<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
The Banc Corporation
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
----------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
THE BANC CORPORATION
17 NORTH 20TH STREET
BIRMINGHAM, ALABAMA 35203
May 18, 1999
To Our Stockholders:
On behalf of the Board of Directors and management of The Banc Corporation,
I cordially invite you to attend the Annual Meeting of Stockholders to be held
on Tuesday, June 15, 1999, at 4:00 p.m. Central Daylight Time at our principal
executive offices at 17 North 20th Street, Birmingham, Alabama. The attached
Notice of Annual Meeting and Proxy Statement describe the formal business to be
transacted at the Annual Meeting.
In addition to the specific matters to be acted on, there also will be a
report on the operations of the Corporation. Directors and officers of the
Corporation will be present to respond to any questions of general interest that
stockholders may have.
It is important that your shares be represented at the Annual Meeting.
Regardless of whether you plan to attend, you are requested to mark, sign, date
and promptly return the enclosed proxy in the envelope provided. If you attend
the Annual Meeting, you may vote in person even if you have previously mailed a
proxy card.
Sincerely,
/S/ JAMES A. TAYLOR
James A. Taylor
Chairman of the Board,
Chief Executive Officer and President
<PAGE> 3
THE BANC CORPORATION
17 NORTH 20TH STREET
BIRMINGHAM, ALABAMA 35203
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 15, 1999
---------------------
To the Stockholders of The Banc Corporation:
You are hereby notified that the 1999 Annual Meeting of Stockholders (the
"Annual Meeting") of The Banc Corporation, a Delaware corporation (the
"Corporation"), will be held at the principal executive offices of the
Corporation at 17 North 20th Street, Birmingham, Alabama 35203, on Tuesday, June
15, 1999, at 4:00 p.m. Central Daylight Time, for the following purposes:
1. to elect seven Directors, each to serve for a term of three years
that is scheduled to expire at the annual meeting of stockholders held the
third year following the year of their election and until their respective
successors are elected and qualified;
2. to ratify the appointment of Ernst & Young LLP as independent
auditors of the Corporation for the year ending December 31, 1999; and
3. 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 May 4, 1999 are
entitled to notice of and to vote at the Annual Meeting, or any adjournments
thereof. In accordance with Delaware law, a list of stockholders entitled to
vote at the Annual Meeting shall be open to the examination of any stockholder,
for any purpose relating to the Annual Meeting, during ordinary business hours
at the Corporation's principal executive offices at 17 North 20th Street,
Birmingham, Alabama, from June 5 through June 14, 1999, 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
/S/ JAMES A. TAYLOR, JR.
James A. Taylor, Jr.
Secretary
DATED: May 18, 1999
IMPORTANT
Regardless of whether you plan to attend the meeting, please mark, sign,
date and return the enclosed proxy in the enclosed self-addressed envelope as
soon as possible. NO POSTAGE IS REQUIRED IF THE ENCLOSED ENVELOPE IS MAILED FROM
WITHIN THE UNITED STATES.
<PAGE> 4
PROXY STATEMENT
OF
THE BANC CORPORATION
17 NORTH 20TH STREET
BIRMINGHAM, ALABAMA 35203
---------------------
FOR 1999 ANNUAL MEETING OF STOCKHOLDERS
INTRODUCTION
The Banc Corporation (the "Corporation") is furnishing this Proxy Statement
to the holders of Corporation common stock, par value $.001 per share, in
connection with the solicitation of proxies to be used at the 1999 Annual
Meeting of Stockholders to be held on June 15, 1999, at 4:00 p.m., Central
Daylight Time, at the principal executive offices of the Corporation at 17 North
20th Street, Birmingham, Alabama 35203 (the "Annual Meeting") and any
adjournment thereof. The enclosed proxy is solicited on behalf of the Board of
Directors of the Corporation. This Proxy Statement and the accompanying proxy
card are first being mailed to stockholders on or about May 18, 1999.
SOLICITATION
The Corporation will bear the costs of preparing, assembling and mailing
the proxy materials and of reimbursing brokers, banks, custodians, other
nominees and fiduciaries for the reasonable out-of-pocket and clerical expenses
of transmitting copies of the proxy materials to the beneficial owners of shares
held of record. Certain officers and regular employees of the Corporation or its
subsidiaries may use their personal efforts to make additional solicitations by
telephone, mail, or otherwise, to obtain proxies. They will receive no
additional compensation for making any solicitations. If the Corporation's
management deems it necessary, the Corporation may also retain the services of a
professional proxy solicitor to aid in the solicitation of proxies from brokers,
banks, custodians and other nominees for which the Corporation will pay a fee
that is anticipated not to exceed $4,500 plus reimbursement for expenses.
VOTING AND REVOCABILITY OF PROXY APPOINTMENTS
Only stockholders of record at the close of business on May 4, 1999 are
entitled to receive notice of and to vote at the Annual Meeting. The
Corporation's only class of stock outstanding is its common stock, par value
$.001 per share. As of the close of business on May 4, 1999, the number of
shares of common stock outstanding and entitled to vote at the Annual Meeting
was 12,205,733. Each share of common stock is entitled to one vote on all
matters. There are no cumulative voting rights. A majority of the outstanding
shares will constitute a quorum at the meeting. Abstentions and broker non-votes
are counted for purposes of determining the presence or absence of a quorum for
the transaction of business.
Stockholders can ensure that their shares are voted at the Annual Meeting
by signing and returning the enclosed proxy card in the accompanying envelope.
Shares of common stock represented by the enclosed proxy card will be voted in
accordance with your selections, if any, if the proxy card is properly executed,
is received by the Corporation prior to the time of voting, and is not revoked.
Where selections are not made on the proxy card, proxies will be voted in
accordance with the recommendations of the Board of Directors.
As of the date of this Proxy Statement, the Corporation's Board of
Directors has not been informed of any matters, other than those set forth in
the foregoing Notice of Annual Meeting of Stockholders, that are to be presented
at 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 best judgment on such
matters.
Sending in a signed proxy card will not affect a stockholder's right to
attend the Annual Meeting and vote in person. Presence at the Annual Meeting by
a stockholder who has signed a proxy card does not by itself
<PAGE> 5
revoke the proxy. Each proxy granted may be revoked by the person giving it (1)
by giving written notice of such revocation to the Secretary of the Corporation,
(2) by execution and delivery of a subsequent proxy, or (3) by attending the
Annual Meeting, giving notice of such revocation and voting in person at the
Annual Meeting, except that any such revocation shall not be effective as to any
matter upon which, prior to such revocation, a vote shall have been cast
pursuant to the authority conferred by such proxy.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, to the best of the Corporation's knowledge,
certain information regarding beneficial stock ownership of the Corporation as
of March 31, 1999 by: (a) each director and named executive officer of the
Corporation, (b) all directors and executive officers as a group and (c) each
stockholder known by the Corporation to be the beneficial owner of more than 5%
of the outstanding Corporation common stock. Except as otherwise indicated, each
person or entity listed below has sole voting and investment power with respect
to all shares shown to be beneficially owned by him or her except to the extent
such power is shared by a spouse under applicable law.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF PERCENTAGE(1)(2)
THE CORPORATION OF COMMON
NAME POSITION HELD COMMON STOCK STOCK OWNED
- - ---- ------------- ------------------- ----------------
<S> <C> <C> <C>
James A. Taylor........... Chairman of the Board, Chief
Executive Officer and President 603,400(3)(4) 4.94%
Terry DuBose.............. Vice Chairman 252,204(5)(6) 2.06%
James Mailon Kent, Jr. ... Vice Chairman 212,000(7) 1.73%
Larry D. Striplin, Jr. ... Vice Chairman 226,000(7)(8) 1.85%
David R. Carter........... Executive Vice President, Chief
Financial Officer and Director 15,000(5) *
James A. Taylor, Jr. ..... Executive Vice President, General
Counsel, Secretary and Director 145,000(5) 1.18%
James R. Andrews, M.D. ... Director 296,000(9) 2.43%
Charles Barkley........... Director 211,000(9) 1.73%
Neal R. Berte, Ed.D. ..... Director 11,000(9) *
W. T. Campbell, Jr. ...... Director 421,469(9)(10) 3.45%
Peter N. Dichiara......... Director 211,000(9)(11) 1.73%
K. Earl Durden............ Director 204,534(9) 1.68%
Steven C. Hays............ Director 75,096(9)(12) *
Larry R. House............ Director 104,800(9) *
Thomas E. Jernigan........ Director Emeritus(13) 417,600 3.42%
Thomas E. Jernigan,
Jr. .................... Director 19,000(7) *
Randall E. Jones.......... Director 48,867(9) *
Mayer Mitchell............ Director 1,000(9) *
Ronald W. Orso, M.D. ..... Director 221,000(9)(14) 1.81%
Harold W. Ripps........... Director 211,000(9) 1.73%
Richard M. Scrushy........ Director 226,000(9) 1.85%
Michael E. Stephens....... Director 216,000(9) 1.77%
Marie Swift............... Director 53,500(9) *
T. Mandell Tillman........ Director 55,172(9)(15) *
Johnny Wallis............. Director 106,000(9) *
All executive officers and
directors as a group (24
persons)................ 4,563,642(16) 37.39%
</TABLE>
- - ---------------
(1) Except as otherwise noted herein, percentage is determined on the basis of
12,205,733 shares of Corporation common stock outstanding plus securities
deemed outstanding pursuant to Rule 13d-3
2
<PAGE> 6
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 with
respect to which that person has the right to acquire beneficial ownership
within 60 days, including, without limitation, shares of Corporation common
stock subject to currently exercisable options. An asterisk indicates
beneficial ownership of less than one percent.
