<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 1, 2000
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
at our principal executive offices at 17 North 20th Street, Birmingham, Alabama,
on Tuesday, June 20, 2000, at 3:00 p.m. Central Daylight Time. 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 upon, 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, please mark, sign, date and return the
enclosed proxy as soon as possible in the envelope provided. If you attend the
Annual Meeting, which we hope you will do, you may vote in person even if you
have previously mailed a proxy card.
Sincerely,
/s/ James A. Taylor
James A. Taylor
Chief Executive Officer, President
and
Chairman of the Board
<PAGE> 3
THE BANC CORPORATION
17 NORTH 20TH STREET
BIRMINGHAM, ALABAMA 35203
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 20, 2000
---------------------
To the Stockholders of The Banc Corporation:
You are hereby notified that the 2000 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
20, 2000, at 3:00 p.m. Central Daylight Time, for the following purposes:
1. to elect nine Directors, each to serve a term of three years
scheduled to expire at the annual meeting of stockholders held the third
year following the year of their election or until their respective
successors are elected and qualified;
2. to approve and ratify the Second Amended and Restated 1998 Stock
Incentive Plan of The Banc Corporation;
3. to ratify the appointment of Ernst & Young LLP as independent
auditors of the Corporation for the year ending December 31, 2000; and
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 May 1, 2000,
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 9 to June 19, 2000, 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 1, 2000
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 2000 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 2000 Annual
Meeting of Stockholders to be held on Tuesday, June 20, 2000, at 3:00 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 10, 2000.
SOLICITATION
The Corporation will bear the costs of soliciting proxies. Certain officers
and employees of the Corporation or its 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 behalf on the Corporation. They will
receive no additional compensation for making any solicitations. The Corporation
expects to reimburse brokers, banks, custodians and other nominees for their
reasonable out-of-pocket expenses in handling proxy materials for beneficial
owners of the common stock. 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 not to exceed $5,000 plus
reimbursement for expenses.
VOTING AND REVOCABILITY OF PROXY APPOINTMENTS
Only stockholders of record at the close of business on May 1, 2000, 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 1, 2000, the number of
shares of common stock outstanding and entitled to vote at the Annual Meeting
was 14,385,021. 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 Annual 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 envelope provided.
Shares of common stock represented by the accompanying proxy card will be voted
in accordance with your selections if the proxy card is properly executed and is
received by the Corporation prior to the time of voting and is not revoked.
Where specific choices are not indicated on the proxy card, proxies will be
voted in accordance with the recommendations of the Board of Directors.
As of the date of this Proxy Statement, the Corporation's Board of
Directors is not informed 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.
<PAGE> 5
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 in itself revoke a proxy.
Each proxy granted may be revoked by the person giving it (1) by giving written
notice to such effect to the Secretary of the Corporation, (2) by executing and
delivering a subsequent proxy or (3) by attending, giving notice 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, 2000, 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 it 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; Chairman of the
Board of The Bank 667,600(3)(4) 4.62%
Terry DuBose............... Vice Chairman; Chairman and
Chief Executive Officer of
Emerald Coast Bank 262,204(6)(19) 1.82%
James Mailon Kent, Jr...... Vice Chairman 214,000(7) 1.49%
Larry D. Striplin, Jr...... Vice Chairman 228,000(7)(8) 1.58%
David R. Carter............ Executive Vice President,
Chief Financial Officer and
Director 28,000(5) *
James A. Taylor, Jr........ Executive Vice President,
General Counsel, Secretary
and Director 163,000(5) 1.13%
James R. Andrews, M.D...... Director 297,000(9) 2.06%
Neal R. Berte, Ed.D........ Director 12,000(9) *
W. T. Campbell, Jr......... Director 422,469(9)(10) 2.94%
Peter N. Dichiara.......... Director 212,000(9)(11) 1.47%
K. Earl Durden............. Director 408,068(9)(20) 2.84%
John F. Gittings........... Director 54,813(12)(13) *
Steven C. Hays............. Director 76,096(9)(14) *
Larry R. House............. Director 105,800(9) *
Thomas E. Jernigan, Jr..... Director 24,000(7) *
Randall E. Jones........... Director 49,866(9) *
Mayer Mitchell............. Director 107,000(9)(15) *
Ronald W. Orso, M.D........ Director 222,000(9)(16) 1.54%
Harold W. Ripps............ Director 212,000(9) 1.47%
Richard M. Scrushy......... Director 227,000(9) 1.58%
Jerry M. Smith............. Director 177,585(12) 1.23%
Michael E. Stephens........ Director 232,353(9) 1.62%
Marie Swift................ Director 54,500(9) *
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
NUMBER OF SHARES OF PERCENTAGE(1)(2)
THE CORPORATION OF COMMON
NAME POSITION HELD COMMON STOCK STOCK OWNED
- ---- ------------- ------------------- ----------------
<S> <C> <C> <C>
T. Mandell Tillman......... Director 56,172(9)(17) *
Johnny Wallis.............. Director 107,000(9) *
All executive officers and
directors as a group (25
persons)................. 4,620,526(18) 32.12%
</TABLE>
- ---------------
(1) Except as otherwise noted herein, percentage is determined on the basis of
14,385,021 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 Corporation common stock subject to currently exercisable
options. An asterisk indicates beneficial ownership of less than one
percent.
(2) Percent 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 of which he disclaims ownership.
(4) Includes 65,000 shares subject to options.
(5) Includes 23,000 shares subject to options.
(6) Includes 156,721 shares held as Trustee for the Emerald Coast Bank Profit
Sharing Plan, of which he maintains voting control, and 14,247 held by his
spouse.
(7) Includes 4,000 shares subject to options.
(8) Includes 6,000 shares as custodian for minor children.
(9) Includes 2,000 shares subject to options.
(10) Includes 3,300 shares held by his minor children.
(11) Includes 210,000 shares held by City Wholesale Grocery Co., Inc., of which
he is the President.
(12) Includes 1,000 shares subject to options.
(13) Includes 900 shares held by spouse.
(14) Includes 4,046 shares held for the benefit of his minor children.
(15) Includes 105,000 shares held by Mitchell Holdings, L.P. of which he is
President of the general partner Mitchell Investment Holdings, Inc.
(16) Includes 210,000 shares held by Birmingham OB/GYN Pension Plan, of which he
is Trustee.
(17) Includes 4,620 shares held for the benefit of children and 3,802 shares
held by his spouse.
(18) Includes 177,000 shares subject to options.
(19) Includes 20,000 shares subject to options.
(20) Includes 203,534 shares held in trust as co-trustee.
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. One
class, which includes Messrs. Dichiara, Hays, House, Jones, Scrushy, Smith,
Stephens and Wallis and Ms. Swift, holds office for a term that will expire at
this year's Annual Meeting; a second 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; and a third class, which includes Messrs. Campbell, Durden, Gittings,
Jernigan, Jr., Mitchell, Ripps, Taylor, Jr. and Tillman, holds office for a term
that will expire
3
<PAGE> 7
at the annual meeting of stockholders to be held in 2002. 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. The Board of Directors elects officers annually. Those officers
serve at the discretion of the Board of Directors.
At this year's Annual Meeting, nine directors are to be elected. The
Corporation recommends the election of Peter N. Dichiara, Steven C. Hays, Larry
R. House, Randall E. Jones, Richard M. Scrushy, Jerry M. Smith, Michael E.
Stephens, Johnny Wallis and Marie Swift, 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 2003 or 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 named will be unable to 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. In the event that any nominee becomes unavailable for
election for any reason, an event that management does not anticipate, shares of
Corporation common stock represented by proxies will be voted for any substitute
nominees designated by the Board of Directors.
NOMINEES FOR 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:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH CORPORATION
- ---- --- -------------------------
<S> <C> <C>
Peter N. Dichiara(1)....................... 44 Director
Steven C. Hays............................. 43 Director
Larry R. House............................. 56 Director
Randall E. Jones........................... 46 Director
Richard M. Scrushy......................... 47 Director
Jerry M. Smith............................. 60 Director
Michael E. Stephens........................ 56 Director
Marie Swift................................ 58 Director
Johnny Wallis.............................. 71 Director
</TABLE>
- ---------------
(1) Member of the Audit Committee.
