SUPERIOR BANCORP
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant þ
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o Preliminary Proxy Statement
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þ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Under Rule 14a-12
SUPERIOR BANCORP
(Name of Registrant as Specified in Its Charter)
(Name of
Person(s) Filing Proxy Statement, if Other Than the Registrant
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. |
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Check box if any part of the fee is offset as provided by Exchange Act Rule
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Identify the previous filing by registration statement number, or the Form or Schedule and
the date of its filing. |
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SUPERIOR
BANCORP
17 North 20th Street
Birmingham, Alabama 35203
March 24,
2008
Dear Stockholder:
On behalf of the Board of Directors and management of Superior
Bancorp, 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
April 23, 2008, at 10:00 a.m. Central 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 or vote over the Internet or by telephone.
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 or voted over the Internet or by telephone.
Sincerely,
C. Stanley Bailey
Chairman and Chief Executive
Officer
SUPERIOR
BANCORP
17 North 20th Street
Birmingham, Alabama 35203
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 23, 2008
To the Stockholders of Superior Bancorp:
You are hereby notified that the 2008 Annual Meeting of
Stockholders (the Annual Meeting) of Superior
Bancorp, a Delaware corporation, will be held at our principal
executive offices at 17 North 20th Street, Birmingham,
Alabama 35203, on Wednesday, April 23, 2008, at
10:00 a.m. Central Time, for the following purposes:
1. To elect 15 directors to serve for a term expiring
at the 2009 Annual Meeting or until their respective successors
are duly elected and qualified, or until their earlier death,
resignation or removal.
2. To approve a proposed amendment to Superior
Bancorps Certificate of Incorporation effecting a
1-for-4
reverse stock split of Superior Bancorp common stock and
decreasing the number of authorized shares of common stock
following the reverse stock split.
3. To adopt the Superior Bancorp 2008 Incentive
Compensation Plan.
4. 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 March 6, 2008, 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 or vote in advance over the
Internet or by telephone as instructed in the proxy statement.
If you attend the Annual Meeting in person, you may revoke your
proxy and vote 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 Superior
Bancorps principal executive offices at 17 North
20th Street, Birmingham, Alabama, from April 11, 2008
through April 23, 2008, and the list shall be available for
inspection at the Annual Meeting by any stockholder who is
present.
By Order of the Board of Directors
William H. Caughran
Secretary
DATED: March 24, 2008
SUPERIOR
BANCORP
17 North 20th Street
Birmingham, Alabama 35203
PROXY
STATEMENT
For 2008 Annual Meeting of
Stockholders
to be Held on April 23, 2008
INTRODUCTION
We are furnishing this Proxy Statement to the holders of
Superior Bancorp common stock, par value $.001 per share, in
connection with our solicitation of proxies to be used at the
2008 Annual Meeting of Stockholders to be held on Wednesday,
April 23, 2008, at 10:00 a.m., Central 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 March 24, 2008.
On May 18, 2006, Superior Bancorp changed its name from The
Banc Corporation. Superior Bancorps subsidiary, Superior
Bank, had changed its name from The Bank on January 1,
2006. All references in this Proxy Statement to Superior Bancorp
and Superior Bank for periods prior to those dates shall be
deemed to refer to their respective predecessor organizations.
Stockholders
Entitled to Vote
Only stockholders of record at the close of business on
March 6, 2008, 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 March 6, 2008, the number of
shares of common stock outstanding and entitled to vote at the
Annual Meeting was 40,211,230. 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 (Proposal One) requires a
plurality of the votes cast. This means that the
15 director nominees receiving the most votes will be
elected. Shares not voted, and properly voted proxies to
withhold authority, will result in a nominee
receiving fewer votes, but will not be treated as votes against
a nominee.
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The amendment to the Certificate of Incorporation to effect a
reverse stock split and decrease the authorized shares of common
stock (Proposal Two) requires approval by the holders of a
majority of our issued and outstanding shares of common stock.
If you are present in person or represented by proxy at the
meeting and you abstain from voting on Proposal Two, your
abstention will have the same effect as a vote against the
proposal. Your failure to attend the Annual Meeting or to be
represented at the meeting by proxy will also have the same
effect as a vote against Proposal Two.
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Adoption of the 2008 Stock Incentive Plan (Proposal Three)
requires the affirmative vote of a majority of shares present in
person or that are represented by proxy at the Annual Meeting.
If you are present in person or represented by proxy at the
meeting and you abstain from voting on Proposal Three, your
abstention will have the same effect as a vote against the
proposal.
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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. However, with respect to Proposal Two,
abstentions and broker non-votes will have the same effect as a
vote against the proposal.
How to
Vote Your Shares
To vote at the Annual Meeting, you may attend the Annual Meeting
and vote your shares in person or you may vote in advance of the
Annual Meeting by Internet, telephone or mail as explained
below. Even if you plan to attend the Annual Meeting, we urge
you to vote in advance. If you own shares in record name, you
may cast your advance vote in one of three ways:
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Vote by Internet: You can choose to vote your
shares over the Internet website listed on the enclosed proxy
card. This website will give you the opportunity to make your
selections and confirm that your instructions have been
followed. To take advantage of the convenience of voting on the
Internet, you must subscribe to one of the various commercial
services that offers access to the Internet. If you vote via
the Internet, you do not need to return the proxy card.
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Vote by Telephone: You can also vote by phone
at any time by calling the toll-free number (for residents of
the United States) listed on the enclosed proxy card. To vote by
telephone, dial the toll-free number and follow the simple
recorded instructions. If you vote by telephone, you do not
need to return the proxy card.
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Vote by Mail: If you choose to vote by mail,
simply mark the proxy card, and then date, sign, and return it
in the postage pre-paid envelope provided.
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Stockholders who hold shares beneficially in street name through
a nominee (such as a broker) may be able to vote by telephone or
the Internet as well as by mail. You should follow the
instructions you receive from your nominee to vote these shares.
If instructions are given in any of the three ways listed above
and are received by Superior Bancorp before or at the Annual
Meeting, and are not revoked, then the shares of common stock
represented thereby will be voted as specified. If no
specification is made, then shares of common stock represented
by the proxy will be voted in accordance with the
recommendations of the Board of Directors.
How to
Revoke Your Proxy
Sending in a signed proxy card or voting over the Internet or by
telephone 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 Superior Bancorp that
you wish to revoke your proxy,
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executing and delivering to the Secretary of Superior Bancorp a
later-dated proxy (including by Internet or telephone
vote), or
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attending, giving notice that you wish to revoke your proxy and
voting in person at the Annual Meeting.
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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 $12,500 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 March 6, 2008, 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, and (c) each stockholder known by us,
based solely upon a review of filings made with the SEC, to be
the beneficial owner of more than 5% of our outstanding common
stock. 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. None of the shares are
pledged as security for indebtedness unless otherwise indicated.
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Percentage (1)(2)
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Number of Shares of
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Of Common
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Name
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Common Stock
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Stock Owned
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C. Stanley Bailey
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985,640
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(3)
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2.41
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%
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Roger Barker
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63,931
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(4)
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*
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William H. Caughran
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19,281
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(5)
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*
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K. Earl Durden
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638,296
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(6)
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1.59
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%
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Rick D. Gardner
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418,511
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(7)
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1.03
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%
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Thomas E. Jernigan, Jr.
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268,958
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(8)
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*
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James Mailon Kent, Jr.
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427,047
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(9)
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1.06
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%
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Mark A. Lee
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1,525,870
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(10)
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3.80
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%
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James M. Link
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12,403
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(11)
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*
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Peter L. Lowe
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86,894
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*
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John C. Metz
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339,657
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(12)
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*
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D. Dewey Mitchell
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284,031
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(13)
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*
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Barry Morton
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318,334
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(14)
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*
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Robert R. Parrish, Jr.
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58,158
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(15)
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*
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Charles W. Roberts, III
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57,303
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*
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C. Marvin Scott
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517,666
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(16)
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1.28
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%
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Mark A. Tarnakow
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24,084
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(17)
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*
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James C. White, Sr.
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11,824
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(18)
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*
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All executive officers and directors as a group (18 persons)
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6,057,888
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(19)
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14.50
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%
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Except as otherwise noted herein, percentage is determined on
the basis of 40,211,230 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. Shares held by
employee benefit plans (as indicated below) are as of the most
recently completed plan allocation coinciding with or preceding
March 6, 2008. Unless otherwise indicated, the address of
each person is
c/o Superior
Bancorp, 17 North 20th Street, Birmingham, Alabama 35203. |
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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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Includes 711,970 shares subject to options that are
exercisable within 60 days, 1,000 shares held by a
trust, of which he disclaims beneficial ownership, and
10,284 shares held for his benefit by employee benefit
plans. |
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Includes 20,000 shares subject to options that are
exercisable within 60 days. |
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Includes 89 shares held as co-trustee of a trust,
860 shares held by his spouse, 8,500 shares of
restricted stock over which he has voting power but not
investment power, and 5,645 shares held for his benefit by
employee benefit plans. |
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Includes 32,500 shares subject to options that are
exercisable within 60 days and 203,534 shares held by
a family trust. |
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Includes 355,985 shares subject to options that are
exercisable within 60 days and 1,327 shares held for
his benefit by employee benefit plans. |
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Includes 30,000 shares subject to options that are
exercisable within 60 days and 217,195 shares held by
a trust of which he is the beneficiary. |
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Includes 30,000 shares subject to options that are
excisable within 60 days. |
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Includes 1,525,062 shares held by a limited liability
company. |
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Includes 5,000 shares subject to options that are
exercisable within 60 days. |
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Includes 5,789 shares held in his spouses IRA. |
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Includes 146,315 shares held by a corporation of which he
is a controlling shareholder and 14,582 shares held for his
benefit by an employee benefit plan. |
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Includes 20,000 shares subject to options that are
exercisable within 60 days. |
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Includes 5,000 shares subject to options that are excisable
within 60 days and 47,287 shares held for his benefit
by an employee benefit plan. |
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Includes 355,985 shares subject to options that are
exercisable within 60 days and 8,683 shares held for
his benefit by employee benefit plans. |
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Includes 6,800 shares of restricted stock over which he has
voting power but not investment power and 2,284 shares held
for his benefit by an employee benefit plan. |
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Includes 5,000 shares subject to options that are
exercisable within 60 days. |
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Includes 1,571,440 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 below, to serve for a term
expiring at the 2009 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. In
other words, the 15 director nominees receiving the most
votes will be elected. Consequently, any shares not voted
(whether by abstention, broker non-vote or otherwise) will 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 above. 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 Superior Bancorp
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C. Stanley Bailey
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59
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Chairman & Chief Executive Officer; Director
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Roger Barker
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60
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Director
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Rick D. Gardner
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48
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Chief Operating Officer; Director
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Thomas E. Jernigan, Jr.
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42
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Director
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James Mailon Kent, Jr.
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67
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Director
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Mark A. Lee
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49
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Director
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James M. Link
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65
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Director
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Peter L. Lowe
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69
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Director
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John C. Metz
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68
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Director
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D. Dewey Mitchell
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51
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Director
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Barry Morton
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69
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Director
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Robert R. Parrish, Jr.
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53
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Director
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Charles W. Roberts, III
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54
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Director
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C. Marvin Scott
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58
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President; Director
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James C. White, Sr.
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60
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Director
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Directors Barker, Jernigan and White are members of the Audit
Committee; Directors Link, Kent and Metz are members of the
Compensation Committee; Directors Link and Morton are members of
the Nominating and Corporate Governance Committee. Current
director K. Earl Durden, who is not standing for re-election at
the Annual Meeting, is also a member of the Nominating and
Corporate Governance Committee. |
C. Stanley Bailey joined Superior Bancorp 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.
Roger Barker has been Senior 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 Superior Bancorp since December 2003 and began
serving as a director of Superior Bank, in 1998.
5
Rick D. Gardner joined Superior Bancorp 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.,
Little Rock, Arkansas, 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 Superior Bancorp 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 Superior Bancorp since
September 1998.
Mark A. Lee has served as President of Forest Hill
Capital, LLC, a private investment advisory firm in Little Rock,
Arkansas, for the past eight years. Prior to that time,
Mr. Lee spent 16 years with Morgan Keegan and Company,
Memphis, Tennessee, in various positions. Mr. Lee has been
a director of Superior Bancorp since January 2008.
James M. Link, Lieutenant General, U.S. Army
(retired), served as President of Teledyne Brown Engineering,
Inc., Huntsville, Alabama, a subsidiary of Teledyne
Technologies, Inc., from July 2001 until January 2008. 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. General Link has been a director of
Superior Bancorp since June 2005.
Peter L. Lowe is the President of G.W. Jones &
Sons Real Estate Investment Company, Inc., Huntsville, Alabama.
Mr. Lowe has been a director of Superior Bancorp since July
2007.
John C. Metz is the Chairman, and Chief Executive Officer
of Metz & Associates, a food service management
company located in Dallas, Pennsylvania, which he founded in
1994. Mr. Metz has been a director of Superior Bancorp
since July 2007.
D. Dewey Mitchell is a co-owner of Capstone Tropical
Holdings, Inc., New Port Richey, Florida, a holding company for
a number of real-estate related businesses in the Tampa Bay
area. Mr. Mitchell served as a director of Kensington
Bankshares, Inc., Tampa, Florida, from its founding until its
merger with Superior Bancorp in 2006, at which time he became a
director of Superior Bancorp.
Barry Morton is Chairman of Robins & Morton,
Birmingham, Alabama, one of the largest contractors in the
United States. Before becoming Chairman, he served for
15 years as President of Robins & Morton. He has
served for more than five years as a director of Superior Bank,
and has been a director of Superior Bancorp since 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 has been a
director of Superior Bancorp since November 2005.
Charles W. Roberts, III has been the President of
C.W. Roberts Contracting, Inc., a road construction company in
Tallahassee, Florida, since 1976. Mr. Roberts has been a
director of Superior Bancorp since January 2008.
C. Marvin Scott joined Superior Bancorp 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., Little
Rock, Arkansas, 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.
6
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 has been a
director of Superior Bancorp since June 2005, and previously
served as a director 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
|
|
C. Stanley Bailey
|
|
|
59
|
|
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Chief Executive Officer; Director
|
William H. Caughran
|
|
|
51
|
|
|
General Counsel and Secretary
|
Rick D. Gardner
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|
|
48
|
|
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Chief Operating Officer; Director
|
C. Marvin Scott
|
|
|
58
|
|
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President; Director
|
Mark A. Tarnakow
|
|
|
42
|
|
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Chief Financial Officer
|
Information concerning Mr. Bailey, Mr. Gardner and
Mr. Scott is set forth above under Nominees for
Director.
William H. Caughran was named General Counsel of Superior
Bancorp in November 2006 upon completion of Superior
Bancorps acquisition of Community Bancshares, Inc.,
Blountsville, Alabama. Mr. Caughran became General Counsel
of Community Bank in 1998 and Community Bancshares, Inc. in
2002. From 1986 to 1998 Mr. Caughran served as in-house
counsel to AmSouth Bank, Birmingham, Alabama.
Mark A. Tarnakow was named Chief Financial Officer of
Superior Bancorp in April 2007. Previously, Mr. Tarnakow
held various financial management positions at Regions Financial
Corporation and its predecessors, Birmingham, Alabama, from 2002
to 2007, serving most recently as the Regional Financial Officer
of the Midwest Banking Group. From 1992 to 2002
Mr. Tarnakow was employed in various financial management
positions for entities affiliated with Banc One Corporation,
Columbus, Ohio. Mr. Tarnakow is a Certified Public
Accountant.
Certain
Information Concerning the Board of Directors and its
Committees
The Board of Directors held a total of seven meetings and acted
by unanimous written consent three times during 2007. During
2007, each of the directors attended at least 75% of the
aggregate of (i) the total number of Board of Directors
meetings of Superior Bancorp and Superior Bank and (ii) the
total number of meetings held by all Board committees of
Superior Bancorp and Superior Bank on which he served during the
period for which he was serving as a director or committee
member. The Board of Directors has determined that the following
13 directors are independent directors under
Rule 4200 of the NASDAQ Stock Market Marketplace Rules :
Messrs. Barker, Durden, Jernigan, Kent, Lee, Link, Lowe,
Metz, Mitchell, Morton, Parrish, Roberts and White. Our
non-employee directors periodically meet in executive session
without the management directors. There is no policy requiring
the directors to attend meetings of stockholders. Four of the 15
members of the Board of Directors at that time attended the 2007
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 registered public accounting firm, reviews
significant audit and accounting policies and practices, meets
with our independent registered public accounting firm
concerning, among other things, the scope of audits and reports,
approves the provision of services by our independent registered
public accounting firm and reviews the performance of overall
accounting and financial controls. The Audit Committee currently
comprises Messrs. Barker (Chair), Jernigan and White.
During 2007, there were nine 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 2007, the Board of Directors revised the Audit
Committee Charter, a copy of which is available on our website
at www.superiorbank.com.
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. Link (Chair), Kent and Metz, all of whom
are independent directors as defined under NASDAQ
Rule 4200. During 2007, the Compensation Committee held
four meetings. The Compensation Committee operates under a
written charter revised in 2007 which is available on our
website at www.superiorbank.com. See Executive
Compensation and Other Information Compensation
Discussion and Analysis Compensation Committee
Report on Executive Compensation.
Nominating and Corporate Governance
Committee. The Nominating and Corporate
Governance Committee recommends to the Board of Directors and
evaluates potential candidates to serve as directors of Superior
Bancorp. The Nominating and Corporate Governance Committee was
established in March 2004 as the Nominating Committee and
consists of Messrs. K. Earl Durden (Chair), who is not
standing for re-election at the Annual Meeting, Link and Morton.
Each of the voting members of the Nominating Committee is an
independent director, as defined under NASDAQ Rule 4200.
The Nominating and Corporate Governance Committee met three
times during 2007.
The Nominating and Corporate Governance Committee has a written
charter, revised in 2007, which is available on our website at
www.superiorbank.com. The Committee is charged with developing
and recommending criteria to be considered in identifying and
evaluating potential candidates to serve as directors of
Superior Bancorp 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 Superior Bancorp 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 Superior Bancorps
strategic focus and its stockholder interests, (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 Superior Bancorp. 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
Superior Bancorp at the time in question.
The Committee will consider recommendations for director
nominees submitted by stockholders. In order for the Committee
to evaluate the nominees properly, such nominations should be
received by the Committee no later than 60 days prior to
the meeting at which the election is to be held and should 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
Superior Bancorp capital stock 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 Superior Bancorp that are owned
8
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. The stockholder should
also send to the Committee 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 William H. Caughran,
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
The following table presents information concerning the
compensation paid to non-employee directors of Superior Bancorp
during 2007:
Director
Compensation
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|
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|
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Change in
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Pension
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Value and
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Fees
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Nonqualified
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Earned
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|
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Non-Equity
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Deferred
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or Paid
|
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|
Stock
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|
|
Option
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Incentive Plan
|
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|
Compensation
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All Other
|
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|
|
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in Cash
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|
Awards
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|
Awards
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Compensation
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Earnings
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Compensation
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Total
|
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Name
|
|
($)
|
|
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($)
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|
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($)(1)
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($)
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($)
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($)
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($)
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Roger Barker
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$
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31,000
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|
|
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|
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$
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31,000
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Glynn C. Debter(3)
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$
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9,500
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|
$
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9,500
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K. Earl Durden
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$
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26,500
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|
|
|
|
|
|
|
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|
|
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|
|
|
|
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$
|
26,500
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Roy B. Jackson(3)
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|
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|
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$
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9,500
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|
|
|
|
|
|
|
|
|
|
|
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|
|
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$
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9,500
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Thomas E. Jernigan, Jr.
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$
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22,500
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|
|
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$
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22,500
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James Mailon Kent, Jr.
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$
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25,500
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$
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7,767
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(2)
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$
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33,267
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James M. Link
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$
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28,000
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$
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28,000
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Peter L. Lowe
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$
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7,500
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$
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2,590
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|
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|
|
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$
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10,090
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John C. Metz
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$
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1,500
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$
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7,500
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$
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2,590
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$
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11,590
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D. Dewey Mitchell
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$
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22,500
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$
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8,760
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$
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31,260
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Barry Morton
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$
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23,000
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$
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23,000
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Robert R. Parrish, Jr.
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$
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25,500
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|
|
|
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|
|
|
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|
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$
|
25,500
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Michael E. Stephens(3)
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$
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6,500
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|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
$
|
6,500
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James C. White, Sr.
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$
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27,500
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|
|
|
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|
|
|
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$
|
27,500
|
|
|
|
|
(1) |
|
Amounts in this column are the amounts recognized by Superior
Bancorp in its financial statements as expenses for 2007 in
connection with stock options granted in 2007 or prior years.