(2) 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.
(3) Does not include 32,100 shares owned by his wife, or 30,000 shares owned by
his son, Brett Taylor with respect to which he disclaims ownership.
(4) Includes 25,000 shares subject to options.
(5) Includes 10,000 shares subject to options.
(6) Includes 156,721 shares as Trustee for the Emerald Coast Bank Profit
Sharing Plan, of which he maintains voting control, and 14,247 shares owned
by his wife.
(7) Includes 2,000 shares subject to options.
(8) Includes 6,000 shares held as custodian.
(9) Includes 1,000 shares subject to options.
(10) Includes 39,132 shares held as custodian, and 17,143 shares held by his
wife.
(11) Includes 210,000 shares owned by City Wholesale Grocery Co., Inc. of which
he is the President.
(12) Includes 4,021 shares as custodian for his children.
(13) Director Emeritus is a non-voting position.
(14) Includes 210,000 shares as Trustee of Birmingham OB/GYN, P.A. Pension Plan.
(15) Includes 4,670 shares held as custodian, and 2,802 shares owned by his
wife.
(16) Includes 78,000 shares subject to options.
PROPOSAL NUMBER ONE
ELECTION OF DIRECTORS
Pursuant to the Corporation's Restated Certificate of Incorporation (the
"Corporation's Certificate") and the Corporation's Bylaws (the "Corporation's
Bylaws"), the Corporation's Board of Directors is divided into three classes,
with each class being as nearly equal in number as reasonably possible. The
Board presently comprises three classes of eight directors each. One class,
which includes Messrs. Barkley, Campbell, Durden, Jernigan, Jr., Mitchell,
Ripps, Taylor, Jr. and Tillman, holds office for a term that will expire at this
year's Annual Meeting; a second class, which includes Messrs. Dichiara, Hays,
House, Jones, Scrushy, Stephens and Wallis and Ms. Swift, holds office for a
term that will expire at the annual meeting of stockholders to be held in 2000;
and a third class, which includes Messrs. Taylor, Berte, Carter, DuBose, Kent
and Striplin and Drs. Andrews and Orso, holds office for a term that will expire
at the annual meeting of stockholders to be held in 2001. Mr. Barkley is not
standing for election. The size of the Board has been reduced to 23 effective at
the time of the Annual Meeting, and this year's class of directors will be
reduced from eight to seven. Each director holds office for the three-year term
to which he or she is elected and until his or her successor is duly elected and
qualified. At each annual meeting of the Corporation's stockholders, the
successors to the class of directors whose terms expire at such meeting will be
elected to hold office for a term expiring at the annual meeting of stockholders
held in the third year following the year of their election and until their
respective successors are duly elected and qualified. The Board of Directors
elects officers annually. Those officers serve at the discretion of the Board of
Directors.
The nominees for election at this Annual Meeting are: W.T. Campbell, K.
Earl Durden, Thomas E. Jernigan, Jr., Mayer Mitchell, Harold W. Ripps, James A.
Taylor, Jr. and T. Mandell Tillman, all of whom presently are members of the
Board of Directors. The enclosed Proxy will be voted in favor of those nominees
unless other instructions are given. These nominees will serve until the annual
meeting of stockholders to be held in 2002 and until their respective successors
are duly elected and qualified. If any nominee is unable to serve as a director,
the enclosed Proxy will be voted for the substitute nominees selected by the
Board of Directors. The Board of Directors has no reason to believe that any of
the persons nominated will be unable to
3
<PAGE> 7
serve if elected. The election of directors requires a plurality of the votes
cast by the holders of Corporation common stock. A "plurality" means that the
individuals who receive the largest number of votes cast are elected as
directors up to the maximum number of directors to be chosen at the meeting.
Consequently, any shares not voted (whether by abstention, broker non-vote, or
otherwise) have no impact on the election of directors. For information about
bylaw restrictions on Director nominations, see "-- Committees of the Board of
Directors."
For each nominee's beneficial ownership of common stock, see "Security
Ownership of Certain Beneficial Owners and Management." Set forth below is
certain additional information regarding each nominee as of April 15, 1999:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH CORPORATION
---- --- -------------------------
<S> <C> <C>
W. T. Campbell, Jr......................... 52 Director
K. Earl Durden(1).......................... 62 Director
Thomas E. Jernigan, Jr.(1)................. 33 Director
Mayer Mitchell............................. 66 Director
Harold W. Ripps............................ 60 Director
James A. Taylor, Jr........................ 34 Executive Vice President, General Counsel,
Secretary and Director
T. Mandell Tillman......................... 50 Director
</TABLE>
- - ---------------
(1) Member of the Compensation Committee.
W. T. Campbell, Jr. has been a director of the Corporation since October
30, 1998. Mr. Campbell served as President of City National Corporation and
Chairman of the Board of Directors of City National from 1984 until it was
merged into the Corporation on October 30, 1998, and was a director of City
National Bank. Mr. Campbell is a practicing attorney in Sylacauga, Alabama with
the firm of McKay and Campbell.
K. Earl Durden has been a director of the Corporation since December 1998.
Mr. Durden served as a Director of Emerald Coast Bancshares, Inc. from its
inception in 1996 until it was merged into the Corporation on February 12, 1999.
Mr. Durden is the President, Chief Executive Officer and a director of Rail
Management Corporation. Mr. Durden also serves as President and a director of
the following companies: Copper Basin Railway, Inc., KWT Railway, Galveston
Railway, Inc. and Grizzard Transfer, Inc., a small trucking company. Mr. Durden
also serves as Chairman, Executive Committee member and a director of the
American Short Line and Regional Railroad Association. Mr. Durden has been
heavily involved in the acquisition, ownership, start up and operation of short
line railroads for the past 19 years.
Thomas E. Jernigan, Jr. has been a director of the Corporation since
September 1998 and served as a director of Warrior Capital Corporation from
December 1997 until it was merged into the Corporation on September 24, 1998.
Mr. Jernigan has been the President of Marathon Corporation, a privately-held
investment management company based in Birmingham, Alabama, for over two years.
Mr. Jernigan has been employed with Marathon Corporation since 1989. Mr.
