Development Advisors, LLC (Real Estate) | 2017 | |||||||||
Robert L. Shoptaw | 77 | Retired Executive, Arkansas Blue Cross and Blue Shield | 2006 | |||||||||
Julie Stackhouse | 65 | Retired Executive Vice President Federal Reserve Bank of St. Louis | 2021 | |||||||||
Russell W. Teubner | 67 | Distinguished Engineer, Broadcom, Inc. | 2017 | |||||||||
Mindy West | 55 | Executive Vice President and Chief Operating Officer, Murphy USA Inc. (Retailer of Gasoline Products and Convenience Store Merchandise) | 2017 |
Committees and Related Matters
During 2022,2023, the Board maintained and utilized the following committees: Executive Committee, Audit Committee, Compensation Committee, NCGC, and Risk Committee.
During 2022,2023, the Audit Committee was composed of Robert L. Shoptaw (Chairman)(Chair), Jay D. Burchfield, Steve Cossé, Edward Drilling, Eugene Hunt, Jerry Hunter, Scott McGeorge, Julie Stackhouse, and Mindy West. The Board has determined that Messrs. Shoptaw and Cossé, along with Mrs.Ms. West, constitute financial experts on the Audit Committee. 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 2022,2023, this committee met 9 times.
The Compensation Committee, which was composed of Jay Burchfield (Chairman)(Chair), Steve Cossé, Jerry Hunter, Susan Lanigan, Scott McGeorge, Robert L. Shoptaw, and Mindy West, met 89 times during 2022.
The NCGC, which was composed of Susan Lanigan (Chairman)(Chair), Steve Cossé, Jerry Hunter, Robert L. Shoptaw, and Mindy West, met 3 times during 2022.
The Risk Committee, which was composed of Mark C. Doramus (Chairman)(Chair), Dean Bass, (effective April 2022), Jay D. Burchfield, Marty Casteel, William Clark, Steve Cossé, Edward Drilling, Eugene Hunt, Jerry Hunter, Susan Lanigan, George Makris, Jr., Scott McGeorge, Tom Purvis, Robert L. Shoptaw, Julie Stackhouse, Russ Teubner, and Mindy West, met 4 times during 2022.
The Company encourages all Board members to attend the annual shareholders’ meeting. Historically, the directors of the Company and its subsidiaries are introduced and acknowledged at the annual shareholders’
The Board met 97 times during 2022,2023, including regular and special meetings. All incumbent directors attended at least 75% of the aggregate of all meetings of the Board and all meetings of the committees on which, and during the time period in which, they served.
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Board Leadership Structure
The Company’s Corporate Governance Principles do not mandate the separation of the offices of Chairman of the Board and Chief Executive Officer. During 2022,recent history, and, indeed, over the last several decades (except for certain brief periods), the offices of Chairman of the Board and Chief Executive Officer were held by the same person. However, effective January 1, 2023, the Board decided to separate these roles, appointing George Makris, Jr. as Executive Chairman and Chairman of the Board and Bob Fehlman as Chief Executive Officer. The Board believes that it is in the best interest of the Company to provide flexibility in the Company’s leadership structure to address differences in the Company’s operating environment as well as differences in the experience, skills, and capabilities of the executive management team serving the Company from time to time. The Board believes that the separation of the roles of Chairman of the Board and Chief Executive Officer promote a variety of significant goals, including, among others, continuity of board leadership, enhanced focus on strategic business initiatives, and effective succession planning. While the Board believes the separation of the Chairman of the Board and Chief Executive Officer positions is currently in the Company’s and shareholders’ best interests, the Board is authorized to combine these positions should circumstances change in the future.
In addition, in an effort to strengthen independent oversight of management and to provide for more open communication, Steve Cossé has served as ChairmanChair of the Executive Committee and as Lead Director during 2022.for a number of years. Following the separation of the Chairman of the Board and Chief Executive Officer roles in 2023, Mr. Cossé continueshas continued to serve as Lead Director and ChairmanChair of the Executive Committee. Mr. Cossé, as an independent Lead Director, chairs executive sessions of the Board conducted without management. These sessions are generally held in connection with regularly scheduled Board meetings. Management also periodically meets with the Lead Director to discuss Board and Executive Committee agenda items, and the Lead Director serves as a liaison between the Chairman of the Board and the independent directors.
Codes of Ethics
Code of Ethics — General. The Company has adopted a general Code of Ethics applicable to all directors, advisory directors, officers, and associates of the Company. The Code of Ethics is designed to promote conducting the business of the Company in accordance with the highest ethical standards of conduct and to promote the ethical handling of conflicts of interest, full and fair disclosure, and compliance with laws, rules, and regulations. Additionally, under the Code of Ethics, directors, advisory directors, officers, and associates or directors who learn of a business opportunity in the course of their service for the Company generally cannot appropriate that opportunity for themselves or for others, but must allow the Company to take advantage of the opportunity. The Company’s Code of Ethics is designed to provide guidance and resources to help ensure that:
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Any material departure from a provision of the Code of Ethics by a director, advisory director, an executive officer, or associate may be waived by the Ethics Committee (in the case of an officer or associate)associate (other than an executive officer)) or the NCGC (in the case of a director, advisory director, or advisory director)executive officer) and shall, as appropriate, be reported to the Board, and any such waiver will be promptly disclosed on its website to the extent required by applicable law, rule, or regulation. The Company will disclose any amendments with respect to its Code of Ethics on its website.
Code of Ethics for Finance Group. The Board has adopted a separate Finance Group Code of Ethics for the Finance Group that supplements the Code of Ethics and applies to the Company’s Chief Executive Officer, Chief Financial Officer, the Chief Accounting Officer, and Controller and all other officers and associates in the Company’s Finance Group.and Accounting, Treasury,
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and Tax Departments of these Codes of Ethics may be found on the Company’s website at www.simmonsbank.com within the “Investor Relations” page.Company and its subsidiaries. To the extent required by applicable law, rule, or regulation, the Company will disclose any amendments or waivers with respect to its Finance Group Code of Ethics for the Finance Group on its website.
Both of these Codes of Ethics may be found on the Company’s website at www.simmonsbank.com within the “Investor Relations” page under “ESG — Governance — Governance Documents”.
Transactions with Related Persons
From time to time, the Bank and such other banking subsidiaries of the Company as are, or may have been, in operation from time to time, have made loans and other extensions of credit to directors, officers, employees, members of their immediate families, and certain other related interests; and from time to time directors, officers, employees, members of their immediate families, and certain other related interests 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 not related to the Company 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 not related to the Company.
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, arm’s-lengtharm’s-length banking relationships entered into in the ordinary course of business do not affect 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-underwritingcredit-underwriting procedures that are no less stringent than those prevailing at the time for comparable transactions by the subsidiary bank of the Company with other persons not related to the Company. 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,non-accrual, past due, restructured, or a potential problem loan. The Company’s Board will review any credit to a director or his or her 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.
An immediate family member of George A. Makris, Jr., Executive Chairman and Chairman of the Board, is employed by the Company. In 2022,2023, Mr. Makris’sMakris, Jr.’s son, George A. Makris III, served as Executive Vice President, General Counsel, and Secretary and received cash and equity compensation consisting of approximately $742,922.as set forth in the Summary Compensation Table. Such compensation is determined on a basis consistent with the Company’s human resources policies and is reviewed and approved by the Compensation Committee.
An immediate family member of Matthew Reddin, who served as Executive Vice President and Chief Banking Officer until July 2023, is employed by the Company. In 2022,2023, Mr. Reddin’s sister, Caroline Butler, served as a Senior Vice President of the Bank and received cash and equity compensation consisting of approximately $283,086.$295,918. Such compensation is determined on a basis consistent with the Company’s human resources policies and iswas reviewed by the Compensation Committee.
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 interest of the Company and its shareholders. The Company’s Code of Ethics and Related Party Transactions Policy address matters concerning related party business dealings. 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 arm’s-lengtharm’s-length transaction with an unrelated third party. Management
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Role of Board in Risk Oversight
The Board has responsibility for the oversight of risk management. The Board, either as a whole or through its committees, regularly discusses with management the Company’s major risk exposures, their potential impact on the Company, and the steps being taken to monitor and manage them.
While the Board is ultimately responsible for risk oversight, the Board committees assist the Board in fulfilling its oversight responsibilities in certain areas of risk. In particular, the Risk Committee assists the Board in assessing and managing the various risks of the Company (including, among others, asset, liability, liquidity, and credit risks, as well as certain risks associated with fraud, third-partythird-party vendors, cybersecurity, and information technology). To aid the Risk Committee in its responsibilities, Company management has formed an Enterprise Risk Management Committee of senior executives and has allocated responsibilities for the administration of the risk management program to the Company’s chief risk officer. The Board has adopted a charter for the Risk Committee that outlines its particular duties. During 2022,2023, due to the importance of risk oversight to the Company and the continued maturation of the Company’s risk management program, the Risk Committee was a “committee of the whole,” with all directors serving as members, andmembers. Based on the current maturation of the Company’s risk management program, the Board has determined that, practicebeginning in 2024, the Risk Committee will continue for 2023.
The Audit Committee, composed of independent directors, focuses on financial risk exposures, including internal controls, and discusses with management, the internal auditors, and the independent registered public accountants the Company’s policies with respect to financial risk assessment and management, including risks related to fraud and liquidity. The Compensation Committee, also composed of independent directors, focuses on the oversight of risks associated with compensation policies and programs.
Environmental, Social, and Governance (“ESG”) Considerations
The Company, along with its subsidiaries, is committed to enhancing the communities that we serve and maintaining an organization that operates with integrity. The Company’s Board is responsible for overseeing the business and affairs of the Company, including matters that relate to ESG considerations. Certain ESG topics are overseen by particular Board committees, including corporate governance matters, which are overseen by the NCGC, and human resources matters, including matters related to our corporate culture, which are overseen by the Compensation Committee. Day-to-dayDay-to-day ESG affairs are managed by the Company’s senior management. The following summary highlights certain aspects of our activities, policies, and practices that relate to ESG matters.
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•In addition to our information security team, we also employ an IT risk and compliance director who has over 18 years of IT governance, risk, and compliance experience. Both our CISO and our IT risk and compliance director report to our chief information officer, who has more than 25 years of technology leadership experience, including leadership experience at global financial institutions, and is responsible, among other things, for oversight of our information technology environment, strategy, and security risks.
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Policy Regarding Employee, Officer and Director Hedging and Pledging
We have a policy that prohibits directors of the Company or any of its affiliates, as well as officers of those entities who are at least senior vice presidents, from engaging in transactions (including, without limitation, prepaid variable forward contracts, short sales, call or put options, equity swaps, collars, units of exchange funds, and other derivatives) that are designed to hedge or offset, or that may reasonably be expected to have the effect of hedging or offsetting, a decrease in the market value of any Company securities. In addition, such persons are prohibited from pledging, hypothecating, or otherwise encumbering Company securities as collateral for indebtedness. Any exception to the policy requires the prior approval of the NCGC.
Communication with Directors
Shareholders may communicate directly with the Board 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 correspondenceCorrespondence addressed to the Board 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 (or appropriate committee of the 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 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 Committee or Director) | |||||
P. O. Box 7009 | |||||
Pine Bluff, Arkansas 71611 |
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
During 2022,2023, the NCGC was composed of Susan Lanigan (Chairman)(Chair), Steve Cossé, Jerry Hunter, Robert L. Shoptaw, and Mindy West. The Board appoints each member of the NCGC and has determined that each member is, and each member who served during 20222023 was, independent in accordance with the NasdaqNASDAQ listing standards.rules. A function of the NCGC regarding nominations is to identify and recommend individuals to be presented for election or re-electionre-election as directors of the Company.
Director Nominations and Qualifications
The Board is responsible for recommending nominees for directors to the shareholders for election at the annual shareholders’ meeting. The Board has delegated the identification and evaluation of proposed director nominees to the NCGC. The NCGC charter, which is available for review within the “Investor Relations” page of the Company’s web site, www.simmonsbank.com (under “ESG — Governance — Governance Documents”), the Company’s by-laws,by-laws, and certain corporate governance principles and procedures govern the nominations and criteria for proposing or recommending proposed nominees for election and re-electionre-election to the Board and its subsidiaries.
The identification of potential directors and the evaluation of existing and potential directors is a continuing responsibility of the NCGC. The NCGC has not retained any third party to assist it in performing its duties. A proposed director may be recommended to the Board at any time; however, director nominations by shareholders must be made in accordance with the procedures set forth in the Company’s by-lawsby-laws and described in this proxy statement under the heading “
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The NCGC has not set any minimum qualifications for a proposed nominee to be eligible for recommendation to be elected as a director of the Company. The corporate governance principles provide
• Geographic location of residence and business interests • Age • Community involvement • Ability to think independently • Ability to fit with the Company’s corporate culture | • Type of business interests • Business and financial expertise • Leadership profile • Personal and professional ethics and integrity • Equity ownership in the Company |
The NCGC has no specific quotas for diversity. In evaluating potential nominees to serve as a director for the Company or the Bank, under the criteria set forth above, the NCGC seeks nominees with diverse business and professional experience, skills, and gender, age, place of residence, and ethnic/racial backgrounds, as appropriate, in light of the current composition of the boards. Additionally, the NCGC seeks geographical diversity and insights into its local and regional markets by primarily seeking potential director nominees who reside within the markets in which the Company has a significant business presence.
Recommendations from Shareholders
The NCGC will consider individuals recommended by shareholders for service as a director with respect to elections to be held at an annual meeting. In order for the NCGC to consider nominating a shareholder-recommendedshareholder-recommended individual for election at the annual meeting, the shareholder must recommend the individual in sufficient time for the consideration and action by the NCGC. While no specific deadline has been set for notice of such recommendations, recommendations provided to the NCGC by a shareholder on or before November 15, 20232024 (for the 20242025 Annual Meeting of Shareholders) should provide adequate time for consideration and action by the NCGC prior to the December 31, 2023,2024, anticipated deadline for reporting proposed nominations to the Board. Recommendations submitted after such date will be considered by the NCGC, but no assurance can be made that such consideration will be completed and committee action taken by the NCGC in time for the next annual shareholders’ meeting.
The Chairman of the Board, other directors, and executive officers may also recommend director candidates to the NCGC. The committee will evaluate individuals recommended by shareholders, the Chairman of the Board, other directors, and executive officers against the same criteria, described above, used to evaluate other nominees.
Annual Self-Evaluations
Board refreshmenteffectiveness remains a key area of focus for us, as evidenced by the 2022 addition of Dean Bass to the Board.us. In furtherance of that goal and in accordance with the Company’s Corporate Governance Principles, the Board, with the oversight of the NCGC, undertakes annual Board and committee self-evaluationself-evaluation processes that involve each director completing detailed questionnaires that assist in the assessment of the performance of the Board, its committees, and their members. The NCGC reports its findings to the Board following completion of the evaluations and oversees any needed follow-upfollow-up action.
Compensation Committee Interlocks and Insider Participation
During 2022,2023, the Compensation Committee was composed of Jay Burchfield (Chairman)(Chair), Steve Cossé, Jerry Hunter, Susan Lanigan, Scott McGeorge, Robert L. Shoptaw, and Mindy West, none of whom were employed by the Company. In addition, none of the committee members were formerly officers of the Company.
Compensation Committee Processes and Procedures
Decisions regarding the compensation of the executivesexecutive officers are generally made by the Compensation Committee, which has adopted a charter that is available for review within the “Investor Relations” page of the Company’s web site, www.simmonsbank.com.www.simmonsbank.com (under “ESG — Governance — Governance Documents”). Specifically, the Compensation Committee has strategic
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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 Compensation Committee and has determined that each member is, and each member who served during 20222023 was, independent in accordance with the NasdaqNASDAQ listing standards.
The Compensation Committee 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 in certain cases. Typically, during the first quarter of each calendar year, the committee generally undertakes 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, Pearl Meyer & Partners, LLC, a compensation and benefits consulting firm, has been retained to advise the Compensation Committee on a regular basis concerning the Company’s compensation programs. The committee engaged the consultant to provide general compensation consulting services, including executive and director compensation. In addition, the consultant may perform special compensation projects and consulting services upon request by the Compensation Committee or Company.
The Board, upon approval and recommendation from the Compensation Committee, determines and approves all compensation and awards to the CEO (and, beginning in 2023, theand Executive Chairman).Chairman. The Compensation Committee reviews the performance of the CEO and Executive Chairman and reviews and approves compensation of the other executive officers. The CEO and/or Executive Chairman also review the performance and compensation of the other executive officers, including the other named executive officers, and report any significant issues or deficiencies, and make recommendations, to the Compensation Committee. The members of the Company’s human resources department assist in such reviews. The human resources department regularly reviews the compensation classification system of the Company, which determines the compensation of all employees of the Company and its affiliates. The Company’s compensation program is based in part on market data. The Compensation Committee also acts upon the proposed grants of stock-basedstock-based compensation recommended by the CEO and/or Executive Chairman for other executives.
In determining the amount of executive officer compensation each year, the Compensation Committee 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 a review of such data, Company performance, and individual performance and circumstances. For performance-basedperformance-based incentives, the Compensation Committee sets performance targets using management’s internal business plan, industry and market conditions, and other factors.
Role of Compensation Consultants
The Company periodically engages compensation consultants to aid in the review of its compensation programs. From time to time, the Company engages compensation consultants to provide national and regional general statistical information regarding compensation within the banking industry. The data reviewed may include base salary, bonus, incentive programs, equity compensation, retirement, and other benefits. This information is used to validate the Company’s classification of positions and salaries within its compensation policies.
The Compensation Committee also uses compensation consultants to evaluate its executive and director compensation programs. Presently, the consultant assists such reviews by providing data regarding market practices and making specific recommendations for changes to plan and award design and policies consistent with the Company’s stated philosophies and objectives.
The Compensation Committee assessed the relationships between Pearl Meyer & Partners, LLC, the Company, the Compensation Committee and the executive officers of the Company for conflicts of interest. In this assessment, the Compensation Committee reviewed the criteria set forth in the SEC’s Reg.240.10C-1(b)Reg. 240.10C-1(b)(4)(i)-(vi), NASDAQ Rule 5605(d)(3)(D)(i)-(vi) and such other criteria as it deemed appropriate. The Compensation Committee did not identify any conflicts of interest for Pearl Meyer & Partners, LLC.
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Executive Officers
The Board elects executive officers at least annually. All of the executive officers shown in the table below have been officers of the Company and/or the Bank for at least five years, except for Messrs. Brogdon and Rawls,Hobbs and Ms. Madea. The table below sets forth the name, age, officer position with the Company and Bank, principal occupation or employment during the last five years, and tenure of service with the Company for each of the executive officers:
Name | | | Age | | | Position | | | Years Served | |
George A. Makris, Jr.(1) | | | 66 | | | Executive Chairman and Chairman of the Board* | | | 10 | |
Robert A. Fehlman(2) | | | 58 | | | Chief Executive Officer* | | | 34 | |
James M. Brogdon(3) | | | 42 | | | President and Chief Financial Officer* | | | 1 | |
Stephen C. Massanelli(4) | | | 67 | | | Senior Executive Vice President and Chief Administrative Officer* | | | 8 | |
Matthew S. Reddin(5) | | | 45 | | | Executive Vice President and Chief Banking Officer, Simmons Bank | | | 8 | |
George A. Makris III(6) | | | 37 | | | Executive Vice President, General Counsel and Secretary* | | | 7 | |
Jennifer B. Compton(7) | | | 50 | | | Executive Vice President and Chief People Officer* | | | 7 | |
David W. Garner | | | 53 | | | Executive Vice President and Chief Accounting Officer* | | | 25 | |
Ann Madea(8) | | | 62 | | | Executive Vice President and Chief Information Officer* | | | 1 | |
Chad Rawls(9) | | | 48 | | | Executive Vice President and Chief Credit Officer, Simmons Bank | | | 4 | |
Brad Yaney(10) | | | 47 | | | Executive Vice President of Credit Risk Management, Simmons Bank | | | 20 | |
Name | Age | Position | Years | |||||||||
George A. Makris, Jr.[1] | 67 | Executive Chairman and Chairman of the Board* | 11 | |||||||||
Robert A. Fehlman[2] | 59 | Chief Executive Officer* | 35 | |||||||||
James M. Brogdon[3] | 43 | President* | 2 | |||||||||
C. Daniel Hobbs[4] | 50 | Executive Vice President and Chief Financial Officer* | 0 | |||||||||
Stephen C. Massanelli[5] | 68 | Senior Executive Vice President and Chief Administrative Officer* | 9 | |||||||||
George A. Makris III[6] | 38 | Executive Vice President, General Counsel and Secretary* | 8 | |||||||||
Jennifer B. Compton[7] | 51 | Executive Vice President and Chief People Officer* | 8 | |||||||||
David W. Garner[8] | 54 | Executive Vice President and Chief Accounting Officer* | 26 | |||||||||
Ann Madea[9] | 63 | Executive Vice President and Chief Information Officer* | 2 | |||||||||
Brad Yaney[10] | 48 | Executive Vice President of Credit Risk Management, Simmons Bank | 21 |
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*
(1)[1]
(2)[2]
(3)[3]
(4)[4]
[5]Mr. Massanelli was appointed Senior Executive Vice President and Chief Administrative Officer in April 2021. Prior to serving in that role, he was Executive Vice President, Chief Administrative Officer, and Investor Relations Officer.
(5)[6]
(7)[7]
(8)[8]
[9]Ms. Madea was appointed Executive Vice President and Chief Information Officer in March 2022. Prior to serving in that role, she was Executive Vice President and IT Executive. Prior to joining the Company, she served as the US Chief Information Officer for Hong Kong Shanghai Banking Corporation (HSBC).
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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 two individuals who, for different portions of 2023, served as principal financial officer, and the three other most highly-compensatedhighly-compensated executive officers during 2022.2023. In addition, this section includes discussion of the 2023 compensation for Matthew S. Reddin, who served as an executive officer until his separation from service on July 5, 2023, and Chad Rawls, who served as an executive officer until July 2023 (Mr. Rawls remains employed by Simmons Bank but, following an internal reorganization, is no longer an executive officer). These fiveeight persons are referred to throughout this discussion as the “named executive officers” or “NEOs.” This discussion focuses on compensation and practices relating to the Company’s most recently completed fiscal year and certain changes to such compensation and practices going forward.
The Company believes that the performance of each of the executive officers has the potential to impact the profitability of the Company, in both the short term and the long term. Therefore, the Company places significant emphasis on the design and administration of its executive compensation program.
Committee
The compensation program for the Company is designed and administered by the Compensation Committee.Committee (also referred to as “Committee” for purposes of this discussion). For 2022,2023, the members of this committeeCommittee were Jay Burchfield (Chairman)(Chair), Steve Cossé, Jerry Hunter, Susan Lanigan, Scott McGeorge, Robert L. Shoptaw, and Mindy West.
Executive Compensation Philosophy
The Company seeks to provide executive compensation packages that are significantly connected to the Company’s overall financial and operational performance, the increase in shareholder value, the success of the Company, and the performance of the individual executive. The main principles of this strategy include the following:
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The Compensation Committee strives to meet these objectives while maintaining market competitive compensation levels and ensuring that the Company makes efficient use of its shares, has predictable expense recognition, and operates within the Company’s risk profile.
Peer Comparison
In determining the amount of executive officer compensation each year, the Compensation Committee reviews competitive market data from the banking industry as a whole and a specific peer group of comparably sized banking organizations. The committeeCommittee uses this peer group of banking organizations for comparison in setting executive compensation practices and levels of base salary, incentives, and benefits.
Prior to setting the peer group, the committeeCommittee obtains the recommendation of its compensation consultant on the makeup of its peer group. For 2022,2023, the compensation consultant conducted a review of publicly-traded regional banks and recommended a peer group based on a review of publicly traded regional banks with similar loan compositions and with assets between approximately $12.6$12.7 billion to $63.0$56.4 billion (approximately 0.5 to 2.52.1 times the Company’s expectedasset size at the time of the peer group analysis) located in the states of Arkansas, Florida, Georgia, Iowa, Indiana, Missouri, Mississippi, Oklahoma, Tennessee, Texas, and Virginia.
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The Compensation Committee adopted the peer group as recommended by its compensation consultant. For our compensation analysis for 2022,2023, the peer group consisted of 2220 banking organizations; the name and ticker symbol for each memberthe members of the peer group are set forth below:
Ameris Bancorp (ABCB) | Atlantic Union Bankshares Corporation (AUB) | |||||
Bank OZK (OZK) | ||||||
BOK Financial Corporation (BOKF) | ||||||
Cadence Bank (CADE) | Commerce Bancshares, Inc. (CBSH) | |||||
FB Financial Corporation (FBK) | ||||||
Hancock Whitney Corporation (HWC) | ||||||
Heartland Financial USA, Inc. (HTLF) | ||||||
Home BancShares, Inc. (HOMB) | ||||||
Independent Bank Group, Inc. (IBTX) | ||||||
Old National Bancorp (ONB) | ||||||
Pinnacle Financial Partners, Inc. (PNFP) | ||||||
Prosperity Bancshares, Inc. (PB) | ||||||
Renasant Corp. (RNST) | SouthState Corporation (SSB) | |||||
Synovus Financial Corp. (SNV) | ||||||
Trustmark Corp. (TRMK) | ||||||
UMB Financial Corp. (UMBF) | United Community Banks, Inc. (UCBI) |
The committeeCommittee believes the peer group was indicative of the market in which the Company competed for the employment and retention of executive management in 2022,2023, as such institutions were of similar size and had similar numbers of employees, product offerings and geographic scope.