Mr. Lowe and Mr. Metz were each granted options in
2007, and Mr. Mitchell was granted options in 2006, to
purchase 5,000 shares of Superior Bancorp common stock. The
grant date fair value of the option awards to Mr. Lowe,
Mr. Metz, and Mr. Mitchell were $17,084, $17,084 and
$19,575, respectively. |
9
|
|
|
(2) |
|
Represents the portion of the earnings on Mr. Kents
deferred compensation which were paid at a rate in excess of
120% of the average federal long-term rate with monthly
compounding during 2007. |
|
(3) |
|
Messrs. Debter, Jackson and Stephens retired during 2007. |
Non-employee directors receive an annual retainer of $10,000,
payable in quarterly installments, 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 have the option of receiving such retainer and fees
in cash or common stock. All directors have elected to receive
their compensation in common stock.
Prior Deferred Compensation Agreements. The
following directors entered into Deferred Compensation
Agreements with us originally effective as of September 1,
1999: Messrs. Durden, Jernigan, Kent and Stephens.
Messrs. Kent and Jernigan also entered into Deferred
Compensation Agreements with Superior Bank, and Mr. Morton
had a Deferred Compensation Agreement with Superior Bank only.
These agreements provided that we would establish and fund
investments in a Deferral 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. All of the 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 was fully vested in his benefits under his
Deferred Compensation Agreements, agreed to the termination of
such agreements effective January 1, 2006 in exchange for
our agreement to fund a new deferred compensation arrangement
for him in the amount of $154,547, representing the then-current
present value of amounts that would have been paid to him under
his Deferred Compensation Agreements. Under this new
arrangement, such amount is deemed to be invested in specified
benchmark funds or indices, and Mr. Kent is 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 Superior
Bancorp 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 2007, all of our officers,
directors and greater-than-10% beneficial owners complied with
all applicable filing requirements except as set forth in the
following paragraph.
Mr. Morton filed a late Form 4 in May 2007 reporting
an open market purchase of 4,600 shares of Superior Bancorp
common stock.
10
EXECUTIVE
COMPENSATION AND OTHER INFORMATION
Compensation
Discussion and Analysis
This Compensation Discussion and Analysis describes our
compensation program for (a) our principal executive
officer, (b) our principal financial officer, and
(c) the three other most highly compensated executive
officers of Superior Bancorp during the year ended
December 31, 2007. These executive officers are referred to
collectively as the named executive officers. For a
summary of the amount of compensation paid to the named
executive officers in 2007, please see Summary of Cash and
Certain Other Compensation below.
Compensation
Philosophy and Policies for Executive Officers
Superior Bancorps Board of Directors has established a
Compensation Committee which is responsible for determining the
compensation of all officers, including the named executive
officers. See Certain Information Concerning the Board of
Directors and its Committees. The Compensation
Committees objective is 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 Superior Bancorp.
The Compensation Committee believes that executives of Superior
Bancorp should be rewarded based upon their success in meeting
certain operational goals, improving earnings and generating
returns for 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 Superior Bancorp must offer
compensation at competitive levels. In addition, the
Compensation Committee believes that Superior Bancorps
stock incentive plans offer its executives meaningful equity
participation in Superior Bancorps common stock. The
Compensation Committee feels that the combination of cash
compensation and equity participation will be effective in
stimulating Superior Bancorps executives to meet both
long-term and short-term goals.
The role of management in determining executive compensation is
limited to gathering information for the Compensation Committee.
For example, compensation data regarding selected peer companies
is compiled by management. See Benchmarking. The
Compensation Committee receives the information from management
and then determines how it will utilize such information in the
Committees decision-making process. The Compensation
Committee does not delegate to any other committee or individual
its authority to determine the compensation of the executive
officers of Superior Bancorp.
Benchmarking
To assist the Compensation Committee in determining competitive
levels of compensation, the Committee reviews external
compensation studies as well as compensation data for selected
positions compiled internally from proxy statements for selected
peer companies. The most recent peer group was composed of the
following financial institutions: Alabama National
Bancorporation (Birmingham, AL), Bank of the Ozarks, Inc.
(Little Rock, AR), BancTrust Financial Group, Inc. (Mobile, AL),
Fidelity Southern Corporation (Atlanta, GA), Hancock Holding
Company (Gulfport, MS), IberiaBank Corporation (Lafayette, LA),
Seacoast Banking Corporation of Florida (Stuart, FL), Simmons
First National Corporation (Pine Bluff, AR), and United
Community Banks, Inc. (Blairsville, GA). Although the
Compensation Committee does not maintain a formal record of, and
has not established fixed targets for, where its compensation
stands with respect to the peer companies, the Compensation
Committees goal is for the compensation package provided
to a Superior Bancorp officer to be comparable to, and
consequently competitive with, the compensation provided by the
peer companies for a similarly situated position.
Elements
of Compensation
There are three primary components of Superior Bancorps
executive compensation program: base salary, short-term
incentive compensation and long-term incentive compensation. The
Compensation Committee has not
11
established a specific targeted mix of compensation between base
salary and short-term and long-term incentives. Short-term
incentives are based upon percentages of base salary and
long-term incentives are determined based upon a targeted pool
of equity. In addition to these primary forms of compensation,
Superior Bancorp provides certain perquisites to its executive
officers and maintains qualified retirement plans in which its
executive officers participate.
Base Salary: The Compensation Committee
endeavors to establish base salary levels for executives that
are consistent and competitive 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. As noted above, the Committee utilizes data for
peer companies in making its determination. For 2007 the
Committee determined that the salary of Mr. Bailey would
increase from $400,000 to $450,000, the salary of Mr. Scott
would increase from $300,000 to $350,000, and the salary of
Mr. Gardner would increase from $250,000 to $300,000 due to
their contributions to Superior Bancorp and in recognition of
the fact that none of these individuals received a salary
increase for 2006. Mr. Tarnakow joined Superior Bancorp in
April of 2007 at an annual base salary of $200,000.
Mr. Caughran joined Superior Bancorp in November 2006, and
his annual base salary of $165,000 was not changed for 2007. The
salary of Mr. Gossett, who served as the principal
financial officer for part of 2007, was increased from $140,770
for 2006 to $146,289 for 2007.
Short-Term Incentive Compensation: The
Compensation Committee has approved a Management Incentive Plan,
which is intended to recognize and reward senior officers of
Superior Bancorp and its subsidiaries and affiliates 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 Management Incentive
Plan, the Compensation Committee approves those officers
selected to participate in the plan based upon the
recommendation of the Chief Executive Officer. Participants are
notified by February 15 of each plan year of their eligibility
to participate in the plan for such year. For each year, the
Compensation Committee will establish corporate financial and
operational performance goals, and participants will jointly
establish with their respective supervisors individual
performance goals. 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 did not exercise this discretion with
respect to any of the named executive officers for 2007. The
Compensation Committee makes a determination of awards based on
the information available to it at the time. The Compensation
Committee has no policy to adjust or recover awards or payments
if the relevant company performance measures upon which they are
based are restated or otherwise adjusted in a manner that would
reduce the size of an award or payment. The Compensation
Committee believes that the decision of whether a recovery is
appropriate depends upon the facts and circumstances surrounding
the restatement or adjustment.
For 2007 the corporate performance goals consisted of five
components: (1) net operating earnings for the year,
weighted at 30%; (2) year-over-year growth in core
deposits, weighted at 20%; (3) year-over-year loan growth,
weighted at 20%; (4) the level of non-performing assets and
net charge-offs at year end, weighted at 20%; and (5) the
regulatory ratings assigned to Superior Bank, weighted at 10%.
The individual goals for each of Mr. Bailey, Mr. Scott
and Mr. Gardner for 2007 were identical to the corporate
goals because each of these officers has responsibility for the
performance of the entire company. The potential award level for
each of Mr. Bailey, Mr. Scott, and Mr. Gardner
was 50% of their respective base salaries as provided in their
respective employment agreements with Superior Bancorp. See
Employment Agreements. The Compensation Committee
determined that Mr. Bailey, Mr. Scott and
Mr. Gardner were entitled to payouts for 2007 of $108,000,
$84,000, and $72,000, respectively, representing 24% of their
respective base salaries. The potential award level of each of
Mr. Tarnakow and Mr. Caughran was 40% of their
respective base salaries. The Compensation Committee determined
that Mr. Tarnakow and Mr. Caughran were entitled to
payouts of $31,569 and $39,600, respectively, representing 24%
of their respective base salaries paid during 2007. The
potential award level of Mr. Gossett was 15% of his base
salary, and the Compensation Committee determined that
Mr. Gossett was entitled to a payout of $9,700,
representing 7% of his base salary. In lieu of cash payments,
Superior Bancorp granted to Mr. Tarnakow and
12
Mr. Caughran restricted stock valued at the closing price
of Superior Bancorp common stock on the date of the award. The
restricted stock vests over a two-year period.
Long-Term Incentive Compensation: In addition
to cash incentive compensation, Superior Bancorp utilizes
equity-based compensation in the form of stock options 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 Superior
Bancorps 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.
Except for stock options granted to new employees as a condition
of their employment, the Compensation Committee generally
considers grants annually at its July meeting. The Compensation
Committee establishes a target for its annual stock option
grants. The amount of options for each individual is determined
taking into account an executives current responsibilities
and historical performance, as well as the executives
contribution to Superior Bancorps results of operations.
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 Superior Bancorp will be a
strong motivation for the executives to pursue the long-term
interests of Superior Bancorp and will promote longevity and
retention of key executives. In 2007 the Compensation Committee
granted the following options to purchase Superior Bancorp stock
to its named executive officers: 50,000 shares to
Mr. Tarnakow; 10,000 shares Mr. Caughran; and
3,000 shares to Mr. Gossett. No grants were made to
Mr. Bailey, Mr. Scott or Mr. Gardner in 2007 in
light of the grants which were made to each individual during
2005 as part of the inducement of each of these individuals to
join the management team of Superior Bancorp. See
Employment Agreements.
Superior Bancorp encourages its executives to participate in the
equity ownership of the company and seeks to facilitate this
ownership through its long-term incentive program. However,
Superior Bancorp has not established any security ownership
requirements or guidelines for its executives.
Retirement
Plans:
The retirement plans maintained by Superior Bancorp are
tax-qualified plans in which named executive officers
participate on the same terms as other full-time employees of
Superior Bancorp. The company maintains a 401(k) plan pursuant
to which it matches 100% of the first 3% and 50% of the next 2%
of compensation contributed to the plan by the employee. During
most of 2007 Superior Bancorp maintained two employee stock
ownership plans (ESOPs), one of which it acquired as
a result of its merger with Community Bancshares, Inc. in 2006.
Contributions to the ESOPs are determined by the Board of
Directors, but must be in an amount sufficient to enable the
ESOPs to service their debt. Superior Bancorps
contributions to the 401(k) plan and ESOPs for the benefit of
the named executive officers are included in the All Other
Compensation column of the Summary Compensation Table
below. Superior Bancorp terminated one of its ESOPs on
August 31, 2007. Each of the named executive officers who
participated in the terminated ESOP elected to have his Superior
Bancorp common stock transferred from the terminated plan
directly to the Superior stock fund of the 401(k) plan.
Superior Bancorp also maintains a defined benefit pension plan
which it acquired as a result of the merger with Community
Bancshares, Inc. The pension plan has been frozen since
December 31, 2003 so that no additional benefits are
accruing under the plan. Superior Bancorp is required to make
contributions to the plan in an amount sufficient to satisfy the
minimum funding requirements of the Employee Retirement Income
Security Act of 1974, as amended. Mr. Caughran is the only
named executive officer with an accrued benefit under the
pension plan. See Pension Benefits.
Perquisites
and Other Benefits:
Pursuant to the terms of their employment agreements,
Mr. Bailey, Mr. Scott and Mr. Gardner each
receive certain perquisites or other benefits, including use of
an automobile, club memberships and life insurance in excess of
that provided under the companys group term life insurance
plan. The Compensation Committee believes that all of these
benefits are appropriate considering the level of responsibility
of these officers. See Summary Compensation
Table All Other Compensation.
13
Tax and
Accounting Considerations
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 Superior Bancorps 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 Superior Bancorp would honor its
obligations to the executive officers under the compensation
arrangements approved by the Compensation Committee.
We account for all compensation paid in accordance with
generally accepted accounting principles. The accounting
treatment has generally not affected the form of compensation
paid to the named executive officers.
Use of
Contractual Arrangements
The Compensation Committee considers contractual arrangements to
be an effective method of attracting and retaining the services
of executives in critical positions. The terms of the
companys agreements are summarized under Employment
Agreements and Potential Payouts Upon Termination of
Employment or Change in Control of Superior Bancorp.
Compensation
Committee Report
The Compensation Committee has reviewed and discussed with
management the Compensation Discussion and Analysis contained in
this Proxy Statement. Based upon this review and discussion, the
Compensation Committee has recommended to the Board of Directors
that the Compensation Discussion and Analysis be included in
this Proxy Statement.
The foregoing report is submitted by the following directors of
Superior Bancorp, comprising all of the members of the
Compensation Committee of the Board of Directors as of
December 31, 2007.
James M. Link, Chairman
James Mailon Kent, Jr.
John C. Metz
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.
14
Summary
of Cash and Certain Other Compensation
The following table presents certain information concerning
compensation paid or accrued for services rendered to Superior
Bancorp in all capacities during the year ended
December 31, 2007, for the named executive officers.
Summary
Compensation Table
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Change in
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Pension
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Non-Equity
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Value and
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Incentive
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Nonqualified
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Stock
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Option
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Plan
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Deferred
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All Other
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Name and Principal
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Salary
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Bonus
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Awards
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Awards
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Compensation
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Compensation
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Compensation
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Total
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Position Held
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Year
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($)
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($)
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($)
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($)(1)
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($)
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($)
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($)(2)
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($)
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C. Stanley Bailey
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2007
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$
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450,000
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$
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108,000
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$
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39,350
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$
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597,350
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Chairman and CEO
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2006
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$
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400,000
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$
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190,000
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$
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38,185
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$
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628,185
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C. Marvin Scott
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2007
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$
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350,000
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$
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84,000
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$
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35,058
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$
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469,058
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President
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2006
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$
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300,000
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$
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144,000
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$
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57,977
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$
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501,977
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Rick D. Gardner
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2007
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$
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300,000
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$
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72,000
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$
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22,068
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$
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394,068
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Chief Operating Officer
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2006
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$
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250,000
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$
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120,000
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$
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25,762
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$
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395,762
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Mark Tarnakow
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2007
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$
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131,539
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$
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25,895
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$
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8,043
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$
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165,477
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Chief Financial Officer
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2006
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William Caughran
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2007
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$
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165,000
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$
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215,099
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$
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5,180
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$3,480
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(3)
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$
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5,656
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$
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394,415
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General Counsel
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2006
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$
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165,000
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$681
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(3)
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$
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13,678
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$
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179,359
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James C. Gossett
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2007
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$
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146,289
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$
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9,835
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$
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9,700
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$
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7,958
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$
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173,782
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Finance Director
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2006
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$
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140,770
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$
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3,450
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$
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21,000
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$
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10,613
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$
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175,833
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External Reporting(4)
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(1) |
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Amounts in this column are the amounts recognized by Superior
Bancorp in its financial statements as expense for the year
shown in connection with outstanding stock options granted
during that year or prior years. Mr. Tarnakow,
Mr. Caughran, and Mr. Gossett were granted options to
purchase 50,000, 10,000, and 3,000 shares, respectively, of
Superior Bancorp common stock in 2007. Mr. Gossett was
granted options to purchase 5,000 shares of Superior
Bancorp common stock in 2006. See Grant of Plan-Based
Awards. |
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(2) |
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Represents the following expenses paid or reimbursed by Superior
Bancorp for executive officers in 2007:
Mr. Bailey country club expenses of $3,765;
automobile expenses of $15,250; life insurance premiums of
$3,016; reimbursement of $325 related to the payment of taxes,
company contributions of approximately $11,114 to the
companys defined contribution retirement plans, and 5,880
in reimbursement of expenses in connection with the
companys use of an airplane owned by an entity controlled
by Mr. Bailey; Mr. Scott country club
expenses of $5,736; automobile expenses of $14,750; life
insurance premiums of $2,773; reimbursement of $685 related to
the payment of taxes, and company contributions of approximately
$11,114 to the companys defined contribution retirement
plans ; Mr. Gardner automobile expenses of
$9,750; life insurance premiums of $1,025; reimbursement of $179
related to the payment of taxes; and company contributions of
approximately $11,114 to the companys defined contribution
retirement plans; Mr. Tarnakow automobile
expenses of $3,923 and company contributions of $4,120 to the
companys defined contribution retirement plans;
Mr. Caughran company contributions of
approximately $5,656 to the companys defined contribution
retirement plans; and Mr. Gossett company
contributions of approximately $7,958 to the companys
defined contribution retirement plans. Amounts shown as company
contributions to defined contribution retirement plans are
estimates since plan allocations for 2007 have not been
finalized. Represents the following expenses paid or reimbursed
by Superior Bancorp for executive officers in 2006:
Mr. Bailey country club expenses of $1,500;
automobile expenses of $9,250; life insurance premiums of
$2,262; reimbursement of $311 related to the payment of taxes,
company contributions of $18,182 to the companys defined
contribution retirement plans, and $6,680 in reimbursement of
expenses in connection with the companys use of an
airplane owned by an entity controlled by Mr. Bailey;
Mr. Scott country club expenses of $5,088;
automobile expenses of $14,750; life insurance premiums of
$2,773; relocation expenses of $10,145; reimbursement of $8,157
related to the payment of taxes, and company contributions of
$17,064 to the companys defined contribution retirement
plans ; Mr. Gardner automobile expenses of
$9,250; life insurance premiums of $1,025; reimbursement of $205
related to the payment of taxes; and company contributions of
$15,282 to the companys defined contribution retirement
plans; Mr. Caughran automobile expenses of
$5,539 and company contributions of $8,139 to the companys
defined contribution |
15
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retirement plans; and Mr. Gossett company
contributions of $10,613 to the companys defined
contribution retirement plans. |
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(3) |
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Represents the net change in the actuarial value of
Mr. Caughrans accumulated benefit under the Community
Bancshares, Inc. Revised Pension Plan for the years indicated. |
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(4) |
|
Mr. Gossett served as the principal financial officer of
Superior Bancorp through May 9, 2007. |
Grants of
Plan-Based Awards
The following table contains information concerning compensation
granted to the named executive officers during 2007 pursuant to
incentive compensation plans of Superior Bancorp.
Grants of
Plan-Based Awards
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All Other
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All Other
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Stock Awards:
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Option Awards:
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Number of
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Number of
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Exercise or
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Grant Date
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Estimated Future Payouts Under Non-Equity Incentive
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Estimated Future Payouts
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Shares of
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Securities
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Base Price
|
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Fair Value
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Plan Awards
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Under Equity Incentive Plan Awards
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Stock or
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Underlying
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of Option
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of Stock
|
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Grant
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Threshold
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Target
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Maximum
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Threshold
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Target
|
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Maximum
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Units
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Options
|
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Awards
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and Option
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Name
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Date
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($)
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($)(1)
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($)
|
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(#)
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(#)(2)
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(#)
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(#)
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(#)
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($/Sh)
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Awards
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C. Stanley Bailey
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1/23/07
|
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N/A
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$
|
225,000
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N/A
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C. Marvin Scott
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1/23/07
|
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N/A
|
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$
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175,000
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N/A
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Rick D. Gardner
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1/23/07
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N/A
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$
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150,000
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N/A
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Mark Tarnakow
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4/30/07
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N/A
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$
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80,000
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N/A
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7/17/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
50,000
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
$
|
9.99
|
|
|
$
|
170,843
|
|
William Caughran
|
|
|
1/23/07
|
|
|
|
N/A
|
|
|
$
|
66,000
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/17/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
10,000
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
$
|
9.99
|
|
|
$
|
34,169
|
|
James C. Gossett
|
|
|
1/23/07
|
|
|
|
N/A
|
|
|
$
|
21,116
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/17/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
3,000
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
$
|
9.99
|
|
|
$
|
10,251
|
|
|
|
|
(1) |
|
Amounts represent target awards under the Management Incentive
Compensation Plan, which equal a specified percentage of base
salary. The plan does not have threshold or maximum amounts.
Plan awards of up to 125% of target could be paid for
extraordinary performance and amounts significantly below target
could be awarded for less than adequate performance. Actual cash
payments made in 2008 for 2007 are shown in the summary
compensation table and are below the targets. Awards of
restricted stock made in 2008 in lieu of cash payments and a
discussion of performance targets are disclosed in the
Compensation Discussion and Analysis above. |
|
(2) |
|
The number of shares of Superior Bancorp common stock which may
be acquired pursuant to the exercise of stock options granted
during 2007. |
Employment
Agreements
C. Stanley Bailey. Mr. Bailey and
Superior Bancorp have entered into an Employment Agreement,
dated January 24, 2005, under which Superior Bancorp has
agreed to employ Mr. Bailey as Chief Executive Officer of
Superior Bancorp 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.
Superior Bancorp 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 Superior Bancorps business during the
terms of his employment and for one year after Mr. Bailey
ceases to be employed by Superior Bancorp. The agreement
obligates Superior Bancorp to appoint Mr. Bailey to the
Board of Directors of Superior Bancorp, and further provides
that Mr. Bailey will be Chairman of the Board.