Jernigan's father, Thomas E. Jernigan, holds the title of "Director Emeritus," a
non-voting position.
Mayer Mitchell has been a director of the Corporation since September 1998
and served as a director of Warrior Capital Corporation from December 1997 until
it was merged into the Corporation on September 24, 1998. He served as Chairman
and Chief Executive Officer of The Mitchell Company, a real estate development
firm based in Mobile, Alabama, from September 1955 until his retirement from
that company on December 31, 1986. He is currently a co-owner of Mitchell
Brothers, Inc., a private investment company. Mr. Mitchell is a former National
President and Chairman of the Board of Directors of the American Israel Public
Affairs Committee ("AIPAC") and a past member of the Board of Directors of
AmSouth Bank N.A. of Mobile and Altus Bank of Mobile.
4
<PAGE> 8
Harold W. Ripps has been a director of the Corporation since September 1998
and served as a director of Warrior Capital Corporation from December 1997 until
it was merged into the Corporation on September 24, 1998. He has served as a
trustee of Colonial Properties Trust since 1995. In 1969, Mr. Ripps founded The
Rime Companies, a real estate development, construction and management firm,
headquartered in Birmingham, Alabama, specializing in the development of
multi-family properties. Mr. Ripps has served The Rime Companies in an executive
capacity since that time.
James A. Taylor, Jr. has been Executive Vice President and General Counsel
of the Corporation since September 1998. Mr. Taylor has served as a director of
the Corporation and Secretary of the Corporation since December 1998. Mr. Taylor
was a director of Warrior Capital Corporation from October 1997 until it was
merged into the Corporation on September 24, 1998, and served as Executive Vice
President and General Counsel of Warrior from April 1998 until September 1998.
From June 1996 until April 1998, Mr. Taylor served as Vice President -- Legal
Services for MedPartners, Inc. ("MedPartners"), a publicly-traded healthcare
company. From July 1994 until December 1996, Mr. Taylor served as outside
general counsel to Alabama National BanCorporation. From August 1990 until March
1996, Mr. Taylor was in private practice with a law firm in Birmingham, Alabama.
Mr. Taylor is the son of James A. Taylor.
T. Mandell Tillman has been a director of the Corporation since November
1998. Mr. Tillman was a director of Commerce Bank of Alabama from April 1995
until it was merged into The Bank on November 6, 1998. Mr. Tillman has served as
Chairman of the Board of Real Property Services, Inc. since 1985. He holds the
MAI and CRE designations.
See "Management of Corporation -- Continuing Directors and Executive
Officers" for certain information about the other directors named whom it is
anticipated will continue in office following the Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" MESSRS.
CAMPBELL, DURDEN, JERNIGAN, MITCHELL, RIPPS, TAYLOR, JR. AND TILLMAN.
MANAGEMENT MATTERS
There are no arrangements or understandings known to the Corporation
between any of the directors, nominees for director or executive officers of the
Corporation and any other person pursuant to which any such person was or is to
be elected as a director or an executive officer, except the executive
employment agreements of Messrs. Taylor, Taylor Jr. and DuBose provide that each
such person shall be nominated to serve as a director of the Corporation. See
"Management of Corporation -- Continuing Directors and Executive Officers" and
"Executive Compensation and Other Information -- Employment Agreements".
The Board of Directors held a total of two meetings during 1998 and acted
by unanimous written consent 12 times during 1998. During 1998, each of the
directors attended 100% of the aggregate of (i) the total number of meetings of
the Board of Directors and (ii) the total number of meetings of all Board
committees on which he served that were held while he was serving as a director
or committee member, as the case may be, except for Mr. Scrushy, who attended
50% of such meetings and Mr. Barkley who attended none of such meetings.
COMMITTEES OF THE BOARD OF DIRECTORS
The Corporation's Board of Directors has two committees: the Audit
Committee and the Compensation Committee.
The Audit Committee is responsible for reviewing and supervising the
financial controls of the Corporation. The Audit Committee makes recommendations
to the Board of Directors with respect to the audit of the Corporation's
financial statements and the appointment of independent auditors, reviews
significant audit and accounting policies and practices, meets with the
Corporation's independent public auditors concerning, among other things, the
scope of audits and reports, and reviews the performance of overall accounting
and financial controls of the Corporation. The Audit Committee consists of
Messrs. Dichiara, Durden and Jernigan and had no formal meetings during 1998.
5
<PAGE> 9
The Compensation Committee is responsible for reviewing the performance of
the officers of the Corporation and recommending to the Board of Directors the
annual salary and bonus amounts for all officers of the Corporation. The
Compensation Committee also administers the Amended and Restated 1998 Incentive
Stock Plan of the Corporation and the Commerce Bank of Alabama Stock Option
Plan. The Compensation Committee consists of Messrs. Kent and Striplin and Dr.
Orso and met twice during 1998. See "Executive Compensation and Other
Information -- Compensation Committee Report on Executive Compensation".
The Board of Directors as a whole acts in place of a nominating committee.
The Corporation's Bylaws provide that nomination for the office of director may
be made by stockholders only if written notice of such proposed nominations are
delivered to or mailed and received at the principal executive offices of the
Corporation not less than 60 days nor more than 90 days prior to the meeting at
which the election is to be held; provided, however, that in the event that less
than 70 days' notice, or prior public disclosure of the date of the meeting, is
given, or made, to stockholders, then, notice by the stockholders, to be timely,
must be so delivered or mailed and received not later than the close of business
on the tenth day following the day on which such notice of the date of the
meeting was mailed or such public disclosure was made. Such stockholder's notice
shall set forth (a) as to each person the stockholder proposes to nominate for
election or re-election as a director (i) the person's name, age, business
address, and residence address, (ii) the person's principal occupation or
employment, (iii) the class and number of shares of the Corporation that the
person beneficially owns and (iv) any other information relating to the person
that is required to be disclosed in solicitations for proxies for election of
directors pursuant to Section 14 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations promulgated
thereunder; and (b) as to the stockholder giving the notice, (i) the name and
record address of the stockholder, (ii) the class or series and number of shares
of capital stock of the Corporation that are owned beneficially or of record by
the stockholder, (iii) a description of all arrangements or understandings
between the stockholder and each proposed nominee and any other person or
persons (including their names) pursuant to which the nomination(s) are to be
made by the stockholder, (iv) a representation that such stockholder intends to
appear in person or by proxy at the meeting to nominate the persons named in
such notice, and (v) any other information relating to the stockholder that
would be required to be disclosed in a proxy statement or other filings required
to be made in connection with solicitations of proxies for the election of
directors pursuant to Section 14 of the Exchange Act and the rules and
regulations promulgated thereunder. Such notice must be accompanied by a written
consent of each proposed nominee to be named as a nominee and to serve as a
director, if elected. The Corporation may require any proposed nominee to
furnish such other information as may reasonably be required by the Corporation
to determine the eligibility of such proposed nominee to serve as a director of
the Corporation.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's officers and directors and persons who beneficially own more than
10% of a registered class of the Corporation's 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 the
Corporation's common stock are required by SEC regulations to furnish the
Corporation with copies of all Section 16(a) forms that they file. Based on a
review of the copies of the forms furnished to the Corporation, or written
representations that no reports on Form 5 were required, the Corporation
believes that during 1998, all of its officers, directors and greater-than-10%
beneficial owners complied with all applicable filing requirements except that
the following officers and directors were eight days late filing their initial
Forms 3 because of the demands of completing the Corporation's initial public
offering and the acquisitions of City National Corporation, First Citizens
Bancorp, Inc. and Commerce Bank of Alabama: Ms. Swift, Messrs. Taylor, Carter,
Taylor, Jr., Kent, Striplin, Barkley, Berte, Campbell, Dichiara, House,
Jernigan, Mitchell, Ripps, Scrushy, Stephens, and Wallis and Drs. Andrews and
Orso.