See "Management of Corporation -- Incumbent Directors and Executive
Officers" for certain information about the other directors named whom it is
anticipated will continue in office following the Annual Meeting.
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 December 1998.
Mr. Hays served as a director of Commerce Bank of Alabama, Inc. from April 1995
until it was merged into The Bank on
4
<PAGE> 8
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., now Caremark Rx, Inc. Mr.
House is presently the Chairman of the Executive Committee of onehealthbank.com.
Mr. House is also managing principal of VENTUREHOUSE, a venture capital firm
headquartered in Birmingham, Alabama.
Randall E. Jones has been a director of the Corporation since December
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.
Richard M. Scrushy has been a member of the Board of Directors of the
Corporation since September 1998. Since 1984, Mr. Scrushy has been Chairman of
the Board and Chief Executive Officer of HEALTHSOUTH Corporation. Mr. Scrushy
has been a director of Caremark Rx, Inc., formerly MedPartners, Inc., since
January 1993 and served as its Chairman of the Board of Directors from January
1998 through October 1998.
Jerry M. Smith has been a director of the Corporation since September 1999.
Mr. Smith served as a member of the Board of Directors of C&L Bank of Bristol
from 1975 until it was acquired by the Corporation on June 30, 1999, and as a
member of the Board of Directors of C&L Bank of Blountstown from 1987 until it
was acquired by the Corporation and merged into C&L Bank of Bristol on June 30,
1999. Mr. Smith has been Chairman and President of First National Bank of
Alachua in Alachua, Florida since 1971.
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 founded
ReLife, Inc., a publicly-traded rehabilitation company based in Birmingham,
Alabama, and was its Chairman and Chief 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. He is currently the Chairman and Chief Executive Officer of
S Enterprises, Inc.
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 -- 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 Chairman of the Board
of The Bank -- Warrior.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" MESSRS.
DICHIARA, HAYS, HOUSE, JONES, SCRUSHY, SMITH, STEPHENS AND WALLIS AND MS. SWIFT.
5
<PAGE> 9
INCUMBENT 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 28, 2000:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH CORPORATION
- ---- --- -------------------------
<S> <C> <C>
James A. Taylor............................ 58 Chairman of the Board, Chief Executive
Officer and President
David R. Carter............................ 48 Executive Vice President, Chief Financial
Officer and Director
James A. Taylor, Jr........................ 35 Executive Vice President, General Counsel,
Secretary and Director
Terry DuBose............................... 52 Vice Chairman
James Mailon Kent, Jr.(1).................. 59 Vice Chairman
Larry D. Striplin, Jr.(1).................. 70 Vice Chairman
James R. Andrews, M.D...................... 57 Director
Neal R. Berte, Ed.D........................ 59 Director
W. T. Campbell, Jr......................... 53 Director
K. Earl Durden(2).......................... 63 Director
John F. Gittings........................... 53 Director
Thomas E. Jernigan, Jr.(2)................. 35 Director
Mayer Mitchell............................. 67 Director
Ronald W. Orso, M.D.(1).................... 54 Director
Harold W. Ripps............................ 61 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 and Vesta Insurance Group, Inc., a publicly traded insurance holding
company.
David R. Carter has been Executive Vice President and Chief Financial
Officer of the Corporation since September 1998. Mr. Carter has served as 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.
6
<PAGE> 10
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 member of the Board of Directors 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 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 HEALTHSOUTH Corporation, a
publicly-traded provider of rehabilitative health care services, Kulicke & Soffa
Industries, Inc., a publicly-traded manufacturer of electronic equipment, and
Vesta Insurance Group, Inc., a publicly-traded insurance holding company.
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 since December 1998 and Secretary of the Corporation since
December 1998. Mr. Taylor served as Executive Vice President General Counsel and
Secretary of The Bank from December 1998 until November 1999. 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 Capital Corporation from April 1998
until September 1998. From June 1996 until April 1998, Mr. Taylor served as Vice
President -- Legal Services for MedPartners, Inc., now Caremark Rx, Inc. 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. Since November 1, 1999, Mr. Taylor has served as
Senior Vice President -- Finance of Vesta Insurance Group, Inc.
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.
W.T. Campbell, Jr. has been a director of the Corporation since December
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 15,
1998. Mr. Durden served as a Director of Emerald Coast Bancshares, Inc. from its
inception in 1996 until it was merged into the
7
<PAGE> 11
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 served 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 twenty 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 held various positions 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 the
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.
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.
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.
T. Mandell Tillman has been a director of the Corporation since December
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.
CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors of the Corporation currently has two committees: the
Audit Committee and the Compensation Committee. The Board of Directors as a
whole acts in place of a nominating 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 of the Corporation with respect to 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 accountants 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. During 1999, there were five meetings of
the Audit Committee.
The Compensation Committee is responsible for reviewing the performance of
the officers of the Corporation and recommending to the Board of Directors of
the Corporation annual salary and bonus amounts
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<PAGE> 12
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. During 1999, there were four meetings
of the Compensation Committee. See "Executive Compensation and Other
Information -- Compensation Committee Report on Executive Compensation."
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 stock
holder'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.
DIRECTOR ATTENDANCE
The Board of Directors held a total of five meetings during 1999 and acted
by unanimous written consent four times during 1999. During 1999, each of the
directors attended at least 80% of the aggregate of (i) the total number of
Board of Directors' meetings and (ii) the total number of meetings held by all
Board committees on which he served during the period for which he was serving
as a director or committee member except for Richard M. Scrushy and Larry R.
House. The Corporation believes that attendance at meetings is only one means by
which directors may contribute to the effective management of the Corporation
and that the contributions of all directors have been substantial.
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 1999, all of its officers, directors and greater-than-10%
beneficial owners complied with all applicable filing requirement except for Mr.
Jernigan who was late in filing a Form 4.
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<PAGE> 13
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, 1999, 1998 and
1997, 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 $100,000. These executive officers are referred to
collectively as the "named executive officers."
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------------------------- ------------
OTHER SECURITIES
ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION HELD YEAR SALARY ($) BONUS ($) COMPENSATION(1) OPTIONS (#)
- -------------------------------- ---- ---------- --------- --------------- ------------
<S> <C> <C> <C> <C> <C>
James A. Taylor.......................... 1999 $250,000 $150,000 $ 75,409 75,000
Chairman of the Board, 1998 161,111 96,667 31,113 125,000
Chief Executive Officer and President; 1997 25,000 -- 4,200 --
Chairman of the Board of The Bank
Terry DuBose............................. 1999 $228,035 $ -- $ 28,653 50,000
Vice Chairman of the Board; 1998 175,000 25,000 17,916 --
Chairman of the Board and Chief 1997 160,718 -- 17,524 --
Executive Officer of Emerald Coast Bank
James A. Taylor, Jr.(2).................. 1999 $164,742 $ -- $ 62,792 15,000
Executive Vice President, General 1998 108,000 25,000 14,000 50,000
Counsel, Secretary and Director 1997 -- -- -- --
David R. Carter(3)....................... 1999 $164,742 $ -- $ 61,817 15,000
Executive Vice President, Chief 1998 162,000 25,000 8,968 50,000
Financial Officer and Director 1997 -- -- -- --
Robert S. McKean(4)...................... 1999 $135,663 $ -- $ 39,395 25,000
President and Chief Executive 1998 86,000 10,000 -- 5,000
Officer of The Bank 1997 -- -- -- --
</TABLE>
- ---------------
(1) Represents the dollar value of board fees received and insurance premiums
paid by the Corporation with respect to life, health, dental and disability
insurance, automobile allowance and 401(k) matching contribution for the
benefit of the named executive officer.
(2) Mr. Taylor received $13,500 in consultation fees in 1998, which is included
in his reported 1998 salary.
(3) Mr. Carter received $40,500 in consultation fees in 1998, which is included
in his reported 1998 salary.
(4) Mr. McKean received $10,000 in consultation fees in 1998, which is included
in his reported 1998 salary.
