THE BANC CORPORATION
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(Rule 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ____ )
Filed by the Registrant x
Filed by a Party other than the Registrant o
Check the appropriate box:
x Preliminary Proxy Statement.
o Confidential, for Use of the Commission only (as permitted by Rule 14a-6(e)(2)).
o Definitive Proxy Statement.
o Definitive Additional Materials.
o Soliciting Material under § 240.14a-12.
THE BANC CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x No fee required.
o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act
Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
o Fee paid previously with preliminary materials.
o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
PRELIMINARY COPY
THE BANC CORPORATION
17 North 20th Street
Birmingham, Alabama 35203
April , 2006
Dear Stockholder:
On behalf of the Board of Directors and management of The Banc
Corporation, we cordially invite you to attend the Annual
Meeting of Stockholders to be held at our principal executive
offices at 17 North 20th Street, Birmingham, Alabama 35203,
on May 18, 2006, at 10:00 a.m. Central Daylight Time.
The attached Notice of Annual Meeting and Proxy Statement
describe the formal business to be transacted at the Annual
Meeting.
It is important that your shares be represented at the Annual
Meeting. Regardless of whether you plan to attend, please mark,
sign, date and return the enclosed proxy as soon as possible in
the envelope provided. If you attend the Annual Meeting, which
we hope you will, you may vote in person even if you have
previously mailed a proxy card.
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Sincerely, |
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C. Stanley Bailey |
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Chief Executive Officer |
PRELIMINARY COPY
THE BANC CORPORATION
17 North 20th Street
Birmingham, Alabama 35203
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 18, 2006
To the Stockholders of The Banc Corporation:
You are hereby notified that the 2006 Annual Meeting of
Stockholders (the Annual Meeting) of The Banc
Corporation, a Delaware corporation, will be held at our
principal executive offices at 17 North 20th Street,
Birmingham, Alabama 35203, on Thursday, May 18, 2006, at
10:00 a.m. Central Daylight Time, for the following
purposes:
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1. To elect 13 directors to serve a term of one year
or until their respective successors are elected and qualified,
or until their earlier death, resignation or removal. |
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2. To consider and vote upon a proposed amendment to the
Corporations Restated Certificate of Incorporation to
change the name of the Corporation to Superior
Bancorp. |
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3. To consider and vote upon a proposed amendment to the
Corporations Restated Certificate of Incorporation to
increase the number of authorized shares of common stock from
35 million shares to 50 million shares. |
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4. To consider and vote upon a plan under which directors
of the Corporation may elect to take shares of the
Corporations common stock in full or partial satisfaction
of directors fees otherwise payable to them. |
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5. To ratify the appointment of Carr, Riggs &
Ingram, LLC as independent auditors of The Banc Corporation for
the year ending December 31, 2006. |
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6. To transact such other business as may properly come
before the Annual Meeting or any adjournment thereof. |
All stockholders are cordially invited to attend the Annual
Meeting; however, only stockholders of record at the close of
business on April 5, 2006, are entitled to notice of and to
vote at the Annual Meeting, or any adjournments thereof.
Regardless of whether you plan to attend the meeting, please
mark, sign, date and return the enclosed proxy in the enclosed
prepaid envelope as soon as possible. If you attend the annual
meeting in person, you may revoke your proxy in person.
Attendance at the meeting does not of itself revoke your proxy.
In accordance with Delaware law, a list of stockholders entitled
to vote at the Annual Meeting shall be open to the examination
of any stockholder, for any purpose relating to the Annual
Meeting, during ordinary business hours at The Banc
Corporations principal executive offices at 17 North
20th Street, Birmingham, Alabama, from May 8, 2006
through May 18, 2006, and the list shall be available for
inspection at the Annual Meeting by any stockholder who is
present.
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By Order of the Board of Directors |
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/s/ Rick D. Gardner |
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Rick D. Gardner |
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Secretary |
DATED: April , 2006
TABLE OF CONTENTS
PRELIMINARY COPY
THE BANC CORPORATION
17 North 20th Street
Birmingham, Alabama 35203
PROXY STATEMENT
For 2006 Annual Meeting of Stockholders
To Be Held On May 18, 2006
INTRODUCTION
We are furnishing this Proxy Statement to the holders of The
Banc Corporation common stock, par value $.001 per share,
in connection with our solicitation of proxies to be used at the
2005 Annual Meeting of Stockholders to be held on Thursday,
May 18, 2006, at 10:00 a.m., Central Daylight Time, at
our principal executive offices at 17 North 20th Street,
Birmingham, Alabama 35203 (the Annual Meeting) and
any adjournment thereof. The enclosed proxy is solicited on
behalf of our Board of Directors. This Proxy Statement and the
accompanying proxy card are being mailed to stockholders on or
about April , 2006.
Stockholders Entitled to Vote
Only stockholders of record at the close of business on
April 5, 2006, are entitled to receive notice of and to
vote at the Annual Meeting. Our only class of voting stock
outstanding is our common stock, par value $.001 per share.
As of the close of business on April 5, 2006, the number of
shares of common stock outstanding and entitled to vote at the
Annual Meeting was 20,287,060. Each share of common stock is
entitled to one vote on all matters. There are no cumulative
voting rights.
Vote Required
Before any business may be transacted at the Annual Meeting, a
quorum must be present. A majority of our outstanding shares of
common stock which are entitled to vote at the annual meeting,
represented in person or by proxy, shall constitute a quorum for
the transaction of business. Assuming a quorum is present,
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The election of directors requires a plurality of the votes cast. |
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The proposed amendments to our Restated Certificate of
Incorporation (Proposals Two and Three) require approval by the
holders of a majority of our issued and outstanding shares of
common stock. |
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The proposals to approve the director compensation plan and to
ratify the appointment of independent auditors must be approved
by a majority of the votes cast. |
Abstentions and broker non-votes will be counted for purposes of
determining the presence or absence of a quorum for the
transaction of business, but will not be counted as votes cast
on any matter except with respect to Proposals Two and Three.
Since those proposals require the affirmative vote of a majority
of all outstanding shares of our common stock, abstentions and
broker non-votes will have the same effect as a vote against
Proposals Two and Three.
How to Vote Your Shares
To vote at the Annual Meeting, you may attend the Annual Meeting
and vote your shares in person or vote by signing and returning
the enclosed proxy card in the envelope provided. Shares of
common stock represented by the accompanying proxy card will be
voted in accordance with your voting instructions if the proxy
card is properly executed and is received by us prior to the
time of voting and is not revoked. Where specific choices are
not indicated on the proxy card, proxies will be voted in
accordance with the recommendations of the Board of Directors.
How to Revoke Your Proxy
Sending in a signed proxy card will not affect your right to
attend the Annual Meeting and vote in person. You may revoke
your proxy at any time before it is voted at the Annual Meeting
by:
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giving written notice to the Secretary of The Banc Corporation
that you wish to revoke your proxy, |
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executing and delivering to the Secretary of The Banc
Corporation a later-dated proxy, or |
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attending, giving notice and voting in person at the Annual
Meeting. |
Solicitation
We will bear the costs of soliciting proxies. We have engaged
Georgeson Shareholder Communications, Inc. to aid in the
solicitation of proxies, for which we will pay a fee of
approximately $7,000 plus reimbursement of expenses. Some of our
officers and employees (or those of our subsidiaries) may use
their personal efforts to make additional requests for the
return of proxies by telephone, mail or otherwise and may
receive proxies on our behalf. They will receive no additional
compensation for making any solicitations. We expect to
reimburse brokers, banks, custodians and other nominees for
their reasonable
out-of-pocket expenses
in handling proxy materials for beneficial owners of our common
stock.
Other Matters
As of the date of this Proxy Statement, the Board of Directors
does not know of any matters, other than those set forth in the
foregoing Notice of Annual Meeting of Stockholders, that may be
brought before the Annual Meeting. If other matters requiring a
vote of the stockholders arise, the persons designated as
proxies will vote the shares of common stock represented by the
proxies in accordance with their judgment on such matters.
2
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth, to the best of our knowledge,
certain information regarding our beneficial stock ownership as
of April 5, 2006, by: (a) each of our current
directors, our Chief Executive Officer and our other current
executive officers, (b) all current directors and executive
officers as a group, (c) each stockholder known by us to be
the beneficial owner of more than 5% of our outstanding common
stock, and (d) two former executive officers who would have
been among our four most highly compensated executive officers
other than the Chief Executive Officer had they been serving as
executive officers at December 31, 2005. Except as
otherwise indicated, each person listed below has sole voting
and investment power with respect to all shares shown to be
beneficially owned by him or her.
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Percentage(1)(2) | |
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Number of Shares of | |
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Of Common | |
Name |
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Common Stock | |
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Stock Owned | |
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C. Stanley Bailey
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976,656 |
(3) |
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4.65 |
% |
Roger Barker
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51,750 |
(4) |
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* |
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K. Earl Durden
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627,068 |
(5) |
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3.08 |
% |
Rick D. Gardner
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417,184 |
(6) |
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2.02 |
% |
James C. Gossett
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32,800 |
(7) |
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* |
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Thomas E. Jernigan, Jr.
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55,002 |
(8) |
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James Mailon Kent, Jr.
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425,002 |
(9) |
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2.09 |
% |
James M. Link
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5,000 |
(10) |
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Barry Morton
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301,300 |
(11) |
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1.38 |
% |
Robert R. Parrish, Jr.
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5,000 |
(12) |
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* |
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C. Marvin Scott
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508,983 |
(13) |
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2.47 |
% |
Michael E. Stephens
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270,353 |
(14) |
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1.33 |
% |
James A. Taylor
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1,091,902 |
(15) |
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5.28 |
% |
James C. White, Sr.
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8,000 |
(16) |
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All executive officers and directors as a group (14 persons)
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4,776,000 |
(17) |
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21.51 |
% |
Tontine Financial Partners, L.P.
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1,323,407 |
(18) |
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6.52 |
% |
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55 Railroad Avenue, 3rd Floor |
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Greenwich, Connecticut 06830 |
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Former Executive Officers:
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David R. Carter
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163,042 |
(19) |
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F. Hampton McFadden, Jr.
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128,500 |
(20) |
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(1) |
Except as otherwise noted herein, percentage is determined on
the basis of 20,287,060 shares of Corporation common stock
outstanding plus securities deemed outstanding pursuant to
Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as
amended (the Exchange Act). Under
Rule 13d-3, a
person is deemed to be a beneficial owner of any security owned
by certain family members and any security of which that person
has the right to acquire beneficial ownership within
60 days, including, without limitation, shares of common
stock subject to currently exercisable options. Unless otherwise
indicated, the address of each person is c/o The Banc
Corporation, 17 North 20th Street, Birmingham, Alabama
35203. |
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(2) |
Ownership percentage for each named individual is calculated by
treating any shares subject to options that are held by the
named individual and that are exercisable within the next
60 days as if outstanding, but treating such option shares
held by others and treating shares subject to options held by
the named individual but not exercisable within 60 days as
not outstanding. If ownership of restricted stock is shown, the
individual has sole voting power, but no power of disposition. |
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(3) |
Includes 711,970 shares subject to options that are
exercisable within 60 days. |
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(4) |
Includes 20,000 shares subject to options that are
exercisable within 60 days and 2,500 shares of
restricted stock. |
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(5) |
Includes 32,500 shares subject to options that are
exercisable within 60 days, 2,500 shares of restricted
stock and 205,534 shares held as co-trustee. |
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(6) |
Includes 355,985 shares subject to options that are
exercisable within 60 days. |
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(7) |
Includes 32,500 shares subject to options that are
exercisable within 60 days. |
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(8) |
Includes 30,000 shares subject to options that are
exercisable within 60 days and 5,000 shares of
restricted stock. |
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(9) |
Includes 30,000 shares subject to options that are
excisable within 60 days and 5,000 shares of
restricted stock. |
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(10) |
Includes 5,000 shares subject to options that are
exercisable within 60 days. |
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(11) |
Includes 20,000 shares subject to options that are
exercisable within 60 days and 2,500 shares of
restricted stock. |
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(12) |
Includes 5,000 shares subject to options that are excisable
within 60. |
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(13) |
Includes 355,985 shares subject to options that are
exercisable within 60 days. |
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(14) |
Includes 20,000 shares subject to options that are
excisable within 60 days and 2,500 shares of
restricted stock. |
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(15) |
Includes 405,000 shares subject to options that are
exercisable within 60 days. Does not include
32,100 shares owned by his wife, of which he disclaims
ownership. |
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(16) |
Includes 5,000 shares subject to options that are
exercisable within 60 days. |
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(17) |
Includes 2,028,940 shares subject to options that are
exercisable within 60 days and 20,000 shares of
restricted stock. |
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(18) |
Shares held by Tontine Financial Partners, L.P. Tontine
Management, L.L.C. is the general partner of Tontine Financial
Partners, L.P. and Tontine Management, L.L.C. Tontine Financial
Partners, L.P. and Tontine Management, L.L.C. claim shared power
with their principals to vote and to dispose of all shares.
Information regarding Tontine Financial Partners, L.P. and
Tontine Management, L.L.C. is based on filings made by such
entities as of December 31, 2005. |
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(19) |
Includes 130,000 shares subject to options that are
exercisable within 60 days. |
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(20) |
Includes 105,000 shares subject to options that are
exercisable within 60 days. |
4
PROPOSAL NUMBER ONE
ELECTION OF DIRECTORS
Under our Restated Certificate of Incorporation and Bylaws, each
member of our Board of Directors stands for election annually.