The executive salary and benefitincentive programs are generally targeted to the peer group median for each compensation category in order to be competitive in the market. In cases where an executive’s experiences or performance warrant, the Company may exceed the peer group median. The Company’s incentive programs are analyzed with similar programs of the peer group. The incentive programs are designed for the emphasis of performance-basedperformance-based compensation.
The committeeCommittee 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 considered but not determinative in setting compensation or making additional grants.
Decisions Regarding Composition of Total Direct Compensation
The Company’s executive compensation program consists of a mix of separate components that seek to align the executives’ incentives with increasing shareholder value. For 2022,2023, the Company’s executive incentive compensation program includesincluded both non-equitynon-equity and equity incentive compensation.compensation (except in the cases of George Makris, Jr., the Company’s executive chairman, whose incentive compensation program includes only equity incentive compensation; Mr. Reddin, the Company’s previous chief banking officer, who, due to the timing of his separation from service in July 2023, did not receive a non-equity incentive award; and C. Daniel Hobbs, the Company’s chief financial officer, who, due to the timing of his hiring in December 2023, did not participate in any incentive compensation program for 2023). The Company established target allocations of non-equitynon-equity incentive compensation for participating executive officers. For 2022,2023, for the CEO, the Board set a target allocation of potential non-equitynon-equity incentive compensation at 100% of salary. For all participating executive officers other than the CEO, the Compensation Committee set targets for potential non-equitynon-equity incentive compensation based upon the executive’s scope and performance ranging from 30%40% to 100% of salary. The Company also established target allocations of equity incentive compensation for all participating executive officers. For 2022,2023, for the CEO, the Board set a target allocation of potential equity incentive compensation at 170%135% of salary. For all participating executive officers other than the CEO, the Compensation Committee (or, in the case of the executive chairman, the Board) set targets for potential equity incentive compensation based upon the executive’s scope and performance ranging from 40%45% to 100%200% of salary. If performance goals are achieved at the threshold level, the annual grants for equity incentive compensation to such executives will vest at 75% of target. If performance goals are achieved at the target level, the annual grants for equity incentive compensation to such executives will vest at 100% of target. If performance goals are achieved at the maximum level, the annual grants for equity incentive compensation to such executives will vest at 150% of target. In recent years, the annual grants for equity incentive compensation have consisted of restricted stock awards, restricted stock unit awards, performance share unit awards and/or stock options as specified by the Compensation Committee.
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The compensation of the named executive officers for 20222023 was allocated as follows:
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“Total direct compensation” means annual base salaries plus bonus plus non-equitynon-equity and equity incentive compensation, excluding non-recurring,non-recurring, special purpose grants, payments, or bonuses (including, for the avoidance of doubt, bonuses for the successful completion of mergers and acquisitions). The foregoing percentages are based on the grant date fair value of annual compensation (calculated in accordance with Accounting Standards Codification Topic 718, Compensation — Stock Compensation). Please refer to the discussion of Accounting Standards Codification Topic 718, Compensation — Stock Compensation, which precedes the 20222023 Summary Compensation Table, below.
The Company emphasizes market practices in the design and administration of its executive compensation program. The Compensation Committee’s philosophy is that incentive pay should generally constitute a significant component of total direct compensation. The executive compensation program utilizes stock options, restricted stock awards, restricted stock units and performance share units, although no stock options or restricted stock awards were issued during 2022.2023. Equity incentive performance measures generally 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.
Consistent with the recommendation of the compensation consultant, the Compensation Committee included restricted stock units and performance share unit awards as components of the 20222023 incentive compensation program.
Executive Compensation Program Overview
The Company takes shareholder feedback on its compensation programs very seriously. The Company appreciates that approximately 74%95% of shares that voted on the Company’s “say-on-pay”“say-on-pay” proposal at the 20222023 Annual Meeting of Shareholders approved the 2022 compensation of the named executive officers, as disclosed in the 20222023 proxy statement. Whilestatement, and the Compensation Committee views this as an indication that the Company has been generally effective in implementing its compensation philosophy and objectives,objectives. Nevertheless, the Committee acknowledges that this level of support is lower than that generally received in previous years. In response to this vote, and to enhance its understanding of investor perspectives regarding executive compensation and governance matters, the Company reviewed the analysis of certain proxy advisory firms and undertook engagements with certain of its largest shareholders to seek their feedback on these matters. Members of the Company’s executive management team and/or the chairman of the Compensation Committee (who is an independent director) participated in these discussions. Management provided both the Compensation Committee and the Board with updates concerning conversations with shareholders to enable both the Compensation Committee and the Board, as appropriate, to take into account the topics discussed and the feedback received. The following tables summarize certain executive compensation topics discussed during these engagements, as well as the Committee’s perspectives on them:
The four primary components of the Company’s executive compensation program are:
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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.responsibilities and to offset cost of living increases. Base salary levels are also used as a benchmark for the amount of incentive compensation opportunity provided to an executive. For example, participation in the cash incentive plan (“CIP”) is set within a range of base salary based upon the executive’s scope of responsibility and the executive’s performance.
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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
In certain years, the BoardCompany has approved one-time,issued one-time, discretionary bonuses in special situations, such as in connection with onboarding a new (or promoting an existing) executive or certain mergers and acquisitions. While the Company does not have a practice of routinely utilizing discretionary bonuses as a significant part of the executive compensation program, the Company does believe that such compensation may be appropriate in special situations, such as the Company’s successful merger and acquisition activities. TheIn addition, in recent years, competition among financial institutions for key personnel has increased, and, in the Company’s experience, one-time bonuses can be an important and effective tool for recruiting and retaining key personnel who may have other employment opportunities. As a result, the Committee continues to believe the Company should be able to award one-time bonuses where special circumstances warrant and further believes that although mergers and acquisitions are an important partsuch use of these types of bonuses is consistent with the practices of many of the Company’s overall growth strategy, these transactions are complex, opportunistic events that are difficultpeers (and, again, is important to predict from a timing perspective and that must be carefully evaluated when they arise. The Company believes that building intomaintaining competitive pay practices at the long-term incentive plan (discussed in greater detail below) an expectation thatCompany). During 2023, the Company must continue to engage in mergers and acquisitions over the course ofissued a particular performance period could incent executive officers to seek transactions that may pose higher levels of risk to, and uncertainty for, the Company’s long-term performance. Therefore, the Company believes it is more appropriate to use one-time, discretionary bonuses to reward executives for exemplary leadership and service when deemed warranted in connection with important, strategic corporate transactions. In connection with the successful completion of the Company’s acquisitions of Landmark Community Bank, Triumph Bancshares, Inc., and Spirit of Texas Bancshares, Inc., and in recognition of such exemplary leadership and service, the Company, during 2022, awarded each of Messrs. Brogdon, Massanelli, and Reddin a cash signing bonus in the amount of $20,000, $15,000, and $15,000, respectively.
2. Non-Equity Incentives
The Company uses the CIP as a short-termshort-term incentive to encourage achievement of its annual performance goals. The CIP focuses on the achievement of annual financial goals and awards.operating goals. The CIP is designed to:
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The CIP is designed to provide executives with market competitive compensation based upon their scope of responsibility. The size of an executive’s CIP award is influenced by these factors, market practices, Company performance, and individual performance. The Compensation Committee generally sets the annual CIP award for an executive to provide an incentive at the market median for expected levels of performance. All of the named executive officers (except Messrs. Makris, Jr., Reddin, and Hobbs) participated in the CIP in 2022.2023. Awards earned under the CIP for 2022 are contingent upon employment with the Company through the payment date in the first quarterend of the following fiscal year (no later than March 15),applicable performance period, except for payments made in the event of death, retirement, or disability.
The ultimate amount paid to an executive under the CIP is a function of four variables:
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For 2022, company-wide core diluted earnings per share2023, company-wide adjusted pre-provision net revenue (“PPNR”) and adjusted efficiency ratio (“ER”) were approved as the performance goalsmetrics for the CIP for Messrs. Fehlman, Brogdon, Makris Brogdon, Fehlman,III, and Massanelli. For Mr. Reddin, company-wide core diluted earnings per share, adjusted efficiency ratio, and total business unit revenueRawls, PPNR, as well as commercial loan asset quality factors (“AQ Factors”), were approved as the performance goalsmetrics for the CIP for 2022.2023. The Committee developed corresponding threshold, target, and maximum performance levels for each measure.the PPNR and ER metrics. The Committee also set target annual incentive opportunities for each participating named executive officer, measured as a percentage of base salary. Threshold and maximum payout opportunities, at 50% and 200% of target, were established for each performance goal.the PPNR and ER metrics. No
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deemed to be “make or miss,” with a set payout for performance that met or exceeded the target goal and no payout if performance did not meet the target goal. To incent CIP participants to make decisions that have positive long-termlong-term impact on the Company, even at the expense of short-termshort-term results, and to prevent unusual gains and losses from having too great an impact on plan payouts, the Compensation Committee retained discretion to exclude items impacting comparability from company-widecompany-wide results and adjust actual results for specific items that occurred during the plan year. In addition, the final payouts for Messrs. Brogdon and Massanellicertain officers were eligible for negative adjustments based on the actual expenses incurred by their respective departments as compared to budgeted amounts;amounts, and the final payoutpayouts for all participating named executive officers (except Mr. Reddin was subject to reductionRawls) were eligible for negative adjustments based uponon certain company-wide asset quality metrics. Further, the Compensation Committee reserved the right to adjust the amount payable under the CIP in accordance with any standard or on any other basis as the Compensation Committee may determine. The 20222023 CIP design was generally consistent with the design used in 2021.
The Compensation Committee generally sets the performance measures in the first quarterhalf of each year based on management’s confidential business plan and budget for the coming year, which typically includes planned revenue growth, cost management and profit goals. The committeeCommittee also sets threshold, target, and maximum performance levels where applicable. Maximum performance levels reflect ambitious goals which can only be attained when business results are exceptional. Threshold performance levels for the components are usually set based on an analysis of the budget for the coming year or as a percentage of target.
The Compensation Committee also assesses actual performance relative to pre-setpre-set levels and, in doing so, determines the amount of any final award payment. In determining final awards and in evaluating performance, the committeeCommittee considers adjustments to GAAP net income and other corporate performance measures for unplanned, unusual, non-recurring,non-recurring, or other appropriate items.
Each participant in the CIP is allocated a targeted incentive as a percentage of his or her base salary which is payable if and to the extent the Company’s performance satisfies the Target performance level for all componentseach component under the CIP and satisfies(or, for the qualifying criteria (if any)AQ Factors for Mr. Rawls, if the Company’s performance meets or exceeds the target goal), subject to Committee adjustment. The table below shows the targeted benefit for the participating named executive officers for 2022.
Executive Name & Title | | | Targeted Benefit (% of Base Salary) | | | Targeted Benefit ($) | | ||||||
George A. Makris, Jr., Chief Executive Officer | | | | | 100.00% | | | | | $ | 900,735 | | |
James M. Brogdon, Chief Financial Officer | | | | | 75.00% | | | | | $ | 356,250 | | |
Robert A. Fehlman, President and Chief Operating Officer | | | | | 100.00% | | | | | $ | 566,500 | | |
Matthew S. Reddin, EVP, Chief Banking Officer | | | | | 90.00% | | | | | $ | 370,800 | | |
Stephen C. Massanelli, SEVP, Chief Administrative Officer | | | | | 50.00% | | | | | $ | 175,100 | | |
Executive Name & Title | Targeted Benefit | Targeted Benefit | ||||
Robert A. Fehlman, Chief Executive Officer | 100.00% | $750,000 | ||||
James M. Brogdon, President | 100.00% | $550,000 | ||||
George A. Makris III, EVP | 50.00% | $185,000 | ||||
Stephen C. Massanelli, SEVP | 50.00% | $181,000 | ||||
Chad D. Rawls, EVP | 45.00% | $150,750 |
For the participating named executive officers (except Mr. Reddin)Rawls), the identification and weighting of the CIP components was uniform and limited to core diluted earnings per sharePPNR and adjusted efficiency ratio.ER. For Mr. Reddin,Rawls, the identification and weighting of the CIP components included core diluted earnings per sharePPNR (weighted at 25%50%), adjusted efficiency ratio (weighted at 25%), and total business unit revenueAQ Factors (weighted at 50%). For certain other business executives participating in the plan, the applicable CIP components included other individualized performance criteria related to the executive’s duties or performance components within the business line the executive manages. Further, the weighting of the CIP components may vary among the other participants in the CIP. The weighting of the CIP components for the named executive officers participating in the CIP in 20222023 was as follows:
Component | Weighting | Weighting | ||||
Adjusted Pre-Provision Net Revenue | 50% | 50% | ||||
Adjusted Efficiency Ratio | 50% | 0% | ||||
Commercial Loan Asset Quality Factors | 0% | 50% |
Component | | | Weighting (all NEOs except Reddin) | | | Weighting (Reddin) | | ||||||
Core Diluted Earnings per Share | | | | | 50% | | | | | | 25% | | |
Adjusted Efficiency Ratio | | | | | 50% | | | | | | 25% | | |
Total Business Unit Revenue | | | | | 0% | | | | | | 50% | | |
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Each of PPNR and ER has three performance levels that help determine the participant’s payout for that component: Threshold, Target and Maximum. Absent exercise of Committee discretion, no payout is earned
The core diluted earnings per sharePPNR component was based upon the Company’s “core earnings” (2023 “adjusted pre-provisionnet revenue” (net interest income plus noninterest income minus noninterest expense, then adjusted to exclude non-corefor certain items (on a pre-tax basis), including itemsmerger related tocosts, branch right sizing, the Company’srightsizing costs, early retirement program costs, gain/loss on sale of securities, gain on insurance settlement, and merger-related costs) divided by the average diluted number of common shares outstanding for the period.FDIC special assessment). For the participating named executive officers, except Mr. Reddin, this component was allocated 50% of the participant’s targeted CIP benefit (the allocation for Mr. Reddin was 25%).benefit. The performance levels for 20222023 were set by the Compensation Committee considering 2021 targets2022 results and the Company’s budget for 2022.2023. The core diluted earnings per sharePPNR target was set at $2.43.$410,000,000. The threshold level was set at $2.26,$369,000,000, and the maximum was set at $2.60.$451,000,000. If core diluted earnings per share are2023 PPNR was below the threshold, there would be no core diluted earnings per sharePPNR entitlement (absent the exercise of Committee discretion).
The Committee certified $2.40 as the core diluted earnings per share for 2022, which exceeded the threshold but was less than the target and, thus, provided a benefit of 91% of the allocated target benefit for this component. In certifying such performance, the Compensation Committee excluded from its calculations a $33.8 million “Day 2 CECL provision expense” (pre-tax) (which equates to a $25 million provision expense (after-tax)) that the Company was required to take in connection with the completion of its acquisition of Spirit of Texas Bancshares, Inc. (which occurred in April 2022) as a result of technical accounting rules (and, which, therefore, the Committee deemed to be appropriate to exclude for evaluating management’s and the Company’s actual performance for compensation purposes). Without this exclusion, the Company’s core diluted earnings per share for 2022 would have been $2.20, which was below threshold.
In addition, for Mr. Reddin,Rawls, the total business unit revenue component was based upon the revenue generated by the business units that reported to Mr. Reddin for 2022, and thisAQ Factors component was allocated 50% of Mr. Reddin’sRawls’ targeted CIP benefit. The committee established a Threshold, Target,benefit and Maximum for this component. Performance levels for 2022 were set by the Compensation Committeewas based upon the Company’s internal operating goals. The Threshold, Target, and Maximum were set at $750,996,000, $807,523,000, and $864,050,000, respectively (following an increasefollowing with respect to original performance levels for this component to account for the effects of the Company’s acquisition of Spirit of Texas Bancshares, Inc., which was completed in April 2022). Actual total business unit revenue for 2022 was $793,756,000, which exceeded the threshold but was less than the target and, thus, provided Mr. Reddin a benefit of 88% of the allocated target benefit for this component.
Benefit Level(1) | | | Threshold 50% | | | Target 100% | | | Maximum 200% | | | 2022 Results | | | 2022 Benefit Level | | |||||||||||||||
Core Diluted Earnings per Share | | | | $ | 2.26 | | | | | $ | 2.43 | | | | | $ | 2.60 | | | | | $ | 2.40 | | | | | | 91% | | |
Adjusted Efficiency Ratio | | | | | 60.4% | | | | | | 56.4% | | | | | | 51.4% | | | | | | 57.3% | | | | | | 89% | | |
Aggregate Benefit(2) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 90% | | |
Asset Quality Factor (Commercial Loan Portfolio) | Target Goal (Commercial Loan Portfolio) | |||
Loans Past Due 30-89 Days (Excluding Non-Accruals) | Less than or Equal to 0.10% | |||
Criticized Loans to Total Loans | Less than or Equal to 3.00% | |||
Non-Performing Loan Ratio | Less than or Equal to 0.40% | |||
Charge-Offs to Total Loans | Less than or Equal to 0.20% |
Each of the above twofactors was weighted 10% of the targeted benefit allocation attributable to the AQ Factors component except for “Charge-Offs to Total Loans,” which had a weighting of 20%. The AQ Factors were deemed to be “make or miss,” with a set payout for performance that met or exceeded the target goal and no payout if performance did not meet the target goal.
Each of the AQ Factors met or exceeded its target goal except “Criticized Loans to Total Loans,” for which performance did not meet the target goal.
However, threshold performance for the PPNR and ER components atwas not achieved. As a result, none of the designated levels based upon the 50% weighting for each component applicable to all participating named executive officers except Mr. Reddin.
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In determining the final CIP payout, however, after consultation with its compensation consultant and the Executive Chairman, the Compensation Committee (and, in the case of Mr. Reddin
Benefit Level(1) | | | Threshold 50% | | | Target 100% | | | Maximum 200% | | | 2022 Results | | | 2022 Benefit Level | | |||||||||||||||
Core Diluted Earnings per Share | | | | $ | 2.26 | | | | | $ | 2.43 | | | | | $ | 2.60 | | | | | $ | 2.40 | | | | | | 91% | | |
Adjusted Efficiency Ratio | | | | | 60.4% | | | | | | 56.4% | | | | | | 51.4% | | | | | | 57.3% | | | | | | 89% | | |
Total Business Unit Revenue | | | | $ | 750,996,000 | | | | | $ | 807,523,000 | | | | | $ | 864,050,000 | | | | | $ | 793,756,000 | | | | | | 88% | | |
Aggregate Benefit Before | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Asset Quality Reduction(2) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 89% | | |
Aggregate Benefit After | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Asset Quality Reduction(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 79% | | |
•Successful Execution of the Better Bank Initiative: During 2023, the Company executed its Better Bank Initiative, a program designed to evaluate and enhance various aspects of the Company’s people, processes, and systems. As a result of the initiative, the Company was able to achieve $18 million in annualized cost savings, substantially exceeding the Company’s original target of $15 million.
•Successful Completion of the Credit Optimization Initiative: During 2023, the Company also completed its Credit Optimization Initiative, a program designed to gain additional consistency, efficiency, and effectiveness of the Company’s lending function. Through this initiative, the Company undertook a comprehensive revision of its credit policy and implemented substantial improvements to its credit underwriting, documentation, and funding processes that made them more effective and transparent, while also providing for a better overall customer experience.
•Successful Management of Industry Challenges: During 2023, the financial industry experienced multiple unforeseeable events, including bank failures, increases in interest rates, and significant deposit migrations. Despite these challenges, the Company maintained strong asset quality, capital, and liquidity positions, and the Company ended 2023 with all regulatory capital ratios significantly exceeding “well capitalized” guidelines.
•Strong Risk Management: During 2023, Company executives successfully managed regulatory examinations and continued to enhance the Company’s enterprise risk management program. Company management also responded to certain significant changes in regulatory requirements concerning fees charged to consumers.
•Operating Performance: During 2023, the Company utilized cash flows from securities sales to reduce higher-cost wholesale funding, achieved loan growth of approximately $700 million, and recognized noninterest expenses that were $29 million favorable to budget. Additionally, the Company saw strong operating results from its wealth and agri-lending units, as well as increased income from its swap activity.
•Industry Recognition: Among other things, the Company was named to Forbes magazine’s 2023 list of “World’s Best Banks” for the fourth consecutive year and recognized by Forbes as one of “America’s Best Midsize Employers” for 2023.
Based on its evaluation of these factors and others, the Compensation Committee (or the Board, as applicable) approved, with respect to Messrs. Fehlman, Brogdon, Makris III, and Massanelli, a payment of 35% of each of the core diluted earnings per share and adjusted efficiency ratio components, as well as the 50% weighting for the total business unit revenue component, applicableparticipating named executive officer’s respective target benefit opportunity. With respect to Mr. Reddin.
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A summary of the CIP payments to the participating named executive officers for 2022 are2023 is shown in the following table.
Name | Component | Weighting | Targeted | Earned | Amount | |||||||||
Robert A. Fehlman | Adjusted Pre-Provision Net Revenue | 50 | % | $375,000 | 0 | % | $ 0 | |||||||
Adjusted Efficiency Ratio | 50 | % | $375,000 | 0 | % | $ 0 | ||||||||
Discretionary Payment |
|
| $262,500 | |||||||||||
Total CIP Benefit |
|
| $262,500 | |||||||||||
James M. Brogdon | Adjusted Pre-Provision Net Revenue | 50 | % | $275,000 | 0 | % | $ 0 | |||||||
Adjusted Efficiency Ratio | 50 | % | $275,000 | 0 | % | $ 0 | ||||||||
Discretionary Payment |
|
| $192,500 | |||||||||||
Total CIP Benefit |
|
| $192,500 | |||||||||||
George A. Makris III | Adjusted Pre-Provision Net Revenue | 50 | % | $ 92,500 | 0 | % | $ 0 | |||||||
Adjusted Efficiency Ratio | 50 | % | $ 92,500 | 0 | % | $ 0 | ||||||||
Discretionary Payment |
|
| $ 64,750 | |||||||||||
Total CIP Benefit |
|
| $ 64,750 | |||||||||||
Stephen C. Massanelli | Adjusted Pre-Provision Net Revenue | 50 | % | $ 90,500 | 0 | % | $ 0 | |||||||
Adjusted Efficiency Ratio | 50 | % | $ 90,500 | 0 | % | $ 0 | ||||||||
Discretionary Payment |
|
| $ 63,350 | |||||||||||
Total CIP Benefit |
|
| $ 63,350 | |||||||||||
Chad D. Rawls | Adjusted Pre-Provision Net Revenue | 50 | % | $ 75,375 | 0 | % | $ 0 | |||||||
AQ Factors | 50 | % | $ 75,375 | 80 | %[1] | $ 60,300 | ||||||||
Discretionary Payment |
|
| $ 54,700 | |||||||||||
Total CIP Benefit |
|
| $115,000 |
________________________
[1]
Name | | | Component | | | Weighting Factor (%) | | | Targeted Incentive ($) | | | Earned Benefit Level (%) | | | Incentive Earned ($) | | ||||||||||||
George A. Makris, Jr. | | | Core Diluted Earnings per Share | | | | | 50% | | | | | $ | 450,368 | | | | | | 91% | | | | | $ | 409,834 | | |
| Adjusted Efficiency Ratio | | | | | 50% | | | | | $ | 450,368 | | | | | | 89% | | | | | $ | 400,827 | | | ||
| Total CIP Benefit | | | | | | | | | | | | | | | | | | | | | | $ | 810,661 | | | ||
James M. Brogdon | | | Core Diluted Earnings per Share | | | | | 50% | | | | | $ | 178,125 | | | | | | 91% | | | | | $ | 162,094 | | |
| Adjusted Efficiency Ratio | | | | | 50% | | | | | $ | 178,125 | | | | | | 89% | | | | | $ | 158,531 | | | ||
| Total CIP Benefit | | | | | | | | | | | | | | | | | | | | | | $ | 320,625 | | | ||
Robert A. Fehlman | | | Core Diluted Earnings per Share | | | | | 50% | | | | | $ | 283,250 | | | | | | 91% | | | | | $ | 257,758 | | |
| Adjusted Efficiency Ratio | | | | | 50% | | | | | $ | 283,250 | | | | | | 89% | | | | | $ | 252,093 | | | ||
| Total CIP Benefit | | | | | | | | | | | | | | | | | | | | | | $ | 509,851 | | | ||
Matthew S. Reddin | | | Core Diluted Earnings per Share | | | | | 25% | | | | | $ | 92,700 | | | | | | 91% | | | | | $ | 84,357 | | |
| Adjusted Efficiency Ratio | | | | | 25% | | | | | $ | 92,700 | | | | | | 89% | | | | | $ | 82,503 | | | ||
| Total Business Unit Revenue | | | | | 50% | | | | | $ | 185,400 | | | | | | 88% | | | | | $ | 163,152 | | | ||
| Asset Quality Reduction (10% of Targeted Benefit) | | | | | | | | | | | | | | | | | | | | | | $ | (37,080) | | | ||
| Total CIP Benefit | | | | | | | | | | | | | | | | | | | | | | $ | 292,932 | | | ||
Stephen C. Massanelli | | | Core Diluted Earnings per Share | | | | | 50% | | | | | $ | 87,550 | | | | | | 91% | | | | | $ | 79,671 | | |
| Adjusted Efficiency Ratio | | | | | 50% | | | | | $ | 87,550 | | | | | | 89% | | | | | $ | 77,920 | | | ||
| Total CIP Benefit | | | | | | | | | | | | | | | | | | | | | | $ | 157,591 | | |
AQ Factor (Commercial Loan Portfolio) | Target Goal | 2023 | Weighting | 2023 | ||||||||||
Loans Past Due 30 – 89 Days | Less than or Equal to 0.10% | 0.05 | % | 10 | % | $15,075 | ||||||||
(Excluding Non-Accruals) |
|
| ||||||||||||
Criticized Loans to Total Loans | Less than or Equal to 3.00% | 3.43 | % | 10 | % | $ 0 | ||||||||
Non-Performing Loan Ratio | Less than or Equal to 0.40% | 0.38 | % | 10 | % | $15,075 | ||||||||
Charge-Offs to Total Loans | Less than or Equal to 0.20% | 0.01 | % | 20 | % | $30,150 | ||||||||
Total Benefit |
|
| $60,300 |
3. Equity Incentives
Since 2015, the Company has annually established a Long-TermLong-Term Incentive Plan (“LTIP”) for equity awards under the Simmons First National Corporation 2015 Incentive Plan (as such plan has been amended and restated from time to time) (the “2015 Plan”). The major components of the LTIP are non-qualifiednon-qualified stock options, restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and performance share units (“PSUs”) that are settled in shares of Common Stock based on results over a three-yearthree-year performance period. IfDuring 2023, shareholders approveapproved the Simmons First National Corporation 2023 Stock and Incentive Plan (the “2023 Plan”) as described in Proposal 6, no further LTIP awards will be granted under the 2015 Plan. As a result, following the date of this annual meeting, and futurethe 2023 Annual Meeting, LTIP awards instead will beare granted under the 2023 Plan. As with the 2015 Plan, the 2023 Plan includes non-qualifiednon-qualified stock options, RSAs, RSUs and PSUs as available award types.