16
C. Marvin Scott and Rick D.
Gardner. Mr. Scott and Mr. Gardner have
entered into employment agreements with Superior Bancorp 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) Superior Bancorp 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 Superior Bancorp
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, Superior Bancorp 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 Superior Bancorp 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.
Mark A. Tarnakow, William H. Caughran and James C.
Gossett. Superior Bancorp and each of
Mr. Tarnakow, Mr. Caughran, and Mr. Gossett are
parties to Change in Control Agreements under which each
individual would be entitled to certain benefits in the event
that, following a Change in Control (as defined) of Superior
Bancorp, the individuals employment is terminated
involuntarily without Cause (as defined) or voluntarily by the
individual after a material diminution in the individuals
compensation, authority or duties or a material change in the
geographic location at which the individual must perform
services. The benefits to which each individual would be
entitled include a lump sum payment of a specified multiple of
the individuals base salary and target bonus, immediate
vesting of all unvested amounts under benefit plans, and
continued participation in Superior Bancorps welfare
benefit plans for certain time periods. The multiple of salary
and bonus payable to each individual is 2.99 for
Mr. Tarnakow, 1.5 for Mr. Caughran and 1.0 for
Mr. Gossett.
In connection with the acquisition of Community Bancshares,
Inc., Superior Bank entered into an agreement with
Mr. Caughran dated August 31, 2006 which provides that
Mr. Caughran will serve as the General Counsel of Superior
Bancorp and Superior Bank. In accordance with the terms of the
agreement, Mr. Caughran was paid a bonus of $215,099 in
November 2007. No other benefits are due to Mr. Caughran
pursuant to that agreement.
The provisions of each of these agreements relating to
termination of the individuals employment are discussed
below under the caption Potential Payouts Upon Termination
of Employment or Change in Control of Superior Bancorp.
17
Outstanding
Equity Awards at Year End 2007.
The following table provides information with respect to equity
awards held by the named executive officers at December 31,
2007.
Outstanding
Equity Awards at Fiscal Year-End
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|
|
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|
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|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
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|
|
|
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|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
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|
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|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
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|
Plan
|
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Awards:
|
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|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
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Equity
|
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|
Market or
|
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Incentive
|
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|
Payout
|
|
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|
|
|
|
|
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|
Equity
|
|
|
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|
|
|
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|
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|
Plan
|
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|
Value
|
|
|
|
|
|
|
|
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|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
of
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
Number of
|
|
|
Unearned
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
Number
|
|
|
Value of
|
|
|
Unearned
|
|
|
Shares,
|
|
|
|
Number of
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
of Shares
|
|
|
Shares or
|
|
|
Shares,
|
|
|
Units or
|
|
|
|
Securities
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
or Units
|
|
|
Units of
|
|
|
Units or
|
|
|
Other
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
of Stock
|
|
|
Stock
|
|
|
Other
|
|
|
Rights
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
|
|
|
That
|
|
|
That
|
|
|
Rights
|
|
|
That Have
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Unearned
|
|
|
Exercise
|
|
|
Option
|
|
|
Have Not
|
|
|
Have Not
|
|
|
That Have
|
|
|
Not
|
|
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Options
|
|
|
Price
|
|
|
Expiration
|
|
|
Vested
|
|
|
Vested
|
|
|
Not Vested
|
|
|
Vested
|
|
Name
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
($)
|
|
|
Date
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
($)
|
|
|
C. Stanley Bailey
|
|
|
711,970
|
|
|
|
|
|
|
|
|
|
|
$
|
8.17
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C. Marvin Scott
|
|
|
355,985
|
|
|
|
|
|
|
|
|
|
|
$
|
8.17
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rick D. Gardner
|
|
|
355,985
|
|
|
|
|
|
|
|
|
|
|
$
|
8.17
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark Tarnakow
|
|
|
|
|
|
|
50,000
|
(1)
|
|
|
|
|
|
$
|
9.99
|
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William Caughran
|
|
|
|
|
|
|
10,000
|
(1)
|
|
|
|
|
|
$
|
9.99
|
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James C. Gossett
|
|
|
|
|
|
|
3,000
|
(1)
|
|
|
|
|
|
$
|
9.99
|
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
(1)
|
|
|
|
|
|
$
|
10.56
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
$
|
10.68
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
$
|
6.25
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,500
|
|
|
|
|
|
|
|
|
|
|
$
|
7.67
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,500
|
|
|
|
|
|
|
|
|
|
|
$
|
6.65
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,500
|
|
|
|
|
|
|
|
|
|
|
$
|
6.00
|
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
These options will vest upon the earlier of five years from the
date of grant or (a) 50% vesting upon Superior Bancorp
common stock reaching a per share market value price of $12.00
and (b) 50% vesting upon Superior Bancorp common stock
reaching a per share market value price of $14.00. |
Options
Exercises and Vesting of Stock.
During 2007, no named executive officer exercised stock options
or became vested in any restricted stock.
Pension
Benefits.
The following table provides information with respect to
retirement benefits of the named executive officers pursuant to
defined benefit plans and related supplemental executive
retirement plans maintained by Superior Bancorp.
Pension
Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Present Value
|
|
|
|
|
|
|
|
|
Years of Credited
|
|
|
of Accumulated
|
|
|
Payments During
|
|
|
|
|
|
Service
|
|
|
Benefit
|
|
|
Last Fiscal Year
|
|
Name
|
|
Plan Name
|
|
(#)
|
|
|
($)
|
|
|
($)
|
|
|
C. Stanley Bailey
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C. Marvin Scott
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rick D. Gardner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark Tarnakow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William Caughran
|
|
Community Bancshares, Inc. Revised Pension Plan
|
|
|
5
|
(1)
|
|
$
|
48,718
|
(2)
|
|
|
|
|
James C. Gossett
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18
|
|
|
(1) |
|
Mr. Caughrans years of credited service are less than
his actual years of service because the Community Bancshares,
Inc. Revised Pension Plan was frozen as of December 31,
2003 and accrual of credited service ceased at that time. |
|
(2) |
|
The key assumptions used in determining the present value of
Mr. Caughrans benefit are the same assumptions used
to calculate the plans liabilities as disclosed in
Note 20 to the consolidated financial statements of
Superior Bancorp and its subsidiaries contained in Superior
Bancorps Annual Report on
Form 10-K
for the year ended December 31, 2007. |
Superior Bancorp became the sponsor of the Community Bancshares,
Inc. Revised Pension Plan upon its merger with Community
Bancshares in November 2006. The plan was frozen as of
December 31, 2003 such that no new participants may enter
the plan and no current participants may accrue any additional
benefits under the plan. The amount of the retirement benefit
for a participant is determined by the length of the
participants credited service under the plan and his
average monthly earnings for the five highest compensated,
consecutive calendar years of the participants final ten
consecutive calendar years of employment. Compensation covered
by the plan is total compensation, including bonuses, overtime
or other forms of extraordinary compensation, subject to the
limitation on compensation imposed by Section 401(a)(17) of
the Internal Revenue Code. The amount of compensation taken into
account in determining a participants retirement benefits
was also frozen as of December 31, 2003.
Nonqualified
Deferred Compensation
None of the named executive officers participate in any deferred
compensation plans.
Potential
Payouts Upon Termination of Employment or Change in Control of
Superior Bancorp
As discussed above under the caption Employment
Agreements, each of Mr. Bailey, Mr. Scott and
Mr. Gardner are parties to an employment agreement with
Superior Bancorp, and each of Mr. Tarnakow,
Mr. Caughran and Mr. Gossett is a party to a change in
control agreement with Superior Bancorp.
Messrs. Bailey, Scott and Gardner. If the
employment of any of Mr. Bailey, Mr. Scott or
Mr. Gardner is terminated other than for Cause (as defined)
or as a result of his death or disability, or if any such
executive terminates the agreement as a result of certain
adverse changes in his functions, duties or responsibilities or
of another material breach by Superior Bancorp of its
obligations, the executive is entitled to continued compensation
at the then-current rate (including bonus compensation) for the
then-remaining term of the agreement, provided that the
executive 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
the executives 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 the
executives employment by Superior Bancorp 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 the executive terminates such employment
following the occurrence of specified events within two years
after a Change in Control, the executive 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 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.
If the employment of Mr. Bailey, Mr. Scott and
Mr. Gardner had terminated as of December 31, 2007,
other than for Cause, death or disability or following a Change
in Control, Superior Bancorp would have been obligated to make
payments of $1,081,031 to Mr. Bailey; $840,784 to
Mr. Scott; and $720,672 to Mr. Gardner, assuming each
individual elected to be paid in a lump sum discounted to
present value. Superior Bancorp would also be obligated to
continue the executives participation in all benefit
programs through January 24, 2010 at an approximate cost of
$16,752 for Mr. Bailey, $16,842 for Mr. Scott, and
$14,462 for Mr. Gardner and to transfer to each executive
title to the company automobile assigned to the executive at an
approximate cost of $73,889 for Mr. Bailey, $21,494 for
19
Mr. Scott, and $16,673 for Mr. Gardner. The costs for
continued benefits assume that there are no premium increases
under the companys insurance programs prior to
January 24, 2010.
If the employment of Messrs. Bailey, Scott and Gardner had
terminated as of December 31, 2007 following a Change in
Control, Superior Bancorp or its successor would have been
obligated to make payments of the following amounts, including
gross-up
payments: $2,823,736 to Mr. Bailey; $2,180,375 to
Mr. Scott; and $1,873,706 to Mr. Gardner. Superior
Bancorp or its successor would also be obligated until
December 31, 2010 to provide each executive with life
insurance, medical insurance, dental insurance and accident and
disability insurance substantially equivalent to what executive
received prior to the termination of his employment at an
approximate cost of $25,128 for Mr. Bailey, $25,263 for
Mr. Scott and $21,693 for Mr. Gardner and to transfer
to each executive title to the company automobile assigned to
the executive at an approximate cost of $73,889 for
Mr. Bailey, $21,494 for Mr. Scott, and $16,673 for
Mr. Gardner. The costs for continued benefits assume that
there are no premium increases under the companys
insurance programs prior to December 31, 2010.
Messrs. Tarnakow, Caughran, and
Gossett. Pursuant to the terms of their Change in
Control Agreements, Mr. Tarnakow, Mr. Caughran, and
Mr. Gossett would each be entitled to certain benefits in
the event that, following a Change in Control (as defined) of
Superior Bancorp, the individuals employment is terminated
involuntarily without Cause (as defined) or voluntarily by the
individual after a material diminution in the individuals
compensation, authority or duties or a material change in the
geographic location at which the individual must perform
services. The benefits to which each individual would be
entitled include a lump sum payment of a specified multiple of
the individuals base salary and target bonus, immediate
vesting of all unvested amounts under benefit plans, and
continued participation in Superior Bancorps welfare
benefit plans for certain time periods. The multiple of salary
and bonus payable to each individual is 2.99 for
Mr. Tarnakow, 1.5 for Mr. Caughran and 1.0 for
Mr. Gossett.
If the employment of Messrs. Tarnakow, Caughran and Gossett
had terminated as of December 31, 2007 following a Change
in Control, Superior Bancorp or its successor would have been
obligated to pay Mr. Tarnakow $837,200, Mr. Caughran
$346,500, and Mr. Gossett $168,232. In addition,
Messrs. Tarnakow, Caughran and Gossett would have become
vested in options to purchase 50,000, 10,000 and
3,000 shares, respectively, of Superior Bancorp common
stock which were granted in 2007, and Mr. Gossett would
have become vested in options to purchase an additional
5,000 shares of Superior Bancorp common stock which were
granted in 2006. The expense to Superior Bancorp resulting from
the vesting of these options as of December 31, 2007 would
have been $139,823 for Mr. Tarnakow, $27,964 for
Mr. Caughran, and $14,609 for Mr. Gossett. Superior
Bancorp would also incur the following expenses in connection
with continuing certain welfare insurance benefits for
Mr. Tarnakow for three years, for Mr. Caughran for
18 months, and for Mr. Gossett for one year: $18,348,
$1,138, and $5,776, respectively. The costs for continued
welfare insurance benefits assume that there are no premium
increases under the companys insurance programs during
these time periods.
Equity
Compensation Plan Information
The following table summarizes information as of
December 31, 2007, 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.
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Number of Shares
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Remaining Available for
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Number of Securities
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Future Issuance Under
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to be Issued Upon
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Weighted-Average
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Equity Compensation
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Exercise of
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Exercise Price of
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Plans (Excluding
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Outstanding Options,
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Outstanding Options,
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Securities Reflected in
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Plan Category
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Warrants and Rights
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Warrants and Rights
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Column (a))
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(a)
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(b)
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(c)
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Equity Compensation Plans Approved by Security Holders(1)
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1,466,096
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$
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8.21
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136,730
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Equity Compensation Plans not Approved by Security Holders(2)
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1,742,097
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$
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8.32
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34,048
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Total
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3,208,193
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$
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8.27
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170,778
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20
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(1) |
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Excludes 206,875 shares of restricted stock granted under
the Third Amended and Restated 1998 Stock Incentive Plan of The
Banc Corporation. |
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(2) |
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Includes options covering (a) 1,740,937 shares issued
to Messrs. Bailey, Scott and Gardner and three other
management employees in connection with their employment
agreements, (b) 34,048 shares reserved for issuance to
other new management hires, and (c) 1,160 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 (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, 2007, the Compensation Committee
has granted options to purchase 1,466,096 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 Superior Bancorp. As of December 31, 2007, there
were options outstanding under this plan to purchase
1,160 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.
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
employment agreements for Mr. Bailey, Mr. Scott and
Mr. Gardner provide that they will be nominated to serve as
directors of Superior Bancorp.
Compensation
Committee Interlocks and Insider Participation
The Compensation Committee comprises Messrs. Link, Kent and
Metz. None of the members of the Compensation Committee is a
former or current officer or employee of Superior Bancorp or any
of its subsidiaries.
Certain
Transactions and Relationships
Superior Bancorp has a written policy concerning transactions
with its directors and their family members. The policy provides
that neither Superior Bancorp nor its subsidiaries will make
payments to, or for the benefit of, any non-employee director or
his family members totaling more than $60,000 per year in direct
compensation, other than board or committee fees and payments to
family members who are non-executive employees of Superior
Bancorp or its subsidiaries. The policy also provides that
Superior Bancorp will meet or exceed the requirements of the
NASDAQ Stock Market with respect to director independence. The
policy does not prohibit business relationships between Superior
Bancorp or its subsidiaries and business entities affiliated
with its directors except
21
to the extent that such relationships would cause less than a
majority of Superior Bancorps directors to be independent
under NASDAQ rules.
Superior Bancorp and Superior Bank have entered into
transactions with certain directors or officers of Superior
Bancorp 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.
The Mailon Kent Insurance Agency received commissions of
approximately $185,328 from the sale of insurance to Superior
Bancorp during 2007. James Mailon Kent, Jr., a director of
Superior Bancorp, is the owner of the Mailon Kent Insurance
Agency.
On July 24, 2007, Superior Bank sold a branch office
building in Huntsville, Alabama to a limited liability company
of which Peter L. Lowe, a director of Superior Bancorp, is a
member, for $3,000,000. The limited liability company then
leased the building back to Superior Bank. The initial term of
the lease is 14 years and the lease may be renewed, at
Superior Banks option, for three additional terms of five
years each. The amount of the monthly lease payments to be made
by Superior Bank is $19,500 for the first year of the lease and
increases annually until it reaches $26,881 per month in year
14. Rent for the renewal terms is to be determined based on
appraisals of the property.
On January 30, 2008, Superior Bank entered into agreements
with a limited liability company, of which Mr. Lowe is a
member, pursuant to which the limited liability company
purchased on January 31, 2008 office buildings located in
Albertville and Athens, Alabama for a total of $4,250,000. The
limited liability company then leased the buildings back to
Superior Bank. The initial term of each lease is 13 years,
and each lease may be renewed, at Superior Banks option,
for two additional terms of five years each. The amount of the
monthly lease payments to be made by Superior Bank in the first
year is $13,240 for the Albertville office and $14,208 for the
Athens office. These amounts increase annually until they reach
$17,393 for the Albertville office and $18,666 for the Athens
office in year 13. Rent for the renewal terms is to be
determined based on appraisals of the properties.
Superior Bank paid these limited liability companies a total of
$97,500 in rent during 2007.
Superior Bancorp believes that the foregoing transactions were
made on terms and conditions reflective of arms length
transactions.
22
PROPOSAL NUMBER
TWO
AMENDMENT OF CERTIFICATE OF INCORPORATION
TO EFFECT A REVERSE STOCK SPLIT AND
DECREASE AUTHORIZED SHARES OF COMMON STOCK
Overview
On March 6, 2008, Superior Bancorps Board of
Directors approved, subject to approval by our stockholders, a
proposed amendment (the Proposed Amendment) to
Superior Bancorps Restated Certificate of Incorporation
effecting a
1-for-4
reverse split of its issued and outstanding shares of common
stock (reverse stock split or reverse
split) and decreasing the number of its authorized shares
of common stock from 60,000,000 to 15,000,000. The form of the
Proposed Amendment is attached to this Proxy Statement as
Annex A. Contingent on approval of this proposal by the
requisite vote of the stockholders and the filing of the
Proposed Amendment with the Secretary of State of the State of
Delaware, the
1-for-4
reverse stock split and reduction of authorized shares would be
effective in accordance with the terms of the Proposed Amendment.
Reasons
for the Proposed
1-for-4
Reverse Stock Split
The number of outstanding shares of Superior Bancorp common
stock has increased as a result of the acquisitions completed in
2006 and 2007. As of March 6, 2008, there were
approximately 40,211,230 shares of Superior Bancorp common
stock issued and outstanding. This number of shares is
significantly higher than the number of issued and outstanding
shares of those financial institutions that Superior considers
to be its peer banks. The number of outstanding shares affects
market value per share, book value per share, tangible book
value per share, and earnings per share. Reducing the number of
outstanding shares of Superior Bancorp to an amount more
consistent with the number of outstanding shares of our peer
banks should:
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facilitate easier comparison of Superior Bancorp to its peer
banks with respect to those measurements affected by the number
of outstanding shares;
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broaden the pool of investors that are interested in investing
in Superior Bancorp by attracting new investors who would prefer
not to invest in shares that trade at single-digit share prices;
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make our common stock a more attractive investment to
institutional investors;
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reduce the relatively high transaction costs and commissions
incurred by our stockholders due to our currently high number of
shares outstanding and correspondingly relatively low per share
trading price; and
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illustrate more effectively the impact of our operational
efforts by enhancing the visibility of any changes to our
reported earnings per share.
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In evaluating whether or not to authorize the Proposed
Amendment, in addition to the considerations described above,
the Board of Directors also took into account various negative
factors associated with a reverse stock split. The factors
include: the negative perception of reverse stock splits held by
some investors, analysts and other stock market participants;
the fact that the stock price of some companies that have
effected reverse stock splits has subsequently declined back to
pre-reverse stock split levels; the adverse effect on liquidity
that might be caused by a reduced number of shares outstanding;
and the costs associated with implementing a reverse stock
split. Also, other factors such as our financial results, market
conditions and the market perception of our business may
adversely affect the market price of our common stock. As a
result, there can be no assurance that the price of our common
stock would be maintained at the per share price in effect
immediately following the effective time of the reverse stock
split.
Stockholders should recognize that if a reverse stock split is
effected, they will own a fewer number of shares than they
currently own (a number equal to the number of shares owned
immediately prior to the reverse stock split divided by
four subject to a cash payment in lieu of fractional
shares). While we expect that the reverse stock split will
result in an increase in the per share price of our common
stock, the reverse stock split may not increase the per share
price of our common stock in proportion to the reduction in the
number of shares of common stock
23
outstanding or result in a permanent increase in the per share
price (which depends on many factors, including our performance,
prospects and other factors that may be unrelated to the number
of shares outstanding).
If a reverse stock split is effected and the per share price of
our common stock declines, the percentage decline as an absolute
number and as a percentage of our overall market capitalization
may be greater than would occur in the absence of a reverse
stock split. Furthermore, the liquidity of our common stock
could be adversely affected by the reduced number of shares that
would be outstanding after the reverse stock split. In addition,
the reverse stock split will likely increase the number of
stockholders who own odd lots (less than 100 shares).
Stockholders who hold odd lots typically will experience an
increase in the cost of selling their shares, as well as
possible greater difficulty in effecting such sales.
Accordingly, a reverse stock split may not achieve the desired
results that have been outlined above.