The Board of Directors has recommended the election of the
nominees for director identified, to serve for a term expiring
at the 2007 Annual Meeting or until their successors are duly
elected and qualified, or until their earlier death, resignation
or removal.
The Board of Directors has no reason to believe that any of the
persons named will be unable to serve if elected. If any nominee
is unable to serve as a director, the enclosed Proxy will be
voted for a substitute nominee selected by the Board of
Directors. The election of directors requires a plurality of the
votes cast by the holders of our common stock. A
plurality means that the individuals who receive the
largest number of votes cast are elected as directors up to the
maximum number of directors to be chosen at the meeting.
Consequently, any shares not voted (whether by abstention,
broker non-vote or otherwise) have no impact on the election of
directors.
Nominees for Director
For each nominees beneficial ownership of common stock,
see Security Ownership of Certain Beneficial Owners and
Management. Set forth below is certain additional
information regarding each nominee:
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Name (1) |
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Age | |
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Position with The Banc Corporation |
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C. Stanley Bailey
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57 |
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Chief Executive Officer; Director |
Roger Barker
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58 |
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Director |
K. Earl Durden
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69 |
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Director |
Rick D. Gardner
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46 |
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Chief Operating Officer; Director |
Thomas E. Jernigan, Jr.
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41 |
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Director |
James Mailon Kent, Jr.
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65 |
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Director |
James M. Link
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63 |
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Director |
Barry Morton
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68 |
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Director |
Robert R. Parrish, Jr.
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51 |
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Director |
C. Marvin Scott
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56 |
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President; Director |
Michael E. Stephens
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62 |
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Director |
James A. Taylor
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64 |
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Director; Chairman of the Board |
James C. White, Sr.
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58 |
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Director |
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(1) |
Messrs. Barker, Jernigan and White are members of the Audit
Committee; Messrs. Durden, Link and Stephens are members of
the Compensation Committee; Messrs. Durden, Link and Taylor
(ex officio) are members of the Nominating and Corporate
Governance Committee. |
C. Stanley Bailey joined The Banc Corporation as
Chief Executive Officer and a Director in January 2005. During
2004, he was Chairman and Chief Executive Officer of Silver
Acquisition Corp., Overland Park, Kansas. Mr. Bailey was
founder, chairman and chief executive officer of Superior
Financial Corp., Little Rock, Arkansas, a financial services
company, from late 1997 until the sale of the company in late
2003. From 1971 through 1997, he served in various executive
management positions with AmSouth Bancorporation, Birmingham,
Alabama and Hancock Holding Company, Gulfport, Mississippi, a
bank holding company. Subject to his re-election at this Annual
Meeting of Stockholders, Mr. Bailey is expected to become
Chairman of the Board upon Mr. Taylors scheduled
retirement on January 24, 2007.
Roger Barker has been Vice President and Chief Financial
Officer of the Buffalo Rock Company, a distributor and bottler
of soft drink products, for over five years. He has been a
director of The Banc Corporation since December 2003 and began
serving as a director of The Bank, the predecessor to Superior
Bank, in 1998.
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K. Earl Durden is the Chairman and Chief Executive
Officer and a director of Rail Management Corporation, where he
has been an officer and director since 1980. Mr. Durden
also serves as Chairman and a director of Copper Basin Railway,
Inc. He has been a director of The Banc Corporation since
December 1998.
Rick D. Gardner joined The Banc Corporation as Chief
Operating Officer in January 2005 and was elected as a director
in June 2005. During 2004, he was Chief Operating Officer of
Silver Acquisition Corp., Overland Park, Kansas.
Mr. Gardner was an officer of Superior Financial Corp. from
1998 through late 2003, serving as Chief Administrative Officer
and, previously, as Chief Financial Officer. From 1981 through
1998, he served, first, as an accountant with Grant Thornton and
then in various executive management positions with Metmor
Financial, Overland Park, Kansas, and First Commercial Mortgage
Company, Little Rock, Arkansas.
Thomas E. Jernigan, Jr. has been the President of
Marathon Corporation, a privately held investment management
company based in Birmingham, Alabama, for over five years. He
has been a director of The Banc Corporation since September 1998.
James Mailon Kent, Jr. has been the owner of Mailon
Kent Insurance Agency in Birmingham, Alabama for over
20 years. He has been a director of The Banc Corporation
since September 1998.
James M. Link, Lieutenant General, U.S. Army
(retired), has served as President of Teledyne Brown
Engineering, Inc., Huntsville, Alabama, a subsidiary of Teledyne
Technologies, Inc., since July 2001, and was elected as a
director of The Banc Corporation in June 2005. He previously
served as Senior Vice President, Applied Technology Group, of
Science Applications International Corporation, Huntsville,
Alabama. He completed his military career as Deputy Commanding
General, U.S. Army Materiel Command, from 1998
2000. Additionally, he is a director of Dewey Electronics
Corporation.
Barry Morton is Chairman and Chief Executive Officer of
The Robins & Morton Group, Birmingham, Alabama, one of
the largest contractors in the United States. Before becoming
Chairman and Chief Executive Officer, he served for
15 years as President of Robins & Morton. He
served for more than five years as a director of The Bank, the
predecessor to Superior Bank, and was elected as a director of
The Banc Corporation in June 2005.
Robert R. Parrish, Jr. is president and owner of
Parrish Group, Inc. of Tallahassee, Florida, a holding company
for companies involved in real estate development, construction
and sales in the Capitol Region of Florida. Mr. Parrish has
served in such capacities for Parrish Group and its predecessors
for more than 20 years. Mr. Parrish was appointed as a
director in November 2005.
C. Marvin Scott joined The Banc Corporation as
President in January 2005 and was elected as a director in June
2005. During 2004, he was President of Silver Acquisition Corp.,
Overland Park, Kansas. Mr. Scott served as President and
Chief Operating Officer of Superior Financial Corp. from April
1998 through late 2003. From 1971 through 1997, he served in
various executive management positions with Crestar, a Richmond,
Virginia-based bank holding corporation, AmSouth Bank and
Hancock Holding Company. From February 1996 until January 1998,
he was Chief Retail Officer and Senior Vice President of Hancock
Holding Company, and he was previously Executive Vice
President Consumer Banking at AmSouth Bank.
Michael E. Stephens has been a private investor for more
than five years and is the Chairman and Chief Executive Officer
of S Enterprises, Inc., Indian Springs, Alabama. He has been a
director of The Banc Corporation since September 1998.
James A. Taylor has been a private investor since January
2005. He has been Chairman of the Board of The Banc Corporation
since its incorporation in 1998 and also served as Chief
Executive Officer from 1998 until January 2005 and as President
in 1998 and from February 1999 until September 2000. From 1981
through 1998, he served in various executive management
positions with Alabama National BanCorporation and its
predecessors and Warrior Capital Corporation. Mr. Taylor is
also a director of Southern Energy Homes, Inc., a producer of
manufactured housing, and Security Engineers, Inc., a provider
of private security services. Subject to his re-election at this
Annual Meeting of Stockholders, Mr. Taylor is expected to
retire as
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a director and as Chairman of the Board on January 24,
2007, as contemplated by his current agreement with The Banc
Corporation.
James C. White, Sr. has served as Managing Partner
of Banks, Finley, White & Co., Certified Public
Accountants, Birmingham, Alabama, one of the nations
largest and oldest minority- owned certified public accounting
firms, since the firms inception in 1973. He was elected
as a director of The Banc Corporation in June 2005, and
previously served as a director of The Bank, the predecessor of
Superior Bank.
The Board of Directors unanimously recommends a vote FOR
the election of all nominees identified above. The enclosed
Proxy will be voted in favor of those nominees unless other
instructions are given.
Executive Officers
The following table sets forth certain information about our
current executive officers:
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Name |
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Age | |
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Position |
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C. Stanley Bailey
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57 |
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Chief Executive Officer; Director
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Rick D. Gardner
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46 |
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Chief Operating Officer; Director
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James C. Gossett
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43 |
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Chief Accounting Officer
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C. Marvin Scott
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56 |
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President; Director
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Information concerning Mr. Bailey, Mr. Gardner and
Mr. Scott is set forth above under Nominees for
Director.
James C. Gossett was named Chief Accounting Officer of
The Banc Corporation in July 2005. Previously, he became
Controller of The Bank in 1999 and was named Chief Financial
Officer of The Bank in 2003. Mr. Gossett is a Certified
Public Accountant.
Certain Information Concerning the Board of Directors and its
Committees
The Board of Directors held a total of eight meetings during
2005 and acted by unanimous written consent three times
during 2005. During 2005, each of the directors attended at
least 75% of the aggregate of (i) the total number of Board
of Directors meetings and (ii) the total number of
meetings held by all Board committees on which he or she served
during the period for which he was serving as a director or
committee member. The Board of Directors has determined that the
following nine directors were independent directors
under Rule 4200 of the NASDAQ Stock Market Marketplace
Rules during 2005: Messrs. Barker, Durden, Jernigan, Kent,
Link, Morton, Parrish, Stephens and White. Our non-employee
directors periodically meet in executive session without the
management directors. While there is no policy requiring their
attendance, directors are encouraged to attend the Annual
Meeting of Stockholders. Six current members of the Board of
Directors attended the 2005 Annual Meeting.
The Board of Directors currently has three standing committees:
the Audit Committee, the Compensation Committee and the
Nominating and Corporate Governance Committee.
Audit Committee. The Audit Committee is responsible for
overseeing our accounting and financial reporting processes and
the audits of our financial statements. Among other things, the
Audit Committee is responsible for the appointment, retention,
compensation and oversight of our independent auditors, reviews
significant audit and accounting policies and practices, meets
with our independent auditors concerning, among other things,
the scope of audits and reports, approves the provision of
services by our independent auditors and reviews the performance
of overall accounting and financial controls. The Audit
Committee currently comprises Messrs. Barker (Chair),
Jernigan and White. During 2005, there were eight meetings of
the Audit Committee. See Report of the Audit
Committee.
7
Each of the members of the Audit Committee is an independent
director, as defined under NASDAQ Rule 4200, and meets the
standards required by Rule 10A-3(b)(1) under the Securities
Exchange Act of 1934. The Board of Directors has determined that
each of Mr. Barker and Mr. White qualifies as an
audit committee financial expert, under the Rules of
the Securities and Exchange Commission. In January 2004, the
Board of Directors adopted a revised Audit Committee Charter, a
copy of which was attached as Appendix A to the Proxy
Statement relating to our 2004 Annual Meeting of Stockholders.
Compensation Committee. The Compensation Committee is
responsible for reviewing the performance of all of our officers
and recommending to the Board of Directors annual salary and
bonus amounts for them. The Compensation Committee also
administers the Third Amended and Restated 1998 Incentive Stock
Plan of The Banc Corporation and the Commerce Bank of Alabama
Stock Option Plan. The Compensation Committee currently
comprises Messrs. Stephens (Chair), Durden and Link, all of
whom are independent directors as defined under NASDAQ
Rule 4200. During 2005, the Compensation Committee held
four meetings. See Executive Compensation and Other
Information Compensation Committee Report on
Executive Compensation.
Nominating and Corporate Governance Committee. The
Nominating and Corporate Committee recommends to the Board of
Directors and evaluates potential candidates to serve as
directors of The Banc Corporation. The Nominating and Corporate
Governance Committee was established in March 2004 as the
Nominating Committee and consists of Messrs. Durden
(Chair), Link and Taylor (ex officio; non-voting). Each
of the voting members of the Nominating Committee is an
independent director, as defined under NASDAQ Rule 4200.
Mr. Taylor, who is not an independent director under such
definition, acts solely in a non-voting advisory capacity to the
Committee. The Nominating and Corporate Governance Committee met
twice during 2005.
The Nominating and Corporate Governance Committee has a written
charter, adopted by the Board in March 2004, which was attached
as Appendix B to the Proxy Statement relating to our 2004
Annual Meeting of Stockholders. The Committee is charged with
developing and recommending criteria to be considered in
identifying and evaluating potential candidates to serve as
directors of The Banc Corporation as well as establishing
policies and procedures for identifying, recruiting,
interviewing and recommending to the Board qualified candidates
to serve as directors. The Committee is also responsible for
developing and recommending to the Board criteria to be used in
reviewing and evaluating candidates recommended by shareholders
of The Banc Corporation and is responsible for reviewing and
evaluating such candidates and making recommendations to the
Board.
In evaluating and recommending director nominees, the Committee
does not rely on a fixed set of qualifications, but instead
attempts to identify nominees with (i) a broad range of
business experience consistent with The Banc Corporations
strategic focus and its stockholder interest, (ii) the
ability to dedicate the time and resources necessary for service
on the Board of Directors, and (iii) familiarity with the
primary geographic markets served by The Banc Corporation. In
addition, the Committee is charged with ensuring that at least a
majority of our directors satisfy the director independence
requirements imposed by the NASDAQ Marketplace Rules. In
evaluating director nominees, including incumbent directors and
any nominees recommended by stockholders, the Committee
considers a nominees business experience and skills,
character, judgment, leadership experience, familiarity with
community banking issues, knowledge of our geographic markets
and relevant issues therein, and such other criteria as the
Committee may deem relevant and appropriate based on the
composition of the Board of Directors and the strategic goals of
The Banc Corporation at the time in question.