No stock options (or RSAs)or RSAs were granted in 2022.2023. PSUs reward the achievement over a 3-year3-year performance period of specified financial performance criteria specified in the PSU at the time of the grant. Achievement of a threshold level of performance results in a payout equal to 50% of each participant’s approved target opportunity. Target performance results in a payout equal to 100% of the targeted opportunity. The maximum number of shares that can be earned for each of these performance measures is 200% of the targeted number of PSUs. The ultimate value of performance shares, which are paid in stock, is also impacted directly by stock price appreciation or depreciation
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over the performance period. Dividend equivalents are paid at the conclusion of the performance period based on the number of shares actually earned during the applicable performance period. If the performance with respect to any component is in excess of the Threshold and less than the Maximum, then the participant’s entitlement is a prorated percentage computed based upon the Company’s actual performance in proportion to the closest performance level for that component. RSUs generally vest in approximately equal installments over three years after the date of grant.
For the three-yearthree-year performance period commencing in 20222023 (“20242025 Performance Period”), the allocation of the equity vehicles under the LTIP is 50% in RSUs and 50% in PSUs (valued at target). Performance does
When performance-basedperformance-based grants of restricted stock are utilized, the Compensation Committee identifies the specific components of the Company’s financial performance to be used in determining the grants. The components are weighted to emphasize the current strategic focus of the Company. The Compensation Committee sets Threshold, Target, and Maximum performance levels for each component which if satisfied will entitle the participant to 50%, 100%, and 200%, respectively, of the participant’s targeted benefit attributable to that component. The Company’s performance at the Threshold level for a component entitles the participant to 50% of the Participant’s target benefit times the weighting factor for such component. The Company’s performance at the Target level for a component entitles the participant to 100% of the Participant’s target benefit times the weighting factor for such component. The Company’s performance at the Maximum level entitles the participant to 200% of the Participant’s target benefit times the weighting factor for such component. Performance in excess of the Maximum does not entitle the participant to a benefit in excess of the maximum target benefit times the weighting of that component. If the performance with respect to any component is in excess of the Threshold and less than the Maximum, then the participant’s entitlement is a prorated percentage computed based upon the Company’s actual performance in proportion to the closest performance level for that component. In determining final awards and in evaluating performance, the committeeCommittee considers adjustments to GAAP net income and other corporate performance measures for unplanned, unusual, non-recurring,non-recurring, or other appropriate items.
20242025 Performance Period Grant
The equity incentive granted for the 20242025 Performance Period (three-year(three-year period 2022-2024)2023-2025) consists of 50% RSUs and 50% PSUs. The RSUs granted for the 20242025 Performance Period are time vested in approximately equal installments on the first, second, and third anniversary of the grant date. For the 20242025 Performance Period, the PSUs were granted to the equity incentive plan participants in February 2022January 2023 and will be payable in early 20252026 after certification of the results of the 20242025 Performance Period by the Compensation Committee or, in the case of Messrs. Makris, Jr. and Fehlman, the Board. In February 2022,January 2023, the Compensation Committee established the performance criteria and the target payout for the PSUs, under the LTIP, including the participating named executive officers. The table below sets forth certain details for the equity incentive for the participating named executive officers in the 20242025 Performance Period:
Executive Name & Title | | | Targeted Equity Incentive (% of Salary)* | | | Targeted Equity Incentive ($) | | | RSU Allocation ($) | | | PSU Allocation ($) | | ||||||||||||
George A. Makris, Jr., CEO | | | | | 170% | | | | | $ | 1,531,250 | | | | | $ | 765,625 | | | | | $ | 765,625 | | |
James M. Brogdon, CFO | | | | | 75% | | | | | $ | 356,250 | | | | | $ | 178,125 | | | | | $ | 178,125 | | |
Robert A. Fehlman, President & COO | | | | | 100% | | | | | $ | 566,500 | | | | | $ | 283,250 | | | | | $ | 283,250 | | |
Matthew S. Reddin, EVP | | | | | 60% | | | | | $ | 247,200 | | | | | $ | 123,600 | | | | | $ | 123,600 | | |
Stephen C. Massanelli, SEVP | | | | | 60% | | | | | $ | 210,120 | | | | | $ | 105,060 | | | | | $ | 105,060 | | |
Executive Name & Title | Targeted | Targeted | RSU | PSU | ||||||
Robert A Fehlman, CEO | 135% | $1,012,500 | $ 506,250 | $ 506,250 | ||||||
James M. Brogdon, President | 120% | $ 660,000 | $ 330,000 | $ 330,000 | ||||||
George A. Makris, Jr., Exec. Chairman | 200% | $2,000,000 | $1,000,000 | $1,000,000 | ||||||
George A. Makris III, EVP | 60% | $ 222,000 | $ 111,000 | $ 111,000 | ||||||
Stephen C. Massanelli, SEVP | 60% | $ 217,200 | $ 108,600 | $ 108,600 | ||||||
Matthew S. Reddin, EVP** | 60% | $ 255,000 | $ 127,500 | $ 127,500 | ||||||
Chad D. Rawls, EVP | 45% | $ 150,750 | $ 75,375 | $ 75,375 |
________________________
*
**Mr. Reddin’s equity incentive awards were forfeited upon his separation of service from the Company in July 2023.
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For grants made to each of the participating named executive officers for the 20242025 Performance Period, the Compensation Committee established threetwo PSU financial performance criteria: core return on average assetstangible book value per share growth (“Core ROAA”), core return on tangible common equity (“Core ROTCE”TBV Growth”) and total shareholder return (“TSR”) rankings. The weighting of each criterion for each of the participating named executive officers is as follows:
Criterion | Weighting | ||||||
TBV Growth Ranking | 50% | ||||||
TSR Ranking | 50% |
The Core ROAATBV Growth ranking criterion compares the Company’s three-year average annual Core ROAAthree-year tangible book value per share growth during the 20242025 Performance Period with the three-year average annual Core ROAAthree-year tangible book value per share growth for each of the other financial institutions contained in the KBW Regional Banking IndexCompany’s peer group used for the Company’s 2023 compensation analysis (“Index”Peer Group”) during the same period. Core ROAA. “Tangible book value per share” means the Company’s core earnings (net income adjusted to exclude non-core items, including items related to the sale of branches, branch right sizing,tangible common stockholders’ equity (which is the Company’s early retirement program, and merger-related costs)total common stockholders’ equity minus intangible assets) divided by the average total assets for the period.number of Company shares of common stock outstanding. For the Core ROAATBV Growth ranking criterion, if the Company’s three-year average annual Core ROAAthree-year TBV Growth ranks at the 50
The TSR ranking criterion compares the TSR for the Company during the relevant performance period (which, for the 20222023 PSU grants, is the 20242025 Performance Period) with the TSR for each of the other financial institutions contained in the KBW Regional Banking Index (“Index”) during the same period. The TSR for the Company and each of the other financial institutions in the Index are calculated using the first twenty and the last twenty trading days during the relevant performance period (which, again, for the 20222023 PSU grants, is the 20242025 Performance Period). For the TSR ranking criterion, if the Company’s TSR ranks at the 50
The PSU payout percentage will (absent exercise of Committee discretion) be the sum of (1) the payout percentage for the Core ROAATBV Growth entitlement multiplied by .30,.50 and (2) the payout percentage for the Core ROTCE entitlement multiplied by .35, and (3) the payout percentage for the TSR entitlement multiplied by .35;.50; provided that in no event may the PSU payout percentage exceed 200% of the target.
Criterion | Threshold | Target | Maximum | ||||||||
TBV Growth Ranking | 25th Percentile | 50 th Percentile | 75 th Percentile | ||||||||
TSR Ranking | 25th Percentile | 50 th Percentile | 75 th Percentile | ||||||||
In addition, the Compensation Committee periodically utilizes time-vestedtime-vested restricted stock grants in the form of RSAs or RSUs (in addition, or as an alternative, to PSUs) in connection with hiring or promoting executives within the Company and as equity incentives for senior officers below the executive level. During 2022, 3492023, 347 Company associates received time-vestedtime-vested RSU grants.
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 units.RSUs.
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Performance of 20202021 PSUs
As previously described in the Company’s proxy statement for the Company’s 20212022 annual shareholders’ meeting, as part of the LTIP established by the Compensation Committee in 2020,2021, PSUs with a three-yearthree-year performance period ending on December 31, 20222023 (“20222023 Performance Period”) were granted to each of the named executive officers except Mr. BrogdonHobbs (“20202021 PSUs”). The performance criteria for the 20202021 PSUs included the Company’s core diluted earnings per sharereturn on average assets ranking for 2022the 2023 Performance Period (“2022 Core EPS”ROAA Ranking”), which was allocated a 70%30% weighting, the Company’s core return on tangible common equity ranking for the 2023 Performance Period (“Core ROTCE Ranking”), which was allocated a 35% weighting, and the Company’s TSR ranking for the 20222023 Performance Period (“2022 TSR”2023 TSR Ranking”), which was allocated a 30%35% weighting.
For 2022each of the Core EPS,ROAA Ranking, Core ROTCE Ranking, and 2023 TSR Ranking, the threshold, target, and maximum performance levels were $2.26, $2.43,25th percentile, 50th percentile, and $2.60,75th percentile, respectively. The Committee certified $2.40 asCore ROAA Ranking attainment at the 202224th percentile, which was below the threshold performance level; Core EPS,ROTCE Ranking attainment at the 32.3 percentile, which exceeded the threshold but was less than the target performance level; and thus, provided a benefit of 91% of2023 TSR Ranking attainment at the allocated target benefit for this criterion. In certifying such performance, the Compensation Committee excluded from its calculations a $33.8 million “Day 2 CECL provision expense” (pre-tax) (which equates to a $25 million provision expense (after-tax)) that the Company was required to take in connection with the completion of its acquisition of Spirit of Texas Bancshares, Inc. (which occurred in April 2022) as a result of technical accounting rules (and, which, therefore, the Committee deemed to be appropriate to exclude for evaluating management’s and the Company’s actual performance for compensation purposes). Without this exclusion, 2022 Core EPS would have been $2.20,nd percentile, which was below threshold.
Thus, the aggregate payout (taking into account the weightings of the performance criteria) for the 20202021 PSUs was 64%22.61% of the target benefit.
Performance Table for 20202021 PSUs
Benefit Level[1] | Threshold | Target | Maximum | 2023 | 2023 | |||||||
Core ROAA Ranking | 25th Percentile | 50th Percentile | 75th Percentile | 24th Percentile | 0% | |||||||
Core ROTCE Ranking | 25th Percentile | 50th Percentile | 75th Percentile | 32.3 Percentile | 64.6% | |||||||
2023 TSR Ranking | 25th Percentile | 50th Percentile | 75th Percentile | 2nd Percentile | 0% | |||||||
Aggregate Benefit[2] | 22.61% |
________________________
[1]
Benefit Level(1) | | | Threshold 50% | | | Target 100% | | | Maximum | | | 2022 Results | | | 2022 Benefit Level | |
2022 Core EPS | | | $2.26 | | | $2.43 | | | $2.60 | | | $2.40 | | | 91% | |
2022 TSR | | | 25th Percentile | | | 50th Percentile | | | 75th Percentile | | | 4th Percentile | | | 0% | |
Aggregate Benefit(2) | | | | | | | | | | | | | | | 64% | |
[2]
4. Benefits
A.
Profit Sharing and Employee Stock Ownership PlanThe Company previously offered a combination profit sharing and employee stock ownership plan. This plan was open to substantially all of the employees of the Company including the named executive officers. The plan and the contributions to the plan were designed to provide for retirement benefits to employees and allow the employees of the Company to participate in the ownership of stock in the Company. During 2016, the Company terminated this plan and merged it into the Company’s 401(k) Plan.
B.
401(k) Plan and Employee Stock Purchase PlanThe Company offers a qualified 401(k) Plan in which it makes matching contributions to encourage employees to save money for their retirement. Additionally, the Company may make profit-sharingprofit-sharing contributions to the plan which are allocated among participants based upon plan compensation without regard to participant
33
contributions. 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 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 100% of the first 3% of eligible compensation and 50% of the next 2% of eligible compensation for a total match of 4% of eligible pay for each participant who defers 5% or more of his or her eligible pay. Additionally, for 2022,2023, the Compensation Committee approved a discretionary contribution of 2.3%1.32% of aggregate associate compensation into the 401(k) Plan based upon the Company satisfying certain internal financialCompany’s performance, criteria, which areis expected to be made in the first quarter of 2023.2024. Account balances under the 401(k) Plan are fully vested at all times.
Additionally, under the current Simmons First National Corporation First Amended and Restated 2015 Employee Stock Purchase Plan, the Company offers a convenient method for eligible employees of the Company and its subsidiaries to purchase shares of Common Stock at a favorable price through payroll deductions. As described below in Proposal 5, the Company is seeking shareholder approval to amend and restate the current plan to increase the number of offerings, to increase the aggregate number of shares reserved for issuance, and to extend the term of the plan.
C.
Perquisites and Other BenefitsHistorically, perquisites and other benefits have represented a small part of the overall compensation package and generally are offered only after consideration of business need. The Compensation Committee annually reviews the perquisites and other personal benefits that are provided to senior management. The primary perquisites include cell phone reimbursements or stipends, club memberships, and certain relocation and moving expenses. In some cases, the Company, rather than (or in addition to) administering separate perquisite programs for particular officers, will provide a cash stipend to an executive officer to cover the approximate costs of such items. The stipends are taxable income to the officers who receive them and are generally uniform in amount for officers with similar duties and responsibilities.
In addition, the Company has purchased bank owned life insurance on the lives of certain of the named executive officers and has entered into split dollar life insurance agreements with each of the participating named executive officers that provide a defined, lump sum life insurance benefit upon the death of the officer to such officer’s designated beneficiary or estate. The Company also permits executive officers (and directors) to use Company aircraft for personal purposes, provided that those executives (and directors) reimburse the Company for the Company’s incremental cost of such use (with certain exceptions). All executive officers and directors who used the Company aircraft for personal purposes during 2023 reimbursed the Company for the Company’s incremental cost of such use.
D.
Post-Termination CompensationDeferred Compensation Arrangements. In 2022,2023, the Company maintained certain non-qualifiednon-qualified deferred compensation arrangements designed to provide supplemental retirement pay from the Company to certain of the executive officers. FourFive of the named executive officers had such agreements with the Company.Company during 2023. The Deferred Compensation Agreements for Messrs. Makris, Jr., Brogdon, Fehlman, Makris III, and Reddin are non-qualifiednon-qualified defined benefit type plans.plans (although Mr. Reddin’s plan was forfeited upon his separation from service from the Company). The Company bears the entire cost of benefits under these plans. The Company provides these retirement benefits in order to attract and retain executives. The amounts payable to the participants under these plans are determined by each plan’s benefit formula, which is described in the section of this proxy statement titled “Pension Benefits Table.”
Additionally, in 2017, the Company adopted the Simmons First National Corporation Deferred Compensation Plan (“NQDC Plan”). The NQDC Plan is as a non-qualifiednon-qualified deferred compensation plan in
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incentive pay; and “Excess Compensation” is the amount of Plan Compensation that exceeds the compensation limits under the federal tax laws applicable to qualified retirement plans.
The NQDC Plan provides for discretionary non-electivenon-elective Company contributions to the accounts of the participants, as well. Benefits under the NQDC Plan are fully vested at all times and are payable only upon separation from service according to the 409A compliant distribution election made by the executive officer upon election to participate in the plan.
ChangesChange in Control.Control Agreements. The Company has entered into Change in Control Agreements (“CIC Agreements”) with certain members of senior management of the Company and its subsidiaries, including each of the named executive officers.officers (although Mr. Reddin’s CIC Agreement was terminated in connection with his separation from service in July 2023, and Mr. Hobbs’s CIC Agreement was executed in January 2024). 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 two to three times certain elements of their compensation which the Compensation Committee believes is competitive with the banking industry as a whole and specifically with the designated peer group.
Upon a change in control, followed by a termination of the executive’s employment by the Company without “Cause” or by the executive after a “Trigger Event” within a specified time, the CIC Agreements require the Company to pay or provide the following to the executive:
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In addition, upon a change in control, all outstanding stock options vest immediately and all restrictions on restricted stock lapse. Restricted stock units vest if the employee is terminated within one year of the change in control. In the case of PSUs, if the change in control occurs after the first nine months of the applicable performance period then the PSU will vest and be payable at the target benefit level, with the remaining portion of the PSU terminated. Also, any CIP benefits become payable at the target benefit level and are pro-ratedpro-rated for the period elapsed. Further, upon a change in control, the requirement under the deferred compensation agreements for Messrs. Makris, Jr., Brogdon, Fehlman, Makris III, Hobbs, and Reddin (while Mr. Reddin’s agreement was in effect) that the participant remain employed until retirement age (age 60 for Messrs. Fehlman, Brogdon, Makris III, Hobbs, and Reddin, and age 65 for Mr. Makris)Makris, Jr.) is void, and the benefit is immediately 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 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.“double-trigger.” The double-triggerdouble-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.
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After a prior review of the existing CIC Agreements, the Company adopted a policy not to approve any new CIC Agreements containing a single trigger or a tax gross-upgross-up feature or any amendments to existing CIC Agreements to implement a single trigger or tax gross-upgross-up feature. The Compensation Committee reviews the change in control arrangements annually and makes adjustments from time to time to ensure that they are consistent with its compensation philosophies, current market practices, and assigned duties and responsibilities.
Other Payments and Awards
During 2023, the Company issued a severance payment in the amount of $1,000,000 to Matthew S. Reddin in connection with his termination without cause and in exchange for a customary, general waiver and release of claims, as well as post-employment covenants with respect to confidential information, non-competition, and non-solicitation of certain customers and employees.
To incent Mr. Hobbs to join the Company, in December 2023, the Company issued Mr. Hobbs an award of 21,000 RSUs (having a grant-date fair value of $356,580), which will vest on a pro-rata basis over five years. Additionally, in connection with the promotions of Mr. Fehlman to chief executive officer and Mr. Brogdon to president and chief financial officer that became effective on January 1, 2023, the Company issued Messrs. Fehlman and Brogdon 17,521 and 13,141 PSUs, respectively (and having grant-date fair values of $400,705 and $291,862, respectively) (collectively, the “Promotional PSUs”). The Promotional PSUs are structured in the same manner as those PSUs discussed in the section of this proxy statement captioned “2025 Performance Period Grant” above. Further, in connection with Mr. Rawls’ transition from chief credit officer to chief commercial banking officer that was effective during 2023, the Company issued Mr. Rawls 3,000 RSUs (having a grant-date fair value of $51,060), of which 25% vest on the first anniversary of the grant, 25% vest on the second anniversary of the grant, and 50% vest on the third anniversary of the grant.
Other Guidelines and Procedures Affecting Executive Compensation
Stock-Based Compensation Procedures Regarding Compensation Committee and Board Approval.Approval. The Compensation Committee approves all grants of stock-basedstock-based compensation, except that any proposed stock-basedstock-based compensation to the CEO (or, beginning in 2023,or the Executive Chairman)Chairman is originated and recommended by the Compensation Committee and then submitted to the Board for approval. Grants to the CEO or the Executive Chairman may or may not occur simultaneously with grants to other executives. Prospective grants of stock-basedstock-based compensation to other executives are proposed to the Compensation Committee by the CEO and/or the Executive Chairman. The committeeCommittee considers, modifies, if necessary, and acts upon the proposed grants.
Stock-Based Compensation Procedures Regarding Timing and Pricing of Awards.Awards. The Company’s policy is to make grants of stock options only at current market prices. Historically, the exercise price of stock options was set at the closing stock price on the day prior to the date of grant. However, optionsOptions granted under the 2015 Plan will have the exercise price set at the closing stock price on the date of the grant. If shareholders approve the 2023 Plan as described in Proposal 6, options granted in the future under the 2023 Plan(if any) will have the exercise price set at the closing stock price on the date of the grant. The Company does not grant “in-the-money”“in-the-money” options or options with exercise prices below market value at the time of the grant. The Company’s general policy is to consider equity grants at scheduled meetings of the Compensation Committee, and such grants are either effective on the approval date or a specified future date. For performance-basedperformance-based grants, based upon the Company’s results for the prior year, the Committee has typically approved such grants in January or February pursuant to authority delegated to it by the Board. The Company may make grants at other times throughout the year, upon due approval of the Compensation Committee or the Board, in connection with grants to the CEO, the Executive Chairman, or to other executives in non-routinenon-routine situations, such as the hiring, promotion or retention of an executive officer or in connection with an acquisition transaction.
The Company schedules grants of equity awards at generally consistent times throughout the year. The Company does not time or plan the release of material, non-publicnon-public information for the purpose of affecting the value of executive compensation.
Role of Executive Officers in Determining Executive Compensation.Compensation. The Compensation Committee 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 in certain cases. The Board, upon approval and recommendation from the Compensation Committee, determines and approves all compensation and awards to the CEO (and, beginning in 2023,and the Executive Chairman).Chairman. The
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Compensation Committee determines and approves all compensation and awards to the other executives.executive officers. The committeeCommittee reviews the performance and compensation of the CEO and the Executive Chairman. The CEO, the Executive Chairman, and/or the President, with the assistance of the associates in the Company’s Human Resources Department, review the performance and compensation of the other executive officers, including the other named executive officers, and provide their perspectives and report any significant issues or deficiencies to the committee.Committee. The Human Resources Department regularly reviews the unified compensation classification program of the Company which sets the compensation of all employees of the Company and its affiliates. The Company’s executive compensation decisions are based in part on peer data provided by the compensation consultant. Executive officers generally do not otherwise determine or make recommendations on the amount or form of executive compensation.
Adjustments to Incentive Compensation as a Result of Financial Inaccuracies.Inaccuracies. The Compensation Committee’sBoard has adopted a compensation clawback policy is to recover improper amounts related to past awardswhich provides for the recoupment, under certain conditions, of certain incentive-based compensation (as defined in the policy) in the event material inaccuracies are foundof an accounting restatement (as defined in the policy). The Company’s financial results. Under the clawback provisions in the cash and equity incentive plans, including the proposed 2023 Plan, as described in Proposal 6,incorporate the committee will seek recovery of any
Share Ownership Guidelines.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-termlong-term corporate performance. Although the directors and named executive officers (other than Mr. Hobbs) already have an equity stake in the Company (as reflected in the beneficial ownership information contained in this Proxy Statement), the Company has adopted share ownership policiesguidelines for directors and certain officers.
Members of the Company’s board of directors are required to own shares of Common Stock with a value equal to at least three times the annual equity retainer paid to the director for service on the board, and directors are generally given five years to comply with the stock ownership requirement. Directors are not required to purchase shares to reach this guideline but are restricted (with limited exceptions) from liquidating shares received as equity-basedequity-based compensation until the ownership guideline is satisfied.