Procedure for Effecting Proposed Amendment and Exchange of
Stock Certificates
If our stockholders approve the Proposed Amendment, and the
Board of Directors determines that a reverse stock split, at a
ratio of
1-for-4,
continues to be in the best interests of Superior Bancorp and
its stockholders, the Board will file the Proposed Amendment
reflecting the reverse split and the reduction of the authorized
number of shares of our common stock with the Secretary of State
of the State of Delaware. The reverse stock split and the
reduction of the authorized number of shares of our common stock
will become effective as of 11:59 p.m., Eastern Time, on
the date of filing, which time will be referred to as the
effective time. We anticipate that the effective
time will be promptly following the Annual Meeting. Except as
described below under Cash Payment in Lieu of Fractional
Shares, at the effective time each four shares of common
stock issued and outstanding immediately prior to the effective
time will, automatically and without any further action on the
part of our stockholders, be combined into and become one share
of common stock. Subject to the cash payment in lieu of
fractional shares described below, each certificate which,
immediately prior to the effective time represented pre-reverse
stock split shares, will be deemed for all corporate purposes to
evidence ownership of post-reverse stock split shares. The
number of authorized shares of our common stock will be
decreased from 60 million shares to 15 million shares.
Additionally, the number of shares of common stock subject to
outstanding options issued by Superior Bancorp will be reduced
by a factor of four and the respective exercise prices will be
increased by a factor of four.
No fractional shares of common stock will be issued by Superior
Bancorp in connection with the reverse stock split. Holders of
common stock who would otherwise receive a fractional share of
Superior Bancorp common stock pursuant to the reverse stock
split will receive cash in lieu of the fractional share as
explained more fully below under Cash Payment in Lieu of
Fractional Shares. The cash payments represent merely a
mechanical rounding off of the fractional shares that result
from the reverse stock split and are not separately
bargained-for consideration. Such cash payments will reduce the
number of post-split stockholders of record to the extent there
are stockholders of record presently holding fewer than four
shares at the effective time of the Proposed Amendment. Our
common stock is currently registered under Section 12(b) of
the Securities Exchange Act of 1934. As a result, we are subject
to the periodic reporting and other requirements of the
Securities Exchange Act of 1934. The proposed reverse stock
split would not affect the registration of our common stock
under the Securities Exchange Act of 1934.
Superior Bancorps transfer agent, Registrar and Transfer
Company, will act as exchange agent for purposes of implementing
the exchange of stock certificates, and is referred to as the
exchange agent. As soon as practicable after the
effective time, a letter of transmittal will be sent to
stockholders of record as of the effective time for purposes of
surrendering to the exchange agent certificates representing
pre-reverse stock split shares in exchange for certificates
representing post-reverse stock split shares in accordance with
the procedures set forth in the letter of transmittal. No new
certificates will be issued to a stockholder until such
stockholder has surrendered such stockholders outstanding
certificate(s), together with the properly completed and
executed letter of transmittal, to the exchange agent. From and
after the effective time, any certificates formerly representing
pre-reverse stock split shares which are submitted for transfer,
whether pursuant to a sale, other disposition or otherwise, will
be exchanged for certificates representing post-reverse stock
split shares. STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK
CERTIFICATES AND SHOULD NOT SUBMIT ANY CERTIFICATES UNTIL
REQUESTED TO DO SO.
24
Even if the stockholders approve the Proposed Amendment, we
reserve the right not to effect the reverse stock split and
decrease in the number of authorized shares of our common stock
if in the opinion of the Board of Directors it would not be in
the best interests of Superior Bancorp and its stockholders.
No
Appraisal Rights
Because the reverse stock split will apply to all issued and
outstanding shares of common stock and outstanding rights to
purchase common stock or to convert other securities into common
stock, the proposed reverse stock split will not alter the
relative rights and preferences of existing stockholders. The
par value of Superior Bancorps common stock will remain
unchanged at $0.001 per share.
If a reverse stock split is approved by the requisite vote of
the stockholders, stockholders have no right under Delaware law
or Superior Bancorps Restated Certificate of Incorporation
or By-Laws to dissent from a reverse stock split or to dissent
from the payment of cash in lieu of issuing fractional shares.
Cash
Payment in Lieu of Fractional Shares
If the proposed reverse stock split is effected, in lieu of any
fractional shares to which a holder of common stock would
otherwise be entitled as a result of such reverse stock split,
such holder will receive cash equal to the fair value of such
holders fractional share of common stock as soon as
practicable after the effective time of the reverse split. Fair
value of a fractional share of common stock will be determined
by multiplying the fractional share by the average of the
closing trading prices of the common stock (as adjusted to
reflect the reverse stock split) during regular trading hours
for the five trading days immediately preceding the effective
time of the reverse stock split.
Federal
Income Tax Consequences
The following description of the material federal income tax
consequences of a reverse stock split is based on the Internal
Revenue Code of 1986, as amended (the Code),
applicable Treasury Regulations promulgated thereunder, judicial
authority and current administrative rulings and practices as in
effect on the date of this Proxy Statement. Changes to the laws
could alter the tax consequences described below, possibly with
retroactive effect. Superior Bancorp has not sought and will not
seek an opinion of counsel or a ruling from the Internal Revenue
Service regarding the federal income tax consequences of a
reverse stock split. This discussion is for general information
only and does not discuss the tax consequences which may apply
to special classes of taxpayers (e.g., non-resident aliens,
broker/dealers or insurance companies). The state and local tax
consequences of a reverse stock split may vary significantly as
to each stockholder, depending upon the jurisdiction in which
such stockholder resides. Stockholders are urged to consult
their own tax advisors to determine the particular consequences
to them.
In general, the federal income tax consequences of a reverse
stock split will vary among stockholders depending upon whether
they receive cash for fractional shares, or solely a reduced
number of shares of common stock in exchange for their old
shares of common stock, or both. Superior Bancorp believes that
because a reverse stock split would not be part of a plan to
increase periodically a stockholders proportionate
interest in the companys assets or earnings and profits,
the reverse stock split would likely have the following federal
income tax effects.
A stockholder who receives solely a reduced number of shares of
common stock would not recognize gain or loss. In the aggregate,
such a stockholders basis in the reduced number of shares
of common stock would equal the stockholders basis in its
old shares of common stock.
A stockholder who receives cash in lieu of a fractional share as
a result of the reverse stock split would generally be treated
as having received the payment as a distribution in redemption
of the fractional share, as provided in Section 302(a) of
the Code, which distribution would be taxed as either a
distribution under Section 301 of the Code or an exchange
to such stockholder, depending on that stockholders
particular facts and circumstances. Generally, a stockholder
receiving such a payment should recognize gain or loss equal to
the difference, if any, between the amount of cash received and
the stockholders basis in the fractional share. In the
aggregate, such a stockholders basis in the reduced number
of shares of common stock will equal the stockholders
basis in its old
25
shares of common stock decreased by the basis allocated to the
fractional share for which such stockholder is entitled to
receive cash.
The Company would not recognize any gain or loss as a result of
a reverse stock split.
Decrease
in Authorized Common Stock
In the event that the
1-for-4
reverse stock split is approved and implemented, the Board of
Directors recommends a reduction in the number of authorized
shares of Superior Bancorp common stock from 60 million to
15 million. The Board of Directors believes it is in the
best interests of Superior Bancorp to have a sufficient number
of shares available, if needed, for issuance in connection with
possible future transactions approved by the Board of Directors
without the necessity for a special stockholders meeting
(except as may be required by applicable law or regulatory
authorities or by the rules of the Nasdaq Global Market).
However, the Board of Directors does not anticipate a need for
60 million authorized shares of Superior Bancorps
common stock if the number of outstanding shares and shares
reserved for future issuance under compensation arrangements is
reduced in a
1-for-4
stock split. The Board of Directors believes that
15 million authorized shares will provide sufficient
flexibility to consider and respond to future business
opportunities and needs as they arise.
Superior Bancorps Restated Certificate of Incorporation
provides that Superior Bancorp may issue up to 60 million
shares of its common stock, $.001 par value per share, of
which 40,211,230 shares were issued and outstanding as of
March 6, 2008. In addition, as of such date, approximately
(a) 29,580 shares were reserved for issuance under our
Third Amended and Restated 1998 Stock Incentive Plan, under
which options to purchase a total of 1,467,256 shares were
outstanding, (b) 34,048 shares were reserved for issuance
under other stock options granted, assumed or reserved for
future grants by Superior Bancorp under which options to
purchase a total of 1,742,097 shares were outstanding, and
(c) 30,937 shares were reserved for issuance in lieu of
cash compensation to non-employee directors. After giving effect
to all such reserved shares, approximately
16,484,852 shares were available for issuance on such date.
At the 2008 Annual Meeting stockholders will vote on the
adoption of the 2008 Stock Incentive Plan (See
Proposal Three below) pursuant to which
1,200,000 shares of common stock will be reserved if such
plan is adopted.
If a 1-for-4
reverse stock split is approved and implemented, we anticipate
that the number of outstanding shares of common stock will
decrease to approximately 10,052,807, the number of shares
currently reserved for issuance upon future grants, the exercise
of outstanding options and in lieu of cash compensation to
non-employee directors will decrease to 825,979, and the number
of shares reserved for issuance pursuant to the 2008 Stock
Incentive Plan, if such plan is adopted by the stockholders,
will decrease to 300,000.
There are no preemptive rights with respect to our common stock.
The Board of Directors recommends a vote FOR the proposal to
amend the Restated Certificate of Incorporation to effect a
reverse stock split of Superior Bancorp Common Stock by a ratio
of 1-for-4
and to decrease the authorized common stock of Superior Bancorp
to 15 million shares.
26
PROPOSAL NUMBER
THREE
ADOPTION OF THE SUPERIOR BANCORP 2008
INCENTIVE COMPENSATION PLAN
At the Annual Meeting, our stockholders are being asked to
approve the Superior Bancorp 2008 Incentive Compensation Plan
(the 2008 Plan). Our Board has approved and adopted
the 2008 Plan, subject to approval by our stockholders.
The 2008 Plan is intended to succeed the Third Amended and
Restated 1998 Stock Incentive Plan (the
1998 Plan). Approval of the 2008 Plan by our
stockholders will be considered approval of the 2008 Plan for
purposes of Sections 162(m) and 422 of the Code. If the
2008 Plan is approved by our stockholders, no awards will be
made under the 1998 Plan after such approval. If the 2008 Plan
is not approved by our stockholders, the 1998 Plan will remain
in full force and effect until its expiration date.
The principal features of the 2008 Plan are summarized below,
but the summary is qualified in its entirety by reference to the
2008 Plan itself. The full text of the 2008 Plan is attached to
this Proxy Statement as Annex B.
Purpose
of the 2008 Plan
The purpose of the 2008 Plan is to provide additional incentive
for our directors and key employees to further the growth,
development and financial success of Superior Bancorp and its
subsidiaries by personally benefiting through the ownership of
Superior Bancorp common stock, or other rights which recognize
such growth, development and financial success. Our Board also
believes the 2008 Plan will enable us to obtain and retain the
services of directors and employees who are considered essential
to our long-range success by offering them an opportunity to own
stock and other rights that reflect our financial success. The
2008 Plan is also designed to permit us to make awards intended
to be qualified performance-based compensation under
Section 162(m) of the Code and, accordingly, to be eligible
for deductibility by Superior Bancorp.
The 2008 Plan will become effective immediately upon stockholder
approval at the Annual Meeting.
Securities
Subject to the 2008 Plan
The maximum aggregate number of shares of common stock that may
be issued or transferred pursuant to awards under the 2008 Plan
is 1,200,000 shares, of which no more than
360,000 shares may be issued for full value
awards (defined under the 2008 Plan to mean any awards
permitted under the 2008 Plan that are neither stock options nor
stock appreciation rights, as more fully described under
Awards under the 2008 Plan below).
The 2008 Plan counts shares on a gross basis and
does not allow the re-grant of shares withheld or surrendered in
payment of the exercise price or tax withholding obligations of
an award. In the event of any termination, expiration, lapse or
forfeiture of an award granted under the 2008 Plan or the 1998
Plan, any shares subject to the award at such time will again be
made available for future grants under the 2008 Plan. In no
event, however, will any such shares of common stock again be
available for future grants under the 2008 Plan if such action
would cause an incentive stock option to fail to qualify as an
incentive stock option under Section 422 of the Code.
To the extent permitted by applicable law or any applicable
exchange rule, shares issued in assumption of, or in
substitution for, any outstanding awards of any entity acquired
in any form of combination by the company or any of its
subsidiaries will not be counted against the shares available
for issuance under the 2008 Plan.
The shares of common stock covered by the 2008 Plan may be
treasury shares, authorized but unissued shares or shares
purchased in the open market. For purposes of the 2008 Plan, the
fair market value of a share of common stock as of any given
date will be the closing sales price for a share of common stock
on the stock exchange or national market system on which the
common stock is listed on such date or, if there is no closing
sales price for the common stock on the date in question, the
closing sales price for a share of common stock on the last
preceding date for which such quotation exists, as reported in
The Wall Street Journal. The closing sales price for a
share of common stock on the NASDAQ Global Market on
March 6, 2008 was $4.84, as reported in The Wall Street
Journal.
27
Eligibility
Our employees and our directors are eligible to receive awards
under the 2008 Plan. As of March 6, 2008, we had
approximately 802 employees, and we currently have
16 directors, 13 of whom are non-employee directors. No
employee or director is entitled to participate in the 2008 Plan
as a matter of right, nor does any such participation constitute
assurance of continued employment or service. Only those
employees and directors who are selected to receive grants by
the administrator may participate in the 2008 Plan.
Awards
under the 2008 Plan
The 2008 Plan provides that the administrator may grant or issue
stock options, stock appreciation rights (SARs),
restricted stock, restricted stock units, dividend equivalents,
performance awards and other stock-based awards, or any
combination thereof. Each award will be set forth in a separate
agreement with the person receiving the award and will indicate
the type, terms and conditions of the award.
Non-Qualified Stock Options
(NQSOs). NQSOs will provide for the
right to purchase shares of common stock at a specified price,
and usually will become exercisable (as determined by the
administrator) in one or more installments after the grant date,
subject to the completion of the applicable vesting service
period or the attainment of pre-established performance goals.
NQSOs may be granted for any term specified by the
administrator, but the term may not exceed ten years.
Incentive Stock Options
(ISOs). ISOs will be designed to
comply with the applicable provisions of Section 422 of the
Code, and will be subject to certain restrictions contained in
the Code. Among such restrictions, ISOs must have an exercise
price per share that is not less than the fair market value of a
share of common stock on the date of grant, may only be granted
to our employees and must not be exercisable after a period of
ten years measured from the date of grant. However, if
subsequently modified, ISOs may cease to qualify for treatment
as ISOs and be treated as NQSOs. The total fair market value of
shares (determined as of the respective date or dates of grant)
for which one or more options granted to any employee (including
all options granted under the 2008 Plan and all other option
plans of Superior Bancorp or any parent or subsidiary
corporation) may for the first time become exercisable as ISOs
during any one calendar year may not exceed the sum of $100,000.
To the extent this limit is exceeded, the options granted will
be NQSOs. In the case of an ISO granted to an individual who
owns (or is deemed to own) more than 10% of the total combined
voting power of all classes of stock of Superior Bancorp or any
parent or subsidiary corporation, the 2008 Plan provides that
the exercise price of an ISO must be at least 110% of the fair
market value of a share of common stock on the date of grant,
and the ISO must not be exercisable after a period of five years
measured from the date of grant. Like NQSOs, ISOs usually will
become exercisable (as determined by the administrator) in one
or more installments after the grant date, subject to the
completion of the applicable vesting service period or the
attainment of pre-established performance goals.
Stock Appreciation Rights. Stock appreciation
rights provide for the payment of an amount to the holder based
upon the excess (if any) of the fair market value of our common
stock over the exercise price of the SAR. The exercise price per
share of a SAR must be at least 100% of the fair market value of
a share of common stock on the date of grant. SARs under the
2008 Plan will be settled in cash or shares of common stock, or
in a combination of both, at the election of the administrator.
SARs may be granted in connection with stock options or other
awards, or separately. SARs may be granted for any term
specified by the administrator, but the term may not exceed ten
years.
Restricted Stock. Restricted stock may be
issued at such price, if any, as may be determined by the
administrator and may be made subject to such restrictions
(including service vesting or vesting based on the satisfaction
of pre-established performance goals), as may be determined by
the administrator. In general, restricted stock may not be sold,
or otherwise hypothecated or transferred, until the vesting
restrictions and other restrictions applicable to such shares
lapse. A holder of restricted stock, unlike a holder of options
or restricted stock units, generally will have voting rights and
may receive dividends prior to the time when the restrictions
lapse.
Restricted Stock Units. Restricted stock units
provide for the issuance to the holder of shares of common
stock, subject to vesting conditions (including vesting based on
continued service or the satisfaction of pre-established
performance goals). The issuance of shares of common stock
pursuant to restricted stock units may be delayed beyond the
time at which the restricted stock units vest. Restricted stock
units may not be sold, or otherwise
28
hypothecated or transferred, and a holder of restricted stock
units will not have voting rights or dividend rights prior to
the time when the vesting conditions are satisfied and the
shares are issued. Restricted stock units generally will be
forfeited, and the underlying shares of stock will not be
issued, if the applicable vesting conditions are not met.
Dividend Equivalents. Dividend equivalents
represent the right to receive the value of the dividends per
share paid by us, if any, calculated with reference to a
specified number of shares of common stock. Dividend equivalent
rights may be granted in connection with full-value awards
granted under the 2008 Plan. Dividend equivalents may be paid in
cash or shares of common stock, or in a combination of both, at
the election of the administrator.
Performance Awards. Performance awards may be
granted by the administrator to employees or directors based
upon, among other things, the contributions, responsibilities
and other compensation of the particular recipient. Generally,
the amount paid or distributed under performance awards will be
based on specific performance goals and may be paid in cash or
in shares of common stock, or in a combination of both, at the
election of the administrator. Performance awards may include
phantom stock awards that provide for payments based
upon the value of our common stock. Performance awards may also
include bonuses granted by the administrator, which may be
payable in cash or in shares of common stock, or in a
combination of both.
Other Stock-Based Awards. The administrator
may grant to employees or directors other stock-based awards. An
other stock-based awards means any type of equity-based or
equity-related award not otherwise described by the terms of the
2008 Plan. Payment of other stock-based awards may be made in
cash, in shares of common stock, or a combination of cash and
common stock.
Section 162(m) Performance-Based
Awards. The administrator may designate employees
whose compensation for a given fiscal year may be subject to the
limit on deductible compensation imposed by Section 162(m)
of the Code. The administrator may grant to such employees and
other eligible employees awards under the 2008 Plan that are
paid, vest or become exercisable upon the achievement of
specified performance goals which are related to one or more
performance criteria, as applicable to Superior Bancorp or any
subsidiary, division, operating unit or individual. These
performance criteria include: net earnings (either before or
after interest, taxes, depreciation
and/or
amortization); gross or net sales or revenue; net income (either
before or after taxes); operating profit; cash flow (including,
but not limited to, operating cash flow and free cash flow);
return on assets; return on capital; return on
stockholders equity; return on sales; gross or net profit
or operating margin; costs; funds from operations; expense;
working capital; earnings per share; price per share of common
stock; regulatory ratings; market share; growth in loans
and/or other
assets; growth in deposits and various measures of credit
quality.
Performance goals established based on the performance criteria
may be measured either in absolute terms or as compared to any
incremental increase or decrease or as compared to the results
of a peer group. Except as provided by the administrator, the
achievement of each performance goal will be determined in
accordance with generally accepted accounting principles to the
extent applicable. At the time of grant, the administrator may
provide that objectively determinable adjustments will be made
for purposes of determining the achievement of one or more of
the performance goals established for an award. Any such
adjustments will be based on one or more of the following: items
related to a change in accounting principle; items relating to
financing activities; expenses for restructuring or productivity
initiatives; other non-operating items; items related to
acquisitions; items attributable to the business operations of
any entity we acquire during the performance period; items
related to the disposal of a business or segment of a business;
or items related to discontinued operations that do not qualify
as a segment of a business under GAAP.
Award Limits. The 2008 Plan provides that
awards covering not more than 120,000 shares may be granted
to any individual in any calendar year, subject to adjustment
under certain circumstances in order to prevent the dilution or
enlargement of the potential benefits intended to be made
available under the 2008 Plan, as described below. These award
limits will be adjusted appropriately in the event that the
1-for-4
reverse stock split of Superior Bancorp common stock
(Proposal Two) is approved by stockholders at the Annual
Meeting and becomes effective. See Adjustments for
Stock Splits, Recapitalizations and Mergers below.
29
Vesting
and Exercise of Awards
The applicable award agreement will contain the period during
which the right to exercise the award in whole or in part vests,
including the events or conditions upon which the vesting of an
award may accelerate. No portion of an award which is not vested
at the holders termination of employment or termination of
directorship will subsequently become vested, except as may be
otherwise provided by the administrator either in the agreement
relating to the award or by action following the grant of the
award.
Generally, an option or SAR may only be exercised while such
person remains our employee or director or for a specified
period of time (up to the remainder of the award term) following
the holders termination of employment or directorship, as
applicable. An award may be exercised for any vested portion of
the shares subject to such award until the award expires.
Only whole shares of common stock may be purchased or issued
pursuant to an award. Any required payment for the shares
subject to an award will be paid in the form of cash or a check
payable to us in the amount of the aggregate purchase price.