The Committee will consider recommendations for director
nominees submitted by stockholders if submitted in accordance
with our Bylaws. Our Bylaws provide that nominations for the
office of director may be made by stockholders only if written
notice of such proposed nominations is delivered to or mailed
and received at our principal executive offices not less than
60 days nor more than 90 days prior to the meeting at
which the election is to be held; provided, however, that in the
event that less than 70 days notice, or prior public
disclosure, of the date of the meeting, is given, or made, to
stockholders, then notice by a stockholder,
8
to be timely, must be so delivered or mailed and received not
later than the close of business on the tenth day following the
day on which such notice of the date of the meeting was mailed
or such public disclosure was made. Such stockholders
notice shall set forth (a) as to each person the
stockholder proposes to nominate for election or re-election as
a director (i) the persons name, age, business
address, and residence address, (ii) the persons
principal occupation or employment, (iii) the class and
number of shares of the Corporation that the person beneficially
owns and (iv) any other information relating to the person
that is required to be disclosed in solicitations for proxies
for election of directors pursuant to Section 14 of the
Securities Exchange Act of 1934, as amended (the Exchange
Act), and the rules and regulations promulgated
thereunder; and (b) as to the stockholder giving the
notice, (i) the name and record address of the stockholder,
(ii) the class or series and number of shares of capital
stock of The Banc Corporation that are owned beneficially or of
record by the stockholder, (iii) a description of all
arrangements or understandings between the stockholder and each
proposed nominee and any other person or persons (including
their names) pursuant to which the nomination(s) are to be made
by the stockholder, (iv) a representation that such
stockholder intends to appear in person or by proxy at the
meeting to nominate the persons named in such notice, and
(v) any other information relating to the stockholder that
would be required to be disclosed in a proxy statement or other
filings required to be made in connection with solicitations of
proxies for the election of directors pursuant to
Section 14 of the Exchange Act and the rules and
regulations promulgated thereunder. Such notice must be
accompanied by a written consent of each person proposed to be
named as a nominee and to serve as a director, if elected. We
may require any proposed nominee to furnish such other
information as may reasonably be required to determine the
eligibility of such proposed nominee to serve as a director.
Stockholders wishing to recommend potential director nominees
should write to the Committee in care of Rick D. Gardner,
Secretary, Superior Bancorp., 17 North 20th Street,
Birmingham, Alabama 35203.
Stockholder Communications with the Board
The Board of Directors provides a process for stockholders to
send communications to the Board of Directors. Stockholders may
send written communications to the Board of Directors addressed
to the Board of Directors (or to an individual director),
Attention: Secretary, Superior Bancorp., 17 North
20th Street, Birmingham, Alabama 35203. All communications
will be compiled by the Secretary and submitted to the Board of
Directors or the individual directors.
Director Compensation
Current Compensation Arrangements. Prior to July 1,
2005, all non-employee directors received $1,500 compensation
for each meeting of the board attended and a retainer of
$1,500 per quarter for serving as directors. In addition,
all non-employee directors who are members of standing or ad hoc
committee of the Board of Directors received $100 per
committee meeting. Directors are eligible to receive grants of
stock options and restricted stock under the Third Amended and
Restated 1998 Stock Incentive Plan of The Banc Corporation.
Effective July 1, 2005, non-employee directors receive an
annual retainer of $10,000, meeting fees of $1,500 per
Board meeting, and committee meeting fees of $1,500 per
meeting for committee chairs and $1,000 per meeting for
committee members, and (subject to the approval of
Proposal Four at this Annual Meeting) have the option of
receiving such retainer and fees in cash or common stock. All
directors except Mr. White have elected to receive their
compensation in common stock. See Proposal Number
Four: Approval of Plan to Issue Shares of Common Stock To
Non-Employee Directors in lieu of Directors Fees.
Prior Deferred Compensation Agreements. The following
current directors entered into Deferred Compensation Agreements
with us originally effective as of September 1, 1999:
Messrs. Durden, Jernigan, Kent, Stephens and Taylor.
Messrs. Taylor, Kent and Jernigan also entered into
Deferred Compensation Agreements with The Bank (now Superior
Bank), and Mr. Morton had a Deferred Compensation Agreement
with The Bank only. In addition, James Taylor, Jr. and
David R. Carter, who were directors during part of 2005, and F.
Hampton McFadden, Jr., who was an executive officer during
part of 2005, also had such agreements. With the exception of
the agreements relating to Mr. Taylor,
Mr. Taylor, Jr., Mr. Carter and
Mr. McFadden, these agreements provided that we would
establish and fund investments in a Deferral
9
Account for the director as provided in the agreements. Upon
termination of a directors service other than by reason of
death or following a change in control, the agreements obligated
us to pay the director within 60 days of termination the
amount equal to the Deferral Account Balance. The
agreements further provided that, if the director were
terminated following a change in control, we must pay the
director the primary and secondary benefits. The primary benefit
is the Deferral Account balance at the end of the plan year
immediately preceding the directors termination of
service, which is payable to the director in ten equal annual
installments. The secondary benefit is the amount equal to the
growth in the Deferral Account and must be paid within
60 days of the end of each plan year. The agreements
relating to Mr. Taylor, Mr. Taylor, Jr.,
Mr. Carter and Mr. McFadden were amended in 2004 to
provide for payment of a defined benefit based on then-current
projections rather than the variable benefit applicable to the
other directors.
In connection with our agreements relating to the separation of
Mr. Taylor, Mr. Taylor, Jr., Mr. Carter and
Mr. McFadden from employment as executive officers, they
were fully vested in their benefits under their Deferred
Compensation Agreements. All of the other affected directors
other than Mr. Kent agreed, effective July 31, 2005,
to terminate their Deferred Compensation Agreements and accept
shares of our common stock having a value equal to their
Deferral Account balances in full satisfaction of our
obligations under their Deferred Compensation Agreements.
Mr. Kent, who is fully vested in his benefits under his
Deferred Compensation Agreements, has agreed to the termination
of such agreements in exchange for our agreement to fund a new
deferred compensation arrangement for him in the amount of
$154,547, representing the present value of amounts that would
have been paid to him under his Deferred Compensation
Agreements. Under this new arrangement, such amount will be
deemed to be invested in specified benchmark funds or indices,
and Mr. Kent will be entitled to receive benefits based
upon the value of his deemed investment account after giving
effect to deemed investment gains and losses on the account.
Mr. Kent may elect to receive such benefits in five or ten
annual installments or in a lump sum beginning in 2011 or 2016,
at his election, subject to earlier termination of the
arrangement.
Code of Ethics
We have adopted a code of ethics that applies to all of our
employees, including our principal executive, financial and
accounting officers. A copy of our code of ethics is available
on our website, www.superiorbank.com. We intend to disclose
information about any amendments to, or waivers from, our code
of ethics that are required to be disclosed under applicable
Securities and Exchange Commission regulations by providing
appropriate information on our website. If at any time our code
of ethics is not available on our website, we will provide a
copy of it free of charge upon written request.
Section 16(a) Beneficial Ownership Reporting
Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires our officers and directors and persons who beneficially
own more than 10% of a registered class of our equity
securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers,
directors and beneficial owners of more than 10% of our common
stock are required by SEC regulations to furnish The Banc
Corporation with copies of all Section 16(a) forms that
they file. Based on a review of the copies of the forms
furnished to us, or written representations that no reports on
Form 5 were required, we believe that during 2005, all of
our officers, directors and greater-than-10% beneficial owners
complied with all applicable filing requirements except as set
forth in the following paragraphs.
Owing to the substantial transition in The Banc
Corporations management and the composition of its Board
of Directors during 2005, a number of reports were not timely
filed due to administrative error and/or delays in obtaining the
required electronic filing identification codes from the SEC.
For those reasons, the initial reports of beneficial ownership
on Form 3 for Messrs. Link, Morton, White and Gossett
were filed late. Also during the course of the year, it was
determined that Mr. Barkers initial report on
Form 3, which should have been filed in December 2003, was
never filed, and that report was filed in April 2005.
10
In addition, we have determined that filings should have been
made with respect to certain directors upon the conversion into
our common stock of shares of our preferred stock held by such
directors. Such conversion was effective as of July 1,
2005, and should have been reported by the following directors:
Mr. Durden (125,000 common shares); Mr. Kent
(125,000 common shares); and Mr. Stephens
(12,500 common shares). Corrected filings are in the
process of being made to reflect these preferred stock
conversion transactions.
W.T. Campbell, Jr., a former director, filed a report on
Form 5 in February 2005 showing the December 2004
disposition by gift to certain family members of
3,900 shares, of which he retained a beneficial ownership
interest in 2,600 shares. Such transactions should have
been reported on Form 4. In addition, James R.
Andrews, M.D., a former director, filed a late report on
Form 4 showing the disposition of 8,500 shares in four
open market sale transactions in May 2005.
11
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and Certain Other Compensation
Executive Officer Compensation. The following table
presents certain information concerning compensation paid or
accrued for services rendered to The Banc Corporation in all
capacities during the years ended December 31, 2005, 2004
and 2003, for (a) our Chief Executive Officer and our other
most highly compensated executive officers whose total annual
salary and bonus in the fiscal year ended December 31, 2005
exceeded $100,000; (b) our former Chief Executive Officer,
who ceased to be an executive officer on January 24, 2005;
and (c) two other former executive officers who would have
been among our most highly compensated executive officers for
the year ended December 31, 2005 had they still been
serving as executive officers at that date. These executive
officers are referred to collectively as the named
executive officers. With respect to our current executive
officers, Messrs. Bailey, Scott and Gardner joined The Banc
Corporation in 2005 and Mr. Gossett did not serve as an
executive officer prior to 2005. Therefore, information with
respect to our current executive officers is presented for 2005
only.
Summary Compensation Table
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Long-Term | |
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Compensation Awards | |
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Annual Compensation | |
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Restricted | |
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Securities | |
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Name and Principal |
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Other Annual | |
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Stock | |
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Underlying | |
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All Other | |
Position Held |
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Year | |
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Salary($) | |
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Bonus($) | |
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Compensation(1) | |
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Awards | |
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Options(#) | |
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Compensation | |
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Current Executive Officers:
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C. Stanley Bailey
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2005 |
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$ |
369,231 |
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$ |
99,130 |
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711,970 |
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$ |
2,598 |
(2) |
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Chief Executive Officer |
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C. Marvin Scott
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2005 |
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$ |
276,923 |
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$ |
38,555 |
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355,985 |
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$ |
3,839 |
(2) |
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President |
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Rick D. Gardner
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2005 |
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$ |
230,769 |
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$ |
13,578 |
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355,985 |
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$ |
1,310 |
(2) |
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Chief Operating Officer |
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James C. Gossett
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2005 |
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$ |
129,039 |
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$ |
15,000 |
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5,000 |
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Chief Accounting Officer |
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Former Executive Officers:
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James A. Taylor
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2005 |
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$ |
38,498 |
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$ |
20,090 |
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5,000 |
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$ |
7,796,824 |
(3) |
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Chief Executive Officer |
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2004 |
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$ |
500,480 |
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$ |
339,664 |
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85,000 |
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$ |
158,459 |
(2) |
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(through January 24, 2005) |
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2003 |
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$ |
293,200 |
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$ |
1,292,920 |
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$ |
394,185 |
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$ |
157,763 |
(2) |
David R. Carter
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2005 |
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$ |
316,925 |
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$ |
3,595 |
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$ |
1,253,532 |
(3) |
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Executive Vice President, |
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2004 |
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$ |
292,200 |
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$ |
60,000 |
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$ |
39,937 |
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30,000 |
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$ |
12,608 |
(2) |
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Chief Financial Officer |
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2003 |
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$ |
243,384 |
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$ |
148,700 |
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$ |
21,538 |
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$ |
13,959 |
(2) |
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(through November 15, 2005) |
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F. Hampton McFadden, Jr.