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<PAGE> 14
Option Grants in 1999. The following table contains information concerning
the grant of stock options under the Amended and Restated 1998 Stock Incentive
Plan, and the Commerce Bank of Alabama Incentive Stock Option Plan to the named
executive officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------------
NUMBER PERCENT OF ALTERNATIVE TO
OF TOTAL (F) AND (G):
SECURITIES OPTIONS/ GRANT DATE
UNDERLYING SARS VALUE
OPTIONS/ GRANTED TO EXERCISE --------------
SARS EMPLOYEES OF GRANT DATE
GRANTED IN FISCAL BASE PRICE EXPIRATION PRESENT VALUE
NAME (#) YEAR ($/SH) DATE $ (1)
- ---- ---------- ---------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C>
James A. Taylor.......................... 75,000 31.38% $10.50 6/14/2009 $408,000
Terry DuBose............................. 50,000 20.92% $11.00 2/15/2009 $273,500
James A. Taylor, Jr...................... 15,000 6.28% $10.50 6/14/2009 $ 81,600
David R. Carter.......................... 15,000 6.28% $10.50 6/14/2009 $ 81,600
Robert S. McKean......................... 15,000 6.28% $10.50 6/14/2009 $ 81,600
</TABLE>
- ---------------
(1) The fair value of the options granted was based upon the Black-Scholes
pricing model. The Corporation used the following weighted average
assumptions for 1999: a risk free interest rate of 6.12%, a volatility
factor of .39%, a weighted average life expected to be of options (in years)
of 6.5 and a dividend yield of 0%.
Aggregated Option Exercises in 1999 and Option Values at Year End. The
following table provides information with respect to options exercised by the
named executive officers during 1999 and the number and value of securities
underlying unexercised options held by the named executive officers at December
31, 1999.
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...................... -- -- 65,000/135,000 --
Terry DuBose......................... -- -- 20,000/30,000 --
James A. Taylor, Jr.................. -- -- 23,000/42,000 --
David R. Carter...................... -- -- 23,000/42,000 --
Robert S. McKean..................... -- -- 7,000/18,000 --
</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
is renewable daily for an additional three-year term, 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'
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<PAGE> 15
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.
Mr. Taylor's employment agreement was amended to include as part of his
compensation the rental payments for the condominium the Corporation will
provide for Mr. Taylor as a residence.
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.
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 for a three-year term and 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.
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 may
participate in other executive compensation plans. The agreement was for a term
of three years, was renewable daily for a three-year term and 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.
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. Mr. Taylor, Jr. resigned
his position as Executive Vice President, General Counsel and Secretary of the
Bank on November 1, 1999. He continues to serve as a director of The Bank. Mr.
Taylor, Jr. will receive a base salary of $162,000 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
will be reviewed at least annually by the Corporation's Board of Directors for
the extension of the term for an additional three-year period. The agreement was
renewed by the Board of Directors of the Corporation on March 15, 2000 for an
additional three-year period. If Mr. Taylor, Jr. is terminated for any reason
other than
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<PAGE> 16
"cause" as defined in the agreement, he shall receive three years base
compensation, director's fees and all benefits or their cash equivalents. In
addition, he would be entitled to a "gross up" payment to cover any excise tax
imposed on any severance payment to Mr. Taylor.
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. Mr. Campbell's contract was renewed
as of October 30, 1999 for an additional three-year period.
John F. Gittings. On October 30, 1998, Mr. Gittings entered into an
employment agreement with the Corporation and The Bank for a three-year term.
Mr. Gittings serves as Chief Executive Officer of The Bank-Monroeville and
receives a minimum annual salary of $100,000. The agreement provides that Mr.
Gittings will be entitled to receive other benefits including life insurance, an
automobile and may participate in other executive compensation plans. The
Corporation may terminate the agreement only upon prior notice for a period
equal to the remaining term of the agreement. If Mr. Gittings is terminated for
any reason other than "cause" as defined in the agreement, Mr. Gittings 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 a 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 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 The
Bank's Board of Directors. In addition, The Bank must provide Ms. Swift an
automobile. Ms. Swift's agreement was renewed as of January 1, 2000 for an
additional three-year period.
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. Mr. Wallis receives a base salary of $100,000. In addition, The Bank
must provide Mr. Wallis an automobile.
David R. Carter. The Corporation has entered into an employment agreement
with David R. Carter, effective as of January 1, 2000. Under his employment
agreement, Mr. Carter will serve as the Executive Vice President and Chief
Financial Officer of the Corporation and Executive Vice President and Chief
Financial Officer of The Bank. Mr. Carter will receive a base salary of $162,000
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 will be reviewed at least annually by the
Corporation's Board of Directors for the extension of the term for an additional
three-year period. If Mr. Carter 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 benefits or their cash equivalents. In addition, he
would be entitled to a "gross up" payment to cover any excise tax imposed on any
severance payment to Mr. Carter.
DIRECTOR COMPENSATION
Directors of the Corporation receive $1,500 compensation for each meeting
of the board attended and a retainer of $1,500 per quarter for serving as
directors of the Corporation. Directors are eligible to receive the grant of
stock options under the Corporation's Amended and Restated 1998 Stock Incentive
Plan.
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<PAGE> 17
The following directors of the Corporation have entered into Deferred
Compensation Agreements with the Corporation effective as of September 1, 1999;
Andrews, Berte, Campbell, Carter, Dichiara, Durden, Gittings, Hays, House,
Jernigan, Jones, Kent, Orso, Ripps, Scrushy, Stephens, Swift, Taylor, Taylor,
Jr., Tillman. Taylor, Kent and Jernigan also have Deferred Compensation
Agreements with The Bank. These agreements provide that the Corporation will
establish and fund investments and Deferral Account for the director as provided
in the agreement. Upon termination of a director's employment other than death
or following a change in control, the Corporation shall pay the director within
60 days of termination the amount equal to the Deferral Account balance. If the
director is terminated following a change in control, the Corporation 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 Deferred Account and must be paid within 60 days of the end of each plan
year.
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 nominated or elected as a director or an executive officer except as
otherwise disclosed herein. The following directors of the Corporation were
elected or nominated to the Board of Directors of the Corporation in connection
with certain acquisitions: Steven C. Hays, Randall E. Jones and Mandell
Tillman -- Commerce Bank of Alabama, Inc.; W.T. Campbell, Jr. -- City National
Corporation; Earl Durden and Terry DuBose -- Emerald Coast Bancshares Inc.; and
Jerry M. Smith -- C&L Banking Corporation and C&L Bank of Blountstown. See
"Management of Corporation -- Incumbent Directors and Executive Officers" and
"Executive Compensation and Other Information -- Employment Agreements".
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Kent, Jr., Striplin, Jr. and Dr. Orso comprise the Compensation
Committee. None of the members of the Compensation Committee is a former or
current officer or employee of the Corporation or any of its subsidiaries.
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.
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<PAGE> 18
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. As of March 31, 2000, the
Compensation Committee has approved grants under the Corporation Incentive Plan
of options to purchase 685,500 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 Bank of Alabama 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 31, 1999, there were
outstanding options under the Commerce Option Plan to purchase 30,169 shares of
Corporation common stock at a price of $6.24 per share.
The Corporation Executive Incentive Compensation Plan. The Corporation has
adopted the Executive Incentive Compensation Plan. Pursuant to this plan, the
Corporation will pay to the participants of the Plan a one-time cash bonus in
the aggregate amount equal to three percent of the amount that the total market
capitalization (as defined in the plan) on the determination date exceeds the
total market capitalization on January 5, 2000. The determination date is
defined as the earlier of (1) January 5, 2003 or (2) the date on which the
Corporation ceases to be publicly traded. James A. Taylor is the only
participant of the Executive Incentive Compensation Plan.
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
15
<PAGE> 19
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 cash and equity-based incentive compensation.
Base Salary. While the demand for experienced executives in the banking
industry continues to grow, the Corporation has been very successful in
attracting and retaining key executives. The Corporation believes that its
compensation package has been and will continue to be instrumental in its
success. The Compensation Committee endeavors to establish base salary levels
for key executives that are consistent with those provided for similarly
situated executives of other publicly-held financial institutions, 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 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-compensation
executives of a corporation during its tax year. Compensation in excess of
$1,000,000 continues to be deductible if that compensation is "performance
based" within the meaning of that term under Section 162(m) of the Internal
Revenue Code. The Compensation Committee is aware of the potential effects of
the Code. The Committee has chosen not to distort its methodology and
application of the factors it believes pertinent so as to ensure that all
executive compensation is deductible under Section 162(m). While the
Compensation Committee intends that the 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
16
<PAGE> 20
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 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 1999 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, comprising all of the members of the Compensation Committee of the
Board of Directors.