However, the administrator may in its discretion and subject to
applicable laws allow payment through one or more of the
following:
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the delivery of certain shares of common stock owned by the
holder;
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the surrender of shares of common stock which would otherwise be
issuable upon exercise or vesting of the award;
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the delivery of property of any kind which constitutes good and
valuable consideration;
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with respect to options, a sale and remittance procedure
pursuant to which the holder will place a market sell order with
a broker with respect to the shares of common stock then
issuable upon exercise of the option, provided the broker timely
pays a sufficient portion of the net proceeds of the sale to us
in satisfaction of the option exercise price for the purchased
shares plus all applicable income and employment taxes we are
required to withhold by reason of such exercise; or
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any combination of the foregoing.
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Transferability
of Awards
Awards generally may not be sold, pledged, assigned or
transferred in any manner other than by will or by the laws of
descent and distribution or, subject to the consent of the
administrator, pursuant to a domestic relations order, unless
and until such award has been exercised, or the shares
underlying such award have been issued, and all restrictions
applicable to such shares have lapsed. Notwithstanding the
foregoing, awards other than ISOs may also be transferred to
certain family members and trusts or an entity owned by these
family members and trusts with the administrators consent.
Awards may be exercised, during the lifetime of the holder, only
by the holder or such permitted transferee.
2008 Plan
Benefits
No awards will be granted under the 2008 Plan until the 2008
Plan is approved by our stockholders. The future benefits that
will be received under the 2008 Plan by our current directors,
executive officers and all eligible employees are not currently
determinable.
Adjustments
for Stock Splits, Recapitalizations and Mergers
In the event of any recapitalization, reclassification, stock
split, reverse stock split, reorganization, merger,
consolidation,
split-up,
spin-off or other transaction that affects our common stock, the
administrator of the 2008 Plan will equitably adjust any or all
of the following in order to prevent the dilution or enlargement
of the benefits or potential benefits intended to be made
available under the 2008 Plan or with respect to any award:
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the number and kind of shares of common stock (or other
securities or property) with respect to which awards may be
granted or awarded under the 2008 Plan;
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the limitation on the maximum number and kind of shares that may
be subject to one or more awards granted to any one individual
during any calendar year;
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the number and kind of shares of common stock (or other
securities or property) subject to outstanding awards under the
2008 Plan;
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the number and kind of shares of common stock (or other
securities or property) for which automatic grants are
subsequently to be made to non-employee directors; and
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the grant or exercise price with respect to any outstanding
award.
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Consequently, in the event that the
1-for-4
reverse stock split of Superior Bancorp common stock
(Proposal Two) is approved by stockholders at the Annual
Meeting and becomes effective, the administrator will make
appropriate adjustments to the 2008 Plan as described above.
Change in
Control
In the event of a Change in Control (as defined in the 2008
Plan), each outstanding award will be assumed, or substituted
for an equivalent award, by the successor corporation. If the
successor corporation does not provide for the assumption or
substitution of the awards, the administrator may cause all
awards to become fully exercisable prior to the consummation of
the transaction constituting a Change in Control. The
administrator may also grant awards under the 2008 Plan which
provide for immediate accelerated vesting upon the consummation
of a Change in Control or the occurrence of a subsequent event,
such as the termination of the participants employment or
service.
Administration
of the 2008 Plan
The Compensation Committee will be the administrator of the 2008
Plan. The Committee is expected to consist solely of two or more
directors, each of whom is intended to be independent under
rules promulgated by a securities exchange on which our common
stock is listed, and to qualify as both a non-employee
director, as defined in
Rule 16b-3
and an outside director for purposes of
Section 162(m) of the Code. The Committee may delegate its
authority to grant certain awards to one or more of our
officers. Any such officer will not be delegated the authority
to grant awards to individuals who are subject to the reporting
requirements of Section 16 of the Securities Exchange Act
of 1934, as amended. The administrator has the power to:
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select which directors and employees are to receive awards and
the terms of such awards, consistent with the 2008 Plan;
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determine whether options are to be NQSOs or ISOs, or whether
awards are to be qualified performance-based
compensation under Section 162(m) of the Code;
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construe and interpret the terms of the 2008 Plan and awards
granted pursuant to the 2008 Plan;
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adopt rules for the administration, interpretation and
application of the 2008 Plan;
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interpret, amend or revoke any of the rules adopted for the
administration, interpretation and application of the 2008
Plan; and
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amend one or more outstanding awards in a manner that does not
adversely affect the rights and obligations of the holder of
such award (except in certain limited circumstances).
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Amendment
and Termination of the 2008 Plan
The administrator may amend the 2008 Plan at any time, subject
to stockholder approval to the extent required by applicable law
or regulation or the listing standards of the NASDAQ Global
Market (or any other market or stock exchange on which the
common stock is at the time primarily traded). Additionally,
stockholder approval will be specifically required to increase
the maximum number of shares of common stock which may be issued
under the 2008 Plan, change the eligibility requirements or
decrease the exercise price of any outstanding option or stock
appreciation right granted under the 2008 Plan.
The administrator may suspend or terminate the 2008 Plan at any
time. However, in no event may an award be granted pursuant to
the 2008 Plan on or after the tenth anniversary of the effective
date of the 2008 Plan.
31
Federal
Income Tax Consequences Associated with the 2008 Plan
The following is a general summary under current law of the
material federal income tax consequences to an employee,
director or consultant granted an award under the 2008 Plan.
This summary deals with the general federal income tax
principles that apply and is provided only for general
information. Some kinds of taxes, such as state, local and
foreign income taxes and federal employment taxes, are not
discussed. Tax laws are complex and subject to change and may
vary depending on individual circumstances and from locality to
locality. The summary does not discuss all aspects of federal
income taxation that may be relevant in light of a holders
personal circumstances. This summarized tax information is not
tax advice, and a holder of an award should rely on the advice
of his or her legal and tax advisors.
Non-Qualified Stock Options. If an optionee is
granted a NQSO under the 2008 Plan, the optionee should not have
taxable income on the grant of the option. Generally, the
optionee should recognize ordinary income at the time of
exercise in an amount equal to the fair market value of a share
of common stock at such time, less the exercise price paid. The
optionees basis in the stock for purposes of determining
gain or loss on a subsequent sale or disposition of such shares
generally will be the fair market value of the common stock on
the date the optionee exercises such option. Any subsequent gain
or loss generally will be taxable as a capital gain or loss.
Incentive Stock Options. No taxable income
should be recognized by the optionee at the time of the grant of
an ISO, and no taxable income should be recognized for regular
federal income tax purposes at the time the option is exercised;
however, the excess of the fair market value of the common stock
received over the option price is an item of
adjustment for alternative minimum tax purposes. The
optionee will recognize taxable income in the year in which the
purchased shares are sold or otherwise made the subject of a
taxable disposition. For federal income tax purposes,
dispositions are divided into two categories: qualifying and
disqualifying. A qualifying disposition occurs if the sale or
other disposition is made more than two years after the date the
option for the shares involved in such sale or disposition is
granted and more than one year after the date the shares are
transferred upon exercise. If the sale or disposition occurs
before these two periods are satisfied, then a disqualifying
disposition will result.
Upon a qualifying disposition, the optionee should recognize
long-term capital gain in an amount equal to the excess of the
amount realized upon the sale or other disposition of the
purchased shares over the exercise price paid for the shares. If
there is a disqualifying disposition of the shares, then the
excess of the fair market value of those shares on the exercise
date over the exercise price paid for the shares should be
taxable as ordinary income to the optionee. Any additional gain
or loss recognized upon the disposition will be recognized as a
capital gain or loss by the optionee.
We should not be entitled to any federal income tax deduction if
the optionee makes a qualifying disposition of the shares. If
the optionee makes a disqualifying disposition of the purchased
shares, then generally we (or our subsidiary corporation) should
be entitled to a federal income tax deduction, for the taxable
year in which such disposition occurs, equal to the ordinary
income recognized by the optionee.
Stock Appreciation Rights. No taxable income
generally should be recognized upon the grant of a SAR, but,
upon exercise of the SAR, the cash or the fair market value of
the shares received should be taxable as ordinary income to the
recipient in the year of such exercise.
Restricted Stock. In general, a recipient of
restricted stock should not be taxed upon the grant or purchase
of restricted stock that is subject to a substantial risk
of forfeiture and non-transferable, within the meaning of
Section 83 of the Code. However, at the time the restricted
stock is no longer subject to the substantial risk of forfeiture
(e.g., when the restrictions lapse on a vesting date),
the participant should recognize ordinary income equal to the
fair market value of the common stock on the date the
restrictions lapse, less the amount the participant paid, if
any, for such restricted stock. A recipient of restricted stock
may, however, make an election under Section 83(b) of the
Code to be taxed at the time of the grant or purchase on an
amount equal to the fair market value of the common stock on the
date of transfer, less the amount paid, if any, for such
restricted stock. If a timely Section 83(b) election is
made, the recipient should not recognize any additional income
as and when the restrictions applicable to the restricted stock
lapses.
Restricted Stock Units. A recipient of
restricted stock units generally should not have ordinary income
upon grant of restricted stock units. When the shares of common
stock are delivered under the terms of the award, the recipient
should recognize ordinary income equal to the fair market value
of the shares delivered, less any amount paid by the participant
for such shares.
32
Dividend Equivalent Awards and Performance
Awards. A recipient of a dividend equivalent
award or a performance award generally will not recognize
taxable income at the time of grant. However, at the time such
an award is paid, whether in cash or in shares of common stock,
the participant will recognize ordinary income equal to the
value received.
Tax Deductions and Section 162(m) of the
Code. Except as otherwise described above with
respect to incentive stock options, we generally should be
entitled to a federal income tax deduction when and for the same
amount the recipient recognizes as ordinary income, subject to
the limitations of Section 162(m) of the Code with respect
to compensation paid to certain covered employees.
Under Section 162(m), income tax deductions of
publicly-held corporations may be limited to the extent total
compensation (including base salary, annual bonus, stock option
exercises and non-qualified benefits paid) for certain executive
officers exceeds $1 million in any one year. The
Section 162(m) deduction limit, however, does not apply to
certain performance-based compensation as provided
for by the Code and established by an independent compensation
committee. In particular, stock options and SARs will satisfy
the performance-based compensation exception if the
awards are made by a qualifying compensation committee, the
underlying plan sets the maximum number of shares that can be
granted to any person within a specified period and the
compensation is based solely on an increase in the stock price
after the grant date (i.e., the exercise price or base
price is not less than the fair market value of the stock
subject to the award on the grant date). Other awards granted
under the 2008 Plan may be qualified performance-based
compensation for purposes of Section 162(m), if such
awards are granted or vest based upon the achievement of one or
more pre-established objective performance goals using one of
the performance criteria described previously.
The 2008 Plan is structured in a manner that is intended to
provide the administrator with the ability to provide awards
that satisfy the requirements for qualified
performance-based compensation under Section 162(m)
of the Code where appropriate. If the administrator determines
that it is in the companys best interests to make use of
such awards, we believe that the remuneration attributable to
those awards will not be subject to the $1 million
limitation. We have not, however, requested a ruling from the
Internal Revenue Service or an opinion of counsel regarding this
issue. This discussion will neither bind the Internal Revenue
Service nor preclude the Internal Revenue Service from adopting
a contrary position.
Section 409A of the Code. Certain awards
under the 2008 Plan may be considered non-qualified
deferred compensation for purposes of Section 409A of
the Code, which imposes certain additional requirements
regarding the payment of deferred compensation. Generally, if at
any time during a taxable year a non-qualified deferred
compensation plan fails to meet the requirements of
Section 409A, or is not operated in accordance with those
requirements, all amounts deferred under the non-qualified
deferred compensation plan for the taxable year and all
preceding taxable years, by or for any participant with respect
to whom the failure relates, are includible in the gross income
of the participant for the taxable year to the extent not
subject to a substantial risk of forfeiture and not previously
included in gross income. If a deferred amount is required to be
included in income under Section 409A, the amount also is
subject to interest and an additional income tax. The interest
imposed is equal to the interest at the underpayment rate plus
one percentage point, imposed on the underpayments that would
have occurred had the compensation been includible in income for
the taxable year when first deferred, or if later, when not
subject to a substantial risk of forfeiture. The additional
income tax is equal to 20% of the compensation required to be
included in gross income.
Vote
Required
Adoption of the 2008 Plan requires an affirmative vote of the
holders of a majority of the shares of common stock cast on such
proposal, in person or by proxy, provided that there is a quorum
of stockholders represented at the Annual Meeting.
Recommendation
of the Board of Directors
The Board of Directors unanimously recommends that
stockholders vote FOR the adoption of the Superior Bancorp 2008
Incentive Compensation Plan.
33
RELATIONSHIP
WITH INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
General
Our independent registered public accounting firm for the fiscal
year ended December 31, 2006 was Carr, Riggs &
Ingram, LLC (Carr Riggs). On August 10, 2007,
the Audit Committee determined not to reengage Carr Riggs as the
independent registered public accounting firm to audit Superior
Bancorps financial statements. Carr Riggs reports on
the Superior Bancorps financial statements for the
preceding two years did not contain any adverse opinion or
disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope, or accounting principles, except that
Carr Riggs report dated March 16, 2006, that was
included in our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2005, which was
filed with the Securities and Exchange Commission on
March 16, 2006, expressed an opinion that Superior Bancorp
and its subsidiaries had not maintained effective internal
control over financial reporting as of December 31, 2005,
based on criteria established in Internal Control -
Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. During Superior
Bancorps two most recent fiscal years and the subsequent
interim periods preceding Carr Riggs dismissal, there have
been no disagreements with Carr Riggs on any matter of
accounting principles or practices, financial statement
disclosure, or auditing scope or procedure which disagreements,
if not resolved to the satisfaction of Carr Riggs, would have
caused Carr Riggs to make reference to the subject matter of the
disagreements in connection with its reports on Superior
Bancorps financial statements. Carr Riggs report
dated March 16, 2007, that was included in our Annual
Report on
Form 10-K
for the fiscal year ended December 31, 2006, which was
filed with the Securities and Exchange Commission on
March 16, 2007, expressed an unqualified opinion on the
effectiveness of the Companys and subsidiaries
internal control over financial reporting as of
December 31, 2006.
On August 10, 2007, the Audit Committee engaged Grant
Thornton LLP (Grant Thornton) to serve as the
independent registered public accounting firm to audit our
financial statements. During Superior Bancorps two most
recent fiscal years and the subsequent interim periods preceding
the engagement of Grant Thornton, Superior Bancorp has not
consulted with Grant Thornton regarding either (i) the
application of accounting principles to a completed or proposed
specified transaction or the type of audit opinion that might be
rendered on Superior Bancorps financial statements, or
(ii) any matter that was the subject of a disagreement with
Carr Riggs or a reportable event as described in
Item 304(a)(1)(v) of the Securities and Exchange
Commissions
Regulation S-K.
The Audit Committee has not yet made a recommendation to the
Board of Directors concerning the appointment of an independent
registered public accounting firm to audit our financial
statements for the current fiscal year ending December 31,
2008. Management expects representatives from Grant Thornton to
attend 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.
Audit
Fees
The aggregate fees (including reimbursable expenses) paid to
Grant Thornton for professional services rendered for the audit
of Superior Bancorps financial statements for the fiscal
year ended December 31, 2007 and for the reviews of the
financial statements for Superior Bancorps Quarterly
Report on
Form 10-Q
for the third quarter of 2007 were $288,013. The aggregate fees
(including reimbursable expenses) paid to Carr Riggs for
professional services rendered for the audit of Superior
Bancorps financial statements for the fiscal year ended
December 31, 2006 and for the reviews of the financial
statements for Superior Bancorps Quarterly Reports on
Form 10-Q
for 2006 were $585,710.
Audit
Related Fees
The aggregate audit related fees (including
reimbursable expenses) paid to Grant Thornton for the fiscal
year ended December 31, 2007 were $60,000. The aggregate
audit related fees (including reimbursable expenses) paid
to Carr Riggs for the fiscal year ended December 31, 2006
were $198,444. Audit related fees primarily consist of fees
relating to benefit plan audits.
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Tax
Fees
The aggregate tax fees paid to Grant Thornton for the fiscal
year ended December 31, 2007 were $58,000, and the
aggregate tax fees paid to Carr Riggs for the fiscal year ended
December 31, 2006 were $15,000.
All Other
Fees
The aggregate fees paid to Grant Thornton and Carr Riggs for all
other services rendered to Superior Bancorp, other than services
described above, were $0 for the fiscal years ended
December 31, 2007 and 2006, respectively.
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 our
external auditors 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. Two members of the
Audit Committee are audit committee financial
experts under the Rules of the Securities and Exchange
Commission. The Audit Committee oversees Superior Bancorps
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 companys
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 Superior Bancorps 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 Superior
Bancorps 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 Superior
Bancorp, including the matters in the written disclosures
required by the Independence Standards Board.
The Audit Committee discussed with Superior Bancorps
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 Superior Bancorps internal controls, and
the overall quality of Superior Bancorps financial
reporting.
(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.
35
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 Superior Bancorps audited
consolidated financial statements be included in the annual
report on
Form 10-K
for the fiscal year ended December 31, 2007, as filed with
the SEC.
The foregoing report is submitted by the following directors of
Superior Bancorp, comprising all of the members of the Audit
Committee of the Board of Directors as of December 31, 2007.
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 2009 annual meeting of
stockholders must be received by us no later than the close of
business on November 24, 2008. You may also submit a
proposal for presentation at the annual meeting of stockholders
to be held in 2009, 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 February 7, 2009, 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: Corporate Secretary
36
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 promptly SIGN, DATE and RETURN the enclosed Proxy or vote
over the Internet or by telephone.
By Order of the Board of Directors,
William H. Caughran
Secretary
Birmingham, Alabama
March 24, 2008
37
ANNEX A
PROPOSED
AMENDMENT TO ARTICLE IV, SECTION 4.1 AND
SECTION 4.4 OF
THE RESTATED CERTIFICATE OF INCORPORATION OF SUPERIOR
BANCORP, AS
APPROVED BY THE BOARD OF DIRECTORS AS OF MARCH 6, 2008
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 2008 Annual Meeting of
Stockholders of the Corporation, (a) the first paragraph of
Article IV, Section 4.1 of the Restated Certificate of
Incorporation of the Corporation shall be amended, and
(b) a new Section 4.4 shall be added to
Article IV of the Restated Certificate of Incorporation of
the Corporation, to read, respectively, as follows:
Section 4.1 Authorization
of Capital. Effective at 11:59 p.m.,
Eastern Time, on the filing date of this Certificate of
Amendment of Restated Certificate of Incorporation of the
Corporation (the Effective Time), the total number
of shares of all classes of capital stock which the Corporation
shall have authority to issue shall be Twenty Million
(20,000,000) shares, comprising Fifteen Million (15,000,000)
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 Twenty
Thousand Dollars ($20,000.00).
Section 4.4 Reverse
Stock Split. As of the Effective Time (as
defined in Section 4.1 hereof), a one-for-four reverse
stock split of the Common Stock shall become effective, such
that every four shares of Common Stock outstanding (including
treasury shares) immediately prior to the Effective Time shall
be reclassified and combined into one share of Common Stock
automatically and without any further action by the holder
thereof upon the Effective Time, and shall represent one share
of Common Stock from and after the Effective Time. No fractional
shares of Common Stock shall be issued as a result of such
reclassification and combination. In lieu of any fractional
share to which the stockholder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by
the product of (a) the average of the closing prices of the
Common Stock as reported on the Nasdaq Global Market or other
principal market of the Common Stock for each of the five
trading days immediately preceding the Effective Time, and
(b) four. Following the Effective Time, each holder of
Common Stock shall be entitled to receive, upon surrender to the
Corporation of certificates representing Common Stock prior to
the combination and reclassification described herein (Old
Certificates), a certificate or certificates representing
the number of shares held by such holder after such combination
and reclassification (New Certificates). From and
after the Effective Time, Old Certificates shall represent only
the right to receive New Certificates.
A-1
ANNEX B
PROPOSED
SUPERIOR BANCORP 2008 INCENTIVE COMPENSATION PLAN
Superior Bancorp, a Delaware corporation (the
Company), by resolution of its Board of
Directors, hereby adopts the Superior Bancorp 2008 Incentive
Compensation Plan (the Plan). The Plan will
become effective upon the approval of the Companys
stockholders (the Effective Date).
The purpose of the Plan is to promote the success and enhance
the value of the Company by linking the personal interests of
its directors, officers and employees to those of the
Companys stockholders and by providing such individuals
with an incentive for outstanding performance to generate
superior returns to the Companys stockholders. The Plan is
further intended to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of
directors, officers and employees upon whose judgment, interest,
and special effort the successful conduct of the Companys
operation is largely dependent.
ARTICLE I
DEFINITIONS
Wherever the following terms are used in the Plan they shall
have the meanings specified below, unless the context clearly
indicates otherwise. The singular pronoun shall include the
plural where the context so indicates.
1.1. Administrator shall
mean the entity that conducts the general administration of the
Plan as provided in Article X.