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2005 |
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$ |
286,339 |
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$ |
12,967 |
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$ |
1,138,811 |
(3) |
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Executive Vice President, |
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2004 |
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$ |
264,000 |
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$ |
50,000 |
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$ |
23,870 |
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25,000 |
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$ |
8,594 |
(2) |
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General Counsel and Secretary |
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2003 |
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$ |
219,885 |
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$ |
79,000 |
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$ |
27,507 |
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$ |
7,907 |
(2) |
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(through September 30, 2005) |
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(1) |
Represents the following expenses paid or reimbursed by The Banc
Corporation for current executive officers in 2005:
Mr. Bailey country club expenses of $594;
automobile expenses of $8,325; relocation expenses of $83,327;
and miscellaneous business expenses of $6,884;
Mr. Scott country club expenses of $2,894;
automobile expenses of $13,128; relocation expenses of $15,700;
and miscellaneous business expenses of $6,833; and
Mr. Gardner automobile expenses of $6,198 and
relocation expenses of $7,380. Represents the following expenses
paid or reimbursed by The Banc Corporation to the former
executive officers (a) in 2005: Mr. Taylor
country club expenses of $785; automobile expenses of $2,022;
housing expenses of $7,283; and medical expenses of $10,000;
Mr. Carter country club expenses of $1,142;
automobile expenses of $1,892; and medical expenses of $561; and
Mr. McFadden |
12
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country club expenses of $11,200; automobile expenses of $1,650;
and medical expenses of $117; (b) in 2004:
Mr. Taylor country club expenses of $10,209;
automobile expenses of $24,264; housing expenses of $87,396;
medical expenses of $9,900; deferred compensation accrual of
$188,320; and other fringe benefits of $19,575;
Mr. Carter country club expenses of $3,800;
automobile expenses of $3,551; medical expenses of $960;
deferred compensation accrual of $31,715; and other fringe
benefits of $871.00; and Mr. McFadden country
club expenses of $10,625; automobile expenses of $2,838; medical
expenses of $1,804; and deferred compensation accrual of $8,603;
and (c) in 2003: Mr. Taylor country club
expenses of $9,909; automobile expenses of $25,275; housing
expenses of $87,396; deferred compensation accrual of $246,741;
and other fringe benefits of $14,864;
Mr. Carter country club expenses of $3,000;
automobile expenses of $3,338; medical expenses of $2,012;
deferred compensation accrual of $12,373; and other fringe
benefits of $805; and Mr. McFadden country club
expenses of $18,720; automobile expenses of $2,838; medical
expenses of $25; and deferred compensation accrual of $5,924. |
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(2) |
Represents premiums paid on life insurance for the indicated
executives. |
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(3) |
Represents separation/contract buy-out payments in 2005 of
$7,778,621 to Mr. Taylor, $1,253,532 to Mr. Carter and
$1,138,811 to Mr. McFadden. Mr. Taylors amount
also includes life and disability insurance premium payments of
$18,503. |
Option Grants in 2005. The following table contains
information concerning grants of stock options to the named
executive officers.
Option/ SAR Grants in Last Fiscal Year
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Alternative to | |
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Individual Grants | |
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(f) and (g): | |
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Grant Date | |
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Number of | |
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Percent Of Total | |
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Value | |
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Securities | |
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Options/SARs | |
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Underlying | |
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Granted To | |
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Exercise | |
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Grant Date | |
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Options/SARs | |
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Employees In | |
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Price | |
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Expiration | |
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Present | |
Name |
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Granted(#) | |
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Fiscal Year(1) | |
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($/Sh) | |
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Date | |
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Value($)(2) | |
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Current Executive Officers:
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C. Stanley Bailey
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711,970 |
(3) |
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37.19 |
% |
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$ |
8.17 |
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1/24/2015 |
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$ |
3,268,654 |
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C. Marvin Scott
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355,985 |
(3) |
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18.59 |
% |
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$ |
8.17 |
|
|
|
1/24/2015 |
|
|
$ |
1,634,327 |
|
Rick D. Gardner
|
|
|
355,985 |
(3) |
|
|
18.59 |
% |
|
$ |
8.17 |
|
|
|
1/24/2015 |
|
|
$ |
1,634,327 |
|
James C. Gossett
|
|
|
5,000 |
|
|
|
0.26 |
% |
|
$ |
10.68 |
|
|
|
7/14/2015 |
|
|
$ |
35,475 |
|
Former Executive Officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James A. Taylor
|
|
|
5,000 |
|
|
|
.26 |
% |
|
$ |
9.96 |
|
|
|
4/20/2015 |
|
|
$ |
37,545 |
|
David R. Carter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F. Hampton McFadden, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
We granted options to purchase 1,914,437 shares of
common stock to our employees and directors during 2005. |
(2) |
The fair value of the options granted was based upon the
Black-Scholes pricing model. The Banc Corporation used the
following weighted average assumption for 2005: a risk free
interest rate of 4.34%, a volatility factor of .43%, a weighted
average life of options of 7.0 years and a dividend yield
of 0%. |
(3) |
Options granted under terms of the employment agreements entered
into in connection with the January 2005 management transition. |
13
Aggregated Option Exercises in 2005 and Option Values at Year
End. The following table provides information with respect
to options exercised by the named executive officers during 2005
and the number and value of securities underlying unexercised
options held by the named executive officers at
December 31, 2005.
Aggregated Option/ SAR Exercises in Last Fiscal Year and
Year-End Option/ SAR Values
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities | |
|
Value of Unexercised | |
|
|
|
|
|
|
Underlying Unexercised | |
|
In-The-Money | |
|
|
|
|
|
|
Options/SARs at | |
|
Options/SARs at | |
|
|
|
|
|
|
Fiscal Year-End | |
|
Fiscal Year-End | |
|
|
Shares | |
|
Value | |
|
(#) | |
|
($) | |
|
|
Acquired on | |
|
Realized | |
|
Exercisable/ | |
|
Exercisable/ | |
Name |
|
Exercise(#) | |
|
($) | |
|
Unexercisable | |
|
Unexercisable(1) | |
|
|
| |
|
| |
|
| |
|
| |
Current Executive Officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C. Stanley Bailey
|
|
|
|
|
|
|
|
|
|
|
711,970/ |
|
|
$ |
2,306,783/ |
|
C. Marvin Scott
|
|
|
|
|
|
|
|
|
|
|
355,985/ |
|
|
$ |
1,153,391/ |
|
Rick D. Gardner
|
|
|
|
|
|
|
|
|
|
|
355,985/ |
|
|
$ |
1,153,391/ |
|
James C. Gossett
|
|
|
|
|
|
|
|
|
|
|
32,500/ |
|
|
$ |
362,050/ |
|
Former Executive Officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James A. Taylor
|
|
|
|
|
|
|
|
|
|
|
405,000/ |
|
|
$ |
1,853,000/ |
|
David R. Carter
|
|
|
|
|
|
|
|
|
|
|
130,000/ |
|
|
$ |
620,150/ |
|
F. Hampton McFadden, Jr.
|
|
|
|
|
|
|
|
|
|
|
105,000/ |
|
|
$ |
512,600/ |
|
|
|
(1) |
Values based on year-end closing price of $11.41 per share. |
Equity Compensation Plan Information
The following table summarizes information as of
December 31, 2005, relating to our equity compensation
plans pursuant to which grants of options, restricted stock
units or other rights to acquire shares may be granted in the
future.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares | |
|
|
Number of Securities | |
|
|
|
Remaining Available for | |
|
|
to be Issued | |
|
Weighted-Average | |
|
Future Issuance Under | |
|
|
Upon Exercise of | |
|
Exercise Price of | |
|
Equity Compensation Plans | |
|
|
Outstanding Options, | |
|
Outstanding Options, | |
|
(Excluding Securities | |
Plan Category |
|
Warrants and Rights | |
|
Warrants and Rights | |
|
Reflected in Column (a)) | |
|
|
| |
|
| |
|
| |
|
|
(a) | |
|
(b) | |
|
(c) | |
Equity Compensation Plans Approved by Security Holders(1)
|
|
|
1,312,000 |
|
|
$ |
7.26 |
|
|
|
503,795 |
|
Equity Compensation Plans not Approved by Security Holders(2)
|
|
|
1,719,946 |
|
|
$ |
8.21 |
|
|
|
84,048 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
3,031,946 |
|
|
$ |
7.81 |
|
|
|
587,843 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Excludes 206,875 shares of restricted stock granted under
the Third Amended and Restated 1998 Stock Incentive Plan of The
Banc Corporation. |
(2) |
Includes options covering (a) 1,690,937 shares issued
to Messrs. Bailey, Scott and Gardner and two other
management employees in connection with their original
Employment Agreements, (b) 84,048 shares reserved for
issuance to other new management hires, and
(c) 29,009 shares authorized and issued under the
Commerce Bank of Alabama Stock Option Plan, which we assumed in
the merger with Commerce Bank of Alabama in November 1998. We do
not intend to grant any additional options under this plan. |
Third Amended and Restated 1998 Stock Incentive Plan. The
objectives of the Third Amended and Restated 1998 Stock
Incentive Plan of The Banc Corporation are to further our growth
and development by
14
(i) encouraging selected participants who contribute or are
expected to contribute materially to our success to obtain
shares of our common stock and to encourage them to promote our
best interests and (ii) affording us a means of attracting
qualified personnel. The plan authorizes the grant of incentive
stock options, nonqualified stock options and other awards,
including stock appreciation rights, restricted stock and
performance shares. The plan covers 2,500,000 shares of our
common stock. As of December 31, 2005, the Compensation
Committee has granted options to purchase 1,312,000 shares
of our common stock which remain outstanding and restricted
stock awards covering 162,704 shares of our common stock
which remain outstanding. Those shares may be, in whole or in
part, authorized but unissued shares or issued shares that we
have reacquired.
Our Compensation Committee, which administers the Third Amended
and Restated 1998 Stock Incentive Plan, may grant options or
other awards to employees, officers, directors, consultants,
agents, independent contractors and other persons who
contributed or are expected to contribute materially to our
success. The Compensation Committee, subject to the approval of
the board of directors and the provisions of the plan, has full
power to determine the types of awards to be granted, to select
the individuals to whom awards will be granted, to fix the
number of shares that each optionee may purchase, to set the
terms and conditions of each option, and to determine all other
matters relating to the plan.
The Commerce Bank of Alabama Stock Incentive Compensation
Plan. We assumed the Commerce Bank of Alabama Incentive
Compensation Plan in our acquisition of Commerce Bank of Alabama
on November 6, 1998. This plan authorized the grant of
incentive and nonqualified options to purchase common stock of
The Banc Corporation. As of December 31, 2005, there were
options outstanding under this plan to purchase
29,009 shares of common stock at a price of $6.24 per
share. We have not granted and do not intend to grant any
additional options under this plan.
Employment Agreements
C. Stanley Bailey. Mr. Bailey and The Banc
Corporation have entered into an Employment Agreement, dated
January 24, 2005, under which The Banc Corporation has
agreed to employ Mr. Bailey as Chief Executive Officer of
The Banc Corporation and Superior Bank for a term originally
scheduled to expire January 31, 2008. The Employment
Agreement automatically renews for successive one-year
extensions on each anniversary of the commencement of the term
unless either party gives the other 30 days prior
written notice of nonrenewal. Under the Employment Agreement,
Mr. Bailey is entitled to an initial base salary at the
annual rate of $400,000 per year and to an annual target
bonus of 50% of his base salary, subject to the achievement of
agreed-upon performance goals. Mr. Bailey is also entitled
to participate in other bonus or long-term incentive plans
applicable to similarly situated executive officers, and to
participate in such insurance, medical and other employee
benefit plans as may be provided to such executive officers. The
Banc Corporation is also required to provide Mr. Bailey
with certain other benefits, including a term life insurance
policy in the amount of at least $1 million, an automobile
and customary automobile-related benefits, and initiation fees,
dues and assessments for approved club memberships, and to pay
certain relocation expenses. The agreement restricts
Mr. Baileys ability to engage in various activities
competitive with The Banc Corporations business for one
year after Mr. Bailey ceases to be employed by The Banc
Corporation.
If Mr. Baileys employment is terminated other than
for Cause (as defined) or as a result of his death or
disability, or if Mr. Bailey terminates the agreement as a
result of certain adverse changes in his functions, duties or
responsibilities or of another material breach by The Banc
Corporation of its obligations, Mr. Bailey is entitled to
continued compensation at the then-current rate (including bonus
compensation) for the then-remaining term of the agreement,
provided that Mr. Bailey may elect to receive such payment
in a lump sum discounted to present value using a 6% discount
rate, and to the continuation of other benefits during such
remaining term. If Mr. Baileys employment is
terminated as a result of his disability, he is entitled to
continued compensation at his then-current rate (including bonus
compensation) and the continuation of other benefits for one
year. If Mr. Baileys employment by The Banc
Corporation is terminated within two years following a Change in
Control (as defined), other than for Cause or as a result of his
death, disability or retirement, or if Mr. Bailey
terminates such employment following the occurrence of specified
events within two years after a Change in Control,
Mr. Bailey will be entitled to receive a lump sum payment
equal to three times the sum of (i) his then-current base
salary plus (ii) the target bonus he would have been
entitled to
15
receive, and he will be entitled to receive other benefits
specified in the agreement. In addition, he will be entitled to
a gross-up payment
equal to the amount of any excise taxes imposed upon him as a
result of such payments upon termination following a Change in
Control.
The agreement obligates The Banc Corporation to appoint
Mr. Bailey to the Board of Directors of The Banc
Corporation, and further provides that Mr. Bailey will be
appointed as Chairman of the Board of The Banc Corporation at
such time, if any, as James A. Taylor ceases to serve as
Chairman of the Board.
C. Marvin Scott and Rick D. Gardner. Mr. Scott
and Mr. Gardner have entered into employment agreements
with The Banc Corporation and the Bank providing for terms
substantially identical to those described above with respect to
Mr. Bailey, except that (a) Mr. Scotts
initial annual base salary is $300,000 and
Mr. Gardners initial annual base salary is $250,000;
(b) The Banc Corporation is obligated to provide term life
insurance policies to Mr. Scott in the amount of $750,000
and to Mr. Gardner in the amount of $600,000; and
(c) each of Mr. Scott and Mr. Gardner was
required to be appointed as a director of The Banc Corporation
effective on or before December 31, 2005, if then permitted
by the NASDAQ Stock Market Marketplace Rules, or, if not so
permitted on or before December 31, 2005, then as soon
thereafter as is permitted by the NASDAQ Stock Market
Marketplace Rules. Both Mr. Scott and Mr. Gardner were
elected as directors at the 2005 Annual Meeting of Stockholders
and continue to serve in such capacity.