Officers designated as executive vice president or above are subject to minimum stock ownership requirements. The minimum stock ownership requirement for the Chief Executive Officer and the Executive Chairman is the number of shares and certain other equity instruments which, when multiplied byvalued in accordance with the market price of the stock ownership guidelines, equals five (5) times his or her base salary, while the requirement for all other covered officers is the number of shares and certain other equity instruments which, when multiplied byvalued in accordance with the market price of the stock ownership guidelines, equals three (3) times his or her base salary. Compliance will be tested annually based upon the officer’s salary as of January 1 of such year and the average closing price of the Common Stock during December of the preceding year. Officers will be given five (5) years to comply with the stock ownership requirement,guidelines, after which time, if they are in noncompliance, they will be restricted (with limited exceptions) from liquidating certain shares received as equity-basedequity-based compensation until the ownership guidelines are satisfied.
Tax Considerations
The Company 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 Company’s compensation objectives. The following provisions of the Code have been considered.
Section 162(m). Section 162(m) of the Code 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. The Compensation Committee currently believes, however, that it is generally in the Company’s best interest for the Compensation Committee to retain flexibility to develop appropriate compensation programs and establish appropriate compensation levels. As a result, the Compensation Committee awards compensation that is not fully deductible under Section 162(m) when it believes it is in the best interest of the Company to do so, as it has done in recent years with respect to the named executive officers’ compensation.
Sections 280G and 4999.4999. The Company provides the named executive officers with change in control agreements as described in the section of this proxy statement titled “Changes in Control.” One of the change in control agreements provides for tax protection in the form of a gross-upgross-up payment 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-deductiblenon-deductible excise tax on the recipient of an “excess parachute
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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-upgross-up is to provide a benefit without a tax penalty to the executive who is displaced in the event of a change in control. The Company believes the provision of tax protection for excess parachute payments for one 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 (as previously discussed, though, the Company no longer provides for “gross-up”“gross-up” payments in new change in control agreements).
Summary
In summary, the Company believes this mix of salary, formula-basedformula-based cash incentives for short-termshort-term performance, and equity-basedequity-based compensation for long-termlong-term performance motivates the Company’s management team to produce strong returns for shareholders. Further, in the view of the Compensation Committee, 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.
Compensation Committee Report
The Compensation Committee reviewed and discussed the Compensation Discussion and Analysis included in this Proxy Statement with management. Based on such review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement for filing with the U.S. Securities and Exchange Commission.
Submitted by the Compensation Committee of the Board of Directors.
Susan Lanigan, Chair Jerry Hunter | Jay D. Burchfield Robert L. Shoptaw | Steven A. Cossé | ||||||||||
Mindy West |
RELATIONSHIP OF COMPENSATION POLICIES AND PRACTICES TO RISK MANAGEMENT
The Company intends that total compensation and each of its components, including base salary, bonus, incentive compensation (if applicable), retirement and other benefits should be market competitive and consistent with the Company’s performance goals. The Company seeks to attract, retain, develop and reward high performing associates who are committed to the Company’s success. Base salaries are set based upon the job classification, and incentive compensation (if applicable) is based on Company and individual performance.
The Company has not identified any compensation practice or policy that presents risks that are reasonably likely to have a material adverse effect on the Company. The Company strives to ensure that its compensation programs do not create inappropriate risks for the Company. As a part of its general review of the Company’s compensation programs, the Compensation Committee:
•Reviews with management the Company’s employee compensation plans to take reasonable steps to identify and limit any unnecessary risks that these plans pose to the Company;
•Reviews with management the compensation plans for the named executive officers and makes reasonable efforts to ensure that these plans do not encourage the named executive officers to take unnecessary and excessive risks; and
•Reviews with management the Company’s compensation programs to help identify and revise any features in the compensation programs that would encourage the misstatement or manipulation of the Company’s financial information or reported earnings to enhance employee compensation.
The reviews include consideration of risks in all compensation programs and factors designed to mitigate risks in such programs. The Company has implemented “clawback” provisionsa compensation clawback policy which provides for the recoupment, under certain conditions, of certain incentive-based compensation (as defined in itsthe policy) in the event of an accounting restatement (as defined in the policy). The Company’s cash and equity incentive plans, including the 2023 Plan, incorporate the compensation programs, requiring any ofclawback policy into all awards under the participants to repay any bonus or incentive compensation that was based upon statements of earnings, revenues, gains or other criteria that are later found to be materially inaccurate.plans.
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SUMMARY OF COMPENSATION AND OTHER PAYMENTS TO THE NAMEDEXECUTIVE OFFICERS
Overview The following sections provide a summary of cash and certain other amounts paid for the year ended December 31, 2022,2023, 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, 2022.2023. The compensation disclosed below is presented in accordance with SEC regulations. According to those regulations, the Company is required in some cases to include:
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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.”
20222023 SUMMARY COMPENSATION TABLE
The following table provides information concerning the compensation of the named executive officers for 2020,(as applicable) 2021, 2022, and 2022,2023, the most recently completed fiscal year. The column “Salary” discloses the amount of base salary paid to the named executive officer for each year. The column “Bonus” discloses cash 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 at the grant date fair value measured in dollars and calculated in accordance with Accounting Standards Codification Topic 718, Compensation — Stock Compensation (“Topic 718”). For restricted stock and PSUs, the Topic 718 fair value per share is based on the closing price of the stock on the date of grant. For stock options, the Topic 718 fair value per share is based on certain assumptions which are explained in Note 15 to the Company’s financial statements which are included in the annual report on Form 10-K10-K filed with the SEC on February 27, 2023.2024. The amounts shown in the Summary Compensation Table include the fair value of the option grants, RSU grants and PSU grants in the year of grant, without regard to any deferred vesting. Please also refer to the second table in this Proxy Statement, “Grants of Plan-Based Awards.”
RSAs may vest on a single date or may vest on multiple dates over an extended period after the date of grant. RSAs are conditioned on the participant’s continued employment with the Company and may also have additional restrictions, including performance conditions. Restricted stock allows the participant to vote and receive dividends prior to vesting.
RSUs are a contingent right to receive shares of the Company’s stock upon satisfaction of certain vesting criteria. RSUs may vest on a single date or may vest on multiple dates over an extended period after the date of grant. RSUs are conditioned on the participant’s continued employment with the Company and may also have additional restrictions, including performance conditions. RSUs do not allow the participant to vote or receive
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dividends prior to vesting. While no dividends are paid on the shares underlying the RSUs, the RSU program may provide for a cash bonus after vesting in an amount equal to the dividends which would have been earned on the shares during the period from grant until issuance.
PSUs represent the right to receive a share of stock upon the Company’s satisfaction of certain specified performance criteria. The performance period for the PSUs is generally three years but may be shorter. The PSUs typically vest atafter the end of the performance period following certification by the Compensation Committee at which time the shares earned under the PSU, if any, are paid to the participant. PSUs are conditioned on the participant’s continued employment with the Company and satisfaction of specified performance criteria but may have additional restrictions. PSUs do not allow the participant to vote the underlying shares. While no dividends are paid on the shares underlying the PSUs, the PSU program may
The column “Non-Equity“Non-Equity Incentive Plan Compensation” discloses the dollar value of all earnings for services performed during the fiscal year pursuant to awards under non-equitynon-equity incentive plans, including the CIP.CIP (except as otherwise indicated). 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 CIP 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 CIP 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 officer’s accumulated benefit under all defined benefit and actuarial pension plans (including supplemental plans) in effect during the indicated years; and (2) any above-marketabove-market or preferential earnings on nonqualified deferred compensation, including on nonqualified defined contribution plans. The annual increase in the present value of the benefits for the named executive officers under their deferred compensation plans is disclosed in this column.
The column “All Other Compensation” discloses the sum of the dollar value of:
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2023 SUMMARY COMPENSATION TABLE
Name and Principal Position | | | Year | | | Salary ($) | | | Bonus(a) ($) | | | Stock Awards ($)(b) | | | Option Awards ($)(b) | | | Non-Equity Incentive Plan Compensation ($) | | | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | | | All Other Compensation ($)(c) | | | Total ($) | | |||||||||||||||||||||||||||
George A. Makris, Jr., Chairman & CEO(d) | | | | | 2022 | | | | | $ | 887,618 | | | | | $ | 40,211 | | | | | $ | 1,501,896 | | | | | $ | 0 | | | | | $ | 810,661 | | | | | $ | 351,828 | | | | | $ | 146,361 | | | | | $ | 3,738,575 | | |
| | | 2021 | | | | | $ | 861,751 | | | | | $ | 93,155 | | | | | $ | 3,050,403 | | | | | $ | 0 | | | | | $ | 1,114,988 | | | | | $ | 519,227 | | | | | $ | 133,189 | | | | | $ | 5,772,713 | | | ||
| | | 2020 | | | | | $ | 849,001 | | | | | $ | 514,583 | | | | | $ | 1,298,779 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 608,717 | | | | | $ | 125,132 | | | | | $ | 3,396,212 | | | ||
James M. Brogdon, EVP & CFO(d) | | | | | 2022 | | | | | $ | 465,000 | | | | | $ | 20,000 | | | | | $ | 349,307 | | | | | $ | 0 | | | | | $ | 320,625 | | | | | $ | 96,940 | | | | | $ | 76,010 | | | | | $ | 1,327,882 | | |
| | | 2021 | | | | | $ | 311,950 | | | | | $ | 50,000 | | | | | $ | 820,148 | | | | | $ | 0 | | | | | $ | 298,010 | | | | | $ | 43,493 | | | | | $ | 29,339 | | | | | $ | 1,552,940 | | | ||
Robert A. Fehlman, President & COO(d) | | | | | 2022 | | | | | $ | 558,250 | | | | | $ | 11,490 | | | | | $ | 555,482 | | | | | $ | 0 | | | | | $ | 509,851 | | | | | $ | 612,705 | | | | | $ | 108,075 | | | | | $ | 2,355,853 | | |
| | | 2021 | | | | | $ | 550,000 | | | | | $ | 31,005 | | | | | $ | 1,049,672 | | | | | $ | 0 | | | | | $ | 701,250 | | | | | $ | 611,382 | | | | | $ | 89,953 | | | | | $ | 3,033,262 | | | ||
| | | 2020 | | | | | $ | 550,000 | | | | | $ | 246,964 | | | | | $ | 386,435 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 462,542 | | | | | $ | 85,991 | | | | | $ | 1,731,932 | | | ||
Matthew S. Reddin, EVP, Chief Banking Officer | | | | | 2022 | | | | | $ | 406,000 | | | | | $ | 21,685 | | | | | $ | 242,394 | | | | | $ | 0 | | | | | $ | 292,932 | | | | | $ | 176,792 | | | | | $ | 46,692 | | | | | $ | 1,186,495 | | |
| | | 2021 | | | | | $ | 400,000 | | | | | $ | 10,588 | | | | | $ | 472,863 | | | | | $ | 0 | | | | | $ | 373,500 | | | | | $ | 190,394 | | | | | $ | 50,068 | | | | | $ | 1,497,413 | | | ||
| | | 2020 | | | | | $ | 400,000 | | | | | $ | 119,534 | | | | | $ | 224,824 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 118,531 | | | | | $ | 44,441 | | | | | $ | 907,330 | | | ||
Stephen C. Massanelli, SEVP, Chief Administrative Officer | | | | | 2022 | | | | | $ | 345,100 | | | | | $ | 20,517 | | | | | $ | 206,063 | | | | | $ | 0 | | | | | $ | 157,591 | | | | | $ | 0 | | | | | $ | 57,305 | | | | | $ | 786,576 | | |
| | | 2021 | | | | | $ | 335,001 | | | | | $ | 19,019 | | | | | $ | 435,638 | | | | | $ | 0 | | | | | $ | 216,750 | | | | | $ | 0 | | | | | $ | 55,217 | | | | | $ | 1,061,625 | | | ||
| | | 2020 | | | | | $ | 330,001 | | | | | $ | 99,789 | | | | | $ | 185,502 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 53,725 | | | | | $ | 669,016 | | |
Name and Principal Position | Year | Salary | Bonus[a] | Stock | Option | Non-Equity Incentive Plan Compensation | Change in | All Other Compensation | Total | |||||||||
Robert A. Fehlman, | 2023 | $ 750,000 | $268,004 | $1,414,990 | $0 | $ 0 | $393,300 | $ 95,114 | $2,921,407 | |||||||||
2022 | $ 558,250 | $ 11,490 | $ 555,482 | $0 | $ 509,851 | $612,705 | $ 108,075 | $2,355,853 | ||||||||||
2021 | $ 550,000 | $ 31,005 | $1,049,672 | $0 | $ 701,250 | $611,382 | $ 89,953 | $3,033,262 | ||||||||||
James M. Brogdon, | 2023 | $ 550,000 | $194,640 | $ 933,953 | $0 | $ 0 | $ 64,393 | $ 73,755 | $1,816,740 | |||||||||
2022 | $ 465,000 | $ 20,000 | $ 349,307 | $0 | $ 320,625 | $ 96,940 | $ 76,010 | $1,327,882 | ||||||||||
2021 | $ 311,950 | $ 50,000 | $ 820,148 | $0 | $ 298,010 | $ 43,493 | $ 29,339 | $1,552,940 | ||||||||||
C. Daniel Hobbs | 2023 | $ 37,784 | $225,000 | $ 356,580 | $0 | $ 0 | $ 0 | $ 1,000 | $ 620,364 | |||||||||
George A. Makris, Jr., | 2023 | $1,000,000 | $ 13,591 | $2,003,549 | $0 | $ 0 | $ 70,298 | $ 115,518 | $3,202,955 | |||||||||
2022 | $ 887,618 | $ 40,211 | $1,501,896 | $0 | $ 810,661 | $351,828 | $ 146,361 | $3,738,575 | ||||||||||
2021 | $ 861,751 | $ 93,155 | $3,050,403 | $0 | $1,114,988 | $519,227 | $ 133,189 | $5,772,713 | ||||||||||
George A. Makris III | 2023 | $ 370,001 | $ 66,319 | $ 216,014 | $0 | $ 0 | $ 47,393 | $ 55,759 | $ 755,486 | |||||||||
Stephen C. Massanelli, | 2023 | $ 362,000 | $ 65,419 | $ 211,306 | $0 | $ 0 | $ 0 | $ 48,451 | $ 687,175 | |||||||||
2022 | $ 345,100 | $ 20,517 | $ 206,063 | $0 | $ 157,591 | $ 0 | $ 57,305 | $ 786,576 | ||||||||||
2021 | $ 335,001 | $ 19,019 | $ 435,638 | $0 | $ 216,750 | $ 0 | $ 55,217 | $1,061,625 | ||||||||||
Matthew S. Reddin, | 2023 | $ 217,813 | $ 0 | $ 248,086 | $0 | $ 0 | $ 0[e] | $1,027,592 | $1,493,491 | |||||||||
2022 | $ 406,000 | $ 21,685 | $ 242,394 | $0 | $ 292,932 | $176,792 | $ 46,692 | $1,186,495 | ||||||||||
2021 | $ 400,000 | $ 10,588 | $ 472,863 | $0 | $ 373,500 | $190,394 | $ 50,068 | $1,497,413 | ||||||||||
Chad D. Rawls, | 2023 | $ 335,000 | $ 55,762 | $ 197,735 | $0 | $ 60,300 | $ 0 | $ 45,255 | $ 694,052 |
________________________
[a]
[b](b)
41
$309,095 and $363,591, respectively; and $309,095, respectively; the maximum possible value of the 2021 total stock awards reported in the “Stock Awards” column for Messrs. Fehlman, Brogdon, Makris, Brogdon, Fehlman,Jr., Massanelli, and Reddin and Massanelli would be $1,332,948, $939,822, $3,787,458, $939,822, $1,332,948,$540,716, and $596,476, and $540,716, respectively; and the maximum possible value of the 2020 total stock awards reported in the “Stock Awards” column for Makris, Fehlman, Reddin, and Massanelli would be $1,948,169, $579,652, $337,236, and $278,253, respectively.
Note that, for 2021, the “Stock Awards” column also includes the incremental fair values associated with the May 2021 adjustments to the 2019 PSUs and 2020 PSUs awarded to Messrs. Fehlman, Makris, Fehlman, Reddin,Jr., Massanelli, and Massanelli.Reddin. For Messrs. Fehlman, Makris, Fehlman,Jr., Massanelli, and Reddin, and Massanelli, these values were $483,119, $1,576,291, $483,119,$225,485, and $225,636, and $225,485, respectively, calculated in accordance with Topic 718.
[c](c)
| | | 401(k)Plan | | | Stipend and Club Dues | | | NQDC Plan | | | Insurance Premiums | | | Dividends on Unvested Restricted Shares | | | Total Other Compensation | | ||||||||||||||||||
Mr. Makris | | | | $ | 19,215 | | | | | $ | 19,604 | | | | | $ | 96,971 | | | | | $ | 10,571 | | | | | $ | 0 | | | | | $ | 146,361 | | |
Mr. Brogdon | | | | $ | 19,215 | | | | | $ | 12,000 | | | | | $ | 30,878 | | | | | $ | 13,917 | | | | | $ | 0 | | | | | $ | 76,010 | | |
Mr. Fehlman | | | | $ | 19,215 | | | | | $ | 12,000 | | | | | $ | 62,943 | | | | | $ | 13,917 | | | | | $ | 0 | | | | | $ | 108,075 | | |
Mr. Reddin | | | | $ | 19,215 | | | | | $ | 13,200 | | | | | $ | 0 | | | | | $ | 13,917 | | | | | $ | 360 | | | | | $ | 46,692 | | |
Mr. Massanelli | | | | $ | 19,215 | | | | | $ | 12,000 | | | | | $ | 18,866 | | | | | $ | 7,224 | | | | | $ | 0 | | | | | $ | 57,305 | | |
401(k) Plan | Stipend and | NQDC Plan | Insurance | Payment | Total Other | |||||||||
Mr. Fehlman | $17,556 | $12,000 | $50,859 | $14,699 | — | $ 95,114 | ||||||||
Mr. Brogdon | $17,556 | $12,000 | $29,500 | $14,699 | — | $ 73,755 | ||||||||
Mr. Hobbs | $ 0 | $ 1,000 | $ 0 | $ 0 | — | $ 1,000 | ||||||||
Mr. Makris, Jr. | $17,556 | $12,000 | $75,385 | $10,577 | — | $ 115,518 | ||||||||
Mr. Makris, III | $17,556 | $12,000 | $11,351 | $14,852 | — | $ 55,759 | ||||||||
Mr. Massanelli | $17,556 | $12,000 | $11,111 | $ 7,784 | — | $ 48,451 | ||||||||
Mr. Reddin | $13,200 | $ 6,200 | $ 0 | $ 8,192 | $1,000,000 | $1,027,592 | ||||||||
Mr. Rawls | $17,556 | $13,000 | $ 0 | $14,699 | — | $ 45,255 |
[d](d)
[e]Mr. Reddin’s employment ended effective July 5, 2023 (as reported by the Company in its Current Report on Form 8-K filed with the SEC on July 7, 2023). For 2023, Mr. Reddin’s “change in pension value” was $(676,641).
[f]Mr. Rawls served as an executive officer in his role as Executive Vice President and Chief Credit Officer from March 2022 through July 2023. Effective July 2023, Mr. Rawls serves as Executive Vice President and Chief Commercial Banking Officer and is no longer an executive officer.
2023 GRANTS OF PLAN-BASED AWARDS
This table discloses information concerning each grant of an award made to a named executive officer in 2022.2023. This includes CIP awards, and restricted stock unit awards and performance share unit awards under the Company’s equity incentive plans, which are discussed in greater detail under the caption “Compensation Discussion and Analysis.” The Threshold, Target and Maximum columns reflect the range of possible payouts under the CIP. In years when granted, in the 6th6th and 7th7th columns, the number of shares of Common Stock underlying options granted in the fiscal year and corresponding per-shareper-share exercise prices are reported. In all cases, the exercise price was equal to the closing market price of the Common Stock on the date of grant. Finally, in the 8th8th column, the aggregate value computed under Topic 718 for all stock and option awards made in 20222023 is reported.
42
Name | Grant Date |
|
| All | All | Exercise | Grant Date | |||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||
Robert A. Fehlman | ||||||||||||||||||||||
CIP | 01-20-23 | $375,000 | $750,000 | $1,500,000 | ||||||||||||||||||
Equity Plan | 01-20-23 | 11,088 | 22,175 | 44,350 | $ 507,142 | |||||||||||||||||
Equity Plan | 01-20-23 | 8,761 | 17,521 | 35,042 | $ 400,705 | |||||||||||||||||
Equity Plan | 01-20-23 | 22,175[b] | $ 507,142 | |||||||||||||||||||
James M. Brogdon | ||||||||||||||||||||||
CIP | 01-19-23 | $275,000 | $550,000 | $1,100,000 | ||||||||||||||||||
Equity Plan | 01-19-23 | 7,228 | 14,455 | 28,910 | $ 321,046 | |||||||||||||||||
Equity Plan | 01-19-23 | 6,571 | 13,141 | 26,282 | $ 291,862 | |||||||||||||||||
Equity Plan | 01-19-23 | 14,455[c] | $ 321,046 | |||||||||||||||||||
C. Daniel Hobbs | ||||||||||||||||||||||
Equity Plan | 12-04-23 | 21,000[d] | $ 356,580 | |||||||||||||||||||
George A. Makris, Jr. | ||||||||||||||||||||||
Equity Plan | 01-20-23 | 21,902 | 43,803 | 87,606 | $1,001,775 | |||||||||||||||||
Equity Plan | 01-20-23 | 43,803[b] | $1,001,775 | |||||||||||||||||||
George A. Makris, III | ||||||||||||||||||||||
CIP | 01-19-23 | $ 92,500 | $185,000 | $ 370,000 | ||||||||||||||||||
Equity Plan | 01-19-23 | 2,432 | 4,863 | 9,726 | $ 108,007 | |||||||||||||||||
Equity Plan | 01-19-23 | 4,863[c] | $ 108,007 | |||||||||||||||||||
Stephen C. Massanelli | ||||||||||||||||||||||
CIP | 01-19-23 | $ 90,500 | $181,000 | $ 362,000 | ||||||||||||||||||
Equity Plan | 01-19-23 | 2,379 | 4,757 | 9,514 | $ 105,653 | |||||||||||||||||
Equity Plan | 01-19-23 | 4,757[c] | $ 105,653 | |||||||||||||||||||
Matthew S. Reddin[e] | ||||||||||||||||||||||
Equity Plan | 01-19-23 | 2,793 | 5,585 | 11,170 | $ 124,043 | |||||||||||||||||
Equity Plan | 01-19-23 | 5,585[c] | $ 124,043 | |||||||||||||||||||
Chad D. Rawls | ||||||||||||||||||||||
CIP | 01-19-23 | $ 75,375 | $150,750 | $ 301,500 | ||||||||||||||||||
Equity Plan | 01-19-23 | 1,651 | 3,302 | 6,604 | $ 73,337 | |||||||||||||||||
Equity Plan | 01-19-23 | 3,302[c] | $ 73,337 | |||||||||||||||||||
Equity Plan | 12-05-23 | 3,000[f] | $ 51,060 |
________________________
[a]
Name | | | Grant Date | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards(a) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | | | All Other Options Awards Number of Securities Underlying Option (#) | | | Exercise or Base Price of Option Awards: ($/Sh) | | | Grant Date Fair Value of Stock and Option Awards ($) | | |||||||||||||||||||||||||||||||||||||||
| | | | | | | | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | Threshold (#) | | | Target (#) | | | Maximum (#) | | ||||||||||||||||||||||||||||||||||||
George A. Makris, Jr. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CIP | | | | | 02-24-22 | | | | | $ | 450,368 | | | | | $ | 900,735 | | | | | $ | 1,801,470 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Equity Plan | | | | | 02-24-22 | | | | | | | | | | | | | | | | | | | | | | | | 13,614 | | | | | | 27,228 | | | | | | 54,456 | | | | | | | | | | | | | | | | | $ | 750,948 | | |
Equity Plan | | | | | 02-24-22 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 27,228(b) | | | | | | | | | | | $ | 750,948 | | |
James M. Brogdon | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CIP | | | | | 02-23-22 | | | | | $ | 178,125 | | | | | $ | 356,250 | | | | | $ | 712,500 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Equity Plan | | | | | 02-23-22 | | | | | | | | | | | | | | | | | | | | | | | | 3,106 | | | | | | 6,211 | | | | | | 12,422 | | | | | | | | | | | | | | | | | $ | 174,653 | | |
Equity Plan | | | | | 02-23-22 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,211(c) | | | | | | | | | | | $ | 174,653 | | |
Robert A. Fehlman | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CIP | | | | | 02-23-22 | | | | | $ | 283,250 | | | | | $ | 566,500 | | | | | $ | 1,133,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Equity Plan | | | | | 02-23-22 | | | | | | | | | | | | | | | | | | | | | | | | 4,939 | | | | | | 9,877 | | | | | | 19,754 | | | | | | | | | | | | | | | | | $ | 277,741 | | |
Equity Plan | | | | | 02-23-22 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,877(c) | | | | | | | | | | | $ | 277,741 | | |
Matthew S. Reddin | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CIP | | | | | 02-23-22 | | | | | $ | 185,400 | | | | | $ | 370,800 | | | | | $ | 741,600 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Equity Plan | | | | | 02-23-22 | | | | | | | | | | | | | | | | | | | | | | | | 2,155 | | | | | | 4,310 | | | | | | 8,620 | | | | | | | | | | | | | | | | | $ | 121,197 | | |
Equity Plan | | | | | 02-23-22 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4,310(c) | | | | | | | | | | | $ | 121,197 | | |
Stephen C. Massanelli | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CIP | | | | | 02-23-22 | | | | | $ | 87,550 | | | | | $ | 175,100 | | | | | $ | 350,200 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 103,032 | | |
Equity Plan | | | | | 02-23-22 | | | | | | | | | | | | | | | | | | | | | | | | 1,832 | | | | | | 3,664 | | | | | | 7,328 | | | | | | | | | | | | | | | | | $ | 103,032 | | |
Equity Plan | | | | | 02-23-22 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3,664(c) | | | | | | | | | | | | | | |
[b](b)
[c](c)
[d]This RSU award was made under the 2023 Plan vests in five substantially equal annual installments on December 4, 2024, 2025, 2026, 2027 and 2025.2028.