1.2. Award shall mean an
Option, a Restricted Stock Award, a Restricted Stock Unit Award,
a Performance Award, a Dividend Equivalents Award, a Stock
Appreciation Right or an Other Stock-Based Award, which may be
awarded or granted under the Plan (collectively,
Awards).
1.3. Award Agreement shall
mean a written agreement executed by an authorized officer of
the Company and the Holder which shall contain such terms and
conditions with respect to an Award as the Administrator shall
determine, consistent with the Plan.
1.4. Award Limit shall mean
120,000 shares of Common Stock for grants to any individual
in any calendar year as adjusted pursuant to Section 11.3.
1.5. Board shall mean the
Board of Directors of the Company.
1.6. Change in Control
shall mean the occurrence of any of the following
transactions or events occurring on or after the Effective Date:
(a) a merger, consolidation or other corporate
reorganization of the Company in which the Company does not
survive, or, if it survives, the shareholders of the Company
before such transaction do not own more than 50% of,
respectively: (i) the common stock of the surviving entity,
and (ii) the combined voting power of any other outstanding
securities entitled to vote on the election of directors of the
surviving entity;
(b) the acquisition, other than from the Company, by any
individual, entity or group (within the meaning of Section
l3(d)(3) or l4(d)(2) of the Exchange Act of beneficial ownership
of 25% or more of either: (i) the then outstanding shares
of Common Stock of the Company, or (ii) the combined voting
power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors;
provided, however, that neither of the following shall
constitute a Change in Control:
(A) any acquisition by the Company, any of its
subsidiaries, or any employee benefit plan (or related trust) of
the Company or its subsidiaries, or
(B) any acquisition by any corporation, entity, or group,
if, following such acquisition, more than 50% of the then
outstanding voting rights of such corporation, entity or group
are owned, directly or
B-1
indirectly, by all or substantially all of the persons who were
the owners of the Common Stock of the Company immediately prior
to such acquisition;
(c) individuals who, as of the effective date of the Plan,
constitute the Board of the Company (the Incumbent
Board) cease for any reason to constitute at least a
majority of the Board, provided that any individual becoming a
director subsequent to such date, whose election, or nomination
for election by the Companys shareholders, was approved by
a vote of at least a majority of the directors then comprising
the Board, shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose,
any individual whose initial assumption of office is in
connection with an actual or threatened election contest
relating to the election of the directors of the Company (as
such terms are used in
Rule 14a-l
1 of Regulation l4A promulgated under the Exchange Act; or
(d) approval by the shareholders of the Company of:
(i) a complete liquidation or dissolution of the
Company, or
(ii) the sale or other disposition of all or substantially
all the assets of the Company, other than to a corporation, with
respect to which immediately following such sale or other
disposition more than 50%, respectively, of the then
outstanding shares of common stock of such corporation, and the
combined voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the election
of directors, is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
outstanding Common Stock of the Company, and the outstanding
voting securities of the Company immediately prior to such sale
or other disposition, in substantially the same proportions as
their ownership, immediately prior to such sale or disposition,
of the outstanding Common Stock of the Company and outstanding
securities of the Company, as the case may be.
1.7. Code shall mean the
Internal Revenue Code of 1986, as amended from time to time.
1.8. Committee shall mean
the Compensation Committee of the Board, or another committee or
subcommittee of the Board, appointed as provided in
Section 10.1.
1.9. Common Stock shall
mean the common stock of the Company, par value $0.001 per share.
1.10. Company shall mean
Superior Bancorp., a Delaware corporation.
1.11. Covered Employee
shall mean any Employee who is, or the Committee determines
could be, a covered employee within the meaning of
Section 162(m) of the Code.
1.12. Director shall mean a
member of the Board.
1.13. Dividend Equivalent
shall mean a right to receive the equivalent value (in cash
or Common Stock) of dividends paid on Common Stock, awarded
under Section 8.3 of the Plan.
1.14. DRO shall mean a
domestic relations order as defined by the Code or Title I
of the Employee Retirement Income Security Act of 1974, as
amended from time to time, or the rules thereunder.
1.15. Effective Date shall
mean the date the Plan is approved by the Companys
stockholders.
1.16. Employee shall mean
any officer or other employee (as defined in accordance with
Section 3401(c) of the Code) of the Company, or of any
Subsidiary.
1.17. Exchange Act shall
mean the Securities Exchange Act of 1934, as amended from time
to time.
1.18. Fair Market Value
means, as of any date, the value of a share of Common Stock
determined as follows:
(a) If the Common Stock is listed on any established stock
exchange (such as the New York Stock Exchange, the NASDAQ Global
Market and the NASDAQ Global Select Market) or any national
market system, including without limitation any market system of
The NASDAQ Stock Market, the value of a share of Common Stock
shall be the closing sales price for a share of Common Stock as
quoted on such exchange or
B-2
system for such date, or if there is no closing sales price for
a share of Common Stock on the date in question, the closing
sales price for a share of Common Stock on the last preceding
date for which such quotation exists, as reported in The Wall
Street Journal or such other source as the Administrator
deems reliable;
(b) If the Common Stock is regularly quoted by a recognized
securities dealer but closing sales prices are not reported, the
value of a share of Common Stock shall be the mean of the high
bid and low asked prices for such date or, if there are no high
bid and low asked prices for a share of Common Stock on the date
in question, the high bid and low asked prices for a share of
Common Stock on the last preceding date for which such
information exists, as reported in The Wall Street Journal
or such other source as the Administrator deems
reliable; or
(c) If the Common Stock is neither listed on an established
stock exchange or a national market system nor regularly quoted
by a recognized securities dealer, the value of a share of
Common Stock shall be established by the Administrator in good
faith.
1.19. Fiscal Year means the
fiscal year of the Company.
1.20. Full Value Award
means any Award other than an Option or a Stock Appreciation
Right.
1.21. Holder shall mean a
person who has been granted an Award.
1.22. Incentive Stock Option
shall mean an option which conforms to the applicable
provisions of Section 422 of the Code and which is
designated as an Incentive Stock Option by the Administrator.
1.23. Non-Employee Director
shall mean a member of the Board who is not an Employee.
1.24. Non-Qualified Stock
Option shall mean an Option which is not
designated as an Incentive Stock Option by the Administrator.
1.25. Option shall mean a
stock option granted under Article IV of the Plan. An
Option granted under the Plan shall, as determined by the
Administrator, be either a Non-Qualified Stock Option or an
Incentive Stock Option; provided, however, that Options
granted to Non-Employee Directors shall be Non-Qualified Stock
Options.
1.26. Other Stock-Based Award
shall have the meaning set forth in Section 8.5 of the
Plan.
1.27. Performance Award
shall mean a performance or incentive award that is
denominated in stock and is paid in cash, Common Stock or a
combination of both, awarded under Section 8.2 of the Plan.
1.28. Performance Criteria
means the criteria (and adjustments) that the Committee
selects for an Award for purposes of establishing the
Performance Goal or Performance Goals for a Performance Period,
determined as follows:
(a) The Performance Criteria that shall be used to
establish Performance Goals are limited to the following:
(i) net earnings (either before or after (A) interest,
(B) taxes, (C) depreciation and
(D) amortization), (ii) gross or net sales or revenue,
(iii) net income (either before or after taxes),
(iv) operating profit, (v) cash flow (including, but
not limited to, operating cash flow and free cash flow),
(vi) return on assets, (vii) return on capital,
(viii) return on stockholders equity,
(ix) return on sales, (x) gross or net profit or
operating margin, (xi) costs, (xii) funds from
operations, (xiii) expense, (xiv) working capital,
(xv) earnings per share, and (xvi) price per share of
Common Stock, (xvii) regulatory ratings,
(xviii) market share, (xix) growth in loans
and/or other
assets, (xx) growth in deposits and (xxi) various
measures of credit quality, any of which may be measured either
in absolute terms or as compared to any incremental increase or
decrease or as compared to results of a peer group.
(b) The Committee may, in its discretion, at the time of
grant, specify in the Award that one or more objectively
determinable adjustments shall be made to one or more of the
Performance Goals. Such adjustments may include one or more of
the following: (i) items related to a change in accounting
principle; (ii) items relating to financing activities;
(iii) expenses for restructuring or productivity
initiatives; (iv) other non-operating items; (v) items
related to acquisitions; (vi) items attributable to the
business operations of any entity acquired by the Company during
the Performance Period; (vii) items related to the disposal
of a business
B-3
or segment of a business; or (viii) items related to
discontinued operations that do not qualify as a segment of a
business under United States generally accepted accounting
principles (GAAP).
1.29. Performance Goals
means, for a Performance Period, one or more goals
established in writing by the Committee for the Performance
Period based upon one or more Performance Criteria. Depending on
the Performance Criteria used to establish such Performance
Goals, the Performance Goals may be expressed in terms of
overall Company performance or the performance of a division,
business unit, or an individual. The achievement of each
Performance Goal shall be determined in accordance with GAAP to
the extent applicable.
1.30. Performance Period
means one or more periods of time, which may be of varying
and overlapping durations, as the Committee may select, over
which the attainment of one or more Performance Goals will be
measured for the purpose of determining a Holders right
to, and the payment of, a Performance Award.
1.31. Plan shall mean the
Superior Bancorp 2008 Incentive Compensation Plan, as amended
from time to time.
1.32. Prior Award shall
mean a stock option, restricted stock or other stock award
granted under any Prior Plan.
1.33. Prior Plan shall mean
the Third Amended and Restated 1998 Stock Incentive Plan of The
Banc Corporation, as amended from time to time.
1.34. Restricted Stock
shall mean Common Stock awarded under Article VII of
the Plan that is subject to repurchase or forfeiture.
1.35. Restricted Stock Units
shall mean rights to receive Common Stock or its cash
equivalent awarded under Section 8.4.
1.36. Rule 16b-3
shall mean
Rule 16b-3
promulgated under the Exchange Act, as such Rule may be amended
from time to time.
1.37. Securities Act shall
mean the Securities Act of 1933, as amended from time to time.
1.38. Stock Appreciation Right
shall mean a stock appreciation right granted under
Article IX of the Plan.
1.39. Subsidiary means any
entity (other than the Company), whether domestic or foreign, in
an unbroken chain of entities beginning with the Company if each
of the entities other than the last entity in the unbroken chain
beneficially owns, at the time of the determination, securities
or interests representing more than fifty percent (50%) of the
total combined voting power of all classes of securities or
interests in one of the other entities in such chain.
1.40. Subsidiary Corporation
shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken
chain then owns stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one
of the other corporations in such chain.
1.41. Substitute Award
shall mean an Award granted under this Plan upon the
assumption of, or in substitution for, outstanding equity awards
previously granted by a company or other entity in connection
with a corporate transaction, such as a merger, combination,
consolidation or acquisition of property or stock; provided,
however, that in no event shall the term Substitute
Award be construed to refer to an award made in connection
with the cancellation and repricing of an Option or Stock
Appreciation Right.
1.42. Termination of
Directorship shall mean the time when a Holder who
is a Non-Employee Director ceases to be a Director for any
reason, including, without limitation, a termination by
resignation, failure to be elected, death or retirement. The
Administrator, in its discretion, shall determine the effect of
all matters and questions relating to Termination of
Directorship with respect to Non-Employee Directors.
1.43. Termination of Employment
shall mean the time when the employee-employer relationship
between a Holder and the Company or any Subsidiary is terminated
for any reason, with or without cause, including, without
limitation, a termination by resignation, discharge, death,
disability or retirement; but excluding terminations where there
is a simultaneous reemployment or continuing employment of a
Holder by the Company or any Subsidiary.
B-4
The Administrator, in its discretion, shall determine the effect
of all matters and questions relating to Termination of
Employment, including, without limitation, the question of
whether a Termination of Employment resulted from a discharge
for cause; provided, however, that, with respect to
Incentive Stock Options, unless the Administrator otherwise
provides in the terms of the Award Agreement or otherwise, a
leave of absence, change in status from an employee to an
independent contractor or other change in the employee-employer
relationship shall constitute a Termination of Employment if,
and to the extent that, such leave of absence, change in status
or other change interrupts employment for the purposes of
Section 422(a)(2) of the Code and the then applicable
regulations and revenue rulings under said Section. For purposes
of the Plan, a Holders employee-employer relationship
shall be deemed to be terminated in the event that the
Subsidiary employing such Holder ceases to remain a Subsidiary
following any merger, sale of stock or other corporate
transaction or event (including, without limitation,
a spin-off).
ARTICLE II
SHARES
SUBJECT TO PLAN
2.1. Shares Subject to Plan.
(a) Subject to Section 11.3 and Section 2.1(b),
the aggregate number of shares of Common Stock that may be
issued or transferred pursuant to Awards under the Plan shall be
1,200,000 shares (the Initial Authorized
Shares). Notwithstanding the preceding sentence, the
aggregate number of shares of Common Stock that may be issued or
transferred pursuant to Full Value Awards under the Plan shall
not exceed 360,000 shares.
(b) To the extent that an Award under the Plan or a Prior
Award under the Prior Plan terminates, expires, is settled in
cash, lapses or is forfeited for any reason, any shares of
Common Stock then subject to such Award shall again be available
for the grant of an Award pursuant to the Plan. To the extent
permitted by applicable law or any exchange rule, shares of
Common Stock issued in assumption of, or in substitution for,
any outstanding awards of any entity acquired in any form of
combination by the Company or any Subsidiary shall not be
counted against shares of Common Stock available for grant
pursuant to this Plan. The payment of Dividend Equivalents in
cash in conjunction with any outstanding Awards shall not be
counted against the shares available for issuance under the
Plan. Notwithstanding the provisions of this
Section 2.1(b), no shares of Common Stock may again be
optioned, granted or awarded if such action would cause an
Incentive Stock Option to fail to qualify as an incentive stock
option under Section 422 of the Code. In addition, the
following shares of Common Stock shall not become available for
purposes of the Plan: (1) shares of Common Stock previously
owned or acquired by the Holder that are delivered to the
Company, or withheld from an Award, to pay the exercise price,
(2) shares of Common Stock that are delivered or withheld
for purposes of satisfying a tax withholding obligation, or
(3) shares of Common Stock reserved for issuance upon the
grant of a SAR that exceed the number of shares actually issued
upon exercise.
2.2. Stock Distributed. Any
Common Stock distributed pursuant to an Award shall consist, in
whole or in part, of authorized and unissued Common Stock,
shares of Common Stock held in treasury or shares of Common
Stock purchased on the open market.
2.3. Limitation on Number of Shares Subject to
Awards. Notwithstanding any provision in the
Plan to the contrary, and subject to Article XI, the
maximum number of shares of Common Stock with respect to one or
more Awards that may be granted to any one Employee during any
calendar year shall not exceed the Award Limit. To the extent
required by Section 162(m) of the Code, shares subject to
Awards which are canceled shall continue to be counted against
the Award Limit.
ARTICLE III
GRANTING OF
AWARDS
3.1. Award Agreement. Each
Award shall be evidenced by an Award Agreement. Award Agreements
evidencing Awards intended to qualify as performance-based
compensation (as described in Section 162(m)(4)(C) of the
Code) shall contain such terms and conditions as may be
necessary to meet the applicable provisions of
Section 162(m) of the Code. Award Agreements evidencing
Incentive Stock Options shall contain such terms and conditions
as may be necessary to meet the applicable provisions of
Section 422 of the Code.
B-5
3.2. Provisions Applicable to
Section 162(m) Performance-Based
Compensation.
(a) The Committee, in its discretion, may determine whether
an Award is to qualify as performance-based compensation (as
described in Section 162(m)(4)(C) of the Code).
(b) Notwithstanding anything in the Plan to the contrary,
the Committee may grant any Award to a Covered Employee,
including Restricted Stock the restrictions with respect to
which lapse upon the attainment of specified Performance Goals
and any performance or incentive award described in
Article VIII that vests or becomes exercisable or payable
upon the attainment of one or more specified Performance Goals.
(c) To the extent necessary to comply with the
performance-based compensation requirements of
Section 162(m)(4)(C) of the Code, with respect to any Award
granted under Articles VII and VIII which may be granted to
one or more Covered Employees, no later than ninety
(90) days following the commencement of any Performance
Period (or such earlier time as may be required under
Section 162(m) of the Code), the Committee shall, in
writing, (i) designate one or more Covered Employees,
(ii) select the Performance Criteria applicable to the
Performance Period (including any applicable adjustments),
(iii) establish the various performance targets, in terms
of an objective formula or standard, and amounts of such Awards,
as applicable, which may be earned for such Performance Period,
and (iv) specify the relationship between Performance
Criteria and the performance targets and the amounts of such
Awards, as applicable, to be earned by each Covered Employee for
such Performance Period. Following the completion of each
Performance Period, the Committee shall certify in writing
whether the applicable performance targets have been achieved
for such Performance Period. In determining the amount earned by
a Covered Employee, the Committee shall have the right to reduce
(but not to increase) the amount payable at a given level of
performance to take into account additional factors that the
Committee may deem relevant to the assessment of individual or
corporate performance for the Performance Period.
(d) Furthermore, notwithstanding any other provision of the
Plan, any Award which is granted to a Covered Employee and is
intended to qualify as performance-based compensation (as
described in Section 162(m)(4)(C) of the Code) shall be
subject to any additional limitations set forth in
Section 162(m) of the Code (including any amendment to
Section 162(m) of the Code) or any regulations or rulings
issued thereunder that are requirements for qualification as
performance-based compensation (as described in
Section 162(m)(4)(C) of the Code), and the Plan shall be
deemed amended to the extent necessary to conform to such
requirements.
(e) The maximum aggregate amount of all Awards intended to
qualify as performance-based compensation during any calendar
year shall not exceed the Award Limit. Unless otherwise
specified by the Administrator at the time of grant, the
Performance Criteria with respect to an Award payable to a
Covered Employee shall be determined on the basis of GAAP.
3.3. Limitations Applicable to
Section 16 Persons. Notwithstanding
any other provision of the Plan, the Plan, and any Award granted
or awarded to any individual who is then subject to
Section 16 of the Exchange Act, shall be subject to any
additional limitations set forth in any applicable exemptive
rule under Section 16 of the Exchange Act (including any
amendment to
Rule 16b-3
of the Exchange Act) that are requirements for the application
of such exemptive rule. To the extent permitted by applicable
law, the Plan and Awards granted or awarded hereunder shall be
deemed amended to the extent necessary to conform to such
applicable exemptive rule.
3.4. At-Will
Employment. Nothing in the Plan or in any
Award Agreement hereunder shall confer upon any Holder any right
to continue in the employ of the Company or any Subsidiary, or
as a Director of the Company, or shall interfere with or
restrict in any way the rights of the Company and any
Subsidiary, which rights are hereby expressly reserved, to
discharge any Holder at any time for any reason whatsoever, with
or without cause, except to the extent expressly provided
otherwise in a written employment agreement between the Holder
and the Company and any Subsidiary.
ARTICLE IV
GRANTING OF
OPTIONS TO EMPLOYEES AND NON-EMPLOYEE DIRECTORS
4.1. Eligibility. Any
Employee or Non-Employee Director selected by the Administrator
pursuant to Section 4.4(a) shall be eligible to be granted
an Option.
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4.2. Disqualification for Stock
Ownership. No person may be granted an
Incentive Stock Option under the Plan if such person, at the
time the Incentive Stock Option is granted, owns stock
possessing more than 10% of the total combined voting power of
all classes of stock of the Company or any then existing
Subsidiary Corporation or parent corporation (as defined in
Section 424(e) of the Code) unless such Incentive Stock
Option conforms to the applicable provisions of Section 422
of the Code.
4.3. Qualification of Incentive Stock
Options. No Incentive Stock Option shall be
granted to any person who is not an Employee of the Company or a
Subsidiary Corporation.
4.4. Granting of Options.
(a) Options may be awarded to any Employee or Non-Employee
Director who the Administrator determines should receive such an
Award. The Administrator shall in its discretion, and, subject
to applicable limitations of the Plan:
(i) Subject to the Award Limit, determine the number of
shares to be subject to such Options granted;
(ii) Subject to Section 4.2 and Section 4.3,
determine whether such Options are to be Incentive Stock Options
or Non-Qualified Stock Options; and
(iii) Determine the terms and conditions of such Options,
consistent with the Plan.
(b) Upon the selection of an Employee or Non-Employee
Director to be granted an Option, the Administrator shall
instruct the Secretary of the Company to issue the Option and
may impose such conditions on the grant of the Option as it
deems appropriate.
(c) Any Incentive Stock Option granted under the Plan may
be modified by the Administrator, with the consent of the
Holder, to disqualify such Option from treatment as an
incentive stock option under Section 422 of the
Code.