Stock Option Grants to Messrs. Bailey, Scott and
Gardner. Under their respective employment agreements, The
Banc Corporation is obligated to grant, and has granted as of
January 24, 2005, options to acquire 711,970 shares of
common stock to Mr. Bailey, 355,985 shares to
Mr. Scott, and 355,985 shares to Mr. Gardner,
each at an exercise price of $8.17 per share, the market
price on the date of grant. Such options have a ten-year term.
Such options were originally scheduled to vest and become
exercisable as follows:
|
|
|
|
|
50% on April 24, 2005; |
|
|
|
20% on the later of (x) the date on which the average
closing price per share of The Banc Corporation common stock
over a 15-consecutive-trading-day period (the Market Value
price) is at least $10 but less than $12, and
(y) June 29, 2005 (the Alternate Vesting
Date); |
|
|
|
15% on the later of (x) the date on which the Market Value
price is at least $12 but less than $14, and (y) the
Alternate Vesting Date; and |
|
|
|
15% on the later of (x) the date on which the Market Value
price is at least $14, and (y) the Alternate Vesting Date. |
|
|
|
To the extent not otherwise vested, on January 24, 2010. |
The initial 70% of such grants vested as provided above. The
remaining 30% of such grants were vested effective
November 15, 2005, as a result of the determination by the
Compensation Committee of the Board of Directors to vest all
outstanding but unvested stock option grants in full as of such
date. In consideration of such accelerated vesting,
Messrs. Bailey, Scott and Gardner agreed to forgo any
bonuses for which they would otherwise have been entitled with
respect to 2005.
Change-in-Control
Agreement with James C. Gossett. Mr. Gossett, our Chief
Accounting Officer, does not have an employment agreement with
The Banc Corporation. However, The Banc Corporation and
Mr. Gossett are parties to an agreement, dated
April 1, 2002, under which Mr. Gossett would be
entitled to one years compensation (including bonus
compensation) and immediate vesting of all unvested amounts
under stock incentive or deferred compensation arrangements in
the event that Mr. Gossett voluntarily terminates his
employment for Good Reason (as defined) within one year after a
Change in Control (as defined) of The Banc Corporation.
Prior Employment Agreements with James A. Taylor and James A.
Taylor, Jr.
The Banc Corporation was a party to an Employment Agreement,
dated January 1, 2002, with James A. Taylor, formerly
Chairman of the Board and Chief Executive Officer of The Banc
Corporation, and an Employment Agreement, dated
September 19, 2000, with James A. Taylor, Jr.,
formerly President and Chief
16
Operating Officer of The Banc Corporation. These agreements are
described in The Banc Corporations previous filings with
the Securities and Exchange Commission, including The Banc
Corporations Proxy Statement in connection with its 2004
Annual Meeting of Stockholders. Under these agreements, the
transactions related to our change in senior management in
January 2005, described above, triggered various obligations of
The Banc Corporation to Mr. Taylor and
Mr. Taylor, Jr. In order to resolve certain issues
that arose in the construction of provisions of the agreements
and to facilitate the equity investment and management
transition described above, Mr. Taylor and
Mr. Taylor, Jr. engaged in discussions with a
committee of independent directors appointed by The Banc
Corporations Board of Directors and, after such
discussions, entered into new agreements with The Banc
Corporation which supersede the obligations of The Banc
Corporation under their employment agreements and which provide
for payments to Mr. Taylor of a lesser amount over a longer
period of time than would have been provided for under his
employment agreement. Material terms of the new agreements are
described below.
Agreement with James A. Taylor. The Banc
Corporations employment agreement with Mr. Taylor
entitled him to certain payments based on his current
compensation upon the occurrence of specified circumstances, and
gave him the option to demand the discounted present value of
such payments in a lump sum. The transactions described above
would have triggered The Banc Corporations obligations to
make such payments to Mr. Taylor. On January 24, 2005,
The Banc Corporation entered into an agreement with
Mr. Taylor providing for certain compensation in lieu of
the payments to which he would have been entitled under his
employment agreement. Under this new agreement, The Banc
Corporation paid to Mr. Taylor $3,940,154.90 on
January 24, 2005 and $3,152,123.92 in December 2005, and
will pay Mr. Taylor an additional $788,030.98 by
January 24, 2007. The agreement also provides for the
provision of certain insurance benefits to Mr. Taylor, the
transfer of a key man life insurance policy to
Mr. Taylor, and the maintenance of such policy by The Banc
Corporation for five years (with the cost of maintaining such
policy included in the above amounts), in each case
substantially as required by his employment agreement. The Banc
Corporations obligation to provide such payments and
benefits to Mr. Taylor is absolute and will survive the
death or disability of Mr. Taylor.
The agreement provides for various covenants by Mr. Taylor
that were not contained in his employment agreement, including
an agreement that Mr. Taylor will not engage in specified
activities that are or could be competitive with the business of
The Banc Corporation or Superior Bank so long as he is receiving
any benefits under the agreement or providing services to The
Banc Corporation or Superior Bank, as a director, consultant,
employee or otherwise, and an agreement that he would not sell
any shares of The Banc Corporations common stock or other
securities of The Banc Corporation for a year without the prior
written consent of The Banc Corporation. The agreement also
contains customary covenants by Mr. Taylor concerning
noninterference, nonsolicitation and nondisparagement.
Mr. Taylor is permitted to be a passive investor
(a) owning up to 5% of publicly traded entities which may
be competitors of The Banc Corporation or Superior Bank and
(b) owning up to 10% of any bank(s) in which James A.
Taylor, Jr. acts in an executive capacity, in each case
without relinquishing his position as Chairman and a director of
The Banc Corporation.
Under the agreement, Mr. Taylor will continue to serve as
non-executive Chairman of the Board of The Banc Corporation
through January 2007.
Agreement with James A. Taylor, Jr. The Banc
Corporations employment agreement with
Mr. Taylor, Jr. entitled him to certain payments based
on his current compensation upon the occurrence of specified
circumstances, and gave him the option to demand the discounted
present value of such payments in a lump sum. The transactions
described above would have triggered The Banc Corporations
obligations to make such payments to Mr. Taylor, Jr.
On January 24, 2005, The Banc Corporation entered into an
agreement with Mr. Taylor, Jr. pursuant to which The
Banc Corporation paid to Mr. Taylor, Jr.,
$1,382,872.17 on January 24, 2005 in lieu of the payments
to which he would have been entitled under his employment
agreement. The agreement also provides for the provision of
certain insurance benefits to Mr. Taylor, Jr. and for
the immediate vesting of his unvested incentive awards and
deferred compensation in each case substantially as required by
his employment agreement. The Banc Corporations obligation
to provide such payments and benefits to
Mr. Taylor, Jr. is absolute and will survive the death
or disability of Mr. Taylor.
17
The agreement provides for various covenants by
Mr. Taylor, Jr. that were not contained in his
employment agreement, including an agreement that
Mr. Taylor, Jr. will not engage in specified
activities that are or could be competitive with the business of
The Banc Corporation or Superior Bank so long as he is receiving
any benefits under the agreement or providing services to The
Banc Corporation or Superior Bank, as a director, consultant,
employee or otherwise, and an agreement that he will not sell
any shares of The Banc Corporations common stock or other
securities of The Banc Corporation for a year without the prior
written consent of The Banc Corporation. The agreement also
contains customary covenants by Mr. Taylor, Jr.
concerning noninterference, nonsolicitation and
nondisparagement. Mr. Taylor, Jr. is permitted to be a
passive investor owning up to 5% of publicly traded entities
which may be competitors of The Banc Corporation or Superior
Bank.
Mr. Taylor, Jr.s agreement originally provided
that he would continue to serve as a director of The Banc
Corporation through January 2006, subject to certain
limitations. However, Mr. Taylor, Jr. resigned as a
director in September 2005 to pursue other business
opportunities.
Prior Employment Agreements with David R. Carter and F.
Hampton McFadden, Jr.
We previously had employment agreements with David R. Carter,
formerly our Executive Vice President and Chief Financial
Officer, and F. Hampton McFadden, Jr., formerly our
Executive Vice President, General Counsel and Secretary. These
agreements were described in our previous filings with the
Securities and Exchange Commission, including our Proxy
Statement in connection with our 2005 Annual Meeting of
Stockholders. These agreements have been bought out and
terminated, and we entered into new agreements with the
officers, effective June 30, 2005. The material terms of
the new agreements are as set forth below:
Agreement with David R. Carter. Our subsidiary Superior
Bank paid to Mr. Carter, in a lump sum, an amount equal to
the discounted present value of three times his annual base
salary and other cash compensation, plus a cash amount in
satisfaction of the Companys contractual obligation to
provide certain health insurance benefits to him, for a total
pre-tax cash payment of approximately $1.25 million. In
addition, Mr. Carter was fully vested in stock options and
restricted stock previously granted to him and in benefits under
his deferred compensation agreement with us, and was entitled to
certain other incidental benefits. In exchange for these
payments, Mr. Carter released us from all obligations under
his previous employment agreement and was restricted from
certain activities that might be competitive with our business
activities.
Mr. Carter continued to serve as our Chief Financial
Officer through the filing of our Quarterly Report on
Form 10-Q for the
three months ended September 30, 2005, and served
thereafter as a consultant to Superior Bank through
January 24, 2006, during which time he received his normal
compensation.
Agreement with F. Hampton McFadden, Jr. Our
subsidiary Superior Bank paid to Mr. McFadden, in a lump
sum, an amount equal to the discounted present value of three
times his annual base salary and other cash compensation, plus a
cash amount in satisfaction of the Companys contractual
obligation to provide certain health insurance benefits to him,
for a total pre-tax cash payment of approximately
$1.10 million. In addition, Mr. McFadden was fully
vested in stock options and restricted stock previously granted
to him and in benefits under his deferred compensation agreement
with us, and was entitled to certain other incidental benefits.
In exchange for these payments, Mr. McFadden released us
from all obligations under his previous employment agreement and
was restricted from certain activities that might be competitive
with our business activities.
Mr. McFadden continued to serve as General Counsel of the
Company through September 30, 2005, and served thereafter
as an outside legal advisor to Superior Bank through
January 24, 2006, during which time he received his normal
compensation.
Management Matters
There are no arrangements or understandings known to us between
any of our directors, nominees for director or executive
officers and any other person pursuant to which any such person
was or is to be nominated or elected as a director or an
executive officer except as otherwise disclosed herein. The
18
employment agreements for Mr. Bailey, Mr. Scott and
Mr. Gardner provide that they will be nominated to serve as
directors of The Banc Corporation. In addition, our agreement
with Mr. Taylor provides that he will continue to serve as
non-executive Chairman of the Board of The Banc Corporation
through January 2007.
Compensation Committee Interlocks and Insider
Participation
The Compensation Committee comprises Messrs. Stephens,
Durden and Link. None of the members of the Compensation
Committee is a former or current officer or employee of The Banc
Corporation or any of its subsidiaries.
Certain Transactions and Relationships
The Banc Corporation and Superior Bank have entered into
transactions with certain directors or officers of The Banc
Corporation or their affiliates. Such transactions were made in
the ordinary course of business on substantially the same terms
and conditions, including interest rates and collateral, as
those prevailing at the same time for comparable transactions
with other customers, and did not, in the opinion of management
involve more than normal credit risk or present other
unfavorable features.
Brett Taylor was the vice president of Morris Avenue Management
Group, Inc., a wholly-owned subsidiary of The Banc Corporation,
until April 30, 2005, for which he received compensation
during 2005 of less than $60,000. Mr. Taylor is the son of
James A. Taylor, Chairman of the Board.
The Mailon Kent Insurance Agency received commissions of
approximately $180,567 from the sale of insurance to The Banc
Corporation during 2005. James Mailon Kent, Jr., a director
of the Corporation, is the owner of the Mailon Kent Insurance
Agency.
The Banc Corporation believes that all the foregoing
transactions were made on terms and conditions reflective of
arms length transactions.
See Proposal Number One: Election of
Directors Director Compensation Prior
Deferred Compensation Agreements with respect to the
issuance of stock to some of our current directors in
satisfaction of our obligations under terminated Deferred
Compensation Agreements with such directors. In addition to the
arrangements described in that section, we also paid cash in the
amounts of their respective Deferral Account balances (not
exceeding $60,000 in any individual case) to various retiring
directors of The Banc Corporation and/or The Bank (now Superior
Bank) in satisfaction of our obligations under similar Deferred
Compensation Agreements with such retiring directors. Further,
with respect to one retiring director of The Bank who was fully
vested in his deferred compensation benefits, we have agreed
with him to fund a new deferred compensation arrangement in the
amount of $65,564 on the same terms as described with respect to
our agreement with Mr. Kent.
See Executive Compensation and Other
Information Prior Employment Agreements with James
A. Taylor and James A. Taylor, Jr. and
Prior Employment Agreements with David R.
Carter and F. Hampton McFadden, Jr. with respect
to certain payments made during 2005 and to be made on or before
January 24, 2007 to Mr. Taylor and made during 2005 to
Mr. Taylor, Jr., Mr. Carter and Mr. McFadden.
19
Stockholder Return Comparison (1)
Below is a line graph comparing the closing price of our common
stock, the Nasdaq Composite Index and the Nasdaq Financial
Index. The following graph assumes $100 invested in the common
stock and in each index.