James Mailon Kent, Jr.
Ronald W. Orso, M.D.
Larry D. Striplin, Jr.
CERTAIN TRANSACTIONS AND RELATIONSHIPS
The Bank, Emerald Coast Bank and C&L 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,
Emerald Coast Bank and C&L Bank involve more than normal credit risk or present
other unfavorable features.
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.
Emerald Coast Land Management leases 3 branches to Emerald Coast Bank. The
rent payments in 1999 totaled $419,342. Emerald Coast Land Management is owned
by certain Directors and Officers of Emerald Coast Bank including Terry DuBose
and K. Earl Durden.
James A. Taylor, Chairman of the Board, Chief Executive Officer and
President of the Corporation and Chairman of the Board of The Bank, and Larry D.
Striplin, Jr., Vice Chairman of the Corporation, are both members of the Board
of Directors of Vesta Insurance Group, Inc. ("Vesta"). Effective September 30,
1999,
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<PAGE> 21
Vesta entered into secured revolving credit facilities with the Corporation and
The Bank in the aggregate amount of $20 million. The loans under these
facilities bore interest rates varying from The Bank's Prime Rate to 2% over the
interest rate earned on a certificate of deposit provided by Vesta as
collateral. On December 30, 1999, Vesta repaid $15 million of the principal
amount outstanding under these credit facilities. In connection with the
repayment of this debt, the Corporation and Vesta restructured the credit
facilities to consist of two lines of credit provided by The Bank as follows: a
$5 million unsecured line, all of which was outstanding as of December 31, 1999,
and a $10 million secured line of credit, none of which was outstanding as of
December 31, 1999. The loans under these new credit facilities bore interest at
The Bank's prime rate. Subsequent to December 31, 1999, Vesta repaid the $5
million outstanding on the unsecured line of credit and canceled both credit
agreements relating to the lines of credit effective February 29, 2000.
In November 1999, James A. Taylor, Jr. was employed as Senior Vice
President -- Finance of J. Gordon Gaines, Inc., a subsidiary of Vesta. Mr.
Taylor, Jr. received an annual base salary of $140,000, 50,000 options to
purchase Vesta common stock and a restricted stock award of 25,000 shares.
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
BANC CORPORATION, NASDAQ COMPOSITE INDEX
AND NASDAQ FINANCIAL INDEX
DECEMBER 10, 1998 -- DECEMBER 31, 1999
<TABLE>
<CAPTION>
BANC CORPORATION NASDAQ COMPOSITE INDEX NASDAQ FINANCIAL INDEX
---------------- ---------------------- ----------------------
<S> <C> <C> <C>
12/10/98 100.00 100.00 100.00
12/31/98 99.50 108.77 105.98
12/31/99 61.00 202.44 97.57
</TABLE>
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<PAGE> 22
PROPOSAL NUMBER TWO
AMENDMENT OF STOCK INCENTIVE PLAN
The Corporation has adopted and amended from time to time the Amended and
Restated 1998 Stock Incentive Plan of The Banc Corporation. The Board of
Directors of the Corporation has further amended the Corporation Incentive Plan
to increase the number of shares of Corporation common stock reserved for
issuance under the Corporation Incentive Plan from 1,000,000 to 1,500,000. The
amendment is subject to the approval of the stockholders by a majority of those
present or represented by proxy and entitled to vote at the Annual Meeting, at
which a quorum is present. A majority of the outstanding shares will constitute
a quorum at the Annual Meeting. The stockholders are being asked to approve and
ratify the Second Amended and Restated 1998 Stock Incentive Plan, which will
include the amendment described herein. The Board of Directors of the
Corporation has approved this amendment to the Corporation Incentive Plan
subject to the receipt of stockholder approval.
As described in the Compensation Committee Report on Executive
Compensation, one of the fundamental components of compensation for the
executive officers and employees of the Corporation is incentive compensation.
The Compensation Committee has used the Corporation Incentive Plan as its sole
means of providing long term growth-related incentives, thus motivating and
encouraging officers, directors and employees to pursue the long-term interests
of the Corporation and stockholders and to meet operational goals. The
Corporation Incentive Plan has also provided the Corporation with greater
flexibility in attracting and retaining key executives and employees and has
allowed the Corporation to provide incentive compensation opportunities that are
competitive with those of other companies. By increasing the number of shares
reserved for issuance under the Corporation Incentive Plan, the amendment to
this plan will allow the Corporation to continue to achieve and further the
goals of the Corporation Incentive Plan in future years. Furthermore, this
amendment will ensure that there is a sufficient number of shares available each
year for grants to executive officers, employees, directors, consultants, and
independent contractors of the Corporation and enable the Corporation to provide
incentives to retain its current executive officers and employees and attract
other highly qualified executive officers and employees.
The amendments to the Corporation Incentive Plan will benefit the
Corporation by enabling the Compensation Committee to provide appropriate
incentives to the Corporation's current and prospective executive officers,
director, employees, agents, independent contractors and others.
PLAN SUMMARY
The features of the Corporation Incentive Plan are summarized under
"Incentive Plans." The summary is qualified in its entirety by reference to the
specific provision of the Corporation Incentive Plan, as proposed to be amended,
which is set forth as Appendix A to this Proxy Statement.
The Corporation Incentive Plan is administered by the Compensation
Committee and is designed to provide for several types of awards, including the
grant of stock options, restricted stock awards, stock appreciation rights and
performance shares. Directors, executive officers, key employees, consultants,
agents, independent contractors and other persons may participate in the
Corporation Incentive Plan in the discretion of the Compensation Committee. The
Compensation Committee has the sole authority and discretion to determine the
types of awards granted and terms, conditions, restrictions and provisions
relating to each award at the time of grant.
The Corporation Incentive Plan provides for the grant of options to
purchase shares of Common Stock at exercise prices which are not less than the
fair market value of the shares of Common Stock on the date of grant. The
Compensation Committee sets the term and conditions of each option on the date
of grant; however, the term may not exceed ten years from the date of grant. The
Compensation Committee may grant incentive or nonqualified options.
Upon the exercise of options, the option exercise price must be paid in
full in cash or other form acceptable to the Corporation or by delivery of
shares of Common Stock owned by the optionholder and acceptable to the
Compensation Committee having a fair market value that is equal to the exercise
price.
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<PAGE> 23
The Corporation may also grant awards of stock appreciation rights,
restricted stock and performance shares. The Compensation Committee will
determine the terms and conditions of each award of stock appreciation rights,
restricted stock or performance shares at the time of grant. The terms of each
such grant will be set forth in the appropriate award agreements.
As of April 15, 2000, the Corporation had granted options to purchase
685,500 shares of Corporation Common Stock
<TABLE>
<CAPTION>
NAME AND POSITION NUMBER OF OPTIONS
- ----------------- -----------------
<S> <C>
James A. Taylor............................................. 200,000
Terry DuBose................................................ 50,000
James A. Taylor, Jr......................................... 65,000
David R. Carter............................................. 65,000
Robert S. McKean............................................ 25,000
-------
Executive Officers as a Group............................... 405,000
Directors (non employees)................................... 120,000
Non-Executive Officer Employees............................. 160,500
-------
Total............................................. 685,500
=======
</TABLE>
FEDERAL INCOME TAX CONSEQUENCES
The following statements are based on current interpretations of existing
federal income tax laws and represent only a general summary of some of the
applicable provisions.
Stock Options. Generally, there are no federal income tax consequences
either to the optionholder or to the Corporation upon the grant of a stock
option. On exercise of an incentive stock option, the optionholder will not
recognize any income and the Corporation will not be entitled to a deduction for
tax purposes, although such exercise may give rise to liability for the
optionholder under the alternative minimum tax provisions of the Internal
Revenue Code of 1986, as amended. The Corporation will not be entitled to any
deduction for tax purposes upon disposition of such shares, and the entire gain
for the optionholder will be treated as capital gain. However, if the
optionholder disposes of shares acquired upon exercise of an incentive stock
option within two years of the date of grant or one year of the date of
exercise, the optionholder will recognize compensation income and the
Corporation will be entitled to a deduction for tax purposes in the amount equal
to the excess of the fair market value of the shares on the date of exercise
over the option exercise price (or the gain on sale, if less). On exercise of a
nonqualified stock option, the amount by which the fair market value of the
shares on the date of exercise exceeds the option exercise price will generally
be taxable to the optionholder as compensation income and will generally be
deductible for tax purposes by the Corporation. The disposition of shares
acquired upon exercise of a nonqualified stock option will generally result in a
capital gain or loss for the optionholder, but will have not tax consequences
for the Corporation.