ARTICLE V
TERMS OF
OPTIONS
5.1. Option Price. The price
per share of Common Stock subject to each Option granted to
Employees and Non-Employee Directors shall be set by the
Administrator; provided, however, that:
(a) Except in the case of an Option that is a Substitute
Award, such price shall not be less than 100% of the Fair Market
Value of a share of Common Stock on the date the Option is
granted (or, in the case of Incentive Stock Options, the date
the Option is modified, extended or renewed for purposes of
Section 424(h) of the Code); and
(b) In the case of Incentive Stock Options granted to an
individual then owning (within the meaning of
Section 424(d) of the Code) more than 10% of the total
combined voting power of all classes of stock of the Company or
any Subsidiary Corporation or parent corporation thereof (as
defined in Section 424(e) of the Code), such price shall
not be less than 110% of the Fair Market Value of a share of
Common Stock on the date the Option is granted (or the date the
Option is modified, extended or renewed for purposes of
Section 424(h) of the Code); and
5.2. Option Term. The term
of an Option granted to an Employee or Non-Employee Director
shall be set by the Administrator in its discretion;
provided, however, that the term shall not be more than
ten (10) years from the date the Option is granted, or five
(5) years from the date the Option is granted if the Option
is an Incentive Stock Option granted to an individual then
owning (within the meaning of Section 424(d) of the Code)
more than 10% of the total combined voting power of all classes
of stock of the Company or any Subsidiary Corporation or parent
corporation thereof (as defined in Section 424(e) of the
Code). Except as limited by requirements of Section 409A or
Section 422 of the Code and regulations and rulings
thereunder, the Administrator may extend the term of any
outstanding Option in connection with any Termination of
Employment or Termination of Directorship of the Holder, or
amend any other term or condition of such Option relating to
such a Termination of Employment or Termination of Directorship.
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5.3. Option Vesting.
(a) The period during which the right to exercise, in whole
or in part, an Option vests in the Holder shall be set by the
Administrator and the Administrator may determine that an Option
may not be exercised in whole or in part for a specified period
after it is granted. At any time after grant of an Option, the
Administrator may, in its discretion and subject to whatever
terms and conditions it selects, accelerate the period during
which an Option vests.
(b) A Option is exercisable only while the Holder is an
Employee or Non-Employee Director, as applicable; provided,
however, that the Administrator in its discretion may
provide that the Option may be exercised subsequent to a
Termination of Employment or Termination of Directorship, as
applicable, following a Change in Control or because of the
Holders retirement, death or disability or termination
without cause, or otherwise.
(c) To the extent that the aggregate fair market value of
stock with respect to which incentive stock options
(within the meaning of Section 422 of the Code, but without
regard to Section 422(d) of the Code) are exercisable for
the first time by a Holder during any calendar year under the
Plan, and all other plans of the Company and any Subsidiary
Corporation or parent corporation thereof (as defined in
Section 424(e) of the Code), exceeds $100,000, the Options
shall be treated as Non-Qualified Stock Options to the extent
required by Section 422 of the Code. The rule set forth in
the preceding sentence shall be applied by taking Options and
other incentive stock options into account in the
order in which they were granted. For purposes of this
Section 5.3(c), the fair market value of stock shall be
determined as of the time the Option or other incentive
stock options with respect to such stock is granted.
ARTICLE VI
EXERCISE OF
OPTIONS
6.1. Partial Exercise. An
exercisable Option may be exercised in whole or in part.
However, an Option shall not be exercisable with respect to
fractional shares and the Administrator may require that, by the
terms of the Option, a partial exercise be with respect to a
minimum number of shares.
6.2. Manner of Exercise. All
or a portion of an exercisable Option shall be deemed exercised
upon delivery of all of the following to the Secretary of the
Company, or such other person or entity designated by the
Administrator, or his, her or its office, as applicable:
(a) A written notice complying with the applicable rules
established by the Administrator stating that the Option, or a
portion thereof, is exercised. Such rules may provide that for
administrative convenience an Option may not be exercised during
such period (not exceeding 10 days) as is specified in advance
by the Administrator. The notice shall be signed by the Holder
or other person then entitled to exercise the Option or such
portion of the Option;
(b) Such representations and documents as the
Administrator, in its discretion, deems necessary or advisable
to effect compliance with all applicable provisions of the
Securities Act and any other federal, state or foreign
securities laws or regulations. The Administrator may, in its
discretion, also take whatever additional actions it deems
appropriate to effect such compliance including, without
limitation, placing legends on share certificates and issuing
stop-transfer notices to agents and registrars;
(c) In the event that the Option shall be exercised
pursuant to Section 11.1 by any person or persons other
than the Holder, appropriate proof of the right of such person
or persons to exercise the Option; and
(d) Full cash payment to the Secretary of the Company for
the shares with respect to which the Option, or portion thereof,
is exercised. However, the Administrator may, in its discretion,
(i) allow payment, in whole or in part, through the
delivery of shares of Common Stock which have been owned by the
Holder for at least six months, duly endorsed for transfer to
the Company with a Fair Market Value on the date of delivery
equal to the aggregate exercise price of the Option or exercised
portion thereof; (ii) allow payment, in whole or in part,
through the surrender of shares of Common Stock then issuable
upon exercise of the Option having a Fair Market Value on the
date of Option exercise equal to the aggregate exercise price of
the Option or exercised portion thereof; (iii) allow
payment, in whole or in part, through the delivery of property
of any kind which constitutes good and valuable consideration;
(iv) allow payment, in whole or in part, through the
delivery of a
B-8
notice that the Holder has placed a market sell order with a
broker with respect to shares of Common Stock then issuable upon
exercise of the Option, and the broker timely pays a sufficient
portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price; or (v) allow
payment through any combination of the consideration provided in
the foregoing subparagraphs (i), (ii), (iii) and (iv);
provided, however, that the payment in the manner
prescribed in the preceding paragraphs shall not be permitted to
the extent that the Administrator determines that payment in
such manner shall result in an extension or maintenance of
credit, an arrangement for the extension of credit, or a renewal
or an extension of credit in the form of a personal loan to or
for any Director or executive officer of the Company that is
prohibited by Section 13(k) of the Exchange Act or other
applicable law.
6.3. Conditions to Issuance of Stock
Certificates. The Company shall not be
required to issue or deliver any certificate or certificates for
shares of stock purchased upon the exercise of any Option or
portion thereof prior to fulfillment of all of the following
conditions:
(a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed;
(b) The completion of any registration or other
qualification of such shares under any federal, state or foreign
law, or under the rulings or regulations of the Securities and
Exchange Commission or any other governmental regulatory body
which the Administrator shall, in its discretion, deem necessary
or advisable;
(c) The obtaining of any approval or other clearance from
any federal, state or foreign governmental agency which the
Administrator shall, in its discretion, determine to be
necessary or advisable;
(d) The lapse of such reasonable period of time following
the exercise of the Option as the Administrator may establish
from time to time for reasons of administrative
convenience; and
(e) The receipt by the Company of full payment for such
shares, including payment of any applicable withholding tax,
which in the discretion of the Administrator may be in the form
of consideration used by the Holder to pay for such shares under
Section 6.2(d).
6.4. Rights as
Stockholders. Holders shall not be, nor have
any of the rights or privileges of, stockholders of the Company
in respect of any shares purchasable upon the exercise of any
part of an Option unless and until certificates representing
such shares have been issued by the Company to such Holders.
6.5. Ownership and Transfer
Restrictions. The Administrator, in its
discretion, may impose such restrictions on the ownership and
transferability of the shares purchasable upon the exercise of
an Option as it deems appropriate. Any such restriction shall be
set forth in the respective Award Agreement and may be referred
to on the certificates evidencing such shares. The Holder shall
give the Company prompt notice of any disposition of shares of
Common Stock acquired by exercise of an Incentive Stock Option
within (a) two years from the date of granting (including
the date the Option is modified, extended or renewed for
purposes of Section 424(h) of the Code) such Option to such
Holder, or (b) one year after the transfer of such shares
to such Holder.
6.6. Additional Limitations on Exercise of
Options. Holders may be required to comply
with any timing or other restrictions with respect to the
settlement or exercise of an Option, including a window-period
limitation, as may be imposed in the discretion of the
Administrator.
ARTICLE VII
AWARD OF
RESTRICTED STOCK
7.1. Eligibility. Subject to
the Award Limit, Restricted Stock may be awarded to any Employee
or Non-Employee Director who the Administrator determines should
receive such an Award.
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7.2. Award of Restricted
Stock.
(a) The Administrator may from time to time, in its
discretion:
(i) Select from among the Employees or Non-Employee
Directors (including Employees or Non-Employee Directors who
have previously received Awards under the Plan) such of them as
in its opinion should be awarded Restricted Stock; and
(ii) Determine the purchase price, if any, and other terms
and conditions applicable to such Restricted Stock, consistent
with the Plan.
(b) The Administrator shall establish the purchase price,
if any, and form of payment for Restricted Stock; provided,
however, that such purchase price shall be no less than the
minimum amount required by applicable state law.
(c) Upon the selection of an Employee or Non-Employee
Director to be awarded Restricted Stock, the Administrator shall
instruct the Secretary of the Company to issue such Restricted
Stock and may impose such conditions on the issuance of such
Restricted Stock as it deems appropriate.
7.3. Rights as
Stockholders. Subject to Section 7.4,
upon delivery of the shares of Restricted Stock to the escrow
holder pursuant to Section 7.5, the Holder shall have,
unless otherwise provided by the Administrator, all the rights
of a stockholder with respect to said shares, subject to the
restrictions in his or her Award Agreement, including the right
to receive all dividends and other distributions paid or made
with respect to the shares; provided, however, that, in
the discretion of the Administrator, any extraordinary
distributions with respect to the Common Stock shall be subject
to the restrictions set forth in Section 7.4.
7.4. Restriction. All shares
of Restricted Stock issued under the Plan (including any shares
received by Holders thereof with respect to shares of Restricted
Stock as a result of stock dividends, stock splits or any other
form of recapitalization) shall, in the terms of each individual
Award Agreement, be subject to such restrictions as the
Administrator shall provide, which restrictions may include,
without limitation, restrictions concerning voting rights and
transferability and restrictions based on duration of employment
or directorship with the Company, Company performance and
individual performance; provided, however, by action
taken after the Restricted Stock is issued, the Administrator
may, on such terms and conditions as it may determine to be
appropriate, remove any or all of the restrictions imposed by
the terms of the Award Agreement. Restricted Stock may not be
sold or encumbered until all restrictions are terminated or
expire. A Holders rights in unvested Restricted Stock
shall lapse, and such Restricted Stock shall be surrendered to
the Company without consideration, upon Termination of
Employment or Termination of Directorship, as applicable;
provided, however, that the Administrator in its
discretion may provide that such rights shall not lapse in the
event of a Termination of Employment or Termination of
Directorship, as applicable, following a Change in Control or
because of the Holders retirement, death or disability or
termination without cause, or otherwise.
7.5. Escrow. The Secretary
of the Company or such other escrow holder as the Administrator
may appoint shall retain physical custody of each certificate
representing Restricted Stock until all of the restrictions
imposed under the Award Agreement with respect to the shares
evidenced by such certificate expire or shall have been removed.
7.7. Legend. In order to
enforce the restrictions imposed upon shares of Restricted Stock
hereunder, the Administrator shall cause a legend or legends to
be placed on certificates representing all shares of Restricted
Stock that are still subject to restrictions under Award
Agreements, which legend or legends shall make appropriate
reference to the conditions imposed thereby.
7.8. Section 83(b)
Election. If a Holder makes an election under
Section 83(b) of the Code, or any successor section
thereto, to be taxed with respect to the Restricted Stock as of
the date of transfer of the Restricted Stock rather than as of
the date or dates upon which the Holder would otherwise be
taxable under Section 83(a) of the Code, the Holder shall
deliver a copy of such election to the Company immediately after
filing such election with the Internal Revenue Service.
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ARTICLE VIII
PERFORMANCE
AWARDS, DIVIDEND EQUIVALENTS, , RESTRICTED STOCK UNITS, OTHER
STOCK-BASED AWARDS
8.1. Eligibility. Subject to
the Award Limit, one or more Performance Awards, Dividend
Equivalent Awards, Restricted Stock Unit Awards
and/or Other
Stock-Based Awards may be granted to any Employee or
Non-Employee Director whom the Administrator determines should
receive such an Award.
8.2. Performance Awards. Any
Employee or Non-Employee Director selected by the Administrator
may be granted one or more Performance Awards. The value of such
Performance Awards may be linked to any one or more of the
Performance Criteria or other specific performance criteria
determined appropriate by the Administrator, in each case on a
specified date or dates or over any period or periods determined
by the Administrator. In making such determinations, the
Administrator shall consider (among such other factors as it
deems relevant in light of the specific type of award) the
contributions, responsibilities and other compensation of the
particular Employee or Non-Employee Director.
8.3. Dividend
Equivalents. Any Employee or Non-Employee
Director selected by the Administrator may be granted Dividend
Equivalents based on the dividends declared on Common Stock, to
be credited as of dividend payment dates, during the period
between the date a Full Value Award is granted and the date such
Full Value Award vests, is exercised, is distributed or expires,
as determined by the Administrator. Such Dividend Equivalents
shall be converted to cash or additional shares of Common Stock
by such formula and at such time and subject to such limitations
as may be determined by the Administrator.
8.4. Restricted Stock
Units. Any Employee or Non-Employee Director
selected by the Administrator may be granted an award of
Restricted Stock Units in the manner determined from time to
time by the Administrator. The Administrator is authorized to
make awards of Restricted Stock Units in such amounts and
subject to such terms and conditions as determined by the
Administrator. The Administrator shall specify the date or dates
on which the Restricted Stock Units shall become fully vested
and nonforfeitable, and may specify such conditions to vesting
as it deems appropriate, and may specify that such Restricted
Stock Units become fully vested and nonforfeitable pursuant to
the satisfaction of one or more Performance Goals or other
specific performance goals as the Administrator determines to be
appropriate at the time of the grant, in each case on a
specified date or dates or over any period or periods determined
by the Administrator. The Administrator shall specify the
distribution dates applicable to each award of Restricted Stock
Units which shall be no earlier than the vesting dates or events
of the award and may be determined at the election of the
Employee or Non-Employee Director, subject to compliance with
Section 409A of the Code. Payment of Restricted Stock Units
shall be in cash, in Common Stock or a combination of both, as
determined by the Administrator.
8.5. Other Stock-Based
Awards. Any Employee or Non-Employee Director
selected by the Administrator may be granted an Other
Stock-Based Award (as hereinafter defined) in the manner
determined from time to time by the Administrator. An Other
Stock-Based Award means any other type of equity-based or
equity-related Award not otherwise described by the terms of
this Plan (including the grant or offer for sale of unrestricted
Shares) in such amount and subject to such terms and conditions
as the Administrator shall determine. Such Awards may involve
the transfer of actual shares of Common Stock, or payment in
cash or otherwise of amounts based on the value of shares of
Common Stock.
8.6. Termination of Employment or Termination
of Directorship. A Performance Award,
Dividend Equivalent Award, Restricted Stock Unit Award
and/or Other
Stock-Based Award is exercisable or distributable only while the
Holder is an Employee or Non-Employee Director, as applicable;
provided, however, that the Administrator in its
discretion may provide that the Award may be exercised or
distributed subsequent to a Termination of Employment or
Termination of Directorship, as applicable, following a Change
in Control or because of the Holders retirement, death or
disability or termination without cause, or otherwise.
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ARTICLE IX
STOCK
APPRECIATION RIGHTS
9.1. Grant of Stock Appreciation
Rights. A Stock Appreciation Right may be
granted to any Employee or Non-Employee Director selected by the
Administrator. A Stock Appreciation Right may be granted:
(a) in connection and simultaneously with the grant of an
Option, or (b) independent of an Option. A Stock
Appreciation Right shall be subject to such terms and conditions
not inconsistent with the Plan as the Administrator shall impose
and shall be evidenced by an Award Agreement.
9.2. Coupled Stock Appreciation
Rights.
(a) A Coupled Stock Appreciation Right
(CSAR) shall be related to a particular
Option and shall be exercisable only when and to the extent the
related Option is exercisable.
(b) A CSAR may be granted to the Holder for no more than
the number of shares subject to the simultaneously granted
Option to which it is coupled.
(c) A CSAR shall entitle the Holder (or other person
entitled to exercise the Option pursuant to the Plan) to
surrender to the Company unexercised a portion of the Option to
which the CSAR relates (to the extent then exercisable pursuant
to its terms) and to receive from the Company in exchange
therefor an amount determined by multiplying (i) the
difference obtained by subtracting the exercise price per share
of the CSAR from (ii) the Fair Market Value of a share of
Common Stock on the date of exercise of the CSAR by the number
of shares of Common Stock with respect to which the CSAR shall
have been exercised, subject to any limitations the
Administrator may impose.
9.3. Independent Stock Appreciation
Rights.
(a) An Independent Stock Appreciation Right
(ISAR) shall be unrelated to any Option and
shall have a term set by the Administrator in its discretion;
provided, however, that the term shall not be more than
ten (10) years from the date the ISAR is granted. An ISAR
shall be exercisable in such installments as the Administrator
may determine. An ISAR shall cover such number of shares of
Common Stock as the Administrator may determine The exercise
price per share of Common Stock subject to each ISAR shall be
set by the Administrator; provided, that such exercise
price per share shall not be less than 100% of the Fair Market
Value of a share of Common Stock on the date the ISAR is
granted. An ISAR is exercisable only while the Holder is an
Employee or Non-Employee Director; provided, that the
Administrator may provide that ISARs may be exercised following
a Termination of Employment, or Termination of Directorship, as
applicable, or following a Change in Control, or because of the
Holders retirement, death or disability or termination
without cause, or otherwise.
(b) An ISAR shall entitle the Holder (or other person
entitled to exercise the ISAR pursuant to the Plan) to exercise
all or a specified portion of the ISAR (to the extent then
exercisable pursuant to its terms) and to receive from the
Company an amount determined by multiplying (i) the
difference obtained by subtracting the exercise price per share
of the ISAR from the Fair Market Value of a share of Common
Stock on the date of exercise of the ISAR by (ii) the
number of shares of Common Stock with respect to which the ISAR
shall have been exercised, subject to any limitations the
Administrator may impose.
9.4. Payment and Limitations on
Exercise.
(a) Payment of the amounts determined under
Section 9.2(c) and 9.3(b) above shall be in cash, shares of
Common Stock (based on its Fair Market Value as of the date the
Stock Appreciation Right is exercised), or a combination of
both, as determined by the Administrator. The Company shall not
be required to issue or deliver any certificate or certificates
for shares of stock issuable upon the exercise of any Stock
Appreciation Right prior to fulfillment of the conditions set
forth in Section 6.3 above.
(b) Holders of Stock Appreciation Rights may be required to
comply with any timing or other restrictions with respect to the
settlement or exercise of a Stock Appreciation Right, including
a window-period limitation, as may be imposed in the discretion
of the Administrator.
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ARTICLE X.
ADMINISTRATION
10.1. Committee. The
Committee shall consist solely of two or more Non-Employee
Directors appointed by and holding office at the pleasure of the
Board, each of whom is intended to (a) be independent under
rules promulgated by a securities exchange on which the
Companys Common Stock is listed and (b) qualify as
both a non-employee director as defined by
Rule 16b-3
and an outside director for purposes of
Section 162(m) of the Code. Appointment of Committee
members shall be effective upon acceptance of appointment.
Committee members may resign at any time by delivering written
notice to the Board. Vacancies in the Committee may be filled by
the Board.
10.2. Duties and Powers of
Committee. It shall be the duty of the
Committee to conduct the general administration of the Plan in
accordance with its provisions. The Committee shall have the
power to interpret the Plan and the Award Agreements, and to
adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith, to
interpret, amend or revoke any such rules, and to amend any
Award Agreement provided that the rights or obligations of the
Holder of the Award that is the subject of any such Award
Agreement are not affected adversely. Any such grant or award
under the Plan need not be the same with respect to each Holder.
Any such interpretations and rules with respect to Incentive
Stock Options shall be consistent with the provisions of
Section 422 of the Code. In its discretion, the Board may
at any time and from time to time exercise any and all rights
and duties of the Committee under the Plan except with respect
to matters which under
Rule 16b-3
or Section 162(m) of the Code, or any regulations or rules
issued thereunder, are required to be determined in the
discretion of the Committee. The Board or the Committee may in
its discretion, and consistent with applicable law, delegate to
one or more officers of the Company all or part of the
Committees authority and duties with respect to Awards to
be granted to individuals who are (i) not subject to the
reporting requirements of Section 16 of the Exchange Act,
and (ii) not Covered Employees.
10.3. Majority Rule; Unanimous Written
Consent. The Committee shall act by a
majority of its members in attendance at a meeting at which a
quorum is present or by a memorandum or other written instrument
signed by all members of the Committee.
10.4. Compensation; Professional Assistance;
Good Faith Actions. Members of the Committee
shall receive such compensation, if any, for their services as
members as may be determined by the Board. All expenses and
liabilities which members of the Committee incur in connection
with the administration of the Plan shall be borne by the
Company. The Committee may, with the approval of the Board,
employ attorneys, consultants, accountants, appraisers, brokers
or other persons. The Committee, the Company and the
Companys officers and Directors shall be entitled to rely
upon the advice, opinions or valuations of any such persons. All
actions taken and all interpretations and determinations made by
the Committee or the Board in good faith shall be final and
binding upon all Holders, the Company and all other interested
persons. No members of the Committee or Board shall be
personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or
Awards, and all members of the Committee and the Board shall be
fully protected by the Company in respect of any such action,
determination or interpretation.