COMPARISON OF CUMULATIVE TOTAL RETURN
THE BANC CORPORATION, NASDAQ COMPOSITE INDEX
AND NASDAQ FINANCIAL INDEX
DECEMBER 31, 2000 DECEMBER 31, 2005
Table I Cumulative Value of $100 Investment
|
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Value of Initial $100 Investment |
|
12/31/00 | |
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12/31/01 | |
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12/31/02 | |
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12/31/03 | |
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12/31/04 | |
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12/31/05 | |
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The Banc Corporation
|
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$ |
100.00 |
|
|
$ |
132.38 |
|
|
$ |
147.81 |
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$ |
161.91 |
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$ |
156.77 |
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$ |
217.34 |
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Nasdaq Composite Index
|
|
$ |
100.00 |
|
|
$ |
78.95 |
|
|
$ |
54.06 |
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|
$ |
81.09 |
|
|
$ |
87.83 |
|
|
$ |
89.04 |
|
Nasdaq Financial Index
|
|
$ |
100.00 |
|
|
$ |
103.35 |
|
|
$ |
99.49 |
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|
$ |
127.44 |
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$ |
143.18 |
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$ |
143.43 |
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Compensation Committee Report on Executive Compensation
(1)
The Compensation Committee is responsible for establishing a
compensation plan that will enable The Banc Corporation to
compete effectively for the services of qualified officers and
key employees, to give those employees appropriate incentive to
pursue the maximization of long-term stockholder value and to
recognize those employees success in achieving both
qualitative and quantitative goals for the benefit of The Banc
Corporation. The Compensation Committee makes recommendations as
to appropriate levels of compensation for specific individuals,
as well as compensation and benefit programs for The Banc
Corporation as a whole.
|
|
|
Compensation Philosophy and Policies for Executive
Officers |
The Compensation Committee believes that executives of The Banc
Corporation should be rewarded based upon their success in
meeting certain operational goals, improving earnings and
generating returns for
(1) The information under these captions is not soliciting
material or material filed with the SEC,
except (a) as otherwise required by the rules of the SEC or
(b) as we may specifically so request or specifically
incorporate it by reference in a filing with the SEC.
20
stockholders. The Compensation Committee strives to establish
levels of compensation that take these factors into account and
provide appropriate recognition for past achievement and
incentive for future success. The Compensation Committee
recognizes that the market for executives with expertise and
experience in the banking industry is highly competitive. In
order to attract and retain qualified executives, the
Compensation Committee believes that The Banc Corporation must
offer compensation at competitive levels. In addition, the
Compensation Committee believes that The Banc Corporations
stock incentive plans offer its executives meaningful equity
participation in The Banc Corporations common stock. The
Compensation Committee feels that the mix of cash compensation
and equity participation will be effective in stimulating The
Banc Corporations executives to meet both long-term and
short-term goals.
The Banc Corporations compensation program has two basic
components: (i) base salary and (ii) cash and
equity-based incentive compensation.
Base Salary: The Banc Corporation feels that it has been
successful in attracting and retaining key executives. The Banc
Corporation believes that its compensation package has been and
will continue to be instrumental in its success. The
Compensation Committee endeavors to establish base salary levels
for key executives that are consistent with those provided for
similarly situated executives of other publicly held financial
institutions of similar size and in similar geographic markets,
taking into account each executives areas and level of
responsibility. While the Compensation Committee reviews
selected information concerning such comparable financial
institutions as part of its analysis, The Banc Corporation does
not maintain a formal record of where its compensation stands
with respect to other publicly held financial institutions, nor
does it set fixed targets for where its compensation stands in
comparison thereto.
Incentive Compensation: The Compensation Committee also
recommends cash incentive compensation for executives, based
upon each executives success in meeting qualitative and
quantitative performance goals established by the Board of
Directors and each executives superiors. Bonus
determinations are made on a case-by-case basis, and there is no
fixed relationship between any particular performance factor and
the amount of a given executives bonus. The Compensation
Committee also believes that exceptional performance by an
executive related to specific projects or goals set by the Board
of Directors and senior management should be rewarded with
special cash bonuses that are awarded from time to time as
circumstances indicate. The Compensation Committee believes that
this approach is more favorable to The Banc Corporation and
provides more effective incentives than determining bonuses on
the basis of a formulary approach.
For 2005, the Compensation Committee approved a Management
Incentive Plan, which is intended to recognize and reward senior
officers of The Banc Corporation and its subsidiaries and
affiliates (Participants) who have contributed to
the enhancement of stockholder value through the achievement of
corporate and personal performance goals during each plan year.
Under the terms of the 2005 Management Incentive Plan,
Participants will be recommended by the Chief Executive Officer
and approved by the Compensation Committee of the Board of
Directors, with Participants being notified by February 15 of
each plan year of their eligibility to participate in the Plan
for such year. For each such year, the Compensation Committee
will establish a threshold level of corporate financial and
operational performance, and achievement of such thresholds is a
prerequisite for any award payments with respect to such year.
Participants will jointly establish with their respective
supervisors individual performance goals for each such year.
Participants will be assigned to specific potential award levels
ranging from 15% to 50% of their respective base salaries, and
will be eligible to earn up to 125% of their potential award
levels depending upon corporate performance. Awards will be made
in a lump sum distribution by March 15 of the year following the
plan year. The Compensation Committee has discretion to increase
the earned award payment or award a discretionary payment in
lieu of the award payment. The Compensation Committee has
adopted a substantially similar plan for 2006.
In addition to cash incentive compensation, The Banc Corporation
utilizes equity-based compensation in the form of stock options
and other awards to encourage its executives to meet operational
goals and maximize long-term stockholder value. Because the
value of stock options granted to an executive is directly
related to The Banc Corporations success in enhancing its
market value over time, the Compensation Committee believes that
its stock option programs are effective in aligning the
interests of management and stockholders.
21
The Compensation Committee determines stock option grants and
other awards valued in whole or in part by reference to or
otherwise based on the value of The Banc Corporations
common stock. Under The Banc Corporations incentive
compensation plans, specific grants are determined taking into
account an executives current responsibilities and
historical performance, as well as the executives
contribution to The Banc Corporations results of
operations. Awards are also used to provide an incentive to
newly-promoted officers at the time that they are asked to
assume greater responsibilities. In evaluating award grants, the
Compensation Committee considers prior grants and shares
currently held, as well as the recipients success in
meeting operational goals and the recipients level of
responsibility. However, no fixed formula is utilized to
determine particular grants. The Compensation Committee believes
that the opportunity to acquire a significant equity interest in
The Banc Corporation will be a strong motivation for the
executives to pursue the long-term interests of The Banc
Corporation and will promote longevity and retention of key
executives. Information relating to stock options granted to the
Chief Executive Officer and the four other most
highly-compensated executive officers of The Banc Corporation is
set forth under Executive Compensation and Other
Information in this Proxy Statement.
The Omnibus Budget Reconciliation Act of 1993 contains a
provision under which a publicly traded corporation is sometimes
precluded from taking a federal income tax deduction for
compensation in excess of $1,000,000 that is paid to the chief
executive officer and the four other most highly-compensated
executives of a corporation during its tax year. Compensation in
excess of $1,000,000 continues to be deductible if that
compensation is performance based within the meaning
of that term under Section 162(m) of the Internal Revenue
Code. The Compensation Committee is aware of the potential
effects of the Code. The Committee has chosen not to distort its
methodology and application of the factors it believes pertinent
so as to ensure that all executive compensation is deductible
under Section 162(m). While the Compensation Committee
intends that The Banc Corporations compensation plans will
meet, to the extent practical, the prerequisites for
deductibility under Section 162(m), if it develops that a
portion of the compensation of one or more executive officers is
not deductible under Section 162(m), then the Compensation
Committee expects that The Banc Corporation would honor its
obligations to the executive officers under the compensation
arrangements approved by the Compensation Committee.
The Compensation Committee will continue to review and evaluate
compensation programs at least annually. When and where
appropriate, the Compensation Committee will consult with
independent compensation consultants, legal advisors and The
Banc Corporations independent auditors with respect to the
proper design of the program toward achieving The Banc
Corporations objectives.
Chief Executive Officer Compensation: The Compensation
Committee determines our chief executive officers
equity-based compensation and reports to the Board of Directors
on other compensation arrangements with the chief executive
officer. In addition, the Compensation Committee recommends to
the Board of Directors the level of non-equity incentive
compensation that is appropriate for the chief executive officer
with respect to each fiscal year of The Banc Corporation. In
making such recommendation, the Compensation Committee takes
into account The Banc Corporations performance in the
marketplace, its success in meeting strategic goals and its
success in meeting monthly and annual performance goals
established by the Board of Directors. Again, ultimate
compensation decisions are not made in a formulary manner, but
in a manner which takes into account The Banc Corporations
competitive position, its position in the financial markets and
its ability to achieve its performance goals. The Compensation
Committee believes that it is important to ensure that, if The
Banc Corporations chief executive officer is successful in
leading The Banc Corporation to achieve the goals set by the
Board of Directors, his compensation will be at a level
commensurate with that of chief executive officers of
similarly-situated publicly held financial institutions.
C. Stanley Bailey has served as Chief Executive Officer of
The Banc Corporation since January 24, 2005. In connection
with the establishment of Mr. Baileys employment
agreement, described elsewhere in this Proxy Statement, the
Compensation Committee took into account the recommendations of
a special committee of independent directors (consisting of
Messrs. Stephens, Kent and Barker) charged by the Board of
Directors with reviewing and negotiating the proposed
arrangements with Mr. Bailey, and consulted extensively
with BrinTech, an independent compensation consultant. The
Compensation Committee believes
22
that the terms of Mr. Baileys employment agreement
provide appropriate incentive for Mr. Bailey to take
appropriate steps to enhance stockholder value and are
consistent with the goals and policies outlined above.
The Compensation Committee believes that the compensation of The
Banc Corporations executives during 2005 was appropriate.
It is the intent of the Compensation Committee to ensure that
The Banc Corporations compensation programs continue to
motivate its executives and reward them for being responsive to
the long-term interests of The Banc Corporation and its
stockholders. The Compensation Committee will continue to review
and evaluate compensation programs at least annually.
The foregoing report is submitted by the following directors of
The Banc Corporation, comprising all of the members of the
Compensation Committee of the Board of Directors as of
December 31, 2005.
|
|
|
K. Earl Durden |
|
James M. Link |
|
Michael E. Stephens, Chairman |
23
PROPOSAL NUMBER TWO
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
TO CHANGE THE NAME OF THE CORPORATION TO
SUPERIOR BANCORP.
On October 20, 2005, our Board of Directors approved an
amendment to Article I of our Restated Certificate of
Incorporation to change the name of The Banc Corporation to
Superior Bancorp. Such approval by the Board is
subject to the approval of such amendment by the holders of a
majority of the outstanding shares of our common stock. A copy
of the proposed Amendment is attached to this Proxy Statement as
Annex A.
Change of Corporate Name
Effective November 1, 2005, our principal subsidiary, which
had previously operated as an Alabama state-chartered bank known
as The Bank, became a federally chartered thrift
institution under regulation by the federal Office of Thrift
Supervision. Beginning in January 2006, we began operating our
subsidiary under the name Superior Bank. Our Board
of Directors believes that our brand identity and marketing
efforts will be enhanced by changing our corporate name to
Superior Bancorp., thereby more closely associating
the name of the parent company with that used by our principal
subsidiary and providing greater brand recognition in our
markets. This change in corporate name will have no affect on
any rights of our stockholders, and outstanding stock
certificates will continue to be valid.
Subject to approval by our stockholders at the Annual Meeting,
we expect to file an amendment to our Restated Certificate of
Incorporation to reflect the name change as soon as practicable
after the Annual Meeting. At or shortly after the effective date
of the name change, we expect that our Nasdaq trading symbol
will change to SUPR.
Recommendation of the Board of Directors
The Board of Directors unanimously recommends that
stockholders vote FOR the adoption of the amendment to the
Restated Certificate of Incorporation to change our corporate
name to Superior Bancorp. The affirmative vote
of the holders of a majority of the outstanding shares of common
stock entitled to vote at the Annual Meeting will be necessary
for the approval of such amendment.
PROPOSAL NUMBER THREE
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK
By unanimous written consent dated March 31, 2006, our
Board of Directors approved an amendment to Article IV,
Section 4.1 of our Restated Certificate of Incorporation to
increase the number of authorized shares of common stock of The
Banc Corporation from 35 million to 50 million. Such
approval by the Board is subject to the approval of such
amendment by the holders of a majority of the outstanding shares
of our common stock. A copy of the proposed amendment is
attached to this Proxy Statement as Annex B.
Increase in Authorized Common Stock
The Board of Directors recommends that the stockholders approve
the proposed amendment because it considers such amendment to be
in the best long-term and short-term interests of The Banc
Corporation, its stockholders and its other constituencies. The
proposed increase in the number of authorized shares of common
stock will ensure that a sufficient number of shares will be
available, if needed, for issuance in connection with any
possible future transactions approved by the Board of Directors,
including, among others, stock splits, stock dividends, stock
incentive plans, acquisitions and other corporate purposes. The
Board of Directors believes that the availability of the
additional shares for such purposes without delay or the
necessity for a special stockholders meeting (except as
may be required by applicable law or regulatory authorities or by
24
the rules of the Nasdaq National Market) will be beneficial to
The Banc Corporation by providing it with the flexibility to
consider and respond to future business opportunities and needs
as they arise. The availability of such additional shares will
also enable us to act promptly when the Board of Directors
determines that the issuance of additional shares of common
stock is advisable. It is possible that shares of common stock
may be issued at a time and under circumstances that may
increase or decrease earnings per share and increase or decrease
the book value per share of shares currently outstanding.