20
<PAGE> 24
Stock Appreciation Rights. The grant of an SAR would not result in income
for the grantee or in a deduction for the Corporation. Upon the exercise of an
SAR, the grantee would recognize ordinary income and the Corporation would be
entitled to a deduction measured by the fair market value of the shares plus any
cash received.
Restricted Stock. The grant of restricted stock should not result in
income for the grantee or in a deduction for the Company for federal income tax
purposes, assuming the shares transferred are subject to a "substantial risk of
forfeiture" as intended by the Corporation. If there are not such restrictions,
the grantee would recognize ordinary income upon receipt of the shares.
Dividends paid to the grantee while the stock remained subject to restriction
would be treated as compensation for federal income tax purposes. At the time
the restrictions lapse, the grantee would receive ordinary income, and the
Corporation would be entitled to a deduction measured by the fair market value
of the shares at the time of lapse.
Performance Shares. The grant of performance shares would not result in
income for the grantee or in a deduction for the Corporation. Upon exercise of
performance shares, the grantee would recognize ordinary income and the
Corporation would be entitled to a deduction measured by the fair market value
of the shares. The Corporation is entitled to a deduction for any compensation
income taxed to the recipient.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" THE APPROVAL AND RATIFICATION OF THE CORPORATION INCENTIVE PLAN.
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<PAGE> 25
PROPOSAL NUMBER THREE
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
this Meeting. They will have an opportunity to make a statement if they desire
to do so, and they are expected to be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" THE RATIFICATION OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR THE
CURRENT FISCAL YEAR.
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.
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
OF STOCKHOLDERS
Stockholders' proposals intended to be presented at the 2001 Annual Meeting
of Stock holders must be received by the Corporation no later than January 1,
2001, 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 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 1, 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 confirmed discretionary authority to vote on any such
proposal.
22
<PAGE> 26
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 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 1, 2000
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<PAGE> 27
APPENDIX A
SECOND AMENDED AND RESTATED 1998 STOCK INCENTIVE PLAN
OF THE BANC CORPORATION
1. Establishment, Purpose and Duration of the Plan.
(a) Establishment and Purpose. The Banc Corporation, a Delaware
corporation (the "Company") hereby establishes an incentive compensation plan to
be known as the "Second Amended and Restated 1998 Stock Incentive Plan of The
Banc Corporation" (the "Plan"), as set forth herein. The purpose of the Plan is
to further the growth and development of the Company and its direct and indirect
subsidiaries (each a "Subsidiary" and collectively, "Subsidiaries") by
encouraging selected employees, directors, consultants, agents, independent
contractors and other persons who contribute or are expected to contribute
materially to the Company's success (collectively, "Participants") to obtain a
proprietary interest in the Company through the ownership of stock or receipt of
performance-based incentives, thereby providing such persons with added
incentives to promote the best interests of the Company and affording the
Company a means of attracting to its service persons of outstanding ability.
(b) Effective Date and Duration. The Plan shall be effective on June 1,
1998, the date of its adoption by the Board of Directors of the Company (the
"Effective Date"), and shall remain in effect, subject to the right of the Board
of Directors to amend or terminate the Plan at any time pursuant to the
provisions hereof, until all shares of Common Stock of the Company subject to
the Plan have been purchased or acquired pursuant to the provisions hereof;
provided, however, that in no event may an Award of an Incentive Option (as such
terms are defined in Sections 2 and 5(a) hereof, respectively) be granted under
the Plan after June 1, 2008, although an Incentive Option granted prior thereto
may extend beyond such date.
2. Stock Subject to the Plan. An aggregate of 1,500,000 shares of the Company's
Common Stock, par value $.001 per share (the "Common Stock"), shall be reserved
for issuance under the Plan pursuant to the exercise of Options (as defined in
Section 5 hereof) or SARs (as defined in Section 6(a) hereof) or as Restricted
Stock (as defined in Section 6(b) hereof) or Performance Shares (as defined in
Section 6(c) hereof) (such Options, SARS, Restricted Stock and Performance
Shares are hereinafter collectively referred to as "Awards"). Such shares of
Common Stock may be, in whole or in part, authorized but unissued shares or
issued shares which have been reacquired by the Company. If, for any reason, an
Option or SAR shall lapse, expire or terminate without having been exercised in
full, or if Restricted Stock or Performance Shares are forfeited, the unused
shares of Common Stock covered by such Option, Restricted Stock or Performance
Shares, or the number of shares of Common Stock upon which the SAR is based,
shall again be available for Awards under the Plan.
3. Adjustments Upon Changes in Capitalization. If at any time after the date of
grant of an Award, the Company shall by stock dividend, split-up, combination,
reclassification or exchange, or through merger, consolidation or otherwise,
change its shares of Common Stock into a different number or kind or class of
shares or other securities or property, then the number of shares available for
grant under the Plan or subject to outstanding Awards and, with respect to an
Award, the price thereof, as applicable, shall be appropriately adjusted by the
Compensation Committee (as defined in Section 4(a) hereof), in its sole
discretion, to prevent dilution or enlargement of rights; provided, however,
that the number of shares of Common Stock subject to any Award shall always be a
whole number.
A-1
<PAGE> 28
4. Administration.
(a) Administration by Compensation Committee. The Plan shall be
administered by the Compensation Committee of the Board of Directors of the
Company ("Compensation Committee"). The Compensation Committee shall be composed
of at least two Non-Employee Directors, in accordance with Rule 16b-3
promulgated pursuant to the Securities Exchange Act of 1934, or any successor
rule thereto.
(b) Powers of Compensation Committee. The Compensation Committee shall
administer the Plan and, subject to the provisions of the Plan and of the
Certificate of Incorporation and Bylaws of the Company, shall have sole
authority in its discretion to determine the types of Awards to be granted, the
persons to whom, and the time or times at which, Awards shall be granted, and
the terms, conditions, and provisions of, and restrictions relating to, each
Award, including, without limitation, vesting provisions, and applicable
performance criteria. In making such determinations, the Compensation Committee
may take into account the nature of the services rendered by such Participants,
their present and potential contributions to the Company's success and such
other factors as the Compensation Committee in its sole discretion may deem
relevant. The Compensation Committee shall also have the authority to interpret
the Plan, to prescribe, amend and rescind rules and regulations relating
thereto, to establish procedures deemed appropriate for the administration
thereof, to determine the terms and provisions of the respective agreements,
which evidence the Awards that are granted (collectively, "Award Agreements"),
and to make all other determinations necessary or advisable for the
administration of the Plan, all of which determinations shall be conclusive and
not subject to review. All determinations and decisions made by the Compensation
Committee pursuant to the provisions of the Plan shall be final, conclusive and
binding on all persons, including the Company, its stockholders, directors,
officers, employees, Participants, and their respective estates and
beneficiaries.
(c) Definition of "Change in Control." For purposes of the Plan, a "Change
in Control" shall mean any of the following events: (i) the acquisition at any
time by a "person" or "group" (as such terms are used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act")) of
beneficial ownership (as defined in Rule 13(d)-3 under the Exchange Act),
directly or indirectly, of securities representing more than 50% of the combined
voting power in the election of directors of the then outstanding securities of
the Company or any successor of the Company; (ii) during any period of two
consecutive years or less, the individuals who at the beginning of such period
constituted a majority of the Board of Directors cease, for any reason other
than death, disability or retirement, to constitute a majority of the Board of
Directors, unless the election of or nomination for election of each new
director during such period was approved by a vote of at least a majority of the
directors still in office who were directors at the beginning of the period;
(iii) approval by the stockholders of the Company of any sale or disposition of
substantially all of the assets or earning power of the Company; or (iv)
approval by the stockholders of the Company of any merger, consolidation, or
statutory share exchange to which the Company is a party and as a result of
which the persons who were stockholders of the Company immediately prior to the
effective date of the merger, consolidation or share exchange shall have
beneficial ownership of less than 50% of the combined voting power in the
election of directors of the surviving corporation; provided, however, that no
Change in Control shall be deemed to have occurred if, prior to such time as a
Change in Control would otherwise be deemed to have occurred in accordance with
the foregoing, the Board of Directors, by vote of at least 75% of the entire
membership of the Board of Directors, determines that the event otherwise
qualifying as a Change in Control shall not be treated as a Change in Control
hereunder. Each determination concerning whether an event constitutes a Change
in Control under an Award Agreement shall be made in a consistent manner as to
the particular event with respect to all Award Agreements of all Participants in
effect at the time of the event.