6
<PAGE> 10
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
Executive Officer Compensation. The following table presents certain
information concerning compensation paid or accrued for services rendered to the
Corporation in all capacities during the years ended December 31, 1998, 1997 and
1996, for the chief executive officer and the four other most highly compensated
executive officers of the Corporation whose total annual salary and bonus in the
last fiscal year exceeded $100,000. These executive officers are referred to
collectively as the "named executive officers."
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION(1) AWARDS
--------------------------------------------- ------------
OTHER SECURITIES
ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION HELD YEAR SALARY($) BONUS($) COMPENSATION(2) OPTIONS(#)
- - -------------------------------- ---- --------- -------- --------------- ------------
<S> <C> <C> <C> <C> <C>
James A. Taylor(3)........................ 1998 $161,111 $96,667 $31,113 125,000
Chairman of the Board and 1997 25,000 -- 4,200 --
Chief Executive Officer 1996 -- -- -- --
Terry DuBose.............................. 1998 $175,000 $25,000 $17,916 --
Vice Chairman of the Board, 1997 160,718 -- 17,524 --
Chairman of the Board and 1996 63,000 -- 6,500 --
and Chief Executive Officer of
Emerald Coast Bank
J. Daniel Sizemore(3)..................... 1998 $158,583 $17,217 $26,400 --
former President and Chief Operating 1997 108,233 39,706 15,700 2,335
Officer 1996 103,161 30,000 21,236 2,335
David R. Carter(4)........................ 1998 $162,000 $25,000 $ 8,968 50,000
Executive Vice President, Chief 1997 -- -- -- --
Financial Officer and Director 1996 -- -- -- --
Johnny Wallis(5).......................... 1998 $150,000 $ 6,250 $24,774 5,000
Director; Chairman and Chief 1997 108,450 37,025 25,636 --
Executive Officer of The Bank of Warrior 1996 104,100 14,300 21,652 --
</TABLE>
- - ---------------
(1) Dollar value of perquisites and other benefits were less than the lesser of
$50,000 or 10% of total salary and bonus for each named executive officer.
(2) Represents the dollar value of and insurance premiums paid by the
Corporation with respect to life, health, dental and disability insurance
and automobile allowance for the benefit of, and board fees received by, the
named executive officer.
(3) Mr. Sizemore resigned his position as President and Chief Operating Officer
in February 1999 and currently serves as consultant to the Corporation.
James A. Taylor currently serves as President of the Corporation.
(4) Mr. Carter received $40,500 in consultation fees in 1998, which is included
in his reported 1998 salary.
(5) Mr. Wallis served as Chairman of the Board, President and Chief Executive
Officer of the Corporation from its incorporation in 1982 until October
1997. Mr. Wallis served as President of The Bank until January 1998, and now
serves as Chief Executive Officer of The Bank of Warrior.
7
<PAGE> 11
Option Grants in 1998. The following table contains information concerning
the grant of stock options under the Amended and Restated 1998 Stock Incentive
Plan, the Commerce Bank of Alabama Incentive Stock Option Plan and the
Corporation's stock option plans to the named executive officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------------------
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS/
UNDERLYING SARS
OPTIONS/ GRANTED TO EXERCISE
SARS EMPLOYEES OF
GRANTED IN FISCAL BASE PRICE EXPIRATION GRANT DATE
NAME (#) YEAR ($/SH) DATE PRESENT VALUE $(1)
- - ---- ---------- ---------- ---------- ---------- ------------------
<S> <C> <C> <C> <C> <C>
James A. Taylor.................... 125,000 30.39% $11.00 11/5/2008 $516,250
Terry DuBose....................... -- -- -- -- --
J. Daniel Sizemore................. -- -- -- --
David R. Carter.................... 50,000 12.15% $11.00 11/5/2008 $206,500
Johnny Wallis...................... 5,000 1.20% $11.00 11/5/2008 $ 20,650
</TABLE>
- - ---------------
(1) Grant value is determined using the Black-Scholes option pricing model
assuming (a) option life equal to 80%, (b) an average volatility for the
banking industry, (c) a risk free rate of return of 4.68%, and (d) dividend
yield of 0%.
Aggregated Option Exercises in 1998 and Option Values at Year End. The
following table provides information with respect to options exercised by the
named executive officers during 1998 and the number and value of securities
underlying unexercised options held by the named executive officers at December
31, 1998.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FISCAL YEAR-END FISCAL YEAR-END
SHARES VALUE (#) ($)
ACQUIRED ON REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) ($) UNEXERCISABLE UNEXERCISABLE
- - ---- ----------- -------- ---------------------- --------------------
<S> <C> <C> <C> <C>
James A. Taylor....................... -- -- 25,000/100,000 35,750/143,000
Terry DuBose.......................... -- -- -- --
J. Daniel Sizemore.................... -- -- 51,055 407,002.89
David R. Carter....................... -- -- 10,000/40,000 14,300/57,200
Johnny Wallis......................... -- -- 1,000/4,000 1,430/5,720
</TABLE>
EMPLOYMENT AGREEMENTS
James A. Taylor. Pursuant to the executive employment agreement entered
into between the Corporation and James A. Taylor in October 1997, Mr. Taylor
will serve as Chairman of the Board and Chief Executive Officer of the
Corporation and Chairman of the Board of The Bank. In addition, Mr. Taylor will
be nominated to serve as a director of the Corporation and each of its
subsidiaries. Mr. Taylor will receive a minimum annual base compensation of
$250,000 plus a bonus of 15% of the base amount per quarter.
Under this agreement, Mr. Taylor will be entitled to receive other benefits
including a car allowance and country club dues and may participate in other
executive compensation plans. The agreement is for a term of three years which
renews daily, and it is terminable by the Corporation only upon three years'
notice. If Mr. Taylor is terminated for any reason other than "cause" as defined
in the agreement (including constructive termination), he shall receive three
years' base compensation, directors' fees and all benefits or their cash
equivalents and be entitled to a "gross-up" payment to cover any excise tax
imposed on any severance payment to Mr. Taylor.
8
<PAGE> 12
The Corporation entered into a deferred compensation agreement with Mr.
Taylor on July 23, 1998. That agreement provides that the Corporation shall fund
the premium of two life insurance policies on Mr. Taylor's life which will
provide a split dollar benefit to the Corporation and Mr. Taylor's estate in the
event of his death. Upon the termination of Mr. Taylor's employment for reasons
other than death or Cause (as defined in the agreement), Mr. Taylor will become
entitled to receive 15 annual payments in the approximate amount of $140,000
commencing April 15, 2007.
J. Daniel Sizemore. The Corporation had an employment agreement with J.
Daniel Sizemore from November 6, 1998, until he resigned his employment on
February 15, 1999. Mr. Sizemore was employed in November 1998 as President and
Chief Operating Officer of the Corporation, President and Chief Executive
Officer of The Bank and President of The Bank's Albertville branch. In addition,
Mr. Sizemore was a director of the Corporation and each of its subsidiary banks.
The agreement provided for minimum annual compensation of $270,000 including
salary, director's fees and bonuses and entitled Mr. Sizemore to receive other
benefits such as a car allowance, country club dues and life insurance and
participation in other executive compensation plans. The agreement was for a
term of three years, was renewable daily and was terminable by the employer only
upon three years' notice.
On February 15, 1999, Mr. Sizemore and the Corporation entered into a
three-year Non-Competition and Referral Agreement pursuant to which Mr. Sizemore
resigned from the Corporation and terminated his employment. Under this
agreement, Mr. Sizemore will receive a total of $240,000: $20,000 each month
from March 1999 to August 1999, $10,000 each month from September 1999 to
February 2000, and $5,000 per month from March 2000 to February 2001. As part of
this agreement, Mr. Sizemore agreed to refer $12,000,000 in loans to the
Corporation's subsidiaries. In addition, Mr. Sizemore agreed not to compete
directly or indirectly with the Corporation and not to solicit the employment of
any employee of the Corporation.