[e]Mr. Reddin’s RSU and PSU awards were cancelled on July 5, 2023, the date his employment with the Company ended.
[f]This RSU award was made under the 2023 Plan and vests in three annual installments of 750, 750, and 1,500 shares on December 5, 2024, 2025, and 2026, respectively.
43
OPTION EXERCISES AND STOCK VESTED IN 20222023
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 20222023 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 or units that vested; and the aggregate dollar value realized upon vesting of stock or units.
Option Awards | Stock Awards | |||||||
Name | Number of | Value | Number of | Value | ||||
Robert A. Fehlman | 0 | $0 | 14,705 | $313,024 | ||||
James M. Brogdon | 0 | $0 | 7,444 | $140,278 | ||||
C. Daniel Hobbs | 0 | $0 | — | — | ||||
George A. Makris, Jr. | 0 | $0 | 46,103 | $990,193 | ||||
George A. Makris, III | 0 | $0 | 4,773 | $100,878 | ||||
Stephen C. Massanelli | 0 | $0 | 6,338 | $134,486 | ||||
Matthew S. Reddin | 0 | $0 | 7,593 | $161,262 | ||||
Chad D. Rawls | 0 | $0 | 2,857 | $ 63,929 |
________________________
[a]
| | | Option Awards | | | Stock Awards | | ||||||||||||||||||
Name | | | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise(a) ($) | | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting(b) ($) | | ||||||||||||
George A. Makris, Jr. | | | | | 0 | | | | | $ | 0 | | | | | | 84,223 | | | | | $ | 2,299,447 | | |
James M. Brogdon | | | | | 0 | | | | | $ | 0 | | | | | | 5,373 | | | | | $ | 135,947 | | |
Robert A. Fehlman | | | | | 0 | | | | | $ | 0 | | | | | | 30,092 | | | | | $ | 813,098 | | |
Matthew S. Reddin | | | | | 0 | | | | | $ | 0 | | | | | | 14,251 | | | | | $ | 379,494 | | |
Stephen C. Massanelli | | | | | 0 | | | | | $ | 0 | | | | | | 13,715 | | | | | $ | 369,009 | | |
[b](b)
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 20222023
The following table provides information concerning unexercised options and restricted stock (including RSUs and PSUs) that has not vested for each named executive officer outstanding as of the end of 2022.2023. 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 as of December 31, 2022, $21.58,29, 2023 (which was the last business day of the year), $19.84, by the number of shares.
44
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 20222023
Option Awards | Stock Awards | |||||||||||||||
Name | Number of | Number of | Option | Option | Number of | Market Value of | Equity | Equity | ||||||||
Robert A. Fehlman | 8,680 | 0 | $20.29 | 12-31-24 | ||||||||||||
15,270 | 0 | $22.20 | 03-25-25 | |||||||||||||
42,410 | 0 | $22.75 | 08-09-25 | |||||||||||||
9,810 | 0 | $23.51 | 01-19-26 | |||||||||||||
3,322[a] | $ 65,908 | |||||||||||||||
6,585[b] | $130,646 | |||||||||||||||
22,175[c] | $439,952 | |||||||||||||||
2,252[d] | $ 44,680 | |||||||||||||||
19,754[e] | $ 391,919 | |||||||||||||||
44,350[f] | $ 879,904 | |||||||||||||||
35,042[f] | $ 695,233 | |||||||||||||||
James M. Brogdon | 12,000[g] | $238,080 | ||||||||||||||
1,374[h] | $ 27,260 | |||||||||||||||
4,141[i] | $ 82,157 | |||||||||||||||
14,455[j] | $286,787 | |||||||||||||||
931[d] | $ 18,471 | |||||||||||||||
12,422[e] | $ 246,452 | |||||||||||||||
28,910[f] | $ 573,574 | |||||||||||||||
26,282[f] | $ 521,435 | |||||||||||||||
C. Daniel Hobbs | 21,000[k] | $416,640 | ||||||||||||||
George A. Makris, Jr. | 21,420 | 0 | $20.29 | 12-31-24 | ||||||||||||
25,440 | 0 | $22.20 | 03-25-25 | |||||||||||||
104,580 | 0 | $22.75 | 08-09-25 | |||||||||||||
27,290 | 0 | $23.51 | 01-19-26 | |||||||||||||
8,716[l] | $172,925 | |||||||||||||||
18,152[m] | $360,136 | |||||||||||||||
43,803[n] | $869,052 | |||||||||||||||
5,911[d] | $117,274 | |||||||||||||||
54,456[e] | $1,080,407 | |||||||||||||||
87,606[f] | $1,738,103 | |||||||||||||||
George A. Makris, III | 1,013[a] | $ 20,098 | ||||||||||||||
2,420[o] | $ 48,013 | |||||||||||||||
4,863[p] | $ 96,482 | |||||||||||||||
687[d] | $ 13,630 | |||||||||||||||
7,260[e] | $ 144,038 | |||||||||||||||
9,726[f] | $ 192,964 | |||||||||||||||
| | | Option Awards | | | Stock Awards | | ||||||||||||||||||||||||||||||||||||||||||
Name | | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested ($) | | | Equity Incentive Plan Awards: Number of Unearned Shares or Units That Nave Not Vested (#) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares or Units That Have Not Vested ($) | | ||||||||||||||||||||||||
George A. Makris, Jr. | | | | | 21,420 | | | | | | 0 | | | | | $ | 20.29 | | | | | | 12-31-24 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | 25,440 | | | | | | 0 | | | | | $ | 22.20 | | | | | | 03-25-25 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | 104,580 | | | | | | 0 | | | | | $ | 22.75 | | | | | | 08-09-25 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | 27,290 | | | | | | 0 | | | | | $ | 23.51 | | | | | | 01-19-26 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,696(a) | | | | | $ | 209,240 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 17,431(b) | | | | | $ | 376,161 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 27,228(c) | | | | | $ | 587,580 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 18,616(d) | | | | | $ | 401,733 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 52,292(e) | | | | | $ | 1,128,461 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 54,456(f) | | | | | $ | 1,175,160 | | |
James M. Brogdon | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 16,000(g) | | | | | $ | 345,280 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,748(h) | | | | | $ | 59,302 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,211(i) | | | | | $ | 134,033 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 8,242(e) | | | | | $ | 177,862 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 12,422(f) | | | | | $ | 268,067 | | |
45
Option Awards | Stock Awards | |||||||||||||||
Name | Number of | Number of | Option | Option | Number of | Market Value of | Equity | Equity | ||||||||
Stephen C. Massanelli | 5,000 | 0 | $20.29 | 12-31-24 | ||||||||||||
24,420 | 0 | $22.75 | 08-09-25 | |||||||||||||
5,050 | 0 | $23.51 | 01-19-26 | |||||||||||||
1,232[a] | $ 24,443 | |||||||||||||||
2,443[q] | $ 48,469 | |||||||||||||||
4,757[r] | $ 94,379 | |||||||||||||||
835[d] | $ 16,566 | |||||||||||||||
7,328[e] | $ 145,388 | |||||||||||||||
9,514[f] | $ 188,758 | |||||||||||||||
Matthew S. Reddin[s] | ||||||||||||||||
Chad D. Rawls | ||||||||||||||||
642[h] | $ 12,737 | |||||||||||||||
1,372[t] | $ 27,220 | |||||||||||||||
3,302[u] | $ 65,512 | |||||||||||||||
3,000[v] | $ 59,520 | |||||||||||||||
436[d] | $ 8,650 | |||||||||||||||
4,116[e] | $ 81,661 | |||||||||||||||
6,604[f] | $ 131,023 |
________________________
[a]
| | | Option Awards | | | Stock Awards | | ||||||||||||||||||||||||||||||||||||||||||
Name | | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested ($) | | | Equity Incentive Plan Awards: Number of Unearned Shares or Units That Nave Not Vested (#) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares or Units That Have Not Vested ($) | | ||||||||||||||||||||||||
Robert A. Fehlman | | | | | 8,680 | | | | | | 0 | | | | | $ | 20.29 | | | | | | 12-31-24 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | 15,270 | | | | | | 0 | | | | | $ | 22.20 | | | | | | 03-25-25 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | 42,410 | | | | | | 0 | | | | | $ | 22.75 | | | | | | 08-09-25 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | 9,810 | | | | | | 0 | | | | | $ | 23.51 | | | | | | 01-19-26 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,772(j) | | | | | $ | 59,820 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,643(k) | | | | | $ | 143,356 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,877(l) | | | | | $ | 213,146 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,320(d) | | | | | $ | 114,806 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 19,928(e) | | | | | $ | 430,046 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 19,754(f) | | | | | $ | 426,291 | | |
Matthew S. Reddin | | | | | 19,060 | | | | | | 0 | | | | | $ | 22.75 | | | | | | 08-09-25 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | 3,580 | | | | | | 0 | | | | | $ | 23.51 | | | | | | 01-19-26 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,613(j) | | | | | $ | 34,809 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,899(m) | | | | | $ | 62,560 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4,310(n) | | | | | $ | 93,010 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3,095(d) | | | | | $ | 66,790 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 8,696(e) | | | | | $ | 187,660 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 8,620(f) | | | | | $ | 186,020 | | |
Stephen C. Massanelli | | | | | 5,000 | | | | | | 0 | | | | | $ | 20.29 | | | | | | 12-31-24 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | 24,420 | | | | | | 0 | | | | | $ | 22.75 | | | | | | 08-09-25 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | 5,050 | | | | | | 0 | | | | | $ | 23.51 | | | | | | 01-19-26 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,331(j) | | | | | $ | 28,723 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,464(o) | | | | | $ | 53,173 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3,664(p) | | | | | $ | 79,069 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,554(d) | | | | | $ | 55,115 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7,392(e) | | | | | $ | 159,519 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7,328(f) | | | | | $ | 158,138 | | |
[b](b)
[c](c)
[d]These PSUs were issued under the 2015 Plan with a performance period ending on December 31, 2022.2023. The actual number of shares which were earned under the award based on achievement of performance goals (which achievement was certified in January 2023)March 2024) is shown in the table.
[e](e)
[f](g)
[g]These RSUs vest in fourthree installments (each of 4,000shares) on April 26 in years 2023-2026.
[h]These RSUs vest on February 24, 2024.
[i]These RSUs vest in two installments (2,070shares and 2,071shares) on February 23 in years 2024-2025, respectively.
[j]These RSUs vest in three installments (4,818shares, 4,818shares, and 4,819shares) on January 19 in years 2024-2026, respectively.
[k]These RSUs vest in five installments (each of 4,200shares) on December 4 in years 2024-2028.
[l]These RSUs vest on April 22, 2024.
[m] These RSUs vest in two installments (each of 1,374 9,076shares) on February 24 in years 2023-2024.2024-2025.
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[n](i)
[o]
[p]These RSUs vest in three installments (each of 1,621shares) on January 19 in years 2024-2026.
[q]These RSUs vest in two installments (1,221 shares, 1,221 shares and 1,222shares) on February 23 in years 2023-2025.
[r]These RSUs vest in three installments (1,585shares, 1,586shares, and 1,586shares) on January 19 in years 2024-2026, respectively.
[s]Mr. Reddin’s RSUs and PSUs were cancelled on July 5, 2023, the date his employment ended.
[t]These RSUs vest in two installments (each of 686shares) on February 23 in years 2024-2025.
[u]These RSUs vest in three installments (1,100shares, 1,101shares, and 1,101shares) on January 19 in years 2024-2026, respectively.
[v]These RSUs vest in three installments (750shares, 750shares, and 1,500shares) on December 5 in years 2024-2026, respectively.
2023 PENSION BENEFITS TABLE
The following table provides information with respect to certain agreements that provide for payments or other benefits at, following or in connection with retirement. This includes tax-qualifiedtax-qualified defined benefit plans and supplemental executive defined benefit retirement plans but does not include defined contribution plans (whether tax qualified or not). TheDuring 2023, the Company providesprovided supplemental executive defined benefit retirement agreements for George A. Makris, Jr., James M. Brogdon, Robert A. Fehlman, George A. Makris III, and Matthew S. Reddin. The Present Value of the Accumulated Benefit reflects the actuarial present value of the named executive officer’s accumulated benefit under the agreements, computed as of December 31, 2022.2023. In making such calculations, for all participating named executive officers except Mr. Reddin, it was assumed that the retirement age will be the normal retirement age as defined in the agreement or if not so defined, the earliest time at which a participant may retire under the plan without any benefit reduction due to age.
Makris, Jr. Plan
The supplemental executive defined benefit retirement agreement for George A. Makris, Jr. was established in 2013 and amended in 2018 (and amended again in January 2023). The Makris, Jr. Plan is designed to work with the other retirement arrangements of the Company, on an aggregated basis with Social Security benefits, to provide a targeted level of benefits for Mr. Makris.Makris, Jr. The Makris, Jr. Plan requires Mr. Makris, Jr. to remain in the employ of the Company until he attains age 65 to be eligible to receive benefits under the agreement, provided that in the event of a change in control the benefits are fully vested. The Makris, Jr. Plan provides a benefit upon normal retirement at or after age65, or upon death or disability prior to age65, a monthly sum equal to one twelfth (1/12) of twenty percent (20%) of the final average compensation (the average compensation paid to him by the Company for the most recent five consecutive calendar years; provided that, under the January 2023 amendment, the five year period ends with 2022), but in no event shall the monthly sum be less than $8,333.33. The benefit payments begin on the first day of the seventh month following retirement, death or disability and continue for 120 consecutive months. Compensation for purposes of the Makris, Jr. Plan includes salary, bonus and short-termshort-term incentive compensation programs (CIP), but excludes equity compensation plans (stock options, RSAs, RSUs and PSUs) and long-termlong-term incentive compensation programs. Additionally, under the January 2023 amendment, final average compensation is subject to certain cost-of-livingcost-of-living adjustments.
Brogdon Plan
The supplemental executive defined benefit retirement agreement for James M. Brogdon was established in 2021 and is designed to work with the other retirement arrangements of the Company, on an aggregated basis with Social Security benefits, to provide a targeted level of benefits for Mr. Brogdon. The Brogdon Plan requires Mr. Brogdon to remain in the employ of the Company until he attains age 60 to be eligible to receive
47
benefits under the agreement, provided that in the event of a change in control the benefits are fully vested. The Brogdon Plan provides a benefit upon normal retirement at or after age60, or upon death or disability prior to age60, a monthly sum equal to one twelfth (1/12) of thirty percent (30%) of the final average compensation (the average base salary paid to him by the Company for the most recent five consecutive calendar years). The benefit payments begin on the first day of the seventh month following retirement, death or disability and continue for 180 consecutive months.
Fehlman Plan
The supplemental executive defined benefit retirement agreement for Robert A. Fehlman was established in 2010 and amended in 2017. The Fehlman Plan is designed to work with the other retirement arrangements of the Company, on an aggregated basis with Social Security benefits, to provide a targeted level of benefits for Mr. Fehlman. The Fehlman Plan requires Mr. Fehlman to remain in the employ of the Company until he attains age 60 to be eligible to receive benefits under the agreement, provided that in the event of a change in control the benefits are fully vested. The Fehlman Plan provides a benefit upon normal retirement at or after age60, or upon death or disability prior to age60, a monthly sum equal to one twelfth (1/12) of thirty percent (30%) of the final average compensation (the average compensation paid to him by the Company for the most recent five consecutive calendar years). The benefit payments begin on the first day of the seventh month following retirement, death or disability and continue for 180 consecutive months. Compensation for purposes of the Fehlman Plan includes salary, bonus and short-termshort-term incentive compensation programs (CIP), but excludes equity compensation plans (stock options, RSAs, RSUs and PSUs) and long-termlong-term incentive compensation programs.
ReddinMakris III Plan
The supplemental executive defined benefit retirement agreement for Matthew S. ReddinGeorge A. Makris III was established in 20172022 and is designed to work with the other retirement arrangements of the Company, on an aggregated basis with Social Security benefits, to provide a targeted level of benefits for Mr. Reddin.Makris III. The ReddinMakris III Plan requires Mr. ReddinMakris III to remain in the employ of the Company until he attains age 60 to be eligible to receive benefits under the agreement, provided that in the event of a change in control the benefits are fully vested. The ReddinMakris III Plan provides a benefit upon normal retirement at or after age60, or upon death or disability prior to age60, a monthly sum equal to one twelfth (1/12) of thirty percent (30%) of the final average compensation (the average compensation paid to him by the Company for the most recent five consecutive calendar years). The benefit payments begin on the first day of the seventh month following retirement, death or disability and continue for 180 consecutive months. Compensation for purposes of the ReddinMakris III Plan includes salary, bonus and short-termshort-term incentive compensation programs (CIP), but excludes equity compensation plans (stock options, RSAs, RSUs and PSUs) and long-termlong-term incentive compensation programs.
Reddin Plan
The supplemental executive defined benefit retirement agreement for Matthew S. Reddin was established in 2017 and was designed to work with the other retirement arrangements of the Company, on an aggregated basis with Social Security benefits, to provide a targeted level of benefits for Mr. Reddin. The Reddin Plan required Mr. Reddin to remain in the employ of the Company until he attains age 60 to be eligible to receive benefits under the agreement, provided that in the event of a change in control the benefits were to be fully vested. The Reddin Plan provided a benefit upon normal retirement at or after age60, or upon death or disability prior to age60, a monthly sum equal to one twelfth (1/12) of thirty percent (30%) of the final average compensation (the average compensation paid to him by the Company for the most recent five consecutive calendar years). The benefit payments would have begun on the first day of the seventh month following retirement, death or disability and continued for 180 consecutive months. Compensation for purposes of the Reddin Plan included salary, bonus and short-term incentive compensation programs (CIP), but excludes equity compensation plans (stock options, RSAs,
48
RSUs and PSUs) and long2022-term incentive compensation programs. Because Mr. Reddin separated from service with the Company in July 2023 without meeting the qualifications necessary to receive a benefit, Mr. Reddin is no longer eligible to receive any benefit under the Reddin Plan.
2023 PENSION BENEFITS
Name | Plan Name | Number of | Present | Payments | ||||||
George A. Makris, Jr. | Makris, Jr. Plan | [a] | $3,019,107 | $0 | ||||||
James M. Brogdon | Brogdon Plan | [a] | $ 204,826 | $0 | ||||||
Robert A. Fehlman | Fehlman Plan | [a] | $3,243,899 | $0 | ||||||
George A. Makris III | Makris III Plan | [a] | $ 136,480 | $0 | ||||||
Matthew S. Reddin | Reddin Plan | [a] | $ 0 | $0 |
________________________
[a]
Name | | | Name Plan | | | Number of Years Credited Service (#) | | | Present Value of the Accumulated Benefit ($) | | | Payments During Last Fiscal Year ($) | | |||||||||
George A. Makris, Jr. | | | Makris Plan | | | | | (a) | | | | | $ | 2,948,808 | | | | | $ | 0 | | |
James M. Brogdon | | | Brogdon Plan | | | | | (a) | | | | | $ | 140,433 | | | | | $ | 0 | | |
Robert A. Fehlman | | | Fehlman Plan | | | | | (a) | | | | | $ | 2,850,599 | | | | | $ | 0 | | |
Matthew S. Reddin | | | Reddin Plan | | | | | (a) | | | | | $ | 676,641 | | | | | $ | 0 | | |
NONQUALIFIED DEFERRED COMPENSATION
The Company maintains the Simmons First National Corporation Nonqualified Deferred Compensation Plan (“NQDC Plan”), as a non-qualifiednon-qualified deferred compensation plan. The NQDC Plan is an excess contribution plan primarily open to executive officers and other highly compensated individuals whose compensation exceeds the annual tax code limit on compensation that can be taken into account for purposes of contributions to the Company’s 401(k) Plan. Under the NQDC Plan, participants may make contributions of up to 90 percent of Plan Compensation on a nonqualified basis. The Company’s matching contribution under the plan is limited to four percent (4%) of Excess Compensation, provided the Executive Officer has elected a deferral rate on Excess Compensation of at least five percent (5%) for the year. “Plan Compensation”
The NQDC Plan provides for discretionary non-electivenon-elective Company contributions to the accounts of the participants at the discretion of the Company. For 2022,2023, the Company made a discretionary contribution at a formula rate of 2.3%1.32% of 20222023 Plan Compensation reduced by the amount of the discretionary contribution to the 401(k) Plan based upon the same formula rate. The Company matching and discretionary contributions were credited to the accounts in the first quarter of 20232024 but are reflected in the “Aggregate Balance at December 31, 2022”2023” column in the table below. See footnote (d)[d] to the table below.
The assets of the NQDC Plan are held in an irrevocable trust. The participants are allowed to self-directself-direct the investment of their account among the same investment options offered under the Simmons First National Corporation 401(k) Plan. The earnings on the investments in the NQDC Plan do not constitute above-marketabove-market or preferential earnings which would require us to report earnings in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table.
Benefits under the NQDC Plan are fully vested at all times and are payable upon separation from service or at a selected future date (or dates) according to the 409A compliant annual distribution election made by the executive officer prior to the plan year.
49
The following table sets forth the participant contributions, Company contributions and the aggregate earnings, withdrawals and balances during 20222023 for the named executive officers under the NQDC Plan:
2023 NONQUALIFIED DEFERRED COMPENSATION
Name | | | Executive Contributions in 2022(a) ($) | | | Company Contributions in 2022(b) ($) | | | Aggregate Earnings in 2022(c) ($) | | | Aggregate Withdrawals/ Distributions ($) | | | Aggregate Balance at December 31, 2022(d) ($) | | |||||||||||||||
George A. Makris, Jr. | | | | $ | 45,061 | | | | | $ | 96,971 | | | | | $ | (163,823) | | | | | $ | 0 | | | | | $ | 815,580 | | |
James M. Brogdon | | | | $ | 35,175 | | | | | $ | 30,878 | | | | | $ | (782) | | | | | $ | 0 | | | | | $ | 65,271 | | |
Robert A. Fehlman | | | | $ | 162,254 | | | | | $ | 62,943 | | | | | $ | 10,059 | | | | | $ | 0 | | | | | $ | 813,211 | | |
Matthew S. Reddin | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | |
Stephen C. Massanelli | | | | $ | 77,443 | | | | | $ | 18,866 | | | | | $ | (8,004) | | | | | $ | 0 | | | | | $ | 278,505 | | |
Name | Executive | Company | Aggregate | Aggregate | Aggregate | |||||||
George A. Makris, Jr. | $ 50,699 | $75,385 | $163,439 | $0 | $1,105,102 | |||||||
James M. Brogdon | $ 37,819 | $29,500 | $ 12,193 | $0 | $ 144,783 | |||||||
Robert A. Fehlman | $169,306 | $50,859 | $ 43,786 | $0 | $1,077,222 | |||||||
Matthew S. Reddin | $ 0 | $ 0 | $ 0 | $0 | $ 0 | |||||||
George A. Makris III | $ 22,437 | $11,351 | $ 1,777 | $0 | $ 35,566 | |||||||
Chad D. Rawls | $ 0 | $ 0 | $ 2,454 | $0 | $ 18,089 | |||||||
C. Daniel Hobbs | $ 0 | $ 0 | $ 0 | $0 | $ 0 | |||||||
Stephen C. Massanelli | $ 56,362 | $11,111 | $ 20,614 | $0 | $ 366,592 |
________________________
[a](a)
[b](b)
[c](c)
[d](d)
Name | | | Amounts in “Aggregate Balance at December 31, 2022” Column Reported as Compensation in Summary Compensation Tables for Previous Years | | |||
George A. Makris, Jr. | | | | $ | 617,258 | | |
James M. Brogdon | | | | $ | 0 | | |
Robert A. Fehlman | | | | $ | 619,930 | | |
Matthew S. Reddin | | | | $ | 0 | | |
Stephen C. Massanelli | | | | $ | 194,096 | | |
Name | Amounts in “Aggregate Balance at December 31, | |||||
George A. Makris, Jr. | $759,290 | |||||
James M. Brogdon | $ 66,053 | |||||
Robert A. Fehlman | $845,127 | |||||
Matthew S. Reddin | $ 0 | |||||
George A. Makris III | $ 0 | |||||
Chad D. Rawls | $5,849 | |||||
C. Daniel Hobbs | $ 0 | |||||
Stephen C. Massanelli | $290,405 |
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.
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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 — $21.58.
Cash Payments. None of the named executive officers presently has an employment agreement which guarantees him employment for any period of time. Therefore, any post-terminationpost-termination payments of salary or severance to any named executive officer would be provided only if offered under any Company broad-basedbroad-based severance plan in the event of a reduction in force or other termination by the Company without cause which is discretionary in nature or pursuant to a Change in Control Agreement (“CIC Agreement”).