5. Options.
(a) General. The Company may grant options to purchase shares of Common
Stock ("Options") subject to the provisions of this Plan and the applicable
Award Agreement. The Compensation Committee shall determine whether all or any
portion of such Options shall be incentive stock options ("Incentive Options")
qualifying under Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"), or stock options which do not so qualify ("Nonqualified Options").
Both Incentive Options and Nonqualified
A-2
<PAGE> 29
Options may be granted to the same person at the same time; provided, however,
that each type of Option is clearly designated. Incentive Options shall have a
term of not more than ten years.
(b) Exercise of Options. The exercise of an Option shall be contingent
upon the Company's receipt from the holder thereof of a written representation
that at the time of such exercise it is the optionee's then present intention to
acquire the shares of Common Stock subject to the Option for investment and not
with a view to the distribution or resale thereof (unless a registration
statement covering such shares of Common Stock shall have been declared
effective by the Securities and Exchange Commission), and an Option may not be
exercised for less than ten shares at any one time (or the remaining shares then
purchasable if less than ten) and may not be exercised for fractional shares of
Common Stock. No shares of Common Stock shall be issued upon exercise of an
Option until full payment therefore has been made and any withholding
obligations of the Company have been satisfied. The proceeds received by the
Company upon exercise of an Option shall be added to the Company's working
capital and be available for general corporate purposes.
(c) No Rights as a Stockholder. The holder of an Option shall have none of
the rights of a stockholder with respect to the shares of Common Stock
purchasable upon exercise of the Option until a certificate for such shares
shall have been issued to the holder upon due exercise of the Option.
(d) Incentive Options. Incentive Options may be granted only to employees
(including officers) of the Company or any Subsidiary; provided, however, that
Incentive Options may not be granted to any person who, at the time the
Incentive Option is granted, owns (or is considered as owning within the meaning
of Section 424(d) of the Code) stock possessing more than ten percent of the
total combined voting power of all classes of stock of the Company or any
Subsidiary (a "ten percent Owner"), unless at the time the Incentive Option is
granted, the exercise price is at least 110% of the Fair Market Value (as
defined in Section 7 hereof) of the Common Stock and such Incentive Option by
its terms is not exercisable subsequent to five years from the date of grant. A
director or other person who is not an employee of the Company or of a
Subsidiary is not eligible to receive Incentive Options under the Plan. The
aggregate Fair Market Value (determined on the date the Award is granted) of
Common Stock with respect to which Incentive Options are exercisable for the
first time by any Participant during any calendar year (under all plans of the
Company and its Subsidiaries) shall not exceed $100,000. The exercise price of
an Incentive Option shall not be less than 100% of the Fair Market Value of the
Common Stock on the date of grant or 110% of Fair Market Value in the case of
Incentive Options granted to a ten percent Owner.
(e) Nonqualified Options. Options may be granted to any Company employees
(including employees who have been granted Incentive Options), directors,
consultants, agents, independent contractors and other persons whom the
Compensation Committee determines will contribute to the Company's success.
(f) Substitute Options. Notwithstanding any other provision of this Plan,
in the event that the Company or a Subsidiary consummates a transaction
described in Section 424(a) of the Code (e.g., the acquisition of property or
stock from an unrelated corporation), persons who become employees of the
Company or any Subsidiary on account of such transaction may be granted Options
in substitution for the options granted by such former employer. If such
substitute Options are granted, the Compensation Committee, in its sole
discretion, consistent with section 424(a) of the Code, shall determine the
exercise price of such substitute Options.
6. Other Awards.
(a) SARs. The Company may grant stock appreciation rights ("SARs"),
subject to the provisions of this Plan and the applicable Award Agreement. An
SAR shall constitute the right of the Participant to receive an amount equal to
the appreciation, if any, in the Fair Market Value of a share of Common Stock
from the date of grant of such right to the date of payment. Upon exercise of
the SAR, the Company shall pay such amount in cash or shares of Common Stock of
equivalent value or in some combination thereof (as determined by the
Compensation Committee) as soon as practicable after the date on which such
election is made in accordance with the Award Agreement evidencing the SAR.
(b) Restricted Stock. The Company may grant shares of restricted Common
Stock ("Restricted Stock") under the Plan, subject to the provisions of this
Plan and the applicable Award Agreement. Restricted
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Stock shall be subject to forfeiture provisions and such other restrictive terms
and conditions as may be determined by the Compensation Committee in its sole
discretion and set forth in the applicable Award Agreement pursuant to which
such Restricted Stock is issued, and shall not be transferable until all such
restrictions and conditions (other than securities law restrictions) have been
satisfied. Restricted Stock shall be issued and delivered at the time of grant
or at such other time as is determined by the Compensation Committee.
Certificates evidencing shares of Restricted Stock shall bear a restrictive
legend referencing the risk of forfeiture and the non-transferability of such
shares. The Compensation Committee may, in its sole discretion, require the
automatic deferral of dividends or reinvestment of dividends for the purchase of
additional shares of Restricted Stock. During the period of restriction as set
forth in the Award Agreement, the Participant owning shares of Restricted Stock
may exercise full voting rights with respect to such shares.
(c) Performance Shares. The Company may grant the right to receive shares
of Common Stock subject to the attainment of performance objectives determined
by the Compensation Committee in its sole discretion ("Performance Shares"),
subject to the provisions of this Plan and the applicable Award Agreement. The
performance goals to be met over a specified period (the "Performance Period"),
the amount of payment to be made if the performance goals or other conditions
are met and additional terms and conditions of the issuance of Performance
Shares shall be determined by the Compensation Committee and set forth in the
applicable Award Agreement. The value of a Performance Share at any time shall
be the Fair Market Value of a share of common stock at such time. An Award of
Performance Shares shall be expressed in terms of shares of Common Stock. After
the completion of a Performance Period, the performance of the Company,
subsidiary, division or individual, as the case may be, shall be measured
against the performance goals or other conditions, and the Compensation
Committee shall determine whether all, none or a portion of an Award shall be
paid. The Compensation Committee shall pay any earned Performance Shares as soon
as practicable after they are earned in the form of cash, Common Stock of
equivalent value or in some combination thereof (as determined by the
Compensation Committee) having an aggregate Fair Market Value equal to the value
of the earned Performance Shares as of the date they are earned. Any Common
Stock used to pay earned Performance Shares may be issued subject to any
restrictions deemed appropriate by the Compensation Committee. In addition, the
Compensation Committee, in its discretion, may cancel any earned Performance
Shares and grant Options to the Participant which the Compensation Committee
determines to be of equivalent value based on a conversion formula stated in the
applicable Award Agreement. The Compensation Committee, in its discretion, may
also grant dividend equivalent rights with respect to earned but unpaid
Performance Shares as evidenced by the applicable Award Agreement. Performance
Shares shall have no voting rights.
7. Fair Market Value.
(a) Periods During Which Common Stock is Publicly Traded. For purposes of
the Plan, the "Fair Market Value" as of any date means (i) with respect to an
Award of an Incentive Option and an Award which is intended to qualify under the
"performance-based exception" set forth in section 162(m) of the Code, the
average of the high and low sales price of a share of Common Stock on such date
as reported by any national securities exchange or the Nasdaq National Market
System ("Nasdaq") on which the Common Stock is actively traded or, if no Common
Stock is traded on such exchange or Nasdaq on such date, then on the next
preceding date on which any Common Stock was traded on such exchange or Nasdaq;
and (ii) with respect to all other Awards, the closing sales price of a share of
Common Stock on such date as reported by any national securities exchange on
which the Common Stock is actively traded or, if no Common Stock is traded on
such exchange or Nasdaq on such date, then on the next preceding date on which
any Common Stock was traded on such exchange or Nasdaq.