Terry DuBose. The Corporation entered into an employment agreement with
Terry DuBose on February 12, 1999. Under the terms of his employment agreement,
Mr. DuBose will serve as Vice Chairman of the Corporation and Chairman of the
Board and Chief Executive Officer of Emerald. The agreement is for a term of
three years which is renewable daily, and it is terminable by the Corporation
only upon three years' notice. Mr. DuBose will receive a minimum annual
compensation of $235,000 of which $60,000 is payable by the Corporation and
$175,000 is payable by Emerald Bank. In addition, Mr. DuBose is entitled to
receive other benefits such as performance bonuses, payment of country club fees
and dues, life insurance, an automobile and payment of reasonable travel
expenses, and may participate in all benefit plans provided by the Corporation.
If Mr. DuBose is terminated for any reason other than "cause" as defined in the
agreement, Mr. DuBose shall receive his annual compensation for the three years
following his termination. In the event of a "Change in Control" as defined in
the agreement, the Corporation shall pay Mr. DuBose his average monthly
compensation as calculated per the agreement for thirty-six months.
Johnny Wallis. On January 1, 1998, The Bank entered into an employment
agreement with Johnny Wallis, a director of the Corporation. Mr. Wallis serves
as Chairman of the Board and Chief Executive Officer of The Bank. The term of
the agreement is for three years and will be reviewed annually by the Board of
Directors of The Bank. Mr. Wallis receives a base salary of $100,000. Under the
agreement, The Bank must provide Mr. Wallis with an automobile.
James A. Taylor, Jr. The Corporation has entered into an employment
agreement with James A. Taylor, Jr., dated as of January 1, 1999. Under his
employment agreement, Mr. Taylor, Jr. will serve as the Executive Vice
President, General Counsel and Secretary of the Corporation and Executive Vice
President, General Counsel and Secretary of The Bank. In addition, Mr. Taylor,
Jr. will be nominated to serve as a director of the Corporation and its
subsidiaries. Mr. Taylor, Jr. will receive a base salary of $162,500 per year
and is eligible for bonuses. In addition, he is entitled to receive other
benefits including a car allowance and country club or athletic club dues and
may participate in all other executive compensation plans. The term of the
agreement is three years, and it will be reviewed at least annually by the
Corporation's Board of Directors for the extension of the term for another year.
If Mr. Taylor, Jr. is terminated for any reason other than "cause" as defined in
the agreement, he shall receive three years' base compensation, director's fees
and all
9
<PAGE> 13
benefits or their cash equivalents and be entitled to a "gross up" payment to
cover any excise tax imposed on any severance payment to Mr. Taylor, Jr.
W. T. Campbell, Jr. During the three-year term of the employment agreement
entered into among the Corporation, The Bank and W.T. Campbell, Jr. on October
30, 1998, Mr. Campbell will serve as the Chairman of the Board for The Bank of
Sylacauga. Mr. Campbell will receive a minimum annual salary of $135,000. The
agreement provides that Mr. Campbell will be entitled to receive other benefits
including a life insurance policy and may participate in other executive
compensation plans. The agreement is terminable by the Corporation only upon
prior notice for a period equal to the remaining term. If Mr. Campbell is
terminated for any reason other than "cause" as defined in this agreement, Mr.
Campbell shall receive his annual compensation for three years following
termination and may not, directly or indirectly, carry on, engage in or solicit
similar business with any customer of the Corporation in any county where the
Corporation or its subsidiaries do business.
Marie Swift. On January 1, 1998, The Bank entered into an employment
agreement with Marie Swift, a director of the Corporation. Ms. Swift serves as
President of The Bank of Warrior. The term of the agreement is for three years,
and it will be reviewed annually by the Board of Directors. Ms. Swift receives a
base salary of $100,000 per year plus any bonus which may be approved by Board
of Directors of The Bank. Under the agreement, The Bank must provide Ms. Swift
with an automobile.
INCENTIVE PLANS
Corporation Incentive Plan. The objectives of the Amended and Restated
1998 Stock Incentive Plan of The Banc Corporation are to further the growth and
development of the Corporation and its subsidiaries by (1) encouraging selected
Participants who contribute or are expected to contribute materially to the
Corporation's success to obtain proprietary interests in the Corporation to
encourage them so as to promote the best interests of the Corporation and (2)
affording the Corporation a means of attracting qualified personnel. One million
shares of Corporation common stock are covered by the Corporation Incentive
Plan. Those shares may be, in whole or in part, authorized but unissued shares
or issued shares that have been re-acquired by the Corporation. The Corporation
Incentive Plan authorizes the grant of options to purchase Corporation common
stock. The options may be qualified as incentive stock options under Section 422
of the Internal Revenue Code of 1986 (the "Code") if so determined at the time
of grant. The Corporation Incentive Plan also authorizes other awards including
stock appreciation rights, restricted stock and performance shares.
The Corporation Incentive Plan is administered by the Compensation
Committee of the Board of Directors of the Corporation. The Compensation
Committee, subject to the approval of the Board of Directors and the provisions
of the Corporation Incentive 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 Corporation Incentive Plan. The Corporation Incentive Plan provides that the
Compensation Committee will select grantees from among employees, officers,
directors, consultants, agents, independent contractors and other persons who
contributed or are expected to contribute materially to the success of the
Corporation or its subsidiaries.
The option exercise price of each option shall be determined by the
Compensation Committee, but shall not be less than 100% of the fair market value
of the shares on the date of grant in the case of incentive options. No
incentive option may be granted to any employee who owns, on the date of grant,
stock representing in excess of 10% of the combined voting power of all classes
of stock of the Corporation or a subsidiary unless the exercise price for stock
subject to such options is at least 110% of the fair market value of such stock
at the time of grant and the option term does not exceed five years. The
aggregate fair market value of stock with regard to which incentive options are
exercisable by an individual for the first time during any calendar year may not
exceed $100,000. The terms and conditions of each option shall be fixed from
time to time by the Compensation Committee. The Compensation Committee has
approved grants under the
10
<PAGE> 14
Corporation Incentive Plan of options to purchase 524,000 shares at an exercise
price equal to "Fair Market Value" (as defined in the Corporation Incentive
Plan) on the date of the grant.
The Commerce Option Plan. On May 4, 1995, the Commerce Bank of Alabama,
Inc. shareholders adopted the Commerce Bank of Alabama Incentive Stock Option
Plan for the benefit of key employees of Commerce. The Commerce Option Plan
authorizes the grant of options to purchase Commerce common stock intended to
qualify as Incentive Options and the grant of non-qualified options. The
Commerce Option Plan was assumed by the Corporation pursuant to the merger of
Commerce with and into The Bank. As of December 30, 1998, there were outstanding
options under the Commerce Option Plan to purchase 82,384 shares of Corporation
common stock at prices between $4.30 and $6.24 per share.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
General
The members of the Compensation Committee are Larry D. Striplin, Jr., James
Mailon Kent, Jr. and Ronald W. Orso. The Compensation Committee is charged by
the Board of Directors with establishing a compensation plan that will enable
the Corporation to compete effectively for the services of qualified officers
and key employees, to give such employees appropriate incentive to pursue the
maximization of long-term stockholder value, and to recognize such employees'
success in achieving both qualitative and quantitative goals for the benefit of
the Corporation and its stockholders. The Compensation Committee makes
recommendations as to appropriate levels of compensation for specific
individuals, as well as compensation and benefit programs for the Corporation as
a whole.