The Company has entered into CIC Agreements with certain executives of the Company and the subsidiary bank pursuant to which the Company would pay certain salary benefits. As of December 31, 2022,2023, the Company had CIC Agreements with Messrs. Makris, Jr., Fehlman, Brogdon, Fehlman, Reddin,Makris III, Rawls, and Massanelli.Massanelli (Mr. Hobbs did not enter into a CIC Agreement until January 2024). The Company would make such payments only if there is a change in control and if the Company terminates an executive without “Cause” within twenty-fourtwenty-four months of a CIC or the executive resigns within six months after a “Trigger Event.” The Company will pay an amount up to three times, in the case of Mr. Makris, Jr., and two times for all other named executive officers, 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 CIP for the current year, or the average CIP bonus paid to the executive over the preceding two years. The termination compensation is payable in cash within 30 business days following the termination, unless the participant is a Specified Employee, as defined in Section 409A of the Code, in which case the termination compensation shall be payable on the first day of the seventh month after termination.
The CIC Agreement for Mr. Fehlman will also provide the executive with continuing coverage under the Company’s medical, dental, life insurance, and long-termlong-term disability plans for three years following the change in control date. Additionally, if Mr. Fehlman 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-yearthree-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 Agreement for Mr. Fehlman requires the Company to make a tax “gross-up”“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 Code (notably, the Company no longer provides for “gross-up”“gross-up” payments in new CIC agreements). 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-equitynon-equity incentives to the named executive officers through the Company’s Executive Stock Incentive Plansexecutive stock incentive plans, including the 2023 Plan and the 2015 Plan (provided that the Company now only provides new incentives through the 2023 Plan), and the CIP. Please also refer to the discussion of equity and non-equitynon-equity incentives above at
Equity Incentives — Stock Options. Unvested stock options vest upon the named executive officer’s death or disability or upon the officer’s involuntary termination of service within one year after 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 Compensation Committee 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 20222023 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 Units. Upon the retirement (after age 65 or after age 62 with ten years of service), death or disability of a named executive officer, the vesting of unvested RSUs is accelerated to the date of such event. Further, unvested RSUs will vest if, within one year after a change in control, the named executive officer is involuntarily terminated. Upon any other termination, the named executive officer forfeits his unvested RSUs, unless the Compensation Committee takes specific action to vest some or all of the unvested stock. Accordingly, the table below reflects the accelerated vesting of this stock upon retirement, death, or disability of the named executive officer or a change in control.
51
Equity Incentives — Performance Share Units. Unvested PSUs vest upon the named executive officer’s death or disability. Upon a change in control, unvested PSUs vest if the change in control occurs after nine months have elapsed in the performance period, otherwise the unvested PSUs are terminated. Further, unvested PSUs vest pro rata based on the period of employment during the performance period 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 PSUs, unless the Compensation Committee takes specific action to vest some or all of the unvested PSUs. Accordingly, the table below reflects the accelerated vesting of the PSUs upon the named executive officer’s retirement (if he or she has met the qualifying criteria), upon death or disability, or upon a change in control in compliance with the rules set forth above. An executive forfeits all undistributed PSUs upon the termination of the executive’s employment for all other reasons.
Non-Equity Incentives — CIP. Upon a change in control, the CIP benefit will be accelerated and payable on a pro-ratapro-rata basis based on the target level benefit. 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, which coincides with the last day of the performance period under CIP for 2022.2023. As a result of such assumption, the table below reflects the acceleration of the full value of the target level benefit. However, in the case of retirement, death, or disability, the CIP benefit will not be accelerated but will be payable (in the case of retirement, on a pro-rata basispro-rata basis) based on the actual benefit level achieved. Therefore, these amounts would not be increased or enhanced as a result of the executive’s departure. The amounts earned under the CIP for 20222023 are reported in the Summary Compensation Table.
Retirement Arrangements — Makris, Jr.Plan, Brogdon Plan, Fehlman Plan, Makris III Plan, and Reddin Plan. Upon a change in control, the sole participant under each of the Makris, Jr. Plan, Brogdon Plan, Fehlman Plan, and ReddinMakris III Plan, Mr. Makris, Jr., Mr. Brogdon, Mr. Fehlman, and Mr. Reddin,Makris III, respectively, will become fully vested in the benefits under such plans. Payment of the benefits would commence on the first day of the seventh calendar month following the executive’s termination of services to the Company. In the absence of a change in control, upon the death or disability of the participant or the executive’s retirement at or after age 60 for
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-termlong-term disability insurance coverage for three years from the date of the change in control and certain tax gross-upgross-up payments for Mr. Fehlman. The conditions to the Company’s obligations under the CIC Agreements are discussed above. Except for the benefits payable under the CIC Agreements, the Company has no obligation to continue any other perquisites after a named executive officer’s employment terminates.
52
In addition, as described in the “Compensation Discussion and Analysis” section above, the Company has purchased bank owned life insurance that provides a defined, lump-sumlump-sum death benefit for certain of the named executive officer’s designated beneficiary or estate.
Executive Benefits and Payments upon Termination | | | Retirement | | | Involuntary Not for Cause Termination | | | Change in Control With and Without Trigger Event Termination | | | Death / Disability | | ||||||||||||
George A. Makris, Jr. | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash compensation programs | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 5,404,410 (a) | | | | | $ | 0 | | |
Accelerated Vesting of Incentives(b) | | | | $ | 2,717,598 | | | | | $ | 0 | | | | | $ | 3,853,246 | | | | | $ | 3,878,335 | | |
Retirement Plans(c) | | | | $ | 2,723,794 | | | | | $ | 0 | | | | | $ | 2,723,794 | | | | | $ | 2,723,794 | | |
Other Benefits(d) | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 2,547,000 | | |
James M. Brogdon | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash compensation programs | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 1,662,500(e) | | | | | $ | 0 | | |
Accelerated Vesting of Incentives(b) | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 1,117,830 | | | | | $ | 984,544 | | |
Retirement Plans(f) | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 1,563,634 | | | | | $ | 1,563,634 | | |
Other Benefits(d) | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 890,000 | | |
Robert A. Fehlman | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash compensation programs | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 2,266,000(e) | | | | | $ | 0 | | |
Accelerated Vesting of Incentives(b) | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 1,590,407 | | | | | $ | 1,387,465 | | |
Retirement Plans(f) | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 3,043,084 | | | | | $ | 3,043,084 | | |
Other Benefits and Tax Gross-Up(d)(g) | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 41,752(h) | | | | | $ | 1,650,000 | | |
Matthew S. Reddin | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash compensation programs | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 1,565,600 (e) | | | | | $ | 0 | | |
Accelerated Vesting of Incentives(b) | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 852,402 | | | | | $ | 630,849 | | |
Retirement Plans(f) | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 1,926,028 | | | | | $ | 1,926,028 | | |
Other Benefits(d) | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 800,000 | | |
Stephen C. Massanelli | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash compensation programs | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 1,050,600(e) | | | | | $ | 0 | | |
Accelerated Vesting of Incentives(b) | | | | $ | 374,980 | | | | | $ | 0 | | | | | $ | 581,020 | | | | | $ | 533,737 | | |
Retirement Plans | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | |
Other Benefits(d) | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 660,000 | | |
Executive Benefits and Payments upon Termination | Retirement | Involuntary | Change in | Death/Disability | ||||||
George A. Makris, Jr. | ||||||||||
Cash compensation programs | $ 0 | $ 0 | $5,888,475[a] | $ 0 | ||||||
Accelerated Vesting of Incentives[b] | $2,817,727 | $ 0 | $3,330,105 | $4,337,897 | ||||||
Retirement Plans[c] | $2,858,573 | $ 0 | $2,858,573 | $2,858,573 | ||||||
Other Benefits[d] | $ 0 | $ 0 | $ 0 | $2,547,000 | ||||||
James M. Brogdon | ||||||||||
Cash compensation programs | $ 0 | $ 0 | $2,200,000[e] | $ 0 | ||||||
Accelerated Vesting of Incentives[b] | $ 0 | $ 0 | $1,936,775 | $1,994,216 | ||||||
Retirement Plans[f] | $ 0 | $ 0 | $1,356,338 | $1,356,338 | ||||||
Other Benefits[d] | $ 0 | $ 0 | $ 0 | $ 890,000 | ||||||
Robert A. Fehlman | ||||||||||
Cash compensation programs | $ 0 | $ 0 | $3,000,000[e] | $ 0 | ||||||
Accelerated Vesting of Incentives[b] | $ 0 | $ 0 | $2,567,720 | $2,648,242 | ||||||
Retirement Plans[f] | $ 0 | $ 0 | $3,459,804 | $3,459,804 | ||||||
Other Benefits and Tax Gross-Up[d][g] | $ 0 | $ 0 | $1,754,688[h] | $1,650,000 | ||||||
George A. Makris III | ||||||||||
Cash compensation programs | $ 0 | $ 0 | $1,110,000[e] | $ 0 | ||||||
Accelerated Vesting of Incentives[b] | $ 0 | $ 0 | $ 578,388 | $ 515,225 | ||||||
Retirement Plans[f] | $ 0 | $ 0 | $1,277,859 | $1,277,859 | ||||||
Other Benefits[d] | $ 0 | $ 0 | $ 0 | $ 610,000 | ||||||
Stephen C. Massanelli | ||||||||||
Cash compensation programs | $ 0 | $ 0 | $1,098,342[e] | $ 0 | ||||||
Accelerated Vesting of Incentives[b] | $ 343,542 | $ 0 | $ 588,693 | $ 518,003 | ||||||
Retirement Plans | $ 0 | $ 0 | $ 0 | $ 0 | ||||||
Other Benefits[d] | $ 0 | $ 0 | $ 0 | $ 660,000 | ||||||
Chad D. Rawls | ||||||||||
Cash compensation programs | $ 0 | $ 0 | $ 971,500[e] | $ 0 | ||||||
Accelerated Vesting of Incentives[b] | $ 0 | $ 0 | $ 460,412 | $ 386,323 | ||||||
Retirement Plans | $ 0 | $ 0 | $ 0 | $ 0 | ||||||
Other Benefits[d] | $ 0 | $ 0 | $ 0 | $ 533,000 | ||||||
C. Daniel Hobbs | ||||||||||
Cash compensation programs | $ 0 | $ 0 | $ 0 | $ 0 | ||||||
Accelerated Vesting of Incentives[b] | $ 0 | $ 0 | $ 416,640 | $ 416,640 | ||||||
Retirement Plans | $ 0 | $ 0 | $ 0 | $ 0 | ||||||
Other Benefits | $ 0 | $ 0 | $ 0 | $ 0 | ||||||
Matthew S. Reddin[i] | ||||||||||
Cash compensation programs | $ 0 | |||||||||
Accelerated Vesting of Incentives | $ 0 | |||||||||
Retirement Plans | $ 0 | |||||||||
Other Benefits | $1,000,000 |
________________________
[a](a)
53
[b](b)
[c](c)
[d](d)
[e](e)
[f](f)
[g](g)
[h](h)
[i] Because Mr. Reddin separated from service with the Company in July 2023, the table only shows Mr. Reddin’s payments in connection with involuntary not for cause termination. The amount shown reflects a $1,000,000 severance payment to Mr. Reddin.
54
542023 PAY RATIO DISCLOSURE
As required by Item 402(u) of Regulation S-K,S-K, we are providing the following information:
For fiscal 2022,2023, our last completed fiscal year:
•
•
Based on this information, the ratio for 20222023 of the annual total compensation of our Chairman & CEO to the median of the annual total compensation of all employees is 5945 to 1.
We completed the following steps to identify the median of the annual total compensation of all our employees and to determine the annual total compensation of our median employee and CEO:
•
•
•
•
With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column for 20222023 of our Summary Compensation Table.
This ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll records and the methodology described above. The SEC rules for identifying the median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
PAY VERSUS PERFORMANCE DISCLOSURES
Pay Versus Performance Table
As required by Section 953(a) of the Dodd-FrankDodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K,S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of the Company. For further information concerning the Company’s variable pay-for-performancepay-for-performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to the “
55
Pay Versus Performance
Year | Summary | Compensation | Average | Average |
| Net | Adjusted | |||||||||
Total | Peer Group | |||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | ||||||||
2023 | $2,921,407 | $2,529,002 | $1,324,323 | $ 1,163,203 | $ 85 | $116 | $175.06 | $286.84 | ||||||||
2022 | $3,738,575 | $ 126,277 | $1,414,202 | $ 735,041 | $ 89 | $116 | $ 256.4 | $344.30 | ||||||||
2021 | $5,772,713 | $7,414,844 | $1,668,021 | $1,923,320 | $118 | $125 | $ 271.1 | $293.90 | ||||||||
2020 | $3,396,212 | $1,790,825 | $1,021,269 | $ 478,520 | $ 84 | $ 91 | $ 254.9 | $352.69 |
________________________
[1]
Year | | | Summary Compensation Table Total for PEO(1) | | | Compensation Actually Paid to PEO(2) | | | Average Summary Compensation Table Total for Non-PEO Named Executive Officers(3) | | | Average Compensation Actually Paid to Non-PEO Named Executive Officers(4) | | | Value of Initial Fixed $100 Investment Based On: | | | Net Income (millions)(7) | | | Core Diluted Earnings per Share, as Adjusted(8) | | |||||||||||||||||||||||||||
| Total Shareholder Return(5) | | | Peer Group Total Shareholder Return(6) | | ||||||||||||||||||||||||||||||||||||||||||||
(a) | | | (b) | | | (c) | | | (d) | | | (e) | | | (f) | | | (g) | | | (h) | | | (i) | | ||||||||||||||||||||||||
2022 | | | | $ | 3,738,575 | | | | | $ | 126,277 | | | | | $ | 1,414,202 | | | | | $ | 735,041 | | | | | $ | 89 | | | | | $ | 116 | | | | | $ | 256.4 | | | | | $ | 2.40 | | |
2021 | | | | $ | 5,772,713 | | | | | $ | 7,414,844 | | | | | $ | 1,668,021 | | | | | $ | 1,923,320 | | | | | $ | 118 | | | | | $ | 125 | | | | | $ | 271.1 | | | | | $ | 2.69 | | |
2020 | | | | $ | 3,396,212 | | | | | $ | 1,790,825 | | | | | $ | 1,021,269 | | | | | $ | 478,520 | | | | | $ | 84 | | | | | $ | 91 | | | | | $ | 254.9 | | | | | $ | 2.40 | | |
[2]
Year | Reported | Reported | Equity | Reported | Pension | Compensation | ||||||||
2023 | $2,921,407 | $(1,414,990) | $ 1,169,462 | $(393,300) | $246,423 | $2,529,002 | ||||||||
2022 | $3,738,575 | $(1,501,896) | $(2,053,122) | $(351,828) | $294,548 | $ 126,277 | ||||||||
2021 | $5,772,713 | $(3,050,403) | $ 4,723,606 | $(519,227) | $488,155 | $7,414,844 | ||||||||
2020 | $3,396,212 | $(1,298,779) | $ (192,234) | $(608,717) | $494,343 | $1,790,825 |
________________________
(a)
Year | | | Reported Summary Compensation Table Total for PEO | | | Reported Value of Equity Awards(a) | | | Equity Award Adjustments(b) | | | Reported Change in the Actuarial Present Value of Pension Benefits(c) | | | Pension Benefit Adjustments(d) | | | Compensation Actually Paid to PEO | | ||||||||||||||||||
2022 | | | | $ | 3,738,575 | | | | | $ | (1,501,896) | | | | | $ | (2,053,122) | | | | | $ | (351,828) | | | | | $ | 294,548 | | | | | $ | 126,277 | | |
2021 | | | | $ | 5,772,713 | | | | | $ | (3,050,403) | | | | | $ | 4,723,606 | | | | | $ | (519,227) | | | | | $ | 488,155 | | | | | $ | 7,414,844 | | |
2020 | | | | $ | 3,396,212 | | | | | $ | (1,298,779) | | | | | $ | (192,234) | | | | | $ | (608,717) | | | | | $ | 494,343 | | | | | $ | 1,790,825 | | |
(b)(b)
56
the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows:
Year | Year End | Year over | Fair Value | Year over | Fair Value | Value of | Total | |||||||||
2023 | $1,300,498 | $ (126,726) | $— | $ (4,310) | $— | $— | $ 1,169,462 | |||||||||
2022 | $ 943,722 | $(2,820,957) | $— | $(175,887) | $— | $— | $(2,053,122) | |||||||||
2021 | $1,752,043 | $ 2,674,572 | $— | $ 296,991 | $— | $— | $ 4,723,606 | |||||||||
2020 | $1,262,710 | $(1,319,726) | $— | $(135,218) | $— | $— | $ (192,234) |
(c)
Year | | | Year End Fair Value of Equity Awards | | | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards | | | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | | | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | | | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | | | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | | | Total Equity Award Adjustments | | |||||||||||||||||||||
2022 | | | | $ | 943,722 | | | | | $ | (2,820,957) | | | | | $ | — | | | | | $ | (175,887) | | | | | $ | — | | | | | $ | — | | | | | $ | (2,053,122) | | |
2021 | | | | $ | 1,752,043 | | | | | $ | 2,674,572 | | | | | $ | — | | | | | $ | 296,991 | | | | | $ | — | | | | | $ | — | | | | | $ | 4,723,606 | | |
2020 | | | | $ | 1,262,710 | | | | | $ | (1,319,726) | | | | | $ | — | | | | | $ | (135,218) | | | | | $ | — | | | ��� | | $ | — | | | | | $ | (192,234) | | |
(d)(d)
Year | | | Service Cost | | | Prior Service Cost | | | Total Pension Benefit Adjustments | | |||||||||
2022 | | | | $ | 294,548 | | | | | $ | — | | | | | $ | 294,548 | | |
2021 | | | | $ | 286,264 | | | | | $ | 201,891 | | | | | $ | 488,155 | | |
2020 | | | | $ | 292,452 | | | | | $ | 201,891 | | | | | $ | 494,343 | | |
Year | Service | Prior Service Cost | Total Pension | |||||||
2023 | $234,426 | $ 11,997 | $246,423 | |||||||
2022 | $294,548 | $ — | $294,548 | |||||||
2021 | $286,264 | $201,891 | $488,155 | |||||||
2020 | $292,452 | $201,891 | $494,343 |
[3](3)
(4)[4]
57
adjustments were made to average total compensation for the NEOs as a group (excluding Mr. Makris)Makris, Jr. or Mr. Fehlman, as applicable) for each year to determine the compensation actually paid, using the same methodology described above in footnote (2):
Year | Average | Average | Average Equity | Average | Average | Average | |||||||||
2023 | $1,324,323 | $(595,318) | $ 353,896 | $ (26,012 | ) | $106,314 | $1,163,203 | ||||||||
2022 | $1,414,202 | $(338,312) | $(248,840) | $(221,609 | ) | $129,600 | $ 735,041 | ||||||||
2021 | $1,668,021 | $(641,177) | $ 943,872 | $(199,488 | ) | $152,092 | $1,923,320 | ||||||||
2020 | $1,021,269 | $(245,560) | $(232,221) | $(173,755 | ) | $108,787 | $ 478,520 |
________________________
(a)
Year | | | Average Reported Summary Compensation Table Total for Non-PEO NEOs | | | Average Reported Value of Equity Awards | | | Average Equity Award Adjustments(a) | | | Average Reported Change in the Actuarial Present Value of Pension Benefits | | | Average Pension Benefit Adjustments(b) | | | Average Compensation Actually Paid to Non-PEO NEOs | | ||||||||||||||||||
2022 | | | | $ | 1,414,202 | | | | | $ | (338,312) | | | | | $ | (248,840) | | | | | $ | (221,609) | | | | | $ | 129,600 | | | | | $ | 735,041 | | |
2021 | | | | $ | 1,668,021 | | | | | $ | (641,177) | | | | | $ | 943,872 | | | | | $ | (199,488) | | | | | $ | 152,092 | | | | | $ | 1,923,320 | | |
2020 | | | | $ | 1,021,269 | | | | | $ | (245,560) | | | | | $ | (232,221) | | | | | $ | (173,755) | | | | | $ | 108,787 | | | | | $ | 478,520 | | |
Year | | | Average Year End Fair Value of Equity Awards | | | Year over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards | | | Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | | | Year over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | | | Average Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | | | Average Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | | | Total Average Equity Award Adjustments | | |||||||||||||||||||||
2022 | | | | $ | 213,141 | | | | | $ | (422,473) | | | | | $ | — | | | | | $ | (39,508) | | | | | $ | — | | | | | $ | — | | | | | $ | (248,840) | | |
2021 | | | | $ | 464,427 | | | | | $ | 419,330 | | | | | $ | — | | | | | $ | 60,115 | | | | | $ | — | | | | | $ | — | | | | | $ | 943,872 | | |
2020 | | | | $ | 224,702 | | | | | $ | (412,364) | | | | | $ | — | | | | | $ | (44,559) | | | | | $ | — | | | | | $ | — | | | | | $ | (232,221) | | |
Year | Average | Year over | Average | Year over | Average | Average | Total | |||||||||
2023 | $507,913 | $(149,464) | $— | $ (4,553) | $— | $— | $ 353,896 | |||||||||
2022 | $213,141 | $(422,473) | $— | $(39,508) | $— | $— | $(248,840) | |||||||||
2021 | $464,427 | $ 419,330 | $— | $ 60,115 | $— | $— | $ 943,872 | |||||||||
2020 | $224,702 | $(412,364) | $— | $(44,559) | $— | $— | $(232,221) |
(b)(b)
Year | | | Average Service Cost | | | Average Prior Service Cost | | | Total Average Pension Benefit Adjustments | | |||||||||
2022 | | | | $ | 126,601 | | | | | $ | 2,999 | | | | | $ | 129,600 | | |
2021 | | | | $ | 149,093 | | | | | $ | 2,999 | | | | | $ | 152,092 | | |
2020 | | | | $ | 105,788 | | | | | $ | 2,999 | | | | | $ | 108,787 | | |
Year | Average | Average Prior | Total Average Pension | |||||
2023 | $105,041 | $1,273 | $106,314 | |||||
2022 | $126,601 | $2,999 | $129,600 | |||||
2021 | $149,093 | $2,999 | $152,092 | |||||
2020 | $105,788 | $2,999 | $108,787 |
[5](5)
(6)[6]
(7)[7]
(8)[8]
58
Financial Performance Measures
As described in greater detail in the “
Compensation Discussion and Analysis” section above, the Company’s executive compensation program reflects a variable•
•
•
•
Analysis of the Information Presented in the Pay versus Performance Table
As described in more detail in the “
Compensation Discussion and Analysis” section above, the Company’s executive compensation program reflects a variableCompensation Actually Paid and Cumulative TSR
59
Compensation Actually Paid and Net Income
Compensation Actually Paid and Core Diluted Earnings per Share, as Adjusted Pre-Provision Net Revenue
60
Cumulative Total Shareholder Return of the Company and Cumulative Total Shareholder Return of the Company’s Peer Group
DIRECTOR COMPENSATION
The following table providesdiscussion and tables provide information with respect to the compensation of directors of the Company during 2022,2023, the most recently completed fiscal year. The Company maintains an equity compensation program for its non-employeenon-employee directors. In accordance with SEC regulations, outright grants of stock are valued in accordance with the terms of the plan and consistent with Topic 718, at the closing price of the stock on the date of grant.
All non-employeenon-employee directors receive an annual equity retainer of(of approximately $60,000, for 2023) for service on the Board, payable in restricted stock units that vest in four substantially equal installments. In order for an installment to vest, the director must be serving on the Board at the scheduled time of vesting. The first installment vests as of the grant date, and the second, third, and fourth installments vest on July 1, 2022;3, 2023; October 1, 2022;2, 2023; and January 3, 2023,2, 2024, respectively. The RSUs were issued on May 3, 20222023 (following the directors’ reelection to the Board) under the 20152023 Plan and valued at the closing price of the Common Stock on that date, $24.40.$15.77. If a director joins the Board in between annual meetings of shareholders, the annual retainer is prorated and paid in cash. If shareholders approve the 2023 Plan as described in Proposal 6, no further equity awards will be granted under the 2015 Plan following the date of this annual meeting, and future equity awards to non-employee directors, including the annual RSU equity retainer, instead will be granted under the 2023 Plan.
Non-employee directors also receive a cash retainer for their service on the Board and the board of Simmons Bank. Non-employeeFor 2023, non-employee directors serving on committees receivealso received an annual cash retainer for service on the committee as set forth in the table below (unless the director electselected to receive such retainers in RSUs). Committee chairmen receivechairs received an enhanced retainer due to their increased responsibilities. For any director appointed to the Board or to a committee during the year, the cash retainers are prorated based upon the remaining period of service.
Committee | Member Retainer | Chair Retainer | ||
Audit | $15,000 | $30,000 | ||
Compensation | $10,000 | $20,000 | ||
Executive | $10,000 | $30,000 | ||
Nominating & Corporate Governance | $10,000 | $20,000 | ||
Risk | $10,000 | $35,000 |
61
Committee | | | Member Retainer | | | Chairman Retainer | | ||||||
Audit | | | | $ | 15,000 | | | | | $ | 30,000 | | |
Compensation | | | | $ | 10,000 | | | | | $ | 20,000 | | |
Executive | | | | $ | 10,000 | | | | | $ | 30,000 | | |
Nominating & Corporate Governance | | | | $ | 10,000 | | | | | $ | 20,000 | | |
Risk | | | | $ | 10,000 | | | | | $ | 35,000 | | |
The Company maintains a voluntary deferred compensation plan in which non-employeenon-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-yearten-year U.S. Treasury bond, computed quarterly. The plan was frozen with respect to new deferrals for director fees, as well as closed to new participants, in December 2022. The table below summarizes the compensation the Company paid the directors during 2022.