Except for (i) issuance of shares upon exercise of
currently outstanding stock options or in connection with future
options or awards under our Third Amended and Restated 1998
Stock Incentive Plan, (ii) issuance of shares in
satisfaction of directors compensation obligations, and
(iii) issuance of
approximately shares
in connection with the consummation of our pending merger with
Kensington Bankshares, Inc., which we announced in March 2006,
we do not have any immediate plans, agreements, arrangements,
commitments or understandings with respect to the issuance of
any additional shares of our common stock, including those which
would be authorized upon approval of the proposed amendment.
Under our Restated Certificate of Incorporation, we currently
have authority to issue 35 million shares of common stock,
par value $.001 per share, of which 20,287,060 shares
were issued and outstanding as of April 5, 2006. In
addition, as of such date, approximately
(a) 1,815,795 shares were reserved for issuance under
our Third Amended and Restated 1998 Stock Incentive Plan, under
which options to purchase a total of 1,312,000 shares were
outstanding, (b) 1,803,994 shares were reserved for
issuance under other stock options granted, assumed or reserved
for future grants, (c) 100,000 shares were reserved
for issuance in lieu of cash compensation to non-employee
directors, and (d) approximately 6,228,000 shares
(subject to adjustment based upon the trading price of our
common stock at the time of consummation) were expected to be
issued in connection with the consummation of our proposed
merger with Kensington Bankshares, Inc. After giving effect to
such reserved shares, approximately 4,765,151 shares were
available for issuance on such date.
There are no preemptive rights with respect to our common stock.
Recommendation of the Board of Directors
The Board of Directors unanimously recommends that
stockholders vote FOR the adoption of the amendment to the
Restated Certificate of Incorporation to increase the number of
authorized shares of our common stock from 35 million to
50 million. The affirmative vote of the holders of a
majority of the outstanding shares of common stock entitled to
vote at the Annual Meeting will be necessary for the approval of
such amendment.
PROPOSAL NUMBER FOUR
APPROVAL OF PLAN TO ISSUE SHARES OF COMMON STOCK
TO NON-EMPLOYEE DIRECTORS IN LIEU OF
DIRECTORS FEES
Introduction
In April 2005, our Board of Directors, acting upon the
recommendation of our Compensation Committee, modified our
directors compensation policies effective July 1,
2005, to provide that non-employee directors would receive an
annual retainer of $10,000 (paid in equal quarterly
installments), meeting fees of $1,000 per Board meeting
attended, and committee meeting fees of $1,500 per meeting
for committee chairs and $1,000 per meeting for other
committee members. (These fees are inclusive of all meetings of
the Board of Directors of The Banc Corporation and the Board of
Directors of Superior Bank, so that only one such fee is payable
when meetings of both the parent and subsidiary boards occur on
the same day, as is our customary practice.) At the same time,
our Board of Directors, acting upon the recommendation of our
Compensation Committee, approved a plan to allow non-employee
directors to receive some or all of their directors fees
in shares of our common stock (the Non-Employee Directors
Stock Plan). This plan requires the approval of our
stockholders at the Annual Meeting.
25
The Board of Directors believes that this plan will more closely
align the interests of our non-employee directors and our
stockholders by providing our non-employee directors with
additional incentive to enhance our stockholder value. The
material details of the plan are described below.
Plan Summary
Under the Non-Employee Directors Stock Plan, non-employee
directors have three options with respect to receipt of their
directors compensation:
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They may elect to take their annual retainer and all Board and
committee fees in cash; |
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They may elect to take their annual retainer and Board meeting
fees in Banc Corporation common stock and continue to receive
committee fees in cash; or |
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They may elect to take all director compensation (annual
retainer, Board meeting fees and committee fees) in Banc
Corporation common stock. |
Non-employee directors are required to make an election with
respect to their form of compensation each year as of the date
of the Annual Meeting of Stockholders in that year, and such
election is binding until the next Annual Meeting of
Stockholders. Any shares of stock issued in lieu of meeting fees
are valued at the closing price per share of our common stock as
reported on the NASDAQ National Market System on the day on
which the applicable Board or committee meeting occurs, and any
shares of stock issued in lieu of the annual retainer are valued
at the closing price per share reported on the last trading day
of the quarter preceding the quarter for which payment is made
(thus, for example, for the quarter beginning April 1 in
any year, the stock payable in lieu of that quarters
installment of the annual retainer is valued as of the last
trading day in March).
The issuance of shares under the Non-Employee Directors Stock
Plan for the period beginning July 1, 2005 and ending on
the date of the 2006 Annual Meeting of Stockholders is subject
to approval by the stockholders at the 2006 Annual Meeting. If
this proposal is not approved, all directors who have elected to
receive stock will instead be paid cash for all applicable Board
and committee meetings from July 1, 2005 through the date
of this Annual Meeting.
There is no written plan document governing the Non-Employee
Directors Stock Plan. A summary of the plan based on the minutes
of the applicable meetings of the Board of Directors and its
Compensation Committee, is attached hereto as Annex C.
Solely for purposes of registering the shares to be issued under
the Non-Employee Directors Stock Plan, the Board of Directors
has initially reserved 100,000 shares of common stock for
issuance to non-employee directors in lieu of directors
fees. At such time, if any, as such reserve is inadequate for
reasonably anticipated issuances during the next fiscal year,
the Board of Directors may reserve additional shares for
issuance in lieu of non-employee directors fees on the
same terms as outlined above. Your vote to approve the plan
constitutes your approval of the establishment of such
additional reserves as determined by the Board of Directors to
be necessary.
New Plan Benefits
For the period beginning July 1, 2005 and ending on the
date of the 2006 Annual Meeting of Stockholders, all of our
non-employee directors except Mr. White (who elected to
receive his directors compensation in cash) have elected
to receive all of their directors compensation, including
committee fees, in stock. With respect to those non-employee
directors, the following table illustrates the amount of cash
directors fees foregone and the number of shares of stock
reserved for issuance to such non-employee directors through
April 4, 2006 if the plan is approved. Additional shares
will be reserved for issuance for Board and committee meetings
between April 4, 2006 and the date of the Annual Meeting
according to the methodology described above. If the plan is
approved, all such shares will be issued as soon as practicable
following the Annual Meeting, and an indeterminate number of
shares will be issued in future periods to those
26
directors electing to receive stock. If the plan is not
approved, none of such shares will be issued, and all directors
will receive accrued fees in cash.
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Dollar Value of | |
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Name |
|
Forgone Fees | |
|
Shares to be Issued | |
|
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| |
|
| |
Roger Barker
|
|
$ |
24,000 |
|
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|
2,169 |
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K. Earl Durden
|
|
|
19,500 |
|
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1,768 |
|
Thomas E. Jernigan, Jr.
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|
21,500 |
|
|
|
1,947 |
|
James Mailon Kent, Jr.
|
|
|
19,000 |
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1,718 |
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James M. Link
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|
20,500 |
|
|
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1,855 |
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Barry Morton
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|
|
21,000 |
|
|
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1,895 |
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Robert R. Parrish, Jr.
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|
|
6,000 |
|
|
|
528 |
|
Michael E. Stephens
|
|
|
16,500 |
|
|
|
1,503 |
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James A. Taylor
|
|
|
14,500 |
|
|
|
1,314 |
|
Federal Income Tax Consequences
In general, non-employee directors who elect to receive shares
of our common stock in lieu of cash directors fees will
incur ordinary taxable income in an amount equal to the fair
market value of the shares at the time of issuance, and we will
be entitled to a deduction for compensation expense in a like
amount. If and at such time as a director sells such shares, the
director will incur a long-term or short-term capital gain or
loss, depending on the time of the sale and the price received
by the director. Such sales will have no tax effect on us.
Recommendation of the Board of Directors
The board of directors unanimously recommends that the
stockholders vote FOR the non-employee directors
stock plan, as outlined above.
27
PROPOSAL NUMBER FIVE
RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
Subject to ratification by the stockholders, the Audit Committee
of the Board of Directors has re-appointed Carr,
Riggs & Ingram, LLC, Montgomery, Alabama, as
independent auditors to audit The Banc Corporations
financial statements for the current fiscal year. Management
expects representatives of Carr, Riggs & Ingram, LLC to
be present at the Annual Meeting. They will have an opportunity
to make a statement if they desire to do so, and they are
expected to be available to respond to appropriate questions.
The Board of Directors unanimously recommends that the
stockholders vote FOR the ratification of Carr
Riggs & Ingram, LLC as independent auditors for the
current fiscal year.
Change in Independent Auditors
As disclosed in June 2004, after discussion between the Audit
Committee of our Board of Directors and representatives of
Ernst & Young LLP, which previously served as the
independent auditors for The Banc Corporation, the Audit
Committee and Ernst & Young LLP reached a mutual
decision that Ernst & Young LLP would not stand for
re-election to audit our financial statements for the fiscal
year ending December 31, 2004.
For the fiscal years ended December 31, 2003 and 2002,
Ernst & Young LLPs reports on our financial
statements did not contain any adverse opinion or disclaimer of
opinion, nor were such reports qualified or modified as to
uncertainty, audit scope or accounting principles. In addition,
during the fiscal years ended December 31, 2003 and 2002
and through June 14, 2004, (1) there were no
disagreements between The Banc Corporation and Ernst &
Young LLP on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure,
which disagreement(s), if not resolved to the satisfaction of
Ernst & Young LLP, would have caused it to make
reference to the subject matter of the disagreement(s) in
connection with its report, and (2) there were no
reportable events, as defined in Item 304(a)(1)
(v) of the Securities and Exchange Commissions
Regulation S-K,
except that, as described below, certain matters relating to our
internal controls as they existed during the fiscal year ended
December 31, 2002 were identified that we and
Ernst & Young LLP treated as material weaknesses in
internal controls for such year, as more fully described in
Item 14 of our Annual Report on
Form 10-K for such
year. No material weaknesses were identified for the fiscal year
ended December 31, 2003, the last fiscal year with respect
to which Ernst & Young served as our independent
auditors.
The matters relating to our internal controls as they existed
during the fiscal year ended December 31, 2002 that we and
Ernst & Young LLP treated as material weaknesses for
such year related to the following areas:
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1. Internal controls governing loan approval and loan
officers ability to originate loans in excess of
authorized lending limits; |
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2. Internal controls governing monitoring of loan risk
ratings by loan officers and a lack of timely review of the loan
portfolio by our independent loan review function; and |
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3. Internal controls relating to the monitoring of past due
loans to ensure all loans over 90 days delinquent are
appropriately considered for nonaccrual status. |
Prior to the discovery of the Bristol, Florida bank group
situation described in our Annual Report on
Form 10-K for the
fiscal year ended December 31, 2002, which ultimately
caused us to restate our financial statements for the second and
third quarters of 2002, we were in the process of enhancing our
internal control for financial reporting.
In July 2002, we established a Loan Administration Services
department. We hired an experienced loan administration officer
as the head of that department and staffed the department with
both current employees and new hires with specific expertise in
loan administration services. During 2003, we expanded that
department as we broadened its responsibilities and completed
the centralization of all loan files in order to
28
provide an enhanced degree of centralized supervision,
monitoring and accountability. We also added a new software
program that interfaces automatically with loan review data and
our loan platform and tracks exceptions with the loan portfolio.
This software provides for regular and frequent
follow-up tracking
during the term of the loan. Our Loan Administration
Services Department reviews all Loan Approval Forms on each new
loan to identify any loans that may be over a loan
officers lending limits.
In addition, throughout our banking operations we reduced the
size of loans that could be authorized by individuals, as well
as reducing the number of individuals with loan authority. We
named regional credit officers who are accountable for loans in
each of our operating regions. Further, during the first half of
2003, we increased our loan review staff. During the third
quarter of 2003, we engaged an independent loan review firm,
Credit Risk Management, LLC (CRM), which provides
independent loan reviews and other loan review services
throughout the Southeast. CRM reviewed approximately
$290 million in commercial loans that had not previously
been reviewed during 2003. The combined coverage of our loan
portfolio from internal loan reviews and the CRM review in the
first three quarters of 2003 was 71%, including 90% of the loans
in the Bristol portfolio. We have subsequently contracted with
CRM to conduct ongoing supplemental loan reviews on our behalf,
which reviews have largely superseded the peer review process
and serve as a complement to our internal loan review function.
Management and loan review personnel meet at least monthly to
review loan risk rating downgrades and upgrades recommended by
loan officers, as well as charge-off and non-accrual
recommendations. We have undertaken other regular monitoring and
review activities to identify loans that appear reasonably
likely to become past due and to review proposed actions to be
taken with respect to all credits rated 5 (special
mention) or worse, indicating that the credits represent a
higher risk to us. We believe these above-described actions
remediated the material weaknesses. As noted above, no material
weaknesses were identified as of December 31, 2003.
Ernst & Young LLP has furnished us with a letter
addressed to the SEC in which Ernst & Young LLP states
that it agrees with the statements in the first three paragraphs
above (including the numbered subsections of the third
paragraph) and with the statements in this paragraph. We filed
this letter as an exhibit to our Current Report on
Form 8-K dated
June 14, 2004, as amended.