(b) Periods During Which Common Stock is Not Publicly
Traded. Notwithstanding subsection (a) above with respect to any date on which
the Common Stock (or Common Stock convertible therefrom) is not listed or traded
as set forth in subsection (a), above, "Fair Market Value" for a share of Common
Stock as of any date of reference hereunder (the "Determination Date") shall be
the value per share of Common Stock as determined by the most recent appraisal
conducted by a professional independent appraiser engaged by the Company for the
purpose of determining Fair Market Value under the Plan, which appraisal is as
of a date within 12 months prior to the Determination Date or, if no such
appraisal has been made during such prior
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<PAGE> 31
12-month period, the highest of (i) the book value of the Common Stock as of the
last day of the Company's fiscal year next preceding the Determination Date,
(ii) the average price per share of the Common Stock paid by all persons (other
than Participants) during the 12 months prior to the Determination Date in
arms-length transactions with the Company, or (iii) the fair market value per
share of the Common Stock as determined by the Compensation Committee as of the
Determination Date. Notwithstanding the preceding, in the case of the occurrence
of a Change in Control involving the Company, for the period beginning with the
Change in Control and extending until the one-year period following the Change
in Control, Fair Market Value shall equal (x) in the case of a Change in Control
involving the sale of Common Stock to an entity, person or group, the average
price per share of Stock paid by the entity, person or group for the shares of
Common Stock purchased by such entity, person or group in the 12-month period
ending on the Change in Control date or, (y) in the case of a Change in Control
involving the sale of substantially all of the assets of the Company, the amount
per share of Common Stock which each holder of record of Common Stock
immediately following such sale would receive as a liquidation distribution.
(c) Material Changes Affecting Fair Market Value. Notwithstanding
subsection (b) above, if, as of any Determination Date, subsection (a) above is
inapplicable and, because of material events occurring prior to the
Determination Date but subsequent to an event to be used to assess Fair Market
Value under subsection (b) above, the Compensation Committee believes in its
sole and absolute discretion that a business development or other event has
occurred indicating that the amount otherwise determined under subsection (b)
above does not accurately reflect the fair market value of the Common Stock as
of the Determination Date, the Compensation Committee has the right in its
discretion, but not the obligation, to obtain an independent appraisal of the
Common Stock as of the Determination Date, and such independent appraisal shall
be conclusive to determine Fair Market Value as of the Determination Date.
Pending any such determination by an independent appraiser, any payments due
hereunder that require Fair Market Value assessment shall be delayed until the
appraisal is complete.
8. Payment and Withholding.
(a) Payment. Upon the exercise of an Option or Award that requires payment
by a Participant to the Company, the amount due to the Company shall be paid in
cash or by check payable to the order of the Company for the full purchase price
of the shares of Common Stock for which such election is made. Except as
otherwise provided by the Compensation Committee before the Option is exercised
all or a part of the exercise price may be paid by the Participant by delivery
of shares of the Company's Common Stock owned by the Participant and acceptable
to the Compensation Committee having an aggregate Fair Market Value (valued at
the date of exercise) that is equal to the amount of cash that would otherwise
be required.
(b) Withholding. The Company shall have the right to deduct from all
Awards paid any federal, state, local or employment taxes that the Company deems
are required by law to be withheld with respect to such payments. Whenever
shares of Common Stock are to be issued in satisfaction of the exercise of an
Award, the Company shall have the right to require the Participant (or legal
representative, as applicable) to remit to the Company an amount sufficient to
satisfy federal, state and local withholding tax requirements or make other
arrangements therefore prior to the delivery of any certificate or certificates
for such shares. At the election of the Participant, and subject to such rules
and limitations as may be established by the Compensation Committee from time to
time, such withholding obligations may be satisfied through the surrender of
shares of the Company's Common Stock which the Participant already owns, or to
which the Participant is otherwise entitled under the Plan.
9. Non-Transferability of Awards. Except by the laws of descent and
distribution or as provided in an Award Agreement, no benefit provided under
this Plan shall be subject to alienation, assignment or transfer by the
Participant (or by any person entitled to such benefit pursuant to the terms of
this Plan), nor shall it be subject to attachment or other legal process of
whatever nature, and any attempted alienation, assignment, attachment or
transfer shall be void and of no effect whatsoever and, upon any such attempt,
the benefit shall expire and lapse. Each Participant may, from time to time,
designate any beneficiary or beneficiaries (who may be named contingently or
successively) to whom any benefit under this Plan is to be paid in case of the
Participant's death before the participant receives any or all of such benefit.
Each such designation shall
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<PAGE> 32
revoke all prior designations by the same Participant, shall be in a form
prescribed by the Company, and shall be effective only when filed by the
Participant in writing with the Company during the Participant's lifetime. In
the absence of such designation, benefits remaining unpaid at the Participant's
death shall be paid to the Participant's estate. Shares of Common Stock shall be
delivered only to the Participant entitled to receive the same or to the
Participant's authorized legal representative. Deposit of any sum in any
financial institution to the credit of any Participant (or of any person
entitled to such sum pursuant to the terms of this Plan) shall constitute
payment to that Participant (or such person).
10. Termination of Employment; Acceleration of Vesting.
(a) Options. Upon termination of employment for any reason other than
death, Disability (as defined below in this subsection 10(a)), Retirement or a
Change in Control, any Incentive or Nonqualified Option held by the Participant
shall expire on the earlier of (i) the last day of the term of the Option or
(ii) the date which is three months after the date of termination of such
employment. Upon termination of employment by reason of death, Disability or
Retirement, the Option held by such Participant shall expire on the earlier of
(w) the last day of the term of the Option or (x) the date which is one year
after the date of termination of such employment. Upon termination of employment
by reason of a Change in Control, the Option held by such Participant shall
expire on its original expiration date. The term "Disability" with respect to a
Participant means physical or mental inability to perform the normal duties of
his employment or engagement as determined, after examination of the Participant
by a physician, selected by the Compensation Committee; provided, however, that
if such Participant fails or refuses to cooperate in such examination, the
determination of his Disability shall be made by the Compensation Committee in
its sole discretion. The term "Retirement" with respect to a Participant means
the Participant's termination of employment in a manner which qualifies the
Participant to receive immediately payable retirement benefits under any
retirement plan adopted or hereafter adopted by the Company, or which in the
absence of any such retirement plan is determined by the Compensation Committee
to constitute retirement.
An installment of a Participant's Option shall not become exercisable on
the otherwise applicable vesting date of such Award if the Participant's date of
termination occurs on or before such vesting date. Notwithstanding the foregoing
sentence, an Option shall become fully and immediately exercisable upon (y) the
death or Disability of the Participant or (z) or the occurrence of a Change of
Control.
(b) SAR's. Upon termination of employment for any reason other than death,
Disability, Retirement or a Change in Control, an SAR held by the Participant
shall expire on the earlier of (i) the last day of the term of the Option or
(ii) the date which is three months after the date of termination of such
employment. Upon termination of employment by reason of death, Disability or
Retirement, the SAR held by such Participant shall expire on the earlier of (w)
the last day of the term of the SAR or (x) the date which is one year after the
date of termination of such employment. Upon termination of employment by reason
of a Change in Control, the SAR held by such Participant shall expire on its
original expiration date.
An installment of an SAR shall not become exercisable on the otherwise
applicable vesting date if the Participant's date of termination occurs before
such vesting date. Notwithstanding the foregoing sentence, an SAR shall become
fully and immediately exercisable upon (y) the death or Disability of the
Participant or (z) the occurrence of a Change in Control.
(c) Restricted Stock. If the Participant's date of termination does not
occur during the restricted period set forth in the Award Agreement (the
"Restricted Period"), then, at the end of the Restricted Period, the Participant
shall become vested in the shares of Restricted Stock, and shall own the shares
free of all restrictions otherwise imposed. The Participant shall become vested
in the shares of Restricted Stock, and become owner of the shares free of all
restrictions otherwise imposed by this Agreement, prior to the end of the
Restricted Period if the Participant's date of termination occurs by reason of
the Participant's death, Disability or a Change in Control.