2023 DIRECTOR COMPENSATION
Name | | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($)(a) | | | All Other Compensation ($)(b) | | | Total ($)(c) | | ||||||||||||
Dean Bass(d) | | | | $ | 60,000 | | | | | $ | 60,024 | | | | | $ | 0 | | | | | $ | 120,024 | | |
Jay D. Burchfield | | | | $ | 0 | | | | | $ | 155,047 | | | | | $ | 0 | | | | | $ | 155,047 | | |
Marty D. Casteel | | | | $ | 48,000 | | | | | $ | 107,034 | | | | | $ | 0 | | | | | $ | 155,034 | | |
William E. Clark, II | | | | $ | 70,000 | | | | | $ | 60,024 | | | | | $ | 105 | | | | | $ | 130,129 | | |
Steven A. Cossé | | | | $ | 105,000 | | | | | $ | 60,024 | | | | | $ | 0 | | | | | $ | 165,024 | | |
Mark C. Doramus | | | | $ | 0 | | | | | $ | 155,047 | | | | | $ | 105 | | | | | $ | 155,152 | | |
Edward Drilling | | | | $ | 85,000 | | | | | $ | 60,024 | | | | | $ | 53 | | | | | $ | 145,077 | | |
Eugene Hunt | | | | $ | 65,000 | | | | | $ | 60,024 | | | | | $ | 0 | | | | | $ | 125,024 | | |
Jerry Hunter | | | | $ | 85,000 | | | | | $ | 60,024 | | | | | $ | 31 | | | | | $ | 145,055 | | |
Susan Lanigan | | | | $ | 75,000 | | | | | $ | 75,026 | | | | | $ | 105 | | | | | $ | 150,131 | | |
George A. Makris, Jr.(e) | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
W. Scott McGeorge | | | | $ | 0 | | | | | $ | 145,026 | | | | | $ | 0 | | | | | $ | 145,026 | | |
Tom Purvis | | | | $ | 70,000 | | | | | $ | 60,024 | | | | | $ | 105 | | | | | $ | 130,129 | | |
Robert L. Shoptaw | | | | $ | 100,000 | | | | | $ | 60,024 | | | | | $ | 0 | | | | | $ | 160,024 | | |
Julie Stackhouse | | | | $ | 75,000 | | | | | $ | 60,024 | | | | | $ | 105 | | | | | $ | 135,129 | | |
Russell Teubner | | | | $ | 70,000 | | | | | $ | 60,024 | | | | | $ | 53 | | | | | $ | 130,077 | | |
Mindy West | | | | $ | 85,000 | | | | | $ | 60,024 | | | | | $ | 105 | | | | | $ | 145,129 | | |
Name | Fees Earned or | Stock | All Other | Total | ||||
Dean Bass | $ 82,500 | $ 60,758 | $ 0 | $143,258 | ||||
Jay D. Burchfield | $ 97,500 | $ 60,758 | $ 0 | $158,258 | ||||
Marty D. Casteel | $ 50,500 | $ 99,349 | $ 0 | $149,849 | ||||
William E. Clark, II | $ 70,000 | $ 60,758 | $105 | $130,863 | ||||
Steven A. Cossé | $105,000 | $ 60,758 | $ 0 | $165,758 | ||||
Mark C. Doramus | $ 2,500 | $138,730 | $ 77 | $141,307 | ||||
Edward Drilling | $ 85,000 | $ 60,758 | $ 53 | $145,811 | ||||
Eugene Hunt | $ 65,000 | $ 60,758 | $ 0 | $125,758 | ||||
Jerry Hunter | $ 85,000 | $ 60,758 | $ 0 | $145,758 | ||||
Susan Lanigan | $ 80,000 | $ 68,980 | $105 | $149,085 | ||||
George A. Makris, Jr.[d] | $ — | $ — | $ — | $ — | ||||
W. Scott McGeorge | $ 0 | $130,532 | $ 0 | $130,532 | ||||
Tom Purvis | $ 70,000 | $ 60,758 | $ 74 | $130,832 | ||||
Robert L. Shoptaw | $100,000 | $ 60,758 | $ 0 | $160,758 | ||||
Julie Stackhouse | $ 77,500 | $ 60,758 | $ 83 | $138,341 | ||||
Russell Teubner | $ 70,000 | $ 60,758 | $ 53 | $130,811 | ||||
Mindy West | $ 87,500 | $ 60,758 | $105 | $148,363 |
________________________
[a](a)
[b](b)
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[c](c)
Director | | | SB Board | | | SB Committees | | | SB Total | | |||||||||
Bass | | | | $ | 11,250 | | | | | $ | 30,000 | | | | | $ | 41,250 | | |
Burchfield | | | | $ | 15,000 | | | | | $ | 10,000 | | | | | $ | 25,000 | | |
Casteel | | | | $ | 15,000 | | | | | $ | 55,000 | | | | | $ | 70,000 | | |
Clark | | | | $ | 15,000 | | | | | $ | 30,000 | | | | | $ | 45,000 | | |
Cossé | | | | $ | 15,000 | | | | | $ | 0 | | | | | $ | 15,000 | | |
Doramus | | | | $ | 15,000 | | | | | $ | 20,000 | | ��� | | | $ | 35,000 | | |
Drilling | | | | $ | 15,000 | | | | | $ | 30,000 | | | | | $ | 45,000 | | |
Hunt | | | | $ | 15,000 | | | | | $ | 10,000 | | | | | $ | 25,000 | | |
Hunter | | | | $ | 15,000 | | | | | $ | 10,000 | | | | | $ | 25,000 | | |
Lanigan | | | | $ | 15,000 | | | | | $ | 10,000 | | | | | $ | 25,000 | | |
McGeorge | | | | $ | 15,000 | | | | | $ | 20,000 | | | | | $ | 35,000 | | |
Purvis | | | | $ | 15,000 | | | | | $ | 30,000 | | | | | $ | 45,000 | | |
Shoptaw | | | | $ | 15,000 | | | | | $ | 0 | | | | | $ | 15,000 | | |
Stackhouse | | | | $ | 15,000 | | | | | $ | 20,000 | | | | | $ | 35,000 | | |
Teubner | | | | $ | 15,000 | | | | | $ | 30,000 | | | | | $ | 45,000 | | |
West | | | | $ | 15,000 | | | | | $ | 10,000 | | | | | $ | 25,000 | | |
Director | SB Board | SB Committees | SB Total | |||||
Bass | $15,000 | $42,500 | $57,500 | |||||
Burchfield | $15,000 | $12,500 | $27,500 | |||||
Casteel | $15,000 | $57,500 | $72,500 | |||||
Clark | $15,000 | $30,000 | $45,000 | |||||
Cossé | $15,000 | $ 0 | $15,000 | |||||
Doramus | $15,000 | $22,500 | $37,500 | |||||
Drilling | $15,000 | $30,000 | $45,000 | |||||
Hunt | $15,000 | $10,000 | $25,000 | |||||
Hunter | $15,000 | $10,000 | $25,000 | |||||
Lanigan | $15,000 | $10,000 | $25,000 | |||||
McGeorge | $15,000 | $20,000 | $35,000 | |||||
Purvis | $15,000 | $30,000 | $45,000 | |||||
Shoptaw | $15,000 | $ 0 | $15,000 | |||||
Stackhouse | $15,000 | $22,500 | $37,500 | |||||
Teubner | $15,000 | $30,000 | $45,000 | |||||
West | $15,000 | $12,500 | $27,500 |
[d](d)
PROPOSAL 3 — ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
The Compensation Committee and the Board are committed to excellence in governance and are aware of the significant interest in executive compensation matters by investors and the general public.
The Company has designed its executive compensation program to attract, motivate, reward, and retain the management talent required to achieve our corporate objectives and enhance shareholder value. We believe that our compensation policies and procedures are centered on pay-for-performancepay-for-performance principles and are strongly aligned with the long-termlong-term interests of our shareholders.
As required by SEC rules,regulations, the Company is presenting the following proposal, which gives you as a shareholder the opportunity to approve or disapprove our pay program for named executive officers by voting for or against the resolution set forth below (“say-on-pay”say-on-pay” vote). While the vote on the resolution is advisory in nature and will not bind the Company to take any particular action, the Compensation Committee and the Board intend to carefully consider the shareholder vote resulting from the proposal in making future decisions regarding the Company’s compensation program. The Company anticipates that the next “say-on-pay”“say-on-pay” vote will occur at the 20242025 annual shareholders’ meeting.
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed in the Proxy Statement pursuant to Item 402 of Regulation S-K,S-K, including the Compensation Discussion and Analysis, the compensation tables and narrative discussion, is hereby APPROVED.”
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE
FOR PROPOSAL 3.AUDIT COMMITTEE
During 2022,2023, the Audit Committee was composed of Robert L. Shoptaw (Chairman)(Chair), Jay D. Burchfield, Steve Cossé, Edward Drilling, Eugene Hunt, Jerry Hunter, Scott McGeorge, Julie Stackhouse, and Mindy West.
This committee provides assistance to the Board in fulfilling its responsibilities concerning oversight of 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, and the control systems of management and internal accounting controls. The Audit Committee has adopted a charter, which is available for review within the “Investor Relations” page of the Company’s web site, www.simmonsbank.com.www.simmonsbank.com (under “ESG — Governance — Governance Documents”). This committee met 9 times in 2022.2023.
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The Board appoints each member of the Audit Committee and has determined that each member is, and each member who served during 20222023 was, independent in accordance with the NasdaqNASDAQ listing standards. The Board has determined that Messrs. Shoptaw and Cosse,Cossé, along with Mrs.Ms. West, satisfy the requirements of “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-KS-K promulgated by the SEC and the independence standards applicable to audit committee financial experts as set forth in Regulation S-KS-K of the SEC. The Board has designated each of them as an “audit committee financial expert.” Further, the Board has determined that Mrs.Ms. West and Messrs. Shoptaw and CosseCossé each satisfy the requirements as a financially sophisticated audit committee member as set forth in Rule 5605(c)(2)(A) of the NASDAQ Listing requirements.
The Company is required to obtain pre-approvalpre-approval by the Audit Committee for all audit and permissible non-auditnon-audit services obtained from the independent auditors. All services obtained from the independent auditors during 2022,2023, whether audit services or permitted non-auditnon-audit services, were pre-approvedpre-approved by the Audit
The Audit Committee issued the following report concerning its activities related to the Company for the previous year:
The Audit Committee has reviewed and discussed the audited financial statements of the Company for the year ended December 31, 2022,2023, with management;
The Audit Committee has discussed with FORVIS, LLP (“FORVIS”), its independent auditors, the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the Securities and Exchange Commission;
The Audit 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 Committee concerning independence, and has discussed with the independent accountants the independent accountants’ independence; and
Based upon the foregoing review and discussions, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K10-K for the last fiscal year for filing with the Securities and Exchange Commission.
In its analysis of the independence of FORVIS, the Audit Committee considered whether the non-auditnon-audit related professional services rendered by FORVIS to the Company were compatible with maintaining the principal accountant’s independence.
AUDIT COMMITTEE
Robert L. Shoptaw, | Jay D. Burchfield | Steve Cosse | |||||||||||||
Jerry Hunter | Susan Lanigan | Scott McGeorge |
| Mindy West |
PROPOSAL 54 — TO RATIFY SELECTION OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Audit Committee of the Board re-selectedre-selected the accounting firm of FORVIS, LLP (formerly, BKD, LLP) as independent auditors of the Company and its subsidiaries for the fiscal year ending December 31, 2023,2024, subject to a formal acceptance of an engagement letter from FORVIS, LLP, and seeks ratification of the selection by the Company’s shareholders.
Principal Accountant Fees
Audit Fees
The aggregate fees billed to the Company for professional services rendered by FORVIS for the audit of the Company’s annual financial statements for the year ended December 31, 2022,2023, and the reviews of the financial statements included in the Company’s quarterly reports on Form 10-Q10-Q for 20222023 were $1,328,200.$1,394,666. The aggregate fees billed to the Company by FORVIS for such services in 20212022 were $1,187,000.$1,328,200.
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Audit Related Fees
The aggregate fees billed to the Company for professional services rendered by FORVIS for the audit related fees during 20222023 were $28,000.$29,500. The aggregate fees billed to the Company by FORVIS for such services in 20212022 were $47,500.$28,000. These services are primarily for the audit services provided in connection with audits of employee benefit plans and, for the year 2021, acquisitions.
Tax Fees
The aggregate fees billed to the Company for professional services rendered by FORVIS for tax services and preparation of tax returns during 20222023 were $0. The aggregate fees billed to the Company by FORVIS for such services in 20212022 were $0.
All Other Fees
There were no fees billed to the Company by FORVIS during 20222023 or 20212022 for services other than those set forth above.
Shareholder ratification of the Audit Committee’s selection of FORVIS as our independent auditors for the year ending December 31, 2023,2024, is not required by the Company’s by-lawsby-laws or otherwise. Nonetheless, the Board has elected to submit the selection of FORVIS to our shareholders for ratification. If the selection of FORVIS as our independent auditors for the year ending December 31, 2023,2024, is not ratified, the matter will be referred to the Audit Committee for further review.
Representatives of FORVIS are expected to 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 FORVIS AS THE COMPANY’S INDEPENDENT AUDITORS FORPROPOSAL 6proposal 5 — APPROVAL OF THEapproval of the
SIMMONS FIRST NATIONAL CORPORATION 2023 STOCK AND INCENTIVE PLANcorporation
second amendED and restated 2015 employee stock purchase plan
The Company is asking shareholders to approve the Simmons First National Corporation 2023Second Amended and Restated 2015 Employee Stock and IncentivePurchase Plan (the “2023 Plan”“Second A&R ESPP”), which amends and restates the current plan to increase the number of offerings from 20 to40, to increase the aggregate number of shares of the Company’s Class A Common Stock, par value $0.01 per share (the “Common Stock”) reserved for issuance from 500,000shares to 800,000shares, and to extend the term of the plan. The purpose of the proposed amendments is to provide the Company with the ability to continue to make available a convenient method for eligible employees of the Company and its subsidiaries to purchase shares of Common Stock at a favorable price through payroll deductions and to ensure that the Company has a sufficient reserve of Common Stock available under the plan to accommodate participation by eligible employees in plan offerings. The plan is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code (the “Code”).
The 2023plan was originally adopted as the Simmons First National Corporation 2015 Employee Stock Purchase Plan (the “ESPP”), which was approved by shareholders with an effective date of June 1, 2015. The ESPP was amended and restated as the Simmons First National Corporation First Amended and Restated 2015 Employee Stock Purchase Plan (the “First A&R ESPP”) to increase the number of offerings from 10 to20, to increase the aggregate number of shares of Common Stock reserved for issuance under the plan from 200,000shares (on a split-adjusted basis) to 500,000shares, and to extend the term of the plan. The First A&R ESPP was approved by shareholders with an effective date of April 17, 2019.
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The Second A&R ESPP was approved by the Board, subject to shareholder approval, on March 6,December 19, 2023, based upon the recommendation of the Compensation Committee.Committee (for purposes of this discussion, the “Committee”). Subject to approval by shareholders at the 20232024 annual meeting, the 2023 PlanSecond A&R ESPP will become effective as of April 18, 2023. The 2023 Plan will reserve a pool of 3,800,000 shares of Common Stock that may be issued pursuant to awards to employees, non-employee directors, and consultants as compensation during a term of no more than ten years.23, 2024. If the 2023 PlanSecond A&R ESPP is approved by shareholders, the Company intends to register the 3,800,000 additional 300,000shares available under the 2023 Planplan with the SEC pursuant to a registration statement on Form S-8S-8 shortly after the annual meeting and prior to granting awards in connection with such shares.
Under the Second Amended and Restated Simmons First National Corporation 2015 Incentive Plan (the “2015 Plan”). AsA&R ESPP, as under the prior versions of February 28, 2023, 1,019,612the plan, the Company will offer eligible employees the opportunity to purchase shares of Common Stock remained available for awards under the 2015 Plan, which expires on June 30, 2030 (assuming maximum payout levels for outstanding performance share units)plan (each such opportunity, an “Offering”). The Committee will determine the purchase price of the shares of Common Stock to be sold under each Offering (the “Purchase Price”) in accordance with the limitations set forth in the plan.
The opportunity to purchase shares of the Company’s Common Stock through the plan is intended to provide an incentive to Company has committed that, following February 28, 2023, it will not grant any new awards underemployees, who contribute and are expected to contribute materially to the 2015 Plan unlesscontinued success of the 2023 PlanCompany. The plan is not approved by shareholders ata part of the 2023 annual meeting. If this proposal is not approved atCompany’s competitive total compensation policy for all employees. In addition, the 2023 annual meeting,Board believes the plan supports broad-based employee ownership in the Company, may continue to grant new awards underand provides a convenient method for achieving such ownership that aligns the 2015 Plan, but our ability to provide equity-based compensation will be limited. In that case, our ability to attract, retain, and motivate talent may be adversely impacted, andeconomic interests of the Company may need to consider compensation alternatives that do not include equity-based compensation, or include equity-based compensation to a lesser degree than current practices.employees with shareholders. In the Board’s opinion, equity-based compensationemployee participation in the plan has significantly contributed to the Company’s growth and success and is expected to continue to do so in the future. Thus, the Board considers approval of the 2023 PlanSecond A&R ESPP critical to the Company’s ability to continue to execute its strategic plans.
The significant terms of the 2023 PlanSecond A&R ESPP are described in this Proxy Statement. This description is only a summary and is qualified in its entirety by reference to the 2023 Plan,Second A&R ESPP, which is included in
Summary of Amendments
The Company believes that an equity compensationSecond A&R ESPP includes the following amendments to the First A&R ESPP, which have been approved by the Board subject to approval of the shareholders at the 2024 annual meeting:
•Increases the number of Offerings under the plan is an important componentfrom 20 to 40;
•Increases the number of its overall compensation program and is necessary for the Company to continue to attract, retain, and motivate individuals of outstanding competence as employees, non-employee directors, or consultants. The Company also believes that the 2023 Plan provides flexibility to develop and deliver incentive programs that are competitive, that attract and retain key talent, and that meet current and evolving compensation practices. The use of equity-based awards reflects the Board’s belief that encouraging share ownership by executive officers and other key employees provides a direct, financial interest in the Company’s continued success while maintaining sound governance practices. The Company estimates that the 2023 Plan’s share reserve of 3,800,000 shares of Common Stock will allow the Company to maintain its equity compensation practices for a period of approximately 4 years based on current circumstances, including the value of the Common Stock, the number of eligible participants in the 2015 Plan in the last twelve months, and the value of awards granted in the last twelve months. However, this is an estimate based on factors that are subject to change, and the actual number of awards granted in any year may be higher or lower than anticipated for a variety of reasons.
•
Key Data
As of February 28, 2023, 127,267,765 March 4, 2024, 125,396,745shares of Common Stock were outstanding and the closing market price per share of the Company’s Common Stock as reported on the Nasdaq stock market was $22.23.
Overhang | | | December 31, 2022 | | | February 28, 2023 | |
Number of outstanding stock options(a) | | | 470,180 | | | 469,280 | |
Weighted average exercise price of outstanding stock options | | | $22.56 | | | $22.58 | |
Weighted average remaining contractual life of outstanding stock options | | | 2.45 years | | | 2.29 years | |
Total number of outstanding full-value awards(b) | | | 1,187,159 | | | 1,476,397 | |
Number of outstanding unvested restricted stock awards | | | 0 | | | 0 | |
Number of outstanding unvested performance share unit awards (at target)(c) | | | 351,403 | | | 538,566 | |
Number of outstanding unvested time-based restricted stock unit awards | | | 835,756 | | | 937,831 | |
Total shares available for grant(d) | | | 1,776,385 | | | 1,019,612 | |
Number of shares to be reserved under the 2023 Plan | | | 3,800,000 | | | 3,800,000 | |
In determining the number of additional shares of Common Stock outstanding.to request under the Second A&R ESPP, the Board evaluated a number of factors, including the size of the Company’s employee population, the Company’s recent share usage under the First A&R ESPP and the anticipated share usage under the Second A&R ESPP. The current offering period under the First A&R ESPP began on January 2, 2024; on that date, there were 94,897shares of Common Stock available for issuance under the plan. If the 2023 PlanSecond A&R ESPP is not approved, by shareholders, no new awards will be grantedthe Company estimates that it would not have sufficient shares remaining under the 2015 Plan afterFirst A&R ESPP to continue offering opportunities to purchase shares under the 2023 annual meeting. Ifplan following the 2023 Plan had been approved by shareholders as of February 28, 2023,current offering period, assuming the potential dilution based on shares associatedCompany continues to conduct Offerings and grant options consistent with outstanding awards (with performance share units at target)employees’ historical usage and the shares available under the 2023 Plan would have been approximately 4.4%. WhileCompany’s expected practices, and noting that future circumstances may require the Company is awareto make changes to its expected practices. In light of the potential dilutive effect of equity awards, it also recognizesfactors described above, and the significant performance benefitsfact that may be derived from including such awards inthe Board views the ability to
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continue to offer an employee stock purchase plan as critical to the Company’s compensation program.
| | | Year Ended December 31, | | |||||||||||||||
| | | 2022 | | | 2021 | | | 2020 | | |||||||||
Number of stock options granted(a) (“A”) | | | | | 0 | | | | | | 0 | | | | | | 0 | | |
Number of time-based restricted stock awards granted(b) (“B”) | | | | | 0 | | | | | | 0 | | | | | | 0 | | |
Number of performance share unit awards vested (earned)(c) (“C”) | | | | | 149,278 | | | | | | 57,472 | | | | | | 80,470 | | |
Number of time-based restricted stock unit awards granted (“D”) | | | | | 534,572 | | | | | | 502,536 | | | | | | 446,104 | | |
Total share usage under 2015 Plan (“E”) (A+B+C+D) | | | | | 683,850 | | | | | | 560,008 | | | | | | 526,574 | | |
Total option equivalent share usage (“F”) ((E-A) x 2.0x conversion factor) | | | | | 1,367,700 | | | | | | 1,120,016 | | | | | | 1,053,148 | | |
Weighted-average shares outstanding (“G”) | | | | | 123,958,067 | | | | | | 109,576,618 | | | | | | 109,860,321 | | |
Burn rate (F/G) | | | | | 1.10% | | | | | | 1.02% | | | | | | 0.96% | | |
AdministrationSummary of the Plan
Administration.
EligibilityShares Subject to the Plan.Subject to adjustment as described in the plan, the aggregate number of shares reserved for issuance under the Second A&R ESPP is 800,000
In the event of any subsidiary),change in the Common Stock through a recapitalization, merger, consolidation, stock dividend or split, combination of shares or otherwise, the Committee may make such equitable adjustments to the plan and consultantsto any then-current Offering as it deems necessary and appropriate. These adjustments may include changing the number of shares of Common Stock reserved under the Companyplan and certain of its subsidiaries. Employees include officers or otherchanging the Purchase Price for the then-current Offering.
Eligibility.Prior to each Offering under the Second A&R ESPP, the Committee will specify the eligibility criteria to participate in the Offering. Generally, all employees of the Company and its subsidiaries. Consultants include individuals providing bona fide consultingsubsidiaries will be eligible, provided that the following employees may be excluded from participation in an Offering: (i) employees who have been employed less than 2 years, (ii) employees whose customary employment is 20 hours or advisory servicesless per week, (iii) employees whose customary employment is 5 months or less in any calendar year, and (iv) certain highly compensated employees. No employee will be eligible to participate in the Company or its subsidiaries. If shareholders approve this proposal, asSecond A&R ESPP if the employee owns (or would own after participating in an Offering) more than five percent (5%) of
Offerings.The Second A&R ESPP provides for purchase of the Common Stock by eligible employees through a maximum of 40 Offerings, which is an increase of 20 Offerings over the number permitted under the 2023 Plan asFirst A&R ESPP. Each of such date. In the future,Offerings will be open for a 12month period (the “Offering Period”). The Company may make more than one Offering during any calendar year.
Purchase of Shares.An eligible employee may participate in an Offering by authorizing at any time prior to the first day of the Offering Period a payroll deduction in a dollar amount not exceeding any limitation set forth for the Offering by the Committee would consider, onor, in the event the employee is participating in more than one Offering during any calendar year, a case-by-case basis, whether individual consultants wouldcumulative sum of $25,000 per calendar year, provided that the maximum number of shares of Common Stock that may be eligible for awardsacquired by any employee in any calendar year under the 2023 Plan.
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Each participating employee may at any time during an Offering Period increase, decrease or suspend his or her payroll deductions, or may withdraw from participation in the Offering. Under current rules established by the Committee, payroll deductions may not be changed more than once in each Offering Period and withdrawal requests (effective on the last day of the Offering Period) must be received on or before the last day of such Offering Period.