Compensation Philosophy and Policies for Executive Officers
As its first principle, the Compensation Committee believes that executives
of the Corporation should be rewarded based upon their success in meeting the
Corporation's operational goals, improving its earnings and generating returns
for its stockholders, and the Compensation Committee strives to establish levels
of compensation that take such factors into account and provide appropriate
recognition for past achievement and incentive for future success. The
Compensation Committee recognizes that the demand for executives with expertise
and experience in the banking industry is intense. In order to attract and
retain qualified persons, the Compensation Committee believes that the
Corporation must offer current compensation at levels consistent with other
financial institutions. In addition, the Compensation Committee believes that it
is in the best interests of the Corporation's stockholders to offer its
executives meaningful equity participation in the Corporation in order that
those executives' interests will be aligned with those of the Corporation's
stockholders. The Compensation Committee feels that the mix of cash compensation
and equity participation will prove to be effective in stimulating the
Corporation's executives to meet both long-term and short-term goals.
The Corporation's compensation program has two distinct elements: base
salary; and incentive compensation, including both cash incentive compensation
and equity-based compensation.
Base Salary. While the demand for experienced executives in the banking
industry continues to grow, the Corporation has been very successful in
attracting key executives. The Corporation believes that its compensation
package is instrumental in such success. The Compensation Committee endeavors to
establish base salary levels for those key executives that are consistent with
those provided for similarly situated executives of other publicly-held
financial institutions, taking into account each executive's areas and level of
responsibility. The Corporation does not maintain a reference record of where
its compensation stands with respect to other publicly-held financial
institutions.
Incentive Compensation. In addition to base salary, the Compensation
Committee recommends cash incentive compensation for executives of the
Corporation, based upon each executive's success in meeting qualitative and
quantitative performance goals established by the Board of Directors and each
executive's superiors. Bonus determinations are made on a case-by-case basis,
and there is no fixed relationship between any particular performance factor and
the amount of a given executive's bonus. In addition to the annual
11
<PAGE> 15
bonus review, the Compensation Committee also believes that exceptional
performance by an executive related to specific projects or goals set by the
Board of Directors and senior management should be rewarded with special cash
bonuses that are awarded from time-to-time as circumstances indicate. The
Compensation Committee believes that this approach is better than determining
bonuses on the basis of a formulary approach.
In addition to cash incentive compensation, the Corporation utilizes
equity-based compensation in the form of stock options and other awards to
encourage its executives to meet the Corporation's operational goals and
maximize long-term stockholder value. Because the value of stock options granted
to an executive is directly related to the Corporation's success in enhancing
its market value over time, the Committee believes that its stock option
programs are effective in aligning the interests of management and stockholders.
The Compensation Committee determines stock option grants and other awards
valued in whole or in part by reference to or otherwise based on the common
stock of the Corporation. Under the Corporation's incentive compensation plans,
both of which are described above under "Executive Compensation and Other
Information -- Incentive Plans", specific grants are determined taking into
account an executive's current responsibilities and historical performance, as
well as the executive's perceived contribution to the Corporation's results of
operations. Awards are also used to provide an incentive to newly-promoted
officers at the time that they are asked to assume greater responsibilities. In
evaluating award grants, the Compensation Committee will consider prior grants
and shares currently held, as well as the recipient's success in meeting
operational goals and the recipient's level of responsibility. However, no fixed
formula is utilized to determine particular grants. The Compensation Committee
believes that the opportunity to acquire a significant equity interest in the
Corporation will be a strong motivation for the Corporation's executives to
pursue the long-term interests of the Corporation and its stockholders, and will
promote longevity and retention of key executives. Information relating to stock
options granted to the five most highly-compensated executive officers of the
Corporation is set forth elsewhere in this Proxy Statement.
The Omnibus Budget Reconciliation Act of 1993 contains a provision under
which a publicly traded corporation is sometimes precluded from taking a federal
income tax deduction for compensation in excess of $1,000,000 that is paid to
the chief executive officer and the four other most highly-compensated
executives of the corporation during a corporation's 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 Section 162(m) of the Code. The Compensation Committee has concluded
that ensuring deductibility under Section 162(m) is not as important as
structuring incentive compensation based on methodology and factors it deems
appropriate. The Compensation Committee has chosen not to distort its
methodology and application of the factors it believes pertinent so as to ensure
that all executive compensation is deductible under Section 162(m). While the
Compensation Committee intends that the Corporation's compensation plans will
meet, to the extent practical, the prerequisites for deductibility under Section
162(m), if it develops that a portion of the compensation of one or more
executive officers is not deductible under Section 162(m), then the Compensation
Committee expects that the Corporation would honor its obligations to the
executive officers under the compensation arrangements approved by the
Compensation Committee.
The Compensation Committee will continue to review and evaluate
compensation programs at least annually. When and where appropriate, the
Compensation Committee will consult with independent compensation consultants,
legal advisors and the Corporation's public accounting firm with respect to the
proper design of the program toward achieving the Corporation's objectives.
Chief Executive Officer Compensation. The Compensation Committee
determines Mr. Taylor's equity-based compensation and reports to the Board of
Directors on other compensation arrangements with Mr. Taylor, and recommends to
the Board of Directors the level of non-equity incentive compensation that is
appropriate for the chief executive officer with respect to each fiscal year of
the Corporation. In making such recommendation, the Compensation Committee takes
into account the Corporation's performance in the marketplace, its success in
meeting strategic goals and its success in meeting monthly and annual
performance goals established by the Board of Directors. Again, ultimate
compensation decisions are not made in a
12
<PAGE> 16
formulary manner, but in a manner which takes into account the Corporation's
competitive position, its position in the financial markets and its ability to
achieve its performance goals. The Compensation Committee believes that it is
important to ensure that, if Mr. Taylor is successful in leading the Corporation
to achieve the goals set by the Board of Directors, his compensation will be at
a level commensurate with that of chief executive officers of similarly-situated
publicly held financial institutions.
Conclusion
The Compensation Committee believes that the compensation of the
Corporation's executives during 1998 was appropriate. It is the intent of the
Compensation Committee to ensure that the Corporation's compensation programs
continue to motivate its executives and reward them for being responsive to the
long-term interests of the Corporation and its stockholders. The Compensation
Committee will continue to review and evaluate compensation programs at least
annually.
The foregoing report is submitted by the following directors of the
Corporation, who comprise the Compensation Committee of the Board of Directors.
James Mailon Kent, Jr.
Ronald W. Orso, M.D.
Larry D. Striplin, Jr.
CERTAIN TRANSACTIONS
The Bank and Emerald Coast Bank have entered into transactions with their
directors, executive officers, significant stockholders and 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 of The Bank and Emerald Coast Bank
involve more than normal credit risk or present other unfavorable features.
During 1998, Warrior Capital Corporation sold a total of 495,000 shares of
Warrior Capital Corporation common stock at $4.79 per share to various executive
officers and directors of the Corporation. James A. Taylor, James A. Taylor,
Jr., Richard M. Scrushy and James R. Andrews each purchased 210,000, 105,000,
105,000 and 75,000 shares, respectively. The dollar amounts and the share
numbers have been adjusted to take into account the 300-for-one exchange
effected in the merger of Warrior Capital Corporation into the Corporation in
September 1998.
On February 12, 1999, Emerald Coast Bancshares, Inc. was merged with and
into the Corporation. As a result of the merger, K. Earl Durden and Terry
DuBose, who became directors of the Corporation on December 15, 1998, received
205,534 and 85,483 shares of Corporation common stock.
13
<PAGE> 17
STOCKHOLDER RETURN COMPARISON
Below is a line graph comparing the closing price of the Corporation's
common stock, the Nasdaq Composite Index and the Nasdaq Financial Index. The
following graph assumes $100 invested in the Corporation's common stock and in
each index.
COMPARISON OF CUMULATIVE TOTAL RETURN
THE BANC CORPORATION, NASDAQ COMPOSITE INDEX
AND NASDAQ FINANCIAL INDEX
DECEMBER 10, 1998 -- DECEMBER 31, 1998
CHARISMA GRAPH
<TABLE>
<CAPTION>
NASDAQ NASDAQ
MEASUREMENT PERIOD THE BANC COMPOSITE FINANCIAL
(FISCAL YEAR COVERED) CORPORATION INDEX INDEX
<S> <C> <C> <C>
12/10/98 100.00 100.00 100.00
12/31/98 99.50 108.77 104.98
</TABLE>
DIRECTOR COMPENSATION
Directors of the Corporation receive $1,500 compensation for each board
meeting attended and a retainer of $1,500 per quarter for serving as directors
of the Corporation. Directors are eligible to receive grants of stock options
under the Amended and Restated 1998 Stock Incentive Plan of The Banc
Corporation. See "-- Executive Officer Compensation -- Option Grants in 1998"
and "Principal Stockholders of the Corporation."