Shares of Restricted Stock may not be sold, assigned, transferred, pledged
or otherwise encumbered until the expiration of the Restricted Period or, if
earlier, until the Participant is vested in the shares. Except as otherwise
provided in this subsection 10(c), if the Participant's date of termination
occurs prior to the end of
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<PAGE> 33
the Restricted Period, the Participant shall forfeit the Restricted Stock as of
the Participant's date of termination.
(d) Performance Shares. If the Participant's employment with the Company
terminates during the Performance Period because of the Participant's
Retirement, Disability, or death, the Participant shall be entitled to a
prorated value of the Performance Shares earned, determined at the end of the
Performance Period, and based on the ratio of the number of days the Participant
is employed during the Performance Period to the total number of days in the
Performance Period. If a Change in Control occurs during the Performance Period,
and the Participant's date of termination does not occur before the Change in
Control date, the Participant shall earn the Performance Shares that would have
been earned by the Participant in accordance with the terms of the Award as if
100% of the Performance measures set forth in the Award Agreement for the
Performance Period had been achieved, but prorated based on the ratio of the
number of days the Participant is employed during the Performance Period through
the date of the Change in Control, to the total number of days in the
Performance Period.
(e) Forfeiture by Reason of Misconduct. Notwithstanding any other
provision hereof to the contrary, if the Compensation Committee determines that
a Participant has committed an act of embezzlement, fraud, dishonesty, breach of
fiduciary duty or deliberate disregard of any rules of the Company or any
Subsidiary which results in loss, damage or injury to the Company or any
Subsidiary, neither the Participant nor his representative or estate shall be
entitled to exercise any Award. In making such determination, the Compensation
Committee shall act fairly and shall give the Participant an opportunity to
appear before the Compensation Committee and present evidence on his behalf.
11. Deferrals. The Compensation Committee may permit a Participant to defer
such Participant's receipt of the payment of cash or the delivery of Common
Stock that would otherwise be due to such Participant by virtue of the exercise
of an Option or SAR, the lapse or waiver of restrictions with respect to
Restricted Stock or the satisfaction of any requirements or goals with respect
to Performance Shares. If any such deferral election is required or permitted,
the Compensation Committee shall, in its sole discretion, establish rules and
procedures for such payment deferral.
12. No Right to Continued Employment or Engagement. Nothing contained in this
Plan or in any Award Agreement shall confer upon any Participant any right to
continue in the employ of the Company or any Subsidiary or obligate the Company
or any Subsidiary to continue the engagement of any Participant or interfere in
any way with the right of the Company or any such Subsidiary to terminate such
Participant's employment or engagement at any time.
13. Vesting of Rights Under Awards. Nothing contained in the Plan or in any
resolution adopted by the Board of Directors shall constitute the vesting of any
rights under any Award. The vesting of such rights shall take place only
pursuant to a written Award Agreement with respect to such Award, in form and
substance satisfactory to the Company, which shall be duly executed and
delivered by and on behalf of the Company and the Participant to whom the Award
shall be granted.
14. Agreement to Refrain from Sales. Holders of Options, Restricted Stock and
Performance Shares shall agree, pursuant to the applicable Award Agreement, to
refrain from selling or offering to sell the shares of Common Stock issuable
upon exercise of the Options or the unrestricted shares of Common Stock upon
termination of the forfeiture and other restrictive provisions of the
Restrictive Stock and Performance Shares for such reasonable period of time
after the effective date of any registration statement relating to an
underwritten offering of securities of the Company, as may be requested by the
managing underwriter of such underwritten offering and approved by the Board of
Directors.
15. Termination, Amendment and Modification. The Board of Directors or the
Compensation Committee may at any time and from time to time alter, amend,
suspend or terminate this Plan in whole or in part, except (i) without such
stockholder approval as may be required by law, no such action may be taken
which changes the minimum Incentive Option price, increases the maximum term of
Incentive Options, materially increases the benefits accruing to Participants
receiving Incentive Options hereunder, materially increases the number of
securities which may be issued pursuant to Incentive Options, extends the period
for granting Incentive
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<PAGE> 34
Options past the tenth anniversary of the initial effective date of the Plan or
materially modifies the requirements as to eligibility for receipt of Incentive
Options hereunder, and (ii) without the consent of the Participant to whom any
Award shall theretofore have been granted, no such action may be taken which
adversely affects the rights of such Participant concerning such Award, except
to the extent such action is required by statute, or rules and regulations
promulgated thereunder, or as otherwise permitted hereunder.
16. Indemnification. Each person who is or at any time serves as a member of
the Compensation Committee shall be indemnified and held harmless by the Company
against and from (i) any loss, cost, liability or expense that may be imposed
upon or reasonably incurred by such person in connection with or resulting from
any claim, action, suit or proceeding to which such person may be a party or in
which such person may be involved by reason of any action or failure to act
under this Plan; and (ii) any and all amounts paid by such person in
satisfaction of judgment in any such action, suit or proceeding relating to the
Plan. Each person covered by this indemnification shall give the Company an
opportunity, at its own expense, to handle and defend the same before such
person undertakes to handle and defend the same on such person's own behalf. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the charter or
bylaws of the Company, as a matter of law, or otherwise, or any power that the
Company may have to indemnify such person or hold such person harmless.
17. Reliance On Reports. Each member of the Compensation Committee shall be
fully justified in relying or acting in good faith upon any report made by the
independent public accountants of the Company, any independent appraisal of the
Common Stock and any other information furnished in connection with this Plan.
In no event shall any such person be liable for any determination made or other
action taken or any omission to act in reliance upon any such report or
information, or for any action taken, including the furnishing of information,
or failure to act, if on good faith, all consistent with and subject to the
requirements of Section 141(e) of the General Corporation Law of the State of
Delaware.
18. Miscellaneous.
(a) Gender and Number. Whenever the context so requires, the singular
shall include the plural and the plural shall include the singular and the
gender of any pronoun shall include the other gender.
(b) Severability. The invalidity of this Plan with respect to one or more
persons shall not affect the rights and obligations of any other person
hereunder in any manner whatsoever. The invalidity of one or more provisions of
this Plan shall not affect the validity of any other provision of this Plan in
any manner whatsoever as long as the fundamental benefits and obligations of the
parties hereto are not materially modified by such invalidity.
(c) Requirements of Law. The granting of Awards and the issuance of Common
Stock under the Plan shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies as may be
required.
(d) Governing Law. All matters relating to this Plan or to Awards granted
hereunder shall be governed by the laws of the State of Delaware, without regard
to the principles of conflict of laws thereof, except to the extent preempted by
the laws of the United States.
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PROXY THE BANC CORPORATION PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE BANC CORPORATION
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 20, 2000
The undersigned hereby appoints James A. Taylor and David R. Carter, 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 2000 Annual Meeting of Stockholders to be held at
3:00 p.m. on Tuesday, June 20, 2000, 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 2003 the following
individuals:
<TABLE>
<S> <C>
Peter N. Dichiara Jerry M. Smith
Steven C. Hays Michael E. Stephens
Larry R. House Marie Swift
Randall E. Jones Johnny Wallis
Richard M. Scrushy
</TABLE>
[ ] FOR [ ] AGAINST
INSTRUCTIONS: To withhold vote for any individual(s) nominated as Directors in
Item 1 above write names below:
- --------------------------------------------------------------------------------
2. APPROVAL OF THE SECOND AMENDED AND RESTATED 1998 STOCK INCENTIVE PLAN OF
THE BANC CORPORATION. To approve and ratify the Second Amended and
Restated 1998 Stock Incentive Plan of The Banc Corporation.
[ ] FOR [ ] AGAINST
3. RATIFY THE APPOINTMENT OF INDEPENDENT AUDITORS. To ratify the appoint of
Ernst & Young LP as independent auditors for 2000.
[ ] FOR [ ] AGAINST
4. In their discretion, Proxies are authorized to vote upon such other
business as may properly come before the 2000 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: , 2000
----------------------
------------------------------
(Print Name)
------------------------------
(Signature of Stockholder(s)
PLEASE DATE, SIGN AND RETURN
THIS PROXY TO THE CORPORATION
IN THE ENCLOSED ENVELOPE.
THANK YOU.