Effective June 14, 2004, our Audit Committee engaged Carr
Riggs & Ingram, LLC to serve as our independent
accountants. During the fiscal years ended December 31,
2003 and 2002 and through June 14, 2004, The Banc
Corporation did not consult Carr Riggs & Ingram, LLC
regarding either:
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(i) the application of accounting principles to a specified
transaction, either completed or proposed; or the type of audit
opinion that might be rendered on our financial statements, and
neither a written report was provided to us nor oral advice was
provided that Carr Riggs & Ingram, LLC concluded was an
important factor considered by The Banc Corporation in reaching
a decision as to the accounting, auditing or financial reporting
issue; or |
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(ii) Any matter that was either the subject of a
disagreement (as defined in paragraph (a)(1)(iv) and the
related instructions to Item 304 of
Regulation S-K) or
a reportable event (as described in paragraph (a)(1)(v) of
Item 304 of
Regulation S-K). |
Audit Fees
The aggregate fees (including reimbursable expenses) of Carr,
Riggs & Ingram for professional services rendered for
the audit of The Banc Corporations financial statements
for the fiscal years ended December 31, 2004 and 2005 and
for the reviews of the financial statements for The Banc
Corporations Quarterly Reports on
Form 10-Q and
statutory audits for the fiscal years ended December 31,
2004 and 2005 were $489,448 and $435,047, respectively.
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Audit Related Fees
The aggregate audit related fees (including
reimbursable expenses) of Carr, Riggs & Ingram for the
fiscal years ended December 31, 2004 and 2005 were $30,000
and $30,000, respectively. Audit related fees primarily consist
of fees relating to benefit plan audits.
Tax Fees
The aggregate tax fees paid to Carr, Riggs & Ingram
were $0 for each of the fiscal years ended December 31,
2004 and 2005.
All Other Fees
The aggregate fees billed by Carr, Riggs & Ingram for
all other services rendered to The Banc Corporation, other than
services described above, were $0 for each of the fiscal years
ended December 31, 2004 and 2005.
Pre-Approval Policies
The Audit Committee pre-approves all audit and non-audit
services provided by the independent auditors. These services
may include audit services, audit related services, tax services
and other services. The Audit Committee pre-approved all of the
services for the audit fees described above. The Audit Committee
regularly monitors the services provided by the independent
auditors for both audit and non-audit services. None of the
services described above were approved by the Audit Committee
pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of
Regulation S-X.
The Audit Committee has considered whether the provision of the
services covered above is compatible with maintaining Carr,
Riggs & Ingrams independence and has concluded
that it is.
REPORT OF THE AUDIT COMMITTEE (1)
The members of the Audit Committee are independent
directors, as defined under NASDAQ Rule 4200, and
meet the standards required by Rule 10A-3(b)(1) under the
Securities Exchange Act of 1934. The Audit Committee oversees
The Banc Corporations financial reporting process and
internal controls on behalf of the Board of Directors and is
responsible for the appointment, retention, oversight and
compensation of the corporations independent auditors and
the approval of services they perform. Management has the
primary responsibility for establishing and maintaining systems
of internal controls and for the preparation of the financial
statements and other financial information included in The Banc
Corporations Annual Report. In fulfilling its oversight
responsibilities, the Audit Committee reviewed the consolidated
financial statements with management, including a discussion of
the quality, not just the acceptability, of the accounting
principles, the reasonableness of significant judgments, and the
clarity of disclosures in the financial statements.
The Audit Committee reviewed with the independent auditors, who
are responsible for expressing an opinion on the conformity of
those audited financial statements with accounting principles,
generally accepted in the United States, their judgments as to
the quality, not just the acceptability, of The Banc
Corporations accounting principles and such other matters
as are required to be discussed with the Audit Committee under
auditing standards generally accepted in the United States. In
addition, the Audit Committee has discussed with the independent
auditors their independence from management and The Banc
Corporation, including the matters in the written disclosures
required by the Independence Standards Board.
(1) The information under this caption is not soliciting
material or material filed with the SEC,
except (a) as otherwise required by the rules of the SEC or
(b) as we may specifically so request or specifically
incorporate it by reference in a filing with the SEC.
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The Audit Committee discussed with The Banc Corporations
internal and independent auditors the overall scope and plans
for their respective audits. The Audit Committee meets with the
internal and independent auditors, with and without management
present, to discuss the results of their examinations, their
evaluations of The Banc Corporations internal controls,
and the overall quality of The Banc Corporations financial
reporting.
Based on the Audit Committees discussions with management
and the independent auditors, as described above, and upon its
review of the representations of management and the report of
the independent auditors, the Audit Committee recommended to the
Board of Directors that The Banc Corporations audited
consolidated financial statements be included in the annual
report on
Form 10-K for the
fiscal year ended December 31, 2005, as filed with the SEC.
The Audit Committee also selected Carr Riggs & Ingram,
LLC, subject to stockholder ratification, to be employed as The
Banc Corporations independent auditors to perform the
annual audit and to report on, as may be required, the
consolidated financial statements which may be filed by The Banc
Corporation with the SEC during the ensuing year.
The foregoing report is submitted by the following directors of
The Banc Corporation, comprising all of the members of the Audit
Committee of the Board of Directors as of December 31, 2005.
Roger Barker, Chairman
Thomas E. Jernigan, Jr.
James C. White, Sr.
STOCKHOLDER PROPOSALS FOR
NEXT ANNUAL MEETING OF STOCKHOLDERS
Any proposals that our stockholders wish to have included in our
proxy statement and form of proxy for the 2007 annual meeting of
stockholders must be received by us no later than the close of
business on December 19, 2006. You may also submit a
proposal for presentation at the annual meeting of stockholders
to be held in 2007, but not to have the proposal included in our
proxy statement and form of proxy relating to that meeting. If
notice of any such proposal is not received by us by the close
of business on March 15, 2007, then we will not address the
proposal in our proxy statement relating to that meeting, and
all proxies solicited and received by the Board of Directors
will be deemed to have confirmed discretionary authority to vote
on any such proposal. Any proposals should be sent to:
Superior Bancorp.
17 North 20th Street
Birmingham, Alabama 35203
Attention: Rick D. Gardner, Secretary
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OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors
does not know of any business which will be presented for
consideration at the Annual Meeting other than that specified
herein and in the Notice of Annual Meeting of Stockholders, but
if other matters are presented, it is the intention of the
persons designated as proxies to vote in accordance with their
judgments on such matters.
Please SIGN, DATE and RETURN the enclosed Proxy promptly.
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By Order of the Board of Directors, |
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/s/ Rick D. Gardner |
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Rick D. Gardner |
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Secretary |
Birmingham, Alabama
April , 2006
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ANNEX A
PROPOSED AMENDMENT TO ARTICLE I OF THE RESTATED
CERTIFICATE OF
INCORPORATION OF THE BANC CORPORATION, AS APPROVED BY THE
BOARD OF DIRECTORS ON OCTOBER 20, 2005
RESOLVED, that, subject to the approval by the affirmative vote
of the holders of a majority of the issued and outstanding
common stock of the Corporation at the 2006 Annual Meeting of
Stockholders of the Corporation, Article I of the Restated
Certificate of Incorporation of the Corporation shall be and
read as follows:
ARTICLE I
The name of the Corporation is Superior Bancorp.
A-1
ANNEX B
PROPOSED AMENDMENT TO ARTICLE IV, SECTION 4.1 OF
THE RESTATED
CERTIFICATE OF INCORPORATION OF THE BANC CORPORATION, AS
APPROVED BY THE BOARD OF DIRECTORS AS OF MARCH 31,
2006
RESOLVED, that, subject to the approval by the affirmative vote
of the holders of a majority of the issued and outstanding
common stock of the Corporation at the 2006 Annual Meeting of
Stockholders of the Corporation, the first paragraph of
Article IV, Section 4.1 of the Restated Certificate of
Incorporation of the Corporation shall be and read as follows:
Section 4.1 Authorization
of Capital. The total number of shares of all classes of
capital stock which the Corporation shall have authority to
issue is Fifty-Five Million (55,000,000) shares, comprising
Fifty Million (50,000,000) shares of Common Stock, with a par
value of $.001 per share, and Five Million (5,000,000)
shares of Preferred Stock, with a par value of $.001 per
share, as the Board of Directors may decide to issue pursuant to
Section 4.3, which constitutes a total authorized capital
of all classes of capital stock of Fifty-Five Thousand Dollars
($55,000.00).
B-1
ANNEX C
SUMMARY DESCRIPTION OF NON-EMPLOYEE DIRECTORS STOCK PLAN
Non-employee Directors of The Banc Corporation and Superior Bank
are entitled to receive an annual retainer of $10,000 (paid in
equal quarterly installments), meeting fees of $1,000 per
Board meeting attended, and committee meeting fees of
$1,500 per meeting for committee chairs and $1,000 per
meeting for other committee members. (These fees are inclusive
of all meetings of the Board of Directors of The Banc
Corporation and the Board of Directors of Superior Bank, so that
only one such fee is payable when meetings of both the parent
and subsidiary boards occur on the same day, as is our customary
practice.) Non-employee directors may elect to receive some or
all of their directors fees in shares of our common stock
under this plan (the Non-Employee Directors Stock
Plan).
Under the Non-Employee Directors Stock Plan, non-employee
directors have three options with respect to receipt of their
directors compensation:
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They may elect to take their annual retainer and all Board and
committee fees in cash; |
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They may elect to take their annual retainer and Board meeting
fees in Banc Corporation common stock and continue to receive
committee fees in cash; or |
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They may elect to take all director compensation (annual
retainer, Board meeting fees and committee fees) in Banc
Corporation common stock. |
Non-employee directors are required to make an election with
respect to their form of compensation each year as of the date
of the Annual Meeting of Stockholders in that year, and such
election is binding until the next Annual Meeting of
Stockholders. Any shares of stock issued in lieu of meeting fees
are valued at the closing price per share of Banc Corporation
common stock as reported on the NASDAQ National Market System on
the day on which the applicable Board or committee meeting
occurs, and any shares of stock issued in lieu of the annual
retainer are valued at the closing price per share reported on
the last trading day of the quarter preceding the quarter for
which payment is made.
C-1
PRELIMINARY COPY
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PROXY |
THE BANC CORPORATION |
PROXY |
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE BANC
CORPORATION
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
MAY 18, 2006
The undersigned hereby
appoints C. Stanley Bailey and C. Marvin Scott, either one of
whom may act without joinder of the other, with full power of
substitution and ratification,
attorneys-in-fact and
Proxies of the undersigned to vote all shares of common stock of
The Banc Corporation which the undersigned is entitled to vote
at the 2006 Annual Meeting of Stockholders to be held at
10:00 a.m. Central Daylight Time on Thursday, May 18,
2006, at the Corporations principal executive offices at
17 North 20th Street, Birmingham, Alabama 35203, and at any
and all adjournments thereof:
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1. |
ELECTION OF DIRECTORS. To elect as Directors for a
one-year term ending on the date of the Annual Meeting of
Stockholders in 2007 the following individuals. |
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C. Stanley Bailey
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James Mailon Kent, Jr. |
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C. Marvin Scott |
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Rick D. Gardner |
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Robert R. Parrish, Jr. |
Roger Barker
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James M. Link |
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Michael E. Stephens |
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Thomas E. Jernigan, Jr. |
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James C. White, Sr. |
K. Earl Durden
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Barry Morton |
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James A. Taylor |
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o FOR o WITHHOLD
INSTRUCTIONS: To withhold vote for any individual(s)
nominated as Directors in Item 1 above write names below:
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2. |
AMENDMENT TO CHANGE CORPORATE NAME. To amend the
Corporations Restated Certificate of Incorporation to
change the name of the Corporation to Superior
Bancorp. |
o FOR o AGAINST o ABSTAIN
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3. |
AMENDMENT TO INCREASE AUTHORIZED CAPITAL STOCK. To
amend the Corporations Restated Certificate of
Incorporation to increase the number of authorized shares of
common stock to 50 million shares. |
o FOR o AGAINST o ABSTAIN
(Continued and to be signed on other side)
(Continued from other side)
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4. |
APPROVAL OF NON-EMPLOYEE DIRECTOR STOCK PLAN. To
approve a plan under which non-employee directors of the
Corporation may elect to take shares of the Corporations
common stock in full or partial satisfaction of directors
fees otherwise payable to them. |
o FOR o AGAINST o ABSTAIN
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4. |
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS. To
ratify the appointment of Carr, Riggs & Ingram, LLC as
independent auditor to audit The Banc Corporations
financial statements for the 2006 fiscal year. |
o FOR o AGAINST o ABSTAIN
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5. |
In their discretion, Proxies are authorized to vote upon such
other business as may properly come before the 2006 Annual
Meeting of Stockholders. |
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE
MANNER DIRECTED HEREIN. IF NO DIRECTION IS INDICATED, THE SHARES
WILL BE VOTED FOR ALL DIRECTOR NOMINEES AND FOR ALL PROPOSALS.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE DIRECTOR
NOMINEES AND FOR ALL PROPOSALS.
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Dated: , 2006 |
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(Print Name) |
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(Signature of Stockholder(s) |
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PLEASE DATE, SIGN AND RETURN THIS PROXY TO THE BANC CORPORATION
IN THE ENCLOSED ENVELOPE. THANK YOU. |