14
<PAGE> 18
PROPOSAL NUMBER TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Subject to ratification by the stockholders, the Corporation's Board of
Directors has reappointed Ernst & Young LLP, Birmingham, Alabama, as independent
auditors to audit the Corporation's financial statements for the current fiscal
year. Management expects representatives of Ernst & Young LLP to be present at
the Annual Meeting. They will have an opportunity to make a statement if they
desire to do so, and they are expected to be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" SUCH RATIFICATION.
CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANTS
On June 16, 1998, the Board of Directors of the Corporation approved the
engagement of Ernst & Young LLP as its independent auditors for the three years
ending December 31, 1998, to replace the firm of Dudley, Hopton-Jones, Sims &
Freeman PLLP who were the auditors of Warrior Capital Corporation ("Warrior"),
the predecessor of the Corporation. The reports of Dudley, Hopton-Jones, Sims &
Freeman PLLP on Warrior's financial statements for the past two fiscal years did
not contain an adverse opinion or a disclaimer of opinion and were not qualified
or modified as to uncertainty, audit scope or accounting principles.
In connection with the audits of Warrior Capital Corporation's financial
statements for each of the two fiscal years ended December 31, 1997, and in the
subsequent interim period, there were no disagreements with Dudley,
Hopton-Jones, Sims & Freeman PLLP on any matters of accounting principles or
practices, financial statement disclosure or auditing scope and procedures
which, if not resolved to the satisfaction of Dudley, Hopton-Jones, Sims &
Freeman PLLP would have caused Dudley, Hopton-Jones, Sims & Freeman PLLP to make
reference to the matter in their report. The Corporation has requested Dudley,
Hopton-Jones, Sims & Freeman PLLP to furnish it a letter addressed to the
Commission stating whether it agrees with the above statements and Dudley,
Hopton-Jones, Sims & Freeman has provided such letter.
Management expects representatives of Dudley, Hopton-Jones, Sims & Freeman
PLLP to be present at the Annual Meeting. They will have an opportunity to make
a statement if they desire to do so, and they are expected to be available to
answer appropriate questions.
MANAGEMENT OF CORPORATION
CONTINUING DIRECTORS AND EXECUTIVE OFFICERS
See "Election of Directors" for information about executive officers and
directors who are nominees for re-election to the Board of Directors. The
following table sets forth certain information about directors of the
Corporation who are continuing in office and certain executive officers of the
Corporation as of April 15, 1999:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH CORPORATION
- - ---- --- -------------------------
<S> <C> <C>
James A. Taylor............................ 57 Chairman of the Board, Chief Executive
Officer and President
David R. Carter............................ 46 Executive Vice President, Chief Financial
Officer and Director
Terry DuBose............................... 51 Vice Chairman
James Mailon Kent, Jr.(1).................. 58 Vice Chairman
Larry D. Striplin, Jr.(1).................. 69 Vice Chairman
James R. Andrews, M.D. .................... 56 Director
Neal R. Berte, Ed.D. ...................... 58 Director
Peter N. Dichiara(2)....................... 44 Director
</TABLE>
15
<PAGE> 19
<TABLE>
<CAPTION>
NAME AGE POSITION WITH CORPORATION
- - ---- --- -------------------------
<S> <C> <C>
Steven C. Hays............................. 42 Director
Larry R. House............................. 54 Director
Randall E. Jones........................... 45 Director
Ronald W. Orso, M.D.(1).................... 52 Director
Richard M. Scrushy......................... 45 Director
Michael E. Stephens........................ 55 Director
Marie Swift................................ 57 Director
Johnny Wallis.............................. 70 Director
</TABLE>
- - ---------------
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
James A. Taylor has been Chairman of the Board and Chief Executive Officer
of the Corporation since its incorporation in 1998. Mr. Taylor has served as
President of the Corporation since February 1999. Mr. Taylor served as President
of the Corporation from its incorporation until November 1998. Mr. Taylor served
as Chairman of the Board, President and Chief Executive Officer of Warrior
Capital Corporation from October 1997 until it was merged into the Corporation
on September 24, 1998. Mr. Taylor was Founder, Chairman of the Board and Chief
Executive Officer of Alabama National BanCorporation, a publicly-traded bank
holding company based in Birmingham, Alabama, from its incorporation in 1986
until his retirement in April 1996. From 1981 until 1996, Mr. Taylor served as
Chairman of the Board and Chief Executive Officer of various banks and bank
holding companies that ultimately comprised Alabama National BanCorporation. Mr.
Taylor is also on the Board of Directors of the American Sports Medicine
Institute.
David R. Carter has been Executive Vice President and Chief Financial
Officer of the Corporation since September 1998. Mr. Carter has been a director
of the Corporation since December 1998. Mr. Carter served as Executive Vice
President and Chief Financial Officer of Warrior Capital Corporation from April
1998 until September 1998. Mr. Carter served as a consultant to Warrior Capital
Corporation from January 1998 until April 1998. From June 1995 through January
1998, Mr. Carter served as the Chief Financial Officer of Roxco, Ltd., a
regional construction company. From February 1981 through January 1995, Mr.
Carter served in various capacities with Trustmark, a publicly-traded bank
holding company based in Jackson, Mississippi, including Chief Financial Officer
from September 1988 until January 1995.
Terry DuBose has been a director of the Corporation and served as Vice
Chairman since December 1998. Mr. DuBose served as Chief Executive Officer and
President of Emerald Coast Bancshares, Inc. from its inception in 1996 until it
was merged into the Corporation on February 12, 1999. Mr. DuBose served as
Chairman of the Board, President and Chief Executive Officer of SouthTrust of
Northwest Florida Holding Company from January 1987 until 1996. Mr. DuBose
served as President and Chief Executive Officer of First Bank of Marianna from
1978 until it was acquired by SouthTrust in 1987. Mr. DuBose serves on the Board
of Directors of the Florida Banking Association, the Florida Government
Relations Counsel and the Florida Community Bankers Counsel.
James Mailon Kent, Jr. has been a director of the Corporation since
September 1998 and served as a director of Warrior Capital Corporation from
October 1997 until it was merged into the Corporation on September 24, 1998. Mr.
Kent has served as Vice Chairman of the Corporation since December 1998. Mr.
Kent served as a director of Alabama National BanCorporation from 1988 until
1996 and served as Vice Chairman of Alabama National BanCorporation from 1988
until 1994. Mr. Kent has been the owner of Mailon Kent Insurance Agency in
Birmingham, Alabama for over 20 years.
Larry D. Striplin, Jr. has been a director of the Corporation since
September 1998 and served as a director of Warrior Capital Corporation from
October 1997 until it was merged into the Corporation on September 24, 1998. Mr.
Striplin has served as Vice Chairman of the Corporation since December 1998.
Since October 1995, Mr. Striplin has been the Chairman and Chief Executive
Officer of Nelson-Brantley
16
<PAGE> 20
Glass Contractors, Inc. and Chairman and Chief Executive Officer of Clearview
Properties, Inc. Until October 1995, Mr. Striplin had been Chairman of the Board
and Chief Executive Officer of Circle "S" Industries, Inc., a privately-owned
bonding wire manufacturer. Mr. Striplin is a member of the Board of Directors of
MedPartners, Inc. ("MedPartners"), a publicly-traded healthcare company,
HEALTHSOUTH Corporation, a publicly-traded provider of rehabilitative health
care services, and Kulicke & Soffa Industries, Inc., a publicly-traded
manufacturer of electronic equipment.