ARTICLE XI
MISCELLANEOUS
PROVISIONS
11.1. Transferability of Awards.
(a) Except as otherwise provided in Section 11.1(b):
(i) No Award under the Plan may be sold, pledged, assigned
or transferred in any manner other than by will or the laws of
descent and distribution or, subject to the consent of the
Administrator, pursuant to a DRO, unless and until such Award
has been exercised, or the shares underlying such Award have
been issued, and all restrictions applicable to such shares have
lapsed;
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(ii) No Award or interest or right therein shall be liable
for the debts, contracts or engagements of the Holder or his
successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, pledge, hypothecation,
encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law
by judgment, levy, attachment, garnishment or any other legal or
equitable proceedings (including bankruptcy), and any attempted
disposition thereof shall be null and void and of no effect,
except to the extent that such disposition is permitted by the
preceding sentence; and
(iii) During the lifetime of the Holder, only the Holder
may exercise an Option or other Award (or any portion thereof)
granted to him under the Plan, unless it has been disposed of
pursuant to a DRO; after the death of the Holder, any
exercisable portion of an Option or other Award may, prior to
the time when such portion becomes unexercisable under the Plan
or the applicable Award Agreement, be exercised by his personal
representative or by any person empowered to do so under the
deceased Holders will or under the then applicable laws of
descent and distribution.
(b) Notwithstanding Section 11.1(a), the
Administrator, in its discretion, may determine to permit a
Holder to transfer a Non-Qualified Stock Option to any one or
more Permitted Transferees (as defined below), subject to the
following terms and conditions: (i) a Non-Qualified Stock
Option transferred to a Permitted Transferee shall not be
assignable or transferable by the Permitted Transferee other
than by will or the laws of descent and distribution;
(ii) any Non-Qualified Stock Option which is transferred to
a Permitted Transferee shall continue to be subject to all the
terms and conditions of the Non-Qualified Stock Option as
applicable to the original Holder (other than the ability to
further transfer the Non-Qualified Stock Option); and
(iii) the Holder and the Permitted Transferee shall execute
any and all documents requested by the Administrator, including,
without limitation documents to (A) confirm the status of
the transferee as a Permitted Transferee, (B) satisfy any
requirements for an exemption for the transfer under applicable
federal, state and foreign securities laws and (C) evidence
the transfer. For purposes of this Section 11.1(b),
Permitted Transferee shall mean, with respect
to a Holder, any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece,
nephew,
mother-in-law,
father-in-law,
son-in-law,
daughter-in-law,
brother-in-law,
or
sister-in-law,
including adoptive relationships, any person sharing the
Holders household (other than a tenant or employee), a
trust in which these persons (or the Holder) control the
management of assets, and any other entity in which these
persons (or the Holder) own more than fifty percent of the
voting interests, or any other transferee specifically approved
by the Administrator after taking into account any federal,
state, local and foreign tax and securities laws applicable to
transferable Non-Qualified Stock Options.
11.2. Amendment, Suspension or Termination of
the Plan. Except as otherwise provided in
this Section 11.2, the Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any
time or from time to time by the Board, or the Compensation
Committee of the Board. However, without approval of the
Companys stockholders given within twelve (12) months
before or after the action by the Administrator, no action of
the Administrator may, except as provided in Section 11.3,
(i) increase the limits imposed in Section 2.1 on the
maximum number of shares which may be issued under the Plan,
(ii) decrease the exercise price of any outstanding Option
or Stock Appreciation Right granted under the Plan, or
(iii) result in a material change in eligibility
requirements. Except as provided in Section 11.12, no
amendment, suspension or termination of the Plan shall, without
the consent of the Holder, alter or impair any rights or
obligations under any Award theretofore granted or awarded,
unless the Award itself otherwise expressly so provides. No
Awards may be granted or awarded during any period of suspension
or after termination of the Plan, and in no event may any Award
be granted under the Plan after the first to occur of the
following events:
(a) The expiration of ten (10) years from the date the
Plan is adopted by the Board; or
(b) The expiration of ten (10) years from the date the
Plan is first approved by the Companys stockholders.
11.3. Changes in Common Stock or Assets of the
Company, Acquisition or Liquidation of the Company and Other
Corporate Events.
(a) Subject to Section 11.3(d), in the event of any
dividend or other distribution (whether in the form of cash,
Common Stock, other securities or other property),
recapitalization, reclassification, stock split, reverse stock
split,
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reorganization, merger, consolidation,
split-up,
spin-off, combination, repurchase, liquidation, dissolution, or
sale, transfer, exchange or other disposition of all or
substantially all of the assets of the Company, or exchange of
Common Stock or other securities of the Company, issuance of
warrants or other rights to purchase Common Stock or other
securities of the Company, or other similar corporate
transaction or event that affects the Common Stock, then the
Administrator shall equitably adjust any or all of the following
in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan
or with respect to an Award:
(i) The number and kind of shares of Common Stock (or other
securities or property) with respect to which Awards may be
granted or awarded (including, without limitation, adjustments
of the limitations in Section 2.1 on the maximum number and
kind of shares which may be issued under the Plan, adjustments
of the Award Limit, and adjustments of the manner in which
shares subject to Full Value Awards will be counted);
(ii) The number and kind of shares of Common Stock (or
other securities or property) subject to outstanding
Awards; and
(iii) The grant or exercise price with respect to any Award.
(b) Subject to Section 11.3(d), in the event of any
transaction or event described in Section 11.3(a) or any
unusual or nonrecurring transactions or events affecting the
Company, any affiliate of the Company, or the financial
statements of the Company or any affiliate, or of changes in
applicable laws, regulations or accounting principles, the
Administrator, in its discretion, and on such terms and
conditions as it deems appropriate, either by the terms of the
Award or by action taken prior to the occurrence of such
transaction or event and either automatically or upon the
Holders request, is hereby authorized to take any one or
more of the following actions whenever the Administrator
determines that such action is appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan or with respect to
any Award under the Plan, to facilitate such transactions or
events or to give effect to such changes in laws, regulations or
principles:
(i) To provide for the purchase of any such Award for an
amount of cash equal to the amount that could have been attained
upon the exercise of such Award or realization of the
Holders rights had such Award been currently exercisable
or payable or fully vested, to authorize a cash payment to the
Holder of an Option or SAR in an amount equal to the amount that
could have been attained upon the exercise of the Option or SAR,
or to cancel for no consideration an Option that upon exercise
would not yield a positive benefit for the Holder;
(ii) To provide for the replacement of such Award with
other rights or property selected by the Administrator in its
discretion having an aggregate value not exceeding the amount
that could have been attained upon the exercise of such Award or
realization of the Holders rights had such Award been
currently exercisable or payable or fully vested;
(iii) To provide that the Award cannot vest, be exercised
or become payable after such event;
(iv) To provide that such Award shall be exercisable as to
all shares covered thereby, notwithstanding anything to the
contrary in Section 5.3 or the provisions of such Award;
(v) To provide that such Award be assumed by the successor
or survivor corporation, or a parent or subsidiary thereof, or
shall be substituted for by similar options, rights or awards
covering the stock of the successor or survivor corporation, or
a parent or subsidiary thereof, with appropriate adjustments as
to the number and kind of shares and prices;
(vi) To make adjustments in the number and type of shares
of Common Stock (or other securities or property) subject to
outstanding Awards,
and/or in
the terms and conditions of (including the grant, exercise or
purchase price), and the criteria included in, outstanding
options, rights and awards and options, rights and awards which
may be granted in the future; and
(vii) To provide that, for a specified period of time prior
to such event, the restrictions imposed under an Award Agreement
upon some or all shares of Restricted Stock, Restricted Stock
Units or Other Stock-Based Awards may be terminated, and, in the
case of Restricted Stock, some or all shares of such Restricted
Stock may cease to be subject to forfeiture under
Section 7.4 after such event.
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(c) Subject to Sections 11.3(d) and 3.2, the
Administrator may, in its discretion, include such further
provisions and limitations in any Award, agreement or
certificate, as it may deem equitable and in the best interests
of the Company.
(d) With respect to Awards which are granted to Covered
Employees and are intended to qualify as performance-based
compensation under Section 162(m)(4)(C), no adjustment or
action described in this Section 11.3 or in any other
provision of the Plan shall be authorized to the extent that
such adjustment or action would cause such Award to fail to so
qualify under Section 162(m)(4)(C), or any successor
provisions thereto. No adjustment or action described in this
Section 11.3 or in any other provision of the Plan shall be
authorized to the extent that such adjustment or action would
cause the Plan to violate Section 422(b)(1) of the Code.
Furthermore, no such adjustment or action shall be authorized to
the extent such adjustment or action would result in short-swing
profits liability under Section 16 or violate the exemptive
conditions of
Rule 16b-3
unless the Administrator determines that the Award is not to
comply with such exemptive conditions. The number of shares of
Common Stock subject to any Award shall always be rounded down
to the next whole number.
(e) The existence of the Plan, the Award Agreement and the
Awards granted hereunder shall not affect or restrict in any way
the right or power of the Company or the stockholders of the
Company to make or authorize any adjustment, recapitalization,
reorganization or other change in the Companys capital
structure or its business, any merger or consolidation of the
Company, any issue of stock or of options, warrants or rights to
purchase stock or of bonds, debentures, preferred or prior
preference stocks whose rights are superior to or affect the
Common Stock or the rights thereof or which are convertible into
or exchangeable for Common Stock, or the dissolution or
liquidation of the company, or any sale or transfer of all or
any part of its assets or business, or any other corporate act
or proceeding, whether of a similar character or otherwise.
(f) No action shall be taken under this Section 11.3
which shall cause an Award to fail to comply with
Section 409A of the Code or the Treasury Regulations
thereunder, to the extent applicable to such Award.
11.4. Approval of Plan by
Stockholders. The Plan will be submitted for
the approval of the Companys stockholders within twelve
(12) months after the date of the Boards initial
adoption of the Plan. No Awards may be granted or awarded prior
to such stockholder approval. In addition, if the Board
determines that Awards other than Options or Stock Appreciation
Rights which may be granted to Covered Employees should continue
to be eligible to qualify as performance-based compensation
under Section 162(m)(4)(C) of the Code, the Performance
Criteria must be disclosed to and approved by the Companys
stockholders no later than the first stockholder meeting that
occurs in the fifth year following the year in which the
Companys stockholders previously approved the Plan.
11.5. Tax Withholding. The
Company or any Subsidiary shall have the authority and the right
to deduct or withhold, or require a Holder to remit to the
Company, an amount sufficient to satisfy federal, state, local
and foreign taxes (including the Holders FICA obligation)
required by law to be withheld with respect to any taxable event
concerning a Holder arising as a result of this Plan. The
Administrator may in its discretion and in satisfaction of the
foregoing requirement allow a Holder to elect to have the
Company withhold shares of Common Stock otherwise issuable under
an Award (or allow the return of shares of Common Stock) having
a Fair Market Value equal to the sums required to be withheld.
Notwithstanding any other provision of the Plan, the number of
shares of Common Stock which may be withheld with respect to the
issuance, vesting, exercise or payment of any Award (or which
may be repurchased from the Holder of such Award within six
months (or such other period as may be determined by the
Administrator) after such shares of Common Stock were acquired
by the Holder from the Company) in order to satisfy the
Holders federal, state, local and foreign income and
payroll tax liabilities with respect to the issuance, vesting,
exercise or payment of the Award shall be limited to the number
of shares which have a Fair Market Value on the date of
withholding or repurchase equal to the aggregate amount of such
liabilities based on the minimum statutory withholding rates for
federal, state, local and foreign income tax and payroll tax
purposes that are applicable to such supplemental taxable income.
11.6. Prohibition on
Repricing. Subject to Section 11.3, the
Administrator shall not, without the approval of the
stockholders of the Company, authorize the amendment of any
outstanding Award to reduce its price per share. Furthermore, no
Award shall be canceled and replaced with the grant of an Award
having a lesser price per share without the further approval of
stockholders of the Company. Subject to Section 11.2, the
Administrator shall have the authority, without the approval of
the stockholders of the Company, to amend any outstanding award
to
B-16
increase the price per share or to cancel and replace an Award
with the grant of an Award having a price per share that is
greater than or equal to the price per share of the original
Award.
11.7. Forfeiture
Provisions. Pursuant to its general authority
to determine the terms and conditions applicable to Awards under
the Plan, the Administrator shall have the right to provide, in
the terms of Awards made under the Plan, or to require a Holder
to agree by separate written instrument, that: (a)(i) any
proceeds, gains or other economic benefit actually or
constructively received by the Holder upon any receipt or
exercise of the Award, or upon the receipt or resale of any
Common Stock underlying the Award, must be paid to the Company,
and (ii) the Award shall terminate and any unexercised
portion of the Award (whether or not vested) shall be forfeited,
if (b)(i) a Termination of Employment or Termination of
Directorship occurs prior to a specified date, or within a
specified time period following receipt or exercise of the
Award, or (ii) the Holder at any time, or during a
specified time period, engages in any activity in competition
with the Company, or which is inimical, contrary or harmful to
the interests of the Company, as further defined by the
Administrator or (iii) the Holder incurs a Termination of
Employment or Termination of Directorship for cause
(as such term is defined in the discretion of the Administrator,
or as set forth in a written agreement relating to such Award
between the Company and the Holder).
11.8. Effect of Plan upon Other Compensation
Plans. The adoption of the Plan shall not
affect any other compensation or incentive plans in effect for
the Company or any Subsidiary. Nothing in the Plan shall be
construed to limit the right of the Company or any Subsidiary:
(a) to establish any other forms of incentives or
compensation for Employees, Directors or Consultants of the
Company or any Subsidiary, or (b) to grant or assume
options or other rights or awards otherwise than under the Plan
in connection with any proper corporate purpose including
without limitation, the grant or assumption of options in
connection with the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of
any corporation, partnership, limited liability company, firm or
association.
11.9. Compliance with
Laws. The Plan, the granting and vesting of
Awards under the Plan and the issuance and delivery of shares of
Common Stock and the payment of money under the Plan or under
Awards granted or awarded hereunder are subject to compliance
with all applicable federal, state, local and foreign laws,
rules and regulations (including but not limited to federal,
state and foreign securities law and margin requirements) and to
such approvals by any listing, regulatory or governmental
authority as may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith. Any securities
delivered under the Plan shall be subject to such restrictions,
and the person acquiring such securities shall, if requested by
the Company, provide such assurances and representations to the
Company as the Company may deem necessary or desirable to assure
compliance with all applicable legal requirements. To the extent
permitted by applicable law, the Plan and Awards granted or
awarded hereunder shall be deemed amended to the extent
necessary to conform to such laws, rules and regulations.
11.10. Titles. Titles are
provided herein for convenience only and are not to serve as a
basis for interpretation or construction of the Plan.
11.11. Governing Law. The
Plan and any agreements hereunder shall be administered,
interpreted and enforced under the internal laws of the State of
Delaware without regard to conflicts of laws thereof.
11.12. Section 409A. To
the extent that the Administrator determines that any Award
granted under the Plan is subject to Section 409A of the
Code, the Award Agreement evidencing such Award shall
incorporate the terms and conditions required by
Section 409A of the Code. To the extent applicable, the
Plan and Award Agreements shall be interpreted in accordance
with Section 409A of the Code and Department of Treasury
regulations and other interpretive guidance issued thereunder,
including without limitation any such regulations or other
guidance that may be issued after the Effective Date.
Notwithstanding any provision of the Plan to the contrary, in
the event that following the Effective Date the Administrator
determines that any Award may be subject to Section 409A of
the Code and related Department of Treasury guidance (including
such Department of Treasury guidance as may be issued after the
Effective Date), the Administrator may adopt such amendments to
the Plan and the applicable Award Agreement or adopt other
policies and procedures (including amendments, policies and
procedures with retroactive effect), or take any other actions,
that the Administrator determines are necessary or appropriate
to (a) exempt the Award from Section 409A of the Code
and/or
preserve the intended tax treatment of the benefits provided
with respect to the Award, or (b) comply with the
requirements of Section 409A of the Code and related
Department of Treasury guidance.
B-17
REVOCABLE PROXY
SUPERIOR BANCORP
ANNUAL
MEETING OF STOCKHOLDERS
APRIL 23, 2008
10:00 a.m.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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 Superior
Bancorp which the undersigned is entitled to vote at the 2008 Annual
Meeting of Stockholders to be held at 10:00 a.m. Central
Daylight Time on Wednesday, April 23, 2008, at Superior
Bancorps principal executive offices at 17 North
20th Street, Birmingham, Alabama 35203, and at any and all
adjournments thereof:
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.
PLEASE
COMPLETE, DATE, SIGN, AND MAIL THIS PROXY CARD PROMPTLY
IN THE
ENCLOSED POSTAGE-PAID ENVELOPE OR PROVIDE YOUR INSTRUCTIONS
TO VOTE
VIA THE INTERNET OR BY TELEPHONE.
(Continued,
and to be marked, dated and signed, on the other side)
ê
FOLD
AND DETACH HERE
ê
SUPERIOR
BANCORP ANNUAL MEETING, APRIL 23, 2008
YOUR
VOTE IS IMPORTANT!
You
can vote in one of three ways:
1. Call
toll free 1-866-388-1533 on a Touch-Tone Phone. There is NO
CHARGE to you for this call.
or
2. Via
the Internet at https://www.proxyvotenow.com/supr and follow
the instructions.
or
3.
Mark, sign and date your proxy card and return it promptly in the
enclosed envelope.
PLEASE
SEE REVERSE SIDE FOR VOTING INSTRUCTIONS
REVOCABLE PROXY
SUPERIOR BANCORP
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PLEASE MARK VOTES AS IN THIS
EXAMPLE |
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ANNUAL MEETING OF
STOCKHOLDERS APRIL 23, 2008 |
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For |
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Withhold All |
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For All Except |
1. |
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ELECTION OF DIRECTORS. To elect as directors for a term
expiring at the 2009 Annual Meeting of Stockholders the following
individuals: |
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Nominees: |
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(01) C. Stanley Bailey |
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(06) Mark A. Lee |
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(11) Barry Morton |
(02) Roger D. Barker |
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(07) James. M. Link |
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(12) Robert R. Parrish, Jr. |
(03) Rick D. Gardner |
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(08) Peter L. Lowe |
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(13) Charles W. Roberts, III |
(04) Thomas E. Jernigan, Jr. |
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(09) John C. Metz |
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(14) C. Marvin Scott |
(05) James Mailon Kent, Jr. |
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(10) D. Dewey Mitchell |
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(15) James C. White, Sr. |
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INSTRUCTION: To withhold
authority to vote for any nominee(s), mark For All Except
and write that nominee(s) name(s) or number(s) in the space
provided below. |
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Please be sure to date and sign this proxy card
in the box below. |
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Date
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Sign above |
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For |
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Against |
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Abstain |
2. |
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AMENDMENT TO EFFECT A 1-FOR-4 REVERSE STOCK SPLIT AND
DECREASE AUTHORIZED CAPITAL STOCK. To amend Superior Bancorps
Restated Certificate of Incorporation to effect a 1-for-4 reverse
stock split of common stock and decrease the number of authorized
shares of common stock to 15 million shares. |
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For |
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Against |
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Abstain |
3. |
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APPROVAL OF THE 2008 INCENTIVE COMPENSATION PLAN. To approve
the Superior Bancorp 2008 Incentive Compensation Plan. |
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The Board of Directors recommends a
vote FOR proposals 1, 2 and 3 listed above.
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Mark here if you plan to attend the meeting |
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Mark here for address change and note change |
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Note:
Please sign exactly as your name appears on this Proxy.
If signing for estates, trusts, corporations or partnerships,
title or capacity should be stated.
If shares are held jointly, each holder should sign.
IF
YOU WISH TO PROVIDE YOUR INSTRUCTIONS TO VOTE BY TELEPHONE OR
INTERNET, PLEASE READ THE INSTRUCTIONS BELOW
FOLD
AND DETACH HERE IF YOU ARE VOTING BY MAIL
PROXY
VOTING INSTRUCTIONS
Stockholders
of record have three ways to vote:
1. By
Mail; or
2. By
Telephone (using a Touch-Tone Phone); or
3. By
Internet.
A
telephone or Internet vote authorizes the named proxies to vote your
shares in the same manner as if you marked, signed, dated and
returned this proxy. Please note telephone and Internet votes must be
cash prior to 3 a.m., April 23, 2008. It is not necessary
to return this proxy if you vote by telephone or Internet.
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Vote by
Telephone
Call Toll-Free on a Touch-Tone Phone anytime prior to
3 a.m., April 23, 2008.
1-866-388-1533 |
|
Vote by
Internet
anytime prior to
3 a.m., April 23, 2008 go to
https://www.proxyvotenow.com/supr |
Please
note that the last vote received, whether by telephone, Internet or
by mail, will be the vote counted.
Your
vote is important!