At the end of each Offering Period, the balance of each participating employee’s aggregated payroll deduction account will be applied toward the purchase of the largest number of whole shares of Common Stock possible, subject to application of the Share Limitation. Any remaining funds will be refunded to the participating employee. Common Stock purchased under the plan will be delivered to each participating employee’s account at the securities brokerage firm designated by the Company to maintain employee stock accounts.
Purchase Price.The Committee will determine the Purchase Price of the shares of Common Stock to be sold under each Offering. The Purchase Price will not be less than the lesser of (i) 85% of the fair market value of the Common Stock at the time the option is granted at the beginning of the Offering Period, or (ii) 85% of the fair market value of the Common Stock at the time such option is exercised at the end of the Offering Period. In general, the “fair market value” of a share of Common Stock in exchange for cash, another award, or other securities, or to extend the exercise period beyond the original term of the stock option or the SAR award (in each case, unless such repricing is in connection with a corporate transaction such as a change in control or an event referred to in the “Changes in Capitalization and Similar Changes” section below).
Notwithstanding the period of restriction established byforegoing, the Committee lapses. The period of restriction may lapse after the participant has completed a period of continuous employment or service, has satisfied one or more performance goals specified by the Committee, or both.
Share Proration.If the number of dividend equivalents with respect to restricted stock units under such terms and subject to such limitations as the Committee deems appropriate.
Transferability.A participating employee may not transfer his or state securities laws.
Termination of Employment or ServiceEmployment.
Amendment or Termination of the Company’s Common Stock by reason of any stock dividend, stock split, reverse stock split, recapitalization, merger, consolidation, reorganization, reclassification, combination, exchange of shares or similar event or change in the Company’s capital stock, the aggregate number and kind or class of shares reserved under the 2023 Plan and subject to outstanding awards under the 2023 Plan, the exercise price of stock options and SARs, and other relevant provisions will be proportionately, equitably and appropriately adjusted by the Committee to retain the economic value or opportunity. As an example only, a two-for-one stock split would generally double the number of shares reserved under the 2023 Plan. Similarly, a two-for-one stock split would generally double the number of shares covered by each outstanding award and reduce the exercise price of outstanding stock options and SARs by one-half.
DurationDuration.
The followingdiscussion below is a brief summary of the general U.S.United States federal income tax consequences of awards underto participating employees and to the 2023 Plan.Company, based on current statutes, regulations and interpretations as currently in effect. This summary is based on U.S. federal income tax laws and regulations in effect on the date of this Proxy Statement and is not a complete description of the U.S. federal income tax laws. Tax laws are subject to change. This summary is intended for the information of shareholders considering how to vote at the Annual Meeting and not as tax or legal advice to participants in the 2023 Plan, as the consequences may vary with the types of awards granted, the identity of the participants, and the method of payment or settlement of an award. In addition, this summary is not intended to be exhaustive, does not constitute legal advice or tax advice to any person and does not describe possible “golden parachute” excise taxes, municipal,address foreign, state or foreignlocal income tax consequences of awards, federalor gift, estate, employment taxes, or other non-income tax consequences. Participating employees should consult with their own tax advisors with respect to the tax consequences of any participant’s death.participating in the Second A&R ESPP.
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Amounts withheld from a participating employee’s compensation through payroll deductions under the Second A&R ESPP will constitute ordinary income for federal income tax purposes in the year in which such amounts would otherwise have been paid to participantsthe employee. Such amounts will be subject to normal employment and income tax withholdings. However, a participating employee will generally not recognize any income for federal income tax purposes either on the grant of an option or upon the issuance of any shares of Common Stock under the 2023 Plan in respect of awards are expected to be deductible by the Company as compensation at the same time the participant recognizes the ordinary income, subject to the limitations of Section 162(m) of the Code. Second A&R ESPP.
Under Section 162(m)423 of the Code, the Company generally cannot deduct compensation paid to certain covered employees of more than $1 million annually.
If a participating employee disposes of any shares acquired under the lengthSecond A&R ESPP after the one-year and two-year holding periods described above (a “qualifying disposition”), the employee will recognize ordinary income equal to the lesser of time(a) the participant held the shares of Common Stock.
If a participating employee dies while owning shares purchased under the Second A&R ESPP, then the employee’s final income tax return must include ordinary income equal to the lesser of (a) the amount, if any, by which the fair market value of the shares at the grant date exceeds the Purchase Price (but no less than zero), or (b) the amount, if any, by which the fair market value of the shares at the time of death exceeds the Purchase Price. When the shares are sold, the amount of any such ordinary income will be added to the participant’s basis in the shares, and any additional gain or resulting loss recognized on the disposition of the shares after such basis adjustment will be treated as a capital gain or loss.
The Company will be entitledgenerally may not take an income tax deduction with respect to the grant of any option, the issuance of any shares of Common Stock under the Second A&R ESPP or the disposition of any shares acquired under the Second A&R ESPP in a federalqualifying disposition. However, if an employee disposes of shares purchased under the Second A&R ESPP in a disqualifying disposition, the Company may take an income tax deduction in the corresponding amount at that time. For each share of Common Stock received, the taxationyear of the post-receipt appreciation or depreciation is treated as either a short-term or long-term capital gain or loss, depending upon the length of time the participant held the shares.
Historical Plan Benefits
The following table indicates the aggregate number of shares of Common Stock purchased under the plan since inception through December Section 409A31, 2023 by (i) each of the Code (“Section 409A”) imposes certain requirementsCompany’s current named executive officers, (ii) all current executive officers as a group, and (iii) all employees who are not current executive officers as a group. No shares of Common Stock have been purchased under the plan by any individual director or director nominee who is not an employee or by the current non-employee directors as a group (with the exception of Marty Casteel, who purchased 654shares during the time he was employed by the Company). Other than as reported for Mr.Makris, Jr. and Mr.Makris III in the following table, no shares of Common Stock have been purchased under the plan by an associate of any current executive officer, current director, or current director nominee. No person has received 5% or more of the total shares of Common Stock purchased under the plan since its inception.
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Aggregate Purchases from Plan Inception through December 31, 2023
Name and Position | Aggregate Number of Purchased Shares | |
Named Executive Officers | ||
Robert A. Fehlman | 1,005 | |
James M. Brogdon | 0 | |
C. Daniel Hobbs | 0 | |
George A. Makris, Jr. | 7,781 | |
George A. Makris, III | 0 | |
Stephen C. Massanelli | 930 | |
Matthew S. Reddin | 0 | |
Chad Rawls | 103 | |
All current executive officers as a group (10 persons) | 14,666 | |
All current and former employees, excluding current executive officers, as a group | 390,437 |
New Plan Benefits
Participation in the Second A&R ESPP is voluntary and entirely within the discretion of the eligible employees of the Company and its subsidiaries. In addition, participation levels depend on nonqualified deferred compensation arrangements, including requirements with respect to an individual’s
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EQUITY COMPENSATION PLAN INFORMATIONEquity Compensation Plan Information
The following table sets forth information as of December 31, 20222023 with respect to compensation plans under which equity securities of the Company are authorized for issuance. This table does not include the 300,000 additional shares that would be available for issuance under the 2023 PlanSecond A&R ESPP if itProposal 5 is approved by shareholders.
Plan Category | Number of Securities | Weighted Average | Number of Securities | |||
Equity Compensation Plans Approved by Shareholders | 1,931,269 | $22.57 | 3,726,439[c] | |||
Equity Compensation Plans Not Approved by Shareholders[d] | 0 | 0 | 0 | |||
Total | 1,931,269 | $22.57 | 3,726,439 |
________________________
[a]
Plan Category | | | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights(a) | | | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights(b) | | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in First Column) | | |||||||||
Equity Compensation Plans Approved by Shareholders | | | | | 2,008,742 | | | | | $ | 22.56 | | | | | | 1,914,754(c) | | |
Equity Compensation Plans Not Approved by Shareholders(d) | | | | | 0 | | | | | | 0 | | | | | | 0 | | |
Total | | | | | 2,008,742 | | | | | $ | 22.56 | | | | | | 1,914,754 | | |
[b](b)
[c](c)
[d](d)
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE
FOR PROPOSALDELINQUENT SECTION 16(a) REPORTS
Section 16(a) of the Securities and Exchange Act of 1934 and the regulations issued thereunder require directors and certain officers and beneficial owners of any company registered under that Act to file reports on Forms3, 4, & 5 with the U.S. Securities and Exchange Commission showing their beneficial ownership in securities issued by such company within specified timeframes. Based solely upon a review of such reports by the directors and officers of the Company for the preceding fiscal year provided to the Company by such persons, the Company has identified one late Form 4 filing for one transaction for James Brogdon,believes that all of our Section 16 filers filed on a timely basis the Company’s chief financial officer, and one late Form 4 filing for one transaction for Russell Teubner, a Company director.
FINANCIAL STATEMENTS
A copy of the annual report on Form 10-K10-K for the year ended December 31, 2022,2023, required to be filed with the SEC, 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.
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Upon written request by any shareholder addressed to George A. Makris III, Secretary, Simmons First National Corporation, P. O. Box 7009, Pine Bluff, Arkansas 71611, a copy of the Company’s annual report on Form 10-K10-K required to be filed with the SEC, including the financial statements and schedules thereto, will be furnished without charge.
PROPOSALS FOR 20242025 ANNUAL MEETING
Shareholders who intend to submit proposals pursuant to Rule 14a-814a-8 of the Exchange Act to be presented at the Company’s 20242025 Annual Meeting of Shareholders and included in the Company’s proxy statement relating to such meeting must submit such proposals to the Corporate Secretary of the Company at the Company’s principal executive offices no later than November 15, 2023.20, 2024. Such proposals must also comply with the additional requirements of Rule 14a-814a-8 of the Exchange Act (or any successor rule) to be eligible for inclusion in the proxy statement for the 20242025 Annual Meeting of Shareholders.
In addition, the Company’s by-lawsby-laws provide that only such business (including, without limitation, the nomination of persons for election to the Board) which is properly brought before a shareholder meeting will be conducted. For business (including, without limitation, the nomination of persons for election to the Board) to be properly brought before an annual meeting of the shareholders by a shareholder, the shareholder must provide notice to the Corporate Secretary of the Company at the Company’s principal executive offices not later than 90 days nor earlier than 120 days prior to the first anniversary of the prior year’s annual meeting of the shareholders. In the event that the Company did not hold an annual meeting of the shareholders in the prior year or if the first anniversary of the prior year’s annual meeting of the shareholders is more than 30 days before or after the date of the current year’s annual meeting of the shareholders, the shareholder’s notice is timely only if it is delivered to the Company’s Corporate Secretary at the principal executive offices of the Company no later than the 10
Accordingly, a shareholder who intends to raise a proposal to be acted upon at the 20242025 Annual Meeting of Shareholders, but who does not desire to include the same in the Company’s 20242025 proxy statement, must provide written notice to the Company’s Corporate Secretary no earlier than December 20, 2023,24, 2024, nor later than January 19, 2024.
In addition to satisfying the foregoing requirements under the Company’s by-laws,by-laws, to comply with the SEC’s new universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-1914a-19 under the Exchange Act no later than February 18, 2024.
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, and the persons named as proxies in the Company’s proxy for the 20242025 Annual Meeting of Shareholders may exercise their discretionary authority to vote upon any such proposal to the extent brought before such meeting.
OTHER MATTERS
Management knows of no other matters to be brought before this annual meeting. However, if other matters should properly come before the meeting, it is the intention of the persons named in the proxy to vote such proxy in accordance with their best judgment on such matters.
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
Certain statements contained in this Proxy Statement may not be based on historical facts and should be considered “forward-looking“forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-lookingforward-looking statements may be identified by reference to a future period(s) or by the use of forward-lookingforward-looking terminology, such as “anticipate,” “believe,” “budget,” “contemplate,” “continue,” “estimate,” “expect,
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“expect,” “foresee,” “intend,” “indicate,” “likely,” “target,” “plan,” “positions,” “prospects,” “project,” “predict,” or “potential,” by future conditional verbs such as “could,” “may,” “might,” “should,” “will,” or “would,” by variations of such words or by similar expressions. These forward-lookingforward-looking statements include, without limitation, those relating to the Company’s future growth, mergers andbusiness strategies, acquisitions and their expected benefits and effects, revenue, expenses, assets, asset quality, profitability, earnings, accretion, dividends, customer service, lending capacity and lending activity, loan demand, investment in digital channels, critical accounting policies, net interest margin, non-interestnon-interest revenue, non-interest expense, market conditions related to and the impact of the Company’s stock repurchase program, consumer behavior and liquidity, the Company’s ability to recruit and
These forward-lookingforward-looking statements are based on various assumptions and involve risks and uncertainties, and may not be realized due to a variety of factors, including, without limitation: changes in the Company’s operating, acquisition, or expansion strategy; the effects of future economic conditions (including unemployment levels and slowdowns in economic growth), governmental monetary and fiscal policies (including the policies of the Federal Reserve), as well as legislative and regulatory changes, including in response tochanges; general business conditions, as well as conditions within the Pandemic;financial markets, developments impacting the impacts of the Pandemic on the Company’s operations and performance; the ultimate effect of measures the Company takesfinancial services industry, such as bank failure or has taken in response to the Pandemic; the pace of recovery when the Pandemic subsides and the heightened impact it has on many of the risks described herein and in other reports we file with the SEC;concerns involving liquidity; changes in real estate values; changes in interest rates; changes in liquidity; inflation; changes in the level and composition of deposits, loan demand, and the values of loan collateral, securities and interest sensitive assets and liabilities; changes in credit quality; actions taken by the Company to manage its investment securities portfolio; changes in the securities markets generally or the price of the Company’s Common Stock specifically; changes in the assumptions used in making the forward-looking statements; developments in information technology affecting the financial industry; cyber threats, attacks or events; reliance on third parties for the provision of key services; further changes in accounting principles relating to loan loss recognition; uncertainty and disruption associated with the discontinued use of the London Inter-Bank Offered Rate; the costs of evaluating possible acquisitions and the risks inherent in integrating acquisitions; possible adverse rulings; judgements, settlements, fines and other outcomes of pending or future litigation;litigation or government actions; loss of key employees; increased unemployment; labor shortages; market disruptions, including pandemics or significant health hazards, severe weather conditions, natural disasters, terrorist activities, financial crises, political crises, war and other military conflicts (including the ongoing military conflictconflicts between Russia and Ukraine)Ukraine and between Israel and Hamas) or other major events, or the prospect of these events; changes in customer behaviors, including consumer spending, borrowing, and saving habits; the soundness of other financial institutions and indirect exposure related to the closings of Silicon Valley Bank (SVB), Signature Bank and Silvergate Bank and their impact on the broader market through other customers, suppliers and partners (or that the conditions which resulted in the liquidity concerns with SVB, Signature Bank and Silvergate Bank may also adversely impact, directly or indirectly, other financial institutions and market participants with which the Company has commercial or deposit relationships); increased delinquency and foreclosure rates on commercial real estate loans; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market areaareas and elsewhere, including institutions operating regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the internet; the failure of assumptions underlying the establishment of reserves for possible credit losses, fair value for loans, other real estate owned, and those factors set forth from time to time in the Company’s press releases and filings with the SEC, including, without limitation, the Company’s Form 10-K10-K for the year ended December 31, 20222023 (which has been filed with, and is available from, the SEC). Many of these factors are beyond our ability to predict or control, and actual results could differ materially from those indicated in or implied by the forward-lookingforward-looking statements due to these factors and others. In addition, as a result of these and other factors, our past financial performance should not be relied upon as an indication of future performance.
We believe the assumptions and expectations that underlie or are reflected in our forward-lookingforward-looking statements are reasonable, based on information available to us on the date hereof. However, given the described uncertainties and risks, we cannot guarantee our future performance or results of operations or whether our future performance
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will differ materially from the performance reflected in or implied by our forward-lookingforward-looking statements, and you should not place undue reliance on these forward-lookingforward-looking statements. Any forward-lookingforward-looking statement speaks only as of the date hereof, and we undertake no obligation to update or revise any forward-lookingforward-looking statements, whether as a result of new information, future events or otherwise, and all written or oral forward-lookingforward-looking statements attributable to us are expressly qualified in their entirety by this section.
BY ORDER OF THE BOARD OF DIRECTORS:
George A. Makris III, Secretary
Pine Bluff, Arkansas
March 14, 202320, 2024
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Appendix A
SIMMONS FIRST NATIONAL CORPORATION2023SECOND AMENDED AND RESTATED
2015 EMPLOYEE STOCK AND INCENTIVEPURCHASE PLAN
(Effective April 18, 2023)
1.2 1.Purpose of the PlanPlan.. The purpose of the Plan is to promote the long-term growth and profitabilityprovide eligible employees of the Company and its Subsidiaries,subsidiaries, whether now owned or hereafter acquired, a convenient opportunity to provide Employees, Non-Employee Directors and Consultants with an incentive to achieve corporate objectives, to attract and retain individuals of outstanding competence and to provide Employees, Non-Employee Directors and Consultants with incentives that are closely linked to the interests of all shareholders of the Company.
2.Qualification.The Plan is not qualified under Section 401(a) of the Company of a complete liquidation or dissolution of the Company.
3.Administration.The Plan is administered by the Compensation Committee, which consists of at least two or more members of the Board, appointednone of whom are eligible to administerparticipate in the Plan pursuant to Article III herein, which shall be the Compensation Committeeand all of whom are “non-employee directors,” as such term is defined in Rule 16b-3(b)(3) of the Board unless the Board determines otherwise. All members of the Committee shall be “independent directors”Securities and Exchange Commission, under applicable stock exchange listing requirements. In the event the Board exercises the authority of the Committee in connection with the Plan or an Award as contemplated by Section 3.1(a) herein, the term “Committee”
4.Stock Reservation.An aggregate of 800,000 shares of Class A, $0.01 par value, common stock of the Company (“SFNC Stock”) is available for purchase under the Plan. Shares of SFNC Stock which are to be delivered under the Plan may be obtained by the Company by authorized purchases on the open market or from private sources, or by issuing authorized but unissued shares of SFNC Stock. In the event of any change in the SFNC Stock through recapitalization, merger, consolidation, stock dividend or split, combination or exchanges of shares or otherwise, the Compensation Committee may make such equitable adjustments in the Plan and the then outstanding offering as it deems necessary and appropriate including, but not limited to, changing the number of shares of SFNC Stock reserved under the Plan and the price of the current offering. If the number of shares of SFNC Stock that participating employees become entitled to purchase is greater than the number of shares of SFNC Stock available, the available shares shall be allocated by theCompensation Committee among such participating employees in such manner as it deems fair and equitable. No fractional shares of SFNC Stock shall be issued or sold under the Plan.
5.Eligibility to Participate.All employees of the Company and such of its subsidiaries as shall be designated by the Compensation Committee will be eligible to participate in the Plan. Each offering may exclude from participation in the offering (i) employees who have been employed less than 2 years, (ii) employees whose customary employment is 20 hours or less per week, (iii) employees whose customary employment is for not more than 5 months in any calendar year, and (iv) highly compensated employees (within the meaning of section 414(q) of the Internal Revenue Code. No employee shall be eligible to participate in the Plan if, immediately after an option is granted under the Plan, the employee owns more than five percent (5%) of the total combined voting power or value of all classes of shares of the Company or of any parent or subsidiary of the Company.
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6.SFNC Stock Offerings.The Company may make up to forty (40) offerings of twelve (12) months’ duration each to eligible employees to purchase SFNC Stock under the Plan. An eligible employee as defined in the Offering may participate in such Offering by authorizing at any time prior to the first day of such Offering a payroll deduction for such purpose in a dollar amount, not exceeding any limitation set forth in the Offering, or in the event the participant is participating in more than one Offering during any calendar year a cumulative sum of $25,000 per calendar year, provided that the maximum number of shares of SFNC Stock that may be acquired by any participant in any calendar year under the plan is limited to the Share Limitation for such year, as defined in Section 8 below. The Compensation Committee may at any time suspend an Offering if required by law or if determined by the Compensation Committee to be in the best interests of the Company.
7.Participant Accounts.(a) The Company will maintain or cause to be maintained separate payroll deduction accounts for all participating employees for each Offering. All funds received or held by the Company or its subsidiaries under the Plan may be, but need not be, segregated from other corporate funds. Payroll deduction accounts will not be credited with interest. Any balance remaining in any employee’s payroll deduction account at the end of an Offering period will be refunded to the employee.
(b)Each participating employee will receive a statement of his or her payroll deduction account and the number of shares of SFNC Stock purchased therewith following the end of each Offering period.
(c)Subject to rules, procedures and forms adopted by the Compensation Committee, a participating employee may at any time during the offering period increase, decrease or suspend his or her payroll deduction, or may withdraw from participation in an offering. Under the initial rules established by the Compensation Committee, payroll deductions may not be altered more than once in each Offering period and withdrawal requests (effective on the last day of the offering) may be received on or before the last day of such offering. In the event of a participating employee’s retirement, death, disability or termination of employment, his or her participation in any offering under the Plan shall cease, no further amounts shall be deducted pursuant to the Plan, and the balance in the employee’s account shall be paid to the employee, or, in the event of the employee’s death, to the employee’s beneficiary designated on a form approved by the Compensation Committee (or, if the employee has not designated a beneficiary, to his or her estate).
8.Option Grant.Each employee participating in any offering under the Plan will be granted an option, upon the effective date of such offering, for as many full shares of SFNC Stock as the amount of his or her payroll deduction account at the end of any offering period can purchase but not in excess of the share limitation, as defined below. No employee may be granted an option under the Plan which permits his or her rights to purchase SFNC Stock under the Plan, and any regulations promulgated thereunder.
As of the last day of the Offering period, the payroll deduction account of each participating employee shall be totaled. If such account contains sufficient funds to purchase one or more full shares of SFNC Stock as of that date, the employee shall be deemed to have exercised an option to purchase the largest number of full shares of SFNC Stock (not exceeding the Share Limitation) at the purchase price. Such employee’s account will be charged for the amount of the purchase and the stock will be delivered in accordance with Section 13. Any remaining funds in the employee’s account will be refunded to the employee.
9.Purchase Price. The Compensation Committee shall determine the purchase price of the shares of SFNC Stock which are to be sold under each offering, which price shall not be less than the lesser of (i) an amount equal to 85 percent of the Fair Market Value of the SFNC Stock at the time such option is granted, or (ii) an amount equal to 85 percent of the Fair Market Value of the SFNC Stock at the time such option is exercised. “Fair Market Value” of a Share means (A)share of SFNC Stock on a given date is defined as the per-share closing market price of a share on the applicable principal U.S. market on the relevant dateprevious trading day (or, if it is a trading date or, if not,none, on the most recent date on which a Sharethere was traded prior to such date,one or more trades executed), as reported by the stock exchangeNASDAQ Global Select Market, or system forother similar service selected by the applicable principal U.S. market, or (B)Compensation Committee. However, if the ShareSFNC Stock is not tradedlisted on a national securities exchange, “Fair Market Value” is defined as provided in (A)the last reported sale price of a share on the previous trading day, or if no sale took place, the last reported sale price of a share of stock on the most recent day on which a sale of a share of stock took place as recorded on such exchange. If the SFNC Stock is neither listed on such date on a national securities exchange nor traded in the opinion of the Committee, the method provided in (A)over-the-counter
A-2
market, “Fair Market Value” is inapplicable or inappropriate for any reason,defined as the fair market value of a share on such date as determined pursuant to a reasonable method adopted by the Committee in good faith for such purpose.
10.Non-Assignability of Option.No option, right or other employee of the Company or its Subsidiaries.
11.Term, Termination and Amendments. No offering under this plan shall be commenced after March 15, 2035, provided that the plan shall terminate earlier in the event all of the stock allocated to the extent permitted by Section 409A ofplan has been purchased. The Board may terminate the Code; and (vi) to make all other determinations and take all other actions necessary or advisable for the administration of the Plan in its discretion. In the event of a conflict or inconsistency between the Plan and any Agreement, the Plan shall govern, and the Agreement shall be interpreted to minimize or eliminate any such conflict or inconsistency.
12.Securities Law Compliance. Certain officers of the Code, or causes an Award that previously qualified for an exemption fromCompany are subject to restrictions under Section 409A16(b) of the Code1934 Act. With respect to become subject to Section 409A of the Code.
13.Delivery of the provision, and the remaining parts of the Plan shall not be affected and shall remain in full force and effect.Shares.
o – 0 – o
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Your vote matters – here’s how to vote! You may vote online or by phone instead of the Plan. Electronic communications sent through email will be deemed to be effective on the date and at the time sent, and other electronic communications sent through other means described inmailing this Section 21.12 will be deemed to be effective when they are sent or otherwise made available.
IMPORTANT ANNUAL MEETING INFORMATION IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLEBE HELD ON APRIL 23, 2024. THE NOTICE, PROXY STATEMENT, AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND C 1234567890 J N T C123456789 MMMMMMMMMMMM M MMMMMMM 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext If no electronic voting, delete QR code and control # Δ ≈ You may vote online or by phone instead of mailing this card. Online Go to www.investorvote.com/SFNC or scan the QR code — login details are located in the shaded bar below. Save paper, time and money! Sign up for electronic delivery at www.investorvote.com/SFNC Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Votes submitted electronically must be received by April 17, 2023 at 11:59 P.M., EST. Your vote matters – here’s how to vote!