James R. Andrews, M.D. has been a director of the Corporation since
September 1998 and served as a director of Warrior Capital Corporation from
October 1997 until it was merged into the Corporation on September 24, 1998. Dr.
Andrews served as a director of Alabama National BanCorporation from 1989 until
1996. Dr. Andrews has practiced as an orthopedic surgeon specializing in
sports-related injuries for over 25 years.
Neal R. Berte, Ed.D. has been a director of the Corporation since September
1998. Dr. Berte has been the President of Birmingham-Southern College since
1975.
Peter N. Dichiara has been a director of the Corporation since September
1998 and served as a director of Warrior Capital Corporation from 1984 until it
was merged into the Corporation on September 24, 1998. Mr. Dichiara has been the
President of City Wholesale Grocery, a grocery supply company based in
Birmingham, Alabama since October 1983.
Steven C. Hays has been a director of the Corporation since November 6,
1998. Mr. Hays served as a director of Commerce Bank of Alabama, Inc. from April
1995 until it was merged into The Bank on November 6, 1998. Mr. Hays also served
as Executive Vice President of Steel Processing Services, Inc. from 1981 until
the sale of the company in 1993. He presently manages a number of personal
investments.
Larry R. House has been a director of the Corporation since September 1998
and served as a director of Warrior Capital Corporation from October 1997 until
it was merged into the Corporation on September 24, 1998. From 1985 to 1992, he
was Chief Operating Officer of HEALTHSOUTH Rehabilitation Corporation, now
HEALTHSOUTH Corporation, a publicly-traded provider of rehabilitative health
care services. From 1992 to 1993, Mr. House was President of HEALTHSOUTH
International, Inc. From 1993 to 1998, Mr. House served as Chairman of the Board
and Chief Executive Officer of MedPartners, Inc.. Mr. House is a member of the
Board of Directors of the American Sports Medicine Institute.
Randall E. Jones has been a director of the Corporation since November 6,
1998. Mr. Jones served as a director of Commerce Bank of Alabama, Inc. from
April 1995 until it was merged into The Bank on November 6, 1998. Mr. Jones is
the owner and President of Randy Jones Insurance Agency, Inc., representing
Nationwide Insurance Company since 1978. He is a past president of the
Albertville Rotary Club and the Albertville Chamber of Commerce.
Ronald W. Orso, M.D. has been a director of the Corporation since September
1998 and served as a director of Warrior Capital Corporation from October 1997
until it was merged into the Corporation on September 24, 1998. Dr. Orso served
as a director of Alabama National BanCorporation from 1988 until 1997. Dr. Orso
has practiced in the field of obstetrics and gynecology for over 23 years. He is
the past Chairman of the Department of Obstetrics and Gynecology and the past
president of the Medical Staff at Baptist Medical Center in Birmingham.
Richard M. Scrushy has been a director of the Corporation since September
1998. Since 1984, Mr. Scrushy is Chairman of the Board and Chief Executive
Officer of HEALTHSOUTH Corporation. Mr. Scrushy has been a director of
MedPartners, Inc. since January 1993 and served as its Chairman of the Board of
Directors from January 1998 through October 1998.
Michael Stephens has been a director of the Corporation since September
1998 and served as a director of Warrior Capital Corporation from December 1997
until it was merged into the Corporation on September 24, 1998. He has been the
Chairman and Chief Executive Officer of S Enterprises, Inc. He founded ReLife,
Inc., a publicly-traded rehabilitation company based in Birmingham, Alabama, and
was its Chairman and Chief
17
<PAGE> 21
Executive Officer from 1986 until 1994. Mr. Stephens also serves on the Boards
of Directors of Rehabilitation Designs of America based in Kansas City, Kansas,
and PsychPartners, Inc. based in Birmingham, Alabama.
Marie Swift has been a director of the Corporation since September 1998 and
served as a director of Warrior Capital Corporation from its incorporation in
1982 until it was merged into the Corporation on September 24, 1998. Ms. Swift
served as Secretary of the Corporation from September 1998 to December 1998. Ms.
Swift has been President of The Bank of Warrior since January 1998. Prior to
that, she served as Senior Vice President of Warrior Savings Bank from 1982
until 1998.
Johnny Wallis has been a director of the Corporation since September 1998
and served as director of Warrior Capital Corporation from its incorporation in
1982 until it was merged into the Corporation on September 24, 1998. Mr. Wallis
served as the Chairman of the Board, President and Chief Executive Officer of
Warrior Capital Corporation until October 1997. Mr. Wallis served as President
of The Bank until January 1998 and continues to serve as Chief Executive Officer
of The Bank of Warrior.
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING OF
STOCKHOLDERS
Stockholders' proposals intended to be presented at the 2000 Annual Meeting
of Stockholders must be received by the Corporation no later than January 19,
2000, to be considered for inclusion in the Corporation's Proxy Statement and
form of proxy for that meeting.
A stockholder of the Corporation may wish to have a proposal presented at
the annual meeting of stockholders to be held in 2000, but not to have such
proposal included in the Corporation's proxy statement and form of proxy
relating to that meeting. If notice of any such proposal is not received by the
Corporation at the address appearing on the first page of this proxy statement
by April 3, 2000, then the Corporation will not address the proposal in its
proxy statement relating to that meeting, and all proxies solicited and received
by the Corporation's Board of Directors will be deemed to have conferred
discretionary authority to vote on any such proposal.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors of the
Corporation 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 best judgments on such matters.
Please SIGN, DATE and RETURN the enclosed Proxy promptly.
By Order of the Board of Directors,
/S/ JAMES A. TAYLOR, JR.
JAMES A. TAYLOR, JR.
Secretary
Birmingham, Alabama
May 18, 1999
18
<PAGE> 22
PROXY THE BANC CORPORATION PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE BANC CORPORATION
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 15, 1999
The undersigned hereby appoints James A. Taylor and James Mailon Kent, Jr.,
either one of whom may act without joinder of the other, with full power of
substitution and ratification, attorneys-in-fact and Proxies of the undersigned
to vote all shares of common stock of The Banc Corporation which the undersigned
is entitled to vote at the 1999 Annual Meeting of Stockholders to be held at
4:00 p.m. on Tuesday, June 15, 1999, at the principal executive offices of the
Corporation at 17 North 20th Street, Birmingham, Alabama 35203, and at any and
all adjournments thereof:
1. ELECTION OF DIRECTORS. To elect as Directors for a three-year term ending
on the date of the Annual Meeting of Stockholders in 2002 the following
individuals:
<TABLE>
<S> <C>
W.T. Campbell, Jr. Harold B. Ripps
K. Earl Durden James A. Taylor, Jr.
Thomas E. Jernigan, Jr. T. Mandell Tillman
Mayer Mitchell
</TABLE>
[ ] FOR [ ] AGAINST
INSTRUCTIONS: To withhold vote for any individual(s) nominated as Directors in
Item 1 above write names below:
- - --------------------------------------------------------------------------------
2. RATIFICATION OF THE INDEPENDENT AUDITORS. To ratify the appointment of
Ernst & Young LLP as independent auditors of The Banc Corporation for the
year ending December 31, 1999.
[ ] FOR [ ] AGAINST
3. In their discretion, Proxies are authorized to vote upon such other
business as may properly come before the 1999 Annual Meeting of
Stockholders.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS INDICATED, THE SHARES WILL BE VOTED FOR ALL DIRECTOR NOMINEES
AND FOR ALL PROPOSALS. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE
DIRECTOR NOMINEES AND FOR ALL PROPOSALS.
Dated: , 1999
-----------------
------------------------------
(Print Name)
------------------------------
(Signature of Stockholder(s))
PLEASE DATE, SIGN AND RETURN
THIS PROXY TO THE CORPORATION
IN THE ENCLOSED ENVELOPE.
THANK YOU.
